Читать книгу The Republic of Virtue - F. H. Buckley - Страница 10
ОглавлениеFOR FOREIGN INVESTORS, America is always a good bet, and that’s especially true when they come from corrupt countries, as Kambir Abdul Rahman and Yassir Habib did. Together the two formed Abdul Enterprises and deposited a million dollars in Chase Manhattan Bank to give themselves credibility. Then they hired Melvin Weinberg to approach American politicians for their support. If this is beginning to sound familiar, that’s because it’s the Abscam sting of 1978–80, and the basis for the 2013 film American Hustle.
Kambir Abdul Rahman and Yassir Habib didn’t exist. The entire operation was an FBI plan to entrap corrupt politicians, and before it was over it led to the conviction of six U.S. congressmen as well as Senator Harrison Williams (D-NJ). Melvin Weinberg was all too real, an elementary school dropout and ne’er-do-well who once took $10,000 from a doctor on a promise to kill his wife and then simply kept the money without doing the job. He subsequently moved on to bigger stings, making $500,000 a year and never paying income tax. In time the feds caught up with him, and after being convicted of wire fraud he agreed to work for the FBI to entrap corrupt politicians. Beginning with low-level New Jersey pols, he quickly moved up to Washington officials as word spread that he had money to hand out. The first congressman he caught in his web was Michael Myers (D-NJ), who was persuaded to introduce a private bill that would have permitted “Rahman” and “Habib” to remain in the United States. “I’m no Boy Scout,” he told Weinberg. Truer words were never spoken, but Myers might have been less candid had he known that he was being taped and the FBI was listening in.1
It made for a good movie, but it was only garden-variety corruption, where public officials take money under the table in exchange for an official act and are sentenced to jail. In such cases, the FBI and the local police seem entirely up to the job of ferreting out the grifter, the pol on the take. What they miss are the nudges and winks that fall short of an official act, the way in which campaign donors and lobbyists support candidates and thereafter enjoy a privileged relationship with them. The donors and lobbyists will expect to have their calls returned and their opinions respected, and that’s not a crime. “Ingratiation and access . . . are not corruption,” ruled Justice Kennedy in Citizens United v. FEC.2 In a subsequent case, Chief Justice Roberts took it one step further. There’s nothing wrong with campaign donors not only gaining access but expecting that the officials they support will respond to their interests, he thought. Rather, it’s “a central feature of democracy.”3 That sounds like a heavy dose of realism.
There are worse things in the annals of government than donors who influence elected officials. But that isn’t an endorsement of America’s pay-for-play networks, in which officials exchange public favors for campaign contributions, book contracts, media hires, charitable gifts and the like. Then we get the shady dealings of Bill and Hillary Clinton that were detailed by Peter Schweizer in Clinton Cash.4
What “ingratiation and access” might look like became clear from Clinton Foundation emails to the State Department, made public only after protracted Freedom of Information Act litigation forced their disclosure. In 2009, Salman bin Hamad al-Khalifa, the crown prince of Bahrain, sought a private meeting with Hillary Clinton, the newly appointed secretary of state. The request went through normal diplomatic channels, but that didn’t work. Bahrain wasn’t on the State Department’s best-friends list, and little wonder, since Human Rights Watch says that the little sheikdom regularly practices torture and that its human rights record is “dismal.” Nothing daunted, the crown prince turned to the Clinton Foundation, which had received $32 million from him. The foundation’s chief executive, Doug Band, then reached out to Huma Abedin, Mrs. Clinton’s chief aide. The two were so close that Clinton saw Huma as her surrogate daughter (but would demote her to “one of my staffers” after the Anthony Weiner scandal broke).5 Abedin’s job at the State Department included taking care of “Clinton family matters,” and while working at State she was also on retainer with both the Clinton Foundation and Band’s advisory firm.6 And when Band wrote her, “Cp of Bahrein in tomorrow to Friday Asking to see Good friend of ours,” that did the trick.7 Secretary Clinton met with the prince, and then, between 2010 and 2012, Clinton’s State Department approved major arms sales to Bahrain, including chemical weapons that would be used to crush pro-democracy protests.8
In another case, Secretary Clinton brokered a deal that helped the Swiss banking giant UBS, which the IRS had sued to force disclosure of the names of the 52,000 Americans with secret bank accounts. UBS had stalled on releasing the names, pleading that this would violate Swiss secrecy laws. Within months of assuming office, Clinton took the unusual step of personally announcing that UBS would have to turn over the names of only 4,500 depositors. Thereafter, UBS donations to the Clinton Foundation swelled: from $60,000 by the end of 2008, to a total of $600,000 at the end of 2014. The bank also made a $32 million donation to the foundation’s inner-city loan program, and paid Bill Clinton $1.5 million to participate in a series of question-and-answer sessions with a UBS executive. Secretaries of state are sometimes called on to tout major U.S. businesses, but this was a foreign corporation, and a bank at that.9
In surveying the pattern of fees and donations to the Clinton Foundation, Schweizer suggested that the Clintons had put America’s foreign policy up for sale. The foreign countries that supported the foundation, many of them human rights abusers such as Saudi Arabia, were presumably more interested in seeking Secretary Clinton’s favor than in foundation issues such as empowering women and improving LGBT rights. And if it was favors they wanted, favors they got. Foreign dignitaries, such as Salman bin Hamad al-Khalifa, were more likely to score a meeting with Secretary Clinton if they supported the foundation, and this was true of private individuals as well. More than half the private people who met with her were foundation donors, either personally or through their businesses. Eighty-five private donors in all gave a total of $156 million.10
That’s a lot of money, but some donors seemed to get their money’s worth. In one example, Hillary Clinton’s State Department approved the transfer of 20 percent of U.S. uranium production capacity to the Russian government at the same time that businessmen involved in the transfer donated $145 million to the Clinton Foundation. Simply a coincidence, claimed Clinton, who said she wasn’t aware of what was happening.11 Another foundation donor, Rajiv Fernando, a securities trader, was appointed to the International Security Advisory Board, which provides the State Department with advice on arms control, disarmament, nonproliferation and international security. Its members typically include past cabinet secretaries, nuclear scientists and distinguished diplomats. They have access to the most secret government information, and none of the others had a clue what Fernando was doing there. When ABC News started asking questions about him, Fernando promptly resigned and the State Department stonewalled requests for information about how he was appointed.12
All of this looked very much like a quid pro quo, a contribution to the Clinton Foundation (the quid) in return for a government favor (the quo). There isn’t direct evidence of a bribe, however, but only a suspicious pattern of favors granted against contributions given. So Clinton loyalists say it’s not proved, it’s all innuendo. But in such cases it’s never really proved, unless somebody is wired or the phones are tapped, and even those measures don’t catch the pattern of reciprocal gifts that make up the pay-for-play networks of corruption. As it is, we are permitted to wonder if we’d have learned more about corrupt dealings had Hillary Clinton not taken the extraordinary step of wiping her private emails from her hard drive with a software program from a company that afterward boasted it had “stifled” the FBI’s investigation of Clinton.13
In a very short time, the Clinton Foundation had become fabulously wealthy. It took in $2 billion, with a significant bump after Hillary became secretary of state. Part of this came from speaking fees, $150 million between 2001, when Bill Clinton left the White House, and 2015.14 Often the speeches were made in Third World dictatorships. Speaking fees for former presidents generally decline over time, but Bill Clinton’s fees doubled or tripled after his wife became secretary of state. In one case, he declined to speak at a charity devoted to building schools in countries devastated by the 2004 Indian Ocean tsunami unless he was paid $500,000. That was a quarter of what the event brought in, and it would have been enough to build ten preschools in Indonesia.15 When Hillary Clinton left office as secretary of state, she got into the act. After she quoted a fee of $300,000 for a speech, UCLA officials asked whether they might get a reduced rate as a public university. That was the special university rate, they were told.16
Then there’s the way the foundation was run. It wasn’t a normal grantmaking foundation that acted as a conduit for passing money to worthy causes. Instead, it was more of an operating foundation, which organized events where others were encouraged to donate money. Its work involved the high-level schmoozing at which the Clintons have been so adept: international conferences, speeches, prizes and the like. In 2013 the foundation took in $140 million but spent only $9 million on direct aid. The rest went toward administrative expenses—salaries, bonuses, conferences, travel and development. Bill Allison, a senior fellow at the Sunlight Foundation, a nonpartisan watchdog group, looked at the financials in 2015 and concluded that the foundation appeared to be run as a slush fund for the Clintons.17
As if to demonstrate how the Clinton Foundation had become a pay-for-play network, contributions began to dry up as soon as Donald Trump defeated Mrs. Clinton. The Australian government, which had given the foundation $66 million over a ten-year period, announced plans to zero out the payments a few weeks after the election. As for the speaking fees, a wag announced that Mrs. Clinton had agreed to give a speech to Goldman Sachs executives in return for a brand-new toaster.
