I’m going to build out on this in the next several days and weeks. The reason is simple, this is the cornerstone of DC Business; it has nothing to do with legislation, lawmaking, or the other reference points we retain in the illusion of modern politics. It’s going to get ugly!
CTH often describes the background DC motives with the phrase: “There are Trillions at Stake.” Here we take a look at what that really means, and how DC politics is not quite based on the ideas that frame many reference points.
With people taking notice of DC politics for the first time, and with people not as familiar with the purpose of DC politics, we end up within two different references. Perhaps it is valuable to reset the larger frames of reference and provide clarity.
I’ve been talking about this for well over a decade, and we have had this conversation on these pages for just as long. However, in this video Bill Gurley brings some modern receipts. WATCH:
Most people think when they vote for a federal politician -a House or Senate representative- they are voting for a person who will go to Washington DC and write or enact legislation. This is the old-fashioned “schoolhouse rock” perspective based on decades past. There is not a single person in Congress writing legislation or laws.
In modern politics, not a single member of the House of Representatives or Senator writes a law, or puts pen to paper to write out a legislative construct. This simply doesn’t happen.
Over the past several decades a system of constructing legislation has taken over Washington DC that more resembles a business operation than a legislative body.
Here’s how it works right now.
Outside groups, often called “special interest groups”, are entities that represent their interests in legislative constructs. These groups are often representing foreign governments, Wall Street multinational corporations, banks, financial groups or businesses, or smaller groups of people with a similar connection who come together and form a larger group under an umbrella of interest specific to their affiliation.
Sometimes the groups are social interest groups, activists, climate groups, environmental interests etc. The social interest groups are usually non-profit constructs who depend on the expenditures of government to sustain their cause or need.
The for-profit groups (mostly business) have a purpose in Washington DC to shape policy, legislation and laws favorable to their interests. They have fully staffed offices just like any business would – only their ‘business‘ is getting legislation for their unique interests.
These groups are filled with highly paid lawyers who represent the interests of the entity and actually write laws and legislation briefs.
In the modern era, this is actually the origination of the laws that we eventually see passed by Congress. Within the walls of these buildings, within Washington DC, is where the ‘sausage’ is actually made.
Again, no elected official is usually part of this law origination process.
Almost all legislation created is not ‘high profile’; they are obscure changes to current laws, regulations or policies that no-one pays attention to. The passage of the general bills within legislation is not covered in media. Ninety-nine percent of legislative activity happens without anyone outside the system even paying any attention to it.
Once the corporation or representative organizational entity has written the law they want to see passed, they hand it off to the lobbyists.
The lobbyists are people who have deep contacts within the political bodies of the legislative branch, usually former House/Senate staff or former House/Senate politicians themselves.
The lobbyist takes the written brief, the legislative construct, and it’s their job to go to Congress and sell it.
“Selling it” means finding politicians who will accept the brief, sponsor their bill and eventually get it to a vote and passage.
The lobbyist does this by visiting the politician in their office, or, most currently familiar, by inviting the politician to an event they are hosting. The event is called a junket when it involves travel.
Often the lobbying “event” might be a weekend trip to a ski resort, or a “conference” that takes place at a resort. The actual sales pitch for the bill is usually not too long and the majority of the time is just like a mini vacation etc.
The size of the indulgence within the event, the amount of money the lobbyist is spending, is customarily related to the scale of benefit within the bill the sponsoring business entity is pushing. If the sponsoring business or interest group can gain a lot of financial benefit from the legislation, they spend a lot on the indulgences.
Recap: Corporations (special interest group) write the legislation. Lobbyists take the law and go find politician(s) to support it. Politicians get support from their peers using tenure and status etc. Eventually, if things go according to norm, the legislation gets a vote.
Within every step of the process there are expense account lunches, dinners, trips, venue tickets and a host of other customary financial waypoints to generate/leverage a successful outcome. The amount of money spent is proportional to the benefit derived from the outcome.
The important part to remember is that the origination of the entire process is EXTERNAL to Congress.
Congress does not write laws or legislation, special interest groups do. Lobbyists are paid, some very well paid, to get politicians to go along with the need of the legislative group.
When you are voting for a Congressional Rep or a U.S. Senator, you are not voting for a person who will write laws. Your rep only votes on legislation to approve or disapprove of constructs that are written by outside groups and sold to them through lobbyists who work for those outside groups.
