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Business-Managed Democracy » Government » National » Corporate Reach » Revolving Door |
The revolving door refers to the interchange of personnel, usually between businesss and government, but also between lobby groups, management consultants, think tanks and government, as well as between the media or public relations firms and government. The problem is that government officials can be unduly influenced, either by their previous employers or potential future employers, and this undermines the effectiveness of governments in regulating to protect the environment.
There is also a revolving door between environmental groups and the industries they criticise which can give rise to similar conflicts of interest whereby environmental groups can be unduly influenced by business interests. What is more, the revolving door can help business interests gain unearned environmental credibility.
Regulatory agencies find hiring people from business and industry attractive because of their commercial expertise and their ability to liaise with the industry. However business executives, management consultants and lobbyists who take up government positions often maintain their business sympathies in their new jobs. In some cases they even seek government jobs so as to further business interests. This can contribute to regulatory capture whereby an industry has undue influence over a regulatory agency or government ministry. This undermines both the development and also the enforcement of strong legislation to protect citizens and their environment.
As an example, there is a long history of a revolving door between Monsanto and the US agencies that regulate its activities: "ever since the first Bush Administration, our presidents have been appointing ex-Monsanto lawyers, consultants, directors, chairmen, and CEOs to highly important positions in the FDA [Food and Drug Administration] and EPA [Environmental Protection Agency]."
Despite efforts to regulate against the revolving door in the US, it became far more common during the Bush administration when George W. Bush appointed unprecedented numbers of corporate executives and business lobbyists to government posts, including regulatory agencies with power over decisions affecting the environment. For example, Philip Cooney became chief of staff of the White House Council on Environmental Quality for George W. Bush after serving as a lawyer and lobbyist for the American Petroleum Institute. In his government position he amended government scientific reports to downplay the role of greenhouse gas emissions in causing global warming. After he resigned his government position he was hired by Exxon Mobil.
Top personnnel from the Environmental Protection Authority (EPA) have also moved on to take up industry positions. For example its first head, William Ruckleshaus, became Senior Vice President of Legal Affairs of the timber giant Weyerhaeuser Company, then returned to head the EPA in 1983. In 1988 he was appointed Chairman and Chief Executive Officer of Browning Ferris Industries, the nation's largest solid waste company, and held board positions for Monsanto, Pharmacia Corporation, Nordstrom, Weyerhaeuser and others.
Lee Thomas, another EPA head (1985-89), went on to be president of Georgia-Pacific, a pulp and paper company, as well as board member of the American Forest and Paper Association and DuPont. William Reilly was head of the World Wildlife Fund (WWF) before being appointed to head the EPA (1989-93). Afterwards he returned to the WWF for a short time, later becoming a director at oil company, ConocoPhillips and advisor to TPG Capital, an international investment firm.
In the UK, there is also a revolving door between the large management consulting firms and government. Not only has the UK government seconded hundreds of management consultants into advisorial and policy positions in government (see UK Government Consultants and McKinsey & Company) but key government civil servants and advisors, as well as politicians, have found positions in consulting firms, including:
David Craig, a former consultant himself, notes in his book Plundering the Public Sector,
As the consultants thus take control of large swathes of public spending — from health to social security to defence budgets — they assume the authority to channel billions into the coffers of their erstwhile employers (whose ranks that are more likely than not to re-join later in their careers in order to resume life on salaries in the high six figures)... Former Whitehall officals simultaneously enrich themselves and lend respectability to the revolivng door by moving in the opposite direction, while senior colleages they leave behind, who are responsible for employing and monitoring consultants, increasingly have one eye on the opportunities a grateful consultancy industry may offer them at some point in the future.
Additionally senior government bureaucrats and politicians often look forward to a post-government career in business. It is in the interests of businesses, lobbyists and think tanks to hire former government officials and politicians because they know how the political system works, have valuable policy experience and inside knowledge, and still have influence with their former colleagues.
; Robert Reich, Supercapitalism: The Transformation of Business, Democracy, and Everyday Life, Scribe, Melbourne, 2008, p. 139.Public Citizen’s Congress Watch found that in the US, between 1998 and 2005 42 percent of the members of House of Representatives who left government and 53 percent of senators who left government became lobbyists, mainly for large corporations, with starting salaries up to $500,000 a year and up to $2 million a year for former chairs of congressional committees and subcommittees. (This compares with around 3 percent of Congress in the 1970s.) Regulations only stop them from directly lobbying their former colleagues for one year. After that they are able to turn their political careers into extremely lucrative lobbying careers.
