Bacon's Rebellion

Democracy Thrives in Sunlight

An Endless Game of Whack-a-Mole

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by

James A. Bacon
in

whack_a_mole
Illustration credit: Big Fur Hat

There is no question that Virginia needs to clean up its laws regarding the giving of gifts, and the reporting of those gifts, to public officials. The sole encouraging aspect of the ongoing GiftGate saga is that there appears to be near-unanimous agreement, even among elected officials, upon the need for reform. Here at Bacon’s Rebellion, we will do our small part to keep the heat on legislators to make good.

But let’s not pretend that the fundamental problem of money in politics will change. Matt Mitchell makes the case quiet plainly on the Neighborhood Effects blog associated with the Mercatus Institute at George Mason University.

As long as elected officials are expected to dole out lucrative privileges to particular firms, particular firms will want to play in the political sandbox.

Even if Virginia adopted a complete ban on all gifts of any size to elected officials and their family members, I predict firms and their leaders would still donate to political action committees, they’d endorse candidates, they’d sponsor third-party political advertisements, they’d organize get-out-the-vote efforts, and they’d host fundraisers and campaign events. In an endless game of whack-a-mole, reformers could no doubt try to curtail these efforts too (with the First Amendment a likely casualty). But so long as businesses face such lucrative incentives to play politics, the reformers will always be one step behind.

A better—more permanent, and more direct—reform would strike at the heart of the quid-pro-quo problem. It would limit the government’s ability to favor particular firms in the first place. This would require the elimination of all targeted tax exemptions and credits. … The state would also need to eliminate all programs that make grants or loans to particular firms (you can see a listing of such programs here).

In one fell swoop, these types of reforms would instantly remove the incentive for firms to seek the favor of politicians.

Well said. I would argue only with Mitchell’s conclusion. His proposed reforms would eliminate some of the incentives for firms to seek the favor of politicians, but many of the biggest incentives would remain. As long as state and local governments play a role in transportation, land use, education, health care, insurance, banking, utilities and a host of other industries, favor-seeking will always be with us.

— JAB

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19 responses to “An Endless Game of Whack-a-Mole”

  1. TMT Avatar
    TMT

    One reform that would help would be to require the reduction to writing and the immediate Internet posting of any communication with elected officials or senior appointed officials, by a person being compensated for making such contact, when the contact relates to the appropriation of public money or the application of regulation. For example, if all of the contacts related to the public funding of the Silver Line had been disclosed to the public and the media, would Kaine have still transferred the DTR to MWAA and set in motion the massive toll increases on the DTR’s users? Maybe. Maybe not.

    We all have a First Amendment right to petition the government for relief of grievances, but none of us have a right to do so in secrecy.

  2. larryg Avatar
    larryg

    if you want to strike at the heart of this fetid deadly threat to Democracy, you’d acknowledge that money is not free speech and make it illegal – period.

    this is like the NSA saying that they’ll collect data but not misuse it!!!!

    once you ALLOW money in politics, it’s like trying to plug the leaks in a bucket used as shotgun target practice.

    and TMT demonstrates just how corrosive the environment is when he SUSPECTS that money MIGHT have been involved in MWAA/Kaine/DTR>

    his belief is that Kaine might well have been just as dirty as McDonnell but was more clever at hiding it.

    right?

    so.. no.. as long as we allow “legal” laundering of money via PACS it’s just a farce….

    only the truly dumb in politics go from quid-pro-quo donations to a PAC to a direct transfer of money from the principal to them… that’s what makes McDonalds sins so inexplicable.

    I trusted him to have good judgement even if I disagreed with his politics but the man proved beyond a shadow of a doubt that he is just as bad as Anthony Weiner… he’s so full of his own arrogance that it never occurred to him what things would look like downstream.. so what McDonnell proved was not that we have a gap in gift law – but just how wide open things really are if a leader chooses to engage in them.

  3. Peter Galuszka Avatar
    Peter Galuszka

    Brought to you by the KOCH BROTHERS!

  4. Breckinridge Avatar
    Breckinridge

    Bacon is onto something. The giving of gifts, whether tangible goods or entertainment, or the donation of campaign dollars is not really the problem, but symptoms of the problem. But he’s wrong if he assumes it is all about direct rent seeking, the corporate appetite for grants, tax favors or special treatment directed at one company or industry. The routine decisions that government makes on the large questions can be just as important. Many of the corporate entities hovering around the General Assembly this year were truly interested in a general transportation funding package, for example, rather than a special project related to their businesses. Many others have great interest in education, mainly because they are worried about an educated workforce but the benefits they seek are general — not specific.

    But often what you suspect is going on really is — and they want some goodie just for themselves.

