Selling Out

How Big Corporate Money Buys Elections, Rams Through Legislation, and Betrays Our Democracy

Mark Green

• Publisher: Avon
• Year: 2013
• Print ISBN: 9780060735821
• eBook ISBN: 9780062322012
• Topic: Politics & International Relations
• Subtopic: Political Economy
• Index: Politics & International Relations

THE EVIL OF ACCESS:

An Introduction

“There are two things you need for success in politics.

Money . . . and I can’t think of the other.”

—Senator Mark Hanna (R–OH), 1903

“Political action committees and moneyed interests are setting the nation’s political agenda. . . . Are we saying that only the rich have brains in this country? Or only people who have influential friends who have money can be in the Senate?”

—Senator Barry Goldwater (R–AZ), 1988

“The Enron scandal should launch a national movement to leash the corrupt power of money in politics so that legislators and regulators can serve the public interest.”

—The American Prospect, February 2002

Representative Jim Shannon, a Democrat from Boston’s North End—home to working-class families as far back as the 1848 potato famine—wasn’t happy. As a protégé of Speaker Tip O’Neill, and a member of the prestigious Ways and Means Committee, he thought he’d learned all about the culture of Congress, about its blend of high-minded rhetoric and low-road cynicism. But now he was confronted with an overbearing business lobbyist, telling him that his client was disappointed with Shannon’s position on an important tax bill while reminding Shannon that this particular client “makes good PAC contributions to the party.” Shannon exploded. “I’m tired of hearing appeals based on money,” he shouted. Looking pained, the lobbyist responded, “You think I like this any more than you do?”

How do you know when a democracy is in decline? When a bridge collapses, so does the reputation of its engineer. When a plane loses two engines, passengers suddenly lose their lives. A democracy, however, is more like a bather in water slowly getting hotter and hotter: it’s hard to notice the change in circumstances until it’s too late.

How do you know when a difference in degree becomes a difference in kind, when a democracy goes from warm to scalded?

when the 0.1 percent of Americans who contribute $ 1000 or more to political candidates have far more influence than the other 99.9 percent;

when, in an election year, it’s nearly more likely for an incumbent congressperson to die than to lose;

when senators from the ten largest states have to raise an average of over $34,000 a week, every week, for six years to stay in office;

when the cost of winning a House or Senate seat has risen tenfold in twenty-four years;

when it’s far easier for a working-class person to win a seat in the Russian congress than in the American one;

when legislatively interested PAC money goes 7 to 1 for incumbents over challengers—and 98 percent of House incumbents win;

when most other democracies get a 70 to 80 percent turnout of eligible voters, while in the U.S. it’s half in presidential elections, a third in congressional elections, and often only a fifth in primaries;

when one senator and one mayor each spend more getting elected than all the legislative candidates in Great Britain combined.

It’s true, as Václav Havel wrote, that a genuine democracy is the equivalent of a distant horizon we can see but never reach. Still, at minimum a democracy requires that “the people will participate in the process by which their lives are organized,” as historian Lawrence Goodwin put it. But is it a democracy if 0.1 percent pay the piper, if 80 percent stay at home in primaries, if 98 percent of incumbents return to a “permanent Congress”?

Selling Out is a book about how big money is sabotaging our democracy—and how to stop it. For despite occasional bursts of reform, the system of checks and balances we studied in high school has steadily evolved instead into a system of checks, checks, and more checks. Warren Beatty’s caricatured rants in Bulworth about how elected officials care more about their contributors than about their constituents are a far more accurate depiction of Washington and state capitals today than those heard in July 4th speeches.

Indeed, the corporate abuse in mid-2002 was the direct by-product of a corporate Washington filled with those paid to be what Kipling called “shut-eyed sentries.” In the view of Joan Claybrook, head of Public Citizen and a veteran of the campaign finance wars, ! “political money from the Enrons and others bought loopholes, exemptions, lax law enforcement, underfunded regulatory agencies, and the presumption that corporate officials could buy anything they wanted with the shareholders’ money.”

The basic problem is that candidates regard money as Mark Twain did bourbon: “Too much is not enough.” Because the press and public judge a candidacy by its treasury, and because no one can be sure how much will be “enough,” candidates feel the pressure to engage in financial overkill, just as the Soviets and Americans did with nuclear missiles in their arms race. And when the Supreme Court in the 1976 Buckley v. Valeo decision struck down the Federal Election Campaign Act’s spending ceilings, the alms race took off. Then—and now—the sky’s the limit.

