Archive for the ‘Campaign Finance’ Category

Politics of the Oligarchs

Campaign FinanceimageFor most of the 20th Century, indeed for much of the history of our Republic, there was a consensus that money – particularly vast sums of money – had an inherently corrupting influence on American politics.

The intersection of money and politics, both at the fringes and at the center of our democracy, has often led to full-blown scandal. William Andrews Clark used his copper fortune to buy a U.S. Senate seat in Montana in 1899 by bribing state legislators. By today’s standards Clark’s “acquired” Senate seat was a real bargain. He reportedly spent only $300,000.

In the 1920′s money was at the core of the Teapot Dome scandal that sent a cabinet member to jail and forever defined Warren Harding’s administration as among the most corrupt in the nation’s history. In 1935 the nation’s electric industry, threatened by Franklin D. Roosevelt’s desire to break-up the great utility holding companies, mounted what was at the time the greatest (and costliest) lobbying campaign ever. The effort consisted of phoney “grassroots” lobbying of Congress financed by the then unheard of sum of $5 million. We know about this because a then little known Alabama Senator by the name of Hugo Black used a Congressional investigation to expose how the big money was gathered, laundered and spent to protect the utility monopoly.

Watergate, Abscam (the money and political scandal that serves as the basis for the Oscar-winning film American Hustle), Al Gore’s fundraising at a Buddhist temple, well, you get the point and we could go on-and-on.

With its latest ruling on political money, the United States Supreme Court (or more correctly five justices) further shredded the one-time consensus that too much money mixed up with politics is fundamentally bad for American democracy. The Court’s McCutcheon ruling now joins the historic case Citizens United, both written by Chief Justice John Roberts, in systematically eliminating constraints on money in politics. While Roberts’ McCutcheon ruling left in place individual limits on contributions to candidates and political action committees, one only has to read the opinion to see that those limits will eventually topple, too.

Justice Clarence Thomas voted with the Roberts’ majority in the McCutcheon case, but argued in a separate opinion that, amazingly, the Court hadn’t gone far enough. Thomas called the ruling “another missed opportunity,” and as Politico reported, said he would strike down all limits on campaign donations and that the state of the law will be unsatisfying incomplete until the court squares up to that issue. “Until we undertake that reexamination, we remain in a ‘halfway house’ of our own design,” Thomas declared. In other words, stay tuned.

The Sheldon Primary

Amid the general and persistent fog of American politics, the daily battle for the dominate soundbite, the buzz of the latest opinion poll, jobs report or health care enrollment number it is easy to miss what is happening right in plan sight. But, like the revelation Dorothy must have felt when she pulled back the curtain on the less-than-meets-the-eye Wizard of Oz, the direction of our politics – if you want to see it – was on display in stark relief a few days ago at the expensively tacky Venetian Hotel in Las Vegas.

It is a rich irony that the conservative majority on the Supreme Court knocked another brick out of the wall of campaign finance law just days after four of the likely Republican candidates for president next year were cooing and scraping in front of the $93 million dollar man – casino billionaire Sheldon Adelson.

In my distant memory there was a time when it was considered unseemly for a politician to audition, at least publicly, for the favor of a business mogul whose vested interests are so obvious. As Jonathan Alter points out in his New Yorker blog there is no secret as to what “the Sheldon primary” that recently featured the governors of New Jersey, Wisconsin, Ohio and the former governor of Florida was all about.

Adelson, who makes most of his money at a casino in Macau (which, if your geography is rusty is “a special administrative region” of the People’s Republic of China) wants no expansion of Internet gaming that might threaten his gambling halls and he wants two federal investigations of his operations to go away. He’d also like to name the next Secretary of State and dictate U.S. policy toward Israel and the Mideast. Give the guy credit for candor.

“I’m against very wealthy ­people attempting to or influencing elections,” Adelson told Forbes in 2012. “But as long as it’s doable, I’m going to do it.”

So here was Ohio Gov. John Kasich shamelessly and publicly sucking up to Adelson, the guy who single-handedly spent $93 million in 2012 attacking Mitt Romney’s tenure at Bain Capital, a generous gesture that kept Newt Gingrich in the GOP presidential race long weeks past his expired by date. As Kasich’s home state Cleveland Plain Dealer wrote, “Kasich, more so than any of his peers, drops all pretense” in his effort to kiss Adelson’s ring, or something. “He laces his 30-minute speech with direct appeals and shout-outs to the host with the most. Starting with the fifth or sixth, one national reporter loudly guffaws with each utterance of ‘Sheldon.’”

