Episode 558: Spending Big Money To Fight Big Money : Planet Money A half a billion dollars. A Harvard professor. And, maybe, the end of campaign finance as we know it.
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Episode 558: Spending Big Money To Fight Big Money

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Episode 558: Spending Big Money To Fight Big Money

Episode 558: Spending Big Money To Fight Big Money

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ROBERT SMITH, HOST:

Planet Money listeners, thanks for listening to the show. NPR has lots of other great podcasts. You might want to check out, including the live debate show Intelligence Squared U.S. You can find it on iTunes under podcasts.

If you look at the polls for the U.S. Senate race in New Hampshire this year and you go all the way down the list close to the bottom is this name Jim Rubens. He's a long shot, polling in the single digits. But a few days ago Rubens found out that his odds of winning the U.S. Senate seat in New Hampshire just improved a lot.

JIM RUBENS: To be honest I was in my bed looking at my early morning emails which I do every morning beginning about 6 - 6 a.m.

JACOB GOLDSTEIN, HOST:

One of those emails was from his campaign manager who sent him a link to a story in The New York Times. The story said a new super PAC from outside New Hampshire was about to spend big money on the race. It's called the Mayday PAC. It's a group that Jim Rubens had never talked to, and the big news from the story was this Mayday PAC was about to spend what could be millions of dollars on him to help Jim Rubens win the Republican primary in September.

RUBENS: I said, oh, my God. Look at this.

SMITH: Ruben's own campaign had only raised a total of a half a million dollars so far, which is a pretty small amount for a Senate race. The super PAC could spend far more than that. It could mean TV ads, mailers, billboards, robot phone calls, get out the vote effort. Basically Rubens had just won the campaign finance lottery.

RUBENS: I predicted at the very outset of this campaign between 70 and 85 percent of the money would be outside money.

GOLDSTEIN: I imagine you thought that money would be against you, not for you.

RUBENS: I did it. I clearly did.

SMITH: So why Rubens? It turns out that the Mayday PAC was not interested in electing Rubens because he wants to repeal Obamacare - he does - or because he got an A-rating from the NRA when he was in the state legislature. The Mayda PAC was going to throw money at Jim Rubens for one reason. He wants to reduce the influence of big money in politics. Rubens is part of the Mayday PAC's master plan to create a super PAC to end the power of super PACs. Hello and Welcome to Planet Money. I'm Robert Smith.

GOLDSTEIN: And I'm Jacob Goldstein. Today on the show half a billion dollars, a Harvard professor and maybe the end of campaign finance as we know.

(SOUNDBITE OF MUSIC)

SMITH: OK. Super PACs. Super PACs are actually these really new political animals, and they came into being in the past few years after a couple of court decisions found that rich people and corporations and unions can spend as much money as they want trying to influence the outcome of elections.

GOLDSTEIN: And so in the 2012 election, a few really really rich people said great. They poured hundreds of millions of dollars into super PACs, and more than half that money came from fewer than 200 donors - 200 people.

SMITH: There's this one big rule for super PACs they can't coordinate directly with candidates, but they can do basically everything else you think of when you think of an election. They can run ads on a candidate's behalf, they can attack the other guy, get the vote out, whatever. They can pour millions of dollars into a race at the very last minute.

GOLDSTEIN: When I was working on this story, I talked to a guy named Barney Keller. He works for the Club for Growth. This is an advocacy group that pushes for things like lower taxes, fewer regulations. They have their own super PAC, and he explained to me super PACs now have this effect on Congress that goes way beyond just campaigns.

BARNEY KELLER: Part of the thing that motivates members of Congress is the fear of losing their job, so if they think that by voting against a pro-growth agenda they're going to receive a primary challenge from the Club for Growth, they adjust their voting behavior.

GOLDSTEIN: So this is the new political landscape. On top of all that traditional campaign fundraising, members of Congress now have to look over their shoulders at these largely unregulated groups that can swoop into campaigns and dump huge sums of money.

SMITH: For the last several years, good government types have been wringing their hands over this power of the super PAC. One professor at Harvard decided to actually do something about it, Lawrence Lessig. He's a famous guy in some circles. He's a lawyer. He worked on the Microsoft anti-trust case that led him to be a sort of activist in the world of copyrights, and that - that led him into campaign finance. For Lessig, it seemed like whatever issue you really care about - whether it's copyright or the tax code - everything just comes down to money.

LAWRENCE LESSIG: Members of Congress spend 30 to 70 percent of their time calling and connecting with the tiniest fraction of the 1 percent of Americans in order to fund their campaigns. And there's no surprise those Americans have an enormous influence inside of our political system. So it's that incredible influence of that tiny fraction that is the problem, and that problem is caused by the way we fund campaigns.

