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Cover Story: Ruling Class

How Corporate Power and Money Control Cincinnati... or Not

By Margo Pierce · April 23rd, 2008 · Cover Story
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  Strings Attached
Woodrow J. Hinton

Strings Attached



Everyone has heard about the smoke-filled room crammed with rich -- sometimes just powerful but always white -- men hunkered down over a table bickering and dickering over how to manipulate individuals, organizations or politicians to suit their whims. Most believe that scene was relegated to old movies and bad novels.

Still, efforts by a handful of powerful people with related interests to exert control is something that never goes out of style.

Dan La Botz, a community organizer and professor of history at the University of Cincinnati, sees that kind of power brokering as unhealthy, undermining what democracy is supposed to be about. But La Botz's thesis -- Who Rules Cincinnati? A Study of Cincinnati's Economic Power Structure and Its Impact on Communities and People -- isn't a conspiracy theory.

"What might sometimes appear to be a conspiracy by the wealthy and powerful corporate elite is simply the way that their interests and outlooks coincide, leading them to act together to carry out their will politically," he writes. "This commonality of outlook and action is not a conspiracy. It is simply upper class economic interests expressed in social and political organization and policy."

La Botz published Who Rules Cincinnati? through Cincinnati Studies, a think tank studying local political, economic, social and cultural developments. La Botz serves on the group's Editorial Board, and this is its first published report.

La Botz presents three main questions: Who owns what? How do the owners of property use their wealth to influence social organizations and politics? What has corporate control meant for Cincinnati?

"I had a general sense when I began that companies like Procter & Gamble played a big role in Cincinnati, but I found that their actual influence and control over so many organizations was surprising," La Botz says. "What I hope the paper does is that it leads to a discussion in Cincinnati about who rules Cincinnati, about the condition of our city and about what needs to be done to change it. I'm sure others could read the same thing and come to other conclusions. But what will be fruitful will be that it hopefully opens other people to think about these questions and perhaps present other evidence or counter evidence to what I've written."

Talking is exactly what people have been doing since the paper was released in January (see "Power to the Corporations," issue of Jan. 30). Some have nothing to say, as with several corporate executives who declined to be interviewed. Others, like the Intercommunity Justice and Peace Center, have used the paper as the basis for a "Community Conversation."

The 97-page study contains a vast amount of data about the largest and most powerful companies in the city. La Botz chose to focus on what he considered to be the seven most influential corporations: Procter & Gamble, Kroger, Macy's/Federated Department Stores, Fifth Third Bancorp, Western and Southern Financial, American Financial Corp. and E.W. Scripps.

Annual revenue, memberships on nonprofit and other boards, political contributions and a comparison of urban and suburban neighborhoods are a few of the areas La Botz inventories.

Bill Woods, president of Applied Information Resources (www.airinc.org), finds the consolidation of all the information helpful. Heading a "nonprofit, public-policy research and community-information organization dedicated to citizen education on public issues," he says the paper raises some important questions about the undue influence a single group can have in the decision-making process.

"He does a service in pointing out the inequities of power in our community," Woods says. "Certainly the corporation(s) have the potential and often use that potential of making decisions. ... We need a lot more leavening with beefing up the citizen voice. One of the problems is that the citizens' voice is diverse -- you're talking about African Americans in certain neighborhoods, whites in Westwood -- so the civic voice isn't all one voice."

That point is a non-issue, according to Michael Weissbuch, an associate professor of political science and sociology at Xavier University. He characterizes La Botz's paper as "tiresome."

"Realizing that an individual person who is not 'important' or powerful doesn't have that voice -- that's what these citizen's organizations are for, whether it be religious groups, ethnic groups," Weissbuch says. "That's where the oversight comes from, and that's where the voice occurs.

"However, I think ultimately when you reach the decision-making point, those people who have perhaps the most invested, have the most expertise, they get to make that choice. While I don't personally consider our city council to be much of a 'wow' in terms of brainpower, nevertheless I think the one thing they have done well is to try to advocate for their various constituencies."

Growing inequity in politics
La Botz disagrees with the assessment that the voice of the people is or even can be accurately represented within the realm of government when elected officials get substantial campaign contributions from corporations. And corporations, after all, are supposed to be only one of many voices to be considered.

He notes in Who Rules Cincinnati? that the P&G Political Action Committee (PAC) clearly states that it participates in the political process as a way to shape public policy that impacts the company. That's the same thing individual citizens, citizen groups, churches and other organizations do when they talk to their elected officials, too. So what's the big deal?

"The total amount contributed by P&G PAC in 2006 to influence elections at all levels throughout the country was $260,880," La Botz writes.

"With more than a quarter of a million dollars in play, P&G PAC represented a significant contributor to local, state and national political campaigns."

