April's Lowdown

April 2011, Volume 13, Number 4

Edited by Jim Hightower and Phillip Frazer


Corporate "mystery money" makes a mockery of our democracy

The Big Three secret funders of the $75 million campaign to trash Democratic candidates

It's unlikely that you have heard of a novel entitled Alpaca, but it was a remarkably portentous piece of political writing by one of America's first billionaires, Dallas oilman H. L. Hunt. Self-published in 1960, the 191-page book laid out his vision of a libertarian, plutocratic utopia.

Hunt's ideal society was one in which the wealthiest would have a disproportionate say in government. He saw them as the achievers and, as proven by their riches, the most meritorious of citizens. They should get not one vote, he believed, but three, for they could be trusted to protect the volatile masses from the rise of populists.

The book was met with well-deserved hoots of laughter, derision, and outrage, and H. L. spent the rest of his life branded as the self-indulgent billionaire that he was. None could imagine at the time that Hunt's preposterous plutocratic kookiness would ever creep from the fringe into the center of American politics. Yet, 50 years later, the essence of his anti-democracy screed is back with a vengeance. It has gotten political lift from another generation of self-serving billionaires, been sanctioned by a cabal of corporatists on the US Supreme Court, and become the guiding 'principle' for Republican congress critters, governors, and legislators.

However, instead of following Hunt's clumsy plan of increasing the number of votes that moneyed elites get, today's proponents of corporate plutocracy have simply elevated money itself above votes, establishing cold, hard cash as the real coin of political power. The more you spend on politics, the bigger your voice is in government, making the vast vaults of billionaires and corporations far superior to the voices of mere voters. Indeed, politicians (Republicans and Democrats alike) rarely speak to ordinary people anymore. They talk to Big Money, and when elected, Big Money talks to them.

This distortion of America's democratic ideals was decisive in last year's elections, and its anti-democratic punch will be breathtakingly worse in 2012. This is no accident of history. Corporate powers--working through a web of hirelings that includes political operatives, lawyers, lobbyists, politicians, pundits, academics, and astroturf groups--have been pushing relentlessly for years to get to this point. None have been more determined than the Koch boys--Charles and David.

"We operate like a hedge fund. We look for opportunities where we can invest and make a difference." -- Steven Law, CEO of American Crossroads, a corporate front group created by Karl Rove to pour tens of millions of dollars into negative campaigns to defeat Democrats.

As first reported in the March 2010 Lowdown, these super-secretive brothers have been setting up, financing, and orchestrating a nefarious network of far-right front groups for more than three decades. They have quietly poured tens of millions of dollars from their industrial conglomerate, foundations, and personal fortunes (now topping $21.5 billion each) into Americans for Prosperity, the Cato Institute, the Federalist Society, FreedomWorks, the Heritage Foundation, and dozens of other political organizations, as well as funding and 'educating' malleable politicians eager to serve the rising plutocracy. From Reagan's presidency forward, their extensive network has been steadily (and often stealthily) sliding the brothers' wildest laissez-fairy fantasies into law.

Operating anonymously from behind their plush curtain of wealth, the Kochs have been the right wing's Wizards of Oz--only Ozzier.

So, imagine what an unpleasant surprise it has been for them to have that curtain suddenly parted during the past year, exposing them for all to see. On a bright sunny Sunday this January, a throng of people traveled to Rancho Mirage, California, to help tug on the Koch curtain, letting a little sunlight shine into one of their plutocratic conclaves. I was among them.

Twice a year, Charles invites 150 or so of his simpatico billionaires to huddle privately with top GOP elected officials and functionaries, Supreme Court justices (Thomas and Scalia have performed in the past), and such reactionary sparklies as Glenn Beck. They hobnob and plot political strategy for the next year, reviewing the latest propaganda messages, lobbying efforts, court cases, dishonest issue campaigns, election targets, etc... And they pledge major bucks to get it all done.

