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Congressional and corporate corruption harm ordinary Americans

Congress does not permit ethics investigations of its members when these are initiated by citizens. Since 1997, the House has required citizens to obtain a letter of transmittal from a member of the House before filing a complaint. So far, no one has been able to get such a letter. The Senate allows such complaints but almost never acts on them.

In both houses, Republicans protect Democrats, and Democrats protect Republicans. Information, even evidence, that people in Congress may have violated an ethics provision or may have acquired income on which taxes were not paid is not acted upon when brought to the attention of the appropriate authorities in the Justice Department or the Internal Revenue Service. This means the old chestnut that our government isn't perfect but it's still the best in the world is a sham. The statement that the United States has the best government money can buy is, unfortunately, true and proof that money doesn't necessarily buy good government. The Federal Election Campaign Act is without teeth. Under Section 527 of the tax code, undisclosed contributions to groups associated with members of Congress are legal.

The possibility of anyone proving that a congressperson or a staff member has been bribed has been virtually eliminated. The Supreme Court has ruled in United States v. Sun-Diamond Growers of California that when members of Congress or their staff receive (illegal) gratuities, prosecutors must show a precise (pretty much unprovable) connection between a gift and an official act. A member of Congress is free to accept "gifts" (bribes) from special interests almost without fear of prosecution for bribery.

Some people are pretending that gifts that benefit a politician are not bribes but "free speech." Does anyone think this doesn't impugn the integrity of the institution? When you make the rules, you can do almost anything you want. Former Attorney General Janet Reno, whose image as public official was subject to ridicule by the national press, was unable to advance the Justice Department's Public Integrity Section's very weak investigation into the 1996 campaign finance scandals. At least she tried.

Even when people in government are caught red-handed, nothing of significance happens to them. Former Rep. Bud Shuster, R-Pa., former chairman of the Transportation and Infrastructure Committee, had a chief of staff, Ann Eppard, who is today the most powerful transportation lobbyist in Washington. Prosecutors had evidence of gifts amounting to $230,000 in illegal donations and the official acts produced by those gifts, intended, successfully, to influence public policy. She was allowed to plead guilty and received a very minimal $5,000 fine. At least she was prosecuted, but compared to the far more lucrative arena of high finance she was but a bit player, and the bribe she received was peanuts. However, no one can prove it was peanuts because no one can get Congress or Justice to investigate allegations of corruption. Shuster resigned in February 2001 and was succeeded by his son.

Members in both major political parties were at fault but the ideological center of deregulation and corporate privilege lies more with the Republicans. They led in creating the rules that not only allow but foster and practically command the corruption that defines the all-too-cozy relationships between corrupt corporate behavior and politics. Once the rules were written this, de facto, allowed corruption and in effect decriminalized influence peddling by public officials. Anyone who wanted to survive in politics was forced to go along. One thing most went along with was deregulation. This meant the disarming and under-funding of the watchdogs in government using the now discredited excuse that the industry could regulate itself. Members of Congress who have been trying to restore integrity to national public life are rare.

In July it was revealed that Citigroup, America's largest banking conglomerate, had assisted disgraced energy giant Enron by creating phony financing vehicles. Citigroup and J.P. Morgan Trust made off with $200 million in consulting fees for their part. Among other assets, Citigroup owns CitiFinancial Credit Corporation, which has been criticized for unfair lending practices to poor people. It was the combination of deregulation, a mantra of conservatives for more than twenty years, and Enron's influence over government that led to the plunder of billions of dollars from American investors. The list of crimes includes the manufactured energy crisis in California last year.

The scandals that have rocked the corporate world came in the sector that is probably the most heavily regulated, the financial sector. Its boards of directors and auditors, accounting firms and state and federal regulators, all are charged with monitoring corporate behavior so that information unfavorable to the P/E (price-earnings) ratio is not misrepresented. When profits are overstated and debts understated, stock prices tend to rise. CEOs and others who were paid in stock can reap huge fortunes from rising stock prices. Accounting rules are being changed, but one has to have an uneasy feeling that such rules can be circumvented in a business culture which has allowed the current torrent of scandals to happen.

Obviously the business community was unable to regulate itself and there are insufficient deterrents in both civil and criminal law to control it. It is almost impossible to send wealthy CEOs to jail because they have the money to hire master criminal lawyers. Rules can be written which would make it possible to recover profits made from sales of stock on the eve of the release of negative information that will cause the price to fall, and such rules should extend to every officer of the corporation.

Bin Laden, the terrorist who I like to imagine is dead and buried in the mountains of Tora Bora, would have been greatly entertained to see how the combination of corporate and governmental corruption have harmed millions of innocent Americans. He hasn't done nearly as much to create the conditions that have lowered the value of 401(k) accounts. I imagine his ghost, outlined in fire and brimstone, bragging to his compatriots that things are working out better than he had hoped. His unwitting allies ? the CEOs of fallen corporations who escaped with tons of money and are busy building enormous mansions in the Hamptons, the Caribbean and elsewhere ? will probably never be adequately prosecuted and will not be forced to give back much of what they have taken. Their colleagues in Congress and the Administration expect to stay in power and/or be reelected. And probably will.

John C. Mohawk, Ph.D., columnist for Indian Country Today, is an author and professor in the Center for the Americas at the State University of New York at Buffalo.