And This is Different from the US, How?

I am out of the country (currently in Thailand for a wedding).  I read this in the local Asian WSJ, an article about money and patronage in the Malaysian political process.  And while I suppose I was supposed to think "wow, Malaysia is sure screwed up" -- all I was really left with at the end of this article was "how is this any different from the US?" How does 1MDB differ from, say, various green energy funds at the Federal level or community development funds at the local level?

Malaysian Prime Minister Najib Razak was fighting for his political life this summer after revelations that almost $700 million from an undisclosed source had entered his personal bank accounts.

Under pressure within his party to resign, he called together a group of senior leaders in July to remind them everyone had benefited from the money.

The funds, Mr. Najib said, weren’t used for his personal enrichment. Instead, they were channeled to politicians or into spending on projects aimed at helping the ruling party win elections in 2013, he said, according to a cabinet minister who was present.

“I took the money to spend for us,” the minister quoted Mr. Najib as saying.

It still isn’t clear where the $700 million came from or where it went. But a six-month Wall Street Journal examination revealed that public entities spent hundreds of millions of dollars on a massive patronage machine to help ensure Mr. Najib’s United Malays National Organization stayed in power. The payments, while legal, represented a new milestone in Malaysia’s freewheeling electoral system, according to ruling-party officials....

The effort relied heavily on the state investment fund Mr. Najib controlled, 1Malaysia Development Bhd., according to minutes from 1MDB board meetings seen by The Wall Street Journal and interviews with people who worked there.

The prime minister, who is chairman of 1MDB’s board of advisers, promised repeatedly that the fund would boost Malaysia’s economy by attracting foreign capital. It rolled up more than $11 billion in debt without luring major investments.

Yet Mr. Najib used the fund to funnel at least $140 million to charity projects such as schools and low-cost housing in ways that boosted UMNO’s election chances, the Journal investigation found.

The minutes portray a fund that repeatedly prioritized political spending, even when 1MDB’s cash flow was insufficient to cover its debt payments.

This illustrates one (of many) reasons why those lobbying to reduce campaign spending are on the wrong track.  Because no matter how much one limits the direct spending in elections, no country, including the US, ever limits politicians from these sorts of patronage projects, which are essentially vote-buying schemes with my tax money.

The reason there is so much money in politics is because supporters of large government have raised the stakes for elections.  Want to see money leave politics? -- eliminate the government's ability to sacrifice one group to another while subsidizing a third, and no one will spend spend a billion dollars to get his guy elected to public office.

By the way, in this current Presidential election we are seeing a vivid demonstration of another reason campaign spending limits are misguided.  With strict spending limits, the advantage goes to the incumbent.  The only people who can break through this advantage are people who are either a) already famous for some other reason or b) people who resort to the craziest populist rhetoric.  Both of which describe Donald Trump to a T (update:  Trump has spent virtually no money in this election, so he should be the dream candidate of clean elections folks, right?)


  1. me:

    Ultimately, for people in the public such as administrators, private property is a paradox. I fail to see a functioning substitute - give up all your assets, pensioned off for life?

  2. slocum:

    "By the way, in this current Presidential election we are seeing a vivid demonstration of another reason campaign spending limits are misguided. With strict spending limits, the advantage goes to the incumbent. The only people who can break through this advantage are people who are either a) already famous for some other reason or b) people who resort to the craziest populist rhetoric."

    Or to people who have widespread support in the media (the alarm came on this morning to NPR which was running a Hillary Clinton tongue-bath segment about her bucolic suburban upbringing -- "You can take the girl out of Park Ridge, but you can't take Park Ridge out of the girl". Gack)

  3. Bram:

    How much cash was laundered through the Clinton Foundation while she was SecState? Nobody cares that she monetized U.S. Foreign Policy - and she will soon win her party's nomination for President. The U.S. is no better than your average banana republic at this point.

  4. morganovich:

    3 words:

    "the clinton foundation".