While all of this is happening, the same outside groups who write the laws are providing money for the campaigns of the politicians they need to pass them. This construct sets up the quid-pro-quo of influence, although much of it is fraught with plausible deniability.
This is the way legislation is created.
If your frame of reference is not established in this basic understanding, you can often fall into the trap of viewing a politician, or political vote, through a false prism. The modern origin of all legislative constructs is not within Congress.
“we’ll have to pass the bill to, well, find out what is in the bill” etc. ~ Nancy Pelosi 2009
“We rely upon the stupidity of the American voter” ~ Johnathan Gruber 2011, 2012.
Once you understand this process, you can understand how politicians get rich.
When a House or Senate member becomes educated on the intent of the legislation, they have attended the sales pitch; and when they find out the likelihood of support for that legislation, they can then position their own (or their families) financial interests to benefit from the consequence of passage. It is a process similar to insider trading on Wall Street, except the trading is based on knowing who will benefit from a legislative passage.
The legislative construct passes from K-Street into the halls of Congress through congressional committees. The law originates from the committee to the full House or Senate. Committee seats which vote on these bills are therefore more valuable to the lobbyists. Chairs of these committees are exponentially more valuable.
Now, think about this reality against the backdrop of the 2016 Presidential Election. Legislation is passed based on ideology. In the aftermath of the 2016 election, the system within DC was not structurally set up to receive a Donald Trump presidency.
If Hillary Clinton had won the election, her oval office desk would be filled with legislation passed by Congress which she would have been signing. Heck, she’d have writer’s cramp from all of the special interest legislation, driven by special interest groups that supported her campaign, that would be flowing to her desk.
Why?
Simply because the authors of the legislation, the originating special interest and lobbying groups, were spending millions to fund her campaign. Hillary Clinton would be signing K-Street constructed special interest legislation to repay all of those donors/investors.
Congress would be fast-tracking the passage because the same interest groups also fund the members of Congress.
President Donald Trump winning the election threw a monkey wrench into the entire DC system…. In early 2017 the modern legislative machine was frozen in place.
The “America First” policies, represented by candidate Donald Trump, were not within the legislative constructs coming from the K-Street authors of the legislation.
There were no MAGA lobbyists waiting on Trump ideology to advance legislation based on America First objectives.
As a result of an empty feeder system, in early 2017 congress had no bills to advance because all of the myriad of bills and briefs written were not in line with President Trump policy. There was simply no entity within DC writing legislation that was in line with President Trump’s America First economic and foreign policy agenda.
Exactly the opposite was true. All of the DC legislative briefs and constructs were/are antithetical to Trump policy. There were hundreds of file boxes filled with thousands of legislative constructs that became worthless when Donald Trump won the election.
Those legislative constructs (briefs) representing tens of millions of dollars’ worth of time and influence were just sitting there piled up in boxes under desks and in closets amid K-Street and the congressional offices. Legislation needed to be in-line with an entire new political perspective, and there was no-one, no special interest or lobbying group, currently occupying DC office space with any interest in synergy with Trump policy.
Think about the larger ramifications within that truism. That is also why there was/is so much opposition.
No legislation provided by outside interests means no work for lobbyists who sell it. No work means no money. No money means no expense accounts. No expenses mean politicians paying for their own indulgences etc.
Politicians were not happy without their indulgences, but the issue was actually bigger. No K-Street expenditures also means no personal benefit, and no opportunity to advance financial benefit from the insider trading system.
Without the ability to position personal wealth for benefit, why would a politician stay in office? The income of many long-term politicians on both Republican and Democrat sides of the aisle was completely disrupted by President Trump winning the election. That is one of the key reasons why so many politicians retired immediately thereafter.
When we understand the business of DC, we understand the difference between legislation with a traditional purpose and modern legislation with a financial and political agenda.
Lastly, this is why -when signing legislation- President Trump often says, “They’ve been trying to get this through for a long time” etc. Most of the legislation passed by Congress and signed by President Trump in his first term was older legislative proposals, with little indulgent value, that were shelved in years past.
Example: Criminal justice reform did not carry a financial benefit to the legislative bodies, and there was no financial interest funding the politicians to pass the bill. If you look at most of the bills President Trump signed, with the exception of a few economic bills, they stemmed from congressional construction many years ago.
More to follow….
Paul rino ryan is right at home on K street working for the chamber of commerce lobby today. Adding millions to his bank account while still kneecapping President Trump!
Funny—was just thinking of him when I read about “politicians retiring”….(weren’t we all?)
And John Bonher(sp).
