Doing Well By Doing Good

by Henry on October 20, 2011

I’m eagerly awaiting Rob Reich’s forthcoming book about the political implications of relying on private charity as a means of achieving public goals. In the meantime, this report by the Center for Public Integrity on AT&T’s campaign to build support for a merger with T-Mobile is very much worth reading.

At first sight, it’s hard to understand why the Shreveport-Bossier Rescue Mission, a homeless shelter and clinic in Louisiana, would lobby the Federal Communications Commission. … “People often call on God to help the outcasts and downtrodden that walk among us,” Martin wrote to the FCC. “Sometimes, however, it is our responsibility to take matters into our own hands. Please support this merger.” Not included in Martin’s letter to the FCC was the fact that his organization had received a $50,000 donation from AT&T just five months earlier. Indeed the Shreveport-Bossier Mission is one of at least two-dozen charities that were recipients of AT&T’s largesse and have written in support of the T-Mobile buyout … The marriage of AT&T’s lobbying and charitable efforts is reflected in the company’s organization. James Cicconi , AT&T’s chief lobbyist and a senior executive vice president of the company, is also chairman of the company’s charitable arm: the AT&T Foundation. … Many of the charities, including the Shreveport-Bossier Mission, say that while they take AT&T’s money, it in no way affected their decision to lobby the FCC. “Their money that they gave was in no way connected with what we did,” said Martin, in a phone interview. “We endorsed the merger because we think it’s a good thing for rural people.”

Yep. It’s all for the benefit of the rural people. I imagine that AT&T money supports a number of good causes. Shelters for homeless people are good things to have. Even so, I don’t think that AT&T should be able to take any tax deductions for donations which on the very kindest interpretation seems to shade into their for-profit activities.

{ 21 comments }

1

William Sjostrom 10.20.11 at 2:33 pm

Think of it as being like all the academics who use their government grants to take family vacations on tax free money.

2

Matthew Yglesias 10.20.11 at 2:39 pm

I think it’s worth noting that the primary civil society advocates for the merger are not random charities but the Communications Workers of America.

Several contributors to this cite have made the desirability of bolstering the standing of organized labor in America an important theme of their work. In terms of concrete issues being debated in DC right now, this is one of the biggest organizing opportunities out there. T-Mobile and its assets will either fall to unionized AT&T and its workforce will likely join the union. Alternatively, they’ll fall to non-union Sprint and given the state of American labor law organizing prospects will be bleak.

3

straightwood 10.20.11 at 3:37 pm

Yes, by all means, let us further concentrate the cellular communications industry. This will be good for the consumer because the fewer the companies, the better the treatment the consumers will receive. This has been demonstrated countless times over many decades. If only all industries could be dominated by monopolies or oligopolies, we would live in a consumer paradise.

For example, it is obvious that the five giant banks that dominate US banking are doing a helluva job, and this has been attested by the four giant accounting firms that closely monitor their performance.

4

Kiwanda 10.20.11 at 3:42 pm

While Reich writes pretty good, I think the book falls short, because, you know, what the hell, the guy is pretty shrimpy himself.

(This book review brought to you in the labor-saving spirit of Belle’s review of Game of Thrones, and Chris’s review of Pinker’s book.)

5

christian_h 10.20.11 at 4:01 pm

Well the CWA’s support for further monopolization is an unfortunate expression of the business unionism (“what’s good for the company is good for its workers”) long prevalent in the US. That many of us support organized labour in its struggle with capital does not imply that we support every single thing union bureaucrats do, or want.

6

Henri Vieuxtemps 10.20.11 at 4:16 pm

@5, no, I don’t think this is the issue. The issue is that T-Mobile and Sprint are not unionized. Why aren’t they unionized?

7

Jim Johnson 10.20.11 at 4:42 pm

Wiiliam S: Have you got any particular academics in mind? Or is this like welfare queens driving Cadillacs?

8

Alex 10.20.11 at 4:50 pm

5: Are we sure it’s impossible for AT&T to transfer workers into the old, nonunion T-Mobile operating company after it owns it?

9

Consumatopia 10.20.11 at 5:19 pm

To me, even more interesting than CWA support is the support of unions in other sectors of the economy. It’s entirely possible that some policy might make one sector of unionized workers wealthier while other sectors become poorer. But if other unions outside telecommunication are pro-merger (and from what I can see by cursory Googling, many of them are) then I guess it’s fair to say the merger is pro-union.

10

mds 10.20.11 at 5:26 pm

T-Mobile and its assets will either fall to unionized AT&T and its workforce will likely join the union. Alternatively, they’ll fall to non-union Sprint and given the state of American labor law organizing prospects will be bleak.

This goes somewhat to straightwood’s complaint @3: why are those the only two possible outcomes? It also ties in somewhat to M. Vieuxtemps’ comment @6: why are those the only two possible outcomes?

