How the Rich Are Turning State and Local Races Into Their Own Personal Political Playgrounds

Election '16

The 2012 election has become a political extreme sport for wealthy individuals and corporate America, as they have blown off whatever’s left in campaign finance laws and have strutted on the electoral field as the rest of us watch like spectators from the cheap seats. But what’s not fully appreciated is how the plutocrats’ stampede doesn’t stop with the presidency, but is playing an outsized role in many down-ballot and state races.

“People who are trying to buy influence in the political system do not stop at the federal level,” said Kathy Kiely, managing editor of the Sunlight Foundation’s reporting group, one of the best investigative teams covering money in politics. “Lots of times the states become a very appealing route because it doesn’t take much money.”

In many respects, the down-ballot impact of the U.S. Supreme Court’s Citizens United decision has taken a back seat as the fight for the White House has ruled the airwaves. But because less is known about these ‘lower-level’ contests, and because they are in smaller media markets, big money can go even further to upend the process.

Denise Roth Barber, research director at the National Institute for Money in State Politics said that Citizens United is just the best-known of many court rulings in recent decades that have made it possible for a range of wealthy players to become opportunists in elections—some of whom are individuals who are willing to take public stances while others are more secretive financiers who bankroll groups that hide their identity.

The 2012 political season has had more than its share of both of these players, whose common thread is their wealth and desire to use it to influence politics in ways that a majority of Americans cannot—and do not. For exhibit A, all Roth Barber has to do is walk 10 minutes from her Helena, Montana office to state Republican headquarters. On October 5, a federal judge struck down all Montana campaign contribution limits. That ruling was reversed six days later by a federal appeals court—but not before the state GOP funneled $500,000 to their 2012 gubernatorial candidate, Rick Hill.

“Rick Hill did receive $500,000 from the Montana GOP, which definitely came from outside the state,” she said. “The Montana GOP did not have that money sitting around. They were allowed to give like $22,000 and they had given that already.”

That political money equivalent of a drone attack—dumping half-a-million from secret sources—is just one of the undemocratic distortions unfolding in 2012 below the top of the ticket. Outside of presidential swing states, newly created Orwellian-named groups are also dropping ad bombs for candidates who campaigns were deservedly crashing.

Take Illinois’ Rep. Joe Walsh, a Republican who last week blared that an abortion has never saved a woman’s life. In a race in which he was trailing, the “Now or Never PAC” spent $2 million on TV ads to boost Walsh and  attack Democratic challenger Tammy Duckworth. Another congressional right-winger in a tight race, Rep. Alan West, R-FL, was helped by a $1 million TV buy from the “Treasure Coast Jobs Coalition,” another opaque group whose biggest donor is a New Jersey physician-turned-pharmaceutical executive with unfinished business before federal drug regulators.

The Citizens United and SpeechNow string of legal rulings in 2010 that created so-called ‘super PACs’ only account for one of three big money political money pathways used today. The second is outsized spending by individuals in a few states with no donation caps—they don’t need fabricated groups as conduits. The third is the expanded use of non-profits (which are not required by the IRS to disclose donors) to run campaigns, which has been used by business lobbyists for years but has grown widely in 2012.

Campaign finance experts says there’s no doubt that the newly empowered wealthy are playing a bigger role in 2012. A just-released report by Public Citizen found that many Super PAC donors only care about electing or defeating single candidates, which is a brazen flouting of contribution limit laws. Moreover, two scholars at the University of California-Berkeley, Doug Spencer and Abby Wood, have found that spending in states by corporations and unions freed by Citizens United/SpeechNow, and by rogue non-profits, has surged between the $1,000 and $40,000 level. For wealthy players, that makes state and more local elections like a kid taking $100 bill into a candy store.

Shades of Corruption: Black, White, Grey

Big money can be disruptive no matter what form or conduit it takes, but not all forms of potential corruption are equal. Ready cash obviously can impact who wins. Almost all of 2012’s ‘independent’ spending has gone to negative messaging, with the The New York Times finding that 86 percent of that money has been spent on negative ads this cycle.

