The NewStandard ceased publishing on April 27, 2007.

Electoral Funding Scandals Expose Cracks in Still-broken System

by Michelle Chen

Campaign-finance critics say accusations of misdeeds recently leveled against lawmakers like Tom DeLay point to much bigger problems concerning the methods both parties employ to generate funds and votes.

Nov. 1, 2005 – Tom DeLay's grinning mug shot has become the emblem of congressional scandal in recent weeks. But for all the official scrutiny heaped on the Texas congressman and former majority leader of the House of Representatives, watchdog groups say that the most incriminating evidence of political corruption is simply business as usual on Capitol Hill. Underneath the scandals, they warn, is a free-flow of corporate money that regularly erodes democracy while staying inside the bounds of the law.

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The DeLay scandal traces the course of campaign money through his party’s political machinery. According to the four-page indictment, DeLay colluded with leaders of Republican political action committees to illegally funnel $190,000 in corporate campaign donations to key Texas House candidates, helping them achieve a Republican majority in the Texas House in 2002. That victory enabled a state-level redistricting, which in turn strengthened Republican standing in the US House of Representatives.

Andrew Wheat, director of research with the state watchdog organization Texans for Public Justice, said that a conviction in the case could have a deterrent effect. "Hopefully, there will be consequences that will persuade people that it’s not worth the risk," he said. "Otherwise… if laws are unenforced, they have no meaning."

From the perspective of ethics-reform activists, however, the alleged crime is just a peephole into an "imperial" Congress that sanctions and even encourages betrayals of the public trust.

Reform groups consider that the temptation of corporate money to be a bipartisan phenomenon.

"It’s not just about Tom DeLay. It’s about the entire system," said David Donnelly, national campaigns director of the Public Campaign Action Fund, a campaign finance reform group. This latest scandal, he said, grows out of "the everyday trading of campaign donations for policy."

Critics view DeLay’s financial record as a case study in Washington’s "pay-to-play" system. Without rising to the level of criminality, DeLay’s influence-peddling schemes have earned him three official chastisements from the House ethics committee – a move that prompted the retaliatory replacement of several committee members with Delay’s political allies earlier this year.

Before this latest scandal, DeLay was already under scrutiny for participating in a separate campaign-finance scheme, in which the Westar Energy Corporation offered legislators donations in exchange for a special exemption from merger regulations.

Westar and its lobbyist were eventually fined $40,500 by the Federal Elections Commission. The lawmakers involved in the deal – DeLay, Billy Tauzin (R-Louisiana) and Joe Barton (R-Texas) – were not penalized, but the ethics committee did admonish DeLay for his role in the scandal.

Westar ties into a mesh of influence that binds DeLay to energy and utility corporations. Buoyed by Enron’s political fundraising since the late 1980s, DeLay pushed for deregulatory policies that helped the power conglomerate prosper until 2001, when price-gouging scandals precipitated a corporate meltdown.

Political paralysis has led reform groups to doubt whether legislators can be trusted to police themselves.

The 2005 federal energy legislation, however, affirms that the political reach of energy interests extends well past DeLay. The sectors that received billions in tax breaks and subsidies have long ranked among the most generous campaign contributors, doling out some $38 million to congressional candidates in the 2004 election cycle, about three-quarters going to Republicans, according to the political-finance research clearinghouse Center for Responsive Politics.

The controversial bankruptcy act passed earlier this year also bears the fingerprints of big business. The law boosts credit card company profits with regulations that could wipe out the ability of as many as 210,000 people to obtain debt relief through bankruptcy. The Center for Responsive Politics found that in the 2004 elections, finance and credit companies issued roughly $8 million in individual and PAC contributions, with just under two-thirds going to Republicans.

Reform groups consider that the temptation of corporate money to be a bipartisan phenomenon. Overall in the 2004 election cycle, about 55 percent of contributions from business groups went to Republicans, while Democrats swept up the rest.

Emerging ethics scandals have revealed the role of corporate lobbyists in the money chain between private interests and public servants. Channeling gifts, travel subsidies and campaign donations from clients to officials, high-stakes lobbyists often capitalize on cronyism. According to Public Citizen, since 1998, of all outgoing members of Congress eligible to become registered lobbyists, over 40 percent have entered the sector.

Drawing from his own experience inside the beltway, Public Citizen representative Craig Holman told The NewStandard, "I assume now, as a lobbyist here on the hill, that… through corruption and campaign contributions and gifts, is how every major decision is being made now."

Naomi Seligman, deputy director of the advocacy group Citizens for Responsibility and Ethics in Washington, commented: "It’s all about loopholes, isn’t it?… And how these members [of Congress] and lobbyists can jump through them. And so far they’ve been pretty successful, because there’s no policing mechanism to say that you can’t do that."

Political paralysis has led reform groups to doubt whether legislators can be trusted to police themselves. Seligman cited a so-called "ethics truce" on Capitol Hill, or the unwillingness of legislators on both sides of the aisle to air each other’s dirty laundry. For instance, House Minority Leader Nancy Pelosi (D-California) has decried ethics violations among Republicans, but has recently drawn rebukes for her reluctance to investigate Democrats accused of accepting inappropriate favors from lobbyists.

Suspecting that "everyone’s covering their own backside," Seligman said, official statements railing against ethical misconduct are "all message and no substance."

Yet rules of the House ethics committee, which is now relaunching after months of partisan gridlock, ensure that discipline will remain an internal affair. Unlike the Senate Ethics Committee, the House allows only legislators to file formal complaints, not individuals or private groups.

Public-interest advocates also complain that the lobbying disclosure system, though intended to serve the citizenry, offers little real transparency. Congressional lobbying records are not organized into an accessible database, limiting the public’s ability to track the influence of interest groups.

Nonetheless, Holman expressed optimism that the numerous scandals looming over Washington are "making Congress ripe for reform" and could compel more serious consideration of proposals to strengthen government accountability.

Various reform bills introduced earlier this year in the House and the Senate would tighten lobbying-disclosure requirements, restrict gifts and trips subsidized by lobbyists, and extend the "cooling-off" period – the time that retired officials must wait before becoming professional lobbyists.

But reform advocates are wary that historically, efforts to stem the stream of corporate funding have ended up springing new leaks. The 2002 campaign finance reforms, for example, technically closed the "soft money" loophole that had previously allowed unlimited indirect campaign funding from corporations, unions and other interest groups. But both parties responded by establishing "non-profit" political shell organizations to traffic donations around the new legal barriers.

Proponents of a full-scale regulatory overhaul believe the current electoral system has moneyed interests built into it, because inevitably, those who win elections owe at least part of their success to whoever is picking up the tab.

Donnelly of the Public Campaign Action Fund commented that issuing "band-aid" rules to curb wrongdoing is useful to an extent, but should not distract from the need to "deal with the root causes of it, which is the greed and avarice that goes along with so much of the fundraising in politics these days."

On the state and federal levels, the Fund is pushing for "clean-money" laws, which mandate government subsidies for campaigns to replace privately raised funds. The rationale is that if the government alleviates the cost of political campaigning, a more diverse array of people would run for election and form more responsive political bodies not beholden to the agendas of donors.

"People definitely want politicians who are acting unethically to get caught," Donnelly said. "But they often just want different politicians. They want people to be able to run for office without relying upon huge amounts of money from wealthy interests…. It’s a bigger issue about who are the kind of people we put into politics, and what do they have to do to gain public office."

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The NewStandard ceased publishing on April 27, 2007.


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Michelle Chen is a staff journalist.

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