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Transcript: US democracy: The power of money

Empire asks if money transforms or distorts the political process.

Last updated: 02 Dec 2012 12:48
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This is the full transcript for the Empire episode US Democracy: The power of money (September 14, 2012)

Marwan Bishara:

The most expensive election in history, boasting billions of dollars and bankrolled by a few millionaires.

Barack Obama:

Lobbyists and special interests. The people with the $10 million cheques who are trying to buy this election

Marwan Bishara:

When 400 individuals have more wealth than the bottom 150 million Americans and the top 1per cent donate more political money than the bottom 90per cent, we ask: what's the price for democracy?

We follow the money line from Tampa to Charlotte to Washington to New York to find out how business is transforming politics in America.

Marwan Bishara:

I'm Marwan Bishara and this is Empire.

Marwan Bishara:

Welcome to the Oscars of American politics complete with multimillion-dollar sets and red carpets.

Every four years before their final push to Washington, politicians gather their donors and the media for a few days in late summer. Theirs is a cozy relationship lubricated by billions of dollars of campaign spending.

Condolezza Rice:

Thank you…

Marwan Bishara:

While the final numbers won't be known until after the elections, we do know these will be the most expensive elections in history.

We ask: has money fundamentally changed the nature of American democracy?

Soon, I'll be joined by Melanie Sloan, Executive Director of the watchdog group Citizens for Responsibility and Ethics in Washington, Steve Hoersting, the co-founder of the Centre for Competitive Politics and the key architect of the Super PAC system, Clyde Wilcox, a professor of government at Georgetown University and author of over 30 books including “Interest Groups in American Campaigns: The New Face of Electioneering," and Larry Beinhart, novelist and author of critical acclaimed novel “American Hero" which was made into film “Wag the Dog."

The story of Money and Politics is an old one, whichwe've seen played out in every possible setting with every imaginable cast of characters.

Four years ago, Obama was the first presidential candidate since modern campaign finance reform in the 1970s to refuse public funding. And he raised an unprecedented amount of money.

But this year will shatter all past records. The US Federal Election Commission has said campaign spending could top $11 billion, almost triple that of 2008. Not only is the amount of money in this election ballooning, it is coming from fewer and fewer people.

This year's multi-billion dollar election drama has a peculiarly American twist.

Ann Romney:

We got married and moved into a basement apartment. Our desk was a door propped up on saw horses. Our dining room table was a fold down ironing board in the kitchen.

Marwan Bishara:

Nowhere in the world is more money spent attempting to recast millionaire politicians as ordinary working people. And a quick glance at the state of the American economy - and the stark inequality of wealth - is enough to see why.

Nearly one in two Americans - almost 150 million people - have fallen into poverty or are classified as low income. Meanwhile the 6 heirs to the Walmart empire have a fortune equivalent to the bottom 30 percent of US society.

Protestors:

They got bailed out. We got sold out.

Marwan Bishara:

An overwhelming majority of Americans polled say there is too much money in politics -- so how did this happen?

Barack Obama:

Last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests.

Kim Barker, ProPublica:

The Supreme Court's ruling in January of 2010 said that corporations and unions should be able to spend on political ads, and that also they could give money to other groups that were spending money on these sorts of ads, which just sort of upended the way campaign finance restrictions worked.

The only people who aren't going to know who's giving that money are the American voters.

Marwan Bishara:

While the candidates carefully cultivate populist personae, they have become increasingly dependent on the largess of a small group of billionaires.

A coalition of billionaires led by industrialists Charles and David Koch have pledged to spend as much as $400 million to defeat Barack Obama.

Sheldon Adelson has already spent $41 million of his $30 billion fortune and has said he would more than double that.

Sheila Krumholz, Center for Responsive Politics:

If money means that one person could have a substantial effect on the outcome of this election, American citizens may be more inclined to think that the game is rigged and that their vote isn't as valuable as it once was.

Marwan Bishara:

A pool of 2,100 people have given more than $200 million to the 2012 campaigns so far. In other words, 1per cent of donors are exerting greater financial influence on the 2012 race than the bottom 90per cent but this is only the money we know about.

Campaign video:

Now he's adding four billion in debt every day, borrowing from China for his spending. That's what every man, woman and child…

Marwan Bishara:

Most of the cash being funneled into this year's attack ads is anonymous money raised through shell organizations that do not have to disclose their finances: so-called Dark Money.

Kim Barker, ProPublica:

Citizens United decision said fine, you're going to have this flood of special interest money coming in but you're also going to have disclosure and you're going to have the idea of transparency. True, in the case of Super PACs but not true in the case of these Dark Money social welfare non-profits.

