The 196 people who will choose our next president

Billionaires like Adelson and Freiss are behind the vast majority of super PAC dollars. The rest of us don't count

Topics: 2012 Elections, Campaign Finance, ,

The 196 people who will choose our next presidentSheldon Adelson and Foster Friess (Credit: Reuters/Voices To Action with Alice Linahan / CC BY 3.0)
This piece originally appeared on TomDispatch.

At a time when it’s become a cliché to say that Occupy Wall Street has changed the nation’s political conversation — drawing long overdue attention to the struggles of the 99 percent — electoral politics and the 2012 presidential election have become almost exclusively defined by the 1 percent. Or, to be more precise, the .0000063 percent. Those are the 196 individual donors who have provided nearly 80 percent of the money raised by super PACs in 2011 by giving $100,000 or more each.

These political action committees, spawned by the Supreme Court’s 5-4 Citizens United decision in January 2010, can raise unlimited amounts of money from individuals, corporations or unions for the purpose of supporting or opposing a political candidate. In theory, super PACs are legally prohibited from coordinating directly with a candidate, though in practice they’re just a murkier extension of political campaigns, performing all the functions of a traditional campaign without any of the corresponding accountability.

If 2008 was the year of the small donor, when many political pundits (myself included) predicted that the fusion of grass-roots organizing and cyber-activism would transform how campaigns were run, then 2012 is “the year of the big donor,” when a candidate is only as good as the amount of money in his super PAC. “In this campaign, every candidate needs his own billionaires,” wrote Jane Mayer of the New Yorker.

“This really is the selling of America,” claims former presidential candidate and Democratic Party Chairman Howard Dean. “We’ve been sold out by five justices thanks to the Citizens United decision.” In truth, our democracy was sold to the highest bidder long ago, but in the 2012 election the explosion of super PACs has shifted the public’s focus to the staggering inequality in our political system, just as the Occupy movement shined a light on the gross inequity of the economy. The two, of course, go hand in hand.



“We’re going to beat money power with people power,” Newt Gingrich said after losing to Mitt Romney in Florida as January ended.  The walking embodiment of the lobbying-industrial complex, Gingrich made that statement even though his candidacy is being propped up by a super PAC funded by two $5 million donations from Las Vegas casino magnate Sheldon Adelson. It might have been more amusing if the GOP presidential primary weren’t a case study of a contest long on money and short on participation.

The Wesleyan Media Project recently reported a 1,600 percent increase in interest-group-sponsored TV ads in this cycle as compared to the 2008 primaries. Florida has proven the battle royal of the super PACs thus far. There, the pro-Romney super PAC, Restore Our Future, outspent the pro-Gingrich super PAC, Winning Our Future, 5-to-1. In the last week of the campaign alone, Romney and his allies ran 13,000 TV ads in Florida, compared to only 200 for Gingrich. Ninety-two percent of the ads were negative in nature, with two-thirds attacking Gingrich, who, ironically enough, had been a fervent advocate of the Citizens United decision.

With the exception of Ron Paul’s underdog candidacy and Rick Santorum’s upset victory in Iowa — where he spent almost no money but visited all of the state’s 99 counties — the Republican candidates and their allied super PACs have all but abandoned retail campaigning and grass-roots politicking.  They have chosen instead to spend their war chests on TV.

The results can already be seen in the first primaries and caucuses: an onslaught of money and a demobilized electorate. It’s undoubtedly no coincidence that, when compared with 2008, turnout was down 25 percent in Florida, and that, this time around, fewer Republicans have shown up in every state that’s voted so far, except for South Carolina. According to political scientists Stephen Ansolabehere and Shanto Iyengar, negative TV ads contribute to “a political implosion of apathy and withdrawal.” New York Times columnist Tim Egan has labeled the post-Citizens United era “your democracy on meth.”

The .01 Percent Primary

More than 300 super PACs are now registered with the Federal Election Commission. The one financed by the greatest number of small donors belongs to Stephen Colbert, who’s turned his TV show into a brilliant commentary on the deformed super PAC landscape. Colbert’s satirical super PAC, Americans for a Better Tomorrow, Tomorrow, has raised $1 million from 31,595 people, including 1,600 people who gave $1 each. Consider this a rare show of people power in 2012.

Otherwise the super PACs on both sides of the aisle are financed by the 1 percent of the 1 percent. Romney’s Restore Our Future super PAC, founded by the general counsel of his 2008 campaign, has led the herd, raising $30 million, 98 percent from donors who gave $25,000 or more. $10 million came from just 10 donors who gave $1 million each. These included three hedge-fund managers and Houston Republican Bob Perry, the main funder behind the Swift Boat Veterans for Truth in 2004, whose scurrilous ads did such an effective job of destroying John Kerry’s electoral prospects. Sixty-five percent of the funds that poured into Romney’s super PAC in the second half of 2011 came from the finance, insurance and real estate sector, otherwise known as the people who brought you the economic meltdown of 2007-2008.

