The Republic of Virtue: How We Tried to Ban Corruption, Failed, and What We Can Do About It

by F.H. Buckley

A trial lawyer could game the system and ensure that complete diversity was lacking by suing a sham in-state defendant along with the deep-pockets out-of-state defendant.

lawsuits can be a form of legal blackmail. Silicon Valley firms are often sued when there’s been an unexpected change in stock price, on the theory that the company must have known about it and therefore is liable for failing to disclose the information. There might be no evidence to back up the charge, nor any suggestion of wrongdoing, but trial lawyers still sue in order to prod the defendant to settle rather than bear the enormous costs of producing documents on a motion for discovery.

There’s a juste milieu, represented by an upside-down U-shaped curve called the Magee curve, invented by Stephen Magee. The curve plots GDP growth on the vertical axis against number of lawyers per thousand population on the horizontal axis. At the top of the curve, things are copacetic, but moving to the right by adding more lawyers represents a cost to the economy. That’s intuitive, but what is controversial is just where the apex of the curve might be, and Magee puts it significantly to the left of the American level of 3.65 lawyers per 1,000 people. We’d be worse off economically with no lawyers, but we’d be even better off if we had 33 percent fewer lawyers, says Magee, and he calculates that the excess of lawyers costs the American economy more than $1 trillion in GDP.24 That’s speculative and open

LET’S ASSUME that we would do better with a less plaintiff-friendly set of civil justice rules.

The first principle for restoring integrity to our judicial system is that states should be permitted to compete with each other in the judge-made rules they offer in-state parties, but prevented from imposing unfair costs on out-of-state defendants. To do this, only one simple reform is needed: Whenever an in-state plaintiff sues an out-of-state defendant for a nontrivial amount, the latter should be given the option of removing the case to federal court.

If Congress thinks that minimal diversity

makes more sense, it’s free to adopt that standard, which is precisely what Congress tried to do in the 2005 Class Action Fairness Act (CAFA).

What is needed to restore the Framers’ vision is a reinforced CAFA that would permit any out-of-state defendant to transfer a case to federal court so long as it meets minimal monetary standards. Such an amendment is proposed in Appendix B, as the Fairness in Interstate Litigation Act (FILA).3

FILA would also have the happy effect of putting an end to judicial forum shopping, the practice that turned Madison County, Illinois, into the national center for asbestos litigation. The courts in this semirural county near St. Louis have been inventive

By contrast, state court judges are more closely integrated into their local communities. They’ll join the Elks, the Masons or the Rotarians, and that can invite improper overtures.

secular America, the federal bench is a national priesthood, conscious of its high calling and dedicated to the rule of law. Under the Constitution, it is the third branch of government, coequal to the presidency and Congress, and the final arbiter of what the other two branches may do. In every country there must be one final sovereign power.

A bribe corrupts the heart, said the author of Ecclesiastes.9 For corruption of the heart, one need look no further than Judge Mark Ciavarella of Wilkes-Barre, Pennsylvania, and the “kids for cash” scandal that regularly put mildly misbehaving juveniles in lock-up. The story began with tougher drug laws that greatly increased the number of prisoners in Pennsylvania in the 1980s, putting a strain on the state budget. Then someone came up with the bright idea of offloading the jails to the private sector. Privatization was the new big idea, so instead of being guests of the state, the inmates would become guests of a for-profit prison. This was bound to save money, since private enterprise could be counted on to do things more efficiently—or at least more cheaply—than the state. What could go wrong?

In his most recent book, D’Souza speculates that a vengeful Obama ordered his minions to find evidence of a crime, but searching through financial disclosure records wouldn’t have revealed a fictitious transaction. Someone had to come forth and disclose the sham, which brings us to another way that D’Souza showed poor judgment: he chose to channel his contributions through his wife, his mistress, and his mistress’s husband. With a personal life so messy, it doesn’t take a Sherlock Holmes to narrow down who might have ratted him out.

campaign finance restrictions we saw in the last chapter have done little or nothing to diminish corruption or its appearance, and instead have bred a cynicism about whether anything can be done to arrest the slide into crony capitalism. Moreover, what solutions have been proffered are often prompted by partisan motives, and might lead to more public corruption.

That’s what two Yale law professors, Bruce Ackerman and Ian Ayres, have suggested in Voting with Dollars, arguing that anonymity would eliminate the possibility of quid pro quo corruption.

