I don’t cry when I lose. There’s always a new hand coming up. I know in the long run we’re going to win.
SHELDON ADELSON, DECEMBER 5, 2012
For the first time in the history of the United States, the 2012 campaign to elect a president was covered—for the most part—as a business story. That was fine by business, which had been newly freed by the Supreme Court’s Citizens United decision to invest in the emerging market of American politics. That was fine by the politicians who could jet off to Vegas, have lunch with a billionaire casino mogul, and come away with “a $100 million investment” in the campaign.1 And that was just fine by American mainstream media, as most editors and publishers, hosts and programmers had long before accepted as gospel Calvin Coolidge’s false premise that “after all, the chief business of the American people is business.”2 Not citizenship. Not democratic engagement. Not justice. Not the construction of a shining city on a hill. Nor the illuminating of a light unto the nations. No need for any of that romantic mumbo jumbo. America was, as Coolidge famously suggested, all about “producing, buying, selling, investing and prospering.”3
And if that was so, then, surely, every American story could be a business story: the Hollywood box office receipts could shape our culture, commodity prices could tell us all we need to know about eating, and the Christmas spirit could surely be got from reports on folks lining up Thanksgiving night for “Black Friday” shopping. Mr. Potter, not George Bailey, was triumphant. Donald Trump was right: it was all about “the art of the deal.”4 So why not consider the competition for power as the biggest “deal” of all? Why not go all in on the fantasy that government should be “run like a business” and turn campaigns to control the government into the political equivalent of Trump’s The Apprentice?
Trump was certainly willing to oblige. The nation’s most identifiable rich guy—with the possible exception, by campaign’s end, of Mitt Romney—was the Hamlet of the 2012 melodrama, wrestling with the existential angst of a Republican presidential run. He jetted up to New Hampshire for an almost-announcement, ranted and raved about Barack Obama’s birthplace on any Fox News show that would have him, published a manifesto (Time to Get Tough: Making America #1 Again), and made major announcements via a Web site dubbed “Trump HQ.”5 By April 2011, The Donald was leading in polls of likely Republican voters and running close to even with Obama.6 A month later, Trump took himself out of the race, announcing, “I will not be running for president as much as I’d like to” because he was committed to a higher goal: preparing for the next season of his new NBC show, Celebrity Apprentice.7 Within weeks, he was back in the news, saying of his almost-party, “If they pick a loser, I may very well run as an independent.”8 That never happened. In fact, nothing about Trump—not even his planned moderation of a December 2011 debate among the actual Republican candidates just prior to the Iowa caucuses—happened.
Jon Stewart’s Daily Show, Stephen Colbert’s Colbert Report, and The Onion all recognized the absurdity of the Trump talk and treated the rich guy as a political punch line. Unfortunately, the joke was on the America people. Trump’s ridiculous approach to politics, with its “birther” obsessions, fiscal fantasies, and talk about self-financing his campaign by pouring “a large chunk of his $270 million in liquid assets into a presidential bid,” was perfectly in synch with the 2012 Zeitgeist.9 Except for the part about the $270 million. That would not have done the deal.
If Trump had spent all $270 million—more than four times the $63 million that Ross Perot, the last serious independent contender, slathered on a wildly extravagant 1992 media campaign—he would have been at an 8 to 1 disadvantage into trying to break into the presidential race.10 Yes, 8:1. Barack Obama, Mitt Romney, and their backers spent more than $2.3 billion competing for the presidency in 2012. They may even have spent a lot more because the reported figures ($1,112,041,699 for the Obama campaign, the Democratic Party, and outside groups for the president versus $1,246,902,432 for Romney et al.) do not include hundreds of millions of dollars in unaccounted and unaccountable dark money spending by “charities” that sought to influence the contest.11
Even Donald Trump would have had to go begging to compete in 2012, just as Obama and Romney did, for the largesse of the billionaires who invest in campaigns not to advance ideals or to elect the best candidate but to make a cold, calculated business arrangement. “You have to spend money to make money” is the motto for the relative handful of wealthy Americans and businesses that provide most of these funds. And those are the Americans that campaigns, be they Democratic or Republican, take most seriously. Put another way: for candidates wishing to succeed, fund-raising is about big-game hunting. Much is made of the 3 million small donations the Obama campaign generated in 2012, and even of the more than 350,000 Americans who wrote small checks to aid the campaign of quarter billionaire Mitt Romney.12 But the truth is that small donations are small potatoes in the overall scheme of things.
Consider this: Romney’s 350,000 small donors as of mid-October gave $70.8 million. That was barely one-third of what fewer than forty major donors had given to outside groups by the same date.13 In the end, which call does the candidate or the consultant take: the billionaire industrialist with millions to spread around or the grandmother on a fixed income who just wants to do right by her country? Americans know the answer to that question.
That’s the single best explanation for why roughly 87 percent of Americans make no contributions to federal or state political campaigns.14 In the twenty-five most hotly contested 2012 House of Representative races, for example, donors giving $200 or less provided only 12.5 percent of Democratic candidate funds and 18.3 percent of Republican candidate funds. Had it not been for Allen West, the Tea Party favorite who attracted national grassroots support, the figure for Republican candidates would have plummeted to 7.6 percent.15 These small donors, the ones who contribute largely to promote their values and to be good citizens, are bit players in the game. Only one out of every four hundred Americans gives more than $200 to a congressional campaign, and this is where you start if you want to know where the action is.16
Even one in four hundred seems downright egalitarian as the scope of the emerging corporatization of our politics becomes evident. This is about a lot more than The Selling of the President or even The Art of the Deal. This is about the whole shebang. The 2012 election, which decided contests not just for president but also for Congress, dominance of statehouses, control of units of local government across the country, and the very definition of the agenda via initiative and referendum votes, saw more than $10 billion in spending by candidates, parties, wealthy individuals, corporate in-kind donors, super-PACs, and shadowy dark money groups. For five decades, the central goal of campaign finance reformers from John F. Kennedy to John McCain was to have small donors—those who invest for principles and citizenship—increase in numbers and provide the lion’s share of funds. By 2012, that gambit was dead and buried. Small-time donors increasingly came to play the role of chumps, manipulated by focus-group-tested buzzwords and bandied about to show a candidate’s populist credentials but having virtually no influence over candidates once in office. It is difficult to imagine that these donors will not continue to diminish as their impotence becomes increasingly and depressingly apparent. “There will be huge scandals,” McCain said, “because there’s too much money washing around . . . and we don’t know who’s behind it.”17
This chapter looks at that $10 billion figure to help explain the transformation of our politics, and of our governing processes, that has taken place since the U.S. Supreme Court began redefining the rules of engagement in order to facilitate unlimited spending by the wealthiest American and corporations, and since major U.S. media began to cash in on the phenomenon. Americans know about money in politics, and we would be wasting our time here if we simply set out to remind them of a crisis that they see every night on television—not so much in what remains of the news but in the ads. And the ads. And the ads. Our point here is something quite different. We explain how money has flooded every corridor and crevice of our politics, from Washington, DC, to Washington Island, Wisconsin, and has thereby warped even the most local and direct democratic processes. And we explain something that rarely comes through in the horse-race reporting of campaigns, and the slack-jaw coverage of governing by media outlets that would rather collect checks for commercials than reveal the corruptions of empire: even when the Money Power loses, it wins.
