The Four Forms of Legalized Political Corruption

© Josh Sager – April 2016

Polling indicates that most Americans believe that money has too much influence over the current political system. Depending upon how the question is worded, anywhere between 65% and 85% of the American public thinks that big money has corrupted Washington and that our elected officials are serving their donors interests over those of their constituencies.

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The public perception that the federal government has been corrupted is accurate. A recent study by Princeton found that there is virtually no correlation between the opinions of the average American and the policies which elected officials implement; conversely, the opinions of the economic elite are almost directly represented in the policy outcomes. In short, this study suggests that the USA is no longer a pluralistic democracy, but rather an elite-dominated plutocracy.

While most Americans hold the generalized opinion that money has corrupted our political system, relatively few know the exact mechanisms by which this corruption exerts itself. In order to help remedy this disparity, here is a basic overview of the four general categories of legalized political corruption: frontloaded corruption, campaign finance corruption, backloaded corruption, and indirect corruption.

These general categories of corruption are not mutually exclusive and often serve to supplement and mutually reinforce each other.

Frontloaded Corruption

While not in office, some politicians are given opportunities to profit off of a potential future position. This type of corruption can take many distinct forms, but the general pattern is that individuals who are seen as having a good chance of being elected/appointed to a position of power in the near future are given financial rewards by groups that would benefit from owning a politician. Here are a few examples of this:

  • An executive at a bank or oil company is awarded a huge severance package when they leave their firm to run for office—Halliburton gave Dick Cheney a $34 million severance package when he left the CEO position to serve as vice president.
  • A politician between offices is paid hundreds of thousands of dollars in “speaking fees” for giving short speeches to businesses and interest groups—Hillary Clinton made $2.9 million in speaking fees to big banks from 2013 to 2015 alone (this is just two years of speeches to one industry).

Because money is funneled to politicians before they have official power/status, they can avoid dealing with ethics laws or accusations of bribery. It is very hard to prove explicit corruption in these cases, because the bribes are based solely on the understanding that they will be paid back with favors once that politician wins office.

Revolving-Door

In most cases, this type of corruption is capitalized upon by individuals who are either part of the political establishment or members of the moneyed elite. This is because frontloaded corruption is predicated upon the promise that an individual will be elected to a higher office at a future date—if that individual does not actually win office, the bribe is largely wasted—and the elite usually have a more reliable chance at winning their election.

Sometimes, career politicians will dip in and out of public service, capitalizing upon this type of corruption multiple times. While in office, they serve the interests of big-money and, while out of office, they collect legal payoffs from big money for minimal work.

Campaign Finance Corruption

The most expensive and widespread form of political corruption in the US political system today is the reliance most politicians have on big-money donors. In the post-Citizens United political environment, corporations and wealthy individuals can donate millions of dollars to candidates and “uncoordinated” PACs. These funds are primarily used to pay for television advertising (80%), but are also used to pay for organizational efforts (e.g. get out to vote campaigns) and consulting services.

These big-money campaign donations allow candidates to flood the airwaves with advertisements describing their accomplishments and attacking their opponents. The candidate with the most money can buy the most ads, giving them an advantage in getting their messaging out to the public. Unless a candidate has extraordinary small-donor fundraising abilities, they must take the big-money donations in order to compete in this advertising arms race.

While most politicians to take these donations assert that they are simply doing what is necessary to win office and that they won’t be influenced by donors’ policy preferences, the simple fact is that these are self-serving justifications. Even if a politician has the best of intentions, they know that their electoral chances are directly related to their donors’ approval of their conduct while in office.

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This type of corruption is arguably the hardest to deal with, as it has become endemic to our entire political system. Put simply, almost every politician has taken money from big interests and addressing this issue directly would require politicians to admit that they, and their party, have been complicit. Politicians like Bernie Sanders (D) and Buddy Roemer (R) who have refused to participate in this big money corruption are marginalized as unrealistic whenever they try address this issue, often by members of their own party who fear being held to account for their participation in this system.

Backloaded Corruption

After leaving office, many politicians take highly paid “consulting,” lobbying, or speaking engagements from interests that benefit from political influence. These post-public service payoffs act as a legal way for moneyed interests to bribe politicians who look after their interests while in office.

Rather than simply exchange votes on certain issues for cash payments, these wealthy interests have created a culture where politicians know that they will be offered millions of dollars in income for virtually no work once they leave office, if only they toe the corporate line. Any politician to rock the boat and support a bill that offends the moneyed interests (e.g. raising taxes, regulating industry, eliminating subsidies, etc.) will be excluded from the post-election payoffs.

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This type of corruption is insidious because it is both legal and easy to conceal from the public eye. Politicians can claim to have valuable expertise that corporation will pay for and many Americans are willing to take this on face value without looking at the corrupt culture beneath the surface.

Indirect Corruption

In some cases, politicians can be corrupted through gifts and advantages given to their family members. Rather than bribe politicians directly, interests hoping to court those in power can engage in indirect corruption by hiring the family members of the elite, giving them gifts, or providing them access (e.g. references or job referrals), as well as supporting foundations and non-profits working in the politician’s name.

This type of corruption has absolutely been typified by the Clinton family:

  • When Bill was the governor of Arkansas, Walmart gave Hillary Clinton a spot on their board of directors.
  • When Hillary was running for president in 2007/2008, Bill Clinton was taking millions of dollars in income in speaking engagements and collecting many more millions for the family foundation. These donations only increased when Hillary became Secretary of State, and numerous groups with concerns under consideration by the Hillary State Department gave millions of dollars to Bill Clinton and the Clinton Foundation.
  • For the last two years Hillary was at the State Department, Chelsea Clinton was given a $600,000 a year contract by NBC to produce infrequent articles and non-political segments for the media outlet—needless to say, this is DRAMATICALLY more than the market rate.

Conclusion

In combination, these four categories of corruption have been used to steal our democracy out from underneath us. Both parties are complicit in this corruption, but that isn’t to say that both parties are equally bad. Establishment Democrats like the Clintons and Debbie Wasserman Shultz have let this corruption infiltrate the Democratic Party, while basically the entire GOP has been consumed by its most corrupting instincts.

We must get money out of politics, but a bar on the revolving door, and ensure that our politicians are held to the absolute highest ethical standards. If we fail to do this, the American people will continue to suffer under a government that doesn’t react to its preferences.

One thought on “The Four Forms of Legalized Political Corruption

  1. Thoughtful post, as usual. To my way of thinking there is only one way to get money out of politics. But it is so radical that it could never happen.
    All members of Congress and other elected officials must agree to put all their investments and all the investments of their spouses and any family members living at home into US Treasury Bonds. Permanently. No exceptions. They are all given very good pay and retirement benefits and can never accept another paid position as long as they live. Never. They can donate time but can’t get paid.
    We always hear them state the mantra “We work for the PEOPLE”. Well, this is one way to prove it. Put your money where your mouth is. Of course, it will never happen.
    I think of the words of the “good book”. A man cannot serve two masters.

    Liked by 1 person

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