Mitt Romney’s “Cold-Blooded Brothers”: Wall Street Backs One Of Its Own
Bankers are supposed to be the personifications of economic reasoning, but anyone looking at the financial reports of the presidential candidates and super PACs that have come out this week might conclude that there’s more to their political calculations than dollars and cents. Indeed, what these reports fairly shout is that Wall Street’s political picks have been swayed by offended egos and tribalism.
Of course, there’s a straight dollars-and-cents rationale for the bankers’ flight from Barack Obama to Mitt Romney. Obama wants to raise taxes on the rich; Romney wants to lower them. But the sheer extent of Wall Street’s support for Romney suggests that there’s even more in play than that. As Sam Stein and Paul Blumenthal of the Huffington Post have documented, Goldman Sachs employees, who gave Obama more than a million bucks in his first White House run, gave Romney $106,000 in the final quarter of 2011 and Obama just $12,000. Citigroup’s bankers, who gave Obama $730,000 in 2008, gave him just $3,842 in the last three months of 2011, while lavishing $196,000 on Romney. At Blackstone Private Equity, whose chair, Steven Schwarzman, compared the administration’s (tepid) efforts to raise taxes on private-equity firms to Hitler’s invasion of Poland, employees gave Obama just $7,618 while Romney raked in $90,750.
By one measure—the current popularity of Wall Street—Romney picked a poor year to likely become the first presidential nominee to hail from finance. But precisely because Wall Street is (finally! rightly!) under attack as it has not been since the early 1930s, Wall Street is looking for its own political champion as well as economic guardian, and Romney certainly fits the bill. And because Wall Street—both its people and its companies—can donate more than ever before, thanks to Citizens United, Romney also picked a very good year to run: His brethren can give him more than they could in any previous election.
The extent of their Romney support—and, as a corollary, the narrowness of Romney’s funding base—really becomes clear in the financial reports of Romney’s super PAC, set up by his backers to fund all those negative commercials that Romney himself wouldn’t want to endorse. By the end of 2011, it had raised $30.2 million from just 265 donors. Ten million of that came from just ten donors, each contributing a million apiece. Of the eight donors who are identifiable, as a New York Times article by onetime Prospect writing fellow Nick Confessore and Michael Luo documented, six are hedge-fund or private-equity executives. With a base like that, what are the odds that a President Romney is going to scrap the carried interest tax break?
The financial sharpies aren’t just giving to Romney, of course. Texas leveraged-buyout-operator Harold Simmons, who provided most of the funding for the swift-boating of John Kerry in 2004, is back. Last year, he ponied up a cool $7 million for Karl Rove’s American Crossroads super PAC. And casino tycoon Sheldon Adelson and his wife have kept Newt Gingrich’s campaign afloat by showering $10 million on the pro-Newt super PAC.
The big money is mobilizing against Obama, and it would be a mistake to assume that Obama will be able to outspend Romney come next fall. In the final quarter of 2011, Romney and the Republican National Committee raised $93.4 million while Obama and the Democratic National Committee raised $68 million, according to a story in The Wall Street Journal.
For Mitt Romney, it is the best of times; it is the worst of times. The public really dislikes big-time bankers, big-time shadow bankers most of all. Meanwhile, big-time bankers, and big-time shadow bankers in particular, like Mitt Romney, their very own big-time shadow banker, and thanks to Citizens United are able to shovel him more money than ever before. He’s their blood and they are his—cold-blooded brothers to the end.
By: Harold Meyerson, The American Prospect, February 3, 2012
Who Needs “Poor People”: Records Show How Wealthy Shape Presidential Race
Groups known as “Super PACs” raised more than $42 million to back Republican U.S. presidential contenders in 2011, according to campaign filings that show how new donation rules are allowing a relatively few wealthy Americans to shape the race.
The reports filed with the Federal Election Commission (FEC) late on Tuesday offer a vivid picture of the impact of a 2010 U.S. Supreme Court decision that allows unlimited donations to political action committees (PACs), groups that are legally separate from the candidates they support.
The reports showed why the Super PAC supporting Republican frontrunner Mitt Romney, called Restore Our Future, has been such a force in the campaign – largely by running attack ads against Newt Gingrich, Romney’s top Republican rival.
Restore Our Future hauled in $30 million in 2011, and had nearly $24 million in the bank at the end of the year.
The group spent a big chunk of that during the past month in Florida, where its ad barrage against Gingrich was widely credited with helping Romney to victory in Tuesday’s primary. Florida was the latest contest in the state-by-state battle to pick a Republican nominee to challenge Democratic President Barack Obama in the November 6 election.
