Corporate Welfare

When It Absolutely, Positively Has To Be There In The Law


UPS and FedEx are waging a war over labor regulation. We have an article in the works on the topic, so I won't get into all the details, but here's the bare bones: FedEx is regulated by the Railway Labor Act, which is not very union-friendly, while UPS falls under the National Labor Relations Act, which is more congenial to organizing. A union-backed bill would change this, so that a significant portion of FedEx's operations would fall under the NLRA. Not surprisingly, UPS likes this idea and FedEx does not.

Enter the American Conservative Union. Politico reports:

The American Conservative Union asked FedEx for a check for $2 million to $3 million in return for the group's endorsement in a bitter legislative dispute, then flipped and sided with UPS after FedEx refused to pay.

For the $2 million+, ACU offered a range of services that included: "Producing op-eds and articles written by ACU's Chairman David Keene and/or other members of the ACU's board of directors. (Note that Mr. Keene writes a weekly column that appears in The Hill.)"…

In the three-page letter asking for money on June 30, the conservative group backed FedEx. After FedEx says it rejected the offer, Keene signed onto a two-page July 15 letter backing UPS.

Politico calls this "pay to play." Keene's group denies that it has received any money from UPS, which makes the situation sound more like "pay or we won't play." You may suggest your own terms in the comments.

So a Democratic bill to help unions = a proxy battle between competing companies = an entrepreneurial opportunity for a right-wing lobby. Multiply those motives by the number of bills before Congress each session—adding extra for those mammoth pieces of legislation where the stakes are really high, such as cap and trade—and you'll start to get a sense of what politicking means in practice.

Update: Keene replies to his critics here and answers some more questions here.