DOLLAR DEMOCRACY ON STEROIDS

CHAPTER 2

Buying American Politics and

Selling Out the American Dream

“…I refused to take part in what former U.S. Congressman Cecil Heftel of Hawaii called ‘legalized bribery’ ”

— Peter Mathews

U.S. Supreme Court: Super Rich Americans Can Now Buy All of Congress and Both Political Parties. McCutcheon v. FEC (2014)

It was another bright and sunny sparkling Southern California morning in June 1994. No worries. Optimism abounded. I had woken up early to shower, shave, and have a hot breakfast of oatmeal and coffee. I had just wrapped up the semester of teaching at the end of May. I drove with relaxed determination to my Congressional campaign headquarters a short four blocks from my house. By 9 o'clock in the morning, the warm sun and blue sky enveloped me with the promise of new beginnings.

As I opened the door with confidence, my campaign manager who was already in the office before me, greeted me with enthusiasm. The campaign headquarters did not have luxuries such as finished floors like most campaign offices; it was a bare room with concrete flooring. However, our enthusiastic volunteer staff had cleaned and organized it beautifully. Nothing like the fruits of victory to galvanize positive attitudes and enthusiasm, even from unpaid volunteers. My campaign manager said "Congratulations Mr. Democratic primary winner. Your reputation precedes you. Are you ready for this important meeting with

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the ARCO PAC (political action committee)? This is your big day to make an impression. These guys can kick off the raising of hundreds of thousands of dollars that it will take to win in the fall."

I had mixed feelings about this meeting with this oil company's political elite. I had refused to raise money from corporate special interests in my 1992 primary election campaign for the same congressional seat, and still had landed a very strong second-place. As a professor of political science, I knew the strong influence that wealthy corporate donors had over policy votes of candidates who took their money.

Now, as I was facing my campaign manager in that room with desks covered with neatly stacked papers, I looked him in the eye, and seeing his enthusiasm for raising the huge amount of money it would take to defeat a powerful, well-known, well-respected moderate Republican Congressman in November, I said, “Okay let's meet these ARCO guys and see what they have to say.” I could see the sense of relief spread over his face. He was probably thinking maybe this guy is not such a crazy, unrealistic, idealist after all. Maybe Mathews has finally come to realize the importance of raising the serious amount of money that it takes to win a general election and become a Congressman. He wasted no time as he drove me to the ARCO PAC offices for our meeting with the political action committee and its chairman.

We had plenty of time to get there, but my manager drove like there was no tomorrow. It felt like he was ready to hit the jackpot. It felt as if we were going to Vegas, not to gamble, but to collect our winnings. After all we only had to show ARCO that I had won more votes in the Democratic primary than my Republican opponent, incumbent Congressman Steve Horn, had won in his Republican primary: 33,000 votes to 26,000 and that this was a strong sign of my likely victory in the fall. Helping us in this argument was the cover story in a magazine in the Los Angeles Times with a cover picture of the facial profiles of Steve Horn and me, challenging each other like two prizefighters. The caption accompanying the LA Times magazine cover said, "Democrat Peter Mathews poses stiff challenge to incumbent Republican Steve Horn."

We arrived earlier than expected because somewhere on the drive from the campaign office to the ARCO office, my campaign manager

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had morphed into a Grand Prix racer. The fact that ARCO had taken us seriously enough to invite us to meet and interview with them, and possibly gain their financial support, must have given him an adrenaline boost.

When we arrived and saw the gleaming buildings and offices, I'm sure my campaign manager felt that we had landed a tryout in the major leagues, every baseball player's dream. Of course, major-league baseball players produce a lot of viewing pleasure for the fans and are paid handsomely for playing a superb and professional game. In contrast, major-league politicians such as members of Congress are not about producing a pleasurable game to view but much more importantly, members of Congress gain huge amounts of power to create and shape government policies that benefit or hurt millions of people in major ways. The ARCO political action committee chairman and members were clearly aware of this.

As soon as we walked into the gleaming air-conditioned offices where we were being interviewed, we were treated with professional courtesy and warmth by the receptionist. We did not have to wait very long. The folks in the back room must have been notified of our arrival right away.

A guide was sent to escort us to the room where the interview was to take place with the ARCO PAC members. As my campaign manager and I were ushered in to the immaculately furnished conference room, the committee members rose to greet us and shake our hands very cordially. The atmosphere into which we had walked was very positive and welcoming. I knew that the ARCO PAC members were extremely experienced and aware of their important roles and the power that lay in their hands. After all, these were the men and women who would decide which candidates to support and which to reject in their bids to become members of Congress. These committee women and men knew exactly what kinds of questions to ask of the candidates, both challengers and incumbents running for reelection. The political action committee members knew how to judge the substance and nuances of the answers and presentations provided to them by the hopeful candidates for Congress.

I had been interviewed by political action committees before while

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seeking the endorsement of public interest groups, so I was not nervous at all while being seated in the hot seat in the conference room facing all those political judges, members of the ARCO PAC. Shaking each person's hand, and making personal contact, including small talk when appropriate, had broken the ice between me and the committee members. I felt at home being interviewed for an endorsement for the U.S. House of Representatives. I told them that government needs to spend its revenues wisely in building the best K-12 and college and university educational systems. Government should ensure that the kindergarten through technical and trade school as well as college and university systems should provide equal opportunity for every single American child and young adult regardless of their parents’ economic standing. I added that government should also create policies that would encourage the creation of jobs through small business growth and the rebuilding of America's infrastructure, roads, bridges, water and sewer systems, levies, school buildings etc.

As I looked around the room there seemed to be an expectation for something else. After all we were in the Lions’ Den of a corporate big business oil company. I had done my research and knew that in 1994 big business was doing very well in terms of profitability, government subsidies, and corporate tax loopholes given to them by Congress. Big business was getting its way in the area of Free Trade instead of Fair Trade. I knew exactly what the men and women in this room expected to hear from me, if I wanted their political and financial support.

I looked around the room at these women and men playing the role of the political guardians for big oil and once again noticed their expectant expressions. They would have loved it if I had said that what's good for business is good for America. That business, particularly big business, was the engine that drives the train of the American economy. The engine must be constantly fueled by the policies of government, if the boxcars loaded with heavy goods were to be pulled along successfully, and the American economic train was to run smoothly and efficiently.

