Dollarocracy (6 page)

By 1887, the retired nineteenth president of the United States, Rutherford B. Hayes, observed:

           
It is time for the public to hear that the giant evil and danger in this country, the danger which transcends all others, is the vast wealth owned or controlled by a few persons. Money is power. In Congress, in state legislatures, in city councils, in the courts, in the political conventions, in the press, in the pulpit, in the circles of the educated and the talented, its influence is growing greater and greater. Excessive wealth in the hands of the few means extreme poverty, ignorance, vice, and wretchedness as the lot of the many.

Playing off of Lincoln's stirring defense in the Gettysburg Address of the Civil War's appalling carnage as being justifiable only if it protected democracy, Hayes further wrote, “This is a government of the people, by the people, and for the people no longer. It is a government by the corporations, of the corporations, and for the corporations.”
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Several decades later, as the crisis continued, Justice Louis Brandeis of the Supreme Court argued in a similar vein, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.”

Over time, the demands that the Money Power placed on America became so great that America pushed back. Edward Ryan's speech inspired “the righteous reformer,” Robert M. La Follette of Wisconsin, to fight as a governor, senator, and founder of the Progressive movement against this power. Alarmed by revelations regarding the human wreckage left in the wake of the Gilded Age—evidence of which was detailed in the pioneering reports of muckraking journalists such as Lincoln Steffens, Upton Sinclair, Ida B. Wells, Ida Tarbell, and Jacob Riis—an outcry from a new generation of progressive reformers, socialists, and social-gospel Christians rose against what Theodore Roosevelt described as “every evil man whether politician or business man, every evil practice, whether in politics, in business, or in social life.”
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La Follette and Progressives enacted groundbreaking reforms that would for a time make real the promise that “the will of the people shall be the law of the land.”
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Historians of the Progressive Era focus much of their attention on the consumer and labor reforms of the time—food and drug protections, regulation
of wages and hours, workplace-safety initiatives, and the banning of child labor. But there also was an early and ongoing recognition that the corruption of politics by corporate elites represented the most critical of all threats posed by the “grave evils” that Roosevelt said could be found lurking in “the body politic, economic and social.”

So it was that the reformers focused on electoral reforms—secret ballots, voter registration programs, suffrage for women—and, above all, on getting corporate money out of politics. Roosevelt, who had initially played the political game as it was set up by Hanna and the broad network of corporate donors he used to control elections and elected officials, broke with the Republican machine and announced in his 1905 message to Congress that “contributions by corporations to any political committee or for any political purpose should be forbidden by law.” Roosevelt was proposing a sweeping challenge to the Money Power, declaring that “not only should both the National and the several State Legislatures forbid any officer of a corporation from using the money of the corporation in or about any election, but they should also forbid such use of money in connection with any legislation save by the employment of counsel in public manner for distinctly legal services.”
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La Follette, now a senator, and Senator Ben Tillman of South Carolina took up the fight, with the Wisconsin legislator traveling across the country to rally the masses in support of legislation that would make it

           
unlawful for any national bank, or any corporation organized by authority of any laws of Congress, to make a money contribution in connection with any election to any political office. It shall also be unlawful for any corporation whatever to make a money contribution in connection with any election at which Presidential and Vice-Presidential electors or a Representative in Congress is to be voted for or any election by any State legislature of a United States Senator. Every corporation which shall make any contribution in violation of the foregoing provisions shall be subject to a fine not exceeding five thousand dollars, and every officer or director of any corporation who shall consent to any contribution by the corporation in violation of the foregoing provisions shall upon conviction be punished by a fine of not exceeding one thousand and not less than two hundred and fifty dollars, or by imprisonment for a term of not more than one year, or both such fine and imprisonment in the discretion of the court.
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The resulting Tillman Act was passed by the House and Senate and signed into law by Roosevelt in 1907. Its reach would be extended by the Publicity
Act of 1910 and by 1911 amendments to both measures that were intended to address corporate manipulation of party primaries. Unfortunately, the lack of effective enforcement mechanisms and the existence of loopholes meant that corporations merely gamed the system by directing officers and employees to make personal campaign contributions to favored candidates and then providing bonuses to these officers and employees in the amount of their contributions.

The battle against the power of money over elections and politics was carried on by countless Americans across the nation. Consider Burton K. Wheeler, a crusading Montana district attorney and legislator who chased the moneylenders from the temples of American politics a century ago. Wheeler framed his activism as a patriotic and moral crusade. “Gentlemen,” he declared, “we stand only to place humanity above the dollar.”

Wheeler, an epic political figure of twentieth-century public life, was a senator, as well as a vice presidential candidate and a seriously considered presidential prospect, who wrangled mightily with Republican and Democratic presidents, battled corporate titans, and defended the Constitution across the most difficult decades of the century. As La Follette's running mate on the independent Progressive presidential ticket of 1924, he helped to shape the outlines of the New Deal. He went on to work with, and sometimes battle with, FDR through the entirety of its implementation. But Wheeler's defining moment came decades earlier, in the mining country of Montana, where he risked his life, his fortune, and his political prospects to join in organizing a victorious initiative in 1912 that forever banned corporate contributions to Montana candidates and political parties, thereby breaking the stranglehold of corporate cash on the government of a western state that had been ceded to the copper barons.
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“We are opposed to private ownership of public officials,” announced Wheeler and the reformers who ended the dictatorial reign of the Anaconda Copper Mining (ACM) Company over Montana politics. “If elected, I will not put the ACM out of business. But I will put it out of politics.” Wheeler and his compatriots, battling across decades and against the threat of violence in a region where labor leaders and Progressives were jailed, assaulted, and lynched for their activism, finally prevailed. They did not completely close the spigots of the Money Power. But they tightened them enough to open a new era of clean government in Montana.