Marwan Bishara:

American voters might never know who is funding the advertising because these groups are only required to report a fraction of the money they raise. Not only is it legal, it is defended as free speech.

The man credited with leading the charge for unlimited spending in politics is a prominent conservative attorney.

Kim Barker, ProPublica:

He is the architect, he is the guru. James Bopp argues that companies shouldn't be punished for their free speech. And he really believes that.

Marwan Bishara:

I caught up with James Bopp at the Republican National Convention in Tampa and began by asking him whether more political money is healthy for democracy.

James Bopp, legal adviser to Citizens United:

When you have campaign finance restrictions limiting what can be spent, limiting what can be raised, the result is you reduce the number of voices and messages that go out. So that's why I'm in favour of more voices, more messages, more money being spent.

People need this information in order to make an informed choice.

Marwan Bishara:

So what you're saying is political money is expression, it's speech.

James Bopp:

Our first amendment protects the right of every citizen to criticise any government official they choose.

In order to do that, you got a country of 350 million people. You know, you've got to spend money to get the message out. I mean, people can stand on the street corner but you can't reach too many people.

Marwan Bishara:

Does that then give due influence to those who have more money – they basically will speak louder and clearer than anyone else?

James Bopp:

Well, what we have found in America, there are rich people on both sides. In fact, there are more liberal rich people in the United States, more people who support Obama and the Democratic Party who are rich than who support Romney and the conservative side.

So there are rich people on both sides. There's people of average means on both sides.

One thing about America is that you can pool your resources. In other words, people of average means can come together in a group –a labour union, an advocacy group, lobby group, citizens group, whatever you want to call them – and then they can, by pooling their resources, that means that the average person can participate.

We don't just leave it to individuals based on how much money they have. We have groups so that everyone can participate.

Marwan Bishara:

Whether they are Democrats or Republicans, supporters to the Super PAC in general, rich individuals or corporations, are putting out the absolute majority of the money that's being spent in politics in America.

James Bopp:

No, they're putting out -the Republicans' donors are contributing more money to Super PACs than Democrat donors. But that's not all the spending in America.

There are political parties, there are candidates, there's the labour unions, and then there's the media that's overwhelmingly liberal in the United States. So when you have spending by all of these groups what I see is a level playing field.

Actually, the reason liberals don't like Super PACs is because it has leveled the playing field.

Marwan Bishara:

Back in 2004 or before that, 2per cent of the money during election time was not disclosed. Now the figures are something like 40per cent of the money is not disclosed. We don't know who is donating that money.

Is that helpful to the democratic process?

James Bopp:

I'm in favour of disclosure by candidates, political parties and PACs. The problem is in America we have very low contribution limits. And the result is over time these low contribution limits force money into other independent groups.

Marwan Bishara:

So you see it then as spiraling out of control in some way?

James Bopp:

It's getting worse.

Marwan Bishara:

It's getting worse?

James Bopp:

It's getting worse because of contribution limits. And until we raise contribution limits or eliminate them, this will always be a problem.

The question's going to be for us, are we going to have these contribution limits? Are they going to be so low? And creating a distorted system where the money is forced into the pockets of people that are not as accountable or transparent, or will the candidate be able to spend it?

I think we're going to repeal contribution limits. I think that's what's going to happen.

Marwan Bishara:

Melanie, Larry, Steve, Clyde: welcome to Empire. Let's start with our basic assumptions. More and more money into the US elections by fewer and fewer people, less and less transparent. And the numbers are staggering.

Tens of people donated hundreds of millions. Fifty individuals have donated more than 50per cent of individual donors. Certainly, money speaks far louder than words.

Melanie?

Melanie Sloan:

Money does speak louder than words and those with the most money are allowed to have the most words and the loudest voices.

They're the ones who are controlling the television commercials that all Americans are seeing on their screens this election season and it is a significant problem: smaller voices, less money is all being drown out.

Marwan Bishara:

But all this “smaller money" is not exactly saying the same thing, is it?

Steve Hoersting:

No, no, no. There's a wide disparity of viewed being represented by all of this money. And frankly we have much more speech now, we do have more financing of campaigns and related issues, and we know about that in large part because it is disclosed.

There was a lot of activity in previous cycles before Super PACs that was not disclosed. It was these issue ads through these special kinds of sourc-

Marwan Bishara:

As in 2004?

Steve Hoersting:

Yes, you may've heard of the swiftboat Veterans for Truth. Well, they were outside the regulatory system and they spoke quite a bit. They're inside the regulatory system now. People like them in the 2012 cycle, 2010 cycle as well.

Marwan Bishara:

Larry, they might differ. Some might vote or support the likes of Obama, others might support Romney. But they do have something in common. There is something called class consciousness in America.

