The Best Elections Money
excerpted from the book
The Democratic Facade
by Daniel Hellinger and Dennis
R. Judd Brooks
Cole Publishing Company,
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
...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.
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
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
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.