US: Democracy for Sale

How big business runs Washington D.C.

The outcome of the 2004 Presidential election is not certain. However, one thing is for sure; no matter who wins the election, Bush or Kerry, Corporate America will be in control.

The corporations and big donors have spent millions on both campaigns to ensure that the interests of the super rich will be represented fully in the White House. Corporate donors from all major sectors of the economy are spending unprecedented millions on both campaigns.

While everyone knows Bush’s corporate credentials, Kerry’s big cash connections come as a surprise to some.

Kerry has received $6.75 million from finance and investment firms, ensuring Wall Street will continue to rake in millions without being taxed. Kerry has received $1.3 million from drug companies and insurance agencies to make sure the government doesn’t provide decent healthcare or make generic drugs readily available.

Kerry’s campaign has raked in $14.3 million from lobbyists and corporate lawyers. Kerry’s even gotten $1.6 million from industries directly related to military production. Add to this the fact that Kerry himself is a millionaire bordering on billionaire, and would be the third-richest President in history if he won the election.

The rich elite’s connection to politics is nothing new; big money has always "invested" in politicians. For decades, lobbyists have roamed Washington, giving favors and handouts to politicians that promise to pass laws benefiting the super rich.

Lobbying has grown to the extent that certain industries hire more lobbyists than there are politicians to lobby. Over $700 million is spent every year on lobbying.

In one closed session of Congress, a legislator admitted, "lobbyists provide members [of Congress] with free trips, typically involving stays in luxurious hotels in beautiful places, along with various forms of entertainment, whether it is playing tennis, golf, skiing, you name it." "I’ll scratch your back if you scratch mine" is a way of life on Capitol Hill.

In the Democratic primaries, both Kerry and Edwards posed as enemies of "special interests" and lobbyists, but their records show the opposite. In his years as a Senator, nobody on Capitol Hill has taken more money from lobbyists than John Kerry. Edwards is also on record taking free trips and money from lobbyists.

How are politicians, corporate executives, and lobbyists so well connected with each other? Partly because many lobbyists are former politicians, many politicians are former corporate executives, and many executives are former lobbyists; and vice-versa for all of those. In short, a swindler is a swindler, no matter what the title.

Over 19% of the most influential lobbyists are former politicians. Some of them even sat on congressional committees designed to regulate the industries that these same ex-politicians now lobby for. The drug company lobby is just one example (see box).

Ralph Nader noted, "Middle-level and top-level corporate executives become mid-level and top-level government regulators and then return to their corporations. The superficially regulated become the regulators and then become the regulated again." For instance, Dick Cheney is the current Vice President and former CEO of Halliburton, but he is not alone. Many politicians, before and after leaving office, become CEOs; former VPs Al Gore and Dan Quale are two other high-profile examples. Nader goes on to say, "Through their revolving door officials, donations from executives, day-to-day lobbying by trade associations, company lobbies, and corporate law firms – corporations dominate the actions of government."

While Nader correctly exposes corporate rule, socialists believe we need to go further and challenge the underlying system of capitalism.

The capitalist system (and many systems before it) is based on the domination of a few and the oppression of many. The political system is designed to ensure the influence of the elite. It is in the interests of the corporations to maximize profits and drive down wages, regulations, and workers’ rights; they can’t be convinced by "citizen checks" to be nicer. Wall Street and their moneybag politicians won’t give up anything without a fight. The rich will defend their interests by controlling the political process; we need to defend our interests, too.

We can fight back by organizing demonstrations and strikes for better pay, conditions, and social services. Working people also need a political party to represent us; this party should stop at nothing to break the grip that Corporate America currently has on politics and the economy. We need a fundamental transformation of society that takes control, once and for all, out of the hands of the rich elite so working people can democratically run society.

Corporate Tax Fraud Is "Perfectly Legal"

Most working Americans know we’re being ripped off when we pay our taxes, but most of us can’t pinpoint just how it’s being done.

A new book, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich – and Cheat Everybody Else by Pulitzer Prize-winning New York Times journalist David Cay Johnston, documents the way the tax system is organized to benefit the top 1% and punish the rest of us.

The book details how some corporations avoid paying any federal income tax at all. Corporations spend millions hiring experts who find loopholes in tax laws that benefit the rich elite. Meanwhile, the working poor are seven times more likely to be audited than everybody else.

The IRS is massively underfunded, and honest auditors who pursue rich tax cheats put their careers on the line. The IRS was once handed the complete bank records of 1,600 moneybag tax frauds; only four were prosecuted. The IRS had documented knowledge of the Enron fraud two years before the scandal broke. In most of the cases that corporate tax fraud was exposed, CEOs walked away with millions while workers were cheated out of retirement plans.

Johnston’s book also deals with the way that laws, lobbyists, and the media attempt to cover up corporate crime. The new law entitled "Limited Liability Partnership" makes it perfectly legal for corporate lawyers and tax experts to withhold information about the fraud of their clients and partners. The media portrays Enron and Martha Stewart as "bad apples," when, in reality, dishonesty about business practices is entirely commonplace.

Johnston’s book, although extremely informative, is a bit of a boring read (any book about tax codes is destined to be). The book also puts forward "tax reform legislation" as the solution; however, the politicians in office cannot be depended on to pass laws that benefit working people. We need a movement built in the streets, workplaces, and communities to take power out of the hands of the corporations, their lobbyists, and their politicians.

The Lobbyists’ Other Drug War

Over 44 million Americans are without healthcare. Many more are underinsured. Each year, over 18,000 Americans die due to lack of healthcare. Poll after poll shows that a majority of Americans think this country should have a universal healthcare system that provides quality services for all. So why are so many still without coverage?

Pharmaceutical companies, the health insurance industries, and healthcare sellers have donated millions to politicians of both parties to make sure that the profits keep rolling in at the expense of our health. In 2001 alone, drug companies spent $78.1 million on lobbying. In that same year, the pharmaceutical industry employed 623 lobbyists, more than one lobbyist for every U.S. Congressperson.

These corporate lobbyists also help pay for political campaigns of both big-business parties; from 1997 to 2002, drug companies donated over $37 million to political campaigns, all to ensure that Americans have to pay heavily for decent healthcare.

Ralph Nader noted, "A recent highlight of corporate influence over government was the prescription drug bill. The bill was a big profit maker for the drug companies. They invested $150 million in lobbying the government and in return got a $400 billion drug bill."

Dirty deals like this will continue as long as politicians have their interests tied up with corporate profits. That’s why we need a new political party that truly represents the interests of working people, not the agenda of people who make money off of our misery.

From Justice, paper of Socialist Alternative, cwi in the US

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September 2004