Cato V, Part VIII: Public Money and Private Interests

Without necessarily faulting George Clinton for arriving at what doubtless seemed to him to be a very reasonable conclusion as to the proper ratio of constituents to representatives based on the information to which he had access, I would nevertheless ask any reader of Cato V to consider the following examples from the present day before affirming the cited passage of that selfsame text as a timeless pearl of faultless political wisdom. Because though Clinton’s affirmation in 1788 that increasing the number of delegates serving in a given legislature will necessarily decrease the ability of that body to be actively corrupted was – and is – reasonable enough on its own as a theory, there are certain things which have occurred since that time whose effects on the practice of politics the author of Cato V likely could not have predicted.

Take the case of contemporary Brazil as an example. The Federative Republic of Brazil, as it is known officially, is structured not at all unlike the United States of America, with a directly elected executive, a bicameral legislature, and a supreme court. The executive – i.e. the President – is elected via a two-round runoff vote, members of the Senate are elected three each via a plurality vote from one of twenty-seven districts, members of the Chamber of Deputies are selected via proportional vote from among the various Federal States, and the Justices of the Supreme Court are appointed by the President and approved by the Senate. As of 2019 there are eighty-one Senators and five hundred and thirty-one deputies in the Brazilian National Congress. With Brazil’s population sitting at slightly over two hundred and ten million, that works out to about two million five hundred thousand people per Senator and four hundred thousand people per Deputy.

Now, already this ratio of constituents to representatives would seem to exceed what Clinton thought was acceptable in 1788 by a substantial margin. Considering the vehemence with which he objected to the prospect of Representatives in Congress being elected from districts sized to encompass a mere thirty-thousand people, one can imagine that his head would have fairly exploded at the thought of a legislator representing ten times that number. Indeed, one can perhaps also reasonably conclude that the author of Cato V would have struggled to conceive of any nation reaching a population of one hundred million without fragmenting into its constituent parts. Born at a time when the British colonies which would at length become the United States of America contained slightly less than one million people, and writing at a time when this selfsame territory encompassed less than four million, Clinton’s imagination would naturally have been limited by both his own lived experience of population expansion and the means by which he believed it possible to sustain a cohesive national polity across vast distances and amidst large, distinct, and semi-autonomous political entities. Easy though it is to forget, the reason that countries like Brazil can function as such is because technology exists – and has existed – that permits the inhabitants thereof to believe that they are all members of the same integral socio-political community. While in 2019 this communications infrastructure might most often be thought to include television and social media, it has in the past also encompassed print media, radio, telephones, telegraphs, trains, and even permanent roads and bridges. As most of these inventions fall well outside the experience of George Clinton’s lifetime – with the exceptions of roads and print – it would have been only natural for someone in his position to conclude that there was a definite limit on the number of people which could be included within the borders of a single nation before it effectively ceased to be a cohesive nation at all.  

On its face, then, it would be hard to imagine Clinton reacting with anything other than horror and amazement at the continued existence of a country like Brazil, let alone to the knowledge that Brazil is presently about average for its population in terms of the size and composition of its various political institutions. And yet, having confronted the numbers which a great many modern republics – or else representative democracies – are forced to contend with when attending to the task of governance, he would surely have had no choice but to agree that such measures as have regularly been taken are both necessary and proper. Consider, by way of evidence, the theoretical state of the Brazilian House of Deputies if even the ratio to which Clinton objected in 1788 were applied. If, for a population of two hundred and ten million, each Deputy represented thirty thousand people, the lower house of the National Congress would have to contain at least seven thousand Deputies. Not only would this substantially exceed anything that George Clinton or his fellow Founders could likely have imagined, it would represent the largest legislative body in human history. By way of comparison, recall some of the numbers that Clinton may well have been contemplating as of the late 1780s. The United States of America, as aforementioned, contained just slightly less than four million people at that point in time. At a ratio of no more than one Representative for every thirty thousand – as described in the text of the proposed constitution – the lower house of Congress was set to contain a maximum of one hundred and thirty-three members. While the actual number ended up being substantially lower – due to certain districts containing more than thirty thousand people – this is the base figure that Clinton had to work with and the number upon which he could – and presumably did – fix his disdain.

