Life, liberty and the purchase of influence

Sleazy dealings at the top? Cash-for-questions in the Commons? Such behaviour is small beer compared to America, where the stupendous costs of campaigning have turned the entire political system into a machine driven and controlled by money. By John Lichfield

The scene is Chicago during the Democratic convention in July. Robert Rubin, the US Treasury Secretary, is having lunch with a couple of dozen of the biggest wheels in Wall Street. The businessmen are paying $10,000 a head for the right to eat chicken with the man who prints the dollar bills.

There is nothing wrong with that. Mr Rubin is not soliciting the cash for himself. He wants the money for his boss, President Bill Clinton, to help to give him another four years in the White House. The legal limit on individual donations to a presidential campaign is $1,000. Rubin is asking each lunch guest for 10 times this amount. But there is nothing wrong with that either. The money is not for President Clinton's campaign - not exactly. It is going towards a tangle of other Democratic Party activities which are designed to help re-elect President Clinton without ever mentioning his name.

A senior Democratic Party official stands up and hails the Treasury Secretary as the "greatest fund-raiser in the history of the planet." Then he adds with a grin: "Of course, by law, Bob can't raise a dollar." Then he asks the Wall Street giants for even more money...

Such quaint rituals are being enacted all over America this election year. In truth, something of the kind goes on in every US state on every day of every year. American politics have become a perpetual-motion, money- raising machine. It is calculated that a US senator must raise an average of $15,000 on each day of his six-year term to assemble enough cash to stand for re-election.

The spasm of sleaze allegations afflicting the British body politic inevitably prompts suggestions that we are heading the American way. The differences between the two political systems are immense but there are many useful warnings and lessons in the US experience.

In some respects, our politicians are more ethically challenged than America's. Some of the recent UK cases of sleaze - cash-for-parliamentary- questions, for instance - sound crudely corrupt to US ears. Straightforward graft, in the sense of individual enrichment, is now fairly rare in US federal politics (though not unknown at state level). Even the kind of multiple directorships legally enjoyed by some British MPs would be unethical on Capitol Hill. The limit on a US congressman's earnings outside politics is $20,040 (pounds 12,625). The worst excesses of personal greed - such as lobbyist- funded holidays for senators and the pillaging of permanent, interest- free loans from the congressional bank and post office - have been swept away.

On the other hand, the entire US campaign-financing system is now so permeated by big money (and the access and favours big money can buy) that an outsider finds it difficult to see the moral, or logical, distinction between the legal and illegal. The most obvious lesson from the American experience is a depressing one. Money in politics is like rain on an old roof. It will always find a way through. Last year's repairs tend to become next year's weaknesses.

In one sense, there is nothing new in all this. Joseph Kennedy, responding to yet another request for money to bale out his son's 1960 presidential campaign, is said to have responded: "Jack, I don't mind buying you a victory, but I'm damned if I can afford a landslide."

However, the real surrender of US politics to money began in the late 1960s and 1970s with the proliferation of campaign advertising on television. Before that it was a politician's choice whether he was corrupt or not. After that, the compulsion to raise ever larger sums of cash sucked almost everyone into a corrupting system.

Here is a huge difference with Britain. During the general election campaign next year, as your favourite programme is delayed for the 17th time that week, grit your teeth and give thanks for the Party Political Broadcast. Despairing efforts are being made to introduce a similar system of public access to television in the US and to ban, or limit, cash-eating campaign ads. But previous attempts to go this route have fallen foul of the First "free speech" Amendment to the Constitution, as interpreted by the Supreme Court.

US politicians are essentially entrepreneurs who raise their own funds without much help from their parties (although this is changing a little). As the cost of campaigning has soared ($6m for the average Senate race) the relationship between the candidate and his constituency has been bent out of shape.

Consider, say, the plight of Congressman X, who faces a decision on whether to support such and such a development by the Nimby Corporation, a regular benefactor. Focus groups tell him that 20 per cent of his district is fiercely opposed. But the Nimby Corporation, and its like, provide him with the money that allows him to bombard 100 per cent of his electorate with self-justifying television ads at the next election.Which way does he vote? It was political logic of this kind, writ large, which destroyed the Clintons' admittedly clumsy efforts to push public health care through the US congress in 1993-4.