The more reputable media outlets found the whole affair disturbing. The New York Times, for example, agreed with Donald Trump that “it was hard to tell where the foundation ended and the State Department began.”18 To veteran Clinton-watchers, it was all just the latest in a long list of scandals, from the commodity futures trading, Whitewater, Travelgate, Troopergate, Chinagate, Filegate, Pardongate, the impeachment, on up to the private email server. In the past, a record like this would have disqualified a person from candidacy for higher office. That it didn’t do so today, that Hillary Clinton became the Democratic nominee for the presidency, that there were furious apologists for every new scandal—all this seemed to tell us that we now live in a country where corruption is of little concern. With the Trump victory, we may be permitted to wonder if we were wrong, if Mrs. Clinton’s defeat was a popular repudiation of public corruption. But then it was a near-run thing, as she racked up nearly three million more votes than Trump.
In the presidential election season of 2015–16, Hillary Clinton’s ethical lapses drove millions of voters to support the campaign of a self-proclaimed socialist, Bernie Sanders, or of a business mogul, Donald Trump. All our professional pundits were astonished, but was it really that surprising? Sanders and Trump had one thing in common, which voters appreciated: they weren’t Hillary Clinton. On economics, they were both to the left of their respective party’s establishment, but that didn’t hurt them with primary voters. The conservatives who faulted Trump for his lack of entitlement-reform plans didn’t understand the much greater cost that corruption imposes on our economy. The voters got it, however. The old liberal-conservative ideological axis appears increasingly irrelevant as a corruption-virtue axis bids to take its place.
We’ve been here before. Two hundred and forty-one years ago. You might not think of “corruption” as the burning issue of the day in the American colonies in 1776. What about taxation without representation? Well, the tax in question was the price of today’s dinner date. What about restrictions on liberty? But Britain and its American colonies were the freest places on earth (if you didn’t count the slaves, of course). Ordinary Britons couldn’t understand these complaints, and they thought the American Patriots needed to chill. But what they missed was the colonists’ ire over corruption in the British government—the King’s Friends in Parliament, the showering of gifts on royal favorites, the patronage machines of prime ministers and of royal governors in the colonies.
The Patriots thought they could do better. They had studied John Locke and were steeped in theories of natural rights. But they had also read Livy and thought that monarchies were necessarily corrupt, whether in ancient Rome or contemporary Britain. Kingly rule would breed a race of tyrants who surrounded themselves with a swarm of courtiers, who in turn would milk the public purse. The Patriots said we needed a republic instead, one from which selfish dealings and corrupt bargains would be banished—a government founded on the rock of republican virtue, the virtue shown by citizens who champion the general welfare in a personally disinterested manner.19
What the Patriots were experiencing is what the historian J.G.A. Pocock called a “Machiavellian Moment.” Today, Niccolò Machiavelli is not well known as an exponent of republican virtue, but he was in fact a loyal servant of the Florentine Republic and the author of extended reflections on political morality. In his Discourses on the First Ten Books of Livy, he praised the public-spirited Lucius Junius Brutus, who expelled the last Roman king, Tarquin the Proud, and founded the Roman Republic. The American Patriots of the revolutionary period were also steeped in classical Roman history and celebrated the republican heroes of ancient Rome. They quoted Latin epigrams, sometimes accurately, while pamphleteers such as James Madison and Alexander Hamilton adopted the names of Roman republicans as pseudonyms. Patrick Henry ominously warned that “Tarquin had his Brutus, Charles the First his Cromwell, and George III . . . may profit by their example.” The language of republican virtue provided the Patriots with a justification for breaking away from their corrupt British overlords.
But just how long did republican virtue persist in America? There wasn’t much left of it by 1829, when Andrew Jackson introduced the spoils system and gave plum government jobs to his supporters. As for today, the lobbyists of K Street, the hundreds of special-interest associations in Alexandria, and the dense network of political donors in America have created what Pocock characterized as “the greatest empire of patronage and influence the world has known.” Our government, he wrote, is “dedicated to the principle that politics cannot work unless politicians do things for their friends and their friends know where to find them.”20
The dream of a government free of corruption never dies, however, and in the passions excited by the 2016 electoral campaign we experienced another Machiavellian Moment. Voters noticed that government policies were tilted in favor of powerful interest groups and the wealthiest Americans, and they demanded a change. When Martin Gilens and Benjamin Page looked at survey evidence on voting preferences, they found that the wishes of the average voter don’t correlate with those of influential interest groups such as the U.S. Chamber of Commerce.21 Instead, there’s a negative correlation: what business groups want—subsidies for their industries, for example—is what the average voter doesn’t want. It’s the same for economic elites generally: their preferences diverge from those of the average voter. And they pay more attention to politics, are more likely to vote, and contribute more money to candidates.22 They’re also more likely to belong to the same social circle as the candidates they support financially. So they get the things they want—funding for National Public Radio, money for Planned Parenthood, favorable tax loopholes.
In the election, Clinton was the candidate of the status quo, of cozying up to Wall Street. In a speech to Goldman Sachs, as revealed by WikiLeaks, she told the bankers that she would let them write the banking regulations: “How do you get to the golden key, how do we figure out what works? And the people that know the industry better than anybody are the people who work in the industry.”23 She refused to release her speeches, and we now know why. As if to remove any doubt, she told another group that when it comes to policy questions “you need both a public and a private position.”24
On the other side, Trump was the candidate of change, a challenge to politics as usual, to the whole political culture that accepted Clintonian corruption. The Democratic campaign focused almost entirely on his ethical lapses. And his supporters knew he was human, all too human. What they didn’t understand was why Hillary Clinton’s supporters didn’t seem to care about her lapses. She had left a trail of public corruption in her wake, and the Trump supporters wondered why that didn’t seem to matter.
