D.C. and DISCLOSE

The Senate will soon vote on a new version of the DISCLOSE Act. This new version is likely to fail to gain enough votes.

Instead of looking at the national fight in detail, let’s consider a current local case that tells us something about disclosure and campaign finance.

Three members of the District of Columbia city council have called upon the current mayor to resign. Why? Some former supporters of the mayor have alleged that a city contractor spent an undisclosed $600,000 on his behalf in the last election. This donor held a $300 million health care contract with the city.

That contract had been awarded by the administration of the former mayor, the man the current mayor defeated with the putative help of the $600,000. So the contractor faced the following problem: He could stick with the guy that awarded him the contract, but if the former mayor lost the race (as he did in fact), the new mayor might well give someone else (a supporter perhaps?) the $300 million contract. So maybe the contractor should support the former mayor’s challenger. But what if the former mayor had won? He would then take away the contract of his former supporter who had bet on the wrong horse, so to speak. The contractor could solve this problem by supporting the challenger (now current mayor) in secret. Maybe none of this happened, but it is, as they say, a plausible theory.

D.C. is the one of the most leftwing places in the United States, so its political class is condemning the alleged non-disclosure and suggesting the mayor bears responsibility for the deed. Hence, the calls for his resignation.

Yet, there is another lesson in all this. In D.C., business never gained independence from the city government. Firms are nothing more than another point of distribution of government largesse. No capitalism, just cronies. In this world, governing is about helping friends and harming enemies. Disclosure of campaign spending reveals you to be one or the other, and for those dependent on the government, deciding to be a friend or enemy is not an option.

The United States is not yet like the District of Columbia: civil society is not yet wholly dependent on the federal establishment. As government expands, however, the DC disclosure problem will grow: an expectation of retaliation will become the norm. This small scandal in DC thus tells us something larger about unlimited government. The more government matters to economic life, the less resistance to elected officials we can expect. An expanding government militates against a liberal politics.