  5. xtmar:

    Re patronage, I seem to recall that one of the things blamed for the lack of Congressional productivity was the ban on earmarks making it harder to put pork projects in the budget and this buy votes. I have no idea how true this is, but it say least suggests that you can do something on the margins about it.

  6. ColoComment:

    I heard that piece, too. A more favorable, pandering, slime-slushed script could not have been written. Double gack.

  7. ColoComment:

    Thank you, Warren! I have been arguing with people who want to restrict campaign financing to "x" public dollars per candidate, "x" TV ads, etc. I see campaign money/favors as having properties similar to water: it WILL find a way (over, under, or through) to go downhill (to candidates/special interest votes.)
    The growth of government has gone hand-in-hand with the greater ability to cast government largess in the way of special interests. As the old saying goes, "One hand washes the other."

    The only way I see to reduce the ability of integrity-challenged politicians (but I repeat myself?) to giveaway confiscated taxpayer productivity is to reduce the ability of the seller to sell, not the ability of the buyer to buy, Which in essence means reducing the size of government. It may not be possible but if we have to pick a political hill to die on, but I'd rather "die" on this side of the hill (reduce goods sold) than on the other side (control campaign spending.)

  8. morganovich:

    indeed. the only way to take special interest influence out of government is to take influence away from government.

  9. Thane_Eichenauer:

    You can say that Donald Trump resorts to the craziest populist rhetoric or you could consider an alternative explanation that makes at least as much sense.

    "How Persuasion Hides" by Scott Adams (of Dilbert)

  10. morganovich:

    oddly enough, trump is very much like obama. the 2 are sort of mirror images. obviously, their policies differ greatly, but their fundamental strategies do not.

    both are heavily focused on personal story, narrative, and rhetoric and, more importantly, both are masters of the politics of division.

    each shores up a key group through populist pandering and then points to an out group to which he attributes their woes.

    it's immigrants. it's muslims. it's the 1%. it's the energy industry.

    both are bellowing "dey tek er jeobs!" like some southpark character, but they are pointing at different outgroup badguys.

    trump points at immigrants. obama points at evil corporations offshoring operations and not "investing in america"

    it's the exact same playbook. just swap the key phrases out like a mad lib.

  11. jdgalt:

    Or to people who don't need contributions because they already have more money than God.

  12. jdgalt:

    Agreed, except even that may not be enough. After all, the New Deal effectively made major changes to our Constitution, not by either of the lawful amendment processes, but by appointing justices who misinterpret it (and then threatening to "pack" the Court if FDR's new laws were not upheld -- a practice that Obama has repeated).

    If there is a cure, it will have to involve making it impossible to pack the Court. Preferably after packing it once in order to begin the huge job of undoing the last 100 years of wrong precedents.

  13. jfmoris110:

    the difference between Democrat corruption and thirld world corruption is like the difference between retail and wholesale.

  14. Veritas:

    Term limits.

  15. mlhouse:

    There should be no limits to campaign contributions with immediate disclosure. Therefore, the voters can use this information to make their decisions. Want to support a candidate that gets all of their contributions from the US Bar Association or Big Oil? Now you know. THis allows the candidate to focus on policy, not fund raising.

    WIth unlimited donation and immediate disclosure, any violation of campaign finance law is a direct bribe and can be treated as such.

  16. jdgalt:

    There should be no limits on, or disclosure of, campaign contributions. They are speech.

    The way to prevent bribes is to take away politicians' ability to reward their friends.

  17. Ann_In_Illinois:

    I was living in Hong Kong during much of the Clinton administration, and Asia loved Hill and Billy. First, they liked the fact that for once, a US President wasn't pretending to be above bribes. Western countries pretend to be against corruption, but the way the United Nations operates confirms that it's all hypocrisy, and finally Bill Cinton was dropping the pretense.

    But second and even better, Clinton was dirt cheap! Remember John Huang, James Riady, Johnny Chung, Charlie Trie, Wang Jun... - it became clear that you could buy access to the leader of the free world for chump change compared to what it would cost to buy, say, one of Suharto's golf buddies.

    They found it comforting to know that the US President was so affordable.