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To Tell You the Truth,

You Can Keep Your Money

What kind of fuel for the big business engine were these ARCO PAC committee members thinking of? I knew that to win their support, endorsement, and full commitment of campaign funding, I had to mention that I supported government policies that would fuel the engine of big business to successfully pull the boxcars of the economic train. All I had to do to gain their support was to say that I supported tax incentives and corporate subsidies so that the big business engine could do its job well in successfully building up and maintaining the American economy. The expectant faces around the room wanted to see that I truly believed in Charles Wilson's claim that what's good for GM is good for America, and vice versa. Charles Wilson, the former CEO of General Motors, served as President Eisenhower’s Defense Secretary. I knew that I would disappoint most of those in that room including my campaign manager with what I was about to say, but I was going to say what I believed anyway!

I told them I believed that in order to strengthen and grow the American economy we had to guarantee high-quality, affordable and equal education to everyone; and in order to help create high paying, new technology jobs, the federal government needed to invest in America. As any businessperson knows, productive investment costs money. It would take hundreds of billions of dollars to invest in America's educational systems, small business growth, technological development, and to modernize the aging infrastructure. This investment would be absolutely necessary to create the foundation for a successful 21st Century world-class economy. We will pay now, or we will pay dearly later by falling behind other nations in our productivity. I told them if we don't invest now we will see the rich getting richer, the poor getting poorer, and the middle class disappearing. I looked around the room at the eyes of these eminent, powerful, and influential decision-makers, and said the best way to generate the funds for investment in America is to close the unproductive corporate tax loopholes, and to end the most egregious and unproductive corporate subsidies by government, and use the money generated to educate Americans for the 21st Century jobs just around the

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corner. I said, “My good friends of ARCO PAC, if we take this path, our economy and our country will be prosperous and successful and corporations like ARCO will be partners and beneficiaries in this venture.”

I paused to gauge their reaction. They were smiling nervously at each other, a little shocked at a candidate who would tell them directly what they were not too happy to hear. The chairman proceeded to a couple of more relatively insignificant questions and then the interview was over sooner than expected. The PAC chairman got up to shake my hand and said, “Thank you very much for coming, we appreciate your time. Goodbye.” I wasn't sure why I was surprised by this response. I suppose I had thought in the back of my mind that perhaps these people would like to have a serious and vigorous discussion and debate about what it means to close unproductive corporate tax loopholes, and end government subsidies (corporate welfare) of large corporations such as ARCO. No such luck, so I said, “Thank you for your time ladies and gentlemen. Goodbye.” I never heard from ARCO PAC again!

“We Have the Best Politicians

Money Can Buy”

As we were making our way out of the ARCO offices, my campaign manager reminded me that we had a long way to go to raise the requisite $500,000 minimum that winning candidates for Congress were raising and spending in 1994. In the national elections of 2016, the winning candidates for the U.S. House of Representatives averaged more than $1.7 million raised and spent per district. The losing candidates averaged more than $700,000 raised and spent in each district. That was a total of $1,644,300,000 raised and $1,597,000,000 spent in the 2015-16 election cycle (FEC.gov, March 23, 2017). In the 2018 midterm election, $5.2 billion was raised and spent on House and Senate incumbents and challengers by the candidates, political parties, political action committees (PACs), Super-PACs, and non-profits. (opensecrets.org, Oct. 29, 2018). These were mostly wealthy corporate special interests in

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the top 1%, who want tax loopholes, subsidies, and other handouts from members of Congress whom they help elect.

They get these favors from Congress, which causes Congress to cut, or not increase, needed spending for programs that provide opportunity and success for the bottom 99% (the middle class and working poor); programs such as public education pre-school through college and university, full universal healthcare (where Obamacare left 20,000,000 Americans uncovered and Trumpcare increased the uninsured by 7 million more), full and secure retirement for all Americans, higher minimum wage and a living wage, investment in small business and entrepreneurial capital and rebuilding and modernizing our infrastructure, scientific research and development, and direct government employment as in Franklin Roosevelt’s New Deal, all of which would create millions of new well-paying jobs through increased demand and growth in the American economy. In the two years of the Trump presidency (2017-2018), the rate of uninsured Americans has risen from 10.9 percent to 13.7 percent: 7 million more people, mostly women, young adults, and low-income Americans without health insurance. (news.gallop.com, by Dan Witters, Jan. 23, 2019). Today, in 2019, 44 million Americans have no health insurance, eight out of ten of these are workers or their dependents. Another 38 million have inadequate health insurance coverage!

An FDR type New Deal program has been blocked by Big Money going into Congressional campaigns from the Big Corporations and their wealthy owners and lobbyists. Money and favors go out from Congress to the Wealthy Corporate Special Interests and Super-wealthy Donors. This is “Dollar Democracy”, the millions and billions of dollars used by wealthy campaign donors and corporate lobbyists to legally buy influence over our members of Congress, which stops them from representing us, the 99%, and fighting for the American public interest. This reminds me of Will Rogers’ quip, “We have the best politicians money can buy!”

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I told my campaign manager that I understood the need to raise $500,000 to be competitive in the November general election against the Republican nominee, Congressman Steve Horn. But I was not going to raise this money from wealthy corporate political action committees who would expect something from their sponsored candidate. Of course, it was illegal for a political action committee to propose providing funds to a specific congressional candidate with a promise that the candidate, once he wins, will propose and work for a specific piece of legislation, or amendments desired by the donor group. This would be called bribery and is definitely illegal.

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However, I refused to take part in what former U.S. Congressman Cecil Heftel of Hawaii called "legalized bribery": an unwritten understanding between wealthy corporate special interests, and candidates receiving their collectively huge donations; the understanding that once this candidate becomes a Congressman, she or he will vote on behalf of positions taken by the wealthy group of donors, on important public issues (taxes, environmental regulations, trade agreements and outsourcing, etc.). Of course, the unwritten understanding cannot be a specific verbal or written agreement. If a specific quid pro quo agreement is made, both the member of Congress and the wealthy special interest group representative would probably end up in jail. Many political science studies of voting behavior in Congress have shown patterns of up to 80% support by the members of Congress for the positions taken on key issues by their corporate sponsors. This pattern has also applied to state legislators, and their special interest sponsors, from Big Oil corporations, to Big Tobacco corporations, to Big Pharma, to Big Wall Street Banks, to organized groups of super wealthy individual donors.

