Re: Stealing an Election: What's it worth?

From: Edward Cherlin <cherlin_at_pacbell_dot_net>
Date: Tue Jun 07 2005 - 20:21:52 CDT

On Tuesday 31 May 2005 09:51, Edmund R. Kennedy wrote:
> Hello Jim:
>
> Yes, the stock markets seem to not be particularly
> rational. However, setting aside your interesting
> case of potential 3rd party beneficiaries, I'm
> wondering how a person elected through less than
> honest or competent elections would directly benefit?

Boss Tweed's Tammany Hall gang made off with more than $100
million in 19th century money, and let a lot of crooked city
contracts that I don't have numbers for.

The railroads were paid $1 million per mile to lay the
transcontinental railway on the flat, and $6 million in the
mountains. The railroad robber barons reportedly had surveys
done that expanded the Rocky Mountains by 60 miles. That's $250
million extra of public money, some of which went to various
people in government to ensure that the surveys would not be
questioned. Sound familiar?

Members of Congress and the Administration give up a lot of money
in immediate salary to serve in the government, but can look
forward to huge increases in salary and generous stock options
when they leave, if they want to play the game that way. In many
cases, legislators vote in ways that favor companies they have
invested in. Presidents and Vice Presidents with ties to oil or
defense have certainly favored their industries in legislation
and their companies with juicy contracts.

Winners of elections ("incumbents") attract much higher levels of
donations than challengers, and losers may be put out of the
action entirely. How much money can one spend in order to
attract the additional funding? The ratio is obviously less than
one, and probably less than .5. Further than that I cannot go by
theoretical musing. We would have to do a survey. On the other
hand, there is considerable historical data on money spent for
vote buying.

Consider Billy Tauzin, (R) Louisiana. He not only attracted
contributions to his own campaigns, but became the conduit for
money from several industries to other members of Congress. Thus
he built up a fund of votes owed to him, making him even more
attractive to donors seeking favors. His has retired from
Congress to take a lucrative lobbying job.

Consider "Landslide" Lyndon Johnson, (D) Texas, a known rigger
and buyer of elections in Texas. His concern appeared to be
primarily power. He befriended the Speaker of the House before
moving on to the Senate. Being able to get favors in the House
gave him special clout in the Senate, resulting in his becoming
a conduit for oil money to Congressional campaigns. That, a
mastery of Senate rules, a domineering personality, and some
other factors made him _The Master of the Senate_ (title of a
book about him) and enabled him to ram Civil Rights legislation
through Congress after Kennedy's death.

> I'm trying to match apples and apples here. The
> original argument is that the person running for
> election could buy the election and there was even a
> per vote and election machine rate regarding the
> costs. To complete the argument, I want to see
> clearly how the person doing the cheating would
> directly benefit. Then I'd like to see it reduced
> down to a per vote rate the same as the cost of
> subverting the election was. That way, it would be
> easier to show a clear cost/benefit ratio to the
> malfactor involved. Right now, the argument while
> somehwat persuasive is weak, IMHO, because it doesn't
> close the loop.

Votes are sold for as little as $20 in some parts of the US
today, but obviously they are worth a lot more than that. The
money spent by Florida on illegally removing people with the
same names as alleged felons from the voting rolls is a matter
of public record, and I believe that somebody has counted how
many Democratic and Republican voters were disenfranchised the
first time they did it, so you can calculate the cost per net
vote. (They were caught and stopped, but not prosecuted, the
second time. I haven't heard how the third try turned out.) Of
course Florida spent public money to do this, so the politicians
may not care very much what it cost.

> One obvious way to get income from an election is that
> the newly elected official would be able to award
> non-competive, government contracts to interested
> parties in exchange for favors received. (Full
> disclosure, I'm a civil servant.)

Halliburton, anyone? Enron?

> Also, an elected
> official could also tip the balance towards granting a
> permit to a privately funded project that would not
> otherwise be allowed, again for favors received or
> anticipated.

BLM and forest products companies? Oil industry and Interior over
ANWAR? Power plants and EPA? Global warming? No bargaining with
drug companies? Spectrum giveaways? Copyright extensions and
draconian "protection" rac^H^H^Hmeasures?

> However, this needs to be quantified to
> make a direct relationship. While I used to be a land
> butcher that was 15 years ago and things have changed
> a lot.

My guesstimate: several $100 billion annually. One could make a
case for $1 trillion or more getting redirected, considering the
range and size of regulated industries. We don't need a detailed
audit to know that this is what goes on in general, but there
are OMB audits detailing lesser amounts.

> Thanks, Ed Kennedy
>
> --- Jim March <jmarch@prodigy.net> wrote:
> > Ed Kennedy wrote:
> > > Hello Jim:
> > >
> > > I can't necessarily see a huge advantage there but
> > > I'm not a professional investor. The reason I kind of
> > > doubt this is that polls usually predict election results
> > > pretty accurately (setting aside Ohio) so this doesn't seem
> > > like most elections would have results different from what
> > > was polled previous to the election or even during
> > > the elections. via exit polls.

You answered your own question with Ohio. When the polls show a
close enough vote, swing it by a few percent and you know what
companies to short and which to go long on before the election.
You get many more opportunities of smaller sizes in state and
local elections that are subject to even less scrutiny. 11
points in Georgia, and not even the pretense of an
investigation.

> > > Obviously if you knew the results were
> > > going to be radically different from what pre
> > election polling and
> > > exit polls you might be able to have some edge.

> > Otherwise, I can't
> > > see much or a systematic advantage to an investor.
> > Well that's precisely it, isn't it?
> > Make the results go a different way than predicted,
> > bingo.

Exactly. Or, in some cases, find out that they are different
legitimately. Some Morgan-Stanley people told a conference I
attended in 1990 that their gold trading program was authorized
to call the head gold trader at any hour of the day or night
when gold prices on different exchanges diverged sufficiently to
allow a profitable arbitrage play, which then had to be executed
within minutes, before everybody else leaped on it. You or I
can't execute such a strategy because we don't get
up-to-the-second prices and we don't have the international
communications network to react in time.

-- 
Edward Cherlin
Generalist & activist--Linux, languages, literacy and more
"A knot! Oh, do let me help to undo it!"
--Alice in Wonderland
http://cherlin.blogspot.com
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Received on Thu Jun 30 23:17:04 2005

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