When people spend time on welfare they lose the will to work. Eventually they forget what it was like to work. If they were raised under welfare they never learn the value of work and have no concept of what it could be like.
Our political class are living on the welfare dole offered by the lobbyists and interest groups. They have no concept of what their work ought to be or what it would actually be like if they functioned as the Constitution intended them to. All they know is the lobbyist/interest-group handout system. They start out exchanging ‘favors’ to the unions, construction contractors, chamber-of-commerce, etc. in local offices, move up to the statehouse where they get a real dose of the graft machine, then they cash out big-time in DC. The entire party apparatus is built to support this dirty trade. The media and the bureaucrats all jockey for their own turn at the trough.
Excellent. Sunlight is the best disinfectant. I did not, but If you do already understand the genesis of this ‘regulation’ subversion/inversion,
just skip this comment entirely.
I’m remembering back 13-14 years ago when William Black was exposing the mechanism of bank fraud that caused the meltdown of 2008.(Most here probably already know all this history of the aftermath of the crash of ’08… I was otherwise occupied at the time with personal fish to fry, as it were, so my attention to external events was sporadic & severely limited. But I remember *This Guy* talking about his experience with facilitating the S&L investigations & prosecutions in the 1980s, giving context to what was happening that brought about ’08… which is filling in the gaps for me now).
To understand this fully empowers me to align fully & congruently with the opposite now – holding the scope of the criminal perpe-TRAITORS’ roster accountable.
He spoke some Universal Truths back then that even seem relevant now about regulation, in a “that was then, this is now” perspective. – he was an actual, honest, bank regulator who helped investigate & bring a whole herd of criminals to conviction & prison time for the S&L crimes… which the higher-placed criminals decided could never happen again – because the fraud template was too good to let slip away, it just needed a bit of tweaking in it’s ‘fortifications’.
“Regulation” has been inverted, the meaning of the term has been re-defined… from a watchdog-protector… into a facilitator for crime. He revealed how industry { brought down the Glass-Steagall Act }(lessons learned/protective legislation from the ’29 crash), and referencing Citizen’s United, suggests a really good idea, IMO.
((these notes within the following are mine))
WILLIAM K. BLACK: “… Fraud is deceit. And the essence of fraud is, “I create trust in you, and then I betray that trust, and get you to give me something of value.” And as a result, there’s no more effective acid against trust than fraud, especially fraud by top elites, and that’s what we have.
…
BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?
WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. *And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies*.
(([captured] ‘regulation’ is now the criminals’ best friend, re: the All-In Summit talk by Gurley posted))
…
BILL MOYERS: You talk about the Bush administration. Of course, there’s that famous photograph of some of the regulators in 2003, who come to a press conference with a chainsaw suggesting that they’re going to slash, cut business loose from regulation, right?
WILLIAM K. BLACK: Well, they succeeded. And in that picture, by the way, the other — three of the other guys with pruning shears are the…
BILL MOYERS: That’s right.
WILLIAM K. BLACK: They’re *the trade representatives. They’re the lobbyists for the bankers. And everybody’s grinning. The government’s working together with the industry to destroy regulation*. Well, we now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80….”
…
BILL MOYERS: So, you’re saying that people in power, political power, and financial power, act in concert when their own behinds are in the ringer, right?.
..
BILL MOYERS: This wound that you say has been inflicted on American life. The loss of worker’s income. And security and pensions and future happened, because of the misconduct of a relatively few, very well-heeled people, in very well-decorated corporate suites, right?
WILLIAM K. BLACK: Right.
BILL MOYERS: It was relatively a handful of people.
WILLIAM K. BLACK: And their ideologies, which swept away regulation. So, in the example, regulation means that cheaters don’t prosper. So, instead of being bad for capitalism, it’s what saves capitalism. “Honest purveyors prosper” is what we want. And you need regulation and law enforcement to be able to do this.
((both captured now; conspirators in the facilitation; still called “regulation” but accomplishing the opposite = “control fraud”))
…
WILLIAM K. BLACK: There’s a saying that we took great comfort in. It’s actually by the Dutch, who were fighting this impossible war for independence against what was then the most powerful nation in the world, Spain. And their motto was, “It is not necessary to hope in order to persevere.”
Now, going forward, get rid of the people that have caused the problems. That’s a pretty straightforward thing, as well. Why would we keep CEOs and CFOs and other senior officers, that caused the problems? That’s facially nuts. That’s our current system.