The pro-Romney group’s bankroll dwarfed the PACs supporting other Republican contenders, as well as the group that backs Obama. Priorities USA, the pro-Obama group, raised $4.2 million last year and had $1.5 million in the bank on December 31.
The funding disparity between the groups suggests the PAC supporting Romney could help the former Massachusetts governor overcome the Obama campaign’s formidable fund-raising advantage if the two meet in November’s general election. Contributions to candidates’ campaigns are limited to $2,500 per donor.
Obama’s organization continued its dominance in the race for cash among candidates’ campaigns, raising $130 million for the year. That topped the Romney campaign’s $57 million, which led the Republican presidential field.
Tuesday’s filings also revealed the growing warchests that independent Republican groups are building with the presidential and congressional races in mind.
American Crossroads and its affiliated group, Crossroads GPS, raised a total of $51 million in 2011.
“A HUGE EFFECT ON THE RACE”
Super PACs were forged from the 2010 Supreme Court ruling that erased longstanding limits on corporate and union money in federal elections as an unconstitutional restriction of free speech.
The ruling unleashed a flood of money into a political system coming off the most expensive presidential election in U.S. history in 2008, when candidates spent more than $1 billion. It also opened the door for wealthy individuals to prop up candidates by writing a check.
“Super PACs have fundamentally changed the way campaigns are run, and it’s had a huge effect on the race,” former Michigan Republican Party chairman Saul Anuzis said. “If you can find one donor who is willing to play in a big way, it can have an unbelievable impact.”
For the first time, the FEC reports revealed many of the wealthy donors behind the Super PACs.
Harold Simmons, a billionaire Dallas banker and chairman of Contran Corp, gave American Crossroads $5 million and Gingrich’s group $500,000. Contran gave another $2 million to the Crossroads group.
Peter Thiel, billionaire co-founder of the payment service PayPal, gave the Super PAC backing Texas congressman Ron Paul $900,000. Foster Freiss, a billionaire investor from Wyoming, founded the Red, White and Blue Fund that backs former U.S. Senator Rick Santorum and donated $331,000.
The reports did not include the donations by billionaire casino owner Sheldon Adelson and his wife, Miriam, who poured a combined $10 million – $5 million each – into the pro-Gingrich group in January, after the period covered in Tuesday’s reports.
One of Adelson’s step-daughters gave Gingrich’s group $500,000 in 2011, and another gave $250,000, the reports showed.
The first check from the Adelsons came as Gingrich headed into a critical showdown with Romney in South Carolina. It helped pay for a movie and ads criticizing Romney’s work as head of the private equity firm Bain Capital – an issue that helped propel Gingrich to a big South Carolina upset victory.
By last weekend, the pro-Gingrich PAC had spent a total of $8.5 million – much of it, it appears, from the Adelson family.
‘SUPER-RICH PEOPLE’
“Super PACs are allowing a relative handful of super-rich people to have a disproportionate and magnified influence on elections,” said Fred Wertheimer, president of Democracy 21, a watchdog group dedicated to reducing the influence of money in politics.
Super PACs and other outside groups spent about $42 million on the presidential race through the end of January, according to independent expenditure reports filed with the FEC. Romney’s group has spend more than $17 million, compared with $8.5 million for Gingrich.
The filings also shed light on the scrambling by supporters of former House of Representatives speaker Gingrich in recent weeks.
Gingrich’s allies at Winning our Future raised just $2.1 million in 2011. But like Romney’s Super PAC, it raised and spent millions more in January. Much of that money went toward attack ads in South Carolina and Florida.
The flood of money drowned Gingrich in negative ads in Florida, where Romney’s Super PAC outspent Gingrich’s group by nearly 3-to-1 and aired ads questioning his conservative credentials, record in Congress and temperament as a leader.
Romney won Florida easily on Tuesday, beating Gingrich by about 15 percentage points to take a big step toward winning the Republican nomination.
“If you look at it in the simplest way, the role of the Super PACs has been to prop up candidates who in the past would have been forced out of the race because they ran out of resources,” said Anthony Corrado, a campaign finance specialist at Colby College in Maine.
The pro-Romney Super PAC fired back in Florida with a withering barrage of attacks on Gingrich as a Washington insider who peddled his influence to make $1.6 million from mortgage giant Freddie Mac.
Those attacks, and two strong debate performances by Romney, halted Gingrich’s momentum and fueled Romney’s runaway win in Florida on Tuesday.
