The best congress that money can buy

18 June 2012 | By Vanessa Drucker

Indeed, money bought a lot of potential votes last week, when casino billionaire Sheldon Adelson signed a cheque for $10 million to the political action committee (Pac) Restore our Future, a so-called Super Pac that supports Republicans. That munificent sum follows Adelson’s earlier contribution of $21.5 billion to the campaign of former presidential candidate Newt Gingrich.

Do not fret for the financial health of Adelson, chief executive of the Las Vegas Sands, and designated by Forbes magazine as the fourteenth richest person on earth, with assets of $24.9 billion. He can spend $10 million on this and that the way we might splash out for a couple of overpriced martinis.

Something has gone amiss. Transparency International predicts that this year’s presidential campaign spending will mount to $6 billion, the most expensive in history. Much of this largesse was enabled by two key legal decisions in early 2010. The Supreme Court, and later Court of Appeals, ruled that corporations and unions can make unlimited contributions to parties and campaigns, as long as they do not discuss those donations directly with the candidates. The theory of arm’s length communications is that the money is not supposed to buy influence. Oddly, however, Super Pac managers and candidates are nevertheless allowed to engage in strategy discourse through the media. (blog continues below)

Former Republican presidential nominee John McCain has described that 2010 ruling as the “most misguided, naïve, uninformed, egregious decision of the United States Supreme Court I think in the twenty-first century.” McCain, a long advocate of campaign finance reform, also pointed out last week that, since much of Adelson’s corporate profits derive from a Macao casino, offshore money is actually underwriting American politics.

In fact, both American parties benefit from these funding vehicles. The Obama campaign also derives a source of funds via another such Super Pac, Priorities USA Action. But Democrats wail loudest about Super Pac financing, largely because their war chest relies less than that of Republicans on mega donors. Still, it remains a sad reflection on the American system that bread, circuses and Super Pacs determine elections.

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^{Vanessa Drucker is the American Editor of Fund Strategy, based in New York City. She has worked as a financial journalist for 20 years. In the 1980s, she practiced banking and securities law on Wall Street, and is the author of two business novels. Vanessa can be contacted at vanessa.drucker@centaur.co.uk.}

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