The Buying of the President 2004
Private Parties
Let me now . . . warn you in the most solemn manner against the baneful effects of the spirit of the party,” President George Washington said in his farewell address in 1796. Political parties, he said prophetically, “are likely in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the Power of the People and to usurp for themselves the reins of Government.”
Washington’s prophetic fears may be truer and more real than any of us would like to admit. The two major parties are powerful private corporations with outsized public responsibilities and little public transparency or accountability. Their chairmen, functionaries, and spokespeople, of course, all vociferously assert that they are the people, and anything they say or do is honestly and sincerely on behalf, and in the best interests, of Americans. Nonetheless, getting past the bombast, it is the ideas, constituencies, organizations, and money surrounding the parties that substantially define what each public official actually stands for today. And we cannot begin to understand our national politics or presidential candidates if we do not fully comprehend the milieu in which they function. Each party has an informal working alliance of vested economic, ideological, or other interests, as major backers directly and indirectly but also as eminently effective, discreet policymaking partners. The candidates function inside of — indeed, must be active creatures of — these power networks that substantially control the political governance of our Republic.
“Strategic industrial coordination” and “corporate coordination” certainly are not new concepts in business — look at the Japanese keiretsu or the South Korean chaebol systems of collaboration. And in the United States, for decades, entire distinctive industry sectors, each composed of company competitors in the marketplace or hundreds of labor unions, have frequently worked together as needed on specific legislative issues. What is less publicly acknowledged is the loose but unmistakable network that exists between these economic interests, all of whom want something from government and the access to power, that the major political parties possess. The tobacco companies or the National Rifle Association or the Christian Coalition rarely attack the Republican Party or its leading public officeholders, because they are all partners in a strategic and financial power network. Similarly, the trial lawyers or the labor unions or the Sierra Club will rarely publicly challenge the Democratic Party, because they are unofficial, traditional allies. And beyond the balloons and placards we see every four years at convention time, a central, unpublicized purpose of each political party is to assist and further the public policy agendas of its principal patrons.
When one political party controls all three elected branches of the federal government, as the Republicans do for the first time in half a century, there is an obvious power “surge” that alters the network alignments in many ways, something we will later explore. Not surprisingly, one of the manifestations of these new circumstances is financial — money has always been drawn to power like flies to honey. For example, in 1992, when George H. W. Bush was president but the Democrats controlled Congress, the pharmaceutical companies gave $2.5 million to Republican campaigns and party committees and $2.4 million to the Democrats, according to the Center for Responsive Politics. But in the 2002 election cycle, with both the White House and Congress in Republican control, the most profitable industry in the United States gave $16.3 million to the Republicans, but only $4.4 million to the Democrats. In 1990, the controversial tobacco industry gave 51 percent of its campaign cash to Republicans, but in 2002, with that party in control, it gave 78 percent of its political contributions, or nearly $7 million, to Republicans.
Actually, the Republican Party has been dominating the Democratic Party financially in the post-Watergate, Federal Election Commission era, although the gap narrowed somewhat in the 1990s. In the 2002 election cycle, the Republican Party’s three national committees (national, senatorial, and congressional) raised $652 million — $186 million more than the Democratic national committees. In the previous midterm election cycle, 1997-1998, when the Democrats controlled the White House, the Republicans still outraised the Democrats (hard and soft money combined) $405 million to $245 million, a difference of $160 million.
Indeed, in the last six election cycles, starting with 1991-1992, the Republicans collected more total (hard and soft) campaign contributions than the Democrats each time, with an average GOP advantage of $162 million for each election. Considering that incumbent President George W. Bush is expected to break the $200 million fundraising barrier and outspend his Democratic opponent by as much as four times, the campaign finance landscape looks rather bleak for the Democrats, to put it charitably.
Despite George Washington’s warning and the serious implications of their powerful position in society, we all have an understandable tendency to make fun of or belittle our political parties, the same way we have incessantly derided politics and our politicians since the republic began. It was Mark Twain who famously said, “It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.” But humor and a healthy spleen aside, to fully comprehend the uses and abuses of power in Congress and in the White House and entire executive branch, and how it all relates to the intersection of democracy and capitalism in this country, we must not forget one very salient fact of political life: no one has been elected to the White House since the Civil War who is not either a Republican or a Democrat.
Over more than two centuries, we have had different party permutations and historic eras — there is a long body of work chronicling the political evolution, ebb, and flow of our two-party system. The United States of America actually began without political parties, and as two-time Pulitzer Prize-winning historian Arthur M. Schlesinger Jr. has observed, neither the Articles of Confederation nor the Constitution provided for them. But factions and parties inevitably began to coalesce, which worried Washington. Years later, in 1885, French political scientist and diplomat Alexis de Tocqueville wrote in his classic work, Democracy in America, that “Parties are a necessary evil in free governments; but they have not at all times the same character and the same propensities. . . . America has had great parties, but has them no longer.”
Party organizations were created in the mid-19th century, principally to conduct national conventions. The Democratic National Committee was created in 1848. The new Republican Party established the Republican National Committee in 1856. Eventually both parties developed campaign committees for Senate and House candidates as well. But the national parties didn’t actually hire professional staffs or set up permanent headquarters until after World War I. Now, of course, both have slick, multimillion-dollar bureaucracies with a full bevy of fundraisers, lawyers, accountants, communications operatives, opposition researchers, and political consultants.
Not coincidentally, our politics have become more partisan, more sharply divided, and more ideological. As political scientists William J. Keefe and Marc J. Hetherington have noted in Parties, Politics, and Public Policy in America, in 2000 Americans voted the straight party ticket more often than any time in the previous 30 years. And notwithstanding the assertions of Green Party presidential candidate Ralph Nader, 64 percent of Americans said they perceive major differences between the two political parties, the highest margin since that question was first asked by the National Election Study back in 1960. Over the past two decades, the American people have increasingly characterized the Republican Party as “conservative” and the Democratic Party as “liberal.”
ENTICEMENTS OF APATHY
Before we get more deeply enmeshed in whom the political parties represent or to whom they appeal, we need to recognize the significance of the no-shows today. Democracy is not a spectator sport, but in every federal election, 100 million Americans choose to stand on the sidelines and watch, largely regarding the entire political process as so much hot air, not sufficiently relevant to their lives to merit the act of voting itself. From 1960 through 2000, from presidential, nonpresidential, and primary voting statistics, there has been a significant decline in voter participation, which, as Thomas E. Patterson, in The Vanishing Voter, put it, “could be a danger to democracy.” Our youngest and poorest adult citizens participate less; overall, Americans have declining interest in contributing to political campaigns or parties, to attending campaign rallies, or even to paying attention to election-related news.
By not voting, such people not only foreclose the possibility that their ballot will be counted (or, perhaps it should be said, miscounted, uncounted, recounted); they also help to ensure that their public policy preferences won’t count. Their concerns are — no surprise here — substantially ignored because there is no pressing imperative for politicians or their parties to be responsive to nonvoters. Or as Plato put it differently, “One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.” Of course, even if citizens exercise their right to vote but do not possess millions of dollars to organize themselves politically along with other kindred souls, or to support and persuade like-minded politicians or their political party of the extraordinary wisdom of their issues, one could argue that they probably don’t matter all that much either in the public policy power grid of Washington.
Voting or not, 40 percent of Americans in 2000 identified themselves as “independents,” greater than the identification with either major political party. There is no single political party that has gained the sustained allegiance or support of the independents, which, as we will discuss, is not entirely coincidental. And the highest-polling third party in the 2000 presidential election was the Green Party, which garnered almost 2.9 million votes out of 105 million cast, or 2.7 percent. Partly because so many Americans say they are “independent,” politicians generally do not use overtly partisan language in their public utterances. Indeed, one enterprising communications scholar at the University of Texas, Roderick Hart, actually tallied and analyzed the total number of words and found that between 1948 and 1996, presidential candidates talked more about themselves and less about their parties.
