How to buy political access, charitable-donation edition

By Felix Salmon
December 11, 2011
Eric Lichtblau has a depressing, must-read story today detailing how strong government regulation of the for-profit eduction sector was diluted into toothlessness by effective lobbying.

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Eric Lichtblau has a depressing, must-read story today detailing how strong government regulation of the for-profit eduction sector was diluted into toothlessness by effective lobbying. Lobbyists, of course, trade on their access to politicians. And one way that they obtain that access surprised me — although it clearly didn’t surprise Lichtblau, who dropped it into his story in a subordinate clause with nary a raised eyebrow. Here it is with my emphasis:

Senator Tom Harkin, the Iowa Democrat who has led Congressional hearings into the colleges, got into a heated exchange with Mr. Stein, the Education Corporation investor.

The senator said that during a hallway conversation after lunch in the Senate dining room, Mr. Stein promised to “make life rough for me” if Mr. Harkin kept up his attacks.

“I took it as a threat — it was one of the most blatant comments ever made to me in my years in the Senate,” Mr. Harkin said.

Mr. Stein, a frequent Democratic donor who had bought the lunch with the senator at a charity auction, would not discuss the details of the conversation. But he said Mr. Harkin’s account was “totally incorrect”.

I’m sure that nothing illegal happened here, but it seems ethically well over the line to me. For one thing, Harkin is rich even by Senate standards: with an eight-figure net worth, he’s the 17th-richest member of the chamber. If he wants to support a certain charity, he’s more than capable of writing a check, rather than selling his own availability to any lobbyist who wants to bend his ear for an hour.

(Technically, Avy Stein is a private-equity investor who owns a network of schools called Education Corporation of America; he’s not a registered lobbyist. But that, of course, makes no difference.)

My point is that it would be obviously unethical and possibly illegal for Harkin to simply sell his lunch hours to anybody willing to pay his price. But isn’t that effectively what he’s doing here? Yes, the money went to charity rather than directly to Harkin. But the point is that Harkin got something he values greatly in return for his time, and it shouldn’t really matter if a politician is paid in cash or in kind.

According to Alex Knott, lobbyists — among whom Stein isn’t even included — made six donations in Harkin’s honor in 2010, adding up to a total of $218,000.

I don’t know how much Harkin and his wife donate to charity each year, but it’s surely more than nothing. And every time they donate a dollar to charity, they’re making the clearest possible statement that they would rather that charity have that dollar than hold on to it themselves. As a result, if you donate money to one of Harkin’s favorite charities, you can consider that your donation has roughly as much value to him as if you’d given the money to him directly.

Even if you apply a generous discount rate and assume that Harkin would personally prefer cash to a charitable donation in his name, the donation is still worth something to him. He might prefer $10,000 in cash to a $10,000 donation on his behalf, for instance, but he wouldn’t prefer $1,000 in cash to a $10,000 donation to a favored charity. And so you can consider that a $10,000 donation is worth at least $1,000 to Harkin.

Which raises the question: if you wouldn’t be allowed to give $1,000 to Harkin personally, how is it OK to tie a $10,000 donation to some quid pro quo with him? (I have no idea how much Stein paid for his lunch, but I assume it was a substantial amount.)

This is an ethical issue I’ve faced myself. Every so often I’m invited to give a talk somewhere, with a fee attached, and I’d happily give the talk even if there wasn’t a fee. If I ask them to donate the fee to charity, does that eradicate the kind of conflict that would be seen if I accepted a check? I don’t think it does, entirely. On the other hand, if I give the talk and I don’t ask them to donate the fee to charity, I feel as though I’ve missed an opportunity to support a great organization.

Normally I say that I won’t accept a fee, but that I invite them to donate the sum to Doctors Without Borders; they don’t have to tell me whether they did or not. It’s a not-entirely-satisfactory compromise. But then again, I’m just a pundit. For US Senators, the bar should be set high. And if you wouldn’t sell your availability for cash, you shouldn’t do it for a favored charity, either.

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