[Reader-list] When corporations capture the state: corporate lobbying and democracy

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When corporations capture the state: corporate lobbying and democracy
Praful Bidwai <http://www.tni.org/users/praful-bidwai>
 
 
  
    
 May 2010  
  
    
 
 
 <http://www.tni.org/article/when-corporations-capture-state-corporate-lobby
ing-and-democracy> 
 
 
> Washington-style practices of corporate lobbying have crept up on New Delhi
> politics, subverting the policy-making process to meet the profit imperatives
> of private corporations. The new trend of corporate lobbying in India presents
> a real and serious threat to democracy.
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> Several recent developments, including the release of intercepts of a
> telephone conversation between corporate lobbyist Niira Radia and a Dravida
> Munnetra Kazhagam <http://en.wikipedia.org/wiki/Dravida_Munnetra_Kazhagam>
> MP; a Parliament uproar over the underselling of telecommunications spectrum;
> and media stories on the growing power of the lobbyist­politician­policymaker
> nexus, have highlighted a major affliction of the Indian polity which should
> concern all conscientious citizens.
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> Lobbyists have come to acquire enormous clout, to the point of influencing the
> choice of Cabinet minister, nominating key bureaucrats, and formulating
> economic and industrial policies at the nuts-and-bolts level.
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> Indeed, the tapped telephone conversation shows that Ms Radia played a pivotal
> role in ensuring that the telecommunications portfolio would go to the DMK¹s A
> Raja in the second government formed by the United Progressive Alliance, and
> that he would be elevated to Cabinet rank. Also discussed was the power
> struggle within the DMK, which saw Mr M Karunanidhi¹s immediate family
> loyalists outmanoeuvre their cousins, in particular Mr Dayanidhi Maran, who
> was moved from the communications portfolio he held in UPA-1 to textiles.
> There are other instances too of lobbyists intrusively interfering with
> policymaking processes, political party affairs and parliamentary dynamics in
> ways which would have been unthinkable only years ago.
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> Crony capitalism in New Delhi
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> Corporate lobbyists have become important mediators ‹ and sometimes active
> players ‹ in business-government relations in a number of areas, including the
> infrastructure (highways, ports and huge projects under the Jawaharlal Nehru
> National Urban Renewal Mission in 63 cities), energy (including gas, oil and
> energy), telecom (where the 3G auction bids show that the earlier 2G-spectrum
> were sold at a fraction of the market price), and mining (where global
> conglomerates have developed stakes running into billions of dollars in
> India's tribal heartland). Not to be ignored is the clout that lobbyists wield
> in military contracts, agribusiness, seeds, civil aviation, and opening up
> retail trade to organised business, including multinational hypermarket chains
> like Metro, Carrefour and Wal-Mart.
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> Corporate lobbying has become the highest embodiment of crony capitalism in
> India. It has developed into a formidable industry, with at least 30 major
> firms based in New Delhi alone. Each of them appoints dozens of
> "facilitators", "account executives", point-persons and lawyers, all dedicated
> to securing sweetheart deals and licences for their clients, and just as
> importantly, ensuring that their clients' rivals don't get them.
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> Some of these companies, such as Integral PR, Perfect Relations and Genesis
> PR, started as straightforward public relations firms, but have diversified
> into corporate advocacy and lobbying. Others, like Niira Radia's Vaishnavi,
> Neucon and Noesis, Suhel Seth's Counselage, or Deepak Talwar's DTA Associates,
> were launched with corporate lobbying as their core business.
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> Unlike advertising agencies, which offer certain services to whoever is
> willing to pay, lobbying companies are intimately allied in what may be called
> political ways with specific business groups. Since they have access to
> business secrets, including knowledge of malpractices, their loyalty to
> individual industry magnates is all-important. In addition, there are
> individual entrepreneur-lobbyists like MPs Amar Singh and NK Singh, who work
> for different clients.
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> Unsubtle practices and media manipulation
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> Common to them are all the slick techniques and skills that successful, if
> unscrupulous, lobbying requires, including ability to cherry-pick facts that
> suit/favour the client; make attractive PowerPoint presentations that suggest
> familiarity with the subject, if not mastery of it; determination not to be
> fazed by hostile interactions; knowledge of which keywords to use and which
> buttons to press.
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> What matters above all is the ability to do social networking, spend lavishly,
> throw dazzling parties and please industrial magnates, politicians and key
> bureaucrats by finding out their strengths and weaknesses and shamelessly
> exploiting them to the point of blackmail. The lobbyists aren't "the hidden
> persuaders" of the advertising world. They are typically flamboyant people,
> high-profile, even exhibitionist.
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> In some cases, e.g. Mr Talwar's, success in swinging spectacular deals for his
> clients like Coca-Cola depends on personal proximity to key bureaucrats, such
> as former principal secretary to the Prime Minister AN Varma during the 1990s.
> (Mr Talwar has recently cultivated civil aviation minister Praful Patel,
> allegedly to promote his own interests in duty-free shopping at airports.)
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> In many cases, it's the sheer number of people on their payroll which give
> lobbyists the enormous reach and influence they wield‹ranging from business
> journalists to TV anchors, from personal assistants to middle-level
> bureaucrats all the way to top-ranking ministers, and from law firms (who can
> deliver subtle threats) to key officials in the income-tax department, who can
