In recent years, money from special interest groups has flooded Washington. Many say it’s the root of our political dysfunction. But maybe conventional wisdom is wrong. Perhaps the problem lies not with the buyers of influence, but with the sellers. Author Peter Schweizer charges lawmakers’ hunt for cash influences everything from how they write laws to when they vote on a bill. He says Washington politicians use leadership PACs to bankroll lavish lifestyles, and rely on a secret loophole to make loans to themselves. Diane and Schweizer discuss new revelations about the old link between money and politics.

Guests

  • Peter Schweizer president, Government Accountability Institute and author of "Throw Them All Out: How Politicians and Their Friends Get Rich off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison."

Read An Excerpt

From “Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets” by Peter Schweizer. Copyright © 2013 by Peter Schweizer. Reprinted by permission of Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Transcript

  • 11:06:54

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The role of special interest money in American politics has been widely publicized. Less well known is the role politicians themselves play in soliciting donations. In a new book, author Peter Schweizer says Washington's political class profits while the peoples' work is left undone. The book is titled, "Extortion: How Politicians Extract Your Money By Votes and Line Their Own Pockets.” Peter Schweizer joins me in this studio. You are welcome, as always, to be part of the program. 800-433-8850. Send your email to drshow@wamu.org. Follow us on Facebook or send us a tweet. Peter, it's good to meet you.

  • 11:07:49

    MR. PETER SCHWEIZERIt's great to be here. Thanks for having me, Diane.

  • 11:07:51

    REHMAnd it's my pleasure. Even before we begin, we've got a posting on Facebook from Mike, saying, "calling it bribery or calling it extortion is nuance. The fact is, money is undercutting the foundation of our democracy, and the practice by whatever name must be stopped." I would assume you agree with that.

  • 11:08:25

    SCHWEIZERI think there's a lot of truth in that, although I do think there is are important differences between, sort of, the bribery model and the extortion model. Both go on in Washington, but I like to think of it as sort of a marketplace. And their selling influence. That's really what the currency is here. And I think that a lot of the attention has been focused on the sort of buyers of influence, you know? Companies, outside groups, labor, you name it. Buying influence.

  • 11:08:53

    SCHWEIZERBut I think there's been precious little attention paid to the sellers of influence. The politicians. And I think part of it just goes to popular culture. You know, we think of politics sort of like, "Mr. Smith Goes to Washington."

  • 11:09:11

    REHMWe wish.

  • 11:09:11

    SCHWEIZERYes. You know, Jimmy Stewart, and he's got -- there are these outside forces that are trying to corrupt him and corrode him. And if we can just sort of keep him protected from that, everything will be good. There certainly are people like that in D.C., but I do think that a bigger problem we have is that politicians, they actually recognize and see the power and the leverage that they have. And so, it's less of a question of protecting them from outside interests as it is protecting certain individuals or interests from politicians.

  • 11:09:44

    REHMBut, you know the word extortion sounds very crime oriented.

  • 11:09:51

    SCHWEIZERRight.

  • 11:09:51

    REHMSo, you're not talking about crime.

  • 11:09:57

    SCHWEIZERRight. I'm not talking about illegal extortion. This is not something that involves violence, but it does include what I would contend is very real pressure. There are no question that there are industries out there, there's companies out there that want certain benefits and set asides from the government, so they're happily engaged in, you know, lobbying and buying influence in D.C. But there are also sectors of the economy, I would say high tech industry being one of them, who, by and large, just want to be left alone.

  • 11:10:31

    MR. STEPHAN RICHTERThey would prefer to be left alone. But, as a former executive of Microsoft told me, you know, you may not be interested in Washington, D.C., but Washington, D.C. is interested in you. And when certain industries or companies become financially successful, there is no question in my mind, and I think within, people in those companies, that there are politicians that try to come up with ways that effectively force those companies to be involved in the political process.

  • 11:10:57

    REHMInteresting. You talk about something called the toll booth. What's that?

  • 11:11:04

    SCHWEIZERYeah, the toll booth. This is really a term that I got from former executives who sort of explained how the money game goes. And the toll booth, essentially, is, if you look at the legislative process as sort of a highway, you know, it has the beginning. A bill is introduced, and then it goes to committee. And there's a committee vote, and then there's the committee vote, it goes, say, to the full House floor. Think of that as a highway. Well, the toll booth is what we have on a highway. There are certain times when companies or industries feel like they have to pay in the form of campaign donations.

  • 11:11:37

    REHMTo get through.

  • 11:11:37

    SCHWEIZERFor it to get through. And a lot of this rests on powerful chairmen and the Speaker of the House and the Majority Leader. Both political parties do it. It's not exclusive to one or the other. And it's a very lucrative way for those politicians to essentially generate campaign contributions for themselves or their political committees, and lobbying arrangements for family members or friends that happen to be lobbying in those areas.

  • 11:12:02

    REHMI think we've all heard, at one time or another, about lobbying groups who are actually participating in bill writing.

