Pay-to-play, sometimes pay-for-play or P2P, is a phrase used for a variety of situations in which money is exchanged for services or the privilege to engage in certain activities. The common denominator of all forms of pay-to-play is that one must pay to "get in the game", with the sports analogy frequently arising. [1]
The term "pay-to-play"' in the political context refers to a practice where individuals or entities, often through campaign donations or financial contributions, gain access or influence over government officials and decision-making processes (Smith, 2020). This term is used to describe a perceived link between political contributions and political favors or access (Jones, 2019). While it is a widely used term in discussions about campaign finance and political corruption, it doesn't have a single origin or a specific creator (Brown, 2017).
The concept of "pay-to-play" has been present in political discourse for many years (Johnson, 2005). However, it gained significant prominence in the United States during the 20th century, particularly in the context of campaign finance regulations and political fundraising practices (Smith, 2020). The specific phrase "pay-to-play" is believed to have emerged organically within political and media discussions, reflecting the idea that political access and influence could be bought through financial contributions (Davis, 2013).
Prominence and Usage: The term "pay-to-play" is most commonly used in discussions about campaign finance, lobbying, and political corruption (Smith, 2020). It gained prominence in the late 20th and early 21st centuries as concerns grew about the increasing influence of money in politics (Brown, 2017).
"Pay-to-play" practices can have various effects on the political system and the general populace:
Undermining Equal Representation: It can create a perception that those with financial resources have greater access to policymakers, potentially undermining the principle of equal representation (Jones, 2019). Policy Influence: There are concerns that large political contributions can lead to policies that favor the interests of wealthy donors over the broader public (Davis, 2013). Erosion of Trust: It may erode public trust in government, as people believe elected officials are more responsive to donors than to constituents (Johnson, 2005). Barriers to Participation: It can discourage individuals without financial means from engaging in the political process, potentially limiting diversity in political leadership (Smith, 2020). These effects highlight the complex and contentious nature of "pay-to-play" dynamics in politics, with implications for democratic principles and governance.
The term also refers to a growing trend in which individuals or groups may purchase radio or television airtime, much like infomercials, to broadcast content promoting the payer's interests. While these types of shows are typically shows that have little sponsor support and have no substantiated audience, some major program producers do purchase airtime to "clear" their programs in certain major markets.[ citation needed ] This type of format is particularly common among religious broadcasters (televangelism), where the related term pay-for-pray is used. [2]
The term also refers to a growing trend, where venue owners charge an up-front fee to performing artists for the use of their facilities. The practice began in Los Angeles, California, during the 1980s. It has become common in many U.S. cities at low-turnout all-ages shows where performers are required to guarantee a minimum attendance through pre-show ticket sales. [3] Pay-to-play gigs are a contentious practice in the UK, and some of the largest pay-to-play gig organisers have generated large amounts of discussion and criticism. [4]
The term pay-to-play was also used as the title to a song by the band Nirvana (later renamed to "Stay Away"). The refrain referred to the practice of a band or their record label paying radio stations to put a song into heavy rotation. The phrase is also the title to a song by the band Cringer, in which they denounce the practice.
Music Supervision is a booming field in the music industry, whose professionals place music in many kinds of film, television, commercial, web-based and other live and recorded media cues. While some music supervisors are paid only by their employer or per-project, some companies use a pay-to-play model wherein artists pay to submit tracks for consideration to a variety of media concerns, only to have to pay the Music Supervision intermediary again at a cost of half of its earning for the track placement should it win a placement.
The term is also used as slang to refer to Internet services that require that users pay to use them. Usually, it refers to MMORPGs, where players must pay to maintain a playing account, as is the case with Eve Online or World of Warcraft . [5] This is in contrast to free-to-play games. Many formerly pay-to-play MMORPGs have switched to a free-to-play model, including EverQuest , Star Wars: The Old Republic , Aion: The Tower of Eternity , and The Lord of the Rings Online . The game RuneScape features both free accounts for no money or pay-to-play accounts, with a much larger list of features.
The term may also refer to something like the online game Habbo Hotel , where there are games inside the game, which you may pay-to-play to join into a game whilst it is in progress.
