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Lobbying Used to Be Illegal: A Review of Zephyr Teachout’s New Book on the Secret History of Corruption in America

Matt Stoller
Nov 17, 2014 · 10 min read

This book review is cross-posted at Firedoglake, where Zephyr Teachout held an online discussion with readers. You can read the conversation in the comments by clicking on this link.

If there’s one way to summarize Zephyr Teachout’s extraordinary book Corruption in America: From Benjamin Franklin’s Snuff Box to Citizens United, it is that today we are living in Benjamin Franklin’s dystopia. Her basic contention, which is not unfamiliar to most of us in sentiment if not in detail, is that the modern Supreme Court has engaged in a revolutionary reinterpretation of corruption and therefore in American political life. This outlook, written by Supreme Court Justice Anthony Kennedy in the famous Citizens United case, understands and celebrates America as a brutal and Hobbesian competitive struggle among self-interested actors attempting to use money to gain personal benefits in the public sphere.

What makes the book so remarkable is its scope and ability to link current debates to our rich and forgotten history. Perhaps this has been done before, but if it has, I have never seen it. Liberals tend to think that questions about electoral and political corruption started in the 1970s, in the Watergate era. What Teachout shows is that these questions were foundational in the American Revolution itself, and every epoch since. They are in fact questions fundamental to the design of democracy.

Teachout starts her book by telling the story of a set of debates that took place even before the Constitution was ratified — whether American officials could take gifts from foreign kings. The French King, as a matter of diplomatic process, routinely gave diamond-encrusted snuff boxes to foreign ambassadors. Americans, adopting a radical Dutch provision banning such gifts, wrestled with the question of temptation to individual public servants versus international diplomatic norms. The gifts ban, she argues, was evidence of a particular demanding notion of corruption at the heart of American legal history. These rules, ‘bright-line’ rules versus ‘corrupt-intent’ rules, govern temptation and structure. They cover innocent and illicit activity, as opposed to bribery rules which are organized solely around quid pro quo corruption.

The Constitution is full of such bright-line rules. For instance, the residency requirement was intended to protect against ‘adventurers’ and the takings clause protects private property and has an anti-monopoly interpretive framework. The census, rules on representation of House members, the regular electoral cycle of two year terms, age requirements (to prevent dynasties), requirements for legislative journals, salary payments for legislators, and prohibitions on holding legislative and other offices are all anti-corruption provisions. The founders, Teachout argues, were obsessed with corruption. They had seen their beloved British system fall into the trap of corruption, with ‘place men’ (members of parliament dependent on the king) and rotten boroughs, and sought to prevent a recurrence in America.

Teachout points out something fairly obvious, but not recognized today — the theoretical underpinning of the American revolution was that a corrupt government had no legitimacy to govern. This is something the founders well recognized. The debates they had — Madison, Jefferson, Adams, Franklin, Washington, Hamilton, and people in the culture at large — reflected a divide between political philosophers Thomas Hobbes versus Baron de Montesquieu. Hobbes’s vision, echoed today among the Chicago school’s law and economics scholars, was that corruption as a concept made no sense. Life was a brutal competition among selfish actors. In such a paradigm, a revolution would simply be a question of raw power, rather than any set of principles.

The founders roundly repudiated this view, adopting Montesquieu’s arguments that there is such a thing as a public interest and that people could orient themselves around it given sufficient personal virtue and adequate structural incentives to do so. Montesquieu is best-known for his promotion of the concept of different branches of government, but that concept came from his moral view of human nature. Teachout shows that questions of bribery were fairly insignificant in the dialogue over the structure of the new republic, whereas anti-corruption as a Montesquieu-influenced deliberative design principle was the key animator of the shaping of the country.

This debate continued, in some sense, throughout the two hundred plus years of American legal and cultural history. The first significant test of the revolutionary anti-corruption doctrine was the 1795 ‘Yazoo’ controversy, when a Georgia legislature sold a massive land grant to speculators who had, as it turns out, bribed lawmakers. Voters turned out the legislature at the next election, and the newly elected lawmakers voided the deal. The case generated widespread controversy and went to the Supreme Court, where in 1810, in Fletcher v Peck,the court said that the sanctity of the contract must be upheld even in the face of corruption. In a nod to today’s logic of brutal tolerance of corruption, the court argued that corruption may be problematic, but there was nothing the state could do about it. This was a highly consequential decision, and prioritized contract rights over anti-corruption.