These pow-wows have always been strictly clandestine, but Lee Fang, a terrific young investigator and blogger for ThinkProgress.org, obtained a copy of Charles' letter of invitation to this January's gathering of the subterranean Koch klan and posted it on the global bulletin board. Thus, the exclusiveness of the elite's retreat in the California desert was spoiled by the uninvited presence of some 1,500 of the great-unwashed, awaiting them at the gate to their lair of luxury. Organized by Common Cause and about 20 other grassroots groups, our "Uncloak the Koch" rally (which I emceed) did just that.


What a hoot it was to see David Koch and wife Julia on the balcony of their Rancho suite watching us in befuddlement as we exposed their assault on our democracy!

I can testify that the hoity-toity were not at all happy to see us hoi polloi. They tried their best to hide--SUVs with blacked-out windows, for example, were employed to keep such politicos as GOP majority leader Eric Cantor and House budget chairman Paul Ryan from being photographed going into and out of the Koch confab. Current and former executives of such corporations as Amway, Bank of America, Blackstone Group, Godfather's Pizza, Home Depot, and Sysco stayed hunkered down behind the walls of the resort, guarded by baton-wielding sheriff's deputies in riot gear, as helicopters hovered anxiously above.

KOCH MONEY AT WORK. To see how this mass of money twists government into an anti-democratic instrument of the corporate will, look to Wisconsin. As widely reported, the badger state's new GOP governor, Scott Walker, has gone off on a deranged, unprincipled, relentless, and apparently illegal right-wing holy war against teachers, firefighters, and other public employees--including eliminating their fundamental democratic right of collective bargaining. His autocratic extremism has made him wildly unpopular in his own state and nationally infamous, but less well-known is the fact that Walker is a hopeless Koch-head.

An ambitious but unknown county executive in Milwaukee prior to 2010, this guy climbed into the governor's chair on a stack of Koch money. The brothers' corporate PAC was Walker's single biggest donor in last year's election. Also, David himself gave $1 million to the Republican Governors Association, a donation that leveraged an RGA expenditure of more than $3.4 million in Wisconsin to help elect Walker. In addition, Americans for Prosperity (AFP)--a front group created, financed, and directed by David--put hundreds of thousands of dollars of electioneering support behind Walker's gubernatorial bid.

Then came the cashing in of those chips. The head of AFP (a former Jack Abramoff lobbying partner) says that even before Walker was sworn in, he was urging the new guv to stage a political showdown with Wisconsin's public employees. Also, to keep a tight rein on their boy, the Koch's quietly opened a seven-person lobbying shop one block from the state capital. And, as soon as the corporatized governor took office, another Koch front, the American Legislative Exchange Council (ALEC), moved in to guide his anti-labor agenda and to push for corporate tax cuts, de-funding Wisconsin's health care program, and weakening state environmental protections.

The brothers have more than a purely ideological interest in all of this. Their $100-billion-a-year conglomerate, Koch Industries, owns substantial timber, oil, coal, and pipeline facilities in Wisconsin, so it is looking for a nice return on its investment in Walker's anti-government extremism. For example, one stunning provision slipped into the bill to gut worker rights gives Governor Walker unchecked power to sell off any publicly owned utilities to private interests on a no-bid basis. Guess what corporation happens to be in the utility business? Right.

In February, public anger exploded all over Walker because of his unbridled, imperious assault on working families, the middle class, and democracy itself. Only a month and a half after taking office, his job approval numbers have tanked, and 74 percent of the state's people oppose his ploy to gut collective bargaining. Week after week, thousands of workers, farmers, students, veterans, environmentalists, and just plain folks have poured into Madison, surrounding the capitol square in furious protest. I've seen this democratic phenomenon myself--last month, I spoke at a rousing, farmer-worker solidarity rally at the capitol that drew more than 185,000 mad-as-hellers. They were a joy to behold.

But Walker does have two steadfast friends left--Charles and David. Even though they're outlanders who can't vote in Wisconsin, the Koch machine has rushed to his aid, voting with their many, many dollars. In just one ad-buy, AFP put up $342,000 to demonize the Wisconsinites protesting the power grab. AFP also put on astroturf rallies in 10 cities, bussed a contingent of Koch-funded tea party activists to Madison for a pathetically small show of support for Walker, and set up a 'standwithwalker.com' website.