Dollar Democracy Is Not a Victimless Crime

As my campaign manager drove us back to our campaign headquarters, this time at a more leisurely pace, we had a very sincere and thought-provoking conversation about campaign finance, and the influence of wealthy special interest groups on American elections and policies made by elected officials. The powerful influence over our government that Corporate America in general has, and in this case Big Oil, is clearly illustrated by the following:

ARCO is one of the top sponsors and funders of politicians elected to the executive and legislative branches of the American Government. It funds their campaigns through its wealthy political action committee (ARCO PAC, whose Southern California branch interviewed me in 1994). In the 1996 election cycle, ARCO PAC gave more than $357,000 to federal candidates. At the same time, it gave $1.25 million in “soft money” (which could only be used for party-building activities

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such as voter registration and voter turnout) to the Republican and Democratic National Committees. ARCO PAC gave another $500,000 in state elections, where often, as in California, corporations can give directly to candidates’ campaigns.

At this time Robert Healy was ARCO’s Vice-President for Governmental Affairs. According to CounterPunch editor Jeffrey St. Clair, writing in “Dime’s Worth of Difference”, on October 25, 1995 Healy attended a coffee klatsch with Vice-President Al Gore and Marvin Rosen, finance chair of the Democratic National Committee (DNC). Healy donated the maximum of $1000 to the Clinton-Gore Re- election Campaign. Through July to December 1995, mainly under Healy’s direction, ARCO gave $125,000 to the DNC. It so happened that President Clinton’s Commerce Secretary Mickey Kantor became the most intense supporter of lifting the export ban on Alaskan oil. Kantor, previously U.S. Trade Representative, promoted this as an important portion of Clinton’s Asian Trade Policy.

According to St. Clair, President Clinton hosted a birthday celebration at the White House for ARCO’s former CEO, Lodwrick Cook, a personal friend of his. Cook and Clinton’s Commerce Secretary Ron Brown traveled together on a trade mission to China in August 1994. On this trip, Cook and Brown negotiated ARCO’s investment in the large Zhenhari oil refinery near Shanghai. This got it ready to process crude oil from Alaska. Further evidence of the influence of oil companies, including ARCO, on U.S. government energy policy was seen in 1994 and beyond. Congressman Don Young of Alaska, Chair of the House Resources Committee, received more campaign money from BP, ExxonMobil, ARCO, and Chevron PACs than any other member of Congress. In 1994, while President Clinton was on his summer vacation in Jackson Hole, Wyoming, oil company executives met with him. According to St. Clair, they “pressed Clinton for concessions: 1) Increased drilling on the outer Continental Shelf, especially in the Gulf of Mexico 2) A break on Royalty Payments 3) Expedited leasing for Coal-bed methane in the Rocky Mountain Front 4) Opening the National Petroleum Reserve—Alaska to drilling 5) Removal on the ban on export of Alaskan Crude oil to overseas refineries.” (Jeffrey St. Clair, “Dime’s

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Worth of Difference”, p 201-202).

The National Petroleum Reserve—Alaska is 24 million acres of pristine land, and was set aside for entry only in the case of a national emergency. Yet under Clinton’s Interior Secretary, Bruce Babbit, the Reserve was opened to the oil corporations for drilling. This was done, despite the fact that it is crossed by a huge migrating Caribou herd, one larger than the herd in ANWR (Arctic National Wildlife Refuge). The National Petroleum Reserve—Alaska is also home to many declining species, including Polar Bears, Arctic Wolves and foxes, and Musk Ox. The largest river on Alaska’s North Slope, the Colville River is contained within it. Also, the Colville River Canyon, and nearby marshes and lakes, make up one of the world’s most important migratory bird staging areas. But Big Oil’s corporations invested enough money in American elections and lobbying to get their way, regardless of Climate Change (Climate Disruption) or the needs of the natural environment.

This is the process through which influence is peddled: ARCO and

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other oil companies contribute heavily to the political campaigns of their favored candidates. Once they are elected to government, ARCO and friends have access to these decision makers, before and while laws and policies are made. It has become a “pay to play” system.

It is not just the majority of Democratic politicians, Bill Clinton, and Al Gore who understand and use this “pay to play” system very well; it is also Republican politicians, including Dick Cheney, and George W. Bush, who know and use this “pay to play” game extremely well. Added to this is the fact that Dick Cheney was the CEO of Halliburton Corporation, the largest oil and gas drilling equipment producer, and George W. Bush was CEO of an oil corporation before he was President.

With influence from the Energy Industry (Big Oil, Big Gas, and Big Coal), President Bush signed the energy bill into law on August 8, 2005. The U.S. House of Representatives had voted 275 to 156 to pass the energy bill on July 28; the U.S. Senate voted on July 29 to approve it. According to Public Citizen, since 2001 energy corporations had:

The energy bill provided billions of dollars in corporate tax loopholes and subsidies to the wealthy oil, gas, and coal corporations. It also repealed the Public Utility Holding Company Act (PUHCA). The PUHCA provided strong consumer protection and effective regulation of the energy sector. Without the PUHCA, insurance companies, oil companies, hedge funds and investment banks are now allowed to own utilities. This gives these corporate owners the right to capture guaranteed revenues from the utilities for leveraging the acquisition of non-utilities. It threw the door wide open to the “price-gouging of ratepayers” (http://www.citizen.org/cmep/article_redirect.cfm?ID=13980).

