Dollarocracy (12 page)

And, no, we're not done. Beneath the state level are the county and local levels of government, where thousands of officials were chosen in 2012 elections. The influence of Big Money on local races can be dramatically greater than at the federal and state levels, since it doesn't take that much money to change the character of a race for a county commission, a mayor's post, a town council, or a school board. Yet local government often decides where and how and even whether a corporation can develop a mine, turn a public park into a private condominium development, or take money from hard-pressed public schools into order to fund the speculative fantasies of charter-school enthusiasts.
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More than four hundred cities, from Anchorage, Alaska, to Wheeling, West Virginia, elected mayors in 2012, and almost invariably the campaigns saw “unprecedented,” “unrivaled,” and “explosive” spending. Cities where mayoral contests had historically been local affairs fought out “at the doors” witnessed media extravaganzas, where tens of millions of dollars were spent on contests that recreated all the pathologies of the presidential election.
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In San Diego, for instance, a frenzied contest between Democrat Bob Filner, a liberal congressman with strong ties to organized labor, and Republican Carl DeMaio, a councilman who was a favorite of downtown developers, cost at least $13 million.
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And remember that the Filner-DeMaio runoff on November 6 was merely the end of a yearlong process; a primary in June had included other candidates and had cost millions more. There was significant spending for city council races and other local fights, including a June referendum to roll back pensions for public employees. When all was said and done, spending on San Diego's local elections in 2012 cost in the $20 million range—the kind of money that used to be considered “excessive” in high-stakes gubernatorial and U.S. Senate races.

It wasn't just mayoral races. Local races that were once thought of as classic grassroots contests were transformed in 2012 into hyperexpensive battles where traditional grassroots politics was overwhelmed by outside money. Take, as an example, the District 8 city council contest in San Jose. The city was wrestling with questions about how to maintain and fund public employee pensions. The incumbent, Rose Herrera, and her challenger, Jimmy Nguyen, had different views on those questions, which they ably articulated. But independent groups that were unaffiliated with the candidates, and that got the overwhelming majority of their money from outside the working-class district, wanted to have their say as well. So groups like the San Jose Silicon Valley Chamber of Commerce started writing checks for more than $100,000.
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Ultimately, the contest for a single council seat in a midsized American city featured television ads, radio ads, and stacks of mass-mailed communications that ended up costing well in excess of $500,000. It probably does not need to be explained that the candidate of the San Jose Silicon Valley Chamber of Commerce, Herrera, won. But she did. And so did the four Las Vegas–area county commissioners who accumulated $1.6 million for their 2012 re-election races.

One of the biggest donors to the commissioners was Bill Walters, a developer who was in the process of turning a golf course on county land into a business park. Walters, whose money flowed in increments of $20,000 and $25,000 to the various contenders, told the
Las Vegas Review-Journal
that “he doesn't call his contributions ‘donations,' instead viewing them as ‘investments' in good candidates.” He explained, “The bottom line is, if you own a business in Las Vegas, if you have employees in Las Vegas . . . the most important people in the world to you are the people who run local government.”
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A lot of wealthy donors came to that conclusion in 2012. Across the country, there were hundreds of examples of local contests where, using the tactics and tools of the new
Citizens United
era, wealthy developers and business owners—and, in some communities such as San Jose, the unions representing the public employees who were targeted by those outside interests—paved over the grassroots and erected a Dollarocracy on Main Street. Our calculations, based on a study of reports from across the country, suggest that spending for thousands of municipal, school board, local judicial, and county races across the country can easily be placed in the $500 million range and could well exceed that figure.

That brings us into the $9 billion range for baseline spending on races where voters had to pick a candidate. So where do we find the last billion on the way to the $10 billion figure? On the part of the ballot that makes no mention of parties' candidates, except in judicial races.

Welcome to the new frontier of the money-and-media election complex.

If you were looking for extreme spending in 2012, for the spending that produced the most ads on television stations in states such as California and Maryland, you would have to pay attention to the campaigns for and against initiatives and referendums. According to
State Legislatures
magazine, 174 ballot measures were considered by the electorates of thirty-eight states on November 6, 2012.
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That figure does not include the hundreds of local school and public-services spending referendums considered in states across the country; almost all of these referendums saw substantial spending. How substantial? Add up the numbers from all the ballot measures—from liquor
law changes in Chicago precincts, where local bar owners ponied up their thousands, to the $55 million fight over labeling of genetically modified food in California
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—and the total easily exceeds $1 billion.

In many statewide “issue” votes around the country, the spending went beyond “substantial.” The proper word is “extreme” or, arguably, “obscene.” Consider this: in California, spending on statewide initiatives was at least $450 million. In Maryland, it was $100 million. In Michigan, the initial spending reports pointed to total spending easily in excess of $150 million.
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The Michigan figure is instructive, as the
Detroit News
explained in a
preelection
report that summed up the extent to which initiatives and referendums trumped all other politics in a number of major states:

           
The high-profile ballot issues alone total $149.5 million—and counting—of the campaigning to amend the constitution, a whopping 85 percent of all spending on state races.

                
Ballot proposal spending dwarfs the $107 million spent in 2010 on all state races for governor, attorney general, secretary of state, the Legislature and courts.

                
“This is really all about the ballot stuff—that's what's carrying the whole thing,” said Rich Robinson, executive director of the Michigan Campaign Finance Network, which tracks money in state politics.