In John Roberts’ world rich guys like Adelson writing huge checks to politicians and the committees who support them is, in the words of Garrett Epps of The Atlantic merely “free speech” for rich guys. Millions in financial support from the deepest of the deep pockets is just “like volunteering to lick stamps at the campaign office; reclusive Nevada billionaires are just constituents, like the widow seeking her pension benefits; the desires of business executives are just beliefs, advanced in the way the Founding Fathers wanted—by writing big checks. Under this rationale, it is hard to see why direct-contribution limits should be allowed, and we may assume that cases soon to be brought will give the majority the chance to eviscerate those limits.”

Roberts’ reasoning equates Sheldon Adelson’s $93 million in political spending to my bumper sticker. It’s all a matter of free speech, says the Chief Justice, but obviously not at all about equal access to the political process or disproportionate influence over the lawmakers.

NBC’s Chuck Todd has documented how this “free speech” campaign has been going: “Political spending from outside groups – either created or bankrolled by American billionaires – has skyrocketed from $193 million in 2004 and $338 million in 2008,” Todd wrote recently, “to a whopping $1 billion in 2012, according to the Center for Responsive Politics. To put this $1 billion in outside spending in perspective, it’s almost TWICE what John Kerry and George W. Bush spent COMBINED in the 2004 presidential race ($655 million). And it’s THREE TIMES the amount John McCain spent in the 2008 election ($333 million). Another way to look at all of this money: Overall political spending on races (presidential plus congressional) has DOUBLED from $3 billion in 2000 to $6.2 billion in 2012. And in presidential races alone, the combined amount that George W. Bush and Al Gore spent in 2000 (about $250 million) QUADRUPLED to the combined amount Barack Obama and Mitt Romney spent in 2012 ($1 billion-plus). And that doesn’t count the political-party spending.”

My bumper sticker is sounding less and less important as, in reality, we turn electoral politics, once dominated by candidates and parties, into a free spending game for Sheldon Adelson and other billionaire oligarchs who have the money and the vested interests to increasingly dominate our elections. As long as it’s doable, as Sheldon might say, why not.

Ironically it was Newt Gingrich, the guy who benefited from the Adelson financed attacks on Romney’s private equity past, who said during the last campaign, “You have to ask the question, ‘Is capitalism really about the ability of a handful of rich people to manipulate the lives of thousands of people and walk off with the money?’” The answer, more and more, seems to be – yup.

“Watching events in Russia and Ukraine,” columnist Gail Collins writes, “you can’t help noticing all the stupendously rich oligarchs with their fingers in every political development. It’s a useful word, connoting both awesome power and a group you don’t really want to have around.

“In the former Soviet Union, the money elite generally get their power from the politicians. Here, it seems to be the other way around. But the next time casino zillionaire Sheldon Adelson invites the Republican presidential hopefuls to go to Las Vegas and bow before his throne, feel free to say they were just off honoring an oligarch. Apparently, the founding fathers would have wanted it that way.”

Truth be told the Founders wouldn’t recognize American politics today. They were tough, aggressive partisans to be sure, but they couldn’t have imagined a political process where a handful of extraordinarily well-to-do rich guys have been able to bend the system merely by spending lavish amounts of cash. In poll after poll, Americans express exasperation and cynicism about our politics. Millions don’t participate feeling that their vote – not to mention their voice  – doesn’t count. Younger Americans, in particular, see a rigged system built and maintained by the really wealthy to perpetuate themselves and their point of view.

If you think the American electorate is cynical now, just wait until all the campaign spending limits come off as the Roberts’ court take it upon itself to ensuring that more money from fewer people is the overriding and perhaps only decisive factor in our politics. Americans may not like Congress much these days, but one suspects they’ll like a bunch of well-heeled oligarchs calling all the shots even less.

The question then: will we change this trajectory and blunt the politics of the oligarchs or will we, as Gail Collins says, decide that “what this country really needs is more power to the plutocrats?”

The End of Spending Limits

1381180830000-XXX-McCutcheon-hdb3864Shaun McCutcheon (that’s him in the photo) is a wealthy guy; an electrical contractor from Alabama who is also a conservative political activist. The Supreme Court appears ready to give Shaun what he says he wants  – the chance to spend a great deal more of his money on candidates for federal office.

