US: Corruption Unchained

The U.S. Department of Justice has announced that it will not seek a new trial of the former Governor of the state of Virginia, Robert McDonnell and his wife, Maureen McDonnell on charges of corruption.

A jury had found them both guilty in 2014 for receiving gifts of over $175,000 from a businessman. However, the U.S. Supreme Court overturned the convictions in a June 2016 ruling.

Anything goes in America, third-world style

Government prosecutors, who could have decided to try the case again, announced on September 7th:

“After carefully considering the Supreme Court’s recent decision and the principles of federal prosecution, we have made the decision not to pursue the case further.”

As a result, prosecuting corruption by U.S. public officials has just become far more difficult.

Lobbyists and politicians can feel more confident that their myriad exchanges and relationships are less likely to lead to corruption prosecutions.

The United States, once an admirable leader on combatting political corruption, has now fallen into line with the lax standards of business-political relationships that pervade many other countries.

While left-wing Democratic politicians, notably Senators Bernie Sanders and Elizabeth Warren, rail against corruption in U.S. politics, the mainstream Democratic Party officials at the helm of the Justice Department have accepted an increasingly narrow definition of political corruption.

Moving in the wrong direction on corruption

This is the core message from the Justice Department’s decision not to retry the McDonnells – a decision significantly endorsed by a major figure in the Democratic Party’s leadership (and close friend of the Clintons), current Virginia Governor Terry McAuliffe.

Perhaps the bigger message is that the mainstream U.S. politicians from both political parties are content to accept money in politics in all its forms.

The new era of greater money flows started with the 2010 Supreme Court ruling, decided by its then five conservative members, in the Citizens United case that watered-down existing regulations (while also opening the floodgates to corporate financing of elections).

The latest U.S. developments send a clear message: Actions by U.S. politicians that look wrong, smell wrong and raise profound ethical issues are deemed legal by the courts. Only truly stupid lobbyists and politicians have to worry.

The U.S. Supreme Court has determined that corruption in the public sector is a criminal act only when there is a specific quid pro quo.

To be clear, a case of criminal corruption can only be brought when a politician takes a direct action that leads to a meaningful financial benefit for an individual or organization that has provided the politician with valuable gifts.

Specific benefits, slightly shrouded promises

The Supreme Court concluded that the McDonnells did nothing criminally wrong when Virginia businessman Jonnie Williams, Sr., gave them a gold Rolex watch, a Ferrari, $50,000 in financial aid for their beach house and a significant portion of the costs of their daughter’s wedding.

Newspaper readers may be forgiven for believing this is the kind of political corruption found in Third World or former Soviet countries – but it is perfectly legal in the United States today.

Williams, who ran a dietary supplement company, needed public credibility to build his business and saw the McDonnell’s as key to his goal.

In one situation, Governor McDonnell spoke to Williams about the status of a promised loan, then a few minutes later McDonnell called senior officials to arrange a meeting for Williams. The U.S. Supreme Court decided that such activities were OK.

Supreme Court: Protecting the political class, not democracy

So the standard now is that there has to be a smoking gun that shows that gifts explicitly resulted in a real business gain for the giver. On that basis, most canny political leaders in most countries could easily avoid criminal prosecution for corruption.

After all, it is not rocket science for such leaders to ensure their own actual fingerprints are not on government contracts awarded to friendly businessmen. Rather, they will see to it that the specific signatures on deals are those of less important government officials.

Supreme Court ruling: Big payoff to both parties

Many U.S. politicians will be happy about the latest decisions. For example, recently a New York court found Sheldon Silver, the once powerful Speaker of the New York State legislature, guilty of corruption and he was sentenced to 14 years in prison.

And right now, the U.S. Justice Department is investigating alleged corruption involving U.S. Senator Robert Menendez (D-NJ).

The new decision may not only have set the stage to improve the chances for Silver to appeal his conviction, but also to make Menendez more confident that, even if he faces trial, he may never face prison.

The U.S. Supreme Court made a unanimous decision in support of the McDonnells. Chief Justice John Roberts announced the ruling and stressed that critical in determining corruption is the definition of what is an illegal “official act.”

The Court ruled that there has to be a very specific benefit and that setting up a meeting, calling another public official, or hosting an event does not, standing alone, qualify as an “official act.”

Justice Roberts stressed that a less narrow interpretation would limit the proper services performed by public officials. Roberts noted:

“Conscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. Representative government assumes that public officials will hear from their constituents and act appropriately on their concerns.”

The U.S. Justice Department’s decision not to retry the McDonnells will be an encouragement to lobbyists of all kinds in their relationships with public officials in the United States.

Lobbyists relish the fact that, unless they are so careless and benighted to include a very specific quid pro quo in their wheelings and dealings, they will probably not have to worry about any charges brought against them by U.S. prosecutors.

A stinking city on the Hill…

America needs a new law that ensures that all kinds of “influence-peddling” that take place in secrecy are illegal.

Indeed, it needs public financing of elections and far stricter ethics/conflict of interest laws at the federal and state levels for public officials that relate to conflicts of interest. The chances that such reforms will come in the near future are remote.