How Record Spending Will Affect 2016 Election
The role of money and politics in the 2016 presidential election is a conundrum.
Humongous sums will be spent; the effect on the outcome could be minimal, but in time the flood of cash may produce Watergate-level money scandals.
Spending by candidates, parties and outside groups and individuals may approach $10 billion. Both Hillary Clinton and Jeb Bush, if they receive their parties' nominations, each could spend more than $2 billion, about twice as much as Barack Obama and Mitt Romney each forked out in 2012.
With several Supreme Court decisions lifting restrictions -- on the misguided premise that money doesn't buy political influence -- the way is open for an orgy of spending by well-heeled interest groups and super rich individuals on both political sides. Even beneficiaries, including Clinton and several top Republican aspirants, say the system is rotten.
Yet, unlike in the past, the money advantage may not be decisive. Among Democrats, Clinton would dominate even without her overwhelming financial advantage; she’d certainly be at least competitive as a general election candidate.
Among Republicans, Bush may lap the field, but at least four other contenders -- Scott Walker, Marco Rubio, Ted Cruz and Rand Paul -- are likely to build $50 million war chests, counting their so-called super-PACs, before next February's first four contests: Iowa, New Hampshire, South Carolina and Nevada.
The big money stuff then hits in the first few weeks of March. On March 15, states can hold winner-take-all primaries, raising the stakes. But if a couple of the candidates who aren't named Bush score well in the early contests, they'll have enough resources to compete in this stage.
All of the top contenders have sugar daddies, billionaires who seem willing to spend unprecedented sums on their campaigns, principally via the super-PACs, which have no contribution limits; these entities are supposed to be independent of the campaign, a fiction that no one believes.
There will be vast amounts of independent expenditures on both sides; the network of the right-wing multibillionaire Koch brothers is planning to spend almost $900 million.
The Supreme Court, in a series of rulings that have created this Wild West of campaign spending, argued that major money “does not give rise to quid-pro-quo corruption,” or give big donors special access.
The justices might want to take a look at the recent indictment of New Jersey Senator Robert Menendez. Whatever the legal merit of the charges, the facts are indisputable: A Florida ophthalmologist earmarked sizable donations to a super-PAC to go to the Democratic lawmaker, who went to bat with the federal government for the doctor's dubious Medicare disputes and other interests.
As for the oft-cited contention that these rich givers are driven only by principle or ideology, look at the South Carolina congressional seat held by Bob Inglis until 2010. He was a conservative, free-market Republican supported by business interests, including the Koch brothers. After delving into the issue, he changed his position on climate change and concluded that it was a serious threat. In 2010, some of these interests, including the Koch brothers, abandoned him, and in a rare primary loss, he was defeatd by challenger Trey Gowdy, who did get money from the Kochs' political action committee.
Then there's the dark money, which derives from sham entities known as social welfare organizations, that both sides establish and that can make major politically intended expenditures without having to reveal the identity of donors. There was $300 million in dark money spent in the last presidential race; there may be twice as much for 2016. These donors often are looking for special favors or access, which wouldn't be as easy to do if the spending were reported openly.
If U.S. political history is any guide, this staggering amount of money in the political system, much of it from vested interests, will result in scandals. Whether it’s through lawsuits, or leaks or an industrious news media, that seems inevitable.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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