Allan Brownfeld

Allan C. Brownfeld is a syndicated columnist and associate editor of the Lincoln Review, a journal published by the Lincoln Institute of Research and Education, and editor of Issues, the quarterly journal of the American Council for Judaism.

Pay-for-Play in Illinois and Business as Usual in Washington: How Different Are They in Reality?

There has been much discussion of the now-impeached Illinois Governor Rod Blogojevich's alleged "pay-for-play" scheme to sell Barack Obama's U.S. Senate seat to the highest bidder. Sadly, this is not much different from the usual political enterprise observed in Washington and throughout the country -- only a bit more blatant and caught on tape by the FBI.

"In some ways, the only thing Blogojevich did wrong was he was stupid enough to say it out loud," said Meredith McGehee of the Campaign Legal Center. "For other people, it's a wink and a nod. Verbalizing it crosses the line.

Northwestern University law professor Albert Altschuler says that if Blogojevich "made a quid pro quo offer for campaign funds, then he's guilty of breaking the law. There's a thin line. It's different if he said, 'If I was in the Senate, I'd be in a position to raise money for you.'"

It may be legal for those who contribute large amounts of money to presidential campaigns to be named to ambassadorships and other important posts, but what exactly is the ethical difference between this and what the Illinois Governor is accused of doing?

The way the game is usually played, when campaign money is solicited, a specific quid pro quo is not discussed. This, of course, would be illegal. But both those who contribute funds and those who receive them understand that what is being purchased is access. The specifics of what is wanted is discussed later.

Robert S. Bennett, one of Washington's best-known white-collar criminal defense lawyers, says that the Blagojevich case raises many issues about political corruption. "This town is full of people who call themselves ambassadors and all they did was pay $200,000 or $300,000 to the Republican or Democratic Party," said Bennet, referring to a passage in the criminal complaint filed against the now-former governor suggesting that Blagojevich was interested in an ambassadorial appointment in return for the Senate seat. "You have to wonder, how much of this guy's problem was his language, rather than what he really did."

In Washington, politicians regularly receive political contributions in return for their decisions, whether they involve making appointments or taking a particular position on a piece of legislation. Lawmakers regularly vote in favor of bills and steer appropriations backed by their donors. Why else, after all, would special interests contribute millions of dollars to politicians? Satirist Mark Russell once noted that while we may think there are two parties, Republican and Democratic, liberal and conservative, in reality there is only one party, "a fund-raising party."

The incentive structure within Congress is to raise a great deal of money, even if the individual congressman involved in fundraising comes from a safe seat in a largely one-party district. The Hill, the congressional newspaper, reports that:

Every few months the Democratic National Committee distributes a list to caucus members showing which members have paid their "dues" -- the money they're expected to give to the party -- and met their fundraising goals. The chairmen of "exclusive" committees, like Appropriations and Ways and Means, are expected to come up with $1.5 million. . . . The chairmen are expected to pay $500,000 in dues and raise at least $1 million. Top leaders are expected to pay at least $800,000 and raise $2.5 million. House Speaker Nancy Pelosi (D-CA) hit her target of raising $25 million.

The Repubicans are engaged in precisely the same enterprise. According to The Hill:

One of the more blatant examples was the fundraising one-upmanship between Reps. Jerry Lewis of California and Hal Rogers of Kentucky as they vied for the Appropriations chairmanship in 2004. Traditionally, Rep. Ralph Regula (R-OH), the most senior candidate, would have been next in line. But he lived up to his reputation as a lackluster fundraiser. . . . Rogers stepped up with a $300,000 check to the Battleground 2004 fundraising program. Then Lewis strode to the microphone with a check for $600,000. Regula fumed quietly. Lewis won the chairmanship and is now the ranking member. Regula is retiring.

The amount of outright corruption which appears to be permissible in Congress is formidable. Consider the case of Rep. Charles Rangel (D-NY), chairman of the House Ways and Means Committee.

Among the most serious revelations are these:

* Rangel led a successful congressional effort to protect a tax break that benefited an oil company after the firm's chief executive pledged a $1 million contribution to the Rangel Center at City College of New York.

* Rangel failed to properly report income he received from a vacation property in the Dominican Republic.

* Rangel failed to comply with state law regarding his ownership of four rent-controlled apartments in New York City.

* Rangel improperly claimed a tax deduction for a primary residence in Washington, D.C., despite also claiming his primary residence in his New York congressional district.

* Rangel routed $800,000 from his campaign committee treasury to his son for virtually no work on a Web site.

Thus far, the House Ethics committee and the Democratic leadership in the House have taken no action against Rep. Rangel.

But the line between "illegal" and "unethical" remains less than clear. Writing in The Nation, Erick Alterman notes that:

By some standards -- even by some New York standards -- the corruption of Charles Rangel is a minor league affair. After all, New York's senior senator, Charles Schumer, bears significant responsibility for the onset of the financial crisis on Wall Street, owing to his eagerness to demand weaker and weaker regulation for the people writing the checks to fund his political ambitions.