By the time La Follette and Wheeler ran on the Progressive Party ticket in 1924, the party's platform announced:

           
The great issue before the American people today is the control of government and industry by private monopoly. For a generation the people have struggled patiently, in the face of repeated betrayals by successive administrations, to free themselves from this intolerable power which has been undermining representative government.

                
Through control of government, monopoly has steadily extended its absolute dominion to every basic industry.

                
In violation of law, monopoly has crushed competition, stifled private initiative and independent enterprise, and without fear of punishment now exacts extortionate profits upon every necessity of life consumed by the public. The equality of opportunity proclaimed by the Declaration of Independence and asserted and defended by Jefferson and Lincoln as the heritage of every American citizen has been displaced by special privilege for the few, wrested from the government of the many.
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La Follette's was the most successful third-party run against the Money Power in American history. It certainly contributed to slowing the march of the plutocrats, but it did not prevail. Over the next fifty years, lawmakers, jurists, and presidents would wrestle with this power. They could briefly gain the political advantage, as when Franklin Roosevelt denounced the “economic royalists” and pledged to do battle with “the privileged princes of these new economic dynasties, thirsting for power, [who have] reached out for control over government itself.”
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From the 1920s to the 1960s, the Federal Corrupt Practices Act was the nation's primary law regulating the financing of elections. It looked good on paper—requiring the reporting of campaign contributions and spending, regulating political parties and committees, limiting spending in congressional races with a $5,000 cap on House runs and a $25,000 cap on Senate campaigns. But as Lyndon Johnson famously observed with regard to the federal statute that governed his politicking from that first special-election campaign for a Texas congressional seat in 1937 to his landslide victory over Barry Goldwater in the 1964 presidential election, it was always “more loophole than law.”
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The next, and last, great reform wave began in the 1960s and culminated in the early 1970s. It was provoked by the escalation in campaign costs attributable mostly to the emergence of TV advertising by the 1960 election.
Shortly after taking office, President John F. Kennedy bemoaned the “great financial burdens” on campaigns due largely to the costs of television advertising. It meant that candidates' chances were largely “governed by their success as fundraisers.”
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“The cost of conducting campaigns has become astronomical,” Democratic National Committee chairman John M. Bailey stated at the same time, citing “soaring outlays for television.”
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The great problem was that rank-and-file voters were unaccustomed to making campaign contributions; that had been the role of political parties. And soaring costs put enhanced pressure on politicians to seek funds from the wealthy. “I couldn't begin to finance my campaign on the offerings of small contributors,” Senator Frank Church, an Idaho Democrat who kept alive the western populism of Burton K. Wheeler and his kind, complained in 1962. “I discovered what every candidate for Congress learns, that big contributors are essential.”
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For Church, like countless others from less-populated and rural states, that meant fat-cat out-of-state contributors. Long gone were the days of Harry Truman, who even as a presidential candidate in 1948 once paused on a whistle-stop campaign trip to pass the hat and raise the money needed to get to the next train stop.

Church noted that Americans had reason to be justifiably proud that “cash bribes are about extinct as a method of attempting to influence votes in the United States Congress.” But the new unsolved problem was how to deal with the “heavy” influence over politicians achieved through large campaign contributions. “There is always the danger that a certain bias, favorable to the big contributor, will weigh upon the judgment of even the most objective legislator.” To Church, it “isn't what we do in Congress but how we get into Congress that accounts for the lingering suspicion in the public mind.”
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And it was only going to get worse, much worse, unless Congress intervened.

President Kennedy appointed a nine-person bipartisan commission on campaign costs in 1962 to make recommendations specifically for the presidential campaigns.
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Although Kennedy was in favor of free airtime for candidates and extensive televised candidate debates, the commission's recommendations centered on capping donation amounts and giving significant tax credits to encourage small donors, Such changes would, in effect, sharply reduce large contributions and institute a public subsidy for small campaign contributions.
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The report met with the enthusiastic support of former presidents Truman and
Dwight Eisenhower and former presidential candidates Thomas Dewey, Adlai Stevenson, and Richard Nixon.
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The resulting legislation never got very far. Some critics thought it was not sweeping enough and should cover congressional races as well. Others were already adjusting to the new politics of money. But most did not see the crisis that was coming. The
New York Times
editorialized that the commission's recommendations “seem to have dropped into a bottomless void.”
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To give some sense of the crisis that did come, consider this: the total amount of TV and radio political ad spending in 1960 that so alarmed Kennedy, Church, and many of the leading politicians in both parties was around $14 million. With inflation factored in, that number translates into $109 million in 2012. That is around 2 percent of what was spent on TV political advertising in the 2012 election cycle.
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