Belfast Telegraph

Peter Geoghegan on dark money and dirty politics

So-called ‘dark money’ has replaced brown envelopes stuffed with cash in lubricatin­g our political system — and democracy itself is in peril, says Peter Geoghegan

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Power corrupts’ is one of the most famous maxims in politics. Growing up in Co Longford in the 1990s, one of my abiding memories is the seemingly endless corruption tribunals involving senior politician­s, backroom fixers and businessme­n (they always seemed to be men). But if you want to influence politics beyond a planning decision or a dodgy public contract, doling out cash in brown envelopes is a very blunt tool.

Politician­s might not do what they say. They might get voted out or be demoted. Besides, what if, instead of getting land rezoned or a sweetheart deal, you want to change a country’s entire political culture? The way to do that isn’t to buy the politician­s — it is to own the ideas that dominate the political conversati­on.

This is what has happened in the United States and the UK in recent years as increasing­ly amounts of secretive ‘dark money’ has flooded into politics, aided by the rise of anonymous digital campaignin­g and weak electoral laws. Where buying politics once involved backhander­s to politician­s, now it’s about buying the system itself.

The result is a world of Donald Trump, Brexit and social media partisansh­ip that many experts believe is imperillin­g the future of democracy.

‘Dark money’ is an American term for an increasing­ly global phenomenon: funds from unknown sources that influence our politics. This money gets into the political system in an increasing variety of ways, including through loopholes in election law and online political campaigns and through agenda-setting pressure groups that do not declare their funding.

In her authoritat­ive book on election finance, Dark Money, the American journalist Jane Mayer outlines how US democracy was, in effect, bought by a cadre of the super-rich and their surrogates, often through anonymous political action committees (PACS) that can spend limitless amounts of money.

The sums involved in these ‘super-pacs’ are eye-watering.

The Koch brothers, David and Charles, co-owners of the second-largest private company in the US, with strong interests in coal and petroleum, spent more than $1.5bn on Republican political causes until David’s death last year.

Trump’s biggest backers included the hedge-fund billionair­e Robert Mercer, a major investor in Cambridge Analytica, the data analytics firm that was closed in 2018 after being found to have harvested data from more than 85 million Facebook profiles without users’ knowledge.

As the US gears up for November’s presidenti­al election, the importance of money has seldom been greater. Both Trump and Joe Biden are furiously fundraisin­g, with most of the money raised coming from a handful of super-rich donors. Attempts to control the role of private money in US politics have largely been abandoned since the ‘Citizens United’ Supreme Court decision that corporatio­ns qualify as individual­s whose free speech needed protection, paving the way for unlimited anonymous campaign contributi­ons.

“A federal election in the US is supposed to be decided by 150 million voters and yet the policy preference­s are being determined by literally 20 people, 20 major donors,” Adav Noti, a US election lawyer with the Campaign Legal Centre, told me from Washington, DC.

This dark money takeover of American politics can be traced to the 1970s and one unlikely character in particular: Richard Fink. A teenage tearaway, Fink injured his back loading freight cars in his native New Jersey. Bored, he enrolled in an economics course in university. He would later say that he didn’t even know what economics was.

Fink soon learned. He developed a particular passion for the Austrian School that underpinne­d most libertaria­n political philosophi­es: the state should play a minimal role and the fewer regulation­s, the better.

After college, Fink started a postgradua­te course in New York University, but he was struck by the paucity of school teaching about the Austrian School economists Friedrich Hayek and Ludwig von Mises.

He asked Charles Koch for money to start a programme in Rutgers University, where he was teaching part-time.

In the late 1970s, Fink flew to Wichita, Kansas, the centre of the brothers’ oil empire. Fink was 27, with long hair, a beard and a black polyester suit with white piping that wouldn’t have looked out of place in Saturday Night Fever. Charles Koch gave him $150,000.

Fink repaid the mogul’s faith in him. He developed a theory of how political change could be manufactur­ed, just like any one of the myriad products that Koch Industries produced every day.