Romney’s campaign has raised twice as much as his super PAC, which is more than you can say for Rick Santorum, whose super PAC — Red, White & Blue — has raised and spent more than the candidate himself. Forty percent of the $2 million that has so far gone into Red, White & Blue came from just one man, Foster Friess, a conservative hedge-fund billionaire and Christian evangelical from Wyoming.

In the wake of Santorum’s upset victories in Colorado, Minnesota and Missouri on Feb. 7, Friess told the New York Times that he’d recruited $1 million for Santorum’s super PAC from another (unnamed) donor and upped his own giving, though he wouldn’t say by how much. We won’t find out until the next campaign disclosure filing in three months, by which time the GOP primary will almost certainly be decided.

For now, Gingrich’s sugar daddy Adelson has pledged to stay with his flagging campaign, but he’s also signaled that if the former speaker of the House goes down, he’ll be ready to donate even more super PAC money to a Romney presidential bid. And keep in mind that there’s nothing in the post-Citizens United law to stop a donor like Adelson, hell-bent on preventing the Obama administration from standing in the way of an Israeli attack on Iran’s nuclear facilities, from giving $100 million, or for that matter, however much he likes.

Before Citizens United, the maximum amount one person could give to a candidate was $2,500; for a political action committee, $5,000; for a political party committee, $30,800. Now, the sky’s the limit for a super PAC, and even more disturbingly, any donor can give an unlimited contribution to a 501(c)(4) — outfits defined by the IRS as “civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare,” and to make matters worse, that contribution will remain eternally secret.  In this way, American politics is descending further into the darkness, with 501(c)(4)s quickly gaining influence as “shadow super PACs.”

A recent analysis by the Washington Post found that, at a cost of $24 million, 40 percent of the TV ads in the presidential race so far came from these tax-exempt “social welfare” groups. The Karl Rove-founded American Crossroads, a leading conservative super PAC attacking Democratic candidates and the Obama administration, also runs a 501(c)(4) called Crossroads GPS. It’s raised twice as much money as its sister group, all from donations whose sources will remain hidden from American voters. Serving as a secret slush fund for billionaires evidently now qualifies as social welfare.

The Income Defense Industry

In his book “Oligarchy,” political scientist Jeffrey Winters refers to the disproportionately wealthy and influential actors in the political system as the “Income Defense Industry.” If you want to know how the moneyed class, who prospered during the Bush and Clinton years, found a way to kill or water down nearly everything it objected to in the Obama years, look no further than the grip of the 1 percent of the 1 percent on our political system.

This simple fact explains why hedge-fund managers pay a lower tax rate than their secretaries, or why the U.S. is the only industrialized nation without a single-payer universal healthcare system, or why the planet continues to warm at an unprecedented pace while we do nothing to combat global warming. Money usually buys elections and, whoever is elected, it almost always buys influence.

In the 2010 election, the 1 percent of the 1 percent accounted for 25 percent of all campaign-related donations, totaling $774 million, and 80 percent of all donations to the Democratic and Republican parties, the highest percentage since 1990. In congressional races in 2010, according to the Center for Responsive Politics, the candidate who spent the most money won 85 percent of House races and 83 percent of Senate races.

The media loves an underdog story, but nowadays the underdog is ever less likely to win. Given the cost of running campaigns and the overwhelming premium on outspending your opponent, it’s no surprise that nearly half the members of Congress are millionaires, and the median net worth of a U.S. senator is $2.56 million.

The influence of super PACs was already evident by November 2010, just nine months after the Supreme Court’s ruling. John Nichols and Robert McChesney of the Nation note that, of the 53 competitive House districts where Rove’s Crossroads organization outspent Democratic candidates in 2010, Republicans won 51. As it turned out, however, the last election was a mere test run for the monetary extravaganza that is 2012.

Republicans are banking on that super PAC advantage again this year, when the costs of the presidential contest and all other races for federal posts will soar from $5 billion in 2008 to as high as $7 billion by November. (The 2000 election cost a “mere” $3 billion.)  In other words, the amount spent this election season will be roughly the equivalent of the gross domestic product of Haiti.

The Myth of Small Donors

In June 2003, presidential candidate Howard Dean shocked the political establishment by raising $828,000 in one day over the Internet, with an average donation of $112. Dean, in fact, got 38 percent of his campaign’s total funds from donations of $200 or less, planting the seeds for what many forecast would be a small-donor revolution in American politics.