The Court heard arguments yesterday in McCutcheon v. Federal Election Commission, a sort of sequel to the 2010 Citizens United case that I’ve lamented here in months past. If the Court goes the way the questioning seemed to indicate yesterday one more big prop will be kicked out from under the American jumble of campaign finance laws and once again American democracy will most closely resemble a political version of “The Price is Right.”

Right now, ol’ Shaun is prohibited from contributing more than $123,200 to federal candidates and political parties in a two-year cycle. You might think that would be more than enough political spending for most of us and, of course, it is. But guys with lots of money, from the right and the left, like to participate in the political process because, well you know why they like to participate in the political process. If the Court rules his way Mr. McCutcheon will soon get to start writing checks to federal candidates – just buying good government, I know – for millions and millions every year.

As Charles Fried, who served as Solicitor General in the Reagan Administration noted recently in the New York Times, “Ever since the 1976 Supreme Court case Buckley v. Valeo, in which the court upheld limits on individual federal campaign contributions, every Supreme Court decision on this issue has been based on the distinction between money given to candidates — contributions — and money that individuals or organizations use for their own independent campaign-related expenditures.

“The underlying idea is that while the First Amendment prohibits the government from limiting your political speech (and the more you speak, the more you may have to spend), a contribution is money spent to help someone else speak. The government may not limit your own expression (and since Citizens United that applies to corporations and unions, too), but for almost half a century Congress has limited contributions without being challenged by the Supreme Court.”

Until now.

The Court’s efforts to further destroy limits on money in politics, at least after Citizens United, seems inevitable. Once you decide that the sky is the limit for the Koch Brothers or Bob’s Muffler Shop to spend money on independent political efforts then how can you logically – at least in the logic of the Robert’s Court – limit what Shaun McCutcheon can lavish in the way of cash on his Congressman and yours?

Two things above all stand out in this confluence of money, politics and policy. One is the unbridled willingness of the “conservative” Robert’s Court to trample on precedent and long-established law. The Citizens United decision tossed out 100 years of established law – law made by one branch of government and endorsed by a second – and substituted the wisdom of five appointed justices none of whom has ever held elected office. The expected next move will toss all or most of a law on the books for more than 40 years.

David Cole, writing in the New York Review of Books, makes the case that the current session of the Supreme Court may well see a host of established laws, including the candidate funding restrictions, upended by Roberts and his four like-minded colleagues. “In all of these cases,” Cole writes, “the real question is not whether the conservatives will win, but how they will win. (It’s conceivable that the liberal side will prevail in one or more cases, but most court observers think the odds are against it.) Moreover, in most of the cases, Justice [Anthony] Kennedy, usually the swing vote, has already aligned himself with the strongly conservative view, so the outcome is likely to turn on Roberts. If the Chief Justice and his Court proves to be Conservative, the term could end with a radical revision of established precedent in a host of constitutional areas. If the Court is simply conservative, the status quo precedents will remain intact. We’ll know by June 2014.”

So much for the notion of judicial restraint.

The second takeaway relates to the fact that no member of the current Supreme Court has ever been elected to anything. This is important, I think, because the justices – at least the five most consistently conservative justices – completely dismiss the arguments that unregulated money can and will lead to what the Washington Post’s Dana Milbank quaintly calls “legalized corruption.” Election law expert and law professor Richard L. Hasen says it just as bluntly: “The closer the money comes to the hands of members of Congress, the greater the danger of corruption and undue influence of big donors” and he say what the Court appears ready to do “will greatly increase the chances of a corrupt Congress.”

When U.S. Solicitor General Donald Verrilli suggested yesterday that the Court may have gotten it wrong in Citizens when it  dismissed “the risks of corruption from independent expenditures” Justice Antonin Scalia simply said, “It is what it is.” Very thoughtful.

What the definition of “is” is can simply be reduced to money purchasing political influence. And the bigger the purchase the bigger the influence. With the expected decision in McCutcheon it is possible that as few as 500 very, very rich Americans can finance all the costs of running for federal office for everyone running. In such a system the small $250 contribution from the retired couple or the small business owner ceases to matter. Why waste your valuable fundraising time connecting with what Justice Ruth Bader Ginsberg called “the little people” when you can raise a few hundred thousand with a couple of calls to civic minded guys like Shaun McCutcheon?