                
Campaigns to amend the state constitution or thwart those changes are being largely funded by a handful of wealthy individuals, labor unions and organizations bundling millions in anonymous donations, a
Detroit News
analysis of spending data shows.

                
Some of the donors are more traceable than others.

                
The most widely known financier of ballot issues is billionaire Ambassador Bridge owner Manuel “Matty” Moroun, whose companies have dumped $33.1 million into a campaign to pass Proposal 6, requiring statewide votes for new public bridges, and another $3.5 million for Proposal 5, seeking a two-thirds voting threshold for the Legislature to raise taxes.

                
In the Proposal 2 fight over a union-led effort to enshrine collective bargaining in the constitution, members of the DeVos family in Michigan have contributed $1.58 million to a campaign to defeat the initiative while billionaire Las Vegas casino mogul Sheldon Adelson and his wife have chipped in another $2 million to the cause.
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Hey, not
that
Sheldon Adelson? Not the guy whose $150 million in contributions to Republican candidates and causes made him the most notorious campaign donor of the super-PAC era? The very same. Like most of the major donors to candidates, including the privatization-obsessed DeVos family,
Adelson moved his money into referendum and initiatives campaigns that gave him a chance to achieve his ends.
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A century ago, in the Progressive Era, initiatives, referendums, and recalls (“IRRs,” as the old campaigners described it in the shorthand of the day) were seen as democratizing tools—like the direct election of U.S. senators—that would take politics out of the back rooms and give people the power to set agendas, frame policy, and hold elected officials to account. Throughout much of the twentieth century, in states from California to Maine, this was the case. With the rise of Dollarocracy, however, IRRs have been co-opted by the Money Power.

The same goes for judicial elections. Just as the Progressives of a century ago sought to battle corruption by handing more authority over policy-making to the voters via direct-democracy initiatives, and just as they sought to take the power to select senators away from state legislators and give it to the people, they battled to move authority over the selection of state and local judges out of the back rooms and into the hands of the voters. There are now thirty-nine states where the voters, as opposed to the politicians and their Big Money backers, choose justices and judges in elections that, until recently, served the purpose the Progressive reformers of the past intended. The relative integrity of the justice system for much of the twentieth century makes it easy to forget just how corrupt the process was only one hundred years ago. In recent generations, there was minimal funding of these judicial races: American Bar Association ratings, newspaper recommendations, experience and reputation in the community, and party affiliations went a long way toward determining the outcomes. As recently as 1990, total campaign spending for all state Supreme Court races nationwide was estimated at $3 million.

That is no longer the case. Over the past two decades, corporate interests and funders like the Koch brothers and the U.S. Chamber of Commerce have zeroed in on judicial elections as a cost-effective way to buy control of the court system. By the mid-1990s, the spending on state Supreme Court races increased fivefold from 1990; it then tripled again by 2000, according to a 2012 study by the Center for American Progress (CAP). “Since then,” the CAP reports, “corporate America's influence over the judiciary has grown. The U.S. Chamber of Commerce, in particular, has become a powerful player in judicial races. From 2001 to 2003 its preferred candidates won 21 of 24
elections. The chamber spent more than $1 million to aid the 2006 campaigns of two Ohio Supreme Court justices, and in the most recent High Court election in Alabama, money from the state's chamber accounted for 40 percent of all campaign contributions.”
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That does wonders when it comes to reducing corporate liability in civil cases, among other things.
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The most dramatic recent example of the payoff provided for corporate interests that set out to buy state court elections comes from West Virginia. The A. T. Massey Coal Company—yes, the same Massey Energy Company responsible for the worst American mining disaster since 1970, killing twenty-nine West Virginia miners in 2010—took an interest in West Virginia court contests in 2002 when a West Virginia jury ordered Massey to pay out $50 million to plaintiffs. As the matter went through the appeals process, then CEO Don Blankenship spent $3 million of his own money in the 2004 election cycle to unseat a justice on the state Supreme Court and gain the seat for his ally, Brent Benjamin. Well, Benjamin won, and when Massey's appeal got to the state's highest court, Benjamin joined the majority in a 3–2 vote to overturn the award.
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The process accelerated in 2012, as tens of millions of dollars in money, much of it from outside the targeted states, poured into judicial contests. The spending shattered records and produced tens of millions in spending and some of the crudest campaigns of the season.
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With spending for down-ballot state judicial posts, as well as circuit, county, and municipal judgeships, added in, the total spending is certainly in the range of $50 million. Most of that money was targeted to win control of the top courts, since they have the power to overrule the lower courts. And a substantial portion of the spending on High Court races paid for advertisements designed to discredit and defeat sitting justices. According to the Justice at Stake Campaign, a record-breaking $29.7 million was spent on more than 51,000 television ads seeking to influence 2012 state Supreme Court contests.
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Ten states saw television advertising exceed $1 million: Alabama, Florida, Illinois, Louisiana, Michigan, Mississippi, North Carolina, Ohio, Texas, and, yes, West Virginia. And the money came from familiar groups, such as the American Future Fund, the shadowy organization that pumped money into the West Virginia attorney general contests. Talk about coming at a “problem” from all sides—the American Future Fund was picking prosecutors
and
judges.
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But that's just one reason that “investing”
in judicial contests is probably the best investment to be found in American electoral politics. Because there is scant press coverage of judicial races, and because in some states judicial candidates are limited in what they are allowed to talk about during the campaign, judicial candidates who are seen as insufficiently procorporate tend to be easy pickings. A barrage of negative attack ads is often enough to do the trick.