  • 11:12:14

    RICHTERYeah.

  • 11:12:15

    REHMNow, is that part of the process, too?

  • 11:12:18

    SCHWEIZERYes. That's part of the process. Think about it from the standpoint of a lobbyist. You know, if you are somebody who lobbies, let's say, for the energy industry. Best case scenario is that laws and bills get introduced that scare the daylights out of the energy industry. That's what's best for you as a lobbyist, because it's gonna generate more demand for your services. So, you have instances where, what are called sometimes milker bills. Milker bills are designed to scare industries, primarily for the purpose of getting them to hire lobbyists or to make campaign contributions.

  • 11:12:55

    SCHWEIZERThere's less intention that the bill actually pass and becomes law. It's more a vehicle to generate concern or fear, which, of course, leads to donations.

  • 11:13:05

    REHMCan you give me a specific example?

  • 11:13:09

    SCHWEIZERThere are a number of examples in sort of how this methodology works. There was a case in 2009. The President of Shell Oil, who's now retired, was telling me about this, where there was consideration of a Congressional committee about high gasoline prices. And there was a Congressional hearing that was very spirited, individuals from both political parties were attacking Shell Oil and other companies for high gas prices. Set aside the policy question of whether they're responsible or not, but this is what he told me happened next.

  • 11:13:40

    SCHWEIZERAfter being lambasted and being threatened that legislation might be forthcoming, he was literally approached by those same politicians afterwards, and told, you know, I would understand your issues better if you held a fundraiser for me. This is sort of common practice. I've heard this from people from Goldman Sachs, from Microsoft, from different sectors of the economy.

  • 11:14:04

    REHMNow, you know what Speaker John Boehner...

  • 11:14:07

    SCHWEIZERYes.

  • 11:14:08

    REHMHas said about your book.

  • 11:14:10

    SCHWEIZERYeah.

  • 11:14:10

    REHMHe said that you are clueless about the legislative process. He said you should probably read "Congress For Dummies" before you start making bogus and salacious claims to sell books. He went on to say that the idea that floor votes, specifically floor votes, are scheduled based on campaign donations, is absurd.

  • 11:14:45

    RICHTERYeah, and notice what he doesn't do in his response, is deal with any of the facts in the book. And I think the facts are very clear. Here's the question, Diane. You have a series of very curious timing events, where in one case that I cited, showed, for example, the Wireless and Fairness Act, which dealt with, you know, whether there are going to be taxes on the wireless industry. The day before that floor vote was scheduled by the Republican leadership, there were 35 checks sent from AT&T executives in donations of more than 50,000 dollars.

  • 11:15:21

    SCHWEIZERThere are numerous other examples. The question that we have to ask ourselves is, number one, is this just spontaneous, that you have these executives who are from different parts of the country, with the same company, deciding on the same day to send a check to Speaker Boehner's campaign committee? That's the first scenario. It's spontaneous. The second one is that they just decided, out of the goodness of their heart, to make donations.

  • 11:15:45

    REHMAnd what's the third?

  • 11:15:46

    RICHTERAnd the third possibility is that they were essentially told, indirectly, it's never direct, but told, you know, look, it's a very busy legislative calendar. We're not sure if we're going to get to this. And AT&T got the message and said, we need to make sure that this is something that they want to do. And that's what corporate executives tell me happen all the time.

  • 11:16:07

    REHMDid you try to talk with Speaker Boehner?

  • 11:16:10

    SCHWEIZERYes, absolutely. And we were told that the fundraising and the legislative activities are totally separate, which is true in a theoretical, structural sense. I talk about that in the book. But if you talk to, you know, members of Congress, or people who follow Congress, they will tell you that, you know, the two people that coordinate heavily in any Congressional office are the Chief of Staff and the Chief Fundraiser. Because there is a direct correlation between the committees you're on, the legislation you're pushing or you're not pushing, and your ability to raise money.

  • 11:16:43

    REHMPeter Schweizer. His new book is titled, "Extortion: How Politicians Extract Your Money By Votes and Line Their Own Pockets." What I'd like to understand is are there any good guys out there?

  • 11:17:02

    SCHWEIZERThere are. There are. And, you know, this something that I tell people all the time. I'm actually an optimist, which sounds very strange.

  • 11:17:09

    REHMI'm glad you are.

  • 11:17:12

    SCHWEIZERSomebody has to be, right? No, it's -- what I think the problem is is the structure of the system in Washington, D.C., that it has become based on the ability to raise money. That's the committee that you get assigned to. They have classifications and they have party dues, and you're expected to raise a certain amount of money. And if you don't, you're not gonna be on an A list committee. You have a situation where members of Congress, I think, have learned, and realized, that their best prospect for raising money is when the clock is ticking.

