Lobbying seeks to influence politicians or others in position of power to legislate or take actions in favor of those for whom they are lobbying. People who conduct lobbying are called lobbyists.
Lobbying isn’t new. In fact, it’s probably been around as long as people assembled into societies governed by a handful of people. In the United States, William Hull became the first lobbyist in America in 1792 by the Virginia veterans of the Continental Army to lobby for additional benefits. Lobbying became commonplace during the late 1800s and into the early 1900s, eventually curtailed in 1946 through the first lobbying laws.
How It Works
The First Amendment of the Constitution of the U.S. states:
Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances. Cornell University Law School.
Lobbyists petition the government on behalf of the people. Although we tend to think of lobbyists as petitioning on behalf of special interest groups, some of which run counter to our own interests, in truth we are all part of one special interest group or another. We may be gun owners or eschew firearms; we may believe in a free internet or a regulated internet. There’s guaranteed to be lobbyist representing one or more of these interests somewhere in Washington, D.C., or the state capitals of the U.S.
Lobbyists exist to explain each special interest to the legislators in the government. With so much to understand about their constituents, it would be next to impossible for everyone in politics to understand the nuances of all issues in their jurisdiction. Lobbyists, then, become experts in the issues pertaining to the concepts they represent, explain them to the elected officials, and attempt to influence laws based on the transfer of this knowledge.
Lobbying works in different ways. Individuals may lobby their elected officials independent but, more often than not, special interest groups or businesses hire lobbyists or lobbying firms to lobby for them.
Lobbyists may meet in groups or privately with politicians. A brief, or short paper, that details the facts about the issue may be provided as part of the education process. Lobbyists may also prepare talking points for politicians who let them know they are favorable to the cause or special interest the lobbyist represents.
Anyone may establish themselves as lobbyists, and anyone may lobby an elected official on behalf of an organization. It is more difficult, perhaps, to make an appointment with a busy official for the average person than for a lobbyist with whom the politician has a working relationship. Politicians may rely on lobbyists for updates and as a conduit to information that’s germane to the ideology appealing to their constituents.
Examples of Lobbying
There are many examples of lobbying.
- Health care lobbying: Pharmaceutical and medical device manufacturers lobbied President Barack Obama to pass the 21st Century Cures Act. More than 400 groups banded together to lobby the president to pass a law that would speed up the process of approval for drug and medical device regulatory approval, increases funding for the National Institutes of Health and approves money to help fight opioid addition, among other things. The legislation also boosts funding for research and treatment for mental illnesses. Critics contend that speeding up the approval process for drugs and medical devices puts patients at risk, but those suffering from diseases that are waiting for medicines to be approved were able to lobby for the bill successfully.
- Consumer affairs lobbying: Consumers are concerned about the effects of genetically modified organisms (GMOs) on the food chain. Consumers expressed the need for GMO disclosure on the labels of food products and packaging. The Grocery Manufacturers Association, Food Marketing Institute, and Coalition for Safe Affordable Food — which includes hundreds of groups, including the Agricultural Retailers Association, Corn Refiners Association, National Association of Wheat Growers and National Milk Producers Federation — all wanted to ensure flexibility to label their products as they saw fit. They wanted to control the labeling requirements before the government set strict and untenable requirements on their industries. Therefore, they lobbied for the bill, knowing that their customers demanded it but ensuring that the bill was written favorably for their industries. The result is that product labels may disclose GMO status or consumers can be prompted to scan a quick response code to visit a website that reveals the information.
- Taxation lobbying: Did you know that Olympic medals were taxed? Medals and prizes won by both Olympians and Paralympians were taxed by the IRS, which seemed unfair to many Americans. The Olympic and Paralympic committee successfully lobbied the U.S. Congress to waive the taxes on Olympians’ medals and awards. Olympians can still be taxed for lucrative endorsement deals, but that seems fair to most Americans, who like to see Olympic and Paralympic talent rewarded and not punished by taxes.
- Firearms ownership: The most controversial lobbying example is the National Rifle Association (NRA). The NRA has been able to protect the rights of Americans to bear arms and own almost any type of firearms thanks to its continual lobbying efforts.
How Lobbying Applies to Small Business
As you can see from these examples, lobbying has both a direct and indirect impact on small businesses. While a small business is unlikely to hire a personal lobbyist for its firm, small-scale farmers banded together through the auspices of their industry groups to lobby for choices when labeling GMO products. The results are labeling requirements that satisfy consumer demand by being flexible enough to allow any scale of farmer to follow them.
Small businesses may band with other companies, businesses, or trade groups to influence legislation that impacts their businesses and industries. Manufacturers may lobby for changes to environmental or trade laws favorable to their industry. Small service providers may lobby for changes to taxation laws or other laws to expand markets. The complexities of lobbying and the costs to hire a lobbyist force many small businesses to work through industry trade groups or band together with others to lobby for major changes in laws successfully.
Pros and Cons of Lobbying
There are numerous pros and cons of lobbying.
- Defined system to present ideas: The lobbying system has been in effect for more than two centuries. As a result, it’s a defined system that enables all groups to share ideas with those in power.
- Build relationships with elected officials: Special interest groups can forge relationships with lobbyists and elected officials through lobbying efforts in ways that may not be possible outside of the lobbyist relationship.
- Provides all with a voice: Everyone is, to some extent, a member of one group or another. We hold beliefs in common with others whether it is for GMO labeling, gun control or advocacy, or faster access to life-saving cures. Because of the efforts of groups and lobbyists, our ideas matter to those in power so that they hear voices other than their own when considering many options and points of view.
- Anyone can lobby: Although hiring a lobbyist or lobbying firm is how many businesses choose to lobby their elected officials, anyone can lobby for any cause. It is a wonderful example of how the democratic process and the protections found in our Constitution can be used to give the public a voice.
- It can take the form of illegal activities: Although lobbying itself is legal, some lobbyists resort to unethical means to achieve their goals. Bribes, for example, or kickbacks are both illegal. To achieve goals for clients, some lobbyists may resort to illegal methods.
- Can act against the public good: In the example previously cited of GMO labeling, the resulting label laws may or may not act in the public’s best interest. The same holds true with fast-tracking U.S. Food and Drug Administration approval of medical devices. For those whom the devices will help, it is a great law. For those who may eventually be hurt by a device or a drug or device fast-tracked without thorough testing, it isn’t good. Lobbyist activities can work against the good of the majority.
- Changes how the government operates: Millions upon millions of dollars are spent on lobbying activities annually. It’s changed how the government acts and what politicians expect.
The Bottom Line
Lobbying is the practice of presenting ideas to someone in a position of power or authority to persuade them to act in a manner that supports those ideas. Small businesses engage in lobbying on their own or by combining with other businesses or trade groups to advocate for policies and laws favorable to their business interests. While lobbying remains legal, it has developed an unsavory reputation due to the potential for the needs of special interest groups to supersede the needs of the majority.