James's Blog

Speaking Fee Bribery

Bribery of high government officials may be happening in plain sight but outside the purview of our current anti-bribery policies. We should update our anti-bribery policies to prevent this kind of bribery.

Let’s say I’m Goldman Sachs and I want to bribe the Treasury Secretary. I’d be happy to pay the Treasury Secretary directly but, though I may be rapacious and corrupt, I’m also risk averse and don’t want to be caught and punished.

I have a better idea. I’ll build a track record of paying former government officials if they treated me well when they were in office. Then the Treasury Secretary will know that if they do what I want, they’ll get a big bribe after they leave office. And because there’s no explicit quid pro quo, even if I’m caught, I won’t get in any trouble. I’ll just say the payment was a speaking fee (for example: Janet Yellen, Ben Bernanke, Bill and Hillary Clinton).

It’s trickier to outlaw speaking fee bribery than to outlaw direct bribery because there’s plausible deniability. It’s at least conceivable that the speaking fees are payments for speeches. We also don’t want to penalize former government officials for their public service by preventing them from working and earning money after their time in office. Still, bribery is so destructive to government function and public trust that we should disallow speaking fee bribery even if doing so would limit conceivably legitimate work.

We could disallow speaking fee bribery while still allowing legitimate work by forbidding payment to a former government official if the payment is:

  • likely affected by how that official’s decisions in office affected the payee,
  • substantially different from work payments the official received before leaving office, and
  • substantially different from work payments received by the official’s peers that haven’t served in government.

Bribery is cancerous to effective government. It corrupts policy and destroys public trust. Speaking fee bribery escapes our current anti-bribery policies and we should update them to prevent it.

Edited 2021-07-09