  • 11:17:46

    SCHWEIZERSo, you have scenarios where there's an important debate that's taking place on the floor. There's going to be a vote, either in the committee or on the full House floor. And they will leave the Capitol building, because they're required to, get on the phone, and make phone calls, and say, look, we've got this vote coming up. I really need your support. You know, I want this to be a priority, but it may not be a priority. That's kind of how this works, and so I think part of the problem we have with gridlock in Washington, Diane, is not so much the partisan divide.

  • 11:18:16

    SCHWEIZERAlthough, there is that. I think it's part of a business model. I mean, as the former President of Shell Oil told me, in D.C., the only way you make money is by not solving problems.

  • 11:18:27

    REHMPeter Schweizer, and the book is titled, "Extortion." Short break here. And when we come back, we will talk more, take your calls, your email. I look forward to speaking with you.

  • 11:20:01

    REHMPeter Schweizer has a new book. It's titled "Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets." And just before the break we were talking about gridlock and you say that at times there is a reward for not doing something. What do you mean?

  • 11:20:29

    SCHWEIZERWell, think about it this way. If there's an issue related to say the tax code, there's the research and development tax credit which, you know, high tech companies and other companies rely upon to do extensive technology research. That tax credit has been on the books since 1981 but it's not permanently on the books. It gets renewed every one or two years. And the reason they don't make it permanent is precisely because if they made it permanent they would not be able to go back to those industries for campaign contributions, to hire lobbyists, etcetera.

  • 11:21:03

    SCHWEIZERSo a better way to do it from their standpoint is to just extend it every year or every couple of years. It's chaotic for everyone else. It creates indecisiveness and indecision because companies don't know whether they're going to have this benefit from doing this research. But from the standpoint of what I call the political class in D.C., it's the perfect way to do business because it's like an annuity. You just go back to it for income again and again and again. And that's unfortunately, I think, where a lot of the incentives are in Washington, D.C.

  • 11:21:33

    REHMWhat's your own background and why did you come to this conclusion?

  • 11:21:40

    SCHWEIZERWell, that's a great question. You know, I come from a background where I've written books in the past. I sort of consider myself a Regan conservative and -- but I came to the conclusion probably about seven or eight years ago that the challenges we face as a country are not going to ultimately be solved in D.C. by a certain set of ideological beliefs because the system itself is so corrupted. And I think it's corrupted in that it's become an industry.

  • 11:22:12

    SCHWEIZERThe notion that we have that people, whether they are politically from the left or from the right, come to D.C. to change policy. Yes, there are those people. They are idealists and I think they're wonderful. But I think the town is primarily dominated by people who see it as a business. So there's an industrial logic that gets followed in making bills and in making regulations that has very little to do with the actual policy itself and has a lot more to do with making money and creating revenue for what I call the permanent political class.

  • 11:22:41

    REHMCourse it's not just members of congress. You talk about President Obama using what you call the double milker. Tell us about that.

  • 11:22:53

    SCHWEIZERYeah, the double milker bill, this was a bill in 2011. President Obama certainly engaged in the double milker, as did people from both political parties. And a double milker bill is basically a bill that's designed to set two powerful industries against one another. Because what you want to do is create basically an arms race where they're going to both make maximum donations to you and they're going to hire your friends and family members as lobbyists.

  • 11:23:20

    SCHWEIZERAnd so what you do is you essentially introduce a bill or somebody introduces a bill. In the case of 2011, the example I use is to stop online piracy act, which sort of the shorthand was that this bill was going to -- it was very much favored by Hollywood and by the recording industry. It was basically going to tell Google and other online companies, you have a responsibility to shut down websites that are selling or giving away illegally pirated movies and, you know, songs and whatnot. And if you don't shut them out of the, you know, Google search, you could be held liable for that.

  • 11:23:56

    SCHWEIZERWell, of course, the entertainment business loved this idea because they're losing a lot of money from this intellectual theft. The online high-tech industry hated this idea because now they're going to have to be policing the internet. So what happened was, Diane, the bill was introduced. President Obama and Republicans and Democrats, a lot of them said, you know, we're going to think about this for a little bit. And this process literally went on for months.

  • 11:24:22

    SCHWEIZERWell, when there's a bill like that that one side has a lot to gain and another one has a lot to lose, your best bet as a politician is not to commit too early. It's to essentially set off this arms race and that's exactly what happened. President Obama pulled it off masterfully. So did members of congress from both political parties. And at the end of the day, the eleventh hour and 45th minute, the president finally did declare that he would not support the bill. But at that point, essentially the Hollywood industrial donors had been tapped out and had no money left to give. And there was a lot of resentment among the so-called suits in Hollywood over this double milker bill.

  • 11:25:01

    REHMHow much time do you think members of congress spend raising money?

  • 11:25:07

    SCHWEIZERThat's a great question, Diane. Most of the research that I've seen indicates that it's probably about 70 percent of their time. Yeah, 70 percent of their time.

  • 11:25:17

    REHMMy jaw has just dropped.

  • 11:25:20

    SCHWEIZERYeah.

  • 11:25:21

    REHMIs it really that much?