It wins prior to, during, and after elections. Long before a single vote is cast, a “money primary” defines who is taken seriously as a contender for president, U.S. senator, governor of a state, mayor of a big city. The media confirm the reality by taking fund-raising—which is easy to cover and requires little in the way of insight or analysis—far more seriously than other measures of political accomplishment: grassroots organizing, the assembling of endorsements from key players, a visionary platform. Once the candidates who will be treated seriously are identified, the campaign begins and media outlets shift over from covering how much money was raised to how much is being spent. Even when money is a bad measuring stick—as in the Iowa Republican caucuses, where the severely impoverished campaign of Rick Santorum actually caught up with and beat the immensely wealthy campaign of Mitt Romney—media outlets obsess on the money until it is beaten.18 Then they say that the candidate who somehow, remarkably, amazingly beat the money (a Santorum, for instance) cannot possibly prevail in the long run because he or she does not have . . . enough money.19 In this case, the media are right. Occasionally, they acknowledge that Mitt Romney bought the Republican nomination for the presidency with massive spending on negative ads that, one by one, defeated more popular contenders. As CNN noted, Romney did not compete in the race for the Republican nomination; he “dominated,” spending “far more than any other campaign” and, indeed, “more than the combined spending of Ron Paul, Rick Santorum and Newt Gingrich.”20 But the media rarely question whether such spending is good for democracy.
Free-market capitalists they may be, or they may imagine themselves to be, but Republicans should be furious at what the Money Power did to them in 2012. It saddled the Grand Old Party with inept and frequently unelectable candidates, not just in the presidential race but also in critical U.S. Senate contests. Even as they took advantage of the Republican fiasco, Democrats should have been just as angry because their party did not “beat” Big Money in 2012; it competed for Big Money and secured a large enough treasury to hold its own against the combined resources of Romney, the Republicans, and their “independent allies.” Obama’s overall spending and that of his backers were certainly comparable with that of the Republicans and at critical stages in the campaign, superior. Obama’s team and its allies had a money advantage in the postprimary period when the Obama camp defined Romney as a “quarter billionaire” “vulture capitalist” with race horses, a car elevator, and a penchant for shuttering factories and taking health care away from vulnerable Americans. Trump did not run, but the Republicans ended up with a Trump-like caricature of a rich-guy candidate who couldn’t relate. The Democrats missed no opportunity to paint him as such—developing a narrative that spread from their paid advertising to news coverage in a dream scenario politically. The Obama camp enjoyed that money advantage again in the closing stages of a campaign where those themes were restated with devastating effect.21
Obama and his campaign did not have the most money. But unlike the most popular of Romney’s primary opponents, they had enough money when they needed it. Advertising Age, which replaces empty punditry with serious analysis of the marketing game that is modern politics, summed things up when it headlined a postelection analysis “Romney and Republicans Outspent Obama, but Couldn’t Out-Advertise Him: Targeting and Message-Control Carried the Day.”22 That is the real story of the president’s victory—not a triumph over Big Money but an abler use of the campaign’s own Big Money, with corresponding debts to pay.23
Indeed, the Obama campaign astutely worked both sides of the street. On the one hand, it announced its distaste for Big Money in politics to enthusiastic audiences; on the other hand, it quickly realized it needed to bag the big game to have much hope of winning in November.24 As Nicholas Confessore noted, “His campaign’s big-dollar fund-raising has become more dependent than it was four years ago on a smaller number of large-dollar donors and fundraisers.”25 Obama held countless soirees with millionaires, like the June 2012 $35,800-a-plate dinner he had on Manhattan’s Upper East Side with Wall Street bankers, private equity executives, and hedge fund managers.26 One explanation for why President Obama laid an egg in the first presidential debate was not that he was too busy doing his duties as chief executive and commander in chief to prepare; instead, it was that he had spent the entire Friday before the debate doing three private fund-raising events with big game rather than preparing for the debate, as candidates had done in the past.27 Kantar Media’s Elizabeth Wilner, one of the sharpest observers of the business of elections, explained the importance of this fund-raising: Had Obama “been outspent by a wider margin, we might well be writing today about how the outside groups helped win the air war for President-elect Romney.”28
Many older Republicans quietly lamented the fact that Mitt Romney lacked the political courage, people skills, and focus displayed by his father, former Michigan governor and Nixon Cabinet secretary George Romney. Likewise, when Seymour Hersh returned to spend significant time on Capitol Hill in the early 2000s, after having been mostly absent for several decades, he was struck by how the intellectual and ethical caliber of members had plummeted.29 It has become increasingly common for observers to bemoan the unwillingness of individuals of great talent and integrity to enter public life. These transformations are all but unavoidable under Dollarocracy. Being a politician today means engaging in endless fund-raising—hours every day spent backslapping, glad-handing, butt-kissing, begging, and, ultimately, offering deals to very rich people for donations. This comes at the expense of actual public service or even traditional politicking. We admire those friends of ours who have worked hard to have successful careers in Congress, but after the 2012 election cycle we can see that many of them might have never entered public life decades ago if they knew this would be their fate. For a generation of idealistic and principled young Americans eager to serve, electoral politics is not a viable career option. Electoral politics is an arena that will attract people on the make, whose only principle is to take care of number one, which means taking care of those with deep pockets.
When the Democrats prevailed—winning the presidency, 55 of 100 Senate seats, a solid plurality of votes for U.S. House seats, as well as the vast majority of gubernatorial races—they were still hamstrung by a money-defined politics that had Obama and his fellow partisans curtailing their victory celebrations in order to begin the next stage of wrangling over “fiscal cliffs,” “debt ceilings,” and a host of other crises manufactured by Republican politicians and interest groups that had just been defeated. Despite the election numbers, that struggle was all about imposing precisely the austerity measures that voters had rejected overwhelmingly on November 6. And despite epic unpopularity, enough to fuel much of the antipathy toward Romney, Wall Street, with its record campaign donations split between both parties, was still in the catbird seat.30 So it was that, even when money got “beat,” money won, as casino magnate Sheldon Adelson well recognized on his “victory lap” visit to Washington after the 2012 election. The vanquished billionaire did not look like a beaten man; he looked like someone who had experienced some setbacks but who was already hard at work calculating for the next election cycle and an eventual victory.
That’s how the money-go-round goes round. Sometimes you are up; sometimes you are down. But if you have the money to buy a ticket on the carousel, when you are down, you know that you will eventually be up. “Obama’s victory was just a blip in the master plan measured in decades, not election cycles,” Forbes’s December 2012 profile of billionaire right-wing donors Charles and David Koch noted. “We’re going to study what worked, what didn’t work, and improve our effort in the future,” David Koch said. “We’re not going to roll over and play dead.”31
What changed in 2012 was the price of that carousel ticket. It went way, way up—to more than $10 billion.
That number provides our place of beginning. Let’s consider what $10 billion bought in 2012 and what it is still buying as you read these words.
