Deregulating America

THE OPEN MIND – “DEREGULATING AMERICA”
HOST: RICHARD HEFFNER
GUEST: MICHAEL PERTSCHUK, FORMER CHAIRMAN FTC

HEFFNER: I’m Richard Heffner, your host on THE OPEN MIND. And my guest today, for some years considered the regulatory bête noir of American industry, sort of an official Ralph Nader, is former member and chairman of the federal Trade Commission, Michael Pertschuk. Now Mr. Pertschuk is the author of W. W. Norton’s Giant Killers, a rather fast-paced celebration of what he calls the most generous impulses of the American tradition as embodied in the handful of public interest lobbyists who do manage at times to take on, and even to bring down to defeat, giant corporations and giant industries and giant professions whose vast resources enable them to retain legions of enormously well paid private interest lobbyists. Now chairman of the Washington based Advocacy Institute which councils do-gooders in their public interest lobbying efforts, he seems so impressed with their achievements that I want to ask Mr. Pertschuk, right off, whether even their generous impulses could begin to fill the governmental void left by the deregulatory thrust of the 1970s and ‘80s. In fact, should we really be celebrating this sort of privatization of regulation?

PERTSCHUK: The answer to your first question is no. That is to say, no citizen lobbies can replace a strong and effective government – which sees as its responsibility, protecting citizens against private greed. But it reminds…you reminded me of a story actually that really took place in Washington several years ago – and Robert Redford came to Washington to lobby on an environmental issue. And it was pretty big stuff, even for the senators, and he got admitted to every office and he was…he was travelling…he was working with Joan Claybrook, who is a wonderful lobbyist who has worked with Ralph Nader for many years. And they were lobbing on an environmental issue and for three days every door swung open to him and every senator was polite and listened. And at the end of that time his side of the issue got exactly seven votes out of the hundred votes in the Senate. And he turned to Joan and he said, ‘My God, how do you people stand it? How do you put up with it?’ And Joan’s answer was quite honest. She said, ‘We don’t always lose…(chuckle) we don’t always lose.’ So the answer is, not that there’s a balance of resources or power, or that we ought to be…we ought to say, look, the government is responsive to citizens all the time, let’s not worry about our democratic institutions. The truth for this and one of the reasons for writing the book is that most people think that the government never pays attention to citizens, that they just pay attention to organized special interest.

HEFFNER: But you know, I felt, as I read Giant Killers, I couldn’t help but think back to the ways in which President Reagan put his emphasis upon volunteerism. He said, look, let government withdraw from this area and that area and let us put our emphasis upon voluntary actions. And I just wanted to make it straight that you either were or were not celebrating volunteerism as a substitute for government regulation.

PERTSCHUK: Well, I mean…I think…you know, we’ve talked about this before. In many ways there is much too much regulation in our society and most Americans do not like government and do not like regulation, but regardless of whether it was 1980 and the Reagan landslide, or ’84, if you really ask the American people if they expect their government to protect them against environmental hazards and against corporate overreaching, against unsafe products, the answer is ‘Yes.’ We don’t particularly like government, but we know that we can’t, as individuals, protect ourselves against powerful institutions. And in many cases, public interest lobby, citizen lobbies, have been successful in stopping the Reagan administration from going to Congress and asking Congress to dismantle the safety and consumer protection laws. They haven’t really been able to do that. They have been able to put the agencies that…the watchdog agencies like the Federal Trade Commission to sleep. I mean, if I were…I mean, if I were a consumer who was cheated today in the marketplace I would go to my State Attorney General or my local Consumer Protection Office. I’d probably not bother to write to the regional office of the FTC, whereas ten years ago I might have had some hope.

HEFFNER: How about the Advocacy Institute?

