Inside Public Integrity

Published — March 9, 2016

Commentary: Is America a ‘Nation on the Take’?

Eleanor Bell/Center for Public Integrity


America stands at a historic crossroads. One path leads to a renewal of our Democratic ideal, the other to government by the few, the rich and the powerful. So argue Wendell Potter and Nick Penniman in their new book, “Nation on the Take: How Big Money Corrupts our Democracy and What We Can do About It” (Bloomsbury).

Potter will be familiar to Center for Public Integrity readers as a former health insurance executive turned critic, Center columnist and author. His previous book “Deadly Spin” won the 2011 Ridenhour Book Prize. Penniman is executive director of the organization Issue One, which is dedicated to reducing the influence of money in politics; he was previously publisher of the Washington Monthly and director of the Huffington Post Investigative Fund.

In this excerpt from “Nation on the Take,” the authors describe how the United States arrived at this crucial juncture, detail their assessment of the scope of the problem and chart a possible way forward toward what they view as a more equitable political system.

America is a dream.

The poet says it was promises.

The people say it is promises—that will come true.

—langston hughes, “freedom’s plow”

Our country is indeed a dream — a dream created during a period of time known as the American Enlightenment, which came to a focal point during the American Revolution and lasted until the early nineteenth century.

The leading political thinkers of the day were the ones we know so well: Thomas Jefferson, John Adams, James Madison, Thomas Paine, George Mason, Alexander Hamilton, Benjamin Franklin. Their dream was to create a democratic republic, in which ultimate power rested with the citizens. Just after the Declaration of Independence asserts the unalienable rights to “life, liberty and the pursuit of happiness,” it states:

“That to secure these rights, governments are instituted among Men, deriving their just powers from the consent of the governed, that whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

They knew that self-government would be messy and inefficient at times, but they had faith that common ground would be regularly found and that people would slowly but surely build a better nation together. As Jefferson said: “Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the form of kings to govern him? Let history answer this question.”

In addition to the Declaration of Independence, the Constitution of the Commonwealth of Massachusetts is a shining example of the idealism that defined the era. Ratified in 1780, it is thought to be the world’s oldest still-functioning written constitution. Drafted in part by John Adams, it inspired and informed the U.S. Constitution, forged seven years later. Part I, Article VII, of the Massachusetts charter reads: “Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men; therefore, the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity, and happiness require it.”’

Government for the common good, not for the “profit, honor, or private interest of any one man, family, or class of men.”

Those words don’t seem to ring true today. Not just for those who follow politics, but for all of us. A profound shift has occurred — one that, perhaps because it has occurred slowly, has yet to fully register as the serious crisis it is. But it has by no means gone unnoticed.

A few years ago, CBS News conducted a poll about Americans’ perception of government. The headline of the resulting story they published: alienated nation: Americans complain of government disconnect. The first sentence reads: “Americans see their leaders in Washington as overpaid agents of wealthy individuals and corporations who are largely disconnected from the concerns of average Americans.”

We, the people, are losing our faith in the dream of democracy. As our collective power is increasingly eclipsed by a rigged system of politics and governance dominated by a handful of billionaires and a phalanx of well-financed special interests, we are growing skeptical that the promises will come true.

Right now there is no credible outside threat to our American way of life. No other nation is sounding the death knell of ours. But the rapid proliferation of a system akin to oligarchy — within our own country— threatens to cripple our march forward.

It’s a threat the Founding Fathers knew we would always have to guard against. In the summer of 1787, when delegates to the Constitutional Convention were in the heat of their debates, they were obsessed with bribery, influence, and corruption. James Madison, who kept meticulous notes, recorded the word “corruption” fifty-four times. To them, the notion of corruption was both the corruption of the individual and the corruption of the system of governance. They were less obsessed with corrupt individuals—with bad apples—than with the system itself, with the orchard. The rotting of the fruit of liberty was seen as the dominance of private interests over the public interest. It was the bending of governing priorities away from the common good—a process that would, over time, fatally damage the whole project of a democratic republic — of “We, the people,” of the “consent of the governed.”

Seen in this light, government is us. Or it should be. We give our govern- ment our money, in the form of taxes. Then we hire its executives, through elections. Then we imbue it with directions and instructions, in the form of legislation. If all goes well, our politicians utilize our tax dollars to manifest our brightest ideas. The most exquisite dynamic is achieved when the common good is served while individual liberty is protected. No kings, no dictators. Us, in charge of ourselves, leveraging our resources behind our highest hopes, while protecting each other’s freedoms, shaping our country, forever working to form “a more perfect union.”

