world and the global recession has demonstrated that corruption is very much part of business as usual in rich countries that often lecture the poor. to discuss the phenomenon of corruption i'm joined by daniel kauffman in washington he's a senior fellow at the brookings institution also in washington we have dave when hold he's president of the american league of lobbyists and in east lansing we go to bruce being he's professor at michigan state university college of law and another member of our cross talk team you know on the hunger are right if i don't you know if i go to you in washington first today this just recently we had a transparency international restates annual report on corruption around the world and there are not too many surprises there are we because of the financial scandals in the financial crisis in the west some of the western countries have dropped down . and the ones the laggards are still there and i must admit russia is part of that lagging group but do you like these types of reports how their methodology how they

judge things because is we getting at what is how we define corruption is that something that we have to revisit because it's just not bribery i think the state is left out a lot go ahead. and yes i have to acknowledge chopra that i'd like them but i mean vomiting all of these efforts including you know helping transparency international but also we do our own with their worldwide governance indicators i think they are there. to basically measure i monitor how countries are doing they're not there not because it's a very broad picture so one has to drill down and look at the different money for stations or corruption so it's a cat cut it's a flag and i said flag it already shows this diaper like transparency international why we do it dollar it also shows that one should not go our core into two myth of

what people say that poor countries are or the corrupt ones and their rich countries are doing well that's not the case once you look at the data you see very clearly that countries like greece or italy have much more corruption that african countries like more trial in my own country like chile and so on which runs much better than there in europe for instance so it's very very important to look at the data carefully because it says a lot of the same time by now is to go to the next stage and go to each country and measure the different money for states or corruption because as you say peter they're they're very different dimensions which are very important how much it's because of bribery from corporations even cheated by where they capture their state and their state regulations and so on your little bit i mean i know you've used that term before capture and i to go to you bruce here i mean if we look at the

financial scandals that have rocked the united states and some financial institutions in the west i mean in your opinion and in researching a corruption in do you do these kind of financial downturns they manifest corruption or are they just revealing more because we could spend a whole week of programs of cross talk about all of the corruption has come out of major corporations the last ten years for instance in the united states. well that's certainly true peter. whether whether we think that it's worse because of the financial crisis or not i'm i doubt it but regulatory capture of regulatory agencies and legislators certainly in this country is a phenomenon that i think everybody has acknowledged forever but it's just not part of the political rhetoric. thirty three years ago we started with the foreign corrupt practices act and we've been exporting our standards to the rest of the

world while ignoring them here. i know that danny has spent a lot of time on that sort of thing but. it's not just corporations it's the institutions it's the entire system it's the way it's set up we call it democracy and yes it's a wonderful system but it is not perfect and it's certainly not what we teach our children in the third grade ok dave if i can go to you a lot of people would say though it would grease is the works of a lot of corruption is lobbyists and that's why you're on the program do you how do you feel about that obviously you would disagree but what role does lobbying play in all of this because again if we use the term capture which i really like is that really captures the meaning of what different types of corruption in that in the normative sense and that's why i started out with this report because they mention things that are quite obviously obviously corrupt and we could all agree with them but as we just heard as you go deeper and deeper down how does it really work and

people say lobbyist or at the heart of it. i tend to disagree with course i think lobbyists are our job is to educate inform people and lobbying in america is the most regulated industry in america i've been to other countries and tried to help them with their code of ethics and especially in the in the south european eastern area and they're still on of the old you know i would say the one nine hundred seventy s. and before lobbying rules were it was pay to play in america now lobbying is on our microscope and i and i point nine percent of us are doing it accurately effectively transparently for our clients and the people who are breaking the system go to jail and that's a good thing well but i think what's happening and i've talked to people in russia as well is that there is this. this is cultural system of that corruption or bribery or whatever you want to call it is is part of the way business is done

