649Corruption Outline PDF

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Full outline for Corruption Law course. Use to study for exam. Contains all notes from lecture and reading. Also useful for planning your essay approach. ...

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Corruption outline I.

Keating Five a. Exposition i. McCain’s view: (1) poor judgment; (2) gave off appearance of corruption ii. Obama’s view: (1) McCain is corrupt cronyist that makes bad decisions; (2) McCain allows associations to taint his view about the economy b. Commentary i. if McCain is clueless, is he still corrupt? ii. Different lenses to evaluate McCain: (1) Motive test (what’s going on in your head); (2) “But for” test (would you have still taken same action); (3) appearance of corruption (over and under inclusive bc some things that appear improper aren’t corruption and some things that don’t are corruption) iii. Does politician also have to maintain propriety?

II.

Machiavelli a. Civic humanism: republics/democracies are fragile (see Rome), rich are treated like gods; b. Solution: “churn;” have to make examples every once in awhile to keep fear in leaders and bring people back to original virtue c. It’s the duty of the individual to be devoted to virtue (common good, not selfinterest) and oppose corruption (luxury, commerce, self-interest)

III.

Cato’s Letters a. Perks of office: (1) salary; (2) power; (3) access; (4) ability to do public service b. George Washington an example of devotion to public good c. Does system corrupt thet people or do people corrupt the system? Need legal system in place to successfully govern “republic of devils” d. Virtue v. efficacy: which should we value more?

IV.

Misc. questions a. Why do we vote when votes don’t matter? i. We think they do matter ii. Kantian: we wouldn’t want everyone else to not vote, so we vote iii. Expression b. Why don’t we allow people to sell their votes? i. The nature of the vote itself: a vote is something expressive in nature, tied to you as an individual; so tied to you that immoral to sell that part of you; we think it’s dirty to sell parts of ourselves (i.e. prostitution, etc.). In other words, there’s intrinsic value to having a non-transferable right to vote ii. Would we have any type of civic discourse? Would we have any type of investment in the system? What type of investment would we have in the system? iii. Tyranny in the minority: the oligarchy

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iv. Tyranny of the majority: rich plutocrat with majority view can win office and oppress minority; OR only rich plutocrats can get office and they all have majority view that oppresses a minority v. Would it demoralize voters otherwise? vi. Would money then decide elections? Doesn’t it now? Well, yeah, but money would be even more directly tied to the vote V.

Ben Franklin a. Officeholders shouldn’t be paid; people should be motivated to serve for the public good; b. Criticism: if they’re unpaid, they get money elsewhere and increases chance of corruption; only plutocrats will serve

VI.

Madison a. Evils factions b. Way to control factions: (1) remove faction causes (either remove freedom of people to create factions or give people same opinions); OR (2) remove faction’s effects (by having bigger republics to dilute significance of corruption. Second is preferable to first on basis of CBA bc first destroys liberty

VII.

Pluralism a. View: there is no common good, only competing interests; this is counter to idea of common good b. Counter Founders: they all believed common good exists

VIII.

The Squeaky Wheel v. Corrupt Content a. Squeaky Wheel view: you look at the process; is there transparency, etc. If the process is tainted then there is corruption; anti-smoke-filled room view b. Corrupt Content view: it’s not just about having a squeaky clean process; there are certain types of things that constitute corruption; “corruption” isn’t defined as just there being a bad process or it’s corruption bc took place in the smoke-filled room

IX.

Earl Fitzwilliam/Duke of Malton a. English system in 18th century: land proprietors had significant influence over non-land owning electorate, a large portion of electorate: if tenants didn’t vote for right people, tenants would be evicted or threatened to be evicted and/or their rent would increase. This caused a system that the more land and properties that one owns and rents, the more political power they had. Became an arms race for key properties b. Commentary i. What’s problem with this system? ii. The landowners had greater control of the system, but was this bad, esp if these people have better idea of what’s going on in the political system? iii. What’s the line between acceptable and unacceptable ways to use power and money?

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1. Unacceptable: (1) contestant pays other to drop out so they don’t split the vote bc sense that we’re not letting things play out on merits, smacks of election-fixing, indicates immorality of contestant and we don’t want immoral people in office; (2) treating (treat a voter by offering beer, food, party w/intention that they vote for you as a result) X.

