A Stakeholder Approach to Ethical Lobbying Policy
Posted by Dave HowardJul 12
David Howard
July, 2011
Introduction
The Lobbying Disclosure Act of 1995, 2 U.S.C. §1602 (1995) defines lobbying as “a deliberate attempt to effect or to resist change in the law through direct communications with public policymakers including legislators, legislative staff, and executive branch officials.” Lobbying and lobbyists have gotten a bad reputation as a result of scandals that have peppered the news over the years but they do serve a purpose in advancing the causes of citizens, industry, charities and non-governmental organizations. Ostas (2007) quotes a 1956 speech given by then-candidate John F. Kennedy in which he called lobbyists “…expert technicians … capable of explaining complex and difficult subjects in a clear, understandable fashion.” Indeed, due to the vast growth of government oversight and the many bills in front of members of Congress every day, lobbyists working each side of the issues provide a valuable service to legislators by making short work of understanding key points of contention.
Despite the need for such expert advice and the continuing role of lobbyists in guiding public policy, the public overwhelmingly sees lobbyists as villains in Washington and the bane of democratic process. In a 1964 poll, 76 percent of Americans said that they trusted government to do the right thing “just about always” or “most of the time.” When the same question was asked in 1994, the number dropped to 21 percent, with about half of the respondents stating that the federal government was “controlled by lobbyists and special interests” (Ostas, 2007).
Jones (2007) reports that in a 2007 poll, Gallup asked the public to rate the honesty and ethical standards of lobbyists, and only 5% describe their ethics as “very high” or “high.” Congressmen rated only slightly higher at 9%. Nevertheless, the public’s business must be done and lobbyists provide a vital service to Congress by crystallizing and summarizing the arguments on all sides of the issues. Regardless of public opinion, 100% of congressional representatives must take a position on all of the bills before them and vote their conscience. Conscience therefore becomes the ultimate yardstick and the ultimate qualifier for the integrity, honesty and morality of the lobbyist’s work. Lobbying is protected under the constitution as free speech, freedom of association and petition for the redress of grievances. The Supreme Court has, in numerous cases, upheld the rights of corporations to lobby Congress under the constitution.
Practical Models for Ethics Policy
How then, can lobbyists and the clients they represent provide an ethical framework that allows for their role in governmental affairs yet ensures the equal consideration of additional stakeholders in both the process and the monitoring of their lobbying activities?
Different ethical decision-making platforms offer solutions to different stakeholders. As with most ethical dilemmas, it is rare to find a single approach that will satisfy or produce a consensus view among all parties to that dilemma. The comparison below makes clear the need for a hybrid approach; one that can be applied by different types of organizations and the advocates that they send to city halls, state houses and Washington D.C. to seek support for their causes.
Ethical Relativism – values and customs vary from individual to individual and from situation to situation. One set of values may apply in one situation but not another. Restrictions may adversely affect one group more than another. International customs and culturally accepted norms. Globalization has added additional levels of gray to the spectrum of ideas about lobbying.
Virtues – the public and those opposed to particular industries, associations and their arguments may argue based on the virtue or non-virtue of one position or the other. Even lobbyists will argue the virtue of their position i.e.; anti-abortion groups, creationists, etc. What is right and what is wrong are not always clear. Which is more right and virtuous: cleaner air from reduced emissions or cleaner water from a moratorium on oil drilling? Whose position is more virtuous; those of the Catholic Church in defending the transfer of priests accused of sex crimes or those of abuse victims calling for further investigation into allegations of collusion by bishops and cardinals?
Rights – Both sides of the lobbying issue assert their rights to free speech, public redress and representation of their interests. In the abortion debate for example, one side defends the so-called “rights of the unborn” while their opponents support “a woman’s right to choose” Many supporters of the “right to life” also express support for the death penalty. This paradox puts a citizen advocate in support of two lobbying positions that are contradictory. Without lobbyists, the citizen advocate’s credibility and philosophical integrity would no doubt be called into question but two lobbyists can separately and equally defend values that seem opposites on the surface.
Utilitarianism – Experts in the field, media and public policy academics tend to analyze the power and influence of lobbyists and the relationship between lawmakers and public relations organizations in utilitarian terms. That is; does the function do more good than harm and within that function does public or private good displace the other to its detriment?