Larry Beinhart:

Alright, so here's the Iran story. Okay, I went to visit Iran a couple of years ago and Iran has a democracy. We may not think so but they really do.

The limitation is this: if you want to be a candidate for public office you go before the council of guardians. Council of guardians decides, are you religiously orthodox enough? And if so, then you can campaign. And once you're in that campaign, they have real elections and they're really contested and they really say nasty things about each other and run ads and all that good stuff.

United States, we have a system, call their system the hard machine, our system is the soft machine. Average price to run for congress is $1 million. Average price to run for senate is $5 million. So before you can run for congress you have to demonstrate that you are acceptable to the people who will give you enough money to allow you to run.

Effectively, you have a council of guardians and they're a council of financial guardians. We're soft money.

Marwan Bishara:

You think it's actually effective? You spend more money and you get better results in the elections?

Clyde Wilcox:

Not always. A lot of times candidates who spend the most money lose. You know, I don't think we spend too much money on elections although I think the average American would not say “I wish I had twice as many TV ads" right now.

But I do think in contradiction to Steve that a lot of this money is not transparent in this election. We don't know where it's coming from, we don't know how it's being spent and that's a problem.

Marwan Bishara:

And you don't think $11 billion that's been estimated is a staggering figure for an election campaign?

Clyde Wilcox:

It's a lot of money but we spend a lot of money advertising beer, advertising cars, and so forth. I think it's being spent very badly and I think the messages are not educating voters but I think the total amount of money by itself is not the problem.

Marwan Bishara:

So if the total amount of money is not the problem, the disparities in who spends the money the problem, being 1per cent of the donors spent as much as 95per cent of the donors?

Melanie Sloan:

Well, I would disagree with Clyde. I think too much money is being spent. And I don't think American democracy is better off because of all the money spent and all the ads that're out there. Especially when, if you consider what's out there, most of those ads are full of lies anyway. And the ads particularly by the groups that have very innocuous sounding names but nobody knows who's really behind them or who's funding those ads. Those are the nastiest, most vitriolic ads with the least truth. And yet those are ads that're out there in order to sway voters. So I don't see how Americans are better off.

Marwan Bishara:

So you don't accept the fact that this levels the playing field, as it were? Media versus Super PAC ads on television?

Larry Beinhart:

It narrows the playing field.

Marwan Bishara:

How is that?

Larry Beinhart:

It limits the – okay, for example this should be a really robust dialog going back to breaking up the big banks, seriously regulating the financial market, raising taxes on excess income, a whole bunch of stuff that has worked in the past.

Marwan Bishara:

But the banks are not even part of the US election agenda.

Larry Beinhart:

They're not part of the agenda because we have one party that is owned and operated by the financial interests and one party that sells out to the financial interests.

Marwan Bishara:

I'm not going to ask you which is which.

Larry Beinhart:

Well, it's obvious which is which. The Republicans make no bones about representing the power of money and that money should be unrestricted and buy anything it wants, do anything it wants.

And Democrats kind of say, “Well, there are other social economic issues that should be respected, but we won't push them too hard ‘cause we need your contributions."

Money narrows the dialog.

Marwan Bishara:

So actually, the more money the merrier for the Republicans at the end of the day?

Steve Hoersting:

Well I think it's the more money the merrier for America because what you do is you get more voices out there.

Larry Beinhart:

No you get fewer voices.

Steve Hoersting:

The $11 billion figure you cited really has to be compared to what? We've accumulated $5.6 trillion in debt. We have a $16 trillion deficit. We just hit that milestone. There's about $100 trillion in liabilities. And the government takes it upon itself to decide in some sense how that's divided up.

The citizens want to be able to speak about that. Because it's, after all, their representatives in the capital that're supposedly benefiting them. They want to have some say in that process.

And with regard to why is neither party really speaking much about the banks during this election. It's possible because they don't want to shine too much light on the role of Fannie Mae, which was mortgages, and Freddie Mac – mortgage incentives.

Mortgage incentives that the federal reserve, our central bank, really had to accommodate along the way.

Melanie Sloan:

It's not the average citizen though who's sitting there supporting these elections. That's just simply not true. Very few people are actually sending in $20 contributions to members of congress. The people who are funding these elections are, for the most part, millionaires and billionaires through the Super PACs, the other secret kind of funds.

Marwan Bishara:

Actually the number is quite amazing Melanie. 2,100 people have donated more than 2.5 million people in this country.

Melanie Sloan:

Right. And that fits in with the idea that it's very few Americans who are actually behind all of this. And even when we're talking about campaign contributions directly to members of congress of the people who make those kinds of contributions are lobbyists and members of trade associations and corporations. All people who want something from those members of congress.