IN NEW YORK CIRCLES, it’s not hard to come across a Clinton Foundation donor. They’re honorable men, for the most part, and simply playing the game as it’s played in America. Unlike suspect donors such as Rajiv Fernando, they aren’t seeking personal favors for themselves, but they might at some point want to recommend a worthy friend or suggest a benign policy change. It’s rather like the old-boy network of days gone by, populated by members of the Cosmos or Harvard clubs. The difference is that today’s network has been monetized.
That wouldn’t have surprised Alexis de Tocqueville. His Democracy in America, according to Harvey Mansfield and Delba Winthrop, “is at once the best book ever written on democracy and the best book ever written on America.”1 Reading it today, many Americans have been led to believe that Tocqueville actually liked America, but that’s because they weren’t paying attention. Tocqueville was astonished by what he saw here, bowled over, and while he was able to see positive features that had eluded other visitors such as Captain Marryat and Mrs. Trollope, what the unwary reader might take as praise was often meant as blame.2
Tocqueville preferred France’s family-centered aristocracy to what he saw as America’s selfish individualism. Say what you want about aristocracy, he thought, but it ties people to past and future generations and makes them more caring. In a democracy, by contrast, one generation is cut off from those that preceded it and those that will follow. What remains is a radical autonomy, with little connection even to one’s own generation. At first, individualism merely saps the virtues of public life, “but in the long run it attacks and destroys all the others and will finally be absorbed in selfishness.” It throws one “back toward himself alone and threatens finally to confine him wholly in the solitude of his own heart.”3
Tocqueville saw an answer to individualism, however, in America’s free institutions. With greater accuracy, he would have identified American politics as the remedy, for what he had in mind was how we have an incentive to join a political party. “When the public governs,” he said, “there is no man who does not feel the value of public benevolence and who does not seek to capture it by attracting the esteem and affection of those in the midst of whom he must live.”4 In short, politics will rescue us from individualism, and Americans have bought into politics with a vengeance. By one count, there are more than half a million elected officials in this country,5 from the president all the way down to the local dogcatcher.
I saw how far politics might extend when I first moved to the United States and rented a new house in Chevy Chase, D.C. As the house was new, it didn’t have a garbage can, so I phoned the city to ask for one. And phoned and phoned. Finally a neighbor, observing the plastic bags I kept putting out on garbage day, took pity on me. “Don’t call the city,” he told me. “Call your councilman.” That’s what I did, and the garbage can arrived a few days later. Not long after that came the first fundraising mailer from the councilman. I learned how I might be able to “attract the esteem” of my local city councilor, but it didn’t seem much like a virtue. It felt more like a shakedown, as though I might not expect such prompt service in the future if I failed to make a donation. I might have preferred to live in a city where it sufficed to pay my taxes, and where I could have cultivated my individualism without knowing who was on city council. What I wanted was less of politics and more of an honest and impersonal administrative state, one in which garbage cans are delivered without being followed by a solicitation for money. That was the very point of administrative law and civil service reform, which were meant to replace the realm of politics with that of law, with equal justice rendered to all, without special payoffs to the well connected or to campaign donors. If Tocqueville’s politics made Americans less individualistic, it also made us more corrupt.
The Mutual Protection Association
What happens when the state recedes and people are left to their own devices? That’s more like freedom, and it’s where one finds the clubs and associations that Tocqueville discovered in America and which he so much admired. We’ll find them in the PTA, the Red Cross and the groups that pick up litter along the roadways. They are formed around individuals united in a common goal, often doing things the government can’t or won’t do. To the extent they’re effective, voluntary associations permit us to shrink the state, an insight that won Elinor Ostrom a Nobel Prize in economics in 2009.6 Conversely, the expansion of the government plausibly explains Robert Putnam’s claim in Bowling Alone that Americans are less likely to join an association today than they were fifty years ago, or in Tocqueville’s day.7
People who join a voluntary association become less individualistic, and that’s all to the good. At the same time, the organization can be seen as what the philosopher Robert Nozick called a “mutual protection association.”8 What Nozick had in mind was an association that would do all the things in the state of nature that we would normally expect the government to do: provide a justice system, a police force, a fire department and so on. But even where there’s a government, there are things the state won’t do but which an association of private individuals might do. Sometimes it benefits most of us and sometimes only a narrow interest group. The League of Women Voters, the trade union, the special interest cartel—they’re all mutual protection associations.
Even if Putnam is right about a declining disposition to join up, we’ll still find more voluntary associations in America than in other countries. People here feel they should lend a hand, and joining a group for that purpose makes people more sociable, more concerned about the opinions of others, more like a little politician. It smooths the corners and wears away sharp edges, which is often a good thing, but it also sacrifices the je m’en fiche individualism of the eccentric, of the Christopher Hitchens who takes a savage delight in eviscerating sacred cows. The desire to please others civilizes us, but taken to the extreme it may smile at corruption.
There can be material incentives to join up and pay our dues, particularly when noncontributing free riders can be excluded from participation. If an organization is creating its own baseball diamond, for example, we may want to contribute our share if that’s the only way we get to play. Pay-for-play, in other words. Even if free riders can’t be excluded—from what economists call public goods—we might still want to chip in if a failure to do so would be noticed and we’d be stigmatized as a freeloader, and perhaps denied other goodies that might have been tossed our way.
That, of course, is the secret of the Clinton Foundation. Taken at face value, the Clinton Global Initiative provides public goods on a worldwide basis. There’s no pressure to donate, but there are strong incentives for doing so, especially while Mrs. Clinton was the secretary of state and then widely expected to be the next president. A major donor such as Rajiv Fernando didn’t have to wait for the next world for his reward, but instead got a government position for which he was not obviously qualified. It’s nothing like bribery, but only the expectation of return favors. Without contracts, without promises, a settled pattern of cooperation easily develops when one person gives to another, who then gives a return gift, and this is repeated over time.
Marcel Mauss and Lewis Hyde called this a gift economy, as opposed to the market economy of legally enforceable bargains, and they regarded it as a worthy alternative to market transactions.9 And all it requires to get started is the very human instinct of gratitude, the readiness to repay gifts with return gifts. Stable forms of cooperation can emerge when parties deal with each other over a period of time, as W. D. Hamilton and Robert Axelrod have shown, borrowing from the work of the evolutionary biologist Robert Trivers on “reciprocal altruism” in animals.10 When gifts are exchanged again and again, the parties come to expect that the relationship will be maintained in good faith, and that’s as good as a promise. The historian René Girard called it mimetic rivalry, with good paid back for good, and ill for ill.11 One sees this everywhere, and it might sound uplifting. But grafted onto the institutions of public authority it creates a pay-for-play nexus, and in America it has produced the thickest form of crony capitalism in any First World country.