“If Scalia got out of his ideological echo chamber,” Dana Milbank writes in the Post, “he would discover that, encouraged by the court, wealthy conservatives donate to groups such as the Club for Growth and Heritage Action, which threaten to fund primary challenges to Republican lawmakers who show any ideological impurity. Because most Republicans are in safe seats (in part because of Supreme Court-sanctioned gerrymandering), the only threat to their reelection is in a primary — and so they have no choice but to obey the conservative billionaires’ wishes. The problem on the left isn’t as acute, but it’s only a matter of time before liberal billionaires execute a similar purge.”

It’s probably just a coincidence, but Politico reports today that the Koch brothers have given $500,000 to one of the shadowy outside groups that has lobbied Republicans to shutdown the government and threatened GOP “moderates” if they don’t hold fast to the defund Obamacare strategy. That kind of money going directly to candidates can’t be far away.

Reflect on this: the laws restricting the power of money and the impact on our politics of the few with “real” money were passed in the wake of serious political money scandals. The Court has already overturned one law passed in the wake of revelations that rich millionaires, like the notorious Montana Sen. William Andrews Clark, had bribed their way into the United States Senate. The law on trial in the Supreme Court this week was passed in the wake of Watergate, a case of political corruption that had at its heart political money. As sure as dawn follows the night political corruption most odorous is marshaling for the next huge scandal.

Former Solicitor General Fried reminds us that “Justice Scalia once wrote in another context, this argument is not a wolf in sheep’s clothing: ‘this wolf comes as a wolf.’ The only reason the Supreme Court would be tempted to let this wolf in is if the Court wants to see the destruction of all limits on an individual’s donations to a political candidate.”

Thanks to the United States Supreme Court more than ever the political money wolf is at democracy’s door.

Nothing Succeeds Like Excess

vivian-gordon-murder-walkerAnthony Weiner is so very, very New York. So is Alex Rodriguez the just suspended Yankee third baseman.  Even though they once called Arkansas home, Bill and Hillary Clinton are so very New York, too. They Clintons are spending August in the Hamptons don’t you know, while Hillary takes a little break from the $200,000 a speech circuit. Cashing in can be so tiring.

Don’t get me wrong, I love the biggest big city in the world. It’s the capitol of everything from food to finance, but New York is also the world center of entitlement and excess. And its almost always been so. Long before Weiner was tweeting his Anthony to complete, but always attractive strangers New York’s mayor was a dandy dresser and world-class grafter named James J. Walker. That’s Hizzoner nearby at the height of his power and corruption in the late 1920′s. Nice suit.

Had Jay Gatsby existed anywhere other than in Scott Fitzgerald’s great novel Walker would have been at one of his Long Island parties. Not for nothing was Walker called “The Night Mayor of New York.” When the Yankees were home at the Big Ballpark in the Bronx the mayor was there. While in the State Senate Walker pushed a bill legalizing big-time boxing in New York. His seat ever after was a ringside. The mayor was so good to the boxing world that he’s in the Boxing Hall of Fame and the Hall named its biggest award for Beau James.

Long before Weiner’s encounters with electronic communication and sexting, Jimmy Walker, the very married mayor, had a thing for a New York show girl and living very, very large.  Ben Hecht, the Chicago reporter who wrote The Front Page, once observed: “Walker is a troubadour headed for Wagnerian dramas. No man could hold life so carelessly without falling down a manhole before he is done.”

For a while – a long while – all the city loved him. New York has always loved good copy and Walker always practiced the first rule of New York – don’t bore me. But eventually the excess, the recklessness, the corruption and, yes, the sense of entitlement that is such a part of the New Yorkers who think they have it made caught up even with Gentleman Jim.

Then New York Gov. Franklin Roosevelt, eying a presidential candidacy in 1932, opened the manhole for Walker and down he went. As he took the stand Walker quipped, “There are three things a man must do alone. Be born, die, and testify.” With an indictment hanging over his slick backed hair Walker headed for Europe and only came back when the heat was safely turned way down. In that way, too, Walker was an earlier example of New York entitlement. The motto must be: “Do it and do your best to get away with it.”

Weiner, a seriously troubled guy with a pathological need for tabloid attention, seems determined to go down texting. Shame isn’t the way new York rolls. Weiner will never be mayor, but he may actually expand the definition of New York excess as he grasps for Gracie Mansion. The Clinton’s web of relationships with Weiner’s wife Huma – the candidate and spouse live in a fancy Manhattan apartment owned (of course) by a wealthy Clinton supporter and Ms. Weiner worked for both Bill and Hill – is all of a piece with the New York Times Style section, which most weeks reads to those of us who live anywhere west of the Hudson River like the house organ of the truly beautiful and entitled. Not to mention the frequently clueless and the tasteless sons and daughters of excess.