SHADOWING THE CAMPAIGNS
The only restriction on Super PACs is that they are not allowed to coordinate their actions with the candidates they back. Romney has cited the restriction repeatedly when he has been asked to tell his Super PAC to pull down controversial ads.
In reality, however, most of the Super PACS are run by former staffers for the candidates who know what works for the campaigns without being told.
“I’ve known Newt for 12 years. I can dance with the campaign without coordinating with the campaign,” said Rick Tyler, a longtime Gingrich staff member who now runs the pro-Gingrich Winning Our Future group.
“I’m carefully watching what he’s saying in the public record,” he said. “It’s not hard for me to follow.”
Gingrich has been the target of more than $16 million in negative ads, while $5 million has been spent to hammer Romney, the FEC reports said.
The $57 million raised by the Romney campaign led the Republican candidates in the money chase in 2011. Gingrich raised nearly $13 million and Texas Governor Rick Perry, who has dropped out of the race, raised nearly $20 million.
By: John Whitesides, Reuters, February 1, 2012
Unlimited Contributions Give “Super PACs” Power To Change Presidential Race
With the South Carolina primary less than a week away, residents of the state are being bombarded with a barrage of political advertisements funded by Super PACs.
“It’s coming in fast and furious,” said Randy Cable of South Carolina’s conservative talk radio station WORD.
Cable said that Super PACs are buying up a majority of his station’s air time.
“They’re a game changer,” Cable told Rock Center Special Correspondent Ted Koppel in an interview scheduled to air Monday night.
This election season is the first presidential race to feel the influence of Super PACs, political action committees that can receive unlimited money from individuals, corporations and unions. Some of these Super PACs have morphed into powerful outside organizations working solely on electing a presidential candidate of their choosing. While a campaign supporter can only donate $2500 directly to a presidential candidate, he or she can donate unlimited amounts of money to a Super PAC supporting the same candidate.
“The Super PACs are outspending the candidate committees two to one at this point in time,” Cable said. “The ones that are buying the most [air time] are going to have the biggest impact. You know, just like in the world of business and advertising, politics goes the same way. Those that spend the most have the biggest impact.”
Every major GOP presidential candidate has a Super PAC supporting their campaign. Super PACs are supposed to operate independently of the candidates, meaning they can’t communicate directly with the politicians and their campaign staff. Super PACs have been effective even with the communication barrier, because they are often run by people who already know how the candidates think. A look at whose running the Super PACs reveals a roster of former staffers and advisers to the presidential candidates.
Carl Forti, a former political director for Mitt Romney, helped launch the ‘Restore Our Future’ Super PAC in 2010. The Super PAC supports Romney’s campaign for president.
Koppel asked Forti, “Some of the research I’ve read on you and your organization suggests that you may by the end of this political year have spent four hundred million dollars on the campaign. Is that fair? Does that seem reasonable?”
Forti responded by saying, “Potentially. Well, that seems a little high probably, but between the different entities it may be three hundred, three-fifty.”
Of those criticizing the millions raised by Super PACs, Forti said, “There’s a lot of criticism leveled at Super PACs, but we’re just operating under the laws as provided.”
The Citizens United Supreme Court decision in 2010 allowed the unique political action committees to form. In the case of Citizens United against the Federal Election Commission, the Supreme Court ultimately ruled that the government could not limit political spending by corporations.
Some of this election year’s most negative advertising has come from Super PACs, giving candidates a way to effectively attack an opponent without having the blame pinned directly on them.
At a press conference held Monday morning in South Carolina, Republican presidential candidate Jon Huntsman cited the negative tone of this year’s campaign when he announced he was dropping out of the race.
“This race has degenerated into an onslaught of negative and personal attacks not worthy of the American people and not worthy of this critical time in our nation’s history,” Huntsman said.
Political analysts say that an anti-Newt Gingrich ad run by ‘Restore Our Future’ during the lead-up to the Iowa Caucuses significantly impacted Gingrich’s one-time lead. Gingrich finished fourth in the caucuses.
“We learned in Iowa, if you unilaterally disarm, you might as well not run. If you allow other candidates to have a scorched earth, multimillion dollar ad campaign and there’s nothing that responds, they simply, by constant defamation drive you down,” Gingrich told Koppel.
Following Gingrich’s finish in Iowa, a Super PAC supporting the former Speaker of the House called ‘Winning Our Future,’ received a $5 million donation from wealthy casino owner Sheldon Adelson. In South Carolina, ‘Winning Our Future’ has launched anti-Romney advertisements.