  • 11:25:23

    SCHWEIZERThat's what it is based on what members of congress say that they do. And when you look at the demands of fundraising, remember it's not just the, you know, friends of John Smith campaign committee they're raising money for. Many of them now have leadership pacts, they have joint fundraising committees and they have this thing called party dues in the House where you are required, depending on the committee you are on, to raise -- it could be half a million dollars an election cycle that you don't see one penny of. It goes to the party campaign committee. You're required to raise that as well. So your commitments go well beyond just your regular campaign committee.

  • 11:26:01

    REHMWhen did that rule go into effect?

  • 11:26:04

    SCHWEIZERThat really started in the 1990s. Both parties do it and it has become a way for the political parties to essentially extort members. And I've talked with members since the book has come out and before. And in the back of the book I actually reprint the party dues list, which are sort of a secret in D.C., which says this is -- if you want to sit on this committee here's how much money you need to raise.

  • 11:26:28

    REHMAnd you say something to the effect that the recent government shutdown, though perceived by people like me as a political crisis, was actually seen by others as opportunity. How so?

  • 11:26:49

    SCHWEIZERYes. I mean, this is again where the incentives are totally distorted. I think if you look at a lot of the rancor in D.C., yes, there certainly are political differences. But I would content that what we see in Washington, D.C., it's a little bit like professional wrestling. I imagine you probably don't watch professional wrestling, Diane. I don't either but, you know, when you -- if you first see it and you have no exposure to it, you see two guys, you know, hitting each other with chairs and stomping on each other and you think, these guys really hate each other. But then when you start to become familiar with it you realize it's really a show and they're in business together.

  • 11:27:25

    SCHWEIZERI'm not contending that everything in D.C. is a show but if you look at things like a government shutdown, it creates opportunities for both parties to raise a lot of money from their base. It creates a lot of panic and chaos among industries, among organized labor and really compels them to, you know, provide more donations and hire more lobbyists, etcetera.

  • 11:27:46

    REHMSo you also talk about how politicians extort money from each other. How do they do that?

  • 11:27:55

    SCHWEIZERYes. There is extortion that takes place primarily through this party dues system. And so how it basically works is this. You know, the Speaker of the House -- again, both parties do this -- the Speaker of the House will announce a list secretly which essentially says, if you want to sit on the House Appropriations Committee or Ways and Means, both very powerful committees, you need to raise half a million dollars.

  • 11:28:21

    REHMIs this on paper?

  • 11:28:22

    SCHWEIZERIt is on paper. If you look in the appendix of the book, I actually reprinted from both political parties. The Republicans and Democrats do it a little bit differently. The Republicans have it on their wall at the Republican Congressional Committee. They have a listing of the name. It'll tell you how much money they've raised, how much they're supposed to raise, whether they're behind. The Democrats have a paper list that they circulate. And it is a price list. And if you want to be on the Appropriations Committee, you need to raise half a million dollars election cycle. If you don't, you're probably going to be removed from that committee and moved to a so-called C committee.

  • 11:28:57

    REHMAnd how do politicians line their own pockets?

  • 11:29:01

    SCHWEIZERWell, this again comes from how fundraising is no longer just about the, you know, friends of John Smith campaign committee. They all have a leadership pact. And here's the beautiful thing about a leadership pact, Diane. It's like a second pocket where you can take donations. You can -- the donation cap is twice as high as it is on regular committees so it's not just $2500. It's $5,000. But here's the beautiful part. While a regular campaign committee has very real specific restrictions that the FEC will enforce on what that money is spent on, leadership pacts have no restrictions from the FEC.

  • 11:29:37

    REHMNone.

  • 11:29:37

    SCHWEIZERNone. So you can take your FEC -- I'm sorry, you can take your leadership pact and you can take the family for a trip to Scotland and have your leadership pact pay for it, and that's completely legitimate. You can go to the best golf courses in the country and have the leadership pact pay for it. You can go out to, you know, wonderful steakhouses and...

  • 11:29:58

    REHMAnd name members of congress who've done exactly that.

  • 11:30:02

    SCHWEIZERWell, there's several of them mentioned in the book. Senator Saxby Chambliss, Republican from Georgia, a Senator, loves to play golf. And so in the last election cycle he dropped more than $100,000 from his leadership pact money to go to golf. The irony here is that leadership pacts are designed to help members of your party get elected.

  • 11:30:23

    REHMBut I would think that something like that is pretty secret.

  • 11:30:29

    SCHWEIZERIt's secret except they're required to disclose them on their FEC filings. So if you go through the filings you will find numerous examples of this. You know, I gave the example of Saxby Chambliss. There's, you know, Congressman Meeks from New York or you can look at others who love to go to sporting events. So they will use leadership pact money to get box seats at Yankee games or to go to a bowl championship series college football games. These tickets can be thousands of dollars apiece. And they will use leadership pact money to do it. So it's a lifestyle subsidy.

