“Well written and an interesting perspective.” Clan Rossi --- “Your article is too good about Japanese business pushing nuclear power.” Consulting Group --- “Thank you for the article. It was quite useful for me to wrap up things quickly and effectively.” Taylor Johnson, Credit Union Lobby Management --- “Great information! I love your blog! You always post interesting things!” Jonathan N.

Monday, October 21, 2013

Leadership Funds: A Congressional Conflict of Interest

Congressional leadership funds constitute a loop-hole by which members of Congress can more easily use donations for personal expenses including vacations. To count on those very same members to turn off the sugar-water that they themselves enjoy is perhaps the epitome of naivety. A solution to a systemic conflict of interest cannot come out of the parties themselves, but must be from an exogenous or outside force. In this essay, I depict the conflict of interest and suggest places we might look to eliminate the conflict of interest.
The seat of the U.S. Congress. The dome was completed during Lincoln's term. Image Source: Wikimedia Commons
 
In the second quarter of 2012, the YG Action Fund, which was being run at the time by former staffers of House Majority Leader Eric Cantor (R-VA), snagged $5 million from Sheldon Adelson, a casino magnate. The Congressional Leadership Fund pulled in $1.28 million, which includes $1 million from Bob Perry. The House Democrats’ leadership fund raised $4.3 million.[1] At a time when bipartisanship was a rarity, lawmakers of both parties heartily availed themselves to their own leadership funds even though the “leadership fund” exception to donation and use limits had ostensibly been slipped into a bill on the assumption that such funds would be given to members through the leaderships for the campaigns.

The strictures on how members of Congress can spend money from their respective leadership funds and that of the leadership were designed to be relatively lax—to make it relatively easy to use the funds to cover even personal expenses. One Congresswoman loaned her own campaign not a small sum of money from her leadership fund, charging the campaign 18 percent interest.  Essentially, the transaction was a transfer of money from her heavily regulated campaign contributions to her leadership fund, which could be used to pay relatives (to “work” on her campaign) and take vacations.

Even assuming that the party leaderships would still be dolling out the cash to favored lawmakers instead of each member also having his or her own leadership fund, a structural or institutional conflict of interest imperils any reform coming from the lawmakers or their respective leaderships. In other words, the rare instance of bipartisanship in supporting the leadership-fund loophole has the not insignificant problem of private gain at the expense of the donors and even the public interest. For the open secret in Washington that members of Congress do in fact benefit financially from their offices cannot but impact and warp the lawmakers’ official roles.

Yet strangely, the conclusion of the investigative report broadcast on CBS’s “60 Minutes” on October 20, 2013 that the American people can only wait until Congress finally decides to act to reform its own sordid practice even though the members of Congress have a huge personal disincentive in doing so. In other words, the assumption of the journalists was that the people would just have to accept being held hostage to a Congressional conflict of interest.


Discounting the harm in an institutional conflict of interest seems to be engraved in the American body politic and culture. The typical assumption that people can obviate a conflict of interest that benefits them personally renders the society itself as naïve as a deer in headlights. We seem blinded to the necessity or at least facilitating general policy of deconstructing an institutional conflict of interest by going above or beyond the parties to it. To rely on the parties benefitting is a fool’s errand.

The problem seemingly forestalling needed reform to unwind the “leadership fund” conflict is that the Congress is the end of the line in terms of enacting reform (i.e., passing a law). To be sure, the U.S. president is at least theoretically separate from the bicameral legislature and could put pressure on Congressional members to police themselves. However, the president would surely lose many otherwise useful friends on Capitol Hill that way.

I suspect the delegates at the federal convention in 1787 assumed that the state governments would be able to check the self-aggrandizing Congressional loop-hole because one of the virtues of modern federalism is that both the General Government (i.e., the federal government) and the governments of the states can check and balance each other. However, for this check to function, the state governments must have enough autonomy and have a direct role inside the General Government. Since the war between the CSA and USA commencing in 1861, the General Government has encroached so on the purview of the state governments that the latter had not the wherewithal by 2012 to restrain a misbehaving Congress. The switch from legislative appointment to popular election for U.S. Senators in 1913 effectively removed the state governments’ “breathing hole” in cold Washington.

For a state’s citizenry may have no problem with federal encroachment and be too dispersed to hold Congress accountable directly whereas the same state’s legislature and chief executive/head-of-state would have an incentive to eliminate Congressional loop-holes and, moreover, restrain Congress’s over-reaches that have come to eclipse federalism itself. In short, the problem goes deeper than members of Congress using donor dollars for personal edification rather than to advance the political principles held by the donors. The system of public governance in the U.S. has incrementally been self-contorted by an oblivious citizenry for decades. In fact, the increasingly dangerous gridlock (e.g., on raising the debt-ceiling) could have been predicted from the federal government’s habit of forcing “one size fits all” more and more on a diverse empire of republics that spans a continent and more.




[1] Paul Blumenthal, “House GOP Super PACS Tap Sheldon Adelson To Raise $6.6 Million,” The Huffington Post, July 16, 2012.