How billionaire backers pick America’s candidates

by Thomas Frank

Harper’s Magazine Essay (April 2012)

While visiting Kansas City last December, I read a local newspaper story lamenting the gradual transformation of Missouri into a reliably Republican citadel – a red state, as we like to say. In the past, I read, Missouri had been different from its more partisan neighbors. It had been a “bellwether” state that “reflected national trends”, rather than delivering votes for any particular party. But now all that was over, and I assumed the article would go on to mourn the death of judicious public reason – the tradition of giving rival arguments a hearing and testing them with that famous “Show Me” skepticism.

I was wrong. Forget the death of open-mindedness. What was actually being mourned that day in the Kansas City Star was a possible loss of advertising revenue by the state’s TV stations. If Missouri was no longer a battleground state, then the two parties and their various backers would no longer fight their expensive electronic war over the airwaves between Saint Louie and Saint Joe, and “spending on TV ads in the state [would] plummet”.

This was the concern, not some airy nonsense about ideology or polarization. That would have been a mere matter of opinion, while this was so hard and so real it came with a price tag. Here is what Missouri’s creeping Kansification was going to cost: in the last election cycle, the national candidates and their allied PACs blew almost $21 million on advertising in the state. Given Missouri’s tilt to the right, every last penny of a similar windfall might be lost. Even worse: Missourians had squandered their battleground status just before what promises to be the biggest-spending political year ever. As the paper noted, campaign expenditures are predicted to skyrocket between now and November.

Thanks to their own ideological stubbornness, Missourians – or, more accurately, Missouri broadcasters – will now miss out on all that. The Star reassured readers chat the hammer blows inflicted on their local FCC license holders “would not be fatal”. Yet the ultimate lesson was clear: political conviction comes at a high cost. Unemployment in Missouri stands at eight percent, and like other Midwestern states, it has been hemorrhaging jobs and industries for decades. Now it has gone and turned away the one bonanza that even loser states, as long as they remain appropriately fickle, have a shot at winning: campaign finance.

When I came across the Star article, I thought it was an outlier – a strange and peculiarly tone-deaf way to approach political questions. Before long, however, I started noticing the same thing elsewhere: a tendency to describe Campaign 2012 exclusively in terms of the massive amounts being spent to sway us. Financial journalists reported dispassionately on “how to play the ad glut”, with even the drooping billboard industry preparing for a jackpot. “Without This Year’s Elections The Ad Business Would Be Totally Screwed”, screamed a January headline on the Business Insider website.

It wasn’t just the business press that was fixated on campaign spending. On the night of the Nevada caucuses, for example, CNN anchorman Don Lemon could be seen reporting on economic hardship in that state: the foreclosures, the real estate collapse, the unemployment. The network even trotted out a Nevadan homeless person to make its point. Then, a short while later, Lemon was back with one of those interactive displays, for which CNN is so famous – in this case, a screen tracking outlays by candidates and outside groups on TV commercials.

After recalling what a glorious burst of spending the campaigns had rained down on other states as they prepared to vote, Lemon observed that now it was Nevada’s turn. Especially given the level of suffering there, said Lemon, “you would think the candidates may say, ‘Hey, you know, we want to put a little money into the economy’ “. But now it was the anchorman’s duty to report a lamentable fact. Those candidates were actually spending less in long-suffering Nevada than they had elsewhere, and some of them had declined to buy even a single minute of airtime in the Sagebrush State. “They’re not add[ing] to the economy here”, Lemon soberly noted. The effrontery! The heartlessness!

Political advertising, in other words, might correctly be understood as a modern-day form of largesse. When presidential candidates run TV commercials assailing one another, they are playing the role of aristocrats in some medieval ceremony, throwing handfuls of coins to the toiling masses. And beside these gilded personages stand the commentariat, marveling in song and rhyme at what a fine democratic tableau it all is.

Alternatively, we might see TV commercials as one of the few stimulus programs Republicans fully endorse. They are also just about the only form of redistribution from the billionaire class that the rest of us will ever see. {1}

And what of the ads themselves? After filling us in on how much each campaign had spent, CNN’s Lemon shared a few specimens. He told us exactly how many times each commercial had aired in Nevada and Florida, letting us calculate for ourselves the relative stopping power of each salvo. Did people’s hatred for Gingrich continue to mount after the fiftieth time an anti-Newt commercial had run, or were there diminishing returns?

