Less Regulation Means Less Opportunity for Government Corruption
Smaller government has the possibility to be more honest government.
The federal indictment of a former Massachusetts state senator, Brian Joyce, gave some headline writers an opportunity to focus on the comic element of his alleged scheme.
The Democratic politician pleaded not guilty. He was charged in part with having accepted 504 pounds of free coffee from a franchise widely identified as Dunkin' Donuts. With Saturday Night Live already memorably mocking that company's seductiveness for a certain element of lowbrow New England culture, it's tempting to react to the Joyce news with a certain Boston cynicism—"at least it wasn't Stahhbucks"—and move on.
But there are some serious points here, too. It will be interesting to see whether the federal effort to make "honest services fraud" charges stick against Joyce are any more successful here than were so-far failed efforts by zealous prosecutors to criminalize sketchy but maybe not actually criminal behavior by the Republican governor of Virginia, Robert McDonnell; by the Democratic Speaker of the New York legislature, Sheldon Silver; and by the Republican majority leader of the New York State Senate, Dean Skelos.
In all three of those federal cases against state-level politicians, judges eventually defined honest services fraud differently than prosecutors did, and dismissed the convictions. The Supreme Court's 8-0 opinion in McDonnell v. United States was emphatic on the point: "conscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. The basic compact underlying representative government assumes that public officials will hear from their constituents and act appropriately on their concerns…The Government's position could cast a pall of potential prosecution over these relationships."
The opinion, by Chief Justice Roberts, warned that if the prosecutors prevailed, "officials might wonder whether they could respond to even the most commonplace requests for assistance, and citizens with legitimate concerns might shrink from participating in democratic discourse. This concern is substantial."
The honest services fraud issue is just one part of the story here, though. Reading the indictment—which includes charges of racketeering, extortion, money laundering, defrauding the IRS, and bribery—it's hard to miss the fact that a lot of the alleged corruption involves government interference with free markets. The "nationally branded coffee and pastry fast-food business" had an interest in state laws governing the relations between franchise holders and parent companies, and in "tip-pooling" legislation about how employees split tips.
The indictment also discusses Joyce's involvement in allegedly "exerting pressure on and advising" members of a town planning board whose approval a developer needed to subdivide a piece of land.
The indictment also features a company "interested in promoting property-assessed-clean-energy 'PACE' legislation in Massachusetts. PACE was an alternative energy financing program that required state legislation because its funding was derived from issuing bonds that were secured by increased property tax assessments."
If state and local government just let restaurants do what they want with their tip money, let landowners do what they want with their property, and let people who want solar panels or windmills on their property pay for them themselves, there would be less opportunity for corruption.
Smaller government, in other words, in addition to whatever other virtues it has, has the possibility to be more honest government. And larger government—more involvement of politicians in regulating or subsidizing or licensing the economy—has the potential to be more dishonest government. It provides more opportunities for crooked politicians to shake down businessmen, and more opportunities for crooked businessmen to try to buy political influence.
Whether that is what happened in Joyce's case will be for a jury or perhaps eventually appellate judges to decide. Prosecutors, the press, and voters can try to weed out dishonest politicians. But the soundest political set-up is one that recognizes that there will always be some scoundrels, and that therefore tries to limit their power. Hoist a cup of coffee to that.