So for your average folks back home, they're not the people supporting these folks.

Marwan Bishara:

Actually, Clyde, for an outsider like me, it's a bit interesting to look at, we're not only talking about individuals anymore, we're talking about corporations. So corporations since the 2010 ruling are treated as citizens. What does that add to the equation?

Clyde Wilcox:

Oh, it's just more money for the groups who have already had advantages. Of course, unions also have advantages as well. But in this particular election campaign, I think Steve's really wrong. It's just not the average citizen asking a millionaire to a Super PAC to represent their speech. The billionaires are either giving money for ideological reasons, neither one of which is what the average American cares about in this election.

Marwan Bishara:

I want to take it back to your original Iran story. So what would it mean if an Iranian Israeli Saudi French corporation opens its own off-shore or its own on-shore corporation in the United States and it donates huge amounts of money. Tens of millions, hundreds of millions of dollars to a certain candidate.

Would Iran then, or Saudi Arabia be able to play a role in US elections?

Steve Hoersting:

Let's be clear about it. We have a ban on foreign participation. Contributions and independent speech. From president to dog catcher. From the very highest to the very lowest of our elected offices. So the law's really written as tightly as it possibly can but the domestic-

Marwan Bishara:

What about an American registered corporation?

Steve Hoersting:

Exactly right.

Marwan Bishara:

Domestic, supported by an outside corporation.

Steve Hoersting:

Right. The domestic subsidiary of a foreign corporation, its employees are allowed to participate but it really has to be part of their salaries and the money they raise from their activities here in the United States. Otherwise it's captured under the law.

You don't think that an American corporation that co-ventures on various international investments with a foreign corporation would have a vested interest to support that country's interest in its own corporate money in America?

Steve Hoersting:

The interest is there. I just think that the law prevents it as well as it possibly can.

Melanie Sloan:

No it doesn't. The law is out there, Steve's right, but there's always ways around a law, especially in this situation where we're talking about multinational corporations and we're talking about American subsidiaries.

Sure, the money has to be American. But if the money has been developed here in America, created or earned here in America. But of course, that corporation might have a much greater interest in another country in, say, oil fields in some Arab land, they're going to be spending their money accordingly.

Steve Hoersting:

A very minimal amount of corporate money going into this election. What we're really seeing is money from individuals and wealthy individuals. And the reason is really pretty basic.

Michael Jordan, a famous basketball player, the most famous, the best, said “I don't speak about politics because Republicans buy gym shoes too." I'm not going to alienate any customers.

Melanie Sloan:

I have to disagree with you.

Steve Hoersting:

Corporations are really in the same boat.

And if you look at what happened with the Target corporation, it gave $150,000 to a pro business group. It was boycotted instantly. And it said no, we're finished.

Melanie Sloan:

But corporations are giving money secretly, they're giving to organizations with innocuous-sounding –

Marwan Bishara:

Hence we come to the lack of transparency.

Melanie Sloan:

-names like the American Action Network for example. Crew discovered earlier this year that Aetna had given over $4 million to the American Action Network which was running ads, so there're lots of corporations that're likely giving ads to certain kinds of organizations that have no transparency and no disclosure. We just don't know and they're giving it that way so they can avoid being boycotted but still affect the election.

Clyde Wilcox:

This is a really critical point: we just don't know. Right? We can find out about a particular corporation with a particular contribution, but it's really a problem that we can't track the money.

Marwan Bishara:

I could understand corporations in general and the last 50, 40 years they've been dominant because they are the richer, giving money to candidates. And now suddenly there are these – I don't want to call them – zealouts?

You know, the Sheldon Adelson types and the Koch brother types and others, Haim Saban types and so forth, who are ready to give tens of millions, hundreds of millions of dollars to one candidate or to one party. They are certainly disturbing the corporate establishment balance in the country.

Larry Beinhart :

Okay, Adelson's an individual lunatic. I think of George Soros as an individual idealist. My bias. And that's always happened. Long tradition of socialist millionaires in Britain who gave money to progressive causes, and America – a lot of that stuff happens. And personally, I think it's fun seeing Adelson give how many millions of dollars

Marwan Bishara:

$100 million or so, or the $40 million spent on ads.

Larry Beinhart :

To Gingrich, right? It was like two clowns at the circus.

Marwan Bishara:

Hold your thought, we're going to be back after a quick news break.

PART TWO

Marwan Bishara:

Welcome back to Empire with my guests Melanie Sloan, Larry Beinhart, Steve Hoersting and professor Clyde Wilcox. In a minute we'll be speaking to Senator Lugar who's been a Washington insider for the past 36 years and who knows the ins and outs of money in politics.

