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“Presidential Candidates, Each Sold Separately”: The Donor Class Will Shape The Choice Of Candidates Long Before A Single Ballot Is Cast

Mark Hanna used to say, “there are two things important in politics.The first is money and I forget the second.” The next president will take the oath of office in 2017, but between now and then expect a lot of money to be spent buying the ear of the next president. The large amount of spending will be driven in part because there are presently 22 candidates vying for the two major party nominations. If Prof. Lawrence Lessig makes it official, there will be 23.

Our campaign finance laws maintain the legal fiction that there is a difference between money given directly to a candidate’s campaign and money spent on ads in support of the candidate that benefit them. Your local billionaire can still only give $5400 (or $2700 per election per candidate) to a candidate for federal office. But at the very same time the wealthy can spend an unlimited amount on ads touting their favorite candidate or trashing the object of their ire.

I don’t know about you, but I’d be mighty grateful if someone spent a million in support of me. And I’d probably be more grateful for the million spent than the $5400 given directly.

The wealthy have had the right to spend lavishly on independent ad buys since Buckley v. Valeo in 1976. But the real spending spiked after Citizens United and a case called SpeechNow with the advent of the Super PAC. According to www.opensecrets.org, in 2010 Super PACs raised $828 million and spent $609 million in the federal election.

Spending through a Super PAC, even if there is one funder ponying up 95 percent or more of the money, gives the illusion that there are groups involved—often with an appropriately Orwellian name—instead of just one random rich guy. Using Super PACs as a vehicle, in 2012 Sheldon Adelson and his wife spent $93 million, William “Bill” Koch of the Koch Brothers spent $4.8 million and Foster Friess spent $2.6 million.

And already we see billionaires lining up behind 2016 candidates in the “money primary” like they were buying so many action figures in a toy store with matching podiums, blue suits, and karate grip. Of course, like so many toys, each candidate is sold separately. And the spending has already started. As Mother Jones recently put it, “These 8 Republican Sugar Daddies Are Already Placing Their Bets on 2016.”

The other phenomenon that has happened is some are backing more than one candidate. With 5 Dems and 17 Republicans, the Center for Public Integrity, argues that “[i]t’s speed dating season for presidential campaign contributors.”

There is no rule that says a donor must only back one candidate. If they want, they can hedge their bets and back two or three. Hell, if they want, they can try to collect them all. At least ten donors are backing two or more of the Republican candidates.

Donors don’t have to be loyal to a single political party either.  Seventeen mega spenders are already backing Republican Bush and Democrat Clinton, who may end up as respectively the most popular GI Joe and American Girl doll of 2016. For example, John Tyson, chairman of Tyson Foods, has supported both Bush and Clinton. The same is true of Richard Parsons, the former head of Time Warner, and David Stevens, the CEO of the Mortgage Bankers Association.  For a full list of the seventeen Clinton/Bush supporters see here.

Now it’s not necessarily a bad thing for there to be over 20 candidates for president over a year out. It’s a big country with diverse views. But because the presidential public financing system was allowed to atrophy, each of these candidates must run in privately funded races. And this has led to the unseemly spectacles of multiple candidates flying to California for the “Koch” primary or to Las Vegas for the “Adelson” primary. The only primaries that should matter are the ones with actual voters. But the reality is the donor class is likely to shape the choice of candidates long before any Iowans caucus or a New Hampshirite cast a single ballot.

 

By: Ciara Torres-Spelliscy, Brennan Center for Justice, New York University School of Law, August 14, 2015

August 16, 2015 Posted by | Campaign Financing, Democracy, Mega-Donors, Politics | , , , , , , | 1 Comment

“What Donors Want”: They Helped Elect A New Class Of Congress Members; Now What?

When the 114th Congress convenes on Tuesday, lawmakers won’t merely be thinking of the voters who put them in office. They’ll also be mindful of the donors who helped them reach those voters in the first place.

The 2014 midterm elections cost some $3.7 billion, according to the nonpartisan Center for Responsive Politics. That’s a lot of moneyed interests to consider, and sometimes they aren’t pulling lawmakers in the same direction. What’s a senator to do, for example, if the small-government Koch groups see a federal spending plan as too lavish while the U.S. Chamber of Commerce thinks of it as a win for business?

Scott Reed, a top political adviser for the Chamber, had this take on donor expectations: “We don’t expect the candidates we endorsed to line up 100 percent with us, but we’d like to get them in the 80 percent range.”