A-Rod, the perfect New York combination of talent, arrogance, excess and entitlement, seems ready to do everything possible to postpone his ultimate punishment at the hands of the game that made him a gazillionaire in order to make the Yankees – more big excess from the Big Apple – pay him extravagantly for going through the motions for a few weeks of this baseball season. Maybe he needs the money. Buying up evidence, not to mention banned substances, can be expensive.

Thank me. I’m not even going to mention Eliot Spitzer.

At least Beau James Walker had the grace to resign as mayor when the luster finally wore off.  Still, as they say, nothing succeeds like excess. When Walker finally came back to Manhattan and before his death in 1946 many New Yorkers continued to love the man who made his sense of entitlement a political virtue. His sympathetic biographer wrote in 1949, “He stayed Beau James, the New Yorker’s New Yorker, perhaps the last one of his kind.”

Guess not.

 

Following the Money

One of the great faults of American journalism – and there seem to be so many in the age of never ending news cycles – is what journalist and tax analyst David Cay Johnston calls the “unfortunate tendency…to quote people accurately without explaining the underlying context.”

The story of the IRS targeting conservative groups for extra scrutiny when those groups applied for IRS certification of tax-exempt status is a case in point – a breaking political story without a lot of context. Most reporting, as far as it has gone, has appropriately focused on who did what and why? Google Lindsey Graham/IRS and you’ll find 4,500,000 hits with the latest being the senator’s call for a special prosecutor to probe the “a scandal worse than Watergate.”

What has largely been missing is the origin of the whole brouhaha. Of course the who did what and why must be investigated and, trust me, it will be, but nothing ever happens in a vacuum where politics are concerned. The context of the IRS scandal is enormously important to understanding what has happened. Appropriate for the IRS – it always begins with money.

As former Wall Street insider and one-time Treasury Department counselor Steven Rattner tried to provide a little context recently in the New York Times:

“The decision in 2010 to target groups with certain words in their names did not come out of nowhere. That same year, the Supreme Court decision in the Citizens United case substantially liberalized rules around political contributions, stimulating the formation of many activist groups.

“In the year ended Sept. 30, 2010, the division received 1,741 applications from ‘social welfare organizations’ requesting tax-exempt status. Two years later, the figure was 2,774. Meanwhile, the staff of the division tasked with reviewing these applications was reduced as part of a series of budget reductions imposed on the I.R.S. by anti-tax forces.

“A far higher proportion of the new applicants wanted to pursue a conservative agenda than a liberal agenda. So without trying to defend the indefensible profiling, it wouldn’t be that shocking if low-level staff members were simply, but stupidly, trying to find an efficient way to sift through the avalanche of applications.”

In other words, thousands of applications for tax-exempt status for “social welfare organizations” inundated the IRS in the two years after five members of the Supreme Court effectively removed most restrictions on money, especially corporate money, in American politics. A bunch of smart political operatives – think Karl Rove and Bill Burton – seized this historic moment in our political history to create an opportunity to make a lot of money for themselves and spend a lot of money in highly partisan ways with all of it carefully hidden from any public disclosure. The one quasi-public step of the process to receive IRS sanction is to apply for an exemption, which as Steve Rattner notes, thousands of groups were doing in the wake of the Citizens United decision. Other groups just began operating without the formal approval apparently confident that they would eventually get the OK. The most well-financed groups like Rove’s Crossroads GPS and Burton’s Priorities USA could afford the kind of legal talent that is steeped in the nuance of IRS rules thereby virtually ensuring that their applications would thread the tax agency needle.

A little more context. Turns out the IRS rarely denies an application for one of these “social welfare” organizations. The Center for Public Integrity looked at all this and concluded that over the last four fiscal years the IRS has denied the applications of just 60 groups, while approving more than 6,800 applications.

Congress has, of course, delegated the rule making for how to assess these groups to the IRS meaning the bureaucrats are left to determine just what constitutes a “social welfare organization.”

Here’s what the agency’s own internal guidance says:

“Whether an organization is ‘primarily engaged’ in promoting social welfare is a ‘facts and circumstances’ determination.

