Fight Over 'Astroturf Lobbying' is Looming

A little-noticed but very important piece of legislation is winding its way through Congress -- a measure that would shed light on the pernicious practice known as "astroturf lobbying."

I've touched on astroturf groups in the past, in the context of the phony "grassroots" anti-naked-shorting coalition -- the National Coalition Against Naked Shorting -- which is a front for foundering companies like Overstock.com, and even slimier penny stock operations. NCANS 's "executive director" has claimed that naked shorting was the "real problem" at Enron.

Last month, a provision of the Senate lobbying reform bill that would have required full disclosure of the backers of astroturf groups went down to defeat. Here is an NPR article on the subject, and an editorial in the Los Angeles Times that sets forth the issues succinctly.

The NCANS is a classic astroturf group -- an organization that gives the appearance of being a "grassroots" organization, while in fact representing narrow corporate interests. NCANS is so anxious to hide its backers that it won't even publish its address, and the fools who send it money do so via a lawyer.

Such sham organizations would wilt under the hot light of disclosure. Corporate interests ranging from Microsoft to oil and health care and insurance companies have used astroturf groups effectively. The naked shorting nutcases are the only Wall Street-related groups that I'm aware of that that have used astroturfing, and they have done so effectively.

An early provision of the Senate bill would have detailed reports from groups spending at least $25,000 on astroturfing. This was rejected on phony "free speech" grounds, and even a watered-down provision is running into opposition.

As the LA Times put it, "members of Congress have a right to know whether a campaign is the result not of a spontaneous sea change in public opinion but a professional operation. Such truth-in-packaging doesn't mean that lawmakers will disregard the outpouring of opinion on a given subject, only that they will put it in proper perspective."

Yes, members of Congress have a right to know. But so do regulatory agencies, which are at least as prone to campaigns by astroturf groups -- and the SEC's ongoing waste of resources over naked shorting is a good example of that.

Astroturfing disclosure will come up before the House of Representatives in the coming months. The House should show some guts on this issue and require full disclosure by corporate con men.

© 2007 Gary Weiss. All rights reserved.

-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.