Dark Money and Tech

[.green]Josh Gabert-Doyon:[.green] How does the flow of dark money and political influence operate in the in the UK?  

[.green]Peter Geoghegan:[.green] The best way to start thinking about a lot of this stuff is to ask: what do we mean by dark money? With those catch-all phrases that we hear a lot, it's useful to start off with a definition. If you look at the person who's probably the most well-known on this stuff, it's Jane Myers, The New Yorker journalist who wrote a great book called Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. What she's really writing about it the unaccountable flows of money into American politics, like a load of big money, American libertarian money, people like the Koch brothers that go into things like political action committees, or PACs, and what are called Super PACs [an organisation that pools election campaigns donations to be used independently from official campaigns while keeping donors anonymous].  

This is money from anonymous sources that feeds into the British political system and the American political system. In the British context, we have some of that money flow through organisations called "unincorporated associations", which sounds very grand, but is basically a vehicle for giving out political donations. It's very easy for those organisations to give out money anonymously. In the run-up to the British General Election in 2019, there was significant amounts, millions, going through unincorporated associations to political parties, not only to the Conservatives, but mainly going to the Conservatives. That's one form of dark money.  

But there's also other ways in which anonymous money can influence politics. And it's not just through political parties. If you think about things like think tanks and research institutes, who pop up in the news and in media, especially on the right of politics, with names like the Institute of Economic Affairs (IEA), Policy Exchange, and the Centre for Policy Studies, and all these other similarly monikered organisations, which again, sounds very grand, as if they're very serious research bodies. But most of these organisations don't declare where their funding comes from and are funded mainly by corporates bodies and a lot of what they do is more like lobbying than research. Because that money is anonymous that's another way in which interests can fund parties, because these think tanks don't just sit in their offices writing reports – they're often very, very close to government and government ministers. A lot of people who are in the cabinet now, people like Dominic Raab, Priti Patel, Matt Hancock, they've all had money from the IEA or people attached to the IEA. They've all spoken at their events we know from lobbying registers that they're in close contact with them.

Another way in which what you might call dark money or anonymous funding can influence politics is online. We've all seen this huge increase in the growth of online politics. And what dark money means in this context is that it's easy to buy political adverts anonymously, in the name of fake grassroots groups – what's called astro-turfing – where these groups that appear as single-issue organisations join the general election. One group appeared called Capitalist Worker and spent about £60,000 on Facebook ads. It's claiming that they've got no donations above [the election commission threshold of] £7500 but spends all this money, buys all these Facebook ads and then disappears. And it's not officially connected to a political party but again, it's trying to influence the political conversation.  

This is how money seeps into politics in lots of different ways. I think we tend to focus purely on party politics, on political parties and political campaigns. But, in this era we're in now where it's almost continuously campaigning – politics has stopped being something that happens just in terms of votes, referendums, or general elections, and has become something that's happening all the time. Money is able to influence that constant political debate, and it's able to push agendas and viewpoints, that might have been very fringe, but are now able to be front and centre.

[.green]JGD:[.green] What should tech platforms take responsibility for? You mentioned there's this ease with which ad buying can be done, but where do we draw the line on the responsibility of the platforms and the responsibility that we should ascribe to political organisations.

[.green]PG:[.green] We've basically outsourced huge aspects of our democracy to tech companies. What tech companies decide to do becomes the norm.  

We've seen this for example, about two years ago, when Facebook brought out the ad library – for the first time you could see who was buying political adverts in Britain on Facebook. That was seen as this great new thing –"well done Facebook!" Journalists went online, wrote loads of stories about who was buying ads on Facebook. That genre is dying now because it's very easy to work around that [public ad listing], but also again, people are buying ads in other spaces that aren't regulated as much. But what the problem with that [whole genre] is, when you can ask the question: Why are we getting Facebook to do this, rather than our own electoral system? If political parties buy adverts in the real world, they're registered. Why is it that we have a system in which adverts that are bought in the virtual world aren't registered? Why are we allowed to have a tech company decide what to do or not do and often for reasons of – in the case of Facebook – reputation management for them. in 2016 Facebook basically said that they did not know what was happening in their platform in the American election.

Similarly, in Britain. We know that millions and millions of pounds were spent on Facebook ads in the 2016 Brexit referendum, and in subsequent general elections, and that Facebook was the place in which hard-line messages have been pushed further and further. But we know so little about what goes on, because our electoral system, and our electoral laws, were basically written before the internet, and we've made no attempt to keep pace with them.  

