Americans are tired of the national political con game. Fundraisers are scamming Americans through telemarketing and direct mail by trumpeting political candidates and causes to fraudulently raise millions of dollars for other issues or to pad their pockets. And politicians are caught siphoning off campaign cash for other business and personal expenses.
The popularity of outsider presidential candidates such as Donald Trump and Vermont Sen. Bernie Sanders suggests many Americans living outside the Beltway are disgusted with the status quo and role of money in politics. Think about it: Millions of Americans are seriously considering Sanders, an avowed socialist whose central theme is attacking the “moneyed interests” controlling Washington. Millions more are considering Trump, at least in part because they think he is a billionaire and can’t be bought by special interests.
But it is not just about money and politics — otherwise Jeb Bush would be winning. It’s about finding out who is paying for the negative ads and simulated research.
As one of the largest trade associations in Washington, we work hard to influence lawmakers and steer them toward sound policy decisions. Yet I am dismayed by the influence of secret money. It is killing the economic health of our nation, and something must change. Here are three recent problems and three possible solutions to the problem of money in politics.
Problem No. 1: The Patent Troll Plague. Tens of thousands of job-creating businesses are being shaken down in a legal extortion scheme by patent trolls, initiated by sleazy lawyers who buy old, ambiguous patents and then claim they are being violated. Small and medium-sized businesses — from restaurants to retailers to real estate agents — make up more than 80 percent of trolls’ targets. Startups are fertile ground for trolls, because entrepreneurs are typically blindsided by patent litigation and lack the financial resources to face a prolonged legal fight.
In 2013, President Obama asked Congress to pass legislation to stop the trolls. A bipartisan bill quickly made its way through the House and was on its way through the Senate until then-Majority Leader Harry Reid refused to bring the bill to the floor — around the same time trial lawyers gave him a million dollars in contributions. And it’s not just trial lawyers pushing back against patent reform. The pro-troll lobby is both strong and opaque, making it hard to tell which companies are pushing the millions being spent to block the proposal.
Solution: Say Who’s Paying You. Any time a group runs an ad or presents research in testimony to Congress, they should disclose who paid for it. I proposed this idea years ago for research and quickly heard from both liberal and conservative groups who did not like the idea. But even as the leader of a large trade association, I believe nonprofit advocacy groups like ours should have to disclose funding and advocacy expenses. Our ads include our name and website information, our member list is published and our tax return is public. Shouldn’t every nonprofit advocacy group be doing this?
Problem No. 2: Sky-High Prescription Drug Spending. Reckless federal spending is ruining our children’s economic future. Our current financial crisis is largely driven by rising healthcare costs and the high price of prescription drugs. Americans pay the highest drug prices in the world, yet Congress has done the pharmaceutical companies’ bidding, banning drug imports from other countries.
Solution: Look Abroad to Drive Down Healthcare Costs. Americans should urge Congress to support common-sense ideas, such as allowing prescription drug imports from Canada or insisting government payments or reimbursements for drugs only pay what Canadians pay for drugs. Voters should also ask questions if their elected leaders are not supporting these pragmatic proposals.
Problem No. 3: Interest Groups are Hurting Americans. Saving for retirement should be an individual responsibility, backed by government support (not the other way around). Yet when the Obama administration proposed that those who give Americans financial advice must act as fiduciaries and disclose any payments they receive for products they recommend, the financial industry not only opposed it, but got a large business group to run an expensive ad campaign implying this is bad for all businesses.
Americans should be encouraged to make well-informed investment decisions, not decisions based on secret kickbacks their financial advisors receive. Business executives would definitely want themselves and their employees to know if their financial advisers are getting secret kickbacks if they are being told to buy certain investments. So why is a group largely composed of non-financial industry members pushing back against a rule that would bar or shed sunlight on conflicts of interest for financial advisors?
Solution: Honesty is the Best Policy. Boards of nonprofit associations should require ethical positions, transparency and disclosure. They should have guiding principles. For example, our association does not advocate for government spending directly benefitting our industry, because we believe our growing debt is a huge threat to our national economy. More, boards should not incentivize executives to simply gather funds from others to have their name used, hiding the real donors and boosting revenue to boost executive pay.
Of course, not all government regulation of money in politics is good. Many ethics rules irrationally and harmfully restrict government officials from doing their jobs. But sunshine is said to be the best disinfectant. If we require our investment advisers, our advocacy groups and our government officials to disclose their funding and potential conflicts of interest, we can make better decisions about whom to trust and support.
Gary Shapiro is president and CEO of the Consumer Technology Association (CTA)™, the U.S. trade association representing more than 2,200 consumer technology companies, and author of several New York Times best-selling books. Connect with him on Twitter: @GaryShapiro. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