Down in the trenches of actual voting combatants — those independents, Republicans, and Democrats who make their choices at the polls — it is possible, using the detailed, nationwide Bush-Gore election night returns and exit polling, to ascertain telling differences between the ultimate supporters of the two parties. These distinctions in fact have been gradually evident in several recent congressional and presidential elections. Indeed, as Michael Barone and others have noted, the returns and polling reveal a tale of two nations, separated by geography, gender, race, religiosity, and class.
Recalling those TV network, red-and-blue graphic maps of the United States, so indelibly etched into our national consciousness, major metropolitan areas are, generally speaking, heavily Democratic; rural and newer metropolitan areas are overwhelmingly Republican. More women voted Democratic (54 to 43 percent), but beneath the much ballyhooed gender gap, married women actually were pretty evenly divided between Bush and Gore (49 to 48 percent), suggesting that it is unmarried women who lean unmistakably Democratic. Whites supported Bush (54 to 42 percent); Blacks (90 to 9 percent), Hispanics (62 to 35 percent), and Asians (55 to 41 percent) backed Gore.
The breakdown of religious demographics is by itself starkly illuminating. White voters identifying themselves as members of the “religious right,” who comprise 14 percent of the national electorate, overwhelmingly supported Bush over Gore (80 to 18 percent). White Protestants, more broadly beyond just the “religious right” — altogether a majority of Americans at 56 percent — backed Bush (63 to 34 percent). Jewish voters — 4 percent of the nation — sided with Gore (79 to 18 percent). But most stunning are the polling data surrounding the extent of involvement in organized religion. Churchgoers attending religious services at least weekly — 42 percent of the electorate — supported Bush (59 to 39 percent). Those who don’t regularly attend religious services, “seldom or never” — which happens also to comprise 42 percent of the electorate — voted for Gore (56 to 39 percent).
In terms of income and class, most people with annual incomes over $100,000 voted for Bush over Gore (54 to 43 percent). And most people with annual incomes under $15,000 supported Gore (57 to 37 percent), who exhorted a populist, “the people versus the powerful,” campaign message.
DOWN AND DIRTY WITH THE TWO PARTIES
Beyond the particulars about who gravitates to which party on Election Day, the fact is that Americans are enormously unimpressed with our two major political parties. In 1996, according to an ABC News-Washington Post survey, two-thirds of Americans agreed with the statement that “both political parties are pretty much out of touch with the American people.” Worse, in more recent polling by Democrat Mark Mellman and former Reagan strategist and pollster Richard Wirthlin, more than three in four Americans believe that large contributions to political parties have a great deal of impact on public policy decisions made by the federal government. An overwhelming majority of citizens, 84 percent, said that members of Congress will be more likely to “listen to those who give money to their political party in response to their solicitation for large donations.” On the other hand, only one in four Americans (24 percent) believes that a member of Congress is likely to give “the opinion of someone like them special consideration.”
Sad to say, these dim views of the two parties and their soul-searing money chase were underscored by some of the sworn depositions in the Bipartisan Campaign Reform Act litigation.
Indeed, however effective or historically meaningful the hard-won McCain-Feingold legislation proves to be, the litigation in response to it has spawned considerable candor and glimpses of raw truth — under oath — from dozens of players from all sides about politics in America. For example, in October 2002, lawyers for the National Rifle Association and the Federal Election Commission journeyed out to Cody, Wyoming, to question former Republican U.S. Senator Alan Simpson, who was blunt and often funny when in office — traits that have only become magnified in retirement. At one point after several specific questions, he barked at the NRA’s attorney, Hamish Hume of the Washington law firm of Cooper and Kirk: “I’m 71 years old, and I get tired of this kind of nitpicking crap. What is it you are after from me? What is — ask the goddamn question! What is it you want from me? Ask me something, not just whatever, whatever, whatever. What is it? What do you want?”
But in the FEC deposition, Simpson cut through it in a way rarely heard anywhere today. “The campaign fundraising system of America has a corruptive and corrosive effect on government. . . . It makes “people look at the system and say, what are they doing now?”
Under oath, Simpson admitted he never liked raising money for the Republican Party, but apparently liberated in retirement after decades of dependency, he saved his strongest reaction for the donors. Simpson received thousands and thousands of dollars from the NRA and its individual members over the years, which is not surprising because he represented a rural Western state and the NRA has been the 17th most generous patron to the Republican Party since 1978, sending millions of dollars to the three national committees and hundreds of GOP candidates. Although Simpson referred to Charlton Heston, the former actor and until recently president of the NRA, as “a very close friend of mine,” he had less kind words for what the NRA does. “It’s called whoring,” he said. “And that’s where you all are right now. . . . It’s not giving according to your deep-held philosophy. It’s giving so you can get access and kiss butt and do all the rest of the things so you won’t get knocked off the perch.”
(Is it remarkable that the “whoring,” in Simpson’s mind, is restricted only to donors? Welcome to the warped Washington world of compartmentalized reality and situational ethics.)
He scorched those powerful single-interest organizations with hundreds of thousands of members nationwide, to whom they send detailed “scorecards” about lawmakers’ legislative “performance.” Besides trashing the NRA to their lawyer’s face, Simpson said, “NEA, National Education Association, tough, mean sons of bitches. AARP [American Association of Retired Persons], tough, mean sons of bitches. These guys smile a lot and carry a dirk up their sleeve.”
Simpson talked about how these groups shamelessly play on the most basic instincts of fear and survival to raise a buck. “You can raise a hell of a lot more money — every group I’m connected with, a member of the VFW [Veterans of Foreign Wars] or the American Legion or the NRA or the AARP — I joined them just so I could find out how wretched their advertising is — that the more money they can get is to say, now we’re in the political system. Take part or get taken apart. Do you realize as a veteran that you’re going to get screwed until your eyeballs fall out unless you get active in lobbying this Congress?”
Finally, he complained about the “disruptive” and inordinate amount of time legislators must devote to fundraising. “I was assistant majority leader of the Senate under Bob Dole. And I can’t tell you how many times in the course of a day that we’d have something scheduled, and they’d say, ‘Bob and Al, I won’t be there tonight. I got to be in Detroit for a fundraiser.’ ‘Got to be in New York.’ And I used to say to them, ‘You know, you get paid 133,600 bucks. Why don’t you show up here and vote and stick with us so we can get the nation’s business done?’ ‘Well, I’d like to, but I can’t, because I’m on the phone all afternoon. I have to go to another building. And I’ll be on the phone all day over there, doing the calls.’”
It is a violation of federal law to solicit campaign funds from U.S. government property, so members of Congress slink off down the street to their respective party headquarters and dial for dollars there.
Under oath, other senators echoed Simpson’s sentiments. Former Republican Senator Warren Rudman, in a written statement submitted into evidence, said the access and influence accorded to major donors “is inherently, endemically, and hopelessly corrupting. You can’t swim in the ocean without getting wet; you can’t be part of this system without getting dirty.”
And parties have a way of ensuring their members get dirty. Internal, secret, tally sheets are kept by the House and Senate Republican and Democratic Party campaign committees, not unlike local capos marking down weekly protection payments up and down the block. As a made public official, you pony up for the party. You don’t have to talk like Marlon Brando in The Godfather, and you’re not likely to wake up with a bloody horse head next to you, but it is clearly understood that you either raise cash for the party or you don’t move up the political hierarchy in either house of Congress.
Congresswoman Marcy Kaptur, Democrat of Ohio, worked in the Carter White House before serving as a member of the U.S. House of Representatives for the past two decades. “You’re now expected to produce dollars, dialing for dollars, to help your colleagues, to the tune of hundreds of thousands of dollars if you are going to move forward. . . . When you go to a [party] caucus meeting, you are now graded and publicly embarrassed about how much money you’ve raised compared to the rest of your colleagues,” she told the Center for Public Integrity. “And it’s that way on both sides of the aisle. . . . People bid on both sides of the aisle for committee positions based on how much money they’ve raised.”
One person who knows as much about political parties, devastating scandal, and fundraising as just about anyone in the nation is Bill Brock, who served as congressman and senator from Tennessee for 14 years. Brock was the U.S. trade representative and later secretary of labor in the Reagan administration and from 1977 to 1981 served as chairman of the Republican National Committee. When last interviewed by the Center for Public Integrity in 1992, he candidly acknowledged the nightmare he faced trying to lead the GOP out of the dark wilderness of Watergate. “The party was in awesome disarray,” he told the Center. “We’d been decimated from two consecutive elections. . . . The Watergate damage was pervasive. There were questions about whether the party should still exist. We had a lot of discussion about whether we should change our name.”