While Gingrich has publicly denounced the negative advertisement, the Super PAC supporting him continues to run the ad that paints Romney as a greedy businessman and attacks his record from his days at venture capital firm Bain Capital.
“We’re now entering a world where until the laws are changed, every serious campaign will have one or more Super PACs. They will spend an absurd amount of money and it will virtually all be negative. That’s a fact,” Gingrich said. “Given the playing field right now, you have no choice.”
The power of the Super PAC has been mocked by comedian Stephen Colbert, host of Comedy Central’s ‘The Colbert Report.’ Colbert created his own Super PAC and recently handed over control of it to Jon Stewart, renaming it ‘The Definitely Not Coordinated with Stephen Colbert Super PAC.’
Colbert handed over control to form an exploratory committee about a possible presidential run in South Carolina. His Super PAC also launched a satirical anti-Romney advertisement that likened the former Massachusetts governor to a serial killer, implying that Romney killed businesses.
Colbert talked to Koppel shortly before he relinquished control of his Super PAC.
“It would be stupid to be in the 2012 campaign or want your voice heard in the 2012 campaign and not have a Super PAC,” Colbert said. “I mean, the RNC, the DNC, those organizations really don’t mean much anymore. Karl Rove has more money than the RNC.”
Back in South Carolina, the advertisements seem to be getting nastier by the day as the million dollar donations continue to pour in.
“These Super PACs don’t have reputations to protect, so I think that there is a tendency for them to get nastier in the ads that they run and they don’t have the same restraints operating on them as candidate committees do,” said Ellen Weintraub, a commissioner for the Federal Election Commission.
Weintraub and the FEC are tasked with regulating the Super PACs. Weintraub said that a key difference between the PACs and the candidate committees is that the Super PACs do not have to disclose their donors as often. The first time that many of the Super PACs will disclose their donors will be at the end of January, which means that voters will have cast their vote in several key primaries before knowing who is behind the advertisements that flooded their televisions and radios.
“At some point, you have to step back from the regulations, you know, take your face out of the book and see the forest for the trees,” Weintraub said. “And I think for a lot of people out there, seeing the massive amounts of money that are being raised and spent by groups in the candidates’ names effectively on the outside, and seeing that these groups do appear to have some kind of connection to the candidates. I think it’s going to raise a lot of questions for the public.”
So how do political advertisements get so nasty? Unlike consumer advertisements, political ads do not have to be vetted by the Federal Trade Commission.
“I mean it’s actually more difficult to sell somebody white bread than it is to sell a president getting into the White House,” said Linda Kaplan Thaler, an advertising executive.
Thaler is behind campaigns like Wendy’s advertising campaign and the Toys R’ Us popular jingle, ‘I Don’t Want to Grow Up.’ Thaler said that when it comes to consumer advertising, it’s about building a love for the brand. With politicians, it’s different.
“You know, when it comes to politics, it’s not so much about, you know, that I have to love the candidate I’m voting for. It’s very often, I have to dislike him the least,” Thaler said.
By: Jessica Hopper, Rock Center, January 16, 2012
For “A Government That Represents All The People”, Overturn Citizens United
In America today, the top 1 percent earns more income than the bottom 50 percent and the wealthiest 400 individuals own more wealth than the bottom half of the country–150 million Americans. We have the most unfair distribution of wealth and income of any industrialized country.
In America today, the middle class is largely disappearing while the rich and largest corporations are doing phenomenally well. Meanwhile, despite a $15 trillion national debt, the effective tax rate for the top 1 percent is the lowest in decades and many large corporations enjoy huge tax loopholes and pay little or nothing in taxes.
In America today, while insurance companies and the pharmaceutical industry enjoy large profits, 50 million Americans lack health insurance, and we are the only major country on Earth that does not provide healthcare to all as a guaranteed right.
All of these disturbing American realities, and many more, are related to the sad fact that the Washington political establishment is much more interested in representing the wealthy and the powerful than the needs of ordinary Americans. Why is that? The answer is simple. We have a horrendous campaign finance system in which Big Money is able to elect the candidates of its choice and defeat those who oppose its agenda.
The absurd Citizens United Supreme Court decision makes a bad situation much worse. Now, corporations can go right into their treasuries, set up super PACs, and spend as much as they want, without disclosure, on political advertising. This gives the Big Money interests even more power over the political process. It makes it harder and harder for the voice of the average American to be heard.
