Is the U.S. Political System Characterized by “Legalized Corruption”? Some Tentative Concerns About a Common Rhetorical Strategy

Today is Election Day in the United States. It’s an important election (they all are, really), and I hope those of our readers who are eligible to vote in the United States will do so. But this post isn’t going to be about these U.S. elections specifically. Rather, I want to consider a question about the U.S. electoral system more generally: Is it accurate to describe the U.S. system as a one of “legalized corruption”? That is, do the campaign finance and lobbying rules in the United States amount to a system in which wealthy individuals and interest groups “purchase” favorable policy through what are effectively “bribes”—in the form of campaign contributions or support?

The use of the rhetoric of corruption and “legalized bribery” to describe the U.S. political system has been around for a while, and it seems to have become even more pronounced over the last few election cycles—perhaps galvanized by the U.S. Supreme Court’s controversial decision in the Citizens United case. (For examples, see here, here, here, and here.) I certainly understand, and indeed share, the underlying concerns about how the influence of concentrated economic wealth can distort the political process and tilt policy outcomes in a direction that favors the affluent. Yet I’ve felt increasingly ambivalent about the use of the language of “systemic corruption” or “legalized bribery” to describe the very real money-in-politics problem in the United States. There are three main reasons for my ambivalence. Continue reading

What Would Senator Warren’s Anticorruption Bill Really Mean for Advocacy Groups? 

Last month, Senator Elizabeth Warren introduced her Anti-Corruption and Public Integrity Act, a 300-page blueprint for how to counter the structural enablers of public corruption in the United States. Included among her many proposals (which are detailed at length here) is a set of new lobbying regulations. Many civil society groups—most notably Oxfam—have praised the bill for bringing “an end to lobbying as we know it.” This enthusiasm is understandable, as few professions are decried with the special fervor Americans reserve for lobbyists. The very word conjures up images of slick, well-heeled, sleazy political operators who manipulate and corrupt the political system for their corporate clients. But of course lobbyists are a much more diverse group. Some lobbyists work for big pharma, banks, or the gun industry, but others work for the girl scouts, the environment, or the poor. Indeed, some work within anticorruption organizations. And so while there are many things to like about Senator Warren’s bill, including many of the proposed new lobbying regulations, it’s a bit odd that none of the anticorruption organizations that have praised the bill (see, for example, here and here) appear to have acknowledged (at least publicly) how the bill’s lobbying restrictions would affect their own work.

With that in mind, there are at least four aspects of the Warren bill that should concern anticorruption groups and other civil society advocacy organizations:

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The Flawed and Flimsy Basis for the American Bar Association’s Opposition to Anonymous Company Reform

In last week’s post, I raised the question of why the American Bar Association (ABA), which represents the U.S. legal profession, so strenuously opposes even relatively modest measures to crack down on the use of anonymous companies for money laundering and other illicit purposes. In particular, the ABA has staked out a strong, uncompromising opposition to the bills on this topic currently under consideration in the U.S. House (the Counter Terrorism and Illicit Finance Act) and in the Senate (the TITLE Act). As I noted in my last post, the substance of the ABA’s objections (summarized in its letters here and here) appear, at least on their surface, unpersuasive as a matter of logic, unsupported by evidence, or both. This, coupled with the fact that many ABA members strongly disagree with the ABA’s official position on this issue, made me wonder how the ABA’s President and Government Affairs Office had come to take the position that they had.

After doing a bit more digging, and talking to several knowledgeable people, I have a tentative answer: The ABA’s opposition to the currently-pending anonymous company bills is based on an aggressive over-reading of a 15-year-old policy—a policy that many ABA members and ABA committees oppose but have not yet been able to change, due to the ABA’s cumbersome procedures and the resistance of a few influential factions within the organization.

Why does this matter? It matters because the ABA’s letters to Congress deliberately give the impression that the ABA speaks for its 400,000 members when it objects to these bills as against the interests of the legal profession and contrary to important values. But that impression is misleading. There may be people out there—including, perhaps, members of Congress and their aides—who are instinctively sympathetic to the anonymous company reforms in the pending bills, but who might waver, for substantive or political reasons, if they think that the American legal profession has made a considered, collective judgment that these sorts of reforms are undesirable. The ABA’s lobbying documents deliberately try to create that impression. But it’s not really true. The key document setting the policy—the one on which the ABA’s House of Delegates actually voted—was promulgated in 2003, hasn’t been reconsidered or updated by the House of Delegates since then, and doesn’t really apply to the currently-pending bills if one reads the document or the bills carefully.

I realize that’s a strong claim – one could read it as disputing the ABA President’s assertion, in her letters to Congress, that she speaks “on behalf of” the ABA and its membership in opposing these bills. And I could well be wrong, and remain open to correction and criticism. But here’s why I don’t think the ABA’s current lobbying position should be read as reflecting the collective judgment of the American legal profession on the TITLE Act or its House counterpart: Continue reading

Regulatory Discretion and Corruption in the FDA

In the United States, the regulatory agency responsible for ensuring safe food and medicine, the Food and Drug Administration (FDA), has been marred by numerous scandals – from a 2016 insider trading prosecution to a 2009 politicized medical device approval to a 2013 ProPublica investigation that found the FDA overlooked fraudulent research and let potentially unsafe drugs stay on the market. These scandals have, understandably, undermined public confidence in the FDA. What’s the explanation for these problems? Why is there such a large public perception of corruption, and so many questionable incidents, at the FDA?