One hundred and thirty-three Representatives, it seemed, were by his reckoning too few to adequately reflect the diversity of interest and opinion possessed by the contemporary inhabitants of the United States of America within the context of a national legislature. What ratio would he have preferred? While it’s hard to say exactly, a reasonably educated guess might but the figure at something like ten thousand per district rather than thirty thousand. This would have yielded a House of Representatives comprised of four hundred members, a number which compares quite reasonably to the contemporary British House of Commons and its five hundred and fifty-eight MPs. Granted – and as discussed at length thus far – the House of Commons as it existed in the late 1780s hardly represented a favorable basis of comparison for a truly representative electoral regime. But at the very least it did function. Widespread corruption notwithstanding, the five hundred and fifty-eight members of the lower house of Parliament managed to form governments, formulate and approve legislation, and conduct investigations without consistently devolving into an intractable patchwork of multifarious factions. By the standards of the 18^th century, in short, it was possible for five hundred and fifty-eight people representing half as many distinct communities to go into a room somewhere and come to some kind of workable agreement on the issues of the day. Having observed this fact, it would accordingly seem reasonable enough for some like George Clinton to arrive at the conclusion that a legislature comprised of one hundred and fifty fewer members should have been able to function equally well, if not better.

 That being said, four hundred, or even five hundred and fifty-eight, is a far cry from seven thousand. And though modern communications and transportation technology has, as aforementioned, allowed magnitudes more people here at the dawn of the 21^st century to cultivate a more cohesive sense of community than was conceivable at the end of the 18^th century, the interests that govern countries like Brazil have still not attempted to push the ratio of constituents to representatives much beyond what George Clinton could have observed in contemporary Great Britain. The Brazilian Constitution could most certainly be modified so that the House of Deputies contained the aforementioned seven thousand legislators. An amendment to that effect could be proposed, and approved, and adopted in fairly short order, with the Brazilian people standing to enjoy a more granular representation in the lower house of the National Congress than they do at present. In spite of it being both possible and potentially desirable, however, such a measure has never been attempted, or seemingly even contemplated, in Brazil or in any other comparably large representative democracy. Germany, with a population of eighty-three million hasn’t tried it, or France (sixty-seven million), or Italy (sixty-million), or the United Kingdom (sixty-seven million). More than likely this is because the governing interests in all of these countries – and the electorates, presumably – have independently concluded that legislatures above a certain size, regardless of the population they are intended to represent, simply aren’t a good idea. They aren’t manageable; they’re not efficient; they don’t function, in essence. The causes behind it are doubtless varied, but the evident validity of this conclusion is spoken to by how widely it is observed. Even India, a nation of over one billion people in 2019, maintains the membership of the lower house of its national legislature at a mere five hundred and forty-five. Rest assured this was not happened upon by chance; the governing interests in India came to the same realization as did their counterparts in other representative democracies. That is to say, notwithstanding actual population figures, there is a limit beyond which the size of a legislative assembly becomes a hindrance to its ability to perform its intended role. 

Being made to realize this practical truth of modern democratic organization – along with the aforementioned ability of modern communications technology to forge relatively cohesive political communities out of vast and disparate populations – would doubtless have altered no small portion of Clinton’s thinking on the subject of legislative representation. Sincere though he may have been in his assertion in 1788 that the people of the United States stood to be dangerously underrepresented in the version of Congress described in the text of the proposed constitution, it is exceedingly difficult to imagine that his sense of conviction would have long withstood exposure to the realities of 20^th and 21^st century representative democracy. The figures which generations of statesmen and legislators have since been forced to content with far exceed anything which he was likely prepared to imagine, let alone take into consideration when crafting a stable model of democratic governance. This isn’t to say it was wrong of him to even question the scheme of representative government modeled by the Framers in the text of the proposed constitution, or to postulate the existence of a relationship between legislative composition and legislative behavior. On the contrary, Clinton should be admired for his willingness to question what so many others quite easily accepted, and for the incisive manner in which he did so. That being said – and as the preceding and proceeding discussions hopefully make clear – the subject of democratic representation was far more complex than he was either aware or willing to admit. And this is not even to mention the much thornier subject of political corruption.

