“Individuals usually don’t have enough incentive to take action, even though it is clear they will be collectively better off by taking action.” In 2015, Israeli Linor Deutsch co-founded Lobby99, the first lobbying organization that works for citizens and not for corporations. With more than 6,000 members who pay a monthly fee, it is the first successful attempt to influence elected officials in order to protect the public interest against vested interests.
“Our model is the next generation of democracy. Elected officials’ decisions are skewed because of lobbyists and vested interests. That is why we started to lobby for the people.” Linor Deutsch, 37, is an energetic Israeli woman with an ambitious goal: to influence elected officials, just as big corporations do every single day to increase their profits. But in Deutsch’s case, the clients whose interests she favors are the Israeli public—or at least the subsample who pays a monthly fee (of their choice) to Lobby99, the organization she leads.
The top 1 percent has always hired lobbyists, but now the rest of the public also has the possibility to hire someone to protect their interests. When Deutsch lectures in business schools, as she recently did at Chicago Booth during a Stigler Center event, she says that she is trying to solve a well-known collective action problem: “Individuals usually don’t have enough incentive to take action, even though it is clear they will be collectively better off by taking action.”
Lobby99 was founded in 2015 with funds from 1084 donors and now boasts more than 6,200 members—a significant number for a small country like Israel. All members pay a monthly fee of their choice and get a single vote, no matter how much they gave. To prevent capture, Lobby99 does not accept big donations. It prefers that members give small amounts on a regular basis instead of one-off contributions because its “lobby-for-the-public model” is based on participation.
The organization’s budget is the equivalent of $1 million in 2020, which allows it to employ 11 people including lobbyists, researchers, and community developers. Members propose and vote on lobbying priorities twice a year, and authorize the budget annually.
People pay a share of their income to fund public lobbyists who act on their behalf to draft legislation based on priorities decided through a vote. Lobby99’s model sounds familiar and not particularly innovative; it is usually called “democracy.” So why do people also need to pay lobbyists in addition to members of their parliament? ProMarket asked Deutsch to answer.
Q: Why do people need lobbyists when they have elected politicians?
I’ll tell you my personal story to answer. I was born in a small town in the south of Israel, and I have always wanted to work for the Knesset, the Israeli parliament. After my service in the army, a degree in political science and law, and an MA in gender studies, I eventually was accepted to work at the Knesset as an assistant to a member of the Knesset (MK). On my very first day, I had to draft a bill, and I asked a senior colleague for help. He gave me the talk of my life: “Why are you coming to me with this problem? You see all those people walking around with orange tags? They are the lobbyists; everything you want to know, you can ask them. They have been here for ages, and they know the system and the rules. They work for you. They can draft bills for you and also get you media coverage.” Then he added: “Come on, you look like a smart girl. How long do you want to work for the Knesset? Who do you think can arrange you interviews to get well-paid jobs at the Bank of Israel, Google, or Amazon? Lobbyists!”
Q: Are lobbyists really so powerful, in your experience?
I’ll tell you another story. The American corporation 3M (with $32 billion revenues a year) was stuck with a few tons of reflecting material in Israel and they didn’t know what to do with it. They heard that there was a public tender for orange vests that workers use when they are in the streets. 3M asked a lobby firm to help to win the tender. The lobbyists were more ambitious: “What if the Knesset approves a bill saying that every single citizen in the country has to have a vest?” 3M was interested, but how could it be sure that, even if the bill was approved, it would win the tender? Easy answer: The lobbying firm would influence the tender’s criteria.
To make a long story short: The bill passed, 3M won the tender, it finished all the 20 tons of reflecting material it had been stuck within Israel, and it needed to import even more material from the United States. The whole story was recorded by a hidden camera. People were outraged.
Q: How did you decide to start Lobby99?
In 2011, there were social protests in Israel, fueled by social media, which had everyone in Israel talking about “public interest,” as opposed to special interests. There was a new vibe in Israeli politics. That was the premise for Lobby99, but the trigger was a 2014 debate on recently-discovered gas deposits. The government was negotiating with energy tycoons and offering very favorable contracts. One of the most famous reporters covering the negotiation, very well connected with Knesset members, suddenly quit his job and moved to work for energy tycoons as a lobbyist.
That was the event that led Yaya Fink, Lobby99’s co-founder, to react.
He approached me. We were both parliamentary assistants, and we decided to become the first “public lobbyists.” I didn’t want to be a lobbyist; I didn’t like the label. But the Israeli public was not at the table of the negotiations, and it had no chance to influence something as important as energy policy.
Q: What do you lobby for?
