Monsanto Lobbying and Beyond Monsanto

Monsanto Lobbying and Beyond

MONSANTO lobbying +

Monsanto. The name alone makes millions cringe. How can a company named after a middle-aged homemaker become so controversial? The major complaints against Monsanto include that they are poisoning the poor; trying to own everything; destroying the food supply; suing small farmers over the very robocrops they themselves unleashed; and patenting plants, animals, genes and the building blocks of life itself. Abetting these crimes are the press; regulators and the courts; international political institutions and individuals who act within them, and science / higher education. This is all achieved through the manipulation of public officials by Monsanto's army of hired lobbyists. This view is only partially correct, for many of Monsanto's alleged crimes have been adjudicated, and the nature of political influence has changed from the days when hired lobbyist promised campaign contributions to incumbent or potential lawmakers for implied agreement to look the other way. The modern route to influence is developing more toward direct participatory control of the political process, achieving monetary settlement in the private sector in exchange for silence, or obtaining favorable outcomes using the only lobbyists supposedly allowed access to the judiciary, lawyers. This paper will review these themes and try to make sense of all the controversy, clarify what truth is verifiable and question the many accusations of varying accuracy and exaggeration.

Restricting the scope of investigation

Monsanto itself publishes the lobbying expenses it filed with the U.S. Federal Elections Commission on its homepage, along with pre-emptive messaging that attempts to frame and shape discussion of a number of the issues introduced above (Monsanto Company, 2012a, n.p.). What appears on the surface as half a dozen issue topics, however, quickly reveals numerous threads that explain Monsanto's stance on perhaps forty legal and social conflicts surrounding the corporation's products and market behavior, and that an exhaustive inquiry would not only require a staff of legal consultants, but many of the complaints activists level at the firm have been closed to some degree and therefore can be ruled out. Likewise there are so many accusations against Monsanto in the media, by individuals and organizations ranging from farmers' groups to anti-globalization activists to governments, claiming a wide range of offenses that sound like science fiction, but in general boil down to several classes of objection more easily comprehended in summary than in specific. These issues indicate why a corporation like Monsanto would incur the expense of influencing regulation surrounding what would seem to be the most commonplace of human activities, subsistence.

The easiest allegations to dispense with are those that Monsanto wants to eventually market genetically modified animal products (Organic Consumers Association, 2012, n. p.). Monsanto asserts the firm has shed its pig and dairy operations on its "Issues" page (Monsanto Company, 2012b), and while the firm claims its goal was never to patent animal genes or traits but rather a particular in vitro fertilization method, a pig gene marker and omega-3-enriched feeds, the issue is moot now because they are out of the livestock business and Monsanto's annual 10-K report to the U.S. Securities and Exchange Commission (SEC) cross-verifies that these subsidiaries have been sold (Monsanto Company, 2012c, p. 48). The 10-K is a form all publicly traded U.S. companies with various characteristics must file with the SEC showing their audited financial statements, and as the official statement of the company's revenues before federal regulators including the Internal Revenue Service and the Department of Justice, this is about as definitive a statement as the public is allowed to see for any U.S. corporation. There are many other ways to track political lobbying activity for corporations but the 10-K is the most transparent statement of financial returns available to the public for Monsanto. If they lie to the SEC, they have to go back and re-file anyway under costly legal and accounting oversight. Monsanto has had such an accounting dispute with the SEC regarding the inclusion in 2010 of some distributor incentives that materially affected prior 2009 filings (Monsanto Company, 2012c, p. 93) and while this is an accounting irregularity the company would likely be charged with had it gone unaddressed, the company is rectifying this essentially technical matter that is neither large nor sinister enough to justify further examination here. This SEC investigation does however provide ammunition for Monsanto's enemies on the street however, (Reuters, 2011, n.p.), which illustrates more how both sides can distort otherwise mundane information to serve their own objectives. Monsanto is by no means less guilty of such framing, they demonstrate on their "Issues" page, committing to total transparency and then limiting that to the issues they "are willing to discuss" in the subsequent paragraph (Monsanto Company, 2012a). The other main insight the 10-K provides is where the firm outlines risk to its shareholders, and that discussion will inform this investigation both as to what Monsanto might have an interest in lobbying for or against, and how they present that information to their stakeholders and regulators.

