Democracy is the best political system money can buy

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… and the ‘Cash-for Cameron’ Scandal is just the latest proof

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In common parlance the word used for trying to influence people’s actions by means of financial incentives is ‘bribery’. But in the world of democratic politics we insist on using words like ‘funding’, ‘lobbying’ or ‘soft-finance’.

But the endless efforts to try to differentiate between the ‘ethical’ use of money to influence politics, and the unethical or illegal uses, miss the reasons why democracy seems to inevitably lead to the toxic mix of money and power we see in the world today.

For those who missed it, Britain’s latest political scandal was the revelation that the co-treasurer of the governing Conservative party was caught on camera apparently offering access to the prime minister and chancellor for up to £250,000 of donation. He cited examples of how donors had been invited to private dinners with David Cameron and his family, and Cameron was forced to declare details of the names of millionaire donors who he had dined with.

There have been so many scandals in British politics, people have become desensitised to stories about sleaze. It is almost expected by the public that politicians will behave in a corrupt manner.

Anyone who thinks that this is a one-off scandal, should think again. Many will remember the resignation of former defence secretary Liam Fox amidst questions about lobbying; and the ‘Cash for Honours’ affair that stained the Labour Party’s last term in office. But the fact that the accusations of possible ‘sale’ of peerages was considered illegal only reminds us that such practices go back many decades; for when Lloyd George sold peerages, it was actually legal, and made illegal under the Honours (Prevention of Abuses) Act of 1925!

Anyone who thinks these big scandals are the only troubling examples, they are not. They are the tip of an iceberg of a political culture in a mature democracy. There are numerous, less ‘scandalous’ examples of perfectly legal behaviour that most people are unaware of.

And anyone who thinks that these are unique to Britain needs to look wider. British democracy (like that in other mature democracies like the United States and France) wears a uniform that disguises its many stains. But younger democracies such as India, Russia, Pakistan, Iraq, Afghanistan and elsewhere seem to find it much harder to conceal the fact that corruption and democracy have become synonymous – and that ‘government of the people, by the people, for the people’ actually means government for the richest and most powerful people in society.

British democratic scandals

The ‘Cash for questions’ scandal broke in 1994 – alleging that a parliamentary lobbyist, Ian Greer, had bribed MPs in exchange for asking parliamentary questions, and other tasks, on behalf of businessman Mohamed al Fayed. But as recently as 2009 there was a similar scandal when four Labour members of the House of Lords were suspended for offering to help make amendments to legislation for up to £120,000.

But more shocking than these examples of breaching the rules are the completely legal and acceptable practices within a democratic system. The term ‘revolving door’, which has been used in this regard, is common in Britain, the United States and elsewhere.

In 2010 the Channel 4 programme Dispatches, exposed ‘Cash for influence’ members of Parliament offering to work for a lobbying firm for fees of £3,000 to £5,000 per day. Former UK Defence Secretary Geoff Hoon, who was implicated in this scandal, was extremely frank when he said that “One of the challenges I think I am really looking forward to is sort of translating my knowledge and contacts about sort of international scene into something that bluntly makes money”.

Hoon may have been shamed by the story but still managed to a get job at defence firm Westland - which landed a £1.7bn contract when he was Defence Secretary.

However, his business interests are as nothing compared to his former boss, Tony Blair, whose multimillion pound ventures include visiting Libya to lobby for JP Morgan.

Hidden Truths

This is a long established tradition in British politics as well as in other countries.

Many former ministers become consultants, directors or lobbyists for big business. Prime Minister John Major was a member of Carlyle Group‘s European Advisory Board since 1998 and was appointed Chairman of Carlyle Europe in May 2001, before stepping down in August 2004. Former Health secretary and Business Secretary Patricia Hewitt was slated for adding board membership of Eurotunnel to her independent directorship at BT, consultancy to Boots UK and adviser to private equity firm Cinven, which specialises in health care. But few people had concerns that Margaret Thatcher’s former Energy minister Lord Wakeham was a director of the scandal-ridden US energy giant Enron; or that both Wakeham and former Chancellor of the Exchequer Lord Lawson were appointed as non-executive directors of N M Rothschild & Sons.

But the less well known stories about legal political lobbying illustrate just how disturbing the system really is.

In October 2011 questions emerged about the appropriateness of Cameron’s appointment of Adrian Beechcroft to prepare a private report for Downing Street on how employment law might be overhauled to ‘boost economic growth’. Beechcroft is a multimillionaire venture capitalist, who is estimated to have given over half a million pounds to the Conservative party. He recommended that firms should be more easily allowed to fire allegedly poorly performing staff without explanation.

This example is not isolated. In the book ‘Who Runs Britain?’, Robert Peston illustrates how big business effectively held a revolver to the head of the Labour government – threatening to pull their activities overseas if policy concessions were not made for their sake – so affecting tax returns, GDP and their electoral credibility. Osborne’s recent budget must be seen in this light, cutting income tax for the rich, whilst declaring Britain must be seen to be ‘open’ for business.

When people in countries in the Middle East cry out for ‘democracy’, they should be careful what they wish for. For if they are calling for voice in society, a chance to elect their rulers, hold them to account and for the rule of law, this is fine. Indeed, Islam defined these elements of government long before modern democracies existed.

But if they want democracy as it is today, they should not merely look to the overtly corrupt politics of Russia, India, Afghanistan, Pakistan and Iraq. They should look to the hidden and manifest practices in mature democracies across the world.

For, as Mark Twain once said “Only a government that is rich and safe can afford to be a democracy, for democracy is the most expensive and nefarious kind of government ever heard of on earth.”

 

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