Wednesday, September 14, 2016

Corporate Money in Politics: Undue Influence and Conflicts of Interest

Indications of “the pervasive influence of corporate cash in the democratic process, and the extraordinary lengths to which politicians, lobbyists and even judges go to solicit money” can be seen in sealed but leaked court documents in Wisconsin.[1] This glimpse in to the real money-game in business and government shows just how much corporate money is in play. “The files open a window on a world that is very rarely glimpsed by the public, in which millions of dollars are secretly donated by major corporations and super-wealthy individuals to third-party groups in an attempt to sway elections.”[2] In addition, the files show just how easy it is for public officials to deny having been subject to conflicts of interest. The combination of a lot of money and the ability to get away with exploiting a conflict of interest is toxic to a viable representative democracy (i.e., a republic).

Beginning in 2012, five Wisconsin prosecutors investigated alleged criminal campaign-finance violations by the campaign committee of Scott Walker, the Wisconsin governor and, in 2016, a Republican U.S. presidential candidate. The investigation was launched after Scott Walker was recalled after his anti-union measure, Act 10, became law. “The prosecutors alleged that the governor’s campaign committee had operated a coordinated network involving outside lobby groups through which unlimited amounts of corporate money could be channeled without public disclosure.[3] This means that had the files not been leaked to The Guardian, the Wisconsin citizens would have been none the wiser concerning how much corporate money is donated even to state-level public officials through lobby groups.

“I got $1m from John Menard today,” Walker says in one email, referring to the billionaire owner of the home improvement chain Menards.[4] Surely, the company’s executives wanted something in return—even if it was not in the public interest, hence the distorting of the democratic system. A clearer picture of this happening can be seen by tracing forward donations amounting to $750,000 from the owner of NL Industries, a company that historically produced lead paint, to a third-party group closely aligned to Walker. “Within the same timeframe as the donations, the Republican-controlled legislature passed new laws making it much more difficult for victims of lead paint poisoning to sue NL Industries and other former lead paint manufacturers (the laws were later overturned in the federal courts).”[5] To be sure, positive correlation does not constitute causation, but the tight temporal connection of the donation and the legislation clearly suggest private motives in Walker, the Republican legislators, and the company’s owner. Moreover, a conflict of interest is present here in that Walker and the legislators allegedly put the private interests of a company above the public duty of public office-holders to act in line with the public welfare rather than a private interest that is paying the officials. Substituting a private interest for a broader interest is one of the hallmarks of a conflict of interest.

The investigation uncovered an even clearer case of an exploited conflict of interest. Allies of Scott Walker sought to help financially a conservative member of the Wisconsin supreme court, David Prosser, hang onto his seat in a 2011 re-election. Specifically, “a network of like-minded groups and campaigners channeled $3.5m in undisclosed corporate funds to pay for TV and radio ads backing the judge.”[6] Viewers of the ads would have had no idea how much private money was going into them—how important that money was in the re-election of a judge. “The push was seen as vital, the documents disclose, as a means of retaining the [Republican] majority of the court and thereby preserving the anti-union measures introduced by Walker. ‘If we lose [Justice Prosser], the Walker agenda is toast,’ one ally writes in an email sent around to the governor’s chief of staff and several conservative lobbyists.”[7] Put another way, corporate funds may have made the difference in the retention of the Republican majority on the Wisconsin Supreme Court as well as Walker’s Act 10 and future legislation. If so, we could conclude that plutocracy—the rule of private money—had achieved the upper hand over democracy in Wisconsin.

Regarding the associated conflict of interest, Justice Prosser refused to recuse himself in 2015 from a case in which the Wisconsin supreme court sat in judgment over the investigation, “despite the fact that the investigation focused on precisely the same network of lobbying groups and donors that had helped him hang onto his seat. The judge joined a majority of four conservative justices who voted to terminate the investigation and destroy all the documents” that were subsequently leaked to the Guardian.[8] For an official who was subject to the investigation to sit in judgement of it is a clear conflict of interest to which human nature itself would be hard pressed to cave into temptation to exploit the conflict in favor of the official’s own private interest rather than the broader duty of the office to objectively and fairly adjudicate cases.

So it is astounding that Prosser told the Guardian that four years had passed since his re-election before he joined the decision to close the investigation, “over which time any potential conflict of interest had faded.[9] The judge’s argument is specious—even ludicrous—because people do not forget an intangible obligation to private interests after a few years. Generally speaking, the passage of time makes no difference in a conflict of interest unless circumstances bearing on the conflict have changed such that the conflict no longer exists. That Prosser had used such a flimsy defense points to how easy he thought it is to put to rest any concerns regarding a conflict of interest. In other words, he would have had to do better had he been worried that the public and federal and state investigators would be likely to go after his conflict of interest. I contend the underlying reason for the easy treatment of such conflicts is the commonly held belief that conflicts of interest are not inherently unethical, so they are fine as is unless they are exploited. This belief is dangerous to the viability of a republic. Moreover, the combination of the ease of getting away with exploiting such a conflict and the overwhelming amounts of corporate cash being spent to influence public officials and electorates is especially toxic to representative government.



[1] Ed Pilkington, “Leaded Documents Reveal Secretive Influence of Corporate Cash on Politics,” The Guardian, September 14, 2016.
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] Ibid.
[8] Ibid.
[9] Ibid.