In another instance, Governor Matt Blunt proposed a dramatic increase in the cost of accessing driver’s license records by the Department of Revenue to pay for a new computer contract. The State Department of Revenue, on May 1, 2007, announced that it was raising the fee to $7 per record.68 In October, the Revenue Department signed a contract worth up to $50 million with BearingPoint, Inc., to refurbish the state’s computer system for driver’s license records.69 BearingPoint’s lobbyist in Missouri was Jay Reichard.70 After the connection became public and questions were raised about the fee, the State Legislature balked and canceled the plan.
Among Andy Blunt’s clients was Maximus, Inc., a Virginia-based firm that provides services to governments in the administration of health care. It ran the Missouri Medicaid payment system. Andy Blunt also represented a medical services contractor named ACS Heritage, which billed 10 million Medicaid prescriptions to the state Medicaid program every year.71 When Governor Blunt set up a program for people to compare the prices of various prescriptions, the state chose ACS for the job.72
When Governor Matt Blunt announced in January 2008 that he would not seek reelection, Missourians were stunned. He explained that he had accomplished all that he set out to do, but many assumed that, with low poll numbers, he didn’t want to fight what might prove to be a losing battle. (Among those disappointed were not only his family members but also a libertarian, pot-smoking gubernatorial candidate from Salem, Missouri, who had changed his name to Chief Wana Dubie and had hoped to produce bumper stickers that read: Dubie versus Blunt.)73
Back in Washington, Roy Blunt suffered from his close association with lobbyist Jack Abramoff. Abramoff had been sentenced to prison for bribing government officials and politicians with expensive meals, vacations, and cash. He had signed letters for some of the lobbyist’s clients and had received campaign contributions. He was also on the FOO (Friends Of Owner) comp list at the lobbyist’s restaurant, Signatures. Blunt could eat there for free, dining on $74 steaks and a $140 tasting menu, although his spokesperson said he never did.74
When the Abramoff scandal erupted, it took down Tom DeLay but actually helped Blunt, at least at first. Roy Blunt took DeLay’s place as majority leader, serving in an interim capacity from September 2005 to February 2006. His son was still governor of Missouri, and two of his children and his wife were all lobbyists. Blunt seemed to be the natural permanent successor to DeLay. The Hill newspaper ran a poll that reportedly showed Blunt beating his nearest competitor, Congressman John Boehner, by a two-to-one margin.75 Blunt ran a hard-nosed campaign, described by one veteran observer as “an old-style machine campaign based on subtle and not-so-subtle signals to other members that they dare not cross him.”76 But reformers in the House were worried about his connections to Abramoff, and Blunt lost in an upset to Boehner. “In the end,” said Congressman Jeff Flake of Arizona, “we needed a course correction.”77
But Blunt was far from defeated in his quest for yet more power and influence. In 2009 he announced his plans to run for the U.S. Senate. Like Harry Reid, Blunt knew the value of setting up an elaborate system of fund-raising entities that allows a politician to extract donations from the same contributor several times. For his 2010 Senate run, in addition to his campaign committee and his leadership PAC, he also created the Blunt Victory Committee, which transferred money both to his campaign and to the National Republican Senatorial Committee, which in turn also helped his campaign. He created yet another committee called the Road to Senate Victory Fund, which collected more than $1 million from donors and then transferred a chunk of it to Blunt and a handful of others.78
Blunt put his son Andy, a senior adviser to Thompson Communications, on the payroll as campaign manager.79 But Blunt’s campaign committee also paid almost $7 million to Thompson Communications for the race. It was by far his biggest expense, more than ten times the amount he paid to the next vendor. How much of this money ended up in Andy’s pocket is impossible to say.80
Roy Blunt won his Senate race and returned to Washington, where he joined the powerful Senate Appropriations Committee and the Senate Commerce, Science, and Transportation Committee. His son Andy continues to work as a lobbyist; his clients include American Airlines, railroad companies, and many other major corporations.81 In February 2011, former governor Matt Blunt took a job in Washington as head of the American Automotive Policy Council, an association created by the “Big Three” automakers to lobby for them (convenient, since his father had just joined the Transportation Committee in the Senate).82 Daughter Amy Blunt has worked in recent years for Lathrop & Gage, a large Kansas City law firm with a Washington, D.C., lobbying and government affairs practice.83 And the senator’s wife continues to work as a lobbyist, now for Kraft Foods.84
For Roy Blunt, family enrichment is just part of the way the game is played. When Congressman Tom DeLay was criticized for putting his daughter and wife on the payroll and for his brother’s lobbying work, Blunt defended him: “The things that Tom has been criticized about in one way or another every member of Congress could be criticized about.” Indeed. DeLay’s student has greatly surpassed his teacher.85
The Reids and the Blunts are particularly powerful and successful political families. In The Godfather, the New York–area Mafia was divided into five families. In Washington today, there are many more—but some are more powerful than others.