Playing One Value Against Another
This may prove to be a critical but acceptable weakness in using the utilitarian model to arrive at ethical and defendable decisions. Stakeholders in any ethical dilemma may use a cost-benefit analysis to make a compelling argument for their side of the debate. Health care reformists hold that the rising costs of healthcare in the United States are the result of insurers cutting reimbursements and raising premiums while denying coverage to people with pre-existing conditions and those with no or low-income who cannot afford to pay their “fair share” of the cost of coverage. On the other side of the spectrum, opponents of reform claim that America has the best system in the world and that the free market works in all other areas, so it should be with the market for health care. These stakeholders argue that hospitals and physicians are raising rates and fees, demanding higher reimbursements far beyond the rise in actual costs thereby inflating the value of health care and forcing the insurance companies to charge higher premiums and reconsider exclusion policies. The utilitarian approach, a cost/benefit analysis, is a process that is already standard operating procedure in nearly every business concern. If the resulting decision maximizes good and minimizes harm for all stakeholders then that decision is the “right thing to do.” A truly utilitarian approach however must include consideration of the effects of the action on all stakeholders.
Who Has Skin in the Game?
Lobbying plays such a central role in the public policy process that stakeholders come from every corner of society and every industry. The Senators and Representatives that take the lobbyists’ information and proposals must assess and balance the impact of legislation on their own constituents as well as the rest of the nation. Congress is under constant watch by media, citizens, activists and other governments. The lobbyist, no matter who his or her client may be, is shielded from the direct response to their policy recommendations by the representative or committee they are soliciting. The client and the lobbyist are afforded a level of anonymity that enables them to continue working the issue even if the representative loses support or even is removed from office by voters in response to their eventual support or opposition on the issue.
Hamilton and Hoch (1997), note that increased freedom in the flow of information has made it easier for stakeholders on all sides to bring power and influence to bear on the lobbying industry. The press can stimulate and facilitate public discussion of business lobbying. Investors and stockholders with skin in the game of lobbying can use shareholder resolutions to pressure for internal dialogue. Consumers can make ethical choices when purchasing products and services. Pension and mutual fund managers can make investment choices based on ethical lobbying activities. Citizens can keep the issue in plain sight by expressing their concerns and their own expectations of the values and ethics of their elected officials and the company they keep. Religious groups, charities and social service providers also lobby for their causes with a focus on values and morals that are widely accepted and applied when they act as consumers and observers of the public affairs process. State and local governments and their constituents stand to gain or lose based on the lobbying of various issues at the federal level that affect their region. The bottom line is no longer a measure of profits for stockholders. The changing nature of societal norms and values has pushed businesses to operate in an ethically responsible manner. The Lobbying Disclosure Act of 1995 requires lobbyists to reveal which issues they are working on. Stakeholders have a clear opportunity to see a bigger picture of corporate lobbying activities A well-reasoned policy regarding the ethical rights and limitations of lobbyists and governments requires a multi-faceted approach. No single approach can possibly address the needs of all stakeholders and issues. Recent advances in technology and communications have driven the debate over lobbying ethics to higher levels of analysis and understanding. To this end, commercial as well as non-profit organizations have sought to work with interested parties to develop palatable guidelines that address the concerns of policy advocates and their critics. Two such rule sets are the American League of Lobbyists (ALL) Code of Ethics and the “Woodstock Principles” adopted by the Woodstock Theological Center at Georgetown University.
Industry Standards and Best Practices
The Woodstock Theological Center developed a set of guiding ethical principles for lobbying that are widely accepted as a thoughtful and relevant set of operating guidelines for those engaged in the influence of public policy. The seven sections of the Woodstock Principles, without their subparts are as follows:
1. The pursuit of lobbying must take into account the common good, not merely a particular client’s interests narrowly considered.
2. The lobbyist-client relationship must be based on candor and mutual respect.
3. A policymaker is entitled to expect candid disclosure from the lobbyist, including accurate and reliable information about the identity of the client and the nature and implications of the issues.
