How Are Bribes Different Than Lobbying?

Reading stories about this year’s massive New Jersey corruption scandal, I almost have to laugh at the ridiculousness of it. The perp walk into the rented bus, the mayor only three weeks into his term, the cereal box (Apple Jacks!) stuffed with cash – the images are straight out of TV. But it brings up an important question: how do we draw the line between bribes and lobbying? When you hand a mayor $5,000 in cash in hopes of getting a building permit approved, you both go to jail. But when Goldman Sachs hands $3M in campaign contributions to congressmen in hopes of getting regulations eased, it’s totally legal. Does that seem right?

Simon Johnson and John Talbott recently published three articles (which I cannot recommend highly enough) in Salon describing the role of corporate lobbying and deregulation in the financial crisis. In their view, this sort of lobbying IS criminal. And when you look at the facts, it’s hard to disagree with them.

Here are some of those facts. In August 2008, as the financial crisis heated up, Goldman hired a famous lobbyist to come in house and focus on regulation. In January 2009, Goldman was one of several firms receiving bailout money that continued to lobby in Washington DC. And how much did they lobby? The chart below (from opensecrets.org) details their official lobbying over the last decade. ABC News reported that since 1989 Goldman and its executives have given $43 million in campaign contributions.

Goldman Sachs annual lobbying expenditures

Goldman Sachs annual lobbying expenditures

Or let’s look at earmarks. A defense spending bill that passed in the House this week contained more than 1,100 earmarks totaling $2.7 billion in spending. The 18 members of the subcommittee that wrote the bill included 148 earmarks totaling $461 million for entities whose employees have given $822,765 in campaign contributions to those congressmen since 2007. John Murtha, the notoriously corrupt earmark slut from Pennsylvania, chaired the subcommittee and wrote $77 million in earmarks. Defense contractor Argon ST and its employees donated $46,600 to Murtha since 2007, and it got an earmark providing $8 million to improve its torpedo-decoy technology. Special thanks to the Wall Street Journal for all of the info above.

So again, let’s make the comparison: a building inspector in New Jersey takes $30,000 to make sure a real estate developer’s projects move forward, and he goes to jail. A congressman takes $46,000 make sure a company gets an $8 million contract and it’s perfectly legal. And we wonder why the federal government is so screwed up.

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13 responses to “How Are Bribes Different Than Lobbying?

  1. I agree with this post completely. We hear people say “only in America” but this is really not true. This kind of corruption and bribery is rampant in other third world countries. I believe this is one of the best arguments for small government at all levels. Small government is probably the only way to limit corruption and bribery.

  2. Excellent post. I am adding you to my public blogroll links

    The silent conspiracy of ALL the politicians regading legalized bribery is why Gov Dean banned me from the public Presidential Democratic debates in 2007-2008. I had no history of “playing ball” and therefore could ot be trusted, nor allowed to appear in public debates.

    One cure is to make all federal elected positions limited to one term – no re-elections.

  3. Pingback: Goldman Sachs Bribery Contributions « FrankLynchUSA

  4. I said once already that our Government is not going to cut off the hands that feed them. That is why we are paying the crooks on wall street.

    • zeusiswatching

      You are very right. We all get laid off and forced into bankruptcy over medical expenses while these crooks laugh their way to the bank.

  5. The thought of term limits is very appealing but may not be the answer in the long run. We have a large group of bureaucrats or government employees that have a major influence on government policy. If we institute term limits without curbing this influence we may shift the majority of the power to these unelected people. I don’t know the whole answer but limiting the size of government at the state and federal level sounds like a good start. If more decisions were made at the local level it appears to me the people making the decisions would be more accountable.

  6. One would think that local operators would be more accountable, but as the New Jersey case shows, they are just as crooked as DC politicians. At all levels, having citizens pay attention to this stuff and vote out corrupt politicians would be a huge help.

    • zeusiswatching

      Probably the biggest reason why the term limits idea (though attractive on the surface) was a poor one. Citizens paying attention to the people whom we elect, not a time span, should decide who stays in elected office and for how long.

  7. Thoughtbasket has hit on a very important point. The people have to be pay attention and vote. Maybe it should be mentioned that people should cast their vote for the “right” reasons. The “right” reason doesn’t include voting for a crook that serves your interest at the expense of others. We see numerous cases of this in our congress now.

  8. Maybe if they did away with the electorial vote more voters would vote. For not all the votes count (if you are a republican and live in a blue state your vote don’t count…or vice versa). And I don’t vote for crooks and lairs. John Mc Cain was going to get my vote until he lied… He said the government shouldn’t get into the bailout business and I agreed with that. Until, he voted yes for it anyways. Once they lie….I wouldn’t vote for anyone.

    • zeusiswatching

      McCain actually threw a temper tantrum and suspended his campaign over this. He lost my respect forever with that stunt.

  9. zeusiswatching

    Outstanding post! This is one of your very best and deserving of the widest circulation.

  10. These comments show how complex our problem really is. We are forced to pick from two undesirables. This is the system we have. I think we are led to believe we have a choice when we really don’t. Maybe one candidate will get us to the cliff faster but either candidate will lead us over the cliff into catastrophe. If we analyze the past we see that the federal government has slowly built an elite class and pitted everyone else against each other. They all promise they will fix things and always make things worse.

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