In a pay-to-play gig, the performer will either pay the promoter some money to be allowed to perform at the show, or will have to offer some in-kind payment. In a conventional comedy club, the promoter will pay the acts for their performance, and will raise the money to stage the gig by charging the audience. Some clubs offer open mic slots, where newer acts are allowed to learn the craft, unpaid; this is not the same as pay-to-play. Many comedians are against pay-to-play schemes, which they consider exploitative. [6]
Pay-to-play was cited as a cause of major damage to the quality of the New York comedy scene. [7] In economic terms, a pay-to-play strategy elevates those people who can afford to perform for nothing, or can afford to pay for their stage-time, which has nothing to do with their quality as an act. The pay-to-play promoter is able to profit from the goodwill and desire to perform of the acts, while discouraging appearances by those who cannot afford to perform without payment.
In some shows, the performer is asked to bring a certain number of paying audience members. As a payment-in-kind policy, this has caused similar controversy to pay-to-play. [8] A show where the acts are obliged to bring the audience is called a bringer. [6]
Similar to the trend cited above in music, pay-to-play is the practice of visual artists paying gallery owners, dealers, curators, publishers, festival and contest sponsors, and better-established artists to critique, review, judge, exhibit, collect, or publish works created in such disparate media as painting, photography, video, and sculpture. Pay-to-play is a type of vanity gallery. Pay-to-play is characterized by cash flow that moves away from visual artists. Pay-to-play is sold to visual artists and justified by visual artists as "an investment in future sales" [9] and may be self-victimization. [10]
Pay-to-play in the engineering, design, and construction industry can refer to:
Pay-to-play might also be used to explain the appearance of engineering, design, and construction public work being done not in an open and fair manner.
PwC's 2014 Global Economic Crime Survey explored financial corruption in the construction industry. [11] This survey found that asset misappropriation and bribery were the most prevalent crimes, with nearly 70% of crimes being perpetrated by insiders. In 2018, 14 people were charged with bribe-taking, money laundering, grand larceny and other charges relating to construction projects at Bloomberg LP's offices in New York. [12]
Pay-to-play is a provision in a corporation's charter documents (usually inserted as part of a preferred stock financing) that requires stockholders to participate in subsequent stock offerings in order to benefit from certain antidilution protections. [13] If the stockholder does not purchase his or her pro rata share in the subsequent offering, then the stockholder loses the benefit(s) of the anti-dilution provisions. In extreme cases, investors who do not participate in subsequent rounds must convert to common stock, thereby losing the protective provisions of the preferred stock. This approach minimizes the fears of major investors that small or minority investors will benefit by having the major investors continue providing needed equity, particularly in troubled economic circumstances for the company. It is considered a "harsh" provision that is usually only inserted when one party has a strong bargaining position.
In the finance industry, the term pay-to-play describes the practice of giving gifts to political figures in the hopes of receiving investment business in return.
In the U.S., after discovering that this practice was not uncommon and was undermining the integrity of the financial markets, the U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB) severely regulated and limited the interactions and gifts-giving practices between the investment industry personnel and politicians and candidates. This can be seen most notably in Rule 206(4)-5 of the Investment Advisers Act of 1940 and Rules G-37 and G-38 of the MSRB Rule Book. [14]
Pay-to-play occurs when investment firms or their employees make campaign contributions to politicians or candidates for office in the hope of receiving business from the municipalities that those political figures represent. It usually applies to investment banking firms that hope to receive municipal securities underwriting business in return or to investment management firms that hope to be selected for the management of government funds such as state pension funds.
An example of this form of corruption or bribery is the 2009 probe by then New York State Attorney General Andrew Cuomo into private equity funds payments to placement agents with political connections to obtain business with the New York State Common Retirement System. [15] [16]
In politics, pay-to-play refers to a system, akin to payola in the music industry, by which one pays (or must pay) money to become a player. Almost always used in criticism, the phrase 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". [17]
Typically, the payer (an individual, business, or organization) makes campaign contributions to public officials, party officials, or parties themselves, and receives political or pecuniary benefits such as no-bid government contracts, influence over legislation, [18] [19] political appointments or nominations, [20] [21] special access [22] or other favors. The contributions, less frequently, may be to nonprofit or institutional entities, [23] or may take the form of some benefit to a third party, such as a family member of a governmental official. [24] Incumbent candidates and their political organizations [25] are typically the greatest beneficiaries of pay-to-play. Both the Democratic and Republican parties have been criticized for the practice.