In addition, between 1998 and 2004 more than 2200 high-ranking government officials became lobbyists. This included more than half the senior officials of the Clinton administration who became corporate lobbyists when they left government office.
Politicians who do favours for particular corporations or business interests can also look forward to highly paid corporate executive positions, board memberships, or lucrative consultancies after they retire from political life. Even if such job offers are not explicitly promised, it is in the interests of those looking forward to a post-government career in business not to displease the business community whilst in office and this means they tend to take a business viewpoint whilst still in government.
The premier of New South Wales in Australia, Bob Carr, is one of many Australian examples of the revolving door. In 2005 he became a part-time consultant to Macquarie Bank two months after leaving office, for a fee reported to be A$500,000 per year. The investment bank had been involved in many of the state’s infrastructure projects during Carr’s premiership, including controversial private toll roads. In his new position, Carr lobbied the state government in favour of privatisation proposals on behalf of the Bank. Macquarie Bank has appointed several former Australian politicians to well-paid positions in the Bank.
As public relations firms diversified into lobbying in the 1970s they hired people on the basis of their political connections—who they knew and who their friends were. For this reason we find the same revolving door pattern between public relations and lobbying firms and government as between think tanks and government.
.When the Republicans lost office in 1992 there was a mass movement of government officials to the lobbying and PR firms. Ralph Nader’s group, Congress Watch, tracked 300 of them and over half moved to Washington DC lobby and PR firms. The door swings both ways and former lobbyists often become part of government, where they have a unique opportunity to help their former clients.
Hill and Knowlton’s lobbying efforts have been aided by its employment of government officials who have good access to government. Frank Mankiewicz, of Hill and Knowlton, said that one of his firm’s strengths is being able to “get half an hour of somebody’s time.” One of the best known Washington lobbyists, Robert Gray, started off as appointment secretary and then cabinet secretary for President Eisenhower before being hired by Hill and Knowlton. There he established Hill and Knowlton’s lobbying operations in the 1960s at a time when public relations was seen as quite a separate activity to lobbying.
When Ronald Reagan was campaigning for the Presidency in 1980, Hill and Knowlton paid Gray while he took part in the campaign in the hope that this would provide invaluable lobbying access if Reagan was elected. As it happened Gray did not go back to work for Hill and Knowlton but set up his own public relations/lobbying firm to take advantage of the access he now had to the Reagan government. Later his firm was reintegrated into Hill and Knowlton’s operations. It was Gray who rehabilitated Richard Nixon from disgrace to respected ‘Elder Statesman’.
Apart from Gray, Hill and Knowlton is full of former government officials. A former chief of staff to George Bush was appointed head of Hill and Knowlton’s US operations before leaving to become senior vice-president of Philip Morris. One of Hill and Knowlton’s vice presidents had been a general policy adviser to Bill Clinton. Margaret Thatcher’s Press Secretary from 1979-1990 is now a director of Hill and Knowlton UK. When Hill and Knowlton established a European affairs senior adviser they hired Stanley Clinton Davis who had been a member of both the European Commission and the British Parliament.
Howard Paster, who was head of Hill and Knowlton’s Washington office, became one of Bill Clinton’s top appointments as Director of Intergovernmental Affairs for the White House. Paster was replaced in Hill and Knowlton by Clinton aide, Thomas Hood. Less than a year later Paster went back to work for Hill and Knowlton as chairman at twice his original salary. Clinton replaced Paster with a former employee of Griffin Johnson and Associates whose clients include the American Nuclear council, the American Petroleum Institute, CBS, Waste Management (now WMX, Inc) and the Tobacco Institute.
In Australia one of former Prime Minister Bob Hawke’s advisers was appointed to head Hill & Knowlton’s Canberra office.
Burson-Marsteller offices, like Hill and Knowlton’s are full of ex-government officials who now lobby their former colleagues. In the 1980s they hired a number of such people, including a former press secretary to Nancy Reagan, a former press secretary to the Carter White House and a former secretary to the Senate’s Democratic minority.
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