Jack Abramoff, the Law, and the Imperial Presidency

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In the wake of Jack Abramoff’s guilty pleas in federal court, Democrats and many libertarians are salivating at the possibilities of seeing members of Congress (mostly Republicans) led out of their offices in handcuffs and spending time in those federal prisons that those same members have supported through their legislation and budgetary appropriations.

Yet, we are reluctant to celebrate, because if the U.S. attorneys — and their various cheerleaders among press and pundits — have their way, the result will not be a more "honest" Congress or the dawning of Good Government, but the cold, hard reality of the growth of executive power in government. Unfortunately, many of the same people who have been decrying the "imperial presidency" have been the ones calling for the U.S. Department of Justice (part of the executive branch) to unleash their own prosecutorial dogs. If things go as prosecutors and their supporters hope, that "imperial presidency" will gain even more dictatorial power.

Before going farther, however, we emphasize that we are not defending Congress and the behavior of its members. Indeed, the best way to describe Congress is to call it a legal protection racket. As Fred McChesney has pointed out:

…a politician has an alternative for raising money: selling protection. He can agree not to do something that otherwise he says he would do, something that would reduce the wealth of the potential donor. The most obvious burden that can be threatened is a tax, but there are any number of other things that a politician can propose and then withdraw for a price. A private citizen will be just as willing to pay for a special favor worth $1 million as he will to avoid a $1 million tax. (This assumes constant marginal utility of wealth; with declining marginal utility of wealth, a citizen will pay more to avoid the $1 million loss than for the $1 million gain.)

This, then, is the essence of the political protection racket. Superficially, selling special favors and selling protection do look the same: payment is made to the politician in both cases. But in the extortion racket, citizens are made to pay, not for special favors from Uncle Sugar, but to protect private wealth that they have earned the old-fashioned way, outside the political process.

As objectionable as this process may be, unfortunately, it is legal. We have seen it done many times, a recent episode being the Microsoft prosecution. With Microsoft, we had a tag-team effort involving all three branches of government, not to mention the rest of the Beltway parasites who enthusiastically backed the government. In the end, the executive branch had its fines, members of Congress received new lobbying cash from Microsoft, and the players in the judicial branch had fees, salaries, and prestige.

The Abramoff case is far more troubling. Abramoff’s transgressions involve the usual set of derivative and ancillary "crimes" that federal prosecutors often use in place of those actions that would constitute real harm to individuals. Thus, we see Abramoff getting ready to live in Club Fed for many years, having pled guilty to those derivative crimes of "wire fraud, conspiracy," and "tax evasion." What we do not see are the substantive crimes such as theft or outright bribery. This is not surprising. McChesney notes:

(Politicians) may well take payments to make private parties better off, such as providing tariffs or subsidies. Occasionally, these payments cross the legal line and are actionable as bribery. Prosecutions are few and far between. They largely target not the true substance of the transaction — payment for special favors — but some failure to follow the prescribed legal methods of payment for the favors. Campaign-spending laws provide the blueprint for perfectly legal bribery.

Furthermore, the Jack Abramoffs of the world do not "corrupt" government, as we are hearing today. Instead, the wide reach of government makes people like Abramoff inevitable, as they are responding to the actions and potential actions of legislators and bureaucrats to create economic and social opportunities for some people — and to take away those same opportunities for others.

Most lobbyists do not flaunt their wealth and influence as did Abramoff, which is why he is in the dock and they are engaged in business as usual. They are satisfied with their six and (sometimes) seven-figure incomes and do not much care for upstarts like Abramoff, who no doubt peeled business away from more established lobbyists, just as Michael Milken took clients away from established financial houses on Wall Street. Like Milken in the early 1990s, Abramoff will see the inside of a prison.

While one rightly can call the behavior of legislators and others reprehensible, there are ways to deal with the problem. Bad publicity is one way, and elections are another. Neither provide a perfect remedy, but as long as legislative branches of government exist, our options are limited.

The current mechanism to deal with members of Congress who have received largess from Abramoff — and one that we do not applaud — is prosecution. Over the next year, federal prosecutors will target certain members of Congress who received gifts and campaign contributions from Abramoff and attempt to criminalize their actions.

The first tactic will be to claim that members of Congress "sold" their votes — in other words, bribery. However, we predict that if the various gifts and contributions were legal in and of themselves, then trying to prove bribery in a court of law will be rather dicey, and most federal prosecutors, who are used to employing bullying tactics in order to win guilty pleas, are not skilled enough to convince jurors that real bribery took place. (Of course, that assumes that the jurors themselves are not corrupt, and federal juries often are little more than lackeys for the prosecution.)

The second tactic will be to fit the law into grotesque shapes in order to gain "wire fraud," "conspiracy," or similar charges that often do not de facto require a real crime to be committed. Anyone who doubts should remember that Martha Stewart (whose conviction has been upheld by a rubber-stamp federal appeals court) did not commit a crime in the sale of her stock, yet went to prison anyway. Prosecutors might have more success with these kinds of charges, as they de facto require a burden of proof that is quite low.

The major problem that prosecutors face here is that all of these payments and gifts were given openly and were dutifully recorded. Thus, U.S. attorneys will have to find a way to criminalize something that the law says is legal.

Unlike the Abscam case of the early 1980s in which FBI agents offered open bribes (in front of a hidden camera) to members of Congress in which the quid pro quo was clearly stated, prosecutors do not have any evidence that is open-and-shut. That will not keep them from trying to gain convictions, but it should.

(We add that Abscam itself was an outrage. The FBI, upset that congressional committees had exposed wrongdoing and outright crimes by federal agents during the 1960s and 1970s, targeted members of Congress in retaliation. Yes, the congressmen should not have taken the money, but they never should have been put in that situation in the first place, as the entire set of "crimes" was created by the FBI.)

Our real problem with this affair however, is not just the use of ancillary and derivative "crimes" to further the cause of prosecutors, but rather because we are seeing another example of the executive branch gaining power at the expense of the legislative branch. This process began with Abraham Lincoln, gained strength during the regimes of Theodore Roosevelt and Woodrow Wilson, and reached full speed during the Franklin D. Roosevelt Presidency.

The U.S. Constitution clearly marks the separation of powers, but the "emergency" conditions of the Great Depression led FDR to demand from an acquiescent Congress that it "re-delegate" its own delegated powers to the president. Since World War II, the process has continued apace. Even the downfall of the Richard Nixon Presidency via Watergate has not appreciably slowed this sorry process.

When people complain of the powers that George W. Bush has used, they need to remember that he is doing only what Congress and the courts have permitted him to do. If Democrats do not like the current "imperial" presidency, then they have no one to blame but themselves, for their party was in power when the process commenced in earnest, and FDR still remains the gold standard as far as loyal Democrats are concerned.

Although the present angst of some members of Congress might prove to be good theater (and we are living in an era of bread-and-circuses, after all), in the long run it will serve to strengthen the executive branch of government at the expense of the Constitution. If we wish to rid ourselves of the Jack Abramoffs of the world, there is a better way: smash the state apparatus that makes lobbying so lucrative in the first place.

January 9, 2006

William L. Anderson, Ph.D. [send him mail], teaches economics at Frostburg State University in Maryland, and is an adjunct scholar of the Ludwig von Mises Institute. Candice E. Jackson [send her mail] is an attorney and graduate of Pepperdine Law School.

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