“Relevant factors include the amount of funds received from and devoted to particular activities; other resources used in conducting such activities, such as buildings and equipment; the time devoted to activities (by volunteers as well as employees); the manner in which the organization’s activities are conducted; and the purposes furthered by various activities.”

Rove’s group, just to take one example, spent more than $300 million in the 2012 election cycle on its version of “social welfare” and is already financing campaign-style attack ads against Hillary Clinton; perhaps the earliest such attack in the history of presidential politics.

Writing in The Atlantic long-time Washington policy and politics observer Norm Ornstein nailed it when he said: “The idea that Crossroads GPS, or the American Action Network, or Priorities USA, or a host of other organizations engaged in partisan campaigning on both sides are ‘social welfare organizations’ is nonsense. Bloomberg’s Julie Bykowicz recently pointed to another example to show the farce here. Patriot Majority USA, run by a Democratic operative, told the IRS its mission was ‘to encourage a discussion of economic issues.’ It spent $7.5 million in ads attacking Republican candidates in 2012–and then virtually disappeared, with Bykowicz unable to reach the group by e-mail or phone. ‘Social welfare?’”

Ornstein’s fundamental point is this: “This is all about disclosure of donors, and about political actors trying to find ways to avoid disclosure.” Bingo.

In Idaho the ultra-conservative Idaho Freedom Foundation, which has never even hinted at the source of most of its money, operates under another section of federal tax law – section 501(c)(3) – and finances a “news service” that generally serves to reinforce the group’s libertarian political agenda, which most recently has been focused on lobbying to keep Idaho from establishing a health insurance exchange under the Affordable Care Act – Obamacare – and publicizing the objections of the group’s executive director to the state’s traffic enforcement mechanism. In order to be exempt under section 501(c)(3) a group must be deemed to be a “public charity” or a “private foundation.”

In Idaho most hospitals are public charities so are many educational foundations and arts and humanities groups, but so too is the Idaho Freedom Foundation, which has become one of the most powerful political forces in the state. It must be noted that IFF received its IRS designation before Citizens United started the avalanche of secret political money flowing to tax code empowered outfits like Rove’s, but still the Idaho group most recent tax return says it collected more than $350,000 in grants and contributions in 2011 to further its “public charity” work.

The real point here is that the IRS code is a confused, often contradictory hodge-podge of rules and dodges. Citizens United further confused the already messy landscape and spawned an entirely new industry where vast amounts of unregulated, unreported money is being used to influence public policy and elections. Money and politics going together is as old as eggs with bacon, but this new political world, illustrated anew by the IRS “scandal,” has perverted the one standard that has a chance of keeping our politics remotely clean and transparent. That standard is disclosure. Perhaps the months of investigation into who did what and why at the IRS will help Congress and the American voter see just who is hell bent on using secret money, with the help of the tax code, to increasingly dominate politics.

If it turns out the IRS willfully targeted certain groups, while not looking closely at others, then heads must roll. But if instead it turns out, as seems entirely possible, that the extra “scrutiny” was based on a fumbling bureaucratic response to a incredibly flawed system then Congress should set about to fix that problem.

As Salon’s David Dayen notes, “It’s pretty simple, then, to figure out what took place. The IRS, faced with the enormous task of dealing with a surge of 501(c)(4) groups taking advantage of an often contradictory law, performed triage by taking the path of least resistance – going after the most obvious targets, who didn’t have the resources to artfully stay within the tax laws, or to fight back against invasive reviews. They shied away from the heavily lawyered-up big-money groups, and instead focused on battles they thought they could win.”

There’s some additional context for you.

Endless Money

Corporations Really Are People

While the nation holds its collective breath over the fate of Obamacare (hint, it’s going down) the conservative judicial activists on the U.S. Supreme Court have affirmed their original controversial decision that its just fine to have unlimited and often undisclosed corporate money flow into our political system.

At issue in the case summarily disposed of Monday was a Montana Supreme Court decision that attempted to uphold the Treasure State’s 100-year plus ban on corporate money in state elections.

The Court’s five man majority reversed the Montana court decision and reminded all of us of the essence of its earlier ruling in the now infamous Citizens United case.  “Political speech does not lose First Amendment protection simply because its source is a corporation,” the majority said in an unsigned, one-page ruling.

Turns out that Mitt Romney was right, corporations are people, at least when it comes to spending political money that the Court equates with free speech protections under the First Amendment.

