Blog: Wal-Mart lobbying report - the panic is unfounded

Blog: Wal-Mart lobbying report - the panic is unfounded
New York:  The media controversy over the issue of Wal-Mart's lobbying for FDI in India, citing disclosure reports filed by the company with the US Senate, reflects a poor understanding of how business and politics work in the United States. The media has chosen to sensationalise the issue, instead of placing these disclosure reports in context.

Lobbying is legal in the United States. Though subject to extensive and often complex rules, it is considered part of free speech protected by the US Constitution. Controversial because many believe that lobbying firms may have too much say in the corridors of power in Washington, it is also considered essential to the proper functioning of the US government.

Yes, Wal-Mart spends millions on lobbying. All American companies do. According to the Center for Responsive Politics, America's premier research group tracking money in US politics and its effect on elections and public policy, Exxon Mobil (which according to Forbes is the largest corporation in the US) spent $9.9 million on lobbying in 2012, whereas Boeing and Google spent $12 million and $13 million respectively. Not only corporations, trade unions, universities, and other non-profit groups too spend large amounts on lobbying. Harvard University, for instance, spent $0.5 million on lobbying in 2011. Besides, the $25 million dollar sum that is being bandied about by some sections of the Indian press and expectedly pounced on by the BJP in Parliament, is a sum that was spent over a period of five years. Wal-Mart's spend, therefore comes to about $5 million per year, which is in-line with other companies of their size. The firms they used for this lobbying were the usual suspects, including Patton Boggs and the Podesta Group.

This money represented Wal-Mart's total lobbying spend, not its expenditure on India-related lobbying. NDTV's review of the disclosure reports revealed that the money was spent on a wide range of issues, including "Tax issues affecting retail sales", the "Marketplace Fairness Act", "Discussions regarding e-fairness taxation"and "ERISA preemption of State laws on health benefits requirements." One report showed FDI in India as one among several discussion items. However, this cannot justify attributing Wal-Mart's entire lobbying spend to India-related lobbying.

Moreover, since this concerns the actions of a US corporation lobbying the US government, it is not clear why Indians should be concerned. It is the US government that has been pushing for India to open up retail, and that fact is well known. Whether this is because it thinks the move would have broad benefits for US businesses, or because it is being unduly influenced by large corporations, is not a matter of public concern in India. This is not money that was being spent to lobby the Indian government, or anyone else in India.

While the excitement over this in India is understandable - both corruption and organised retail are hot topics in the media - it is silly to confuse legitimate lobbying with corrupt practices.

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