Well Compensated Pawns

Let's talk about Congressional corruption

The idea that lawmakers are bought is pervasive. It’s a nice picture... lunch at a fancy restaurant, white table cloths, linen napkins, a legislator and a lobbyist discussing some upcoming legislation that will affect a client. Allusions and inferences bouncing back and forth, never explicit, the suggestion of a donation implying which way the client would like the lawmaker to vote.

I’m not saying vote buying doesn’t happen, in fact I’m quite certain it does, but not in that manner.

Buying Votes

Let’s explore how vote buying works.

Imagine for a moment that your employer stops by your desk. After some chitchat they mention there’s a ballot initiative in the upcoming election that won’t be good for the company. They pull an envelope out of a stack, strongly suggest you vote against it, and then they move on.

You just got handed some cash to go vote a certain way. But that’s not vote buying. On election day you are still free to choose whether to vote for or against the initiative. And you already got the cash.

But it’s not very smart on the employer’s part, they’re handing out cash (i.e. making an ‘investment’) and there’s no way to make sure of a return on that investment.

Let’s change the calculus: this time when your employer stops by, there is no stack of envelopes. In this scenario you have to prove you voted against the ballot initiative. Much smarter. Now the employer only has to pay for compliance.

But there’s a problem. What counts as proof? A picture or video of the voting machine? Not in today’s world. Anyone could use AI to have it show whatever they want. You could vote for the initiative, snap a pic, run it through AI, voila, it shows you voted against the initiative. Your employer is probably too smart to accept that.

This is why we as constituents have private ballots, aka “Australian” ballots. They were introduced in the late 1800’s to combat these exact types of situations. Private ballots are the reason this doesn’t happen. A rational person isn’t going to throw money at someone just in the hopes they vote a certain way if they can’t verify they did.

Back to Congress. In the early 1970’s Congress changed their voting procedures. Before that most legislative votes weren’t recorded, and this created a problem for constituents. When some lousy legislation gets passed, how are you supposed to know if your members voted for or against it? The solution is straightforward: record the votes and publish them.

Based on what we already talked about, you should already be seeing the problem... These recorded votes are what enable the situation I described at the beginning. The lobbyist waits for lawmakers to vote on the bill, pulls the voting record, verifies the lawmaker voted “correctly” and initiates the donation. That one seemingly minor rules change is what made the corruption, dysfunction, and gridlock we witness possible.

For the lawmaker, their choice boils down to: vote for constituents (and receive nothing extra), or vote for the lobbyist’s client (and get a payday). This is how most people envision the corruption in D.C. -- very quid pro quo. And why citizens view politicians as immoral, unethical, bought, etc. -- because they are putting special interests over constituents.

Vote buying isn’t the only way voting records can be used.

A More Cost Effective Approach

Back at your desk, imagine your employer tells you that you need to vote against the ballot initiative or you lose you job. This is coercion, compelling someone to act against their own will through threats. In today’s world, you would effectively lose your job, because, as we discussed above, you can’t prove you voted against the initiative.

It’s a different story for lawmakers, their vote is public record. Everybody can access it. Not just voters. Think tanks. Lobbyists. And their bosses: party leadership. Your boss can’t punish you for your vote, but party leadership can punish legislators. That’s another thing the 1970’s reforms added. More powerful tools for members who dissent from the majority view of the party. If you don’t toe the party line, you will be punished.

The punishments can vary widely, from loss of access or appointments, committee positions, to blocking their legislation from the floor, or, in what has become more and more common, funding a primary challenger. If a legislator loses support of the party come election time and goes up against a party backed candidate, it’s nearly impossible to get re-elected. In other words, they’re out of office.

Breaking from the party means they can’t do anything for constituents, AND they’re out of a job. What is accomplished by voting against the party? On the votes that matter, healthcare, immigration, checking executive power, votes are reliably along party lines. Not because all the members of the party agree, but because the cost of dissent on those votes is highest, precisely when the stakes are the highest.

Lawmakers are pawns in the system. And just like pawns in a chess match, they are the cannon fodder. Watch. You’ll see it. Here’s the easiest one: if you see a member get labeled “RINO” they’re not long for the political world.

Combat Pay

It’s no secret that lawmakers accumulate personal fortunes while in office, but most people attribute it to lobbying. That’s the obvious read. But we could ban lobbying completely tomorrow and guess what... Lawmakers would still accumulate massive wealth.

I am not trying to manufacture sympathy for Congressional members here; they are well compensated cannon fodder. But that compensation doesn’t come in the form of their salary, instead it’s political donations and investments.

Members of Congress have access to privileged information before the public does, information that can have major impacts on stock markets. This creates a major opportunity-risk misalignment.

Enrichment though political donations is also no secret. Whenever Congress changes the campaign finance laws, workarounds pop up.

That’s old news. But now this chart made by The Independent Reporter might make more sense:

Source: Independent Reporter

Political donations and stock trading are the retention bonus for staying in the party’s good graces.

In the media this a story of heroes and villains, but in reality it’s far more mundane. It’s the same old story: human beings responding to the incentives and disincentives put in front of them. No conspiracy. No evil.

The innocuous 1970’s reforms made legislators pawns, but pawns who get paid millions of dollars don’t leave the board.

And that’s the point. The system doesn’t need corrupt people. It doesn’t need evil people. It just needs humans, people who respond to their party’s carrots and sticks. When all 535 members are behaving the same way, it’s not individuals, personalities, morals, or values. When every member of Congress responds the same way, there’s a system problem, not a people problem.

You would too. So would I.

That’s not an excuse.