“A Rigged Democracy Produces A Rigged Economy”: Citizens United, Democracy For Sale
When the Supreme Court struck down the core of our country’s campaign finance laws in 2010, in the landmark Citizens United case, most of America didn’t take notice. After all, politicians already looked too cozy with the wealthy donors who bankrolled their elections. How much worse could it get?
Plenty. Even as super PAC spending was set to break the $100 million mark before Memorial Day, it was easy to consider corruption less pressing than issues like finding a job. But this election cycle is showing us how a rigged democracy produces a rigged economy — and how the ironically named Citizens United decision now stacks the deck against the 99 percent of Americans still working too hard to make ends meet.
How have things gone from bad to worse?
First, these “independent expenditures” are proving to be anything but independent. Restore Our Future is known openly as former Gov. Mitt Romney’s PAC, and he’s its chief fundraising draw. The PAC is staffed by former Romney aides, and its treasurer is Romney’s former general counsel from 2008. Oil billionaire Harold Hamm gave $985,000 to the “independent” PAC one month after Romney named him as chairman of his Energy Policy Advisory Group.
Second, their size is exploding. Romney’s super PAC alone spent $46 million before Memorial Day — more than all the outside groups combined in the past election cycle. This allowed Romney to outspend Rick Santorum’s grass-roots campaign by 400 percent during the pivotal Ohio primary — which Romney won by just 1 point.
Third, people writing million-dollar checks are not neutral observers without a financial stake in the policy debates of the day. As of mid-May, 15 organizations backed by these individuals had contributed more than $1 million each to Romney through his super PAC. Of those donors, 10 are hedge fund managers or investment holding companies that stand to profit handsomely from tax loopholes and financial deregulation that they are now actively promoting to Romney. This is about a return on investment. Small donors can’t afford to play at this table.
Restore Our Future then funnels these mega-donations into campaign ads with populist themes about job creation. But the real agenda is a disaster for middle-class and working-class Americans.
Consider the “carried interest tax loophole,” a special deal that exempts the fund managers who bankrolled the ad from paying the 35 percent income tax on the bulk of their compensation. Romney’s top donors instead pay a much lower 15 percent, and leave the middle class to pick up the $10 billion tab. A hedge fund manager with $100 million in gains could save as much as $25 million in taxes — not a bad return on the investment in Romney’s candidacy.
As consumers were taking it on the chin at the gas pumps this spring, oil speculators profited from the price spikes. And worse, a leaked document showed the new profits were funneled directly into ads attacking President Barack Obama for trying to close tax subsidies for big oil companies — thanks to Citizens United. This Orwellian twist was lost on most voters, because there’s no obligation to disclose the donors behind these attacks.
Before Citizens United, corporations were banned from making contributions to candidates running for federal office, and individuals were limited in how much money they could contribute. Citing this decision, an appellate court then effectively removed any limits on individual or corporate contributions to candidates, by allowing this money to go to groups clearly identified with the candidate. The court reasoned that contributions given to outside organizations could not be corruptive in the same way that money given directly to the candidates can be.
Now, super PACS are actively accepting unlimited contributions from individuals, unions and corporations. The vast majority of Americans have never had the influence of the powerful — but what was once an uneven playing field now resembles Mount Everest.
A Congress elected by the people can take immediate steps. The DISCLOSE 2012 Act will require super PACs to list their top donors as part of any advertisements and provide for more timely disclosure of all donors after large expenditures.
But the larger burden lies with the Supreme Court. A majority of its nine justices now or in the future must reclaim our democracy from the highest bidder and hand it back to the American people. This tightly rigged political process will only exacerbate the growing insecurity of our working and middle class.
This elections season, we would all be wise to tune out the flood of nasty political spots. But we must not ignore the buying and selling of influence it represents — and how this system silences the voices of the American people.
By: Tom Perriello and Amy Rosenbaum, Politico, May 29, 2012
“The RNC Can Thank John Roberts For A Job Well Done”: GOP Super PACs Dominate Early Ads With Lies
The five Republican stooges on the Supreme Court must be very happy. They clearly hoped to give Republicans an advantage in future elections when they took the extreme judicial activist measure in the Citizens United v. FEC decision of overturning a major chunk of the McCain-Feingold campaign finance–reform law. By opening the floodgates to unlimited secret corporate contributions, they figured that they would help the party of corporate cronyism outspend Democrats. So far, they are being proven right.
