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Source link: http://archive.mises.org/10305/mr-smith-tear-down-this-website/

“Mr. Smith, Tear Down This Website”

July 17, 2009 by

This isn’t exactly shocking, but it’s still amusing that a major beltway “ideological” group managed to get caught red-handed trying to prostitute itself:

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 plus, 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.)”

The conservative group’s remarkable demand — black-and-white proof of the longtime Washington practice known as “pay for play” — was contained in a private letter to FedEx, which was provided to POLITICO.

The letter exposes the practice by some political interest groups of taking stands not for reasons of pure principle, as their members and supporters might assume, but also in part because a sponsor is paying big money.

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. Keene did not return a message left on his cell phone.

The “legislative dispute” at issue is UPS’ attempt to increase FedEx’s labor costs through government fiat. UPS wants FedEx covered under the National Labor Relations Act, which would increase the influence of state-monopoly unions over the UPS competitor. The ACU promised FedEx some political manpower to fight off UPS’ rent-seeking, in exchange for a seven-figure “contribution”:

ACU asked FedEx to pay as much as $3.4 million for e-mail and other services for “an aggressive grass-roots campaign to stop the legislation in the Senate.”

“For the activist contact portion of the plan, we will contact over 150,000 people per state multiple times at a cost of $1.39 per name or $2,147,550 to implement the entire program,” the letter says. “If we incorporate the targeted, senator-personalized radio effort into the plan, you can figure an additional $125,000 on average, per state” for an estimated 10 states. The total would be $3,397,550.”

The letter shows one reason why activists get so much junk mail, both on paper and electronically: Some groups that send it charge handsomely for the service.

Under the grass-roots program ACU proposed, “Each person will be contacted a total of seven times totaling nearly 11 million contacts total in the 10 targeted states.” “Within 72 hours of an agreement on the whole plan, we can have the data sets delivered and the first round of e-mail ready for delivery,” the offer states. “Within seven days, the mail can be in the USPS system and the phone call delivered.”

So, in essence, ACU wanted $3.4 million so it could spam several million people. I’m shocked FedEx didn’t take the ACU up on this offer. The ACU responded by joining several other “conservatives” in writing a letter that lambasted FedEx chairman Fred Smith establishing his own website to oppose UPS’ rent-seeking:

The letter accuses FedEx of “falsely and disingenuously” labeling the rules change a “bailout” for UPS, since FedEx would become subject to the same arduous union structure.

The letter is also signed by Grover Norquist, president of Americans for Tax Reform, who is also on ACU’s board. FedEx is pushing its case with a website called www.BrownBailout.com.

The letter signed by the conservative leaders concludes: “To paraphrase the words of Ronald Reagan, ‘Mr. Smith, tear down this website.’”

I wonder what the going rate is for the Cato Institute is these days…

{ 11 comments }

Ohhh Henry July 17, 2009 at 10:54 am

Probably the official reaction to this scandal, if any, will be to introduce legislation to monitor, control and censor blogs and other internet communications.

Rajesh Dhawan July 17, 2009 at 11:24 am

I agree with Henry. The pimps (politicians) are not going to be happy. The sordid stuff of dark political alleys, seen clearly in the open is not pretty.

The results of today’s political system were predicted long time ago:

“In a controlled (or mixed) economy, a legislator’s job consists in sacrificing some men to others. No matter what choice he makes, no choice of this kind can be morally justified (and never has been). Proceeding from an immoral base, no decision of his can be honest or dishonest, just or unjust—these concepts are inapplicable. He becomes, therefore, an easy target for the promptings of any pressure group, any lobbyist, any influence-peddler, any manipulator—he has no standards by which to judge or to resist them. You do not know what hidden powers drive him or what he is doing. Neither does he.”

“The Principals and the Principles,” The Ayn Rand Letter.

Read more on mixed economy here – http://aynrandlexicon.com/lexicon/mixed_economy.html

kmeisthax July 17, 2009 at 1:20 pm

@Ohhh Henry: They (the FTC) are already planning to regulate blogs, mostly out of fear of people astroturfing for a product.

Then again, the government -is- one giant astroturf!

kmeisthax July 17, 2009 at 1:29 pm

@Ohhh Henry: They (the FTC) are already planning to regulate blogs, mostly out of fear of people astroturfing for a product.

Then again, the government -is- one giant astroturf!

Curt Howland July 17, 2009 at 4:56 pm

Sausage and Legislation.

Two things you do NOT want to see being made.

jeffrey July 17, 2009 at 5:17 pm

Beltway crooks!

Chuck July 17, 2009 at 8:13 pm

I would not be surprised by any revelations about the political class save evidence of common decency.

Dan Holway July 18, 2009 at 7:07 pm

While the ‘pay-for-play’ shenanigans of the ACU are embarrassing for them, I am more interested in S.M. Oliva’s portrayal of UPS as a bad guy in this matter:

“The ‘legislative dispute at issue is UPS’ attempt to increase FedEx’s labor costs through government fiat. UPS wants FedEx covered under the National Labor Relations Act, which would increase the influence of state-monopoly unions over the UPS competitor.”

I suspect that most people are surprised to learn that UPS and FedEx must do business under different rules. Despite the obvious fact that the two companies perform remarkably similar services, the federal government regards FedEx as an airline and UPS as a trucking company. This distinction allows FedEx to operate under rules that makes them much more able to resist unionization, while UPS must play by rules that are much more onerous in this regard. While I believe that the best policy would be to remove all federal labor policies in favor of a free market approach, I certainly can’t blame UPS for wanting its chief private competitor to do business under the same rules to which UPS is subject. If the burden of the NLRA falls upon UPS, why should FedEx not operate under the same burden? If the new GM and Chrysler were suddenly allowed to operate under greater relative freedom, wouldn’t you expect Ford to cry foul and try to level the field?

Bill in StL July 19, 2009 at 9:10 pm

@ Dan Holway: Certainly it is unfair that the laws make UPS more vulnerable to unionization than FedEx. However, from a libertarian standpoint, the only legitimate action by UPS is an attempt to avoid or abolish the NLRA themselves. Fairness does not dictate that we oppress those around us who are not subject to the oppression we face, even if they are our competitor’s. That’s envy, not justice.

And from a consumer’s standpoint, it’s definitely better to have one semi-free company and one unfree company, instead of two unfree ones.

Bill in StL

Russell Smith August 24, 2009 at 12:36 am

Miss Rand’s analysis says it all.
The most effective political reform of (all) political corruption is to limit govt to its proper function,
-and its only moral justification for existing:
the defense and protection of individual rights and the freedom to exercise those rights:
Guard the streets,
Guard the shores,
Run the courts,
-and otherwise leave everything else to the people and their markets.

(When buying and selling are legislated, the first thing to be bought and sold are legislators.)

Russell Smith August 24, 2009 at 1:01 am

Or another way to express it:

(Regarding politicians and supporters of controlled/
mixed economies:)
Either they know what they are doing,
or they don’t;
Which means:
Either they are incompetent,
or they are evil.

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