Under the Cheney-Bush energy bill, the oil and gas industry received

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$6 billion in subsidies and corporate tax loopholes. Here are a few of the many sections of the bill that guaranteed the multi-billion-dollar giveaway to the oil and gas men, by a Vice-President and President who were themselves oil and gas men funded by the industry, and Democratic and Republican members of Congress heavily funded by the same oil and gas corporate interests:

Section 1329 speeds up the write-off of “geological and geophysical” costs associated with exploring for oil. This will cost taxpayers over $1.266 billion from 2007-2015. Section 1323 allows the owners of oil refineries to expense 50% of the costs of equipment that is used to increase the capacity of the refinery by at least 5%, which is a governmental giveaway to the oil corporations of $842 million from 2006-2011. Section 1325-6 provides a tax break that allows natural gas corporations to depreciate their property at a much faster rate, receiving a $1.035 billion giveaway from the government. Title IX, Subtitle J provides $1.5 billion in direct payments to natural gas and oil corporations to drill in deepwater wells. According to Public Citizen, this provision was a pet project of Texas Republican House Majority Leader Tom DeLay. It designated a private organization, Sugar Land- based Texas Energy Center, as the “program consortium” that would give out taxpayer money to corporations. With strong ties to Tom DeLay, the Texas Energy Center’s six different chief executives (Herbert W. Appel, Jr., Robert C. Brown, III, Phillip E. Lewis, Thomas Moccia, Ronald E. Oligney, and Barry Ashlin Williamson) gave a total of $8,000 to DeLay’s campaign since March 2004. Additionally, three of the Center’s executives gave a total of $4,500 to President George W. Bush’s 2004 successful re-election campaign.

For us to better understand the tremendous impact of “Dollar Democracy”, (the influence of campaign funding and lobbying dollars on the decisions of public officials that effect all of us), we need only to look a little further: at this time, the Texas Energy Center’s lobbyist was Barry Ashlin Williamson. He had gone to work in 1988 for the Reagan administration and had become principal advisor on the creation and formulation of a national energy policy, to the U.S. Secretary of Energy. Williamson was later chosen by President George H.W. Bush to be the U.S. Interior Department’s Director of the Minerals Management

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Service, the agency that manages gas and oil exploration and production on the nation’s 1.4 billion acre continental shelf. The Texas Energy Center was to “…play host to The Research Partnership to Secure Energy for America, whose members include Halliburton and Marathon Oil.” (http://www.citizen.org/cmep/article_ redirect.cfm?ID=13980)

In addition to the $6 billion in corporate tax loopholes and subsidies given to the oil and gas industries by Cheney, Bush and the U.S. Congress, the energy bill rolled back many of the most important regulations in place on the oil and gas industry:

Called the “Halliburton Loophole”, Section 322 exempts from the Safe Drinking Water Act a coal bed methane drilling technique known as “hydraulic fracturing” (“fracking”), which pollutes underground drinking water. Halliburton, for which Dick Cheney was the CEO in the 1990s, is one of the largest corporations engaged in widespread fracking. This exemption prevents lawsuits by Western ranchers and others who claim that fracking pollutes groundwater by injecting contaminated fluids underground. Sixteen companies benefit the most from the Halliburton Loophole, exempting them from clean water laws:

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ChevronTexaco, BP, ConocoPhillips, Marathon Oil, Halliburton, Anadarko, Burlington Resources, Devon Energy, Dominion Resources, EOG Resources, Evergreen Resources, Oxbow (Gunnison Energy), Tom Brown, Western Gas Resources, William Cos, and XTO. Practicing “Dollar Democracy” these oil and gas corporations gave almost $15 million to federal candidates, more than three-quarters of it to Republicans. At the same time they spent more than $70 million lobbying Congress. They reaped hundreds of millions of dollars in profits with their Halliburton Loophole. The American people reaped bloody noses, severe headaches, respiratory illnesses, other maladies, flammable faucets, polluted air and dangerous drinking water!

Section 323 of the Cheney-Bush energy bill exempts oil and gas companies from the Federal Water Pollution Control Act for their construction activities around oil and gas drilling. The bill abolished a host of other regulations necessary for the protection of human and environmental health.

The Cheney-Bush-Congress energy bill gave $9 billion in corporate tax loopholes and government subsidies to the heavily polluting coal industry. Section 1307 gives $1.612 billion in tax subsidies to invest in new coal plants. Section 401 appropriates $1.8 billion of taxpayers’ money to support building a new set of coal power plants. Section 421 gave $3 billon of taxpayer money to “help build a new fleet of coal power plants.” (http://www.citizen.org/cmep/article_redirect.cfm?ID =13980). These are just three of the $9 billion worth of giveaways to the coal industry through the practice of Dollar Democracy. In the 2004 election cycle alone, just before the 2005 energy bill became law, the Energy and Natural Resources industry (which includes coal), gave $54 million to federal candidates, and spent $186 million lobbying them (www.opensecrets.org). The coal corporations got the gold mine, and the American People got the shaft. The oil, gas, and coal corporations and their owners had the money to pay, and bought the right to play, in the game of Dollar Democracy.

The following are partial lists of wealthy special interest donors (mostly corporations and their owners) who have bought Congress and got the government to work for them:

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About The Above Tables

(The data on the above pages is available from the Federal Election Commission as of March 6, 2019)

NOTE: All the numbers on this page are for the 2017 - 2018 election cycle and based on Federal Election Commission data released electronically on 03/06/19 for Fundraising totals, Source of Funds and Total Raised vs Average, and on 02/01/19 for Top Contributors and Industries.

These tables list the top donors to the House candidates in 2017-2018, and to the Senate candidates from 2013-2018.

The organizations themselves did not donate, rather the money came from the organizations' PACs, their individual members or employees or owners, and those individuals' immediate families. Organization totals include subsidiaries and affiliates. at www.fec.gov

(The data for the above top five leaders of Congress was compiled by the Center for Responsive Politics from Federal Election Commission data, and can be found at www.OpenSecrets.org.)

The above is only a partial list of the thousands of wealthy, mostly corporate donors who have given tens of millions of dollars to just the top five members of Congress to buy influence/access to them. Wealthy donors have given billions of dollars in the last several years to the rest of Congress to buy access and influence policies that help them and often hurt the rest of America. We have a system of Pay to Play. The problem is that only the top 1% can afford to pay and get to play. The rest of America, the bottom 99%, can’t afford to pay and don’t get to play in the game of politics which effects many aspects of our lives: access to good jobs, quality affordable education, adequate health care, a clean sustainable environment, good roads and clean efficient public transit, safe neighborhoods, good parks and recreation, public libraries, dependable infrastructure, after school academic and arts programs, and leisure time, such as guaranteed paid vacations, to spend with our children, families, and friends.