PERTSCHUK: Well, first of all, it’s a very modest group that we’ve put together. We have a good deal of fun helping citizen groups…not individuals, but groups who’ve come to Washington, groups like Common Cause, groups like SANE, groups of new American citizens who are just discovering the democratic process – like some Hispanic voters in the Southwest – help them learn the ropes of Washington, help them learn something about the legislative process, and the tricks of the trade of lobbying. I mean, this program is called OPEN MIND…most…and I…most people do not have an open mind about lobbying. They think of lobbying as something awful, something sleazy, something inherently corrupt. The fact of the matter is that lobbying, when it is understood to be the role of citizens petitioning their government for what they believe in – as groups, as voluntary associations – can be the heart of democracy. And many people feel strongly about government, feel strongly about laws, either for or against them, and give up because they don’t really feel that anyone listens and they don’t know how to make their voices heard.

HEFFNER: But isn’t that because of that old question, how many legions does the Pope have? How many legions do the good do-gooders have?

PERTSCHUK: Well, one of the stories in the book…and the book essentially is a series of stories, and I learned a lot from them…is the story of how a group of citizens came together and stopped the building of the MX missile. Now the MX missile was a huge nuclear weapon system that both Presidents Carter and Reagan wanted. It wasn’t a partisan issue. They wanted to build two hundred of them, which m any citizens’ groups felt would have created a very dangerous system. Whether or not they’re right or wrong is beside the point. But over a three year period I would guess a total of about twelve thousand citizens around the country, from different Congressional districts who cared very deeply about arms control, so deeply that they took the time to learn the facts about the issue – to study the issue and took the trouble to learn something about their Congressman, not only who he or she was, but what he or she felt, what pressures were on that Congressman, what was in that Congressman’s mind, what troubled him, what moved him, and they worked in the districts. They developed local citizen coalitions of different groups and they varied —it might be a church group in one district, it might be a Common Cause group or a SANE group or a FREEZE group in another district. They had a bridge with a small group of lobbyists in Washington, also working for these groups. Lobbyists in Washington didn’t change very much…didn’t change votes, they didn’t do what people think lobbyists do, which is to buy lunches and try and weezle votes out of people. The lobbyists in Washington found out what was happening for the citizens back home – what the status of the legislation was, what the Congressmen…each of the Congressmen was thinking about – and those people in those districts made their voices heard and many of them changed votes. Now, this is as few as two or three hundred people in a district who felt strongly about an issue, strongly enough to work hard, strongly enough not to be frustrated when they lost one or two votes, but to keep coming back and they could win.

HEFFNER: Look, you’re very enthusiastic about t his and you write an enthusiastic book about a number of instances in which what you consider to be the right side, the good side, won out. So you are talking about successful public interest lobbying.

PERTSCHUK: I am, I am.

HEFFNER: Ah, you know it reminds me a little of the movies of the thirties, when you’d have Jimmy Stewart coming to Washington and representing the people…

PERTSCHUK: Right, right – Mr. Stewart…

HEFFNER: …’Mr. Smith Comes to Washington’, and you have the organization at the grass roots. In practical terms, in a nation of nearly a quarter of a billion people, for whom do the lobbies generally work?

PERTSCHUK: Well, do you want to talk about numbers?

HEFFNER: Sure!

PERTSCHUK: My guess is there…

HEFFNER: …I want to talk about power and achievement.

PERTSCHUK: Well, well, my guess is…and it’s not a guess, it’s an educated guess – there are about forty thousand lobbyists in Washington, lawyers and lobbyists. Most of them work for corporations, most of them work for trade associations and corporations with private economic interest. There may be two hundred to two hundred fifty public interest or citizen group lobbyists in Washington. So if you look at those odds, the odds are overwhelming. And it is true that I just write about successes and it is true that the public interest or the …the public interest often loses and that special interests have influence and money does still speak in Washington, but it isn’t quite as bad as all that. I mean, the fact of the matter is that most…I mean, what concerned me and what really led to the writing of the book is the feeling of most people when you go out of Washington…even in Washington, that it is not worthwhile. There is such powerful special interest in Washington and it is just not worthwhile joining Common Cause or voting or getting involved in a campaign or joining…or having a local church group really get involved with trying to let their Congressman know how they feel. It is worthwhile. One of the things that happens with these forty thousand lobbyists, and part of the book…and part of the fun of the book is that when you have a lot of money…the tobacco industry is a perfect example. You know, I tell the story of how the tobacco industry, which is almost a mythic lobby set of people…That is powerful lobby that nobody can really do anything about – tobacco lobby.

