By Conor Friedersdorf
The retired former governor has upended his life to spread his message that our political system is corrupt, but he's still not naming names
Unlike his better known rivals in the GOP presidential primary, Buddy Roemer has never run a third-tier pizza chain or distinguished himself by zinging liberals in frequent Fox News Channel appearances. He did spend four years as governor of Louisiana, the same amount of time Mitt Romney spent in the Massachusetts statehouse. And he served as a congressman for almost 8 years. But it hasn't translated into substantial media coverage or support from voters in polls.
One reason is money. Try to donate $200 to Roemer's campaign and he won't take it -- his self-imposed contribution limit is just $100. President Obama and his Republican rivals are happy to accept checks for 25 times that amount. The difference is that Roemer has made the nexus of money and politics the centerpiece of his campaign. And win or lose, it's worth listening when a former governor and congressman comes out of retirement to zealously proclaim that the system he served under is corrupt, especially if he's got evidence to back it up.
In the interview below, Roemer explains why a man happily retired from public life would uproot himself, put together a campaign, pound the pavement in New Hampshire, and pursue a bid for higher office that is almost certain to fail. He reveals the specific instance of corruption that pushed him over the edge, offers fixes for the financial system, and laments that decent men are behaving in ways that do grave damage to the nation. All this is interesting. Insiders freed to speak their minds often are. But what fascinated me most is the complicated impulse that is holding Roemer back. Here is a man so persuaded of the importance of his message that he has upended his whole life to spread it near and far. Yet he is reluctant to share with his audience the very stories that persuaded him of the problem.
Read on. It's quite an ending.
(What follows has been condensed, reorganized and edited.)
What motivated you to run for president? And to put money in politics at the center of your campaign?
The answer is Louisiana.
I grew up in a state where winks and nods were the way you did business in politics -- where people were delivered to the polls in buses and paid money to vote. Where leading politicians bragged about how much money they made in office. Where what you knew was not nearly as important as who you knew. My definition of corruption growing up was Louisiana politics, where the privileged few did not have access to power. I ran for Congress thinking that I I loved the state, but I wanted to get as far away from it as possible. So I went to Washington. I ran for Congress.
But I wasn't in the corruption cycle that Louisiana had become. It got so bad, Conor, that the unemployment rate went to 12.8 percent. In the late 1980s we had the highest unemployment rate in America. So I ran for governor with little chance to win. I think I was in sixth place of six candidates. A couple of Congressmen ran. Bob Livingston. Billy Tauzin. Those are famous names in Washington. Edwin Edwards ran. Jim Brown ran. Speedy Long ran, the former Congressman. And me.
I was in last place, but my issue was cleaning up the politics.
And you won.
The governor and the anti-Roemer forces spent about 20 million. I spent one million, but I was able to beat them. So I grew up in a corrupt state and I saw the results. Teacher's pay, worst in America. Roads you couldn't drive on. Our bond rating was the worst in America. The unemployment rate was the worst in America. Our politicians were flamboyant. I'm very dull compared to them. But they were corrupt. And I saw what it did to people. We've gone from eight Congressmen to six. We've lost 25 percent of our Congressmen. People were leaving the state. And so I served four terms in Congress, once as governor. And then in private enterprise I was happy.
What's your profession?
I build banks.
Community banks. Main Street banks, they're called. No bailouts. But how could you help but notice, over the last few years, the power of money in politics. And I recognize the Louisiana symptoms. Our bond rating was decreased. Our unemployment began to soar. Our infrastructure decayed. Politicians in high office bragged about how much money they were raising.
I said wow. I've been here, man. And I know what the effects are. I know it's discounted by politicians, because most of them are clean. Most can honestly say, "Yeah, but it doesn't affect me." "Yeah, but I'm not one those." And I'm not talking about direct, individual corruption. I'm talking about institutional corruption, as Larry Lessig explains in his book. And to me it was so obvious. After 16 years being out of this world, I see corruption again. I can smell it. I can feel it.