Brock, a lobbyist for years in Washington since leaving the Reagan cabinet, ran unsuccessfully for the U.S. Senate in heavily Democratic Maryland in 1994. During the campaign he was astonished by the large soft-money contributions that had flooded the political zone. He declared in a recent sworn statement as part of the McCain-Feingold litigation, that in his opinion — contrary to the current Republican Party’s position — “political parties, the essential ‘connection’ between citizens and their government, were weakened. In effect the parties increasingly became conduits for single-interest influence rather than for the development of broadly based representative government. . . .
“These contributions compromise our elected officials. When elected officials solicit these contributions from interests who almost always have matters pending before the Congress, [they] become at least psychologically beholden to those who contribute. It is inevitable and unavoidable. The contributors, for their part, feel they have a ‘call’ on these officials. Corporations, unions and wealthy individuals give these large amounts of money to political parties so they can improve their access to and influence over elected party members. Elected officials who raise soft money [for the party] know this. The appearance of corruption is corrosive and is undermining our democracy.”
A MERCENARY MILIEU
Nothing focuses a politician’s mind better than hard, cold campaign cash. Consider the under-oath insights of former congressman Pat Williams, a Democrat from Montana who represented his district from 1979 to 1997.
“Throughout the West, the past 25 years of polls . . . have indicated a strong desire for Westerners to protect the land and water and air with strict environmental laws and regulations. However, they vote for federal candidates who are on the other side of those very issues. And I believe that that division, that gap, that dichotomy is caused by money, and the portraying of some candidates in very bad light and other candidates in very good light. Thus, confusing voters to such a degree that they end up voting for people who don’t actually do what the majority of voters want.”
The top five mining contributors to the political parties in the 2000 and 2002 election cycles — Peabody Energy, Addington Enterprises, Freeport-McMoRan, Boich Group, and the National Mining Association — gave more than $3.4 million, 89 percent of their party donations, to the Republican national committees and just $809,000 to the Democrats.
The mining industry is feeling rejuvenated after its frustrations with the previous administration and its “extreme ideology that drove extreme solutions,” as Jack Gerard, president of the National Mining Association, told The New York Times. Nine months into the Bush administration, Interior Secretary Gale Norton rewrote Clinton-era regulations, thereby preventing the Bureau of Land Management from vetoing mining operations that could cause irreparable harm to the environment or Native American cultural sites. She also systematically permitted mining on sites that her predecessor, Bruce Babbitt, had vetoed because he determined they had endangered species or would impact sacred Native American sites. In addition, Norton bowed to industry pressure when a federal judge threw out regulations that once required mining companies to report a low concentration of toxic release pollutants that are said to be extremely dangerous if leaked into the water supply. The administration chose not to appeal the decision. The Bush administration rolled back the disclosure requirements of the Environmental Protection Agency’s annual Toxic Release Inventory, a publicly available database that allows citizens to know what hazardous chemicals are in their area. The mining industry has been the largest worldwide industry polluter since 1997. More than half of the mining industry’s 3 billion pounds of annual waste may now go unreported.
On the influence front, Peabody Energy, the world’s largest coal production company, and largest mining contributor to the Republican Party, sent two executives to Vice President Cheney’s Energy Task Force in 2001 to promote the use of coal. The task force report ultimately recommended increases in coal production.
But not in their wildest dreams did the industry imagine that a kindred soul — hell, one of their lobbyists — would become chairman of the Republican Party.
One of Governor Bush’s campaign confidantes and public spokesmen during the 2000 Florida recount was Montana Governor Marc Racicot (pronounced ROS-coe); the two men had met years earlier and become friends. For eight years as governor, Racicot was a deft and popular politician whom local critics regarded as too close to the mining and logging industries, and not just because he took thousands of dollars in campaign contributions from them.
One of his major embarrassments as governor occurred when the national news media broke the story that asbestos poisoning at W. R. Grace & Co.’s vermiculite mine in Libby, Montana — Racicot’s hometown — had killed or sickened hundreds of residents. Racicot, who missed the first open meeting in Libby over the issue because he was in New Hampshire campaigning with Bush, claimed total ignorance about the mine being a major health hazard. Former congressman Pat Williams found that assertion preposterous and disingenuous, noting that it had been well known for decades, even prompting Williams to introduce legislation in 1985 to help workers get compensation for occupational diseases such as the kind afflicting Libby.
Racicot signed a new law in 1999, weakening Montana’s Superfund statutes by protecting polluters from responsibility for cleanup costs. In 2000, he signed a bill changing existing state law so that mining companies needn’t always refill open pits once mining had ended, resulting in “weaker reclamation standards, more unreclaimed land and toxic, polluted water in Montana,” the Montana Conservation Voters, an environmental group, claimed. During his tenure as governor, he opposed Montana voter Initiative 137 banning cyanide use in new and expanded Montana gold mines. A New York Times editorial decried his poor environmental record: “Mr. Racicot endorsed an easing of Montana’s clean water laws, supported drilling for natural gas on the Rocky Mountain Front, criticized Mr. Clinton’s plan to protect roadless areas in the national forests and resisted reasonable solutions aimed at stopping the slaughter of bison that migrate each year from Yellowstone National Park.”
After his national television exposure in the Florida recount and his highly publicized role as an articulate Republican governor close to the new president — and shortly after leaving public office — Racicot and his wife moved to the nation’s capital, where he quickly became a rich man as a Washington lobbyist, cashing in on his new fame and proximity to power. Bracewell & Patterson, a Houston-based firm with 350 lawyers and 11 offices worldwide, hired him as a partner in its Washington office in February 2001. It has proven to be a bonanza for all concerned. According to federal lobbying records, in 2000 Bracewell & Patterson earned $2.8 million in lobbying income from clients. In 2001, the firm’s lobbying income jumped to $4.6 million.
Racicot became a registered lobbyist working Washington and the new administration on behalf of Enron, the American Forest and Paper Association, Burlington Northern Santa Fe, the National Energy Coordinating Council, the Recording Industry Association of America, and Quintana Minerals. They paid Racicot’s firm $710,000 in lobbying fees in just the first half of 2001. The Los Angeles Times reported that on behalf of the National Electric Reliability Council, Racicot had personally lobbied Vice President Dick Cheney on the Environmental Protection Agency’s attempts to require old plants to update their clean-air equipment. The Cheney task force later recommended that the Justice Department consider dropping lawsuits it had filed against certain companies for alleged environmental violations. The Bush administration continues to stonewall requests for public information about the secret energy task force.
Racicot also went on the corporate boards of Burlington Northern Santa Fe, the Mass Mutual Financial Group, and Siebel Systems. BNSF, best known as the second largest railroad in the country, is the largest transporter of low-sulfur coal in the United States, generating revenues of more than $2 billion from it in 2001. The railroad hauls 90 percent of the traffic from the Powder River Basin of Wyoming and Montana to coal-fired electric generating stations in Midwest and Mountain states. From the BNSF’s own annual report, we are informed that “deregulation in the electric utility industry is causing power generators to seek lower cost fuel sources and this increases demand for Powder River Basin coal.” Besides employing Racicot as a board member and lobbyist, the company has also added Republican former House member J.C. Watts. BNSF was a campaign contributor to Racicot when he ran for governor.
Siebel Systems, with 5,000 employees operating in 33 countries, was the first software company to reach $1 billion in sales — ahead of Microsoft. In 1999, the company began selling electronic government software, and by early 2001 it had come to understand how the influence game is played in Washington. Siebel created from scratch one of the largest political action committees in the software industry. As The San Jose Mercury News reported, in a 12-month period, the company raised $2.1 million from 373 employees, all but 18 of them giving the maximum annual contribution, $5,000. Billionaire company founder Thomas Siebel is a major Republican donor, giving $500,000 to the National Republican Congressional Committee in 2000, the largest single donation ever to that national GOP committee.