Calhoun on Compensation Bill a. Argument: C requires higher pay for Congress b. Supporting arguments i. Best candidates are bought off by executive branch ii. More money=more quality/wisdom/justice c. Reps shouldn’t be marionettes to the masses (masses said no on higher pay) i. Commentary 1. This is counter: (1) reps should straight vote their constituents’ views (“pure repping”); (2) trustee model (exercise best judgment on merits of the masses) 2. How do these views inform what is and what isn’t corrupt? a. Pure repping is more communication than corruption 3. How independent-minded do you want reps to be? a. If stick too much to what public wants faction problem b. Spirit of what the people want rather than mirror? c. What if you can’t persuade your voters? d. Deciding this question requires belief in a right or best choice, but pluralist says there is none

XI.

JS Mill a. Should be fee to run for office sufficient to separate contenders from pretenders b. Should be limits on the amount of money a candidate can spend out of pocket, but not limit the amount of money that supporters/friends spend (as a practical matter, he doesn’t have control over them!) c. Rich and non-rich people should govern together in office to work together for common good d. Commentary i. Merits of limiting amount of money candidate can spend ii. Does Mill have it backwards? Should it be that we limit donor money and not individual money? Aren’t donors more likely to influence the individual? Doesn’t limiting personal pocketbook but not donors open one up to corruption and influence? iii. Should we limit both donors and individual expenditures? 1. If you don’t limit, then harder for non-incumbants; incumbents have name recognition and those that can’t spend as much can’t overcome their lack of name-recognition iv. Is there a common good between the rich and the poor?

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1. Static Middle: don’t want winners and losers: or in other words, don’t want too big of winners or too big of losers; need to keep it somewhere in the middle for social peace XII.

Lobbying agreements a. Clippinger v. Hepbaugh (1843, PA Sup. Ct.) i. Facts: C gets life estate; wants to sell; K for contingent $100 to H if he successfully passes “private” legislation to let them sell; H gets the job done but C refuse to pay ii. PP: Lower Court: C loses, K is valid iii. Holding: C wins, K is invalid 1. Can’t allow this: this didn’t do damage, but private laws can have broader impact and be corruptible; won’t risk incentivizing these kinds of contingent contracts in the future. iv. Commentary: did court get it right? Is this criminal? 1. Why does the contingency make it illegal? 2. What’s the concern? a. Would lead to unequal access? b. Lobbying for a private bill has public implications? c. Sinister one-sided influences in the source of evidence for a view – fears “designing men” using this to misrepresent – thinks there’s a tight link between contingency fee and secrecy (but not clear what that is) d. Why don’t we just get rid of private acts altogether? e. Appearance of corruption. Not even just worried about secrecy or “badness” of contingency fee, but “widespread and growing suspicion of legislative integrity, which of itself is an evil of no little magnitude” f. Contingency Ks enforcement will contaminate legislature’s/government’s legitimacy in eyes of the public b. Tool Co. v. Norris (1864) i. Facts: N is a “miscellaneous sort of person” that goes around looking for jobs; went to DC during rebellion to look for money-making opportunities; N got job w/Tool Co. to secure a gov’t K between gov’t and Tool Co. for muskets; N meets w/some senators and asks them to introduce him to Secretary of War; Senators say no at first, but gets a letter from one of them; N meets Secretary of War and strikes a deal ii. PP: Co. asks for jury instruction that K is against public policy but this is denied iii. Holding: Co. wins, this K is void 1. This K is against public policy 2. Gov’t should only consider whether something is most efficient and economical way to meet public need: this type of agreement introduces personal influence which is improper and can lead to inefficient gov’t spending of money

