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
p129
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
...money 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.
p136
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.
p140
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 ...
p144
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.
p147
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.
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