Richard Lugar:

The money situation is really out of control and probably will go even further out of control.

Marwan Bishara:

But before that, a quick look at what donors get for their money.

There's no end of ways to spend your money this election season.

See Obama hang out on stage with Al Green

Photo op with the Prez…?

Big time? Dinner with Obama at the home of a Hollywood star.

And Mitt? Meet him at a reception in Aspen, Colorado

Picture? No problem...

High roller? How about a weekend at a Utah resort?

What are donors really getting in return for their money? Can a US election really be bought?

Even many high profile lobbyists are now criticising the growing role of money in politics.

Nick Allard:

There is way too much money in politics. There's a flood of money after the recent court decisions. The real problem that rots the system is that they have to spend so much time fundraising they have little time left to do the serious business of governing our nation.

Marwan Bishara:

Candidates spend an inordinate amount of time fundraising. And some skeptics argue that it's not so much that their time is taken up raising money, but that their attentions are focused on a tiny elite.

Lawrence Lessig:

You have candidates who are spending an obsessive amount of time trying to dance in a way that inspires the large contributors to give. And that in my view is the core of the corruption here.

It's not the amount of money. It's not even necessarily that a candidate is spending 30per cent of his time or 40per cent of his time raising money. It's that he's spending 30 or 40per cent or 50per cent, or in some of these congressional contexts up to 70per cent of their time raising money on the tiniest slice of the 1per cent. Meaning they can't help but become especially sensitive to the needs and the desires of that tiny slice of the 1per cent.

Marwan Bishara:
He calculates that less than 50per cent of individuals are responsible for almost 50per cent of the money spent by outside Super-PACS. Others disagree. They don't believe that money dictates policy.

Nick Allard:
Money does not buy results. Money may buy courtesy and access and that's an issue, but it certainly doesn't buy results. The fact is that you get a lot less for a political contribution than the man on the street or most people think.

Marwan Bishara:
Supporters of the system say that the mega-donors are funding campaigns out of a desire to participate in the civic process. But according to various studies, the rates of return on lobbying are astonishing, 100, 400, even 22,000per cent.

Last year the International Monetary fund produced a report tying financial industry lobbying to favorable legislation for banks and lenders.

Lawrence Lessig:

There's no doubt that there's lots of people in the system on the left and the right who are giving money for the best possible reasons. But there's also no doubt that all the way down there are people giving money to the system because it is a very wise investment.

Marwan Bishara:

There is no denying that money means influence, but it's not necessarily quid pro quo.

Lawrence Lessig:

Most members of congress assert vehemently, that they can't be bought. I'm sure that's true. If you walked into a congressman's and said how much is it going to take for me to get your vote the congressman would be outraged and kick you out and probably report you to the US Attorney. But what congressmen fail to recognize, or acknowledge, is that these bonds of obligation get formed subconsciously.

Marwan Bishara:

One man who knows exactly how Washington works is Indiana's Richard Lugar, the most senior Republican senator. Just this year, Lugar lost his bid for re-election. Groups opposing the incoming senator outspent his campaign by more than $1 million.

I caught up with the senator at his offices in Washington and asked him if he was hostage to big donors.

Richard Lugar:

Well, I wasn't a hostage. My Super PACs unfortunately didn't raise very much money. At least the ones who were supporting me. But I did have support from the US chamber of commerce for example which is not a Super PAC, it's been out there for quite a while. And is very conspicuous in terms of their ads. So there was certainly money from outside there.

Marwan Bishara:

Almost $6 million or so.

Richard Lugar:

I have no idea ultimately how much came in, from whom. This is still being sorted out. But it was a lot of money and one primary contest.

Marwan Bishara:

Clearly now in the case of the presidential elections we are seeing huge amounts of money. This is the most expensive election in the history of democracy let alone America. What does that say about the role of money in a country where there are angrier people, bigger disparities of wealth?

Richard Lugar:

Without getting into the philosophy of whether this much money ought to be out there, it's not clear really what the money is going to do at this stage.

Marwan Bishara:

But it says, senator, is that if you're not able to raise hundreds of millions of dollars or, as a senator, probably in the next four years tens of millions of dollars, you're not going to be elected, that renders you hostage to money.

Richard Lugar:

Yes, either that or you have a lot of money to begin with, you are a self-financed candidate.

Marwan Bishara:

That's true. There's lots of them out there.

Richard Lugar:

I agree with perhaps your general line of thinking. And that is that the money situation is really out of control and will probably go even further out of control.

Marwan Bishara:

So you agree then senator that if this continues, if the trend continues, politicians in this country are going to be hostage to big money in the country.

