[EL] Check out N.Y. Lawmakers Charged in Plot to Buy SpotonMayoral Ball...

Thu Apr 4 07:13:14 PDT 2013

Thanks Brad - couple thoughts:

First, shrinking the size of elected government at best only reduces the breadth of this problem, not the depth.  In other words, even if we eliminate everything else the federal government does besides providing for the common defense, in the real world today that still leaves many billions of dollars ($666.2 billion, in fact, according to Wikipedia) subject to the oversight and influence of federal elected officials.  I can see how there wouldn't as many donors who have enough skin in that game to target for extortion as there are today, but there would still be LOTS of them who do.

And second, the way conservatives view freedom as something threatened only by restrictions imposed by elected government, but seem to be agnostic about other restrictions on freedom - such as those imposed economically - increasingly strikes me as one-sided.  No one in America is free to live wherever he or she wants or to drive whichever car we want, for example - our freedom to make those choices is limited by how much money we have.  All of us (including me and even including you, I think) accept those limitations on our freedom without much quarrel because they serve a purpose: namely incentivizing productivity and efficiently allocating resources.  

But to my eye, contribution/extortion limits on public officials serve the same purposes.  Even under the defense-only federal government described above, the efficiency of the "common defense" market (the cost-effectiveness of each tank, rifle, bullet, etc.), depends on the integrity of each fiduciary who participates in it.  

So think of contribution limits this way (again, even under the now "small" federal government that spends only two-thirds of a trillion dollars in 2013): government should limit the degree to which each member of its senior leadership has financial relationships with constituents and other business partners for the same reason the contractors who provide the tanks, rifles, bullets and so forth prohibit their executives and board members from accepting kickbacks.  Those companies - or at least the ones I'm familiar with - prohibit not only their purchasing agents or first-line sales people from taking money from business partners on the side, they extend those prohibitions to senior executives and board members.  

And those kickback policies aren't narrowly drawn, like bribery laws, meaning they aren't limited only to prohibiting gifts that come with an explicit quid-pro-quo connection to a specific contract, they're generally rather broad - requiring at least compulsory disclosure of any outside business relationship up the chain of management and usually a prohibition of such relationships beyond a relatively small amount.  (So one of my clients at a major corporation will let me buy him a nice dinner once a year, for example, but wouldn't let me pop for dinner once a week.)  These policies help companies at an individual level, by protecting shareholders from losses due to conflicts of interest by their fiduciaries, and help society at a broader level, by making markets more efficient and transparent.  Point being that to my eye, the kind of "government" conservatives prefer - where choices are governed by "the market" rather than by elected representatives - seems to me to have a greater need to ensure the efficiency of those markets, not less.  

Which I guess is why I'm surprised by how much work you're willing to accept from the expressive element of giving money to public officials in the course of evaluating the concept of contribution limits in general.  I certainly accept that there's some important political expression involved in contributing money to a candidate, and that contribution limits stop serving much purpose below a reasonably significant amount of money.  But as I understand your view (and Jim's and many other conservatives who I take seriously), that expressive element trumps any interest in protecting market efficiency even at any amount of money - which is where I see tension in that view of money and "government."

-----Original Message-----
From: Smith, Brad [mailto:BSmith at law.capital.edu]
Sent: Wed 4/3/2013 2:02 PM
To: Joseph Birkenstock
Cc: law-election at uci.edu
Subject: RE: [EL] Check out N.Y. Lawmakers Charged in Plot to Buy SpotonMayoral Ball...

One of the costs of big government will be an increase in rent-seeking and an increase in the "extortion" function by unethical officials. This doesn't mean we shouldn't have big government. We just have to recognize that it is one of the costs of big government, just like one cost of a particular program - social security - is loss of control of a significant portion of one's wages, and ability to save for one's future on one's own terms. Doesn't mean we shouldn't have it (though some might conclude that). Just means you want to be sure you're considering all the costs and all the benefits. Conversely, one cost of a strong First Amendment is putting up with lots of speech you'd rather not hear. Many of the checks put in place in our system of government to prevent rent-seeking and extortion have been eroded or in some cases all but abolished - federalism, bicameralism, the takings clause, and especially the doctrine of enumerated powers. These things may have been done for what was seen to be good reason, but nevertheless one cost was to erode checks on the abuse of power by officials and rent seeking by factions.

Liberals, who are more wedded to big government, naturally tend to seek to solve this problem by placing still more restrictions on freedom and giving more power to government. Conservatives, who are less wedded to big government, naturally tend to seek to solve this problem by reducing the size and power of government in other areas, rather than expanding it in this.

If you are skeptical of public officials, you will not generally want to increase their power, especially in a sensitive area that directly pertains to criticism of officials and efforts to replace them. That limits on contributions might be seen as an effort to limit their de facto power (by making it harder to extort) doesn't get us far, because it does so by increasing their de jure and de facto power in that key area of free speech. Practical consequences then come into play. The track record of government when given this new power is not very good. In fact, it is really bad. The fact that the arguments made by most regulatory advocates do not follow the argument Joe makes (some do, and it is clearly recognized by people on both sides of the debate, but let's not kid ourselves, that is not the basic pro-regulatory argument), but instead argue the need in order to protect government from the citizenry (rather than citizens from government) further makes conservatives extremely wary.