Yes, we’re weary of screeds about money in politics. It’s an old story: from Plutarch writing about how money corrupted elections and ruined Rome . . . to the Standard Oil Trust in the 1890s, which, it was said, “did everything to the Pennsylvania Legislature except refine it” . . . to Lyndon Johnson’s emergence as a major politician, according to biographer Robert A. Caro, only when he distributed large funds from Texas oil interests to congressional colleagues . . . to Richard Nixon’s $2 million contribution from milk interests in 1972, followed by his order to increase milk price supports and thereby milk prices to millions of American families. . . to Charles Keating, of “Keating Five” fame, who, when asked whether his substantial contributions influenced the policy makers receiving them, helpfully replied, “I want to say in the most forceful way I can: I certainly hope so.”

We’ve been so periodically bombarded by small-bore corruption or Watergate-size scandals that money in politics has become like sex in Victorian England—a subject of gossip, amusement, and ultimately indifference. “They all do it,” many citizens sigh, with a shrug.

Allow me to be skeptical about cynicism. While money has long been the lifeblood of the body politic, only recently has it metastasized into an authentic crisis due to its volume and impact. While in 1976 it cost an average of $87,000 to win a House seat and $609,000 a U.S. Senate seat, those amounts grew by 2000 like beanstalks to $842,000 for the House and $7.2 million for the Senate—a tenfold leap (or more than threefold in current dollars). And more money brought with it intended leverage. “We’re all tainted by this corrupt system,” concludes Senator John McCain (R–AZ), a national leader for cleaner elections.

So, although issues such as terrorism, social security, health care, and pollution absorb far more public attention and concern, the scandal of strings-attached money corrupting politics and government is the most urgent problem in America today—because it makes it harder to solve nearly all our other problems. How can we produce smart defense, environmental, and health policies if arms contractors, oil firms, and HMOs have such a hammerlock over the committees charged with considering reforms? How can we adequately fund education and child care if special interests win special tax breaks that deplete public resources? How can we attract the best people to be public servants if those who run and serve are increasingly either special-interest hustlers or self-financing multimillionaires?

It was before the firm became a household name, but in early April 2001 the vice president knew to take the call of CEO Kenneth Lay of Enron and to agree to an April 17private meeting on “energy policy matters.” Dick Cheney knew that Enron was President George W. Bush’s biggest contributor in his gubernatorial and presidential campaigns and had placed company allies in several key posts—like Thomas White as secretary of the Army, Alberto Gonzalez as White House counsel, Lawrence Lindsay as chief White House economist, Patrick H. Wood III as chair of the Federal Energy Regulatory Commission, and Harvey Pitt, an Enron and Arthur Andersen lawyer, in charge of what he hoped would become a “kinder and gentler” Securities and Exchange Commission (SEC).

As reported by John Nichols of The Nation magazine, Lay handed Cheney a memorandum at the meeting that said, “The administration should reject any attempt to re-regulate wholesale power markets by adopting price caps,” and that included a “wish list” of Enron’s policy recommendations. At first, Lay got what he desired: the next day, Cheney came out of hiding to tell the Los Angeles Times that price caps were out of the question (“short-term political relief for the politicians,” he said); and after a total of six meetings between Cheney, Lay, and aides, the Bush-Cheney energy task force adopted all or significant parts of seven of eight company policy recommendations.*

“There is no company in the country,” concluded Representative Henry Waxman, the California Democrat leading the congressional investigation of Enron, “that stood to gain as much from the White House plan as Enron.” Agreeing was author Kevin Phillips, who in 2002 wrote in the Los Angeles Times, “Not in memory has a single major company grown so big in tandem with a presidential dynasty and a corrupted political system.”

After Enron was dragged under by a riptide of fraud and self-dealing, however, Cheney refused to disclose who attended these meetings—and got sued by the General Accounting Office—while President Bush falsely implied that Ken Lay had supported rival Ann Richards in his 1994 Texas gubernatorial campaign.

Then on July 14, 2002, Cheney gave a solemn, strong speech denouncing corporate irresponsibility and saying that their administration “will pursue the wrongdoers.”

When the McCain-Feingold campaign finance bill narrowly passed the Senate, guaranteeing its enactment, its supporters enjoyed a round of champagne, hugs, and high fives at a Capitol Hill celebration on Wednesday, March 20, 2002. It had been twenty-eight years since the last major campaign finance law, and the victors—especially former Common Causer Fred Wertheimer, who had worked on both bills—felt vindicated.