> be used to coerce and cajole decision-makers. Some TV anchors were implicated
> in lobbying for high berths in UPA-2 for certain MPs. Corporate lobbyists
> assiduously cultivate the media, which duly returns the favour.
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> As many journalists well know, the second mode of operation is typical of some
> of India's biggest corporate conglomerates, who plant their loyalists in every
> major media outlet and agency. Their key personnel get to know ‹ typically in
> advance of the news editor ‹ just which stories are set to appear in all the
> relevant papers which might affect their interests or their rivals'. They work
> in a mafia-style manner to kill the story if it's inconvenient or "hostile",
> and to have it played up if it favours them. This doesn't have to be done at
> the state, divisional or district level. Controlling the top papers and
> channels at their headquarters and influencing other key agencies is effective
> enough. If all else fails, what always works is the threat of withdrawing
> advertising support.
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> From Washington to New Delhi: a worrying new trend in Indian politics
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> The reach, political influence and financial power of the corporate lobbyists,
> as well as the fervour of their activity, has acquired wholly new and menacing
> dimensions in the past decade or so. It's not that there were no lobbyists
> earlier. There were ‹ from individual influence-peddlers like SK Patil and
> Rajni Patel in the 1960s and 1970s, to the organised "liaison agents" of the
> 1980s who hung around Udyog Bhavan and Raksha Bhavan, the headquarters of the
> industry and defence ministries. But the business didn't have an organised
> character, a sharp enough focus, concentration of high-level manpower, and
> even one-hundredth of the ability to secure shady deals.
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> Precisely because India is furiously globalising and energetically pursuing
> neoliberal policies, Big Business today has an incomparably bigger stake than
> in the past in securing windfall contracts for highway, airport and flyover
> construction and special economic zones; in privatising natural resources and
> obtaining leases on land, water, minerals and forests; in rigging the capital
> markets; in opening up foreign air travel routes to private airlines; in
> helping multinational corporations to penetrate retail trade; in taking over
> city bus transportation at assured super-profits; and in invading the public
> sphere so that foodgrains can be diverted to alcohol production, and pricey,
> artificially flavoured biscuits can displace wholesome, nutritious, freshly
> cooked food in mid-day meal schemes for school children. So much for the
> much-vaunted "free market"!
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> Such blatant manipulation of the entire policy-making apparatus makes
> old-style "licence-permit Raj"‹always exaggerated for its supposedly
> debilitating impact on the economy, and forever deftly manipulated by business
> groups‹pale in comparison. Then, the bureaucrat had to be influenced and
> induced to open up a partially-closed system. Now, the bureaucrat is an
> already-willing ally of Big Business. The contest is over who will secure the
> favour first to keep the rival out.
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> Secondly, lobbying is about recruiting as many retired top-ranking public
> servants as possible so they can influence their former colleagues and juniors
> on their clients' behalf. Thus, private oil, gas and electricity companies,
> steel producers, telecom corporations and airlines have all recruited retired
> bureaucrats or public sector executives. This pernicious practice should be
> banned and punished. No retiree should be allowed to accept any position in a
> related company for 10 years.
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> Another characteristic of the new-generation corporate lobbyists is their
> strong global connections. They work closely with organisations like the
> US-India Business Council and with major Western lobbying firms like Patton
> Boggs and Burson-Marsteller, which are big players in Washington. The US
> capital is said to be crawling with 17,000 registered lobbyists. It won't be
> an exaggeration to say that the US-India nuclear deal would probably not have
> gone through the US Congress without the efforts of the USIBC, Patton Boggs
> and the American-Israeli Political Action Council.
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> Corporate lobbying is far more insidious and commercially collusive than the
> politician-criminal nexus. It's also much more damaging at the national level.
> Lobbyists exert the most pernicious conceivable influence on policy-making and
> corrupt the process of democracy. They introduce irrational and extraneous
> elements in decision-making and subvert the public interest. They add uniquely
> to sleaze, venality, cynicism and corruption in the entire polity.
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> Way back in the 1980s, the Indian political class acknowledged the corrosive
> role of lobbyists in military contracts and altogether banned middlemen from
> defence purchase negotiations. But now it has succumbed to that very influence
> on a gigantically greater scale ‹ not just in military contracts, but in every
> sphere. Unless this toxic influence is removed, and lobbying is outlawed and
> punished, it will undermine and hollow out Indian democracy, our most precious
> possession. Democracy must be defended against business manipulation and
> predatory corporate lobbying.
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>  Praful Bidwai <http://www.tni.org/users/praful-bidwai>
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> Independent Journalist
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> TNI Fellow and former senior editor of The Times of India, Praful is a
> freelance journalist and insightful columnist for several leading newspapers
> in South Asia writing regularly on all aspects of Indian politics, economy,
> society and its international relations. He is an associate editor of Security
> Dialogue, published by PRIO, Oslo; a member of the International Network of
> Engineers and Scientists against Proliferation (INESAP) and co-founder of the
> Movement in India for Nuclear Disarmament (MIND).
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