Part 3 of a 10-part Series:

The Powell Memo Let Loose

“All for ourselves, and nothing for other people, seems in every age of the world, to have been the vile maxim of the masters of mankind.”

Adam Smith, 1776

The wealthy, business elites and the corporatocracy took the advice from Powell’s memo and ran with it. The most obvious strategy was to exert influence in the places of power—where decisions that affect all of us are made. One way was through direct contributions to political candidates. Here in the United States, campaign finance reform (i.e., getting “big money” out of politics) has undergone a cycle of incremental improvements followed by regression. This is due to both the practical need for large amounts of money in order to run for office as well as limits imposed by Constitutional free speech jurisprudence.  Since the disastrous Supreme Court decision in Citizens United v FEC (2010), the amount of money already pouring into political campaigns has grown ever larger. Political committees may now accept unlimited contributions, so long as they do not “coordinate” with a candidate or a party. Although many of the fat cat donors have a political party preference, many of the special interest groups donate large sums to both parties—insuring access and influence regardless of what the people decide about who is elected.

Even prior to Citizens United, the Supreme Court eliminated the Millionaires Amendment in the 2008 Davis v FEC decision. The Millionaires amendment had allowed candidates running against an über-wealthy, self-funded opponent to bypass campaign contribution limits. Although the Millionaires Amendment imposed no limit on a wealthy candidate’s ability to spend funds on his own campaign, the Court’s rationale was that the Millionaires Amendment unconstitutionally “penalized” wealthy candidates; that such burden was not justified by any governmental interest in preventing corruption or the appearance of corruption; and that equalizing electoral opportunities for candidates of different personal wealth was not a permissible Congressional purpose. 

According to the FEC, the largest individual donors to Republicans in the 2020 election were Sheldon Adelson ($225 million), Richard Uhlein ($75 million), Kenneth Griffin ($70 million), Timothy Mellon ($60 million) and Dustin Moskovitz ($50 million). The two largest donors to Democrats—Michael Bloomberg ($150 million) and Thomas Steyer ($80 million)—were running for President themselves, so a large part of their donations was likely made to their own campaigns. The Adelson-backed super-PAC decided to support Trump late in the campaign, which likely contributed to Trump’s upset victory.  Thus illustrating yet more evidence of a “pay-to-play” political system.

Interest groups as well as wealthy individuals donate to political campaigns. One might think that these interest groups—who operate from individual donations and pooled funds—would likely be more representative of “the people.”  Yet, here again, we see that many of these groups either represent business interests (e.g., the Chamber of Commerce), or are “astroturf” organizations which appear to be supported by grass roots small donations, but are actually funded by wealthy (and often anonymous) donors:

1. U.S. Chamber of Commerce   $130 million
2. Crossroads GPS     $110 million
3. Americans for  Prosperity    $59 million
4. National Rifle Association    $58 million
5. American Future Fund    $51 million

In 1971, only 175 firms had registered lobbyists in the nation’s capital. By 1982, some 2,500 firms had registered lobbyists. The number of Political Action Committees (PACs) increased from less than 300 to over 1,200 between 1976 and 1980, and their expenditures on congressional races increased nearly 500%.  In 1975, total revenue of Washington lobbyists was less than $100 million. By 2006, it was over $2.5 billion.  Although the number of lobbyists and the amount of money spent on lobbying proliferated during the 1980s and 1990s, the number of active lobbyists peaked at 14,837 in 2007.  In terms of both number of lobbyists and money, lobbying has been on the decrease following restrictions and reporting requirements passed by the Obama administration in 2008.

The Federal Election Commission (FEC) is itself a rather toothless organization. It is governed by six Commissioners, three from each of the major political parties. This (unsurprisingly) often results in deadlock. However, Commissioners must be confirmed by the Senate, and so the FEC frequently operates without a full Commission, which hinders its ability to issue rules, conduct investigations and approve enforcement actions. Shortly after the Citizens United decision, the FEC allowed the creation of independent expenditure-only committees, now known as super-PACS. Unlike political candidates, who must build their campaign coffers with legally limited smaller donations, super-PACs can collect six and seven figure donations. This “outside” (i.e., not under the control of a party or candidate) spending has amounted to $4.5 billion since 2010, outpacing “regular” candidate spending and contributing to record-breaking expensive campaigns. Billions of super-PAC dollars can flow instantly into ads and other communications—and they are often hard to distinguish from the ads produced by the candidates themselves.

Capturing the policy agenda with money may have been the primary agenda. But, in order to survive public scrutiny (and perhaps opposition), the oligarch agenda had to be supported with “scientific” sounding logic and argument. Money that wasn’t directly used to influence legislators and legislation was directed into academic-style “think tanks” that provided an intellectual foundation for oligarch ideology. This strategy is termed “preference-shaping,” a technique generally associated with advertising and marketing. When applied to the electorate, preference shaping is designed to insure that—during those few times when ordinary people (i.e., voters) are in a position to make a decision—that they are imbued with the world view, frameworks, and preferences of the plutocrats.

The Heritage Foundation was established in 1973 among a list of conservative notables. The Heritage Foundation receives an average annual revenue of $112.7 million. The Libertarian CATO institute was founded in 1974 and relocated to Washington in 1981. The older American Enterprise Institute—with an average annual revenue of $64 million—has been around since 1938. The AEI provided many of the personnel to staff the George W. Bush Administration. The Claremont Institute, founded in 1979, has become more recently infamous for its former senior fellow John Eastman, a figure (with another memo) who is nearly inextricable with January 6^th. These are the sources of foundational ideologies that preach the gospel that allowing a few folks to become obscenely wealthy is good for all of us. This includes the “greed is good” ethos that emerged in the 1980s as well as “trickle-down” (aka supply side) economics—which has actually been disproven by real economists. But you would never know this from the continued promotion of it among economic and political elites.

Campaign finance ethics tends to focus on individual candidates—who is giving to whom in exchange for what favors. But the huge sums of money in our political system have a more insidious (and harder to discern) effect on both democracy and the welfare of the rest of us. It creates a system that is wealth-biased, or based on the presumption that everyone is equally free to accumulate as much as they are logistically able—and indeed are even expected to do so. Those whose only objective is the increase of their own wealth and power are easily able to create a unified and coherent value system.

All the rest of us, however, have a much wider universe of needs and interests: some folks struggle to keep a roof over their head or have enough to feed their families; others are worried about the quality of K-12 education for their children today and the cost of higher education for their children tomorrow. Others have more existential concerns about climate change, globalism, or war. If we can find time, energy, and resources which are not consumed with daily survival, we may be able to help toward one of these causes in some small way. But we will never have the unified clout of plutocrats and the corporatocracy. Indeed, a 2014 study by political science academics concluded that, “When the preferences of economic elites and the stands of organized  interest groups are controlled for, the preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy.”