Daniel Halliday
Sep 2 · Last update 5 mo. ago.
Do corporate donations made to political parties in a democratic system amount to corruption?
Political campaign contributions have become a multimillion dollar industry in most democratic countries in the world. What effect does that have on politicians, on elections and on policy? Could this amount to corruption?
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Yes, the scale of the financial support of election affects both policy and outcome
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This campaign contribution system goes so far as to undermine democracy in many countries
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Lobbying and donations are an important part of parties getting their message heard
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Yes, the scale of the financial support of election affects both policy and outcome

Corporations are founded on the basis of making profit, so to argue that donations made to political parties is not for some kind of gain, that will directly or indirectly lead to profit is naive. Big corporate interests often donate money to both sides of all major parties in the run up to elections, so they are obviously not supporting the parties campaign. In effect they are playing the parties off one another, cutting donations if party policy is not to their liking. This has had the effect of major parties falling in line with policy that favours big sponsors, or risking not only having their funding cut but a relative boost to that of their opponent party.

A clear example of this was the prospect of gambling reform in Australia, in the run up to the 2013 elections. Public opinion was overwhelmingly behind reforms to the current law concerning poker machines, but a big shift in funding and pressure from gaming industry lobby groups effectively took the issue off the table. As campaign contributions control, to a large degree, how effective the campaign a political party can pull off is, and as this usually amounts to who wins an election no one is willing to challenge something such as this when it happens.

Even in countries with laws against corporate donations operations similar to this still exist, as different means are often sought as a way round policy. One example of this is in the UK there has been a long list of scandals surrounding party funding, for example the cash for honours scandal in 2006 where peerages (titles such as baron) were swapped for political donations. This scandal ended in prosecution, the rejection of peerages and the repaying of donations, but also caused financial difficulty for the labour party and damaged their image publicly as the seedy link between financial support and political honours became public.

However it is by far the United States that has spawned the most powerful well funded lobbying groups that have led to the passing of policies such as ‘Medicare Part D’. This policy provided prescription drugs to those that couldn’t afford them, but made the government unable to negotiate price, causing Medicare drugs to become more expensive to the taxpayer, and generating hundreds of billions in profit for private pharmaceuticals companies. Similarly, large lobbying groups that influence policy change on behalf of the NRA, AIPAC (Israel) and oil corporations have long been blamed for the US' failure to reform social problems in the US, and international humanitarian and climate issues.

theguardian.com/commentisfree/2014/sep/11/political-donations-corrupt-democracy-in-ways-you-might-not-realise cbsnews.com/news/under-the-influence enacademic.com/dic.nsf/enwiki/2151870/Cash_for_Honours

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Daniel Halliday
Feb 26
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DH edited this paragraph
Even in countries with laws against corporate donations operations similar to this still exist, as different means are often sought as a way round policy. One example of this is in the UK there has been a long list of scandals surrounding party funding, for example the cash for honours scandal in 2006 where peerages (titles such as baron) were swapped for political donations. This scandal ended in prosecution, the rejection of peerages and the repaying of donations, but also caused financial difficulty for the labour party and damaged their image publicly as the seedy link between financial support and political honours became public.
This campaign contribution system goes so far as to undermine democracy in many countries

The political structure this donation system supports ends up being more plutocratic or oligarchic than democratic. Democracy is always at risk when the wealthy interests of a small, elite group of society dominate the democratic process to such a degree that issues can remain outside of the political sphere regardless of popular opinion. These systems end up functioning in such a way where public opinion is balanced against financing by big business and in this case money shouts the loudest.

This relationship between wealth and winning elections goes back over a hundred years. Money was already completely entrenched in United States politics when business man Mark Hanna managed William McKinley’s presidential campaigns of 1896 and 1900. Hanna, himself born into a wealthy family, was so comfortable with this relationship that he would joke: “there are two things that are important in politics. The first is money and I can’t remember what the second one is.”

Today the relationship between money and politics has reached the multiple billion dollar mark, with corporations regularly spending in excess of two billion US dollars yearly in lobbying expenditure since the early 2000s. This massive amount of money has seen lobbying groups become a powerful industry in their own right, with some lobbying groups being able to sway enough votes as to “unseat members of Congress” according to Professor of Finance Michael S Rozeff. This process effectively leads to corporate money indirectly being able to either pressurise or buy the favour of government lawmakers, many of whom have retire into positions in influencing organisations themselves, making this a particularly grim undermining of democracy.

goodreads.com/author/quotes/199395.Mark_Hanna theatlantic.com/business/archive/2015/04/how-corporate-lobbyists-conquered-american-democracy/390822 lewrockwell.com/2005/08/michael-s-rozeff/good-and-bad-lobbying-groups

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Daniel Halliday
Feb 26
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DH edited this paragraph
This relationship between wealth and winning elections goes back over a hundred years. Money was already completely entrenched in United States politics when business man Mark Hanna managed William McKinley’s presidential campaigns of 1896 and 1900. Hanna, himself born into a wealthy family, was so comfortable with this relationship that he would joke: “there are two things that are important in politics. The first is money and I can’t remember what the second one is.”
Lobbying and donations are an important part of parties getting their message heard

Campaign donations allow parties to put together an effective government, and advertise that in order to secure power. If this were not the case politics would be the direct process of someone who has the most money securing power, by means of effectively funding their own campaigns, and there would be many more Donald Trump style leaders in the world. Donations and lobbying are an important part of parties getting their point across, and people getting through to politicians respectively.

Following the Report of the Global Commission on Elections, Democracy and Security in 2012, Brazil tried to address the issue of campaign corruption by simply banning corporate donations. The 2016 Rio de Janeiro mayoral elections were the first to be held under this new rule set, and the result was one of self-financing millionaires coming out on top. This result repeated itself across the country and “20% of the 5,500 mayors elected in Brazil [in] this year [we]re millionaires”. weforum.org/agenda/2016/12/here-s-what-happened-when-brazil-banned-corporate-donations-in-elections

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Daniel Halliday
Dec 7
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DH edited this paragraph
Following the Report of the Global Commission on Elections, Democracy and Security in 2012, Brazil tried to address the issue of campaign corruption by simply banning corporate donations. The 2016 Rio de Janeiro mayoral elections were the first to be held under this new rule set, and the result was one of self-financing millionaires coming out on top. This result repeated itself across the country and “20% of the 5,500 mayors elected in Brazil [in] this year [we]re millionaires”. https://www.weforum.org/agenda/2016/12/here-s-what-happened-when-brazil-banned-corporate-donations-in-elections/
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