In the Shadows: How Unaccountable Elites Corrupt Democracy

An Article by Janine R. Wedel, George Mason University, published at Discover Society

Over the past decade-plus, I have been charting the emergence of a new type of flexible power broker, adept at wielding influence through informal, under-the-radar means. Strange as this may sound, my work as a social anthropologist mapping shadow influencers who routinely gamed both communist and post-communist systems in Eastern Europe helped me identify this breed and their practices. With this new breed of player has come a reconfiguration of both official and private organizations. Formal procedures, hierarchies, and bureaucracies have been giving way to trust-based informal social networks, ad hoc organizations, and informal modes of organizing within and across organizations. Losing ground are formal and legal modes of operating. Losing ground, too, are formal policymaking bodies altogether. Not to mention accountability, the bulwark of democratic society.

These new influence-wielding practices are not illegal. They also are not necessarily ‘corrupt’ and may even be, in some cases, the only way business can be accomplished. But these means, and those who use them are less visible and more difficult to detect than their predecessors.

As I explain in my two most recent books, Unaccountable (2014) and Shadow Elite (2009), this change can be traced to several causes: the privatization, deregulation, and governmental ‘reform’ fervor that began to take hold in the United States and the United Kingdom in the early 1980s; the end of the Cold War a decade later, dispersing global authority and opening up sparsely governed arenas; and the rise of the Internet and digital technology soon after that. As a result, today government contractors, consulting firms, think-tankers, and quasi-official bodies (such as government advisory boards) daily stand in for government, creating a more dispersed and fragmented governing and policy landscape. Individuals, networks, and ad hoc groups play a far greater role in shaping that landscape, often in unaccountable ways.

Today’s power cliques, composed of members in official and private roles, not only circumnavigate should-be included officials and standard processes. They also work through unconventional venues such as think tanks and the media to drive consensus in a certain direction. Take, for instance, the COINdinistas (COIN stands for counterinsurgency) and their influence on the conduct of U.S. wars in Afghanistan and Iraq. To pursue their strategy of deep engagement with local populations to counteract terrorism, a collection of generals, including David Petraeus, influential military reporters, scholars, defense contractors, and think-tankers coalesced around the idea of counterinsurgency. They did an end run around the bureaucracy, using as a vehicle a new Washington think tank called the Center for a New American Security (CNAS) to shape war policy. It played a key role in making and justifying the military policy that shaped the recent years of these wars. Deploying CNAS-affiliated reporters across the media, they swayed public and policymaker opinion to their side. By effectively sidelining the bureaucracy and enlisting the media to help, they won the fight and left their colleagues with little choice, but to walk with them.

Modern-day power brokers are, increasingly, using outside organizations to push through their policy agendas. These entities have neither the strictures nor transparency demanded in formal government venues, nor the input of democratically elected lawmakers. While power rested more in visible and rule-bound bodies in the old world, today small informal gatherings and associations are gaining global influence.

A case in point is the Group of Thirty, the Consultative Group on International Economic & Monetary Affairs. Stuart Mackintosh, its executive director, told me in June 2014 that the body is “a cross between an internal think tank and a very exclusive club” whose members have “multiple, overlapping associations . . . with one another.” Its list of members reads like a Who’s Who of those who help shape the global economy. “We don’t make policy,” says Mackintosh, “but you can see our recommendations ending up in policy.”

One example of this is the hugely consequential issue of derivatives trading and accounting of them. The G30’s study group and report on derivatives in the early 1990s helped solidify the standards for “best practices.” Several on-the-ground analysts have suggested that the group was closely aligned with the would-be regulated (banks) and furthered policy that closely matches their interests and biases.

The late Dennis Weatherstone, who chaired the study group, wasn’t just an expert—he was a banker who ran JP Morgan. The banks, of course, didn’t want increased regulation on their new and emerging profit centers. At the time of its release, the New York Times (22 July 1993) described the report this way: “A group of leading financial experts gave a relatively clean bill of health yesterday to the rapidly growing set of financial products called derivatives that some have suggested make the global financial system vulnerable to a widespread crisis.”

Of course, this laissez-faire approach allowed derivatives to lay dynamite throughout the global financial system.

In such an informal organizing mode, high-prestige, powerful players can increase their weight, both individually and collectively, while creating an influence-wielding venue that will outlast any individual members. “What makes it effective,” Mackintosh observed of the G30, “is that it has a spot between public and private. ...We issue recommendations that neither the public or private sector could promulgate on their own.” Of course, this is the chasm into which accountability stumbles.

While not necessarily unethical, and while sometimes resulting in policy decisions that can be deemed to be in the public interest, all these groups are virtually beyond the authority of elected leaders and democratic processes. And most of these decision-making episodes could have benefited from including expertise from outside the network; some decisions caused huge harm because they didn’t.

Players at the top of today’s influence game are adept at ambiguity, line-blurring, reinventing, self-regulating, adapting, and branding, all the while pushing the limits of acceptability. I’ve identified two kinds of all-out power brokers: “shadow lobbyists” and “shadow elites.” The way they organize their roles, work in and around entities, and enlist sponsors—in short, their modus operandi—enables them to evade accountability.

Shadow lobbyists, the simplest in terms of the MO of the new breed of influencers, appear to be on the rise in the United States and, by some accounts, Europe and elsewhere. Shadow lobbyists choose not to register as lobbyists when they are clearly wielding influence that we can’t see or trace.

