The corruption of US politics

From Occupy to the Tea Party, the obsession with corruption is far more damaging to democracy than politicians' alleged shady dealings.

Sean Collins
US correspondent

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Among students of American history, it is generally recognised that American politics is much less corrupt than it was in the past. Sure, politicians on the take, like the Nucky Thompson character in the Prohibition-era drama Boardwalk Empire, still exist: witness William Jefferson, the Louisiana congressman who was found in 2005 to have $90,000 in bribes stashed in his freezer. But examples like Jefferson stand out precisely because they are so rare.

And yet, more and more today you hear claims that the money-changers are overrunning the temples of Congress and the White House. Campaign fundraising by so-called ‘Super PACs’ (or Political Action Committees), created by a recent Supreme Court ruling, are said to be distorting the 2012 contest for president. Occupy protesters suggest that the roots of our problems lie in corporations controlling politics, and a common cry from them is to ‘get money out of politics’. And it is not just a liberal-left complaint: many conservatives, including the Tea Party types, contend that ‘crony capitalism’ is alive and well in Washington, and that’s why we shouldn’t trust big government.

The recent publication of two books on the role of money in American politics provides further evidence that this is a concern shared by those who come from seemingly different ideological perspectives. Peter Schweizer, a fellow at the conservative Hoover Institution and a speechwriter for Sarah Palin, has written Throw Them All Out, an exposé of politicians’ money-grabbing activities. At the same time, Lawrence Lessig, a law professor at Harvard and a self-proclaimed liberal, has published Republic, Lost, a treatise on how money corrupts Congress.

Schweizer accuses American politicians of engaging in shady dealings in various forms: from trading shares on insider knowledge to making generous grants and loan guarantees to friends in the green-energy business. He recognises that the kind of corrupt politicians ‘who stuff money in their freezers’ are ‘vintage stuff’ now, but finds rampant corruption nonetheless, which he calls ‘honest graft’. While coming from a conservative background, he targets both Democrats and Republicans, often referring to a ‘political class’ as a whole. Schweizer’s book was the basis for a recent story on the CBS current-affairs show, 60 Minutes, which generated some wider publicity and put him in the limelight for a while.

On the face of it, Schweizer’s points sound commonsensical and quite damning, but they really don’t hold up under scrutiny. And while his book is long on examples, he falls far short from demonstrating that ‘all’ politicians are corrupt and should be ‘thrown out’.

Schweizer makes a lot of allegations, but that’s all they are – allegations. He may show that certain investments by politicians appear suspicious, but he has no proof that there is fire where there is smoke. For instance, Schweizer hauls Spencer Bachus, Republican representative from Alabama, over the coals. He finds it highly dubious that on 19 September 2008, Bachus shorted the market through the purchase of options – that is, he bet on a stock market decline – the day after he and his fellow members of the House Financial Services Committee had listened to doomsday warnings from Federal Reserve chairman Ben Bernanke and US treasury secretary Hank Paulsen. In the event, Bachus profited from his trade, gaining the not-so-enormous sum of $6,000. But is this a scandal? Who didn’t know on 19 September that the economy was going to hell in a handbasket? You didn’t need Bernanke and Paulsen to tell you that – Lehman Brothers had just gone under four days earlier.

In another example, Schweizer writes about how Massachusetts Democrat John Kerry supposedly made money from investments in pharmaceuticals companies while a member of a Senate Committee working on healthcare reform in 2009. But the idea that Kerry is using Congress to get rich is risible: he entered the halls already loaded, as his wife is the heiress to the Heinz fortune (net worth estimated at $1 billion). Furthermore, at the time, it was unclear if healthcare reform would pass, given the opposition from both Democrats and Republicans. And, as it happens, the trading was done by Kerry’s family trust, over which he has no control.

What really undermines Schweizer’s case is how he misleads the reader about the law. The subtitle of his book says that politicians engage in deals that ‘would send the rest of us to prison’. But that is simply not true. He also writes that ‘they have legislated themselves as untouchable as a political class’, but again, that’s false. Congressmen and senators have not created a special exemption for themselves, as Schweizer contends. Over the years, they have taken the line that the laws that apply to citizens generally should apply to elected politicians, too.

The standard interpretation of insider-trading law in the US is very specific: it occurs when a fiduciary of a company trades that company’s shares based on confidential information. Neither politicians nor the general citizenry are business fiduciaries. It is one thing to argue for a new law to proscribe representatives’ financial dealings (a law that hasn’t existed since the Founding); but it is quite another to imply, as Schweizer does, that the politicians have done something sneaky to get around the existing law.

For all Schweizer’s puffed-up outrage, there really isn’t anything to get all that excited about. He paints a picture of an incorrigible Congress unwilling to reform itself. But, as it happens, Congress has recently taken up the issue of representatives trading on non-public information, and President Obama announced his support for legislation in the State of the Union address last week. Indeed, as we went to press, the Senate voted to pass such a law, and the House will vote on it next week. But if, as it appears likely, a new law is passed, it will not be much of a big deal. We will still be left with major problems, like the economy and a lack of political vision, that have nothing to do politicians’ alleged insider dealings.

Accusations like those tossed around by Schweizer may sound quite radical, but they really represent a degraded form of political discourse. Schweizer talks about a ‘Permanent Political Class’ (in upper case) which transcends party allegiances, but he essentially argues that American politics is comprised of a bunch of corrupt individuals. There are many things that you can criticise the political class in general for, but being crooked is not one that holds up. This kind of conspiratorial thinking – which ranges from publications like Rolling Stone on the left to writers like Schweizer on the right – is not only inaccurate and overblown; it also feeds cynicism and ultimately has a demobilising effect.

