The Utah Senate will soon debate and vote on HJR1, the subject of a massive advertising and lobbying blitz by Utah’s billion-dollar credit unions. It will be very interesting in the next few days to see whether good public policy can hold its own against an attempt to flex raw political muscle.

            If you compare the lobbying pressure applied to legislators from both sides of this debate, there’s no contest. It has been highly one-sided. If hardball politics is what is required for victory, then the big CUs are going to win in a mudslide. They have spent more than a million dollars of members’ money on parallel advertising campaigns, and have inundated lawmakers with thousands of phone calls, letters, e-mail messages and petition signatures. They’ve used every lobbying and political arm-twisting technique in the book, and more noisy rallies, press conferences and lots of hand-wringing are yet expected.

            In contrast to the in-your-face CU campaign, the low-key approach by supporters of HJR1 is almost startling. While just as strong in their opinions, HJR1 backers have been quiet, calm and professional, relying on the strength of their public policy arguments to carry the day. No advertising campaign. No blizzard of e-mail messages and phone calls. No showy press conferences or demonstrations.

            Just the power of being right on the issue.

            So who will win? I hope and expect that HJR1 will pass. Two things severely diminish the impact of the enormous, and expensive, credit union arm-twisting campaign.

            First, for a political message to work with legislators, no matter how loud and noisy, it has to be based on the facts. On the unvarnished truth. For unsophisticated people, the Big Lie technique of repeating an untruth over and over might work. But for legislators who have been around the block a time or two, who have dealt with this issue in the past and assigned a task force to study it for two years, the Big Lie doesn’t work. They know passage of HJR1, which simply supports current state policy, doesn’t impose taxes on anyone, and calls on Congress to pay attention to this issue, isn’t going to destroy the credit union industry.

            An untruth repeated in a million radio and TV ads, phone calls, e-mail messages and petitions, doesn’t magically make it truthful. When HJR1 passes and is sent to Congress and Utah’s credit union industry continues on as usual, I imagine a lot of members are going to scratch their heads and ask the big CU operatives, “Now, tell me again why we were so concerned about this thing? Tell me why we blew through a cool million bucks of our money?” Might be some red faces at that point.

            Second, there is a subtle (and sometimes not so subtle) threat implied in the big advertising and lobbying blitz orchestrated by the CUs. The threat is this:  “We’ll get you in the next election!” The problem with such a threat is that it rings hollow to most legislators. For all their bluster, the big credit unions have not been able to deliver politically. They have lost in elections. They have lost in leadership contests. They have lost in trying to get people fired. They have lost in state courts. They have lost in federal courts. They have lost before regulators. They have lost before legislative committees and task forces. They have lost before the full Legislature. So the threat of political payback isn’t terribly frightening. Legislators willing to stand up to the hardball tactics know that they have plenty of strong, active and smart political support that will be exercised at the right times in the right places.

            So here’s hoping that good public policy can win against misinformation, intimidation, and political threats. While HJR1 doesn’t tax anyone, it is crucially important as a statement of principle. Most Utah lawmakers simply don’t believe that enormous, wealthy, highly-profitable businesses that share none of the characteristics of charitable, non-profit institutions, should avoid shouldering a fair share of the costs of education and government.  

            Most legislators know that it makes no sense for taxpayers to subsidize a billion-dollar credit union that wants to make multi-million dollar loans to wealthy developers to build extravagant homes for rich people. Most legislators know the difference between a traditional credit union deserving its tax exemption and a mega-financial institution that has obviously strayed from the role and mission of a credit union.

            Good public policy vs. high-pressure politics. A very interesting contest.

(Sponsored by The Exoro Group)