During a summer school on the theme of parties and democracy held at the European University Institute in Florence last September, the talk turned to political corruption, as it often does when politics students visit Italy. The Telegraph’s principal revelations in the MPs’ expenses scandal had appeared some while before, but the summer school students were in any case more intrigued by the doings of Silvio Berlusconi and the daily stories of political chicanery in La Repubblica and Corriere della Sera. They also had revealing stories of their own. In Bulgaria, we were told, one vote in seven had been bought by a political party before a recent election. Bulgaria is 71st in Transparency International’s most recent ‘corruption perceptions index’, sharing with Romania and Greece the lowest ranking in the European Union. The highest price paid for an individual vote was said to be about €15, and the proof that the voter had fulfilled his part of the bargain was a photo of the completed ballot paper taken with a mobile phone. (A number of countries now ban voters from taking mobile phones into the polling booth.) In Turkey, which is number 61 in the index, and is thus seen as being less corrupt than Bulgaria, Romania or Greece, bribery and corruption, we were told, are to be found everywhere in the government and the military. In Greece, in the lead-up to the 2007 election, the ruling party offered €3000 compensation to anyone who had suffered as a result of that summer’s fires. No evidence was required. The opposition alleged that public money was being used to buy votes.
Less serious, but pretty nasty, was a student’s claim that in Macedonia left-wing activists urged their young supporters to hide their conservative grandparents’ identity cards on election day in order to prevent them from voting. ‘That happens in Spain too,’ another student said (Spain is number 32 on the index). Earlier that summer in Norway (No. 11), Aslaug Haga, the minister for oil and energy, and leader of the Centre Party, resigned following questions about illegal building projects at her family homes. The English-language edition of the Aftenposten reported allegations that she had taken part in back-room deals to win support for Tromsø’s bid for the Winter Olympics and that she had had a hand in arranging a state consultancy job for a colleague. In France, 24th on the list, Jacques Chirac famously refused to resign in the face of claims that he had received substantial illegal payments for public works contracts while mayor of Paris and president of the Gaullist Party.
In Poland (No. 49), soon after the summer school ended, the ‘casino scandal’ cost the government two ministers and two junior ministers. The allegation here was that lobbyists had bribed politicians in an attempt to stop the imposition of a higher tax on gambling. A Polish colleague of mine at the European University, who has spent a long time investigating the links between money and politics in the post-Communist democracies, tells a joke about two ministers from neighbouring Balkan states. There are versions tailored to most regions of the world. In this variation, one minister visits the other and remarks on his host’s wonderful new house in the country. ‘How can you afford this place?’ he asks. ‘See that bridge over there?’ the host replies. ‘Yes,’ says the visitor. ‘Ten per cent,’ the host says proudly. Sometime later, the visit is reciprocated, and the second minister is now living in an even more sumptuous villa than his counterpart. ‘This is marvellous,’ the visitor says, ‘but how can you afford it?’ ‘Do you see that bridge over there?’ his host asks. ‘What bridge?’ the visitor asks. ‘Exactly,’ his host replies: ‘100 per cent.’
Living in Italy (No. 63), and coming from Ireland (a surprisingly healthy 14th place), I had my own stories. I even have some scandalous tales about the Netherlands (No. 6), which has long been regarded as a model of good governance, but where the large sums of public money available for building roads and infrastructure have created huge incentives for developers to suborn the modestly paid local government officials who often award the tenders. By most standards, therefore, the levels of corruption exposed by the expenses scandal in the UK (in joint 17th place, with Japan) are relatively modest. Stories of corruption are told in every European country, even in Denmark, which, at number 2, is seen as the least corrupt of the EU member states (New Zealand tops the global list, Singapore comes third). In Germany (No. 14), much controversy was aroused by the move of Gerhard Schröder from the chancellorship to a directorship of a Gazprom subsidiary just two months after losing the 2005 election, and three months after he and Putin had signed an agreement between Russia and Germany to build a $5 billion pipeline.
In Ireland, as documented by Frank McDonald and Kathy Sheridan in their recent bestseller about property developers,the building industry and Fianna Fáil have spent decades in a mutually beneficial partnership. Highly favourable tax deals benefited developers in the boom years, and at the local level councillors have been given cash donations in return for their votes on planning and rezoning issues. Among the worst offenders was the overbearing Ray Burke, a former minister, who was eventually jailed for tax evasion, but had earlier pocketed almost £3 million when he sold his family home to the property developers Flynn and O’Flaherty.