Yes, of course: there were — and always will be — bad people and bad pieces of legislation. The factions and special interests will fight for their legislative handouts and carve-outs, and politicians will lose their virtue. Corrupt moments in our future are inevitable.

And, of course, for centuries, women, people of color, and non-land- owners were legally excluded from voting and running for office. But powerful, popular grassroots movements like suffrage, abolition, and civil rights—fueled by the early American Enlightenment’s dreams of liberation and equality — forced profound course corrections that are among this country’s greatest accomplishments, not just for United States citizens but for humankind.

Today we all seem to feel as if we need another such profound course correction, one that is focused on reclaiming our right to self-government and renewing our hope in the American dream. Correctly, we suspect that the system is rigged, our government has become coin-operated, and that we’ve been sidelined.

In 1998, the total amount of money spent on federal elections was $1.6 billion. By 2012, it had nearly quadrupled to $6.2 billion.

The Supreme Court’s 2010 Citizens United ruling was akin to crop-spraying gasoline onto a wildfire. In a narrow 5–4 decision, the majority of justices asserted that corporate spending in politics is an act of free speech and should therefore be unlimited. Subsequent lower court rulings have expanded that rationale to reduce some limits on political campaign contributions, which has put the chase for political money on steroids.

At times, the news seems almost surreal. Take for instance, how a single family—the Kochs—which owns Koch Industries, has forged a small but very wealthy network of donors who have pledged to spend nearly $900 million influencing the outcome of the 2016 elections. That’s $500 million more than the Republican National Committee spent in 2012.

On the other side of the Big Money equation — the fundraising side — the nonstop scramble for campaign cash is distracting and exhausting our elected officials as never before, and perpetually repelling good people from office. Members of Congress simply don’t spend as much time thinking about us as they once did. They spend most of their time thinking about how to get enough money from wealthy individuals, lobbyists, and political action committees to get reelected—it’s what political operatives refer to as a “permanent campaign” mentality.

In January 2013, newly elected Democrats in the House of Representatives were being given an orientation session by the Democratic Congressional Campaign Committee about how they should spend their time serving in the House—what was once referred to as the “People’s House.” Among the materials they were presented with was a “model daily schedule.” That schedule provided for four hours of “call time,” one to two hours of “constituent visits,” two hours of committee hearings or floor votes, one hour of “strategic outreach,” and one hour of “recharge time.” You have no doubt already guessed what “call time” and “strategic outreach” are: fund-raising. Which means that new representatives are expected to spend half of their time either dialing for dollars or attending fundraising events.

Who are they calling? Probably not you. Certainly not us. Mostly, very wealthy donors in the richest cities in America. And who’s throwing the introduction daily fundraisers for them? Often, the very industries they are supposed to be regulating, based on their congressional committee assignments. The Finance Committee members rake in contributions from the bankers and their lobbyists, the Natural Resources Committee members from the oil and coal executives and their lobbyists. That’s why these types of committees on Capitol Hill are referred to as “cash committees.”

As Ray Plank, the former founder and chairman of the Apache Corporation, told the conservative journalist Peter Schweizer, whose book Extortion was later turned into a 60 Minutes episode, campaign cash and corporate contracts with well-connected lobbying firms are “protec tion money. It’s what you expect from the mafia.”

Yet, in Washington and the state capitals, such activity is not seen as mafia-like. It’s run-of-the-mill. It’s the way things get done. Anyone who questions it, or wants to change it, is deemed naïve or—even worse!— idealistic.

And it’s done in broad daylight.

One of the many pernicious effects of this endless extraction of campaign cash from lobbyists and wealthy individuals is that politicians have little time to form strong relationships with one another, particularly across the aisle. For all of the newspaper editorials and Press Club forums about gridlock, partisanship, and polarization in Washington, and all the appeals to politicians to get along, too little attention is paid to whether they have time to get along. When announcing in early 2013 that he wouldn’t be seeking reelection in 2014, Senator Tom Harkin (D-IA) remarked, “The time is so consumed with raising money now, these campaigns, that you don’t have the time for the kind of personal relation ships [between lawmakers] that so many of us built up over time.”

Our legislators — our employees, remember — also have less time to draft, study, or pass legislation. The more than nine thousand registered lobbyists in D.C. are keenly aware of this vulnerability, and they are poised to take advantage of it. Collectively, they annually disclose more than $3 billion in expenses—including the many events they hold for members of Congress. The nonprofit transparency group the Sunlight Foundation tracks categories of influence peddling. One category is called “Hill coverage,” which is defined as the “average percentage of incumbent members of Congress receiving contributions from the organization over the course of the 2008, 2010 and 2012 election cycles.” AT&T, for instance, has 88 percent Hill coverage—meaning that 88 percent of members of Congress have received contributions from AT&T sources. Honeywell International also has 88 percent coverage. United Parcel Service has 87 percent. Lockheed Martin has 80 percent. Comcast, General Electric, Boeing, and Verizon all have around 70 percent.

