Howard Rich's Blog

February 11, 2009

The American Kleptocracy

Scottish lawyer Alexander Tytler once fretted about what would happen to democracies when “voters discover that they can vote themselves largesse from the public treasury.”

“From that moment on,” he wrote, “the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy.”

Sound familiar?

It should, because it’s precisely what’s happening right now in the United States of America.

Of course, compounding our nation’s headlong rush from unsustainable to insane levels of government growth is another equally pernicious enemy of freedom and free markets – government corruption.

Whether in the form of bribery, extortion, cronyism, nepotism, patronage, graft or embezzlement, corruption costs America billions of dollars each year at all levels of government.

And it seems every day we’re confronted with fresh scandals and new breaches of the public trust that invariably end up draining money from taxpayers’ wallets and pocketbooks.

Rod Blagojevich. Jack Abramoff. Ted Stevens. Charles Rangel.

These are names that have been seared into the national consciousness, ingrained in the minds of Americans every bit as fed up with scandal as we are with the adverse monetary effects of all this political bad behavior.

And yet these names are just the tip of an iceberg of unethical activity that goes much deeper than the scandals that make the nightly news.

In fact, most corruption is perfectly legal under state, federal and local law. It is essentially “legalized bribery,” where organizations that donate to elected officials are rewarded with government contracts – often without a competitive bidding process!

Last November – despite $30 million in special interest spending aimed at convincing them otherwise – Colorado voters said “enough is enough” to these shady deals.

By approving the nation’s most comprehensive anti-corruption statute, Coloradans struck a huge blow against the pay-to-play mentality that sadly defines the way in which many American politicians conduct the people’s

business.

Under one of the provisions of Colorado’s new anti-corruption law, entities which receive no-bid contracts from state government are prohibited from making political contributions.

Simply put, if an organization receives taxpayer funds from elected officials in the form of a contract that wasn’t competitively bid, it is banned from turning around and padding politicians’ pockets with campaign cash.

Not surprisingly, many of the groups that spent so much money fighting to preserve the status quo are now attacking the Colorado law in court, arguing that it represents an unconstitutional suppression of political speech.

Well bribery isn’t free speech, it’s bribery – a principle that the courts have consistently upheld.

But why would these special interests spend so much money on campaigns and lawsuits to defeat anti-corruption measures?

Because corruption pays huge dividends.

In fact, after New Jersey implemented new disclosure requirements on political contributions and government contracts a few years back, it was revealed that for every $1 dollar spent contributing to political candidates, campaign donors received $500 worth of government business.

In any economic environment, that’s an unheard of return on investment.

Of course, the need for tough anti-corruption laws is more critical now than ever – especially since President Barack Obama has decided that his definition of an “economic stimulus” plan is to dump billions of dollars into state and local bureaucracies.

Aside from the intellectual bankruptcy of such an approach, consider the fact that “rushed spending” is much more dangerous than your run-of-the-mill boondoggling.

For example, only 30% of the government contracts approved in the wake of Hurricane Katrina were openly and competitively bid.

Simply put, Obama’s hasty and ill-conceived bailout invites pay-to-play corruption on an unprecedented scale.

American taxpayers are feeling increasingly helpless as they watch more of their money going toward new government programs and projects that we don’t need – which is why strong anti-corruption measures like the one in Colorado are so important, and overdue.

It’s not just about saving money, it’s about restoring integrity to the process and power to the individual taxpayer.

By Howie Rich

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