The lavish lifestyle of Charles Haughey, the former Fianna Fáil taoiseach, was sustained by frequent donations from his friends in the construction industry. His shady dealings are recounted in great detail in the 2006 report of the Moriarty Tribunal, which was set up to investigate irregular payments to politicians. Two days after becoming taoiseach in 1979, for example, Haughey approached the property developer Patrick Gallagher to ask for help in clearing his huge debt with Allied Irish Bank. Gallagher gave him £300,000 out of what he later testified was ‘a sense of duty’. Fianna Fáil politicians were not the only ones involved. In his testimony to the Mahon Tribunal, set up to investigate evidence of political corruption in planning and property development, Frank Dunlop, a former government information officer and later a public relations consultant and bagman, said that in 1991 he had paid more than £100,000 to various councillors to secure planning permission for a developer to build on 180 acres in west Dublin. One Fine Gael councillor wanted £250,000 for his vote, but later settled for just £20,000. Dunlop, a former college classmate of mine, who once wanted to do research on local government in Kilkenny, was sentenced to two years in prison.
With the exception of the European Parliament, which currently has 736 members, 300 more than the US House of Representatives, the House of Commons is the largest legislative chamber in Europe. There are currently 646 MPs in Westminster, as against 630 in the Italian Chamber, 622 in the German Bundestag and 577 in the French Assembly. There are also 734 members of the House of Lords, as compared with the 343 members of the French Senate, the 315 of the Italian Senate and the 69 of the German Bundesrat. The UK also has generously provisioned local parliaments in Scotland, Wales and Northern Ireland. Close to 100 of the Labour MPs in Westminster have government posts, and they are shadowed by Conservative and Lib Dem frontbenchers. Another large tranche of MPs serve as chairs or deputy chairs of select committees, or have other more or less demanding jobs in Parliament. Some MPs have no formal function, but are prominent contributors to debates and discussions in the House. This leaves roughly 300 – twice the total number in the Dutch parliament – who may well be busy with constituency matters, but are unlikely to be very engaged in parliamentary or legislative activities. They remain largely anonymous, but they usually turn up, and vote as instructed. These are the MPs who are beloved of the whips, the so-called lobby fodder, and according to Martin Bell in A Very British Revolution, they are also the MPs who tend to claim the most for expenses: ‘There was nothing they wouldn’t claim for or, when the division bell sounded, vote for.’
Many of the current 646 MPs will not be returning to Westminster after the next election. In the wake of the expenses scandal, a large number have promised to resign or retire. Others will be deselected, and many will not be re-elected because of shifts in electoral support. Traditionally, the swing from one party to another has been relatively low in the UK – Britain has one of the lowest rates of electoral volatility in Europe – though often large enough to produce a change of government. In the ten elections held between 1950 and 1979, the government was defeated five times and re-elected five times, and the winning margin was usually pretty tight. The regular alternation of power and the competition for the so-called ‘median voter’ was believed to keep British politics hovering around the moderate centre.
Since 1979, the pattern has been different. The Conservatives won big in 1979, and were re-elected three times, mostly with very large majorities. Labour won by a large margin in 1997, and has so far been re-elected twice. Before 1979, victories were measured in terms of tens of seats. Since 1979, they have been measured in the hundreds. If there is a swing against Labour in the coming election, it could cut a swathe through the House of Commons.
In the current climate of scepticism about MPs and their parties, and after all the opprobrium that has followed the Daily Telegraph’s stories about padded expense accounts, flipped second homes and the lack of transparency and accountability, a career in the parliamentary peloton looks less attractive by the day. For one thing, it’s losing its status. Not all MPs will have coins thrown at them or be jeered in the street, as was the case with a number of Italian MPs during the mani pulite investigations of the early 1990s, when more than 150 members of the Italian parliament were placed under investigation. But according to polls cited by Bell, 79 per cent of respondents in 2008 thought that ‘most MPs use public office to make money improperly’ and 48 per cent of respondents to one BBC poll believed that half of all MPs were ‘corrupt’. In 2004, well before the expenses scandal, the EU commissioned Eurobarometer poll found that 10 per cent of British respondents trusted political parties, a figure just lower than that in Germany (11 per cent) and Italy (13 per cent), and far below that in Greece (28 per cent) and Denmark (32 per cent).
Nor is the job very well paid. To be sure, an annual salary of some £65,000 and what is even now a generous system of allowances and expenses place MPs among the top earners in the country. But since they spend most of their time mixing with the great and the good, and with ministers, financiers, journalists and TV personalities, all of whom earn substantially more than they do, it is easy to understand their sense of relative deprivation. This is exacerbated by the knowledge that theirs is not a secure profession. A large number of the MPs who will lose their seats later this year are well below retirement age – the average age of MPs is 55 – and will have to find some other way of earning a living. Having spent time in the House of Commons is no longer the best qualification for this. There are resettlement allowances for defeated MPs, as there are for most compulsory redundancies, but in other parliaments such allowances are usually higher. The basic salaries are often higher too. Italian MPs, who are the best paid in Europe, earn the equivalent of more than £100,000 a year; German MPs pull in about £80,000; French MPs earn a little less – around £60,000 – but this seems to be after national insurance and other costs have been deducted.