    This business of the government granting favors or goodies to “create jobs” is a two-way street. Governments now compete with each other, offering sweeter and sweeter benefits. State vs. State. Henrico vs. Fairfax. It’s obscene, and the business people themselves might admit to you they really do not make decisions on this basis. But if the government is offering, they will not turn it down. And once the government has done it for Company A, I would argue that Company B has a duty to its stockholders to see if it can get the same deal.

    The solution, which I would support, is to end it all. Nationwide. From Fairbanks to Miami. No specific tax break or grants for one company over another. Let the localities compete for business on the issues that matter — transportation, an educated workforce, low general tax rates and low crime rates. It is easy and a cheap shot to totally blame the business community for this form of prostitution. This is consensual sex, not rape.

    As to TMT’s fascistic suggestion, if you want to broadcast every communication about an issue or a grievance or a request for assistance, I want that rule to apply to everybody. Let’s demonstrate how absurd the suggestion is by demanding that every constituent who wants a sidewalk paved, or every citizen who is opposed to an abortion restriction bill, or asks a legislator to write a recommendation letter to UVA, also gets his or her name and communication posted instantly. Don’t just do it to business lobbyists or advocates for other government programs.

    Because that is how this government works. Everybody in good legal standing has the ultimate goodie that a politician wants — a ballot. Everybody has the right to call their city councilman or state legislator or congressman (although the latter really are totally out of touch now.) Campaign contributions should all be reported and published. Gifts above the nominal ball point pen or cup of coffee should all be reported and published. And if the outcome remains messy, I still prefer it to the scary visions of utopia peddled by the Left.

  5. larryg Avatar
    larryg

    there is NOTHING MORE REVEALING to look at someone who contributes money on VPAP and you follow it and it ends right at the door of a PAC – and form that point on – what happens to it is anybody’s guess.

    we PRETEND that this is DISCLOSURE.

    it’s a mockery.

    you can go see how the PAC distributes money to candidates but at that point, the “fund” is a massive commingled one in which, for instance, the Koch Boys (or Dominion or whoever) could give a pot of money to the PAC (with instructions) and out the other end flow the Kock boys money totally commingled with everyone else.. absolutely no way to connect who actually got the money from the original contributor.

    I’d give a pretty penny to hear someone at VPAP comment on this – but the problem is (as Peter points out) that if they did – there would be adverse impacts to VPAP.

    so in some ways, VPAP is a hostage to this disgusting process.. they do their best.. but in the end they are also co-opted by … don’t know how else to say it – a really corrupt process.

  6. Breckinridge Avatar
    Breckinridge

    If you make a contribution to a PAC and give the recipient directions on how you want it spent, that directive is supposed to be reported. I’m otoo lazy to look up the code but it’s there. Technically if Dominion gave $10 grand and said, spend it on these five candidates, the PAC should show that on the report. Now, people can ignore the law and the real joke in Virginia is lack of enforcement. But it is not legal to give it with directions and keep that secret. And most of the players do try to follow the law.

    What also should be illegal is for a candidate to take money in his direct campaign committee and give it to someone else. If the donation is to Delegate C it should stay with Delegate C. I’m not sure if that requirement to report a directed contribution also applies to a candidate committee — might be a loophole there. But I think it does.

    You are of course right that VPAP is a bunch of foxes guarding a hen house. It will never be an advocate for change. But you also forget that the whole system of political action committees was a reaction to Watergate and the freewheeling flow of secret cash that was the common practice until then. It was a reform effort. Then creative brains started working around it.

    1. DJRippert Avatar
      DJRippert

      “What also should be illegal is for a candidate to take money in his direct campaign committee and give it to someone else.”.

      BINGO!

  7. Breckinridge Avatar
    Breckinridge

    And Peter — you say “Koch Brothers” and I think “Union Bosses”. Big Labor owns the Democratic Party as completely as any bought dog that ever existed. The Koch Brothers have a long way to go before they can match the clout of AFSCME or SEIU (did I get that right? Service employees?). When you start worrying about the unions I’ll pay attention to your whining about the Kochs.

  8. larryg Avatar
    larryg

    “If you make a contribution to a PAC and give the recipient directions on how you want it spent, that directive is supposed to be reported. ”

    are you serious? do you really believe it is followed? how is it enforced?

    “I’m otoo lazy to look up the code but it’s there. Technically if Dominion gave $10 grand and said, spend it on these five candidates, the PAC should show that on the report. Now, people can ignore the law and the real joke in Virginia is lack of enforcement. But it is not legal to give it with directions and keep that secret. And most of the players do try to follow the law.”

    you go to VPAP and every single donation goes into one fund. It’s a de-facto money-laundering function… thats what PACs are for, guy.

    “What also should be illegal is for a candidate to take money in his direct campaign committee and give it to someone else. If the donation is to Delegate C it should stay with Delegate C. I’m not sure if that requirement to report a directed contribution also applies to a candidate committee — might be a loophole there. But I think it does.”

