Big Three Ask for Money, Spend On Lobbying


Executives for the Big Three auto makers are in Washington again asking for money. (Did you know they drove to Washington this time?!?!) While groveling for billions of dollars to aid the ailing industry, the Big Three are also spending heavily on lobbying and campaign contributions. CBS News (via Consumerist) reports on the influence spending:

The Big Three may be spending big on lobbying, but their campaign contributions aren’t keeping pace with fellow bailout seeking banks and financial institutions. Open Secrets’ Eliza Krigman wrote about this last month, suggesting that the auto industry’s lesser contributions create a situation whereby lawmakers feel as though they owe the industry little:

Why, when Wall Street took the fast lane to grab its share of $700 billion in federal bailout funds, does the auto industry seem stuck in neutral? The carmakers’ campaign contributions to Congress suggest one reason: Most lawmakers, especially those on the finance committees that heard this week from pleading GM, Ford and Chrysler executives, don’t owe much payback to Detroit.

Meanwhile, the primary beneficiaries of the available bailout money — securities and investment firms, commercial banks, mortgage companies and insurers — are among the top 15 contributors to federal politics, according to the nonpartisan Center for Responsive Politics. By comparison, and perhaps as another sign of Detroit’s hard times, the automotive industry ranks 34th among contributors to Congress, giving just $8.7 million this election cycle, far behind Wall Street and even below crop producers, retailers and accountants. The industry’s ranking, which also accounts for contributions from car dealers, has been steadily slipping, from 16th in 2000 to 20th in ’02 and 25th in ’04 and ’06.

In the past, the industry has gotten by with this level of contribution to lawmakers campaigns. Back in 2006, Sunlight’s Larry Makinson on the Sunlight blog about the nexus between contributions and the inaction in Congress on reforms to CAFE standards that could have made the industry into less of a basket case. Makinson then left an ominous warning:

Members need [money] to fill the coffers of their reelection campaigns – in the last election the average House race cost just over $1 million; Senate seats were going for about $7.2 million. Industries respond well to that need, showing up at fundraisers, delivering checks on a regular basis, and thereby building relationships that last for years. Like Pavlov’s dogs, incumbents have come to expect the contributions to roll in year after year, as long as the industry remains relatively happy.

Of such logic are loopholes made. And also dilemmas. When an industry can stave off disaster either by retooling their factories and business plans or by living a few more years on an economically-illogical loophole from Congress, which do you think they’ll choose? And for how long? And at what price?

Washington is full of unpleasant choices to be made, and they’re tough enough without the logic of cold, hard cash getting in the way. And I don’t just mean the kind that’s stashed away in freezers.