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After I won the 1994 Congressional Democratic Primary, the Democratic Party and the Democratic Congressional Campaign Committee helped sponsor a seminar in Sacramento for newly elected congressional nominees, such as myself, to attend and learn the ropes of how to run a successful professional campaign in the general election. My campaign manager arranged for me to attend. While he said that he respected my decision to not accept corporate political action committee money so I would not be beholden to wealthy corporate interests while in Congress, he insisted that we must raise the $500,000 in order to run a serious campaign and win in November. So I told him that we could try to raise the money from individual donors as well as from public interest groups such as environmental groups, labor groups, women's equality groups and any other groups pursuing the general wellbeing of the community and the nation. This would be a gargantuan task, especially considering that corporate political action committees and affiliated groups have deep pockets and raise and contribute the vast majority of campaign money to candidates for high office in America.

This is an inside story of what really goes on between politicians running for high office and their wealthy special interest donor groups.

Even Some Public Interest Groups Have Been Infected by Dollar Democracy

As a Congressional candidate once again for the 1996 Democratic primary election, I was called for interviews for endorsements by public interest groups as well, not just by special interest groups such as the oil companies. One of these public interest groups (groups that promote the public good, such as clean air, clean water, clean renewable energy, health care for all, healthy food, environmental sustainability, living wages, small business opportunity, public education, etc.) was the California League of Conservation Voters (CLCV). It was June 1995 and the Congressional Democratic Primary in my California district was in March 1996. The CLCV’s issues platform was based on the foundation of environmental sustainability.

I was excited about the interview and expected to ace it and win the

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group’s endorsement hands down. I not only knew the technical aspects of environmental sustainability, but I held strong convictions and philosophical beliefs, that I could clearly articulate, about the need for strong environmental policies in Congress. I drove to the CLCV’s West Los Angeles office full of enthusiasm. My interview with the CLCV endorsement committee was enjoyable, fulfilling, and went very smoothly. Unlike in the ARCO PAC interview, here I was with kindred spirits—people who thought and felt as I did politically, holding the same values as me. When the interview ended, the committee members greeted me warmly and thanked me for coming. The vice chair of the group walked me to the door, personally.

As I walked down the stairs to my car, I saw my Democratic Primary opponent entering the front door downstairs. As we crossed paths, I greeted him and wished him good luck in his interview. I knew his campaign had deep pockets because he was a corporate lawyer and a partner in his corporate law firm, one of the biggest in Los Angeles. It turned out that he ended up raising over $300,000 to my $60,000 for the March Primary, most of it from Corporate sources, including (at that time) maximum donations of $1,000 each from his corporate law partners. When I arrived home later that night, I found that the vice chair had left me a message to call her so that we could discuss the CLCV interview and endorsement. I called her right away, certain that the news would be favorable. When she came on the line she went right to the point. She said “Peter, you did very well in the interview. You knew the details of environmental policy and we saw that your philosophical values regarding the environment are the same as ours. You would be a 100 per cent vote for us in Congress. Your opponent would probably vote for the environment about 60 per cent of the time. However, we decided to endorse your opponent. The reason is that he is ‘financially viable’, and you are not! It is nine months before the election and he already has $165,000 in his campaign account. You have only $5,000 in yours. We wish you luck, and if by any chance, you win in the March Primary, we the California League of Conservation Voters will support you 100 per cent in the November General Election against the Republican

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incumbent!

While refusing to accept corporate PAC money for my campaign, so that I would be free to serve the public interest in Congress, I had struggled to raise $60,000. My campaign volunteers and I had walked and talked door-to-door to 15,000 voters for 2 years, and had enough money for only one mailing to only 40,000 of the 150,000 voters that needed to be reached with our message. We mailed our only brochure three weeks before the election. My opponent, with his campaign war chest of $300,000 was able to mail several brochures to targeted groups of voters. They contained multiple messages with specific appeal to each group of voters, telling them only what the specific group wanted to hear, based on expensive public opinion polls. These were all paid for by corporate special interests, and ironically also by the CLCV, a public interest group collaborating with them.

Because they feel the need to have some influence, no matter how little, the public interest group often endorses the candidate with more money, who is overwhelmingly funded by wealthy corporate special interests. Having big money makes her/him “viable”, in their minds. That’s why the best candidate who would best serve the public interest rarely wins. Instead, the wealthy special interests have been winning and the American People have been losing for the last forty-five years! Outspent 5-1, and unable to garner the support of the CLCV public interest group, I lost the election by a razor thin 51% to 49% margin. I have experienced this at times with other public interest groups such as labor and public education groups. One of the first questions they asked me in the endorsement interview was, “How much money do you expect to raise for this campaign?” and, “How much have you raised so far?” The important questions about my core beliefs and issue positions, usually come later, if I first satisfied them about my “financial viability.” This is one pernicious effect of “Dollar Democracy.”

My Inside View of American Politics and Dollar Democracy

After winning the 1994 Democratic Primary Election for Congress, I was invited to Washington, D.C. to meet with the Democratic

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Congressional Campaign Committee (DCCC) leadership. They wanted to take a measure of the candidate and to strategize for the November General Election.

The office of the DCCC was not too far from the Capitol. I met with the leaders of the DCCC, including Congressman Martin Frost of Texas, as well as with other party leaders. I was told in no uncertain terms that in order to win in November I had to do only three things: RAISE MONEY, RAISE MONEY, and RAISE MONEY. I mentioned the example of Senator Paul Wellstone, who was outspent 7 to 1 and still won his first U.S. Senate campaign in Minnesota in 1990 based on ideas, issues, and the grassroots support of thousands of volunteers. The Democratic Party leaders in the room listened patiently. They must have been briefed about this naïve, idealistic Political Science Professor, Peter Mathews, who might try to quixotically follow Senator Wellstone’s example. They immediately nipped in the bud any thoughts I might have had on trying to run my campaign the Wellstone Way: focusing on a grassroots campaign, meeting voters door-to-door, speaking to neighborhood groups and associations, holding town hall meetings with the voters, taking part in many debates, speaking on college campuses, to Kiwanis and Rotary Clubs, labor unions, small business associations, environmental organizations, etc., and recruiting hundreds of volunteers from them to campaign with me.