Restricting scope: lawsuits settled and dismissed

Therefore discussion of genetic modification of animals, their products and claims Monsanto is being investigated by the SEC at least can be closed. They were doing that, they got out of it, the SEC investigation is true but unremarkable, although their tactic of subsidizing distributors is at the core of many complaints. Monsanto may easily be pursuing weird-science animals abroad or through its vast research expenditures, but none of those are transparent enough to be tracked back to the parent firm in its reporting to the U.S. federal government at least, and thus exceed the power of this research to command disclosure. One significant and high-profile complaint surrounding the manufacture of Viet Nam War-era defoliant Agent Orange can also be closed, as earlier this year the company settled out of court with the final class of appellants not excluded through legal technicalities in Nitro, West Virginia, not for the manufacture of that carcinogenic chemical itself (the class action suit by Vietnamese survivors was not deemed adjudicable in the U.S. And never made it to the bench (Rusche, 2012, n. p.)), but for the handling of it in and around the facility subsequently acquired by Monsanto before the class action. Monsanto is the "successor in interest" to Pharmacia (Monsanto, 2012, 10K p. 90); Pharmacia and other litigants may have spilled dioxins all over Nitro, which caused many people cancer and other problems, this settlement suggests, but since the settlement took place out of court, that would preclude Monsanto from having to admit guilt, and presumably carry a gag order for aggrieved parties if it did.

Recently adjudicated as well was the high-profile farmers' groups' pre-emptive lawsuit seeking an injunction against Monsanto's widespread and ongoing practice of suing small farmers when wind- or insect-borne proprietary genetics show up in native, 'legacy' crops. Class status for the appellants was recently denied in the U.S. courts on grounds Monsanto had not yet taken action against those particular individuals (Gerken, 2012, n. p.). The suits the individuals were trying to preempt are also at the core of Monsanto's offending market tactics but the case itself looking forward remains as of this writing a non-issue, although this probably remains of considerable interest to Monsanto's lobbyists and legal squadrons in that the success of future lawsuits will be affected to the degree the campaign was able to turn public opinion against the company, and thus provoke more scrutiny by legislators, regulators and ultimately the courts. The pre-emptive attempt at injunction apparently failed to claim any high-name lawmakers, who would presumably face Monsanto in their career afterward if they continued as legislators.

Lobbying defined and undefined

If they continued as legislators. The likelihood of this gets to Monsanto's reportable lobbying expenditures, and while lobbying is typically considered in a vernacular sense the deployment of fast-talking insiders attempting to menace legislators with threats of public relations campaigns against, or the promise of support toward, election or re-election, and Monsanto has no shortage of such activity to report, what such campaigns as "Millions Against Monsanto" demonstrate, is that restricting definition of 'lobbying' to expenditures reportable to the Federal and States' Election Commissions hides the vast majority of pressure corporations like Monsanto bring to bear, through direct participation in the political process outside the legal definition of 'lobbying.' If rulemaking legislators are elected, then what Monsanto et al. are really trying to affect is the vote, and so a wider consideration of 'lobbying' must take into account the lobbying these corporations perform influencing voters to elect legislators, through political campaigns and with self-serving propaganda between elections. Where regulators are appointed, Monsanto has debatably achieved high-level placement that directly influences rulemaking in documentable ways not often reported under strict election-law definitions of 'lobbying.' The rest of this report argues that in fact the bulk of Monsanto's influence is exerted through these off-balance-sheet administrative and electoral activities, which fall outside the strict legal reporting of lobbying expenditure to agencies of regulatory oversight. Monsanto affects legislation, expenditures toward which must be reported as 'lobbying,' but how they do this is by affecting rulemakers, who are either elected, or appointed (including to the courts) by elected legislators (including the Executive), and so to affect the legislators setting the rules, requires influencing the sentiment of the voters who elect them.

This functional definition underlies many academic definitions of 'lobbying,' if not the letter of Federal Election Commission reporting statutes. McGrath (2007) quotes what he calls "the most influential PR text yet written" (269-70), Grunig and Hunt's 1984 assertion that "lobbyists attempt to focus attention on issues, facts and appeals that will lead to acceptance of their clients' point-of-view." Thomas and Hrebenar (2008) define 'lobbyist' as a "person designated by an interest or interest group to facilitate influencing public policy in that group's favor by performing one or more of the following for the group" which list includes monitoring governmental rulemaking activity, "advising on political strategies and tactics," direct contact with public officials, and managing the overall effort to affect policy outcomes (4). These authors expand these activities to "include decisions about who gets elected to make those policies," including representing "informal groups" not required to report more formalized lobbying expense and activity (Thomas and Hrebenar, 2008, p. 4).