The Montana Attorney General, among others, had argued that the state’s special, if not unique, history of corporate influence – and in the early 1900′s corporate control – over Montana politics required a special remedy, namely banning corporate money from state races. The law dates back to when Copper King William A. Clark literally bought himself a seat in the United States Senate using the vast wealth he accumulated from his mining interests in Montana. Fast forward a hundred years and Karl Rove and others are using the opening created by Citizens United to use their free, if not inexpensive, speech rights to try and buy a president, a United States Senate and a few governors for good measure.

Remarkable how history has a way of repeating itself.

More interesting than the one-pager from the “conservatives” on the Court who show such respect for precedent that they overturned 100 years of settled law in the Citizens case is the dissent from Justice Stephen Breyer, who apparently has been reading the newspapers.

Breyer wrote: “Montana’s experience, like considerable ex­perience elsewhere since the Court’s decision in Citizens United, casts grave doubt on the Court’s supposition that independent expenditures do not corrupt or appear to do
so.”

Justice Breyer’s concern about the corrupting influence of money, even if it is only the appearance of corruption, is at the cold heart of this issue and the evidence is everywhere to be seen.

Mitt Romney invited a few hundred of his biggest donors over the weekend to a closed-to-the-press gathering in Park City, Utah. The donors were treated to the kind of face-time with the candidate that Joe and Jill Six-Pack could never hope to get. Also in attendance was the head of the pro-Romney Super PAC Restore Our Future. Our Swiss cheese-like campaign finance laws say Charlie Spies, the Super PAC leader and a D.C. lawyer, can’t legal “coordinate” with the campaign even as the television spots he is paying for mirror the campaign’s messages. But, apparently it is alright for Mr. Spies to camp out in the lobby of the hotel were the Romney event was taking place to see and be seen by those coming and going.

It brings to mind the great line from the movie Casablanca. The Vichy French police official Captain Renault, played by Claud Rains, announces that he is “shocked, shocked” that gambling is going on in Rick’s Cafe just as a croupier hands him his winnings for the night. The Super PAC’s will be the real story of the 2012 election and no one should be shocked that the charade of separation of candidates from PAC’s is as much a fiction as the Easter Bunny.

And, of course, Democrats do it, too. Republicans may just be better at attracting the kind of donors who will spend a few billion on a campaign. Both parties share the guilt for allowing this money in politics situation to spiral completely out of control.

Following the political money scandal that grew from the Watergate break-in just 40 years ago, the Congress, responding to popular outrage, made a stab at reforming campaign finance laws. (It’s worth remembering that Watergate, arguably the greatest political scandal in our history helped reveal the extent to which corporate money was being utilized by Richard Nixon to maintain his hold on the White House.)

The U.S. Supreme Court has sent a clear signal with its refusal to reconsider Citizens United that the sky is the limit when it comes to money in politics. Six billion is the estimate for this cycle and at the rate this trend is expanding it will be $12 billion in four more years.

Ironically, its not really the money that individuals give to candidates that is the major cause of worry in this case. But rather the unregulated, often unreported, no-limits funding of causes and candidates by those with the deepest pockets. That is what casts grave doubt, as Justice Breyer says, on the very essence of a democracy. Do the people chose the leaders or do the most well-to-do individuals and corporations chose?

Nothing succeeds like excess, they say, and by that standard the unregulated, uncontrolled campaign finance system in the United States is succeeding like never before.

As Captain Renault would say, “Round up the usual suspects.”

 

It’s the Money, Stupid

A Hundred Years of History

On the presidential campaign trail in 2008, Arizona Sen. John McCain regularly invoked Theodore Roosevelt as his role model. “I count myself as a conservative Republican, yet I view it to a large degree in the Theodore Roosevelt mold,” McCain told the New York Times in 2008.

Channeling T.R. certainly has appeal for both Republicans and Democrats. Who other than perhaps a small-government Libertarian wouldn’t want to associate with the memory of one of the four presidents on Mt. Rushmore, a man arguably one of the greatest of the great presidents?

But by invoking Roosevelt as a model, McCain, in very many ways an exemplary individual and once upon a time a true maverick, is guilty of historical malpractice. The politics of our nation’s capitol today, and the distinguished senator from Arizona is part of it all, are as removed from the democracy Teddy Roosevelt embraced as Phoenix is removed from an ice flow. One need only look at this week’s news to understand the difference.