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iv. Commentary 1. Can gov’t consider anything else besides what is cheapest/most economical? Can they consider whether company has hired minorities or if there’s strategic advantage for good political relations later? a. According to judge, no: buck stops with efficient+cheap 2. What is SCOTUS worried about? a. N has incentive to maximize gap between profit and price that gov’t actually pays b. Any agreement for compensation to get something from gov’t c. Influence one person can have on another: like Madison’s point, “Enlightened statesmen will not always be at the helm” 3. SCOTUS thus thinks that there’s no difference between Ks to lobby Congress or to lobby an agency to try to get a K; but is there a difference? a. Lobbying Congress is worse bc can have large effect on public b. Lobbying Congress not as bad bc there are more people to convince and more room for debate: there are also higher transaction costs for a company to try to influence Congress than an agency c. Trist v. Child (1874) i. Facts: Trist has claim against gov’t and makes K with Child, a lawyer, to lobby the gov’t; if Child is successful, he gets 25% of money; Child writes Trist and tells him about lobbying efforts and tells Trist to write all of his friends in congress; Child and son are successful but Trist refuses to pay ii. Holding: Trist wins, K is invalid 1. We don’t want people writing to Congress to influence Trist’s position: will end the republic 2. There’s a difference between professional services (drafting petition and setting forth claim, taking testimony, collecting facts, preparing arguments) and paying someone to influence the gov’t: first proper, but latter always improper iii. Commentary 1. Are we outraged by paid lobbyists? a. Are we concerned bc corporations pay for most lobbyists? What if other groups had lobbyists? b. Most talented lobbyists probably work for highest grossing corporations 2. The court is going after the outcome here, not the squeaky wheel problem d. Chesebrough (Ct. App. NY, 1893)

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i. Facts: Mr. Cheese has lobbying K w/R.R. company and gets 10k if procures Act for R.R.; Cheese gets Act for R.R.; Cheese wins jury verdict ii. PP: iii. Holding: Cheese wins 1. Jury found he wasn’t a lobbyist bc he didn’t ask or solicit any legislator to vote for the bill 2. Looking at the jury instructions, they said that if there was a private meeting between Cheese and legislators, the K is void 3. Jury said this type of K was ok by finding for Cheese: if they think it’s ok, then we should think it’s ok; let the people speak! So even if there was a private meeting between Cheese and legislators, we wink and nod, looking the other way 4. BUT, true that jury could have found that P just drew up the legislative bills, explained them to the legislature, and procured their introduction into the legislature iv. Commentary 1. Seems a turning of the tide in regards to legality of lobbying e. Hazelton v. Sheckells (1906) i. Facts: contingency K for legislation. Miller owns the property, and it’s worth 9k if the gov’t takes it to use for a hall of records; Hazelton believes he can more than that and Miller hires him to try to pull off that transaction ii. Holding: K not ok 1. Per Tool Co., striking this down as a prophylactic measure: nothing wrong with this specific K but opens door to other Ks that probably are iii. Commentary 1. Court describes as similar to Cheseborough, but there K upheld and here K not upheld 2. It’s entirely possible that Miller was simply wrong about how much his property was worth and that Hazelton knows its value is going to be higher. What’s wrong with that scenario? The contingency was on the purchase of the land, not the passage of the legislation, and he did fulfill that part of the deal. There’s nothing that indicates he has used any kind of special access to persuade Congress to buy the land. 3. There seems to be some concern that the gov’t has been duped into paying more than the land was worth. Hazelton argues that they’re two different transactions – his purchase of the land and then the sale to the gov’t – but the court refuses to see it that way. There seems to be little rationale for why they insist on seeing these as one big transaction, but it has a general anxiety about contracts to persuade the gov’t of anything. 4. The court is explicitly concerned about any K to get compensation from the gov’t

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5. How big or narrow should the prophylactic measure be? a. Here, the concern is very broad –potentially covers too many Ks and is overinclusive: all such Ks aren’t bad b. The court seems to be holding the person accountable who wants something from the gov’t, rather than holding the government accountable for needing to take an objective approach to proposals it receives. Someone needs to bring these types of proposals to the gov’t, and it has to have some responsibility for handling them ethically. c. It’s odd that they’re prohibiting the transaction between the private company and the middleman, rather than policing the interaction between the middleman and the gov’t. d. In favor of the rule: it’s bad policy to uphold Ks that tie the compensation to a particular outcome because it creates a perverse incentive for bribes or other types of undue influence. It’s not a practice that is going to encourage fair dealing – only paying people if they win their issue. e. Even if the prophylactic here seems to big, that’s maybe appropriate because it allows Congress to legislate and place more specific constraints on the practice, which also opens up accountability to the voters if they don’t like how Congress tries to fix the problem. f. Steele v. Drummond (1927) i. Facts: Lobbying case; Drummond spends 50k to uphold his side of the deal; Steele stops performing ii. Holding: K is ok 1. Not worried about shareholders: there’s only 1 here, Steele 2. Only in clear cases will Ks be held void iii. Commentary 1. Court has discarded the prophylactic reasoning: cares about the freedom of K (Lochnerism) 2. Case flips presumption in favor of upholding lobbying Ks XIII.

