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Robert Reich
NationofChange / Op-Ed
Published: Wednesday 12 December 2012
“Right now there is stunned disbelief that Republicans fared so poorly after all the money they invested,” said Brent Bozell, president of For America, an Alexandria-based nonprofit that advocates for Christian values in politics.

Why Billionaire Political Investors Will Keep Pouring Money Into Politics - Until They’re Stopped

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I keep hearing that the billionaires and big corporations that poured all that money into the 2012 election learned their lesson. They lost their shirts and won’t do it again.

Don’t believe that for an instant.

It’s true their political investments didn’t exactly pay off this time around.

“Right now there is stunned disbelief that Republicans fared so poorly after all the money they invested,” said Brent Bozell, president of For America, an Alexandria-based nonprofit that advocates for Christian values in politics.

“Congrats to @KarlRove on blowing $400 million this cycle,” Donald Trump tweeted. “Every race @CrossroadsGPS ran ads in, the Republicans lost. What a waste of money.”

Rove’s two giant political funds — American Crossroads (a Super PAC) and Crossroads Grassroots Policy Strategies (a so-called nonprofit “social welfare organization” that doesn’t have to report its donors) — backed Mitt Romney with $127 million spent on more than 82,000 television spots. Rove’s groups spent another $51 million on House and Senate races. Ten of the 12 Senate candidates they supported lost.

The return on investment for American Crossroads donors turned out to be just 1 percent, according to any analysis by theSunlight Foundation, a Washington-based group that advocates for open government.

Among Rove’s investors was Sheldon Adelson, the billionaire who owns the Las Vegas Sands Corporation.

Adelson invested more than $100 million in the election, mostly on Republicans who lost – including $20 million that went to Romney’s super PAC “Restore Our Future,” $15 million to another super PAC that almost single-handedly kept Newt Gingrich’s Republican primary campaign going, and about $50 million to nonprofit Republican fronts such as Rove’s Crossroads GPS.

Adelson wasn’t alone, of course. Texas industrialist Harold Simmons invested $26.9 million; Chicago Cubs owner Joe Ricketts invested close to $13 million; a network organized by billionaire industrialists Charles and David Koch invested $400 million.

But if you think these losses mean the end of high-stakes political investing, you don’t know how these people work.

You see, if and when they eventually win, these billionaires will clean up. Their taxes will plummet, many of laws constraining their profits (such environmental laws preventing the Koch brothers from more depredations, and the anti-bribery Foreign Corrupt Practices Act that Adelson is being investigated for violating) will disappear, and what’s left of labor unions will no longer intrude on their bottom lines.

And they have enough dough to keep betting until they eventually win. That’s what it means to be a billionaire political investor: You’re able to keep playing the odds until you get the golden ring.

Looking ahead, Adelson tells the Wall Street Journal he’s ready to double his 2012 investment next time around. “I happen to be in a unique business where winning and losing is the basis of the entire business,” he says, “so I don’t cry when I lose. There’s always a new hand coming up.” He isn’t looking back at his losses. “I know in the long run we’re going to win.”

Exactly. Adelson, Simmons, the Koch brothers, and other billionaires will keep pouring in as much money as it takes to eventually win — unless they’re stopped. And procurers like Karl Rove will make sure they’re at the gaming table.

Relative to their net worth, the billionaire investors have been playing for a pittance. Forbes magazine estimates Adelson’s net worth at $21.5 billion. His Las Vegas Sands Corporation just approved a special dividend paying him about $1.2 billion this year, ahead of any possible tax increases that might emerge from congressional budget negotiations.

In the meantime, he and other billionaire political investors are profiting from their reputations as high-stakes players.

Adelson says he has many friends in Washington, “but the reasons aren’t my good looks and charm. It’s my pocket personality,” referring to his political investments. And his determination to keep playing the odds ensures his Washington friends will continue to pay attention.

POLITICO reports Adelson recently met with three GOP governors said to be eying the 2016 presidential race.

This week he met separately with House Speaker John Boehner and Majority Leader Eric Cantor (the Adelsons invested $10million in super PACs affiliated with Boehner and Cantor),possibly to discuss changes to the Foreign Corrupt Practices Act.

As income and wealth become ever more concentrated in America, the nation’s billionaire political investors will invest even more.

