Money power and people power

The big new factor in the current election is not the Tea Party rebellion from below.  It is the corporate money revolution from above.

The game of politics has long been stacked to the advantage of corporations and multi-millionaires, but their advantage has been raised to a new level. The right-wing majority on the U.S. Supreme Court in its Citizens United decision earlier this year unleashed corporations to spend money without limit and in secret.  They lost no time in taking advantage of this ruling.

The Washington Post reported earlier this month on how the flood of corporate money is affecting the 2010 election campaign:

Interest groups are spending five times as much on the 2010 congressional elections as they did on the last midterms, and they are more secretive than ever about where that money is coming from.

The $80 million spent so far by groups outside the Democratic and Republican parties dwarfs the $16 million spent at this point for the 2006 midterms. In that election, the vast majority of money – more than 90 percent – was disclosed along with donors’ identities. This year, that figure has fallen to less than half of the total …

The trends amount to a spending frenzy conducted largely in the shadows.  The bulk of the money is being spent by conservatives, who have swamped their Democratic-aligned competition by 7 to 1 in recent weeks. …

Conservative groups such as Americans for Job Security and Crossroads GPS, an arm of the American Crossroads group, co-founded by former George W. Bush administration adviser Karl Rove, are organized as nonprofits and don’t have to disclose who is giving them money. Some liberal groups, such as the League of Conservation Voters, an environmental group, are also nonprofits but raise money on a much smaller scale.

One major player this year is the 60 Plus Association, an Alexandria-based group that bills itself as the conservative alternative to the AARP seniors group. In 2008, the group reported less than $2 million in revenue, most of it from direct-mail contributions.

This year the group has spent $7 million on election-related ads, according to its FEC reports. It also funded a $9 million campaign against Obama’s health-care overhaul in 2009.

Click on Washington Post for the full article.

Karl Rove, formerly chief political adviser to President George W. Bush, has promoted the organization of fund-raising groups under Section 501(c)(4) of the tax code, which allows “social welfare” organizations such as the Sierra Club or National Rifle Association to spend money on political campaigns without disclosing donors.  This is different from the Section 527 groups such as MoveOn, which do have to report their donors.

Two newly-created groups, American Crossroads and Crossroads GPS, have raised more than $50 million between them for attack ads and hope to raise $75 million by election day to use against Democrats.  American Crossroads reports the names of donors; Crossroads GPS does not.

The U.S. Chamber of Commerce is running attack ads mostly against Democratic candidates across the country.  The Chamber earlier announced a fund-raising a goal of $75 million to spend in the current election, twice what it spent in the previous mid-term.  The Chamber has foreign members, and President Obama and other Democrats have raised the question of whether foreign money is being used to influence the U.S. election.  The Chamber denies this, but refuses to open its records.   To me, that is a false issue.  It is not as if large corporations with headquarters in the United States have any loyalty to the U.S. national interest that sets them apart from foreign businesses.

Greg Sargent, a Washington Post blogger, observed:

Here’s something important that’s getting lost in the firefight over the money funding the ads by the U.S. Chamber and Karl Rove’s groups: Many of the ads themselves have been debunked by independent fact checkers as false, grossly misleading, or marred with distortions.

… . Thus far the media focus has understandably been on the flap over the White House’s foreign money charges. But there’s another big part of the story that’s going undercovered: The scope of the dishonesty and distortion that’s flowing from the conservative side of this debate.

Not only are the ads themselves getting widely debunked, but the justifications the groups are offering for the ad onslaught attacking Democrats (that liberals and labor do this too) are also demonstrably false or misleading. We’re witnessing a massive disinformation campaign flooding airwaves across the country that could change the outcome of major races and shift the balance of power in Congress, funded by money from undisclosed sources, justified with still more falsehoods and disinformation.

Click on The Plum Line for the full article.

The New York Times has a profile of the Iowa-based American Future Fund, started with seed money from Bruce Rastetter, chief executive officer of Hawkeye Energy Holdings, a big ethanol corporation.   It has raised $7 million for issue-related ads and has targeted 14 Democratic candidates, almost all of whom sit on congressional committees with a say over ethanol policy.  But as the Times concedes, it is hard to be certain of intention because everything is clouded in secrecy.

The problem is not that Team Republican has an unfair advantage over Team Democrat.  Democratic politicians are not angels, and have not been backward in soliciting corporate support. The two parties have rough parity in fund-raising for individual candidates and party organizations.

The Democrats were ahead of Republicans two years ago in support from Section 527 groups.  One reason they are behind in this election is that President Obama has discouraged contributions to independent groups, possibly for ethical reasons, possibly from a desire to control the message or maybe both.  This could very easily change in 2012 or after.  This is not the problem.

