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MONEY
IN POLITICS:
Gifts, Earmarks & Revolving Doors By
Alan Shapiro
To the Teacher:
The
111th Congress opened in January 2009 and has begun work on such serious issues
as the economic crisis, healthcare, global warming, two wars, major Middle East
and South Asia problems, and nuclear weapons. Exactly how Congress handles these
issues depends in part on the effects of money, position, and power on our political
system. The
introductory student reading and three additional readings below discuss such
practices as gift-giving, earmarks, and a revolving door that swings among people
in government, the military and private industry. Discussion questions and possibilities
for inquiry and active citizenship follow. Previous
sets of materials in the high school section of www.teachablemoment.org explored
related matters:
Introduction:
A systemic government issue
Although
many U.S. officials are above reproach, corruption is a major problem in our government.
The basic reason is simple. Lawmakers and officials in various departments allocate
money for everything from building roads and fighter jets to providing prescription
drugs for seniors and subsidizing cotton crops and scientific research. These
funding decisions affect the financial interests of construction and defense companies,
pharmaceutical and insurance companies, individual and corporate farmers, research
universities - and many other companies, industries, and institutions. A
position in government means access to power and money. Thousands
of lobbyists are hired by interest groups to influence government officials to
pass or oppose a bill, to regulate or not to regulate a certain activity, to approve
or reject a contract. K Street lobbying firms spend billions each year to influence
lawmakers. Questionable
activities ensue. Does Senator X vote against gun laws because he believes the
Second Amendment forbids them? Or because he wants the National Rifle Association
to contribute to his political campaigns so he can continue in power? Does Representative
Y work hard to fund a new fighter plane because she wants the best defense for
America or because she will soon retire from government and wants a high-salaried
job with a defense contractor? Or are the motives of X and Y mixed? Sometimes
the evidence suggests that an official's actions are motivated by a desire for
personal gain. Often that evidence is cloudy. But sometimes it is very clear-as
when, for example, Congressman Randy "Duke" Cunningham (R, CA) pleaded
guilty to accepting $2 million in bribes from defense contractors in 2005. Many
other situations fall somewhere between the ambiguous and the certain. They are
often related to lawmakers' acceptance of gifts, insertion of earmarks into bills,
lucrative favors, and jobs. This does not mean that our politicians are crooks.
It means that the systemic operations of our government create temptations--and
that politicians are human. For
discussion 1.
What questions do students have about the introduction? How might they be answered? 2.
What is there about our system of government that produces temptations?
Student
Reading 1:
Gifts and unpaid taxes
A
Gift Exchange for Hillary Clinton?
In
November 2004, former president Bill Clinton's foundation received a gift of $100,000.
The donor was Robert Congel, a developer. A
few weeks earlier, then-Senator Hillary Clinton (Democrat-NY) had helped to secure
legislation that had allowed Congel to use tax-exempt bonds to help finance his
pet project, a shopping and entertainment complex in Syracuse, New York called
Destiny USA. The
New York Times reported that both Congel and a spokesman for Hillary Clinton
said there was "no connection between his donation and her legislative work
on his project's behalf." A 2007 law requires companies and lobbyists to
report donations to charities linked to legislators. But no laws require former
presidents to report money they receive for their foundations. Congel
has been a major contributor and fundraiser for Republican campaigns. In 2004
he bundled $200,000 in contributions from himself and others for former President
Bush's re-election effort. He has also given lesser amounts to Mrs. Clinton and
other New York Democrats. (Charles Savage, New York Times, 1/4/09) Hillary
Clinton intervened at least six times in government issues directly affecting
companies and others that later contributed to her husband's foundation, according
to the Associated Press. Her spokesman, Philippe Reines, said, "Throughout
her tenure, Senator Clinton has proven that she acts solely based on what she
believes is best for the state and people she represents, without consideration
to any other factor." Rep.
Rangel's Beach House Deal Representative
Charles Rangel (D-NY) bought a $1,100-per-night beach house in the Dominican Republic
in 1988. Since then, he has earned $75,000 in rental income from it. Rep. Rangel
said that "cultural and language barriers" had kept him from understanding
the finances of his villa "and vowed to repay several thousand dollars in
federal taxes he owes after failing to report [the] rental income from the villa." Rep.