Richard Lugar:

Well not hostage, they are going to be seeking-

Marwan Bishara:

Indebted?

Richard Lugar:

Yeah, indebted, perhaps. And it's a bad situation, I believe, in good government. But I would say as a conservative it appears to me best for the political parties to having contest as opposed to a situation where the parties are superseded by –

Marwan Bishara:

Individual money, corporate money… Do you think money is speech? And hence freedom of speech is consistent with freedom to spend money?

Richard Lugar:

Well it's an interesting argument and I don't have an adamant view either way. I think being able to spend money is an important way of being able to express yourself. However even the excesses that're here really have to be recognized.

Marwan Bishara:

How is that square with democracy in this country?

Richard Lugar:

Well, if you are a billionaire and you're prepared to put $100 million, say, into this election, you will argue that this is freedom of speech that as an American I have a right to speak out and furthermore to use my money to make certain that my point of view, my freedom of speech is extended.

This is basically where the Supreme Court came out of the Citizens United case. I would just say simply that at some point it appears to me that the structure of our government is going to change if millionaires are calling the shots and demanding their point of view.

In some cases the millionaire's point of view may not be a bad one. May be that it's time to cut taxes or cut the spending or get the budget under control. Sometimes a billionaire does have an interest in oil or in some other energy form or in some particular business situation. That becomes a little more dubious. This is no longer a general proposition of cutting taxes. It may be of enhancing one's own industry and wealth.

But whatever it may be, my point is there have to be limits and this is not going to be easy to come by because people are going to claim that the constitution asserts the right to do this, this and this. People make other assertions.

I think we're going to be back in the Supreme Court in due course in some case and we shall see then how the ruling goes.

Marwan Bishara:

Melanie, let's pick it up from where senator Lugar left off. How much do you actually get for your money once you move from elections to real life here in Washington?

Melanie Sloan:

Well it depends. If you donated a lot and bundled a lot, which is where you collected a lot of cheques for members of congress, you can get all sorts of things ranging from positions on advisory boards to an ambassadorship to another country.

A lot of members of congress arrange lots of breakfasts, lunches, dinners – all sorts of access – so that you, if you have issues you're pushing, can come in and talk to them about it and you'll get a better hearing than everyone else.

Marwan Bishara:

I looked at one of those studies by Kansas University. They say multinational corporations get 22,000per cent of their money. Meaning for every dollar they spend, they get $220 back in tax breaks. That's quite amazing.

Steve Hoersting:

I can't imagine that that makes much sense.

Marwan Bishara:

Are you doubting the Kansas University study?

Steve Hoersting:

I haven't read the study. But what I do know is this: if you want to look at the ratio of that -and you can also apply it to campaign spending in the United States- compared to the amount of money our government regulates in the economy.

Basically, what you have is while you have the government deciding where $5.6 trillion dollars will or will not be spent, and how we will deal with $100 trillion in unfunded liabilities, people who are sovereign after all United States, are going to want to have a say in that.

They're going to want to speak to their representatives and say “Here's what we believe about this."

Really, in a way, the right to speak is the most polite and best way of self defence. It really is in an economy like this.

Marwan Bishara:

So they pay their money, they pay their dues in the elections, now they've become politicians in congress. How much do they owe those who supported them in the elections.

Clyde Wilcox:

Well it turns out not to be all that simple. Because there's lots of people who supported them in the elections. But what you typically find is any former member of congress will point to one or two votes where they changed the vote because there was an important donor involved.

You see party leaders often saying “Boy, this interest has helped us, we can't take this on in this session." But it's not simple. It's not like there's a price tag and you get this for that. There's lots of other influences.

Marwan Bishara:

Exactly. The professor from Harvard told us that it's really not as simple as a question of barter. That is it more of a dependency relationship between donors and donee, meaning a politician becomes more dependent in general. Washington becomes a dependency culture economy whereby politicians always expect richer people to give them money and richer people always expect something back.

Clyde Wilcox:

Here's where I maybe disagree a little bit with Steve. I think that if we had contribution limits but still spent the same amount of money the candidates would then go out and get money from a wider range of donors. Like Obama sort of did in his first campaign.

There's a lot of people out there who might be willing to give smaller amounts of money if they didn't see $10 million cheques coming into a Super PAC and think “What's my $10 doing?"

Marwan Bishara:

But what happens at the end of the day in real life, Washington, here, what we have is special interests meaning corporate money is represented by 23 times more lobbyists than average citizen union, association and so on.

Larry Beinhart:

Well part of the problem is this: what they spend their time doing is raising money, campaigning, and maybe having the patience to sit through hearing when the cameras are on.

