Reprinted from Robert Reich Blog
Washington has been rocked by the scandal of J. Dennis Hastert, the longest-serving Republican speaker in the history of the U.S. House, indicted on charges of violating banking laws by paying $1.7 million (as part of a $3.5 million agreement) to conceal prior misconduct, allegedly child molestation.
That scandal contains another one that's received less attention: the fact that Hastert, who never made much money as a teacher or a congressman, could manage such payments because after retiring from Congress he became a high-paid lobbyist.
This second scandal is perfectly legal but it's a growing menace.
This isn't because more recent retirees have had fewer qualms. It's because the financial rewards from lobbying have mushroomed, as big corporations and giant Wall Street banks have sunk fortunes into rigging the game to their advantage.
In every election cycle since 2008, more money has gone into lobbying at the federal level than into political campaigns. And an increasing portion of that lobbying money has gone into the pockets of former members of Congress.
In viewing campaign contributions as the major source of corruption we overlook the more insidious flow of direct, personal payments -- much of which might be called "anticipatory bribery" because they enable office holders to cash in big after they've left office.
For years, former Republican House majority leader Eric Cantor was one of Wall Street's strongest advocates -- fighting for the bailout of the Street, to retain the Street's tax advantages and subsidies, and to water down the Dodd-Frank financial reform legislation.
Just two weeks after resigning from the House, Cantor joined the Wall Street investment bank of Moelis & Co., as vice chairman and managing director, starting with a $400,000 base salary, $400,000 initial cash bonus, and $1 million in stock.
As Cantor explained, "I have known Ken [the bank's CEO] for some time and ... followed the growth and success of his firm."
Exactly. They had been doing business together so long that Cantor must have anticipated the bribe.
Anticipatory bribery undermines trust in government almost as much as direct bribery. At a minimum, it can create the appearance of corruption, and raise questions in the public's mind about the motives of public officials.
Was the Obama White House so easy on big Wall Street banks -- never putting tough conditions on them for getting bailout money or prosecuting a single top Wall Street executive -- because Tim Geithner, Barack Obama's treasury secretary, and Peter Orszag, his director of the Office of Management and Budget, anticipated lucrative jobs on the Street? (Geithner became president of the private-equity firm Warburg Pincus when he left the administration; Orszag became Citigroup's vice chairman for global banking.)
Another form of anticipatory bribery occurs when the payment comes in anticipation of a person holding office, and then delivering the favors.
According to the New York Times, as Marco Rubio ascended the ranks of Republican politics, billionaire Norman Braman not only bankrolled his campaigns but subsidized Rubio's personal finances.
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