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November 11, 2003

Comments

Seb

"Excellent - we are all in agreement!"

And look at how easy it was to come to this happy conclusion!

Alex Parker

I made this point on my blog and on Drezner's comments section, but felt like I was yelling into the void:

If there was cronyism, would you expect there to be a high correlation between the size of the contract and the size of the campaign contributions to Bush or to the GOP? Considering A) the ability of the company to complete the given task must have been at least part of the criteria, and B) companies give money for a great many reasons, not just to ensure reconstruction contracts, I don't think you'd expect such a clear correlation.

What you would want to look for is if there was a greater tendency to give contracts to donating companies, rather than non-donating. Drezner didn't address this, but for what its worth neither did the CPI study. (The CPI seemed to be mainly comparing whether the companies donated more to Bush than to Democrats).

I don't understand why Drezner thinks that the size of the contract is the relevant factor here.

TM

"Yelling into the void"? I thought I put up a comment agreeing with you.

It turns out that in Drezner's Slate article, he says this:

That's a large enough sample to provide an **imperfect test** of the Center for Public Integrity's underlying argument...

The section I emphasised links to the following:

"The perfect test would be to collect all of the firms that are both competent and eligible and see whether the size of their contributions affected whether they received a contract and how large the contract was. However, given the wide variation in both contract size (from $2.3 billion to $10,000) and campaign expenditures (from zero to $8.8 million), what's presented is still a fair test of whether there is systemic corruption."

That picks up part of your point - we need info on losers and eligible non-participants to really round this out.

I think Drezner does a good job of saying the CIPC did not prove their case (or was it their case? Depends on whether you believe their press release). To take their data and claim there is no cronyism does not seem to follow.

Alex Parker

The problem is, you'd expect the big companies that would be able to handle a contract of this size to be regular donors no matter what.

Thus, it does seem like a fair assessment on CPI's part to point out that the companies which received contracts tended to give more to Republicans than Democrats. However, I'd bet that most companies tend to give more money to Republicans and Democrats in general.

This is further complicated by the fact that a lot of the companies--such as Haliburton--which received contracts have a virtual monopoly on their given industry. (This is from Yglesias's blog, but I can't find the link).

Hmmm...definitely need more data.

TM

The Steven Kellner article I link to seems pretty good. I will clip this:

It is legitimate to ask why these contractors gave money to political campaigns if not to influence contract awards. First, of course, companies have interests in numerous political battles whose outcomes are determined by elected officials, battles involving tax, trade and regulatory and economic policy -- and having nothing to do with contract awards. Even if General Electric (the largest contributor on the Center for Public Integrity's list) had no government contracts -- and in fact, government work is only a small fraction of GE's business -- it would have ample reason to influence congressional or presidential decisions.

Second, though campaign contributions have no effect on decisions about who gets a contract, decisions about whether to appropriate money to one project as opposed to another are made by elected officials and influenced by political appointees, and these can affect the prospects of companies that already hold contracts or are well-positioned to win them, in areas that the appropriations fund. So contractors working for the U.S. Education Department's direct-loan program for college students indeed lobby against the program's being eliminated, and contractors working on the Joint Strike Fighter lobby to seek more funds for that plane.

IceCold

The Kellner column was good, but actually could have been even stronger. The basis for his conclusions would not be limited to conversations with a couple of his colleagues who worked in contracting; the whole contracting process is his evidence.

The CPI's whole approach depends on ignorance of the subject, along with a naive and enthusiastic embrace of demagogic fantasies about cronyism. Of course large segments of the country indulge themselves in these, and the "elite" media would be lost without them. The WaPo routinely opens stories on Halliburton with sentences like "Halliburton, the firm once headed by Vice President Dick Cheney ....".

I was disappointed to see Drezner's tack picked up, since it's really irrelevant (and depends for its importance on the naive model of campaign-contribution cronyism). The contracting process is the issue. Unless someone can make a good case that an improper or unreasonable procedure was followed, there's not much to talk about. Trying to match up campaign contributions and contract awards ignores the actual contracting process. The details and substance of any no-compete awards or amendments -- common devices fully legitimate under the rules -- are the things to evaluate, not FEC lists.

Neither CPI nor anyone else has made charges of substance that address the contracting process itself, AFAIK. Some smaller oil-patch firms were bitching to the press about parts of the Halliburton award before the war, but based on a very limited amount of info or expertise on the work involved, their case didn't seem too persuasive (I've been involved with contracting for work in conflict zones, and in the case of oil field repair or fire-fighting would certainly presume the bigger players would be the safer bet for taxpayer's money -- but this is based on very little information).

I think this whole subject is quite enlightening -- it's a model of how cheap ignorant demagoguery has replaced analysis or investigation by the media. Congressmen and others make the most preposterous charges, and instead of debunking them (which their interns should be able to do on lunch-hour), the major media just run with it. And the administration just sits there, instead of demolishing the slanderous nonsense as the tendentious ignorant b.s. it really is.

As Kellner said, a troubling and bewildering discussion for those who actually know something about how the process really works.

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