and i think we've got to get to the heart of it of changing it from the top down and then into little the leaders and the people demand more you're going to have corruption i think that people are demanding more thing that go back to daniel i mean let's look at the government oversight of b.p. i mean do you think those people are going to go to jail i tend to doubt it you know i mean when you have that kind of lax regulation lobbyist very much behind that what is the only one of most lobbied in in the world and in the united states i mean what i'm saying is that we can all agree that you know all of these things are terrible and they're wrong but they just keep going on and on and on go ahead. yeah yeah i think one has to get down into they did there are many regulatory agencies in the us and bruce knows them very well and they gave it to the case of the m.m.s. well regulated b.p. and many others it's going to be a case study where there was captured the way it was such

a cup sure but they were they cozy relationship through gifts and other in other issues that took place between m.m.s. and their regulatory agency and b.p.'s going to be a case study and when you see some people may be indicted or prosecutors may not done in the past some people have in the land that in jail but that's not enough bruce systemic issue one has to look at all the agencies let let's look also more carefully at what happened with c.c. and with other key agency through in the financial crisis that had a lot to do that was also capture even if it was such a soft and he does not always require a course bribery payment and table so that's a huge issue but that's as david this is saying i mean why nice to be careful in just pointing the finger out one group is not just lobbies is true that they have been three point five billion dollars in lobbying expenditures in the u.s.

alone or over two thousand and nine and these three billion plus these is the extent of expenditure so that place an enormous role but one has to look at the other side of the picture politicians and that are very pleased to work work we have a solution with another government agencies that basically play are all indeed so it takes at least not two but three to tango here bruce i mean basically we have you know go ahead go ahead this is crosstalk jump in direct head. you know you know i think you're absolutely right you know i always say that. a lot of us never vote on the house or senate floor it really comes down to when you provide that information out to a legislator or decision maker they've got to make those decisions at the end of the day they need to be accountable and what's happening now in this recent election the people are speaking out and say i need you to be accountable to us so at the end of the day you know it's easy to make the lobbyist the bogeyman and the

scapegoats but at the end of the day we never vote on the house or senate floor brousseau when it really comes down to it yet i was just going to say to you is that one of the things this is it is we see this no one's use of term here but revolving door i mean politicians become lobbyists ok everybody keeps track of everybody lot of favors i mean it can be very subtle ok like i can count on this guy for a job or things like this you know or a banker is you know we can go into the whole financial crisis where you know it would be. the security and exchange commission you had wall street you had government to every everybody's playing the same game here i mean this is the systemic corruption that i think that doesn't release and pointed out in these reports because they don't have the same kind of categorization what do you think about that. here i mean you asked the question about who's going to jail and what's legal i mean let's recall who makes the laws and who makes things legal congress has had its hands completely into this financial crisis in the late

ninety's. there is no doubt that they're not going to jail or the only thing you can do to a congressman or a senator is not elect him i mean. we're marveling at the fact that there's almost one hundred seats available that might that are contested well i recall that there are four hundred thirty five seats up every year what what is it what do we call it when three hundred thirty five of the guys are in serious contests we don't call it corruption but in this country there's no doubt that we have legalized what in other countries we call corruption the institutions are set up to accommodate the congressman and the congress and make the rules you can't put them in jail they want to finish. all right i'm sorry go ahead daniel go ahead. yeah i wanted to compliment that day already two thousand and four we did that paper which we called

legal corruption and we measured over one hundred one hundred countries in the war in terms of all of these issues which are not captured in it which are not measured in the journal corruption induces which are much more subtle in terms of undue influence on the on the policies on the regulations to regulate including gregory capture and the u.s. in two thousand and four was rated in the bottom half of the award while there nor was there nor debates where i bet top so one can say one can do better and be the new watch group. being here if i were to go to a short break after we continue we'll continue our discussion on corrupt state. taking.