GOLDSTEIN: A few years back, Lessig wrote a book all about campaign finance, and that book had some ideas for what to do about it, how to change the system. And these ideas were pretty out there. One of his big ideas in that book - have somebody run for president and during the campaign they promise

GOLDSTEIN: if elected they will do two things. First thing, fix campaign finance reform, second thing once that's done, they will resign the presidency.

SMITH: Lessig say never found anyone willing to take the presidency and then resign, and so in recent years he came up with a much more practical solution. You know, he looked at these super PACs and he said, yeah, you know, if they're so powerful, if they're so scary, why don't I make one of my own? This is where he came up with the idea for the Mayday PAC, the super PAC to fight super PACs.

LESSIG: There's something ironic with that. You might think, but we need to embrace this irony and recognize that we need to use the system that exists to change the system.

SMITH: OK. So here's how Lessig is doing it. This is the story of the Mayday PAC in three and a half steps. Step one - he started a super PAC.

GOLDSTEIN: And this part was straightforward enough. The paperwork to start a super PAC is no big deal. It was just a question of how to roll it out, and really, for Lessig, the answer was obvious.

SMITH: If you are a Harvard professor, you announce your super PAC at a TED talk.

(SOUNDBITE OF TED TALK)

LESSIG: So on May 1, may 1, aka Mayday - we're going to try an experiment. We're going to try launching of what we could think of as a super PAC to end all super PACs.

GOLDSTEIN: So OK. Lessig has a super PAC, but a super PAC is really just a bucket that you fill up with money. The Mayday PAC's first goal was to raise $6 million in small donations by the Fourth of July. If they did that, they would get 6 million in matching funds from rich, big money donors.

SMITH: May past, June past. I'm sure the TED talk numbers went up, but the fundraising did not. They had not hit the goal. Then the Mayday PAC got the attention of a social media superstar.

GEORGE TAKEI: Well, I have at that point 7.2 million followers.

GOLDSTEIN: Bonus points if you know who that is. Three, two, one - time's up.

(SOUNDBITE OF TV SHOW, "STAR TREK")

TAKEI: (As Hikaru Sulu) I had (unintelligible) accelerating to warp one, sir.

GOLDSTEIN: Just before that deadline, George Takei, better known as Mr. Sulu, read about the Mayday PAC on the internet and posted about it on Facebook and Twitter.

TAKEI: That reached a lot of kindred souls who felt the same way and joined in.

SMITH: And so with the help of the dulcet tones of George Takei, the Mayday PAC hit its goal and raised $12 million by Independence Day.

GOLDSTEIN: That took them two step - start using that bucket full of money to win elections.

SMITH: And, you know, it's not easy to sway elections on the issue of campaign finance. I mean, sure if you ask people whether they think campaign finance should be changed, if you ask them if rich people should have less influence on the political process, almost everybody says, yes. But say you ask people what issues determine how you actually vote? You'll hear...

UNIDENTIFIED MAN #1: Foreign policy, immigration, jobs at home.

UNIDENTIFIED WOMAN: Welfare rights and women's rights.

UNIDENTIFIED MAN #2: Economy, civil rights, national defense.

SMITH: See, campaign finance is not what the professionals call a defining issue. Most voters may not even know where particular candidates stand on it. Now, Lessig's plan is to spend that $12 million to change all this, at least in a couple of races. He looked around for candidates who believe in changing campaign finance, candidates who were in close races, candidates who needed a lot of help.

RUBENS: Jim Rubens here, a candidate for U.S. Senate from New Hampshire.

SMITH: Jim Rubens. In addition to Rubens, the Mayday PAC will support a Democratic candidate in an Iowa congressional race this fall, and three more candidates who they haven't announced yet. The Mayday PAC will run ads making it clear that if you, the voter, care about campaign finance, you should vote for Rubens or for these other picks.

GOLDSTEIN: And Lessig, he's already trying that super PAC intimidation thing. The group this week pointed out that Congressman can - and this is a quote - "inoculate themselves against challenge by coming out now for reform."

SMITH: And so for step two for this election, that's it - five candidates total. This year Lessig says, is really just an experiment to see if what they're trying can work. And by work he really means, can these candidates win? And that's important. I mean, Barney Keller, the guy from the Club for Growth says if you make a big deal and you throw money behind a guy, you'd better make sure that he pulls it off.

KELLER: You know, there's trust with your donors. I mean, if you go and you spend a bunch of money and you lose, and you lose big, you know, your members pretty soon ask you, well, what are you doing with the money? Why are you making investments in these places?

GOLDSTEIN: If Lessig and the Mayday PAC do win all or even most of these races, then it's on to step two and a half.

SMITH: And the half stands for half a billion dollars - give or take a few hundred million.