The U.S. Senate Disclosure Act Database reveals 36 lobbying entries for Monsanto Company alone, not counting their employee Political Action Committee (PAC), to around $8 million (U.S. Senate, 2012) or so. The scope and definition of these contributions, expenditures, what activities are and are not considered such, and their reporting is set out in 2 U.S.C. 431(8) for federal candidates, and candidates and leadership PACs must disclose expenditures "bundled" by lobbyist / registrant PACs (Federal Election Commission, 2012, 50582). Monsanto gladly shares the names of who they gave their lobbying dollars to, on their home page (Monsanto Company, 2012e, n.p.), but beyond the names of who received this money, exactly how those expenses were deployed, affecting what issues, and what Monsanto got in return remains opaque and would require extensive research if the truth were possible to reconstruct, given the interest of the recipients in covering any collusion they and Monsanto may have committed on the campaign trail. Then the database for each state would have to be searched, for the same type of what effectively is opaque information beyond names and the bill numbers Monsanto paid others to or in many cases directly lobbied pro-or con in its own name. Nor do these definitions account for any donated lobbying or campaign materials up to a certain extent, activity volunteered by an 'uninterested' third party, lobbying by private individuals not running for office, or expenses not accrued on balance sheet by corporations, which includes PACs. Nor does the definition of lobbying expense include for example attempts by private individuals, say shareholders, who would directly and materially benefit from reduced regulatory barriers for Monsanto, even if the firm never knew of those activities and they were not required to be reported as lobbying. Therefore the broader McGrath (2007) and Thomas and Hrebenar (2008) definitions are more useful to a comprehensive and insightful understanding of Monsanto's work to influence public policy, often directly on the Hill but also often through influencing the electorate, which then elects the politicians who appoint regulators or write law themselves.

Legal disclosure not always complete

What are the campaign lobbying activities Monsanto admits to? The names of committees and individual candidates the firm donated to are clearly listed as a mix of Democratic and Republican candidates for office from local levels up to Congress, in apparently every state, including John Boehner; the Blue Dog PAC; Orrin Hatch, but also Raul Labrador, David Leobsback, and the Preserving America's Traditions and Rely on Your Beliefs PACs in 2011, whoever they are (Federal Election Commission, 2012). Even convicted crack dealer / D.C. Mayor Marion Berry got a piece of the Monsanto funding pie back in 2009, and John D. Ashcroft in 1999 (Federal Election Commission, 2012). Many of these constitute the arch-conservative leadership but these records display "Committees and Candidates Supported / Opposed," and attempting to disaggregate exactly who and what was supported, opposed, and how, from the influence traded at the "1997 Republican Senate-House Dinner" (Monsanto gave $1,500, 10 Jul. 1997) (Federal Election Commission, 2012) for example or from any of these records, would mislead more than it would reveal. Nonprofit watchdog group Open Secrets.org (2012) summarizes the Senate Disclosure Act information into about four registered activities last year per some ten or fifteen agencies on several dozen bills, to an expense of over $6 million, which is less than is clearly displayed on the Senate's own disclosure engine (U.S. Senate, 2012). Monsanto's displayed total comes to less than $500,000 (Monsanto Company, 2012d, n.p.). These may be different PACs. What to make of this conflicting, labyrinthine and apparently contradictory paper trail?

The major issues reveal where Monsanto's interests lie, as reported by the corporation itself, and by the actions brought against it in various courts around the world, including that of public opinion. The quality of all this information must be viewed as suspect given the interest all of these parties set out to defend, spin and frame (McGrath, 2007, p. 269-70). Where Monsanto discloses it settled on the Nitro poisoning, it frames that on its "Issues" page as that the "U.S. Supreme Court agreed that the companies were not responsible for the implications of military use of Agent Orange in Vietnam, because the manufacturers were government contractors, carrying out the instructions of government" (Monsanto Company, 2012a, n.p.). The "Court agreed that the companies were not responsible" sounds far different than a negligent company settling because its erstwhile partner spilled dioxins all over a West Virginia company town. Returning to the remaining disclosures in the Monsanto 10-K shows the firm expects "to face unpredictable regulatory environments that may be highly politicized" (Monsanto Company,. 2012c, 35), there specifically in India. "We operate in volatile, and often difficult, economic and political environments," the firm explains, and as such the genetically-modified cotton operation "is currently operating under state governmental pricing directives that we believe limit near-term earnings potential in India" (Monsanto 2012c, p. 35). What the 2011 10-K could not report but the 2012 edition will, is that the agrichemical giant is being charged with Indian partner firms for biopiracy by the Indian National Biodiversity Authority, for stealing eggplants (Laursen, 2012, p. 11). Monsanto stole or has received from a partner it allegedly owns 26% of (Barker, n.d.), stolen eggplant varietals from India in order to develop GM versions, allegedly, in violation of clear local statutes (Laursen, 2012, p.11). The verdict on this charge is still out, but the accusation is ironic considering that Monsanto's intense prosecution for exactly this type of property violation is the major complaint by U.S. farmers against the company.

