Wednesday, February 08, 2006

Sen. Domenici Calls for Limiting Campaign Contributions to In-State Donors

In the wake of the Abramoff scandal, the Senate Homeland Security and Governmental Affairs Committee met on January 25 to discuss ethics and lobbying reform. While many inside the Beltway have reacted to the lobbying scandal by suggesting a ban on lobbyist-paid travel or gifts from lobbyists to politicians, a few sober-minded folks have actually diagnosed the real problem with Washington these days: campaign fundraising.

New Mexico Senator Pete Domenici is one such soul, according to OMB Watch, which reports that Sen. Domenici said the real driving factors behind the corruption so well publicized of late are the growing cost of political campaigns and lawmakers' constant chase for campaign cash. He called for limiting campaign fundraising to a politician's home state and for a ban on campaign contributions from lobbyists.

Way to go Senator!, at least as to the first solution. Allowing Texans to influence elections in New Jersey or New Yorkers to influence elections in California corrupts representative democracy. A New Jersey Senator should represent New Jersey, not wealthy donors from Texas. A California Senator should represent California, not wealthy donors from New York. It doesn't take a "political scientist" to figure that one out.

Of course, an elected official should represent all the citizens of their state, so Senator Domenici's idea should be supplemented with limits on in-state contributions so that the financially powerful don't drown out the rest of us come election day. And if the limits are low enough to truly level the playing field for regular folks to take an equal and active part in our democracy, who cares whether lobbyists can contribute to politicians' campaigns? They won't be able to give enough to put a politician in their pocket.

Campaign cash will serve as a pretty decent measure by which to gauge the sincerity of Washington's "reform" efforts. If Congress does something to reduce the influence of financially powerful donors over campaigns, maybe they're serious. If the Beltway just tinkers around the edges of corruption with less travel and fewer gifts, expect the corruption crowd's gravy train to keep on rolling through American democracy.

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Attorneys for former Enron CEOs Jeffrey Skilling have put prosecution witness and former head of Enron's investor relations Mark Koenig through the ringer for the last three days, as the Houston Chronicle reports.

Defense attorneys have caught Koenig in error on more than one issue, although the importance of those errors or the underlying issues is unclear. For instance, Koenig asserted last week on the stand that Enron had met every earnings estimate from 1997-2000. In reality, Enron missed one estimate by one penny per share during that time period.

Defense attorneys are pursuing a strategy in which they claim Enron's catastrophic downfall was not caused by the massive accounting fraud, of which Lay and Skilling were not only aware, but which they also signed off on. Instead, they appear to be laying the groundwork for the theory that shortsellers (investors whose purchases predict and benefit from a stock's price decreasing) exacerbated the fraudulent behavior of a few lone rogues at Enron.

No big surprises yet. Stay tuned.

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