LESSIG: Then in 2016, we want to raise a substantially larger amount of money - could be 200 million, could be 800 million - so that we can win a Congress committed to fundamental reform in the way

LESSIG: campaigns are funded.

GOLDSTEIN: And sure, this is a lot of money. But remember superPACs can get unlimited donations, so a few really rich people could contribute a huge chunk of that. There is one other thing the group has to do besides raising all that money. Thomas Mann of the Brookings Institution, he says the group has to make sure this is not just one more partisan issue.

THOMAS E MANN: Democratic members of the House and Senate overwhelmingly support various campaign finance reforms and all the action really has to be on the Republican side.

SMITH: Lessig seems to know this already. It's part of the reason he co-founded the Mayday PAC with Mark McKinnon, a political adviser who worked for George W. Bush. And one of the group's biggest donors so far is Peter Thiel, a libertarian billionaire who has given to lots of Republican candidates.

GOLDSTEIN: And so we've come this far, we might as well ask. What happens if the Mayday PAC manages to win big in 2016, if the halls of Congress are filled with candidates who Lessig has supported, who've promised to change the system? What then?

SMITH: The final frontier. Step three - destroy campaign finance as we know it. And weirdly, this part of the plan would actually put a lot more money into politics. Lessig wants to increase public funding for elections. And one way this could work, Lessig says, is vouchers.

LESSIG: So the voucher idea is that every registered voter gets a voucher. In my book, I talk about a $50 voucher. There's a Republican proposal for a $200 voucher. But whatever, they would get a voucher that they could then give to a candidate who agrees to fund his or her campaign with vouchers only and maybe also with small contributions up to $100 so that they would raise their money from the wide range of Americans as opposed to the tiny fraction of the 1 percent who currently funds campaigns.

GOLDSTEIN: And so that could be billions of dollars. I mean, that's a lot of money.

LESSIG: OK, if it's a $50 voucher, that would be $3.5 billion every year. So, yes, it's an investment. It's an investment in our democracy. And all I'm saying is if we invest this tiny amount in our democracy, we might actually get a Congress that is more responsive to us as opposed to responsive to the current funders of their campaigns.

SMITH: Lessig eventually hopes to get limits on donations to superPACs. But even if that doesn't happen, all this new voucher money should mean more political power for ordinary people.

GOLDSTEIN: It will also probably mean more political power for groups like the NRA and the AARP. You can imagine they would tell their members where to send those vouchers, which candidates to support. And that'll almost certainly mean more money for people who own billboards and TV stations because there will be lots of new money for more political ads.

SMITH: And this is where Lessig's plan makes some people nervous, even people who support campaign finance reform. Here's Thomas Mann, the guy from Brookings.

MANN: If there's money out there, then - then a lot of creative people are going to be thinking how to attract it. And the odds are it's not going to be dominated by a New England town debate over what's the best way to invest these vouchers.

GOLDSTEIN: And, Robert, you asked Lessig about this.

SMITH: But once again, just because the money is coming from a lot of regular citizens doesn't mean that there's not going to be horrible negative ads. That seems like this isn't getting rid of a lot of the things people hate about politics.

LESSIG: Absolutely right. I'm not promising utopia. I'm not promising fixing politics so people love it or want their children to marry politicians. That's not what I'm promising. All I'm addressing is a tiny slice - but I think the critical first slice to solve, which is the way we fund elections because the way we fund elections corrupts Congress.

GOLDSTEIN: But before he can address even that tiny slice, Lessig is going to have to win some races this fall. He's going to have to raise hundreds of millions of dollars, and a lot of that money will have to come from rich people who are willing to spend their own money in order to reduce their influence in American politics.

(SOUNDBITE OF SONG, "GET FREE")

MAJOR LAZER FT. AMBER: (Singing) Never got love from the government man, heading downstream till the levee gives in. What can I do to get the money? We ain't got the money, we ain't getting out.

SMITH: If you are interested in PLANET MONEY's take on politics, I'm going to suggest another episode. You should scroll down to episode 358. It's called I'm Calling To Ask For Your Contribution. It's a good one. And if you're looking for another show, you can check out some of NPR's other podcasts, including the live debate show Intelligence Squared US. You can find it on iTunes under podcasts.

GOLDSTEIN: Our show today was produced by Phia Bennin. I'd also like to thank Emily Corwin of New Hampshire Public Radio for her help. I'm Jacob Goldstein.

SMITH: And I'm Robert Smith. Thanks for listening

(SOUNDBITE OF SONG, "GET FREE")

MAJOR LAZER FT AMBER: (Singing) Look at me, I just can't believe what they've done to me. We can never get free. I just want to be. Look at me, I just can't believe what they've done to me. We can never get free. I just want to be. I just want to dream.

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