"Pay to Play" Politics Examined, with Lessons for Campaign-Finance Reform

Article excerpt

   I don't care if she waddles like a duck
   And talks with a lisp.
   I still think I'm in good luck
   If the dollar bills are crisp ...
   'Cause if the purse is fat
   That's where it's at.

   William Robinson Jr. and Robert Rogers,
   "First I Look at the Purse" (BMI) (1)

Once upon a time, at least as popularly portrayed, politics was about public service, not personal gain. Political office was something that individuals did in addition to rather than instead of their jobs as butchers, bakers, and candlestick makers. As G. K. Chesterton noted, however, the notion of politics as a substitute for rather than a complement to ordinary economic pursuits has changed in the past century: "The mere proposal to set the politician to watch the capitalist has been disturbed by the rather disconcerting discovery that they are both the same man. We are past the point where being a capitalist is the only way of becoming a politician, and we are dangerously near the point where being a politician is much the quickest way of becoming a capitalist" (qtd. in Fuller 1961, 337). One way politicians become capitalists starts with selling access to the political process to private groups, just as Internet portals, such as America On Line, provide access to the World Wide Web for a fee. Paying for access to politicians is sometimes termed a "pay for play" arrangement: money exchanged for a chance to transact in the political marketplace.

In this article, I discuss some ways in which political office enables its holder to be a political capitalist. It is popularly assumed that what is being sold in political markets is special favors for special interests, and so "pay for play" is synonymous with rent seeking. The political game being played, however, is more complex than that suggested in this typical good-guy/bad-guy characterization. Many payments are made to avoid the imposition of special costs, not to secure special favors. Much of what is popularly perceived as rent seeking by private interests is actually rent extraction by politicians.

That distinction is crucial in any evaluation of legal limitations on giving to politicians. Proposals to reform campaign finance are all based on the popular view that citizen payments to politicians are made for special favors. Therefore, campaign-finance reform plans typically include limitations on payments to politicians, especially on "soft money" payments that do not go directly to candidates. For several reasons (to be discussed), there are many arguments against limitations on political giving, even when the payments are made for special favors. And if some payments are made to avoid special costs that politicians would otherwise impose, then the case against limiting campaign contributions is even stronger.

The "Pay to Play" Phenomenon

Background: Pay

Concerns about "pay to play" begin with the first part, pay. The role of money in politics seems to be growing. It is difficult to establish this thesis rigorously, for no one has ever ascertained exactly how much is paid to politicians either in the past or in the present. (The extent to which political donations can be documented is discussed in Milyo, Primo, and Groseclose 2000, 77.) Even modern campaign-disclosure laws do not require the reporting of every check written in every campaign. Moreover, payments may be made in money or in kind. For a political candidate needing a car to tour his district or state at election time, the loan of a car is just as valuable as a check that would go to rent a car from Avis.

Nonetheless, from what can be documented, growth in political contributions seems apparent. The most visible fund-raising organizations during the past generation have been political action committees (PACs), creatures of the 1970s revolution in campaign-finance laws. (Although I focus in this section on PAC contributions, I do not intend to suggest that they necessarily constitute the most important source of political giving. …