Why the sudden interest in politics and Washington? Well, to paraphrase that famous philosopher Willie Sutton, that’s where the money is. Thomas Gann, the Siebel Systems “vice president of government affairs” — a Washington euphemism for lobbyist — reportedly acknowledged that the company sees government as “a good commercial opportunity.” That was the understatement of the year, especially after September 11, 2001. Just weeks later, in November, with a 40-foot American flag draped on its San Mateo headquarters, Siebel Systems also unfurled its new homeland security software. According to The San Jose Mercury News, that same month board member Marc Racicot touted the Siebel software directly to White House homeland security director Tom Ridge. His eyes firmly on those tens of billions of dollars in homeland security contract prizes, Siebel also found time to personally meet with Ridge. His company officials have “demoed” the software to several Bush administration officials, in a full dog-and-pony show that included mug shots of the September 11 hijackers.
At the same time, the company launched a multimillion-dollar public relations campaign, including radio ads, and got out the trumpets on its website. “Siebel Solutions for Homeland Security provide a comprehensive multi-agency, multi-channel suite of applications software to enable governments to anticipate, track, prevent, and respond to national security threats,” the company declared.
In February 2002, Siebel testified before the House Committee on Government Reform’s Subcommittee on Technology and Procurement Policy, essentially offering a public Washington advertisement for Siebel Systems. “Chairman [Tom] Davis, Ranking Member [Jim] Turner, and distinguished members of the committee,” he began. “It is my privilege to speak to you today about the homeland security challenges facing our nation and possible solutions offered by private sector technology.” The committee’s chair, Representative Tom Davis, also chairs the National Republican Congressional Committee, which Siebel had seeded with half a million dollars a year and a half earlier, $80,000 in November 2001, and $100,000 roughly two weeks after the hearing. Davis’ own reelection campaign received $10,000 from the Siebel Systems PAC in the 2002 election cycle.
It’s too soon to tell how Siebel’s investment will pay off, but given the amount of campaign cash it had donated, and given that its board includes presidential pal and party leader Marc Racicot, what company could possibly be ahead of Siebel Systems in the long line for major federal contracts from the Department of Homeland Security? One securities analyst, Sameer Bhasin with Okumus Capital Corporation in New York, told CBS.MarketWatch.com, “There’s no other company competing in the homeland security area as aggressively.” Government contracting business could not come at a more crucial time for Siebel Systems. The company is battling a serious sales slump that has plagued the software industry since the tech bubble burst in May 2000. For Siebel, which has also fired hundreds of employees as corporate demand for its products has dropped, the federal government is potentially a growth market.
Meanwhile, sometime after September 11, 2001, Racicot’s firm also had begun to move into the homeland security contracting area, even though they don’t actually make anything. With a bald eagle and American flag on its website, Bracewell & Patterson announced, “We feel a duty to our clients and our country to help resolve these uncertainties in a way that strengthens our nation and preserves the freedoms that define it.” The Washington office of the firm hosted or participated in two seminars in 2003 for its corporate clients: The National Homeland Security Law Conference and “Selling in the Homeland Security Marketplace” before the National Contract Management Association, an organization for government and private sector procurement officers. It touted two of Racicot’s areas of expertise: “Homeland Security” and “Government Relations, Advocacy and Strategy.”
Who better to become chairman of the Republican National Committee?
The White House announced that Racicot — an active, registered lobbyist who would be allowed to continue his corporate lobbying — was the president’s choice to chair the RNC in December 2001. It was a stunning metaphor for how power, money, and hubris in Washington can dull the ethical judgment of an administration that vowed to “restore honor and dignity” to the White House. It also provides another glimpse of the seamy side of our major political parties.
A party chairman whose party controls both ends of Pennsylvania Avenue necessarily is in regular, face-to-face contact with the president, the vice president, cabinet secretaries, and the senior White House staff, as well as the speaker of the House and other GOP congressional leaders. He knows the precise vote counts of all major pending legislation before the roll is called and exactly what legislation the White House plans to introduce on Capitol Hill — pure gold for any lobbyist competing in today’s mercenary milieu. He has infinitely more power and access than other lobbyists, but without the accountability, financial sacrifice, or ethics laws of government officials. Although political parties are major public institutions in our society, top party officials are not regulated by conflict-of-interest laws and are not even required by law to reveal their sources of annual income. Nor does the Freedom of Information Act apply to them, so whom they telephone, meet, or correspond with is elusive and generally unknown.
Racicot, as Republican Party chairman, said he would not accept his $150,000 annual salary, but instead earn much more as an active partner in the law firm. The president, said Racicot, has no problem with his wish to “continue on with my occupation.” But critics, including Senator John McCain and conservative columnists Robert Novak and William Safire, found it offensive. The New York Times reported that before the firestorm of criticism, party officials had offered Racicot as much as $500,000 a year — more than three times the customary salary for the RNC chairman position — if he would stop lobbying, but Racicot had refused. Ultimately, Racicot made a minor concession to the public furor and vowed to cease all corporate lobbying. He continued to work at Bracewell & Patterson, reportedly getting paid $700,000 a year by the firm while also chairing the Republican Party. At the end of his 18-month tenure at the RNC, he became chairman of the Bush-Cheney reelection campaign.
Racicot was paid $1 a year as an RNC “volunteer.” Under this Orwellian construct, thousands of well-heeled corporate lobbyists are all political volunteers in Washington, and Americans apparently should be grateful for their civic participation. The Bush White House similarly didn’t see anything wrong with this picture. Former White House press secretary Ari Fleischer said, “There’s been ample history on both the Democratic and Republican side of chairmen being involved in either lobbying or having outside sources of income.”
Unfortunately, Fleischer was correct — conflicts of interest are a way of life for political party chairmen. The Center for Public Integrity found in an earlier study that between 1977 and 1993, half of the national party chairmen received outside income from corporations and law firms — despite party charters expressly stipulating that the chairman’s position is full-time.
Republicans, among others, expressed outrage at revelations in 1993 by the Center for Public Integrity and others about the late Ron Brown’s conduct as chairman of the Democratic Party in the early 1990s, when he simultaneously maintained a corner office at the lobbying firm of Patton, Boggs as a full partner and maintained business relationships with at least three of its clients. He solicited government contracts for both his law firm and a company he headed, while heading the party.
Because of the Brown controversy, when Washington lobbyist Haley Barbour became GOP chairman in late 1992, he publicly pledged to party leaders and on CNN that he would completely sever his ties to Barbour, Griffith & Rogers. But in fact he never sold his interest in the firm, deriving income from its tobacco, pharmaceutical, and other clients. The subterfuge only became known to reporters in the final days of his four-year term, when Barbour’s firm landed a contract representing the Swiss government and had to register ownership and other information with the Justice Department under the Foreign Agents Registration Act.
Barbour admitted, in an interview for The Buying of the President 2000, that he kept his equity share in the firm, but insisted that he has always operated in a carefully correct manner. “When I ran for chairman, I said I would not actively lobby because I didn’t want a member [of Congress] to wonder whether I was coming down there for the Republican Party or for some business deal that is in Haley’s interest.”
Barbour’s counterpart, Democratic National Committee chairman Don Fowler, worked simultaneously as a lobbyist for various corporate interests, including Chem-Nuclear Systems Inc., registered in South Carolina and Illinois. When later asked about this apparent, though not widely known, conflict of interest during his DNC chairmanship, Fowler said: “My private business concerns never became an issue while I was there, and really haven’t since.” Recall that when mysterious soft-money donors gave millions of dollars to the Democratic Party in the 1996 presidential election, one of them, Johnny Chung (later convicted for bank fraud, tax evasion, and conspiracy), said: “The White House is like a subway. You have to put in coins to open the gates.” Fowler and his staff set up Chung’s White House meetings, and Fowler later defended “servicing” the donors in his testimony to the Senate Governmental Affairs Committee. “I have long believed that one of the principal functions of a political party is to provide a link between the people and government,” he said. “I thus believe it fully appropriate for the head of a national party to secure a meeting for a supporter with an administration official and to advocate a worthy cause.”
