Tobacco Companies’ Lobbying Intensifies in the Face of Increasing Opposition: Another Blow to Trump’s “Drain the Swamp” Campaign Pledge
There are two issues which are the focus for today’s post,
and both have been covered on separate occasions before here in Financial Regulation Matters. In
February we discussed how the stated aims of President Trump, namely to ‘drain
the swamp’ with regards to lobbying influence in Washington, D.C., were immediately
proven to be nothing more than lip-service with the introduction of an
Executive Order that preserved the ability of Congressional and White-House
Officials to lobby after their term has expired. Then, in June, we discussed
how large investors and other financial organisations were beginning to develop
a societally-focused
approach to their business, which translated into a reduction in investment
in companies that profit from providing social ills, like tobacco companies. In
today’s post we will look at an article that was published in The Guardian that discusses the
actualities of the lobbying environment since Trump took office, with particular
attention paid to tobacco firms – ultimately, the tobacco firms, in line with
the revelation that massive concessions have already been made to energy firms,
provide proof if proof were needed that one of Trump’s main campaign pledges
was not only false, but entirely misleading.
The rise
in shareholder activism this year essentially marked the accumulation of an
underlying trend within the business arena concerning socially-concerned business,
one which has seen the development of ‘sustainable finance’ as a genuine
foundation for the future of business (despite the many
shortcomings at present), and also extremely influential investors begin to
the set
the tone with regards to responsible investment. However, that surge in
support for the responsible-investment movement has, rather predictably, led to
a concerted response by those who stand to lose out. One of the key components
of that opposition is the tobacco industry which, everyone should know apart
from the companies themselves apparently, contribute negatively
to society in terms of their products’ effects on public health, and marketing
campaigns designed to entice the young and the poor, amongst a list of other
negative effects. In response to a World Health Organisation (WHO) ‘International Treaty for Tobacco
Control’, one of the leading tobacco companies – Philip Morris – has been
waging a covert war against the Treaty by way of a ‘clandestine
lobbying operation that stretches from the Americas to Africa to Asia’. In
the Reuters report detailing the leaked documents which describe this campaign,
it is stated that because of the anti-smoking treaty it is estimated that 22
million smoking-related deaths will be averted, although Philip Morris responds
by labelling the treaty as a ‘regulatory runaway train’ that is driven by ‘anti-tobacco
extremists’. Yet, whilst the companies continue to aggressively
pursue business in developing countries due to the stringent policies
affecting their business in developed countries, they have found a welcoming
home in the United States which, rather incredibly, adds further weight to the
notion developed by MIT economist Peter Temin that ‘America
is regressing to have the economic and political structure of a developing
nation’.
Since Donald Trump took office, America’s largest cigarette
manufacturer – Reynolds American and Altria Group – have donated $1.5 million
to the President’s inauguration and have hired 17 lobbying firms to ‘have
an active presence on the Hill’, with other leading tobacco companies
following suit. The claim that many of Trump’s appointees ‘have
deep commitments to the tobacco industry’ is seemingly confirmed when we
consider that Jeff Sessions, Trump’s Attorney General, had to return money to the tobacco companies
during his campaign to become a Senator in the 1990s because they had contributed
too much! This facilitative environment was arguably demonstrated as soon
as Trump took office, with British American Tobacco announcing its merger with
Reynolds in a $49.4
billion takeover. The tactics developed by the tobacco companies really
should not be a surprise at this point, with similar
tactics being deployed in the U.K. with regards to plain-packaging, but the
issue really is the environment that
allows such behaviour and in this vein we must return to a concept that raises
its head frequently here in Financial
Regulation Matters – capture.
The actual tactics of the tobacco industry range from
recruiting ‘experts’ to rally on their behalf via funded
research and opinion, developing underhanded
campaigns to influence public opinion, or simply to ‘persuade’ policymakers
by offering copious amounts of money for support. Yet, the campaign is
particularly targeted so that those who can influence
are specifically considered, which is represented by the understanding that
tobacco firms have been lobbying excessively to keep the decision to regarding
tobacco regulation as close to financial
policy makers as much as possible because, rather crudely, ‘finance
ministers, however, can potentially be persuaded that there is a risk of losing
revenue’. Tobacco firms, in that sense, have demonstrated their
intelligence and the benefit of a concerted campaign because they have realised
that the new political landscape is dominated by individualism and perceivable
short-term growth – seemingly the calling card of the U.S. and U.K.
governments. This realisation is demonstrated by the tobacco companies consciously and disproportionately funding Republican election
campaigns, the Trump Administration actively delaying regulatory endeavours against the tobacco companies,
strategically-inspired governmental promotions of those opposed to tobacco
reforms, and proposed
legislative cuts to endeavours that are concerned with education regarding the
negative effects of smoking; Trump himself has been a keen
investor in Tobacco companies, and Vice-President Mike Pence recently
argued that ‘smoking
doesn’t kill’ before accepting donations from the leading tobacco lobbyists’.
Ultimately, there a few deductions that one can make. Not
that previous American governments were not captured because, quite frankly,
lobbying is a massive a business in the U.S. but, in Trump’s America, it is
clear that the Government is captured. Secondly, the absolute nonsense that
Trump espoused during the campaign trail that he would ‘drain the swamp’ was
not just a mis-statement, but an outright lie. Lastly, the disdain that is
demonstrated by Governmental and elected political officials for the poor in
the U.S. and the U.K. is reaching levels that have rarely been seen in the
modern day – smoking
affects the poor considerably more
than any other group, yet the people who went to the polls are actively
having their interests ignored and downplayed. The result of this one instance,
of which we can attribute many others like the Leave-Campaign in the U.K., is
that political statements are losing whatever authority they had: it is
remarkable to think that anyone could truly believe in a politician after the
last few years’ proclamations have, almost universally, been proven to be
untrue – the focus on short-term economic success is masking a growing disillusionment
in politics that is usually the precursor to a socially-defining era of unrest
and conflict; hopefully, that is not the case this time around, although
subscribing to the lessons of History means that particular hope may be very
fanciful indeed.
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