JPMorgan Chase CEO Jamie Dimon waltzed into and out of a Senate Banking Committee hearing Wednesday suffering hardly a PR scratch despite the $2 billion plus his bank lost recently in risky financial bets. Washington’s favorite big banker did comment that some of his current and former underlings at the nation’s biggest (or maybe second biggest) financial institution might have to return some of their compensation and Dimon smoothly quoted Harry Truman on where the buck stops. (No commitment from the buck stops here guy as to whether any of his paycheck might be in jeopardy.)

In the big picture, as Congressional hearings go, Jamie Dimon before the Senate Banking Committee was a Beltway cake walk.  South Carolina Sen. Jim DeMint helped set the tone when he said to the banker, “The intent here is really not to sit in judgment.” Got it.

It is substantially easier, I guess, for members of Congress to ask tough questions of former baseball players who might have used certain banned substances than to ask a really tough question of the biggest banker on Wall Street in the wake of the biggest financial crisis in 75 years. I wonder if Rafael Palmeiro, the steroid-abusing, once-a sure-thing Hall of Fame baseball player, who testified under oath before Congress about his transgressions was glued to C-Span for Dimon’s questioning? Palmerio a small-time drug abuser got the wire brush treatment. Jamie Dimon a big-time player who has opposed many regulations of the banking industry got an air kiss.

The other big money news this week was that Las Vegas casino mogul Sheldon Adelson has decided to further exercise his free speech rights and start spending millions on the Super PAC backing Mitt Romney. The numbers are stunning. So far, Adelson has written checks for $35 million and his minions tell Forbes he may be in the campaign for “unlimited” amounts.

There seems to be little doubt now that the 2012 election will involve billions – billions with a B – of dollars in unregulated, often unreported money from literally a handful of high rollers who, because of their personal financial balance sheets, are able to lavish dollars on the candidates and causes they support – or oppose.

In terms of the presidential election the United States has become, or is dangerously close to becoming, a Banana Republic where the biggest checkbook wins the day. Oligarchs spend money, control the media and determine the course of Russian politics. Can we seriously be that far away? Even the campaigns that benefit from all this lavish spending must be wondering if they can control the essential messages of their own campaigns when some kazillionaire has decided to fund a political action committee and own a few television stations.

All of this has happened thanks to the U.S. Supreme Court’s ruling in the now infamous Citizens United case and that bring us full circle back to Teddy Roosevelt. The Supreme Court, by a 5-4 margin, opened the floodgates to all the unregulated, independent and corporate spending by overturning a century of established law, a law dating back to – that’s right – the Old Rough Rider.

Roosevelt, of course, famously spoke of the threat imposed upon a democratic society by what he called “malefactors of great wealth,” but he also said, “The death-knell of the republic had rung as soon as the active power became lodged in the hands of those who sought, not to do justice to all citizens, rich and poor alike, but to stand for one special class and for its interests as opposed to the interests of others.”

As to the big banks, Roosevelt – he was the Trust Buster after all – would not have stopped at bemoaning their enormous influence over our economy and public policy. JPMorgan and the other top four biggest banks essentially control 56% of the entire U.S. economy. Roosevelt would have acted, he would have broken up the biggest banks in the interest of a capitalist system that resists giving so much control of the economy to so few people.

But that approach is not an option in these times, even given the continuing danger to the U.S. and world economy presented by JPMorgan-like risk taking. Mention breaking up the big banks or re-regulating them as T.R.’s distant relative did in the 1930s and you won’t be invited back to a Georgetown cocktail party.

In his justly famous New Nationalism speech in 1910 – President Obama tried and mostly failed to capture some of the same Rooseveltian quality in his own recent economic speech – the 26th president said:

“At many stages in the advance of humanity, this conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress. In our day it appears as the struggle of freemen to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will. At every stage, and under all circumstances, the essence of the struggle is to equalize opportunity, destroy privilege, and give to the life and citizenship of every individual the highest possible value both to himself and to the commonwealth. That is nothing new.”

It is nothing new. Just over a hundred years ago, the United States had a political leader summoning the country to a higher standard of accountability and behavior. T.R. was a trust buster and an advocate for reducing the enormous reach of money in our politics. There is no one sounding his clarion call today, or if they are their voices are lost in background noise that only money can buy.

Ask yourself, “What would T.R. do?” The great president’s record from 100 years ago tells us and the answer has almost nothing to do with what is happening in our politics in 2012.