Pendleton Act (1883) a. Tried to end the spoils system in the civil service and make it competitive, meritbased. i. Have to take examinations to compete for the positions ii. Classification of the positions by grade iii. Can’t use civil positions for own political ends iv. Limits where fundraisers can be done b. Commentary i. Weakens political parties’ power/control, because now they can’t simply pick people to put as Postmaster, etc. Is this a good thing? 1. Professionalization of bureaucracy; we want people who are qualified to fulfill these important responsibilities.

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ii. Executive branch loses: can’t appoint people iii. Walls of agencies from politics iv. Results in fewer political appointees, undermining power of parties XIV.

XV.

Corrupt Practices Act (England, 1883) a. Criminalizes: (1) treating (providing meat, drink, etc.), not just by a candidate, but for anyone that does it; (2) payment by candidates for conveyance to of voters to the polls, even gratuitous conveyances; (3) budget caps on expenditures; (4) b. Commentary i. Paternalistic? Instructing voters to only choose candidates based on the merits of their views. Not allowing them to be swayed by parades and food and other fancy gifts. ii. What’s problem with conveyances? 1. Exploitation? 2. Disproportionate representation of some groups and not others? 3. Easier for some people to vote and not others? (i.e. a type of unequal/equal access problem) Anti-corruption tools a. Constitutional design (i.e. Madison) b. Publicity as a type of political check c. Courts refusing to enforce certain types of Ks

XVI.

Edward Bellamy, “Principles and Purposes of Nationalism” (1890) a. Bellamy a part of the nationalist movement b. His thing: the money power; there are great disparities of wealth, social equality is at an end, middle class is disappearing, this is resulting in “political corruption, social rottenness, moral degeneracy, industrial oppression, confusion and impending ruin;” the people in control of the industry are in control of politics and are using bribery to control; corporations own the legislatures ; we have to nationalize everything! Pendleton Act won’t work bc doesn’t address fundamental economic inequality and if we don’t address this then we have a commercial republic; the ignorant mass is controlled by the corporations c. Commentary: most people don’t agree w/Bellamy that we either have corporations and death of the republic or nationalization and a republic

XVII.

Corruption Continuum a. Outright bribery i. See “Tried to Dope Indiana House” (1905) 1. Rep. Baker claims to have been given a bribe by a former representative, O.A. Baker, to vote against a cigarette tax bill. 2. Commentary: this is the worst form of corruption– cash-forlegislation is the most blatant version, but the swapping of favors is similar in its effect. (The entire class says they think this is just one version of “buying legislation.”) b. Legislator-to-lobbyist pipeline

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c. Campaign contributions i. Campaign contributions – we have a cap on direct contributions, but with super PACs, there is almost unlimited spending, and you can’t imagine people would spend that kind of money without some expectation of getting something for it. ii. How do we know if the campaign contribution is because the donor already agrees with the candidate, or if the contribution is given to persuade the candidate? d. In-kind donations i. the vacations, golf outings in the McCain chapter – can come weeks and months before an “ask” but when it comes time, that’s all “lurking in the background.” You have to question who is a real friend and who is more of a business acquaintance. You don’t want people beholden to their “friends” because the generosity has been so one-sided. 1. The influence of in-kind donations can start with the lower-level staff, who then influence the lawmaker in the way they communicate policy ideas with him. It’s a small way of influencing – but it’s not necessarily outright bribery. a. Commentary: this seems a little ridiculous 2. SCOTUS might have a hard time policing in-kind donations because they also accept dinners, trips, etc. from people who might wield some influence. e. Treating-lite? i. Is it okay to do something nice for voters generally – pig roast, beer, etc. – as opposed to individual favors – cash, kitchen remodel, etc.? XVIII.

Publicity a. Brandeis, “What Publicity Can Do” i. His thing: Publicity counterbalances plutocrats; plutocrats make bad deals (for everyone else) to grow their wealth; we need to give info directly to investors, we need more than SEC filings; allowing people to know how much bankers are paid for transactions allows shareholders to know that the bankers have hidden int...