The problem is the holders of corporate wealth and power setting themselves up as virtually a fourth branch of government, with whom the elected representatives of the people have to seek permission to get anything done.  There was some accountability when donors to campaigns had to give their names, and candidates had to say “I approve this message.”  The combination of enormous wealth and anonymity is toxic, and it doesn’t matter whether it is exercised through Republicans, Democrats or both equally.

It might, in fact, be a good thing if the Republicans had such an advantage in fund-raising from major donors that the Democrats despaired of matching it.  This would force the Democrats to fall back on their base in organized labor, community organizations and the civil rights movement.

The struggle between money people and people power is built in to the structure of American democracy.  Money power has many built in advantages.  Money never sleeps. It never becomes apathetic, burned out, complacent, discouraged or distracted, and seldom is blind to its true interests.  But when the people wake up, their power can be irresistible.

Click on Campaign chart for an interactive chart showing how much is being spent and by whom in different election races.

Click on Republican congressional candidates race ahead in fundraising for the complete Washington Post article.

Click on Return of the Secret Donors for a New York Times report on the Chamber of Commerce, the American Action Network and Crossroads GPS.

Click on Conservative groups have spent up to $75 million in undisclosed funds, dwarfing left for a report on estimates by the nonpartisan Sunlight Foundation. [Added 10/23/10]

Click on Top Corporations Aid U.S.Chamber of Commerce Campaign for a New York Times report on who’s backing the Chamber of Commerce political effort.

Click on Rove, Chamber ads widely debunked for an analysis of the misleading content of their ads.

Click on Karl Rove group spends big in Election 2010, but is it legal? for a Christian Science Monitor article on a legal challenge to American Crossroads and Crossroads GPS.

Click on American Future Fund Spends Millions on Campaign for a New York Times profile of another active player in this fall’s campaign.

Click on Obama’s surrender on outside spending for a report on President Obama’s disinterest in encouraging independent activity by wealthy supporters.

Click on The Perfect Storm That Threatens American Democracy for commentary by ex-Secretary of Labor Robert Reich on what’s at stake.

Click on Tell all the truth, but tell it slant for an Obsidian Wings comment on contradictions between campaign figures reported by the New York Times and the Wall Street Journal.  The New York Times figures indicate corporate dominance in campaign spending; the Wall Street Journal’s different figures indicate that the Service Employees International Union is the top spender.  [Added 10/25/10]

Click on The spending we don’t know about for a Politico report on the difficulty of knowing who is spending what. [Added 10/25/10]

Click on Who’s the biggest outside spender of them all? for the Washington Independent’s analysis of the differences between the New York Times and Wall Street Journal reports. [Added 10/25/10]

Click on Companies that received bailout money giving generously to candidates to see who the beneficiaries of the TARP and auto industry bailouts are favoring. [Added 10/29/10]

Alex Isenstadt wrote in Politico that the influence of outside groups’ money may not have been as great as it seemed at the time.

A new study from the Wesleyan Media Project found that while outside groups spent slightly more on ads in House and Senate races in the 2010 cycle proportionately to the total amount invested in the campaign, their contributions represented only a small increase from 2000.

Despite the heightened attention on independent groups over the course of the campaign, according to the study, candidates and campaign committees actually drove most of the spending. By the time the final campaign ad aired, candidates and parties paid for 85 percent of all ads in Senate races and 88 percent of ads in House races.

“The initial evidence suggests that while interest groups were aggressive players in the air war, their impact may not have been as negative or as large as initially predicted,” writes Michael Franz, the study’s author and an associate professor of government and legal studies at Bowdoin College.

Click on POLITICO.com for the full article. [Added 1/18/11]

Greg Sargent of the Washington Post replied on his Plum Line web log that the secret money still matters.

During the 2010 cycle there were two separate and distinct arguments being made:

1) The first argument from Dems was largely political, in part to fire up their base and juice fundraising: The heavy spending of outside groups was unfairly tilting the playing field in a big way towards Republicans. That very well may have been overstated, though even if that spending was not quite as substantial as we thought, it forced the Dem party committees to shift money around in ways they might not otherwise have, so it also had an impact in that sense.

2) The second argument: The problem was not the outside spending itself, but that the sources of the money were being kept secret. This argument also had a political component: The goal was to portray the GOP as stooges of special interests with a secret and nefarious agenda. But at bottom it was more of a good-government case: Voters have the right to know who’s paying for ads that are trying to persuade them who to choose to represent them.

The validity of this argument is not undercut in any way by the claim that the outside money constituted a smaller percentage of overall spending than previously thought. Secret money in politics is wrong and corrupts our democracy, no matter how much of it is spent. This will soon be relevant all over again, since outside interests may well spend even more anonymous money in the 2012 cycle than they did last time around. This remains a very important issue.

So, yes, the secret money still matters.

Click on The Plum Line to read the full argument. [Added 1/18/11]

Tags: Democrats and Republicans, Money Power, People Power, Republicans and Democrats