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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.
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).
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 supervisor intermediary again at a cost of half of its earning for the track placement should it win a placement.
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.
Pay-to-play was cited as a cause of major damage to the quality of the New York comedy scene. 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. A show where the acts are obliged to bring the audience is called a bringer.
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. Fighting corruption and bribery in the construction industry 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, Larceny and other charges relating to construction projects at Bloomberg LP's offices in New York.
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.Lemke and Lins, Regulation of Investment Advisers, §§ 2:190 to 2:192 (Thomson West, 2014 ed.).
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 bond 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. Go-Between Tied Funds to Carlyle. New York Times, May 14, 2009 4 Firms Agree to Settlement in New York Pension Fund. New York Times, September 17, 2009
Typically, the payer (an individual, business, or organization) makes Campaign finance to public officials, Political party officials, or parties themselves, and receives political or pecuniary benefits such as no-bid contract, influence over legislation, J. Nesmith, Execs Pay to Play with GOP, CommonDreams.org NewsCenter, Jan. 7, 2004 , retrieved 2007-12-12. Chicago's Pay-to-Play Zoning (series of articles from Chicago Tribune)] political appointments or nominations, L. Riscalla, Pilot shows way to end pay to play, Home News Tribune, Nov. 1, 2005, reprinted by Common Cause at www.commoncause.org , retrieved 2008-01-31. Pay-to-Play, Fletcher-Style, Bluegrassreport.org, February 27, 2007, retrieved 2008-01-31. special access Governor Giving Carte Blanche, Special Access to Major Donors: Pay-to-Play Abuses Aimed at Derailing Public Employee Unions, Jun. 6, 2005 . or other favors. The contributions, less frequently, may be to nonprofit or institutional entities, H. Hausemann, Politicos should return money from casino owner who admits trying to buy their support, nmpolitics.net, July 18, 2006 (contributions to university and schools). or may take the form of some benefit to a third party, such as a family member of a governmental official. Incumbent candidates and their political organizations 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. C. Canary and E. Wojcicki, Dollarocracy: Pay-to-play culture still has a chokehold on Illinois politics, Illinois Issues, May 2007 . Clean Money, Clean Elections . 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 others don't have because they donated to your campaign".Jonathan Fine, president of Preservation Chicago, quoted in D. Mihalopoulos, R. Becker, & D. Little, Neighborhoods for Sale: How cash, clout transform Chicago neighborhoods, Chicago Tribune, January 27, 2008, retrieved 2008-01-31. Good-government advocates consider this an outrage because "political fundraising should have no relationship to policy recommendations". J. Rood, On Heels of 9/11, Clinton Fundraiser Raises Eyebrows, ABC News: The Blotter (quoting Danielle Brian, executive director of the Project on Government Oversight). Citizens for Responsible Ethics in Washington called the "pay-to-play Congress" one of the top 10 scandals of 2008. Top Ten Ethics Scandals of 2008, 2008-12-16.
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 Public Citizen Pay-to-Play and the Federal Government, 02-03-2004, retrieved 2008-02-09. and several states. Public Citizen, Pay-to-Play and State Governments, 02-03-2004, retrieved 2008-02-09. In Illinois, federal prosecutors in 2006 were investigating "pay-to-play allegations that surround Democratic Illinois Gov. Rod Blagojevich's administration". Chicago Tribune, Nov. 1, 2006, retrieved 2008-01-31. 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.
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 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.
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. 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. He also illustrates how wealthy interest groups are not necessarily better off from having better access to politicians.
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.
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