Also, with the example of other companies (e.g., Verizon) being “unionized,” yet managing to incorporate a large number of non-unionized workers, excuse me if I’m skeptical of this “They’ll all get to join the union! Yay!” formulation, especially if it relies on AT&T telling the truth about something for a change (They have already been caught lying to the government about the predicted effects of the merger.). And given that the state of American labor law makes organizing prospects at Sprint bleak, I’m not sure what will be holding AT&T’s feet to the fire after this acquisition, either. See Alex @8.

That many of us support organized labour in its struggle with capital does not imply that we support every single thing union bureaucrats do, or want.

Indeed, the UAW acceptance of a two-tier employment system that purported to protect existing workers’ benefits at the expense of new hires is a case in point, as it is absolutely terrible for the future of the union. That’s something to consider when we’re told that we should be with the CWA or other unions on this because of all the new unionized workers that will inevitably result. Especially in light of the source of this particular “gotcha.”

11

Andrew F. 10.20.11 at 5:46 pm

Reciprocal altruism is a powerful force. There doesn’t have to be a quid pro quo for these charities to decide to lobby a little for AT&T. Writing a letter to the FCC is an inexpensive gesture from a monetary vantage. If the charities, or those who run them, had put more political weight into their effort – well that might be more indicative of a quid pro quo.

As to the advantages of the merger itself for organized labor, I’d imagine they’re more heavily present on the side of AT&T’s employees and Verizon’s than that of any other company.

12

christian_h 10.20.11 at 5:47 pm

Henri (6.); Yes. I’m not sure how you read my comment to imply otherwise. In fact the failure to even attempt unionization at t-mobile and Sprint is intim

13

christian_h 10.20.11 at 5:49 pm

(Sorry hit the wrong button):

… intimately connected to the way some big unions operate nowadays: they have given up on ever organizing workforces unless through an agreement with the employers. I guess hoping to unionize through takeover is the logical next step.

14

Henry 10.20.11 at 6:03 pm

bq. I think it’s worth noting that the primary civil society advocates for the merger are not random charities but the Communications Workers of America. Several contributors to this cite have made the desirability of bolstering the standing of organized labor in America an important theme of their work.

It seems to me that the issue you are raising is entirely analytically separate from the topic of this blogpost – which is whether business should be using charitable donations to boost their lobbying efforts (that said, it isn’t as extraordinary a non-sequitur as Bill Sjostrom’s drive-by, which, even if he were prepared to name names or provide evidence for his ideologically convenient contentions, has no visible connection whatsoever to the actual post). I haven’t blogged on the issue of whether or not the merger is a good idea, because I don’t know enough about it to say anything useful about the specific tradeoffs. But in broad theoretical terms, it seems to me that your implied critique rests on the same kind of mistake as rightwingers make when they claim that left/liberals are really only interested in making the government sector bigger. Just as liberals are actually more interested in whether governments can do good stuff, than in its percentage share of GDP or whatever, lefties on this site (and, for the most part, elsewhere) would like more powerful unions because they can serve as a Galbraithian countervailing force to the business interests which dominate political debate, not because they are ends in themselves. Unions – like every other form of human organization – sometimes suck – but there is excellent reason to believe from political economy that countries with more powerful unions tend to have more egalitarian politics.

Without getting into the specifics of the merger, which I don’t know much about, but which might point in the one or the other way, this would seem to suggest that it is perfectly reasonable for lefties of differing political beliefs to support, or to oppose the merger. If you think that having a bigger union would provide greater political benefits, even if it makes AT&T into a bigger behemoth, than you can reasonably be in favor of the merger. If you think that reinforcing AT&T’s stranglehold, helping recreate Ma Bell etc would have sufficient malign consequences for structures of communication and power, then you can reasonably be opposed to it.

Or to put it more abstractly – more powerful unions would likely help make for more egalitarian politics. But weak unions are not the only reason for unequal access to politics – so it may well be that sometimes you might prefer policy options which might weaken unions if they address structural problems in other ways. Again, I think that figuring this stuff out (or the lesser tradeoffs that you might face in balancing the particular benefits of policies against their structural consequences) requires one to at least begin thinking about what theory you have of how politics fits together, and what kinds of structural changes would help make the policies that you like easier to achieve. From reading your stuff over the last couple of weeks (your enthusiasm about OWS; your recent post pointing out how employers can take secondary retaliatory actions that unions cannot), I’m quite sure that you’re not a standard-issue neo-liberal. But I would still like to hear more about how these ideas about politics fit together with your preferences over policies.