Like Schweizer, Lessig also acknowledges that bribery is not that prevalent today, but other forms of corruption are extensive and should be addressed. But his specific concerns differ from Schweizer’s, and he is more analytical and less sensationalist than him.

Lessig argues that corruption is endemic in American politics today, primarily due to campaign financing and corporate lobbying. Rather than straightforward bribes, Lessig sees a less direct process of back-scratching going on: for example, a corporation or wealthy individual might donate to a candidate and make no immediate demands, but later, as a dependence develops, they call in a favour.

What evidence does Lessig present to demonstrate that political fundraising and lobbying are inherently corrupting? He contends that the corrupting influence of money can be directly observed in the working (or lack of working) of Congress. He argues that moneyed interests have distorted the priorities of Congress, leading representatives to dodge debates over issues like unemployment and global warming in favour of lobbyists’ favoured causes.

Essentially, Lessig believes that if a political issue is not being addressed by Congress, then the reason must be that representatives are unduly influenced by corporate lobbyists or some other form of money distortion. He cannot countenance the possibility that certain politicians may not share the same set of priorities as Lessig himself, or might have an honest difference of opinion. Maybe unemployment doesn’t get discussed because both parties lack a vision about how to tackle it. Maybe global warming doesn’t get discussed because other issues are more pressing. But if a politician doesn’t agree with Lessig’s priorities, he concludes that they must have been bought off. He even uses the term ‘corruption deniers’, an analogy to so-called ‘global warming deniers’, to describe those who disagree with him.

Take the example of post-crisis financial reform. Lessig is dismayed that little has been accomplished in this area, and blames the ongoing influence of Wall Street on politics. But there are other possible explanations. Perhaps certain politicians (from both of the main parties) are holding back on regulating the financial sphere further because they still view finance as an important source of profits (as they did before the meltdown), and are wary of unduly stifling the sector’s competitiveness. Or perhaps some are predisposed towards free markets in principle, and don’t believe that a lack of regulation caused the crisis. Or perhaps some believe regulation might negatively impact upon banks at a time when the financial sector and the economy generally is still on shaky grounds. You may not agree with all or any of these arguments, but it is definitely possible that politicians who espouse such views honestly believe them to be true. Yet in Lessig’s world, such arguments are at best smokescreens; the real reason opponents resist reform must be because they are in the pocket of Wall Street.

Lessig also exaggerates the power of money to shape American politics. While campaign funds definitely can influence the result, they are far from the whole story. Spending money will not buy an election if the candidate is unpopular. Consider former eBay CEO Meg Whitman: she ran for governor of California in 2010 and outspent Jerry Brown by a factor of 10 to one, and yet Brown won handily. Likewise, a politician or idea whose time has come cannot be stopped by advertising money. Lessig himself is honest enough to admit that the academic research cannot establish that money buy politicians’ votes in Congress either.

Moreover, Lessig’s focus on the role of money in the political process misses the bigger picture. What he doesn’t ask is: why do politicians need so much money? At most, he implies it is something of an arms-race. But in reality, politicians need to raise millions because they are undertaking top-down campaigns, with TV advertisements the prominent (and most costly) method of trying to engage with electorate. Most politicians today do not have organic ties with communities via a network of supporters. They are out of touch, and therefore have to try to relate to people by means of TV messages. Campaign funds are better understood as the cost American politicians have to pay in a situation where they do not have ties with people on the ground.

More often than not, the remedies proposed to fight corruption in politics make the situation worse. This would definitely be the case if Lessig’s favoured solution came to fruition. Indeed, his suggestion is bizarre: he recommends that the government provide every individual with a $50 voucher to spend on candidates, and wants to hold a constitution convention (something that hasn’t happened since the American Revolution era) to bring his idea into reality. Of course, the chances of this happening are virtually nil.

His proposal is deeply anti-democratic. Seeing politicians as thoroughly compromised, he says they must be excluded from the reform process. He calls for companies to fund his reform effort (including a shameless direct appeal to Google), and for ‘credible non-politicians’ such as ‘someone who has made her mark in business’ to run as candidates for office on an anti-corruption platform. Once elected, these candidates would ‘hold the government hostage’ (somehow) until it passed reforms. It is hard to believe, but Lessig betrays no sense of irony that his proposal relies on mobilising rich people against the existing political class.

Polls show that the public’s trust in government is at an all-time low. Both Schweizer and Lessig mistakenly believe that the roots of that lack of trust lie in political corruption, and that their proposed remedies will eventually restore trust. Trust in politics and other institutions is an important one today, but Schweizer and Lessig are wrong to see the roots of that mistrust in corruption. Indeed, both exaggerate the extent of corruption in their eagerness to condemn the political class. Together they highlight the disappearance of the old left-right distinctions; their shared conspiratorial mindset has them on the same side of the fence.

The lack of trust we see today is a broader problem tied to the lack of political vision and an inability to articulate values – problems that have worsened over time, and cannot be reversed overnight. In particular, trust cannot be re-established through transparency rules or passing laws against corruption. Indeed, the latest bill against political insider trading, backed by Obama, will only appear to give credence to those who say we should never trust politicians.

The problems in American society are much larger than relatively minor issues of insider trading, campaign financing and lobbying. And the major challenges of our time – such as the economic crisis – cannot be explained by such issues. So don’t worry so much about individual politicians acting illegally and in secret; it’s the institutions operating legally and in plain sight that we should care about.

Sean Collins is a writer based in New York. Visit his blog, The American Situation, here.

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