The $10 billion total figure we use here, which is merely a baseline, is a good deal greater than the estimated fund-raising figures reported around Election Day 2012. “Total Cost of Election Could Be $6 Billion,” read the New York Times headline.32 “Election Costs to Exceed $6 Billion in 2012,” announced Businessweek.33 “Did That $6 Billion in Campaign Spending at Least Help the Economy?” Time magazine asked after the election.34 Even campaign finance reformers declared, “After $6 Billion Election Campaign, Movement to Get Money Out of Politics Starts a ‘Prairie Fire.’”35
Everyone seemed to agree that $6 billion, more than had ever been spent in an American election season, more than had ever been spent in any election season anywhere, was astronomical. And everyone was right. The figure was roughly $2 billion over the amount spent in 2004, the last election cycle where an incumbent president was seeking reelection.36 The fund-raising for the Obama-Romney race alone was ten times the level seen in 1996, the previous cycle where a young Democratic president was challenged by a senior Republican. We happen to think that multibillion-dollar spending spikes and tenfold increases in the amount of money raised are consequential.37 It’s just that the spending was more astronomical than the headlines suggested. The $6 billion figure was based on an estimate by the ablest analysts of federal election spending, the folks at the Center for Responsive Politics, who released the number in an October 31, 2012, report that had the group’s executive director, Sheila Krumholz, declaring, “In the new campaign finance landscape post–Citizens United, we’re seeing historic spending levels spurred by outside groups dominated by a small number of individuals and organizations making exceptional contributions.” Krumholz was absolutely right in that regard, as she was when she added, “One thing we can say for certain is that the transparency the Supreme Court relied upon [in its Citizens United ruling] to justify this new framework has been sorely lacking.”38
Another certainty is that the regulatory agency tasked with overseeing elections, the Federal Election Commission (FEC), is worthless. “Virtually from the beginning,” Thomas Ferguson, Paul Jorgensen, and Jie Chen wrote, “dark forces of law and politics have combined to render the agency almost impotent as a regulator.”39 Today, the FEC’s “powers” are “so weak that for most offenses it can only ask political groups to enter a voluntary process in which they bargain to agree to a monetary settlement,” as the Washington Times reported. “But campaigns have learned not to fear the body, and even those fines are often simply ignored.”40 This lack of enforcement means that accurate reporting of donations and spending is not a life-and-death concern. Likewise, it means the Supreme Court’s call for independent super-PAC money not to be coordinated with a candidate’s campaigns has been routinely and effectively flouted.41 The New York Times noted that “the result is a striking degree of symmetry” between campaigns and the “independent” groups supporting them.42 Even the Internal Revenue Service (IRS) has exhibited little interest in making sure the various relevant nonprofit groups play by the rules. Politico’s examination of the IRS’s role concluded the service had a “feeble” grip on big political cash and was a “toothless tiger.”43 The metaphor widely used is that this is a wild, wild west environment where people shoot first and worry about the legal niceties later, much later, if ever. And there is no sheriff on the horizon.
Accordingly, the Center for Responsive Politics report from late October 2012 acknowledged, “What remains unknown—and may never fully be accounted for—is how much money secretive ‘shadow money’ organizations spent, with some investing massive sums on ads, but also on unreported and purportedly ‘non-political’ activities, as the election neared. It may take years to determine how much they spent. Furthermore, it likely will never be known who provided the vast majority of this money, which includes at least $203 million in the last two months.”44 Bloomberg Businessweek wrote that “a Cayman Islands–style web of nonprofit front groups and shell companies . . . are increasingly being used to protect the identity of donors who want to get involved in politics in big ways without leaving a trace.”45 Thanks to a leak to the Center for Public Integrity, we know the pitch made to donors by one such shadowy group, Colorado’s American Tradition Partnership (ATP). It led a successful fight to overturn Montana’s one-hundred-year ban on corporate money in elections (a topic we explore in Chapter 3) and promised its prospective funders that “no politician, no bureaucrat, and no radical environmentalist will ever know you helped.”46
As the Center for Media and Democracy, which tracked what has variously been referred to as “shadow money” or “dark money” more closely than any group in 2012, explained it:
Unlike PACs or Super PACs formed exclusively for electoral purposes and which report all of their expenditures to the Federal Elections Commission (FEC), “dark money” groups are officially organized as social welfare nonprofits under section 501(c)(4) of the tax code or as trade associations under section 501(c)(6). Because these groups are supposed to primarily advance some sort of social welfare, or in the case of a 501(c)(6) the interests of a particular industry, they need only report their electoral expenditures to the FEC, rather than all of their spending.47
But—and this is a Grand Canyon–sized “but”—
electoral activities have been narrowly construed to only require reporting of expenditures on ads that explicitly call for the election or defeat of a candidate, allowing these groups to avoid disclosure by running “issue ads” that criticize a candidate on issues like taxes or healthcare but stop short of explicitly telling viewers to vote for or against. The omission of an explicit call for a candidate’s defeat or victory allows the groups to claim with a wink-and-a-nod the ads were about “issues,” despite clearly being intended to influence the election.48
So it is that the roughly $44 million that Karl Rove’s Crossroads GPS spent between January 2011 and June 2012 on issue ads scorching President Obama and Democratic candidates for the U.S. Senate went unreported on most formal measures of political activity. Elaborate schemes cloak the identity of donors. A loophole, upheld by a federal appeals court, allows dark money groups to hide the movement of money not expressly given to fund specific issue ads. Donors who wish to remain anonymous simply give to the general fund. Similarly, transfers of money among supposedly independent groups, party committees, and candidate-tied super-PACs are “governed” by so many different sets of “rules” that campaign activity can be shielded from even minimal accountability during the course of an election season, as well as for months, even years, afterward.49 Perhaps forever.
What we do know is that in 2012 “outside money” overtook traditional campaigns and political parties as the main source of election funding and that within the category of outside money, the entirely secretive dark money groups were a significant factor. The dark money total discussed in late October media reports—$203 million—kept rising after major media outlets seized on the $6 billion figure for “total” spending. By mid-November, Center for Media and Democracy executive director Lisa Graves was noting, “At least $400 million, and probably much more than that, was spent by groups organized as ‘nonprofits’ that do not disclose their donors or report many of their electoral expenditures, so little is known about who funds them, who is really calling the shots, and whether or not they are illegally coordinating with candidates.”50
What did Graves mean by “probably much more”? Hundreds of millions more, she told us. And she was right.
Only after the 2012 election, and after the media had fixated on the $6 billion figure, did we learn that Sheldon Adelson had spent “far more” on his various political charities than had been imagined. How much more? On the eve of the election, the boldest estimate of his campaign giving put the figure at $52.2 million.51 One month later, in early December 2012, $150 million in campaign spending by Adelson and his wife had been identified. And that number was all but certain to rise.52 Because he approached the campaign with such billionaire bravado, Adelson was one of the more transparent, easily identified big donors. Others, for instance those who worked at the state and local levels to shift control of legislatures and school boards as part of long-term strategies to privatize education, by design flew well under the radar. But not so far under that the real cost of unlimited spending cannot be detailed.
Let’s look at the data. And in so doing, let’s go deeper. Let’s look at how money is gathered and spent to influence every nook and cranny of American public life. We’re going to introduce you to a lot of numbers because, as former president Bill Clinton famously said during the 2012 campaign, it is about “the math.” But our point in detailing where the $10 billion was collected and where it went is not to provide an accounting of dollars and cents. Our point is to provide a sense of how the money-and-media election complex is fueled. And why.
We are more than happy to accept the Center for Responsive Politics’ well-calculated $6 billion figure for relatively transparent spending on the 2012 federal races as a baseline. We also accept the well-reasoned assessments of the researchers and analysts who track the no-man’s-land of campaign finance abuse when they say that dark money spending in 2012 was “much more” than $400 million. How much more is the question, and when we consulted with analysts from the Center for Media and Democracy, they replied that the number could easily exceed $1 billion. Very easily.53 This dark money is overwhelmingly, though not exclusively, Republican.54 Liberal dark money that ran ads for a Libertarian candidate in the 2012 Montana Senate race may well have contributed to Democrat Jon Tester’s narrow re-election.55 But this is an area ideally suited for billionaires and corporate interests to operate surreptitiously, and it shows all signs of growing in importance.
By pulling the dark money discussion into the sunlight, and by acknowledging the immense amount of in-kind support that elected officials, political parties, business associations, and unions provide to candidates in organized but essentially unaccountable dark aid, we can reasonably assert that the federal elections figure for 2012 exceeded $7 billion.
But federal elections were not the only ones on which Big Money was spent in 2012. The 2012 election cycle saw unprecedented spending at the state and local levels of government and on state and local recalls, referendums, and initiatives. In other words, if there was an election in 2012, there was Big Money spent on it—often, though not always, by the same wealthy individuals and corporations seeking to influence the direction of the presidential race and of congressional contests.