    “rules” for how to move money in politics? you’re a smart guy. Do you seriously believe this is a viable way to make sure money only flows the way it is supposed to? for every rule, there are multiple ways around it.

    “You are of course right that VPAP is a bunch of foxes guarding a hen house. It will never be an advocate for change. But you also forget that the whole system of political action committees was a reaction to Watergate and the freewheeling flow of secret cash that was the common practice until then. It was a reform effort. Then creative brains started working around it.”

    well.. no.. I’d never consider VPAP as the FOX but rather than hound that is supposed to be guarding the hen house but is kept in a cage so his role is to watch the FOX when he comes and bay.

    re: PAC history – actually unions.. –
    http://en.wikipedia.org/wiki/Political_action_committee

    “And Peter — you say “Koch Brothers” and I think “Union Bosses”. Big Labor owns the Democratic Party as completely as any bought dog that ever existed. The Koch Brothers have a long way to go before they can match the clout of AFSCME or SEIU (did I get that right? Service employees?). When you start worrying about the unions I’ll pay attention to your whining about the Kochs.”

    how about we get rid of PACs and see who BOTH give their money to directly?

    the whole concept that corporate/union money in politics is “free speech” is, instead, a license to corrupt.

    but the “union” deal is way overblown. Do you think that Kaine and Warner got “union” money in the same size and scope that their opponents got corporate money?

    I’d be MORE THAN FINE – to outlaw BOTH union AND corporate money to PACs – no problem at all..

    what you and I are witnessing – is how the two-party system denies you a real vote for someone who might well change things… but cannot even get on the ballot because of the way that money and two-party politics works.

  9. DJRippert Avatar
    DJRippert

    Gifts are far more pernicious than campaign contributions. Look at the timeline for the “gifts” given to Tim Kaine or Ken Cuccinelli. Apparently, these two gentlemen had few friends until they were elected to state-wide office. However, after election to state-wide office, gift-giving “friends” sprouted up like mushrooms after a rain shower. These gift-givers are not long time personal friends. They are opportunists who expect a return for their gifts. Anybody who doubts that has spent too much time in the meth lab.

    There are pretty strict rules against the use of campaign contributions for personal gain. People go to jail for violating those rules (see Jesse Jackson, Jr).

    Now – don’t misunderstand me – campaign finance law needs revision. However, the worst culprit at work in Virginia today is gift-giving to elected officials. Banning any gift-giving beyond $100 annually would be a great start. Implementing an ethics commission would be a good second step.

  10. larryg Avatar
    larryg

    I totally disagree unless you want to more correctly call “gifts” what they really are ….when they are more than a few bucks of value.

    People in govt – both Federal and State can – and should – be fired for accepting “gifts”.

    What Jesse Jackson went to jail for is the same thing that McDonnell did. Don’t kid me that his wife told the PAC what to do.

    Money in politics is the Church, gifts are one of the pews.

    PACs are money laundering entities – legalized corruption. Lawyers and other professionals go to jail for co-mingling funds.

    but this is puny compared to how the mixture of PACs and how the two political parties have a de-facto strangle hold on what candidates can run for office – at the State and Federal level and if you doubt that just look at the Cucinelli/Bowling situation.

    we do not have an election environment where an unaffiliated individual can truly run for office – and the reason why? institutional/corporate money that is the private funding of the GOP and the Dems.

    Dominion and the Koches, etc are not dummies. they know where their money needs to go and that it is wasted on candidates that are not GOP or DEm.

  11. larryg Avatar
    larryg

    The thing that truly amazes me with the Tea Party type is the failure of them to focus on what is really important in the cause of “liberty” and “freedom”

    right now – they think the game is to elect those that represent their views but in our current PAC-dominated funding of the two incumbent parties – there is no chance in hades that they’ll ultimately prevail and the proof is the current split in the GOP which threatens to break it into two separate parties and in turn – empower the Dems.

  12. larryg Avatar
    larryg

    the other thing here that is a farce is “full disclosure” concept for BOTH direct Gifts AND PACS.

    there is no disclosure.

    The Koch brothers can give millions to Cucinelli and we never know.

    The Unions could get millions to McAuliff and we never know.

    It’s a joke.

    and I suspect that it’s supported even by those who say they favor “disclosure” so that the people they support – can still get that money.

    so basically we support the money.. for our guys… but oppose it for the ones we oppose…

    and that means… we basically support money in politics but we want ‘restrictions’ …. but not too many…

  13. Breckinridge Avatar
    Breckinridge

    Code of VA 24.2-947.4 reads in part: “3. For each designated contribution received by the campaign committee from a political committee, out-of-state political committee, or federal political action committee, the campaign committee shall list the name of the person who designated the contribution and provide the information required by this subsection. ” There is similar language elsewhere. It could be tightened up.