Anonymity would have the further benefit of shielding the donors from boycotts and other forms of public pressure. This principle was upheld under the Fourteenth Amendment when the Supreme Court struck down a 1956 Alabama law that required the NAACP to turn over its membership lists to the state.3 Alabama had simply wanted to harass NAACP members, in violation of the right of association. Today, when conservative donors have been personally vilified by the president, or fired by their employers for their political beliefs, a rule of anonymity in political donations would protect the same association rights.

A la Donors Trust

Elected officials would still need financial support, and would bid for it through the policies they promote. If contributions dried up after they announced their support for policy X, they’d be tempted to back not-X. Mandated anonymity would dampen pay-for-play, however. The politician who wants to maximize his war chest might be led to vote for or against a broad policy, such as free trade, but with anonymous support he wouldn’t get the signal to push for the narrow and targeted provision in a thousand-page bill that benefits one company only. That means we’d see less big-donor money in politics, while small-donor and ideological money would become more influential.

Buckley makes regular distinctions between corruption and ideological politics as usual. A caller on thr cspan show tried to smear Paul Ryan as corrupt for passing laws that benefit corporations, but he insists that this is not the same as pay to play.

Might a similar ban on other kinds of donors be justified in the “full-blown modern interest-group state” where Judge Williams found himself?17 A good place to start would be America’s lobbyists. In 2012, direct lobbying expenses amounted to $3.3 billion, about twice the sum spent in 2000, according to the Open Secrets blog of the Center for Responsive Politics. That’s more than the $1.2 billion that both major candidates spent in the 2012 presidential election, and it even exceeds the $2.6 billion in total spending by the parties and outside groups on the presidential campaign. Of the $3.3 billion, only about 3 percent came from ideological donors like the NAACP, or labor unions such as the American Federation of Teachers. The rest came from corporate America. If a sugar cartel succeeds in maintaining its subsidies, we shouldn’t be surprised.

government relations departments have become profit centers, as the firms and their lobbyists exploit the new business opportunities provided by an expansive federal government.

Corporate political donations are therefore small potatoes compared with lobbying expenses. According to Lee Drutman, firms that make major lobbying expenditures (more than $1 million a year) spend fourteen times as much on lobbying as on their PACs.

public, it can be rational for those who propose the rule to spend a lot and those who oppose it to spend little. There’s

Concentrated interests vs. Diffuse

The First Amendment right to petition the government is a right to inform Congress of a grievance and to propose solutions. It’s not a right to couple the request for legislative action with a payoff to the congressman. That’s too much like a quid pro quo,

Apart from lobbyists, a good many Americans bundle support for presidential candidates, and many of them have their eyes on a political appointment. That’s how our former ambassador to Hungary, Colleen Bell, got her job. She’s a soap opera producer who was one of Obama’s top campaign bundlers, raising more than $1 million for him together with her husband.

At Philadelphia they sought to write a constitution that would minimize the threat of corruption, but they had no illusions that the voters could be relied on to elect honest officials. They believed that voter preferences should be filtered by an intermediate set of politicians who could better judge the character of higher officials, and that the separation of powers would create a double filtration in which wasteful and self-interested bargains could not survive. That didn’t work out as expected, and there are two kinds of remedies that we might now try: seek to weaken corrupt influences, or aim to empower noncorrupt ones.

The first strategy was that of the Framers and the Supreme Court, and it’s what we would do by singling out bundlers and lobbyists for restrictions, as suggested in the previous chapter. The second sort of remedy proposes a return to a Golden Age of republican virtue through public financing of electoral campaigns, or through election vouchers given to voters for spending as they wish on campaign speech.

What then is to be done? In a giddy moment, we might imagine a revolution in our political culture, with voters rejecting corrupt officials. Or we might fondly pin our hopes on another constitutional convention under the Constitution’s Article V, with thirty-eight of the states somehow agreeing on a remedy for crony capitalism. Neither outcome is within the realm of possibility, and in any event the chimera of a perfect Republic of Virtue, such as Robespierre imagined, should be abandoned as hopelessly naïve. What Baudelaire said of laughter might equally be said of corruption: it reveals a fall from grace, and is thus profoundly human.11 Rather than rely upon people’s intrinsic goodness, we should look more modestly for feasible ways to guard against particular kinds of corruption where we find them. That’s what the Framers did in aiming to design an anticorruption covenant, and the best we can do is keep tinkering with the machinery of government they gave us, as I have suggested.

Parliamentary regimes are relatively free from corruption, compared with presidential ones, a finding that is generally consistent with the empirical evidence on point.

I also thank Jack Abramoff, who shared with me some of his hard-earned lessons about how to rein in lobbyists.