The rich take bribes, too, and ethics rules don t deter them, experts say By Francine McKenna Published: Jan 6, :52 p.m. ET

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1 The rich take bribes, too, and ethics rules don t deter them, experts say By Francine McKenna Published: Jan 6, :52 p.m. ET No one is immune to the temptation of financial incentive Bloomberg Aaron Schock, then a young Republican congressman from Illinois, was forced to resign after a criminal indictment on 24 counts of misusing government and campaign money. Wealthy politicians take bribes as often as their less well-off peers, even if some supporters of President-elect Trump believe the rich are better able to resist temptation.

2 In a National Review column published before the holiday break, and the opening on Tuesday of the 115th Congress, CNBC senior contributor and prospective White House Council of Economic Advisers chief Larry Kudlow wrote, Why shouldn t the president surround himself with successful people? Wealthy folks have no need to steal or engage in corruption. Kudlow, like other Trump supporters, is not worried that a Republican-dominated Congress, backed by a president-elect who refuses to release his taxes or divest business assets that are already presenting conflicts, might ignore conflicts of interest when voting on Trump s appointees. Those members must stand in judgment of cabinet picks with a collective net worth of close to $10 billion, according to a Wall Street Journal analysis of Forbes magazine s estimates and financialdisclosure data. Read: Expensive confirmation battles await some of Trump s wealthy nominees House GOP members caused an uproar when the media found out they d held an emergency meeting late Monday night, an observed holiday, to discuss a proposal to weaken the Office of Congressional Ethics, an independent watchdog. The measure was scheduled for a vote Tuesday afternoon but then scuttled after intense criticism from Democrats, members of the public and even Trump. Financial scandals a subcategory that includes improper gifts, favorable terms on bank loans, conflicts of interest, and inappropriate campaign expenditures constitute the majority of congressional scandals, and they ensnare the rich and not so rich alike, according to research by Scott Basinger, a political scientist at the University of Houston. In the contemporary Congress, barely a month passes without a member of the House or Senate being publicly accused of violating some law, rule, or social norm, Basinger and three co-authors wrote in another paper, Counting and Classifying Congressional Scandals. Each scandal, according to Basinger, adds to the press s and public s cynicism about Congress, even if the financial sums involved are not large. When Andrew Hinshaw, a California Republican, was accused in 1976 of accepting stereo equipment valued at $1,000 as a bribe, the public could infer that this one instance reflected a larger pattern of selfenrichment by our elected representatives, and was exceptional only in that the congressman was caught, wrote Basinger and his co-authors in Read: House Republicans scrap plan to weaken ethics panel after Trump criticism During the 112th Congress, in , for example, Basinger told MarketWatch that 24 members of the House were accused of financial malfeasance. Some of them were quite wealthy.

3 Over the last 40 years several House members have been investigated for tax evasion, including the New York Democrat Charlie Rangel, who led the House Ways and Means Committee, the committee that oversees the IRS, when he was investigated in Rangel reported a net worth of $904,000 for that year, down from a peak of $1.789 million in He still held more than $1.7 million in assets, not including his personal residence, in Rangel s reported assets were less than the House average over the latter stages of his tenure in the House but more than enough to preclude a need to evade taxes. He retired at the end of the last Congress. Some were more serious, such as when Rep. Michael Grimm was indicted in 2014 for mail and wire fraud and filing false tax returns. He pleaded guilty in 2004 to one felony count of tax fraud. Grimm s net worth slipped form approximately $500,000 in , according to financial disclosure filings, to less than $100,000 by Legal expenses have been cited as the reason. The House Ethics Committee said Rep. Don Young, a Republican from Alaska, failed to report nearly $60,000 in gifts and an ownership stake in a family farm between 2001 and In 2014 Young reported a net worth of $1.123 million. Rick Renzi, a former Arizona Republican congressman charged with extortion and money laundering in a land deal and with alleged embezzlement from his own insurance company to bankroll his first House campaign, was sentenced to three years in prison in He reported a net worth of more than $3 million in 2008, when he chose not to seek re-election while under indictment. Republican Rep. Aaron Schock was only 28 and the youngest member of Congress when he took his seat in Schock, from downstate Illinois, is currently facing criminal charges for misuse of campaign funds for personal expenses. Schock s net worth increased substantially while he was in Congress. He reported approximately a half-million dollars in assets other than his personal residence in That number doubled in 2013 and then increased again by 50% in 2014, Schock s last year before resigning in early Schock is accused, among other things, of fudging mileage reimbursements, reporting 90,000 miles that he never traveled over several years. That would have netted him around $45,000, a small percentage of his reported net worth. See: Aaron Schock and 8 others whose work expenses got them in trouble Ethics commissions are not necessarily the answer, however, according to Jeffrey Milyo, a social-sciences professor at the University of Missouri. He told MarketWatch: It s safe to say there are no scientific evaluations of the effectiveness of federal ethics organizations because such analysis would be very difficult.

4 He added that proponents of independent watchdogs are not interested in such research because they hold to the belief such bodies are effective. Milyo has looked at the effectiveness of state ethics commissions, which vary more than federal ones in set-up and authority, thereby providing some room for comparisons. Milyo s 2013 study, Do State Ethics Commissions Reduce Political Corruption? found there is surprisingly little evidence that state ethics commissions, along with such legislation as the Freedom of Information Act and campaign-finance and lobbying regulations, actually work in practice. Instead, anticorruption policies tend to be based more on the intuition of public administrators or self-appointed watchdogs from the press than from any systematic evaluation, wrote Milyo and his coauthor, Kayla Crider, a doctoral student. Money is just a scorecard a means, not an end for those who sell their influence and can t resist bribes, according to Lisa Gilbert, director of Public Citizen s Congress Watch. However, few are immune to the corruptible influence of enough money. Members of Congress may be worried about the reputational risk of unethical actions, but it s more likely, said Gilbert, that they re really just worried about getting caught. More from MarketWatch These are the 10 best and 10 worst U.S. stocks of 2017 This is the future of air travel, says KLM's CEO Best of CES 2017: Gadgets Galore Copyright 2017 MarketWatch, Inc. All rights reserved. By using this site you agree to the Terms of Service, Privacy Policy, and Cookie Policy. Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. Intraday data delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.

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