Rangel put down $20,000 when he bought the villa and took out a $60,000 mortgage
from the resort owner. Theodore Kheel, a New York labor lawyer, was a principal
investor in the resort company. Kheel had contributed given tens of thousands
of dollars to Rangel's political campaigns. The
resort paid Rangel every six months for his share of the rental income. It "stopped
charging interest on his mortgage after two years. The congressman said he paid
little attention to the transactions--and was unaware that the interest had been
waived--because the money was never sent directly to him or his wife but was instead
used to pay down his mortgage…." Rangel
admitted that he had been "irresponsible" in failing to report the income
"and acknowledged that as a member of Congress and chairman of the Ways and
Means Committee he should be held to a higher standard of conduct." Rep.
Rangel's lawyer said that the congressman's wife, Alma, handled the family's finances.
The chief responsibility of the Ways and Means Committee is to write tax legislation.
(David Kocieniewski, New York Times, 9/10/08) During
the 2007-2008 election cycle Rep. Rangel raised more than $5 million dollars.
Contributors included $281,543 from such financial services and real estate firms
as Citigroup ($61,950) and JPMorgan Chase ($50,200) (www.opensecrets.org)
Neither
Clinton nor Rangel is accused of criminal behavior. Clinton spokesman Reines defended
her right, even duty, to assist a constituent in business efforts good for New
York State. Rangel admits to irresponsibility but explains it by pointing to barriers
of culture and language and to his wife's handling of family finances.
Update:
After
an ethics committee investigation of Rep. Rangel lasting more
than two years, he stood silently in the well of House of Representatives
on December 2, 2010.
At
the recommendation of the committee, the House had voted 333 to
79 to censure Rangel for his failure to pay taxes on rental income
from a villa in the Dominican Republic, using his office to solicit
fundraising donations, and nine other charges of misconduct. Censure
is the harshest penalty short of expulsion available to the House.
As
Rangel stood there, Speaker of the House Nancy Pelosi, a fellow
Democrat, read the resolution that found him guilty of bringing
discredit to the House. Rangel then spoke briefly, declaring,
"I know in my heart I am not going to be judged by this Congress.
I'll be judged by my life in its entirety." He has also said
in e-mails to his constituents and publicly, "I brought it
on myself, but I still believe this body has to be guided by fairness."
Some
House members voted for a lesser penalty--a reprimand-in consideration
of his long-term service to the nation and the absence of any
criminal charges. But Rep. Michael McCaul, a Texas Republican
on the ethics committee, probably spoke for the majority when
he said that Rangel's misconduct contributed to the loss of public
trust in the House. "Credibility is exactly what is at stake
here. The credibility of the House of Representatives before the
American people."
For
writing and discussion
Question:
Based on what you know Rep. Rangel's violations of House ethics,
do you think a House censure was the appropriate penalty? Why
or why not?
Assignment:
Write the two best questions you can think of that would be
fair and important to ask Clinton. Then formulate your two best
questions for Rep. Rangel.
After
students have completed their questions, have them break into groups of three
or four. Have each group discuss all its members' questions, discuss the worth
of each, then have them choose the question they regard as the best one for Clinton
and for Rangel. Then choose a student to report those questions to the class. Write
the questions on the chalkboard without comment. Then invite analysis of each.
Is the question clear? Is it answerable? If not, how might it be reframed? How
would you expect Clinton to answer? Rangel? What further questions might these
answers call for? See in the high school section of www.teachablemoment.org "Thinking
Is Questioning" for suggestions on analyzing student questions.
Student
Reading 2:
Reforms and earmarks
Cyberlux
is a small lighting company in Durham, North Carolina. It struggles to compete
with huge corporations like GE and advertises that its bulbs save energy and cost
less than ordinary bulbs.
