Monday, October 10, 2005

What Exactly Did Tom Delay Do Wrong?

The majority leader of the United States House of Representatives, Tom Delay, has been indicted by several grand juries in Texas. The nature of that indictment, and what it says about the law, is worth thinking about. Here is the relevant excerpt from one of the indictments, which can be found at Findlaw:

…the defendants herein, with the intent that a felony be committed, did enter into an agreement with one or more of each other or with a general purpose political committee known as Texans for a Republican Majority PAC that one or more of them would engage in conduct that would constitute the offense of knowingly making a political contribution in violation of Subchapter D of Chapter 253 of the Texas Election Code, a violation of Sections 253.003 and 253.094 and 253.104 of the Election Code, in that said contribution was made directly to the Republican National Committee, a political party, during a period beginning sixty days before the date of a general election for state and county officers and continuing through the date of the election, and indirectly to candidates for the Texas House of Representatives, and that said contribution included a prohibited political contribution by a corporation; and that John Dominick Colyandro, and James Walter Ellis, and Texans for a Republican Majority PAC did perform overt acts in pursuance of the agreement, to wit: John Colyandro and Texans for a Republican Majority PAC did accept contributions from corporations, namely Diversified Collection Services, Inc. in the amount of $50,000, and Sears, Roebuck and Co. in the amount of $25,000, and Williams Companies, Inc. in the amount of $25,000, and Cornell Companies, Inc. in the amount of $10,000, and Bacardi U.S.A., Inc. in the amount of $20,000, and Questerra Corporation in the amount of $25,000; and James Ellis and Texans for a Republican Majority PAC did tender, deliver, and cause to be tendered and delivered to the Republican National Committee and Terry Nelson, a representative of the Republican National Committee, a check (a copy of which is hereinafter reproduced) payable to RNSEC (the Republican National State Elections Committee, a nonfederal component of the Republican National Committee) in the amount of $190,000, said check being from the same bank account into which the above-described corporate contributions had been deposited; and James Ellis and Texans for a Republican Majority PAC did provide the said Terry Nelson with a document that contained the names of candidates for the Texas House of Representatives and amounts to be contributed to each of the said candidates, namely, Todd Baxter, Dwayne Bohac, Glenda Dawson, Dan Flynn, Rick Green, Jack Stick, and Larry Taylor; and James Ellis and Texans for a Republican Majority PAC requested, solicited, and proposed that the Republican National Committee and the Republican National State Elections Committee make political contributions to said candidates after the aforesaid check was delivered to Terry Nelson; and John Colyandro did sign the aforesaid check; and John Colyandro did deliver the aforesaid check, and did cause the aforesaid check to be delivered to James Ellis by instructing Russell Anderson to send the aforesaid check to James Ellis;

The function of the law, one supposes, is to encode the difference between the immoral and the moral action. Sometimes the actions are not obviously immoral, but in context are. If it is true, for example, that Bush Administration officials leaked the identity of a national-security employee, while that identity is protected by statutes designed to insure that covert operations stay covert, the objective nature of such a prohibition is easy to understand. Even if the name was leaked to show that critics of a Bush Administration policy (in this case, promoting the invasion of Iraq by talking about weapons of mass destruction which ultimately proved not to be there) had a partisan agenda, there is still objective value in deterring the exposure of knowledge that, once it moves out into the public square, damages the national security of the U.S. (Whether the U.S. should take such a gigantic role in the world, which requires that we have a correspondingly gigantic national-security apparatus, is an interesting question, but a separate one.)

But assuming that he did what the indictment says he did, what objectively has Rep. Delay done wrong? He has moved money around, but money is the mother’s milk of politics. That he has moved it from federal organizations to state ones, or vice versa, or that he has solicited it from a particular type of voluntary association known as the corporation, is not obviously immoral, the sort of thing that the law should try to prevent, even if it is illegal. Why should money not be allowed to flow up from “national” groups and down to “state and local” ones? Why should certain types of associations – GM, say – be sharply limited in how they can engage politically while others – environmental groups, or sheep farmers – be subject to different rules? This is the essence of arbitrary government – the different treatment of people in similar circumstances – that many historians warn us is the key requirement in the erosion of constitutional liberty.

