Extinguishing Corporate Corruption in an Independent Scotland

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The UK political system has recently revealed a number of its unappealing attributes. These bear heavily on Scotland’s independence referendum; by implication, they illustrate what kind of country an independent Scotland could become. Political fraud must be recognized and constitutionally proscribed, so that an independent Scotland does not fall prey to intractable, endemic corporate corruption. The future of a democratic Scotland depends on it.

The first regards the £500,000 contribution of Ian Taylor of Vitol to the ‘Better Together’ campaign, and the dubious provenance of much of Mr. Taylor’s income. Having studied the American campaign system, it is not difficult for me to imagine how Mr. Taylor can easily get a significant return on his investment. Major donors have direct access to senior politicians and civil servants – Mr. Taylor has dined with Prime Minister David Cameron in exchange for his generous contributions to the Tory party.

If that £500,000 contribution can help write tax or regulatory policy in Vitol’s favour, or deflect scrutiny by regulatory authorities granting impunity to shady business dealings, then it is cash well spent.

Upon independence, Scotland must adopt constitutional mechanisms to assure that no campaign can be dominated by money, whose contributors necessarily want something in return.

The second example of corruption is that the economic basis for the austerity programs in the UK and elsewhere has been shown to be a sham. The study ‘Growth in a Time of Debt’ conducted by Harvard economists Carmen Reinhart and Ken Rogoff purported to show that if a country has a debt to GDP ratio in excess of 90%, this hinders economic growth, and debt levels must be brought down in order to induce economic growth.

This study has served as the intellectual basis for austerity policies in many countries, including the UK. The study was recently examined by 28 year-old graduate student Thomas Herndon, who found it to be riddled with errors and false assumptions. The paper showed that the Excel spreadsheet upon which it was based omitted many variables which would have shown that this 90% ‘tipping point’ thesis was invalid.

The upshot is that George Osborne’s policy of economic austerity imposed on Scotland by a government Scots didn’t vote for is based on an invalid study. No wonder that despite the downgrades of the UK credit rating, avoiding a triple-dip recession is considered ‘healing’.  What economic future can the UK look forward to if the government is basing its policy on lies and skewed information?

This raises the broader question of corruption of information, and how such a shoddy study can become the basis of fiscal policy in so many countries. Why are there not constitutional safeguards in place to verify the validity of research involved in formulation of policy and law? What could be more important for ensuring the integrity and credibility of the Scottish legal system?

The third major source of concern involves the web of corporate lobbying within the UK partially revealed by the resignation of Liam Fox as Minister of Defence in 2011. He had to resign because his ‘assistant’ Adam Werrity, was managing ‘Atlantic Bridge’. Established in 2007, this organization counts George Osborne, William Hague, and Iain Duncan Smith among its alumni.

Naturally, Ronald Reagan and Margaret Thatcher are their patron saints, and Thatcher served as honorary chairwoman from 1997. While all the transatlantic sycophancy transpired, ‘Atlantic Bridge Research and Education Scheme’ was also becoming a corporate outpost of the American Legislative Exchange Council, or ALEC.

ALEC is a secretive organization that effectively allows lobbyists to write the bills for US State legislatures and have them adopted, in addition to providing lonely state legislators with corporate interest suitors willing to make generous campaign contributions. Not content merely to pollute the US political system, ALEC has sought to internationalise the interaction between multinational corporations and legislators whom they can do business with, including in the UK.

The Guardian did some excellent investigative journalism uncovering various ties between ALEC and Atlantic bridge, but the most important lesson an independent Scotland can derive is to see that if left unregulated, corporate corruption will grow like weeds throughout Parliament and the civil service. Atlantic Bridge essentially vanished as a charity after the Werrity imbroglio, covering their tracks as best they could.

David Cameron refused to allow an ethics investigation into the Adam Werrity affair, probably because many in his cabinet were members of Atlantic Bridge. To do so would have revealed the mechanisms whereby various sectors of the government can fall under corporate control: prisons, private security firms who want overseas business, the health system, etc.

An independent Scotland can design a constitutional firewall against corporate corruption, and guarantee the integrity of information used for the formulation of laws and policy. Referenda and elections must be firmly structured and regulated by law, efficiently and equitably funded by the state. No party or candidate should have to depend on massive cash contributions to make up for a lack of popular enthusiasm. Rules for the admissibility of studies and information for making laws and policy can be similar to that of the admissibility of evidence into a court of law. Finally, complete transparency for all lawmakers’ memberships in all organizations, as well as complete transparency for the operations and financing of these organizations, must be required for all MSPs and civil servants.

In short, the motivation to serve in the government of an independent Scotland should be based on the desire to honourably serve the public, not merely to gorge at the taxpayer’s trough.

Scots deserve an honest, clean, and efficient government.

First published on Newsnet.scot on 1 May 2013 as part of a series of articles on constitutional issues published between July 2012 and Sept 2014.

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