There is nothing new about money in American politics. It has twisted the people’s will and infuriated the civic-minded for more than two centuries. Efforts to restrict the flow of campaign spending go back as far as 1757, when George Washington was taken to task for ladling out an excess of rum, beer, and hard cider to the voters in his district. Since then, a series of laws – including the Pendleton Act (1883), the Federal Corrupt Practices Act (1910), the Taft-Hartley Act (1947), the Federal Elections Campaign Act (1971, 1974), and the McCain-Feingold Act (2002) – have aimed to disrupt the synergy between cash and electioneering, with mixed success.

But it is different this time, in two ways.

First of all, there is the sheer size of it. Almost every modern election cycle sees a rise in spending over the previous one. This time, however, the increase will be much steeper. Think of the many outrages brought to you over the past decade or so by campaign dollars: the Swift Boat Veterans for Truth; the millions dumped by friendly billionaires into Americans Coming Together; the adventures of the Bush Pioneers, the Bush Rangers, the Bush Super Rangers. These will fade to insignificance when compared with the 2012 onslaught – the “coming tsunami of slime”, as journalist Joe Hagan calls it.

How big will the tsunami be? No one knows for sure, since today we are operating under different rules than those that prevailed just four years ago. One way of gauging the wall of filth that is headed our way would be to note that the 2010 congressional elections – the first to be conducted in the wake of the Supreme Court’s Citizens United decision – saw more than a fivefold increase in “independent expenditures” over the previous round of midterms. And according to the Center for Responsive Politics, independent spending to date for the 2012 elections is already 108 percent above 2008 levels. At a minimum, then, we can probably look forward to twice as much slime as the last time around.

We have been heading in this direction for a while, thanks to trends in campaign finance that brought us bundlers and PACs and 527s. Citizens United upped the ante by effectively inviting corporations and unions to spend as much as they liked on “electioneering communications”. What really changed, however, was neither the abolition of spending limits nor even the touching solicitude paid to corporations by equating their speech with that of human beings. No, Citizens United (and the related SpeechNow case) altered the political landscape most profoundly by ushering in the Super PAC.

What distinguishes the Super PAC from previous electoral-finance innovations is the deniability it affords the candidate it supports. By law, candidates themselves still cannot accept more than $2,500 from an individual. A Super PAC – officially designated as an “independent expenditure-only committee” – suffers from no such handicap. It can raise and spend potentially oceanic amounts of cash, as long as it maintains its nominal “independence” from a candidate. These slush funds are open to contributions from ordinary citizens, of course. But they have become the stalking horse par excellence for billionaire backers, who are now freed from the nickel-and-dime constraints of direct contribution – and much of this money, being theoretically separate from the candidates themselves, has naturally been poured into vitriolic TV ads.

It dawned on the world that we had reached a new level of campaign savagery during the weeks before the Iowa caucuses. For a brief moment, you will recall, Newt Gingrich, who had foresworn negative advertising and was behaving in an uncharacteristically congenial manner, took the lead in public-opinion polls. Almost immediately, Mitt Romney – which is to say, Mitt Romney’s studiously non-aligned corporate doppelganger, the Restore Our Future Super PAC – blitzed his slow-moving opponent with a storm of derisive TV commercials. The spots ran day and night, and utterly destroyed Gingrich’s standing in the polls.

Among people who follow campaign spending closely, this seems to have been a sort of Hiroshima moment: the vast power of a new weapon was finally unveiled. Candidates like Romney could appear to be models of civic virtue, without an unkind or even combative thought in their heads, while their wealthy patrons came together to heap ridicule on their rivals, in unprecedented quantities of advertising and degrees of viciousness. All of the handshaking and diner-visiting and carefully drawn position papers were swept into irrelevance.

