Tag Archives: lobbying

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.