10
Conclusion
Protection for the Rest of Us
DISGRACED GOVERNOR ROD BLAGOJEVICH, who tried to sell Barack Obama’s U.S. Senate seat in Illinois to the highest bidder, is the modern symbol of corrupt politics. He seems perfectly suited to the role: the extortionist with his cartoonish hair, foul mouth, and equally foul-mouthed wife, sentenced to fourteen years in the state pen.
But what is the difference between his attempted extortion and the legal forms we have examined in this book? Perhaps Blago’s real crime was simply a blunder: he lacked the soft touch and deftness that other politicians have mastered. Knowing he was the target of a federal investigation, he told a colleague (while the FBI was listening), “Assume everybody’s listening; the whole world is listening.” But he blathered on anyway. The Senate seat, Blago said, was a “f—— valuable thing, you just don’t give it away for nothing.”1 He told an aide, “We were approached, ‘pay to play,’ you know, he’d raise me 500 grand, an emissary came, then the other guy would raise a million if I made him a senator.”2 He thought he could make “a play here” for his wife: get her a lucrative job in Washington or get her placed on some corporate boards.3
Extorting campaign donations and favors from powerful people. Getting a job for a family member. Sound familiar? Blago was certainly less sophisticated about it than most players in Washington. This is a guy who, on the day his wife was going to testify at his trial, told the media her new haircut was “beautiful,” adding, “I say that to her every day—and I’m not just saying that because she’s testifying.”4 And when he was caught renovating his house with non-union labor (a problem for a pro-union Democrat), he told the media that he had indeed used a “politically correct” list of contractors “and the landscaper was a lesbian.”5
Blago—must it be said?—lacks the soft touch. Intelligence and gaffes aside, Blago also became too greedy. The key to maximizing the returns of extortion is to restrain “piggish propensities below their full porcine potential.”6
Blago’s ultimate mistake was not that he extorted—but that he extorted in broad daylight. What he did—trading government action for money or favors—happens all the time in Washington. He was often referred to as a classic “Chicago pol,” suggesting that corrupt machine rule is a local affair. Yet most people forget that Blago served three terms in Congress. As Thomas G. Donlan of Barron’s posits, “Since Blagojevich is apparently not smart enough to think up these ploys by himself, it’s unpleasant but fair to believe that he learned them from experience in Washington while he was a congressman.”7 Chicago is a one-party town;
Washington is not. But corruption can work perfectly well in either context.
What happened to Blago seems to personify the solution to political corruption: get rid of the “bad people” in government and replace them with “good people.” Certainly individuals are responsible for their misdeeds and ought to be held to account. But there shouldn’t be style points when it comes to corruption. If others are doing what Blago did, but doing it in a more subtle and sophisticated manner, that is a problem. Indeed, it might be a more severe problem because it is so hard to detect.
FBI investigations alone will never take corruption out of politics. They take too much effort, and they attack the problem serially, one target at a time. Instead, we need to start with a simple proposition: bureaucrats and politicians are just like other people. That may sound obvious, yet it is a real departure from the traditional way we think about government. We like to think our leaders are pursuing the common good. Yet if politicians and bureaucrats are ordinary people, they are going to make most of their decisions based on what benefits them personally.
This is not to say that there are no good, honest, and decent people in politics and government. But by and large people are people: politicians and bureaucrats are as self-seeking as members of other professions, such as bankers on Wall Street or film producers in Hollywood.
We also need to recognize that in Washington today corruption is driven more by extortion than by bribery. The power equation in Washington has shifted from the buyers to the sellers of influence. We all denounce “special interests,” that is, lobbying by firms and industries. We should turn our attention to their counterparts. Our reform efforts have been almost exclusively devoted to restricting the activities of these special interests—in other words, ourselves—as opposed to the activities of the Permanent Political Class. This is unusual because when it comes to most industries in America—insurance, finance, and so on—most regulatory requirements fall on sellers, not buyers. Perhaps that doesn’t happen in this case because it’s the sellers who get to make the rules.
Reforms designed to protect the Permanent Political Class from outside special interests usually backfire and end up being a tool for further extortion. Let me give you a small example of how this fake is played in Washington. In 2006, in the wake of the Jack Abramoff scandal, Congress introduced a series of ethics reforms that were supposed to dramatically limit lobbyists’ influence on Congress by restricting their ability to buy expensive meals or offer other favors to congressional staff.8 Sounds like a good idea, doesn’t it? But here’s what happened: with lobbyists buying meals for staffers now out of the question, politicians started organizing fund-raisers where lobbyists paid to meet with the staffers! Lobbyist Stewart Van Scoyoc noted: “Particularly with the ethics package, it’ll put more pressure on fundraising because it will limit the interaction between lobbyists and staff and push more of it into the fundraising context.” As another lobbyist put it, “Members tap us all year, so why not the staff?”9
While some have proposed public financing of presidential campaigns as a possible solution, this proposal has huge problems. It is more likely to aid incumbents than challengers, since incumbents have many built-in advantages. If a challenger cannot raise money to take on an incumbent and cannot outspend that person, the incumbent will win almost every time. And the courts have repeatedly found that “checkbook activism is no less protected by the First Amendment than grassroots organizing.” Donating money is a form of freedom of speech, in the eyes of our courts.10 The famous Supreme Court case on campaign finance limits, Buckley v. Valeo, noted that “virtually every means of communicating ideas in today’s mass society requires the expenditure of money” and that the ability to donate money for the causes you believe in is a constitutional right.11 Many people have bitterly denounced this decision, but I do not believe any court will ever stop wealthy individuals from spending large sums to express their political views. We could tinker with various rules about what candidates may or may not do to coordinate with those individuals, but we cannot stop the “buyers”—ourselves—from entering the fray.