Here’s a look at what’s on some donor wish lists—and how they intersect and conflict with each other.

The Koch brothers want an authentic spending fight

Billionaire energy executives Charles and David Koch have a network of advocacy groups that sunk at least $150 million into last year’s elections. They want their senators to be soldiers for less government spending.

“What I want these candidates to do is to support a balanced budget,” David Koch told Barbara Walters in an ABC interview in December. “I’m very worried that if the budget is not balanced that inflation could occur and the economy of our country could suffer terribly.”

Tim Phillips, president of Americans for Prosperity, the most active nonprofit in the Koch alliance, said his group won’t be shy about calling out lawmakers who take their eye off this spending ball. Phillips predicted chafing between deficit hawks like his group and others that might be willing to sacrifice purity if it means getting their preferred projects funded.

The Chamber of Commerce wants the government to invest in infrastructure

That makes the Chamber, which put up $35 million to usher into office more business-minded Republicans, a potential foe to the Kochs’ top objective. The group spent most of its money on primary contests and notched a win rate of 14 out of 15 candidates, Reed said. The goal was to elect Republicans who are “committed to governing,” he said.

“What we did not want,” he said, “are the candidates who say, ‘Let’s get to D.C. so we can shut the damn place down.'”

The Chamber thinks Republicans should be prepared to fund infrastructure, even featuring that message in some of its candidate advertisements last year. “The key ingredients to thriving free enterprise are roads, bridges and tunnels,” Reed said.

Crossroads wants to avoid messy clashes that could ding the GOP image ahead of 2016 

The Chamber can probably count on Karl Rove’s powerful Crossroads political groups as an ally. They’re driven far less by ideology than by party politics. That makes sense: Rove was former President George W. Bush’s top strategist, earning the nickname “Bush’s brain.” The Crossroads enterprise spent $100 million on the 2014 races, according to American Crossroads President Steven Law, and wants more than anything to put the party in a good position for the 2016 presidential election.

“Voters expect constructive action, not obstructionism. They want Washington to work and lawmakers to get things done,” Rove wrote in his post-election column in the Wall Street Journal. “Their expectations are low because their distrust of politicians is high. So surprise them. The rewards will be great if the GOP shows it has a governing agenda.”

Translation: Crossroads wants to keep senators from doing politically damaging things that might cost seats or, worse, the presidency in 2016. To that end, Crossroads will spend much of 2015 providing Republican leaders with research to advise them how to broaden the party’s appeal and what kinds of legislation voters would like to see. “There’s an appetite for constructive change, not reflexive opposition,” Law said.

As for any looming fiscal battles, “we strongly support spending restraint,” Law said. “But where we differ with some of the other groups is in tactics.” He said shutting down the government in protest of Obama’s health care law is a prime example of the kind of “colossal failure” he hopes Republican lawmakers will avoid. “You have to think through what you’re going to get for it. We’d be concerned about shutdown gambits that would tarnish the brand.”

Law, like many representatives of the political money groups, will make the rounds on Tuesday, congratulating the new members and attending various parties in their honor. “Everyone we were helpful to has been very kind about letting us know they appreciated our role,” he said.

Sheldon Adelson seeks the death of online gambling

A billionaire casino executive, Adelson wants to stop what he sees as the scourge of online gambling. He argues it’s not about the bottom line for his international gambling empire, but rather it’s an issue of morality because kids can get hooked on betting. Three states have already legalized online gambling, but Congress could step in with a federal ban. That’s what Adelson has pushed for through a Washington advocacy group he started in 2014.

Although some have argued that it’s too late for action, Adelson isn’t just anyone—he’s a megadonor. In addition to pumping more than $90 million into the 2012 presidential election, he spent $5 million last year to elect Republican House members. Politico reports he may have funneled tens of millions more through nonprofit groups that don’t disclose their donors.

Coal Country wants a return to power

The coal industry demonstrated last year that it can still fuel election turnout. Incoming Senate Majority Leader Mitch McConnell used a pro-coal message to pad his win in Kentucky. More than one-third of McConnell’s TV ads in his race against Democrat Alison Lundergan Grimes invoked his pro-coal stance, and voter turnout showed the message hit home: He improved his vote totals throughout the state’s coal counties.

The pro-coal theme also played well in West Virginia, where Republican Shelley Moore Capito defeated a Democratic opponent. The American Chemistry Council, American Energy Alliance and United Mine Workers of America Power PAC all weighed in with campaign money and election-time advertising. They’ll be after lawmakers to push back on President Barack Obama’s new regulations limiting smog, which were seen as a direct hit on the coal industry.