You can make the case that it’s how social media has broken down traditional boundaries in terms of geography, so there's nothing we can do. But there's way more we can do. We can do more both about social media platforms, but also about our targeted advertising, which is part of social media. You can buy Facebook ads that identify very small target audiences people living in the Southside of Glasgow, male, aged 18-35, etc. And the way that's able to happen is because of the way advertising is run on the internet. And there's ways to run advertising on the internet that wouldn't really massively harm the ability for advertisers to get messages out there but would make peoples’ data far more secure and make it far harder to target specifically beyond the way that's currently possible.  

There's a lot of things that could be done, but at the moment there's a sense that it's all too difficult – that we can't do anything, or at least have no huge desire to engage and try to get tech companies to actually do something.  

When the Department of Culture, Media and Sport Select Committee had an inquiry into what they called "fake news" in the wake of the Brexit referendum, which was quite an interesting inquiry led by Damian Collins [MP Conservative, Folkestone and Hythe], I cite it quite a lot in my book, it created quite a loss of heat, but maybe not all that much light. But there was a lot of opportunity for people to come along and talk about things like this. Mark Zuckerberg refused to appear [before the Committee]. Mark Zuckerberg has appeared in Brussels and the European Union have been warning Facebook and trying to demand Facebook's to change, what it allows to feed onto its platform and what doesn't. But in general, most states have decided not to try it because Facebook is almost too big. It's a behemoth. It's bigger than most states. And this is a problem. There's an asymmetry here.

I mentioned my book that even in London alone, Facebook has 3000 employees. The Election Commission has less than 150. The problem then is that we tend to go: "actually, well, nothing can be done about this". And I'm just not sure that's true. We're seeing how even minor tweaks can have huge, huge ramifications. A couple of years ago, Facebook started to try to encourage people into groups and to form private groups on Facebook with the idea that it would grow communities. What we're seeing now, and I'm sure there are lots of great communities, these have become an absolute warren for misinformation, disinformation, and conspiracy theories. I lurk on some of these groups, like 5G conspiracy theory groups – you're talking about thousands of people in a closed group amplifying false messages. We often don't think enough about the very social act of how this works – being the person that shares content, shares conspiracy theories, shares misinformation – there's a social validation that goes with it.  

There really needs to be a root and branch approach to how social media companies interact in our democracy. You've seen these companies saying they couldn't possibly moderate everything. Well, why couldn't you? Facebook's profits are ginormous, there is no reason why they couldn't do a hell of a lot more than they do now. And we know from a very interesting story in BuzzFeed that featured a former Facebook data scientist talking about how Facebook have been used to spread misinformation and to manipulate political campaigns and elections in other countries, through a law firm in the global south so that not much attention was paid to it. But again, they said this in their own leaked memo, that they have blood on our hands. Internally, the organisation knows that things are going badly, in some parts of the organisations. But the only thing they seem to have is this internal culture rather than an external force from governments, and regulations, to change.

[.green]JGD:[.green] Policy-wise, what alternative vision do you see for the tech industry?  

[.green]PG:[.green] I think the time has probably come to talk about the solution that Elizabeth Warren, and others have talked about with respect to tech companies, which is the question of how we would go about breaking up tech monopolies. There's a very strong case for it. You have a small number of very large tech monopolies which all grew out of Silicon Valley in the early 1990s, and later into the early 2000s in a small period of time, which has been compared to, and I think is not dissimilar to, the robber barons and railroad tycoons of 19th century America. In the same way that America in the 19th century was seen as a Terra Nullius – it wasn't of course, there was lots of indigenous people living there - this new land in which there was huge money, power and space to be gobbled up. That's what the internet was like when it started: this huge terrain where there hadn't been any fences put up yet. Huge open land and huge opportunities for you to put your friends up around it and put a hell of a lot of money rent-seeking on it. And that's what's happened with the internet, with a small number of companies that gobble up other companies. We've seen this in the way that Facebook owns WhatsApp, and it owns Instagram – if you're a monopoly player already, then you just buy up all your other competition.

If you look at what happened in America, you had about 30-40 years of real crony capitalism. It's interesting, I was looking back when I was writing my book to what happened in America and it got to a point where there was real popular anger against, what were called the Trusts. People often wonder why it’s called anti-trust legislation, anti-trust law – what the Trusts were was these huge monopolies, whether it was the Vanderbilts or anyone else, there was a series of massive monopoly players in the American market. And that's why antitrust legislation was introduced to break those companies up, because it got to a point politically where people were starting to elect politicians whose almost sole commitment was to break these big trusts up. We’ve got to that place when it comes to big tech companies. Elizabeth Warren did lose out in her presidential nomination ambitions, but she did put forward a series of very coherent arguments and proposals for taking money out of politics and doing something about the huge overreach of tech companies.  