4. In dealing with other shapers of public opinion, the lobbyist may not conceal or misrepresent the identity of the client or other pertinent facts.
5. The lobbyist must avoid conflicts of interest.
6. Certain tactics are inappropriate in pursuing a lobbying engagement.
7. The lobbyist has an obligation to promote the integrity of the lobbying profession and the public understanding of the lobbying process.”
The American League of Lobbyists (ALL) developed a Code of Ethics (see Appendix A) which has remained in effect unchanged since its adoption in 2000. According to the ALL website (2009) “Lobbyists are strongly urged to comply with this Code and to seek always to practice the highest ethical conduct in their lobbying endeavors.” Thomas M. Susman is a partner in the Washington office of Ropes & Gray, a public policy law firm. He served on the board of the American League of Lobbyists, chaired its Ethics Committee, and is a contributor to The Lobbying Manual and Lobbying Laws and Gift Rules Guide. Susman agrees with all but one of the Washington Principles; the common good. Susman (2002) argued that it is not the lobbyist’s job “…to determine whether the common good is best served by cheap power provided by hydroelectric plants that can make electricity more readily available to the poor, or by maintaining pristine waterways. I think that’s Congress’s role, not mine.” His argument is supported by the changing nature of what is perceived as the common good. For example he adds, slavery was considered beneficial to the common good for nearly 2000 years. Since slaves were not citizens, their interests were not relevant. Susman’s argument makes sense. American business exerts strong influence over the decisions and purchasing habits of the populace every day. Most however, would agree that it would be un-American for any single organization to dictate what is best for all.
Stakeholder-centered Corporate Ethics Policy
A corporate policy regarding lobbying and participation in public policy debates must balance the needs of the enterprise and its shareholders with those of other organizational actors such as customers, suppliers, employees, competitors and governmental bodies at the local, state and federal levels. The stated policy of the organization will influence the actions of all of these stakeholders and while no policy will fully satisfy all of the needs and wants of all constituents, the policy should not impede the progress or continued business activities of the company.
Using elements of both the Washington Principles and the ALL Code of Ethics, any organization can draft a single policy that expresses the intent of the organization and the expectations for ethical behavior and advocacy. No policy would be complete that fails to incorporate the concepts of legal compliance, integrity, transparency, public education and avoidance of conflicts of interest. But policies can be interpreted in different ways by different parties. Loopholes emerge over time and create ethical leaks in the policy and weaken the integrity of the organization and its leadership. For this reason, I propose that in addition to the stated policy the organization offer different decision-making approaches and ethical tests by which managers, executives, contractors and employees can apply the principles of the policy to varying ethical dilemmas. .Applying these principles of ethical conduct to corporate lobbying requires effective communication in plain language that can be understood by directors and executives as well as employees, consumers and stockholders.
Practical Application of the Stakeholder View
United Health Group (UHG) is one of the largest health care organizations in the world with nearly 80,000 employees in more than 40 countries. Their products and services range from health insurance to prescription management, hospital and health information systems and enterprise support for health service delivery. The company’s Ethics and Integrity policy (2010) is 32 pages long and is publicly available at the UHG website. Within the policy document is a “quick test” for all employees, consultants and contractors to use when faced with matters of ethics in the workplace. Here, UHG supports the use of both policy and personal ethics when testing the consequences of a course of action. These test questions are similar to the “smell test” outlined by Weiss (2009) as an informal approach to ethical decision-making. Further, the UHG test directs their representatives to “ask questions and keep asking” if they are unclear on either the policy or the answers to the questions in the test.
Each employee brings professional skills and personal values to his or her job. When faced with a difficult situation, it may help to ask these questions:
• Are my actions legal?
• Am I being fair and honest?
• Will my actions stand the test of time?
• How will I feel about myself afterward?
• How will it look in the newspaper?
• Will I sleep soundly tonight?
• What would I tell my child to do?
After asking these questions, if you’re still not sure of the proper course of action, ask – and keep on asking until you’re sure you are taking the right action.
At its core, any successful policy must be based on a stated trust in the organization and all of its members to act ethically. Corporate policy is in place to direct behavior when the right choices are unclear or unstated by the policy per se. AS UHG does in its policy manual, organizations must not only draft policies using a stakeholder approach but allow the policy to be vetted and challenged by various tests of the choices available in any given situation.