During the railroad era, the country faced similar Yazoo-like legal problems managing corruption, but under a different guise. When large corporations got land grants to build rails and facilities, and used lobbying and bribery to acquire them, were those concessions voided? Courts usually said no. A corrupt legislative act might be distasteful, but one could not interrupt commercial society through either democratic or judicial redress over something so undefined as corruption. But questions over structure and process never went away.

In her discussion of the 19th century robber baron era, she includes the critical yet forgotten law of 19th century lobbying. Lobbying today is considered a Constitutionally protected free speech activity, an unfortunate but necessarily tolerated side effect of the First Amendment. That, however, is a relatively recent legal status.

In the 19th century, lobbying was perceived as an illegitimate and inherently corrupt activity, a betrayal of one’s own citizenship. The Georgia draft Constitution in 1877 made lobbying a crime. ”Throughout the country, from the early 1830s through the early 1930s, the sale of personal influence was treated as a civic wrong in the eyes of the law,” she writes. “A citizen did not have a personal right to pay someone else to press his or her legislative agenda.” This anti lobbying sentiment was not enforced through criminal law, but through civil law. Contracts for lobbying were unenforceable by courts, as the case Trist vs Child showed.

In 1890, the first law requiring lobbyists to register was passed in Massachusetts. This began the legitimization of lobbying as a profession. In 1927, the Supreme Court began chipping away at the de fact prohibition on lobbying via contract law, but as late as 1941 it still upheld Trist vs. Child.

Corruption in this era was widespread, as was the reaction against it. The Pendleton Act, which created the civil service, and the secret ballot, were both bright-line rule innovations to reduce the temptation of corruption. The country also began wrestling with the increasingly high cost of campaigns, which was a pivotal factor in the election of 1896 contest between populist Democrat William Jennings Bryan and Republican William McKinley. Banks were assessed a .25% charge on capital to finance McKinley’s run, which amounted to roughly $5 billion in today’s money. This led to, among other things, Teddy Roosevelt’s anti-monopoly crusades and his work to ban corporate contributions in the early 20th century.

Corruption was more than just bribery, it was a threat to self-government and individual citizenship. It was a moral problem. Mark Twain’s novel The Gilded Age, from which the era took its namesake, was a story of an innocent woman turned sophisticated amoral lobbyist. Corruption as a problem had religious overtones.

Gradually, this ardor has cooled. It was only in the post-World War II era that courts began carving out a First Amendment right on lobbying. Lobbying in the post-war administrative state was a necessity, and the increasing expense of public campaigns suggested that restrictions were necessary. But in 1976, the Supreme Court ushered in the modern Hobbesian view of political economy with its ruling in Buckley vs. Valeo. This case invalidated restrictions on campaign spending, and began the reinterpretation of corruption to simply mean quid pro quo bribery. The court argued that spending on elections in a First Amendment right, though the government had a valid anti-corruption interest in limiting speech. Contribution limits were valid, but spending limits were not. Post Buckley, the only limits on campaign spending became corruption-based, so scholars and lawyers began defining their policy preferences in terms of corruption, twisting and warping the term.

The book’s final chapters are a discussion of Citizens United, the Supreme Court’s makeup, and a legal proscription of how to restore the more appropriate conception of corruption in our national life.

According to Teachout, Citizens United was a decision in which the Supreme Court ignored the historic record to narrow the definition of corruption to mean a simple quid pro quo transaction. It found that the First Amendment protects “political speech regardless of the identity of the speaker,” and that the Court found no sufficient “government interest in limiting corporate political advertising.” It equated favoratism and influence with ‘democratic responsiveness’. This was, as Teachout shows earlier, what Benjamin Franklin saw to be a dystopian view of how the American republic would be organized.

