HOW DO POLITICIANS BECOME RICH

We can learn much from the investigation going on in New Jersey related to the closing of the George Washington Bridge if we pay attention. Governor Chris Christie has shown clearly how a politician conducts business. For example, his relationship to the Port Authority explains how he was able to use their budget to benefit himself almost without a trace. As governor, he has the power to appoint people to that body. It is not clear but it sounds like he appointed something like 50 to 80 people at high salaries. Their appointments apparent had nothing to do with the ability of the appointee. He could use such appointments as rewards for past behavior as well as to expected future political favors.

He used his influence to provide many favors to a town’s mayor to gain his political support. In turn, the mayor benefits in the eyes of the town’s people. Two mayors in that state, and there are certainly many more, who were trying to promote economic development in their towns. The governor used the storm relief money as a carrot to influence the mayors to make a bad decision to help corporations. Although not yet proven, it appears the GWB traffic scandal was another attempt to help a corporation but it is unclear how. It is very unlikely the benefiting corporations will directly pay Governor for his “kindness”.

None of this has a monetary reward for Christie. I suspect, his monetary payback will be through the payment of high honorariums for speeches; thousands of dollar for 30 minute speeches; this is such a common form of pay back that people just accept it as a fact of a politicians life and do not record the amount or the source of the funds. In addition, campaign donations are expected to be maximized to the legal limits. No one seems to consider speech honoraria as bribes or as a pay back but as honest pay for honest work or honest donates for political favorites. Speech honoraria are part of political quid pro quo.

                                                                                                                       

We see evidence that Chris Christie was appointing people to high positions such as the Chair of a political party, to the state supreme court, and to other important positions. In the case of court appointments, they can lead to corruption of justice in the form of activist judgments as we have seen in the supreme court of the Untied States but how does that contribute to a politician’s wealth.

The federal government provided emergency management money to help the people of New Jersey recover from the hurricane Sandy. The governor used 2.5 million some of that money for advertisements to promote tourism; that is promote the return of tourism to the shores of his state, except that the ads were campaign ads for his reelection. If you stop and think about it, probably this only illegal thing he did. Still, it helped to relect him but how did that contribute to his personal wealth.

I have a suggestion to help control political excesses. We all know about campaign funds, political financing, and the laws attempting to control these and the problems with term limits. Bribery is illegal. Using campaign funds for personal use is illegal. Accepting expensive gifts is illegal. It is illegal for politicians to become consultants. How then do politicians become rich? What I would suggest is that a new  law be written to tie speech honoraria to gate receipts; not just for elected politicians and other government officials but for everyone; politicians, supreme court justices, their family members, judges of all kinds, movie stars, athletes, Nobel prize winners. The tie to gate receipts would be a way of introducing Adam Smith’s invisible hand. You already know politician become rich but have you ever thought about how that happens with all those laws in place. If you don’t think this idea would make a significant change, ask yourself how politicians become rich. If a person earns $84 per hour speech, ($174,000 a year, which is a senator’s salary) pus expenses would be just fine; currently there is a 15% of salary limit on additions income that is apparently ignored. It is a little different from $30,000 per hour speech. I would like to know how much each senator’s family members make, but will never know that; it is too personal.    

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