    Who enforces? That is the problem. The local Commonwealth’s Attorney or the Commonwealth’s Attorney for the City of Richmond, since the SBE is located there. Local prosecutors usually have little stomach for this kind of investigation.

    I don’t think there is much of a problem with donors laundering money through Virginia registered PAC’s to mask their contributions. Instead there are these 529 committees or other entities making “independent” expenditures that have weak reporting requirements or don’t report in a timely fashion, until after the election is over. I’d close all the loopholes, require full disclosure.

    I also don’t disagree that the gift and entertainment culture is as big or a bigger source of corruption. In that regard, a very low threshold should exist and above that threshold everything should be reported. And don’t forget business relationships — when a lobbyist hires a legislators law firm, or spends money in his store — that can be a source of influence.

    The last real effort to change any of this was a bill introduced by Sam Nixon about four or five years ago. It would have given the SBE audit authority. It would have ended the loophole where a lobbyist takes a legislator out to a $200 dinner and drinks extravaganza, bills it to five clients, and claims there is no requirement to report as the $50 limit PER CLIENT was not reached. It was the lobbyists who killed that effort, with malice. And it will be the lobbyists who join with the legislators this coming session to resist any real reform. And who will catch them? Not today’s press corps.

  14. Ghost of Ted Dalton Avatar
    Ghost of Ted Dalton

    2 points:

    1. larryg is correct….this isn’t going to stop the game. The only way to stop “the game” is to ban money in politics. I, too, used to laugh at this notion. But every day that I grow older, it becomes clearer and clearer to me that it is the only way out of our current messes at all levels of gov’t. The other change has to be a reorientation from “jobs” as a political issue. A politics about “jobs” is a self-defeating politics. While conservatives like to whine about rent seeking (and I agree with them for the most part), they are much worse in that they’ve turned every single public policy question into one about economics/jobs. Sure, there are valid policy concerns that relate to job creation. But not every issue should be viewed through that prism. Unfortunately, the GOP has bastardized our politics in this manner. If you’re a serious conservative thinker, it’s not healthy to base every public policy on “job creation.”

    2. Mr. Bacon, if you want to do away with rent seeking….just acknowledge that such policies will simply destroy Southside/Southwest VA. And that’s no exaggeration. I doubt there would be half of the few private sector jobs out there without massive investment from the state and the Tobacco Commission. Again, I can agree with limiting rent seeking opportunities, but please acknowledge that you’re basically detonating Southside/Southwest Virginia.

  15. larryg Avatar
    larryg

    re: ” I don’t think there is much of a problem with donors laundering money through Virginia registered PAC’s to mask their contributions. ”

    sorry. I do. money comes in and then goes out and why do you think they choose that conduit instead of a direct, fully visible, from the donor to the donee contribution?

    do you really think when you go to a candidate and he’s showing money from the PAC – that that money did not come from a donor to the PAC?

    after all this stuff about gifts and even McDonnell using money from the PAC for his wife’s expenses.. that there is real discipline?

    it’s a joke.

    we are chumps for believing that what goes on with gifts does not go on with PACs.

  16. Peter Galuszka Avatar
    Peter Galuszka

    RENT-SEEKING Koch Brothers!

  17. larryg Avatar
    larryg

    rent seeking, crony capitalism, etc, et al, ad nauseum.

    we act like these are recent things.. that have suddenly and recently descended on the political landscape.

    nothing could be further from the truth!

    this country was connected with a transcontinental rail – the arrangements of which were so rancid and corrupt as to

    http://en.wikipedia.org/wiki/Cr%C3%A9dit_Mobilier_of_America_scandal

    we have a long and wretched history of money in politics:

    just google: List of federal political scandals in the United States

    and it continues – and we continue to talk about “rules”.

  18. Richard Avatar
    Richard

    Getting back to the issue of favors and government handouts to business, isn’t that how government actually works? We’ve seen restrictions at the federal level on “pork” backfire in that there’s no incentive for members of Congress to sign on to a bill unless it meets some test of political purity. I agree that it’s ridiculous to give particular companies incentives to come to your state or city as that leads to stupid competition – a race to the bottom – but if you can’t benefit your region’s industry (coal, farming, suburban development) why would you care about anything but getting some sort of media soundbite based on some simplistic theory of government.

    BTW – it was interesting that the NC Commerce head (newly appointed Republican) has asked for approval of fracking without significant restrictions because it would give her a slush fund based on special oil and gas taxes that she could use to entice companies to come to NC. She said she had a hard time competing with Texas that has such a fund with billions in it that it has used to bring new business and JOBS to Texas. Stupid.

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