In the not so distant past, both the profession of politics and MPs themselves had more status, and the salary had more purchasing power. In a recent and very imaginative piece of research, two young scholars estimated the financial returns accumulated by postwar British MPs by comparing the estates left by politicians to those left by candidates who narrowly failed to get elected.[†] The results are striking. Conservative MPs accumulated much more wealth through outside employment both during and after their terms of office than did Conservative candidates who failed to get elected. Incumbency appears to have more than tripled their chances of becoming a director of a public company. They also did better than Labour MPs. Conservative candidates who won election ended up with twice the wealth of those who failed to win a seat, whereas for Labour candidates, winning a seat made almost no difference to their eventual estates.
Although the figures cited in Bell’s discussion of the expenses scandal are sometimes big enough to make a difference to the estates of the present generation of MPs, the long-term costs of losing office will in most cases outweigh any short-term gains made through the milking of the Additional Costs Allowance. Indeed, the pettiness of some of the claims may be the most depressing thing about this story. The 88p bath plug is the most extreme example, but there are also the food bills, the laundry bills, the bills for cutting back wisteria. These hardly weigh up against the loss of a parliamentary salary. Consider the case of Neil Hamilton, who was defeated by Martin Bell after 14 years as an MP. One of his crimes was to have lived it up in the Paris Ritz at Mohamed al-Fayed’s expense. He and his wife, Christine, stayed for six days instead of the expected two or three, ate six expensive dinners, drank lots of wine and emptied the minibar. They clearly never left the hotel. A luxurious holiday, certainly, but no minibar in the world could have compensated for Hamilton’s loss of earnings after the 1997 election. Nor would it have compensated for the public humiliation. ‘I’ve found it’s much better making political jokes than being one,’ he said on Have I Got News for You. Jacqui Smith – who inadvertently claimed for two porn films watched by her husband – would surely agree.
According to evidence produced in his libel case against al-Fayed in 1999, Hamilton received £10,000 from Mobil in return for proposing an amendment to a piece of legislation that would have saved Mobil millions of pounds in taxes. This was a huge return for relatively little outlay. Bernie Ecclestone famously donated £1 million to the Labour Party and later won an exemption for Formula 1 from the ban on tobacco advertising: again, a relatively large return for a relatively modest outlay, particularly since the donation was later returned by the Labour Party. According to the then parliamentary commissioner for standards, Tim Smith, a Conservative minister, received payments of between £18,000 and £25,000 from al-Fayed for lobbying services, including the tabling of parliamentary questions. He later resigned his seat.
In general, however, it’s difficult to find cases in which lump-sum payments have been made to individual MPs in return for political favours. In this sense, and for all Bell’s righteous anger, British MPs seem relatively uncorrupt. The Ecclestone story was serious, of course, as was the cash-for-questions scandal, which involved a host of MPs. Getting tax reductions for oil companies is serious, too, since it has implications for the funds available for public services and benefits. But these cases are few and far between, and it is easy to find more serious instances of corruption and electoral manipulation elsewhere in Europe. In Italy, as might be expected, corruption is rampant. A series of ad personam laws has been passed by the right-wing majority in order to protect Berlusconi from having to appear in court to answer charges of criminal misconduct in his business affairs. On 23 November last year, La Repubblica listed 18 laws passed by the government since 1994 which have directly benefited Berlusconi and his business empire. The most recent such bill, which proposes to shorten the period that must elapse before the statue of limitations kicks in, would allow Berlusconi to escape judgment in the bribery case that has already led to the conviction of David Mills, Tessa Jowell’s estranged husband. Lower down the hierarchy, public services and state institutions continue to be used extensively by politicians to extract profits or as a source of jobs for friends and party colleagues. It isn’t only administrative appointments that are subject to partisan control. In Naples, for example, most senior hospital consultants are thought to be party appointees.
In politics you can never be too rich, but you can have too many votes. In Roscommon, a largely rural constituency in the West of Ireland, a senior and very popular Fianna Fáil minister urged people to give their first preference votes to one of his running mates so that both might be elected in the three-member constituency. So many voters took him at his word that the running mate was elected with a large majority but the minister, Brian Lenihan, lost his seat. ‘The West always votes for the government,’ he once told me, but in this case the voters opted for the wrong member of the government. Lenihan moved to Dublin, where he later won re-election in a suburban seat. His new running mate was Liam Lawlor, one of the most demanding recipients of the property developers’ largesse, who eventually served three brief spells in jail for refusing to co-operate with the Mahon Tribunal. Lenihan himself carried on until his death in 1995. He had become seriously ill in the late 1980s, and in 1989 received a liver transplant at the Mayo Clinic in the United States. He was a well-liked man, and his friends rallied around to raise money for the expensive operation. On the day of the 1989 general election, as McDonald and Sheridan report, Mark Kavanagh, a wealthy builder, called at Charles Haughey’s house to deliver a cheque and three bank drafts amounting to £100,000: £25,000 was intended for Lenihan’s medical fund and £75,000 for Fianna Fáil. Haughey apparently passed on £25,000 to the party and kept the rest himself. None of the stories told in Martin Bell’s book is anything like as bad as this.
