The Corner

Economy & Business

A Case Study in Using Political Influence for Personal Gain

The incentive to use political connections and/or donations for personal gain grow as the power of government grows (a phenomenon well documented by public-choice economists), and government certainly has grown in recent years. To have a complete picture of the landscape of political influence, we have to be aware of the disparate special interests and what they’re seeking in return for political action. Large campaign contributions from any group are fair grounds for scrutiny, no matter who makes them and who receives them.

With all that in mind it was very interesting to read Tim Carney’s piece at the Washington Examiner last week about campaign contributions going to crony Ex-Im’s number one cheerleader in the Republican House, Stephen Fincher. 

Fincher, once an opponent of the Export-Import Bank —a federal agency that subsidizes foreign buyers of U.S.-made goods — now is trying to undermine his party’s leadership by teaming up with Nancy Pelosi and her party in order to reauthorize Ex-Im Bank as President Obama and his big donors in the business lobby have demanded…. Fincher has pulled up his Tennessee roots and is now firmly planted in D.C. Instead of serving Western Tennessee, Fincher..now represents Wall Street and K Street.

The evidence: He raises virtually all of his re-election money from K street donors rather than from the constituents he’s supposed to represent in Tennessee. 

Fincher has raised a quarter-million for his re-election, according to his most recent campaign finance filing. Exactly two of his approximately 150 donations have come from Tennessee residents. Tennessee residents have given Fincher a combined $750, which rounds to 0 percent of his money raised.

Fincher has raised more money from the K Street firm Barbour, Griffith, and Rogers than he has from individuals in Tennessee. More than 99 percent of the money powering Fincher’s re-election bid comes from political action committees (almost all of them corporate PACs) and K Street lobbyist types.

What are all the out-of-state donors after? It is always hard to say for sure, of course, but Carney notes:

Studying this lengthy list of Fincher’s PAC donors is revealing. Fincher introduced his bill to reauthorize Ex-Im on Jan. 28. Two days later his campaign deposited a $2,000 check from General Electric, Ex-Im’s second-largest beneficiary and most ruthless defender. … Boeing (which benefits from 40 percent of Ex-Im subsidies) and United Technologies chipped in about a week and a half later. All of Ex-Im’s top beneficiaries, exporters and lenders (notably Ex-Im’s leading lender JPMorgan), have given to Fincher’s re-election.

This is even more interesting: There are no sugar interests in Tennessee, but Representative Fincher is an active supporter of crony federal sugar programs and so are his donors. 

Fincher has voted to protect the federal sugar program, whereby our government keeps out foreign sugar and issues taxpayer-backed loans to guarantee high prices for U.S. sugar growers. This hurts families, U.S.-based foodmakers and the economy, while benefitting a handful of privileged sugar companies. Tennessee produces no sugarcane or sugar beets… But Fincher’s donors do. Sugar Cane Growers of Florida PAC, American Crystal Sugar PAC, American Sugar Cane League PAC, Florida Sugar Cane League PAC, Southern Minnesota Beet Sugar Co-Op PAC and the U.S. Beet Sugar PAC are all Fincher donors and all beneficiaries of the corporate welfare Fincher supports.

Now, Fincher isn’t an isolated case, which helps explains how American feel about Congress. As John Fund reminded us on Friday, the American people think that Congress is out of touch, corrupt, and in the tank for special interests:

According to the Gallup Poll, 79% of Americans think Congress is “out of touch with average Americans,” 69% think is is “focused on the needs of special interests, and 52% think it is corrupt. And for the first time the loathing of Congress as in institution is being carried over to the local representative of voters. Record numbers of voters believe their own legislator is afflicted with the above ills.

And the more people know about Congress, the more they believe its members are out of touch, corrupt, and in the tank for special interests:

Even more interesting is that voter disapproval of Congress seems to go up in direct proportion to how knowledgeable people are about how Washington D.C. works. Among those who answer four or five questions correctly about how Congress works and who runs it, 66% rate Congress as poor or bad, and 7% rate it as excellent or good.

Carney has an excellent conclusion to the whole thing, which you can read here

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