The city councilman who wrote a bill and pocketed $80 million

No man is allowed to be a judge in his own cause, because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity. With equal, nay with greater reason, a body of men are unfit to be both judges and parties at the same time; yet what are many of the most important acts of legislation, but so many judicial determinations, not indeed concerning the rights of single persons, but concerning the rights of large bodies of citizens? And what are the different classes of legislators but advocates and parties to the causes which they determine? Is a law proposed concerning private debts? It is a question to which the creditors are parties on one side and the debtors on the other. Justice ought to hold the balance between them. Yet the parties are, and must be, themselves the judges; and the most numerous party, or, in other words, the most powerful faction must be expected to prevail. Shall domestic manufactures be encouraged, and in what degree, by restrictions on foreign manufactures? are questions which would be differently decided by the landed and the manufacturing classes, and probably by neither with a sole regard to justice and the public good. The apportionment of taxes on the various descriptions of property is an act which seems to require the most exact impartiality; yet there is, perhaps, no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice. Every shilling with which they overburden the inferior number, is a shilling saved to their own pockets.

– Federalist No. 10

So the city councilman introduces a bill to rezone the waterfront for development. This development project was the centerpiece of his campaign for office and, after winning his seat on the council, he has tirelessly pushed for its passage.

But now a zealous reporter has uncovered that the councilman is not a disinterested party when it comes to this plan. He and his family have invested heavily in the very same waterfront property he is now urging the city to purchase and to redevelop. If the councilman’s plan passes in the form he drafted it, he and his family stand to gain $80 million.

That’s a huge sum of money.

What would you do for $80 million? It is, for 99.9 percent of us, a life-changing sum. It would be more than enough to pay off every debt and to fulfill every aspiration of saving for the future while living a life of ease. With $80 million you could easily retire. You could retire and create a foundation, dispensing substantial grants to your favorite causes and charities in life-changing, world-changing sums without ever worrying that you would exhaust the balance of capital in your lifetime or in the lifetime of your children.

It is simply impossible for most of us to imagine, then, that $80 million is not more than enough money to raise the suspicion of corruption with our hypothetical city councilman.

But while that city councilman is only hypothetical, that figure of $80 million is all too real.

If Mitt Romney’s proposed tax plan is implemented, he and his family stand to gain $80 million.

In the hypothetical case of our hypothetical city councilman, everyone would agree that his advocacy of a policy that would enrich his family to the tune of $80 million reeks of corruption. He would face an enormous burden of proof to demonstrate that his $80 million windfall was somehow, in some almost unimaginable way, incidental to his plan and not the driving force behind it. Until such proof was supplied, both the councilman and his self-enriching scheme would be under a cloud of well-deserved suspicion.

And yet Mitt Romney’s tax plan is not hypothetical. The personal interest he and his family have — the mind-boggling personal enrichment it promises for him — is all too real.

How is that any different from the hypothetical city councilman? How does this personal enrichment to the tune of $80 million not set off alarm bells? Why are Mitt Romney and his tax scheme not under a similar cloud of well-deserved suspicion?

$80 million. $80-freaking-million.

Seriously, if $80 million is not a sufficient sum to trigger your personal corruption-detector, then you don’t have one.

I wrote about this back in 2005, when Vice President Dick Cheney was pushing a tax plan that would enrich himself personally to the tune of $12.6 million. Here’s the links for that series of posts:

Here was my summary from that final post:

1. Any given proposal — tax-cut, tax-hike, public works, whatever — must justly serve the public interest and promote the common good. Any politician advocating any kind of policy must demonstrate that the policy meets this test.

2. When politicians support proposals that result in immense financial benefit for themselves personally they have an even greater obligation to demonstrate that the proposal in question is truly in the interest of the entire public and not merely in their own interest. When you cash the check, you invite suspicion.

3. To consider off-limits any discussion of the personal financial benefits that politicians may have at stake in a particular policy debate paves the way for massive corruption.

4. Some policies that justly serve the public interest may also result in financial benefit for some politicians who support them. This is bound to occur. A lot. I have no problem with that, but in such cases the burden of proof lies with those politicians to demonstrate which way cause and effect is working.

5. If a politician advocates a policy that benefits him or her financially but on balance does not serve the public interest, then we can conclude that he or she is corrupt.

Seriously, though — $80 million.

  • Firestorm172001

    I just talked to somebody who said that Romney could use the tax evasion allegations here (http://www.usnews.com/news/blogs/rick-newman/2012/08/07/heres-how-mitt-romney-might-have-paid-no-taxes) to defend himself against allegations of corruption here.  The argument was pretty much that if Romney was weaseling out of paying taxes entirely and intended to continue to do so, the exact sum Romney would be weaseling out of paying would be academic with respect to Romney’s personal greed.  In Fred’s analogy, the city councilman would be writing a bill to pay himself out of a fund that he is already secretly embezzling. 

    My friend acknowledged that this would make Mr. Romney significantly more dishonest than previously supposed, but people who bought him as a “job creator”  might be  taken in.

  • EllieMurasaki

    Even at 5% interest
     
    It’s possible to make 5% interest?

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    You might be able to swing it on long-term bonds and/or money market vehicles if you negotiate. I’m still a little too used to 1990s-era interest rates, which were very rentier-friendly.