I was basically told, “You can’t win the way Wellstone did. He was a fluke.” I was told by these Party leaders and strategists that in order to win I had to follow the tried and true path: I must RAISE MONEY, RAISE MONEY, and RAISE MONEY. I must get the minimum of $500,000 (today it’s $1.7 million) that it would take to win, from anywhere, as long as it was legal! They, the leaders, would arrange for my campaign to interview and hire experts in campaign strategy and management. These experts would include a professional political consultant, campaign manager, treasurer, scheduler, fundraising director, and a pollster. All of this would cost money, big money. As importantly, there would be a tremendous cost for hundreds of thousands of targeted mailers, hundreds of street signs and thousands of lawn signs, and money for TV and radio ads.

The cost to print, process, and mail out 15 mailers to over 200,000

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targeted “high propensity” voters (those who have voted in 4 of the past 4 elections) in the district would be around $350,000 minimum. In 1994, a campaign consultant would charge a $50,000 fee plus a commission on each mailer. Today, in 2019, it is much more. The campaign manager’s salary in 1994 was around $5,000 per month. Today, it is much more. The consultant, who works with more than one campaign at a time, designs the brochures and the messages in each, contracts mail house services for the campaign, and provides ongoing tactical and strategic advice. He helps the campaign manager find the polling company and works with him and the pollster to design each and every brochure based on the results of the “base line” poll that is taken at the start of a campaign. In 1994, pollsters were charging $20,000 for a base line poll. The subsequent “tracking” polls conducted every month (or every week closer to the election) would each cost $10,000. The “cross-tabs” in the poll tell the pollster, campaign consultant, and campaign manager what the 5 or 6 issues of greatest importance were to each subset of voters. This information is crucial because it determines the content and design of the brochure/mailer sent to a set of voters.

For example, if the pollster’s polling data showed that the top 5 issues for Democratic women voters in the district between the ages of 18 to 30 were 1) Education, 2) Health Care, 3) Choice on Abortion, 4) Jobs and Pay Equity, and 5) Child Care, then the campaign would mail 5 tailor made brochures, one on each issue to them. The beautiful high- resolution pictures and vacuous statements in them would appeal to many voters who are too busy to read detailed plans with too much writing from the candidate. The brochure on Education would have one picture showing the candidate engagingly speaking with college students on campus, and the other picture would show him answering questions from eager elementary school students in their third-grade classroom, with the teacher looking on approvingly. The vacuous written lines in the brochure will read something like this: “Candidate John Leader firmly believes that a good education is the birthright of every American child. As our Congressman, he will do everything in his power to ensure that our children are guaranteed the strong education that they deserve!” “VOTE FOR JOHN LEADER for OUR EDUCATION CONGRESSMAN on JUNE 3”. Another brochure would be sent in

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similar fashion on the issues of Health Care, Choice on Abortion, and so on.

If the pollster’s “cross-tabs” data showed that the top 5 issues for blue-collar Democratic male voters between the ages of 35 and 55 were 1) High paying Jobs, 2) Fair Trade, 3) Crime, 4) Pensions, and 5) Health Care, the campaign would target a brochure to thousands of these voters, covering one issue per brochure, with glossy pictures depicting the candidate at a Labor Day barbecue with these voters and their families, with some empty feel-good statements about being a “Fighter for Good High Paying Union Jobs and Against Free Trade, and a Congressman who will work to protect the American Dream!”

“Expert” campaign consultants have figured out that glossy campaign brochures, targeted to specific groups of thousands of voters in a particular Congressional district, with messages that appeal only to the individuals in that set of voters is an absolute necessity. Beautiful pictures of the candidate interacting with people in a warm and down- to-earth manner must dominate the brochure. The written words have to be catchy and vague on the issue being covered. I, as the candidate, was told that being specific, clear, and detailed about my stance on the issue would bore and turn off many voters and I would lose the election.

Politics has been reduced to the science and mechanics of winning elections. The heart, soul, and mind have been taken out of it. The expert advisors tell the candidate what to say when speaking, what message should go in the brochures, how it should be presented, what should be in the candidates’ 30 second TV commercials, even what to say and not to say in public debates. When he is elected, this “rubber stamped” politician owes, not only his donors access, favors, and votes, but also the campaign experts who helped put him in office. The basic formula given him is: “Win the election so you can have power. Use your power to do some minimal good as you see it. But don’t say anything or do anything that may alienate your (mostly wealthy, corporate) donors, even if it might promote the common good.” Do not talk about raising taxes on the super-rich, or even closing their corporate tax loopholes, in order to fund schools, colleges, lower tuition, health care for all, and job creation through investment in small businesses and infrastructure such as roads, bridges, clean private and public transportation, renewable

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efficient energy, public libraries and parks. No, don’t anger the wealthy donors: because, once you are elected to Congress, you need their money to get re-elected every two years.

The very meaning of the word “politics” has been perverted. The word “politics” has its origin in the ancient Greek word “Polis”, which meant “City/Community”. The ancient Greeks, to whom we give credit for building the intellectual foundation of modern Democracy, said that it is a Citizen’s duty to be “political”. To be political means being involved fully in making decisions with, by, and for the Community. Today, as corporate sponsored politicians make many decisions that hurt the American Public, and very few decisions that help and strengthen the American Public, people think of politics as a dirty word signifying corruption, manipulation, greed, lies, and broken promises! Dollar Democracy is rampant and is spreading like a disease that threatens the health of working poor, working middle class, and even upper-middleclass Americans, the 99%. It is destroying the American Dream and America itself, unless “We the People” rise up non- violently and fight peacefully for Economic and Social Justice by ENDING DOLLAR DEMOCRACY and replacing it with REAL DEMOCRACY! This book will help show the way.

Human Victims of Dollar Democracy

The naked truth has been exposed, and the emperor has no clothes: American Democracy has become Dollar Democracy, where policies made by elected leaders are bought and paid for by campaign contributions from wealthy special interest lobbyists and super rich individuals. In the 2016 federal elections alone, Congressional and Presidential candidates and their supporters raised and spent over $6.5 billion (opensecrets.org). The bulk of this money came from wealthy individuals and groups: the top half a percent of the U.S. population. As Will Rogers also said, “We have the best Congress money can buy.” Rich individuals and corporations hire lobbyists to walk into the offices of Congresspersons to whom they donate and ask them to vote in favor of their corporate interests against the public interest. As a result, the U.S.

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Congress and other elected leaders have made decisions that benefit wealthy corporations and super rich individuals, to the detriment of regular Americans such as Breanna Lane, Manny Arroyo, and Frank Greenthaler.