Now of course we all prefer to live in societies where laws are largely obeyed, but we also prefer to live in societies where some care is taken before the laws are written – where the law is not used as an arbitrary tool to protect some interest groups and punish others. And the entire campaign-finance apparatus is about this. It is a spider’s web of confusing, arbitrary restrictions indicating that money can be organized through these procedures and not those. Economic theory would predict that such laws would be supported by pressure groups benefiting from them. And among the biggest supporters of campaign-finance rules are incumbent politicians, notably Sen. John McCain of Arizona, who has never gotten over having his reputation tarnished by being associated with the convicted banker Charles Keating in a donations scandal from the 1990s. More generally, the more campaign-finance restrictions there are the higher the transaction costs of building the infrastructure to challenge an incumbent politician. For the challenger the marginal cost of organizing the fundraising needed to mount an effective campaign are large when there are many campaign-finance restrictions. For an incumbent, the network already exists from prior elections, and so the marginal costs are lower. Unsurprisingly, the rise of campaign-finance restrictions has coincided with the increasing impossibility of defeating incumbent politicians. The U.S. has a reelection rate in the House that routinely exceeds 90 percent, and in state legislatures it is often as bad.

We should care about such things because along with federalism and the separation of powers, elections are a key ingredient in the Constitution’s foundation of liberty. And with the disappearance of competitive elections the democratic corner of this foundation has now rotted away to nothing. Campaign-finance restrictions are no answer, because the problem is not that incumbents get too much money. The problem is that they are entrenched monopolists, protected by the usual rent-seeking in which such firms behave. Campaign-finance restrictions make it harder for political entrepreneurs to displace the entrenched monopolists, and so the political market becomes uncompetitive. (People forget that Eugene McCarthy, whose anti-war 1968 candidacy drove Lyndon Johnson from the field and is often held up as the ultimate insurgent campaign, never would have gotten anywhere had it not been for funding by the GM heir Stuart Mott and several Wall Street executives. So too with Ronald Reagan's first foray into California politics.)

The editorial boards of newspapers are also frequently in favor of campaign-finance limitations (The New York Times particularly so), and this too is not surprising from an economic point of view. These organization wish to influence the direction of public policy, and if competition in the market for ideas is limited by restraining the spending of political candidates, their views face less competition. So this too, for all the media’s self-righteous posing on such questions, is just raw self-interest masquerading as principle.

The writer Tacitus reminded of this long ago. A Roman senator in the first century of the empire, he wrote disparagingly of the corruption that quickly manifested itself once the original emperor, Augustus, was gone. Like all histories his is not the last word, but he still has much useful to say to us as the law becomes less about defining the boundary between acceptable and unacceptable behavior for all citizens in all circumstances and more a way to promote the factional privileges that Madison warned us about in Federalist 10. (My translation is of the Annals is from

Mankind in the earliest age lived for a time without a single vicious impulse, without shame or guilt, and, consequently, without punishment and restraints. Rewards were not needed when everything right was pursued on its own merits; and as men desired nothing against morality, they were debarred from nothing by fear. When however they began to throw off equality, and ambition and violence usurped the place of self-control and modesty, despotisms grew up and became perpetual among many nations. Some from the beginning, or when tired of kings, preferred codes of laws. These were at first simple, while men's minds were unsophisticated. The most famous of them were those of the Cretans, framed by Minos; those of the Spartans, by Lycurgus, and, subsequently, those which Solan drew up for the Athenians on a more elaborate and extensive scale. Romulus governed us as he pleased; then Numa united our people by religious ties and a constitution of divine origin, to which some additions were made by Tullus and Ancus. But Servius Tullius was our chief legislator, to whose laws even kings were to be subject.

After Tarquin's expulsion, the people, to check cabals among the Senators, devised many safeguards for freedom and for the establishment of unity. Decemvirs were appointed; everything specially admirable elsewhere was adopted, and the Twelve Tables drawn up, the last specimen of equitable legislation. For subsequent enactments, though occasionally directed against evildoers for some crime, were oftener carried by violence amid class dissensions, with a view to obtain honours not as yet conceded, or to banish distinguished citizens, or for other base ends. Hence the Gracchi and Saturnini, those popular agitators, and Drusus too, as flagrant a corrupter in the Senate's name; hence, the bribing of our allies by alluring promises and the cheating them by tribunes vetoes. Even the Italian and then the Civil war did not pass without the enactment of many conflicting laws, till Lucius Sulla, the Dictator, by the repeal or alteration of past legislation and by many additions, gave us a brief lull in this process, to be instantly followed by the seditious proposals of Lepidus, and soon afterwards by the tribunes recovering their license to excite the people just as they chose. And now bills were passed, not only for national objects but for individual cases, and laws were most numerous when the commonwealth was most corrupt.

The economist Friedrich Hayek, who was so smart about so many things, long argued that equality before the law – the idea that the law does not impose the burdens and benefits of citizenship arbitrarily and unequally – is fundamental to liberty. The lesson of this school of thought when we think about the long-term health of the republic concerns the nature of what exactly Tom Delay did. The increasing complexity of the campaign-finance laws is a way for politicians to simply smite their enemies and discourage competition from outside the professional political class. When the law goes, everything else that we value goes soon after. And thus the question to ask about Tom Delay is not “What did he do that was illegal?” The question is, rather, “What did he do that was wrong?”


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