What’s the way in? My first blog. You only get one first time at anything. I’m on a plane. I’m drinking bad coffee. I’m promoting a new film, Syriana, that I’ve spent the last three and half years writing and directing, cutting and scoring, agonizing as recently as three weeks ago over details like the font and point size of the end-title scroll - I chose Highway Gothic, considered in some circles to be the new Helvetica. Since this is an inaugural blog and it’s clear skies at 37,000 feet, I thought I might write a brief primer on corruption. As I travel around I often ask people if they know what corruption actually is and I’m surprised how few people really understand it. It seems it’s just another one of those words that have been politicized out of meaning. Corruption has been in the news with more frequency lately, but not nearly as much as it should be or as much as it will be.
A brief scan of the cover of yesterday’s NY Times would give you a congressman from San Diego, Randy Cunningham, known as “Duke,” facing significant jail time for accepting 2.4 million dollars in gifts and indirect payments (one “friend” bought his home for 1.7 million dollars only to sell it nine months later in a booming housing market for 700,000 dollars less) from defense contractors, a piece on Nigeria (in many years the gold standard of corruption measured solely in terms of number of shakedowns between the airport and town) pointing out that over the last four decades perhaps as much as 400 billion dollars, all of it from oil profits, has been stolen or misspent, as well as an article ruminating on how the 37 billion in federal aid to New Orleans will be allocated.
Corruption is the inducement of a government official to allocate state assets at a price below market value. In a resource rich nation the resource almost always belongs “to the people.” But someone is making the decision where and to whom to sell the goods and that person can usually be induced. We nominate this one person to rise above the others and we pay him a million times his fair share in order that he’ll sell everybody else’s share to us for less than it would cost on the open market. This is inducement. It’s against the law in America. The problem is if we don’t induce we don’t get the goods. Why? Because everybody else induces too: the French, Brits, Russians, Chinese. All of them. And in order to stay competitive in the global natural resource biz you better be prepared to induce, early and often. Or as Tim Blake Nelson playing Danny Dalton, says in Syriana, “Corruption is just government intrusion into market efficiency in the form of regulation… that’s Milton Friedman, he got a goddamn Nobel Prize.”
So how do we induce and get around the regulation? The simple answer is: through middle-men. An oil exec making 300,000 dollars a year isn’t going to risk ten years in jail to pay a twenty million dollar bribe to a government official in Kazakhstan or Sau Tome or Nigeria, but there are plenty of people who will be willing to do this on his behalf, secretly, often on their word alone, in order that they be cut in on a small percentage of that income stream, in order that one company gain a highly efficient advantage over another.
Perhaps the reason there is so much inducement surrounding the monetizing of oil and natural gas is that it is not a complicated business. You stick a straw in the ground and billions if not trillions start spurting out. This massive pile of wealth, of found money from a puddle under the earth, has the same effect as the gravity of a black hole that bends and swallows the morality of all who pass into its orbit. You think you’re immune? Well, I suspect you just haven’t been induced yet, you haven’t met your devil with just the right, previously unimaginable, dollar figure.
A brief message from Duke, San Diego’s congressman: “The truth is, I broke the law, concealed my conduct and disgraced my office. I know that I will forfeit my freedom, my reputation, my worldly possessions and, most importantly, the trust of my friends.” Randy Cunningham, known as Duke, Congressman from San Diego, lived on a yacht called the “Duke-Stir.” It was anchored in the Potomac basin in sight of the Capitol Building. It was paid for by military contractors. He drove up to the Capitol in a Rolls-Royce paid for by military contractors.
So what do Nigeria and America have in common? The Dukester’s boat was paid for with taxpayer’s dollars, yours and mine. Because those contracts were awarded at above market value, we overpaid for goods and services and the profit went not back to the taxpayer, but to Duke and his boats and cars and fancy toilets. In Nigeria the government officials keep their yachts in the south of France. So do the royal families of other oil-producing kingdoms. And every one of those fifty or hundred million dollar boats represent how many elementary schools and colleges, how many educations, opportunities for young people, investment in research and science, better hospitals and highways, not just for the citizens of Kazakhstan or Nigeria, Sau Tome or Saudi Arabia, but for the citizens of the USA, the people of San Diego and Kentucky, Texas and Vermont.
And remember that if a culture can spring into existence on the banks of the Potomac that makes it seem perfectly okay to accepts multi-million dollar gifts from private business, that same culture can be changed, induced, if you will, to turn those gifts down and represent all of the people instead of a tiny, super-wealthy minority.
