FINAL Dissertation

The Business of America is Lobbying: The Expansion of Corporate Political Activity and the Future of American Pluralism by Lee Jared Drutman A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Political Science in the Graduate Division of the University of California, Berkeley Committee in charge: Professor Henry E. Brady, Chair Professor Paul Pierson Professor David Vogel Professor Neil Fligstein Fall 2010 The Business of America is Lobbying: The Expansion of Corporate Political Activity and the Future of American Pluralism Copyright 2010 by Lee Jared Drutman Abstract The Business of America is Lobbying: The Expansion of Corporate Political Activity and the Future of American Pluralism by Lee Jared Drutman Doctor of Philosophy in Political Science University of California, Berkeley Henry E. Brady, Chair Why does corporate lobbying in Washington, DC continue to expand, year after year? What are companies lobbying for, and why? And what, if anything, can the patterns of activity tell us about both the impact corporate lobbying is having and the ways in which the political economy of the United States is changing? I argue that the modern growth of corporate lobbying reflects a path-dependent learning process. Companies may come to Washington for many different reasons, but the act of establishing an office sets in motion several reinforcing processes that make companies value lobbying more and more over time and that lead companies to become more proactive in their political strategies. Lobbyists teach managers about the importance of being politically active and help to point out (and sometimes even create) new opportunities for lobbying. Managers gain more comfort and confidence in their ability to influence outcomes, and they start to see participation as both more appropriate and more valuable. Success breeds success. The overall effect is that American businesses, once skeptical of government, cautious about getting involved in politics, and reactive in their strategies, have now become increasingly confident, proactive, and aggressive in their lobbying efforts, and businesses are increasingly seeing government policy as not just a threat, but also as a tool. More and more companies are discovering that Washington matters to their business, and those who do are sticking around and increasing their political capacities. As a result, corporate lobbying activity is likely to continue to expand for the foreseeable future, with large corporations playing an increasingly central role in the formulation of national policies. My findings are based on original interviews with 60 corporate and trade association lobbyists and complete lobbying histories of every company in the S&P 500 between1981 and 2005. This dissertation combines both rich qualitative descriptions and rigorous large-N data analysis. 1 Acknowledgments Writing a dissertation is, to state the obvious, a long and arduous journey, but it has also been a wonderful process of intellectual growth and exploration. I am much indebted to many people along the way, especially the wonderful guidance and support I received from my committee members, all of whom consistently challenged me to do my very best while giving me the confidence that I could do so. Henry E. Brady, the chair of my committee, brought me on board early in a massive data collection research project on organized interests that he had undertaken with Sidney Verba at Harvard and Kay Lehman Schlozman at Boston College, and provided wonderful resources and inspiration for me to start collecting extensive data on lobbying histories of S&P 500. Working with Henry, Sidney and Kay taught me to ask big and important questions, and that one can never have enough data. As chair of my committee, Henry was an incredible font of ideas and suggestions, and his rock-solid support and willingness to go to bat for me throughout the process were incredible. Paul Pierson, who chaired my orals, was especially helpful in posing the really hard questions, and reminding me that the questions worth answering are almost always the really hard questions. He also helped me to appreciate that politics is a dynamic process, not a static set of relationships, and the real story is almost always how processes play out over time. David Vogel, who has been an inspiration as a leading scholar of business and politics, was always incredibly helpful situating my scholarship in the proper context and reminding me what contributions I could make to the literature. David’s ability to cut through BS and instantly identify the key points has always been uncanny. Neil Fligstein, who was kind enough to serve as the “outside” member of my committee, provided me with many helpful insights as well and a very useful sociologist’s