Home > Uncategorized > Democracy Compromised I: The Insidious Impact of Money on Elections and Public Policy

Democracy Compromised I: The Insidious Impact of Money on Elections and Public Policy

November 29, 2015

I was disheartened to read two recent articles describing the impact of money on public policy, an impact that is undercutting the ability of our country to function as a democracy. This post and one tomorrow illustrate how this is happening and what we need to do to stop it.

“A Wealthy Governor and His Friends are Remaking Illinois”, Nicholas Confessore’s article in today’s NYTimes describes how a small cadre of billionaires in that State supported fellow billionaire Bruce Rauner’s election to Governor and how they are transforming the way politics are handled in that state. Voters in Illinois, whose last ten Governor’s include four who were convicted of various corruption charges, whose legislature and elected officials have a dismal record when it comes to operating effectively, and whose economy has been hit hard by the loss of manufacturing. were particularly ripe for the message Rauner sent: “…cut spending and overhaul the state’s pension system, impose term limits and weaken public employee unions.” The message penetrated in large measure because it echoed that of a small group of businessmen who donated millions to Rauner’s campaign, which– at $65,000,000— outspent his opponent 2:1 and massively outspent the public unions none of whom donated anything close to a million.

Spending on elections is nothing new… but the massive outpouring of funds that followed Rauner’s election is unprecedented. Since his election, two donors contributed over $20,000,000 to help Rauner implement his agenda. Indeed one donor, hedge fund manager Kenneth C. Griffin, contributed $13.6 million to Mr. Rauner through the end of 2014 — more than the combined sum donated to his gubernatorial opponent by 244 labor unions in the state. 

But while Rauner arguably bought his way into office, he did not as yet buy the hearts and minds of voters in the state:

For Mr. Rauner, the election results affirmed his agenda to shrink government and make the state more friendly to business.

But voters seemed torn. Along with electing Mr. Rauner, they gave Democrats a supermajority in both houses of the legislature.

They also approved two advisory ballot measures. One proposed an increase in the state’s minimum wage, something Mr. Rauner had told a candidate forum he was “adamantly, adamantly against raising.” Another urged lawmakers to amend the Illinois Constitution to allow a millionaires-only income tax increase, something Mr. Rauner had campaigned against.

Rauner is undeterred by the voice of the people on either of these issues, and as a result he is at loggerheads with the legislature over his budget proposal as well as some of his proposals to effectively eliminate public sector unions. His solution to this conflict: spend more of his money and that of his fellow billionaires.

In June, after Mr. Rauner and lawmakers failed to reach a budget deal, Turnaround Illinois (a PAC funded by Rauner and his billionaire friends) spent close to $1 million on television ads assailing Democrats.

The true impact of their financial muscle may not be felt until the legislative elections next fall, in which Mr. Rauner’s allies could again exploit an opening in the campaign finance law to spend unprecedented sums. (The same provision that removed the caps on Mr. Rauner’s campaign lifts them in any legislative race in which a “super PAC” spends more than $100,000. Mr. Rauner’s group has enough money to trigger the law in more than two dozen races.)

Mr. Rauner’s closest supporters hope to elect more Republicans. But some wealthy families, mindful that Democrats are likely to control the legislature for the foreseeable future, have financed an even more ambitious goal: to carve out a new faction of Democrats more willing to reach a compromise with the governor.

That effort has raised more than $14 million, in donations that rival the largest contributions in the presidential campaign. One million dollars came from Helen Zell, Mr. Zell’s wife, and $2 million from the head of a financial firm in which Mr. Rauner is an investor. The largest disclosed contribution came from hundreds of miles beyond Illinois: The former Texas energy trader John Arnold and his wife, Laura, gave $5 million.

Rauner’s strategy in a nutshell: if I spend enough money strategically I can get voters to elect a legislature that agrees with my desires to shrink government, reduce taxes on me and my friends, and eliminate unions and pensions. Rauner is shrewd enough to know that many voters will vote against their own self interest in the name of cutting taxes and other voters, resentful of the jobs, pensions, and benefits they lost will vote to reduce their neighbors pensions and benefits to help fund that tax cut.

Readers of this blog will not be surprised to learn that Rauner is a great advocate of privatization of all public services including public schools. Like many of his billionaire buddies, Rauner believes that businesses can operate these services more effectively and efficiently than “government” and they can do so with less corruption. Like his billionaire friends Rauner cannot see the paradox here: they are spending millions of dollars to advance their self interest while protesting the impact of public sector unions who spent hundreds of thousands to advance the self-interest of their employees. Too bad the unions don’t have the same access to the press as Rauner. As Confessore wrote:

The Chicago Sun-Times reversed its no-endorsement policy to back Mr. Rauner, who was a part-owner of the paper before he ran for governor.

Money can get a newspaper to reverse it’s policy… here’s hoping money won’t prevail in it’s efforts to undermine public policy in the coming years.

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