So stop that current system. ((Trump!)) We’re hiding the losses, instead of trying to find out the real losses. Stop that, because you need good information to make good decisions, right? Follow what works instead of what’s failed.((Trump again!)) Start appointing people who have records of success, instead of records of failure. That would be another nice place to start. There are lots of things we can do. Even today, as late as it is. Even though they’ve had a terrible start to the administration. They could change, and they could change within weeks. And by the way, the folks who are the better regulators, they paid their taxes. So, you can get them through the vetting process a lot quicker….”
~ William Black, April 2009
{ William K. Black on U.S. Financial Fraud }
AND in April 2010, he said…
“… There’s a huge part that is economic ideology. And neoclassical economists don’t believe that fraud can exist. I mean, they just flat out — the leading textbook in corporate law from law and economics perspective by Easterbrook and Fischel, says — I’ll get pretty close to exact quotation. “A rule against fraud is neither necessary nor particularly important.”
Right?
Notice how extreme that statement is. We don’t need laws. We don’t need an FBI. We don’t need a justice department. We don’t even need rules like the SEC. The markets cleanse themselves automatically and prevent all frauds. This is a spectacularly naíve thing. There is enormous ideological content. And it fits with class. *And it fits with political contributions.*
Do you want to look at these seemingly respectable *huge financial institutions, which are your leading political contributors* as crooks?
BILL MOYERS: TheHill DOT com website says Goldman Sachs is uniquely positioned to fight this case, that it *spent $18 million over the last decade lobbying members of Congress, and put millions more in their campaigns*. I mean, you’ve said elsewhere. That’s smart business, right, to invest in the politicians who are going to be investigating you?
WILLIAM K. BLACK: I would tell you, the Savings & Loan crisis, our phrase was, *“The highest return on assets is always a political contribution.”*
…
“…In terms of the Supreme Court decision (Citizens United) – if corporations are going to be just like people…then let’s use the three-strike laws against them. Three-strike laws, you go to prison for life if you have three felonies. How many of these major [[pharmaceutical, etc.]] corporations would still be allowed to exist if we were to use the three-strike laws, given what they’ve been convicted of in the past? And…in most states, they remove your civil rights when you’re convicted of a felony. Well, let’s take away their right to make political contributions if they’re found guilty of a violation….
The culture is deeply criminogenic… We now have the entitlement generation as CEOs. They just plain feel entitled to being wealthy as Croesus with no responsibility, no accountability. *They have become literal sociopaths.*…”
~ William Black, Professor Economics, Law at the University of Missouri-Kansas City, interviewed by Bill Moyers
{ William K. Black, Michael Copps and the Future of the American Dream }
“… Black developed the concept of “control fraud” — frauds in which the CEO or head of state uses the entity as a “weapon.” Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae’s former senior management.”
This get rich and stay rich scheme will/has destroy[ed] America fast.
Thank you AmaraGrace, your post is as valuable as the article itself. I have to bring up a point it seems to miss though.
Corporations can if they wish to be, moving targets. Not by going to a foreign country, but simply because the investors who did things to help 2008 occur, for instance, might have gone somewhere else entirely by 2009, or perhaps even before 2008 became what it was.
In another context I tried to convince leftists that the truly big money people, or the most damaging big money people, are often not going to be where they were when they caused wrongdoing or engaged in it themselves. I warned them that this morning’s oil tycoon could be this afternoon’s wind energy magnate. I did that specifically to help them understand the senator Gore tennessee, who was called the senator from Baxter oil, could I have a son named Al, who was pushing wind power and solar, without being one bit less crooked, and maybe without even having to change the cast of characters with whom he was getting rich (er).
The position of corporations is also highly regulated by government. Under pressure to ‘Go Corporate’ is stronger every year. We live in a time when even the smallest businesses, often businesses without a single employee, find it vital to acquire at least limited corporate status to avoid certain types of tax issues, such as inheritance tax, or personal liability that lawyers and often the legal system itself seem to take great pleasure in inflicting on people who are basically trying to make an honest living.
At the same time, if the corporation is successful enough to be able to go public, even if the original owners seek to retain control through the number of shares owned, the corporation is legally obliged to put all priority on maximizing the return on the value of shares. And it is criminally easy for regulators and politicians tied to regulators to pressure corporations by using regulatory ability, or if necessary, legislative action, and thereby oblige the corporation to lobby, and continue lobbying ever more generously, and provide tax deductible contributions to any entity the regulators and politicians wish them to.