It also creates future conflicts of interest if the beneficiaries are elected and get calls from these supporters—whose access to lawmakers is virtually assured. But there is another distinction to be made between some of the top spenders in 2012: many on the GOP’s side are supporting economic agendas where they will privately profit. In contrast, big Democrat givers tend to back more public-interest agendas, such as civil rights.

The contrast between Colorado and Missouri’s top political moneymen illustrates this point. In Missouri, a retired investor and chess enthusiast, Rex Sinquefield, has spent nearly $7 million in the 2012 cycle—and $21.5 million since 2008—with most going toward state campaigns to replace his state’s progressive income tax with a regressive sales tax. In 2010, he helped ban new local income taxes in Missouri’s biggest cities, Kansas City and St. Louis. He’s also trying to end teacher tenure and recently said that public schools were created by the Klu Klux Klan to repress African-Americas.

Sinquefield appears to be a mild-mannered libertarian activist in online video interviews, but his political money trail reveals an obstinate if not ruthless operator. Any economist will tell you that replacing income taxes with sales taxes most heavily impacts the poor while leaving the wealthy with more cash.

To Sinquefield, the political gets personal. This year, he tried to place a referendum on the November ballot to repeal Missouri’s income tax. His lawyers filed 22 proposals to replace income taxes with sales taxes. That crusade—amounting to one-sixth of all ballot items filed in Missouri this year—became stalled in a dispute over ballot wording by the outgoing Democratic Secretary of State, Robin Carnahan. Sinquefield responded by sending $400,000 to a GOP candidate seeking to succeed her before Labor Day. The state is one of four with no candidate contribution limits. (In other states with donation limits, those kinds of sums have gone into ‘independent’ committees, such as the ‘Now Or Never PAC’ attacking Duckworth in Illinois.)

When one wealthy man can come close to upending a state’s tax structure—and make it more punitive on multitudes while privately standing to profit—it more than suggests that the democratic process is unraveling. Sinquefield is doing as an individual what business lobbyists have historically done via trade associations, such as state chapters of the U.S. Chamber of Commerce, National Federation of Independent Businesses or other groups that share lists of well-off backers (like the American Legislative Exchange Council).

Colorado’s top individual donor is software entrepreneur and gay rights activist Tom Gill, who, according to this Investigative News Network report gave, “$450,000 to Colorado independent expenditure committees so far this cycle, which began in 2011. He’s also given generously out of state—$100,000 to the Ohio Democratic Party Executive Committee and $25,000 to the Iowa Democratic Party, and smaller amounts to 26 candidates and causes in that time.” The INN report said Gil “has doled out nearly $3.7 million to state and federal causes and campaigns in the past five years, making him the largest political donor from Colorado who wasn’t funding his own campaign.”

Where Sinquefield is more focused on private profits, Gil arguably is more focused on civil rights. But in many states, the biggest moneymen—and occasionally women—occupy a world dominated by greys, where public and private goals are blurred.

In Michigan, for example, there’s a big money fight over increasing the required amount of renewable energy feeding utilities. On one hand, it’s clearly a pro-environment effort. Yet proponents would also stand to profit by the adoption of alternative energy sources. Utilities are opposing it, of course, to preserve their profits, and are using every available tactic in 2012, including independent expenditures., a journalism website tracking media buys in real time based on Federal Communication Commission filings, said the fight and another state ballot item about building a new bridge to Canada has made Grand Rapids into one of 2012’s biggest media markets for ad wars.

In Florida, the Palm Beach Post reports that one of that state’s most forceful new players is not the Republican Party, but a pro-corporate warrior woman—Nancy Watkins—who runs 120 political committees. “Hey, I’m 5-foot-1 and 110 pounds. There’s nothing scary about me,” she told the paper. “But, you know, and I realize this is not always artfully said, I do believe that corporations are people and they have a right to be heard.” 

What’s undeniable in 2012 is that politics has become an ever-expanding playground for the richest Americans—and not just at the top of the ticket and presidential campaign. In the post-Citizens United world, the role of average citizens is shrinking while the role of wealthy people and shadowy front groups has grown. There’s a word for that. It’s not democracy, but called a plutocracy.

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