That a tax code that can't be read, and that giant corporations that don't pay their fair share -- and it's legal -- is corrupt. I said, I see all the signs. Unemployment that might be permanent. A loss of vitality. A bond degrade. Ratings falling. Infrastructure decaying. Was there something that caused me to step into the arena after 16 years of being a spectator? And it was two things. My Louisiana experience and then the deja vu of seeing it in Washington, D.C. I think Washington, D.C. is the capital of corruption.
Why? What specifically has persuaded you?
Talking over the years with Congressmen, and with John McCain, a candidate for president. I volunteered with John, and I traveled the country with him four years ago. Off and on, for four or five months. And just their stories about how they spend their time. Their stories about the burdens of having to raise large sums of money just to protect yourself. And then, finally, in this process of re-engagement, I'm a banker. I went to college and studied economics. Then I went to a business school. And majored in banking and finance. And I'm pretty good at what I do.
In five years I've built a bank that is two-thirds or three-quarters of a billion dollars in size. Very profitable. Clean. Didn't foreclose on a single mortgage. Didn't put a single small business under, I'm really proud of that, of the way we honored a long tradition of banking. But I watched banking reform. And I guess that was the straw that broke my reluctant back. I watched banking reform where too big to fail did not disappear. Where Glass-Steagall was not reintroduced. I had gone to Washington in 1998 and 1999 to testify against the elimination of the Franklin Roosevelt Glass-Steagall bill that separated investment banks from banks. I thought they would become too big. Too greedy. Too risk-taking. And I said in 1999 that it will lead to an economic collapse.
I was laughed at.
Then I saw bank reform after the collapse didn't contain Glass-Steagall. It didn't eliminate too big to fail. It didn't increase capital ratios for banks. And then within a month of signing the bill President Obama went to Wall Street, had a fundraiser at $35,800 a ticket sponsored by Goldman Sachs. Well you know, I'm not a Rhodes Scholar. I'm not a rocket scientist. I'm a proud and practical man.
But I call it corruption.
Can you elaborate?
When you sign an inadequate bank reform bill, and you go celebrate with the people who brought the system down -- none of them went to jail. None of them had been called on the carpet. And you act like it's business as usual. It is a disgrace, Conor. I mean, I could add health reform. I believe President Obama on health reform. We need it in this country. I'm a diabetic. I've been a diabetic for more than 40 years. I know that the quality of our health care, the expense of it.
And yet in the health care reform bill, insurance companies were not put under Sherman antitrust, costs go unabated, pharmaceutical companies were protected from price discounting and from fair competition and imports from Canada. There was no tort reform. There were no incentives for health care providers to lower their costs and maintain their quality. It's a disgrace.
These are the largest givers to politicians: insurance companies, tort lawyers, pharmaceutical companies. I mean, the chief of the pharmaceutical association bragged to me about how Obama had called him and begged him not to spend money against the bill. And to sign off on the bill. It was the power of money. It wasn't about what's right, or what works. Or what can help people too poor to get health care. It was never mentioned. It was about the little inside baseball that they hope the average voter never understands, Conor. They know I'm dangerous.
I'm free to talk about it. And It's a corrupt system, no matter how you define the word corruption.
Do you think it's gotten worse since you were in Congress?
Yeah. It's emphasis. It's a matter of priority. The cost of election has gotten higher. The need for money is greater. The time spent on the task of raising money comes before all other things.
The change I would make there would be 48-hour disclosure, not 110 days. It's a joke. I would put criminal penalties on the law. I would not allow lobbyists to be fundraisers. They could either be registered lobbyists, or fundraisers. They can't be both. These are simple, Constitutional rules.
