Countdown

Home > Stories > Stealth Campaigns – Part Five

Stealth Campaigns – Part Five

The $20 Million Men

We may never know exactly why any American would contribute more than $20 million in a single year to influence a presidential election. That is because Bob Perry, a residential housing developer in Houston, Texas, refuses to explain his reasoning and investor George Soros is somewhat vague about his motives.

Neither man seems to want—or need—anything in return from the candidates they finance. Men in the top tier of wealth are not usually seeking a government job or a framed, autographed photo of themselves with the president. And while they are funding some of the most ideologically extreme advertising in American history—Soros on the left and Perry on the right—both men prefer to portray themselves as political centrists.

No matter what their reasons, it was astonishing to many long-time observers of campaign financing that rich Americans were making record-breaking political contributions legally after three decades of post-Watergate efforts by Congress to limit the amounts of money that flow into campaign coffers. The role played by Soros, Perry, and other wealthy men and women in financing today’s presidential selection process suggests that little has changed since 1974, when the public was outraged that millionaire insurance executive W. Clement Stone had secretly provided more than $2 million to assist the reelection of Richard M. Nixon.

In fact, neither Perry nor Soros were big political contributors until after the enactment of the 2002 Bipartisan Campaign Finance Reform Act, whose stated aim was to eliminate unregulated contributions. It was as if the new law had triggered an all-out arms race between Democrats and Republicans to see which camp could create the biggest independent, permanent campaign apparatus. In 2008, this race was still under way as independent groups scouted for new combatants in the contest of writing big checks. In the process, they were elevating the place of secrecy and negativity in the campaign arsenal, dramatically reshaping the political landscape, and attracting an array of corruption allegations.

As the 2008 election got under way, more new names appeared on the list of big contributors to independent groups. One of the most prominent was Sheldon Adelson, owner of the Las Vegas Sands, whom Forbes magazine has identified as the nation’s third-richest man. Adelson, who advocates a hard, pro-Israeli line in the Middle East, helped to establish the conservative independent group Freedom’s Watch with an early contribution. His influence is apparently reflected in the group’s decision to mount an energetic campaign against what its website calls “radical Islam and the emerging Iranian threat.” A few months earlier, he contributed $1 million to a new independent group established by former House Speaker Newt Gingrich.

Some political insiders think the 2002 law’s abolition of soft-money contributions to political parties actually encouraged wealthy donors to contribute even larger sums to independent groups. It takes a lot of concentration for wealthy people to pass out hard-money donations of no more than $4,600 to each of a wide variety of candidates. But when they decide to fund an independent group, they only need to write one big check.

Conservative strategist Grover Norquist noted that it is easy to create a new independent advocacy organization with just a few big checks. “Normally that would be the party’s job,” Norquist told The Associated Press. “But if you can only write a $2,000 check to the parties, five guys can’t get together and do that. But five guys can get together and set up Freedom’s Watch . . . and can make an impact.” Democratic campaign consultant Bill Carrick said men and women who in past elections have acted as bundlers for parties – people who gather many of those small checks from individual donors – also prefer the option of giving to an independent, election-related group instead: “Sometimes, if you go to some traditional fundraising person and they decide, ‘Well, it would be easier for me just to write a check to this 527 [one kind of independent group, named after the section of the federal tax code that governs it] . . .than it would be for me to sit on the phone for hours asking friends and associates to give money to the campaign.’”

Perry’s political giving has been described as the natural extension of his aggressive support for charities. If he sees something that interests him, he gives generously to it and seldom asks to be consulted about how the money will be spent. In April 2007, Texas Monthly quoted an unnamed friend who described Perry’s contributions as “completely binary — the switch is on or the switch is off; he believes in it or he doesn’t.”

In 2004, Perry made his debut as a major national donor to independent GOP committees and quickly became a leading player. He gave $4.5 million to Swift Boat Veterans for Truth, $3 million to Progress for America, and $600,000 to Club for Growth. Half of his 2006 contributions of $10 million went to the Economic Freedom Fund, which ran attack ads in congressional races in West Virginia, Indiana, Georgia, Iowa, Oregon, Colorado, Idaho, and Nevada. Among the political issues that have drawn his attention in recent years: tort reform, immigration reform, education, tax relief, public safety, and job creation. Perhaps because he is a contractor and presumably hires immigrant labor, he does not share the Republican Party’s increasing interest in deporting undocumented workers.

