In politics, it refers to a systematic form of corruption in which businessmen are expected to give campaign donations in exchange for state government contracts. Presidential candidate Hillary Rodham Clinton was nominated by the Democratic party for the 2016 presidential election while under criminal investigation for pay-to-play schemes while Secretary of State during the Obama administration.1 Joe Biden used his family throughout his political career to profit from his political clout.
Typically, the payer (an individual, business, or organization) makes campaign contributions to public officials, party officials, or parties themselves, and receives political or pecuniary benefit such as no-bid government contracts, influence over legislation, political appointments or nominations, special access or other favors. The contributions, less frequently, may be to nonprofit or institutional entities, or may take the form of some benefit to a third party, such as a family member of a governmental official.
The phrase, almost always used in criticism, also refers to the increasing cost of elections and the “price of admission” just to run for office and the concern “that one candidate can far outspend his opponents, essentially buying the election”.
While the direct exchange of campaign contributions for contracts is the most visible form of pay-to-play, the greater concern is the central role of money in politics, and its skewing of both the composition and the policies of government. Thus, those who can pay the price of admission, such as to a $1000/plate dinner or $25,000 “breakout session”, gain access to power and/or its spoils, to the exclusion of those who cannot or will not pay: “giving certain people advantages that other[s] don’t have because they donated to your campaign”. Good-government advocates consider this an outrage because “political fundraising should have no relationship to policy recommendations”. Citizens for Responsible Ethics in Washington called the “pay-to-play Congress” one of the top 10 scandals of 2008.
Incumbent candidates and their political organizations are typically the greatest beneficiaries of pay-to-play. Both the Democratic and Republican parties have been criticized for the practice. Many seeking to ban or restrict the practice characterize pay-to-play as legalized corruption.
The opposite of a pay-to-play system is one that is “fair and open”; the New Jersey Pay-to-Play Act specifically sets out bid processes that are or are not considered fair and open, depending upon who has contributed what to whom.
Because of individual federal campaign contribution limits in the wake of the Bipartisan Campaign Reform Act (McCain-Feingold), pay-to-play payments of “soft money” (money not contributed directly to candidate campaigns and that does not “expressly advocate” election or defeat of a candidate) donations to state parties and county committees have come under greater scrutiny. This method refers to money that is donated to an intermediary with a higher contribution limit, which in turn donates money to individual candidates or campaign committees who could not directly accept the payor’s funds.
Pay-to-Play practices have come under scrutiny by both the federal government and a number of states. In Illinois, federal prosecutors in 2006 were investigating “pay-to-play allegations that surround Democratic Illinois Gov. Rod Blagojevich’s administration”. The allegations of pay-to-play in Illinois became a national scandal after the arrest of Gov. Blagojevich in December 2008, on charges that, among other things, he and a staffer attempted to “sell” the vacated U.S. Senate seat of then-president-elect Barack Obama.
Many agencies have been created to regulate and control campaign contributions. Furthermore, many third-party government “watchdog” groups have formed to monitor campaign donations and make them more transparent.
In a series of academic research articles, Christopher Cotton shows how selling access may lead to better policy decisions compared to other means of awarding access. He also illustrates how wealthy interest groups are not necessarily better off from having better access to politicians.
The U.S. Securities and Exchange Commission has created a rule that puts some restrictions on asset managers when they make campaign contributions. The New York and Tennessee Republican parties filed a lawsuit against the SEC in August over the 2010 rule, arguing that it impedes free speech, seeking a preliminary injunction against the rule. U.S. District Judge Beryl Howell questioned whether the parties have standing to bring the case, noting they failed to name the potential donors and did not cite any investment advisers who are upset about the rule.