Mystery money

The 2010 election was only the start of what will be a deluge of unlimited and unreported corporate spending to control who gets elected in 2012. Last year's democracy-destroying edict by the Supreme Court in the Citizens United case (see Lowdown, September 2009 and March 2010) ordered that cor-porations could spend any amount they want on electioneering propaganda. Citizens United is itself a front group for corporations. So, the Court constitutionalized corporate plutocracy, and a weed patch of secret funds immediately sprang up to elect a mess of pro-corporate Tea Party Republicans.

Bizarrely, these political cash machines are formed under Section 501(c) of the IRS code as charitable organizations for promoting the social welfare! Far from supporting the Little Sisters of the Poor, the vast number of these 'charities' work to advance the welfare of the Behemoths of Corporate America. They are set up specifically to take unlimited sums of money directly out of corporate coffers to elect or defeat any candidates they choose, from city council races to the presidency. The money does not go to candidates, but into campaign ads and other electioneering efforts run by the front groups themselves, making them bigger players than both political parties combined and making their message louder than that of actual candidates.

In every election, the media and various good-government organizations remind us that it's our civic duty to "be an informed voter." Well, good luck with that, for these 501(c) corporate shields are not required to tell us who is putting up the money for the campaigns they're running--and they don't.

Apologists for this perversion of the democratic system insist that it's fair because progressive groups also are free to set up secretly financed campaign fronts. Two problems with that dodge: (1) progressives don't have unfathomable corporate treasuries to draw from; and (2) progressives don't believe in clandestine campaign funding and are generally proud to tell voters who they are. Last year, the 10 biggest secret funds laid out $115 million for their campaigns. One hundred and eight million dollars of that was spent by corporate fronts that hide their donors. In fact, the great bulk of it ($75 million) was spent by 'the Big Three':

1) US CHAMBER OF COMMERCE--$32,851,997. The Chamber recently had to make a slight revision of its longtime claim to be a grassroots business organization of three million Main Street members. As revealed by Mother Jones, its actual membership is less than 10 percent of that number. Moreover, most of its funding and practically all of its governing board are drawn from only about 100 businesses that bear such 'Mom& Poppish' names as Aetna, Alcoa, BP, CIGNA, Exxon Mobil, JPMorgan Chase, Massey Coal, Pfizer, and Shell.

Unsurprisingly, then, this organizational mouthpiece of global giants has been an ardent proponent of increasing the corporate voice in politics, including being an early and official participant in the Citizens United case. Almost immediately after the court's ruling, the chamber formed its secretly funded campaign front for 2010 and quickly launched a blitz of ads, 93 percent of which supported Republicans, mostly by making negative (and false) attacks on Democrats.

Chamber honchos ruthlessly fight any attempts to disclose their funders, but a couple of names have oozed out, including that of media tycoon Rupert Murdoch. The boss of News Corporation (owner of Fox TV, Wall Street Journal, HarperCollins, New York Post, etc...) slipped a cool million bucks from the corporate treasury to the Chamber of Commerce's shrouded campaign fund last year. Murdoch said he had not expected the transfer to become public, but he nonetheless considered it to be "in the interest of the country and of the shareholders...." Of course, shareholders (whose money he was spending) were not consulted by Murdoch. Such executive expropriation is but one part of the grand theft enabled by the Court's sloppy reasoning.

2) AMERICAN ACTION NETWORK--$26,088,031. Formed within days of the Citizens United decision, AAN was a major force in six senate races and 28 house races last year, including the defeat of progressive champion Sen. Russ Feingold. Using undisclosed corporate money, its hall-of-shame campaign tactics were epitomized by a TV ad asserting that "convicted rapists can get Viagra paid for by the new health care bill."

Brand-name corporations would never let their logos be attached to such a false and scurrilous claim, but now they're able to pay AAN to do the dirty work while they escape accountability. The cowards used the "Viagra for rapists" ad against at least four Democrats--two of whom were defeated.