Black pastors bought themselves an unlikely friend

Weighing in at just $183,340 in contributions, All Citizens for Mississippi certainly wasn’t the election cycle’s biggest super-PAC. But it packed an important punch. The group worked to motivate African Americans to head to the polls in support of Republican Senator Thad Cochran, who was facing a surprisingly tough primary challenge from the right. The super-PAC, led by a black minister, put out radio ads warning that Cochran opponent Chris McDaniel would be bad for race relations.

Bishop Ronnie Crudup of the New Horizon Church International, who started the super-PAC, said its work on behalf of Cochran erased any doubt about the importance of Mississippi’s African American voters. Crudup said he’s had post-election conversations with Cochran. “The senator knows that African Americans stepped up for him, and I can’t put words in his mouth, but he has made good, affirmative statements that he appreciates the support.”

On Crudup’s wish list: better funding for historically black colleges and universities, policies that bring jobs to Mississippi and federal funding for workforce development. And there’s the issue of Obamacare. Crudup said he’d be very disappointed if Cochran tries to obliterate what he sees as a law that has been particularly helpful in getting African Americans health insurance coverage. “I think that our senator understands his constituents, black and white, depend on that service,” Crudup said.

 

By: Julie Bykowicz, Thank You Notes, Bloomberg Politics, January 5, 2015

January 8, 2015 Posted by | Campaign Financing, Mega-Donors | , , , , , , , | Leave a comment

“The 100 Rich People Who Run America”: The Ultra-Wealthy Have Taken Over The Political System

We are well past the point that anyone will be shocked or even surprised by how distorted our system of funding campaigns has become, but thanks to some excellent reporting by Ken Vogel at Politico, we now have some interesting new perspective.

We have reached a tipping point where mega donors completely dominate the landscape. The 100 largest donors in the 2014 cycle gave almost as much money to candidates as the 4.75 million people who gave $200 or less (and certainly that number goes from “almost” to “more” if we could include contributions that are not required by law to be disclosed).

Think about this for a minute. This is consequential. It means that candidates running for office are genuflecting before an audience of 100 wealthy individuals to fuel their campaigns. So, whose bidding do we think these candidates are going to do? Is it any wonder that the interests of large corporations and unions get to the front of the line?

Liberal Democrats like to blow their bugles about how all the big money in politics comes from rich Republicans. Actually, as Vogel points out, 52 of the 100 top donors are Democrats, and the No. 1 donor by far is Democrat Tom Steyer, who chipped in $74 million.

At least we’ve achieved some bipartisanship somewhere in our political ecosphere. Both parties are now equal opportunity offenders when it comes to gaming the system.

But I don’t fault Steyer or the Koch brothers for trying to exert their influence on politics and public policy. They have strongly held beliefs and issues they care about deeply, and they are simply spending a lot of their money to try and change things in a direction they believe would be better. Nothing illegal or unethical about that.

But let’s call the system that Citizens United and other rulings and laws have created what it is: an oligarchy. The system is controlled by a handful of ultra-wealthy people, most of whom got rich from the system and who will get richer from the system.

Supporters of the system believe that the $3.67 billion we spent on elections last cycle isn’t really all that much money. An Arkansas poultry company owner and big time political donor, Ronnie Cameron, reflected to Vogel that it’s not so different today than it’s been in the past when, “Our country was founded by the wealthy landowners having the authority and representing all the people.”

He said that out loud. To a reporter. Knowing other people might read those words. Without any apparent irony. Imagine all the poor Americans who will sleep better knowing that a rich Southern chicken farmer is happy to represent their interests.

Vogel gets to the heart of the problem though, reporting that, “When all the donations are tallied and analyzed, 2014 is likely to be noteworthy for two other milestones on the opposite end of the spectrum from the growth of mega-donations: It’s on pace to be the first mid-term election since 1990—the earliest cycle for which the Center for Responsive Politics performed such an analysis—in which the overall number of traceable donations declined. It’s also likely to be the first midterm since 1990 when the candidates’ campaigns spent less than the preceding midterm election.

The decline in candidate spending, though, is more than offset by the increase in spending by super PACs and other groups that can accept huge contributions from the ultra-rich.