Teachout shows how the court itself has undergone transformations that turn it into a deeply elitist and anti-political body. Throughout much of its history, the court had as justices people with practical experience in politics, in getting elected, and in the muck and push and pull of democracy and vote getting. Since the 1970s, nearly all sitting justices have come from academia and appellate courts, creating an unnatural distance from the practice of politics. Conservative justices believe in the law and economics school of thought developed by University of Chicago scholars like Robert Bork, and institutionalized in organizations like the Federalist Society. This line of thinking is Hobbesian, and relies on the selfish man model of human nature. It is formal, abstract, and is not rooted in ordinary human experience, but in models that prioritize efficiency and assumed selfishness. These men ignored 200 years of historical experience, case law, and legislative activity to pursue a legal revolution that in essence rolled back the American break with England. This revolution has restored a system of de facto ‘place men’ and rotten boroughs.

Teachout concludes with a discussion of how to think about corruption as an intellectual question. There are no easy answers, but then again, there never have been. The legislator has a unique role in a representative democracy, he or she must appeal to voters to get elected; indeed ”democracy is premised on that plea…. Creating laws that deter bribery of legislators, but do not deter democratic organizing, has been among the most vexing problems of the American political experiment.” As she points out, “Democracy’s greatest threat (responsiveness to donors), is deeply intertwined with democracy’s greatest promise (responsiveness to voters).”

In a post-Citizens United world, Teachout calls for a renewed discussion of corruption as a broad principle, and suggests several ‘bright line’ institutional innovations. The first is public financing of campaigns, which reduces the temptation of corruption by reducing the dependence of legislators on contributors. And the second is a new set of anti-monopoly laws, which would reduce the aggregate power of private interests that have increasingly come to govern our culture. These come from her establishment of what she calls the ‘Anti-corruption principle’, a principle in which public servants should identify with the public interest. This is both structural, in that we need bright line rules to help them do so. But it is also personal, in that we should act as citizens with personal virtue, and elect public servants who do so as well.

The book is a fascinating and sprawling work designed to help us rethink corruption as an idea. It’s a genuine intellectual achievement, riddled I’m sure with problems that come from trying to sweep several hundred years of legal and political history into one narrative. The Yazoo controversy, for instance, had to do with Native American land claims, which is elided in the book. Slavery is only briefly mentioned, despite slavery being at its very ideological core a question of the corruption of property rights. The 19th century may have seen a very different approach to lobbying, but how the forgotten law of lobbying squares with one of the most corrupt periods in American history is never addressed in the book. These criticisms are more quibbles than anything else — I found myself reorganizing my own thinking about politics based on what Teachout has put together here. She shows that corruption is foundational in all aspects of American law and culture, and that we ignore its rich history only if we want to impoverish our own thinking and imaginations about what is possible.

I would be remiss if I didn’t also note that Teachout herself is as interesting a character as anyone she writes about. She was an organizer of Howard Dean’s Presidential campaign, an inventor of internet politics, and she recently ran for Governor of New York against Andrew Cuomo on the issue of anti-corruption. Her arguments resonate among voters, at the very least. It’s unusual to have a genuine intellectual running for office, and Teachout is a throwback to politicians like Woodrow Wilson and Teddy Roosevelt, deep thinkers who also believed in action. For her, as for them, thinking must be invigorated by advocacy and politics.

Ultimately, the most important audience for the book is the Supreme Court and the judiciary. What Teachout is trying to do is help them understand the context of their work, and arm them with the historical and legal tools to make better decisions about corruption and politics. Teachout has taken on an ambitious task, which is to reorganize the modern conception of corruption and return us, ironically, to our original debates. Scalia, were he honestly an ‘originalist’ as he incoherently claims, would be proud.

Americans broadly speaking would probably agree with Teachout’s interpretation of corruption, rather than that of those who authored Citizens United. Americans see the revolving door of lobbying and believe Congress and the government as institutions are corrupt. They have, in other words, a structural sense of what corruption means. It is not just bribery, it is a set of incentives that are not per se illegal, just unethical. Teachout shows, through painstaking historical research, that this popular conception of corruption is actually far more consistent with the intent of the Constitutional framers than the odd and anomalous John Roberts-led Hobbesian majority.

Corruption in America is a book worth reading, almost as much as Teachout is a person worth following. Reorganizing America is a large task, and many of us are seeking to do that. But first, in some sense, we must reorganize our own thinking, trapped as many of us are in Robert Bork’s nightmarish Hobbesian world of hopelessness. This book will help us take that first critical step.

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