Is Ticketmaster Telling the Truth About Its Finances?
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In the 1870s, George Francis Train and Thomas C. Durant, two executives at the Union Pacific Railroad, were exposed as having stolen large sums of taxpayer money through a complex financing scheme. The U.S. government subsidized the building of the railroad, and Train and Durant paid that money to a construction company, Crédit Mobilier, that they controlled, at inflated construction rates. In doing so, they siphoned some of it to themselves, used some of it for bribes of top policymakers, and otherwise spent it on inefficient construction techniques, so as to boost the cost of building the Union Pacific and thus the amount they could bill the government.
The Crédit Mobilier scandal rocked American politics, showing corruption of dozens of high level politicians, including the Speaker of the House and Vice President. Yet, the amount Train and Durant stole was far less than the ultimate amount wasted. Indeed, corruption often works this way, someone will take a percentage bribe on a project and steer it in wasteful directions, costing not just the amount of the bribe but far more than that. The template for most such scandals is Crédit Mobilier, whether Michael Milken issuing junk bonds costing tens of billions of dollars while making himself a billion, or an insulin maker getting an extra $10 after raising prices by $100 so it can cut in all the middlemen. The cost to all is far higher than the profit to a few.