Campaigners for reform argue that the system can never be cleaned up unless the cost of campaigning is reduced (just as drug smuggling will continue as long as people use drugs). Facts are on their side. Several attempts have been made to tighten the rules since the Watergate scandal of the 1970s. Most were still-born. A few were enacted. But the politicians and parties who passed the laws immediately found ways of by-passing them.

Since 1974 it has been illegal for any individual or corporation to give more than $1,000 to a presidential candidate. Similar limits exist for congressional and state campaigns. The restrictions produced a boom in political action committees, whose sole purpose is to fund and influence politicians. There are 3,882 PACs now registered with the federal government. Since their activities were at least in the open and their accounts published, their rise was originally regarded as an improvement on the old traffic in dollar bills in plain envelopes. But growing concern about PAC influence produced new restrictions.

In recent years large corporate cheques have begun to flow into something called "soft money", which escapes all limits. This was the kind of money being raised by Treasury Secretary Rubin at his $10,000-a-plate lunch in Chicago. In theory, the cash goes to the political parties, not to individual candidates. It is then distributed at state level, supposedly for use in "soft" electoral operations such as administration, promoting the party line on the pressing issues of the day or getting out the vote. In practice, the vast amounts of soft money raised by each main party - up to $150m this year - suggests that much of it percolates to other uses.

Certainly corporate America seems to feel that it is money well spent. US telecommunications firms have given $4.6m in "soft" money this year, equally split between the parties. AT&T alone has given $743,000. The tobacco industry has also given $4.6m - mostly to the Republicans.

A further gaping loophole has been carved by a recent Supreme Court decision lifting limits on fund-raising by so-called "independent committees." These are one-issue organisations which do not operate as part of a campaign but support individual candidates, often producing television ads on their behalf. The opportunities for abuse are boundless. Meanwhile, the parties have mined more gold in the small print of the regulations. It turns out - as a final insult to common sense - that they can raise vast extra sums to help "monitor" their own enforcement of the funding rules.

The point is not that all US politicians are in thrall to lobbyists. The point is that campaign contributions give special interests such an octopoid grip on the system that it has become next to impossible to pass any radical or intricate piece of legislation on Capitol Hill. The Clinton liberal-leaning health-care plan foundered; but so did most of Newt Gingrich right-leaning Contract with America.

The point is not that there are no more honest men or women in American public life. There are still many who play fair or at least stick to the old Texan maxim: "If you can't take their money, screw their women, drink their wine and still vote against them, you're not fit to be in politics." The point is that the system has become such a relentless fund-raising treadmill that many potentially able players are withdrawing from the game, or refusing to join.

Senator Bill Bradley of New Jersey, a thoughtful, dull politician who retires this year, complains that money is gradually driving sense out of US politics. "Money is distorting our democracy. It not only determines who wins, but often who runs. If you've got a good idea and $10,000 and I've got a terrible idea and $1m, I can convince people that the terrible idea is a good one."

In Britain, despite occasional personal lapses into venality, the system of financing politics has been, until now, relatively transparent and clean. Big Business supported the Tories; Big Labour supported Labour. Individuals are banned from spending more than paltry amounts on their campaigns in any case. Even without political ads on television, this is beginning to change. There is no limit on the amount British parties can spend at national or regional level, so long as individual candidates are not named. The more professional campaign techniques introduced in the 1980s have increased the parties' desire for campaign cash.

If US experience is anything to go by, we should be less worried by the recent ugly examples of personal greed and more worried by the arch-lobbyist Ian Greer's (perfectly legal) contributions to individual and party election campaigns. There is a difference between a generic party contribution from, say, Shell, and funds provided by a man who boasts that he can fix specific problems for his clients.

A similar lesson can be learned from scandals in Italy, France, Belgium and Japan. Individual enrichment was part of the story in each case. But the big-league corruption involved corporate donations to party funds and electoral war-chests in return for specific or systematic favours.

When special-interest cash invades campaign finances the democratic well is poisoned. Individual bribes corrupt but campaign-financing bribes corrupt absolutely.