How much coverage do you have? How much coverage do we, the people, have? How much do Main Street businesspeople have? How much attention do people who have little or no money get in such a system? We know that the banks wield enormous power over politics and policy decisions in D.C. But who’s representing the families facing foreclosure? As Bob Dole once famously quipped: “there is no poor people’s political action committee.”

There are also few members of Congress who, upon leaving the Hill, have any interest in starting a poor people’s political action committee. In 1974, around 3 percent of former members became lobbyists. Now, half of them pass through Washington’s “revolving door” and stroll from the Hill down to K Street, many of them to lobby for the industries they once oversaw, based on their congressional committee assignments. Served on the Finance Committee? Become a bank lobbyist. As the New York Times’s Mark Leibovich observed: “In some sense, [they are] living proof of the thing that most voters loathe about Washington: the notion that member- ship in its political class guarantees a win-for-life lottery ticket.”

It’s important to point out early on that lobbying in its purest form is not bad. Making arguments to members of Congress is part of the democratic process. Sharing information and expertise is a good thing. It’s a form of free speech, and a healthy democracy should have plenty of lobbying going on, as long as it is occurring on behalf of all sides of an issue. Our concerns about lobbying involve the relationship between lobbying and political cash, the lobbyists who have little or no fealty to the broader public interest, and those politicians or Hill staffers who see public office as a pathway to a lucrative influence-peddling career. We are also disgusted by lobbying groups that knowingly leverage millions of dollars into false and misleading communications campaigns, which destroy the possibility of having a thoughtful, genuine debate about weighty policy ideas.

If it is functioning well, our country’s project in self-government would be mainly driven by, among other virtuous objectives, national need and appropriate fiscal policy. We would not only know the right policies to enact — we would also enact them. But when government is coin operated—when America becomes a nation on the take—the nation’s needs get shoved aside like neglected children.

Which brings up another crucial link that isn’t discussed often enough: Although the system creates special economic benefits for those who can pay to play, the overall well-being of the economy does not necessarily improve. For too long, campaign finance reform has been viewed as an “anti-corporate” cause. Instead, it should be seen, in part, as pro competi- tion and anti-cronyism.

Luigi Zingales, a conservative economist at the University of Chicago Business School and author of A Capitalism for the People, compellingly documents how the system of lobbying and legislative favors is danger- ously reducing economic competitiveness and opportunity. He writes:

“American capitalism . . . grew in a unique incubator that provided it with a distinct flavor of competitiveness, a meritocratic nature that fostered trust in markets and a faith in mobility. Lately, however, that trust has been eroded by a betrayal of our pro- business elites, whose lobbying has come to dictate the market rather than be subject to it, and this betrayal has taken place with the complicity of our intellectual class.”

Who suffers from this betrayal? Consumers (you and us), small- and medium-sized business owners, big corporations whose lobbyists get beat by their competitors’ lobbyists, and entrepreneurs — that is, nearly everyone.

You see, wherever you are, and whatever you do, whether you love politics or hate politics, whether you devour news or never look at the news, whether you see yourself as an environmentalist or a business leader (or both), as a conservative or a liberal, every moment of your life is being affected by the system of Big Money.

So is it fixable? Yes, if we are clear about what success means. The reformers’ slogan,“Get Money Out of Politics,” is misleading. We can’t get money completely out of politics, but we can create a much, much higher-functioning and responsive system. It requires money to run campaigns, to hire door knockers, to print lawn signs, and to run TV, radio, and online ads (the bulk of the spending). Groups like the NRA, the Sierra Club, and the National Association of Manufacturers will always want to weigh in on key public policy debates. And they should.

What we can do is restore our power — the people’s power — within the system by limiting the most egregious sources of the money, by creating new ways of financing politics that reorient politicians to their voters back home, by demanding total transparency in the giving and spending of political cash, by enacting new ethics and lobbying laws that reduce conflicts of interest and shut down the most transactional forms of polit- ical giving, and by making sure that campaign and lobbying laws are evenly and effectively enforced.

These things shouldn’t seem so hard to achieve. We’ve won similar fights before. We’re Americans, after all.