HEFFNER: But you beat it once.

PERTSCHUK: Well, yeah. But…but part…part of what happened is that the tobacco lobby beat itself. I mean, this was a case in which the Heart Association, the Lung Association, the Cancer Society…These are voluntary citizen associations. Not every political…after ten or fifteen years of getting…of, you know, they send their elected president to Washington, he testifies and says cigarette smoking will kill 300,000 people a year, Mr. Congressman, please do something about it. Finish testifying, go back home, the tobacco lobby takes over and nothing really happens. Finally, in the early ‘80s, the Lung, Heart and Cancer Societies got some very good, professional lobbyists in Washington and they carried on a campaign. This was the legislation to put the new warnings, very strong warnings, very specific, about smoking causing lung cancer and heart disease and emphysema and causing hazards to pregnant women and the like, which the tobacco industry fought very hard. One of the things that happened is that when the tobacco industry got nervous, it went out and hired every lobbyist in Washington that it could buy – liberal, democratic, former liberal/democratic Congressmen and conservative republicans and former House members, and former Senators – and they hired everybody. Well, what happens when you do that is that they begin to trip all over each other. These lobbyists are up on the hill, they’re all telling different stories and…and…and they …they begin to cause problems for themselves.

HEFFNER: You know, that’s the trouble with anecdotes. They did trip and you document the way they tripped all over themselves, but the implication is, going back to the old Jimmy Stewart movie, that we can do that, we can trip them up. And look there are two sides to this, clearly. One is the side in which you want to urge people not to turn cynically away from the potential for public interest lobbying.

PERTSCHUK: Right.

HEFFNER: But I had the feeling, as I read success after success that it’s all OK…

PERTSCHUK: …No, no, it’s not all OK.

HEFFNER: …We did it before and we can do it again.

PERTSCHUK: …No, no, no. Richard, if what you’re…what you’re asking is, is this book intended to say that there is nothing wrong with the balance of political power in our country between wealthy economic interests and unfunded citizen interest? The answer is ‘No’. There is a serious imbalance in the country, and the imbalance comes up…uh…and it becomes exacerbated through the growth of campaign financing. I mean, one of the worse things that happened…that’s happened in Washington since I came in the early ‘60s is that it now costs a million dollars for a congressman to run a campaign, ten or twelve million dollars for a Senator to run a campaign, so that every one of these members is looking for money and the source of that money is the corporate lobbies and trade association lobbies. And that really sets the agenda. And that’s a terribly serious problem. This book is not intended to stand by itself. Citizens know that they lose. They read the paper every day and they see that…that…that on tax issues, on…on…consumer issues, environmental issues, they do not win. I don’t have to tell people…write a book to tell people that corporate lobbies often have their way because they know it. But the trouble is you get so discouraged, and I know this among my friends and family and relatives, so discouraged – they say, why should we bother, the system is so corrupt, we shouldn’t even bother. And that’s not right!

HEFFNER: Well, wait a minute. Corrupt, that’s a strange word. I would like to go back to the point…

PERTSCHUK: …Alright…

HEFFNER: …that you made before because in your book you talk about ah…here, let’s see. See, I…I…when I put on the glasses I can read what I want to say. Here you talk about…ah…’This book owes so much to two lunches’ – two friends of yours and colleagues…

PERTSCHUK: …Right.