I would challenge in court the legitimacy of Super PACs. They're fraudulent, because they're not independent. I mean, Mitt Romney spoke at the fundraiser for one of his Super PACs. All of the SuperPACs are managed by friends, family, partners. Chiefs of staff, former. Campaign managers, former, by each of the candidates. Look at Barack Obama. Look at Rick Perry. It's a joke. And the Supreme Court is waiting on it, because they ruled clearly in Citizens United that they must be independent. And if they are, they cannot be regulated. We are a nation in trouble, Conor, and corruption is at the heart of the problem. Just like it was 30 years ago in Louisiana.
Why don't more former elected officials speak out about this?
I think there are two kinds of former elected officials. There are those who are in the business of politics. They become lobbyists. They become wealthy. They don't want to change the system. They're getting rich on the system. They leave their chairmanship and two years later they're making a million, two million bucks. That's part of the corruption. It ought to be 7 years. You change that!
The second kind of politicians are a lot like me. They're not lobbyists. They're not making money off government. Hell, they're back to private life. And they want to stay as far away from Washington as they can. Once I left office, I didn't go back. I visited Washington, D.C maybe 6 times in 20 years. Always to honor somebody who was retiring. Or to make a brief appearance before a banking committee and say, this is not right, guys, I'm a banker, I know what I'm talking about. It was very rare. So I think there are two kinds of public officials. Those who know the system and want to make a living off of it, and those who want to stay as far away from it as they can. And I was the latter. But I had about all I could stand, particularly when I built my latest bank.
And then saw the financial system crash?
And saw the corruption in bank legislation. I mean, why was Glass-Steagall defeated? Citicorp. So they could be the biggest bank on earth, Conor. And so their CEO could get paid $25 million a year, and make a $50 million bonus. You can't do that with a billion dollar bank. You have to have a trillion dollar bank. They never thought, well do I risk the system? Is there a moral hazard here in banking? That if I'm so big, I'm too big to fail, that the government will bail me out, so hell, let me take some risks? Because if I'm right I'll make a lot of money? And if I'm wrong?
The taxpayers, those suckers, will bail me out.
That's where we live now, Conor, you're either a sucker, or you're on top. And it ain't right. It's not American.
Have you seen anything else in the financial sector that struck you as obviously wrong or corrupt?
Yes, yes. The capital ratios. The capital ratio is a figure -- let's call it 8 percent. Where you would have 8 percent of your assets in capital. And so you'd be leveraged twelve to one. That's normal, that's healthy, and a little known, quiet fact in the banking business is how the big banks want to keep the capital ratio as low as possible. There are some banks, and I won't mention Citicorp or others, that were leveraged 50 or 60 to one. And the other bankers knew it. I read their call sheets, that's what they're called, their call reports. Those are the quarterly reports that have to be filed. And they're public. I read their call reports, and I was like, man! This is a disaster waiting to happen! But you couldn't tell Bill Clinton that. I tried. But hell, Bill Clinton is the one that eliminated Glass-Steagall. You couldn't tell George W. Bush that. You couldn't tell Barack Obama that.
Hell, they got their money from the banks. One of the quiet, regulatory loopholes is that the bigger a bank gets, the smaller its capital ratio was. And it oughtta be the opposite. One of the proposals I had was to raise the capital ratio the bigger the banks got. Because I believe the lesson of moral hazard is that the bigger you are, the smarter you think you are. And the more risk you take.
That's what justifies your size.
So you can get even bigger, and size is justified by the CEOs and presidents who want to make more money. And bankers are paid generally by the size of their organization and its profitability.
So the push was, let's get bigger.
Jack Abramoff said on 60 Minutes that offering a future job to Congressional staff was one of the most effective tactics he used to gain influence. Does that sound right, in your experience?
It does. I won't be specific, except to say that I know it is true. There are Congressmen, particularly on certain committees, the banking committee for example, or finance in the Senate, where the pay is high, and the influence once again is unregulated. Or wink and nod regulated. Where the power of personality -- I know people that have taken big jobs on Wall Street, either themselves personally, or push their staff, to get ready for the time that they retire.
