Big money affecting election

Opinion: October 18, 2010 at 12:00a.m.

The emergence of the neo-populist “tea party” has been the big story of this election cycle. After the votes are cast in November, we may realize that the political resurgence of big business and great wealth was far more significant in determining election outcomes.

To an extent not seen in generations, companies and wealthy investors with a naked economic interest in influencing election results are pouring money into races.

Big money’s reassertion of its interests is the result of two recent game-changing events. One was the Supreme Court’s 5-4 decision in Citizens United v. Federal Election Commission, which overturned provisions of the bipartisan McCain-Feingold campaign finance act that prohibited corporations and unions from making supposedly independent, third-party expenditures to influence the outcome of electoral contests.

The other was emendation of the tax code to allow creation of so-called 501(c)(4) political action committees to which donors can contribute anonymously. Such organizations are supposed to make less than half of their expenditures for political purposes. But the definition of “educational” activity is extremely squishy, and organizations are able to lump a lot of things that look like blatant politicking under that umbrella.

Hidden sources

As the New York Times reported last week, the opportunity to spend limitlessly and secretively has created “dozens of groups awash in money from hidden sources.” They are “spending it at an unprecedented rate, largely on behalf of Republicans.” In fact, one of the most active of these new groups is Crossroads GPS, a political action committee operated by GOP strategist Karl Rove and funded mainly from secret sources. The U.S. Chamber of Commerce, which does not have to disclose its corporate donors, plans to spend $75 million on political advertising in this election, nearly all of it on behalf of Republican candidates. That’s twice what it spent two years ago.

The New York Times reported extensively on an Iowa-based group called the American Future Fund, which is spending millions of dollars from anonymous donors to buy ads bitterly attacking incumbent Democratic lawmakers in 13 states, ostensibly for their “liberal voting records.” In fact, 10 of the 13 targeted members of the House sit on committees or subcommittees with jurisdiction over agricultural and energy policies. Why should that attract attention in this election cycle? While the rest of the American Future Fund’s donors remain anonymous, the paper did establish that the seed money to establish the group came from financier Bruce Rastetter, co-founder of Hawkeye Energy Holdings, one of the country’s largest producers of ethanol.

Ethanol is one of the most heavily subsidized of America’s energy sources. With new agricultural and energy bills waiting to be drafted in the next Congress and billions in federal largess at stake, the American Future Fund’s real agenda probably isn’t all that mysterious.

The law of unintended consequences operates as surely in politics as it does everywhere else, and the drafters of legislation establishing 501(c)(4) organizations may have thought they were promoting philanthropy as surely as the five conservative justices on the Roberts court who struck down that crucial provision of McCain-Feingold believed they were upholding the 1st Amendment. The last great era of big money’s dominance over our politics also began with what many believed was desperately needed reform.

Spoils system

The Civil Service Reform Act of 1883 was supposed to put an end to the spoils system that had prevailed since Andrew Jackson’s presidency. For much of the 19th century, both parties supported their candidates and campaigns by distributing patronage and government contracts. When reform ended that, there was nowhere for the parties to turn but to big business and to the all but unregulated industrialists and financiers who captained it through the Gilded Age. This new relationship between partisanship and unfettered capitalism would reach its apogee in Calvin Coolidge’s famous remark that “the business of America is business.”

The real architect of all this was the brilliant Ohio financier Mark Hanna, who pulled together big money’s contributions to create the first truly modern national campaign on behalf of William McKinley’s successful run for the presidency in 1896. Hanna once remarked: “There are two things that are important in politics. The first is money and I can’t remember what the second one is.”

It will be a tragedy if we can’t remember either.

Timothy Rutten is a columnist for the Los Angeles Times. Distributed by McClatchy-Tribune Information Services.