Swiss multinational corporations in the United States have ramped up efforts to influence American policy making, spending nearly CHF22 million ($23.3 million) on lobbying last year.
From tax reform to repealing and replacing the Affordable Care Act (Obamacare), Swiss multinationals – especially those in the pharmaceutical and financial sectors – have left nothing to chance.
While it is not unusual for multinationals, via their US-based subsidiaries, to engage in lobbying, the amounts of money spent by Swiss firms on lobbying in 2017 rose markedly compared with previous years, according to data from US transparency organisation Center for Responsive Politics (CRP).
Spending by pharmaceutical manufacturer Novartis on lobbying rose from CHF6.4 million in 2016 to CHF8.11 million in 2017. On a smaller but equally ambitious scale, industrial digital technology company ABB Group doubled its spending on lobbying to CHF500,000.
According to the CRP, the lobbying spend of these companies was the highest for both in ten years.
For other Swiss businesses, the amounts spent on lobbying were large, if not historic. Roche spent nearly CHF4 million, Nestlé some CHF2.43 million, Zurich Insurance CHF2.36 million and Credit Suisse CHF1.11 million.
So how is the money used? Generally speaking, the US subsidiaries of Swiss businesses “engage lobbying firms based in Washington”, according to Aaron Scherb, director of legislative affairs for watchdog Common Cause.
“These firms often specialise in a particular sector, for example finance, by employing former public servants or legislators who have privileged contacts with the current decision makers.”
Lobbying activities could be aimed at obtaining detailed information about the legislative process or pushing a business agenda to the relevant authorities. The Lobbying Disclosure Act ensures that the process is relatively transparent because firms engaged in lobbying must be registered and disclose to authorities how much is spent lobbying on which issues.
Obamacare and financial regulation
Several issues at the top of the US political agenda in 2017 were of concern to the managers of Swiss corporations.
Official declarations made by Novartis and Roche mention for example the (aborted) attempt to repeal the health insurance law known as Obamacare. In the financial sector, Zurich Insurance and Credit Swiss lobbied around the Financial CHOICE Act, which would, if enacted, water down financial regulations introduced in the wake of the 2008 financial crisis.
Does all this activity mean there is a “Swiss lobby” in Washington? For Scherb, businesses are more likely to be organised by sector than country of origin.
“Many foreign-based subsidiaries are part of local trade organisations, for example the American Association of Bankers,” he says. “They often pool their resources with American companies that have common interests, to optimise their lobbying efforts.”
Deals made in the USA
Nonetheless, the aim is to stake out a position. The declarations made by ABB Group, for example, reveal a keen interest in the vast infrastructure plans under consideration by the Trump Administration. Estimated to be worth some $1.5 trillion (CHF1.42 trillion), the industry equipment and technology giant could benefit from large contracts for electrical lines or railways, according to a 2017 company document.
Another major measure has caught the eye of Swiss multinationals. The reform of America’s tax code, voted in December, is listed on the lobbying declarations of all Swiss businesses, regardless of sector. It delivered a 14% cut in taxes for businesses. Novartis, Nestlé and ABB, together with the heads of 12 other European companies, met Donald Trump in Davos to praise the reform.
“We’re satisfied with the tax reform,” head of Novartis Vas Narasimhan told Trump. “And we’re equally thrilled with the major progress made by the Food and Drug Administration [FDA, the US organisation for the regulation of food and medicines].”
It’s unlikely the “progress” was random: three legislative projects concerning the FDA in 2017 appeared on the lobbying declarations of Novartis.
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