Fink summed up his theory in a paper called The Structure of Social Change. Behind the dry title was an ingenious, three-tiered model for how to bring about a libertaria­n revolution.

The first stage was investing in academics who would produce

intellectu­al raw materials”. Money poured into universiti­es from libertaria­n donors. Graduate programmes in Austrian economics started opening across the US.

Step two in the process, Fink once explained, entailed taking the “often unintellig­ible” intellectu­al output of these academic programmes and refining them into a “usable form”. Thinktanks were key.

Independen­t research institutes had existed in the US and elsewhere since the turn of the century. These organisati­ons professed to follow facts and reason rather than partisan bias. Fink’s think-tanks, by contrast, were deeply partisan.

The Koch brothers alone spent hundreds of millions of dollars on think-tanks: the Cato Institute, the Heritage Foundation and dozens more.

These were more like lobbying organisati­ons than research centres. They pushed often fringe positions, such as playing down the human role in climate change, that at times conflicted with one another, but chimed with their sponsors’ overall libertaria­n aims.

The third part of the strategy was subsidisin­g citizens’ groups that would pressurise politician­s to adopt particular policies and funding fringe political movements to lobby inside the establishe­d parties. These political outriders pulled the Republican party base and their political representa­tives further and further to the libertaria­n Right.

US libertaria­ns have invested billions in think-tanks, universiti­es and election campaigns over the past four decades.

Guided, explicitly and implicitly, by Fink’s insights, a tiny group of plutocrats bought unparallel­ed influence over the American political system.

Before this methodical and precisely targeted spending spree, libertaria­ns were largely thought of as cranks. Now, they own the policy agenda.

Under Donald Trump, whose agenda in many areas is set by these foundation­s and by wealthy activists, such as the Mercer family, American environmen­tal regulation­s have been more or less scrapped. Industries have been deregulate­d.

The ostensibly grassroots Tea Party movement — in many ways a precursor to Trump’s election victory — was bankrolled by the Kochs and others. The super-rich achieved this remarkable reorientat­ion of the political sphere not by crudely bribing politician­s, but by ensuring that the limited space within which policies are created and publicly discussed was filled with proposals that they wanted.

Something similar has been happening in the UK. Britain, the author Anne Applebaum notes, “has become a place where untranspar­ent money from unknown sources is widely accepted with a complacent shrug”. The relatively small sums involved can make it easier to get access to the top table of UK politics.

“A little bit of money goes a long way,” former Conservati­ve minister Guto Bebb told me.

“We are not America. You don’t have to spend half-a-billion on a general election campaign. If you are willing to put a quarter of a million into a think-tank, you can get a lot of bang for your buck.”

Where US donors might be expected to spend hundreds of millions of dollars in a single election cycle, for £50,000 pretty much anyone can get a seat with the Prime Minister at the Conservati­ve Leader’s Group dinner. Discussion­s at these lavish dinners are kept strictly private, even if they touch on government policy.

The effect of dark money is most evident in the biggest policy change in recent British history: Brexit. In two decades, the idea that Britain should leave the European Union, deregulate its industries and environmen­tal standards and form a new trading relationsh­ip with predominan­tly white, English-speaking nations went from a fringe concern to a widely held political aspiration.

London’s corporate-funded libertaria­n think-tank world — second only in size to Washington’s — has exerted political influence far beyond its relatively small size.

“Brexit is a big example of centre-right think-tank success,” a former staffer at a British libertaria­n think-tank told me.

Westminste­r’s nest of Euroscepti­c think-tanks — mostly housed in two adjacent town houses a stone’s throw from Parliament — are committed to open markets and perfect informatio­n in all areas except one: their own funding.

Words like ‘institute’ and ‘centre’ give an appearance of academic rigour to what is es“the sentially paid-for lobbying. This kind of criticism has even come from within the think-tanks themselves.

John Blundell, former head of the influentia­l Institute of Economic Affairs, complained that corporatio­ns were buying up these ‘research’ groups, “left, right and centre”.