The
company has lost more than $50 million in its eight years of existence. To avoid
bankruptcy, Cyberlux executives decided recently to seek a military contract through
earmarks. An earmark is an add-on to a bill that often has nothing to do with
the bill. It appropriates money for a specific project that some legislator usually
wants for a company, group or individual in his or her district or state. Cyberlux
sent representatives to Washington DC to demonstrate BrightEye, a "portable
illumination system" and to urge North Carolina legislators to buy it for
the military. Those legislators responded by adding an $8 million earmark for
BrightEye in the defense spending bill. In
February 2008 Cyberlux announced that the Air Force would order $3.3 million for
its portable lighting products. A few months later the company hosted fundraisers
for Rep. David Price (D-NC) and Senator Elizabeth Dole (R-NC). Cyberlux also posted
requests on its website for donations to the two legislators. The fundraisers
brought in $10,600. Experts
in campaign finance law say it's illegal for a company to help a candidate raise
campaign donations from the public. A spokesman for Senator Dole said her staff
met with the company but that she did not ask for an earmark. Congressman Price
is a member of the House Appropriations Committee. His staffers met with Cyberlux
representatives and contacted the defense subcommittee "to see if they are
favorably inclined to the technology, to putting funding in the bill," said
Price's chief of staff, Jean-Louise Beard. But she said they did not consider
such actions an earmark request. Cyberlux
has announced it is now seeking $25 million in defense earmarks for 2009. A
Seattle Times six-month inquiry into the 2008 defense bill uncovered $5.8
billion in earmarks, 40 percent of which were hidden. Besides the Cyberlux earmark
these included $588 million for a submarine neither the military nor the Bush
administration wanted. In
2007, in response to mounting criticism of wasteful and secret earmarks, Congress
passed the Honest Leadership and Open Government Act. The law requires that Congress
disclose the sponsors of each piece of earmark legislation, the intended recipients
and the purpose of the earmark. The Seattle Times investigation found that
the House broke this new rule at least 110 times, including with the Cyberlux
earmark. In at least 175 cases, one of which was the unwanted submarine earmark,
Senators Joe Lieberman (I-CT), Christopher Dodd (D-CT) and Jack Reed (D-RI) did
not disclose themselves as sponsors. Why?
Perhaps because they did not wish to make public their violation of the rules.
Perhaps because they wished to appear fiscally responsible. Many
senators dodge the Open Government Act by naming the Defense Department as the
recipient of an earmark. Most earmarks are supposedly defense-related -- but the
exact purpose of the earmark remains unclear. Despite their official silence,
the senators who sponsored the unwanted submarine earmark returned home and announced
very proudly to voters that they had won jobs for sub construction. Earmark
defenders often argue that they know what is best for their district or state
and that earmarks speed the process for a needed project. Rahm Emanuel, now President
Obama's chief of staff, was until recently an Illinois congressman. In that role,
he once defended an earmark he'd gotten to rebuild a bridge that had been rated
as deficient. The bridge, he noted, was later "identified by the Department
of Homeland Security as a major evacuation route in case of a terrorist attack
on Chicago." ("Don't Get Rid of Earmarks," New York Times,
8/24/07) There
are some, but not many, lawmakers who oppose earmarks. Two are from Arizona, both
Republicans: Senator John McCain, who has never filed an earmark and Representative
Jeff Flake, who has repeatedly and unsuccessfully objected to the gross wastefulness
of many earmarks. Seattle
Times reporters spent many, many hours digging through records to document
earmarks. They wrote: "When a reporter for the Congressional Quarterly pointed
out how difficult it remains to pull all the information together, Rep. John Murtha
(D-PA), chairman of the committee that drafts the defense bill, had a quick answer:
'Tough shit.'" (David Heath and Christine Willmsen, Seattle Times, 10/12/08,
www.seattletimes.com). Murtha is an unapologetic earmark supporter who for years
has inserted billions into defense bills. In the 2007-2008 election cycle, Rep.
Murtha raised $3,463,233 from defense contractors like General Dynamics and Boeing.
(www.opensecrets.org) President
Obama has criticized the use of earmarks and declared that ”We are going
to ban all earmarks” from his administration's economic stimulus package
(www.msnbc.msn.com, 1/6/09). For
discussion 1.
What questions do students have about the reading? How might they be answered? 2.
What is an earmark? Despite many criticisms of earmarks over the and despite
periodic reform, the practice of earmarking continues. How do supporters defend
it? Why do opponents oppose it? 3.
Why did Cyberlux seek an earmark for their product rather than simply request
that it be included in a defense spending bill? 4.
What do Senator Dole and Rep. Price have to say about the Cyberlux earmark?
How do you assess their comments? 5.
How would you explain the behavior of the three senators involved with funding
the unwanted submarine?
Student
Reading 3:
The revolving door
Spencer
Abraham (R) was US energy secretary during the early years of the Bush administration.
Among his duties was regulating such energy companies as Exxon Mobil, Chevron,
and Occidental Oil.
After
leaving his cabinet post, Abraham took a $60,000 a year post on the governing
board of Occidental Oil. For two and a half years Occidental had not registered
to lobby the Department of Energy, but resumed after Abraham joined its board.