My own experience is that most potential donors aren't really swayed by the extortion threat, though some can be and are. This is one reason for being wary about excessive compulsory disclosure laws. But potential large donors are usually pretty successful people with ample experience in turning folks down. Donors do get tired up being hit up, and they can complain about it, and they might use the extortion line. I've heard it, to be sure. But it's much the same as the corrupting effect of contributions. It's not that it is never there, but it can be overstated. And usually, in my view, it is self-inflicted - once you've paid the Dane Geld, it's hard to get rid of the Dane. There are a lot of various scenarios here and nuances that I won't go into; we'll just say that the disease does not merit the harms inflicted by the cure. And if a cure is necessary, other cures or partial cures would be better.

Jess Unruh is quoted as having said, "If you can't drink a lobbyist's whiskey, take his money, sleep with his women and still vote against him in the morning, you don't belong in politics."

Perhaps donors need to learn something along the same lines: If you can't take a lawmaker's earmarks, welcome him to your plant, dine with him at Lincoln or Jackson Day dinners, listen to his threats, and still tell him no, you don't belong in business.

Bradley A. Smith
Josiah H. Blackmore II/Shirley M. Nault
   Professor of Law
Capital University Law School
303 E. Broad St.
Columbus, OH 43215
614.236.6317
http://law.capital.edu/faculty/bios/bsmith.aspx

________________________________________
From: law-election-bounces at department-lists.uci.edu [law-election-bounces at department-lists.uci.edu] on behalf of Joseph Birkenstock [jbirkenstock at capdale.com]
Sent: Wednesday, April 03, 2013 11:04 AM
To: JBoppjr at aol.com; margaret.groarke at manhattan.edu
Cc: law-election at uci.edu
Subject: Re: [EL] Check out N.Y. Lawmakers Charged in Plot to Buy Spot onMayoral Ball...

I agree that many contribution limits are too low, and that as a general proposition we'd do better to index them for inflation. But, that said, I wanted to raise a different point about the utility of contribution limits in the abstract, including the aggregate limits being litigated in McCutcheon.

Perhaps it's because I work more with donors than with candidates these days, but for a while now the federal limits have looked more to me like extortion limits than contribution limits. Meaning, I'm sure there are some donors who sincerely want to give more of their hard-earned money to specific public officials, but there are also lots of donors who are quite relieved to be able to "max out" (either or both with respect to a particular candidate or with respect to federal candidates, party committees, or PACs as a whole).

And relieved to do so at a large-but-still-less-than-stratospheric level, since once they've coughed up their $2,600 per election they can truthfully tell a candidate "Look Joe, I'd love to give more if I could give it directly to Birkenstock for Grand Poobah, but unless you can promise me every dollar I give will be spent at your direction I'd really rather not give to parties or PACs and just hope it ends up helping you." Might not be completely convincing to the candidate making the ask (for a joint fundraising committee, for example), but it's not like the candidate can disprove it and it allows the donor at least a facially reasonable pretext to start turning down further dunning opportunities at some point.

But if there were no contribution limits, and to a large extent if there were no aggregate limits, that dynamic would change drastically. Not only would the donor lose the use of the limits as a diplomatic way to put away his or her checkbook, but now the candidate could turn the game around: "Shame you can't see your way clear to sending another check, Mickey - turns out Daffy and Goofy each just wrote another hundred k. You sure you don't want to keep up?"

And that's what most confuses me about the conservative attack on contribution limits: skepticism of public officials and of the power entrusted to public officials is one of the best things I've learned from the conservative school of thought. But the goal of reducing or eliminating limits on how much money these officials can solicit from their constituents seems to be in tension with that lesson, so I'm hoping Jim or anyone else from that point of view might address this concern: is there a workable way to keep the "extortion limit" function of the current contribution limits regime if the limits themselves are overturned, or am I misunderstanding whether conservatives see that function as a worthwhile policy goal in the first place?

________________________________
Joseph M. Birkenstock, Esq.
Caplin & Drysdale, Chtd.
One Thomas Circle, NW
Washington, DC 20005
(202) 862-7836
www.capdale.com/jbirkenstock
*also admitted to practice in CA

-----Original Message-----
From: law-election-bounces at department-lists.uci.edu on behalf of JBoppjr at aol.com
Sent: Wed 4/3/2013 10:04 AM
To: margaret.groarke at manhattan.edu
Cc: law-election at uci.edu
Subject: Re: [EL] Check out N.Y. Lawmakers Charged in Plot to Buy Spot onMayoral Ball...

You have hit on the other interesting point about this. NYC contribution
limits for Mayor are $4,950 and less for other offices. Each of the bribees
demanded much more. This seems to be further anecdotal evidence that
current contribution limits are too low. (See also Congressmen Jefferson and
Cunningham) Jim Bopp

In a message dated 4/3/2013 9:58:22 A.M. Eastern Daylight Time,
margaret.groarke at manhattan.edu writes:

Au contraire, we New Yorkers just want to make sure that bribing public
officials is affordable! The desire to get one's way shouldn't bankrupt a
person.

More seriously, the limits we have in NYS are really generous (I would be
permitted to donate $41,000 to a gubernatorial candidate in the general
election). And these allegations are about donations to parties, about which I
don't have the rules handy. But a LOT of things need to change in NY.

On Wed, Apr 3, 2013 at 9:01 AM, <_JBoppjr at aol.com_ (mailto:JBoppjr at aol.com)
> wrote:

_Click here: N.Y. Lawmakers Charged in Plot to Buy Spot on Mayoral Ballot
- NYTimes.com_
(http://www.nytimes.com/2013/04/03/nyregion/state-senator-and-city-councilman-accused-of-trying-to-rig-mayors-race.html?hp&_r=0)

Thank goodness NYC has contribution limits. It has sure fixed the
corruption problem there. Jim Bopp

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