Financial Leverage

Financial leverage occurs when money — through donors, vendors, or management firms — exerts outsized influence over decisions. Instead of deliberation shaping outcomes, financial dependency dictates policy.

Why It Matters

• Creates conflicts of interest that override democratic input.

• Shifts loyalty from constituents to funders or contractors.

• Undermines transparency when deals are struck behind closed doors.

Tell-Tale Signs

• Contracts renewed without competitive bidding.

• Decisions consistently align with donor or vendor interests.

• Members hesitate to question financial partners.

Examples Across Levels

• Local: Management companies dominating HOA boards by controlling information and contracts.

• State: Lobbyists writing large portions of legislation.

• Federal: Campaign donors gaining privileged access and shaping policy.

Countermeasures

• Require competitive procurement processes.

• Publish financial disclosures and lobbying records.

• Diversify funding sources to avoid single-party dominance.

Related Patterns

• Information Asymmetry

• Judicial or Oversight Capture