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sunday can. still. come up. to. welcome back to cross dog i'm curious about remind you we're discussing the state of corruption. and. stood. before it let's look at what russians think about this topic. corruption today and necessary evil or phenomena we should fight against many argue it's inherent even in highly regulated countries often kickbacks are part of running businesses employing people and even generating growth the us government's on the take measures to put an end to these practices now louis many claim instead of corruption there would be dozens of different phenomena to replace the public

opinion foundation asked freshens if they had faced corruption recently seventy percent of the respondents said they haven't and another twenty seven percent said they have still russian president meeting with big has recently signed a national strategy to eradicate corruption peter. ok dave i'd like to go to you i mean i hear all the time in the mainstream and maybe you're the perfect person to answer the question and with some clarity i hear all the time lobbyists in there representing their clients write laws for the politicians for them to vote on to what degree does that happen you hear this about health care all the time you hear this about finance financial reform i mean the whole revolving door is quite frightening with if you look at the people that are involved in this the people that got us into this mess in the first place are still writing laws for us to get us out of it that's a hard sell for me so how much do lobbyist write laws. well let me give you two

perspectives peter really quickly there are about five thousand bills introduced in the congressional session there's no way a legislator and their staff can be experts on all those issues i mean the health care was one bill. so what you have is when you have your bring in an issue from your client to somebody they'll say can you send me a draft of of you know talking points on this so i can put it from my boss. that's kind of where i think people think well jeez lobbyists are writing bills well. the legislation has to go to legislative council has to go through the member of congress so those people are actually right in the bills now let me let me go back to the russian study real quick i've had the pleasure of dealing with some folks over in russia that are working to put in a code of ethics for people in the government relations industry they're finding it and create increasingly difficult because of the culture over there that it's accepted but they're willing to make the change you know i think most lobbyist feel that transparency and accountability is a good thing but it needs to be measured as well as is as reasonable. in america i

think we have a great code about a code of ethics the american legal office of the great court about that but that doesn't you can't you can't make sure that everybody is following the same moral compass and that's where i think strong rules and regulations come into effect where those people who do break the law you know there are penalties for that daniel what about you what do you think about that i mean this is again another popular phrase that's being thrown on outsourcing government and a lot of people would say that it particularly in the united states a lot of policy is outsourced for private enterprise and something tanks that are supporting private enterprise to write laws because a lot of these things are are quite complicated and they're always going to be written to serve somebodies purpose and it seems to me less and less so the average person's interests what do you think. well in many other countries the actual legal writing is done by the legal body with their stuff and they here in the us

they have enough resources to do that having said that one point that david is making is very important will choose these crucial inputs which is part of the debate and discourse that may come from outside of the legal politician rearmed i work for a think tank now brookings institution before i was with the world bank in providing inputs and we did it in many countries that that's legitimate but it should not be the blueprint for the law itself and b. what david is saying is very important as should be subject to enormous transparency debate and discourse with many such inputs the point about lobbying in my view is not to to just try to eradicate lobbying like like the cream in russia about corruption you cannot eradicate corruption or you cannot eradicate lobbying because it's part of human nature every human every individual would always be the issue is transparent taking it and making it free entry that

there are many different views and issues and representatives that come to that and it should not be monopolized by the most powerful in terms of money and that if this is what has happened in the us money in politics has distorted so much of these that it's the most potent that financial and industrial conglomerates and a bit of that happened in russia too which are driving they have much of these influencing that that would lead me to redefine which should also think about redefining corruption not just a traditional definition of the abuse of public office or private gain but that the privatization of public policy this is what's happening in some countries subjected to capture including in the regulatory capture is that public policy that should be for their benefit. all is being privatized to benefit the fuel because of a distortion influence of mine in politics and by the way the revolving door it's a major issue that has not been resolved and the i would take issue with. those few