The most recent financial disclosure reports released by the Federal Elections Commission over the weekend show conservative Super PACs heavily out raising and outspending liberal ones. And while President Obama will be able to compete financially because his campaign will raise plenty of money on its own, Democrats may be at a serious disadvantage in down ballot races where candidate fundraising is considerably lower and a national Super PAC can deluge a small media market with misleading negative advertisements and mailings.
“Conservative interest groups have dumped well over $20 million into congressional races so far this year, outspending their liberal opponents 4 to 1 and setting off a growing panic among Democrats struggling to regain the House and hold on to their slim majority in the Senate,” reports the Washington Post. “The money could be particularly crucial in races below the national radar that can be easily influenced by infusions of outside spending.”
So far this money is being used to drive the future Republican caucuses in the House and Senate further to the right. From the Post:
One example came this week in Nebraska, where a dark-horse Republican Senate candidate upset two better-funded rivals in the GOP primary thanks in part to a last-minute, $250,000 ad buy by a billionaire-backed super PAC. And in Indiana this month, veteran Sen. Richard G. Lugar was ousted in the GOP primary by challenger Richard Mourdock with the help of millions of dollars in spending by conservative groups. The Club for Growth, which backed a losing candidate in Nebraska, spent more than $2 million to help Mourdock in Indiana.”
Up until now there were other theoretical explanations—besides the obvious one, which is that it pays to be a tool of the rich and powerful—for why Republicans had so much more Super PAC money than Democrats. Initially Republicans supported the Citizens United Supreme Court decision that created Super PACs and Democrats, especially President Obama, did not. So Republicans jumped out to an early lead in Super PAC fundraising, which allowed them to vastly outspend Democrats in close congressional races in 2010. Then in 2011 and early 2012, Republicans were engaged in a competitive presidential primary while Democrats were not, and Super PAC spending was heavy on behalf of candidates such as Mitt Romney and Newt Gingrich but not President Obama. Obama gave Democratic donors the green light to pour money into the Priorities USA Super PAC, but it has not kept pace with its Republican counterparts. The Huffington Post reports, “The group has raised $10.57 million since being founded in 2011, far behind the $50-plus million raised by Restore Our Future and the $28 million raised by American Crossroads.”
But they aren’t anywhere near parity yet and they may never reach it. The reason is obvious. Republicans represent the narrow economic interests of entrenched wealth and privilege, while Democrats advocate for a stronger social safety net and reduced inequality. This has always given Republicans some advantage in fundraising, since the wealthy will obviously give more than the poor or middle class. But the wealthy are also fewer, and their donations were limited to reasonable maximums by campaign finance law, while corporations were banned from giving to candidates. Now that corporations and billionaires have a vehicle for unlimited donations, just one of them can give more than if millions of Americans each donated their entire savings. Giving to Republicans can turn a profit when they are elected and fulfill their promises to crush collective bargaining, quash environmental and workplace safety regulations, and cut taxes. So corporations and their wealthy owners have an incentive beyond mere ideology to give heavily.
And so the partisan disparity in Super PAC spending on congressional races from 2010 is being recreated in 2012. During the Republican presidential primaries in some states, Super PAC spending on advertising outstripped spending by the campaigns themselves. As the New York Times notes, “Through the middle of May, Restore Our Future had spent more than $44.5 million on advertising, direct mail and other advertising, roughly double what Mr. Romney’s campaign had spent during the same period.” If that holds true in the general election, it will favor Republicans, especially in down ballot races, immensely.
These advertisements that conservative Super PACs buy, which are nominally about educating the public rather than electing candidates, are in no way educational. In fact, much like Fox News coverage, which often repeats the claims these ads make verbatim and without fact-checking, they are primarily focused on spreading lies.
Consider the recent ad buys, including one of $25 million, by Crossroads. In April Crossroads released an ad attacking Obama for being an unserious “celebrity” who appears on late night television while the country goes to Hell. Its statistic to burnish this dark view: “Survey: 85% of New College Grads Move Back in with Mom and Dad.” What survey? It turns out, according to Politifact, that the survey in question was the product of an obscure and now defunct firm that will not divulge any information about its methodology. But the firm’s director did say the survey was done “years ago” and is therefore not appropriate for use in an ad on the current president’s record in office. A March 2012 report from the Pew Center found 42 percent of college graduates 18 to 29 years-old living at home. The ad earned a “false” rating from Politifact.
And the ad that is getting $25 million worth of airtime? Factcheck.org finds its central claim to be “almost entirely false.” They write:
The latest multimillion-dollar attack ad from Crossroads GPS claims President Obama broke a promise to not increase taxes for families making less than $250,000 a year. That’s almost entirely false.
