Introduction
Remarks at the 22nd annual conference of the Council on Governmental Ethics Laws in Tampa, Fla., December 5.
It is a kick to be here. Indeed, it is an honor and a pleasure to speak to any group that was formed at the Watergate Hotel in 1974. I want to thank Terry Draver and Bonnie Williams and others for organizing this impressive conference. Terry tells me that, according to the hotel, this is a pavilion we are meeting in, not a tent. That’s kind of like Vice President Al Gore saying that the Buddhist Monastery fund-raiser was a “community outreach” event. Or Texas Gov. George W. Bush saying he is a “reformer with results,” when he never gave a single speech or proposed a single initiative regarding political reform in Texas. I guess this is “spin” — I remember a time in this country when it was called “lying.”
Seriously, all of you here in federal, state and local anti-corruption enforcement stand at the barricades against unmitigated greed, unbridled partisan ambition and good old-fashioned profiteering from government. You are armed with the rule of law, disclosure statutes, and a civil society and news media capable of trumpeting improprieties. We are kindred spirits—I greatly admire and respect what you do, and indeed, we rely on your good work almost daily.
Today I want to talk about what I call “legal corruption.” There is a tendency to fixate on process, laws, regulations. That is great, it is obviously essential. But lets also recall the words of British statesman George Canning, who said, “Away with the cant of ‘measures, not men’—the idle supposition that it is the harness and not the horses that draw the chariots along.”
Men and women write the ethics and conflict of interest laws, and they choose sometimes to have no laws or practically unenforceable laws. Men and women as legislators choose to fund ethics oversight watchdog agencies and commissions—and as we all know, too frequently they choose to cut ethics funding because of retribution or insurance against public embarrassment.
They establish watchdog commissions such as the Federal Election Commission, and ensure that aggressive investigation and enforcement are almost impossible.
How often are you realistically going to issue a subpoena when the six commissioners are three Republicans and three Democrats? It’s always a 3-3 tie. Too bad! No subpoena. And if a politician gets in trouble, he or she merely pays the fine with campaign money. What kind of deterrent is that?
We alienate equally
We live in a number society, and so, for our 10-year anniversary year at the Center for Public Integrity, we went back and added everything up. We have written 1.7 million words since 1990, and written more than 100 investigative reports, including eight commercially published books. We have held 28 news conferences at the National Press Club in Washington, and there have been more than 5,000 articles in the news media, referencing our work or perspective. We are a nonprofit, nonpartisan organization—we alienate Republicans and Democrats equally.
Our funding comes from foundations and individuals and the sale of our publications. Our major donors are listed on our Web site, www.publicintegrity.org. We do not accept advertising, or contributions from companies, labor unions, or governments. We do not lobby or take positions on proposed state or federal policies or legislation. Our operating credo is perhaps best stated by recalling one of President Harry Truman’s best lines, “I don’t give people hell, I just tell the truth and they think it’s hell.”
Most of our work at the Center for Public Integrity these past 10 years has focused on “legal corruption.” I am talking about the decisions of politicians and other public officials to ignore or flout existing laws, exploit their power of the purse, take advantage of ethical and legal gray areas, or just plain cash in on their public service. Don’t worry, I’m not going to talk about all 100 of our investigative reports, but the few I mention are illustrative of legal corruption.
In 1990, we did a report, Americas Frontline Trading Officials, in which we found that half of the highest-ranking White House trade officials quit government and went to work for the foreign governments or foreign corporations they had been negotiating against. A dozen registered foreign agents, one of them working for Saddam Hussein and the government of Iraq, were serving on a trade advisory committee with national security clearances that gave them access to sensitive, trade-related information.
The sitting U.S. trade representative at the time, Carla Hills, saw nothing wrong with this; fortunately, the Justice Department later advised her that it was, in fact, illegal, and all of these foreign agents were removed from their official U.S. positions. Months later, President Clinton signed an executive order on his first day in office back in 1993, putting a lifetime ban on White House trade officials working for foreign interests.
