Summer Reading: Corruption and American Politics VI - The Final Three Essays

This post looks at the final three essays in Corruption and American Politics, an essay collection edited by Michael A. Genovese and Victoria A. Farrar-Meyers (Cambria, 2011).

Pay to Play in the Municipal Bond Market
In "Influence Peddling and Voter Suppression," Thomas A. Hollihan looks at the municipal bond market, where sweetheart deals have greatly increased the cost to taxpayers of getting credit and, in some cases, led to serious crises in local governments, including bankruptcy. But it's not a few bad apples. Hollihan quotes an investigator of the situation, Charles Anderson, as saying, "It's rare to sell a Senate seat, but it's not rare to sell a bond deal. … pay-to-play in the municipal bond market is epidemic."

It's not hard to prevent such pay to play:  you pass an ordinance that requires bonds to be sold at auction. And yet in 2008, 85% of municipal bonds were sold not via auction, but via underwriters selected by local officials. Such underwriters have a great deal of money and other resources with which to influence local officials.

Hollihan also mentions a 2007 survey in which only 34% agreed with the statement, "Most elected officials care about what people like me think." In 2002, 44% agreed. The belief that citizens' voices are heard is weakening. This is largely the result of the growth of lobbyists and of special interests' access to elected officials.

According to a survey cited in the next essay, half of those polled felt that government corruption is part of the way things work in the U.S. And in another survey, half felt that the U.S. is losing ground with respect to government corruption. The result is less involvement in government.

Transparency and Trust
In their essay "The Public and Political Corruption," Matthew J. Streb and April K. Clark quote Michael Johnston on how differently secrecy is seen by the public and by government officials:

Citizens … are apt to see secrecy as evidence of wrongdoing ("why keep it secret if you have nothing to hide?"), while elites defend secrecy as a necessary part of policymaking.

The authors look at the importance of political corruption to the public by citing surveys that show people do not consider it a major factor in their voting decisions. And yet, in multiple polls, about 70% of Americans considered corruption extremely or very important, but not one of the most important domestic priorities.

The authors feel that "the public may be more trusting of government that they do not hear about," that is, state and local government, as well as the Supreme Court (although views of the latter have been changing recently).

The Appearance of Corruption
In her essay "Money for Nothing? The Politics of Reform, Actual Corruption, and the Appearance of Corruption," Victoria
Farrar-Myers has a simple, elegant way of defining corruption:

Those among the governing— whether elected official, political appointee, or administrative hire —are entrusted by the governed to serve in the "public interest." Because of this trust-based relationship, anything that negatively affects the trust that the governed place in the governing has the potential to be seen as "corruptive."

But she focuses on what she calls the "representational relationship at the foundation of the nation's republican form of government." She sees acts of corruption as "severing" the "representational linkage between a public official and his or her constituency.

"The more difficult type of corruption to identify and define … is one where the linkage is perhaps bent, but not broken; where the trust placed by the government is weakened but not completely eradicated; where the representational process is distorted, but not fundamentally altered." These tend to be instances of appearance of impropriety. But Farrar-Myers focuses on the campaign finance context and Supreme Court rulings about campaign finance.

She also looks at lobbying, where the floor debates on the Lobbying Disclosure Act of 1995 recognized that a principal goal of disclosure was to "encourage lobbyists and their clients to be sensitive to even the appearance of improper influence." But Farrar-Myers argues that this act was premised on the idea that the representational system basically worked, while later attempts to regulate lobbying were premised on the idea that the system was fundamentally flawed, giving too much power to special interests.

Farrar-Myers recognizes that it is not sufficiently clear to many people why it should matter if there is an apparent conflict of interest if there is no "actual corruption." She gives two reasons why it should matter. One, "eliminating the appearance of corruption is about removing the temptation for a public official to sway from his or her fiduciary duties owed to the governed; just because no actual corruption has yet to take place, a public official may succumb to the temptation to do so if continually exposed."

Her second reason is that "even the presence of a potential conflict of interest can erode the trust that the governed place in the governing."

Farrar-Myers also looks at the unintended consequences of focusing on the appearance of corruption, including a taint on lobbying, going after de minimis misconduct, and making government operation less efficient through focusing too much on oversight and through an over-abundance of accusations.

She believes that accountability of officials is more important than trying to plug loopholes. But she does not take into account the value of an ethics program to train, advise, and require disclosure, so that enforcement and, therefore, ethics reform related to enforcement, is not so important.

Robert Wechsler
Director of Research-Retired, City Ethics

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