The Best Elections Money Can Buy

excerpted from the book

The Democratic Facade

by Daniel Hellinger and Dennis R. Judd Brooks

Cole Publishing Company, 1991, paper

The Best Elections Money Can Buy

Money and Politics

In 1905, ex-Senator George Washington Plunkett of New York's infamous Tammany Hall machine expressed his philosophy about money and politics: "The day may come when we'll reject the money of the rich as tainted, but it hadn't come when I left Tammany Hall at 11:25 today. The Progressive movement targeted the corruption of big city machines like Tammany, and today no politician would so boldly endorse the political influence of wealth. The Progressives, however, only succeeded in driving the problem underground. Seventy-five years later, columnist Elizabeth Drew warned

Until the problem of money is dealt with, it is unrealistic to expect the political process to improve in any other respect....The argument made by some that the amount spent on campaigns is not particularly bothersome because it comes to less than is spent on, say, advertising cola, or purchasing hair-products, misses the point stunningly....What is at stake is the idea of representative government.

People understand that politicians beholden to powerful economic interests are incapable of representing the broader public interest, and politicians, therefore, go to great pains to avoid the image of being bought. But even if they are not personally corrupt, politicians must turn to private and corporate wealth to meet the stupendous cost of conducting modern campaigns in the age of media and public relations specialists. This practice inevitably provides contributors with political leverage, and it also undermines respect for elections as a legitimate expression of the popular will. Thus politicians are caught in a bind. They share a collective interest as a group and as individuals to avoid the appearance of being bought, and at the same time their careers depend on their skills as fundraisers.

Since 1974, when the seamy side of electoral politics was exposed by the daily soap opera about real political life called the Watergate scandal, several reforms have been instituted in an effort to control the flagrant corruption of politics with money. These measures have failed; more than ever, elections in the l990s are subject to successful fundraising and the artful application of money. The political liabilities

p130 and politics are intricately linked in American politics; this point applies to honest and dishonest politicians alike. The corruption of politics that results is rooted more in the structure of campaign finance than in personal greed.

The Republican party is unabashedly pro-business, whereas the Democrats embrace both corporate and labor interests. Unlike business, labor has no party of its own.

Labor unions are often singled out for criticism, but they exert far less financial leverage than do corporate and wealthy contributors. In 1988, labor contributions accounted for 23 percent of all PAC contributions but only 10 percent of all the money received by House candidates. Labor's potential influence is substantially diluted because most Democratic candidates also receive corporate PAC money. GOP candidates rely almost exclusively on corporate, trade, and conservative PACs, and they attract much more money from individual contributions. Democrats, more dependent on PACs in the first place, rarely depend on labor PACs alone, and frequently their corporate contributions outweigh all other sources, including labor. This has the effect of moving Democrats to the right ...

The Hidden Primary

The net result of the American campaign system is that a disproportionate number of politicians either have great personal wealth or become dependent on the largesse of the wealthy. As a result, even before the first official primary of the long presidential campaign season, there is already underway a "hidden election," or "invisible primary" in which money and the support of elites, rather than votes or popular support, determine who may compete. Two political scientists, Thomas Ferguson and Joel Rogers, have argued that the connection between elite sectors and presidential candidates is so close that political scientists would be better advised to study the contest among candidates for elite financial support than for the votes cast by the mass electorate. Studying the latter, according to Ferguson, is like trying to predict the movement of a cattle herd by examining the droppings (i.e., the votes) rather than studying the cowhands (the elites). The real election is "hidden."

The "hidden election" serves as an initial screening device, assuring that elites can pick the candidates before ordinary citizens are offered any degree of participation. The 1987-88 campaign of Missouri Democrat Richard Gephardt provides a good illustration of how the hidden primary season works. On the one hand, because he is a Democrat, Gephardt needed labor union support. Hence he introduced legislation to restrict imports in industries where jobs seemed threatened by foreign competition. In an attempt to appeal to farmers, he cosponsored a farm relief program. To build credentials as a populist reformer, he gave a speech to Wall Street brokers castigating them for a wave of scandals involving insider trading, emphasizing that American workers paid the cost of Wall Street corruption and financial speculation. To reduce opposition from the National Organization of Women, he reversed his previous position in favor of a constitutional amendment to outlaw abortion. The strategy worked. The media soon anointed him the "populist" candidate.

Though Gephardt may very well have believed in the positions he adopted, his campaign was inconsistent with his record in Congress, where he advocated budget cuts, replacement of the progressive income tax with a two-tier system, higher defense spending, and outlawing abortion. Much of this record made Gephardt an attractive candidate to wealthy elites and to a specialized group of contributors who assume roles as brokers by soliciting support from others. The invisible primary campaign was much more consistent with Gephardt's past record than was his public rhetoric.