The truth is that Obama repeatedly cut taxes for such families, first through a tax credit in effect for 2009 and 2010, and beginning in 2011, through a reduction in the payroll tax that is worth $1,000 this year to workers earning $50,000 a year. And while it’s true that some tax increases contained in the new health care law would fall on individuals, they have mostly not taken effect yet and are small compared with the cuts the president already enacted. And this ad exaggerates them greatly.
The other claims in the ad are judged by Factcheck.org to be “misleading,” and you can read their full debunking here.
Of course, Super PACs are legally barred from coordinating with campaigns and there is the possibility, remote as it may be, that some Super PAC spending can do more harm than good. Last week Romney condemned a plan by billionaire investor Joe Ricketts to run a $10 million ad campaign tying President Obama to the inflammatory statements of his former pastor Jeremiah Wright. As Politico notes:
The risk from rogue third-party groups is a potential menace to both Republicans and Democrats. The GOP has seen more super PACs and 501(c)(4) groups form to support its candidates, but there’s nothing to stop an individual liberal gazillionaire from commissioning ads on a subject the Obama campaign doesn’t want to talk about — say, Mitt Romney’s Mormon faith. And rogue ads could create friendly fire as much as score points against the opposition, as the official GOP’s repudiation of the Ending Spending plan showed.
But that too can be a blessing as much as a curse. Draft dodger George W. Bush disassociated himself with the Swift Boat Veterans for Truth smearing of war hero John Kerry’s record of service in Vietnam. But Bush benefited enormously from the widely repeated claims in the ads. Even news stories debunking the falsehoods peddled by the Swift Boat group may have reinforced negative images of Kerry. Certainly it put him on the defensive. Indeed, this outsourcing of attacks—with a wink and a nudge—has been around almost as long as television commercials for candidates. The most famously effective attack ad in recent presidential politics, the 1988 commercial blaming Massachusetts Governor Michael Dukakis for a murder committed by a convict named Willie Horton who was out of prison in a furlough program, was not actually paid for by Dukakis’ opponent, George H.W. Bush, but by an outside group. Romney may have ultimately benefited from the opportunity to remind voters of Obama’s inflammatory pastor without having to do so himself.
However the specifics of each ad play, it is clear that overall the flood of money from billionaires and corporations into campaigns is helping one party more than the other. The RNC can thank John Roberts for a job well done.
By: Ben Adler, The Nation, May 22, 2012
“How John Roberts Sold The American People Out”: There Is No Public Benefit From The “Moneyed Interests”
Jeffrey Toobin’s New Yorker masterpiece “Money Unlimited: How Chief Justice John Roberts Orchestrated the Citizens United Decision” is required reading for anyone concerned with one of the central problems plaguing the functioning of American democracy: the influence of corporate spending on the political process.
If you’re impatient, you can skip ahead to the last, chilling line: “The Roberts Court, it appears, will guarantee moneyed interests the freedom to raise and spend any amount, from any source, at any time, in order to win elections.” And from there, you can make your own decision about whom to vote for this November, based on the direction that the Supreme Court is currently headed.
But a full reading of Toobin’s article is essential for understanding the larger context. The fight over whether and how to limit corporate spending on elections in the United States goes back more than a century. The battle lines are well-drawn, the sides well-established: “progressives (or liberals) vs. conservatives, Democrats vs. Republicans, regulators vs. libertarians.” The libertarian/Republican/moneyed interest side is currently in ascendence, but this is a long, long struggle, and the pendulum must one day swing back.
What’s so amazing, however, coming at this particular point in American history, right after Wall Street blew up the global economy, is the justification given by Justice Anthony Kennedy in his opinion announcing the decision.
“The censorship we now confront is vast in its reach,” Kennedy wrote. “The Government has muffled the voices that best represent the most significant segments of the economy. And the electorate has been deprived of information, knowledge and opinion vital to its function. By suppressing the speech of manifold corporations, both for-profit and nonprofit, the Government prevents their voices and viewpoints from reaching the public and advising voters on which persons or entities are hostile to their interests.
The implications of this passage are breathtaking. In his rush to protect free speech, on the grounds that there is a public benefit in protecting the right of corporations to spend freely to advise voters “on which persons or entities are hostile to their interests,” Kennedy and four other justices ensured that “moneyed interests” would essentially be able to buy government support for an agenda defined by corporate priorities. How any intelligent person could believe that skewing political messaging toward the sector of American society with the most cash to spend could be in line what the founders of the United States would have believed prudent is simply mind-boggling. We’ll end up paying the price for this sellout for generations to come, but unlike Wall Street, we can’t afford it.