That kind of money buys influence in a way that an individual citizen or other organizations can't. It's why Woods has been actively involved in campaign finance reform.

"One of the things that drew me to campaign finance reform is the growing inequity in the political framework, which is leading toward not a democracy but more toward a plutocracy," he says. "I've heard this particular period compared to the post-Civil War era, where you had one party in control and when corporations were called the 'robber barons.' I think there's certainly some truth in that.

"Democracy is supposed to be the great leveler. We've always had inequities in our society in terms of rich, poor, middle class, etc. But those are meant to be made equal when we all go to the polls and vote on issues and candidates. Money, especially big money ... has gotten bigger and bigger in terms of influencing political campaigns and legislation."

Corporations typically have a singular or narrow focus, as opposed to a government body like the city of Cincinnati that's involved in all kinds of activities. That specialization translates into expertise, according to Weissbuch.

Having companies willing to share the riches of that experience -- both in dollars and time -- is something for which he's grateful.

"From the discussion (La Botz) says, 'Corporate power dominates Cincinnati's economy, society and political life,' " Weissbuch says. "Well, OK. That could be said about pretty much any city in the country. That's what happens. That's why you want corporations to do just that sort of thing. Generally they're run by pretty smart people who have a lot of power. Even though the whole sense of this that's some what of a negative or it's ominous, it's pretty common.

"Then he says democracy and democratic institutions play an even smaller role within such a system. If he's referring to institutions like the city council playing a smaller role, from my perspective that's a good thing. In my estimation, over the last 20, 30 years, the city council has been the most inept group of people I have ever seen trying to run a city. Were it just them, I shudder to think where we would be today."

Weissbuch brushes off the potential for a conflict of interest between a for-profit corporation and the role government is supposed to play. He says that everyone needs to deal with the reality that everyone is out for his or her own self-interest. If the reward for doing the hard work of getting involved in local government is being able to make a little money or throw some business the way of a friend, that's OK.

"My overriding concern is always: Do we have competent people doing the things they should be doing?" Weissbuch says. "And if we have to live with a little nepotism, if we have to live with a little shuffling of business to friends, OK. As long as it doesn't become too much or it doesn't go to people who are not competent, I don't have any problem with it.

"I understand that some segments of the population may be nervous of all these corporate people hanging out in these major projects, but who else would you have that actually knows what they're doing?"

Corporations 'willing to stick their necks out'
Woods believes the concerns La Botz voices about corporate power are legitimate. Describing the efforts of then-Mayor Roxanne Qualls and city council to create an additional revenue stream for Cincinnati Public Schools through an increase on the entertainment ticket tax, he says the football franchise dubbed the tax "onerous" and went so far as to put an amendment into the city charter that "forbade the raising of the ticket tax."

"He points out, quite correctly, that with their money, corporations can and sometimes do wield a lot of influence and power," Woods says. "That hasn't changed much over time."

What has changed is the globalization of the economy and how that draws the attention of corporate executives to areas well beyond the reach of Cincinnati City Council or Hamilton County Commissioners. While La Botz acknowledges this fact in his paper, Woods thinks it carries much more weight. Weissbuch chimes in with an appreciation for the corporate effort to act locally.

"Thank God that we happen to have a responsible corporate community that actually does care about this city and they're willing to stick their necks out to participate," he says. "I think it's time clarity and reality steps into this whole picture and that's what I found lacking, ultimately, in (La Botz's paper). It's not that the research was bad; it's that he twisted it and turned it into something that sounds like one of those plots that these evil corporate outsiders are engaged in to strip the city of its economic well being and put in their pockets."

Oversimplification and exaggeration of conclusions are some of the major flaws in the paper, according to Woods and Weissbuch. One problem both men point out is the assumption La Botz makes about everyone in the upper class -- individuals and corporate heads alike -- being of a like mind in wanting all things in the city to go their way.

"Another factor in the community, beside the civic side which he doesn't deal with too much, is the religious community," Woods says. "A whole lot of suburban churches support the Drop Inn Center, which on the face of it might be thought of as suburban, upper income or middle-class bastions, but because of their belief in alleviating poverty and putting into practice the gospels they support that work.

"My point is that it's a lot more complicated than the thesis that there's this lock-step corporate community that makes all the decisions. I think you have to look at individual decisions, and you often see that when the corporations get active they get their way."

Promoting economic development
One way La Botz attempts to make his point is to follow the money and the people coming out of local corporations. He traces tens of millions of dollars awarded by corporate foundations in the form of grants, and top-level management sits on many of the boards receiving those funds.

The consequence of receiving much-needed dollars -- and the prestige of having a big company name on the board -- is that many institutions will likely do what's necessary to keep both, even at the expense of excluding other voices.