Romney’s carpet-bombing assault in Iowa triggered an immediate campaign-finance arms race among the surviving candidates. But Restore Our Future retained at least a temporary edge over Gingrich’s Winning Our Future and Rick Santorum’s Red, White and Blue Fund and Ron Paul’s Endorse Liberty. A few weeks later, Romney’s secret weapon delivered the Florida primary for the former Massachusetts governor by once again outsliming the hapless Gingrich, reportedly by a factor of five to one.

The rise of the Super PACs, and the sheer volume of cash they enabled candidates to devote to mudslinging without ever dirtying their hands, was something new. Just as new, and equally alarming, was the public’s cognitive capitulation to the process. Over the course of the past few decades, the power of concentrated money has subverted the professions, destroyed small investors, wrecked the regulatory state, corrupted legislators en masse, and repeatedly put the economy through the wringer. Now it has come for our democracy itself.

And by and large, we are pretty blase about it. To judge by our society’s consensus-approved commentary, the permissible modes of political discussion are narrowing by the day. We speculate about what campaign spending will do for regional economies, or how effective this or that TV commercial is at persuading voters, or (at the outermost limits of journalistic daring) whether that selfsame commercial might contain … errors of fact. But what this style of commentary virtually requires the media to ignore is that with every juicy morsel of hate, we are becoming more and more a rich man’s country.

Newt Gingrich did not take the Iowa defeat lying down. Instead, he turned to a billionaire backer of his own, casino mogul Sheldon Adelson, to fill the coffers of Winning Our Future. With his war chest thus replenished, Gingrich began running TV commercials in South Carolina that held Romney responsible for certain unsavory deeds of Bain Capital, the buyout firm he used to run. {2} Largely on the strength of these bludgeoning ads, Gingrich proceeded to win the South Carolina primary.

And if you happened to turn on CNN the night of Gingrich’s big win, you would have heard the centrist pundit David Gergen depict the whole electoral process as a kind of card game for billionaires. While Gingrich took his victory lap in a packed South Carolina ballroom, Gergen predicted his next move: “Don’t you think he’ll call Mr Adelson and say, ‘Why don’t you double down?'”

The line stuck in my craw. Its obvious but unspoken assumption was that the public may vote as its pleases, but that the parties to whom the candidates ultimately answer are the superrich, who will expect some returns but are also sometimes willing to invest in a sagging candidacy – buying on the dips, as it were. Even more disturbing is the unspoken but obvious follow-up question: What is the payoff for Adelson, or for any other major political contributor, if his long shot comes in?

Adelson himself spoke of Barack Obama’s “quest to socialize this country” when Forbes quizzed him about his motives. He also had this to say:

I’m against very wealthy people … influencing elections … But as long as it’s doable I’m going to do it. Because I know that guys like Soros have been doing it for years, if not decades.

Foster Friess, the mutual-fund tycoon who is plowing money into Santorum’s Red, White and Blue Fund, is also happy to discuss his munificence with reporters. And when he does, the conversation seems naturally to gravitate to the language of gambling, investing, and financial speculation.

When Bloomberg’s Margaret Brennan interviewed Friess, for example, she persistently framed his patronage as a daring investment and potential ten-bagger. Friess, she explained, was “betting some of [his] fortune on a long shot”. This was on January 27, when the campaign of the fresh-faced former Pennsylvania senator seemed to be fading. Brennan wondered whether it was time to diversify or even cash out: “At what point do you cut your losses? At what point do you perhaps back one of the front-runners?”

A couple of weeks later, after Santorum was declared the surprise victor in Iowa and pulled off upsets in Minnesota, Missouri, and Colorado, Brennan spoke to Friess again. This time she asked, “Can you say at this point that your support paid off this week?”

The constant chatter of long shots and payoffs failed to rattle Friess. He cheerfully played along, noting that although he had contributed less to Santorum than Sheldon Adelson had to Gingrich, he had secured better political results. “I’m an investor”, Friess joked, “and Sheldon is a casino guy”.

Not that Friess is absolutely locked in to speculative metaphors. He also describes the millions he has put behind Santorum as the result of a political casting call. Musing to ABC News in February, Friess listed the candidate’s strengths as if reading from a classified ad:

fifty-three years old, starts each morning with fifty push-ups, is the grandson of a coal miner, has demonstrated the ability to win blue-collar votes by winning in Pennsylvania, which had over one million Democratic registration advantage, and grew up on a Veterans Administration hospital grounds where his father worked, and is a fellow of modest means.

