Congress and Corruption: Campaign Funds

Lawrence Lessig has produced a fascinating book that provides valuable insights into the ways in which our government functions: Republic Lost: How Money Corrupts Congress—and a Plan to Stop It. 

In Lessig’s view, the corruption we need worry about is not the obvious form in which money is exchanged for favors. While not unheard of, this type of corruption is extremely rare. Rather, Lessig argues, the most common form arises in a set of inappropriate dependencies—"dependency corruption" in his words. The basis for this dependency corruption is the need to raise very large amounts of money for the next election campaign. Lessig states that members of Congress "spend 30 to 70 percent of their time raising money."

Lessig explains how we arrived at this state. The "good old days" might be viewed as the several decades when Democrats controlled Congress with a party that was a mixture of liberals and conservatives, while the Republicans occupied the minority position with a party that filled in the center position. With this mixture of viewpoints, legislation became possible by assembling alliances appropriate for whatever was the topic. This system worked rather well. Lessig tells us that everything changed with the election of 1994 when the Republicans managed to take control of Congress for the first time since 1954.

"The Gingrich election changed everything: By putting the control of Congress in play, it gave both Republicans and Democrats something to fight to the death about."

"It was at this moment that the modern Congress—call it the "Fund-raising Congress"—was born. The Republicans came to power raising an unheard of amount of money to defeat the Democrats. Republicans in 1994 received $618.42 million (up from $534.64 million in 1992) in contrast to Democrats$488.68 million (down from $498.45 million in 1992). In the four years between 1994 and 1998, Republican candidates and party committees raised over $1 billion. Never before had a party come anywhere close."

If money wins elections, and elections determined who controlled Congress, then money becomes a dominant political consideration. Candidates also became dependent on pollsters, consultants and media advertising, things that greatly increased the cost of campaigns. One also was required to worry not just about one’s election, but also about the campaign of the party as a whole.

Where was all this extra money going to come from? The inevitable answer was that much of it would come from those who had money to spend and who had an interest in what the government was up to.

One group consisted of the individual party partisans who were willing to contribute. These tended to be those with the most extreme positions within the given party. The need to be acceptable to these sources of funds contributed in no small way to the increased polarization that has developed in Congress.

"Fund raising happens among the politically active and the extreme, and that puts pressure on the extremists to become even more extreme. As Fiorina and Adams put it, ‘the natural place to look for campaign money is in the ranks of the single-issue groups, and a natural strategy to motivate their members is to exaggerate the threats their enemies pose’."

The more dangerous group consisted of those who wanted or needed something from the government. It was at this point that the modern lobbyist entered the picture.

"The demand for campaign cash has turned the lobbyist into a supplier. Not so much from the money that lobbyists give directly....But instead from the funding they secure indirectly—from the very interests that hire them to produce the policy results that benefit those interests."

"’Lobbyists are in the driver’s seat’ observed Leon Panetta. ‘They basically know that the members had nowhere else to turn’ for money....Lobbyists had become indispensible to politicians."

Lessig cites earmarks as a central part of this money-raising economy. An earmark is a specific funding request slipped by a legislator into a bill in order, ostensibly, to meet some need of constituents.

"The important question is how easily the value of these earmarks can be privatized, so that, in turn, they can benefit the (campaign cash) interest of the congressman: If a congresswoman could secure a $10 million earmark benefiting company X, how easily can some of the value of that $10 million be channeled back to her campaign?"

Actual conversations between legislator and beneficiary along these lines would be unethical and legally challenging. But if there is an intermediary who can provide the communication link, then everything becomes simpler. That is the role that lobbyists play. Their activities are transparent and legal, and they provide a legal and ethical buffer for the participants. They can suggest that clients are interested in certain earmarks being proposed and funded, and the legislators can remind the lobbyist of the services they have provided. Both legislator and beneficiary can feel that they have benefited without having any ethical misgivings—or at least they seem to be able to convince themselves that it is the case.

The same process can be applied to any activity or legislation that government gets involved in: procurements, tax rules, regulations.... Lobbyists are always available to play the role of intermediary.

One tends to think of legislators who provide services for campaign contributions as having been corrupted by evil special-interest parties. Lessig makes it clear that this is really a two-way street. A corporation contributing funds to a candidate can be interpreted as an indirect request for a favor, but a candidate requesting funds from a corporation can also be interpreted as an offer of a favor. It can also be interpreted as a threat that a favor will be withheld if money is not forthcoming. Powerful politicians are not above specifying exactly what amount they expect in campaign contributions.

"’The longer I stay in Washington,’ reporter Jeff Birnbaum writes, ‘the more I believe the protection-money-racket is a good metaphor for what a lot of campaign giving is about’."

Lessig concludes that the problem is not that legislators are personally corrupt, but that they are enmeshed in a system that not only encourages corruption, but one that demands it.

Lessig describes the myriad ways in which this constant need to search for campaign funding disrupts and distorts the governance of our country. We will discuss some of these in the future.