The reforming spirit that has fueled successful fights against Big Money was perhaps best embodied a century ago by Teddy Roosevelt. His time, just like ours, was one of unprecedented technological change when wealth and power were aggregating at the top of society. Massive corporate conglomerations — the bank, oil, railroad, and mining trusts, especially — threatened free and competitive markets. The rich were getting richer by the year. And the public felt outraged, yet exhausted, by the increasing pace of industrialized life and by the sense that their voices no longer mattered.

As most who have read about TR know, he was not just talk. In fact, quite the opposite. In 1907, he helped ram through the first major campaign finance reform bill of the modern era, called the Tillman Act, which banned corporations from contributing directly to political campaigns.

These days, there are signs that Roosevelt’s spirit might be coming back to life. As of the writing of this book, all of the Democratic presiden- tial candidates have embraced money-in-politics reform as a central pillar of their campaigns. Many Republican candidates have acknowl- edged the increasing severity of the problem, although have been less clear about solutions. Love him or hate him, Donald Trump has been refreshingly blunt about what political money buys.

There are signs, too, that the Washington establishment is starting to come around. In the spring of 2015, the dean of Washington journalism, Bob Woodward, who as a young Washington Post reporter broke the Watergate scandal, said at a commencement address at Loyola University:

“There is a new governing crisis here and it is getting worse. It is about money in politics. It involves both political parties. I won’t name names. If you follow the news at all, you know . . . It is important that the next president be able, unfettered and unbought, to find and move the country to the next stage of good.”

A governing crisis. This is a dramatic statement for a careful wordsmith like Woodward.

Inhabiting a totally different part of the political ecosystem from Woodward’s is a guy like John Feehery. Feehery was Dennis Hastert’s chief of staff when Hastert was the Republican Speaker of the House in the early 2000s. He’s now an executive at a big D.C. lobbying and public relations firm. Yet the same week that Woodward gave his Loyola commencement speech, Feehery wrote in the Wall Street Journal:

I don’t have anything against billionaires. It would be nice to have access to that kind of money. But our political system shouldn’t be run by the super-rich for the super-rich’s pet causes.

Run by the super-rich for the super-rich’s pet causes is another way of saying oligarchy. America, an oligarchy. It’s almost sickening to see those words next to one another. Imagine the heartbreak that John Adams and 0x his compatriots would feel if they were alive today.

A growing number of people, of all political stripes, are increasingly fed up. Last year, CBS News partnered with the New York Times on a poll, the conclusion of which was: “In a rare show of unity, Americans, regardless of their political affiliation, agree that money has too much influence on elections, the wealthy have more influence on elections, and candidates who win office promote policies that help their donors.”

But it’s no longer true that nothing is happening. More than at any time since Watergate, regular people are realizing that this situation has to change.

Since 2010, more than six hundred anti–Citizens United resolutions have been passed by cities and states. New campaign finance systems are already functioning in places including Connecticut, Arizona, and New York City. In 2014, led by the reform group Represent.Us, 67 percent of voters in Tallahassee, Florida, supported a major reform package, including lower campaign contribution limits, creation of a new, inde- pendent ethics commission, and a program to empower non-wealthy people to participate in funding politics. The coalition that was assem- bled to win consisted of progressives, independents, and Tea Party members.

Similar coalitions are forming around ballot measures in cities and states throughout the country. And there’s the possibility for immediate progress at the federal level. Even if Congress isn’t ready to legislate, the White House can act, and it should use its authority to do so. Hundreds of thousands of people have urged President Obama to sign an executive order that would require federal contractors — given that they are receiving taxpayer dollars — to disclose their political activities. If such an order were signed, 70 of the Fortune 100 companies would have to do so.

The Securities and Exchange Commission could also help. More than a million comments have been submitted to pressure the SEC to issue a rule requiring publicly traded companies to disclose the political dollars they spend on behalf of investors. Former Republican SEC Commissioner William Donaldson and former Democratic SEC Commissioner Bevis Longstreth are among the chorus calling for change.

But for these types of executive actions and state-based efforts to take root, we must immediately build a much stronger—and politically broader—citizen army. There is already a battalion of reformers working hard every day. But they are waiting for major reinforcements to arrive. That means you. And your friends. It will take you, and us, and millions of other kindred spirits to create a patriotic force powerful enough to reorient the power in this country back to “We, the people.”

Just as we won our right to self-government by fighting the British monarchy more than 240 years ago, we will lose it if we fail to fight to reclaim it now.

Imagine what would happen if we don’t. Can any one of us truly claim that we will be able to revitalize our country as long as this problem worsens? Does anyone believe fixing our democracy is optional? Who among us would surrender ourselves, our children, our communities, to an oligarchy?

America is indeed a dream.

The poets are right: it is promises.

Once again it’s time to prove that the people are also right: it is promises — that will come true.

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