Racicot’s unabashed public declaration at the onset of his tenure as national party chairman that he would simultaneously actively lobby for major corporate clients with business before the federal government — with the public assent of the president — was another “first,” even in ethically challenged Washington.
THE RNC’S GREAT ENABLER
Forget those quaint notions that political parties exist almost entirely to elect candidates. Parties and their chairmen raise hundreds of millions of dollars each election cycle from various special interests that often want something from government. They are the enablers in this ongoing addictive process, helping their elected officials to keep drinking in the campaign cash and helping their patrons to feel good about giving it. Besides being lobbyists in chief, chairmen help to deliver access and other favors to the most generous party patrons. If you think about it unsentimentally, being a corporate schmoozer in our nation’s capital is perfect preparation and experience for the chairman of a political party, needing to keep the far-flung keiretsu functioning, with its officeholder party members and fundraisers, the friendly outside groups running their “independent” expenditure issue ad campaigns, and all of those myriad vested interests desperately seeking access and influence and willing to pay substantially for it.
So whom did the White House and Republican National Committee choose to replace Marc Racicot as chairman? Why, another lobbyist, of course. In June 2003, Ed Gillespie was named to succeed Racicot. And in light of the earlier controversies surrounding the former Montana governor, Gillespie said he would retain partial ownership in his Washington lobbying firm but neither work for nor draw any salary from it while serving as party chairman.
Gillespie is a fixture in recent national GOP politics, a Zelig-like character with an instinct for power. He helped his party take control of Congress in 1994 and draw up the “Contract with America.” He worked for Republican House leader Dick Armey for a decade before becoming RNC communications director under party chairman Haley Barbour during the 1996 elections. He helped secure the White House for George W. Bush by helping Andy Card (now White House chief of staff) run the party convention in Philadelphia and by playing key roles for the campaign from both Austin and Miami during the recount. In 1995, the National Journal called him one of the “chief power wielders in the new House.” In 2001, The New Republic dubbed him “The Insider: the most powerful Bushie you’ve never heard of.”
Gillespie had begun raking in serious corporate dough while he worked with former RNC chairman Barbour in 1997. He became president of Policy Impact Communications, which Barbour chaired and which was associated with Barbour’s high-profile firm, Barbour, Griffith & Rogers. Recognizing that Bush might indeed become the next president of the United States, in January 2000, Gillespie — like Racicot, only sooner — cashed in on his new access to the Bush administration, teaming up with former Clinton White House counsel Jack Quinn to form a new lobbying shop, Quinn Gillespie & Associates.
Gillespie practices a time-honored Washington inside game as an enormously talented political consultant who also works as a highly paid lobbyist for corporate clients needing political access and favors, the same kind of in-and-out influence-peddling role that Charles Black and James Lake played for Bush’s father. Lake functioned as an unpaid deputy campaign manager of the 1992 presidential reelection campaign while simultaneously working as a registered foreign agent for a major investor in the Bank of Credit and Commerce International, BCCI, better known as the Bank of Crooks and Criminals International, at the time the corrupt bank was being investigated by numerous federal grand juries.
Gillespie helped the president-elect as spokesman for the Presidential Inaugural Committee and by assisting close Bush friend Don Evans set up the Commerce Department. He has also earned the loyally and trust of White House political advisor Karl Rove and the Bush inner circle by doing some of the sensitive political work they can’t be seen doing themselves. Gillespie reportedly helped to plant and “spin” some negative news stories about Gore in the crucial weeks before the 2000 election, including accounts of pollution at Gore’s Tennessee farm and an endorsement Gore received from a group of pornographers. He is believed to have helped to orchestrate the infamous “penny-loafer protesters” riot of Republican Capitol Hill aides flown in by Representative Tom DeLay in Miami during the Florida recount. He has also helped the party as a fundraiser; for instance, he was involved in a GOP power and fundraising project called
ROMP ("Retain Our Majority Program") run by GOP House leader Tom DeLay to funnel campaign cash to vulnerable Republican candidates, in Gillespie’s case squeezing major bucks out of Washington’s K Street corridor of lobbyists and lawyers.
From January 2000 through 2002, the Quinn Gillespie firm took in $27.4 million in lobbying fees from such clients as Microsoft, PriceWaterhouseCoopers, the Chamber of Commerce, Tyson Foods, and the National Association of Realtors, according to a report by Public Citizen.
Gillespie’s firm received $700,000 from Enron in 2001 to, essentially, put a happy face on the California energy crisis and block any potential federal regulatory efforts to institute such things as price controls in the troubled Western electricity market. Gillespie also launched the 21st Century Energy Project — one of those corporate-funded “independent advocacy groups” so much in abundance in Washington — reportedly moving money from Enron and DaimlerChrysler to conservative organizations like Americans for Tax Reform and Citizens for a Sound Economy as a way of advancing the Bush administration’s energy plan while preventing any new regulation.
The top five electric utility contributors to the political parties in the 2000 and 2002 election cycles — Dominion Resources Inc., Southern Company, Exelon Corporation, Texas Utilities Company, and the National Rural Electric Cooperative Association — gave nearly three-quarters (74 percent) of their party donations, $5.1 million, to the Republican national committees and just $1.8 million to the Democrats. Back in 1994, when Democrats controlled the White House and the Congress, the industry was more “bipartisan” in its giving, donating $3.3 million to the Democrats and 2.7 million to the Republicans, according to the Center for Responsive Politics.
The electric utility industry has gotten excellent returns on its political access fees. It was, for example, successful in changing — with the leadership of the Bush administration, of course — a provision known as “New Source Review” in the 1977 Clean Air Act, thereby enabling electric generating and other companies to forego putting new, expensive pollution controls in their facilities. Another “independent” organization, the Electric Reliability Coordinating Council, funded by Southern Company and five other energy companies, was formed to work with the Bush administration in getting this law changed, and Racicot and his firm were paid more than $150,000 to lobby in 2001 solely on this issue. The ERCC, the Edison Electric Institute led by Bush Pioneer and George W. Bush’s former Yale roommate Thomas Kuhn, and other energy interests were fired up over Clinton administration EPA-initiated litigation, including indictments, against seven power companies for violating this provision of the Clean Air Act.
Two of Quinn Gillespie’s major telecom clients have been Verizon (formerly Bell Atlantic) and SBC Communications, who just happen to be the 7th and 12th most generous Republican Party patrons, giving more than $4.5 million and $3.7 million, respectively, to the three national committees since 1978. Verizon and Verizon Wireless paid the firm $1.4 million from 2000 through 2002 to lobby on telecom spectrum issues. SBC, which in 2002 had 67 lobbyists in Washington, retained the firm for $1.2 million to lobby on broadband policy issues.
The top five telephone company contributors to the political parties in the 2000 and 2002 election cycles — AT&T, Verizon, SBC, BellSouth Corporation, and MCI (formerly WorldCom) — gave 58 percent of their party donations, more than $9.9 million, to the Republican national committees; 42 percent, $7.1 million, went to the Democrats.
Since their creation in 1984 when the government broke up AT&T’s nationwide telephone monopoly, some of the “Baby Bells” have chafed under a rule that they must, in the spirit of competition, lease parts of their local networks to competitors at discounted rates. Complaining that the regulation essentially compels them to finance the success of their competitors, they have long tried to persuade the FCC and Congress to rescind the law.
In the wake of the 2002 elections and Republican control across the board, SBC and Verizon had reason to believe that the tide in Washington had turned in their favor. Particularly with a Republican majority on the Federal Communications Commission, including a new chairman, Michael Powell, a tech-savvy, free-market advocate of deregulation who happens to be the son of Secretary of State Colin Powell. And in fact in February 2003 he came extremely close to eliminating the phone regulations that obligate the companies to lease their networks to competitors. But he was foiled when a Republican commissioner, Kevin Martin, unexpectedly voted with the Democrats — prompting Republican House Commerce chairman Billy Tauzin to dub him a “Renegade Republican.” Nonetheless, Powell and major party patrons SBC and Verizon did win an important consolation prize: the commission voted to free them from having to share new high-speed data lines with competitors.
