Archive for the ‘lobbying’ Category

The Paradoxical Anti-Keystone Billionaire

The role of wealth in politics, and in particular wealth derived from corporate sources, has reared its head again. It was recently reported that a US billionare is throwing a $5,000 per person fundraiser for President Obama. And it’s no secret that said billionaire, Tom Steyer, is an opponent of the Keystone XL pipeline, and is likely to use the opportunity to press Obama not to approve Keystone.

This story is noteworthy for a couple of reasons, beyond the mere fact that some pretty heavy hitters are weighing in on the Keystone issue.

The first of course is that Steyer himself made much of his money in oil. In particular, he was founder of Farallon Capital Management, and reportedly left the fund — “which had invested in a range of oil and pipeline companies, including BP, Nexen and Kinder Morgan, as well as an oil-carrying railway” — because those investments were at odds with his new-found environmental commitments.

It’s also interesting to wonder what psychological and moral tension created for the American left by the involvement of Steyer — a billionaire — in trying to influence policy. Not that there’s anything unusual about the rich trying to flex their muscles. But Steyer embodies something of a value conflict for the American left. Opposition to Keystone, after all, has come primarily from the left. But so has opposition to what is seen as the growing influence of wealth in American politics.

So it’s tempting to poke fun, here. What must be going through the minds of those who are both opposed to Keystone and opposed to the wealthy having disproportionate influence in politics? Can someone who went ballistic over the Citizens United decision really be happy to see a rich guy like Steyer using his wealth (and his wealthy friends) to try to influence the president? Of course it helps that Steyer is associated only with companies most Americans have never heard of. So when Americans hear that a rich guy is hosting a fundraiser for the president, at least it’s not a rich guy from General Motors, or from Walmart, or from Goldman Sachs. That would raise worries not just about the role of wealth in politics, but of specifically corporate wealth. But of course, Steyer’s wealth didn’t exactly come from running a successful paper route after school, or selling organic apples at the local farmer’s market. But for opponents of Keystone, at least he’s on the right side. So in effect what you have is a sort of Bruce Wayne figure, the billionaire businessman with a heart (not to mention wallet) of gold.

But the important lesson, here, isn’t about the role of wealth in politics. It’s about ideology. It is attractive — but a mistake — to believe that all points of view that are in any way ‘anti-business’ have to hang together. It is entirely consistent to want environmentalists to win over industrialists in matters of pipeline approval, and yet share a widely-held ambivalence about the pronounced role that the wealthy will inevitably play in shaping that debate. And it is dangerously polarizing to assume otherwise.

The True Cost of Conflict of Interest

What does conflict of interest cost?

It was recently reported that certain employees of the Chicago Public Schools food services department were going to be required to undergo ethics training, after it was revealed that they had accepted improper gifts from contractors.

The worry, naturally, is that accepting gifts put those CPS employees into a conflict of interest, a situation in which they were trusted to make good decisions on behalf of CPS, but in which they had an ‘outside’ interest — in this case, gratitude to the gift-givers — that might reasonably be thought likely to warp their judgment. The behaviour here was more specifically a violation of the section of the CPS Code of Ethics that specifically forbids accepting gifts, but the moral root of the problem is conflict of interest.

Now, in addition to the trouble the employees are in, it’s been reported that Chicago Mayor Rahm Emanuel wants to go after two food services companies that had given improper gifts.

Just what have those companies done wrong? What’s wrong with putting someone else in a conflict of interest? I’ve argued before that we might think of this as analogous to suborning perjury. When you intentionally put someone else in a conflict of interest, it means that even if you’re not violating any duties yourself, you’re encouraging other people to violate their duties.

And the companies’ bad behaviour, here, is going to cost them. It may well cost them future contracts, but it may cost them (and other companies that want to compete for CPS contracts) more than that. It’s been reported that they may be required to provide ethics training for their employees, and hire an independent auditor to make sure they’re complying with CPS ethics standards. Neither of those things is likely to be cheap. In an industry with narrow profit margins, such additional costs could well mean the difference between black ink and red.

But the most important “cost” in this case is, of course, the loss of confidence in the CPS and its purchasing procedures. That is always the risk with conflict of interest, namely that when conflicts are accepted and fostered, rather avoided or remedied, they erode confidence in the judgment not just of individuals, but of entire institutions.

Banks, Image Problems, and the Ethics of Lobbying

Ethics in public relations can mean two different things. It can mean managing your firm’s reputation, since a reputation for ethical behaviour is of course a central part of the reputation that any company wants for itself. It can also mean ethics in the way you go about managing that reputation, since there are good and bad ways to do that. Sometimes the two go hand-in-hand.

Businessweek recently reported that Brian T. Moynihan, CEO of Bank of America, has said he is “incensed” at public criticism of his bank, and has called upon 135 ‘market presidents’ (presidents of local business units) to lobby local officials and remind them of how much good the bank does for local communities. Call it reputation management, call it lobbying. Either way, it’s not at all clear that it is a good substitute for changing the practices that have been angering critics in the first place. It’s also not clear that a focus on ‘all the good we do’ is the right approach. Why not tackle the issues head-on?

Yesterday, at Canadian Business for Social Responsibility’s annual Forum, I got the chance to ask keynote speaker Stephen Lewis about the ethics of lobbying. (Lewis, in addition to being a former diplomat and a UN special envoy is also a former parliamentarian, so he seemed a good person to ask.) Lewis said that, in his experience — both as a parliamentarian and as someone who has lobbied hard on behalf of many causes — the best approach to lobbying is honesty. Put your agenda on the table, he said, and you’re likely to get a fair hearing.

That rings true, especially in an era in which just about everyone is cynical about corporate motives. Even people who believe fully in the crucial role that business plays in making the world a better place — and yes, that includes banks — are likely to respect you more if you admit that you’ve got an agenda, and that that agenda is not, and properly is not, direct pursuit of the public good.

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