HEFFNER: …Ah…Thanks for the reminder that beyond craft and story…and they’re interesting stories here, fascinating stories…and they tell of the craftsmanship with which the public interest lobbyists went to work. You said,’…lies democratic promise’. And I understand what you are saying about here…the people, yes. The people become organized or they pick these lobbyists and these lobbyists do their work. But I guess I have to ask you whether the whole theory of lobbying, the acceptance of the notion of ‘This is perfectly fine, this is perfectly acceptable’, really conforms with the power realities of our times. Theoretically? Sure. Practically?

PERTSCHUK: You have a basic theoretical problem in most of these…in most cases in which there is a sort of a diffuse citizen interest and a very concentrated economic interest. An arms manufacturer, the manufacturer of cigarettes, has a very concentrated interest in seeing that the laws protect manufacturing, that interest. Whereas you and I are citizens who are worried about our children smoking, who are worried about arms control generally, have a lot of other things on our minds. It’s a basic disaggregation of interests and an essential problem in a democratic society. But you know, it…it goes back to Tocqueville, who came here in 1830, looked around and found something quite unique about American society, which is a tendency of Americans to group themselves into voluntary associations – not only churches and not then unions, but associations of working people, of those from different countries – to work together in the community, to achieve…to achieve goals of interest to the community. And that’s really what we’re talking about. This…Common Cause is…is an organization with 300,000 citizens. They’re often denigrated as goo-goos or do-gooders, but the fact of the matter is that there is a great tradition of that, and they are a significant force. Now, they are not as significant a force as the Arms contractors. I mean, when you are spending ninety or a hundred billion dollars on Arms…on Arms systems and all around the country there are defense contractors with immense payrolls, that’s a very powerful force. But I didn’t make these stories up. I mean…I…I…you look at the MX missile…I know…

HEFFNER: …The successes, you mean.

PERTSCHUK: …The successes. I mean…there are…The MX missile – you have the president who wanted that MX missile, you had the Army…the Defense Department, the Pentagon with two hundred lobbyists of its own, you had the Arms contractors, you had the Republican leadership of the House of Representatives, you also had much of the Democratic leadership of the House of Representatives who didn’t want to be seen as soft on the Russians and who didn’t like the MX weapon but whose council to the Arms control groups was, ‘Let’s get this weapon out of the way so we can go on to other issues’. Their way to get it out of the way was to have it built. They had enormously powerful structure and they didn’t win! I mean…in 1984, which is the year we looked at, the citizen groups basically convinced a majority of the House…and the …of the House to say ‘No! No more MX missiles’. There is one part of it…there is one element in the story that what I haven’t mentioned that is very important, and it also goes to your question – none of these campaigns would have been possible without strong leadership within the Congress. We take that for granted. In fact, another…in many cases we don’t expect to find good, strong leaders within the Congress. But none of these victories could have been possible without Congressmen and Senators who took the time…and not only on the right side, not only prepared to cast the right vote, but who were able to take the time to act as leaders.
And so much of what…what we found was a partnership between the citizen groups and leaders within the Congress. And there have been good leaders on Arms Control, there have been good leaders on health issues, and that’s a terribly important part of…of the process, when it works.

HEFFNER: Well, you know I’m always delighted when…when a guest mentions Tocqueville’s Democracy in America because maybe someone will go out and buy my edition of it. But thirty-two thirty-three years ago, when I edited Tocqueville’s Democracy in America, in my introduction I was as enthusiastic as you are now about volunteerism and about citizens’ groups, about the importance of this. I think the last three decades may have indicated to us that in the real world the…uh…the combinations, the growth of power on the one side, has been so strong, so overwhelming, that to continue to think in terms of the ultimate potential of the voluntary group is…uh…is not to be terribly realistic, despite these…despite these success stories. And I must say to you, perhaps even on the MX missile business, I don’t know that I totally agree with you that what you achieved was a real achievement. But I do think that this question of lobbying – you’re very much involved now with public interest lobbying. If you had your druthers, given the nature of American society in 1986, 1987, would you be willing to forswear public interest lobbying if at the same time that meant that private interest lobbying were limited?

