4 Things You Should Know About the Plutocrats Buying Our Democracy
Last week, the chair of the Federal Election Commission Ann Ravel made a startling admission: there was virtually no chance of the FEC enforcing anti-corruption campaign finance rules in the 2016 presidential election.
Ravel’s concession was just the latest incident to draw attention to the overwhelming role that private money plays in American elections, as a line of U.S. Supreme Court and federal court rulings have freed corporations and the rich to put ever-larger sums into the latest big-money loopholes, which today are Super PACs backing specific candidates.
Super PACs have exploded since the 2012 presidential election, providing candidates with millions from often-anonymous donors to pay for campaign commercials in key states. Presidential candidates in both parties have used them, although they were best-known for championing Republican presidential candidates in 2012 and that is true again as the 2016 race takes shape.
Who are these wealthy elite spending multi-millions? Last week, the Sunlight Foundation released a study on the biggest donors of the last federal election cycle, breaking the down by everything from gender to party to zip code to get a sense of who is investing in candidates and trying to game the outcome in our elections and why.
(In a truly American irony, the Sunlight Foundation’s research was sponsored by—wait for it—Michael Bloomberg, the runner-up for biggest giver in the 2014 election. Plutocracy is such a large problem that it requires a plutocrat to investigate it.)
Top .01% Are Taking Over
The Sunlight Foundation found that the top .01%—the 1% of the 1%, in their formulation—accounted more than 25% of the money contributed in the 2014 election. Whereas the amount spent per election has varied over the last three cycles (national elections attract far more attention and money than do midterms), the .01%’s share of the money has steadily climbed, showing the small but powerful group is steadily gaining cognizance of their outsized role in the electoral process.
Reflecting this growing awareness, more of the top .01% gave more outlandishly. “In 2010, only 14 individuals contributed a total of $500,000 or more, while members of the $1 million-plus club numbered only eight,” the Foundation wrote. “In 2014, the number of $500,000 and up donors ballooned to a whopping 134, and 63 people gave more than $1 million.”
In fact, the top 10 contributors gave a combined $162 million in 2014. $73 million of that came from the liberal Tom Steyer, who gave entirely to Democratic candidates and environmental causes (and saw little in return; the Democrats lost badly in the midterms). In fact, much of the high-priced giving was partisan, with almost all of the top donors giving the entirety of their millions to a single party’s candidates—often Republicans. Eighteen of the top 25 donors in 2014 gave almost exclusively to Republicans, totaling 79.1 million. Drop Steyer from the Democrat’s total and the Republicans outraised the Dems by a greater than two-to-one margin.
The top donors feature names that are either already familiar. Major liberal givers include Steyer ($73 million) and George Soros ($3.8 million). For the conservatives, the Koch Brothers ($5.2 million) and casino magnate Sheldon Adelson ($5.8 million) make prominent appearances, as does Long Island hedge fund investor Robert Mercer ($9.5 million); Hedge fund investor Paul Singer gave $11 million; David Koch independently accounted for another $3 million. Then there's Michael Bloomberg ($28 million).
The Kochs and their network of wealthy like-minded donors put the vast majority of their money into front groups that did not have to disclose donors. However, investigative reporters found that they spent more than $400 million in the 2012 cycle this way--more than the top 10 unions spent nationally.
Adelson single-handedly floated Newt Gingrich’s 2012 primary run and is flirting with numerous 2016 GOP candidates, while Mercer is doing the same for Texas upstart Ted Cruz, backing most of the inaugural GOP candidate’s record-setting $31 million haul last month. The Adelsons gave $25 million to Mitt Romney’s Restore Our Future PAC in 2012; Singer himself gave $1 million.
They’re Mostly Dudes and They Work in Finance
Certain patterns were unmistakable. Men dominate the major donations, comprising 19 of the top 20 donors. Linda McMahon of World Wrestling Entertainment was the only woman represented in the top twenty, giving $3 million to Republican candidates or causes. In all, men comprised three-quarters of the .01% donors, and outspent women by more than four-to-one. There was also a gender/party divide: men tended to give more to Republicans, women to Democrats.
Wall Street also dominated financial contributions. Finance, Insurance, and Real Estate—the so-called FIRE sector—accounted for $356 million in giving in 2014, 30% of the total given. Of that, almost $200 million went to Republican candidates or causes. $176 million came from donors with professions coded as “securities,” indicating the financial sector, including the biggest single company donor, Goldman Sachs. The megarich are simply rewarding the elected officials who crafted the laws that made them megarich.
The financial industry’s giving dwarfed other sectors, which includes lawyers, oil and gas, and manufacturing On the Democrats’ side, environment interests gave the most due to Steyer.
They’re Increasingly Liberal
The biggest shift the Sunlight Foundation found in the 2014 data compared to previous years was the increase in contributions to outside PACs. Democrats actually out-gave to PACs over Republicans, $194 million to $154 million, respectively. (The numbers were almost exactly opposed to parties.) The relatively new appearance of donors like Steyer and investor Jeremy Grantham, who gave to environmental groups as well, helped fuel this shift, which in large part accounts for the increased flow of money into outside groups. Sunlight found that the percentage of the .01% contributions have shifted dramatically to outside Super PACs just in the past three elections, going from a scant 5% to 31.5% in 2014.
“In a change from both 2012 and 2010, more than half of the One percent of the One Percenters’ contributions to outside groups went to those that supported Democrats and attacked Republicans,” the foundation wrote. “Liberals have learned to love the super PAC.”
They Don’t (Immediately) Get Their Money’s Worth
Not contained in Sunlight’s report, but lurking just beneath any report on the explosion of money in politics, is the fact that pumping money into a candidate or cause appears to have little impact on the electoral outcome. In 2012 Sheldon Adelson neared $100 million in spending on candidates, including Mitt Romney, who floundered; likewise, Karl Rove’s Crossroads GPS spent $174 million for paltry returns. On the other side, Steyer spent $73 million in 2014 only to watch voters reject both his candidates and his cause of increased attention to global warming.
This is not to say money in politics has no effect; far from it. What it suggests is that piles of millions don’t always alter electoral fundamentals. Contemporary national elections favor Democratic turnout, while midterms are heavily weighted in favor of Republican turnout, especially if they’re out of office—hence why Rove’s and Adelson’s combined $300 million did little to stop the election of Barack Obama and the Democratic retention of the Senate, while Steyer’s $73 million did nothing to retain the Senate for Democrats two years later. Likewise, there’s nothing inherently magical about Mercer’s $9 million in 2014 except that he happened to pick the right cycle.
Where money in politics is felt is in distortion of priorities: in the weakening of Wall Street regulations, legislation that continually favors corporations over workers’ rights and wages, the bailing out of failing firms on the taxpayer’s dime, big business tax breaks that amount to corporate welfare, patent laws that protect corporations’ profits and keep prices high, and so on. In short, the invention and protection of the megarich is the return the megarich get for their donations. If their increased giving is any indication, they’re quite happy with this trade.