  • 11:31:04

    REHMAnd, yeah, that they pay no income tax on that...

  • 11:31:08

    SCHWEIZERThat's right.

  • 11:31:09

    REHM...money that they would draw from those pacts.

  • 11:31:12

    SCHWEIZERThat's exactly right. And here's the other beautiful thing about a leadership pact, Diane, is once you retire from office, you can actually cash that money in. You can't do that with a regular campaign committee. But with a leadership pact, you have to pay taxes on it but if you retired with a million dollars in your leadership pact, you could literally just take it and put it in your bank account.

  • 11:31:31

    REHMAnd some have.

  • 11:31:33

    SCHWEIZERThat certainly happens. The better strategy probably is to just sort of keep the leadership pact and have it continue to subsidize your lifestyle because you don't have to pay taxes on it. So it's sort of a tax-free subsidy. It is an area where I think we have slush funds that have been created. And that needs to be changed. And one of the reforms I propose in the book is applying the same restrictions on regular campaign funds to leadership pacts. So this kind of subsidy of lifestyle isn't taking place.

  • 11:32:04

    REHMBut the congress itself would have to create and pass those rules.

  • 11:32:10

    SCHWEIZERYou're exactly right, Diane. And that's the problem.

  • 11:32:11

    REHMAnd they're not likely to do that.

  • 11:32:14

    SCHWEIZERNo. There's a bill that's been introduced in congress I think by three freshmen that is designed to do just this. They have three cosponsors. They have no more. And they are all very junior level congressmen and I doubt they're going to get support from leadership.

  • 11:32:28

    REHMPeter Schweizer. His new book is titled "Extortion: How Politicians Extract Your Money, Buy Votes and Line Their Own Pockets." And you're listening to "The Diane Rehm Show." We're going to open the phones now, 800-433-8850. First to Rockingham, N.C. Hi there, Sandy.

  • 11:32:57

    SANDYYes. Thank you for taking my call. I'm just from a rural area of Rockingham County, N.C. but it seems to me that the -- in congress they hide behind bills that are thousands of pages long. Nobody knows what's in them. It seems to me a lot of problems could be solved if each legislative act was self contained, no more than a handful of pages if warranted, or certainly not more than 20 pages. It just -- you hide so much. We're falling off a financial cliff and then at the eleventh hour, Hollywood gets a lot of benefits. After listening to your talk this morning I presume that's because of the hits they took previously.

  • 11:33:41

    REHMAll right. That's a very interesting...

  • 11:33:42

    SANDYYou know, I'd like a comment from Mr. Schweizer.

  • 11:33:45

    REHMSure. Go ahead.

  • 11:33:47

    SCHWEIZERNo, Sandy, I think that's a great point. And there's also an extortion component to this that I highlight in the book. You're exactly right. Bills have gotten large, indecipherable, difficult for even experts to understand. And that's an opportunity to make money. That's how sick things have become in D.C. So, for example, take the Dodd-Frank Financial Reform bill which is more than 2,000 pages long. Even people like Warren Buffett say, I can't understand this. It makes no sense.

  • 11:34:13

    SCHWEIZERI would contend, Diane, that part of the reason it doesn't make sense is because that's a money-making opportunity. The chief authors of that bill who worked for Senator Dodd and Congressman Frank, after the bill passed, left and they joined an industry where they are now being paid large fees to interpret the very bill that they had written that nobody can understand. It's basically, Diane, like writing a bill in an ancient language like Sanskrit and putting it out there and saying, I will translate it for you but you need to pay me money.

  • 11:34:44

    REHMSo she really has a good point that deliberate complication leads to total lack of understanding.

  • 11:34:56

    SCHWEIZERYes, exactly. And you have to pay a certain select group of people who wrote that bill in order to understand what's in it.

  • 11:35:02

    REHMAll right. Let's go to Phoenix, Ariz. Hi there, Daniel. Let's see, maybe he's not there. Let's go to Rome, Texas and to Gerald.

  • 11:35:18

    GERALDYes. Hello, Diane.

  • 11:35:19

    REHMHi there.

  • 11:35:21

    GERALDI have -- I've been saying for a long time that the government has changed some of the people, for the people, by the people for of big business, by big business and for big business. I really do believe that, for example, the -- when they deregulated gasoline and electricity, it was because of this very thing. Lobbyists were able to get congress and senators to pay so that these deregulations would go into effect so that these people can make more money and the American people would have less money for themselves.

  • 11:35:56

    REHMAll right, sir. Thanks for your call. Go ahead.

  • 11:35:59

    SCHWEIZERNo. I think the caller makes a good point. I think one of the things that emerges from this sort of political economy of politics is that, you know, the traditional notion is that big business and big government have this very adversarial relationship. I think that's really not true. I think it's more collaborative. And you find that in the form of the revolving door. You find that in the form of large companies, for example we mentioned the Dodd-Frank Financial Reform Bill.