Help Wanted: Working Man with Plutocrat-Friendly Views.

I haven’t even touched on the billionaires who are making such an inspiring display of class solidarity behind Mitt Romney – John Paulson, Julian Robertson, Paul Tudor Jones, a Walmart heir or two. Nor have I broached the question that is no doubt vexing many: Where are the liberal billionaires we’ve heard so much about? Well, as it happens, the nation’s number one progressive billionaire, currency speculator George Soros, is reportedly not jazzed about the presidential campaign. He is having trouble distinguishing between Barack Obatna and Mitt Romney, and his failure to take a stake in anybody’s Super PAC has been treated as a news story in its own right.

Many efforts to grapple with the Super PAC phenomenon bog down in the slough of advertising criticism, which offers not one but two misleading schools of thought. One holds that advertising is diabolically powerful, capable of transmitting into the minds of the millions whatever views the man with the camera chooses. The other insists that advertising is not effective in the least, that consumers are wily and evasive, always charting their own course. {3}

Both views are clearly inadequate in the present circumstances. The idea that our votes can simply be purchased by a large enough ad expenditure is contradicted by the burnt-out hulks of gold-plated political campaigns that litter recent history – think of the floundering Steve Forbes, or the tongue-tied Rick Perry, or eBay CEO Meg Whitman’s fantastically expensive 2010 bid for the California governorship. Yet the other argument, that we remain proud and free and immune to the barrage, is such an obvious rationalization that you hear it advanced only by people who stand to benefit from the present spectacle, or are actually in some way responsible for it.

The latter category would include Supreme Court justice Antonin Scalia, who told an audience of lawyers back in January that “I don’t care who is doing the speech – the more the merrier”. Then Scalia tossed in one of the great canards of our time: “People are not stupid. If they don’t like it, they’ll shut it off.” All power, in other words, rests in the hand with the remote. Against the scoffing majesty of the American TV viewer, all the assembled efforts of the nation’s tycoons are as gentle Mediterranean waves against looming Gibraltar.

As it happens, this kind of clueless optimism contributed to the Citizens United decision itself. In the majority opinion, Justice Anthony Kennedy declared flatly that “this Court now concludes that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption”. Got that? Independent expenditures are by definition clean, because those Super PACs are, you know, independent. The court continued unfolding its wisdom:

That speakers may have influence over or access to elected officials does not mean that those officials are corrupt. And the appearance of influence or access will not cause the electorate to lose faith in this democracy.

History records that when the court made this amazing proclamation on January 21 2010, the electorate was in fact in the throes of a wrenching crisis of faith brought on by precisely the “appearance of influence or access” that Justice Kennedy declared to be impossible: namely, the apparent power of Wall Street banks to get themselves a colossal government bailout, an occurrence that had prompted rallies and protests and talk-show jeremiads by the thousand. All the judges had to do to see how wrong they were was use that all-powerful remote and turn, on the damn TV.

Like the showdown we are edging toward today, the 1896 presidential contest between Republican William McKinley and Democrat William Jennings Bryan was one of apocalyptic rhetoric and superhuman fund-raising. Like Barack Obama, Bryan was perceived by a certain stratum of Americans as the representative of an alien, revolutionary tradition. With his fiery rhetoric and opposition to the gold standard, he seemed to embody the spirit of anarchism, or maybe Jacobin Paris. And so his opponents came together as a class to drown him under a deluge of money.

In his classic 1938 history of American graft, The Politicos, 1865-1896, Matthew Josephson tells how McKinley’s campaign manager, the industrialist and uber-fixer Mark Hanna, visited the New York offices of the nation’s great corporations, impressing upon his listeners the “reality of the danger” and demanding from each a percentage of their capitalization in order to put down the Nebraska Robespierre. By and large; Hanna got what he asked. And with it he generated an unprecedented number of pamphlets and lithographs, fielded an army of canvassers, and caused a chorus of “the most violent class hate” to reverberate both in the press and on the lecture circuit. {4} Some speculated that Hanna may have outspent the Democrats by twenty or thirty to one. And money prevailed, of course, even if McKinley nabbed only 51 percent of the popular vote.