Or perhaps “corruption” is the wrong word for it. What Clinton seemed to fear was that the small number of representatives chosen by the American people to speak on their behalf in the lower house of Congress would be too few to resist being influenced by some outside force whose interests were at odds with the general public will. Increase the number of representatives, he avowed, and the likelihood of such an outcome fades in proportion. If this was a valid theory, of course, the largest legislatures would necessarily be the least prone to having their collective will captured or subverted. 

In point of fact, however, this is demonstrably not the case. Consider, by way of example, the aforementioned National Congress of the Federative Republic of Brazil. As mentioned above, the upper house of the same contains eighty-one Senators, the lower house just over five hundred and thirty Delegates. Combined, this cohort of six hundred and twelve legislators represents a figure nearly six times larger than that which caused George Clinton to object so aggressively in 1788 to the paltry size of the proposed United States Congress. If one hundred and fifty-nine was too few – being the maximum number of Senators and Representatives permitted under the terms of the proposed constitution at the time that Clinton was writing – surely the author of Cato V would have agreed that six hundred and twelve was at the very least adequate. Mayhap it was conceivable at the end of the 18^th century that a single individual or organization could, with the proper resources, sway enough legislators within a group of one hundred and fifty-nine to essentially turn the legislative process to their own personal ends. But surely it was not possible for same outcome to result from among over six hundred of the same? Surely no one could muster the means to influence that many people towards a single goal?

As recent history has proven, of course, someone could indeed. Following what initially appeared to be a fairly routine investigation into money laundering by Brazilian law enforcement authorities beginning in 2008, a series plea deals, confessions, and further inquiries conducted between 2014 and 2017 went on to reveal the existence of a massive criminal conspiracy involving Petrobras – the Brazilian national petroleum corporation – as many as nine major construction firms, and dozens of politicians and party functionaries from across the political spectrum. Essentially, some portion of the executive leadership of Petrobras had, for a number of years, engaged in a deliberate campaign of overbidding on construction contracts with the various firms in question – the conglomerate Odebrecht being chief among them – in exchange for sizable kickbacks. In order to ensure that these contracts were approved – and would, in future, continue to be approved – both Petrobras and the construction companies also made large sums of money available to the members of the Senate, the Chamber of Deputies, and the ruling Worker’s Party who were each of them responsible for proposing, lobbying for, and authorizing the same. According to reports compiled after the fact at the behest of Brazilian investigators, this cohort of public servants included at least twenty-nine sitting Senators, thirty-four sitting Deputies, and twenty-three mayors, former mayors, former ministers, or former members of the National Congress. Marcelo Odebrecht, former CEO of the eponymous construction firm, affirmed following his own arrest and conviction for bribery that control over an account containing 40 million Brazilian reals was also given to the office of President Luiz Inacio Lula da Silva in 2010 and transferred to the control of his successor Dilma Rousseff at the beginning of the following year. In total, some 6.2 billion reals (US $2.5 billion) were found to have been misappropriated, about half of which has thus far been recovered.

Now, obviously Petrobras and the aforementioned construction firms did not succeed in paying off over half of the total membership of the Brazilian National Congress. That is to say, their attempts to take hold of the institutions of Brazil’s public administration for their mutual financial benefit did not involve buying the cooperation of a controlling majority of the national legislature. Of the aforementioned six hundred and twelve members of the National Congress, only sixty-three sitting lawmakers were named in official reports as having taken money from one of the relevant organizations. Far from representing fifty-one percent of the total, this figures stands only slightly above ten percent. As it turned out, however, Petrobras and the construction firms didn’t need to buy a majority in the National Congress to get what it was they wanted. They just needed the right people in the right places to go along with their plans at the right time. It was for this reason, among other public officials, that they specifically targeted President Da Silva and President Rousseff, the treasurer of the ruling Worker’s Party, and the President of the Chamber of Deputies. Whereas the aforementioned coterie of Senators, mayors, and ministers doubtless served to guide particular construction projects through the processes necessary to secure their final approval, these key individuals between them arguably held the power to either facilitate the entire scheme or choke it off altogether. By buying their cooperation, the relevant executives at Petrobras and the construction firms thereby guaranteed that their shady dealings would enjoy a gloss of legitimacy and that potential internal investigations would be discouraged at the highest level.