Conclusion
Lobbyists have many ways to address the issue of ethical persuasion of public officials. Both the Washington Principles and the ALL Code of Ethics can be used as a template. Weiss (2009) points out that ethics and conduct codes are often vague and offer generalities without prioritization. Additionally, these codes are not regularly and strictly enforced. Yet, even firms that follow these principles and maintain high ethical standards fall into the categorization by the public as mostly unethical. The impact of this perception is a widespread distrust of the political process, elected officials and the entire district of Washington, D.C. by citizens of every political affiliation and culture. A sound ethics policy must include public discussion of the political process, public education not only on the issues but also who has a stake in the resulting law or appropriation. Elected officials must also hold themselves and their constituents accountable for ethical pursuit of special interests and transparency.
In the end, each organization must do its part. The attached policy recommendation is based on best in class models and industry standards as well as trends in societal norms. The business of lobbying is still a mystery to the average American. We must do our part to remove the veil of ignorance that tarnishes reputations and inhibits more public acceptance and participation in the legislative process. It is my hope that this policy recommendation will enable the organization to do the right thing for the its shareholders, employees, the public and serve as a lasting and model of ethical conduct.
Proposed Organizational Code of Ethics
1. We value honesty and integrity. We are responsible for presenting factual and truthful information to public officials and other interested parties. Any misinformation, once identified must be immediately corrected.
2. In the pursuit of our clients’ interests we are fully compliant with the laws and rules that govern our activities. All lobbyists will be properly registered as required by federal, state and local laws.
3. We avoid and disclose potential or actual conflicts of interest. No lobbyist should pursue a position with a client that is in conflict with another client’s opposing position. No lobbyist should accept appointments to boards or committees that advocate an adversarial position of a client they represent. Each lobbyist is responsible for disclosing personal relationships that may pose a conflict of interest.
4. We advocate our client’s interests rather than our own. Each lobbyist must maintain loyalty to his or her client. If an employee feels that his or her personal beliefs or values interfere with their duty to a client or position, that employee should transfer the client’s project to another member of the firm.
5. We practice the highest standards of confidentiality. No employee may disclose confidential information related to our clients, our legislative activities or our business activities without the express written consent of his or her clients and the Chief Compliance Officer.
6. We disclose all compensation and such compensation is based on a written agreement executed between the client and the firm. No employee may accept gifts unless they are of nominal value.
7. We have a duty to honor and respect the democratic process and educate the general public and the elected officials that we engage in pursuit of new legislation. Each lobbyist is a reflection of the firm and the lobbying industry. We will act in a manner that brings honor to our profession. We must remember that we provide a service to those who serve the public.
8. In every case where a lobbyist is unsure or unclear on the proper and ethical course of action, he or she will consult with their manager and the Chief Compliance Officer for guidance. We will never punish doubt or delay in the pursuit of the correct action. We will address willful violation of our ethics policy to the maximum extent including termination, legal action and revocation of the lobbyist’s registration.
References
American League of Lobbyists (2010). Code of Ethics. Retrieved October 23, 2010, from http://www.alldc.org/ethicscode.cfm
Jones, J. (2007). Lobbyists Debut at Bottom of Honesty and Ethics List. Gallup Poll Briefing, 1. Retrieved November 13, 2010 from Business Source Complete database.
Hamilton III, J., & Hoch, D. (1997). Ethical standards for business lobbying: some practical suggestions. Business Ethics Quarterly, 7(3), 117-129. Retrieved from Business Source Complete database.
Susman, T. (2002). Lobbying: Ethical, though not bound by the “common good”. Woodstock Report, 72. Woodstock Theological Center at Georgetown University. Retrieved from http://woodstock.georgetown.edu/resources/articles/The-Ethics-of-Lobbying.
United Health Group (2010), Ethics and Integrity website. Retrieved from http://www.unitedhealthgroup.com/aboutus/EthicsAndIntegrity.aspx
Weiss, J.W. (2009) Business Ethics: A Stakeholder and Issues Management Approach. Ohio: South-Western Cengage Learning