Biggest problem in U.S. is aggressive competition by Monsanto

As introduced briefly above, Monsanto apparently sues American small farmers when its proprietary genetics show up in surrounding non-GM crops (Gerken, 2012, n.p.). The point is that these farmers save seed, which carries the genetics Monsanto developed and thus owns, but which the farmers also do not want, because this lowers the value of their organic or at least non-GM-labeled products. The result is that the farmers either have to change crops to something Monsanto does not sell, purchase license from Monsanto and stop claiming their crop is organic / non-GM, or stop saving seed. The result of that is higher costs for the independent farmers, who must then buy non-GM seed in the market. The outcome of that would be higher seed prices for Monsanto's competitors, and thus lower relative prices and higher demand for Monsanto's GM seed. The point is that Monsanto sues independent farmers for pollution the farmers don't want (GM genes), probably in order to stimulate demand for its GM products or at least raise relative prices for substitutes. Once farmers convert to the GM crops, the best way to cultivate them is to spray them with Monsanto's other major income generator, the herbicide Roundup, which "Roundup Ready" crops are genetically engineered to resist. Farmers also complain the GM corn, canola, soy and alfalfa are causing resistance in the weeds and predators these crops and chemicals were developed to overcome, a negative externality the University of Illinois is apparently investigating (Kaskey, 2011, n.p.). The farmers vs. Monsanto class action suit, thrown out because it attempted to forestall actions that specifically had not happened yet and thus was unactionable, was aimed at taking away Monsanto's power to do what they apparently have to many farmers in the past. Unfortunately for the farmers, like assault, the police cannot prosecute a crime that has not been committed, even if the stalker has a record a mile long.

So, if Monsanto is convicted of stealing Indian genetics in order to develop their typical genetically herbicide-resistant hybrids, the result will be that the firm wins product-theft lawsuits at home against potential consumers who decline to purchase (organic farmers), using wind, insects and gravity to spread GM pollen to crops whose owners are materially damaged before and after the lawsuit, at the same time it deliberately steals or accepts stolen source genetics from impoverished countries where it operates abroad. What has this got to do with lobbying? Presumably Monsanto and the partners in India will lobby that government to look the other way, change the law, or find some loophole so Monsanto can expand its GM operations there. Monsanto points out on 10-K p. 11 that regulations and public sentiment in importing countries (and in the U.S.) against these accidental, trace "adventitious presence" (2012c, p. 11) genes could provoke further legislation against the firm and thus materially damage sales.

Back home however, outside of the purview of the Indian courts, the reverse-piracy, unwanted-stealing-lawsuit tactic has gotten a boost that Monsanto references in its 10-K on page 34 (2012c). The U.S. Environmental Protection Agency and its Canadian analog have "allowed reduction of the typical structured farm refuge from 20% to 5% for Genuity SmartStax in the U.S. Corn Belt and Canada and from 50% to 20% for the U.S. Cotton Belt." A "structured farm refuge" is a buffer zone where GM farmers must separate their crops from non-GM strains. If this buffer zone has been reduced, the GM corn will now be closer to the organic / 'natural' competitors' crops, increasing the potential for "adventitious presence" transmission, and hence more lawsuits; higher prices for competitors; the whole unwanted pollution lawsuit trick which Monsanto apparently calls later "our indemnification collection system" (2012c, p. 34) for GM cotton at least, if this translation from corporate-speak is accurate. Further expanding the buffer reduction was approval of "refuge-in-a-bag" (Monsanto, 2012c, p. 34) blended GM and 'natural' corn, so that Monsanto's customers can now perhaps grow GM corn right up to the neighbor's fence instead of the necessary buffer crop. One possible result is total market domination and ownership of the U.S. corn, soy, alfalfa and canola supply. What has this to do with eggplants? "We plan to improve and grow our vegetable seeds business, which has a portfolio focused on 23 crops," Monsanto explains to the SEC (2012c, p. 34). "We continue to apply our molecular breeding and marker capabilities to our vegetable seeds germplasm, which we expect will lead to business growth." What works in the U.S. may work all over the world, through vegetable seed exportation. That these statements were pasted out of sequence from Monsanto's report does not change the fact that Monsanto uses "adventitious presence" as an competitive tactic, but itself may turn out to be the thief in India