According to The New York Times, Schumer, as a member of the Banking and Finance Committees, took steps to:

. . . protect industry players from government oversight and tougher rules. . . . Over the years he has also helped save financial institutions billions of dollars in higher taxes and fees. These include weakening bank regulations, undercutting efforts to regulate credit-rating agencies and interfering with efforts to force corporations to increase the transparency of their balance sheets.

In his presidential campaign Barack Obama promised "change" in Washington. In particular, he pledged to limit the role of lobbyists. Hopefully, as time goes on, he will fulfill this pledge. All of us -- Republicans and Democrats alike -- would benefit from such genuine change.

The early days of his administration, however, give us some reason to wonder whether real change is, indeed, in the works. Among the new ethics rules announced by the White House is a two-year prohibition on employees participating in decisions related to their former employers -- and a more specific section banning individuals from taking jobs in the agencies they recently lobbied. No sooner were the new rules announced, however, than President Obama granted a waiver to William J. Lynn, III.

Lynn, a former aid to Senator Edward M. Kennedy (D-MA), served as an undersecretary of defense and comptroller at the Pentagon under President Clinton and was elected an officer of Raytheon in 2005. Lynn was among a group of Raytheon officials who lobbied the Pentagon and Congress as recently as 2007 and 2008, according to records filed with the Senate. Among those expressing concern about Lynn are Senators John McCain (R-AZ), the ranking Republican on the Senate Armed Services Committee, and Charles E. Grassley (R-IA), the ranking Republican on the Senate Finance Committee. Mr. Grassley said that, "Surely a number of Raytheon issues would come across his desk."

Or consider the case of "earmarks," which were widely criticized in the 2008 presidential campaign. "Earmarks" and "pork" have become rallying cries against the failures of government. The Office of Management and Budget, defining an earmark as spending that members of Congress insert in bills in ways that avoid "merit-based" review, says that in 2008 there were over 11,000 earmarks costing more than $16.5 billion, a significant increase over the last few decades.

The former Republican congressman chosen by President Obama to direct billions of dollars in federal highway spending -- despite the widespread concern about "earmarks" expressed during the campaign -- has been an unapologetic advocate of earmarks and has used his influence to win funding for projects pushed by some of his largest campaign contributors. The new Secretary of Transportation, according to The Washington Post:

. . . sponsored $60 million in earmarks last year, steering at least $9 million in federal money to campaign donors. . . . An opponent of earmark reform efforts in Congress, Ray LaHood ranks roughly among the top ten per cent in the House for sponsoring earmarks in 2008. . . . LaHood's record poses an important question. . . . How he would administer part of a $775 billion stimulus package that will be directed to the Transportation Department.

Many of the large American companies that have received billions of taxpayer bailout dollars by pleading that they did not have enough money to lend to customers were, at the same time, spending millions of dollars sending lobbyists to influence the federal government. A Washington Times review of lobbying disclosure reports found that 18 of the top 20 recipients of federal bailout money spent a combined $12.2 million lobbying the White House, the Treasury Department, Congress, and federal agencies during the last quarter of 2008. For example, the government bought $3.4 billion in American Express Company stock January 9 as part of an aid package. In the last quarter of 2008, the company spent more than $1 million on federal lobbying.

Several taxpayer groups assert that companies receiving federal assistance shouldn't be able to lobby the federal government at all, particularly on the Troubled Assets Relief Program (TARP), which is the formal name of the federal bailout plan.

"It's a definite conflict," said Pete Sepp, a spokesman for the National Taxpayers Union. "It's a disturbing sign that TARP recipients think there is still more loot left to get. If they're not slowing down their lobbying, taxpayers need to be worried."

Citigroup and Bank of America have received two rounds of federal assistance thus far. Both have been active lobbyists. Citigroup -- which with $45 billion is the number one recipient of taxpayer assistance -- spent $1.3 million on lobbying in the fourth quarter; nearly as much as the $1.4 million it spent in the third quarter. Bank of America spent $820,000 during the quarter.

"Taxpayers are now significant shareholders in these companies," said Steve Ellis, vice president at Taxpayers for Common Sense, a watchdog group. "The last thing taxpayers want is to be paying for somebody to lobby their elected representative to get more money."

How the legal case against former Illinois Governor Blogojvich is finally resolved, remains to be seen. What we do know with certainty, however, is that his "pay-for-play" philosophy remains alive and well in Washington. Will the new Obama administration be able to turn things around -- and reverse these trends? To do so, it will have to confront Washington's present incentive structure -- one in which both Republicans and Democrats are invested. This will be no easy task. *

"Fear is the foundation of most governments; but it is so sordid and brutal a passion, and renders men in whose breasts it predominates so stupid and miserable, that Americans will not be likely to approve of any political institution which is founded on it." --John Adams