They're not ready to retire now, but they've got a staff member who is. "Well take old Jim, he's a good guy, and I'll be available in a few years. But start with Jim." They think that feathers the nest for them.
It happens all the time.
What's the reception when you tell all this to audiences on the campaign trail?
The people instinctively agree. But you can see it's not their congressman. You can see it's not their party. "Well, you're not talking about Republicans, are you Buddy?" Well, yes I am. "Well why would you do that?" Because I'm a Republican. And you clean the house out at home. I guess I could worry about my neighbor's dirty house. But I've got to clean my own. So it's not an easy sell.
And I campaign across parties.
It's why I'm in New Hampshire. Independents can vote here. I'm after independent minded voters. Republicans, conservative and moderate. And independents, that's who I'm after. I get standing ovations.
That's what I get.
What more can you ask?
But it doesn't start off easy.
I gotta spend some time with it. I don't give 3 minute presentations. It's more like 15 to 20 minutes on the issue of corruption. And how that ties with jobs. I think it ties directly. It ties to job formation and manufacturing with the unfair trade coming from China. I've been to China many times, as you know Conor, and I know what I'm talking about on the issue. They keep our products out. We let their products in. There needs to be a level playing field. We've lost 3 out of four manufacturing jobs. And guess who the biggest contributors were to the politicians the last 3 or 4 years? GE. Guess who closes their American plants and opens plants in China? And what do they do with those products? They don't sell them in China. They sell them back in America. Our tax code is written to lose jobs. Our big companies make profits by giving away American jobs.
One problem with institutional corruption is that it's a tough problem to explain.
People instinctively agree that there is corruption, but many of them process reality through narrative.
They want to hear the Abramoff story. Or the literal bag of cash handed across a desk.
So having been around institutional corruption, having thought about it more than most people, is there a way to tell that story in a way that is specific and compelling? How do you do that?
I'm trying to do it. I have not been successful. I think part of it is the reluctance to talk about specific cases. I find that I've been reluctant. That I'm pretty good on what needs to be done and how to get there. And I can tell Louisiana stories. But it's not the same as a Phil Gramm going from eliminating Glass-Steagall to being a vice-president of UBS. You know, I admire Phil. And I've not told that story. There are other examples. The story of Billy Tauzin, who I admire. Who left the chairmanship of his committee and got paid $2 million as a lobbyist for the pharmaceutical industry.
There are a lot of stories here. And I think I can be criticized for not dwelling on the individuals -- for just talking about the institution. And it has not connected yet. It might be that I need to spend a day or a week thinking about the stories to tell. While honoring the people, still asking the question.
I think I understand your reluctance to tell the specific stories -- but just to be sure, why are you reluctant to tell them?
It's just -- what I know is from people that I knew. Call 'em friends. And I knew the whole person. I knew the good news about the person. I mean, Tauzin ran for governor the year I did. And he's sharp as a whip, and a very decent guy. He fought cancer that would have killed 99 out of 100 guys. The pharmaceutical industry helped him, and he went to work with them afterward.
You know, I don't point my finger at the other Republican candidates for president, although I don't think they're ready to be president. I think they're bought and sold on the key issues of our time.
You know, Conor, it's a good point. I am having difficulty overcoming it.
Understandably so. It goes to Larry Lessig's argument: that part of the pervasiveness of the corruption is that otherwise decent people can get caught up in it.
Yeah, that's true. And maybe that's my way out. Maybe I can give that preamble that Larry Lessig does so well, and say, let me give some examples of people I consider friends, but how the system got them in the wrong direction.
Maybe that, I don't know.
I wish you wouldn't have asked that question.
Is there anything I didn't ask that you want to add?
Not on your life, Conor. Not on your life. You're nosing around a mess of a mountain. It's affecting us as a nation. And this story needs to be written and written and written.