Who Benefits In Money Game, Democracy Or Donors? The 2012 elections are expected to be the costliest ever, with some estimates topping $6 billion spent on campaigns all across America. But what impact does that money really have — especially on the presidential race — and who really benefits?
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Who Benefits In Money Game, Democracy Or Donors?

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Who Benefits In Money Game, Democracy Or Donors?

Who Benefits In Money Game, Democracy Or Donors?

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There's a new stimulus plan under way in America as we speak - $5.8 billion being injected into the U.S. economy, particularly in states like Ohio and Virginia and Colorado and Florida. You might have guessed that I'm talking about campaign spending. Our cover story today: Is the money game having any effect so far?


RAZ: This year's elections will be the most expensive in U.S. history. And as I said, by the time we all head to the voting booth on November 6th, nearly $6 billion will have been spent on campaigns - big and small - all across America. Now, much of that money will come from superPACs and other outside groups free to spend as much as they want. Here is how some of that money is being spent.


UNIDENTIFIED WOMAN #1: ...of unemployment over 8 percent. President Obama insists:

PRESIDENT BARACK OBAMA: The private sector's doing fine.

UNIDENTIFIED MAN #1: Romney and Bain Capital shut this place down. They shut down entire livelihoods.

UNIDENTIFIED WOMAN #2: Obama is trying to force gay marriage on this country.

UNIDENTIFIED MAN #2: Romney and Ryan, if they win, the middle class loses.

RAZ: Now, pro-Republican groups are way ahead of pro-Democratic ones in raising that money, but that could change in the coming months. Rahm Emanuel, the mayor of Chicago and former White House chief of staff, has now joined Priorities USA, that's a pro-Obama superPAC. In a few moments, we'll speak with Bill Burton, the head of that superPAC, but first to Jane Mayer, a reporter with The New Yorker. In a recent issue, she wrote about President Obama's Achilles' heel - his aversion to cultivating wealthy donors. And it goes back to right after Mr. Obama was elected.

JANE MAYER: During the inauguration, there were already grumbles from big donors who were complaining about the kinds of seats they got. They were separated instead of being put together. And they didn't like that. And then there was an absolute firestorm of upset that took place after the first holiday parties that the Obama administration had when, unlike past administrations, President Obama didn't pose with big donors to have their pictures taken. And they felt slighted and offended and that they weren't getting kind of the personal treatment that they were accustomed to.

RAZ: You quoted some of these donors on the record and some who did not want you to use their names. But it seemed, Jane, that in some of these examples, there was almost a sense of entitlement, like some of these folks were saying, hey, you know, I gave X amount thousands of dollars and I should be able to have dinner with the president.

MAYER: Well, I have to agree. I think there's sort of a certain spoiled-sounding tone to some of it. And, you know, in fact, there's a reason for that, which is that I think some big donors really were kind of spoiled by the Clinton years, when President Clinton - he just absolutely coddled big donors. You remember he was accused of allowing them to come sleep over in the Lincoln bedroom. And so many of the big Democratic donors go back to the Clinton years and they remember what it was like to be sort of friends and family. And Obama is just not like that. These are not his best friends, and he just doesn't do business the same way.

RAZ: How did Barack Obama become such a successful politician and at the same time have such antipathy toward the most important thing a politician has to be able to do to win, which is to raise money, to ask for money?

MAYER: Well, I'm not sure I would say antipathy. I think he's very torn about all this. He's uncomfortable with it. He doesn't want to be corrupted by it. But he's also been a pragmatist. I mean, Obama is someone who, don't forget, in 2008, became the first presidential candidate since the Watergate rules to not take public financing and to completely privately finance his presidential bid.

So he's not always been a, you know, a perfect angel on this subject either. But he's tried to do it on the basis of small donations and medium-sized donations, not by cozying up to the super, super rich. And he's been able to do that because of the unusual career he's had. He rose so fast to national prominence that he never really had to cultivate a donor network.

RAZ: But if the president is not able to raise the amount of money - or his superPACs, the pro-Obama superPACs - from these very wealthy potential donors, I mean, how much of an impact could it really have ultimately?

MAYER: It depends how badly outspent he is. I mean, basically, he doesn't need to match them dollar-for-dollar, according to a number of experts that I interviewed, but he needs to be competitive. The question is whether his message gets through. This is a story unfolding, where we're all watching it, kind of holding our breath to see how much power the money really, you know, how much of a punch it really packs. And we really won't know till Election Day.

RAZ: That's Jane Mayer. She's a staff writer for The New Yorker. You can find her article in the August 27th issue of The New Yorker. Jane, thanks.

MAYER: Thank you so much.

RAZ: The biggest pro-Romney superPAC, Restore Our Future, is closing in on $100 million raised. By contrast, the pro-Obama superPAC, Priorities USA, has brought in about a third of that amount. Now, that could change in the coming weeks as Rahm Emanuel begins to help Priorities USA. He is one of the best Democratic fundraisers. Still, according to Bill Burton, the group's founder, Democrats should be worried.

