“Culture of Corruption” Is Real

Illegal or not, much of Congress’s behavior these days is unethical and repugnant.

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Article created by The American Enterprise Institute.

For the most part, as I have argued to audiences over many years, Congress is pretty much a reflection of the rest of society; take a cross section of 535 lawyers, 535 doctors, 535 accountants, 535 professors or 535 cosmeticians, and you will find over time a healthy share of real and petty corruption, alcoholism and sex abuse.

That is a preface to the following: In all my years of watching Congress, I have never seen anything quite like what we have now. It may be a cliché, and it may be a partisan attack term, but it is also true: There is a culture of corruption across Capitol Hill.

It still does not encompass the majority of Members and staffers, most of whom come here to do the right thing and to stay on the path. It may be true that the numbers of offenders, at least those directly breaking the law, are still roughly the same as in other comparable peer groups.

But the problem is palpably worse. While there is plenty of illegality here–and I believe a wave of indictments will hit in the coming months–it is not what is illegal that is the outrage, to use the old phrase, but rather what is legal.

Let us just consider some of the stories that emerged last week, starting with the Chicago Tribune’s story, amplified by The Washington Post, about the tidy real estate profits made by Speaker Dennis Hastert (R-Ill.) and California GOP Reps. Ken Calvert and Gary Miller.

Hastert made nearly $2 million from rural land purchased in his district, done in part through a series of transactions involving a land trust he set up with partners. The land had no major access road nearby when the Speaker purchased it–apparently, according to his office, on impulse, for $2.1 million when he drove past and saw a house on it that he admired.

But soon after the purchase, the Speaker muscled through $207 million in earmarks to build a highway and interchange five miles or so from his property. Not long after the earmark, the land trust sold some of the property to a developer for $5 million, handing the Speaker a windfall of $1.8 million.

Calvert and his business partner purchased land near an air reserve base in Riverside County, Calif., then snagged handsome federal funding–about $10 million worth–for both a freeway interchange and commercial development nearby. Then, within the year, they sold the land for a nice half-million-dollar profit, doubling their investment.

Miller, for his part, found a way to get more than $1 million in highway funding near a commercial development he co-owns in Diamond Bar, Calif.

Now let’s turn to the Bloomberg story on Rep. Alan Mollohan (D-W.Va.), another successful real estate investor. Mollohan got $179 million in government contracts for West Virginia companies that in turn gave $225,000 to his family charity. This amounted to nearly half the charity’s revenue.

Then there is Rep. Vito Fossella (R-N.Y.). The New York Daily News recently wrote two stories on the Staten Island lawmaker. One covered his travel to resorts paid for by campaign donations and corporate largesse; the campaign money went for things such as ski school and equipment. The travel included a discounted corporate jet trip with a campaign adviser the Daily News described this way: “a mob informer identified [him] as an associate of the Gambino crime family.”

In the second story, the Daily News described a bill Fossella sponsored that was crafted by a Wall Street group to make it more difficult for the Securities and Exchange Commission to investigate fraud, insider trading and “churning”–generating commission profits by excessive trading–by securities firms. Some of those firms in turn gave him a hefty set of campaign contributions.

Along with these tales, we had the publication last week of the Senate Indian Affairs Committee report on the Abramoff scandal as it relates to Indian gambling, i.e., to one of many activities of the Abramoff constellation. The report reminds us of the unbridled greed and dirty-dealing of Abramoff, his employees, lawmakers, aides conveniently situated in places like former House Majority Leader Tom DeLay’s (R-Texas) office and their eager confederates such as anti-tax activist Grover Norquist and Christian Coalition head-turned-consultant Ralph Reed, who made sure that much of the Indian gambling money was laundered through various 501(c)(3) groups to hide their intent and impact and to allow the lobbyist to mask the funding of trips like the infamous golf outing in Scotland.

We got no more revelations last week about Rep. William Jefferson (D-La.), who’s under investigation for allegations of bribery, or additions to the numerous stories about how House Appropriations Chairman Jerry Lewis (R-Calif.) helped feather the nests of his family members, his former House colleague Bill Lowery (R-Calif.) and many of his former aides while spreading earmarks all over Southern California. But we did get an illuminating Bloomberg story about the incredible revolving door between the House Appropriations Committee and the lobbying world: Since 1998, a stunning 46 former Appropriations staffers have registered as lobbyists after leaving their Capitol Hill jobs. Many have made huge sums, all for using their committee expertise and contacts to find billions of dollars in earmarks for eager clients.

To reiterate, much of this activity is legal. It’s natural for lawmakers to try to get as much funding as possible for his or her district. And lots of people have made big money in real estate over the past few years. But after then-Rep. Duke Cunningham (R-Calif.) used a house sale to launder a $700,000 bribe, real estate transactions by lawmakers deserve a closer look. And buying land and selling it after securing earmarks that add to its value is the political equivalent of insider trading. It is simply wrong.

Similarly, using campaign money for personal purposes, even if it can be made legal by saying it is payment for fundraising services, is wrong. Mutual backscratching with lobbyists, either in return for perks, campaign donations or contributions to a personal charity, has gone way over the line. The extent of the revolving door is wrong.

There simply is no ethical compass here. The fact that Hastert was responsible for the St. Valentine’s Day Massacre of the House ethics committee makes his own real estate actions even more wrongheaded.

I don’t want Members of Congress and staffers to live ascetic or penurious lives. Lawmakers (and judges for that matter) ought to be paid at least as much as second-year associates in big law firms. (Currently they are not.)

Still, when I look at the eagerness of Members to score big perks from their lobbyist friends and to find ways to make big bucks by transactions that are related to their behavior inside Congress, I cannot find any justification in the large pay gap with their peers.

Illegal or not, much of this behavior is unethical and repugnant. It underscores the deep need for a real package of ethics, earmarking and lobbying reforms–which in turn underscores the shameful and pathetic behavior of the leaders in both chambers who have failed to act and who are trying to sneak through a sham bill. They hope journalists will tire of these stories and that voters won’t notice. I hope they are wrong.


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