AAN is connected. Its president, Douglas Holtz-Eakin, was a McCain-Palin adviser and chief of staff to new House majority leader Eric Cantor, and its CEO is former Senator Norm Coleman (defeated in 2008 by Al Franken). Board members include such multimillionaires as Robert Steel, a top Goldman Sachs executive who served in George W's Treasury Department. Steel's policies helped cause the Wall Street collapse before he jumped to Wachovia Bank, where he engineered a merger with Wells Fargo, which took a $25 billion bailout from us taxpayers; Fred Malek, former CEO of Marriott Hotels, a longtime GOP fundraiser and functionary--he earned the nickname "the Hatchet" in Nixon's sleazy administration, and was John McCain's finance co-chair in 2008; and Kenneth Langone, who co-founded Home Depot and later founded ChoicePoint, an infamous data- mining corporation that helped Bush-Cheney grab Florida's electoral votes and the presidency in 2000.

3) CROSSROADS GPS--$17,122,446. This shadowy monster is the devilish spawn of right-wing guru Karl Rove. NBC News reports that the biggest part of GPS's black-ops money comes from "a small circle of extremely wealthy Wall Street hedge fund and private equity moguls."

GPS works in tandem with American Crossroads, a twin sister also spawned by Rove. The latter outfit is a "527 super-PAC"--which allows rich individuals to donate unlimited personal funds (i.e., not from the corporate coffers) to independent campaigns. American Crossroads amalgamated $21,553,000 in such donations last year. While GPS cloaks the identities of its donors, super-PACs must report the source of their funds to the IRS. Since it's likely that many of AC's individual givers also tap their corporate treasuries to funnel undisclosed money to GPS, clearly the AC list provides some hint as to who's putting cash into the secret fund.

One prominent example is Rob Rowling, a billionaire CEO who heads TRT Holdings, a Texas-based conglomerate that owns such highly visible brands as Gold's Gym and Omni Hotels. He got his tail in a crack last year when his $2.5 million personal donation to American Crossroads was reported. The Rove super-PAC had deeply offended the LGBT community across the country by funding some of the flaming anti-gay candidates of the Republican/Tea Party, leading to a consumer backlash against TRT's gyms and hotels. Rowling squealed that this was unfair, claiming that the money he gave to the gay bashers was his, not the corporation's. But--oops--it leaked out that Rob had also moved $2.5 million from TRT to the GPS stealth stash.

The Chamber, AAN, and Crossroads actually converge into one corporate superhighway of money. Not only do Rove's two groups share offices, but the American Action Network is also in the same space. Plus, Steven Law, now CEO of American Crossroads, previously was the US Chamber's general counsel. To tighten the circle, Rove, Law, Coleman, and other operatives of the triumvirate coordinate their spending through periodic meetings, referring to themselves by a cryptic nickname: 'the Weaver Terrace Group.' It's taken from the Washington street where Karl lives. Cute, cozy, and thoroughly corporate.

!Ya basta! Enough!

Not only is enough enough, it is way too much. Last year was merely a test run of the new corporate money rules--2012 will see these front groups go full throttle. At January's KochFest in the desert, for example, Brother Charles pledged to match every dollar that his fellow billionaires put up for the defeat of Democrats next year. At this one meeting, $49 million was pledged, with much more to come. Similarly, Rove's groups are out to raise $120 million (more than triple their 2010 money) from corporations and ultra-wealthy donors to defeat Obama, win the Senate, hold the House, and rule America.

Yes, Obama and some Democratic groups also can raise a lot of money, but their pool is a puddle compared to the ocean of cash that the plutocratic powers can and will pour into our elections. The only effective (and honest) way for progressives to compete is to begin NOW to rally grassroots support for (1) overturning Citizens United, (2) providing public financing for all elections, (3) revealing and shaming CEOs who're perverting our democracy, (4) requiring free air time (a public resource) for candidates, (5) impeaching a Supreme or two, and (6) generally bringing America's elections back to the people.

Can this be done? Yes! And you Lowdowners, along with other grassroots champions, can be the central instigators of this new "Declaration of democracy for America." Stand up! Speak up! Sign up! Details next month...


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