As we noted earlier, the most profitable U.S. industry has become increasingly aligned with the Republican Party. The top five pharmaceutical contributors to the political parties in the 2000 and 2002 election cycles — Pharmaceutical Research & Manufacturers of America (known as PhRMA), Bristol-Myers Squibb, Pfizer, Pharmacia Corporation (since merged into Pfizer), and Eli Lilly — gave 87 percent of their party donations, nearly $11.2 million, to the Republican national committees and just $1.7 million to the Democrats. Moreover, Pfizer, PhRMA, and Bristol-Myers Squibb are, respectively, the 4th, 14th and 16th most generous Republican Party patrons overall.
The discovery documents from the BCRA (McCain-Feingold) litigation reveal the recent increased coziness between the industry and the GOP. In an internal briefing memorandum dated February 8, 1999, and addressed to Alan Holmer, the president of PhRMA, a staff lobbyist wrote, “We are scheduled to meet with Senator [Mitch] McConnell tomorrow. . . . You are meeting with the Senator principally in his leadership role as chair of the NRSC [National Republican Senatorial Committee]. In that regard, industry has been a solid supporter (see attached correspondence [based on FEC records] reflecting industry support for the Republican Party during the 1997-98 election cycle).” The stated objectives of the meeting include apprising McConnell “of industry’s concern with attention on pharmaceutical costs and efforts by Democrats to demagogue the issue at Republican expense, e.g. Sen. Kennedy prepared to force Republicans to choose between a tax cut for the rich and a drug benefit for seniors.” The final objective: “expressing PhRMA’s willingness to be a resource, substantively and politically, to assist in maintaining a Republican majority in 2000.”
PhRMA attorney Judith Bello, in a sworn deposition in 2002, acknowledged the shift to one party. “We have more heavily made contributions to Republicans than Democrats because they more often favor market-oriented approaches,” she said. According to The Washington Post, over the past decade, PhRMA and its member companies have spent more than $1 billion to influence the public policy process in Washington, easily more than anyone else, hiring in that time more than 600 lobbyists, including numerous former lawmakers.
In mid-2003, The New York Times obtained confidential budget and other documents from inside PhRMA, revealing that the lobbying organization planned to spend $150 million at the state, federal, and international level, an increase of 23 percent over the preceding year. One document noting the “demonization of the industry,” worried that “unless we achieve enactment this year of market-based Medicare drug coverage for seniors, the industry’s vulnerability will increase in the remainder of 2003 and in the 2004 election year.”
Just weeks after those documents surfaced, Congress passed historic market-based Medicare drug coverage for seniors, supported by the White House, the legislation moving to the conference stage. “We applaud the Senate and House for their action,” said Holmer, the PhRMA president.
THE DNC’S TEFLON CHAIRMAN
Meanwhile, for the Democratic Party, there is no aspirin strong enough for the migraine it faces. Since Election Day 2000, the Democratic National Committee and its colorful chairman Terry McAuliffe have been out of luck, out of power, and short on money, at least when compared to the Republicans. For example, when McAuliffe took over as chairman, he discovered the party only had e-mail addresses for 70,000 voters nationwide, compared to 1 million for the GOP. “The Democratic Party has 21st century ideas, but we had Stone Age technology,” he told Business Week. McAuliffe immediately set about to update the DNC’s technological capacity.
The stampede to the GOP covers a wide array of industries. In addition to the ones we’ve briefly discussed — tobacco, mining, and pharmaceuticals — in the 10 years since the 1992 election cycle, such industries as beer, wine, and liquor; accounting; health service/HMOs; commercial banking; defense; insurance; and automotive manufacturing significantly cut back the percentage of money that they gave to the Democratic Party. That amounts to millions of dollars not available for Democratic Party campaign activities. What’s worse for the Democrats, in this zero-sum game the money actually flowed to the Republican Party, which already had a long history of financial superiority.
Ironically, the most successful and prolific fundraiser in Democratic Party history is the current chairman of the Democratic National Committee. Like Gillespie, Terry McAuliffe seems to know and have worked with everyone in his party. But while Gillespie excels in strategic consulting and communication, McAuliffe has made his name in national politics as a marathon money man. He has raised hundreds of millions of dollars over more than two decades for the Democratic Party and its leading candidates, starting out in the finance department of President Jimmy Carter’s reelection campaign in 1980 and ending as the finance chairman of the DNC.
McAuliffe was the finance director for the 1996 Clinton reelection campaign, amidst some of the most controversial campaign finance decisions and scandals of that period. President Bill Clinton became the first chief executive to spend tens of millions of soft-money party dollars for nationwide television commercials about, well, Bill Clinton. It was actually Terry McAuliffe’s idea — expressed in a formal memo to the president, with which Clinton enthusiastically agreed — to reward major Democratic Party donors with overnight stays in the Lincoln Bedroom and elsewhere in the Clinton White House. McAuliffe was cochair of the Presidential Inaugural Committee and first friend to Bill Clinton when it came to raising greenbacks for the Clinton Legal Defense Fund, the Clinton Presidential Library, and even the Clintons’ home in Westchester County, New York. The wealthy McAuliffe even offered to lend the Clintons the $1.35 million they needed to buy the home, but the public furor made the notion untenable.
Like his Republican counterpart, McAuliffe worked at a lobbying firm in Washington in the 1990s. Unlike Gillespie, though, McAuliffe has also been a successful businessman outside Washington and the world of politics, an entrepreneur as well as a lawyer. He takes no salary as DNC chairman. But McAuliffe also has brushed up against potentially serious public scandals over the years, remarkably without ever being ensnared.
Despite the hundreds of hours of congressional hearings over the Clinton campaign finance scandals of 1996 and 1997, plus a subsequent, multiyear Justice Department investigation that netted many small fish; despite two different Independent Counsel preliminary investigations focused on either Vice President Al Gore or White House aide Harold Ickes, in which the Democratic Party had to return millions of dollars in illicit campaign contributions from Asia and more than 45 people took the Fifth Amendment or fled the country — somehow the Democratic Party’s former finance chairman and finance director for the president’s reelection campaign emerged from the tawdry debacle with barely a scratch.
A federal investigation in the late 1990s involving McAuliffe’s real estate business deals resulted in no charges or fines against him, but the companies or labor unions involved with him either settled out of court or were fined by the government. McAuliffe was also implicated in a series of money swaps between Teamsters president Ron Carey and the Democratic Party in 1996. Through a complicated — and, it turned out, illegal — scheme, the Teamsters had poured significant sums of money into the Clinton-Gore campaign and Democratic Party committees with the understanding that the Democrats would help Carey finance his own campaign that year. Following the investigation, three aides to Carey’s campaign — Martin Davis, a consultant; Jere Nash, his campaign manager; and Michael Ansara, a telemarketer — pled guilty to embezzlement, mail fraud, and conspiracy. The three were sentenced to probation, fined, and had to pay restitution to the union. A fourth, Teamsters political director William Hamilton, was convicted on six counts of corrupt practices related to the illegal diversion of union funds.
In February 2001, Carey himself was indicted for seven counts of perjury for lying during the investigation (he was later cleared of the charges). According to media reports, former DNC finance director Richard Sullivan testified that Hamilton and McAuliffe hatched a plan in which $500,000 of Teamsters’ money would flow to the Democratic Party. But the money would be given in return for a $50,000 contribution to Carey from a donor recruited by the DNC. However, the plan failed to materialize because the first proposed donor was rejected by Carey’s aides as unsuitable and no replacement was found. Presumably because McAuliffe — who has always denied any wrongdoing — never conducted the illegal trade, he was never prosecuted.
More recently, McAuliffe’s name was brought up in the Global Crossing affair. The chairman of the now-bankrupt telecommunications company, Gary Winnick, gave McAuliffe an opportunity to invest $100,000 in the private concern. Two years later, McAuliffe sold his interest for $18 million after the company went public. In 1997, around the time McAuliffe was given this exclusive offering, Global Crossing was dealing with federal regulators in Washington. And McAuliffe reportedly got Winnick a golf outing with President Clinton. Was Global Crossing seeking political influence with the president’s money man? Was McAuliffe peddling his access to power? “You invest in stock, it goes up, it goes down,” McAuliffe, said on the Fox News Channel. “If you don’t like capitalism, you don’t like making money with stock, move to Cuba or China.”
