Can the Republican party survive its billionaires?
By Charles Homans,
“For those who misunderstood my joke today,” Foster Friess’s blog post began, “here’s my quest for forgiveness. . . ”
Friess did have some explaining to do. On Feb. 16, the Wyoming investor — who had donated roughly $1 million to the Red White and Blue Fund, the independent campaign organization supporting Rick Santorum — appeared on MSNBC’s “Andrea Mitchell Reports.” Asked about Santorum’s stance on contraception, the 72-year-old Friess told Mitchell: “You know, back in my days, they used Bayer aspirin for contraceptives. The gals put it between their knees, and it wasn’t that costly.”
An excruciating silence followed. “Excuse me,” Mitchell finally said, “I’m just trying to catch my breath from that, Mr. Friess, frankly. Let’s — let’s change the subject.”
That last part proved a bit difficult; Friess’s comment was all anyone wanted to ask his preferred candidate about for the rest of the week. “He’s not creepy,” Santorum said of Friess on Fox News that night. “He’s a good man. . . . You know, he told a bad, off-color joke, and he shouldn’t have done it.”
The prospect of a campaign having to spend days answering for an off-message benefactor is a new hazard on the 2012 campaign trail. According to Federal Election Commission filings released this past week, just five donors accounted for 25 percent of the money that flowed into the presidential race in January. Most of that money, like Freiss’s, has gone to the new breed of independent political action committees known as super PACs, which are legally prohibited from coordinating with candidates but look closely after their interests. Friess, who in an e-mail Friday praised Santorum as a “tireless campaigner [with the] debate skills of a piranha,” personally accounts for more than a third of the Red White and Blue Fund’s war chest.
In the wake of the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission , which threw out decades-old restrictions on corporate contributions to PACs, campaign finance reformers braced for an avalanche of lump-sum donations from corporations, unions and lobbying groups. They didn’t anticipate the particular variety of wealthy mega-donor that has emerged in this year’s Republican primary: a kind of entrepreneurial ideologue whose outspoken views seem like a cartoonish amplification of the candidate’s own.
Friess’s joke on MSNBC sat uncomfortably alongside Santorum’s statements on contraception. The former senator from Pennsylvania has said that as a Catholic, he is personally opposed to contraception, and he has criticized the Obama administration’s recent rule requiring religious institutions’ employee health-care plans to cover birth control, though he has supported other federal funding for family-planning services.
Top donors to the pro-Mitt Romney Restore Our Future super PAC include John Paulson and Julian Robertson, hedge-funders from the politically toxic environs of Wall Street, and Frank VanderSloot, a Mormon vitamin-supplement magnate known in his home state of Idaho for campaigning against what he said were public television’s inappropriate efforts to educate children about same-sex marriage.
Newt Gingrich’s foreign policy hawkishness tracks closely with that of casino executive Sheldon Adelson, who, along with his wife, has provided almost all the funding for the pro-Gingrich Winning Our Future super PAC. The Ron Paul-aligned Endorse Liberty super PAC has received $2.6 million from Peter Thiel, the libertarian PayPal founder whose other philanthropic investments include a fellowship that pays teenagers not to go to college and a plan to build free-floating, autonomous sea colonies.
If these outspoken financiers have proved to be one of the most influential factors in the 2012 race, they have also introduced one of its great wild cards. The specter of the shadowy tycoon has loomed over American politics since the 19th century. But are politicians ready for the less shadowy kind?
The super PAC billionaires are hardly the first of their ilk to dabble in politics. Gilded Age industrialist Mark Hanna famously financed William McKinley’s 1896 and 1900 presidential campaigns, a role he leveraged to secure a Senate seat representing Ohio. Hanna’s heirs could hurl cash at candidates with abandon — and with total anonymity, if they were so inclined — until the 1970s, when a series of Watergate-spawned election reforms established contribution limits and disclosure requirements.
The ’70s reforms began a decades-long game of campaign finance whack-a-mole. The 1980s saw the rise of PACs distinct from campaigns; these were in turn eclipsed by the advent of “soft money,” vast, unregulated donations to the Democratic and Republican national committees, which collectively raked in more than $263 million in 1996. After the Bipartisan Campaign Reform Act, championed by Sens. John McCain and Russ Feingold, shut down the soft money machines in 2002, the action shifted to “527 groups” such as MoveOn and Swift Boat Veterans for Truth, which were allowed to put unlimited funds into campaigns based on issues.