Much of the real power to influence public expenditures and policies rests in the statehouses, and some of the biggest spenders in American politics have recognized this fact. For instance, the Koch brothers may have started as big players on the federal level. But they long ago recommitted to a state-based strategy of funding gubernatorial and legislative campaigns in order to elect not just conservatives but also lockstep supporters of their antiunion, anti-public-education, antigovernment agendas. And they have coupled this money with huge amounts of structural support for the American Legislative Exchange Council (ALEC), in which representatives of major corporations participate in the drafting of “model legislation” that can then be forwarded on for introduction and passage by allied legislators.56
Similarly, billionaire Dick DeVos, an heir to the Amway door-to-door retailing fortune, and his wife, Betsy, both longtime leaders of the Michigan Republican Party, once bragged about their role in national politics. Betsy wrote in 1997:
[My] family is the largest single contributor of soft money to the national Republican Party. . . . I have decided, however, to stop taking offense at the suggestion that we are buying influence. Now, I simply concede the point. We expect to foster a conservative governing philosophy consisting of limited government and respect for traditional American virtues. We expect a return on our investment; we expect a good and honest government. Furthermore, we expect the Republican Party to use the money to promote these policies, and yes, to win elections.57
In the years since Dick DeVos spent $41 million on a losing Michigan gubernatorial race, however, they shifted more and more of their substantial giving to groups that work to elect state legislative supporters of school privatization schemes.58 And it was a significant shift. In 2007, Dick and Betsy DeVos were fined $2.6 million each, for a total of $5.2 million, for illegally funneling $870,000 from a Virginia-based political action committee into the Ohio affiliate of their All Children Matter operation. The transfer was eighty-seven times higher than that allowed under Ohio law and amounted to one of the most blatant assaults on campaign-finance limits in the state’s history. The fines were imposed accordingly—amounting, as reported by the Ohio Elections Commission, a bipartisan grouping that unanimously imposed the sanctions, to “easily the largest fine the Ohio commission has levied.”59
When the outsized players in national politics wade into state and local politics, it is no longer possible, let alone appropriate, to see contests for state senate seats in Ohio or school board posts in Milwaukee as footnotes to stories about campaign spending. Those races need to be seen as part of a whole. A big part. There are now networks of wealthy donors who, freed from much of the oversight provided by the campaign-finance laws that the U.S. Supreme Court has scrapped, pour money into state and local races, writing checks to gubernatorial and mayoral candidates every bit as furiously as they do to presidential contenders.
The 2012 election season in the states began with historic recall elections in Wisconsin, where Governor Scott Walker and his state senate allies were targeted for removal from office by labor and progressive groups infuriated by the governor’s assault on collective bargaining rights and his implementation of a Greek- or Spanish-style austerity program of deep cuts to public service and education funding, combined with de rigueur rounds of additional tax cuts for millionaires, billionaires, and corporations. Walker did not mount a traditional fight back, with appeals to Wisconsin’s conservative contributors. He “went national,” jetting around the country for meetings with the same right-wing donors who funded presidential and congressional races: folks like Texas homebuilder Bob Perry, who drew national attention in 2004 when he wrote $4.45 million in checks to fund the Swift Boat attack campaign against Democratic presidential nominee John Kerry. Perry, who gave $7 million to help Karl Rove get his American Crossroads combine started in 2010 (and another $6.5 million to keep it going in 2012), wrote a $250,000 check to support Walker as the recall fight got started. A few weeks later, he chipped in another $250,000. And at $500,000, Perry was not even Walker’s biggest donor. Or all that uncommon. Thirty-seven individuals, the vast majority of them from outside Wisconsin, each gave the embattled governor contributions of more than $50,000.60 Walker took advantage of a loophole in Wisconsin election law that created precisely the sort of no-holds-barred campaign circumstance proposed by Mitt Romney and other defenders of the Supreme Court’s rulings in cases such as Citizens United. As the Wisconsin Democracy Campaign explained, “Walker drew massive contributions above the usual $10,000 calendar year limit on individual donations because state law allows recall targets to collect unlimited cash to pay bills that come in before a recall election is approved.”61
Before the June 2012 vote, Walker’s personal campaign committee raised and spent $36.1 million—three times the largest amount ever previously spent on a gubernatorial candidate in the state and more than had ever been spent by all the candidates in any previous gubernatorial campaign. According to the Wisconsin Democracy Campaign’s study of the spending, “Nearly $22 million or 64 percent of the individual contributions he raised since January 2011 and spent mostly on the recall came from out-of-state banking, manufacturing, construction, real estate and other powerful special interests hailing from Florida, Texas, New York, Missouri, Nevada, Wyoming and New Jersey, among other states.” But that was only the first wave of the national money that flowed into the state. Another $22.6 million was spent on Walker’s behalf by party organizations and so-called independent groups that backed him, bringing the total spending on the governor’s behalf to $58.7 million.62
In contrast, the campaign of Walker’s Democratic challenger, Mayor Tom Barrett of Milwaukee, spent $6.6 million, while party organizations and independent groups that explicitly backed Barrett spent in the range of $10 million.63 Walker’s money advantage was always dramatic, and it was especially large in the early stages when the direction of the fight was defined. No serious observer doubted that Walker’s money, most of it from out of state, made it possible for the controversial governor to prevail with 53 percent of the vote in June 5. But for our purposes here, let’s add the Walker and Barrett spending, as well as the spending for the post of lieutenant governor and for four Wisconsin state senate races that played out on the same date. What do we get? A cool $93.5 million.64 And that’s one state. By the end of 2012, other states with closely contested gubernatorial races had seen similarly dramatic spending: roughly $50 million in Washington State, roughly $30 million in Missouri, roughly $25 million in North Carolina, and roughly $25 million in tiny New Hampshire.65 In a dozen states during the course of 2012, the candidates alone spent more than $200 million on gubernatorial races.66
Moreover, independent groups often equaled or exceeded candidate spending. Clearly partisan organizations such as the Republican Governors Association (RGA) consistently top the lists of federal super-PAC donors. How? “The Republican Governors Association’s appearance on a list of top donors to super PACs—which were formed to spend money on federal races—at first glance appears to be a mistake. But a close look at the Washington, D.C.–based 527 organization’s disclosure filings shows it is using super PACs to funnel funds into state races,” explained a Center for Public Integrity examination of how the group operates. “The recipient of the RGA’s generosity is a super PAC called ‘RGA Right Direction PAC.’ The super-PAC takes the money it receives from the RGA—which as a 527 can accept unlimited funds from corporations and wealthy individuals—and spends it on state races.” Via the RGA in 2012, million-dollar corporate donations flowed on a regular basis to gubernatorial candidates in states that were still trying to maintain some limits on the size of donations and on corporate dominance of their elections. Similarly, groups such as the Republican Lieutenant Governors Association, the Republican Attorneys General Association, the Republican Secretaries of State Association, the Republican Legislative Campaign Committee, and the Republican State Leadership Committee (RSLC) joined the RGA in moving tens of millions of dollars from corporations and wealthy individuals into state contests.
Indeed, these groups bragged about the money they moved into the states. After the Republican State Leadership Committee celebrated the fact that it had raised almost $40 million for the 2012 election cycle, Politico explained in late October:
RSLC’s political spending has increased 36 percent over last cycle—even more than the group’s overall fundraising.
RSLC is among the Republican independent groups that have risen in prominence in an age of looser campaign finance rules and Democratic control of the White House. Along with its Democratic counterpart, the Democratic Legislative Campaign Committee, and the Republican and Democratic Governors Associations, RSLC has channeled new levels of national money into state campaigns.