A record $6 billion was spent on the 2012 campaign, and outside groups poured $1.3 billion into political races, according to data from the Federal Election Commission and the Center for Responsive Politics.

That’s why Citizens United v. the Federal Election Commissionhas to be reversed – either by a Supreme Court that becomes aware of the poison it’s unleashed into our democracy, or by constitutional amendment.

It’s also why we need full disclosure of who contributes what to whom.

And public financing that matches public money to contributions from small donors.

Most fundamentally, it’s why America’s widening inequality must be reversed.

This article was originally posted on Robert Reich's blog.



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ABOUT Robert Reich

 

ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. Robert Reich's new film, "Inequality for All" is available on DVD
and blu-ray, and on Netflix in February.

$ will flow into politics as

$ will flow into politics as long as gov can pay back 1000 to 1 [solyndra etc]

We need to vote out of

We need to vote out of office, all the Republicans we can. That would be a good start. Then we need to petition Congress to tax the rich and super rich, like FDR did in order to get us out of the Great Depression. We had higher tax rates and brackets, but I like 1938 because it is so easy to remember. In 1938 we had 33 tax brackets from 4% for income up to $64,000. (adjusted for inflation), all the way up to a top marginal rate of 79% for income over $79,000,000. That's right, in the Good Old Days we had tax brackets that actually reached into the incomes of the rich and super rich. 79% for income over $79Million, is a good way to get the Middle Class back, slow down the runaway inequality of the populous, pay down the debt, put the people back to work through the rebuilding of the infrastructure, and just do the right thing. God Bless the Middle Class, and all those striving to get back into it.

If they fired their lawyers,

If they fired their lawyers, lobbyists, stopped the political contributions and just paid their taxes they would save money overall.

Reich echoes many folks'

Reich echoes many folks' sentiments, but he is wrong.
He too confuses the cost or price of something - gaining political office - with its value, once gained. The cost of gaining office need have little to do with the value of having that office.

(Aside as to costs: despite all those big contributions inspired by Citizens United, for many a campaign Internet has in fact reduced costs of effective campaigning and some campaigns - like arguably Obama's - really have needed no funds beyond those given by small donors in order to hold, motivate and mobilize enough voters.)

What makes for corruption of an official is not the cost of gaining office, but the concentrated power that official has - and can offer for sale.

If we truly want to stop corruption and sell-out, we must heed Lord Acton's famous and correct statement: 'Power tends to corrupt, and absolute power corrupts absolutely'.

If you do nothing about the concentration of political power in a relatively few high officers, you cannot hope to reduce corruption. Corruption will pay as long as public policy (and law and budget) decisions are being made - as indeed they are per the 1787 federal constitution and its copycat state and local constitutions and charters - by an oligarchy - a relative few high officials (elected or appointed) - each long-tenured, and influential on many big decisions, each in effect able to 'sell out' a nice bit of his power to the highest bidder, each readily identified and therefore approachable by such a bidder.

Public election financing or campaign finance limits will affect only one of many different pathways that corruption can take. [Recent articles in Nation of Change have documented other pathways, such as post-tenure employment - lobbyist or consulting jobs for the official and his family and friends. ]

Again, what promotes corruption is not the actual (or alleged) cost of gaining office but the concentrated for-sale power of office.

Thank you for this most

Thank you for this most informative, albiet discouraging, article. Obviously, Congress is in the pockets of the 33,000 lobbyiests who represent the most wealthy individuals and corporations who now run the country.

Our vote really counts for little since Corporate America is our government. Sad!!!!!!!

It's time the Supreme Court does it's job instead of kowtowing to the Conservative Wealthy in this country. They are supossed to be non political.

So Adelson cannot be content

So Adelson cannot be content to cheat his patrons with his Skinnerian nightmare casinos with their lousy odds, he needs to loot the US treasury as well?

Thank you professor Reich. We do indeed need to pass a Constitutional Amendment reversing Citizens United. We also need to remove our election process from the parties. Our elections are looking more and more like those in banana republics. We presume the role of guardians of democracy, so it's simply embarrassing to see politically motivated purges and vote suppression, touch screen flim flams, overloaded ballots etc.

I remember when the old Las

I remember when the old Las Vegas was in it's prime and run by organized crime including the Mafia. The corporate ownership of Las Vegas has actually been able to give the Mafia an air of respectability !

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