Meanwhile, Soros, whose charitable interests are legion, contributed more than $23 million to Democratic independent groups in 2004, including $12 million to the Joint Victory Campaign, $7.5 million to America Coming Together, and $2.5 million to MoveOn.org. Michael Vachon, spokesman for Soros, told the Center for Public Integrity that his boss was “a catalyst” for the creation of America Coming Together. “Here is what happened,” Vachon said. “In 2003, when he started to recognize the danger that the Bush administration posed to the world, he asked himself if there was any way for him to play a role in the election. He had never been involved in those kinds of efforts. So we went out and hired two different sets of consultants to analyze the situation for us. And what happened is that they more or less came up with the same answer. . . . What needed to happen was a massive voter-base turnout program. That’s what America Coming Together was.”

Needless to say, after pouring more than $20 million into the 2004 campaign, Soros had every reason to be disappointed when Bush was reelected. The conservative magazine National Review published a cover photo of George Soros holding a T-shirt with a picture of Bush and a line drawn across it. The headline: “I spent $27 million and all I got was this lousy T-shirt.” It was at that point Soros summoned many of his wealthy friends together to form the Democracy Alliance. Despite Soros’ support for so many progressive Democratic groups, Vachon insisted that he is not as driven by ideology as some people have suggested. “He is not the sort of crazed, left-wing millionaire that many in the right wing, particularly press, make him out to be,” he said, adding that Soros would better be described as a Rockefeller Republican. In the past, he has also contributed to groups that advocate public funding of elections.

Unlike most things in American politics, the work of Democracy Alliance is done without any publicity. Meetings are closed to the press and the group even refuses to identify all of its members. Each of the more than 100 members, including actor Rob Reiner, reportedly paid as much as $1 million each to sit at the table. Members of this left-leaning alliance do not pool their contributions, but they do decide collectively where to put their money in an election year. The group was believed to have contributed $85 million to non-party, Democratic endeavors during its first two and a half years in operation. According to The Argument, a book by New York Times Magazine writer Matt Bai, the alliance stumbled at the beginning because of internal differences over organization and funding priorities. Meanwhile, in 2008, Soros’ interest in the political realm appeared to be waning. “I think it’s unlikely that George will make a similar commitment in 2008,” Vachon said. “What motivated him in 2004 was the feeling that this was an important moment in history. I think in a lot of ways, depressingly so, he and many people feel like the damage has been done already.”

Not all big contributors to the independent groups seem as disinterested in payback as Soros and Perry, of course. Dawn Arnall’s husband, Roland, chairman of Ameriquest, became the ambassador to the Netherlands after she contributed $5 million to Progress for America Voter Fund. Sam Fox, who provided the Swiftboat Veterans with $50,000, got a recess appointment to be ambassador to Belgium. When Fox appeared before the Senate Foreign Relations Committee, Senator John Kerry, Democrat from Massachusetts, lambasted him for supporting “the politics of personal destruction.”

Nor were wealthy people the only ones trying to enhance their political influence by aggregating their contributions to independent groups. A new entry in the 2008 cycle was the New Progressive Coalition, with a portfolio of so-called “mutual funds” to enable liberals to give to progressive organizations, many of them with political aims. The slick, new organization was the brain child of Andy Rappaport, a Silicon Valley venture capitalist, and his wife, Deborah. The organization, which assists a selective list of political groups, touts itself as the Charles Schwab of politics. Contributors can make an “investment” of as little as $50. As a for-profit corporation, it does not file a federal disclosure report.

“During the current U.S. presidential election cycle alone, billions will be spent by the campaigns and countless independent organizations,” said Rappaport when he announced the venture in November 2007. “By providing a mechanism for every citizen to make informed decisions about where to make donations, to measure and track the effectiveness of these donations, and to be able to join with other contributors to have a real impact no matter what they can afford, NPC is contributing in a very real way to welcoming citizen participation back into the political and policymaking process.”

Some Democrats credited Rob Stein, a former Clinton administration official, with inspiring wealthy liberals to create an infrastructure independent of the party organization. For several years, Stein traveled the country with a PowerPoint presentation designed to show how Republican multi-millionaires with such names as Scaife, Coors, and Mellon had provided huge amounts of cash necessary for the GOP to develop a vast network of think tanks and other independent organizations dedicated to electing Republican candidates. Former Representative Martin Frost, now president of the independent group America Votes, said Stein’s dream was to have “a progressive infrastructure that would be outside the Democratic Party in the same way that the far right had put money into creating the structures outside the formal Republican structure.” In the parlance of the day, therefore, the “vast right-wing conspiracy” that Hillary Clinton alleged was out to get her when she was first lady, was being met head-on by a rapidly-growing “vast left-wing conspiracy.”