take on the subject. I also benefited greatly from an ongoing dialogue with several other faculty members at Berkeley, whose thoughts, comments, and questions influenced my approach. For both their insights and their time, I thank Jacob Hacker, David Karol, Todd LaPorte, Robert Reich, Gordon Silverstein and Robert Van Houweling. My fellow graduate students at Berkeley were also a wonderful and dynamic bunch, and in particular, my thinking especially benefited from extended conversations with Devin Caughey, Miguel de Figueiredo, Joshua Green, Matthew Grossman, Peter Hanson, Iris Hui, Andrew Kelly, Sarah Reckhow, and Alex Theodoridis. I also want to thank several political scientists not at Berkeley who provided valuable feedback and encouragement along the way that transcended the boundaries of institutional affiliation: Frank Baumgartner, Richard Hall, David Hart, Beth Leech, Suzanne Robbins, and especially James Thurber, who was extremely generous in letting me attend his “Lobbying Institute” at American University and whose advice and encouragement were invaluable. i At the beginning of my fourth year, I left Berkeley and headed to Washington, where Bruce Cain generously welcomed me to the University of California, Washington DC Center that he directs, providing me a home along with much stimulating and productive conversation. During this year, I conducted interviews with corporate lobbyists, and I kindly thank the 60 anonymous lobbyists who each willingly gave up an hour of their lives to talk with a total stranger and without whom none of this would have been possible. My fifth year I was fortunate enough to spend in the Governance Studies Department of the Brookings Institution, where a research fellowship give me the freedom to focus on writing my dissertation full-time. Brookings was an absurdly stimulating environment, and during my too brief ten month stint I benefited tremendously from the many conversations I had with incredibly intelligent and kind colleagues: Sarah Binder, E.J. Dionne Jr., William Galston, Thomas Mann, Pietro Nivola, Jonathan Rauch, R. Kent Weaver, Darrell West, Benjamin Wildavsky, and Benjamin Wittes. My sixth year was spent as an APSA Congressional Fellow, and I thank the Office of Senator Robert Menendez for hosting me and the American Political Science Association and especially Fellowship Director Jeffrey Biggs for providing me with this unique window into the sausage-making process. I enjoyed a once-in-a-lifetime opportunity to work on passing a major financial regulatory reform bill, and in the process, to see the lobbying process up close and personal. My dissertation was also improved through many conversations with dear friends who were not political scientists but nonetheless are still brilliant political and social science minds. A few deserve special thanks for their insights and interest along the way – Ryan Blitstein, Jacob Harold, Heather Klemick, Jonathan Jacoby, Lisa Lerer, Bob Rijkers, Clay Risen, Katie Selenski, and Elbert Ventura. I also owe an insurmountable debt to Annalise K. Nelson for copy-editing my entire dissertation. Finally, I thank my parents, Ava and Lowell Drutman, for believing in me from as far back as I have memories, for encouraging me at every step of the way, and for providing the many opportunities that made a Ph.D. possible. Without them, I would not be where I am today. ii TABLE OF CONTENTS CHAPTER 1: GROWTH, INFLUENCE, AND THE STUDY OF CORPORATE LOBBYING..…... 1 CHAPTER 2: WHEN AND WHY DO COMPANIES LOBBY?.................................................. 22 CHAPTER 3: HOMEOWNERS AND RENTERS ................................................................... 36 CHAPTER 4: THE ROLE OF THE POLITICAL AGENDA, PT I: REGULATORY POLITICS….. 55 CHAPTER 5: THE ROLE OF THE POLITICAL AGENDA, PT II: DISTRIBUTIVE POLITICS... 75 CHAPTER 6: LEARNING TO LOBBY. ................................................................................ 88 CHAPTER 7: SIZE, COMPETITION, PARTISANSHIP, AND COMPLEXITY: ASSESSING ALTERNATIVE HYPOTHESES FOR GROWTH.....................................................................113 CHAPTER 8: THE EVOLUTION OF CORPORATE LOBBYING AND THE FUTURE OF AMERICAN PLURALISM...............................................................................…………… 126 APPENDIX A – THE INTERVIEW SCRIPTS……………...……………………………… 146 APPENDIX B – ISSUES ON WHICH COMPANIES WERE LOBBYING………...……………. 158 APPENDIX C – INDUSTRY AND REGULATION CATEGORIES………………...…...……. 160 REFERENCES........………………………………………………………………………164 iii CHAPTER 1: GROWTH, INFLUENCE, AND THE STUDY OF CORPORATE LOBBYING Over the last three decades, and particularly over the last ten years, there has been a significant expansion of private

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