  • 11:36:26

    SCHWEIZERA lot of the largest actors on Wall Street, you know, Citigroup, Goldman Sachs, they actually didn't mind the bill. It complicated things for them a little bit but it creates these regulatory requirements that are a lot more difficult for smaller competitors to rely on. So it's a way of sort of driving people out of the market. So I think the caller makes a good point but I think we need to recognize that, you know, large government and large corporations have a much more collaborative, I would argue, than adversarial relationship.

  • 11:36:57

    REHMPeter Schweizer and his book is titled "Extortion: How Politicians Extract Your Money, Buy Votes and Line Their Own Pockets." 800-433-8850, call us, email us, follow us on Facebook or Twitter.

  • 11:40:01

    REHMAnd welcome back. If you've just joined us, Peter Schweizer is with me. He is currently with the Hoover Institution at Stanford University. In 2008 and '09 he served as a consultant to the White House office of presidential speech writing. He's a former consultant to NBC News. He's president of the Government Accountability Institute there at the Hoover Institute. Here's an email from Andrew in Michigan, "What's the legal line between corruption such as former Rep. Bill Jefferson was convicted for?" And by the way he was the man who put all those dollars into his freezer.

  • 11:40:57

    SCHWEIZERRight.

  • 11:40:58

    REHM"And the current special interest monetization of votes and favors? Why does this legal line exist? Why are these practices allowed?

  • 11:41:11

    SCHWEIZERIt's a great question, Andrew. I think part of the answer lies in who writes the rules. And member of Congress and their staffs and some people in the executive branch determine what these regulations are and how they will apply. So, you know, you are quite right that these lines are artificial. I mean, I'll give you a very stark one in my mind. There is a law in the books, it's been there for 30 something years, called the Foreign Corrupt Practices Act. And it says that if you or a company, and you provide anything of value to a foreign government official in exchange for getting a contract, you are subject to prosecution under the Foreign Corrupt Practices Act.

  • 11:41:49

    SCHWEIZERRight now, for example, JP Morgan is subject to an investigation because they were hiring Chinese students as interns who happened to be the children of Chinese government officials. And that is deemed to be criminal. Here's the question though, I mean, in Washington, D.C. here all the time lobbyists are hired that are family members of sitting members of Congress and senators. It certainly seems to me that if you hire a government official in China as an intern, that that is somehow subject to criminal investigation, why would it not be in Washington, D.C.? And that is because the rules are written by members of Congress in such a way that benefit themselves. And that I think is the core of the problem.

  • 11:42:32

    REHMAll right. To Daniel in Phoenix, Ariz., now you're on the air.

  • 11:42:38

    DANIELHi, thank you for taking my call.

  • 11:42:39

    REHMSure.

  • 11:42:41

    DANIELI have a question for your guest. You know, I hear the process that Mr. Schweizer describes about how Washington works, and I have, you know, such a kind of deflated feeling about that when I think about that. And yet I'm also part of a healthcare profession that is really influenced by policy in Washington. And I hear all the time from our professional organization about how important money and contributions are to further our professional interests. We need to be active in that and fundraising and such. And I think that that's also true.

  • 11:43:09

    DANIELAnd I get kind of stuck because I don't want to take part of this corrupt system, but I also really believe in some of the things that are being promoted there through my professional association. And I -- you know, and as somebody who's not an insider in any capacity, I find myself sort of not sure what to do. And I'd just like to get his perspective about that.

  • 11:43:33

    SCHWEIZERWell, that's a great question, Daniel. I'm certainly not a health policy expert, so I wouldn't want to comment specifically on what you should do. But I think you sort of personify the dilemma a lot of people have, you know, to the extent that Washington, D.C. can do something for an industry, they can also do something to an industry. And so it creates this sort of love hate relationship and it creates this sort of dilemma as to whether you are in a sense trying to buy influence or whether you are being shaken down.

  • 11:44:04

    SCHWEIZERMy contention is that we need to focus not just on sort of regulating the buyers of influence, which has really been the focus of campaign finance reform for the last 30 years. And I agree with a lot that's on the books. I think we need to focus on regulating the sellers of influence (unintelligible)

  • 11:44:21

    REHMHow could you do that?

  • 11:44:22

    SCHWEIZERWell, one of the things that I propose, and I think you would probably admit, Diane, this would probably change D.C. maybe in unexpected ways, I suggest we do in D.C. what is done in 27 states; Florida, Texas, Washington state and others. In those states when the state legislatures are in session, it is against the law for politicians to solicit or receive campaign contributions, period. And you talk to people who are now in Congress, who are in state legislatures, and they will tell you it was a different sort of dynamic.

  • 11:44:55

    SCHWEIZERYou didn't have this sort of urgency that in a sense pressed companies or pressed laborer, whoever, to make donations at critical times because there was a vote coming up. It sort of creates somewhat of a division between lawmaking and moneymaking. It's not perfect, but I think it would change this town. And if nothing else, I think it would force Congress to be far more efficient when it is in session, getting things done, if for no other reason because they then want to go out and raise money.