In the United States, where a power broker once might have sought the title “lobbyist” to display his influence, today he is likely to take on an executive role with a title like “strategist” or “adviser” or “government affairs specialist.” So prevalent have their activities become that shadow lobbyists are giving registered ones a run for their money. The number of registered lobbyists peaked in 2007 and their ranks have since dwindled nearly 25 percent, according to the Center for Responsive Politics. The business of influencing has changed so much that the American League of Lobbyists decided this year to adopt the more innocuous “Association of Government Relations Professionals.” As the ALL president said in a letter to members: “Through surveys and research, we discovered that a majority of our membership no longer identified themselves as only ‘lobbyists.’”

Shadow lobbyists are often former high government officials now connected to consulting or law firms (in, say, the “public sector” or “government affairs” group) who take on abstruse roles of influence within the corporate world or the international relations game. Many appear in the media as disinterested “experts,” nearly always identified by their former public service title, even if they get paid huge sums in the service of an unrevealed client. Joining the legions of shadow lobbyists, too, are A-list firms that take business from unsavory regimes to burnish their images—activity that, in the past, might have been seen as treasonous. One firm employs “all sorts of dark arts” (their words) on the Internet: editing Wikipedia entries deemed damaging; setting up third-party blogs that also appear independent; and gaming search results to ensure that positive content outweighs negative content. Such efforts sway public perception and mold policy yet are virtually invisible even to a trained observer.

While shadow lobbyists engage in one-off projects as solo operators, their close cousins, shadow elites, are more complex. Shadow elites challenge the principles that have long underpinned both the free market (competition) and modern democratic states (accountability).

Shadow elites often work together as part of a self-propelling longtime trust network, which I call “flex nets,” to pursue their mutual goals and coordinate their efforts. As I detail in Shadow Elite, members of what I call the Neocon core, an informal group of a dozen or so players around ringleader Richard Perle (whose many hats have included assistant secretary of Defense, political and government advisor, think-tanker, pundit, and corporate leader) have worked with each other in various incarnations for some 30 years to realize their goals for American foreign policy via the assertion of military power. In the 2000s this flex net famously helped take the United States to war in Iraq. With shared ideology a motivation, shadow elites’ cachet is in the near-exclusive control they exert over crucial information and thus their ability to control the message. A cornerstone of the Neocon core’s success over several decades has been the skill of its members in challenging official U.S. intelligence, creating alternative versions, and branding same as official and definitive for politicians, government, and the media.

Members of a flex net parlay their standing into influence opportunities, spinning overlapping roles at the nexus of official and private power and creating a virtually closed loop that challenges accountability. While using the official and private organizations with which they are affiliated, members’ chief allegiance is to the network. Thus they coordinate power and influence from multiple vantage points—often far removed from public input, knowledge, or potential sanction. The Neocon core illustrates how a ready-made network of players with its own private agendas can straddle a state-private seesaw to prescribe and help coordinate government policies of monumental import and impact; sell them to government officials, legislators, the media, and the public; help implement them; and continue this strategy, both to justify what they have done and to influence policies that follow from the course taken.

Administrations come and go, but shadow elites persist, as they are not the instruments of any particular administration, even when they occupy official positions. They are less stable, less visible, and more global in reach than their powerbroker forebears. And they are a paradox in terms of political influence, as political scientist Simon Reich helped me grasp: they are more amorphous and less transparent than conventional political lobbies, yet also more coherent and less accountable. While these players might call to mind old notions such as conflict of interest, they illustrate why such labels no longer suffice. As a Washington observer sympathetic to the neoconservatives’ aims told me, “There is no conflict of interest, because they define the interest.”

Clearly, the old ways of understanding influence—looking to interest groups, lobbyists, K Street, revolving doors, and even campaign finance—no longer suffice, as some of today’s top influencers have obviously innovated beyond these traditional modes. The players and their practices are sufficiently novel that they generally fly beneath the radar of watchdog and media organizations (the latter of which, anyway, have been gutted), and cannot be sanctioned by law. So we, the public, are left without reliable means to ferret out undisclosed sponsors and hidden agendas. In other words, our ability to make informed judgment has been severely compromised.

My work over many years has led me to see that, to both understand how so much influence works today, as well as to begin to hold the new influencers to account, we have to follow the players. Because the players’ potency comes from their ability to blend and blur official and private boundaries (among other boundaries), theories and accountability measures that focus on just one or the other sphere, rather than the players who straddle them, miss the very drivers of influence. To track the players and their reach, we need to chart their roles, activities, networks, organizations and sponsors, and look at how these building blocks interact.

It’s a tall order, but a necessary one if we are to fulfill the promise of democracy, uncorrupted by elite insiders who habitually game the system and get off scot free. For me, it’s a bit of déjà vu because today’s elites look a lot like their communist and post-communist counterparts I saw in action decades ago.

Janine R. Wedel, anthropologist and University Professor in the School of Policy, Government, and International Affairs at George Mason University, is the author of Unaccountable: How Elite Power Brokers Corrupt our Finances, Freedom, and Security (Pegasus, 2014) and Shadow Elite: How the World’s New Power Brokers Undermine Democracy, Government, and the Free Market (Basic Books, 2009).