Congressman Hunter, the Jones Act and corruption

by Michael Hansen, Hawaii Shippers Council, September 8, 2018

Bloomberg published on September 4, 2018, the op-ed “Duncan Hunter’s real crime is the Jones Act,” by their editorial writer, James Gibney. The author describes the connection between charges for campaign finance violations brought on August 21, 2018, by the U.S,. Attorney of the Southern District of California against Congressman Duncan D. Hunter (R-CA-50), and his support for and campaign contributions from the Jones Act industry.

Cong Hunter represents the 50th congressional district of California covering part of the San Diego area where General Dynamics Corporation operates its NASSCO shipyard, one of seven major U.S. shipbuilding yards constructing both commercial and naval seagoing self-propelled ships over 1,000 gross tons.

We reported on August 21, 2017, that Cong Hunter was under investigation for these criminal violations:

Several reports appear4d in the media on March 23, 2017, that the U.S. House of Representatives Ethics Committee referred a complaint against Rep Hunter to the U.S. Department of Justice for the misuse of campaign funds. U.S. News & World Report reported, “On Aug. 26, 2016, the Office of Congressional Ethics, an independent panel, referred Hunter to the ethics committee in August.”

The Los Angeles Times reported, “U.S.. Rep. Duncan Hunter is under criminal investigation by the Department of Justice for possibly misspending tens of thousands in campaign funds.” The San Diego Union Tribune reported, “A federal law enforcement official familiar with the investigation confirmed Thursday that the FBI is investigating Hunter for campaign finance violations.”

The Bloomberg editorial board authored three op-eds critical of the Jones Act in December 2017, “The Jones Act costs all Americans too much,” on the 12th, “Still playing with U.S. ports,” on the 20th, and “Maritime Commerce Can Thrive Without the Jones Act,” on the 22nd. We reported on those op-eds.

Key excerpts from Duncan Hunter’s real crime is the Jones Act:

The breadth of transactions in the 47-page indictment against Representative Duncan Hunter for allegedly tapping more than $250,000 in campaign funds for personal use is matched only by their banality.

Hunter, who has been stripped of his chairmanship of the House Subcommittee on the Coast Guard and Maritime Transportation and other positions, will yet have his day in court. But as an ardent champion of a rather obscure law involving U.S. commercial shipping called the Jones Act, he’s already guilty of fleecing U.S. taxpayers and consumers.

Intended to bolster U.S. maritime commerce and the civilian and military industrial bases, it has instead built a protectionist dreadnought that artificially raises shipping costs to defend the interests of a small crew of companies and labor unions and the congressional representatives they have in their pockets

Hunter’s campaign coffers are a case in point. In this election cycle, his top donor has been General Dynamics, which has a shipyard in his district. At least four other entities that benefit from the Jones Act were top 20 contributors. In the 2016 and 2014 cycles, sea-transport companies were his biggest industry donors (more than $200,000) and transport unions were the sixth-largest (nearly $100,000).

Even though foreign ships are generally much cheaper to build and to operate, the act’s defenders insist that there’s no proof that it burdens American consumers, especially those in Alaska, Hawaii, Puerto Rico and other territories dependent on maritime commerce. Apparently, the laws of economics are suspended on water.

Sadly, even if Hunter heads to the hoosegow, the Jones Act is likely to stay in place. Congress’s shipbuilding caucus is one of its biggest — there’s nothing like a deep trough to bring out bipartisanship. Shipping interests gave more than $10 million in the 2016 cycle, and spent almost $25 million in lobbying. Perversely, representatives from Alaska and Hawaii — the two states most disadvantaged by the act — are among those most in thrall to such campaign cash. And although many residents in those states and Puerto Rico are aggrieved, national outrage is hard to summon. As Colin Grabow of the Cato Institute has observed, the act’s “vast costs are dispersed across the economy in the form of higher prices, inefficiencies and forgone opportunities that few people can even tie to the cause.”

---30---

2012: France, Flights, and Free Cars: A Peek into a $10B Jones Act 'Union'