Janine Wedel - Unaccountable - How Elite Power Brokers Corrupt Our Finances, Freedom, and Security

STRATEGIES

Both law and ethics, as I wrote early in these pages, prove to be impotent counters to today’s unaccountability. We must consider the long-term impact of both accountability legislation and the effectiveness of naming and shaming.

What of the first?

As we discussed earlier, it appears that an array of factors helped drive the American Economic Association to adopt a more stringent code of ethics in 2012 for thousands of economists. A study in 2010 of prominent economists not disclosing financial ties got some disapproving press. This came at the same time as an Oscar-winning documentary, complete with “ambush” interviews of academic economists who appeared to take money to deliver positive news about an economy that was about to collapse, namely Iceland. But has the idea that economists might be named and shamed for serving as scholars-for-hire or even just “consultants” struck fear into the hearts of economists with a swirl of undisclosed affiliations? Hardly. Are those economists without money-making and prestige-building roles concerned about guilt by association? It’s doubtful.

Where is the social pressure of the community of economists? It’s hard to detect. And yet, as I argue, if the pattern is to change, sanctions must also come from within.

As for Key Opinion Leader physicians, the passage of the Physician Payment Sunshine Act in the United States may force companies to issue public reports on payments to physicians. But as with economists, does this actually raise the specter of naming and shaming? ProPublica reported in 2014 that many top pharma companies had drastically cut their budgets for physician speaking engagements ahead of the disclosure rules taking effect. 14While the threat of disclosure may have taken some physicians working in America out of the game, again, legislation and transparency alone—that is, naming—cannot suffice in the absence of the effectiveness of shaming.

The Limits of Law

Can law, and the enforcement of it, do all the work? Or even much of it?

The emergence of lobbyists who simply don’t register should serve as a cautionary tale. The fate of several disclosure and ethics laws might be at play. There was the 1995 Lobbying Disclosure Act, which has many loopholes still exploited today. But it wasn’t until around 2008 that the number of lobbyists mysteriously began a sharp decline. Political scientist Tim LaPira offers several reasons in a guest post for the transparency advocates at the Sunshine Foundation, including one I find interesting. He mentions the idea that after the passage of the Honest Leadership and Open Government Act of 2007 and President Obama’s 2009 executive order putting more lobbying strictures on Executive Branch employees, players don’t want to hurt their career prospects by wearing a Scarlet L for Lobbyist. 15

In the end, LaPira believes that the Honest Leadership and Open Government Act is probably the most likely reason lobbyists have gone underground, seeing less risk in not registering than in registering. This shows a failure of enforcement, clearly. But he also emphasizes what I have throughout the book: that lobbying needs redefining to better encompass what it now really is. I would add that influence more broadly needs to be redefined to fit the contortions that power brokers are now making in flexing their muscles. So with both economists and physicians, we need to be on a sharp lookout for new behaviors that might be novel conduits of influence allowing players to evade the rules . . . and avoid being named and shamed.

In the beginning, as well as in the end, there is no substitute for society or what is sometimes called “civil society.” I don’t mean this in a lofty or overarching way. We bring society alive when we connect with our communities beyond the silos of our own networks and professions to see our actions from a different perspective. We bring society alive when we cross-fertilize outside our usual networks. Many of the policy failures we have seen in this book lie with players and groups who are so embedded in their own tight-knit networks and mindsets that they not only ignore those outside their circles, they actively refuse them a place at the decider’s table. Society is alive—and the public trust is possible—when outsiders have a seat. 16

CORRUPTION AND RESTORING THE PUBLIC TRUST

Of course, corruption does not just afflict the Other, the benighted Third World country. The more elusive corruption is now very much a part of Western, highly developed countries that typically rank relatively low on corruption indices. In any case, the fixation on country-by-country ranking is itself misguided; today’s power brokers, as we have said, are often global in reach and work in networks. To that end, the object of analysis should be the players themselves, their border-hopping allies, and the milieus in which they operate. 17

And metrics aren’t up to the task. Metrics might work if the focus on illegal acts—the single transaction in a single venue—made sense; but that, too, is outmoded. The prevailing definition of corruption, “the abuse of public office for private gain,” is ready-made for the clarity of bribery but not for the ambiguity that swirls around today’s influencers. They are more subtle in their dealings and have little need for blatantly illegal activities.

The old model might target a corrupt lawmaker receiving a bribe from a company to get favorable legislation enacted. That model breaks down in the new era, in which relationships are multiple and moving while organizational boundaries and missions are blurred.

And how does one account for corruption that might occur in the service of ideology? Certainly the actions of ideologically driven operatives would not fit neatly into a model that emphasizes transactions with clearly measurable benefits to the transgressors. Money is certainly not the sole motivation of the powerful.

It would seem that we should not just consider the activities of the players, but take a systematic look at their practices. The frenetic role-playing in and of itself doesn’t make one corrupt, but the modus operandi does make accountability and transparency very difficult. A player who acts as a paid consultant in one venue, a pundit in another, and a professor in yet a third is not necessarily engaged in a “double strategy,” but his consultancy and punditry activities can be at odds with his supposedly objective voice as a professor if he does not disclose the former. 18And surely watchdogs will have their hands full trying to untangle all the activities at play.

In sum, to fully capture the new influence and the potential for corruption, metrics should take a back seat to patterns of operation and network configurations charted through analysis of the players’ roles and networks. Shortly, I will describe this in greater detail.

Are They Corrupt?

Shadow elites, shadow lobbyists, and their fellow travelers may be unaccountable, with their “corruption” elusive. But are they, in fact, corrupt?

As we have seen, the bribe-taking bureaucrat or customs official is more likely to be defined as “corrupt” and punished, even as the consequences of his actions are nowhere near as egregious as, say, the financier who devised investment vehicles for selected clients to bet against the housing market without disclosing to other clients (pension funds, insurance companies, and foreign banks) that they were being set up to lose billions.

We redefined corruption as a violation of the public trust in Chapter 1, in broad sync with conceptualizations in texts such as the Qur’an and the Bible. 19Political economist Lloyd J. Dumas elaborates: 20

The violation of the public trust for personal advantage (either for oneself or one’s network) is the essence of corruption, whether it is the public trust of a government official or the trust implicit in a client-consultant relationship. For example, it is expected that the advice given and actions taken by medical doctors will be guided by what is best for the health and well-being of their patients, not by what course of treatment will maximize the doctors’ income or satisfy their desire to try out experimental procedures that may bring them acclaim. In any relationship that conveys power and authority to one individual to act on behalf of others, or even to guide the behavior of others, trust is central. That is one of the key reasons why the massive betrayal of clients’ and the public’s trust by rating agencies and top investment banks created such an earthquake.