The Tilt to the Right

By curbing the kinds of extravagant and illegal donations that led to the Watergate scandal, reform legislation helped to preserve a degree of influence for those individuals with sufficient income to make modest contributions-the upper middle class. Although the GOP claims that the average contribution to its candidates is $25, the proportion of Americans contributing anything at all is very small. According to the Joint Center for Political Studies, only 6.8 percent of the electorate made direct contributions to political candidates in the 1970s. The system of tax credits and deductions designed to encourage contributions is of little benefit to the working class and poor, who do not earn enough to make use of such benefits. And there are signs that middle-class influence is eroding as well. In 1984, only 19 percent of House contributions came from people who contributed less than $150 a year to campaigns. Ten years earlier, these donors accounted for half of all House campaign financing.

Since few working class voters can afford to make substantial individual contributions, they must rely on union or mass membership PACs to balance corporate, wealthy individual and upper-middle-class influence ... compared to corporate and trade PACs, the strength of union PACs has declined sharply. Furthermore, candidates find it far easier to build campaigns from the contributions of wealthy donors and corporate PACs. Only a handful of politicians have successfully raised enough money through a combination of union PACs grassroots organizations, and small contributors.

The overwhelming Democratic congressional majorities resulting from the 1974 off-year election prompted the Republicans to redouble their efforts to improve their financial base. Two conditions were important to the new push: (1) conservative and business fears that the Democrats were about to embark on a new round of liberal economic and social policies, and (2) GOP fears of permanent minority status. The party's concern reached fever pitch after the Watergate hearings and President Nixon's resignation. Guy Vander Jagt, named chair of the National Republican Congressional Committee in 1975, grasped the nature of the perceived crisis and understood that it could be turned to advantage. Vander Jagt offered a summary of his activities.

In 1975, I spent most of the year trying to get business and industries to establish PACs. I worked with the Chamber of Commerce and with the National Association of Manufacturers, and I travelled the country giving my Paul Revere speech: "Wake up, America, wake up. There's a war going on-a war that will determine the economic future of this country, and you aren't involved."

That the call was heeded is reflected in the growth of corporate and trade PACs in the ensuing period.

The financial edge enjoyed by corporations, conservatives, and Republicans has a qualitative dimension not readily grasped from a superficial analysis of the data on contributions. Corporate capital has managed to organize itself in such a way as to maximize its influence at critical pressure points in the system. Business PACs have effectively targeted members of key congressional committees and subcommittees vital to their particular interests. A good example is the House Energy and Commerce Committee. In 1982, labor PACs contributed the sizable sum of $665,757 to members of this Committee. However, the combined PAC contributions solely from energy companies ($468,820) and from the real estate and construction industry ($223,223) surpassed total labor contributions. Additional contributions to committee members from PACs linked to banking and finance and corporations involved in food automobiles, communications, doctors, hospitals, pharmaceutical, insurance, aerospace, and other firms together matched the labor contributions a second time over. The situation was similar for other key committees, such as the Senate Finance Committee and the House Ways and Means Committee, where business PACs accounted for 68 percent ($11 million) of all PAC contributions made to committee members in 1984.

The need to attract corporate PAC contributions has strengthened the hand of Democratic leaders who seek to cure the party's ills by loosening its ties to minorities the unions, and the working class and poor. Stung by their loss of the presidency and control of the Senate in 1980, the Democrats decided to seek corporate PAC contributions aggressively. Rep. Tony Coelho (D Calif.) persuaded big Democratic financiers to contribute to the party's congressional fund and at the same time helped the Democrats to organize more effectively to solicit corporate PAC donations. Both major parties and politicians within each party established "clubs" to facilitate interaction between wealthy contributors and politicians. (Richard Gephardt's "Democratic Leadership Council" is an example.) Major party figures gave speeches and held conferences for such clubs, but Coelho indicated that political education was hardly the driving motivation for joining. "Access. Access," he told columnist Elizabeth Drew, "that's the name of the game. They meet with the leadership and with the chairmen of the committees. We don't sell legislation: we sell the opportunity to be heard."

Impressive signs of Democratic gains in fundraising lie in the comparisons of contributions to the congressional elections in 1984 and the off-year elections in 1986. In this two-year period, Democratic challengers and candidates for open seat races greatly increased their share of contributions from corporate, trade, and "nonconnected" PACs, while maintaining their near monopoly on labor PACs. Democratic candidates' share of corporate contributions rose from only 8 percent in 1984 to 28 percent in the 1986 off-year elections. In 1988, their share compared to contributions to Republicans rose to 27 percent.