Matt Walter, the RSLC’s political director, predicted the heavy national investment in state races would continue past 2012 and “heading into 2014, when the focus returns much more significantly to the state level.”
“I think people have bought into that in part because of the lack of action in Washington, at the federal level, but there is also an increased interest and polarization, in general, in the political process,” Walter said. “It’s difficult to see that trajectory changing.”67
In our discussions with dozens of candidates, party operatives, and consultants working at the state and local levels, the consistent response was that these are the real “growth” areas for campaign spending in the Citizens United era. Corporations and wealthy individuals seeking to influence policy can be talked into writing checks for state races. And not just the high-profile gubernatorial contests. Democratic state attorneys general—notably but not exclusively New York attorneys general Eliot Spitzer and Eric Schneiderman—have been in the forefront of fights to hold Wall Street traders, credit card companies, polluters, agribusiness giants, and gun manufacturers to account.68 So it should not come as much of a surprise that the Republican Attorneys General Association has been collecting big-dollar donations from corporations such as Aetna U.S. Healthcare, Brown & Williamson, Microsoft Corporation, SBC Communications Inc., and, of course, the National Rifle Association. Indeed, as the Washington Post revealed after a study of internal fund-raising documents, Republican state attorneys general have engaged in the solicitation of contributions from corporations and trade groups that have been the subject of lawsuits and regulations by their states.69
After the 2012 election, the Republican state-based groups declared, “In West Virginia, we unseated a five-term incumbent Attorney General.”70 Darrell McGraw, a Democrat who over five terms in office had “consistently drawn the ire of industry groups for his office’s consumer protection litigation,”71 did indeed lose by a 51–49 margin to Republican Patrick Morrisey. A lawyer with a politically connected Washington, DC, law firm, Morrisey bragged during the campaign that he had assisted states challenging the federal Affordable Care Act (Obamacare) and that he “continues to counsel Members of Congress on strategies to repeal the law.” But he obtained his license to practice law in West Virginian only four days before he filed papers to seek the state’s chief law-enforcement position.72 Morrisey’s candidacy would have been absurd by traditional measures of credible candidates in West Virginia. But he had an advantage: virtually unlimited—and unaccountable—outside money. More money from outside the state poured into Morrisey’s race for attorney general than into races for governor or potentially competitive congressional seats.73
One group alone, the Virginia-based Center for Individual Freedom, poured at least $1.6 million into anti-McGraw television ads that aired before the election. As the Charleston Daily Mail noted, “The Center got its start as a front group for the tobacco lobby and now funds conservative candidates and causes. It does not report its donors, though former Bush political operative Karl Rove’s political action committee has given money to the Center, according to spending information made public by Rove’s Crossroads GPS.”74 Another group, the Des Moines, Iowa–based American Future Fund, spent almost $600,000 in ads that benefited Morrisey.75 The organization, which registers with the IRS under laws governing charitable institutions as a nonprofit, runs something called the “AG Project” for the purpose of “bringing attention to the important constitutional issues facing our state and federal courts, as well as identifying and supporting those candidates for states attorney general who defend the constitutional principles that founded our nation.”76 Left unmentioned was the project’s essential purpose: the movement of huge amounts of money into the states for the purpose of electing law-enforcement officials who would take their cues from corporate special interests and national conservatives rather than from their constituents.
In addition to the West Virginia race, the American Future Fund made itself a big player in Missouri, where the group bought $250,000 in advertising to attack the state’s Democratic attorney general, Chris Koster. A former Republican who was rated “100 percent pro-gun” by the National Rifle Association, Koster was no liberal. But he was targeted all the same, and in a common reaction, Koster ramped up his fund-raising to more than $5 million. It was part of a spending spree on down-ballot races in Missouri, where initial reports on formal spending by the committees of candidates for state posts totaled more than $65 million.77 Add on the known interventions by outside groups, and the spending pushed well past $70 million, roughly the combined amount spent by the campaigns of Republican presidential candidates Rick Santorum, Newt Gingrich, and Ron Paul on their races for the party’s 2012 nomination.78
The pattern was the same in state after state, where spending records were met and exceeded by candidates, party organizations, and independent groups. Many of them were funded by national donors who did not even know where their money was going or whom it was being spent for or against. In California, there were no statewide contests, just races for the legislature. But the fund-raising by candidates for the state Assembly and Senate still topped $102 million, with at least $23 million spent by outsiders.79 So that’s, very conservatively, $125 million for California legislative races. In Texas, legislative candidates raised $93 million. In Florida, it was $60 million. Just the formal fund-raising by state legislative candidates and their committees, according to the National Institute on Money in State Politics, totaled $800 million.80 Couple that figure with the independent expenditures of outside groups playing on issues ranging from abortion rights to farm policy to labor rights and, above all, privatization of education, and there is little question that the money flowing in and around the contests for the 7,382 state legislative seats that were chosen in 2012 exceeded $1 billion. Even the most conservative estimates of candidate and party spending on gubernatorial and down-ballot statewide races exceed $300 million. Add on outside spending and the state-based equivalents of dark money in those contests and legislative races, and the overall figure for state races surpasses $1.4 billion. With federal spending, transparent and dark, that takes us to around $8.5 billion.
And, no, we’re not done. Beneath the state level are the county and local levels of government, where thousands of officials were chosen in 2012 elections. The influence of Big Money on local races can be dramatically greater than at the federal and state levels, since it doesn’t take that much money to change the character of a race for a county commission, a mayor’s post, a town council, or a school board. Yet local government often decides where and how and even whether a corporation can develop a mine, turn a public park into a private condominium development, or take money from hard-pressed public schools into order to fund the speculative fantasies of charter-school enthusiasts.81
More than four hundred cities, from Anchorage, Alaska, to Wheeling, West Virginia, elected mayors in 2012, and almost invariably the campaigns saw “unprecedented,” “unrivaled,” and “explosive” spending. Cities where mayoral contests had historically been local affairs fought out “at the doors” witnessed media extravaganzas, where tens of millions of dollars were spent on contests that recreated all the pathologies of the presidential election.82 In San Diego, for instance, a frenzied contest between Democrat Bob Filner, a liberal congressman with strong ties to organized labor, and Republican Carl DeMaio, a councilman who was a favorite of downtown developers, cost at least $13 million.83 And remember that the Filner-DeMaio runoff on November 6 was merely the end of a yearlong process; a primary in June had included other candidates and had cost millions more. There was significant spending for city council races and other local fights, including a June referendum to roll back pensions for public employees. When all was said and done, spending on San Diego’s local elections in 2012 cost in the $20 million range—the kind of money that used to be considered “excessive” in high-stakes gubernatorial and U.S. Senate races.
It wasn’t just mayoral races. Local races that were once thought of as classic grassroots contests were transformed in 2012 into hyperexpensive battles where traditional grassroots politics was overwhelmed by outside money. Take, as an example, the District 8 city council contest in San Jose. The city was wrestling with questions about how to maintain and fund public employee pensions. The incumbent, Rose Herrera, and her challenger, Jimmy Nguyen, had different views on those questions, which they ably articulated. But independent groups that were unaffiliated with the candidates, and that got the overwhelming majority of their money from outside the working-class district, wanted to have their say as well. So groups like the San Jose Silicon Valley Chamber of Commerce started writing checks for more than $100,000.84 Ultimately, the contest for a single council seat in a midsized American city featured television ads, radio ads, and stacks of mass-mailed communications that ended up costing well in excess of $500,000. It probably does not need to be explained that the candidate of the San Jose Silicon Valley Chamber of Commerce, Herrera, won. But she did. And so did the four Las Vegas–area county commissioners who accumulated $1.6 million for their 2012 re-election races.