But like rowdy, uninvited guests at the prom, a prominent front-page story three days later reminded everyone how deeply embedded the pay-to-play system really was.

The New York Post reported that John Whitehead, Governor George Pataki’s appointee to head the nonpartisan Lower Manhattan Development Corporation rebuilding downtown after September 11, would be the headliner at a big-money Republican fund-raiser in April. The reliably Republican Post reported that “Whitehead’s starring role in the gala event with Gov. Pataki has some businessmen quaking over whether they’ll have to pony up donations if they want to get lucrative contracts related to the reconstruction of downtown. That’s because Whitehead is set to award over $1 billion in state contracts.”

One businessman requesting anonymity explained the implicit squeeze: “Look, you don’t have to be a political genius to know that if you’re interested in doing business with Whitehead’s agency and you get an invitation like this, you’re expected to kick in some cash. But I have to say, there’s something really unseemly about doing it when you’re looking at something as sacred as the duty of rebuilding the World Trade Center and the surrounding community.”

After this publicity, Whitehead withdrew from the event.

For years tobacco interests had a surprisingly easy time of it in the New York state legislature and pro-health advocates weren’t exactly sure why. Then a lawsuit and a New York Times investigation in 1999found two smoking guns in the previously sealed files of the Tobacco Institute and Philip Morris: first the institute had secretly funneled $440,000 in a single year to the New York Tavern and Restaurant Association to “carry its baggage,” in the words of an internal memo, and lobby for its interests; second, from 1995 to 1997, 115 of the state’s 211 legislators had accepted tens of thousands in gifts from Philip Morris, including hotel accommodations, tickets to sporting events, and meals.

After these disclosures, Common Cause, the League of Women Voters, and the New York Public Interest Research Group filed formal complaints, which resulted in a $75,000penalty, the largest ever imposed in New York for violations of the lobbying law. Those legislators who accepted the illegal gifts suffered no punishment. But embarrassed by the publicity, the legislature did refuse to enact the bill Philip Morris was pushing to prohibit localities from passing smoking restrictions.

Among the staff sharing responsibility with House Speaker Newt Gingrich (R–GA) for an important 1995 telecommunication bill was a telecommunications entrepreneur named Donald Jones. Jones owned 80 percent of Cyberstar, a firm doing cable business in Wisconsin and the Virgin Islands. Ralph Nader filed an ethics complaint, arguing that the arrangement appeared to be an improper in-kind contribution to Gingrich’s office—a clear violation of House Rule 45, which prohibits private funding of House offices. “The big problem with such an arrangement,” said Gary Ruskin, director of the Congressional Accountability Project, “is that most Americans are shut out of the legislative process while the corporate special interests get the special provisions, exceptions, loopholes, favors, and benefits that they want.” At the time, the telecommunications industry spent about $9 million in campaign contributions each federal election.

A passage in Gingrich’s book Contract with America calls for “wresting power from special interest groups and returning it to the public.”

The Washington Post reported in June 2002 that leading Republican activists, spearheaded by Grover Norquist, were researching the political giving of hundreds of Washington lobbyists in what was called by its compilers “the K Street Project.” “[It’s] part of a campaign that would deny government access to Democrats. . . . ‘What’s different this time is you will have this list to control access’ to the White House, Congress and federal agencies, according to a GOP lobbyist working on it. ‘That’s been very clear from the discussions.’”

An irate Senate Majority Whip Harry Reid (D—NV) on the chamber floor asked what the list was for: “For intimidation and professional retribution? The President should pick up the phone, call his friend [Grover Norquist and] tell him that George W. Bush won’t tolerate what amounts to McCarthyism.”

Instead, the White House replied that the President wouldn’t condemn the project because “he’s not part of it.” And Represen...

Table of contents

• Dedication
• Contents
• 1. The Evil of Access: An Introduction
• 2. The History of Money in Politics: Scandal, Reform, Scandal. . .
• 3. Rules and Laws: How Money Shouts
• 4. Campaigning for Money: 30,000 Phone Calls Later. . .
• 5. The Cost of Money: Democracy Under Attack
• 6. The Players: Profiles from the Money Game
• 7. Reforms don’t Work?: Visit New York City, Maine, Arizona . . .
• 8. Change, For Good: Who Owns Democracy—Enron or You?
• Epilogue: “Imagine....”
• Acknowledgments
• Notes
• Index
• About the Author
• Also by Mark Green
• Copyright
• About the Publisher