Other illegal donations will be considered under two headings:
1. where the contributions themselves are illegal, and
2. where the contribution is legal in itself but where there is an illegal payoff or deal.
Categories of illegal donations include:
1. donations given secretly in jurisdictions where they are required to be disclosed;
2. donations from prohibited sources - these may include payments from the proceeds of crime or (in some countries) from foreign sources, companies, and trade unions;
3. payments in excess of set contribution limits;
4. political payments disguised as business transactions where such payments would have been illegal had they been given as donations.
Political donations that are illegal because of the payoffs linked with them include:
1. The illegal exchange of money for public appointments. Bribes are not always given for the personal benefit of the bribe-taker. They sometimes go into the coffers of a political party or a campaign chest. 'money for honours'. It was proven that a series of appointments to judgeships had been made in Philadelphia in the 1970s in return for money for the local Democratic Party organisation.
2. The exchange of money for public contracts or for favourable regulatory decisions. A well - publicised set of American examples emerged during the Watergate investigations following the re-election as president in 1972 of Richard Nixon. Herbert Alexander described one example - the 'milk deal' - as follows:
'A classic illustration of how money may talk when special interests deal with the government was provided by the dairy industry in the first Nixon administration. The story embraced the so-called 'milk deal' - the sudden increase in the government subsidy of milk prices in seemingly apparent response to campaign contributions.'
Three dairy co-operatives, based in Texas, Missouri, and Kentucky 'came in the late 1960s to constitute the richest new source of political money in years.' The affair of the milk-deal started on March 12, 1971 when the U.S. Secretary of Agriculture announced that there was insufficient reason to raise the milk subsidy. The decision was reversed soon afterwards, bringing a windfall of between U.S. $300-700 million to the milk producers, but higher milk prices for the public. The policy reversal followed a pledge of U.S. $2 million in campaign contributions, though it was stoutly denied that the administration's reversal of policy was a result of this, see 49.
3. Contributions obtained by exerting illegal pressures on the donor. An example of extortion against corporations comes from one of the classic 'city bosses' of political machines in the United States, Bois Penrose of Pennsylvania. In the nineteenth century Boss Penrose would wait until an election was approaching to introduce proposals in the state legislature that would have the effect of reducing the profits of certain corporations. If the corporations then made donations to his campaign coffers, the threatened legislation would be quietly dropped.
A lower-level example of extortion, taken again from the rich experiences of Pennsylvania politics, is the formerly widespread practice of 'macing', see Party Taxes. Workers employed by the state government, without security of tenure and on the basis of their services to the state governor's party organisation, were regularly required to give campaign contributions. These were sometimes in the form of relatively expensive tickets to fund-raising dinners held by their party. They were subjected to threats - ultimately held by the Courts to be illegal - that they would lose their jobs if they omitted to make these contributions.
4. The exchange of donations from criminal syndicates in return for direct or indirect promises of non-enforcement of the law. Again, the literature of 'machine politics' in the United States is a rich source of examples. In the 1970s, a government prosecutor in Western Pennsylvania, Richard Thornburgh, who would later become U.S. Attorney General, discovered what he described as a 'politico-racket' complex in the Pittsburgh area. The scandal would lead to the suicide of the District Attorney for Allegheny County (Pittsburgh) when he faced prosecution.
Thornburgh showed that criminal organisations had been permitted to run illegal gambling schemes with the knowledge that the local police would not prosecute them. Their immunity resulted from arrangements involving campaign contributions to the political allies of the District Attorney. The criminals warned that if their underlings were prosecuted and if the lucrative business in illegal gambling were shut down, the campaign contributions would cease.
This is an example of 'old-fashioned' organisation crime that operated in the days when illegal alcohol, gambling, prostitution, and loan-sharking were the main forms of business and when drug trafficking had not yet become the predominant activity.
5. 'Money for honours'. This is a phenomenon associated principally but not exclusively with Britain. Under British law, it is illegal to link a political payment to the promise of a title such as 'Lord' or 'Sir'. The Honours (Prevention of Abuses) Act was passed in 1925 to end what had until then been an active trade in political honours. Middlemen conducted negotiations between the senior members of the governing party (which was entitled to recommend the award of titles) and rich men who craved to be ennobled or titled. Whether the law eliminated the trade or merely made it more subtle is a matter of argument, see Controlling Fraud, Corruption and Unfair Practices.
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