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Gordon Haskell

5 Percenters: It Takes Two to Make a Deal

(22 August 1949)

From Labor Action, Vol. 13 No. 34, 22 August 1949, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

For the past few weeks the papers have been full of stories about the “five per centers,” men who exercise undue influence on government officials to procure contracts or other favors for businessmen from the government.

So far, two army generals have been relieved of their duties pending further investigation of their relations with men who were doing business with their departments. It is expected that much more will come out before all the dirty linen has been washed.

Recently the comptroller general issued a statement that his office has found evidence of fraud in government contracts during and since the war amounting to many millions of dollars. He stated that in several instances it is evident that these frauds involved collusion between businessmen and men. who were either military or civilian employees of the government.

In one case it appears that two men who were in charge of negotiating a contract for the government received thousands of dollars’ worth of a certain company’s stocks and that in other instances former government employees were given highly paid offices in private companies after having negotiated extremely profitable contracts with them on behalf of the government.

It Takes Two

The facts which are being brought to light now have little to do with the great corporations which made their billions of blood-money in a “legal” manner. That aspect of the war is taken for granted, like the saturation bombing of great cities. The current exposures have to do with a small and insignificant group of capitalist’s who either couldn’t get on the gravy train legally, or who were so greedy that they resorted to the crassest type of book-rigging and outright bribery to satisfy their consuming hunger for profits.

Of course, we all know that it takes two to make a corrupt government official. One, the official himself, and two, the private businessman who offers to corrupt him. And yet the finger of shame, and of the law is pointed more at the government employee who permitted himself to be bribed than at the businessman who did the bribing.

After all, the profit motive is accepted in America as the power which makes business go. To drive a sharp bargain, to make a slick deal, to enrich oneself at the expense of consumers and competitors – these are virtues which distinguish the able businessman from the failure. And if success is good and failure is bad, just where is one to draw the line?

Just when does “legitimate” exaggeration in advertising shade into outright misrepresentation of a product? Just at what point does charging all the traffic will bear turn into outright price-gouging, or when government is the customer, into bilking the public treasury?

Why should it be good business practice for a parts manufacturer to get a contract from a private firm by lavishing parties and gifts and even some cold cash on the firm’s buyer, and immoral to get a contract from the government by doing the same for a government official?

Business Is Business

For people who accept our system of private business, these questions are hard to answer. So when fraud and corruption are found, they direct their fire primarily at the government official who’s caught.

For some strange reason, people expect government officials to have a moral code quite different from that of the business world. They are expected to be public servants who put all thought of self aside and serve the public honestly and incorruptibly and solely for the salary which the government pays them.

We’ve no wish, of course, to apologize for the government official who yields to “pressure,” “influence” or outright and open corruption. Yet I do want to point out that the men who are caught are, by and large, simply the over-greedy or the less careful of their type.

This means simply that very few competent government bureaucrats can consider their jobs as their goal in life. In the code of values of our system, the successful man is the wealthy man. Poverty or even average means is regarded as proof of mediocrity or failure. No poor man can ever hope to be considered as a candidate for an ambassadorship or a cabinet post.

And yet most government posts don’t pay salaries which by themselves can make a man rich. Even if to you five or ten thousand dollars a year may seem a pretty fair amount on which to get by, men who receive such salaries certainly can’t consider that they have “arrived” in a world in which to be “worth” something means to own at least a few tens or hundreds of thousands of dollars.

“Legal” Corruption

Thus the great majority of government officials – who, by selection, accept and praise exactly these values – regard their posts as mere stepping-stones to something bigger and better. That something has to be in the world of private business.

The government job gives the official the chance to make contacts, to impress the businessmen with whom he deals with his ability and, even more important, with the fact that he shares their values, their interests, their point of view. And if in doing so he can pass a few favors their way, he greatly increases his chance to be considered for some executive post in their organization.

In the great majority of cases, this simply leads to BENDING government programs and expenditures to the interest of this or that great corporation, which can be done perfectly legally. In the few exceptional cases in which the public official really puts the interests of the country ahead of the interests of himself or his class, it usually means that in due course he is relieved of his post as a fanatic who can’t adjust himself to the realities of life.

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