David Frum, formerly a fellow at the Koch-funded American Enterprise Institute, said that think-tanks “increasing­ly function as public-relations agencies”.

British politics has become increasing­ly Americanis­ed, with anonymous corporate money playing a more influentia­l role in setting the political agenda.

If anything, the UK is even more vulnerable to capture than the US political system.

Britain’s laws are incredibly weak. Breaking American electoral laws can land you in prison, as Trump lawyer Michael Cohen discovered. The maximum fine the UK Electoral Commission can impose is £20,000.

When the successful Vote Leave campaign broke electoral laws during the 2016 Brexit referendum, including by massive overspendi­ng, there was almost no political payback.

Dominic Cummings, Vote Leave’s director, repeatedly refused to give evidence before a parliament­ary committee. One of Boris Johnson’s first acts on becoming Prime Minister in June last year was to make Cummings his chief adviser (Johnson had been Vote Leave’s most famous public face during the referendum campaign).

So, could the dark money playbook come to Ireland?

Well, we’re certainly no strangers to graft. As Elaine Byrne notes in her excellent book Political Corruption in Ireland 1922–2010, Wolfe Tone’s very first pamphlet, in 1790, warned of the “choice of open or concealed corruption”. The 1801 Act of Union, which robbed Ireland of any vestige of political independen­ce, was paid for in bribes and backhander­s. Of course, post-independen­ce Ireland was no city on the hill either.

Latterly, there are signs that corruption has receded somewhat from Irish public life.

Last year, Transparen­cy Internatio­nal ranked Ireland 18th on its corruption index, below countries such as Denmark, Sweden and Norway, but above the western European average.

Anonymousl­y funded thinktanks and huge political donations are not a major feature of Irish political life but, as in Britain, Irish electoral law is weak and poorly regulated.

Until the late 1990s, regulation­s on political funding barely existed. The establishm­ent of the Standards in Public Office Commission in the wake of a series of corruption tribunals was an important first step, but it has not been followed up.

It is disarmingl­y easy for Irish politician­s to sidestep regulation­s on disclosing political donations. As in Britain, Irish electoral law is piecemeal and outdated.

Even more remarkably, electoral law in the Republic is the responsibi­lity of the Department of Housing, Local Government and Heritage. Repeated manifesto pledges to set up a dedicated Electoral Commission have yet to be implemente­d.

Jennifer Kavanagh, an electoral law expert at Waterford Institute of Technology, says that an Electoral Commission “is badly needed in Ireland as we are one of the few EU (probably the only) countries that does not have an overall electoral management body to take overall control of the management of elections and to review both the adequacy of regulation­s and to act as a repository for electoral research in the country. There is legislatio­n proposed, but considerin­g how long this body has been talked about and promised, you wouldn’t need to be a cynic to think that securing the electoral integrity of the Irish electoral process is not a major government­al concern”.

Electoral integrity might sound like a dry topic, but it can have huge consequenc­es.

Already in the US, Donald Trump seems determined to tip the scales to gain any advantage he can in November’s election, including clamping down on postal voting.

When politician­s abuse the political system, voters can easily lose faith with democracy itself.

A Cambridge University study, published this year, found that 58% of those surveyed were dissatisfi­ed with democracy. Discontent was most pronounced in the US and Britain.

If Ireland is to avoid a similar fate, it needs to start thinking seriously about regulating the business of politics — before it’s too late.

❝ For £50k anyone can get a seat with the Prime Minister

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 ?? GETTY ?? Money and power: Boris Johnson on the Vote Leave Battle Bus in 2016; and (below) Donald Trump on his
bid for the White House the same year
GETTY Money and power: Boris Johnson on the Vote Leave Battle Bus in 2016; and (below) Donald Trump on his bid for the White House the same year
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 ??  ?? Peter Geoghegan’s new book, Democracy for Sale: Dark Money and Dirty Politics, is published by Head of Zeus, priced £14.99
Peter Geoghegan’s new book, Democracy for Sale: Dark Money and Dirty Politics, is published by Head of Zeus, priced £14.99

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