Secret Affect: Astroturfing Sways Public Coverage
Lobbying by companies can provide governments with valuable insights and data for public policy making, yet only 8 percent of the world’s 1,000 largest companies report their spending on lobbying to investors. And when companies make undisclosed payments to dark money groups to secretly influence public policy, this “astroturf” lobbying creates legal, financial, and reputational risks for shareholders as evidenced by utility FirstEnergy’s agreement to pay $230 million for funneling $60 million through dark money groups as part of a bribery scheme.
Astroturf lobbying is defined as funding fake grassroots organizations to provide an illusion of popular support. The concern for shareholders is that companies failing to disclose their payments to trade associations (TAs) and social welfare groups (SWGs) secretly give millions used for lobbying, including astroturf campaigns. Investors face a Russian doll scenario, where a company’s payments to one group are, in turn, passed through to additional groups, all of which can go to other types of lobbying and astroturfing without revealing the original source of money.
Undisclosed dark money lobbying is “at least double what’s publicly reported.” In 2017, TAs and SWGs spent $535 million on disclosed lobbying and $675 million on unregulated efforts to influence public policy, including strategic consulting, broadcast advertising, media relations, social media posts, polling, and funding for astroturfing.
Corporate funding for astroturf campaigns through TAs and SWGs is widespread across industries, yet disclosures to investors of company payments funding this activity are limited. Big tech companies Amazon, alphabet, other MetaPlatforms fund hundreds of TAs and SWGs each year, yet they do not disclose payments to dark money groups that advocate against anti-trust regulation like the American Conservative Union, the National Taxpayers Union, and the Taxpayers Protection Alliance. in the gig economy, About other lyft make contributions to community groups that write favorable op-eds as part of multimillion-dollar lobbying campaigns to keep drivers as contractors.
Last year, on ExxonMobil lobbyist admitted that Exxon funds “shadow groups” to misrepresent climate science, and FTI Consulting has run astroturf campaigns “portraying pro-petroleum groups as grass-roots movements” in Texas on fracking, in Alaska on drilling, and even at the SEC to reduce shareholder rights.
In 2020, the Pharmaceutical Research and Manufacturers of America funneled millions of dollars to prominent “dark money” SWGs like the American Action Network, the American Conservative Union, and the Taxpayers Protection Alliance, pushing industry-friendly messages to lawmakers and 2020 voters. And, telecom companies and their trade associations gave $4.2 million to SWG Broadband for America for an astroturf campaign, which submitted 8.5 million fake FCC comments opposing net neutrality.
For 2022, at least 35 proposals have been filed focused on the need for disclosure of all dark money lobbying payments, as well as direct federal and state lobbying payments. In addition to dark money astroturfing, the proposals note support for groups that lobby against policies that companies publicly support, highlighting lobbying misalignments on issues including climate, racial justice, voting rights, worker rights, drug pricing, corporate tax, and infrastructure.