If we are serious about giving ordinary Americans the power to control their political future, we must overturn the Citizens United decision, eliminate super PACSs, and move toward public funding of elections. Our goal must be a government that represents all of the people, and not just those wealthy individuals and corporations who can put millions into political campaigns.
By: Sen Bernie Saunders, Vermont; U. S. News and World Report Debate Club, January 13, 2012
Who Wants To Be A Millionaire?: “Current Presidential Race Has Demonstrated That A Million Dollars Is Nothing”
Back in the late-1950s there was a TV show called “The Millionaire” about a mysterious rich man, named John Beresford Tipton, who would anonymously give checks for $1 million to total strangers.
Usually, the recipient was a poor schlub who was over the top with joy until it turned out that the money didn’t buy happiness. Clearly, we were all better off in our humble homes, clustered around our 14-inch TVs.
I am bringing this up because the current presidential race has demonstrated that a million dollars is nothing — nothing — these days. Nothing! A million dollars is what they give you for designing the best pantsuit on a reality TV show.
Now, if you want to impress people, you have to be a billionaire, for sure. There are about 400 billionaires in the United States, and, while some of them are famous, like Bill Gates and Warren Buffett, many have profiles so low that their own families may not recognize them. Really, it could be the guy living down the block, if your block happened to contain a 30,000-square-foot Tudor with 10 bathrooms.
But even the humblest billionaire wants to be on the campaign trail this year. They’re everywhere. Rick Santorum has Foster Friess, a mutual fund manager who likes the fact that Santorum starts the day with 50 push-ups. (“That’s the kind of energy level that the Republican Party needs right now.”) Friess has vowed to give Santorum’s super-sized political action committee at least a million. Which certainly is the least he could do for all that exercise.
Newt Gingrich’s “super PAC” got $5 million from billionaire Sheldon Adelson, a casino owner, in what Adelson’s associates said was an act of friendship. I certainly hope so, since giving money to the Gingrich-for-president effort at this point is like betting that the New York Jets will win the Super Bowl. You would think that a casino owner would know what futile acts of desperation look like.
Jon Huntsman’s dad is a billionaire, which didn’t seem to help as much as you would think. (Once again: not buying happiness.) Mitt Romney is probably only a quarter-of-a-billionaire, which, in this company, is kind of the equivalent of playing the harmonica for lunch money on the street.
But it’s hard to be sure about Mitt’s wealth because he has refused to release his tax returns. This is something every major presidential candidate in recent history has done, but so what? If every major presidential candidate in recent history jumped off the roof, would you expect Mitt to do that? How many other major presidential candidates in recent history came from the business sector? How many drove to Canada with their family dog strapped to the roof of the car? So, really, stop with the sweeping generalizations.
Romney does appear to have more billionaire pals than anybody — 10 percent of all the billionaires in the country are already giving money to Mitt, including Sam Zell, Destroyer of Great Newspapers, and John Paulson, a hedge fund operator who made a killing in 2007 by betting against the housing market. Forbes, which put Paulson at No. 17 on its list of richest people in America in 2011, said he had made $4.9 billion in the preceding year.
People, how much TV time do you think a person like that could buy if he put his mind to it? Seriously, by September we could be seeing entire networks devoted to nothing but Mitt Romney. Every week, Mitt will solve crimes, save patients with extremely rare diseases, build a house for a deserving family, help Zooey Deschanel with her dating problems and win bids for abandoned storage lockers all around the country.
Not that President Obama won’t have enough money to buy a channel of his own, if he wants one. So far, the president is behind Mitt in the billionaire donor sweepstakes, but he is still doing fine, thank you very much. So well, in fact, that a spokesman for the re-election campaign has been forced to denounce the idea that Obama will raise $1 billion. There’s that number again.
All these billionaires would not be so worrisome if the Supreme Court had not totally unleashed their donation-making power in the Citizens United case. Gingrich, who loved that decision, was furious when Mitt’s rich friends chipped in to run anti-Newt ads in Iowa.
He declined to acknowledge that the two things had any connection whatsoever.
“In fact, this particular approach, I think, has nothing to do with the Citizens United case. It has to do with a bunch of millionaires getting together to run a negative campaign, and Governor Romney refusing to call them off and refusing to be honest about it,” he told MSNBC.
Except for the part where the law that the court overturned had to do with keeping a bunch of millionaires from getting together to run a negative campaign. But, really, if they’re only millionaires, how much harm could they do?
By: Gail Collins, Op-Ed Columnist, The New York Times, January 13, 2012
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