One of the biggest donors to the commissioners was Bill Walters, a developer who was in the process of turning a golf course on county land into a business park. Walters, whose money flowed in increments of $20,000 and $25,000 to the various contenders, told the Las Vegas Review-Journal that “he doesn’t call his contributions ‘donations,’ instead viewing them as ‘investments’ in good candidates.” He explained, “The bottom line is, if you own a business in Las Vegas, if you have employees in Las Vegas . . . the most important people in the world to you are the people who run local government.”85
A lot of wealthy donors came to that conclusion in 2012. Across the country, there were hundreds of examples of local contests where, using the tactics and tools of the new Citizens United era, wealthy developers and business owners—and, in some communities such as San Jose, the unions representing the public employees who were targeted by those outside interests—paved over the grassroots and erected a Dollarocracy on Main Street. Our calculations, based on a study of reports from across the country, suggest that spending for thousands of municipal, school board, local judicial, and county races across the country can easily be placed in the $500 million range and could well exceed that figure.
That brings us into the $9 billion range for baseline spending on races where voters had to pick a candidate. So where do we find the last billion on the way to the $10 billion figure? On the part of the ballot that makes no mention of parties’ candidates, except in judicial races.
Welcome to the new frontier of the money-and-media election complex.
If you were looking for extreme spending in 2012, for the spending that produced the most ads on television stations in states such as California and Maryland, you would have to pay attention to the campaigns for and against initiatives and referendums. According to State Legislatures magazine, 174 ballot measures were considered by the electorates of thirty-eight states on November 6, 2012.86 That figure does not include the hundreds of local school and public-services spending referendums considered in states across the country; almost all of these referendums saw substantial spending. How substantial? Add up the numbers from all the ballot measures—from liquor law changes in Chicago precincts, where local bar owners ponied up their thousands, to the $55 million fight over labeling of genetically modified food in California87—and the total easily exceeds $1 billion.
In many statewide “issue” votes around the country, the spending went beyond “substantial.” The proper word is “extreme” or, arguably, “obscene.” Consider this: in California, spending on statewide initiatives was at least $450 million. In Maryland, it was $100 million. In Michigan, the initial spending reports pointed to total spending easily in excess of $150 million.88 The Michigan figure is instructive, as the Detroit News explained in a preelection report that summed up the extent to which initiatives and referendums trumped all other politics in a number of major states:
The high-profile ballot issues alone total $149.5 million—and counting—of the campaigning to amend the constitution, a whopping 85 percent of all spending on state races.
Ballot proposal spending dwarfs the $107 million spent in 2010 on all state races for governor, attorney general, secretary of state, the Legislature and courts.
“This is really all about the ballot stuff—that’s what’s carrying the whole thing,” said Rich Robinson, executive director of the Michigan Campaign Finance Network, which tracks money in state politics.
Campaigns to amend the state constitution or thwart those changes are being largely funded by a handful of wealthy individuals, labor unions and organizations bundling millions in anonymous donations, a Detroit News analysis of spending data shows.
Some of the donors are more traceable than others.
The most widely known financier of ballot issues is billionaire Ambassador Bridge owner Manuel “Matty” Moroun, whose companies have dumped $33.1 million into a campaign to pass Proposal 6, requiring statewide votes for new public bridges, and another $3.5 million for Proposal 5, seeking a two-thirds voting threshold for the Legislature to raise taxes.
In the Proposal 2 fight over a union-led effort to enshrine collective bargaining in the constitution, members of the DeVos family in Michigan have contributed $1.58 million to a campaign to defeat the initiative while billionaire Las Vegas casino mogul Sheldon Adelson and his wife have chipped in another $2 million to the cause.89
Hey, not that Sheldon Adelson? Not the guy whose $150 million in contributions to Republican candidates and causes made him the most notorious campaign donor of the super-PAC era? The very same. Like most of the major donors to candidates, including the privatization-obsessed DeVos family, Adelson moved his money into referendum and initiatives campaigns that gave him a chance to achieve his ends.90
A century ago, in the Progressive Era, initiatives, referendums, and recalls (“IRRs,” as the old campaigners described it in the shorthand of the day) were seen as democratizing tools—like the direct election of U.S. senators—that would take politics out of the back rooms and give people the power to set agendas, frame policy, and hold elected officials to account. Throughout much of the twentieth century, in states from California to Maine, this was the case. With the rise of Dollarocracy, however, IRRs have been co-opted by the Money Power.
The same goes for judicial elections. Just as the Progressives of a century ago sought to battle corruption by handing more authority over policy-making to the voters via direct-democracy initiatives, and just as they sought to take the power to select senators away from state legislators and give it to the people, they battled to move authority over the selection of state and local judges out of the back rooms and into the hands of the voters. There are now thirty-nine states where the voters, as opposed to the politicians and their Big Money backers, choose justices and judges in elections that, until recently, served the purpose the Progressive reformers of the past intended. The relative integrity of the justice system for much of the twentieth century makes it easy to forget just how corrupt the process was only one hundred years ago. In recent generations, there was minimal funding of these judicial races: American Bar Association ratings, newspaper recommendations, experience and reputation in the community, and party affiliations went a long way toward determining the outcomes. As recently as 1990, total campaign spending for all state Supreme Court races nationwide was estimated at $3 million.
That is no longer the case. Over the past two decades, corporate interests and funders like the Koch brothers and the U.S. Chamber of Commerce have zeroed in on judicial elections as a cost-effective way to buy control of the court system. By the mid-1990s, the spending on state Supreme Court races increased fivefold from 1990; it then tripled again by 2000, according to a 2012 study by the Center for American Progress (CAP). “Since then,” the CAP reports, “corporate America’s influence over the judiciary has grown. The U.S. Chamber of Commerce, in particular, has become a powerful player in judicial races. From 2001 to 2003 its preferred candidates won 21 of 24 elections. The chamber spent more than $1 million to aid the 2006 campaigns of two Ohio Supreme Court justices, and in the most recent High Court election in Alabama, money from the state’s chamber accounted for 40 percent of all campaign contributions.”91 That does wonders when it comes to reducing corporate liability in civil cases, among other things.92
The most dramatic recent example of the payoff provided for corporate interests that set out to buy state court elections comes from West Virginia. The A. T. Massey Coal Company—yes, the same Massey Energy Company responsible for the worst American mining disaster since 1970, killing twenty-nine West Virginia miners in 2010—took an interest in West Virginia court contests in 2002 when a West Virginia jury ordered Massey to pay out $50 million to plaintiffs. As the matter went through the appeals process, then CEO Don Blankenship spent $3 million of his own money in the 2004 election cycle to unseat a justice on the state Supreme Court and gain the seat for his ally, Brent Benjamin. Well, Benjamin won, and when Massey’s appeal got to the state’s highest court, Benjamin joined the majority in a 3–2 vote to overturn the award.93
The process accelerated in 2012, as tens of millions of dollars in money, much of it from outside the targeted states, poured into judicial contests. The spending shattered records and produced tens of millions in spending and some of the crudest campaigns of the season.94 With spending for down-ballot state judicial posts, as well as circuit, county, and municipal judgeships, added in, the total spending is certainly in the range of $50 million. Most of that money was targeted to win control of the top courts, since they have the power to overrule the lower courts. And a substantial portion of the spending on High Court races paid for advertisements designed to discredit and defeat sitting justices. According to the Justice at Stake Campaign, a record-breaking $29.7 million was spent on more than 51,000 television ads seeking to influence 2012 state Supreme Court contests.95 Ten states saw television advertising exceed $1 million: Alabama, Florida, Illinois, Louisiana, Michigan, Mississippi, North Carolina, Ohio, Texas, and, yes, West Virginia. And the money came from familiar groups, such as the American Future Fund, the shadowy organization that pumped money into the West Virginia attorney general contests. Talk about coming at a “problem” from all sides—the American Future Fund was picking prosecutors and judges.96 But that’s just one reason that “investing” in judicial contests is probably the best investment to be found in American electoral politics. Because there is scant press coverage of judicial races, and because in some states judicial candidates are limited in what they are allowed to talk about during the campaign, judicial candidates who are seen as insufficiently procorporate tend to be easy pickings. A barrage of negative attack ads is often enough to do the trick.