If we think of the pharmaceutical industry specifically, the usual presumption is that the regulators have been captured by the corporations they regulate. But Dr Fauci provides a useful actor to portray what the reality probably truly is. After a long career in government, Dr Fauci certainly knows which bureaucrats and which politicians, and which media figures or organizations will help him to pressure which corporations or general interests. Aside from him being able to move quite a few millions of dollars surreptitiously, even as we have seen, to the biological weapons production facility of a hostile foreign power.
A person like Fauci has probably several times in his career either changed what a legislative action would do, sometimes without the members of the legislature understanding what it would do, or pushed one or other pharmaceutical companies to act as he wished them to by the same kind of manipulation of legislation or regulation. Any pharmaceutical company could be bankrupted in a day if a couple of it’s best performing products, or any of its most promising products for the near future, were to meet any kind of regulatory obstacle.
Since only a handful of people would know that this was happening at all, and very few people outside that circle understand the issues, the power of the supposedly ‘neutral’ expert in the bureaucracy is enormous. After 51 years as the head of NSAID, it is a wonder that Dr Fauci is not richer than the whole Biden family. He must be one of those people who enjoys power and prestige more than money.
As a metaphor, I often say, the ability of the person with power, to take the money from the person with money, is illustrated in dark alleys all over the world every night. The principal remains valid if what the thug in the alley wants is for you to buy a whole table of tickets to the policeman’s ball, or donate heavily to the (tax deductible) Transgender Transition and Cute Kitty Videos Coalition.
Thanks again because the things you point out are very relevant.
Our Senators and Representatives are not in office to represent OUR interests and write law resolving OUR issues…
They are there to sell to us policy measures that that do not represent our interests and do not resolve the issues we want resolved. They in fact represent corporate interests and resolve issues the corporations want resolved.
The chasm between Main Street USA, and Wall Street, could not be greater.
About 5 decades ago, I worked in a very lowly position in Congress, and even then something similar to the system outlined in the article was visible. However, while industry and interest groups did present parts of what became legislation, it was unnamed employees working for the various congressional committees and less often the staffs of individual members who actually wrote the bills and found ways to reconcile different demands from the different economic interests, or not, into a form that might prosper in committee and on the floor, and if it was thought necessary, maybe even to garner popular support, or at least support of some sector of opinion that was considered desirable to the members of Congress, or sometimes just to their
staffs. One of the great truths contained in the article is that often the member of Congress himself or herself did not pay much attention to what was going on until politically powerful interest groups and opinion sectors made the question relevant to reelection, and it is re-election which is the constant highest priority for every member of Congress. When I worked there members of Congress were almost never present in their offices or the Capitol building unless a vote had been called, whereupon they would arrive at the Capitol building and rush to the floor and at the doorway to the floor be told by a trusted aide which way they would be voting. Usually, as far as I knew, they were not off doing something terribly nefarious. They were usually just at a campaign office a couple blocks from the Capitol building making phone calls to try to get donations from people who were somehow not represented
by the organized lobbies. The organized lobbies would do business over lunch or dinner or at some fancy event somewhere. I think the congressman I work for needed to do even more of that phone work because, I hope, he did not have as much support from the organized lobbies as some others did. But perhaps I am optimistic, in any case that was 50 years ago. I have to presume that things are worse now. Keep back though, for every member of the House of Representatives, his next chance of being thrown out of his job seemed like it was only a few days away at all times.
As sort of an exception to the rule Most members who I was able to observe seemed to have some pet issue(s) they were genuinely interested in affecting legislation about. Usually I was not able to determine whether that detailed attention was used for good or ill, for public spirited goals, or for private ones that might be much less noble.
I do remember a conversation I had with
the member of Congress I worked for after he voted for a measure that I had thought he would oppose, because when we had last discussed it, he agreed with me that it would cause businesses unneeded expenses without achieving any good. I believe it was voted for mostly because of constituent pressure. The congressman told me “I can’t do any good if I am not here”. Each one of them, or at least each one who is trying to do some good, still cannot give up the idea that he or she is personally necessary to the continuation of Republic. I suspect many are much more mercenary than that and find their presence there to be useful primarily to themselves.
It was a pretty typical Congressional solution, one which sounded positive, accomplished nothing, and cost private businesses money, but would not be understood by the public to be useless.
That’s my two cents.
“plausible deniability’
It’s not, though. We accept it because the swamp and media accept it. No other reason. In any other country, it’s corruption.