To understand corruption in America, it seems that all one need do is follow the Clintons around and take notes. And yet Hillary emerged as her party’s candidate for the presidency, supported by voters who cared less about her character than about the causes she espoused. She was buoyed up by a media that draws a discreet veil between the public policies and private acts of the candidates it favors. After the Monica Lewinsky story broke, for example, Time magazine’s Nina Burleigh said that she’d be happy to give Bill Clinton oral sex “just to thank him for keeping abortion legal.”12 More recently, as a Newsweek correspondent, Burleigh labeled Peter Schweizer a “right wing hatchet” man when asked to comment on Clinton Cash.13
There’s nothing dishonorable about supporting a corrupt official if his opponent is still worse. Louisiana’s Edwin Edwards was one of the most ethically challenged governors in that state’s colorful history, but in 1991 he had the good chance to find himself opposed by the former Ku Klux Klan grand wizard and neo-Nazi David Duke. “Vote for the Crook” bumper stickers began to appear, as well as “Vote for the Lizard, not the Wizard,” and Edwards handily won the election. Doubtless, many Democrats supported Hillary Clinton because they thought Donald Trump little better than David Duke. It’s different, however, when the supporter ignores the evidence of corruption, winks at it, and absolves her of blame, for then he becomes an enabler and accomplice of corruption.
A bit of that is to be expected. Just as we are biased in favor of our personal friends, we’ll tend to ignore the lapses of political friends—those who are advancing causes we believe in—while denouncing those of political enemies. But at the extreme, with the Nina Burleighs, politics is everything and personal morality becomes irrelevant. We’ll see the mote in the eye of an enemy while ignoring the beam in a friend’s eye.
This double standard might be labeled Polemarchism, from a character in Plato’s Republic. On his way home from Piraeus, Socrates encounters several people with whom he debates the meaning of justice. Polemarchus tells him that justice requires doing good to one’s friends and evil to one’s enemies. Socrates replies that doing evil to anyone doesn’t sound much like justice. Moreover, he says, you might think your friends are good, but what if they’re not? You wouldn’t want to do good to an evil person whom you mistakenly think good. Justice requires doing good to the truly good person, not to the friend who in fact is evil. Friendship therefore is not the proper basis of justice.
Polemarchism is the crudest of ethical theories, but it’s how American politics is increasingly conducted. It’s in the newspapers we read and the shows we watch on TV, where partisan hacks are given a respectful hearing. One finds them on both sides of the debate, though David Brock stands out as an attack dog. It doesn’t get more partisan than Brock’s Media Matters, but he’s still taken seriously as a political commentator by the mainstream media.14
For an example of Polemarchism at work, consider the media reaction to the firing of Gerald Walpin, the congressionally appointed inspector general of the Corporation for National and Community Service (AmeriCorps). Inspectors general are charged with overseeing government moneys, and after Walpin uncovered that the mayor of Sacramento had improperly spent AmeriCorps funds he referred the matter to the Justice Department for prosecution. The mayor was an Obama donor and friend, however, and AmeriCorps was a favored Obama program. A White House lawyer asked Walpin to resign in June 2009, and when Walpin refused to do so he was summarily fired, in violation of the rules for dismissing inspectors general. The White House spread the word that Walpin was incompetent, and for most of the media that was the end of the story.15 In other First World countries, that would have been a major scandal, but not in today’s America. Subsequently, the Obama administration doubled down on its obstructionism by denying inspectors general unfettered access to the documents they need to do their job.16
Let’s suppose that Obama believed he was doing good, defending the work of AmeriCorps while returning a favor to a friend and ally. In the seventeenth century, Pascal wrote that men never do evil so completely and cheerfully as when they believe they are following their conscience.17 They can then enjoy that most delicious of sensations, the feeling of justified hatred toward enemies. When it’s one tribe against another, Republicans against Democrats, when everyone is a Polemarchist, public virtue shrivels and everything is permitted.
The more divided we are, the greater the appeal of Polemarchism. In recent years, partisan divisions have become more pronounced, through what the journalist Bill Bishop has called “the big sort.”18 We don’t care to live on streets where our neighbors despise us, and this self-segregation further intensifies the polarization of American politics. Liberals become more liberal, conservatives more conservative, and what we’re left with is a country in which the grimly serious business of politics becomes all-consuming. But if it’s all a matter of supporting your friends and beating up your enemies, then complaints about a politician’s corruption are hypocritical when leveled at an enemy, and naïve if directed at a friend. Indeed, the more a country is politicized, the more it is corrupt.
This isn’t to say that political loyalties should be irrelevant, that one shouldn’t show a partiality to political friends. There’s something repellant about the paragon of virtue who is indifferent as between allies and opponents. The German philosopher Carl Schmitt was not entirely wrong when he wrote in 1932 that “the specific political distinction . . . is that between friend and enemy.”19 The political fray is necessarily agonistic, pitting one party against another, and it demands that people take sides. But there’s a limit to the merits of loyalty, which is something that Schmitt appears not to have learned. He joined the Nazi Party in 1933, rejoiced in the burning of books by Jewish authors, and then resisted every effort at de-Nazification after the war.
In his more candid moments, the Clinton loyalist will admit that all is not right with the Clinton Foundation, and that Mrs. Clinton’s venality embarrasses him. He might nonetheless ridicule the prissiness of those who are too quick to see corruption in others, who recoil from the rough-and-tumble of political engagement. “It ain’t beanbag,” said Mr. Dooley (the Finley Peter Dunne character) in response to the good government “goo-goos” who looked down their noses at Chicago’s machine politics. With their patrician WASP scorn for the Catholic underclass, the goo-goos didn’t come across very well in The Last Hurrah, the Edwin O’Connor novel and later the Spencer Tracy movie. Moral prissiness can even seem ridiculous. In 1950, a story went around that Senator George Smathers (D-FL) had made some shocking claims about a challenger for his Senate seat:
Are you aware that Claude Pepper is known all over Washington as a shameless extrovert? Not only that, but this man is reliably reported to practice nepotism with his sister-in-law, he has a brother who is a known homo sapiens, and he has a sister who was once a thespian in wicked New York. Worst of all, it is an established fact that Mr. Pepper, before his marriage, habitually practiced celibacy.
Most probably this began as a joke, demonstrating that even a politician can recognize the absurdity in trying to paint his opponent as the lowest form of life.20 Still, our experience with the Clintons suggests that the punctilio of an honor the most sensitive mightn’t be such a bad thing. The person who says politics ain’t beanbag is telling you that corruption doesn’t much bother him, and we might wish that it did.
The Apologist can also be heard to plead that corruption is the way of the world, that everyone does it. The deeper question, he will argue, is whether corrupt means may be employed to arrive at the desired end of a virtuous state. That’s what the French philosopher Maurice Merleau-Ponty wondered when he complained of the hypocrisy of the anticommunist liberal who objected to Stalinist violence: “He forgets that communism does not invent violence but finds it already established, that for the moment the question is not to know whether one accepts or rejects violence, but whether the violence with which one is allied is ‘progressive’ and tends towards its own suppression or towards self-perpetuation.”21 The same thinking brought Rubashov, in Arthur Koestler’s Darkness at Noon, to confess to crimes of which he was innocent in a Stalinist show trial. As a Soviet high official, Rubashov had recognized that in order to defend his communist faith he must acquiesce in his own execution. For Western liberals, Koestler’s book was an exposé of communism’s falsity and inhumanity, but in 1947 Merleau-Ponty saw it differently. As a proponent of a “Third Way” between America and the Soviet Union, he thought there was little to choose between what he saw as liberalism’s institutional violence (colonialism, capitalism) and the legalized violence of communism. While not a Stalinist, he nevertheless sympathized with those who had believed that a reign of truth and justice might at last emerge from communism’s charnel house of lies and violence.
