Politicians’ Extortion Racket

Our conference call to discuss Indispensable Enemies will be on Sunday, February 9th at 7 pm EST.  I will be posting the call in number in the next couple of days.

Lou Hinman, a member of the NYC Independence Party Citywide Executive Committee has shared an excellent New York Times Article with us and has some helpful tips for reading Indispensable Enemies. Here is what he suggests:

The op-ed Politicians’ Extortion Racket by Peter Schweizer that appeared in the New York Times on 10/21/2013 confirms and updates Walter Karp’s observations about “Black Horse Cavalry” in the New York State legislature in the late 1800’s (pp. 159-60).  I have included the article below.
I was also thinking about  people perhaps being intimidated or overwhelmed by Indispensable Enemies.  I think it’s a hard book to read because:
  • It’s repetitious and more polemical than it needs to be, both of which can be tiring to the reader.
  • It tries to be a “theory of everything.”  Although he is surely right to insist that the collusion of the DP and RP should be the point of address in political reform, in dismissing “economic” explanations as “ideological,” he tries to prove too much.
I would recommend that people focus on Part I and Part II (and possibly the last chapter, “The Restoration of Self Government”).
Thanks Lou, great article and good advice.
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The New York Times

October 21, 2013

Politicians’ Extortion Racket

By PETER SCHWEIZER

TALLAHASSEE, Fla. — WE have long assumed that the infestation of special interest money in Washington is at the root of so much that ails our politics. But what if we’ve had it wrong? What if instead of being bribed by wealthy interests, politicians are engaged in a form of legal extortion designed to extract campaign contributions?

Consider this: of the thousands of bills introduced in Congress each year, only roughly 5 percent become law. Why do legislators bother proposing so many bills? What if many of those bills are written not to be passed but to pressure people into forking over cash?

This is exactly what is happening. Politicians have developed a dizzying array of legislative tactics to bring in money.

Take the maneuver known inside the Beltway as the “tollbooth.” Here the speaker of the House or a powerful committee chairperson will create a procedural obstruction or postponement on the eve of an important vote. Campaign contributions are then implicitly solicited. If the tribute offered by those in favor of the bill’s passage is too small (or if the money from opponents is sufficiently high), the bill is delayed and does not proceed down the legislative highway.

House Speaker John A. Boehner appears to be a master of the tollbooth. In 2011, he collected a total of over $200,000 in donations from executives and companies in the days before holding votes on just three bills. He delayed scheduling a vote for months on the widely supported Wireless Tax Fairness Act, and after he finally announced a vote, 37 checks from wireless-industry executives totaling nearly $40,000 rolled in. He also delayed votes on the Access to Capital for Job Creators Act and the Small Company Capital Formation Act, scoring $91,000 from investment banks and private equity firms, $32,450 from bank holding companies and $46,500 from self-described investors — all in the 48 hours between scheduling the vote and the vote’s actually being held on the House floor.

Another tactic that politicians use is something beltway insiders call “milker bills.” These are bills designed to “milk” donations from threatened individuals or businesses. The real trick is to pit two industries against each other and pump both for donations, thereby creating a “double milker” bill.

President Obama and Vice President Joseph R. Biden Jr. seemed to score big in 2011 using the milker tactic in connection with two bills: the Stop Online Piracy Act and the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act. By pitting their supporters in Silicon Valley who opposed the bills against their allies in Hollywood who supported the measures, Mr. Obama and Mr. Biden were able to create a sort of fund-raising arms race.

In the first half of 2011, Silicon Valley had chipped in only $1.7 million to Mr. Obama’s political campaign. The president announced that he would “probably” sign antipiracy legislation — a stance that pleased Hollywood and incensed Silicon Valley. The tech industry then poured millions into Mr. Obama’s coffers in the second half of 2011. By January of 2012, Hollywood had donated $4.1 million to Mr. Obama.

Then, suddenly, on Jan. 14, 2012, the White House announced that it had problems with the antipiracy bills and neither passed. “He didn’t just throw us under the bus,” one film executive and longtime supporter of Mr. Obama anonymously told The Financial Times, “he ran us down, reversed the bus and ran over us again.”

To be sure, not all legislative maneuvers are extortive; sincere and conscientious political deeds occur. Still, the idea that Washington gridlock is an outgrowth of rank partisanship and ideological entrenchment misses a more compelling explanation of our political stasis: gridlock, legislative threats and fear help prime the donation pump.

The reason these fund-raising extortion tactics succeed is that politicians deploy them while bills are making their way through Congress, when lawmakers possess maximum leverage. That’s why at least 27 state legislatures have put restrictions on allowing state politicians to receive contributions while their legislatures are in session.

Why not do the same in Washington? It would reduce politicians’ penchant for cashing in on manufactured crises. Perhaps it would even compel Congress to be more efficient while in session.

We have focused for too long on protecting politicians from special interests. It’s time we stop pitying the poor politicians and start being wary of them — for they play the shakedown game as well as anyone.

Peter Schweizer, a fellow at the Hoover Institution, is the author of “Extortion: How Politicians Extract Your Money, Buy Votes and Line Their Own Pockets.”

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