  • 11:45:22

    REHMWhat about term limits?

  • 11:45:26

    SCHWEIZERYou know, I have mixed feelings on term limits. There's a lot of things that I like about it. It brings in new blood. You know, on the other hand, I think, you know, it eliminates people's choices. I think probably right now I would favor it simply because I don't see any other solutions that sort of get to this root of the problem, which is this permanent political class of incumbency, of people who stay in power for long periods of time, they use the machinery of government to, you know, extract money for themselves and for their family members.

  • 11:45:57

    REHMAnd what about public financing for campaigns?

  • 11:46:03

    SCHWEIZERI think it's problematic for a couple of reasons. I know a lot of people cite examples in Europe. You know, Europe is a parliamentary system, so you have a system where things are much more sort of based on the political party, whereas here because people run from individual districts, it creates sort of a different dynamic. And I guess the second concern I have, and maybe here I'm being too cynical, I would be very suspect of a public financing system that was designed by incumbents. Because my sense would be they would probably set it up in such a way to where it would preserve their built-in advantage in being an incumbent.

  • 11:46:42

    REHMPeter, how did the founding fathers manage money? How much money was involved early on in our history? And how did this become such an enormous problem?

  • 11:46:58

    SCHWEIZERThat's a good question. You know, I have some examples in the book of when George Washington ran for, you know, the state delegation in Virginia. You know, he would pass out mead and other things to people. So money's always been part of politics. I think though that what has happened is that the average member of Congress now compared to 100 years ago is so -- has so much more power. And I think that power in a sense attracts as a magnet money.

  • 11:47:27

    SCHWEIZERBecause, again, if they have power, there are things that they can do for you or they can do against you. And that creates a leverage opportunity to raise money. So my contention would be as the size and scope of government has gotten larger, it has naturally attracted this money. And I think it's going to continue to because the stakes are so high.

  • 11:47:48

    REHMLet's go to Beth in Dallas, Texas. You're on the air.

  • 11:47:54

    BETHHi. I'm calling this morning to get Mr. Schweizer's opinion on a simple constitutional amendment, and I was wondering about its viability in solving the super rotor situation and maybe deflating the amount of money that's going into elections. And the solution is what if we limit any elected official or candidate statewide, local, federal to $100 per year approximately, some amount that is affordable to most citizens, and limit that contribution per organization, corporation, individuals and make that amount the limit per year and peg it to inflation.

  • 11:48:37

    SCHWEIZERI think it's an interesting question. I think the challenge is that you've got so many other things. You've got joint fundraising committees, you got leadership packs, you got super packs. And, you know, the Supreme Court has been pretty clear for the last 40 years that, you know, individuals, not as it comes to campaign contributions to candidates, but when it comes to political advocacy. You know, you're a strong environmentalist or you want strong national defense, that you have a constitutional right to advocate on those issues. So I would look at your kind of reform and would argue that it would probably create distortions and it wouldn't -- it wouldn't sort of get at...

  • 11:49:13

    REHMInteresting.

  • 11:49:13

    SCHWEIZER...the root problem.

  • 11:49:14

    REHMThanks for calling, Beth. And let's see. To Bob in Cleveland, Ohio. You're on the air.

  • 11:49:24

    BOBHi. My question is, you know, you read story after story of veterans being neglected by the government. And is this the reason because veterans don't have a powerful lobby to, you know, pursue their interests?

  • 11:49:41

    SCHWEIZERThat's a very good question. You know, I had a conversation with a member of Congress who described the sorts of tiers of committees. There are A committees which are powerful committees, like House Financial Services, Ways and Means, and those are committees where you're expected to raise a half million dollars. Those are A committees. Then there are B committees. And then there are C committees. And they categorize them this way. The C committees are the ones that are considered least desirable from the standpoint of raising money. The veterans committee is a C committee.

  • 11:50:11

    REHMWow.

  • 11:50:12

    SCHWEIZERAnd that sort of explains to you unfortunately what the priority is and what the currency is in D.C.

  • 11:50:18

    REHMSo out of the mouths of politicians come these words of support for our men and women who fight the battles for us and yet they are relegated to a C space.

  • 11:50:36

    SCHWEIZERYeah, yeah, that's the sad reality.

  • 11:50:38

    REHMAnd that's the way it goes. Let's now go if we can to Joe in Eustis, Texas. Nope. That's not working. Let's try William in Arcadia, Fla. Hi there.

  • 11:50:58

    WILLIAMHow you doing, Diane?

  • 11:50:59

    REHMGood, thanks.

  • 11:51:00

    WILLIAMThank you. My thoughts on the matter is if people want to run for a public office, I don't care if it's dog catcher, street sweeper or stuff like that, they should not get public donations. If they do take a $10 donation, they should be put in prison for ten years. That will stop 99 percent of the corruption.

  • 11:51:20

    REHMWhat do you think?