Similarly, the Apologist for Clinton Cash argues that Mrs. Clinton’s sins are trivial by comparison with the institutional corruption of our present system of politics, where wealthy campaign donors have an outsized voice in government policies. What matters, he thinks, is not whether she enriched her family by corrupt means, but whether her administration would have been more likely to lead in time to a virtuous, progressive state. More progressive it might be, in the Apologist’s eyes, but did he give us any reason to believe that virtue might emerge from so corrupt a vessel?
Finally, the Apologist is apt to rely on the hoariest of procedural tools to avoid substantive moral questions: the legal burden of proof. Unless one can prove a quid pro quo beyond a shadow of a doubt, he says, the Clintons are entitled to a presumption of innocence. And indeed no one has ever proved that Hillary Clinton was corrupt, as her defenders are quick to note. But that’s a long way from saying that the charges against her have been discredited, and the very American tendency to turn all moral questions into legal ones—to insist on moral innocence unless legal guilt is proved to the hilt—encourages corruption. We might not wish to charge the Clintons with crimes, but we may still wish to blame them for their disregard of the proprieties, and to hope that Hillary Clinton has paid a political price for it. We might also want a tougher set of anticorruption laws, of the kind we’ll see later in this book.
SO JUST HOW CORRUPT is America? What we’re interested in is public corruption, where public officials abuse the public trust, and not the private chiseling where one individual cheats another. To measure public corruption, we need something more than the number of criminal indictments for bribery. These might sometimes be without foundation, and themselves a corrupt method of silencing political opponents. That’s how they do things in Russia—and also at times in the United States, as we’ll see. In addition, corruption is mostly a game played under the radar, through the patterns of pay-for-play, of reciprocal gifts that escape detection or, if detected, don’t ascend to the level of crime.
Today there is a relation of mutual dependence between America’s largest firms and the political class, one in which deals are made and favors are traded, and it kicked into high gear with the Troubled Asset Relief Program (TARP) bailouts during the Great Recession of 2007–9. Senior financial executives found themselves traveling to Washington for the first time, and the former assistant treasury secretary Richard Clarida saw how the relationship between Wall Street and the federal government had fundamentally changed: “It’s often said that Wall Street is no longer the financial capital, that it’s Washington, D.C., and that’s certainly true. I don’t think this is destined to change. I think this is going to be a fact of life.”1
From TARP, to the Export-Import Bank, to the tariff protections offered to favored industries, there is a growing concern that the federal government has become a necessary business partner, and that the (imagined but not entirely imaginary) free-market capitalism of the past has been transformed into a wasteful crony capitalism that favors well-connected special interests. The fact that 81 percent of the government’s green-energy grants went to Obama’s 2008 campaign donors should be troubling regardless of one’s stance on climate change.2 Or take the support given to America’s sugar producers, who benefit from tariffs that raise sugar prices 64 to 92 percent above the world average.3 A strategic sugar stockpile isn’t exactly in America’s national interest, but for the industry the tariffs represent money well spent on lobbyists and campaign contributions. And the problem is bipartisan. Rajhuram Rajan and Luigi Zingales calculate that the trade barriers introduced during the Reagan-Bush 1980s amounted to a $30 billion subsidy to industry, and that those subsidies cost consumers $6.8 billion.4
Are trade barriers necessarily harmful, though? Do they always favor powerful interest groups at the expense of average Americans? Many people believe it’s the opposite: that we’re hurting ourselves as a nation with our current trade deals, and that our free-trade policies transfer wealth from the poor to the rich within America. Donald Trump has brought the issue of trade policy to the front burner, arguing that free trade ships jobs overseas and impoverishes many working Americans, who then have even more difficulty buying the consumer goods that free trade is supposed to make affordable. On the other hand, tariffs may impose costs disproportionately on low-income Americans, and the support given to sugar producers is a good example. Poorer Americans spend a greater share of their earnings on food, so a sweet tooth will hurt them in the pocketbook more than rich Americans. If we erect higher trade barriers, then, might we possibly be making things worse for the poorest? Consider, too, that trade barriers would be set in Washington, where the thumbs of donors and lobbyists weigh heavily on the scales, and they won’t be representing America’s underclass. It’s easy to imagine shiny new policy gizmos, but before they’re enacted the same old tools of influence will be applied.
Spending resources to shape legal rules—through campaign contributions, government-relations departments and lobbyists—is called rent-seeking, a phenomenon first described by Gordon Tullock in the 1960s.5 A business seeks rents when it expends resources in the pursuit of politically driven business gains, through government bailouts,6 tariff protections7 or favorable tax treatment.8 The efforts to secure these advantages may bring some public benefit by informing voters and busy officials about the consequences of burdensome laws.9 But there are costs that must be deducted from any such gains. In fact, rent-seeking will often represent a net deadweight loss, either because the firm or industry proposes inefficient rules, or because any social benefits are exceeded by the costs of rent-seeking. It dissipates resources by shifting investments away from core business functions, drawing talent, technology and capital away from their most productive uses.10
The rent-seeking firm or industry will seek to create a semipermanent relationship with a politician.11 We’re most likely to find this happening in regulated industries, and the relationship between regulator and regulated can become very cozy. It’s what George Stigler, an economist at the University of Chicago, called “regulatory capture,” where the regulated industry captures the regulator, who then sides with the industry more than with the public he’s supposed to protect.12 That would seem to be the only explanation for the Agriculture Department’s love affair with the domestic sugar industry, and the same might be said for federal peanut programs, which guarantee farmers high prices and result in overproduction. The Agriculture Department buys the surplus peanuts and then dumps them on poor countries such as Haiti, which further impoverishes the desperately poor peanut farmers there.13
Regulatory capture also helps explain the government’s stimulus programs during the Great Recession. The Federal Reserve’s nearzero interest rates were meant to restart the economy, but it’s been calculated that they cost U.S. savers—many of them retirees on a fixed income—$500 billion in interest income.14 When the zero-interest policy didn’t produce a healthy recovery, the government pumped trillions of dollars into the economy through the TARP bailouts and a quantitative easing program of buying long-term government bonds. Politically connected banks received larger bailouts than financial institutions that spent less on lobbying or political contributions.15 Senator Elizabeth Warren (D-MA) has pointed to a chummy relationship between major banks such as Goldman Sachs and the Federal Reserve, which is supposed to monitor them.16
As the number of government regulations has increased, so too have the rewards from having a hand in shaping them. Our regulatory regime, ostensibly designed to help middle-class buyers, begins to resemble a form of consumer protection for billionaires that cartelizes our economy and squeezes out competition from below.17 Even the burdens of regulation can turn out to be an anticompetitive blessing for the major firms that enjoy economies of scale in coping with them. For a large firm, with its battery of lawyers and compliance experts, it’s simply a cost of doing business. For smaller firms, however, the startup costs of conforming with the regulations can be prohibitive. To mention but one example, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, itself 1,000 pages in length, has already spun off 22,000 pages of regulations. Imagine a new entrant into the market trying to work its way through all of that before it can open its doors for business.