If spending money is a First Amendment right, the restrictions should not be placed on the spenders so much as on the candidates soliciting their help. Limiting the political extortion racket means regulating politicians and bureaucrats, not the American public.
Here are some necessary reforms:
1. Ban the solicitation or receipt of campaign contributions while Congress is in session in Washington. Extortion works best when the threat is imminent. The Mafia street thug who has a bat with him is more likely to get protection money than the distant extortionist making a phone call. The same holds true when it comes to the Permanent Political Class. Important bills that can make or ruin a company or an industry create the perfect baseball bat to use. Holding a fund-raiser in the shadow of the U.S. Capitol, where important legislation might be on the docket, is an extortionist’s dream. Twenty-seven states already have similar laws or rules in place for their state legislatures. In Buckley v. Valeo, the Supreme Court ruled that “the appearance of corruption may persist whenever a favorable legislative outcome follows closely on the heels of a financial contribution.”12 Timing and location (proximity) are important. We need to divorce fund-raising from lawmaking as much as we can—as in Florida House rule 15.3(b):
A House member may neither solicit nor accept any campaign contribution during the 60-day regular legislative session or any extended or special session on the member’s own behalf, on behalf of a political party, on behalf of any organization with respect to which the member’s solicitation is regulated under s. 106.0701, Florida Statutes, or on behalf of a candidate for the House of Representatives; however, a member may contribute to the member’s own campaign.13
The Florida Senate has a similar restriction.
Extortion can occur at any time. But there is no question that there is no more advantageous time to bring leverage on and extort money than when Congress is about to vote.
Some might object that such a rule would put incumbents at a severe disadvantage. After all, Congress can be in session for months, and challengers would be free to raise money throughout that time. But if anything this restriction would force members of Congress to make efficient use of their time. So much of what happens in Washington is related to fund-raising: milker bills, congressional hearings designed to extract, and so on. Eliminating politicians’ ability to raise money while in session would force them to devote their time exclusively to their job: lawmaking.
In 2007, Speaker of the House Nancy Pelosi announced that Congress would be moving to a five-day workweek rather than the traditional three-day week. It sounded like a good idea, but what did members do with the extra time? They held more fund-raisers! “Honestly we’ve already begun to schedule them,” said Monica Notzon, a political fund-raiser. “I think we’re going to see events every day of the week.”14 A lobbyist for the National Federal of Independent Business, Dan Danner, said, “If they’re here more that’s what they’ll do. There’ll be more fundraisers.”15
Imposing this ban would not completely purify all fund-raising, of course. But it would help nudge fund-raising events in the direction of genuine support rather than extraction. As one scholar puts it, “There is little reason to believe that the genuine supporter of a candidate” would not give when Congress is out of session and when supporters are allowed to give.16
2. Place an outright ban on contributions and solicitations involving lobbyists or government contractors. Many states already have these sorts of restrictions in place.17 For example, Connecticut General Statutes §9-704 (c) provides in part that:
contributions from (1) communicator lobbyist; (2) members of the immediate family of a communicator lobbyist; or (3) principals of a state contractor or prospective state contractors shall not be deemed to be qualifying contributions and shall be returned by the campaign treasurer of the candidate committee to the contributor or transmitted to the
State Elections Enforcement Commission for deposit in the Citizens’ Election Fund.
3. Restrict the ability of the Permanent Political Class to convert campaign money into a lifestyle subsidy. If you want to loan money to your campaign, that’s fine. But you shouldn’t collect interest in doing so. You have a First Amendment right to spend money on your campaign and loan money to your campaign, but you have no constitutional right to make a profitable investment out of it.
4. Ban leadership PACs. Leadership PACs have essentially become money-laundering operations. As Congressman Joe Hefley of Colorado put it, “My impression is that a lot of people use leadership PACs as a slush fund.”18 Even former FEC chairman Bradley Smith, who generally opposes restrictions on campaign financing on free speech grounds, believes that leadership PACs have to go because of how they are abused. Sometimes they are used to enhance a politician’s lifestyle, sometimes to bribe colleagues for votes. As one member of Congress put it, “Having a leadership PAC helps me tremendously with my colleagues, whether it’s getting legislation through [or] getting their support for it.”19 Members of Congress horse-trade all the time. They call it log-rolling: if you support building a bridge in my district, I will support beach restoration in yours. We cannot stop such trades. But leadership PACs are not about benefits for districts: they are about benefits for members of Congress.
Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets Page 17