  • 11:51:22

    SCHWEIZERWell, I think that -- you know, I understand and appreciate the frustration you're feeling. I'm not sure that that would...

  • 11:51:29

    REHMNot going to help.

  • 11:51:29

    SCHWEIZER...that would deal with the problem.

  • 11:51:31

    REHMNot going to help.

  • 11:51:31

    SCHWEIZERIt's not going to help. And, you know, here's the challenge is you have to change the incentives, because if you set out and say we're going to make this illegal, they will find ways around it if they're incentivized to do so. So we have to change the incentive structure in what you benefit from in the political process and how you benefited.

  • 11:51:51

    REHMDo House members tend to spend lots more time raising money because of two-year terms than those in the Senate?

  • 11:52:01

    SCHWEIZERYes, they do. They do. And, you know, to some extent I guess it would sort of make sense. I mean, the founders envision the House sort of being closer to the people, the immediate impulses of the people. The Senate, a little bit more detached. So they do tend to spend a lot more time. But it also depends what district you're in. I mean, there are not a lot of districts in the United States today that are highly competitive. So you have people that are in very safe districts, but they're still continuing to raise a lot of money.

  • 11:52:31

    REHMSo here's where you're talking about buying boats.

  • 11:52:35

    SCHWEIZERYes. And this is another problem. You know, the laws and the ethics are very clear that members of Congress can't solicit or receive donations from private citizens in their congressional office buildings or in the -- on the House floor. But there's a huge exemption to that rule. And that is they can solicit and receive donations from each other.

  • 11:52:57

    SCHWEIZERAnd so if you look at leadership packs and how money flows from a leadership pack from one person to another, and you correlate that to votes on bills or co-sponsorship, it becomes pretty clear that one of the ways in which you can get co-sponsors for a bill or vote for a bill is you can in a sense buy your colleagues by giving donations to their leadership packs. And, again, it's a question of timing. The timing is so curious, it raises the question of why is this happening. And I think that's the most logical explanation.

  • 11:53:24

    REHMPeter Schwiezer, his book is titled "Extortion." And you're listening to "The Diane Rehm Show." Here's a tweet from Dee, who says, "You say lawmakers spend 70 percent of their time fundraising. Does that explain why they spend so little time in the Capitol doing the people's work?"

  • 11:53:53

    SCHWEIZERYes and no. It does explain it in part, but also there is this very important I think symbiotic relationship between lawmaking and moneymaking. They are much more likely to motivate, say, corporate packs or labor union packs to give donations if there's an immediacy of a law that they're concerned about or that they want to pass. So, yes, it does mean that they spend less time legislating, but they like being in Washington, they like having Congress in session, they like the sort of drawn out scheduling because it creates this sense of urgency among contributors.

  • 11:54:28

    REHMAll right. And to Cindy in Gainesville, Fla. You're on the air.

  • 11:54:35

    CINDYThanks for taking my call.

  • 11:54:36

    REHMSure.

  • 11:54:37

    CINDYI have been paying attention to the work of Lawrence Lessig and his organization Root Strikers which is talking about a lot of the same issues. And his -- along with he does support campaign finance reform. And also he and others, Republic United I think is one, Wolf PAC, that there's several grass roots movement that are suggesting that the way to solve this problem is through an Article 5 constitutional convention. And in an Article 5 constitutional convention, people approach state legislatures and they have the power to convene a constitutional convention.

  • 11:55:22

    CINDYAnd the reason it's a possibility is that when the Constitution was framed, the founding fathers said to themselves what if Congress becomes corrupt, we need to put in a safeguard. And the Article 5 constitutional convention was their answer. So my question is what does your guest think about this? Is he aware of it? And I am someone who's looking for a way to solve this problem rather than just talk about the problem itself.

  • 11:55:51

    REHMSure. I understand. Thanks for your call.

  • 11:55:55

    SCHWEIZERNo, I think that's a very good point, Cindy. You know, I'm familiar with Larry Lessig's work and I've met with him and I think he raises very important points on this issue. It's interesting how, you know, my contention would be that we're seeing the big division in the country today is not as much left and right as it is Washington, D.C. and the rest of the country. And I think one of the ways in which you see that is kind of the frustration with the fact that Washington, D.C. has become so corrupt.

  • 11:56:23

    SCHWEIZERSo you have Larry Lessig who is calling for a constitutional convention as it relates to these issues. You have among conservatives guys like Mark Levin who've called for the same thing. So you have sort of this interesting convergence between those who are not in power who see a similar problem.

  • 11:56:40

    REHMAnd just by coincidence tomorrow we'll be doing a program on the Constitution.

  • 11:56:48

    SCHWEIZEROh, excellent.

  • 11:56:49

    REHMAnd to what extent it may need revision based on today's realities. Peter Schweizer, thank you for being here.

  • 11:57:00

    SCHWEIZERThanks, Diane.

  • 11:57:01

    REHMHis new book is titled "Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets." Thanks for listening all. I'm Diane Rehm.

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