That means that fewer and fewer everyday Americans are choosing to contribute to campaigns. In fact, less than 1 percent of Americans donate today. And who can blame them for feeling disenfranchised when they see their efforts dwarfed by the mega donors.

At the same time, campaigns are spending less while the special-interest groups are spending more. So we now have a system that discourages voters from participating and engaging, while rewarding and encouraging special interests to participate even more.

“[O]ur nation is facing a crisis of liberty if we do not control campaign expenditures. We must prove that elective office is not for sale. We must convince the public that elected officials are what James Madison intended us to be, agents of the sovereign people, not the hired hands of rich givers, or what Madison called factions.”

Those are the words not of some liberal Democrat. That’s the prescient echo of Barry Goldwater from 30 years ago.

 

By: Mark McKinnon, The Daily Beast, January 5, 2015

January 6, 2015 Posted by | Campaign Financing, Democracy, Mega-Donors | , , , , , , , | 1 Comment

“The Changing Role Of Money In Politics”: An Electoral Landscape In Which Financial Balance Has Tilted Dramatically To The Ultra-Rich

The 2012 presidential election was the first to be held in the aftermath of the Supreme Court’s ruling on Citizens United. Too many of us have forgotten that the results of that election were the opposite of what the megadonors had hoped for.

Can’t buy me gov.

That line neatly sums up the dismal showing on Election Day for the fundraisers, super-PAC strategists, and big-dollar donors of the Republican Party. Outside groups spent north of $1 billion this campaign season—bankrolled mostly by a small cadre of wealthy contributors—and yet they and their funders, especially on the Republican side, were left with little to show for it when the sun rose Wednesday morning. The GOP’s flagship super-PAC, Karl Rove’s American Crossroads, had an abysmal 1 percent return on its $104 million investment. Megadonor Sheldon Adelson and his wife, Miriam, invested $57 million in 2012 races; only 42 percent of the candidates who received Adelson support won. Other big donors—say, Romney super-PAC backers—got nothing for their money.

Perhaps we forgot about all of that because the 2014 midterms turned a lot of it around (with a few exceptions, i.e., Eric Cantor).

The 100 biggest campaign donors gave $323 million in 2014 — almost as much as the $356 million given by the estimated 4.75 million people who gave $200 or less…

And the balance almost certainly would tip far in favor of the mega-donors were the analysis to include nonprofit groups that spent at least $219 million — and likely much more — but aren’t required to reveal their donors’ identities.

The numbers — gleaned from reports filed with the Federal Election Commission and the Internal Revenue Service — paint the most comprehensive picture to date of an electoral landscape in which the financial balance has tilted dramatically to the ultra-rich. They have taken advantage of a spate of recent federal court rulings, regulatory decisions and feeble or bumbling oversight to spend ever-greater sums in politics — sometimes raising questions about whether their bounty is being well spent…

Taken together, the trend lines reflect a new political reality in which a handful of superaffluent partisans can exert more sway over the campaign landscape than millions of donors of more average means.

With sweeping victories for the Republicans these megadonors financed, it appears as though that success overshadows their previous failure in 2012 to influence the election outcome.

But it does raise a couple of questions: Are megadonors more effective at influencing midterms than presidential elections? And if so, why? One possible answer to those questions comes from turning our gaze away from who gives the money in order to focus for a moment on how it is spent.

Over the last few decades, as the amount of money in politics has exploded, the vast majority of those dollars have been spent on media – particularly television advertisements. Recently we’ve been learning more about what audience those ads reach. Derek Thompson reported it this way: Half of Broadcast TV Viewers Are 54 and Older – Yikes. As Cecilia Kang pointed out, younger viewers are trending away from traditional television in favor of subscription-based channels and streaming options.

And so it should probably not come as a surprise that a midterm election focused on turning out older voters in local elections is more fertile ground for expensive television advertising.

It will be interesting to see how all this plays out in the 2016 presidential election. I would simply note that all of Karl Rove’s millions of dollars in TV advertising were no match in 2012 to a simple recording by a catering staff at Mitt Romney’s famous 47% event. In the meantime, the Democrat’s largest megadonor – George Soros – has “shifted his giving away from pure politics, preferring to fund causes devoted to building up progressive infrastructure.”

At least until the laws are changed, megadonors are legally able to use their millions of dollars in an attempt to influence elections. The question will increasingly be…what do they spend it on?

 

By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, January 3, 2015

January 4, 2015 Posted by | Campaign Financing, Elections, Mega-Donors | , , , , , , , | Leave a comment

   

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