BILL BURTON: This is a very close election, and the electorate is very deeply divided. And if you look at every one of the swing states from, you know, Ohio to Colorado to Florida to Virginia to wherever, the race is basically tied or one or two points in either direction. So with the hundreds of millions of dollars that the Republicans are going to bring to bear, plus the very difficult political environment for Democrats, even though Mitt Romney might not seem like that impressive a candidate to most Democrats, he still is a real threat to President Obama.

RAZ: Why are Democrats losing the money race? I mean, you created this superPAC in part to confront the amount of money that Republicans are raising and have raised. Why has it been more difficult for you?

BURTON: Republicans of means are more motivated to engage in this race. If you're somebody who is at an oil company or on Wall Street, and you really want oil companies and Wall Street to be deregulated, then giving 10 or $20 million is a very small investment compared to what you're going to get back if a President Romney, you know, deregulates your industry and, you know, cuts taxes for the wealthy to a tremendous extent. So I just think that, you know, Republicans see this as an investment.

RAZ: Rahm Emanuel, he has now joined your group. How much money do you think he can raise for you?

BURTON: We'll see. You know, I think that this is an all-hands-on-deck moment for Democrats.

RAZ: The president, as you know, supports a constitutional amendment that would effectively overturn Citizens United, right, and limit money in politics. This is something you would support, I mean, something that essentially would put you out of business - would you back that?

BURTON: Absolutely. No, I don't think that superPACs are a good idea. I think the campaign finance system is broken and deeply in need of repair. But that doesn't mean that, you know, as Democrats, we should sit on the sidelines while Karl Rove and the Koch brothers spend hundreds of millions of dollars to advance a right-wing agenda. To paraphrase Donald Rumsfeld, you go to Election Day with the rules that you have, not the rules you wish you had.

RAZ: Thirty-five million so far. What do you hope to raise by Election Day?

BURTON: As much as we can. We're clearing out the change in our couch, we're checking all our pants pockets, we're putting together every single dime to make sure that our efforts are well-funded.

RAZ: And you hope that you won't have to do this again?

BURTON: No. Like I said, this is not the way democracy should work, and campaign finance reform is an important thing. The only way there will be reform is if President Obama is re-elected.

RAZ: That's Bill Burton, co-founder of the pro-Obama superPAC Priorities USA. Bill, thanks.

BURTON: Thank you.

RAZ: But how much of an impact could that outside money have, at least on the presidential level? So far, it doesn't appear like it's having much at all. But according to Sheila Krumholz with the Center for Responsive Politics, that money could have an impact in a different way.

SHEILA KRUMHOLZ: You know, I think the money will be very targeted - it already has been in certain primaries - and we'll see that again in the swing states and in specific places. The political operatives that are running these outside groups are looking very strategically at the map and seeing where they can tip the scales in favor of their candidates. I'd say another really important impact is the dynamism that this injects into the system, that we will not know when the money will drop, where and where it's coming from in many cases.

RAZ: Why does it matter, though?

KRUMHOLZ: Oh, because we want our policy to be based on - and our elections - to be based on the merits of the candidates or of the bill and not on the money. So those who are ponying up the money for the election are going to be coming back. I mean, particularly for those who are corporations, trade associations, unions, this is not an altruistic process. They are not in it to promote democracy. They have an agenda. And particularly for corporations, they have a fiduciary duty to return a profit to their shareholders. So the problem is we may not know who stands to gain and what they will get in the end.

RAZ: How much big money do you estimate is undisclosed on both sides?

KRUMHOLZ: Well, in the last election, the first one after Citizens United, we saw that two out of three dollars were spent by organizations that were hiding their donors. So in this case, we anticipate that hundreds of millions of dollars will be spent by the outside groups, and perhaps much more than that. Perhaps a billion or $1.5 billion, all told, will be spent. It's hard to know precisely because of the hidden money, the hidden donors and also the hidden spending.

RAZ: A lot of attention is being paid to money spent at the presidential level. But I wonder if this outside money is going to have a bigger impact on the congressional and state level.

KRUMHOLZ: I do think that that's where it really stands to fine-tune the turnout and the electoral outcomes. And, again, in key states where those party operatives that have been in this game for a long time are, you know, micro-targeting their message to specific voters in specific states where they see the best opportunity to pick up a seat and potentially turn the tide in favor of their party.

RAZ: What could members of Congress or the president, the people who oppose Citizens United and the amount of money in politics, what could they actually do to change it if they wanted to?

KRUMHOLZ: At a minimum, they can and should pass a narrowly tailored disclose act that ensures disclosure of the donors to these very political nonprofits.

RAZ: That's Sheila Krumholz, the executive director of the Center for Responsive Politics. That's a group that keeps an eye on money, politics and influence in Washington. Sheila, thanks.

KRUMHOLZ: Thank you.


RAZ: By the way, money doesn't always determine the victor. Bob Dole outraised Bill Clinton in 1996. But at the congressional level, it usually does. In 2004, according to the Center for Responsive Politics, House candidates who outraised their opponents won 98 percent of the time.

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