PERTSCHUK: I wouldn’t give it up. I mean…it…it…because it depends upon what you mean by lobbying. Lobbying is a term that covers a lot of activities. Ah…if…if what we’re really talking about is representation of groups in Washington, it is important. It’s important because it’s very difficult for groups to…to come together and tell their own story and they may have legitimate stories. Even private interest…I mean my objection to the private interest is not that they’re there and that they are there to say, ‘Wait a minute, this regulation may destroy an industry, go slow’ – which is a valid part of democracy – but they’re there not just with their voice but with their campaign contributions and their targeted direct-mail campaigns and the rest.

HEFFNER: If you limit those…

PERTSCHUK: Yes. What I…what I would really do is…I mean, the fundamental reform that would change, I think more than anything else, the balance of forces in this country is public financing of campaigns. I mean, the reason why corporate lobbies and trade association lobbies have disproportionate power is because of the …the…the insatiable appetite of our political system for campaign funds. That drives it. In fact, we’re setting up…one thing we’re setting up in Washington is this small group called Lobbyists Anonymous, or Pack Horses Anonymous. And this is a group of lobbyists who essentially are going to give us anonymous testimonials as to how they are shaken down by Congressmen. I mean…pity the poor lobbyist. And I hear these stories because many of these lobbyists were my friends and colleagues whom I work with on the Hill. They represent a corporate client. They feel a piece of legislation is going to destroy their industry, for good or bad. They call up and they ask for an appointment to see the Legislative Assistant of the Congressman, straight above board. They are shifted from the Legislative Assistant to the Administrative Assistant. He says, ‘I’ve been going through the list. We haven’t heard form you recently. The Senator’s having a $5,000 a plate dinner or a testimonial and we haven’t heard from you and I’m afraid you can’t have an appointment’. Now that’s really…when you asked me about…when you reacted to corruption, that is a form of corruption, and it happens all the time. And it is driven, not so much by the lobbyists trying to bribe and buy up the Congressmen, but by the Congressman who sits there from the day he’s elected, trying to figure out how he can build a big enough kitty so that he can scare off any…any opponent. And this is not just Conservative or Republican Congressmen. These are Democrats, and Liberals, Congressmen whom…who on many issues I respect and you would too. They are forced by the system to…to spend much of their time grubbing from money. And that is corrupting.

HEFFNER: So, one thing you would urge is public financing of political campaigns.

PERTSCHUK: Yes, yes, yes.

HEFFNER: Up to and down to what levels?

PERTSCHUK: Well, I don’t know about the levels because it’s not an area that I’m a specialist on. I don’t…I don’t favor so much the…the further limitations on campaign contributions because they’re hard to police, they’re hard to…they’re hard to regulate. I think, perhaps, raising the limits on individual contributions and limiting the amount of political action committee contributions from corporate and trade associations would be useful. The main need is, of course, an ideal that’s going out of fashion, which is that every serious candidate ought to have free access, minimum access, to the tube, to the radio, in order to develop a fair balance of…of debate with the electorate before the election.

HEFFNER: Yes, but on the one hand you say ‘minimum’, and on the other hand you say ‘balance’. Now, they don’t go together.

PERTSCHUK: No. But if you…if you allow…if you make certain that every serious candidate – I mean, not…and you have problems defining who is a serious candidate – every serious candidate has a certain opportunity, minimum opportunity, to speak, to show himself, or herself, and her ideas or his ideas, to the electorate. Then the extra mount of advertising or exposure is really…is only incrementally unbalancing.

HEFFNER: You know, I’m puzzled that you, the former chairman of the Federal Trade Commission, should say that. Are you suggesting that one or two advertisements, one or two commercials – just let the flag be waved once or twice, or at a minimum – and you’ll settle for that?…

PERTSCHUK: …No. No I’m not…

HEFFNER: …Are you suggesting that the great campaigns, the overwhelming campaigns in pushing goods, don’t work when they come to pushing candidates?