A museum about himself
In 1991, the Center issued a report called Saving for a Rainy Day. We found that 112 former members of Congress had pocketed $10 million in leftover campaign funds. Some of them bought themselves Cadillacs or Lincoln Continentals. Others used the money to pay their legal bills after being prosecuted for various ethical transgressions. But my personal favorite is that one fellow [Gene Taylor] actually opened up a museum about himself [in Sarcoxie, Mo.]
All of this, in my view, is legal corruption. In many states, spending campaign cash for non-campaign purposes is a felony. But from 1979 until the practice was ended in 1993, it was perfectly legal for former U.S. House of Representatives members to convert their leftover campaign cash for personal use. Why? Because they had written the laws allowing it!
In 1994, 17 researchers, writers and editors at the Center put out an investigative report (Well-Healed) about the lobbying for and against the Clinton health care plan, in which we tracked the Washington activities of 660 interest groups trying to influence the legislative process. We found that 80 former U.S. officials had tripled, quadrupled, quintupled their salaries by going to work for health care-related interests. Health care companies had contributed $30 million to congressional campaigns in the two years leading up to the Clinton health care legislation. They took members of Congress on 181 all-expenses-paid trips to nice locales such as Honolulu, the Caribbean and, well, Tampa, to “educate” them about health care, of course.
Forty members of Congress sitting on the five key committees with jurisdiction over health care reform legislation owned stock in various companies that would be affected by any new laws some members actually were buying and selling pharmaceutical and other health care-related stocks during the mark-up sessions. One interest group, the people that brought America the “Harry and Louise” commercials, the Health Insurance Association of America, made a deal with then-House Ways and Means Committee Chairman Dan Rostenkowski. HIAA would pull the highly effective TV ads critical of the proposed reform legislation from the airwaves if the committee would make substantive policy concessions to the insurance industry. It was a done deal. The only reason it fell apart is that Rostenkowski was indicted on unrelated federal charges.
Remember, everything that I am telling you is entirely legal.
So you want to buy a president?
In 1996, we wrote the first book ever to identify the special interests behind the presidential candidates, released weeks before the election season began in Iowa. The Buying of the President was serialized by The New York Times syndication service and was the basis for a PBS Frontline documentary entitled, “So You Want to Buy a President?” We utilized 22 researchers and writers and 100 students at two universities to investigate the backgrounds of all of the presidential candidates. We analyzed tens of thousands of federal records, in some cases going back a quarter-century, and we interviewed hundreds of people. Politicians never like to acknowledge that they actually know their contributors or, of course, that the money buys anything. So, taking a page from David Letterman, we put together lists of the “Top Ten Career Patrons” for each of the major presidential candidates. There is, we believe, no way politicians plausibly can claim that they don’t know these people or that there is no relationship when they’ve been collecting hundreds of thousands of dollars from them, year in and year out.
What did we find? Well, take former GOP presidential candidate Bob Dole. Since he was a senator from Kansas, we assumed that he had strong agribusiness support, and we fully expected that his top career patron would be Archer Daniels Midland. But actually, that company was Doles fourth-leading career patron. ADM gave Dole more than $200,000 during his career, took him on 35 trips on the corporate jet, and at the same time, Dole was helping ADM get billions of dollars in ethanol and other federal agricultural subsidies. And yes, the chairman of ADM, Dwayne Andreas, sold an oceanfront condominium right here in Florida to the Doles for $100,000 under the market price, and the first payment on the mortgage wasn’t required for seven or eight months after the sale. The Senate Ethics Committee never had a problem with any of this. Don’t get me started.
Bob Dole’s Gallo connection
Dole’s No. 1 career patron was the Ernest and Julio Gallo wine family, of Modesto, Calif. This really surprised us, because there are no grapes in Kansas. Gallo had given him nearly $400,000 and with Doles help, gotten a special inheritance tax passed, saving the company millions of dollars. The legislation was known inside the Senate as the “Gallo amendment.”
Now, ladies and gentlemen, most Americans never meet their member of Congress. Ninety-six percent of the American people never give a dime to any politician or party at the federal level. Only one-tenth of 1 percent of the American people actually make a campaign contribution of $1,000. And, of course, no one has a U.S. Senate amendment named after him.
