Yes, this. Or, another example, a corporation could legitimately be advocating for more stringent regulation while doing the bare minimum to abide by the law.

Yes, this. Or, another example, a corporation could legitimately be advocating for more stringent regulation while doing the bare minimum to abide by the law. If the environment is sufficiently competitive, the corporation or politician that goes the extra ethical mile gets outcompeted and fails. So the choice is between being hypocritical or not existing. To succeed, they have to either convince all other players to cooperate and use the more ethical, less competitive strategy, or change the system so that the less ethical strategy is not an option.