By: Andrew Leonard, Salon, May 21, 2012
Poor Timing On Mitt Romney’s “Frugal” Habits
The New York Times has a feature piece today on Mitt Romney’s “thrifty habits.” Apparently, the guy considers himself pretty cheap.
It was a stark sign of the tug of war, still evident in Mr. Romney’s life, between an instinctive, at times comical frugality, and an embrace of the lavish lifestyle that accompanied his swelling Wall Street fortune.
Mr. Romney, 64, has poured $52 million of his own money into campaigns for the Senate and the White House, but is obsessed with scoring cheap flights on the discount airline JetBlue.
He has acquired six-figure thoroughbred horses for his wife, Ann, yet plays golf with clubs from Kmart. And he has owned a series of multimillion-dollar homes, from a lakefront compound in New Hampshire to a beach house in California, but once rented a U-Haul to move his family’s belongings himself between two of the vacation retreats.
For the record, if a guy spends $12 million on one of several luxurious mansions, and then rents a U-Haul to move belongings himself, I’m not sure “frugal” is the right adjective.
In any case, the timing of the piece is unfortunate. The article invests 2,000 words in making the case that Romney “has never become entirely comfortable with his own wealth,” and is one of those guys who just doesn’t like to open his wallet, but the article went to print just as Romney was willing to drop $10,000 on a bet over a fairly obscure point during a nationally-televised debate.
As a rule, thrifty individuals don’t throw around five-figure wagers on a whim.
There was also this tidbit:
The Romneys lived in an affluent suburb, Bloomfield Hills, with a housekeeper and two refrigerators in the kitchen. But George Romney still required his children to mow the lawn, shovel snow, rake leaves, weed the garden. “I know he worried that because my brother, sisters and I had grown up in a prosperous family, we wouldn’t understand the lessons of hard work,” Mitt Romney wrote.
I’m pretty sure this is the same guy who later hired a landscaper that relied on undocumented workers and told the company, “Look, you can’t have any illegals working on our property. I’m running for office, for Pete’s sake, I can’t have illegals.”
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, December 11, 2011
Why Americans Think Politics Is Corrupt
After living in Massachusetts, I left the Northeast for the first time to go to grad school at the University of Minnesota. While I lived in the Twin Cities, the Democratic Farmer-Labor Gov. Wendell Anderson was re-elected to a second term. At the beginning of his new term, the governor created a crisis in the Land of Ten Thousand Lakes by making one of his money guys a member of his cabinet.
Coming from Massachusetts and being used to the hurly burly of Bay State politics, I found this scandal surprising. After all, back home there would have been an uproar if the governor hadn’t appointed his financial contributor to the cabinet. But Scandinavians brought a good government ethic to Minnesota. Massachusetts is Massachusetts. In the Bay State political deals are sealed with cash. The last three speakers of the Massachusetts House of Representatives have all been convicted of corruption.
In the last couple of decades, American politics has become a lot more like Massachusetts politics and a lot less like Minnesota’s. There was a time, long ago and far away when people frowned on the appearance of impropriety. Now politicians don’t even seem to care about actual impropriety.
Political pursuit of the almighty dollar is why voters have so little trust in Congress to do the right thing. As a radio talk show host, I hear over and over again from my listeners that legislators are in the tank with big business. I don’t share this skepticism since I have worked with many men and women of great integrity as a political consultant. But perception is reality in politics and as long as people believe that politicians are trading their votes for cash, Americans won’t have any confidence in Congress. And in a democracy, the process will only work if the people trust the system.
The only effective way to restore public trust in politics is to get big money out of the system. The best solution would be public funding of campaigns. But that’s not realistic now since the Supreme Court opened the financial floodgates last year in its infamous Citizens’ United decision. Because of the Court’s ruling, voters will be at the receiving end of a hurricane of violently negative campaign ads over the next year which will destroy whatever is left of public trust in government.
The next best remedy to restored trust in government is to force the networks and individual TV and radio stations to give free time to political candidates. The networks receive billions of dollars in federal freebies every fiscal year since stations do not have to pay for the right to use public airwaves. It’s time for the media to make the same kinds of sacrifices that working families are making to keep this country strong.
By: Brad Bannon, U. S. News and World Report, December 2, 2011
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