The career patron contributing the most to any of the 1996 presidential candidates was the California Correctional Peace Officers Association, the association of California prison guards —known as CCPOA, who gave then-Gov. Pete Wilson $1.5 million worth of contributions and campaign ads. By the way, they hate it when you call them prison guards they are correctional officers. The prison guards bragged to me that they had delivered the governors office to Wilson. They were the first state employees to get a pay raise after Wilson was elected governor, and back in 1996, when we released The Buying of the President, California prison guards were making 25 percent more than public school teachers.
The Lincoln Bedroom story
Not to pick on Republicans, later in 1996, we broke the Lincoln Bedroom story about major Democratic Party donors staying overnight in the Clinton White House. We wrote a report in the Centers newsletter, The Public i, that listed 75 men and women donors who had done this. The report, entitled “Fat Cat Hotel,” later won the Society of Professional Journalists’ “Public Service” award.
The Clinton White House denied that donors were being rewarded in this manner, and months later, internal memos surfaced with handwritten notes by Bill Clinton himself, saying what a great idea it was.
In general, Clinton had more than three times the number of overnight guests in the White House as any previous recent president. As we all know, he also took donors on Air Force One and had 1,500 people attend 103 White House coffees, and those attendees cumulatively contributed $26 million to the Democratic Party. Neither Clinton nor Gore would ever refer to these activities, of course, as fund-raising events.
Remember, everything that I am telling you is entirely legal.
The Buying of the Congress
Some politicians and their patrons would have you believe that all of this money and fund raising does not affect public policies that are enacted. Well, in 1998, 36 researchers, writers and editors at the Center for Public Integrity produced a book, The Buying of the Congress. It showed in stunning example after example that, on important health, safety, environmental and financial issues that affect every Americans daily life, Congress frequently sides with powerful special interests, to our detriment. This book, unfortunately, was released in Washington the same day that Kenneth Starr released his report about Monica Lewinsky. I hate when that happens.
But we looked at the cost of groceries and how certain items cost more because of various deals with donors in Congress. Cable TV rates are higher because of legislation pushed by the cable industry. Take the subject of food safety. Every year, 9,000 Americans die from bad burgers and other tainted food, and millions more get sick. There were zero E. coli bacterial poisoning cases in 1987; today, there are 20,000 a year. People are concerned about the safety of the food they eat. So it was not unreasonable for us to wonder what Congress did on this important subject in the 10-year spread from 1987 through 1996. Well, we found that not a single bill tightening inspection standards in meatpacking plants made it to the floor of the House or Senate. And the food-related industry had fed Congress more than $41 million over the same period of time.
Or take tobacco, a product that kills 400,000 Americans each year. Today, in the new millennium, we still have federal policies to help grow tobacco, insure it, export it, and protect it against foreign imports. In a 10-year period, the cigarette manufacturers have blown smoke and more than $30 million in contributions to members of Congress and the two major political parties. And who can forget the $50 billion tax credit given to tobacco companies in the middle of the night in 1997, and hastily repealed when the American people found out about it?
All of this is entirely legal. But, as all of you know too well, the problems of legal corruption are not just in Washington.
Pay attention to state capitals
For example, Americans need to pay more attention to what’s happening in their state capitals. Last year, state governments enacted 25,000 bills and collected $470 billion in taxes. Today, 41 of 50 state legislatures are part-time, meaning that most of Americas state lawmakers have day jobs. We have a long tradition of “citizen legislatures” in this country, and the Center for Public Integrity has no position about whether that is a good thing. But did you know that seven states have no conflict-of-interest laws, and three states, including Michigan, have no personal financial disclosure laws? We did a 50,000-word report this past May about the conflicts of interest in Americas state legislatures, and at the same time we put 6,000 financial disclosure forms on the Web, which further endeared us to state politicians.
We called and wrote to every state legislator in the U.S., asking about his or her personal financial interests. One state lawmaker was so angry that we were asking these basic, public interest questions that he actually had his mother call us: “Why are you calling my son?” And then he had the state Senate majority leader call us, and he asked, “Why are you harassing one of my members?” We were just asking simple, clarifying-type questions about his disclosure form.
