White Paper: Self-Enrichment in Public Office

Take Back Our Republic congratulates President-elect Donald Trump, Secretary Hillary Clinton, and the other candidates on a hard fought campaign. Our hope, as we emerge from this intense election cycle, is that our nation’s new leadership will take seriously the importance of influence reform. In this paper, we look at the numerous ways that politicians are influenced by their own self-enrichment. We briefly outline simple proposals that would help fix the problem. It is our belief that this can generate an ongoing conversation on this important topic. To that end, we plan to periodically update this paper with new additions to highlight new avenues for reform, new examples of excess, and new solutions to the problem. Please continue to check www.takeback.org for new educational papers, as well as updates to this one.

Introduction

When crafting the U.S. Constitution, delegates to the Constitutional Convention sought to ensure that U.S. politicians would not abuse public office for private gain. In England, they knew, such abuse was all too common, and they wanted better for the United States. During the long summer of 1787, they discussed at length how best to prevent such abuse. Government officials, they decided, would not be allowed to accept gifts from foreign governments without the permission of Congress.

  • Members of Congress would be forbidden from creating paid jobs and then immediately taking those jobs for themselves.
  • Officials who accepted bribes would be removed from public office and disqualified from future service.
  • And government spending would be subject to public scrutiny, with regular reports of receipts and expenditures published from time to time.

Through these and other provisions, the delegates hoped to keep politicians focused on promoting the public good. Unfortunately, the delegates did not anticipate the rise of expensive campaigns or paid lobbying, and what they sought to avoid has now come to fruition: This country’s politicians now commonly enrich themselves and their families through abuse of public office. In doing so, they expose themselves to the influence of wealthy donors, special-interest lobbyists, and even foreign governments. As a result, they often enact corrupt policies, and Americans pay the price for this corruption.

At Take Back Our Republic, we work to put power and influence back into the hands of the people. In keeping with the Founders’ efforts and our most foundational principle, we believe that it is past time that we take a comprehensive approach to the influence self-enrichment has on our government officials. In recent months, we have seen extensive coverage and accusations about the Clinton Foundation and its operations and entanglements, the lengthy and winding trial(s) of state officials like former Virginia Governor Bob McDonnell who was accused of profiting from his governorship, and the conviction(s) of New York Assembly Speaker, Sheldon Silver, as well as Alabama Speaker Mike Hubbard- whose emails paint him as a public official focused on anything but serving the people of Alabama.

Whether in Washington, DC, in its shadows, in one of the union’s bluest states, or in one of its reddest, corruption is a problem. Meanwhile, these scandals are but a mere tip of the iceberg of officials who see their family’s bank accounts increase, their investments balloon, and their post-service earnings skyrocket as they sell influence they gained supposedly serving the people that elected them. The “bought and paid for” attack on politicians has often, sadly, transformed into “bought, paid for, and richer.”

Most Americans see political profiteering as yet another reason elected officials cannot be trusted with regard to their motivations or their votes. Influence belongs in the hands of the voters- the American people. In recent years, we have discovered that obtaining wealth may be the one thing that corrupt politicians hold in higher regard than reelection. When the ability to influence those politicians through providing avenues for profiteering exists, our system becomes all the more ripe for corruption. To address this corruption, we must adapt our laws to present-day circumstances. We at Take Back Our Republic recommend the following:

Stop politicians from using campaign contributions to augment their lifestyles and enrich their families.

Campaigns are meant to be opportunities to express ideas to better the lives of those one seeks to serve. While they are a necessary and often strong expression of democracy, those concerned with corruption in the realm of campaigns know that opportunities for corruption are manifold. Traditionally, avenues for corruption largely centered on politicians who sold out to or extorted special interests and big money to fill their campaign coffers at the expense of serving their constituents. Today, politicians have found ways to take this a step further. Instead of only enriching electoral chances, politicians are using the honor of public service to bolster their personal bank accounts and those of their families. When politicians see their campaign accounts as conduits to their own, the level of dependence on and influence of campaign donors increases, leaving constituents with less of a voice. To limit such corruption, we must ensure that politicians do not put donations to personal use. Here are some practical steps to bring this to an end:

Ban leadership PACs.

Leadership PACs are shadowy and suspicious by nature, and you can see why in this Open Secrets description:

“A leadership PAC is a political action committee that can be established by current and former members of Congress as well as other prominent political figures. Leadership PACs are designed for two things: to make money and to make friends, both of which are crucial to ambitious politicians looking to advance their careers. Leadership PACs are used to fund expenses that are ineligible to be paid by campaign committees or congressional offices. Those costs can include travel to raise a politician’s profile, for instance. Democratic leadership PACs are also used to fund fellow Democrats’ campaigns, especially threatened incumbents or challengers trying to win seats that were previously held by the GOP. Politicians often use their PACs to donate to other candidates because they are considering seeking a leadership position in Congress, a higher office, or leverage within their own party as they show off their fundraising ability.”