The entire process has made a mockery of the justice system. As retired U.S. Supreme Court justice Sandra Day O’Connor put it, “When you enter one of these courtrooms, the last thing you want to worry about is whether the judge is more accountable to a campaign contributor or an ideological group than to the law.”97 “Every litigant,” said the CAP’s Billy Corriher, “is supposed to be equal in the eyes of the law. But this principle is less true with each passing judicial election.”98 Indeed, a new Justice at Stake survey finds that 76 percent of Americans believe campaign contributions have at least some impact on the decisions made by justices and judges in their courtrooms.99 So much for the integrity of the bench.
Of course, this is exactly as might be expected under Dollarocracy. And, notably, it is in the judicial competition that the promise of Dollarocracy is being realized for corporate donors—far more rapidly and far more clearly than in contests for top-of-the-ballot partisan posts or referendum votes. In a number of states, once the moneyed interests control the High Court, increasingly no one even makes a serious attempt to challenge their dominance. In Alabama in 2012, for instance, the Democrats fielded a candidate in only one of the five open Supreme Court races. Just the threat of money is sufficient to keep challengers at bay.100
Maybe this is how Dollarocracy solves the problem of too much money in elections: just stop having meaningful and competitive elections.
Arguably, the dominant meme among the pundits in the weeks following the 2012 election was that Big Money lost and Adelson was the biggest loser of them all. Along with his wife, the twelfth richest man in the world, and the seventh richest in the United States, poured tens of millions into helping Newt Gingrich get beat in the Republican primaries; then he poured tens of millions, and tens of millions and tens of millions more, into helping Mitt Romney get beat in the November election. They spent tens of millions more, directly and indirectly, to influence U.S. House and Senate contests. Major publications and Web sites took a certain glee in noting, as Politico did in December 2012, that “Adelson’s massive amounts of cash largely went toward supporting candidates who lost.”101 “Sheldon Adelson Had a Bad Night,” read the Salon headline on the morning after the November 6 election. But Adelson, media outlets noted with the fascination reserved for coverage of the emotional state of the rich and famous, did not seem all that upset. Perhaps because, while he might not have been winning high-profile races, he was winning contests for “causes close to Adelson’s heart”—and his pocketbook.102
In Michigan, the heartland of the United Auto Workers union and a key base of strength for unions nationally, organized labor sought to protect collective bargaining rights with a constitutional amendment. Antiunion interest from across the country rushed in to defeat the referendum, knowing that its success might create a model for prounion ballot initiatives across the country. Adelson and his wife wrote some of the biggest checks, and they were not just “interested observers.” Just weeks before the Michigan vote, the Adelsons poured $2 million into the coffers of Protecting Michigan Taxpayers, one of several shadowy groups that flooded Michigan airwaves with ads that, literally, sought to suggest that collective bargaining guarantees would make it impossible to remove child molesters from schools.103
It was an antiunion fantasy, but Adelson has few passions to rival his antilabor stance. His Venetian hotel is the Las Vegas Strip’s only hotel-casino that is not unionized. The billionaire says he started backing the Republican Party in the 1990s because it was more consistently antiunion. And union activists like Yvanna Cancela, the spokeswoman for the Culinary Workers Union in Las Vegas, know that. For all the speculation about Adelson’s motivations for donating huge amounts of money in 2012, the casino king’s disdain for organized labor still topped the list. “It is a shame that we have a political system that allows for one person to essentially buy elections,” said Cancela after the election. But wait . . . didn’t all the headlines say Adelson lost?104 Well, he won in Michigan. The measure that would have provided a clear constitutional protection for collective bargaining rights was defeated.105
The New York Times headline two days after the election read, “In Michigan, a Setback for Unions.” It was also an opening for those “causes close to Adelson’s heart.”106 Barely a month after the voting was done, the Michigan legislature passed so-called right-to-work legislation, the most virulent of all antilabor initiatives. In one week, basic protections for all workers were dramatically weakened and the ability of billionaires like Sheldon Adelson to rake in ever-greater profits with the prospect of paying lower wages and benefits to employees was increased.107 And crushing labor is a twofer, because as unions decline in power, so does their ability to pry the Democrats away from dollarcrat policies, not to mention win elections for them.
This is the best way to understand the role that Big Money plays in our politics in the emerging Dollarocracy. The Money Power may win or lose a race, even an election year. But its authority is not conveyed via an election result. Its authority comes from its permanent presence. The Money Power is constant and, ultimately, definitional. Its purpose is not just to prevail on a particular election day. Its purpose is to create a politics where temporary setbacks are just that: temporary. It is their permanence that gives the biggest spenders their power. Adelson knows this. Maybe 2012 wasn’t all that great an election year for him. But it finished with a great big win on one of his most vital issues in a key state, and that win set the stage for new fights filled with promise for Adelson. After all, if the unions that played such a critical role in thwarting Adelson’s ambitions in 2012 could be beaten down in Michigan, the heartland of the labor movement, how hard will it be to beat them down in Nevada, the heartland of Sheldon Adelson’s empire? And if the ability of unions to function as effective political forces can be undermined in enough states, then Adelson’s election year “investments” will go a whole lot further.
Maybe that’s why Sheldon Adelson was smiling when he jetted into Washington a few weeks after the 2012 election in which he was supposedly the biggest loser. Adelson met with congressional leaders and power players. He was startlingly blunt about why the doors opened for him. “Mr. Adelson, 79 years old, said he has many friends in Washington,” wrote the Wall Street Journal, which quoted the billionaire as saying, “but the reasons aren’t my good looks and charm. It’s my ‘pocket personality.’” He was, explained the Journal, “referring to his donations.” And Adelson had a message for those who might have thought he was rethinking his political investment strategies: “Mr. Adelson’s 2012 donations were double what he spent in 2008, and looking ahead, he said, he was ready to again ‘double’ his donations,” reported the Journal. “‘I’ll spend that much and more,’ he said in his first extensive post-election interview. ‘Let’s cut any ambiguity.’”108
It’s cut.