Roughly 10 people at the Center for Public Integrity worked on this project for more than two years. What did we find? That literally hundreds of state lawmakers are engaged in unabashed self-dealing, all legal, of course, because they write the laws. That more than one in five state legislators today sits on a legislative committee that regulates his or her professional or business interest. At least 18 percent of state lawmakers have financial ties to businesses or organizations that lobby state government. Nearly one in four state legislators receives income from a government agency other than the state legislature.
The anecdotes are appalling. A few years ago, The Tampa Tribune did a story about the Florida state legislatures conflicts of interest. For instance, there was proposed legislation to give citizens consumer information about the malpractice record of hospitals throughout the state. Something you might want to know if you are going under the knife— what is the safest, most reliable hospital? Well, the measure died in the health care committee, 5-2. The five killer votes all came from lawmakers whose day jobs were at hospitals, insurance companies and other medical-related offices.
One fellow in Illinois is a registered lobbyist for insurance companies fighting for tort reform at the same time he sits in the state legislature.
One- fourth of all Oregon lawmakers have a spouse on the public payroll, and last year — gosh, what a coincidence — legislative assistants were voted a 60 percent pay raise.
They had a tough time trying to outlaw the scandal-ridden sheriff system in Connecticut — eight lawmakers have family ties to local sheriffs.
One Maine state lawmaker is president and CEO of a multimillion- dollar health care claims processing corporation that gets $10 million in state contracts. The contracts have increased during his tenure in the legislature.
The Delaware legislature actually loosened ethics laws so that eight lawmakers could vote on a utility deregulation bill. All of these members had stock in the company being deregulated; all of them voted with the company.
On and on and on. It’s bad, folks, and maybe it is about time somebody noticed.
In a few weeks, the Center for Public Integrity will release the results of an unprecedented investigation and comparative analysis of state ethics commissions. Many of you were kind enough to talk with us on the record about the daily political pressures you face, and I thank you. Eight state ethics commission directors told us that their legislatures have used the budget process to punish their commissions or otherwise limit their effectiveness.
All of this is legal corruption, most of it outside of public view or the public consciousness.
All of what I’ve talked about, the pervasive legal corruption, and for that matter, this entire, terrific conference, does not occur in a vacuum. No, we sit here today in the hotbed of the closing hours of one of the most remarkable presidential elections in U.S. history. It has revealed one major truth to all Americans and to the world — we have neglected the essential machinery of our democracy. The nation that put a man on the moon 31 years ago and is mapping billions of human genes cannot count votes. Today, Brazil has 100 percent electronic voting, because that country made it a priority. I think we certainly can do better.
And of course it is painfully apparent that we have a campaign finance system that is out of control. Three billion dollars raised in the 2000 election at the federal level, up roughly 50 percent just since 1996. I’m not a mathematician or economist, but I don’t think inflation went up that much. Two millionaires, George W. Bush and Al Gore, together raised $100 million the year before the election. Nine out of 10 dollars the presidential candidates receive in contributions comes the year before the election. What does that mean? The wealthiest, most powerful interests in this country pre-select our choices, before the caucuses and primaries. Do you remember how five major Republican presidential candidates dropped out almost six months before the Iowa caucuses, because the check-writers had not deemed them “worthy”? They hadn’t raised more than $300,000 a day, as Bush had.
That kind of money doesn’t come from backyard bake sales and barbecues. Can anyone in this room imagine Abraham Lincoln or Harry Truman going around with a tin cup, raising $30 million, minimum, the year before the presidential election?
For The Buying of the President 2000, I had the honor of interviewing Archibald Cox, the distinguished Watergate prosecutor who was fired by President Nixon. He told me that there is more money, more secrecy about that money, and less trust in government today than there was during Watergate. He is deeply worried about the fate of our democracy. So am I.
Now that all of you have indigestion from this grim talk of mine, what do we do about all of this? Well, there are no easy, freeze-dried, ready-to-make answers. We all, each in our own ways, just keep standing at the barricades, investigating, disclosing, exposing, enforcing, but most important, educating the American people about their government and their political officials. And maybe the good, the bad and the ugly of this democracy will get better, bit by bit.
I’ll close with the mantra of the Center for Public Integrity, the words of Abraham Lincoln, who said, “I’m a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.”
All of us in this . . . tent, in our own unique ways, do that every day.
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