Four years later, Barack Obama raised a third of his record-breaking $745 million campaign haul from small donors, while Ron Paul raised 39 percent from small dollars on the Republican side.  Much of Paul’s campaign was financed by online “money bombs,” when enthusiastic supporters generated millions of dollars in brief, coordinated bursts. The amount of money raised in small donations by Obama, in particular, raised hopes that his campaign had found a way to break the death grip of big donors on American politics.

In retrospect, the small-donor utopianism surrounding Obama seems naive. Despite all the adulatory media attention about his small donors, the candidate still raised the bulk of his money from big givers. (Typically, these days, incumbent members of Congress raise less than 10 percent of their campaign funds from small donors, with those numbers actually dropping when you reach the gubernatorial and state legislative levels.) Obama’s top contributors included employees of Goldman Sachs, JP Morgan Chase and Citigroup, hardly standard bearers for the little guy. For obvious reasons, the campaign chose to emphasize the small donors over the big ones in its narrative, as it continues to do in 2012.

Interestingly enough, both Obama and Paul actually raised more money from small donors in 2011 than they did in 2008, 48 percent and 52 percent of their totals, respectively. But in the super PAC era that money no longer has the same impact. Even Dean doubts that his anti-establishment, Internet-fueled campaign from 2004 would be as successful today. “Super PACs have made a grass-roots campaign less effective,” he says. “You can still run a grass-roots campaign but the problem is you can be overwhelmed now on television and by dirty mailers being sent out … It’s a very big change from 2008.”

Obama is a candidate with a split personality, which makes his campaign equally schizophrenic. The Obama campaign claims it’s raising 98 percent of its money from small donors and is “building the biggest grass-roots campaign in American history,” according to campaign manager Jim Messina. But the starry-eyed statistics and the rhetoric that accompanies it are deeply misleading. Of the $89 million raised in 2011 by the Obama Joint Victory Fund, a collaboration of the Democratic National Committee (DNC) and the Obama campaign, 74 percent came from donations of $20,000 or more and 99 percent from donations of $1,000 or more.

The campaign has 445 “bundlers” (dubbed “volunteer fundraisers” by the campaign), who gather money from their wealthy friends and package it for Obama.  They have raised at least $74.4 million for Obama and the DNC in 2011. Sixty-one of those bundlers raised $500,000 or more. Obama held 73 fundraisers in 2011 and 13 last month alone, where the price of admission was almost always $35,800 a head.

An increase in small donor contributions and a surge of big money fundraisers still wasn’t enough, however, to give Obama an advantage over Republicans in the money chase. That’s why the Obama campaign, until recently adamantly against super PACs, suddenly relented and signaled its support for a pro-Obama super PAC called Priorities USA.

A day after the announcement that the campaign, like its Republican rivals, would super PAC it up, Messina spoke at the members-only Core Club in Manhattan and “assured a group of Democratic donors from the financial services industry that Obama won’t demonize Wall Street as he stresses populist appeals in his re-election campaign,” reported Bloomberg Businessweek. “Messina told the group of Wall Street donors that the president plans to run against Romney, not the industry that made the former governor of Massachusetts millions.”

In other words, don’t expect a convincing return to the theme of the people versus the powerful in campaign 2012, even though Romney, if the nominee, would be particularly vulnerable to that line of attack. After all, so far his campaign has raised only 9 percent of its campaign contributions from small donors, well behind both Sen. John McCain, 21 percent in 2008, and George W. Bush, 26 percent in 2004.

In the fourth quarter of 2011, Romney outraised Obama among the top firms on Wall Street by a margin of 11 to 1. His top three campaign contributions are from employees of Goldman Sachs ($496,430), JPMorgan ($317,400) and Morgan Stanley ($277,850). The banks have fallen out of favor with the public, but their campaign cash is indispensable among the political class and so they remain as powerful as ever in American politics.

In a recent segment of his show, Stephen Colbert noted that half of the money ($67 million) raised by super PACs in 2011 had come from just 22 people. “That’s 7 one-millionths of 1 percent,” or roughly .00000071 percent, Colbert said while spraying a fire extinguisher on his fuming calculator. “So Occupy Wall Street, you’re going to want to change those signs.”

To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com here.

Ari Berman is a contributing writer for the Nation magazine and an Investigative Journalism Fellow at The Nation Institute. His book, "Herding Donkeys: The Fight to Rebuild the Democratic Party and Reshape American Politics" is now out in paperback with a new afterword.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>