Daily Ticker

A new way for billionaires to influence politics

There’s so much money in American politics these days that fat-cat donors don’t just spend it on candidates and issues anymore  they also spend it attacking each other.

Hedge-fund investor Tom Steyer, a heavyweight Democratic contributor, plans to start running ads taking on billionaire Republican donors Charles and David Koch for their positions on environmental issues. Steyer is an environmentalist who has fought against the Keystone Pipeline and wants to make climate change a top issue in this year’s midterm elections. Koch Industries, the two brothers’ privately owned conglomerate, includes companies involved in the oil, paper, chemical and fertilizer industries. Like many firms in those sectors, Koch Industries lobbies for looser regulations that would lower costs and make it easier to operate.

Steyer wants to vilify the Koch Brothers, who spend at least $10 million per year on lobbying, according to the Center for Responsive Politics, and many millions more on political donations to Republican candidates and political organizations. Americans for Prosperity, the Koch Brothers’ political organization, plans to spend more than $125 million this year helping Republicans get elected to Congress, according to Politico. That would be a record amount for a private group in a midterm election year. The Koch Brothers' donations already seem to be paying off. They support Senate Minority Leader Mitch McConnell (R-KY), for instance, who just beat a Tea Party challenger in the Kentucky primary elections.

Steyer’s own campaign may not have much of an impact on voters, at least if he sticks to environmental issues. Polls consistently show jobs and the economy are the top issues voters care about, as Aaron Task and I discuss in the video above. If there’s a swing issue this year, it will be Obamacare, the highly polarizing health-reform effort. Environmental issues barely register as a concern among voters, even though President Obama favors policies that would address global warming, and occasionally stumps on the issue.

The more troubling trend may be the vast amount of money flooding into politics, leading to the reductio ad absurdum in which big donors campaign against each other as if they, rather than the candidates, represent the real levers of power. Two Supreme Court decisions since 2010 have struck down a variety of limits on political donations and allowed wealthy donors to fund an array of groups that funnel donations to candidates or run ads related to particular issues.

Each presidential and midterm election sets a new record for spending these days, with donations to third-party political groups such as “super PACs” likely to play a bigger role than ever in this year’s midterms. CRP estimates  total spending by such outside groups could total more than $1 billion this year, which would be three times the tally during the 2010 midterms. Such donations are known as “dark money” because super PACs aren’t required to reveal whom the money comes from. That may draw even more money into politics, since corporate donors and others can donate without having to defend their views or actions in public.

The influence of wealthy donors on the political system is becoming so profound that two noted professors recently argued that “America’s claims to being a democratic society are seriously threatened.” Economic elites, they showed in a research paper, have a “quite substantial, highly significant, independent impact on policy.” Not surprisingly, those policies favor the people who lobby for them. A typical voter, by contrast, “has little or no independent influence,” the distressing study concluded.

If there’s any good news, it’s that the flood of money has created a funding arms race that’s wearing down some of the politicians who must raise the funds, and causing “donor fatigue” among some contributors. But don’t look for Congress to reform itself. The billionaires will ensure nothing happens to undermine their influence.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

Recommended for You