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Sunday, June 26, 2011

There's sometimes a difference between "legal" and "right"

by folkbum

Five years or so ago--I'm so old-- this blog weighed in on a controversy about Democratic candidate for Congress Bryan Kennedy. I defended Kennedy's paying himself a stipend from campaign funds, which is a practice allowed (at least, it was then) under federal campaign rules and which, for a middle-class head of household like Kennedy, kept his family fed and his babysitters paid while he did the full-time job of campaigning. (See, for example, these posts: 1 2 3.) While Kennedy was allowed to decide how much to pay himself from campaign funds, it all had to be disclosed in filings and his salary was capped at what he had earned before taking his sabbatical to run for office. In other words, he couldn't hide what he was up to and he couldn't make himself rich in the process.

At the time, a lot of people smelled something fishy; but as Kennedy himself explained, the rules allowed people who were not able to self-finance a campaign--or even self-finance the time off of work to run--a better shot at getting elected:
To support my family, I draw a salary from the campaign that is less than my university salary. I felt it was more ethical to draw a salary from voluntary contributions than to be paid by Wisconsin taxpayers. [...] It's also uncommon because most candidates for federal office don't need to do this.

Why? Because they're usually rich. They can support themselves from their personal wealth, or, if they're already elected officials, they probably enjoy an ample taxpayer salary. [...] Congress isn't made up of normal Americans like you and me. We have a system "of, by and for the rich." Middle-class people are systematically discouraged from running for office.

Teachers, carpenters and Wal-Mart employees are unlikely to socialize in wealthy circles, which makes fund raising more difficult. In addition, the major political parties favor wealthy candidates who can finance their own campaigns.

The result of these realities is that the middle class is terribly underrepresented in the halls of power. [...] Middle-class voices are stifled by millions of dollars from lobbyists and huge corporations. If we want to get anything else done, we have to remove the special interest money and corruption from our government first.
I say all this as preface, as the news this week about Senator Ron Johnson, while it may invite comparison, is really incomparable to what Kennedy did:
After dropping nearly $9 million from his own pocket to win a seat in the U.S. Senate, Ron Johnson didn't have to feel the pain for very long. Johnson's plastics company paid him $10 million in deferred compensation shortly before he was sworn in as Wisconsin's junior senator, according to his latest financial disclosure report.

The first-term Republican declined to say how his Oshkosh firm, Pacur, came up with a figure that so closely mirrored the amount he personally put into his campaign fund.

"You take a look in terms of what would be a reasonable compensation package, OK?" Johnson said this week. "It's a private business. I've complied with all the disclosure laws, and I don't have to explain it any further to someone like you." [...]

Unlike most deferred package deals, however, it appears that the company had not set aside a specified amount annually that would be paid out when he left the firm. Instead, Johnson said the $10 million payment was "an agreed-upon amount" that was determined at the end of his tenure with the company.

Agreed upon with whom? "That would be me," he said.
The story notes that the married-into-money Johnson did not draw a salary for much of his time leading the company, though he still managed to earn in most years what I, with my gold-plated union-thug public-employee compensation package, would need another 20 years to earn. He was not, how shall we say it?, poor, like the Pacur workers who are in the state's BadgerCare program. Nor even middle-class, like Kennedy.

Seriously: Even the smallest number offered in the story, a $650,000 payout for just half of 2010, puts him in the top 1.5% of all earners in the US. Johnson is the embodiment of the kind of politician Kennedy warned us about, one who governs with an eye toward maintaining not merely his own elite status, but that of the rest of his class (as opposed to, say, retiring Sen. Herb Kohl, whose votes often look out for the little guy).

That Johnson could finance his own campaign is one thing. That he then had the authority to pay himself off at the expense of Pacur employees, customers, and shareholders simply reeks. What Johnson did, like what Kennedy did, may be legal. But you'd have a hard time convincing me or any other reasonable observer that Johnson's payoff was right.

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