Business doesn’t corrupt politics so much as politics corrupts business.
That’s the first lesson driven home by the unfurling scandal involving Chris Christie’s Port Authority appointee and the United Airlines CEO.
The second lesson is a key one for believers in free enterprise: Cronyism and political corruption are wrong, not only for the politicians who are betraying the public trust, but also for the businessmen who place profit over ethics and fair competition.
Here’s the New Jersey story:
In February, an investigation by the New Jersey legislature turned up information suggesting a potential quid-pro-quo between United Airlines and the Port Authority of New York and New Jersey. The Port Authority operates Newark Airport in New Jersey. United, since its merger with Continental, is the biggest airline at Newark.
Port Authority Chairman David Samson — a Christie appointee — had dinner with United CEO Jeffery Smisek, who was asking the Port Authority for $600 million in improvements at the airport.
Samson at the dinner reportedly responded with his own request. You see, Continental had in 2009 canceled its Newark-to-Columbia, South Carolina, flight, making it much harder for Samson to weekend at his second home, in Aiken, S.C.
As Bloomberg News reported it, “In a tone described by one observer as ‘playful, but not joking,’ Samson asked: Could United revive that route? An awkward silence fell over the table.”
Later, according to Bloomberg news, Samson threatened to block two improvements at Newark that United had requested.
Eventually United added the route — it was even called “the chairman’s flight” within United. Not many people flew the route, and it lost money — unless, perhaps, you count the value of the chairman’s good graces.
Federal prosecutors are investigating the case, and this week, CEO Smisek resigned, along with two government-affairs executives.
Nobody at United or the Port Authority has been accused of breaking any laws, and spokesmen for both Samson and United deny any wrongdoing.
But if the story as told by many media outlets is generally correct, it teaches us a few things.
First, if there was a quid-pro-quo as described by Bloomberg reporters, then it’s clear who the corrupter would be — and it’s not the CEO. The U.S. media and the politicians often discuss lobbying and campaign contributions as if they amount to borderline bribery by corporate America. In truth, it’s often a case of borderline extortion by government officials.
United’s requests — including improved transit to the airport — were not special pleading and were well within the bounds of public policy discourse. Samson’s supposed request, if the media reports are correct, was where cronyism crept in.
But we shouldn’t go too far in exonerating CEO Smisek ethically — and this is part of broader point about the moral culpability of corporate executives who engage in cronyism of some sort in order to maximize profits.
Libertarians, conservatives and defenders of free enterprise are correct to argue that in instances of corruption and corporate welfare, the public official bears the ultimate blame — he or she is the one who used public power for private gain. But too many free-marketeers give a free ride to the corporate executive in such deals.
Executives are obligated to maximize shareholder value, they argue, and if that involves lobbying for a special favor — or in this case, lobbying through unsavory means—then who can blame them?
We all can, actually. And we all should — especially those of us who think free enterprise is worth defending.
On the cronyism front, the moral calculus is simple: If it’s wrong for a politician to give special treatment to one company or industry (and it is), then it’s wrong for anyone to ask the politician to give special treatment to one company or industry. Encouraging another to sin is itself sin.
The calculus for United Airlines is different, because they didn’t seem to be requesting anything extraordinary. But if a public official wants personal benefits for policy — even if the whole thing is perfectly legal — it’s still morally corrupt. In Catholic moral teaching, we’d say the executive giving into a public official’s improper demands is “cooperating in evil.”
Cooperation in evil is sometimes excusable. But when one can avoid it, one ought to. And if one can avoid cooperating in evil by making a call to the FBI — or by complaining to some higher governmental authority — then there’s no good excuse. Giving in to such demands is feeding the beast of avaricious government.
We still don’t know all the facts about Samson and Smisek, the route to South Carolina and improvements at Newark Airport. There may be a more innocent explanation behind it all.
But for anyone who studies the intersection of business and government, it’s hard not to assume the worst.
This article appears in the Sept. 14 edition of the Washington Examiner magazine.
Timothy P. Carney, The Washington Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Tuesday and Thursday nights on washingtonexaminer.com.