This fall, office parks throughout the land will no doubt ring with Hanna-like calls to take America back from the hands of the Indonesian-socialist usurper. The parallel that really bothers me, though, involves yet another visit to New York City by an enterprising campaign manager. In February, spooked by the success of Romney’s Super PAC – and also by a Koch Brothers conference at which conservative funders reportedly pledged $100 million to defeat the Democrats – the Obama campaign abruptly reversed its opposition to Super PACs. According to a Bloomberg News account, campaign manager Jim Messina was then dispatched to New York City to meet with representatives of the “financial services industry” and encourage them to chip in. During the meeting, the article reports, Messina “assured” his audience that the president would not “demonize Wall Street as he stresses populist appeals in his reelection campaign”. In other words, to avoid the fate of William Jennings Bryan, the president is apparently prepared to jettison a large chunk of his party’s legislative and rhetorical tradition.

Here we begin to see the real consequence of all this getting and spending. It’s not that campaign money has direct power over the public mind – that one advertising dollar can be counted upon to yield one vote. Nor is it true that the public is invulnerable, that we judiciously weigh these messages and see through the lies. The problem is that by putting such a price tag on the White House, we have imported market logic directly into our politics. Yes, even the village socialist will still get to vote, not to mention the village idiot. But in order to be a candidate – to be the kind of person who can make those calls to billionaires and get them to “double down” – Americans will have to undergo a far more rigorous process of ideological winnowing and executive training. And anyone who isn’t an absolute zealot about maximizing shareholder value will fail to make the cut.

For some, this seems to have been the idea all along; this is why companies have political action committees in the first place. In Honest Graft, a 1988 history of money in policies, Brooks Jackson tells us how Republican congressman Guy Vander Jagt barnstormed the nation in the 1970s, proselytizing for corporate PACs. This “preacher in the temple of free enterprise”, as Jackson describes him, believed there would come a day when corporate money would act at long last in its rational self-interest and deliver up a Republican majority in Congress. When Honest Graft was published, however, the consummation of Vander Jagt’s dream was still several years in the future. Corporate PACs had disappointed their prophet and were largely wasting their substance on the conservative faction of the Democratic Party.

To get us where we are today would take hundreds of millions more, a generation of super-lobbyists, and massive K Street projects designed to make the political market function as a political market should. What we ended up with is a system in which politicians answer primarily to the pressures of supply and demand, not to the blunt and obsolete incentives known as votes.

There is a profound irony, of course, in watching the fate of our proudly interconnected world get taken in hand by a collection of ad-hoc propaganda bureaus, broadcasting their top-down messages of gross stupidity via the definitive mass medium of yesterday, the television.

But that is the way the market rolls. There was a period in the first term of George W Bush when the polite-thinking world trembled to hear Republican strategists talk about building a “permanent majority” – a new coalition that would make the GOP the dominant party for decades to come. It is too early to tell, of course, but perhaps with Citizens United they have finally done it. As the syndicated columnist E J Dionne has written, the Supreme Court decision is best understood as part of “a larger initiative by moneyed conservatives to rig the electoral system against their opponents.” It will take time before the legislative follow-through is completed, of course, and Republicans will continue to lose elections here and there, but sooner or later, the weight of the money will tell. The market will speak.

Notes:

{1} A classic example of this redistribution: in Manchester, New Hampshire, one local TV affiliate broadcasts from an unusually luxurious building. According to the political journalist David Frum, the facility is known as the House That Forbes Built, in honor of the lavish ad buys made by Steve Forbes during his 1996 and 2000 campaigns for the presidency.

{2} Again, when I say “Gingrich”, I really mean “the Super PAC supporting Gingrich”. The candidate himself had absolutely nothing to do with the TV commercials that aired on his behalf.

{3} The aesthetic side of advertising criticism – which would point out that Super PAC ads are, by and large, clunky tirades apparently assembled in a matter of minutes by people armed with cheap editing software – is rarely part of the journalistic conversation.

{4} Naked coercion was also used, in a pattern that might be familiar to us today. According to Josephson, job creators across the country threatened their employees with layoffs and outright closings should Bryan win.