A major aim of the company was to win approval for oil shipments from Libya. The
US economic boycott of that country had been lifted after 20 years. With
the help of a former Abraham deputy as its lobbyist, Occidental won approval to
ship oil from Libya to the US Soon, Abraham formed the Abraham Group to advise
energy companies on their relations with government agencies. He won federal approval
for Cheniere Energy, Inc., based in Houston, to build a liquefied natural gas
facility in Texas. The
revolving door is a profitable feature of American political life. A government
official retires, then is hired by a contractor to lobby for the company before
Congress. Or a congressperson whose committee has had connections with defense
contractors leaves office and is hired by a defense contractor to grease the wheels
at the same committee on which he or she has served. Or a defense contractor who
has had business with Congress gets elected to Congress and deals with the requests
of the defense contractor he or she worked for. Another
Bush administration cabinet member, Homeland Security Secretary Tom Ridge, like
Abraham, left his position in early 2005. Also like Abraham, he was hired to work
with firms looking for contracts with his former agency. He was invited to join
the board of Savi Technology, a firm that makes radio frequency-identification
equipment the Homeland Security Department had promoted when Ridge had been its
secretary. Ridge
also joined the boards of Exelon, an energy utility, and Lucent, a telecom company.
Both sought Department of Homeland Security business. Later, Ridge formed Ridge
Global, a company that hired former department and White House officials to win
business on security and crisis management. The
activities of Abraham and Ridge are documented in a 108-page report by Citizens
for Responsibility and Ethics in Washington (CREW) that examines what 24 former
Bush cabinet members did after they left office. The report, titled Revolving
Door, found that "many of these top officials joined the ranks of the companies
they once regulated where there are highly compensated. In many instances, they
have helped their new employers obtain lucrative government grants and contracts." CREW
found that "a number of the former officers had spurned direct lobbying themselves,
avoiding unseemly appearances and complying with one-year prohibitions on lobbying
their former agencies by serving as strategic corporate advisors." The
report details the activities of "15 former cabinet officials who hold positions
with 40 companies that lobby those officials' former agencies" as well as
"9 former cabinet members who hold positions with 15 companies that began
or resumed lobbying the former officials' agencies after those officials joined
the companies." CREW's
investigation took six months. Melanie Sloan, Crew's Executive Director, stated
that "Crew's investigation has shown that most of these former Bush administration
officials have cannily leveraged their time spent in the public sector. By using
their government positions as springboards to new lucrative opportunities, they
have successfully made a mint on the backs of American taxpayers. It may be legal,
but it is certainly not honorable." (www.citizensforethics.org,
1/12/09) (See also www.MiamiHerald.com,
1/12/09)
On President Obama’s first day in office he signed an executive
order that requires all government appointees who leave their job to wait for
two years before joining a lobbying firm. The order also requires lobbyists to
wait for two years before serving in a government agency they lobbied. Obama has
already waived the latter requirement for William J. Lynn III, whom he hopes will
become his deputy defense secretary. (www.thehill.com,
1/23/09)
For
discussion 1.
What questions do students have about the reading? How might they be answered? 2.
What is the revolving door? How does it work? Why? 3.
Describe the revolving door activity of Spencer Abraham and of Tom Ridge. 4.
How would you explain why the revolving door process is so prevalent in Congress
as well as the various departments of the executive branch? If you don't know,
how might you find out?
For
inquiry
What
do students know about the activities of their own two senators and representative?
Have any of their votes suggested the influence of special interests? How do you
know? What earmarks for your state or district have your legislators been responsible
for? Why? Have legislators from your state or district made use of the revolving
door? What evidence do you have for your answer? Such
questions can inform inquiries by individuals and groups of students.
For
citizenship
Following
a particular inquiry, students might produce a report that could be sent to their
legislators, along with a letter that includes their questions and opinions based
on their investigation. Sources The
following websites are very useful: Center
for Responsive Politics (www.opensecrets.org)
Center
for Public Integrity (www.publicintegrity.org)
Public
Citizen (www.citizen.org)
Common Cause
(www.commoncause.org)
Citizens for
Responsibility and Ethics in Washington (www.citizensforethics.org)
This
lesson was written for TeachableMoment.Org, a project of Morningside
Center for Teaching Social Responsibility. We welcome
your comments. Please email them to: lmcclure@morningsidecenter.org.
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