Beyond the apparent problems above, there are currently no rules to prohibit personal use of leadership PAC funds by politicians which certainly makes contributions to such entities potentially more influential over politicians looking to enrich themselves. 7 Additionally, there have been numerous documented instances of seeming quid pro quo contributions from a leadership PAC to a campaign of a colleague only to have the favor returned within days.8 Other noted examples of leadership PAC usage includes using those funds to pay for expensive trips or lavish retreats for the office holder and their friends.9

In fact, Viveca Novak of the Center for Responsive Politics says that “leadership PACs are little more than slush funds.”10 This messy form of organization creates a channel for self-enrichment, increased lack of transparency, and additional opportunities for corruption, quid pro quo transfers, and influence leverage. As a result, we believe it would be best to ban leadership PACs as they currently exist. We do applaud Rep. Mike Capuano (D- MA 7th) for attempting to tackle the problem with H.R. 46511 in the 113th Congress, and we support similar efforts or even eliminating leadership PACs altogether.

Stop politicians from collecting interest on loans to their own campaigns.

Loaning to one’s campaign is a beneficial and crucial ability for politicians with some means yet not wildly wealthy enough to fight against politicians with more hefty campaign war-chests.

It is not a system that was set up to enrich candidates and their families. Unfortunately, that is how the system is being used. In one such case, Rep. Grace Napolitano (D- CA 32nd) was charging her campaign 18% interest on loans which allowed her to profit $22,000/year. Her excuses for such fees were that the mafia charges those rates and that she wasn’t becoming a millionaire or billionaire by such transactions.12 Such statements are not unique to Napolitano and merely show how out of touch many of our politicians have become. At Take Back Our Republic, we do not believe that the practice of being able to loan one’s campaign money should be abolished. We do, however, believe that profiting off such a transaction is wrong and opens the door for significant corruption and profiteering. We urge passage of legislation that will immediately close this loophole.

Place significant limitations on how politicians may use campaign accounts to pay family members.

Many children or spouses of politicians are naturally capable politicos themselves, and they have often been added to the campaign payroll. However, that has led to wide abuses. In one instance, the team at the Government Accountability Institute noted that former Congressman Ron Paul (R-TX) paid six family members a combined total of nearly $305,000. 13 Meanwhile, former Congressman Rodney Alexander (R-LA) paid two daughters more than $130,000 for a campaign that was not even remotely competitive- resulting in a 78% win in a safe district. This congressman failed to even name specific tasks his family members performed when pressed!14 In another egregious example of using the system to one’s advantage, campaign records’ show that Rep. Bobby Rush (D-IL) paid his wife $550,000, while a church he established received ~$190,000 from his campaign account while more than $14 million in taxpayer-backed government grants were awarded to a wellness center associated with the church he founded.15 It is not Take Back Our Republic’s view that worthy campaign staff should be unable to make a living if they are family members. However, when campaigns become slush funds for the candidate’s families, that office holder is all-the-more subservient to his donors and the need to fundraise of serving constituents. As stated above, we support the free market, and we do not seek to forbid capable political hands from working for those they care about. However, because it is so difficult to separate the finances of spouses, we believe that eliminating the ability to pay a spouse out of campaign funds is a common-sense step. Additionally, we believe that children and other designated relations should be subject to the following restrictions: 1) If such a relative works in the consulting realm with multiple clients, they cannot charge their office-holding relative more for service than they do other clients, and 2) If a relative takes a full-time position with a campaign, he/she may receive no more than a 10% raise from the previous year’s tax returns and receive no more than a COLA (cost of living allowance) raise each year for the first five years of full-time employment. While some will argue that this is meddling in the free market as this does not involve government money, it does affect taxpayers when it comes to campaign financing. The level of urgency with which a politician may take in money to pay for the largesse of his/her payments to family members is of grave concern when it could potentially influence the outcome of meaningful legislation.

Download the entire paper.

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Take Back Our Republic strive to be the leading organization in promoting a culture in politics where character and ideas are the basis of being elected and every election is financed with transparency, primarily by the people to be represented and not by outside interests. Headquartered in Auburn, AL since 2015, TBOR has strong financial backing, an engaged board, more than 100 volunteer coordinators in 47 states, and a staff who stands by our mission.

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