Adelson's investment

“I’m against very wealthy people attempting to influence elections.  But as long as it’s doable, I’m going to do it.” ­­- Sheldon Adelson to Forbes Magazine

There is a lot of handwringing about money and politics, but probably few of us recognize the scale of the issue.  

The Supreme Court in the 1970s stated that money was the same as speech and could not be restricted. They extended that recently to allow corporations and unions to contribute directly to campaigns.

Essentially, this definition of free speech means that some people will speak with bullhorns while others will be reduced to a whisper.

This is the year of the SuperPAC. These are the large political action committees that are allowed to campaign on behalf of candidates. While they’re supposedly not allowed to coordinate directly with candidates, these PACs are usually run by aides, associates, or family members of candidates.

President Obama initially opposed SuperPACs, but saw the writing on the wall as the 2012 election cycle began. If he didn’t give the go ahead for his supporters to create and fund a SuperPAC, he’d be hugely outspent. Of course, he’s being outspent anyway.

After the 2010 Citizens United Supreme Court decision, many worried about corporate money in campaigns. It has been an issue, especially with the US Chamber of Commerce, but it turns out that wealthy individuals are a bigger problem.

Part of the way SuperPACs work is by hiding or obscuring their donor lists as long as possible; often until after the election. According to data collected by the Center for Responsive Politics, just 100 individuals contributed more than 80 percent of the total amount raised by SuperPACs.

During the Republican primary campaign, Newt Gingrich did a lot of complaining about the impact of negative advertisements on his candidacy. He’d have a point if not for the fact that one wealthy individual ­— billionaire Sheldon Adelson — was the only reason Gingrich was still in the race. Adelson donated millions to Gingrich’s effort to defeat Governor Romney in the primary.

To put this in perspective, Forbes reports that the $11 million donation to the Gingrich PAC in the spring represented 0.044% of Adelson’s estimated $25 billion net worth. If the median American family donated the equivalent amount of their net worth to a campaign, it would amount to about $34. If the candidate were lucky, that might buy a few postage stamps.

Adelson kept Gingrich in the race because he thought he was a better candidate than Mitt Romney whose hundreds of millions in net worth don’t approach his own. Though he claimed to oppose negative advertising, that’s exactly what his money bought — attack ads opposing Romney by the Gingrich camp.

But when Gingrich’s campaign fell apart, Adelson quickly turned on the faucet for his former opponent. He has already donated at least $10 million to Romney’s PAC, with more likely to follow. He has stated that he may contribute as much as $100 million or more to Republican candidates for the 2012 cycle.

This is pocket change to someone with Adelson’s wealth. But millions are still millions, even if they don’t affect one’s standard of living. So, we’re left to wonder, why do the mega-wealthy fund campaigns at this level?

A June 14th post on electoral-vote.com may give us some insight. After Warren Buffet disclosed that his secretary paid a higher tax rate than he did, President Obama proposed the “Buffet rule” which would mandate that the super-wealthy pay at least 30% in taxes.  

The top marginal tax rate 35%, but it’s rare for anyone to pay that rate. The wealthy get much of their income via dividends and investments, which are taxed at the lower 15% rate. (In the one tax return he’s been willing to release, Romney paid a rate of 13.9%).

Romney opposes the Buffet rule and wants to further reduce taxes on the wealthy. With just the one rule change, Adelson could stand to pay as much as $150 million more per year in taxes.

Elections aren’t easy to buy and Adelson is getting older, so there’s no guarantee of success and he may not have that many remaining years. But, according to electoral-vote.com’s estimate, the Buffet rule could cost Adelson $1.3 billion in his remaining lifetime. And his younger wife could save even more.

So, when you wonder why the wealthy are so interested in our elections, just remember, they’re not interested in enhancing the political process and improving the level of discourse in our democracy. It’s simpler than that.  

For them, it’s an investment.

Now, if only the rest of us had a democracy out there we could buy — with our $34.

Michael Carley is a resident of Porterville. He can be reached at mcarley@gmail.com.