Introduction
Lobbyists play a big role in the American political system. To become a lobbyist, one must be an expert in a certain field in order to convince the elected decision-makers. Many organizations and companies across the United States hire lobbyists to promote their interests in governmental structures. In Texas, there are seven organizations that spend more than a million dollars on lobbyist compensation (Texas Ethics Commission report, 2003). According to the Texas Ethics Commission (2003), the second biggest interest group in Texas is Texas Utilities (TXU) that hired 55 lobbyists with an average compensation of $25, 364, which summed up to be $1,395,000. Later, the membership base varied as in 2007, TXU hired even more lobbyist for its takeover campaign.
Lobbyist Compensation in Texas
In 2007 the company had faced challenges associated with financial recession. Prior to that TXU generated a load of debt, which hindered its progress and made it a risky investment for the private equity. Hence, the company settled for the buyout. Many lawmakers, experts, and government officials argued that the buyout of TXU by the Energy Future Holdings Corp (EFH) will lead to the further accumulation of debt, which may affect gas prices. In order to outweigh the opposition, TXU launched a strong lobbying campaign by hiring 86 professionals with a $17 million sum of compensation.
The Texas Utilities lobbying campaign of 2007 gained public attention. It was massive in scale and it determined the outcome of the TXU takeover (LobbyWatch, 2007). One of the primary goals of the lobbying campaign was to avoid consumer and environmental restrictions imposed on the TXU and its buyout partners (LobbyWatch, 2007). Because the buyout plans were revealed to the public, the utility corporation had to increase its planned lobbying expenditure twice. The lobbying strategy entailed a media and advertising campaign, which constituted most of the costs spent on the lobby. As such, TXU-related lobbyist expenditures included $10,937,336 on media, $146,851 on food and beverages, $15,193 on entertainment and $18,401 on gifts (LobbyWatch, 2007). The total sum was $11,117,781 (LobbyWatch, 2007). Hence, the scale of the lobbying campaign was indeed large.
While it is easier to understand the media and advertisement expenses, the case of the 2007 lobbying campaign provides a valuable insight into the approaches that are utilized by lobbyists. As such, the $146,851 wining and dining expenditure can be analyzed in detail due to the report made by LobbyWatch (2007). The food and beverages expenses refer to the sum of the money lobbyists spent on dinners with government officials and lawmakers during their meetings.
Other than food and drinks, the meetings between lobbyists and lawmakers included entertainment. Total sum of this kind of expenditure was estimated to be $15,193 (LobbyWatch, 2007). Rudy Garza and Michael MacDougall who reported spending up to $1,000 apiece to give San Antonio Spurs tickets to Rep. Rene Oliveira and Chief of Staff J.J. Garza made some of the highest expenditures for entertainment (LobbyWatch, 2007). Other types of entertainment included tickets to Music Halls for representatives and their wives. Therefore, lobbying is not always argued to be fair practice as it favors legislators by providing them material benefits from the interest group.
Another type of expenditure involved in the lobbying process of TXU in 2007 was gifts. Although not all of the political presents were itemized, the total sum spent was $18,401 (LobbyWatch, 2007). Some of the gifts included things such as calendar bases, compensation for “deer processing” services for thirteen representatives who were deer hunters, and NCAA tickets (LobbyWatch, 2007). It can be argued whether gift-giving is considered ethical during the lobbying campaign. It does not directly affect the cases of representing the interest group, but it affects lawmakers and representatives indirectly and on the personal level, which resembles a bribe.
The lobbying campaign of the Texas Utilities in 2007 was comparably homogenous in its targets. As such, nearly 89 percent of people who received gifts from the TXU lobbyists were representatives of the legislative branch (LobbyWatch, 2007). The other 2 percent targeted the executive branch, while the remaining 9 percent were meant for the families and guests of the representatives (LobbyWatch, 2007). The strategy selected by TXU lobbyists was proven effective as the corporation has managed to avoid the undesired restrictions.
Conclusion
In conclusion, during the 2000s Texas Utilities has become the main retail electricity provider in the state of Texas. In addition, the company is known for its extensive use of lobbying throughout the 2000s. As such, in 2003 it had the second-largest lobbying expenditure, while in 2007 it spent $17 million on the same matters. Despite its borderline controversial methods, the lobbying strategy by TXU was successful as it prevented the unwanted consumer and environmental restrictions imposed on TXU and its partners, which allowed for the subsequent buyout.
References
LobbyWatch. (2007) TXU’s Takeover Lobby Cost About $17 Million.
Texas Ethics Commission (2003). Lobbyist registration reports. Texas Ethics Commission.
TXU (2022) About us. Texas Utilities.