The Campaign-Finance Smear
No one has done more to create an “appearance” of corruption in politics than campaign-finance reformers.

February 12, 2002 9:55 a.m.

typical complaint of campaign-finance reformers is that politics is too negative and dishonest.

One might expect therefore that advocates of reform would feel some obligation not to be so negative in the way they depict politicians, or at the very least to be truthful when they do decide to "go negative" against political opponents.

Alas, no one has done more to create an "appearance" of corruption in politics than campaign-finance reformers who ignore or distort facts to make reckless charges of corruption.

Consider The American Prospect, which has a heavy-breathing editorial in its most recent issue decrying how corporations have supposedly stolen away our democracy.

"By buying politicians," The American Prospect writes of Enron, "a favored corporation promoting a new kind of scam simply purchased immunity from regulatory oversight."

Note that there is no "seems," or "appears," in this sentence. It is an outright assertion of bribery, in the cause of promoting corporate fraud.

Given the gravity of this charge, it would be nice if there were some evidence for it.

What the Prospect offers is Wendy Gramm, who "as chief commodities regulator under Bush I, slipped in a midnight rule-change after the 1992 election to exempt Enron's trades from oversight."

"She was rewarded," according to the Prospect, "with a seat on the Enron board and hundreds of thousands of dollars in income."

Sounds pretty sinister. Except the Prospect conveniently neglects to spell out what exactly was involved in this "Enron exemption."

Actually, it wasn't an Enron-specific matter but a ruling that affected a whole new class of trades — nine other companies lobbied for it — that was coming to the fore in the early 1990s.

Here's USA Today (apparently a more nuanced and sophisticated source than the Prospect) on the rule: "Despite the appearance of a trade-off, even Gramm's critics concede that the commission's ruling was a smart move. The energy derivatives market was growing rapidly, and there were worries that without an exemption, the Chicago Board of Trade might sue anyone selling an energy derivative outside of its centralized market."

I frankly don't know enough about derivatives to say with any assurance whether the Gramm ruling was a mistake or not, but it's obviously a subject of dispute. So, before condemning Wendy Gramm for her venal motives, it would be nice to hear some arguments about why she was wrong.

The Prospect offers none.

Maybe the Prospect thinks that the Chicago Board of Trade, which opposed this move, was right. But wouldn't Gramm then have simply been doing the bidding of another moneybags interest out to protect its business, the Chicago Board of Trade?

This is why the campaign-finance reformers, on their own terms, can always win the argument — there are well-heeled interests on all sides of most disputes in Washington, so someone can always be portrayed as selling out to some interest or other.

But the Prospect's treatment of Wendy Gramm is almost responsible compared to the way it smears her husband: "When Enron needed another favor in 2000, her husband, Sen. Phil Gramm of Texas, got yet another regulation waived."

As far as I can tell, this is a regurgitated charge that Ramesh Ponnuru has already dissected on NRO:

Public Citizen had Gramm "muscling through" the offending provision. In fact, Gramm had almost nothing to do with it.

He didn't write it: It came to the Senate from the House, where it was part of a bill that passed by a large margin. He didn't usher it through the Senate: It was considered by the Agriculture Committee, of which he was not a member, rather than the Banking Committee, which he chaired. Indeed, Gramm blocked the bill that included the provision for several months because he objected to other provisions. He did, however, eventually vote for the bill, like most congressmen. It included the offending provision, which had hardly been altered during the legislative process.

So, what's so amazing about the Prospect smear is that it's a discredited one. The Washington Post, the Philadelphia Inquirer, and the Atlanta Journal-Constitution have already run corrections for repeating this charge.

I called American Prospect editor Robert Kuttner to try to ask him if he's going to do the same. He didn't return my call. But it will be interesting to see if the Prospect, which makes such a fuss in its editorial about "corporate accountability," cares as much about journalistic accountability. [Ed. note — someone from the Prospect has e-mailed saying that they will correct this.]

All this really amounts to what campaign-finance reformers call "mud slinging." That's why I can't understand why McCainiacs and other campaign-finance reformers say they want to raise the level of public discourse, when they so relentlessly run it down by imputing corrupt motives to everyone in Washington.

In the case the Prospect, however, this isn't quite accurate — it wants to impute nasty motives not to everyone, but to conservatives in particular.

"The ideology of deregulation," it writes, "provided cover for the cronyism."

This is rather extraordinary, to say in effect that a whole way of looking at the world — a viewpoint based on philosophy and ideas — is really only a cover for corruption. Not only is this a stilted, cynical, and false charge, it is ideologically loaded.

Nowhere in its editorial does the Prospect excoriate the Clinton administration for signing the Kyoto treaty, something that meant a lot to Enron. That's because regulation is presumed to be public spirited, even if an evil corporation is pushing for it.

Part of the liberal motive for campaign-finance reform is clearly to try to systematically prevent American companies from protecting themselves from government regulation. It will be a corruption-free world, in short, only when liberals get everything they want.

Until then, smear away.