Campaign Financing and Corruption in the US by Anthony Didrick
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RESOURCE MATERIAL SERIES No. 56 CAMPAIGN FINANCING AND CORRUPTION IN THE US Anthony Didrick Castberg* I. OFFICIAL CORRUPTION IN THE reduced significantly. The reform UNITED STATES movement was frequently aided by outrageous scandals, such as the Teapot Corruption was common in the US in the Dome scandal during Harding’s 19th century. Patronage was widespread, administration, and by the press, which and although the spoils system was created often played a crusading role in bringing with the intention of diversifying scandals to public attention. bureaucrats, it became clear that corruption continued to increase. Rapid The nation suffered a setback during the industrialization and westward expansion prohibition era, 1919 - 1933. Prohibition not only expanded the role of government, was the result of the 18th Amendment to but also of corruption in government. the US Constitution, which prohibited the Although there was considerable manufacture, import and sale of corruption at the national level and intoxicating liquors. Although well- scandals affecting the presidency, such as intentioned, the Amendment was ill- those involving the Grant administration conceived, as it sought to make illegal what in the 1870’s, most of the corruption in the many, if not most, of the citizens not only US at the time was found at the local level. enjoyed but felt was their right. Although Most famous, perhaps, was New York’s the Amendment tried to eliminate the Tammany Hall, which involved political supply of alcohol, it clearly did not party leaders, politicians, and business eliminate the demand for alcohol. As a interests in collusion to control lucrative result, a thriving underground enterprise government contracts. This corrupt sprung up virtually overnight to supply the activity centered on kickbacks, extortion, demand. This enterprise established the election fraud, and bribery. But a growing Mafia as a major criminal force in the US, consensus among reformers and the and with it, widespread corruption of law population as a whole saw this corruption enforcement. Such corruption was not only as ultimately detrimental to both politics accepted by many citizens but encouraged, and the economy. This consensus led to as it made access to the forbidden the Pendleton Act, which created the first intoxicating liquors much easier. The end federal civil service system in the US. As of prohibition in 1933 did not mean the end a result of this movement, bribery and of organized crime nor the end of corruption other forms of corruption decreased in law enforcement, as organized crime substantially, although it was still to be merely shifted its activities and corruptive found at the city, county and state levels, influence to other forbidden but desired often through political parties. commodities and activities, such as Nevertheless, the reform movement spread gambling, loansharking, prostitution and to all political jurisdictions and, by the drugs. The US has never completely early part of the 20th century, the more shaken loose of the corruptive influences blatant forms of corruption had been of the era of prohibition. But political corruption and scandals at the national * Professor of Political Science, University of Hawaii level, at least, decreased; there were no at Hilo, United States of America. major scandals during the Roosevelt, 412 113TH INTERNATIONAL TRAINING COURSE VISITING EXPERTS’ PAPERS Kennedy or Johnson administrations. Act was passed in 1977, and the Ethics in Government Act in 1978. The movement The US has not, of course, eliminated led to a significant increase in the number political scandals. Perhaps the most of state and local officials charged under famous political scandal involving federal law with corrupt practices, a corruption in high offices in recent history number that reached almost 500 in 1986. was the so-called “Watergate” affair involving President Richard Nixon. This Despite reform, corruption continued. scandal started with what, at the time, The “Abscam” scandal of 1978-80 involved seemed to be a simple burglary of FBI agents posing as Arab sheiks who Democratic Party headquarters in the offered various government officials, Watergate building in Washington, DC. including senators and representatives, The burglars were caught in the act and money for help in obtaining favorable an investigation soon connected them to immigration rulings. Most of this was Nixon’s re-election campaign staff (the recorded on videotape. Six representatives burglars had been trying to obtain and one senator were convicted of bribery. information on Democratic campaign And in 1986-89 two representatives and strategy). President Nixon ordered that many other officials were convicted of money be given to the burglars so that they racketeering, tax evasion, bribery, fraud, would not talk about his involvement in the grand larceny, and perjury for accepting crime. There then followed one cover-up payoffs from military contractors in what after another. The President used the was called the “Wedtech” scandal. In 