They don't have time to think. They don't have time to read.

Marwan Bishara:

But they write legislations.

Larry Beinhart:

No, they do not write legislations. They go, they say “This thing is coming up for a law. We need actual written legislation." And their local lobbyist supplies it.

Marwan Bishara:

Local lobbyist supplies to their aids?

Larry Beinhart:

Yeah. The lobbyists write the laws.

Marwan Bishara:

That is quite an exercise in Washington.

Steve Hoersting:

There are a lot of policy shops in the district that spend a lot of time thinking about what model legislation ought to look like. But I'd like to go back to another point.

Marwan Bishara:

No, Steve-

Steve Hoersting:

Do I know that-

Melanie Sloan:

During the Bush administration Exxon lobbyists were coming in and writing the energy policy. No, that was actually done. There was plenty of articles about it. And they're not alone. Wall Street executives come in and write the banking regs. That's what happens.

Marwan Bishara:

Everything we say is under the law but the end of the day, someone writes the law.

Steve Hoersting:

But Marwan, what I'm saying is that it's one thing for me to very strongly suspect that the Centre for American Progress wrote the healthcare bill. I don't know that.

I could have no more proof of that than proof the sky is purple. I don't know that. But there's a lot of reason to believe the policy shops in the district write a lot of legislation. Yes, that's true.

Marwan Bishara:

There is such a culture in Washington?

Steve Hoersting:

Sure there is. I believe there is. I can't prove it. Now let me also go back to a point Melanie made and Larry made.

Melanie said “You know, these elections, they never really stop." And Larry has said “Congress has spent about 30per cent of their time raising money." And that's because the amount of money that the candidates themselves are allowed to take in is so small relative to inflation, what inflation has done to our dollars, and that's no secret to anyone, that United States currency is being debased.

They have to spend that time because to have any resources at all under current law, they've got to raise it in these dribs and drabs.

Marwan Bishara:

At the end of the day, does that or does that not create dependency on the source of money?

Steve Hoersting:

You know what, if they weren't dependent on the people who hire them for their $50 – and by the way, President Obama got lots of $50 contributions- if they weren't dependent on the people themselves, whom they represent they'd be dependent on news producers, on news hosts, on a lot of broadcast outlets and other people to get their message out, after all this money is to get the message out.

Clyde Wilcox:

He said “If they're not dependent on the people who hired them." That's not the people they call on. When they're making phone call after phone call they're calling people who can write large cheques, typically not from their district, and they're not calling anyone who buys a television on an installment plan.

They're not calling anyone who has to wonder “Can I afford to go out to dinner tonight?" Right? They're calling people who can write a cheque for, you know, $1000 or whatever, and then calling people to say “Can you give money to a Super PAC" or “It would be awfully nice if you helped-

Melanie Sloan:

There are donors who I know that don't live in DC that say they never answer the 202 area code because it's always going to be another politician begging for money. And they don't need to talk to Nancy Pelosi or John Boehner or any of them anymore. They can talk to them any time they want. They have more access than they could ever want.

Marwan Bishara:

This opens two issues for me. One, this is your arena, who's wagging who? Are the politicians wagging the businessmen? Or are the businessmen wagging the politicians? Who's shaking down who? Really.

Larry Beinhart:

That's an interesting question. I think money's the gatekeeper. And the way it works is you don't get in the race, you don't get to play unless you have, you are able to demonstrate you are the kind of person they want there.

Marwan Bishara:

What I found quite paradoxical – Melanie help us out here – is that Americans in general are disturbed by the fact that there's so much money in politics and in elections. So why does this continue to spiral out of control?

Melanie Sloan:

Because they're not so concerned that they're voting against the people who are not doing anything to stop it. There was a bill in congress last year to help require more disclosure of all the campaign spending and the Republicans voted against it en masse.

And there is not enough outrage in the American population that they'll say “We will vote against people on this issue. We will get out there and insist that all our candidates believe in transparency, believe in disclosure or promise to do something about it."

The American population isn't doing enough. They say they don't like it but they're not willing to get out there and vote on this issue.

Larry Beinhart:

Because there is no choice. There is no choice. There's not guy running without money. And if there is, okay, the, call it the soft-core establishment, the news media, the whatever you want to call it, erases them.

I tried to help a guy a couple of years ago. He was running in the primary against Hillary Clinton. He could not even get invited to debate her because he had not raised enough money.

Marwan Bishara:

So money does get you in?

Larry Beinhart:

It's the gatekeeper. It's the gatekeeper. And if you are not a person capable – say, if you want to run in a primary against Hillary Clinton, if you cannot raise five or ten million dollars, CBS won't even talk to you.