It isn't commented on enough really, but we often find ourselves wondering, why is our politics in Britain, but also politics in Europe, starting to look way more American? Why is this? Why is it becoming so partisan and divided? Social media is one way of answering that, but if you look behind that, you see that social media isn't this value neutral thing. When you build tools and you build platforms, you bring your own assumptions and values and judgments to them. Social media came out of Silicon Valley. It's the California Ideology, it's a particular view of the world, and it's a very libertarian view of the world. It's a view of the world that doesn't necessarily chime with other countries in the world in terms of what their cultural backgrounds and norms are, but unsurprisingly, as we all end up getting filtered through this, we see that view of the world becoming this frame through which everything is seen.

Electoral Law

[.green]JGD:[.green] How has the relationship between corporations and dark money think tanks been brought over to the UK from America?

[.green]PG:[.green] In my book I try and sketch a brief history of Libertarian thought in Britain and what's interesting is that in some ways some aspects of Libertarianism came from Britain but when you think about the role of low-regulation anti-government rhetoric and politics in America and how it became such a big mainstay of American politics through the 80s and then through the Tea Party and beyond, a very big part of that was just huge amounts of money funded by people like the Koch brothers. These oil magnets billionaires funded not just political parties, but also things like universities, academics and think tanks. What they were good at doing was coming up against, and proposing alternatives to, policies that were seen as the status quo. They were always in favour of low taxes, but they've also been very influential in casting doubts on things like climate change. It's very effective. There are all these right-wing think tanks that still exist with these big budgets, up to hundreds of millions of dollars every year, places like the Heritage Foundation and the Cato Institute, which are very influential in American politics.

In Britain, we might ask, well, do we have any equivalents? But what's interesting is a lot of these American think tanks were started up almost all by the same person, a man called Anthony Fisher. Anthony Fisher is actually British and in 1955 he set up a thing called Institute for Economic Affairs, a thing which still exists as a right wing think tank in Britain. He was very against, the post-war consensus in Britain, which had both Labour and the Tories both really in favour of planned and managed economy. Fisher was very against us. And he was thinking about getting into politics, so he went to see Friedrich Hayek, one of the godfathers of neoliberalism, who was teaching in the London School of Economics. Hayek said to Fisher: don't go into politics, it’s a waste of time – what you want to do is rather than being a politician, you want to own the ideas that the politicians speak about. Rather than you trying to be a politician, get them to talk about the things you want.  

And the way to do it, Hayek suggested, was to set up what looked like a neutral value research institution, but in the case of the IEA, from its very beginnings its entire job was to sell a particular worldview, a particular ideology. And it's very successful. It's quite successful in Britain. People like Margaret Thatcher gravitation to us, as Milton Friedman said, Thatcherism would never have happened without the IEA. But Fisher went to America in the late 60s, early 70s, and that's where it really took off, he set up literally hundreds of these institutions and organisations, many of which are part of this larger umbrella group called the Atlas network.  

Fast forward then to the early years of the 21st century. What you had then was these think tanks where are still big in American politics, very, very influential. In British politics, much smaller, smaller amounts of money. With Labour in power, these groups like the IEA, the Adam Smith Institute, Policy Exchange, they'd been very influential under Margaret Thatcher, very influential in the 80s and into the 90s, but then were increasingly frozen out. Brexit became an important thing for these guys. It gave them something to rally around. In the run up to the Brexit referendum, some of these think tanks were in favour of it, they thought it would good for a free market, others were against. But after the Brexit vote all these think tanks quite quickly realised there was a new world, there's a new dispensation with an opportunity for right wing think tanks to become far more influential in British politics.  

In my book, I chart how the IEA ended up having this very influential pull on government. How that worked was that what the IEA was very good at was two things. One was producing very quickly, quite thin reports that said, what certain politicians wanted to hear, particularly around Brexit: that No Deal was nothing to fear and everything would be fine. The IEA, which is a registered charity, brought out this report "Plan A", and it [IEA] was subsequently sanctioned by the Charity Commission over this, but this report was saying everything would be fine with a No Deal Brexit. Groups like the European Research Group, people like Jacob Rees-Mogg, were then able to appear on television and on the radio and say: "no, don't worry, folks, the IEA has this Plan A, this is what we need to do." That was very important.  

The other thing was the media. These guys were just in the media all the time constantly in the media. And how that works is that in the 24/7 rolling news environment, you're going to want to have on people who will take what are contrarian positions. The IEA were, for example, very much against the smoking ban. If there was a debate on the radio about the smoking ban before it was introduced, when you needed somebody to appear, you get the IEA. You ring them up, because these guys are phone numbers, you can ring up at any hour, morning, noon or night, and they will appear. This is how these groups are important and influential, and helping to shift the narrative.  