1987, Internal Revenue Service, the FBI, and five Senators obstructed federal regulators other federal agencies against those he in their investigation of a savings and loan thought were leading the efforts to involve company that had been had been looted by him in the conspiracy. He had a very long its owner, Charles Keating, of $2 billion. “enemies” list. Largely due to an Those senators received a total of $1 million aggressive press, all of the details of in campaign donations from Keating. But corruption in the office of the President the senators, called the “Keating Five”, were brought to public attention. were never charged with any crime or Congressional hearings not only brought ethical violation because, while they could to light the many details of the burglary influence federal regulators, they had no and cover-up, but also of illegal campaign direct control over them. One of those contributions made to Nixon’s campaign senators, John McCain, is now a committee. This ultimately resulted in the Republican candidate for the presidency. House Judiciary Committee voting for impeachment, and the President’s More recently, President Clinton was resignation soon thereafter - the first time accused of accepting large campaign in US history that an American president contributions from several Chinese resigned from office. businessmen in return for favorable treatment of China on a variety of matters, As is often the case in major scandals, including the sale of satellite technology. some good resulted in the form of tougher US intelligence agencies allegedly laws and new protections. The Federal intercepted information in early 1995 Election Campaign Act of 1971 was indicating interest on the part of the strengthened after Watergate, and the Chinese government in spending money to Federal Elections Commission was support certain candidates for office in the established. The Foreign Corrupt Practices coming election, an issue raised by 413 RESOURCE MATERIAL SERIES No. 56 Republican legislators but not proven until for being appointed an ambassador. subsequent indictments and trials. The money, however, seems to have bought little The examples cited above are, of course, other than access to the President. high level corruption. Just how much corruption is there in the US at all levels? Early this year, the New York Times We only have official figures on reported reported that China had stolen highly corruption, so the amount of unreported classified nuclear weapons information corruption remains unknown, but the data from the Los Alamos laboratory, we do have gives us some idea of how cases information that allegedly allowed the of corruption compare to other offences. It Chinese to make rapid advancement in is interesting to note that the most their nuclear weapons program. Although widespread crime reporting system in the the theft allegedly took place in the mid US, the FBI’s Uniform Crime Reports 1980’s, during the administration of Ronald (UCR), does not even list corruption or even Reagan, it was charged that the theft had bribery it either Part I offences, those not been detected until 1995, that the deemed to be the most serious, or Part II President had not been informed until April offences, those less serious. Nor does data 1996, and that nothing was done to from state courts list corruption or bribery investigate the alleged theft until 1997. in its data. When we look at data collected Congress was not informed until 1998. by the Department of Justice’s Bureau of Republicans charged that the failure of the Justice Statistics, however, we do find cases Clinton administration to follow up on the of bribery and of other forms of corruption. theft and to promptly notify Congress was Under the general category of “other,” a due to campaign contributions funnelled category that also includes racketeering through Chinese businessmen in the US and extortion, we find that in fiscal year by the Chinese government. To date, none 1996 there were a total of 405 federal of these allegations have been proven, and bribery suspects, of whom only 168 were it would seem to be a highly partisan issue. prosecuted in US District Courts. Of the remainder, 212 were not prosecuted and 25 Earlier this month, it was revealed that were dealt with by federal magistrates (the Secretary of Labor, Alexis Herman, was equivalent of a misdemeanor case). It is under investigation for influence peddling difficult to determine the exact reasons that and soliciting illegal campaign 212 suspects were not prosecuted. Using contributions for the Democratic National slightly different data, for the 232 Committee when she was a White House defendants whose bribery cases were aide during Clinton’s first term. She was terminated in fiscal year 1996 we find that appointed to her current post by Clinton 90.1% of the defendants were convicted, in May 1998. Although the investigation most of them by a jury, and 16 of the 23 is still under way and she has not been who were not convicted had their cases charged with any crime, this is an example dismissed, with only 7 going to trial and of how working for a campaign can result being found not guilty.