6.4.5.2 Financial Kickbacks

(This is a current page, from the Patterns of Power Edition 3 book contents.  An archived copy of this page is held at https://www.patternsofpower.org/edition03/6452a.htm)

Political parties with access to more funds can spend more on advertising, and thereby win votes and power – so they woo the donors.  That calls into question what the donors receive in return:

  • Halliburton, in its 2017 Annual Report to its Political Action Committee members, reported making “$384,550 in contributions” and said that it would continue “to help those candidates for political office who have demonstrated their unwavering support for our industry while also looking to forge relationships with promising candidates and incumbents taking on new leadership positions that have the ability to impact the operations of our business for years to come.” Its contributions have been effective.  A US Congress report – Dollars, Not Sense: Government Contracting Under the Bush Administration – revealed that “In 2000, Halliburton was the 20th largest federal contractor, receiving $763 million in federal contracts. By 2005, Halliburton had grown to become the 6th largest federal contractor, receiving nearly $6 billion in federal contracts.”  It is worth remembering that Dick Cheney, Bush’s Vice President during this period, had previously been the CEO of Halliburton.
  • BMW, having made a large donation to Angela Merkel’s Christian Democratic Party in Germany, benefited in the same week from regulations that granted “exceptional rights for luxury cars” according to the OECD report referred to earlier (para. 59).
  • As described in an article entitled In the halls of shame, the lobbying industry has burgeoned in recent years. The health industry was identified as the second-largest donor group (after the finance sector).
  • One of the most blatant examples of kickbacks is Congress’s response to intensive lobbying by repeatedly legislating to allow large corporations to hide profits overseas and thereby reduce their tax bills, as described earlier (3.3.7.3).

These examples illustrate how wealthy individuals and corporations might use their money to gain an advantage over other people in wielding influence on politicians and political parties.  There is no evidence of illegality in any of these examples, but businesses normally only spend money for shareholders’ benefit.

Both American political parties are equally complicit in their dependence on campaign financing, via Political Action Committees (PACs) and ‘Super PACs’ which make large donations to both parties’ candidates in Congressional elections – as revealed by OpenSecrets.org.  A donor seeking a kickback might not care whether a politician is a Republican or Democrat: the politicians need the campaign funding and vote according to the donor’s wishes rather than what benefits the people they are supposed to represent.

There are strong arguments for reform.  For example, Richard Hasen argues in his book, Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections, that:

“if the government is to ensure robust political debate, the Supreme Court should allow limits on money in politics to prevent those with great economic power from distorting the political process.”

Perhaps the strongest argument for reform is the increasing public dissatisfaction with the political establishment in America, as described in the next sub-section (6.4.5.3).

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