Big donors like Sheldon Adelson were just getting started in 2012. And for every showman like Adelson, there are hundreds of other billionaires, centimillionaires, and CEOs waiting in the wings who prefer anonymity but, like Adelson, demand results. With the institutions, professionals, and PACs they bankroll, they will be back. With more money. And better strategies. “Independent groups have cemented their status as permanent fixtures in the political firmament,” noted the Los Angeles Times. “The center of the strategic universe has shifted from parties to the PACs,” said former George W. Bush strategist Mark McKinnon in the same LA Times article.109
In fact, they never left. Issue advertising is projected to hit $2 billion in 2013, almost double the figure for 2009.110 The megafunders and their PACs are already chomping at the bit about the 2014 election, as it is a midterm with a much lower turnout, especially among traditionally antidollarcrat voters. “A lot of these groups may have much better impact on the money spent on the House and Senate,” just as they did when they dominated the 2010 election, said Bill Allison of the Sunlight Foundation.111 “Once seasonal affairs, campaigns from the presidential race down to the House contests are becoming longer and more intense,” said Confessore, “driven by deep-pocketed donors eager to see incumbents pummeled throughout the political cycle.”112 In short, thanks to Big Money, says Elizabeth Wilner, “we are in the era of the permanent campaign.”113
The “investors” bankrolling permanent campaigns don’t worry about silly notions like “throwing good money after bad.” For them, political investments come from the petty-cash drawer. What does $150 million mean to Adelson, a man with a net worth of $20.5 billion?114 If Sheldon Adelson donated $10 million to political campaigns every single day from January 1, 2013, until Election Day, November 1, 2016, he would wake up on November 2, 2016, with a net worth of $6.6 billion and still be among the 50 or 60 richest people in the United States. Hell, Adelson could spend $150 million on politics—his epic contribution total for 2011–2012—every single day for four months and still be a billionaire twice over and one of the 250 wealthiest persons in America. The Koch brothers could spend $150 million on political campaigns every single day for a full year, and each of them would still remain among the 120 richest Americans.115 Their heirs and their heirs’ heirs and on and on would still have lives of unimaginable leisure. But that won’t happen, because if Adelson and the Koch brothers spend money, it will have the effect of increasing their net worths; that is the whole point. This is the problem with how so much of the media covered the explosion of campaign spending in 2012. There was the assumption, writ large across the reporting, that millionaires and billionaires were desperately spending their fortunes down in order to “buy” an election. That’s silly. A David Koch, a Dick DeVos, a Sheldon Adelson does not spend until it hurts on politics. They’re making investments, not high-end consumer purchases, and those investments are small in the scheme of things.
They are smaller still for what big banks or insurance or agribusiness or energy interests can get on their relatively small “investments”; hence the risk is well worth it. For decades, scholars have posited that campaign spending by big business and the wealthy was actually quite low in view of the immense returns they could gain by writing laws, tax codes, and regulations and having access to the government trough.116 Now corporations and the billionaires who own them have been set free. They have no romantic illusions about politics. When they write checks, they are putting their money into a business enterprise, run increasingly by a money-and-media election complex that they are perfecting. Adelson admitted as much after the election when he acknowledged that he was in favor of “socialized medicine,” abortion rights, stem-cell research, and the welcoming of immigrants to America. “Look, I’m basically a social liberal,” explained the billionaire, as he ticked off the list of issues on which he disagreed with the party and the candidates he lavishly funded in 2012. Yet the billionaire dismissed any suggestion that he might be in the wrong party. He is, he said, a political pragmatist. “Look, nobody agrees with 100 percent of their planks,” he remarked of the GOP platform. What he’s interested in, what so many big donors are interested in, is a politics that serves their business interests. And they can buy it.
Like other members of the American 1 percent who have over the past fifty years seen their personal wealth grow to 288 times the personal wealth of the median American household, simply maintaining the status quo is a pretty good deal. And for the superrich, there’s even more at stake. In Adelson’s case, there was, as Politico noted, the matter of “self-defense”: “Adelson’s Las Vegas Sands Corp. is being scrutinized by federal investigators looking into possible money-laundering in Vegas, and possible violation of bribery laws by the company’s ventures in China, including four casinos in the gambling mecca of Macau. (Amazingly, 90 percent of the corporation’s revenue is now from Asia, including properties in Macau and Singapore.)” But there was also the potential for enormous personal gain. An analysis by Seth Hanlon, the director of fiscal reform for the Center for American Progress Action Fund, estimated that Adelson stood “to receive a potential tax cut from the Romney tax agenda of more than $2 billion—an exponential return on a $100 million investment.”117 And he was hardly alone. As former labor secretary Robert Reich noted:
If and when they eventually win, these billionaires will clean up. Their taxes will plummet, many laws constraining their profits (such as environmental laws preventing the Koch brothers from more depredations, and the anti-bribery Foreign Corrupt Practices Act that Adelson is being investigated for violating) will disappear, and what’s left of labor unions will no longer intrude on their bottom lines.
And they have enough dough to keep betting until they eventually win. That’s what it means to be a billionaire political investor: You’re able to keep playing the odds until you get the golden ring.118
Reich is essentially correct. We would quibble with him only on the question of whether there is a “golden ring” at the end of the calculus or something greater. Our sense is that what took shape in 2012, from the lowliest city council races to the lofty presidential competition, was not so much about grabbing for a precious jewel as it was about creating a monopoly politics where those who own the golden rings will never have to worry about losing them—in the way that a working family might lose a home—because questions about their dominant position will forever be settled.
Of course, this reshaping of the political process to a “heads I win, tails you lose” duopoly requires the same constant commitment that McDonald’s brings to hamburger sales, that Starbucks brings to coffee peddling, that Wal-Mart brings to the unloading of cheap goods. No one in business questions the wisdom of taking steps to corner the market. That’s how to understand what we saw in 2012. It was not a transitory explosion of spending. It was a new model for how those who already possessed immense wealth and power will corner the market unless they are stopped by political challenges and then laws. They will do so by continually engaging in variations on what Politico described in an article on the 2012 electoral machinations of Charles and David Koch: an “ambitious expansion of the billionaire brothers’ political operation that includes the recruitment of new donors and fundraisers into their network by a development team.”119
This “ambitious expansion,” with its “recruitments” and its “development teams,” is not beginning. It is well under way. And it has as its goal not a thing but a definition.
If our politics is always about money, as it was in 2012, it will always default to a position—not an ideal but a rather lowly and easily manipulated position—that will make sense for Sheldon Adelson and David Koch. If all that is needed is a little more money, or a smarter investment strategy, then they have that. And they can adjust until our politics, our very governance, adjusts to them. This is, as Donald Trump explained it, the art of the deal.
That’s what $10 billion bought in 2012: a politics that makes sense to the folks who have $10 billion and are willing to spend it to achieve their ends. We didn’t get a Donald Trump as a president or even as a nominee. But we got a Mitt Romney. Money, not merit, bought the Republican presidential nomination in 2012. Republicans did not want Romney as their nominee; they were so desperate that they entertained the notion of nominating the likes of Herman Cain, Newt Gingrich, and Rick Santorum before finally accepting—thanks to the dramatic spending advantages of the Romney campaign and the pro-Romney Restore Our Future super-PAC—that this was not a free market of ideas or a meritocracy. This was a Dollarocracy.
Once Romney secured the nomination, Barack Obama’s supporters used early financial advantages and skillful messaging to define their opponent as the doltish plutocrat that his own errors confirmed. And they closed the campaign with a final flurry of spending that equaled that of their foes. Yes, Romney and the Republicans spent a little more. But when both major candidates for president and their backers are mounting billion-dollar campaigns, the price of admission has been redefined. This is Dollarocracy.
When a veteran attorney general whose only “crime” is his determination to defend the rights of consumers is defeated by a challenger who got his license to practice law in the state four days before launching a campaign that flooded the airwaves with out-of-state money, this is Dollarocracy.
When the race for a city council is so “awash in money” that supposedly independent business interests are paying $20 a vote to secure a win that will allow them to take away the pensions of public employees, this is Dollarocracy.
When a billionaire can “invest” $2 million in the causes close to his heart and gain the “return” of diminished rights for workers and a discourse where the voice of organized labor is weakened, this is not democracy. This is Dollarocracy.
Political systems do not arrive fully formed. They take shape over time, defined by structural changes and interventions, pressured and influenced by powerful forces. America is not a complete Dollarocracy. But it is Dollarocracy in the making. Democracy did not fall in 2012; it held its own in some places against the withering assault of a $10 billion campaign. But the billionaires who paid for that campaign—to a far greater extent than our media revealed—have established their beachheads. And they are on the march.