Lee Drutman of the New America foundation describes how a seemingly simple rule can become a regulatory nightmare. Dodd-Frank’s “Volcker Rule” began as a three-page proposal to prevent banks from engaging in proprietary trading (where a firm invests its own money rather than that of its depositors). When enacted, this had turned into ten pages, but it soon became 298 pages of rules. That left too many questions unanswered, however, and when finally released the rules were nearly 1,000 pages long. Even then the Federal Reserve criticized the rule’s lack of specificity.18
Complexity in government advantages the large firm that can invest in the legal resources to work its way around the plethora of rules, and that’s especially true if the firm invests in lobbying. One of the largest companies in the world, General Electric, paid no taxes in 2010. At the same time, it spent tens of millions of dollars to lobby for changes to the tax code.19 GE wasn’t alone in this arena, either. The Sunlight Foundation reported that the ten Fortune 100 companies that lobbied on fifty or more bills over 2008–11 paid an average effective tax rate of 17.1 percent, while the publicly traded companies that lobbied on fewer than twenty-five bills paid a rate of 26.0 percent.20 What complexity offers to large firms is not only economies of scale in regulatory compliance, but also the ability to bend the rules in a way that’s hidden from public view.21
Rent-seeking and crony capitalism may bring benefits to particular companies or industries, but they are drags on the overall economy. They’re also highly unjust, for they amount to a transfer of wealth from those who lack access, to those who have it—from the outsider to the corporate welfare bum. The new man without connections is less likely to start a firm or expand an existing one when the scales are weighted against him. Because these practices are wasteful and unfair, people on both sides of the political fence have condemned them, yet they also find beneficiaries and therefore defenders on both sides, too.
Objective measures of corruption are hard to come by, and generally unreliable. But a subjective measurement is readily available and quite useful. Transparency International, a highly regarded German NGO, produces a Corruption Perceptions Index (CPI) every year, rating countries on the basis of reporting by respected observers, including businessmen and experts from the country itself.22 People are asked such questions as:
• Are misbehaving public officeholders prosecuted or penalized?
• Are there effective public auditors?
• Is corruption a problem in the court system? The tax bureau? Inspection bodies?
• Is the executive accountable to oversight institutions?
• Has the government been captured by special interests?
The responses to these questions are used to score each country on a scale of 0 to 100, with higher scores meaning less corruption. The CPI has been criticized for its subjectivity,23 but any ranking system of this nature must inevitably rely on judgment calls, and the CPI is in fact the most widely followed measure of public corruption.
How does the United States do? In 2014 it scored 74 out of 100, giving it a rank of 17th place behind higher-scoring countries.
As Table 1 shows, Denmark beats us hands down on government integrity, with a score of 92.
TABLE 1
Transparency International’s Corruption Perceptions Index 2014
Frank Fukuyama has said that “getting to Denmark” should be the goal of public policy.24 That might seem an impossible dream, though, since Denmark is much more ethnically homogeneous, and societies where people are more alike have been shown to be generally more trusting25 and less corrupt.26 But we couldn’t turn America into Denmark, and we wouldn’t even want to do so. As a self-styled “nation of immigrants,” America prides itself on its diversity, and we’re not about to change that. Moreover, some countries that beat us in the CPI rankings are far more welcoming to immigrants. While 14 percent of American residents (legal and undocumented) are foreign-born, the figure is 20 percent in Canada and 26 percent in Australia, the true nation of immigrants. Canada scores 81 on the CPI, and Australia comes in at 80. Evidently, ethnic diversity isn’t an excuse to throw up our hands over corruption.
Corruption is a silent killer of the U.S. economy, and it’s possible to put a number on this. The dots in Figure 1 represent 107 countries, with their 2014 CPI score on the horizontal axis and their 2015 per capita gross domestic product on the vertical axis.27 Through a standard econometric estimation technique described in Appendix A, the diagonal straight line estimates how corruption affects a country’s wealth (per capita gross domestic product). From corrupt and poor Afghanistan up to honest and rich Luxembourg and Singapore, less corruption means a higher GDP.
The model tells us that if America’s CPI score were to rise to Canada’s score of 81, its per capita GDP would increase from $54,629 to $59,914. Were the CPI score to increase, per impossibilia, to the level of Denmark at 92, per capita GDP would rise to $68,219. For America as a whole, that would amount to an 18 percent or $3.2 trillion increase in the country’s wealth. Think of that missing wealth as the tax that corrupt politicians, regulators and judges impose on all Americans.
The results shown in Figure 1 are consistent with the many cross-country, empirical studies on how public corruption impoverishes people.28 Within the United States as well, there’s a penalty for living in corrupt states. Measuring differences in corruption state by state is tricky: looking at the numbers of state prosecutions of government officials might not be very helpful, since fewer prosecutions could mean either that officials are more honest or that state prosecutors are themselves corrupt. The way around this problem is to look at prosecutions brought by the federal government, since the Justice Department can be presumed to employ uniform standards across the country. With federal prosecutions as a proxy for levels of corruption, it has been shown that corrupt states have significantly lower economic growth.29 Another study found that corrupt states have lower bond ratings, which means they pay higher interest rates on their public debt, and these costs are passed on to taxpayers in those states.30 As a matter of common observation, Louisiana and Mississippi (first and second, respectively, in federal corruption prosecutions per capita) aren’t exactly economic dynamos.
FIGURE 1
More Corruption, More Poverty
Source: GDP per capita, PPP International Monetary Fund World Economic Outlook (April 2015); Transparency International Corruption Perceptions Index 2014.
It’s easy to see how public corruption can impose costs on a country’s or state’s economy. The fraudulent or criminally irresponsible firm that escapes prosecution harms everyone touched by its actions. The honest and efficient firm might fail in the market, while the corrupt, inefficient one flourishes. Even if he plays by the rules, the crony capitalist who milks the system will draw resources from better firms that fail to invest in politics. By schmoozing with Obama and his green-energy appointees, Solyndra was able to score a $570 million loan guarantee from the federal government. The company manufactured solar panels and lost money on every panel it sold. It was like the old garment industry joke where the boss’s son wonders how they stay afloat when they lose money on every suit they sell. “We make it up on volume,” says the boss. For Solyndra, making it up on volume meant passing the loss on to the American taxpayer.
If Transparency International isn’t terribly impressed with American integrity, the World Justice Project (WJP) has no better opinion of us. The WJP, cofounded by a former head of the American Bar Association, collects data from the general public and from legal professionals to rank countries according to their adherence to the rule of law.31 Among the factors considered are equality before the law, an efficient and honest judicial system, and the absence of corruption. Russia came in at 75th place out of 102 countries on the Rule of Law Index in 2015, way behind former communist countries that invested more heavily in the rule of law: Estonia (15), the Czech Republic (20), and Poland (21). What about America? It’s not Russia, not by a long shot, but it still doesn’t rank all that high, coming in at number 19. On the particular measure of an absence of corruption, the United States ranks 20th.
Until fairly recently, the rule of law wasn’t on economists’ radar screens. To explain why some countries were wealthy and some not, they would refer to natural endowments, such as valuable minerals or oil; or point to a country’s infrastructure or to human capital investments, such as those provided by a public education system; or note differences in culture or religion. Over the last forty years, however, economists have increasingly pointed to the role of institutions, such as a legal regime that protects property rights and enforces contracts, in explaining a country’s wealth. That’s the difference between North Korea and South Korea, one country desperately poor and the other rich, but alike in all respects except for their political and legal institutions.32
A corrupt country might be rich in natural assets such as farmland, or oil and minerals, or in capital assets such as plant and machinery, but these aren’t the most important sources of wealth. The World Bank estimates that natural and capital assets amount to only 23 percent of a country’s riches. The other 77 percent is composed of intangible assets, the difference in institutions, of which the most important element is adherence to the rule of law. Remarkably, this accounts for 44 percent of a country’s total wealth, according to the World Bank.33
The United States may be one of the richest countries in the world, but we still pay a price for corruption. If we could somehow make the country more honest, we’d want to do so, and if the cost of corruption is as high as it appears, we should make it one of our chief goals—ahead of changes to the tax code, entitlement reform or fixing our health-care system. But just how might this be done?