That fact that Petrobras is a public company assuredly also went some distance towards narrowing the number of officials whose cooperation needed to be purchased. Because company revenues – generated by the ongoing exploitation of Brazil’s petroleum resources – are technically the property of the Brazilian government, company expenditures connected to major infrastructure projects must in turn by approved by members of the same. If Petrobras needs to build a pipeline, for instance, or a refinery, or new shipping facilities, it can do so only once the relevant construction contracts has been approved by the National Assembly and the President. Because these kinds of projects are doubtless quite common, it accordingly follows that any given contract shouldn’t raise many eyebrows when presented to the relevant authorities. Having knowledge of this state of affairs, the aforementioned conspirators could thus quite easily slip their inflated bids into the normal flow of business between Petrobras and the Brazilian government without having to secure the cooperation of more than the absolute minimum number of public officials. Beyond this relatively small group of beneficiaries – i.e. a few key Deputies and Senators, the leader of the lower house, a party treasurer, and the President – everyone else involved in the aforementioned approval process could safely be relied upon to assume, absent proof to the contrary, that nothing out of the ordinary was actively taking place. They would be made to facilitate corruption without ever knowing or benefiting, their ability to prevent the same stymied by a carefully targeted application of resources and attention. 

To be fair, Petrobras as its currently exists almost certainly represents a species of corporate organization that someone like George Clinton would have struggled to conceive of at the time he penned Cato V in the waning months of 1788. As discussed at length – my God, at length – in a previous series, what corporations did exist in the Anglo-American world at the end of the 18^th century tended to be both limited in scope and possessed of fairly narrow practical authority. Essentially, they functioned to make up for the financial or resource deficiencies which served to prevent a given state or national government from engaging in this or that project or enterprise whose end result was thought to be of substantial benefit to the general public. Rather than raise taxes and allocate personnel for the purpose of repairing a road, say, or building a bridge, a government might instead cede some portion of its authority to a private organization by way of a charter in order to see the same end accomplished at a reduced rate or according to a more efficient timetable han it could have managed itself. Petrobras, to be sure, aligns more closely with this description of a corporation than most modern multinationals, the stated purpose of which has far more to do with increasing share value than generating some manner of demonstrable public benefit. But its sheer size and behavior would still seem to place it well beyond what someone like George Clinton was likely prepared to imagine.

The aforementioned Bank of North America was perhaps the closet corporate entity in terms of scope and purpose with which he might have been familiar. Its purpose was to facilitate government spending; its share releases were authorized according to a government-defined plan. But the Banks was still, at its heart, a private institution whose operating capital came from private sources. Petrobras, by comparison, is a fundamentally public entity, its majority shareholder – to the tune of 64% – being the government of Brazil and the revenue it generates being government property. Corporations on this model, while quite common today – from Petrobras, to Mexico’s Pemex, to Norway’s Equinor, to Saudi Arabia’s Aramco – were completely unknown to the likes of George Clinton, thereby necessarily limiting his ability to conceive of the means by which corruption might be facilitated completely within the sphere of government. The danger, as recent events in Brazil have made clear, lies not just with individuals or organizations exterior to government whose resources might permit them to compromise the same. It can also originate with entities that exist – quite intentionally – somewhere between the public and private spheres. Their mentality having been molded by the need to exist in the latter, they may in turn attempt to use their connection to the former to further their pursuit of profit at the expense of the public good.