  • Grey Seer

    Of course I COULD find ways to spend more money than about the four million. Except I’m a practical sort with no particular need for that sort of thing.

    Why would I buy my own airplane? There are whole companies out there who fly people around, often in excellent comfort, for a miniature fraction of the cost. The same goes for the idea of buying my own holiday home. I see no benefit in isolating myself from the rest of humanity behind my giant wall of money.

    Unless, you know, I can do it literally. I have to admit, if I had enough money to build a fort in the living room out of stacks of notes, I totally would.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    I see no benefit in isolating myself from the rest of humanity behind my giant wall of money.

    That’s kind of the key that I think a lot of rich people and their pretenders have forgotten.

    Someone linked to a Forbes write-up about business CEOs which had been penned and printed in 1955.

    The sheer mundanity and pedestrian-ness of their lifestyles, and the way they didn’t try setting themselves off from their fellow humans by living in gated communities or remote mansions was very noteworthy.

  • DavidCheatham

    Indeed, and that’s what _I_ would do if I won the lottery.

    I’d hire a crew to build a building, find something that seemed a reasonable business idea, and start a business. And repeat.

    Some of these businesses would make money, and that’s good, and some of them would not, but hey, they created jobs, so they’re basically a form of charity.

    Alternately, if I ran into someone else who had a good idea for a business, I’d set _them_ up in one, with me as silent partner.

    And I’ll also start competitors to  some of the currently more abusive businesses, like payday loan places, and destroy, or at least seriously screw up, the market.

    Even if the place I start goes out of business after two months, I’ll have ran half of them out of business in that time, and the other half will have entered a price-war spiral they will find it hard to recover from. And with payday loans, my company going around buying ‘rollover’ loans of people who constantly can’t pay will really harm them, as that is where most of the money is.

    Selling at a loss to price other businesses out of the marketplace is probably illegal somehow, but, hey…the government should feel free to sue my company over that. It’s not like its going to last long enough to finish a trial. I don’t think there’s any real way to handle kamikaze companies. (Please note I’m not talking about bankruptcy. This company borrowing money without the intent to pay it back would be unethical. I’m talking about it just burning my capital and then folding when hitting zero.)

  • BaseDeltaZero

    This is how the idea that if I had zillions of dollars (and $80 million is pretty close to zillions) I would buy a top-of-the-line yacht.  Then I could travel wherever I wanted and take the animals with me.

    Top-of-the-line yachts cost billions, not millions.  Yes, they are very, very silly.

    It’s possible to make 5% interest?

    If you’re investing 80 million dollars, yes.

  • http://dumas1.livejournal.com/ Winter

     

    Top-of-the-line yachts cost billions, not millions.  Yes, they are very, very silly.

    If I’m spending billions of dollars on a boat, it better have guns on it. Maybe something in the twelve inch range, with some smaller guns added here and there.

    And fireworks. It has to be able to launch fireworks. The kind that would make NASA jealous.

    And probably a small helipad or seaplane launcher for when I really really must send someone ashore for fresh tomatoes right this minute.

  • DashRendar1128


    $80,000,000.  That’s enough money to hire 1600 people at a salary of $50,000 each.”

    For one year. And then?

  • EllieMurasaki

    “$80,000,000.  That’s enough money to hire 1600 people at a salary of $50,000 each.”

    For one year. And then?

    Presumably you are not actually paying these people to entertain themselves. While it is of course plausible that you are paying them to do something that needs done but that is not profitable to do, one, that seems unlikely and not terribly bright from a free-marketeer perspective (which is the usual perspective held by anyone lauded as a job creator, which is where this discussion started, isn’t it?), and two, that’s what the public sector’s for. So whatever your employees are doing, it’s probably bringing in money. Not necessarily as fast as the money’s going out, but I’m not sure what one would need sixteen hundred people for to begin with, so start with a smaller operation (and possibly cheaper labor–no cheaper than local living wage for the unskilled labor, of course, and more for skilled, within reason) and it could easily be self-sustaining for some time, and the lower initial outlay would mean reserves on hand to ensure that if it ever stops being self-sustaining, one, you can pay your employees severance so they’re not fucked (nor on unemployment, which is really just fucked with a bit of lube) while looking for new employment, and two, you still have capital for your next try at job creation.

    Anyway, even if you really are just handing sixteen hundred people fifty grand apiece and telling them to entertain themselves, that’s sixteen hundred people who can suddenly afford to buy shit. There might be more efficient ways to inject eighty million into the economy, but handing sixteen hundred people fifty grand apiece and telling them to entertain themselves would certainly be effective at injecting eighty million into the economy.

  • DashRendar1128

    I don’t disagree with the main premise, that the eighty million could be used effectively for job creation as opposed to just lining Romney’s pockets further. But, er, there are slightly less…temporary methods of using that money in that way. (For one thing, if you burn every dime on salaries, what do you do for tools, equipment, transportation, overhead, or whatever other costs you’re incurring?) Eighty million could probably be used to start a series of small businesses in a variety of fields, many of which would fail, but enough of which would hopefully flourish as to make the outlay worth it.

    Just handing people wads of cash, though, that strikes me as a very bad idea, for several possible reasons. For one thing, geographical distribution – if all these 1600 people are in the same small town, for instance, you just killed that town’s economy.


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