On the eve of an election, new Labour has stumbled into an issue that, unlike most which have been represented as crises in its four-year administration, really is critical. It is the eternal need and curse of politics: money. New Labour is now discovering the downside to its extraordinary ability to raise money in substantial amounts, for the first time ever, from wealthy individuals and corporations. It, like nearly all other parties in the rich and developing world, is being sucked into the maw of money and its power to corrupt.
The allegations against Peter Mandelson, the former Northern Ireland Secretary, for assisting the Hinduja brothers to gain British passports in return for a £1m donation to the Dome, and against Keith Vaz, for a variety of transactions; the actions of Lord Irvine, in soliciting donations to the Labour Party from lawyers over whose promotion prospects he held sway – these are not, by international standards, of much importance. Some may not be true. That which is – Irvine’s soliciting of donations – will probably not cost him his job, though it may mean that, in future, the political role will be fenced off more carefully from the judicial one.
But they do increase the stock of evidence that the political process is decreasingly independent of business. Labour had made much capital out of the tainted money from Hong Kong and Taiwan that bolstered Tory election spending in 1997, and out of the ease with which the present Conservative treasurer and pay- master, Michael Ashcroft, has avoided taxes in the UK and elsewhere. It promised to be wholly different – in the cause of openness and to combat public cynicism about politicians.
But these recent episodes diminish Labour’s ability to present itself as a pole of principle. Its critique of the Tories now rings hollow and false, as does the Conservative attack on Irvine. When both main parties are as compromised as the Republicans and Democrats are in the US, politicians lose much of their most precious asset: the ability to inspire and to rouse to civic action.
Yet there seem no obvious ways out of the vice in which business and wealth increasingly grips politics. In part, this is because it can be benign. In the early Nineties, Andersen Consulting, for example, assisted the Labour Party’s Commission on Social Justice (whose secretary, David Miliband, is now head of the Prime Minister’s policy unit) because – as the company’s managing director, Keith Burgess, declared to Paul Foot of Private Eye – “we, too, are concerned with social justice”.
But Burgess also has to run his company, among other consultancies that live or die by government contracts, in a competitive environment. He employed Patricia Hewitt, now the e-commerce minister, as director of research: she has spoken at company events since getting into parliament in 1997. Even if she and her colleagues were to exercise the most consistent propriety in the very many areas in which government and private companies collaborate, negotiate or make deals, the experience Andersen has had and the contacts it has gained mean that it can establish a common culture of acquaintance, assumptions and contacts with some of the best-connected ministers and officials of new Labour. There is now little counterweight to that. Business culture is merging with political culture, and the danger is that business money becomes indistinguishable from political money.
The US sets and shows the trend. In a book published last year, in which the author deliberately sought comparison with Machiavelli – it is called The New Prince – Dick Morris, the former Clinton adviser on strategy, told the politician who wishes to know what to believe to “take whatever position you want, but do take a position, because once you do, ample money awaits you on either side”. It is politics stripped of ideology or principle: “money awaits you” – so, enough!
The prolonged uncertainty over the winner of the last presidential election overshadowed the unprecedentedly large sums spent on the candidates by political action committees, businesses, wealthy individuals and coalitions – and has buried almost wholly the campaign to reform electoral finance, a campaign associated with the Republican Senator John McCain (it is likely to remain buried). However, it was succeeded by a new kind of scandal, one that has pushed out the boat on the enmeshing of business and politics to new criminal depths.
When Bill Clinton left office in January, he pardoned a group of individuals whose relatives had contributed substantially to the Democrat party. One of these was Marc Rich, whose wife Denise had been a generous donor not only to the Clintons personally, but had given nearly $500,000 to his presidential library. Rich fled from the US in 1983 to escape charges on a tax fraud, at that time alleged to be the largest ever; he has remained abroad, in Switzerland, ever since. That this should be Clinton’s departing gesture, and that the connection between contribution and pardon should be so blatant, has shocked many Democrats who had supported him through the Lewinsky and other scandals. For where Monica Lewinsky was the president’s business, this is public business: the law is being subverted by the president, for gain.
The brutally shocking nature of this act has no modern parallel in Britain – even if the allegations against Mandelson and Vaz are proved to have foundation. But it attacks the same fabric – that of the civil society, the assumptions of trust and equity that encourage citizens to be good citizens, and government to be able to be good government. It is called into being not just by the brazen dishonesty of some politicians, but also by the burgeoning demands of the need to stay in power.
Last year in the US, the presidential candidates spent $600m on broadcast TV alone. At the same time, the main networks showed fewer minutes of the conventions, and gave less time to politics on the news, than at any time since they became the dominant news medium. Party organisations, and the dues they pay, meanwhile continue to decline.
British politics does not have these exorbitant bills to face, but expenses are much higher than they once were. Here, too, party members are declining; and here, too, the drawing of business into government through such means as the public-private finance initiative, or the various commissions set up to examine problems, or the regional chambers of commerce established as a possible prototype of regional governments, is going on strongly. Politicians in government have power and need money: businesses have money and need the power to get decisions that favour them. This puts very high strain on the Chinese walls meant to separate them.
Many – even most – European countries are at present convulsed with politics and money scandals. In France, the former (Socialist) foreign minister Roland Dumas is accused and is currently standing trial for alleged misuse of corporate funds at the Elf oil corporation. The story turns around Dumas’s mistress, Christine Deviers-Joncour (now 51), for whom Dumas had allegedly secured a highly paid sinecure at Elf, with a fund of $10m to promote the $3bn sale of six French frigates to Taiwan. Millions of francs went into Dumas’s accounts at the time: the present court case seeks to establish how. Worse, the president and head of state, Jacques Chirac, has been accused by figures within his own RPR centre-right party of being involved in illegal donations to the party from building contractors.
In Germany, the Christian Democratic party, which had led the country for much of the preceding decade, remains shattered by the revelations last year that the former chancellor Helmut Kohl took large funds – again, from the Elf company – to approve the construction of an oil refinery. The funds went to his party: he has refused to comment on the affair, saying he had given his word not to divulge the donors. His obstinacy leaves Germany with the dilemma of bringing one of its most distinguished politicians to trial – a move at which it has so far balked.
These shafts of light reaching into the corrupt practices of business, and of politicians who are voted in to supervise its activities, are dwarfed again by the corruptions of the developing countries – where civil society is much weaker. The same is true in China, and above all in Russia, where the rule of Boris Yeltsin became notorious for the virtual takeover of government by the “oligarchs”, rich bankers and businessmen who awarded themselves huge slices of the country’s assets.
Cleaning up their act seems to bring few rewards to politicians – and failing to do so, as Clinton shows, attracts few real penalties. In the Nineties, Italy was the brightest spot in the struggle against corruption. A centre-left government took power in 1996 on an anti-corruption ticket and, though it failed to root out corruption, it was itself clean, with only minor and usually old scandals uncovered during its term of office. It was the first Italian government for decades about which that could be said.
Today, the leader of the right opposition to the government is Silvio Berlusconi, the owner of three TV stations, the focus of endless charges of conflict of interest and against whom many allegations of corruption have been made (he is immune from trial because of his parliamentary seat). He is likely to win. What price virtue?
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