A Republic No More. Jay Cost

of 1800” was, in many respects, a referendum on this very issue. But in an ironic twist, discussed in Chapter Two, the Jeffersonians eventually endorsed exactly this kind of power. The process happened slowly, over the course of a generation: Treasury secretary Albert Gallatin induced Jefferson to forbear against the Bank of the United States; Madison approved the charter for the Second Bank; and Henry Clay approved the idea of the federal government spending money directly on internal improvements. This was as much of a “revolution” as that which Jefferson wrought by defeating Adams in 1800, and it established the principle that it was legitimate for the government to pursue the general welfare by distributing benefits unequally throughout society—that government could help everybody tomorrow by playing favorites today.

      This is really one of the main ways the government now claims to promote the general welfare, by using social factions as mediators. They receive the direct benefits, and society at large benefits over the long haul—at least in theory.

      The problem with this policy is that the critique that Madison and Jefferson registered against it in the 1790s was entirely valid. Even if favoring particular social factions in the short term is indeed the only way to elevate what Monroe called “the spirit of the nation,” it still facilitates corruption. Those factions that receive special benefits are transformed into interest groups with a motive to lobby the government, and—thanks to their special benefits—the means to do so. Madison summarized the problem in a letter to Jefferson about the relationship between financial speculators and the government. They were no longer a faction in society, he said, but the “pretorian band of the Government, at once its tool & its tyrant; bribed by its largesses, & overawing it by clamours & combinations.”

      Insofar as big government is a direct contributor to political corruption, this is an important reason why. A government seeking to advance the general welfare through mediating factions is uniquely susceptible to political corruption. It transforms social factions into interest groups, which then cajole the government to continue distributing benefits to themselves, even if that is not good for the people as a whole.

       Preface

      TO BEGIN, a warning to the reader: this book is about political corruption, but it is not about Watergate. It is not about Abscam. It has little to say about Teapot Domes, and you will not find a word between these covers about Monica Lewinsky or Paula Jones. There are books out there that chronicle, in lurid detail, these events. This book is not one of them.

      All of those stories have a few items in common. Somebody breaks the law and (more or less) gets punished for it. There is a perp walk of some sort to reassure us that—in the end—good triumphed because indecency was exposed for what it was. Even if the bad guys go to the grave escaping the long arm of the law, the arm of the historian reaches farther still, and the audience can rejoice in the culprits’ reputations duly suffering for their civic transgressions.

      This book, rather, has much more to do with the guys who got away with it, in particular the guys who flaunted it while getting away with it. In the 1890s, as Congress was writing tariff laws governing sugar, Pennsylvania’s political boss, Senator Matthew Quay, admitted that, yes indeed, he was speculating in the sugar markets, that he would go right on doing so even as he voted on the sugar tariff, and there wasn’t a damned thing anybody could do about it, thank you very much. He was right. A decade later, William Randolph Hearst exposed his successor, Boies Penrose, as being on the take from Standard Oil. Nothing came of it, and Penrose was reelected several times thereafter. He died in office.

      Why did nothing happen to those men? Simple: they were not breaking the laws of their day. That is the fascinating feature about corruption—often, it has absolutely nothing to do with illegal activity. There are plenty of ways, as we shall see, to be corrupt without being criminal. More often than not, the criminals merely lack self-control or self-awareness. That makes them easy targets for rebuke, and thus reasons to feel good about ourselves and our government.

      But as Quay and Penrose prove, the law often has trouble keeping up with corruption, in no small part because the people who write the laws like it that way. Perhaps George Washington Plunkitt, a sachem (or boss) of New York City’s Tammany Hall about a century ago, puts it best:

      Everybody is talkin’ these days about Tammany men growin’ rich on graft, but nobody thinks of drawin’ the distinction between honest graft and dishonest graft. There’s all the difference in the world between the two. . . . I’ve not gone in for dishonest graft—blackmailin’ gamblers, saloonkeepers, disorderly people, etc.—and neither has any of the men who have made big fortunes in politics.

      There’s an honest graft, and I’m an example of how it works. I might sum up the whole thing by sayin’: “I seen my opportunities and I took ’em.”

      Just let me explain by examples. My party’s in power in the city, and it’s goin’ to undertake a lot of public improvements. Well, I’m tipped off, say, that they’re going to lay out a new park at a certain place.

      I see my opportunity and I take it. I go to that place and I buy up all the land I can in the neighborhood. Then the board of this or that makes its plan public, and there is a rush to get my land, which nobody cared particular for before.

      There was nothing honest about Plunkitt’s fraud, but he was onto something in drawing the distinction he did. “Dishonest” graft is criminal activity that harms people directly, whereas “honest” graft is technically legal, and the victim is the common good, not a particular individual. What Plunkitt was doing in his day would be outlawed today, but honest graft nevertheless survives, in different forms, always changing to stay one step ahead of the law.

      Why is this the case? The answer to that question is the subject of this book.

      So, what follows is not a tale of heroes and villains. Herein, you will not find clear-cut victories, glorious moments of truth being spoken to power, or exhilarating climaxes when the hard-charging civic hero triumphs and the citizen’s faith in government is restored. If you’re looking for that, go read All the President’s Men. Similarly, the story here does not have the satisfaction that Calvinism supplies: government in this account is not a hopeless, immoral cesspool where everybody is out for themselves and nobody does what is right, and the only thing to do is await the cleansing hellfire unleashed by the Almighty. If you’re looking for something like that, House of Cards is for you.

      Instead, this book is about corruption as a permanent, institutionalized feature of our government. Less sexy, perhaps, but it makes for an interesting puzzle. After all, our Founding Fathers were frankly concerned about corruption, so much so they designed a system to prevent it from occurring. Yet it has occurred anyway. Understanding this irony is the purpose of the book in your hands. While this may not offer much by way of emotional gratification, it is—on closer inspection—much more fascinating. And it can teach us some very important lessons about how our government actually works.

       INTRODUCTION

       “The Violence of Faction”

       Understanding Political Corruption

      POLITICAL CORRUPTION is incompatible with a republican form of government. A republic strives above all else to govern for the public interest; corruption, on the other hand, occurs when government agents sacrifice the interests of everybody for the sake of a few. Corruption can take many forms, as we shall see. It can be patronage. It can be intentionally lax regulatory oversight. It can be tax laws written to favor special interests. Corruption can benefit just one person, a small group, a large minority, or maybe even a majority, just as long as those interests are incompatible