Clearly, like his Republican counterparts, this political party chairman understands how intertwined the private sector is in the daily business of the political parties and knows how to weave and mesh multiple agendas seamlessly. For McAuliffe, the art of the deal, whether personally as an entrepreneur, politically as a legislative and public relations tactician, or professionally as premier fundraiser, is intoxicating. So what if sometimes personal and professional deals are with the same people who happen to be donors to the Democratic Party?
Such has been the attitude and culture of the DNC in recent years. In 1996, for example, when the Center for Public Integrity first published The Buying of the President, we wrote about a vice chair of the DNC named Lottie Shackelford, a former mayor of Little Rock, Arkansas, and a friend of Clinton’s who was simultaneously registered as a lobbyist for a firm called Global USA. Shackelford is still at both places. At Global USA she has been the executive vice president of the government relations and international consulting firm since April 1994. According to its website, Global USA “assists its clients in understanding and addressing the complexities of U.S. government regulations and legislation” through lobbying and government relations. It claims to have expertise in a myriad of issues ranging from international trade to telecommunications and grassroots lobbying. Shackelford represents a number of clients for Global, which works with Miami-Dade County Florida, FM Watch, Psychemedics Corporation, Quest Software, and United to Secure America.
Linda Chavez-Thompson is another DNC vice chair with an interesting day job, simultaneously serving as executive vice president of the AFL-CIO.
UNION SUPPORT
Unions certainly are the single most important constituency for any Democratic presidential candidate. Indeed, they have been without question the most consistent and generous supporters of Democratic candidates in modern American history. For the past quarter century, 6 of the Democratic Party’s top 10 patrons are unions: American Federation of State, County and Municipal Employees; Service Employees International Union; Communications Workers of America; Carpenters Union; American Federation of Teachers; and the United Food & Commercial Workers. AFSCME is the top patron of the Democratic Party, contributing more than $16.4 million — the highest total given by a single organization to either political party. In the 2000 and 2002 election cycles alone, labor groups transferred nearly $175 million to Democratic campaigns; Republicans received less than 1 out of every 10 union dollars.
These substantial numbers don’t even take into account the extensive national grassroots networks composed of thousands of unionized American workers who are at the disposal of a candidate who wins labor’s endorsement. The decades-old debate between the two parties, which we have addressed in the past, rages on. Whenever Republicans are asked about their substantial fundraising advantage over the Democrats, they respond by citing research by a Rutgers University economics professor named Leo Troy, who estimates that the “in-kind contributions” provided by unions in every presidential election amount to hundreds of millions of dollars. Union leaders scoff at such assertions, but there is no denying that it is worth millions of dollars to the Democratic Party. And unlike in-kind company contributions, there is no public disclosure retirement for the unions to report the value of such efforts.
In order to maintain this essential support, Democratic candidates have long been compelled to showcase the more liberal strains of their respective agendas and tout union-friendly initiatives that range from minimum wage legislation, industry protection, and heath care reform. But in addition to these traditional concerns, unions have new worries about the new president and his party’s control of Congress — along with policies diametrically opposed to organized labor and its agenda. On one front, Bush’s Labor Department, complaining of perennial union corruption, is pushing for increased disclosure of union finances. Union bosses naturally protest on the grounds that more stringent accounting would cost millions of dollars. In The Buying of the President 2000, we wrote extensively about union corruption. (Ironically, “although in nearly eight years Clinton and Gore never once publicly uttered the phrase “union corruption,” the Clinton Justice Department was more aggressive in identifying union crimes than the Ashcroft Justice Department has been, according to Syracuse University’s Transactional Records Access Clearinghouse data on federal prosecutions.)
Of course, there’s been no ebb in union scandals, and none is more interesting than the ULLICO affair. Robert Georgine typified, more than most international union presidents, the well-paid, well-fed life. He earned two annual salaries plus bonuses plus a private jet. He was the president of the AFL-CIO Building and Construction Trades Department, earning $264,331, and chairman and chief executive officer of the Union Labor Life Insurance Company, where insiders put his salary in 2002 at $1 million. ULLICO is a 1,400-employee health and life insurance company. In 1997, ULLICO invested $7.6 million in Terry McAuliffe’s favorite company, Global Crossing, which appreciated in value — to some $486 million. ULLICO then sold 40 percent of the stock, holding the rest right up to the time Global Crossing declared bankruptcy.
An outside, independent investigator, former Illinois Governor Jim Thompson, found that 18 ULLICO board directors and officers should return more than $5.5 million in “not appropriate” profits from the sales of ULLICO stock, including Georgine, who had pocketed $837,760. He and three other executives with similarly lavish compensation “were already receiving a bonus, separate from their regular annual bonus, under the Global Incentive Program and significant earnings under the Deferred Compensation Plan. . . . these officers may not have been entitled to another ‘bonus.’”
Georgine and much of the ULLICO board are gone, and, to his credit, AFL-CIO president John Sweeney, who sat on the board, took no inappropriate compensation and actually quit the board when Georgine refused to publicly release the damning Thompson report. In this particular case, the unions — sensitive to corporate governance issues, even counseling and financially assisting Enron employees at the time — ultimately put their own house in order.
Understandably, unions feel threatened by Bush’s plans to privatize as many as 800,000 government jobs — most of them unionized public employees — and to forbid new Homeland Security Department employees from unionizing. This is a significant issue to the dwindling labor movement, which now represents just 14 percent of the workforce, because a majority of the newest members are white-collar workers from government and service sectors. “I think that [Bush] is the most anti-worker, anti-union of all the presidents [in the past three decades],” Sweeney told us. “Sure, we had some tough times with his father, but you didn’t see the same kind of blatant attack on workers that you see today. In the Nixon years, with all the problems there were, he was one of the presidents that was focused on issues of welfare and health care reform.”
The heady Clinton administration days of rides on Air Force One and shared agendas and actual, enacted legislation are long gone for Sweeney and the union presidents on the AFL-CIO executive council.
TRAVAILS OF THE TRIAL LAWYERS
Another important part of the Democratic Party’s funding base — with links to consumer, environmental, civil rights, and other public interest groups — are the trial lawyers. Between 1999 and 2002, the Association of Trial Lawyers of America made $8.4 million in political contributions to political parties, PACs, and candidates, with $7.5 million — 89 percent — going to Democrats. ATLA is the 19th largest Democratic Party patron, contributing more than $8.7 million to the national committees since 1978. The most generous trial lawyer firm supporting the Democratic Party is Williams & Bailey LLP, which has given $4.7 million over the same time frame.
This disproportionate giving reflects the fact that Democrats have been sympathetic to the trial lawyers’ agenda. As an industry, trial lawyers became rich and influential through the substantial fees they received from multimillion-dollar settlements. For a long time, businesses, hospitals, and insurance companies, the groups that usually pay out these enormous settlements, have complained that the awards are outlandish and urged “tort reform” — legislative limits on liability, punitive damages, and lawyer fees. While tort reform passed in some states over the last decade, it did not really catch on nationally in the 1990s. In the course of the eight years of the Clinton administration, almost no proposals on the issue were advanced by Democrats; Clinton, a former law professor, vetoed two reform bills that made it to his desk.
But the trial lawyers’ charmed existence ended after the 2000 election. Unlike his predecessor, President Bush has an infamous reputation among trial lawyers. While governor in Texas he championed tort reform and pushed a sweeping legal reform package that was a trial lawyer’s worst nightmare: the institution of liability limits, raising taxes on law firms, and measures to curb “frivolous lawsuits.” In his presidential campaign, Bush promised to make tort reform a part of his legislative agenda; he has come through on that pledge. The Republicans in control of Washington are working with their allies in the business sector to curb trial lawyers’ ability to sue corporate America. Their primary initiatives include moving multimillion-dollar class action lawsuits to federal courts from state courts, where trial lawyers tend to win bigger settlements, and capping a slew of economic punitive awards in medical malpractice cases and asbestos reform — ending costly lawsuits against companies that used asbestos by setting up a trust to pay victims.