We put some limits on Lobby99’s agenda. In Israel, there are two very polarizing issues: defense and religion. It is not productive for us to try to build a consensus on those topics. Therefore we decided to focus on cross-partisan issues, such as the banking system reform or national resources royalties. There is a high consensus on what policies should be implemented, but people had no voice against the tycoons. We also make sure to choose topics with potential tangible impacts: We prefer a compromise and a bill passed rather than an ideological battle. We want results.
Q: How did you start the organization?
We got money for a four-month pilot initiative. We talked to initial donors and made a list of three topics which would be our first issues: more transparency in the legislative process, reform in the banking system, and natural resources.
We started by advocating for more transparency on lobbying. Until 2008, there was no regulation for lobbying firms. Since then, lobbyists have always blocked all bills to restrict lobbying in the Knesset. Until we came. In the Knesset, there are 250 registered lobbyists, but there was no transparency on who represented which interests or what bills they were working on. We wanted to make transparent which lobbyists sit in a room when a committee discusses a certain bill: It is the only way to know which interests are at stake. If you know that a Facebook lobbyist is in the room, you know that Facebook has an interest in the bill.
We got a transparency bill passed in one month. It was unbelievable. Lobbyists had no time to react. From that moment, I became lobbyists’ enemy number one, but it was such a successful start that we were then able to find many people ready to pay a monthly fee to support our action.
Q: What do members of Knesset get from cooperating with Lobby99?
In the beginning, it was hard; they didn’t know what we were doing and they were very skeptical. But we gave them something they need: knowledge, knowing there are working for the public interest, good publicity, media coverage, achievements to show to their voters. We gave them credit for any success we got.
Q: How do you prevent lobbyists from taking control of Lobby 99? They may be tempted to infiltrate your organization.
First of all, we accept only small sums on a regular basis. Moreover, even if some lobbyists try to influence us, they cannot have any impact on ongoing projects. They could only influence future priorities; it is too late to stop what we are already doing. However, I am not very worried: We know exactly who our members are, how they got in touch with us, from which link they reached our website. And, in any case, we will never engage in a pro-corporation campaign. Since it is not so easy to have an influence on Lobby99, people who don’t like us are trying different approaches.
Q: What is Lobby99’s current top priority?
We were founded after the gas deal was closed. A year and a half ago, we heard that the biggest energy tycoon, Yitzhak Tshuva, was trying to buy the only gas pipeline between Egypt and Israel: That could prevent any competition for centuries. The main supplier of gas would have control of a bottleneck to prevent any foreign competitor from entering the Israeli market. Despite having huge gas resources in Israel, we pay almost $6 per gas unit while other countries pay less than $3. The pipeline acquisition would increase that gap dramatically.
At Lobby99, we considered all possible ways to stop the acquisition. There was no alternative other than to appeal the government decision in the antitrust court—a very expensive trial that usually costs hundreds of thousands of dollars. That’s why no NGO has ever tried to go down that route. But we had no choice, and we had only 30 days to appeal the decision. We found a very senior lawyer who offered to work pro-bono for us, but costs were still close to 100,000 dollars. We asked our members to vote, 95 percent supported the initiative, and then we launched a special crowdfunding to raise the money. Our members and many other people gave us the money we needed.
Q: How do you get people so engaged?
Not everybody is engaged at the same level. Someone might give us $10 just to feel like a better citizen, others might show up to every meeting, send us emails, and want to know everything. The average payment is $10 a month, but we also have $1 subscriptions, and every voice counts the same. Regardless of the amount paid—which is not a donation but a membership fee—people get something in exchange. We try to be extremely transparent: We update our members on a daily basis, we organize a yearly tour to visit the Knesset, we present our successes but also our setbacks, we don’t want to sugarcoat anything.
The most important moment is when we ask them for their suggestions for future campaigns. We collect ideas, then we develop a list of options and ask members to decide. We obviously have to drop many proposals, sometimes because they are beyond our mandate—for example, they are connected to the Palestinian issues—or when it would be almost impossible to get tangible results because comprehensive reforms are needed.
It takes a lot of time to answer every single email: Members know they can’t impose their ideas, but they consider it very important to receive some personalized feedback. That’s what makes them feel important and helps Lobby99 to keep growing. When you tell people the truth, you create trust.
Q: Are you planning to run for office in the near future, as Lobby99 co-founder Yaya Fink did?
I have received many proposals from different parties, but I don’t want to run for office. To me, politics is not an end in itself but only a means for change, and I think that I am much more influential with Lobby99 than as a member of the Knesset.
The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy.
