Bailed-Out Companies Spending Big Money to Elect Politicians They Favor
Following a $57 billion tax-payer bailout in 2009, the American people (and, to a lesser extent, the Canadians) essentially owned General Motors. That includes Republicans and Democrats, as well as independents, Greens, Libertarians and everyone else.
Yet the company’s Political Action Committee wrote a $5,000 check to Senate Minority Leader Mitch McConnell in September, a small piece of the $190,000 the firm has showered on federal candidates this year.
As the Washington Post reported this week, McConnell had been a staunch opponent of the auto-makers’ rescue, saying he could not "ask the American taxpayer to subsidize failure." But, the Post added, “GM doesn't seem to hold a grudge.”
According to the report, GM is not alone among firms that received tax-payer assistance, and are now spending huge campaign dollars to elect politicians (in both parties) who won’t vote to for new regulations, or, in the case of financial firms accused of foreclosure fraud, even to hold them accountable for violating the law:
Companies that received federal bailout money, including some that still owe money to the government, are giving to political candidates with vigor. Among companies with PACs, the 23 that received $1 billion or more in federal money through the Troubled Assets Relief Program gave a total of $1.4 million to candidates in September, up from $466,000 the month before.
An analysis of the campaign spending revealed, “most of those donations are going to Republican candidates.” Despite the Democrats’ decidedly business-friendly approach to governing -- one that has arguably cost them no small degree of support within their base -- corporate America is getting ready to bite the hand that’s fed them throughout the bailouts.
Nowhere is that dynamic clearer than in the world of Big Finance. Democrats bear much of the blame for their current political woes for consistently cozying up to Wall Street. But according to the Post, they’ve now “been abandoned by individual Wall Street donors as well as corporate PACs, leaving the party without an important source of funding as it fends off aggressive Republican challengers.”
Despite the relatively toothless nature of the Wall Street reforms passed by Congress, apparently saying mean things about the financial giants is sufficient to unleash a torrent of campaign dollars for the opposition. Scott Talbott, a lobbyist with the Financial Services Roundtable, told the Post that one factor in Wall Street’s turn is the “tone” some Democrats used against financial firms. "The entire industry was painted with a broad brush, and there was dissatisfaction with that," Talbott said.
Such sensitivity from bailed-out firms fat with tax dollars is a small sign of the arrogance of corporate America today. Now they’re spending freely to influence elections whose outcomes will effect their bottom lines. It’s a feature of America’s first post-Citizens United election, and more frighteningly, it’s a harbinger of things to come.
At a recent conference on the decision, Robert Weisman, president of the watchdog group Public Citizen, noted that $5.2 billion were spent in the entire 2007-2008 election cycle by all federal candidates. “Exxon in that same period made $85 billion in profit; Pfizer made $27 billion selling just Lipitor alone,” said Weisman. “Last year, Goldman Sachs spent $16.5 billion on executive compensation. So if they choose to, corporations can completely overwhelm the political process, and they’re going to choose to do it more and more.”
As I write in my new book, The Fifteen Biggest Lies About the Economy, if there were anyone left who truly believed that the U.S. economy bore even a vague resemblance to a free market, surely the multibillion-dollar bailouts that Wall Street and other sectors have enjoyed since the collapse of the debt-backed securities market came as an eye-opener.
The government intervenes in the market all of the time—we pay some farmers to grow crops, others not to; we promote specific industries’ products in international markets; the government sets up the rules under which corporations negotiate with their workers; governments sign trade agreements that determine which workers will face competition from overseas firms—and which will not—they routinely dole out tax breaks and low-interest loans and waive environmental and other standards to promote regional growth; and on and on and on.
But this election will present a different phenomenon: the private sector intervening more aggressively than ever before in the marketplace of ideas, in the bedrock of a healthy democracy.