Glossary

BRIBERY

The act of dishonestly persuading someone through, offering, promising, giving, accepting or soliciting to act in one’s favor by a gift of money or other inducements. Politicians can be bribed by companies or rich individuals to vote against a specific law, or promote a measure they would not have promoted otherwise, in such a case, bribery becomes a means of political corruption.

 

CONFLICT OF INTEREST

A situation where someone is confronted between personal interest and duties and demands of their position in situation of work. This sort of dilemma often appears in politics: if a member of the government, for instance, also runs a business, they might be tempted to influence regulations in a way that benefits this business, even if it doesn’t benefit the whole population.

 

DARK MONEY

The sources of most of the money politicians and political groups (like parties or political action committees) raise have to be publicly disclosed; even super PACs that are allowed to accept unlimited amounts of money have to report the names of their donors to the Federal Election Commission (this includes all donations of 200 USD and above). However, when the source of the political money is not known, dark money is present.

HOW IS THIS POSSIBLE?

In some instances, the sources of money raised do not have to be disclosed. The two most common cases are the following:

  1. Politically active nonprofits under 501(c)4 tax code – These are nonprofit organisations typically referred to as social welfare groups. They are allowed to participate in politics as long as their political spending amounts to less than 50 percent of their money. A notable example is Americans for Prosperity, the nonprofit organisation of billionaires Charles and David Koch.
  2. Limited Liability Companies (LLC) under 501(c)6 tax code – These are business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues that are not organised for profit. A business league is an association of persons having some common business interest with the purpose of promoting this interest and not of engaging in a regular business for profit. Similarly, chambers of commerce and boards of trade are organisations promoting the common economic interests of all commercial enterprises.

Read more: Washington Post / Irs.gov / Public Integrity

WHAT IS THE ISSUE?

Such organisations can receive unlimited corporate, individual or union contributions that they do not have to make public. In theory, their political influence is supposed to be limited, but the IRS (Internal Revenue Service)- which has jurisdiction over them- is not adequately enforcing these limits. This means that dark money donations have been rising “from less than $5.2 million in 2006 to well over $300 million in the 2012 presidential cycle and more than $174 million in the 2014 midterms” (Open Secrets).

Some LLCs are essentially black boxes; in states like Delaware and Wyoming, laws do not require LLCs to identify the people who own them, only the name of their registered agent. However, this agent is often just another company created for the purpose of serving as a registered agent for LLCs; this leaves the name of the company to be the only piece of information that is public about it.

These laws create avenues for people who want to spend money on politics without disclosing their names. Once the LLC or the nonprofit organisation has been created, it can be used to make political expenditures directly, or it can donate to super PACs. Either way, the name of the donor remains unknown and the political spending is non-transparent.

Read more: Open Secrets / Public Integrity

 

EMBEZZLEMENT

An illegal and fraudulent scheme which consists in the self appropriation of someone else’s money through deceiving means of influence, coercion, or trust. eg: diverting another person, or company’s, financial resources for other, usually personal, objectives.

 

LOBBYING

An activity carried out to influence a government or institution’s policies and decision in favor of a specific cause or outcome.[2]. Usually, the work of a lobbyist consists in trying to convince a politician that they should support specific measures, vote against certain laws etc. However, lobbyists are paid by companies, interest groups or other entities to do so, which makes it a very specific type of advocacy. There are two problems associated with lobbying: first, only actors that can afford it can hire a lobbyist, meaning that this practice might not be representative of the will and interest of the whole population. Second, the lobbyists might not be using fair ways to convince the politicians, either by giving them fake information to support their case, or by trying to buy their support with favors or money.

[2] http://www.transparency.org/glossary/term/lobbying

IS LOBBYING CORRUPTION?

The difference between lobbying, advocacy and corruption is a subtle one. The goal of these practices is the same: it is about influencing the decision-making of people that have political power. Formally, lobbying and advocacy are done using legal means – lobbying can involve donations while advocacy purely relies trying to convince the politician. Corruption, on the other hand, is done using illegal means, such as bribery, threat etc. Already, this shows that the distinction depends on the legal system, and that corruption in some countries will be considered lobbying in others. Laws surrounding lobbying are supposed to be designed so that it becomes a constructive practice which allows groups, businesses and other entities to make their interest heard, thereby contributing to the political debate. On the other hand, corruption appeals to the politicians’ self interest. However, one can argue that some countries’ regulation is not hard enough, in which case lobbying becomes really close to corruption: it uses favors and money that a politician will take, not for the general good but for their own use and purposes. In exchange, the politician will take in account the will of the lobby, even if they think it is harmful to the rest or the community.

Check out Transparency International’s report on Lobbying In Europe.

 

OLIGARCH

From the Greek ὀλιγαρχία (olígos: ‘few’, ἄρχω: ‘to rule’) which literally means ‘the power of the few’. An Oligarch nowadays refers to a business man, who through his wealth exercises power to his advantage over a country or region. This terminology is often associated with ownership of mineral resources or land. ‘Russian Oligarchs’ are regarded as nouveau rich that acquired land and businesses during the 1990’s, taking advantage of the privatization movement that took place with the fall of the USSR.

e.g: Carlos Slim could be considered an oligarch.