Steve Hoersting:

Let's push back against that theory just a bit if we can. We just had an interview with senator Lugar who served voters for 36 years. He was challenged by Richard Mourdock – someone no one's ever heard of. I couldn't pick him out of a lineup – I've lived in the district for about 10 or 12 years.

My point is there's no greater special interest -if you listen to Melanie and others- than the Chamber of Commerce. United States Chamber of Commerce. It's supposed to be a massive special interest group.

Not even they could save Richard Lugar from the voters of Indiana. And that's something to keep in mind here.

Melanie Sloan:

Oh, I'm sorry, if that's not exactly right, so the Chamber of Commerce –and besides we don't actually know who the Chamber of Commerce is, that's a lot of people who gave a lot of money to the corporations to the Chamber of Commerce to support Richard Lugar in the first place – but Richard Mourdock had an awful lot of money. He had money coming in from across the country. From, probably, the Koch Brothers. Certainly the Americans for Prosperity Group spent a lot of money on his race.

So there was a lot of outside money, not money from Indiana, not just money focused on the Indiana voters were putting out, to help defeat Richard Lugar who was no longer viewed as conservative enough at towing the conservative line. So it's really not clear.

We don't know what money helped defeat Richard Lugar yet.

Marwan Bishara:

With more money coming into the elections, are we going to see more and more of it be reflected in loan making in Washington?

Clyde Wilcox:

Well there's different sides coming in with the money so I don't necessarily think that would be the case but here's what I think is wrong with the way we're looking at this problem:

Because what he says is “Look, there's these ideologues on both sides." And you're saying there's the interested money and that's exactly right, there's interested money or there's ideologues. And there's not money in the middle.

So the ideologues on the Democratic party are not the average Democrat. The ideologues on the Republican party are here the people that want to knock off Lugar. Right? And that's not the range of opinion.

I wish I lived in Steve's ideal world where the citizens are aggregating their money and they're choosing their speech.

Steve Hoersting:

They are aggregating. My point about the ideology is that giving is not to purchase favours. And the reason-

Clyde Wilcox:

-That distorts the system

Steve Hoersting:

And the reason we know that, Marwan, is because they would hedge. If we're about purchasing the next incumbent, they would hedge. They hedge in the markets. They hedge with metals. They hedge in everything else they do when they invest besides… But these donors to Super PACs are not hedging.

Marwan Bishara:

But business in general hedges. Some support Obama. Some support Romney. So business in general hedges its bets. Some support this candidate, some support others.

Steve Hoersting:

Business in general is too far a generalization.

Melanie Sloan:

Previously up through early 2000 or so, you would've seen businesses that had political action committees and they would've given to both sides. They would've given to members on both the democratic and the Republican sides because they were hedging their bets.

And I would say it's something more recent. Something that started with a former majority leader Tom DeLay where he said it's unacceptable to hedge your bets. You must give far more money to the Republican party, was really his philosophy. And now we are seeing much less of that sort of hedging although I still think a lot of business do-

Marwan Bishara:

Goldman Sachs is a good example of that.

Melanie Sloan:

Right, but they're campaign contributions. That's very different than the Super PAC and even more different is the money that they give to these secretive organizations that can never be traced back to them.

Marwan Bishara:

Let's connect both halves of our show. Deregulating the elections, will that then lead to deregulating the economy?

Clyde Wilcox:

To deregulating the economy? We've pretty much come as far as we can in deregulating campaign finance and in fact the regulations that're left sort of don't make any sense given the things we've relaxed so if you can give $10 million to a secret group that we don't know how you're spending the money, why do we care that you can only give $3000 directly to a candidate?

Maybe at some point it'd be better just to take the limits off and let them give it to candidates and, you know, let the candidates make the speech.

Marwan Bishara:

Gentlemen, Melanie, thanks for joining us. This was great. And I'll be back with a final thought.

Marwan Bishara:

In the theatrics of the US elections catchy names like soundbites have a role to play. Paradoxically, the more they serve a special interest, the more patriotic they sound!

Americans for Prosperity, My America, Your America, Americans For America, Patriotic Americans for a More Patriotic and American America... And WE love USA..

And there are the bizarre and sarcastic Super PAC names like: Americans For a Better Tomorrow, Tomorrow, or Americans For a Better Tomorrow, Yesterday, and Dogs Against Romney !! And my favourite names : "Bears for a Bearable Tomorrow" or "Citizens Against Super PACs Super PAC". Alas, this last one collected only $35!!!

The way I see it, the dominant Super PAC merit only one suitable name: A few Bitter, Old, Rich White Men for more White Men and Money.

And that's the way it goes. Write to me with your comments and suggestions. Until next time.

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