The Dream of a Virtuous Republic
THE IDEAL of a corruption-free republic is an old one. It lay behind Socrates’ answer to Polemarchus and the design of a virtuous government set out in Plato’s Republic. It inspired John Winthrop’s vision of a City on a Hill, which he described aboard the Arbella in 1630 during its voyage to the new land. Once there, he imagined, the settlers could begin building a country whose citizens would be “knitt together . . . as one man.” There can be no corruption, he said, where people
delight in eache other, make others Condicions our owne, rejoyce together, mourne together, labour, and suffer together, allwayes haveing before our eyes our Commission and Community in the worke, our Community as members of the same body, soe shall wee keepe the unitie of the spirit in the bond of peace, the Lord will be our God and delight to dwell among us.1
A century and a half later, Maximilien Robespierre proposed a dechristianized but not dissimilar republic of virtue for revolutionary France:
In our country we want to substitute morality for egoism, honesty for honor, principles for customs, duties for propriety, the empire of reason for the tyranny of custom, the contempt of vice for the contempt of misfortune, pride for insolence, greatness of soul for vanity, love of glory for love of money, good people for fashionable people, merit for intrigue, genius for wit, truth for showiness, warmth of happiness for boredom of sensuality, greatness of man for pettiness of the great; a magnanimous, powerful, happy people for a polite, frivolous, despicable people, that is to say, all the virtues and all the miracles of the Republic for all the vices and all the absurdities of the monarchy.2
Who could reject this happy harmony, universal honesty and magnanimity? Who would not wish to banish all insolence, intrigue, pettiness, all the vices we find annoying in our neighbors? Well, some people wouldn’t, and the question is what to do with those who fail to live up to the dictates of the most exacting virtue. For Plato, the answer in The Republic lay in a fantastically illiberal tyranny of virtue, under the rule of philosopher kings. In John Winthrop’s Puritan Massachusetts, dissenters from Dissent such as Anne Hutchinson and Roger Williams were simply driven from the colony. For his part, Robespierre believed that the republic of virtue required stern measures of protection from internal enemies, and thus the Terror. Virtue is impotent without the guillotine, he said. “Terror is nothing but prompt, severe, inflexible justice; it is therefore an emanation of virtue.”3
In the pursuit of virtue, there are things we wouldn’t do, such as abandon the principles of a liberal society. There are also things we can’t do, insofar as corruption is driven by cultural norms, by what is socially accepted. Andrew Breitbart memorably said that politics is downstream from culture. But what is upstream from culture? How might the culture itself be changed? We might want to make Americans less willing to accept sordid backroom deals. But just how is that to be done without sacrificing personal liberties? David Hume was not far off the mark when he observed that “all plans of government, which suppose great reformation in the manners of mankind, are plainly imaginary.”4
The Framers of our Constitution were hard-nosed realists about the manners of mankind, and they weren’t about to launch a moral rearmament crusade when they set out to design a corruption-free government in the summer of 1787. The notes of their deliberations at the Constitutional Convention in Philadelphia were kept secret and not published until all the delegates had died, which allowed them to state their opinions of their fellow citizens with remarkable candor. “Take mankind in general,” said Alexander Hamilton, “they are vicious—their passions may be operated upon.”5 That was a little over-the-top, but not a few of the delegates must have nodded their heads in agreement, given their general suspicion of democracy and mob rule.
The Framers’ solution was to turn things on their head. The republic of virtue would not be erected from below, from Winthrop’s moral community knit together as one man, but constructed from above upon a fallen humanity. The new government would accept the reality of our ordinary vices, but would make it harder for them to infect the body politic. By dividing powers and asking one branch to check another, the Framers sought to restrain those who would use the means of government to serve wasteful private ends. And this could be done without employing Plato’s oppressive restrictions on personal freedom. That was the vision of the Framers, at once noble-minded and liberal.
It didn’t last. If we were ever a republic of virtue, we’re not that today, as evidenced by how we rank on Transparency International’s CPI. Wholly corrupt politicians such as Louisiana’s Edwin Edwards might find themselves charged with bribery, and backroom deal-makers like Virginia’s Eric Cantor might be dumped by the voters. But it’s easy to point to successful politicians who’ve raised pay-for-play to a fine art while avoiding the threat of criminal liability. Along the way something went wrong. The Framers meant to produce a corruption-free government, but like a boomerang their Constitution flew back and hit us on the head.
In The Federalist Papers, the selling document for our Constitution, James Madison described a government in which the different branches—executive, legislative and judicial—would be set in equipoise, in a regime of separated powers. The separation of powers means several different things, but all of the convention delegates including Madison thought it would check the possibility of public corruption. That’s not how it turned out, however, for two reasons.
First, the grim logic of the separation of powers ensures that over time the preponderance of power will come to reside in the executive branch.6 That’s what has happened in nearly every other presidential regime and it’s happening apace in the United States. The president has slipped off many of the constraints that were meant to curb his authority through the separation of powers. He makes laws by regulatory fiat and executive order, and unmakes them by refusing to enforce properly enacted legislation. He can reward friends and punish enemies in ways the Framers would not have anticipated.
It turns out that presidential regimes are significantly more corrupt than parliamentary ones. And that’s to be expected. For one thing, the president’s role as his country’s head of state clothes him with a moral authority that prime ministers wholly lack in parliamentary governments. If presidents are the symbols of their countries, prime ministers are more apt to be figures of fun, and ridicule is a sovereign remedy against the abuse of authority. Then there’s the ability of an opposition party in Parliament to hold a government’s feet to the fire when there’s a scandal. By convention, a prime minister is required to attend a daily question period in Parliament, when he must answer his critics, and the opposition can prolong debate over government weaknesses. “No better method has ever been devised for keeping administration up to the mark,” observed Harold Laski.7
Parliamentary governments have far more effective ways to discipline a misbehaving chief executive. It’s a great deal easier to remove an inconvenient prime minister through a simple no-confidence motion or party vote than it is to impeach a sitting president. Not merely are the requirements of a trial in the House of Representatives and a two-thirds majority in the Senate virtually impossible to achieve, but a president may cover up his tracks through his control of information and his ability to delay the proceedings. The separation of powers in the American Constitution was designed to discipline a misbehaving executive, but instead has had the opposite effect, insulating him from criticism.