Despite (or because of) the Democratic gains in fundraising, it is clear that the ideological pendulum did not swing back toward liberalism. The Democrats' courting of corporate and trade PACs reflected a swing to the right in the congressional wing of the party. As the National Journal pointed out after the 1984 elections, business gave more to the Democrats because "there was a dearth of vulnerable Democratic incumbents with voting records that the business community opposed." The American Enterprise Institute's Michael Malbin attributed shifting corporate funding to "congressional Democrats...speaking more about capital formation and other business issues." Representative Coelho's attempts to attract corporate money prompted the chair of the PAC funded by Tenneco Inc., the third largest corporate PAC giver in 1984 and fourth largest in 1986, to comment that "the political climate has changed somewhat and is more [supportive of] the private sector."

Corporate PAC money also helps keep the Democrats listing to the right because it helps more conservative candidates defeat liberals in Democratic primaries. Where liberal Democratic incumbents are relatively secure, corporations use PAC contributions to preserve access to them, as in the case of possible presidential contenders like Senators Ted Kennedy and Joseph Biden. But when liberals are confronted with a viable conservative challenger, they are likely to get short shrift from wealthy individuals and business interests. Liberal Bruce Morrison of Connecticut, for example, was touted by Representative Coelho as worthy of business support, but in the last few weeks of his close but successful 1984 race to retain his seat, he attracted only $7,000 from corporate PACs while his more conservative opponent received $37,000.

Though Democratic incumbents have been attracting more and more corporate support, few Democratic challengers have been similarly blessed. Lockheed Corporation, the biggest corporate sugar daddy in 1984, divided its contributions evenly among Democrats and Republicans, but only two of the 122 candidates It supported were nonincumbents. Tenneco contributed to thirty-seven Democrats, but only one was a nonincumbent. If corporate PACs inadvertently fail to support the winning side, it is easy to show contrition. After several of their preferred Republican incumbents were defeated in 1986, corporate PACs made amends by contributing after the election to the victorious Democratic candidates. The latter welcomed this largesse, since all of them had substantial campaign debts to pay.

The Democratic drive to compete with the GOP for corporate money manifested itself at the 198 8 Democratic convention in Atlanta. Dukakis's fundraiser Robert Farmer, determined that the Democratic treasure chest would not be lighter than the Republicans', went to work on the business community. Fat cats were pumped to join the party's Victory Fund Board of Trustees (which already numbered 200 members) for the modest amount of $100,000 each (through the medium of PACs). Farmer even envisioned seven-figure contributions reminiscent of the preWatergate days. Affluent potential contributors were treated to a midnight dinner with Dukakis and Bentsen in Atlanta, which of course was not included in a published list of official events provided by the party. One Dukakis fundraiser, Nikolas Patsaouras, was rash enough to say of the process: "We're given the names and we meet with them. We get them when they're warm, and we close the sale." But Dukakis fundraisers were careful not to promise the contributors too much. They arranged a third party to witness the "closing" of the sale to ensure that there were no misunderstandings about "deals" being made.

The Financial Realignment of American Politics

Changes in the campaign finance system are intricately entwined with the overall rightward drift in American politics underway since 1968. It is worth recalling, in this regard, that the first modern reform in campaign financing came in 1971, before Watergate and the worst abuses of the Nixon campaign. The influence of money was already rising to a degree that alarmed even career politicians, who were understandably reluctant to change the rules of the game that helped keep them in office. But they recognized that if they did not take action, they would be forced to ride the tide of political money to wherever it would take them.

In view of the continuing rise in the volume of political money, it may seem ludicrous to assert that campaign finance reform has greatly affected anything. Without reform, however, the system would have been even more blatantly offensive to the American public than it is today because the internecine battles among elite factions would have lacked sufficient internal restraint and regulation. Whereas wealth continues to translate into power, the new system reduces the kind of overt blackmail in which Nixon's campaign indulged, and it makes it more difficult (although not impossible) for any single corporate sector to "buy" a candidate.

Hence the relative autonomy of the state was enhanced for a while by campaign finance reform. Smaller contributors, including the upper-middle-class and less wealthy business owners, were given symbolic reassurance that the influence of wealth had been curbed. But campaign reform contributed to a drift to the right in American politics, and the influence of personal and corporate wealth was actually enhanced. The Democrats have learned to play the game by drifting rightward with the GOP. As private and corporate wealth finds new routes into the campaign system, more scandals are inevitable. Meanwhile, the political discourse that occurs in campaigns is more restricted than ever, dictated as much by the search for money as by the search for votes.

The Democratic Facade

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