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. [26] [27] 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". [28] Good-government advocates consider this an outrage because "political fundraising should have no relationship to policy recommendations". [29] Citizens for Responsible Ethics in Washington called the "pay-to-play Congress" one of the top 10 scandals of 2008. [30]
Many seeking to ban or restrict the practice characterize pay-to-play as legalized corruption. Pay-to-Play practices have come under scrutiny by both the federal government [31] and several states. [32] In Illinois, federal prosecutors in 2006 were investigating "pay-to-play allegations that surround Democratic Illinois Gov. Rod Blagojevich's administration". [33] 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. [34] [35]
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. 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 and 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. [36]
The opposite of a pay-to-play system 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. [37] 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. [38] He also illustrates how wealthy interest groups are not necessarily better off from having better access to politicians. [39]
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.
Campaign finance laws in the United States have been a contentious political issue since the early days of the union. The most recent major federal law affecting campaign finance was the Bipartisan Campaign Reform Act (BCRA) of 2002, also known as "McCain-Feingold". Key provisions of the law prohibited unregulated contributions to national political parties and limited the use of corporate and union money to fund ads discussing political issues within 60 days of a general election or 30 days of a primary election; However, provisions of BCRA limiting corporate and union expenditures for issue advertising were overturned by the Supreme Court in Federal Election Commission v. Wisconsin Right to Life.
Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain. Forms of corruption vary but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, influence peddling, graft, and embezzlement. Corruption may facilitate criminal enterprise, such as drug trafficking, money laundering, and human trafficking, although it is not restricted to these activities.
Bribery is the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty and to incline the individual to act contrary to their duty and the known rules of honesty and integrity. With regard to governmental operations, bribery is essentially corrupt "solicitation, acceptance, or transfer of value in exchange for official action".
Campaign finance – also called election finance, political donations, or political finance – refers to the funds raised to promote candidates, political parties, or policy initiatives and referendums. Donors and recipients include individuals, corporations, political parties, and charitable organizations.
Rod R. Blagojevich, often referred to by his nickname "Blago", is an American politician who served as the 40th governor of Illinois from 2003 to 2009. He was impeached, removed from office, convicted, and incarcerated for eight years on federal charges of public corruption. A member of the Democratic Party, Blagojevich previously worked in both the state and federal legislatures. He served as an Illinois state representative from 1993 to 1997, and the U.S. representative from Illinois's 5th district from 1997 to 2003.
Buckley v. Valeo, 424 U.S. 1 (1976), was a landmark decision of the US Supreme Court on campaign finance. A majority of justices held that, as provided by section 608 of the Federal Election Campaign Act of 1971, limits on election expenditures are unconstitutional. In a per curiam opinion, they ruled that expenditure limits contravene the First Amendment provision on freedom of speech because a restriction on spending for political communication necessarily reduces the quantity of expression. It limited disclosure provisions and limited the Federal Election Commission's power. Justice Byron White dissented in part and wrote that Congress had legitimately recognized unlimited election spending "as a mortal danger against which effective preventive and curative steps must be taken".
The Foreign Corrupt Practices Act of 1977 (FCPA) is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.
Patrick Joseph Quinn Jr. is an American politician who served as the 41st governor of Illinois from 2009 to 2015. A Democrat, Quinn began his career as an activist by founding the Coalition for Political Honesty, which used citizen-initiated referendum questions to advocate for political reforms, and later served as a commissioner on the Cook County Board of (Property) Tax Appeals from 1982 to 1986, Illinois State Treasurer from 1991 to 1995, and Lieutenant Governor of Illinois from 2003 to 2009.
The financing of electoral campaigns in the United States happens at the federal, state, and local levels by contributions from individuals, corporations, political action committees, and sometimes the government. Campaign spending has risen steadily at least since 1990. For example, a candidate who won an election to the U.S. House of Representatives in 1990 spent on average $407,600, while the winner in 2022 spent on average $2.79 million; in the Senate, average spending for winning candidates went from $3.87 million to $26.53 million.
Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities like bribery, influence peddling, and embezzlement, as well as practices that are legal in many countries, such as lobbying. Political corruption occurs when an office-holder or other governmental employee acts in an official capacity for personal gain.
Antoin Rezko is an American businessman who was convicted of wire fraud.