PERTSCHUK: Well, I have a certain amount of faith…I’m not talking about one or two commercials. I’m talking about something like the European system, in which you really have time set aside during a campaign for the candidates to debate, to face each other, to get an opportunity to talk seriously, not in terms of five or ten second or thirty second commercials, about what they stand for – a series of substantial, public exposures of the candidates during the heart of the campaign. Then the advertising camp…Look, the advertising campaigns can be deceptive and misleading and manipulate voters and they’re troublesome. I think that…my first priority, however, would be to remove…to remove the incentive to raise all that money by giving legitimate candidates at least some modest and…but substantial access to the tube and that would…and that would help a lot.

HEFFNER: Yes, but if I remember correctly, and it may not be true any longer, there was a time when we were the only people who had the temerity to say that you can buy time. Before then only God could buy time. But saying buying political time, if you talk about other nations in which time is made available to all, and we put quotation marks around ‘serious’ candidates because we don’t know how to define that, but we could, arbitrarily, of course. The question is, can you then go further than that and buy time. And if you have the resources and buy more and more and more time, have you solved the problem?

PERTSCHUK: You haven’t solved the problem.

HEFFNER: Unless you limit the time that can be bought.

PERTSCHUK: Yeah, yeah. I mean, if you are…if you’re talking designing an ideal scheme, I think you would clearly try to achieve some kind of balance. I…and treat the public airways as a public good. But I’m talking…I’m not talking about the millennium, I’m talking about what reforms now would really…would really begin to…to…to restore some balance, and I think reforms on campaign financing, and…especially coupled with public financing of campaigns, and some guaranteed access to the public media, would go a long way.

HEFFNER: Mr. Pertschuk, I must ask you…we just have two minutes left…I must ask you also whether you would be supportive of the legislation that is being suggested that would limit the opportunities that former Congressmen and Senators have, or other government officials, to become lobbyists, to speak for one interest or another?

PERTSCHUK: Well, I…I…I’m not sure I would do that. I think that the system of public disclosure, of…of real disclosure, of who lobbies for whom and where the money comes from and who gets the money – which has really become part of our system in the last fifteen years – coupled with the ability of groups like Common Cause and candidates to point a finger to where their opponents get their money, and to the kind of money that special interest spends on campaigns and otherwise, is a very healthy corrective. Sunshine, as a disinfectant, still works.

HEFFNER: A good old Liberal, aren’t you? Sunshine, disinfectant…

PERTSCHUK: yes, yes, and reconstructive.

HEFFNER: In the few seconds remaining, if you had to make a bet – what would you bet is going to happen in this whole area?

PERTSCHUK: I think that the sys…I think that these public interest groups have the potential for gaining real strength. I believe that as a matter of faith.

HEFFNER: Just as a matter of faith. It’s not making a guess as to what is going to happen. But I don’t want to press you on that. That’s not fair. Thank you so much for joining me today. It’s a fascinating subject and obviously it has so many ramifications and so much about political life.

PERTSCHUK: It was a pleasure being with you.

HEFFNER: Thanks again and thanks for Giant Killers.

PERTSCHUK: Thank you.

HEFFNER: And thanks, too, to you in the audience. I hope you’ll join us again next time. And if you care to share your thoughts about today’s program, please write to THE OPEN MIND, P.O. Box 7977, FDR Station, New York, NY 10150. For transcripts send $2.00 in check or money order. Meanwhile, as another old friend used to say, “Good night and good luck”.

Continuing production of this series has generously been made possible by grants from: The Rosalind P. Walter Foundation, The M. Weiner Foundation of New Jersey, The Mediators and Richard and Gloria Manney, The Richard Lounsbury Foundation, Mr. Lawrence A. Wien Pfizer Incorporated, and The New York Times Company Foundation.