Though they’re backed into a corner, trial lawyers are fighting back. With the support of its 60,000 members, ATLA spent $3.5 million lobbying Congress in 2002; their Democratic backers responded. In an effort to forestall any attempt at tort reform, the Democrats blocked a terrorism insurance bill for more than a year after the September 11 attacks because Republicans wanted to limit punitive damages that victims could seek. In the waning days of the 107th Congress the Republicans abandoned the liability provision and the bill passed. Then in July 2003, Senate Democrats again blocked a bill, this time on medical malpractice reform, because it would have capped jury awards for pain and suffering at $250,000.
BUYING INFLUENCE: THE EMERGING POWERS
Both the Democratic and Republican parties have had to adapt to the new campaign finance landscape nationwide in recent years, and not just because of the historic passage of, and subsequent litigation opposing, the Bipartisan Campaign Reform Act ban on soft money to the national party committees and on “issue ads” within 60 days of the election.
As part of that legislation, the doubling of hard-money limits has clearly given the Republican Party, particularly George W. Bush, a major additional fundraising advantage. The Republicans have always had more maximum-allowance contributors, and moving from $1,000 to $2,000 is hardly difficult for most of them, especially with such astonishingly effective bundling systems as the Bush Pioneers, and now Rangers.
Meanwhile, the proliferation of outside groups and the use of 527 groups and 501(c)(3) “educational” organizations that don’t have to disclose their funding sources are radically changing the campaign dynamic for the parties. The Democratic and Republican parties have created such mechanisms themselves essentially to keep raising big six-figure and seven-figure soft-money checks, under organizations with new names. Realistically, who is going to stop them? The president, who went to a fundraising event just hours after signing the McCain-Feingold law with no White House speech or ceremony and allowed his own political party to challenge the constitutionality of that same law? The Congress, which has demonstrated similar ambivalence about “reform” for years, and is equally addicted to hundreds of millions of dollars from vested interests every two years? The Federal Election Commission, which eviscerated McCain’s new law in a loophole-ridden rule-making process?
Most candidates cannot win today without an informal alliance of outside groups, major party support, and their campaign committee. A coalition of interests working together is the new politics of the 21st century for those few districts that are even contested.
What is not well understood by the American people is the substantially lawless extent to which the political parties launder hundreds of millions of dollars throughout their labyrinth of state and local party committees. There are certain “Cayman Island” states that have no limits on contributions and no public disclosure, and dubious donors can easily slide their big checks into those states, knowing a transfer can be made to another place. The FEC has even “interpreted” the recent campaign finance legislation to mean that members of Congress can raise soft money for state parties. Voila!
The Center for Public Integrity, working with two other organizations, tracked the expenditures and contributions of 225 party committees in the 50 states — analyzing 340,000 database records. We found that in the 2000 elections, Democratic and Republican state party committees raised $570 million, with 46 percent of it coming as soft-money transfers from national party organizations. Donors we thought had given hundreds of thousands of dollars to a political party had actually written millions of dollars in checks to state party committees nationwide, especially in the last week of the presidential election, strategically directed by the national party headquarters to close “battleground” states.
Campaign finance anarchy reigns, and the two major political parties thrive in the chaos. They can cavort and collude with powerful vested interests that want something from government, with very little if any accountability. The amounts of money will increase, and accessibility by ordinary, well-intended, serious folks will become even more limited.
A neutered Federal Election Commission ruled recently that the party organizers for the 2004 Republican Convention in New York and the Democratic Convention in Boston can raise as much money as they want from whomever they wish. The post-Watergate system established that each party convention would get public funding and could augment the costs from private sources. In 1980, for the two party conventions in Detroit and New York, private special-interest money accounted for 13 percent, of the total available cash. In 2000, for the conventions in Philadelphia and Los Angeles, private organizations gave 208 percent more than the government provided. In other words, as an analysis by the Campaign Finance Institute found, U.S. taxpayers gave a total of $27 million to the two political parties for their lavish conventions, but they went out and raised another $56 million from private vested interests. How much will the parties raise for the 2004 conventions? The institute estimates the orgies this time will run up an $89 million tab, not counting the $30 million total from taxpayers.
The conventions themselves have become extravaganzas. In Los Angeles in 2000, there were 130 “invitation only” star-studded parties, receptions, lunches and dinners, and 300 fundraisers and opportunities for vested interests to get “face time” with elected officials, from discreet Beverly Hills estates to the Santa Monica pier. In Philadelphia there were hundreds of parties and fundraising and donor-maintenance events. There were golf tournaments, rock concerts, and large yacht parties. Cars and drivers were made available to every GOP member of Congress.
So the cash will keep flowing and parties will keep selling access and influence. As we leave the mercenary culture of the political parties and turn towards specific investigative profiles of the major 2004 presidential candidates, let us not forget, then, that they seek to win the nomination of their parties, with all the unstated encumbrances and financial alliances that go with them. Every president, upon election, rewards specific vested interests and thousands of campaign workers for their past loyalty, and the organizing principle for all of this is his political party.
As citizens and voters, we are not just electing a president, but by extension his family, his closest aides and advisors, and his national political party. It is a package deal. And that means caveat suffragator, voter beware. Remember James Madison’s warning in the Federalist Papers. The danger in any republic, he said, is when “men of factious tempers, of local prejudices, or of sinister designs, may by intrigue, by corruption or by other means, first obtain the suffrages, and then betray the interests of the people.”
The Republican Party
Top 50 Donors
$10,335,170
$6,566,758
$6,019,447
$5,587,933
$5,549,326
$4,605,106
$4,580,252
$4,175,966
$4,136,810
$3,785,815
$3,735,876
$3,724,155
$3,494,041
$3,427,344
$3,302,135
$3,294,608
$3,251,750
$3,013,422
$2,981,754
$2,959,608
$2,756,200
$2,737,277
$2,704,218
$2,665,872
$2,598,533
$2,543,228
$2,513,687
$2,512,291
$2,498,684
$2,457,615
$2,439,227
$2,409,779
$2,398,086
$2,390,599
$2,381,834
$2,367,260
$2,326,315
$2,274,382
$2,247,028
$2,211,211
$2,200,120
$2,157,750
$2,125,384
$2,104,577
$2,071,151
$2,067,628
$2,041,240
$2,037,604
$2,025,900
$2,024,340
This list is based on individual, corporate, and PAC hard- and soft-money contributions to the Republican National Committee, National Republican Congressional Committee, National Republican Senatorial Committee, and affiliated committees between January 1, 1978, and June 30, 2003.
The Democratic Party
Top Fifty Donors
$16,491,501
$12,703,582
$12,549,102
$10,008,890
$9,032,500
$7,790,904
$7,490,494
$7,438,000
$6,298,492
$5,313,800
$5,139,475
$5,091,721
$4,900,621
$4,717,400
$4,178,430
$4,134,669
$3,936,286
$3,902,333
$3,776,600
$3,632,128
$3,577,500
$3,382,445
$3,313,873
$3,310,000
$3,260,154
$3,222,650
$3,208,020
$3,188,423
$3,150,335
$3,125,015
$3,123,250
$2,894,000
$2,868,500
$2,798,104
$2,735,295
$2,638,028
$2,609,537
$2,524,583
$2,384,679
$2,276,758
$2,232,451
$2,214,228
$2,195,430
$2,170,000
$2,168,289
$2,141,977
$2,118,529
$2,056,633
$2,013,962
$1,976,500
This list is based on individual, corporate, and PAC hard- and soft-money contributions to the Democratic National Committee, Democratic Congressional Campaign Committee, Democratic Senatorial Campaign Committee, and affiliated committees between January 1, 1978, and June 30, 2003.
Books
The Buying of the President 2004
- Introduction
- Equal Rights, Unequal Protection
- Private Parties
- George W. Bush - The Texas Years
- George W. Bush - The War President
- George W. Bush - The Administration
- Wesley Clark
- Howard Dean
- John Edwards
- Richard Gephardt
- Bob Graham
- John Kerry
- Dennis Kucinich
- Joe Lieberman
- Carol Moseley Braun
- Al Sharpton
- Conclusion
- Acknowledgements
The Buying of the President 2000