"We can take some local examples of the corporations' indirect power," La Botz writes. "The University of Cincinnati has a 10-member Board of Trustees, including one student trustee. All of the members of the current board, except the student, are corporate executives, small businessmen, attorneys or professionals in private practice.

"The corporate board members are Sandra W. Helmann, vice president of American Financial, and Margaret Buchanan, the president and publisher of The Cincinnati Enquirer. No working class or poor people, no unions or minority organizations are represented on the board even though this is a public university which serves many working class people."

The one African-American board member, Phillip R. Cox of Cox Financial Corp., "is less a representative of the African American community than another representative of corporate power," La Botz explains. Cox also sits on the boards of Bethesda Hospital, Cincinnati Bell, Cincinnati Museum of Natural History, Cinergy, the Federal Reserve Bank and Touchstone Mutual Funds. In addition, he chairs the Cincinnati Business Committee (CBC) and recently accepted a position on the board of the Cincinnati Center City Development Corporation (3CDC).

The declining financial support for all levels of education, including universities, means "public" institutions now get more of their revenue from the private sector than from the state. With almost $9 million in research money coming from corporations annually, La Botz theorizes that universities make sure the funding sources are satisfied, eliminating the possibility for independent decision making.

Nancy Zimpher, president of UC, recently accepted the position as board chair for the Greater Cincinnati Regional Chamber of Commerce. She was unavailable for an interview. (In addition, the heads of 3CDC, Macy's/Federated and Fifth Third declined to be interviewed for this story.)

Another way La Botz believes corporations concentrate their power and influence is by helping create organizations that represent their position and in some cases circumvent the democratic process. He points to the businesses and corporate alliances such as 3CDC, CBC and Downtown Cincinnati Incorporated (DCI) as entities created solely to promote their member corporations' preferences for economic development.

Woods agrees that a single-focus group like those mentioned cause him some concern.

"I do think to have a healthy society we need a diverse group of people who are involved in the decision," he says. "When an elite process is used, business is always represented, government is always represented (and) sometimes the civic side or citizen groups are not represented or they're asked to ratify something. Getting citizens ahead of the curve where they in fact have a lot of say in what future major decisions are going to be for the city is critical.

"I don't think the corporate leaders sit down at the Queen City Club and say, 'How can we stifle citizen involvement or interest in this area?' I think you would have to look at things issue by issue and see who was trying to influence who, who was involved, etc. I think that gives on a better sense than looking at who's got the money."

Weissbuch says a sanity check is necessary to avoid the political correctness that ultimately ignores the realities the city is facing. He uses Over-the-Rhine development as an example.

"Everybody knows it is great housing ripe for gentrification, but for whatever reason for the last 40 years it hasn't happened," he says. "It's really important that we create a city that outsiders want to come to and a city that maybe, maybe can hook back some of the upper middle class and middle class people that have left.

"Let's say the people in that area were disenfranchised and were moved out of that neighborhood. Where's the social justice? What's going to happen to those people? I think there are a couple truisms. Certainly the middle, upper middle class and business interests aren't that concerned about it because, from their perspective, the people who live in that area are much more of the problem than the solution. The other truism is that the population will move and maybe they wind up, I don't know, in Lower Price Hill or Winton Place or wherever, and they'll be OK."

Sounding a lot like the "trickle down" economic theory of the 1980s, Weissbuch's view is pragmatic, he says. If the city is prosperous, those who have been displaced will eventually make their way back and have a better life as result of having a better place to live. But then he contradicts himself with one of his other truths.

"The fact of the matter is that nobody cares. It really ultimately comes down to that," Weissbuch explains. "The people at the lower end of the socio-economic scale are going to be OK. They are kind of the leaves in the wind of all that happens simply because they don't have economic social power, but by politicians, corporate heads trying to do things that benefit the city, maybe themselves too, then ultimately things will certainly turn out better for those at the lower end than if those people at the top didn't do those things."

La Botz concludes his paper with a section titled "Program for Challenging Corporate Power," which calls for publicly-owned projects such as mass transit, universal health care, changing Ohio's public school funding formula and ending racism and discrimination. All admirable goals, if they work out in reality as neatly as they do on paper.

There's a desperation and urgency expressed as the rationale for taking these steps that make Woods wonder about the intensity.

"If you believed every assertion that he makes in that paper, you'd probably just throw up your hands and go read Jane Austen novels. It's all over," he says. "There's certainly value in somebody taking this on and asking the question, 'Who governs?' He says, 'Who rules?' and I think that's going a bit far."


To download and read a copy of Who Rules Cincinnati? go to www.cincinnatistudies.org.


 
 
 
 

 

 
 
 
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