15

Rob Reich 10.20.11 at 6:25 pm

Thanks for mentioning my work, Henry. But one note of clarification: the former Secretary of Labor will get neither credit nor blame for anything here. I’m not him.
See here for me: http://robreich.stanford.edu and http://twitter.com/robreich
See here for my doppelganger: http://robertreich.org

16

c.l. ball 10.20.11 at 7:49 pm

Here in Chicago iPhone-toting bobos hope ATT will get T-Mobile’s network so we won’t have to pay more to Verizon to have our phones work.

While charities might be writing to back ATT I don’t see what impact they will have unless the rural-benefit argument is credible. Based on my experience in IA, MN & WI the merger-expands-coverage-at-less-cost argument is valid. Of course allowing equal access to carriers would solve the problem sans merger.

17

MarkUp 10.20.11 at 9:35 pm

@11 “Reciprocal altruism is a powerful force.”

As is The Lord’s Resistance Army; both I believe are defined somewhere in The Devil’s Dictionary starting at “marriage” … IIRC.

18

ezra abrams 10.20.11 at 10:18 pm

I understand from psychologists that we define “reasonable” not by appeal to a standard, but by comparision to the extremes, which is why people like ron paul and bachmann are so good at moving the center.

So, from the left, lets keep things in the center: no charitable donations of any sort allowed for any person or institution with a net worth of >1,000,000 dollars, or a net annual income of >150,000 dollars (~ 3x median household).

That will keep hte influence of corporations – which, really – is what we are talking about – down.
Sure, in this example, we got some homeless shelters doin ok. Not as ok as if we had real taxs on the wealthy, but better
Sure in this example, a big company isn’t doing evil; lets not forget, say Bhopal, people selling monitoring devices to the N Koreans, etc etc, the Ford Pinto, etc

When junk bond king milken was facing indictment, he hired Arthur L. Liman, chief counsel for the iran contra senate committe, to be his main lawyer.
Milken was facing indictment in LA county, with many poor black and hispanic voters in the jury pool
So, Liman and team began funding civic events.
finally, the CEO of whatever company was footing the bill called liman and milken into his office, and said, what are these 3 million dollar a month legal bills; can we spend less.
Reputedly, Liman said, will, if you are gonna nickel and dime us, why bother at all

19

William Sjostrom 10.21.11 at 10:57 pm

Goodness, Henry, you are getting serious in your old age, although I do like that “drive-by” line. Do you mind if I steal it? I sort of thought it was obvious that my little crack was a joke on tax free money generating private benefits (apparently not, but I will work harder next time), but I am baffled by your “ideologically convenient” remark, as well as your indignation (and that of some of your commenters). Do you seriously know no one who will admit to gaming grants? Wow. I thought it was routine, and I certainly hear it remarked on and vaguely bragged about all the time. You do the same to dodge tax on consulting money. You buy a ticket to a conference, have the travel agency bill you for a ticket (which is actually several tickets for your family), and make sure the conference is in, say, Paris rather than Baltimore. What’s the ideological point? It’s not as if Labour does it, but Fine Gaelers don’t. And it’s not as if we’re talking something scandalous here, just ensuring the money is worth all the effort of getting it. When UCC was heavily flooded a couple of years ago, it was a running joke around the college that the number of water damaged laptops claimed exceeded the number of laptops in the college. Sadly, for personal reasons, I missed out on that one.

20

Henry 10.23.11 at 3:28 am

bq. Do you seriously know no one who will admit to gaming grants? Wow. I thought it was routine, and I certainly hear it remarked on and vaguely bragged about all the time. You do the same to dodge tax on consulting money. You buy a ticket to a conference, have the travel agency bill you for a ticket (which is actually several tickets for your family), and make sure the conference is in, say, Paris rather than Baltimore. What’s the ideological point? It’s not as if Labour does it, but Fine Gaelers don’t. And it’s not as if we’re talking something scandalous here, just ensuring the money is worth all the effort of getting it. When UCC was heavily flooded a couple of years ago, it was a running joke around the college that the number of water damaged laptops claimed exceeded the number of laptops in the college. Sadly, for personal reasons, I missed out on that one.

I can honestly say that I have never in my academic career heard a colleague say anything that even hinted that they would condone this kind of abuse, let alone participate in it. And I’m rather sorry that you don’t seem to view this as an ethical problem (unless the “Sadly, for personal reasons, I missed out on that one bit” is a rather cumbersome joke).

21

Alex 10.23.11 at 6:43 pm

PS, I do not propose to defend the conduct of the telecommunications industry in this case, which I consider to be shameful, despite my reasonably well-known professional capacity.

I personally think the rural coverage argument is bunk, and if VZW could get their first wave of LTE out there for $3bn’s worth of capex with Alcatel-Lucent, AT&T should be able to push some wireless broadband further into the boonies for less than the $39bn pricetag of the merger. You look at what these guys have achieved working in unlicensed spectrum…probably for less than AT&T’s lobbyists’ budget for steak and martinis alone.

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