Deck 8: Business in Politics

Question 1

Examine again in Exhibit 5 the wording of §201(b)(2) in Title 18 of the United States Code. Did Reps. DeLay, Barton, or Tauzin engage in criminal bribery? Reexamine the wording of §201(b)(1). Did Wittig, Lawrence, or Bornemann commit criminal acts of bribery? If not, were there errors of judgment?

Answer 1

The Person W, the President of the Company WE, hatched a plan to make the Company WE independent from main Company WC, which he renamed it as Company WI, whereby both the companies would become a separate, publicly-traded company. This strategy was to help expand its market cost, which was already fading as stock exchanges plummeted, and the company suffered huge damages. The companies' shares, if uncontrolled by the Commission KC, would gain buyers' interests. Since the borrowing required to support Wittig's purchases was secured by the utility company's cash flow and assets, the utility would be left with the weight of the debt. Wittig wanted to evade the obligations of utility management by taking charge of the new company. However, he encountered a great hurdle. The holding company retained ownership shares of its business, similar to mutual funds, and, if the company is divided into two independent public companies, then they will come beneath the supervision of the Investment Company Act, 1940. This act was essential to curb debt investment, shield customers from hoax debt, etc. Following this, the Person W appointed a Governmental Strategies Incorporated (GSI) lobbyist called Person B to explore for ways to spare Company WE from this statute.
Congressmen Persons D, B, and T were engaged in criminal bribery as they took donations made by Westar resources who lobbied them to repeal the official act i.e. Public Utility Holding Company Act (PUHCA) 1936, wherein there was a provision to exempt Company WE from the Investment Company Act if the PUHCA was rescinded. The representatives took the donations to support their election campaigns, whereby Congressmen Persons T and B were running to ensure election and re-election of their associates and colleagues. Congressman Person D was one of the elected officials engaged in the unlawful solicitation of a federal donation from Company WE in restitution for an official procedure that would serve them.
Person W (the President of the Company WE), Person L (the VP of the Public Affairs), and Person B(GSI lobbyist) committed criminal acts of bribery since they engaged in lobbying and contributed bribery to i nfluence an official act for their own benefit. Person W, through Persons B and L, pressured the Republican representatives in the House Committee of Energy to include a Company WE plan that will exempt only Company WE from the ambit of the Investment Company Act. Person B was the mastermind in actualizing this provision by recommending Person W to offer donations to various Republican representatives of the House during their fundraising campaigns and other events.

Question 2

Is there any difference between what these contributors and lawmakers did and daily practice in Washington, D.C.? Where should the line be drawn?

Answer 2

Legislators are known to be influenced by corporates in framing different laws. Through lobbyists, corporates bribed the representatives of the House and Senators to enact laws that will serve the interests of the corporate. The reason why most representatives upheld the interests of the corporates is such that corporates backed and financed most of the representatives during their election campaigns and donated in their fundraising events. As a result, the lawmakers represented mostly the interests of corporates, while the citizens are facing the consequences of these laws. For instance, the lobbyists have successfully pressured the federal government to minimize regulation in the health industry, thereby rendering healthcare costs remarkably expensive, and it is the citizens who are suffering because of this.
There is a huge difference between how the legislators or patrons did daily and how they practice in the Country U's Capital W. In Capital W, the representatives, in trying to appease the President and the Congress would mostly hide their actions or not disclose their engagement with lobbyists. Most of the lawmakers are known to be discreetly attempting to change laws that favor corporates.
A boundary has to be drawn where policymakers or contributors should not try to push the Congress in the Capital W to give assent to bills that could affect the masses. The corporates provide funds and donations in their election campaigns and the representatives present the interests of the corporates. However, when it comes to the Capital W politicians should not be overridden by vested interests since any attempt of changing or framing a new provision to serve the interests of a particular company can create an adverse impact on the entire nation and citizens will face the aftermath of any terrible decision. Therefore donors and congressmen, although engaging in lobbying, should not attempt to convince the Capital W to give assent to framed laws that serve the purpose of a handful of people, indicating that pushing their interests should not reach the federal government.

Question 3

Should the House Standards and Official Conduct Committee have imposed a stronger sanction on Rep. DeLay? If so, what penalty was deserved?

Answer 3

The President of the Company WE, W, hatched a plan to make the Company WE independent from main Company WC, which he renamed it as Company WI, whereby both the companies would become a separate, publicly-traded company. This strategy was to help expand its market cost, which was already fading as stock exchanges plummeted, and the company suffered huge damages. The companies' shares, if uncontrolled by the Commission KS, would gain buyers' interests. Since the borrowing required to support Person W's purchases was secured by the utility company's cash flow and assets, the utility would be left with the weight of the debt. Person W wanted to evade the obligations of utility management by taking charge of the new company. However, he encountered a great hurdle. The holding company retained ownership shares of its business, similar to mutual funds, and, if the company is divided into two independent public companies, then they will come beneath the supervision of the Investment Company Act, 1940. This act was essential to curb debt investment, shield customers from hoax debt, etc. Following this, Person W appointed a Governmental Strategies Incorporated (GSI) lobbyist Person B to explore for ways to spare Company WE from this statute.
The House on Energy was working on an exemption. As a result, Person B established close contacts with Congressman D (the Majority Leader of the House) to push the interests of Company WE as Congressman D was a powerful figure in deciding the fate of the Westar.
According to the Title 18 of the Country U Code, Congressman D was one of the elected officials engaged in the unlawful solicitation of a federal donation from Company WE in restitution for an official procedure that would serve them, so the Committee HSOCC should have executed stringent sanctions against him. However, the board adjourned the criminal charges and resorted legal action to take its passage itself as Westar and other corporate sponsors were charged for infringing State T laws. Following Congressman D's involvement in Company WE case, the Committee should have sanctioned more penalties.
As a politician who catered to the interests of a public company that hoped for exemption from the Investment Company Act, Congressman DL should be prosecuted for criminal bribery charges and should be fined three times the monetary worth he received as donation from Company WE, and constricted for a minimum five years or debarred to occupy any public office of honor, trust, or profit, as stated in the Country U code.

Question 4

Was Westar's strategy for political action appropriate? If not, what would be a better strategy?

Question 5

Is a strategy of political influence based on the exchange of favors inherently corrupt? Or is it a constructive way to make the complicated trade-offs necessary in a democracy?

Question 6

Did Westar or any of its officers violate the letter or spirit of federal campaign finance laws as they existed at the time (before the new rules of the Bipartisan Campaign Reform Act took hold)? If so, what was the violation?