The corrupting influence of great wealth
April 26, 2021
Last week, Issue One published a story (“Outsized Influence”, Michael Beckel) gives us more reason to worry about the outsized influence that is accruing to a small number of mega-wealthy men and women. It added more insight to the use of money as political speech, an action that augments the use of nonprofit status to give the wealthy undue influence about public policy and our nation’s future.
From available public data they found that in the past 11 election cycles “just 12 megadonors — at least eight of whom are billionaires — contributed a combined $3.4 billion to federal candidates and political groups between January 2009 and December 2020…The $3.4 billion contributed by the top 12 megadonors — six of whom generally supported Democrats and six of whom generally supported Republicans — amounts to 7.5% of the $45 billion that all federal candidates and political groups raised between January 2009 and December 2020.”
In 2020 alone, according to Open Secrets, led by Sheldon and Miriam Adelson who gave more than $218 million to candidates and political groups, the top 12 political spenders were able to plow more than $805 million in support of the candidates of their choosing.
Their wealth has been allowed to get so great that they could spend so heavily without skipping a meal, canceling a vacation or moving to a smaller home.
The Supreme Court’s infamous 2010 Citizens United was the lightning rod for an explosion of political spending. While Federal law limits an individual’s giving to candidates for Federal office and laws in almost every state limit contributions to state campaigns, Citizens United stimulated interested donors to find ample avenues to legally skirt these limits.. Political Action groups, PAC’s and other vehicles with almost no limitation or reason to even identify the source of their funding can weigh into campaigns at every level.
No limits to political spending do not bode well in this era, a time when the very rich are getting even wealthier. Just last week the NY Times spotlighted despite businesses struggling to keep afloat under the weight of the pandemic, the CEOs of major corporations, already very well compensated, were lavishly rewarded for just doing their jobs. Not only were their raises but, while so many suffered, “executives who own large stakes in giant companies, the gains have been even more pronounced. Eight of the 10 wealthiest people in the world are men who founded or ran tech companies in the United States, and each has grown billions of dollars richer this year, according to Bloomberg. Jeff Bezos, the founder of Amazon, which saw profits skyrocket with people stuck at home, is now worth $193 billion. Larry Page, a Google co-founder, is worth $103 billion, up $21 billion in the last four months alone, as his company’s fortunes have only improved during the pandemic. And, according to security filings, a select few are rapidly accumulating new fortunes. Chad Richison, founder and chief executive of an Oklahoma software company, Paycom, is worth more than $3 billion and was awarded $211 million last year, when his company made $144 million in profit. John Legere, the former chief executive of T-Mobile, was awarded $137.2 million last year, a reward for taking over the rival Sprint.”
When personal fortunes determine how loud political voices can be raised, we have much to be concerned about. Donald Trump, Michael Bloomberg and Tom Steyer were able to put their Presidential campaigns forward in ways that were not possible for other people because of their wealth gives them the ability to buy awareness.
This is troubling, but not consider what happens when wealth is combined with strong political beliefs, in the absence of any constraint on spending, political and charitable: we have a brew that is toxic for democracy.
The Walton Family has a passionate belief that public education must be transformed into a system that reflects their free-market beliefs. Through their foundations, they have “invested” billions to support the rise of charter schools and vouchers at the expense of our public education system. Charitable grants need to be matched with policymakers supporting desired policy changes. As part of their strategy, their Foundation has been a major funder of StudentsFirst, a nonprofit organization supporting the expansion of Walton favored school reform. A recent story in the Gothamist, illustrated how foundation grants and political contributions are merged behind a strategy and is fueled by great wealth. at state. Texas resident and Walton heir Alice Walton became a major donor, giving$800,000 to a pro-charter PAC, New Yorkers for a Balanced Albany, to further the candidacy of John Sanchez in a local NY race. “Managing the super PAC is Jenny Sedlis, executive director StudentsFirst (Which is funded by the Walton Foundation), an advocacy group for charter schools…The common denominator for Sanchez, Walton, and Sedlis is their support for charter schools, often a thorny subject in New York City politics.”
Clearly, the sky is the limit for those wanting to impact public policy and those who set it. Clearly, the tools are there to allow wealth to be wielded as a powerful weapon. And for those who have managed to accumulate staggering wealth, as we can see, there is really no limit to their exercise of this advantage.
We need to cut this threat down from two directions. First, recognizing that the massing of wealth is not right. According to Sen. Elizabeth Warren, “A tiny handful of people who have shimmied all the way to the top of the greasy pole get all of the rewards, while everyone else gets left behind.”
We need to revise our tax systems to reverse this direction.
We need to revise our election laws to reverse the impact of Citizens United and to eliminate the channels which have gutted limits on political spending.
We need to ensure that nonprofit organizations, supported by public policies and the benefits of tax forgiveness, are not used for anything but the public’s benefit and are not just a vehicle for personal enjoyment.