When lobbying skirts close to bribery

08 Feb 2011

My attention was drawn to an obscure article on the BuffaloNews.com website linking Verizon’s sizable lobbying budget ($9.3/€6.8 million from 2006 -2009 to State and local government) to considerable subsidies ($614 million or $3.1 million per job) that the company is poised to receive in exchange for building a proposed data center in Niagara County. The publication points out, rather sensibly, that the two could just be coincidental.

In recent years, Verizon has employed anywhere from seven to fourteen in-house lobbyists in addition to retaining outside lobbying firms - fourteen last year - to make sure lawmakers understand the ‘company’s point of view.’ Most of $1.2 million donated in the past five years has gone to Republican and Democratic campaign committees whose main task is to re-elect incumbents to the State Senate and Assembly.

Of course, it would be wrong to single out Verizon as the only telco that engages in lobbying – the practice is endemic and, it seems, a ‘necessary’ cost of doing business in the USA. But Verizon’s activities are dwarfed by Google that ‘invested’ $5.16 billion on lobbyists in 2010, according to the Lobbying Disclosure Act Database.

With issues like net neutrality, online privacy and online tracking getting legislative attention, it’s no surprise that the company’s lobbying budget continued to increase throughout the year. Google spent more money on lobbyists in 2010 than Yahoo, Facebook and Apple combined.

Allow me to digress for just a moment to mention the case where US regulators fined Alcatel-Lucent $137 million and savaged the telecom equipment manufacturer for fostering a corporate culture that allowed millions of dollars in ‘bribes’ to be paid to foreign officials to win contracts.

The bribery affair, which extended to Alcatel-Lucent’s operations in Asia and Central America, is alleged to have taken place between 2001 and 2006. The US Securities and Exchange Commission alleged Alcatel-Lucent’s subsidiaries used sham consulting agreements to funnel more than $US8 million in bribes to government officials in order to obtain or retain lucrative contracts.

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