In a form of “legalized bribery”, many politicians vote for tax cuts, tax loopholes, and corporate subsidies for their wealthy donors. This forces spending cuts in programs that help working Americans and the economy prosper and grow; for example, cuts in funding for small business, infrastructure, health care, teachers, firefighters, police officers, government employees, and research and development of new technologies. Congresspersons are choosing their rich donors over suffering working Americans. Here are some shocking examples:

Breanna Lane, a 22-year-old Utah woman loses part of her skull in a tragic auto accident. This is shocking enough. Worse still, the uninsured waitress, without private health insurance, is kept waiting for four months, with her scalp temporarily sown over the missing part of her skull, because the hospital and Medicaid cannot agree on who should pay the bill! After a painful and horrifying four months, she finally receives her surgery to reattach the missing part of her skull.

Manny Arroyo, a 62-year-old Nevada man, who worked decades for a large U.S. corporation, and has “full health care coverage”, loses his wife to cancer and is stuck with approximately $10,000 in “co- payments.” This crushing debt is a heavy enough burden on his life. Even more heartbreaking for him is his belief that his wife’s death may have been unnecessary! He believes that if their healthcare providers had not delayed specialized diagnosis and treatment, her brain cancer may have been found and treated before it killed her.

Frank Greenthaler, an uninsured 29-year-old California college student and full-time worker starts bleeding internally from his intestine. He rushes to the nearest hospital. He waits for three hours before the treatment preparation begins. Barely able to stand, he makes it clear that he does not wish to drown in medical bills. He is kept at the hospital for 5 days and is “temporarily stabilized” by the doctors and nurses.

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Stabilized but still in serious condition, he is told that he needs to find his way to a Los Angeles County hospital, so that his surgery will be paid for by the county instead of the private hospital! After major surgery and several days at the county hospital, Frank is discharged and is stricken with a $20,000 medical bill from the private hospital. As a working student who can barely make ends meet, he cannot pay the $20,000. This goes on his credit record. The young Californian makes a rapid recovery and is two semesters away from graduating with an engineering degree. Because of his mounting debt, he applies to become a police officer and passes all the tests except the financial credit test. His inability to pay the $20,000 medical bill shatters his dream of becoming a police officer and eventually a forensic psychologist.

As a professor of political science at Cypress College in Southern California, I’ve seen hundreds of students drop out of college in the last several years because they could not afford the skyrocketing tuition and textbook costs. One of my former students, Tony Castro, discovered his strong interest in the study of politics in my introductory American Government class. His enthusiasm for this subject was sparked by a discovery that politics does not have to be about money and power games, but should be about making a positive difference in the world. Tony said his goal was to finish community college, earn his bachelor’s, master’s, and doctorate degrees in Political Science, become a university professor, and inspire young people to change the world for the better. The tragedy is that this academically promising young man was side tracked from this meaningful goal. After a semester or two, because of unaffordable education costs, he dropped out of school and went to work full time to pay for the rising cost of living in Southern California. Tony recently told me that he was hoping to return to college to finish his degree once he retires as a senior citizen! Tony’s experience is shared by hundreds of thousands of American youth today.

Dollar Democracy has cost us millions of well-paying middle-class jobs. In a pleasant middle-class neighborhood in Long Beach, in which Long Beach City College and a Boeing plant are located, signs of outsourcing are apparent. In recent years, many homes have been put up

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for sale. Boeing, which, a few years ago, employed 55,000 people homeowners who earned a solid middle-class living, has exported most of its jobs and manufacturing to low wage states and low wage countries such as China. Only a few jobs are now left here. Policies of Free Trade, not Fair Trade, were imposed by many American political leaders who were influenced by corporate donors, lobbyists, and wealthy investors who benefited from cheap labor found in low wage states and countries.

The above tragic scenarios could have been avoided if American political leaders did not rely on the private financing of their campaigns, and private lobbying by wealthy corporate and individual donors. American campaigns and elections must reject this Dollar Democracy and replace it with Real Democracy based on Clean Money publicly financed elections as practiced in Maine, Arizona, and several other states (which I will discuss in detail in Chapter 10). In doing so, our elected leaders will be free to make decisions that benefit the public interest and promote the “general Welfare” as mandated in the preamble of our Constitution. They can then pursue policies of Fair Trade, creating high paying jobs, rebuilding the middle class, a universal health care system that covers every American, and a tuition free public education system from preschool through technical school, trade school, college and university.

They say you get what you pay for; the corporate lobbyists certainly do. In this book I will show you the connection between money and American politics in 21st Century America. I will expose the ways in which wealthy special interests donate big money to candidates who run for Congress and state legislatures, hire expensive lobbyists, and get laws passed that hurt the public, and block laws and policies that help average Americans achieve the “American Dream.” I will include real life cases of real Americans in order to make the story alive and real.

What is the American Dream? I ask hundreds of my college students this question at the beginning of each semester. These students come from low income, middle class, and upper middle-class family backgrounds. They are a microcosm of 99% of America. Approximately 10 percent of them answer:

“I want to become a multi-millionaire or billionaire so I can maximize my freedom”. The rest, 90 percent of them, describe their American Dream in the following way:

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“I want to pursue the career I enjoy, and that will allow me to make enough money to own my own home and pay my bills, have children and a family, free time to spend with them and go on vacations, pay for my children’s higher education to give them a better life than I had, and to ensure a comfortable retirement”. Is this unreasonable? Of course not! In fact, the American Declaration of Independence and Constitution seem to require government to create the opportunity and foundation for Americans to achieve the Middle-Class Dream.

In recent decades, the “Middle-Class Dream” has been shattered and has become the American Nightmare for millions of formerly middle-class Citizens. I will show how the buying of many politicians, by wealthy special interests and lobbyists, has destroyed the Middle-Class Dream and launched the dismantling of the middle class, whose high paying jobs were exported. It has also destroyed the opportunity for the working poor to become middle class. These politicians have promoted policies that exported high paying manufacturing, high technology and even service jobs from the U.S. to low wage countries. In these low wage countries, anti worker, free trade policies, are promoted by U.S. multi-national corporate interests in league with those countries' corrupt leaders (Fulgencio Batista in Cuba, Anastasio Somoza in Nicaragua, Ferdinand Marcos in the Philippines, Suharto in Indonesia, Augusto Pinochet in Chile, Juan Orlando Hernandez of Honduras). When progressive pro-worker, social justice leaders have arisen and been elected, U.S. corporate-led foreign policy has suppressed, discredited and sometimes overthrown them. For example, Prime Minister Mohammad Mosaddegh of Iran, President Jacobo Arbenz of Guatemala, and President Salvador Allende of Chile.