Just to give you one example, this all sounds a bit vague, some people reading might have heard of the free ports: this idea that you get several ports around Britain to be these mini  tax exempt islands, and apparently it will be very good for growth and all the rest of it. It's an idea that's really been rubbished by a lot of economics experts. They do exist in European Union and the European Union is trying to phase them out. They're often seen as being very good for money laundering. So why is it that on the day that we left the European Union the UK Department for International Trade tweeted in support of free ports? Why did this become this great, totemic thing, the free port? Well what happened was about two years ago, a bunch of people who owned ports, including Bristol port (which is owned by, amongst others, the father of Penny Mordaunt, the former Conservative Defence Minister, and a Big Tory donor) they got together and paid a lobbying firm to create reports that said that free ports are a great idea. Then the IEA started writing about free ports and talking about them, lobbying about them, including people like Shankar Singh, who I write about in my book. Then a small group of Tory backbenchers, mainly actually, then a very little-known character named Rishi Sunak, they took up this idea of free ports. Everyone started talking about free ports all the time. Then the Department of international trade minister Liam Fox and now Liz Truss say that free ports are great, and, in the end, it becomes government policy. What you've got is this conveyor belt: the original report probably costs next to nothing to write, but you can see how a policy that lots of people think is a bad idea can go very quickly from nothing to government policy in less than two years.  

[.green]JGD:[.green] You point out in the book that even with electoral laws in place, the fines do very little. I was wondering if you could outline how you think we should change electoral laws and how we could go about that on a regulatory level?  

[.green]PG:[.green] In Britain our election laws are about 20 years old, but for all intents and purposes, they're completely out of date. They don't work anymore, and they've not been updated, specifically, for the digital age.  

But also, even on their own terms, they just don't work. They're very complicated and very complex. The maximum fine for breaking electoral law in Britain is just £20,000. In America, it's a federal crime. Michael Cohen, Donald Trump's fixer, went to prison for breaking electoral law. Here it’s just a cost of doing business. It's a tiny amount of money. And as we can see time, and again, political parties don't really care about breaking electoral law, because why would they? Anytime wrongdoing is found out, it's after the fact. In Britain it’s become a political football. It's become this thing where the people who don't like the election results then go on about, or at least it's seen as a partisan issue, as the losers trying to score points.  

For example, the Brexit referendum rule breaking I write about a lot in my book. It just becomes seen as partisan: you end up with this thing where people say, well, remain outspent the leave campaign, which is because if you don't count the leaflet that the government put out, etc. It's not the point. I find it really frustrated because my point isn't that Brexit was bought either. My point is that these things should matter.

There are some things you could do, like the Scottish Government's Referendum Act, which nominally would legislate for some second Scottish referendum. Those include some good things, like bringing up the maximum fine for breaking electoral law to £500,000, which is quite a decent in terms of the size of Scotland's political fundraising, is quite a decent disincentive towards bad behaviour. If you're on the hook for half a million quid that would focus the minds. It has more rules to do with permissibility of donations and transparency on political donations. But that would only qualify for political donations in Scotland, they can't remove political donations coming from the rest of the United Kingdom, which would happen during a during a second referendum.  

And there's lots of things you could do. In Britain, for example, we don't have any maximum donation size for individual donations. As we've seen, donors can basically buy access to parties and politics. For £50,000 a year, you can become a member of what's called the Tory Leaders Group, the conservative leader’s group of top Tory donors. This gets you an invitation to a quarterly meeting with the Prime Minister and leading cabinet ministers, an off-the-record private meeting with other donors, so you can have a chat. That's an incredible amount of access for £50,000, all private and not showing up on any transparency records.

How would we get around that? Well, one thing you could do is quite simply bring in caps on individual donations. If we made it up to £10,000, that's a decent amount of money. The maximum individual donation in France is about €7500. That would be a good start in helping to take some of the big money out. We could also incentivise prices to get small donations by match funding them. If government stepped in and match funded, small donations from, five or six to one, that would help as well.  

There are concrete steps that you can take. The big problem is political will. There is currently the Committee on Standards and Public Life and the Public Affairs Committee, both are making inquiries into the Electoral Commission. There's a general sense in which we do need to do something about our electoral laws. But the party of government that conservatives who would have to make bring through any changes, has already said that they think the Electoral Commission's remit should be tightened, and have floated the idea of abolishing it altogether. That's where the real problem is, in my eyes – it’s catching politicians who have won office and won elections, and to want to change a system that's worked for them, even if it's broken.