that are breaking the laws is that one can get around these issues by having a quick revolving door for politicians are going to industry or lobbying they give them a little bit separate and he or she does not directly make their phone calls to lobby but she oversees the whole process of lobbying by other states but it's relatively simple stated to exert on enormous influence and i can influence as a defacto lobby ok but ok gentlemen we've all used and i mean we've i mean if we've all used the same term here transparency and a first bruce is getting more transparent or less transparent because i'm really worried expression in the states it's the same group of people that got us into this mess are saying they can get us out i mean that's why i said that's a hard sell really. it's not it's not something that you're going to buy peter and isn't that something that that ninety nine percent of americans by. the dodd frank

bill which is what nine hundred pages of fine print and in comprehensible phrases that were put in there by the lobbyists perfectly legally by the way that's just not going to solve the next problem the next crisis will happen i mean i like one of the one of the phrases that any use i mean we talk you've brought up the question of bribery in russian law making and russia generally i mean what we have done in the united states is we have privatized bribery privatized corruption and made it illegal well ok but we should acknowledge that and we should take your point that exactly the people that brought us this mess for the last two years are the people who now say oh we'll fix that for ever and they are fixing it courtesy of david and his friends and they're doing everything perfectly legally and terrifically transparently transparently but they are doing it on behalf of their

clients the. really who are you under islam there's a question you think universities do you think universities are non-profits i know i know they're very i mean they go as much as. not just as you know they all bring. i know i look i worked for corporations of thirty years and i lobbied for two years and i know that the universities very carefully lobby for the thirty one billion dollars that uncle sam passes out but that doesn't mean that the this system is working it means that the public is not being represented the clients with big money as danny pointed out those are the ones that are being represented i mean there's three hundred ten million people that aren't represented in these these things and if nobody believes that a large delegates are the way to solve this problem all right dave go in there i'm not surprised go ahead go ahead dave you know i told you disagree i think you know

every american is represented if you think if you think the average plumber or auto worker is not represented in washington d.c. by somebody who is their lobbyist you're mistaken most people are represented by five or six lobbyists in a day if you're an older american a.a.r.p. represent you whether you're a member or not. you know to bake i agree that the system could be improved i told a group of that but the say that lobbyists are at fault that's a generality that just doesn't play with me i think most people want want somebody to blame and because they really don't know what a lobby is does hey that's a great scapegoat members of congress will do it too until they decide they need a campaign contribution and i honestly think that the campaign contributions and lobbying should be disconnected because honestly when you get the grassroots level and that type of thing they should and what happens is at the end of the day you know the issue should be one on on the education and information provided in front

of you then the legislator gets to decide which one is the best choice and another thing in washington if you ever want a legislator your reputation is down the tubes dan you know it looks like you want to jump in there maybe so but if the lady just like your lies that's ok daniel going to head well that's on there just. comey coming in somewhere in the middle i mean i think lobbying can be vastly improved because it's not that nobody among the three hundred ten million is represented by the said vastly equal distribution of power and influence in terms of what's being a successful lobbying and ways not and that depends on money however we and he was just mentioning brief where we're missing half of the other picture and that should be integrated and that pain finance there the whole issue of campaign finance even if if they're lobbying industry disappear tomorrow which i'm not saying it should

happen because i think these are legitimate value of lobbying but that's to be proven even if we disappeared we are left with billions and billions very unequally distributed and very much linked to what kind of a vote politicians are going to have and causes they will take and linked also to issues of regulatory capture which are related to come pain finance and we're seeing them play out right now and after a very very disturbing decision by the supremes cornello in corporations and even for foreign influence and now we don't even know wave comes from so these are transparency is coming so let's not miss the other half of the picture in terms of these money in politics that causes capture which is they come pain finance which as david is suggesting should be linked into this picture and let's not just point fingers at the lobbying issue i'm going to really do that when we need to look at countering gentlemen i wish we had i wish we had

a whole lot more time because we could cover so much more many thanks to my guest today in washington and indeed some answers and thanks to our viewers for watching us here are keep see you next time and remember prost are. still. if you want to go.

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