by ROBERT REICH
Senator Joe Manchin has been Congress’s largest recipient of money from natural gas pipeline companies. He just reciprocated by gaining Senate support for the Mountain Valley pipeline in West Virginia and expedited approval for pipelines nationwide. Senator Krysten Sinema is among Congress’s largest recipients of money from the private-equity industry. She just reciprocated by preserving private-equity’s tax loophole in the Inflation Reduction Act.
We almost take for granted big corporate money in American politics. But it started with the Powell memo.
In 1971, the U.S. Chamber of Commerce asked Lewis Powell, then an attorney in Richmond, Virginia (and future Supreme Court justice) to report on the political activities of the Left.
Richard Nixon was still president, but the Chamber (along with some prominent Republicans like Powell) worried about the Left’s effects on “free enterprise.” Powell’s memo — distributed widely to Chamber members — argued that the American economic system was “under broad attack” from consumer, labor, and environmental groups. In reality, these groups were doing nothing more than enforcing the implicit social contract that had emerged at the end of World War II — ensuring that corporations were responsive to all their stakeholders, not just their shareholders but also their workers, their consumers, and the environment on which everyone depends.
But Powell and the Chamber saw it differently. Powell urged businesses to mobilize for political combat.
Business must learn the lesson . . . that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination—without embarrassment and without the reluctance which has been so characteristic of American business.
He stressed that the critical ingredients for success were organization and funding.
Strength lies in … the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.
On August 23, 1971, the Chamber distributed Powell’s memo to leading CEOs, large businesses, and trade associations. It had exactly the impact the Chamber sought — galvanizing corporate American into action and releasing a tidal wave of corporate money into American politics.
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