Political funding in Australia deals with political donations, public funding and other forms of funding received by politician or political party in Australia to pay for an election campaign. Political parties in Australia are publicly funded, to reduce the influence of private money upon elections, and subsequently, the influence of private money upon the shaping of public policy. After each election, the Australian Electoral Commission distributes a set amount of money to each political party, per vote received. For example, after the 2013 election, political parties and candidates received $58.1 million in election funding. The Liberal Party received $23.9 million in public funds, as part of the Coalition total of $27.2 million, while the Labor Party received $20.8 million.
Corruption in the People's Republic of China post-1949 refers to the abuse of political power for private ends typically by members of the Chinese Communist Party (CCP), who hold the majority of power in the country. Corruption is a very significant problem in China, impacting all aspects of administration, law enforcement, healthcare and education. Since the Chinese economic reforms began, corruption has been attributed to "organizational involution" caused by the market liberalization reforms initiated by Deng Xiaoping. Like other socialist economies that have undertaken economic reforms, such as post-Soviet Eastern Europe and Central Asia, reform-era China has experienced increasing levels of corruption.
In December 2008, then-Democratic Governor of Illinois Rod Blagojevich and his Chief of Staff John Harris were charged with corruption by federal prosecutor Patrick Fitzgerald. As a result, Blagojevich was impeached by the Illinois General Assembly and removed from office by the Illinois Senate in January 2009. The federal investigation continued after his removal from office, and he was indicted on corruption charges in April of that year. The jury found Blagojevich guilty in August 2010 of one charge of making false statements with a mistrial being declared on the other 23 counts due to a hung jury after 14 days of jury deliberation. On June 27, 2011, after a retrial, Blagojevich was found guilty of 17 charges, not guilty on one charge and the jury deadlocked after 10 days of deliberation on the two remaining charges. On December 7, 2011, Blagojevich was sentenced to 14 years in prison.
A number of controversies related to Rod Blagojevich, formerly the Governor of Illinois, were covered in the press during and after his administration. In addition to a reputation for secrecy that was noted by the Associated Press, Blagojevich was the subject of political, legal, and personal controversies similar to those of his predecessor, Republican Governor George Ryan. To the surprise of many, Blagojevich said in 2008 that he agreed with the idea of commuting Ryan's federal prison sentence.
Political finance covers all funds that are raised and spent for political purposes. Such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and candidates. Moreover, all modern democracies operate a variety of permanent party organizations, e.g. the Democratic National Committee and the Republican National Committee in the United States or the Conservative Campaign Headquarters, Labour Party Headquarters and the Liberal Democrat Headquarters in the United Kingdom. The annual budgets of such organizations will have to be considered as costs of political competition as well. In Europe the allied term "party finance" is frequently used. It refers only to funds that are raised and spent in order to influence the outcome of some sort of party competition. Whether to include other political purposes, e.g. public relation campaigns by lobby groups, is still an unresolved issue. Even a limited range of political purposes indicates that the term "campaign funds" is too narrow to cover all funds that are deployed in the political process.
A kickback is a form of negotiated bribery in which a commission is paid to the bribe-taker in exchange for services rendered. Generally speaking, the remuneration is negotiated ahead of time. The kickback varies from other kinds of bribes in that there is implied collusion between agents of the two parties, rather than one party extorting the bribe from the other. The purpose of the kickback is usually to encourage the other party to cooperate in the scheme.
Corruption in Switzerland describes the prevention and occurrence of corruption in Switzerland.
The American Anti-Corruption Act (AACA), sometimes shortened to Anti-Corruption Act, is a piece of model legislation designed to limit the influence of money in American politics by overhauling lobbying, transparency, and campaign finance laws. It was crafted in 2011 "by former Federal Election Commission chairman Trevor Potter in consultation with dozens of strategists, democracy reform leaders and constitutional attorneys from across the political spectrum, and is supported by reform organizations such as Represent.Us, which advocate for the passage of local, state, and federal laws modeled after the AACA. It is designed to limit or outlaw practices perceived to be major contributors to political corruption.
Corruption in Myanmar is among the worst in the world. Owing to failures in regulation and enforcement, corruption flourishes in every sector of government and business. Many foreign businesspeople consider corruption "a serious barrier to investment and trade in Myanmar." A U.N. survey in May 2014 concluded that corruption is the greatest hindrance for business in Myanmar. The ongoing civil war has significantly set back anti-corruption efforts, exacerbating the problem.