 

PHILANTHROPY

Philanthropy is the desire to solve problems or promote causes simply because on thinks it is good to do so through. It is done through the use of generous donations of money to good causes such as hospitals, museums, and medical research. Usually, giving to philanthropic institutions allows donors to benefit from tax reductions. Almost all billionaires are involved in such activities, and many have their own foundation through which money is channeled towards specific recipients. It has been argued that the implication of the richest people in such initiatives could be dangerous at it might influence the political and philanthropic agenda towards the goals that these people consider worth caring about.

 

POLITICAL CONTRIBUTION

Any contribution, made in favors or cash as to support a certain cause. Contribution can be towards a politician, political campaign or party.

e.g: The Koch brothers gave 1.3 billion to an anti-global warming campaign.

 

POLITICAL CORRUPTION

The unlawful manipulation of a government, policies and institutions by a political decision maker or an individual, who abuses their position to keep power, wealth and status. It is a system that can operate at various levels of the political scale: policeman can be bribed not to arrest someone, members of the parliament can vote for a motion against favors from lobbyists, a president can act for the interests of the companies that funded their campaign… This process usually prevents the political system from working towards the good of the public.

 

MONEY LAUNDERING

The process of concealing the origin, ownership or destination of illegally or dishonestly obtained money by hiding it within legitimate economic activities to make them appear legal.

 

NEPOTISM

Form of favoritism based on acquaintances and familiar relationships whereby someone in an official position exploits his or her power and authority to provide a job or favor to a family member or friend, even though he or she may not be qualified or deserving.[3]

[3] http://www.transparency.org/glossary/term/nepotism

 

PLUTOCRAT

A person whose power derives from their wealth. Plutocracy is a form of Oligarchy given that very wealthy individuals are usually a minority of a society. Plutocracy can be institutionalized, in which case one has to have more than a certain net worth, or own a certain amount of land to be in power. It can also be an underlying system in which anyone has the right to have political power, but where only the richest can truly use that right. Finally, it can be argued that if the richest have enough influence on rulers, the system is de facto a plutocracy.

 

POLITICAL AGENDA

The vision or goal of an individual or group which underlies their motives for political policy. A government’s political agenda includes the topics they consider important, the regulations they want to be put in effect quickly, it defines the issues that will be treated or debated while they are in power, and also the issues that will not. Not only the government has a political agenda: the media, companies, and groups in the civil society also have one, and they will try to influence officials into following their agenda. It is arguable that billionaires have the possibility with their wealth to influence society and therefore advance their political agenda further than other individuals.

 
POLITICAL SPECTRUM 

A system by which the classification of different political position on one or more geometric axes that symbolizes independent political dimensions.

E.g: Michael Bloomberg is located on the ‘liberal’ side of the ‘conservative-liberal’ spectrum.

 

RULING ELITE OR RULING CLASS

Refers to the part of the population that has political power or is in close contact with those in power, so that they have a way to influence them. Such a class arguably has different interests than the rest of the population. The more important their influence is in a society, the more influence they have on the political agenda compared to the rest of the population.

 
STATE CAPTURE

A situation where powerful individuals, institutions, companies or groups within or outside a country use corruption to influence a nation’s policies, legal environments and economy to benefit their won private interest.

E.g: Carlos slim state captured Mexico into having a monopoly over telephone communications.

 

TAX EVASION

Inaccurately declaring one’s wealth or income, or a company’s profit in order to avoid paying taxes. This can be done by putting money away in foreign banks that will not disclose this information to one’s home government. A companies’ production can be declared in a country where taxes are lower, but where very little is actually produced. Finally, as it has been seen with the Panama Papers case, it is possible to conceal the link between an individual and their assets by declaring those as the profit of a fake company in a jurisdiction that allows for such a practice. Countries and jurisdictions that have very low taxes or regulations, thereby making tax evasion possible, are referred to as a ‘tax heaven’.

 

TRANSPARENCY

Transparency refers to the fact of accurately disclosing information, rule, plans, processes and actions. As a principle, public officials, civil servants, the managers and directors of companies and organizations, and board trustees to have a duty to act visibly, predictably and understandably to promote participation and accountability and allow third parties to easily perceive what are being performed.[1] Transparency is one of the means by which the influence of money in politics can be fought: increasing transparency on campaign contributions, for instance, can help identifying whether the candidates would be likely to act in the interest of some of the largest donors. Transparency can also be used towards redistribution: if there is a full disclosure of information regarding one’s wealth, it will be easier to fight tax evasion.

e.g: The constitution and law is fully transparent as everyone is entitled to know what is in it.

e.g: Apple wasn’t fully transparent about where their waste is deposited

[1] http://www.transparency.org/glossary/term/transparency

 

… our glossary is still a work in progress, if there are words you cannot find here, check out the glossary of Transparency International!