Many politicians, from State Legislators and Governors to members of Congress and Presidents, dominated by corporate donors and their special interest lobbyists have promoted “outsourcing” based on “Free Trade”. Money went in and favors went out: Corporate lobbyists and their politicians won the gold mine, while the American middle class and poor got the shaft.

I will examine the failing American Health Care system that left 54 million Americans uninsured, and 2 million losing their health insurance every year. I will also look at Americans who still have so called “full

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coverage,” yet are stuck with back breaking co-payments and deductibles. Although “insured”, many of them suffer inadequate care because the Health Industry places its profits above human needs. The Affordable Care Act (Obamacare) may be a step in the right direction, but falls short, leaving 20 million Americans uninsured, even when fully implemented. With no “Public Option” included, Obamacare also does little to rein in costs, leaving the U.S. as the country with the highest per person health care costs among all the modern industrialized nations: per person costs that are twice that of France, which is rated by the World Health Organization as the best (universal) health care system in the world.

We will see how Dollar Democracy has created broken schools and unaffordable colleges. There are great shortages in many public schools attended by middle class and poor children: a shortage of credentialed teachers, a shortage of updated textbooks, a shortage of learning resources, and a shortage of small manageable class sizes, etc. We will carefully evaluate the increasingly staggering costs of American Higher Education due to cuts in government subsidies. We will make clear that these cuts are due to corporate tax loopholes passed by legislators, many of whom were funded by wealthy donors and corporate lobbyists. These tax loopholes and corporate subsidies cost the government almost $1 trillion annually, some of which could be spent on American Public Education.

Under the influence of corporate campaign and lobbying money, Congress re-wrote the pension/retirement rules enabling large corporations to reduce their responsibility to American workers by cutting their pensions or shifting them away from defined benefits. Corporations like Enron engaged in corrupt business and accounting practices that allowed their CEOs and chairmen to sell their stocks at huge profits while encouraging their employees to hold on to, and buy new stocks, as the corporation was going bankrupt. The result was thousands of employees each losing thousands of dollars in retirement savings and pensions. In the 2008 Wall Street debacle which ushered in the Great Recession, very similar creative accounting and fraudulent business practices were engaged in by major financial institutions such as Goldman Sachs, AIG, Lehman Bros., and others. Because of the

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influence of big corporate and lobbyist money in American election campaigns, resulting in government deregulation and corporate bail outs, once again the top 1% (the owners of Big Corporations and Big Banks) got the gold mine, and the bottom 99% of Americans (those making less than $400,000 annually) got the shaft.

Dollar Democracy has resulted in a Reverse Robin Hood: the tax burden was shifted from the super-rich on to the backs of working Americans. Decades of government “tax reforms”, have reduced federal income tax rates on the super wealthy from 91.0 percent on the highest portion of their income (under President Eisenhower) to 28.0 percent (under President Reagan) and 39.6 percent today (under President Obama). Meanwhile, the government increased income taxes, and payroll taxes (under President Reagan) on working Americans (this, while cutting much needed social programs). Government has forced working Americans to pay more in college tuition fees, as their overall cost of living has gone up. This has also been a major cause of the middle class shrinking. Corporate funded politicians have shifted a large share of the federal tax burden from corporations to individual Americans. According to New York University economist Richard Wolfe, in 1945, for every $1 individuals paid in income taxes, corporations paid $1.50. Today, for every $1 individuals pay in income taxes, corporations pay 25 cents.

I will carefully examine the effects of corporate donations and lobbyist money on many politicians and the policies they made which resulted in environmental injustice, and under regulated, unhealthy food. Clean air, clean water, protection against harmful chemicals, and the availability of natural, uncontaminated food are all important for Americans’ health and quality of life. I will look at the increased dangers to the ongoing health of Americans because of weak environmental and food regulation. We will examine the effects of big campaign contributions from corporate polluters and corporate agriculture, such as Monsanto Corporation, on policies that affect peoples’ health.

One of the ingredients Americans need to help them achieve the American Dream is affordable, clean, efficient, and renewable energy. I will examine the effect of big campaign contributions and lobbying activity by the automobile, electric utility, coal, natural gas, and oil

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industries. I will look at the effects of campaign contributions and spending by corporate lobbyists to influence government policies regarding auto fuel efficiency (skyrocketing gasoline prices). This Dollar Democracy also has health related costs for Americans. Government deregulation has resulted in coal fired electric plants producing more dangerous mercury emissions. Because of the influence of corporate campaign contributions and lobbying on our politicians, our government has weakened pollution controls by allowing the buying and selling of pollution credits, causing increased asthma and cancer rates for Americans. In conclusion, I will offer the reader possibilities for significant change in the American election system which will move us away from Dollar Democracy closer to a Real Democracy. These changes will reduce, if not eliminate, the overwhelming power of wealthy special interests in American government and society. We will carefully analyze the Clean Money/Clean Elections campaign finance system, versions of which have already been implemented in Arizona, Maine, Massachusetts, North Carolina, New Mexico, and Vermont. I will also provide a careful look at a successful grassroots campaign, U.S. Senator Paul Wellstone’s, that refused wealthy special interest corporate lobbyist money, and still won a seat in the U.S. Senate. We will see that government leaders who are elected in either of these ways were able to work for policies that improve the lives of all Americans, not just the top 1%. If implemented, this system of Clean Elections will truly bring Liberty and Justice for All, and Reclaim the American Dream for All.

Another structural reform that will have a major impact on shifting the United States from Dollar Democracy to Real Democracy is the Move To Amend Coalition’s strong push to adopt a 28th Amendment to the U.S. Constitution. This amendment would Void Corporate Personhood and declare that Money Is Not Speech as understood by the 1st Amendment. The detailed goals and implications of adopting this amendment will be analyzed and discussed in Chapter 10, the concluding chapter of this book.

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