All of these provided viable avenues for the ultra-wealthy to buy their way into elections; the liberal billionaires George Soros and Peter Lewis, for instance, contributed $23 million apiece to Democratic-aligned 527s in 2004. But it wasn’t until Citizens United and subsequent rulings that outside groups could remove all but the thinnest pretenses of independence from their operations, making it easier for donors to openly throw their weight behind specific candidates.
If Citizens United created a new Wild West of campaign fundraising, it also populated it with a new kind of cowboy. (Friess even wears a Stetson.) For one thing, there’s the scale. “The bags of cash being passed under the table in the Watergate era, those were $100,000 contributions,” says Ellen Miller, the executive director of the Sunlight Foundation, a government transparency group. Compared with today, she says, “it’s quaint.” Adelson recently suggested that he might be willing to spend four times on Gingrich’s candidacy what Soros spent on the entire 2004 race.
There’s also the matter of publicity. Super PACs allow donors to spend as much money as they like, on almost anything they want, but with one catch: The public gets to see who’s paying what. Public mega-donations are not for the faint of heart — just ask Target, which provoked a national boycott from gay rights groups after it donated $150,000 to a Republican-allied PAC in the 2010 Minnesota gubernatorial race.
This may explain why the highest rollers of the 2012 super PAC sweepstakes thus far have been a relatively brash group of billionaires. For the discretion-minded, there are the 501(c)4 groups: nonprofit organizations, often linked to super PACs, that are allowed to solicit anonymous contributions but have more restrictions on how they can spend the money. The super PAC-ers, by contrast, are happy to endure the glare of media attention in exchange for a freer hand in the election. Some of them — such as Adelson, who recently told Forbes that “I’m proud of what I do and I’m not looking to escape recognition,” and Friess, who was cheerfully returning reporters’ e-mails while on a 50th-anniversary vacation with his wife in Peru this past week — seem to be relishing their newfound prominence.
For the campaigns, this is a potentially tricky situation. “It’s kind of like a celebrity who’s untethered,” says University of California at Irvine law professor Richard Hasen. “You don’t know what’s going to happen.” (Surely more than a few of President Obama’s campaign hands shuddered at the gleefully controversial comedian Bill Maher’s announcement on Thursday that he was donating $1 million to a pro-Obama PAC, Priorities USA.) More than half of the respondents in a January Pew poll were aware of the new super PAC rules, and most of them considered their influence to be negative.
A freewheeling billionaire might not be able to sink a candidacy, but he could certainly make things difficult in the way that, say, religious figures such as Jeremiah Wright and John Hagee did for Obama and John McCain, respectively, in 2008. And unlike a rogue preacher, a scandal-prone benefactor who is paying the majority of a super PAC’s bills would be difficult to cut loose.
Two of the biggest super PAC donors, the Dallas corporate raider Harold Simmons and the Houstonhome builder Bob Perry, are products of the Texas political scene, in which campaign contributions have never been limited. It may be that the 2012 primary race ends up resembling a run for the statehouse in Austin, in which many voters don’t mind who’s writing the checks or what they may be expecting in return.
But most of the very wealthy who are playing in the 2012 primary contest seem less intent on transaction than on transformation. When I asked Friess why he was supporting Santorum, he told me via e-mail that “not only is Rick Santorum a relatively fresh face and lesser known” than Romney and Gingrich, “but he is 53 years old and starts each day with 50 pushups.” Friess wrote that he wanted to steer the Republicans away from the “Veteran War Horse strategy [that] has not worked in the past . . . not with [Bob] Dole or McCain,” or with Democrats such as Al Gore and John Kerry. The Democrats, he argued, have “won with candidates from out of nowhere” — or in the case of Jimmy Carter, Bill Clinton and Obama, “from beyond nowhere.”
There’s another precedent, however, that Friess’s ambitions call to mind. In 1968, a liberal philanthropist named Stewart Mott, repelled by Lyndon B. Johnson’s worsening debacle in Vietnam, led a small group of wealthy donors in bankrolling a Democratic primary challenge by Sen. Eugene McCarthy of Minnesota. McCarthy did manage to help drive Johnson out of the race. But this year’s Republicans might want to go back and look at how the rest of that election shook out.
Charles Homans is a special correspondent for the New Republic.