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A U.K. minister got into hot water over a donation. Here’s what it tells us about business financing politics.

Our research suggests businesses have three broad reasons to donate to political parties.

Britain's Housing, Communities and Local Government Secretary Robert Jenrick speaks during a coronavirus media briefing on May 13 at 10 Downing Street. (Andrew Parsons/10 Downing Street via AP)

In recent weeks, British Secretary of State for Housing, Communities and Local Government Robert Jenrick, a Conservative member of Parliament, has been under pressure to resign over cash-for-influence allegations. Documents revealed that Jenrick approved a planning application for a 1 billion-pound ($1.25 billion) property scheme in London, just 24 hours before further taxes would be imposed.

This deal, ultimately saved the developer, Richard Desmond, approximately 45 million pounds ($56 million). Desmond had donated 12,000 pounds ($15,000) to the Conservative party and attended a dinner at which he, and a number of other property developers, sat with Jenrick.

This is certainly a specifically British affair — a $15,000 donation in U.S. politics would hardly raise many eyebrows. But what does this say about the relationship between business and politics in a wider context? We find this incident raises two important questions that we have both published books on and researched in great detail. Why do businesses and individuals donate large amounts to political parties? And what returns do they get on these investments?

Why donate?

Our research suggests donating to political parties is primarily about access. Give enough cash and you will get a seat at the table with those either in, or proximate to, power. However, we shouldn’t fall into the simplistic assumption this necessarily equals influence. Quid pro quos are very rare.

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But the concept of “access” is multifaceted, and its pragmatic use as a potential influence is merely a part of the story. For example, access may be important to people who have a large disposable income, providing the social capital that accompanies any claim to have dined with the powerful. After all, for the politically engaged there must be fewer greater pleasures than to say you were at dinner with the prime minister — or other high-level officials.

And, alongside pragmatism and the pursuance of social relations, there is the third motivating factor of ideology. Here businesses, individuals and organizations simply donate as they support specific ideals.

These three general incentives — ideology, pragmatism and social relationships — provide a means for a better understanding of how and why certain relationships persist.

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What does the Jenrick affair tell us about these relationships?

We know from previous research that donations in the United Kingdom are cyclical. They rise when there is an election, then dip afterward. We also know that donations tend to be ideological, so we would expect donations in this case to follow the same pattern. However, the figure below shows donations from the construction and property sectors to be different.

In general, there are steep peaks in donations around the elections of 2015, 2017 and 2019. For the construction industry, the three elections appear as shallow humps. For property services it’s difficult to discern any increase at all for 2017 and 2019. This suggests a closer relationship to the Conservatives than other sectors and donors. In turn, the Conservatives might be more sympathetic to their concerns and feel more obliged to offer a hearing to donors in these sectors. Politicians do not grant an audience to all lobbyists. Sometimes getting a little bit of attention can make all the difference.

Consistent donors can hope for a reciprocal exchange, whereby any favors are performed separately and diffusely and the parties leave terms unstated and uncertain. These types of exchange make it hard to associate a payment with a specific decision.

However, you could come to the opposite conclusion. The property and construction sectors are so loyal to the Conservative party that their support is a given — while other sectors have to be enticed and rewarded to support election campaigns. But this view ignores the high political cost of discrete exchanges that are explicit and simultaneous. Politicians are accountable to voters, not businesses. Therefore, a discrete exchange of cash for decisions is usually not worthwhile in a system where accountability is as effective is it is in the U.K.

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If “money talks,” what does it say?

Here’s what we know: Donors engage with parties pragmatically, ideologically or to build social relationships. We also know it might be a combination of these factors. They might engage pragmatically with parties in pursuit of certain returns on their investment. These donations might also tend to favor politicians that they align with ideologically — in Denmark, for example, we found evidence of donations to specific party “blocks” on the left and right rather than specific parties. These three things can be true simultaneously.

The conclusion we reach is that “money is multilingual.” It can speak pragmatically, asking for valuable benefits; it can speak ideologically, supporting a general political project; or it can speak socially, reinforcing a network and a social identity. Of course, it can speak all three.

This is what we suspect donations in this case do — they ask for a reciprocal exchange with the political system. Donations support a pro-business vision for the U.K and one that protects existing landowners in the property market. But they also maintain and renew the networks of business and political leaders as members of a single group.

Some would say the social and ideological messages are not worth paying for, and that politicians are likely to ignore the message that they owe donors anything in return. Nonetheless, as the Jenrick affair suggests, a donation to a political party is usually an investment with very little downside.

Iain McMenamin is professor of comparative politics at Dublin City University and author of “If Money Talks, What Does It Say? Corruption and Business Financing of Political Parties” (Oxford University Press, 2013).

Sam Power is lecturer in corruption analysis at the University of Sussex and author of “Party Funding and Corruption (Palgrave Macmillan, 2020).

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