The separation of powers also introduced another kind of corruption, in which members of Congress demand wasteful benefits for their districts as a condition for supporting a bill. This became glaringly obvious in the debate that led to the enactment of the Affordable Care Act (Obamacare) in 2010, in a frenzied atmosphere of last-minute deal-making. To get his filibuster-proof sixty votes, Senator Harry Reid (D-NV), the majority leader, had to bargain with the members of his caucus who demanded special earmarks. Among these, the “Louisiana Purchase” gave $100 million in extra Medicaid funding to the Bayou State to help get Senator Mary Landrieu (D-LA) re-elected. Then came the “Cornhusker Kickback” for Senator Ben Nelson (D-NE), a permanent exemption from his state’s share of Medicaid expansion that would cost taxpayers an additional $45 million in the first decade. Next came “Gator Aid” for Senator Bill Nelson (D-FL), a grandfather clause that would allow Floridians to preserve their pricey Medicare Advantage program. The list went on and on.8 In the final bill, the Cornhusker Kickback was stripped out, but many other goodies were so well hidden in the thousand-page document that they went undetected. Seven years later, we’re still finding out what’s in it.
The Framers’ republic of virtue has evolved into a very different country, one that is more corrupt than those it most resembles, the “settler” societies of Canada, Australia and New Zealand. We share a similar heritage and legal system, but unlike those other countries we have a presidential form of government with a separation of powers, and those features of our Constitution have, over time, made the United States more corrupt. We shaped our institutions, and then our institutions shaped us.
In addition to dividing powers laterally among the branches in the national government, our Constitution disperses power vertically, between Washington and the states. American federalism was not so much a conscious choice by the Framers, however, as a necessity imposed upon them by the states, a legacy of the many years of self-government in each of the thirteen colonies. In Albany, Trenton and other state capitals, Americans had created their own state constitutions and governmental institutions, and were loath to give them up. At the Constitutional Convention, the smaller states, as a condition for joining in the Union, rejected the idea of an all-powerful central government, and that is why we have a federal form of government. This division served to check corruption by bringing government closer to the voters most affected by its actions. Federalism also allows people to move from corrupt states to more honest ones. With fewer people and businesses to prey on, the corrupt state is made to pay for its lack of integrity.
Over time, however, the federal government has assumed control over more and more powers originally left to the states. This happened partly because the Supreme Court gave an expansive definition to the federal commerce power, permitting Washington to overrule the states on purely local matters. Then, through the spending power, the federal government was permitted to condition grants to the states on compliance with federal mandates, which is how state policies on transportation, health care and education came to be often set by Washington.9
On the other hand, states have been exercising powers that should be assigned to the federal government. In particular, state courts have been permitted to rule on interstate civil actions, where the plaintiffs and defendants are in different states, under a strained interpretation of the Constitution by the Supreme Court. These cases more properly belong in federal courts, since the home-state bias of state courts allows in-state plaintiffs to impose wasteful costs on out-of-state defendants. One might think this a trivial matter, but one would be wrong. A wise reform would ensure that all such cases are turned over to federal judges, as the Framers intended.
Mention corruption to a highly educated American, and chances are that he’ll complain about the baneful effects of money in politics. Pressed further, he might mention the 2010 Supreme Court decision in Citizens United v. FEC10 and denounce big-bucks conservative donors such as the Koch brothers. He’ll say that we would get more honest government by eliminating the scandal of money in politics, but his actual aim may be to disarm those he disagrees with and prevent a successful challenge to the incumbents he favors. Instead of making government more honest, restrictions on campaign spending may help protect corrupt incumbents from the wrath of fed-up voters.
What democracy offers as a cure for corruption is competition and the chance to throw the bums out. What the bums want to do, therefore, is neutralize the opposition by restricting its spending and therefore its ability to make its voice heard. That can’t happen here, since the Supreme Court ruled in the seminal case of Buckley v. Valeo (1976) that campaign spending caps would trench on First Amendment rights.11 It’s true that some other countries, lacking the equivalent of our First Amendment, have enacted campaign spending caps without making their political races less competitive. And it’s true that our own elections don’t appear all that competitive, since few seats are ever seriously in play in congressional races. But that doesn’t mean we could adopt stricter spending limits here at no cost in competitiveness, for laws that work elsewhere cannot simply be copied in the United States with the same results. Each country must work out its own compromise between corrupt and competitive politics. If spending in American elections were capped, the result might well be less competition in politics and more corruption in government, given the particular dynamics at work here.
The campaign finance laws we have now are mostly worse than useless. They don’t get in the way of clever donors or officials who know how to skirt the rules, but they’re a snare for the little guy. They’re like a fisherman’s net with the curious feature that the big fish escape while the small ones are caught. Worse still, they’re an invitation for flint-eyed ideologues, ambitious prosecutors, and partisan officials to criminalize political differences.
Rather than imagine a fanciful scenario of politics without money or corruption, we should begin by recognizing that draconian reforms that restrict our freedoms might actually make things worse. When countries already have a certain amount of corruption, there’s a tipping point where stronger anticorruption laws produce more corruption, particularly when they are exploited as partisan political weapons. As Justice Scalia noted, “nothing is so politically effective as the ability to charge that one’s opponent and his associates are not merely wrongheaded, naïve, ineffective, but, in all probability, ‘crooks.’”12 And politically motivated prosecutions for corruption can themselves be a form of corruption. In the United States, this problem may not reach the level of the old Soviet Union, where the prosecutor Lavrenti Beria infamously said, “Show me the man and I’ll show you the crime.” But some of those facing politically charged prosecution here may be forgiven for feeling that it isn’t much different.
If stricter campaign finance limits and more anticorruption laws won’t help, what can we do? Some things, such as our basic constitutional structures, can’t be changed. Nor can we rely upon the innate wisdom and goodness of the voters. The Framers, with their awareness of human fallibility, believed that a purely democratic government isn’t always a good government, and that a virtue-driven constitution must at times blunt the voters’ desires. This wisdom has sadly been forgotten by today’s campaign finance reformers, whose vision of good government resembles John Winthrop’s close-knit Puritan community, in which corruption is simply a departure from the popular will. The Framers had the better of the argument, for the most corrupt officials are often those most attentive to what the voters want. Broad democratic reforms will not ring in a reign of virtue, and the work of combatting corruption is rather a matter of smaller rules here and there.
Here are three proposals for election law reform that would curb corruption rather than aggravate it:
• Unless they are lobbyists, donors should have an unimpeded ability to contribute anonymously to campaign committees and political parties without fear of intimidation or harassment. But when the money is paid into the official’s pockets, that changes things, and a bribery charge properly applies if pay-for-play is promised or given.
• While they can give useful information about proposed rules to overworked congressional staffers, lobbyists should be barred from leveraging their influence through campaign contributions and fundraising for elected officials.
• Lobbyists should not be permitted to “capture” a legislator or congressional staffer with the promise of a high-paying job after he leaves government. To prevent this practice, a Chinese Wall should be erected between lobbying and legislating to close off the revolving door between the two activities.
And that’s it. The existing set of contribution limits and disclosure requirements should be repealed. As we’ll see, they haven’t done anything except make our government more corrupt.
We needn’t tolerate America’s mediocre ranking on cross-country measures of government integrity if we can do something about it. But the optimal level of corruption is not zero, for achieving it would require a Robespierre to weed out those who fail to live up to the most exacting standards of republican virtue. Nor should we subscribe to the sociological fallacy which supposes that pathologies such as corruption can be attributed entirely to deep and immutable social causes. If culture matters, so do the legal rules and institutions that shape our culture and behavior. To understand America’s problems with corruption, we’ll look more closely at some of those institutions, beginning with the most fundamental one of all, the Constitution.