Although his subtitle promises a plan ‘to save our democracy’, Bell’s proposals are relatively modest. They include a clean-up of the system of expenses and allowances; an end to secrecy about MPs’ addresses; the introduction of open primaries, thus reducing the stranglehold of party elites on the selection process (something similar has been introduced in Italy and Portugal); the introduction of the Alternative Vote system (used for the Australian House of Representatives and for presidential elections and by-elections in Ireland); reducing the power of the whips; and encouraging voters to look more closely at the merits of individual candidates rather than judging simply by the party label. Essentially, this is an anti-party message.
Parties are the core of the problem, both in the UK and elsewhere. At one stage Bell says the distrust of politicians in the UK is deeper than in any other European democracy. This may or may not be so – the Eurobarometer poll bears it out – but what is clear is that political parties as such, and not just the politicians who lead them, are everywhere increasingly unloved. Party loyalties have been eroded in almost all established democracies and, in the post-Communist democracies, have never been established. Turnout at elections has never been so low, while support for mavericks, populists and other ostensibly anti-party politicians has never been so high. Party membership has dropped significantly. Back in the 1960s, when comparable cross-national data were first collected, more than 10 per cent of registered voters in European countries were members of a political party; today, the figure is less than 5 per cent, and falls to less than 4 per cent if we put to one side Cyprus and Austria, where mass parties still appear to thrive.
Bell at one point speaks of the unbridgable divide between ‘them’ and ‘us’: between MPs and citizens, or voters and parties. This divide fuels much of the populist anger that parliaments throughout Europe are now facing; and as long as it exists, it leaves the way open for more political corruption. Somewhat surprisingly, both Britain and Ireland have so far remained largely immune to the populist surge. In most other European countries, populist parties of the left or the right have begun to command substantial shares of the vote, and in some cases – Italy, Austria, the Netherlands – they form part of the cabinet. In Ireland, there is nothing comparable, and while both UKIP and the BNP look a lot like some of the more extreme populist parties on the Continent, they struggle to win significant support.
The mainstream parties, meanwhile, struggle to gather the resources necessary to compete effectively for office. Parties can no longer rely on the efforts of ‘amateur democrats’, those activists who once persuaded voters to turn out on election day. Instead they rely on professionals (experts, pollsters, marketing gurus and consultants), all of whom cost money, and all of whose advice costs money to implement. Parties are now capital intensive rather than labour intensive but, lacking activist labour, they have problems raising capital. So they find themselves turning to a relatively small number of private donors. The donors then begin to lean on the party, and the party, being organisationally weak and short of members, gives way. In the past, the pressure of private donors could easily be resisted by a mass organisation, but now the pressure from donors is greater and parties’ capacity to resist it has declined. The problem can’t be solved by increasing public subventions: however much money they get from the state, parties will still seek private donations.
Moreover, wealthy individuals and corporations may no longer need to seek a party to influence: they can set up their own party instead. In the 1980s Berlusconi tried to influence Bettino Craxi’s Socialists; after the collapse of the party system in the early 1990s, he chose to establish a party of his own, built around his media empire, and used it to gain control of government. His control is even more firmly cemented now that Forza Italia has effectively absorbed the ex-Fascist National Alliance into the People of Liberty, a new party which remains Berlusconi’s own and which, in government, acts accordingly. There are similar stories of organised criminals sponsoring their own parties in the post-Soviet republics and in Latin America. According to a recent report, for example, Costa Rica’s attorney general, Francisco Dall’Anese, has warned: ‘We have already been taken over by drug cartels and other activities carried out by organised criminals. What follows is that drug cartels will take over political parties, will finance political campaigns and then take over the government.’
Although this is a far cry from duck islands and bath plugs, it reminds us that there are two issues at stake. First, there is the bad behaviour of individual politicians. This is clearly a problem in Britain, but it seems to be more a matter of venality than corruption. As MPs spend more and more time in the confines of Westminster, and as they lose touch with and cease to take their cue from local citizens, their view of what is expected of them and what they can do inevitably shifts. Bell is right when he emphasises that the real problem with the expenses scandal is not the money: it’s the fact that MPs make their own rules, and effectively end up writing their own cheques. Second, there is the real threat of corruption in the political parties themselves. By legislating for public subventions and by deciding the rules governing donations from the private sector, the parties too are writing their own cheques as the demand for spending grows and grows.