Handouts Corrupt All Governors
What the scandal in Virginia teaches us about politics as usual.
The defense of former Virginia Gov. Bob McDonnell is actually an indictment — of him, and Virginia politics generally.
The prosecution wants to show that Jonnie Williams, the nutritional-supplement salesman who showered McDonnell and his wife, Maureen, with money and pricey gifts, got something special in return: the governor's intercession on behalf of Williams' company, Star Scientific.
McDonnell did do things for Star. He asked members of his administration to meet with company representatives. He held a launch party for the company's premier product, a tobacco extract, at the Executive Mansion. He personally pitched the product to staffers. Maureen even pitched it to Ann Romney.
The governor's defense, though, boils down to this: "So what? He did the same for lots of other companies, too." On the stand, "the former governor said he was eager to promote all Virginia businesses," reported The Washington Post. As The New York Times noted, "the Richmond-based insurer Genworth Financial won a $7 million tax savings from the McDonnell administration. A local brewery . . . got a bill-signing ceremony. The governor pulled out all the stops to help an Israeli firm partner with Pepsi-Cola to make Sabra hummus in Virginia."
"Gov. McDonnell Joins First Lady, Sheila Johnson at Salamander Resort Reception Touting Wine Industry," reported Leesburg Today back in 2012. In court, the McDonnell defense "offered up hundreds of notices like this," noted a TV reporter. Hundreds.
If Jonnie Williams now thinks he got the short end of the stick, you can't blame him. At times the McDonnell administration was a geyser of corporate welfare. It gave the online retailer Backcountry.com $300,000 from the Governor's Opportunity Fund — essentially, a state slush pile, begun in 1992 by Doug Wilder. It gave General Electric a similar sum to help the company, which is worth $265 billion, with employee recruitment. (Every little bit helps, right?)
Under McDonnell the state spent nearly $7 million to bring a 50-job Microsoft data center to Mecklenburg. It threw millions at Steven Spielberg, one of the richest men on the planet, to film part of "Lincoln" in Virginia. It bribed the Washington Redskins to stay in state with millions more.
Near the end of his term, McDonnell's staff produced a glossy, 50-page brochure summarizing his accomplishments. It boasts of the increased funding for the Opportunity Fund; of how McDonnell "developed and passed [the state's] first film industry tax credit;" of how he "led more foreign trade missions than any other governor;" of how he convened a Governor's Conference on Energy, and "passed legislation to establish a Green Jobs Tax Credit," and "established the Clean Energy Manufacturing Incentive Grant," and on and on.
If you read the Constitution of Virginia, you won't find anything remotely connected to any of that. The governor's job, as defined in the constitution, is simple and straightforward: He is to execute the laws of the commonwealth, fill departmental vacancies, serve as commander-in-chief of the state's armed forces and, if necessary, repel invasion or suppress insurrection. Maybe offer up a clemency now and then — but that's about it.
There is nary a word about hawking products like a late-night infomercial.
And yet, from the way McDonnell and other upper-tier politicians talk, you would think the governor's principal function is to act as the promotion and marketing department for Virginia Inc.
McDonnell ran for governor on a three-syllable platform: "Bob's for Jobs." With the country still dragging its hindquarters out of the Great Recession, the message sold well: McDonnell won 59 percent to 41 percent against state Sen. Creigh Deeds, whom he had edged past in the race for attorney general four years earlier by a mere 323 votes. In fact, the theme sold so well Democrat Terry McAuliffe borrowed it for his own campaign theme: "Putting Jobs First."
By the time McAuliffe won, the festering McDonnell scandal had burst. High dudgeon was de rigueur. In his inaugural address, McAuliffe announced he would sign an executive order imposing gift limits on himself and members of his administration, and he urged the legislature to "enact the strongest possible new ethics rules." What McAuliffe did not do was address the original sin beneath the McDonnell scandal — the real reason business interests want to grease politicians' palms in the first place.
Like his predecessor, McAuliffe has continued to give away millions of dollars to companies big and small. Last month, he awarded $4.5 million from the Governor's Opportunity Fund, plus another $5 million from a different pot of economic-development money, to bring the headquarters of CEB, a business-services company, to Arlington. He also has shelled out $5 million for a Chinese paper plant, $300,000 for an engineering company expansion, $350,000 for a fitness-equipment maker, $65,000 for a packaging company and so on.
(McDonnell's predecessor, Tim Kaine, did much the same. Among other things, he used the Opportunity Fund for Hilton hotels, Rolls-Royce and Maersk. Republicans accused Kaine of not using the fund enough. Democrats blasted McDonnell for having voted to cut it.)
The funds come from the state's coffers, which are filled by Virginia taxpayers, which include businesses that might have done other, better things with the money. But politicians find the political allocation of economic goods irresistible because the benefits are clear and concentrated, while the costs are hidden and dispersed.
Despite his calls for tougher ethics rules, however, just three months ago McAuliffe vetoed one. The bill would have prohibited both him and his political action committee from taking money from companies that seek or get handouts from — you guessed it — the Governor's Opportunity Fund.
Moreover, McAuliffe speaks about the state's economy much as McDonnell did. "We need to … build a new entrepreneurial, innovative and dynamic economy," he told leaders of the General Assembly's budget committees a few days ago. "If Virginia is going to remain a leader in the global marketplace, we must renew our efforts to diversify our economy."
The state's economy does not belong to the state's politicians. It is not theirs to manage or direct — though clearly they think otherwise.
As long as they think that — as long as they try to direct the state's economy using slush-fund handouts, special tax favors and product promotions — business interests will continue trying to grab a piece of the action. And the higher the stakes, the harder they'll try. As Jonnie Williams testified when asked why he made his private jet available to McDonnell: "If you're a Virginia company, you want to make sure you have access to these people. He's a politician, I'm a businessman." Q.E.D.
Did Bob McDonnell surrender to some form of corruption when he took so much swag from Williams? No doubt. But by then he already had committed a form of corruption far graver — the kind that led Williams to assume he could get something for his swag in the first place.