Much of the explanation has to do with institutional design: Corruption blooms where transparency and accountability are lacking, yet the FDA has vast discretion over the regulations it sets, incredibly loose restrictions on the money it can receive from industry, and little public accountability. The following steps can be taken to reform the FDA, in the interest of rooting out corruption and restoring public confidence in the agency:

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Why Did Trump’s Anticorruption Rhetoric Resonate? Three Hypotheses

OK, I know I said in last week’s post that I would eventually get back to blogging about topics other than Trump, but not yet. After all, Trump’s election—a political and moral crisis on so many dimensions—poses distinctive challenges for the anticorruption community, in at least two different (though related) respects. The first concerns the consequences of a Trump Administration for US anticorruption efforts, both at home and abroad, a topic I’ve already blogged about (see here and here). The second issue concerns the role that anticorruption sentiments and rhetoric played in Trump’s victory. After all, Trump positioned himself (ironically, outrageously) as an anticorruption candidate, denouncing Secretary Clinton as “crooked Hillary” and pledging to “drain the swamp” of Washington corruption.

It’s no surprise that the mainstream anticorruption community are perturbed, to put it mildly, by the effective deployment of anticorruption rhetoric by a racist xenophobic ultra-nationalist bully. While this is hardly a new phenomenon—see, for example, Katie King’s post on Hungary last year—the Trump victory has forced the anticorruption community to confront it head on. Indeed, at the International Anti-Corruption Conference (IACC) in Panama a couple of weeks back, the appropriation of anticorruption rhetoric by right-wing populists—especially though not exclusively Trump—was a constant subject of hallway conversation, even if relatively little of the IACC’s formal program dealt directly with this issue. (In fairness, many of the IACC speakers did find a way to raise some of these concerns in their presentations, and the organizers also managed to add a last-minute session, in which I was able to participate, discussing this topic.) What are we to make of this? What lessons should the anticorruption community—as well as others aghast at the success of Trump and other right-wing demagogues—take away from Trump’s successful appropriation of anticorruption rhetoric?

I wish I knew the answer to that question. I don’t, and won’t pretend to. But I do think it would be helpful to lay out what I view as the three main competing hypotheses: Continue reading

Troubling Signs of a Resurgent Anti-FCPA Lobbying Campaign

One of the biggest stories in anticorruption enforcement over the last two decades is the surge in enforcement of the U.S. Foreign Corrupt Practices Act. This development has not only been greeted with enthusiasm by anticorruption advocates, but has had bipartisan political support, at least within the executive branch (the enforcement surge began under President George W. Bush, and has continued through President Obama’s administration). But not everyone has been happy about aggressive FCPA enforcement. About five years ago, the U.S. Chamber of Commerce and its allies launched a coordinated lobbying assault on the statute and on the U.S. government’s enforcement practices. The Chamber not only published a report (“Restoring Balance”) advocating significant limitations on the FCPA’s scope, but it convinced (and/or paid) a number of other “experts” to take up the cause, writing op-eds, testifying before Congress, and lobbying in other forums. (The Chamber seemed to deliberately prefer to hire ex-DOJ officials to make its case, most notably former Attorney General Michael Mukasey.) These editorials and presentations, perhaps not surprisingly, tended to recite the same Chamber of Commerce talking points.

But this concerted, coordinated lobbying effort basically went nowhere. Why not? Well, there were probably a number of reasons, including the vigorous resistance of the Department of Justice, the intrinsic weakness of many of the Chamber’s arguments, and the difficulty of getting anything through the U.S. Congress. But another major factor was the Walmart corruption story, which the New York Times broke in 2012 (see here and here.) The allegations involving Walmart’s conduct in Mexico were so shocking that any appetite there might have been in Congress for “reforming” (that is, weakening) the FCPA quickly dissipated. Although FCPA critics continued to advocate changes to the statute and current enforcement practices, the concerted, orchestrated push for FCPA “reform” faded away.

But now there are signs that it’s back. Maybe I’m over-reading the limited evidence, but I think a new campaign for FCPA reform may well be underway—and anticorruption advocates should may attention and be ready to fight back. Continue reading

The Perry Indictment: Not So Farfetched

Texas Governor Rick Perry was indicted August 15 for engaging in what most Americans think of as politics as usual — or at least usual as practiced in Texas.  Perry was charged with abuse of office and coercing a public servant because he threatened to veto funding for an anticorruption unit attached to the Travis County District Attorney’s office unless DA Rosemary Lehmberg resigned.  Lehmberg, a Democrat, had been convicted of drunk driving and a video of her inebriated while in police custody had gone viral.  As Perry explained in vetoing the legislation after she refused to step down, he could not “in good conscience support continued State funding for an office . . . at a time when the person charged with ultimate responsibility of that unit has lost the public’s confidence.”

While Democrats saw a darker motive in Perry’s threat, the chance to replace a Democrat who had been a thorn in Republicans side, few think his threat was illegal.  The Washington Post and New York Times editorial pages, neither enthusiastic backers of Perry’s firebrand Texas conservatism, both sharply questioned the indictment as did President Obama’s former top political adviser David Axelrod.  Veto threats are part of the everyday give-and-take between governors and state legislatures and between Presidents and the Congress.  Indeed, as recently as the 2013 confrontation over the shutdown of the federal government President Obama used the threat of a veto to get his way with the  Republican Congress.  How can that be illegal?   And if it wasn’t, why is Perry’s?

But before politicians write the Perry indictment off as farfetched, they best consult a lawyer.  Continue reading