Opinion » Lead

Updated: October 19, 2012 01:04 IST

Follow the money, find the leader

P. Sainath
Comment (27)   ·   print   ·   T  T  

The victorious campaign in the U.S. presidential elections will have spent over $1.25 billion by November and the winner will spend his term repaying his funders in many ways

The point is not whether Barack Obama wins re-election as President. The point is not whether Mitt Romney can win. The point is that you can’t dream of contesting without a billion dollars. That figure merely ensures you can run, not win. Especially if the other guy can spend even more. All but the tiniest sliver of the elite stands priced out of the game. A democracy neatly labelled in another context, by economist Joseph Stiglitz, as: “Of the 1%, by the 1%, for the 1%.”

The two main candidates, their parties and ‘outside money’ will likely splurge $2.5 billion by the time the campaign fog clears in November. Throw in spending on the Congressional races, says the Centre for Responsive Politics (CRP) — the country’s foremost poll-spending tracker — and the total would close in on $6 billion. (That’s roughly Rs. 32,000 crore. A sum on which you could run the mid-day meal programme for 120 million Indian school children for three years).

Less than one per cent

If we take it that the two presidential campaigns burn equal sums of money, the campaign that wins will have spent over $1.25 billion, all sources included. Say Mr. Romney triumphs and hopes to run again in 2016. Just raising the same war chest means he’d have to, on average, secure over $850,000 every day of his four-year presidency. That leaves you little time for anything else other than pushing bills your funders want. Ask Mr. Obama. When it comes to the polls, then, it’s a fraction of that 1 per cent that calls the shots. (Allowing for variances in scale and form, it sounds a lot like the way Indian elections are or will be going).

Being hostage to money power is no myth. As Dave Lindorff points out in, the biggest contributors to the Obama campaign in 2008 were mostly financial companies. Apart from other big corporations. These included Goldman Sachs, JP Morgan Chase, and Citigroup, who gave him close to $2.5 million via Political Action Committees (PACs).

Another $1.5 million came from two more big banks, “UBS and Morgan Stanley, as well as General Electric, which less than a year later bought a bank.” GE did that in order to gorge on the government’s “bailout” with billions of “rescue” dollars from public money.

Mr. Obama repaid those debts, Mr. Lindorff points out. Among other things, he made Tim Geithner his Treasury Secretary. Mr. Geithner, as head of the New York Federal Reserve branch during the Bush era, “had ignored the derivatives scandals that brought on the financial crash.” Mr. Obama also made Lawrence Summers his top economic adviser. The same Summers who “as Treasury Secretary under President Bill Clinton, had pushed for the deregulation of derivatives, and for allowing banks to merge with investment banks.” There were other such jobs for the boys, too. Yet, this time around, Mr. Romney has collected more Wall Street money than Mr. Obama.

It might appear that direct spending in 2012 by both presidential campaigns is less than it was in 2008 — though not by much. But that’s if you look only at what the candidates or parties are doing. There’s also big spending by ‘Super PACs.’ These are groups that can raise unlimited amounts. Technically, they are not allowed to coordinate their advertising with the candidates. In truth, they act as de facto adjuncts to the campaigns. And after a U.S. Supreme Court ruling in 2010 that threw out the rules on independent expenditures by corporations directly, there’s a lot more money flowing.

There are no limits on the sums that Super PACs can raise from corporations or others. Nor on how much they spend to support or defeat a candidate. (They cannot directly fund a candidate. And must submit details of their donors to the Federal Election Commission).

The CRP reckons that as of October 16: “935 groups organized as Super PACs have reported total receipts” of over $433 million. And “total independent expenditures” of close to $375 million in the 2012 cycle.

Most of the millions spent by outside groups went into television advertising, says the New York Times. In Iowa alone, the two campaigns and linked “independent” groups “have run more than 100,000 ads to win the state’s six electoral votes.”

Meanwhile, the pundits are swooning over the “energy” of the second Obama-Romney debate. This one was “more spontaneous.” What’s more, it had “a town hall format.” Well, yes, if town hall audiences can be handpicked by organisers. And if the town hall audience actually had to have a rehearsal with the moderators (as they did here). That’s apart from submitting all their questions for advance scrutiny — not quite a town hall practice.

Once again, neither man mentioned the word “inequality” at any point in the debate. That is the issue that sparked the ‘Occupy’ movement in countless towns across the country last year. It is an issue that worries several leading economists in the U.S. It is one that reflects in recent IRS data. It shows up in the Census data on poverty out barely a month ago.

But the word was as taboo as “corporate crime.” The only mention of it came from a questioner who wanted to know why women were paid 72 per cent of what men received for the same work. The closest Mr. Obama ever came near it was when he charged Mr. Romney with wanting “folks at the top” to “play by a different set of rules.” Neither mentioned the word even in his replies to the question.

Compensation on Wall Street rose by four per cent last year to $60 billion, says the New York Times. Higher than in any year except 2007 and 2008. And “the average pay packet of securities industry employees in New York state was $362,950, up 16.6 % over the last two years.” Meanwhile, about 25 million people who want full-time jobs can’t find them. The number of those on food stamps is at record levels. And 50 million people suffer food insecurity in a nation where, as economist Paul Buchheit points out: “The 10 richest Americans made enough money last year to feed every hungry person on earth for a year.”

There were a couple of other things in the debate that should interest Indians. Both candidates agonised over petrol prices — speaking to an audience that clearly felt the need to regulate those prices. Even more interesting: In the time given to the energy crisis, Mr. Obama never once mentioned nuclear energy as an option. He did not even club it under ‘clean’ energy. (Though he’s happy with India holding to that belief). “Wind, solar and bio-fuels” was his mantra. Mr. Romney mentioned ‘nuclear’ once but gave it no special status.

Setting up debates

And now more on who sets up the debates and how they are run. Last week, we ran Ralph Nader’s point about “the secret debate contract negotiated by the Obama and Romney campaigns that controls the Commission on Presidential Debates (CPD), the campaigns’ corporate offspring.” Their grip on the process is stifling, dishonest and total. It wasn’t always that way. Till 1987, the debates were sponsored, for over a decade, by the League of Women Voters.

Why did that change? Why did the League, which ran an independent show, lose control over the debates? Why did it feel compelled to walk out, or was it forced out of them, in 1987? I asked the League and received a prompt emailed reply from Betsy Gardner, its Administrative Coordinator. The party campaigns were exerting huge pressures and control. Whether in choosing a debate format, in picking a ‘moderator,’ or on the questions to be asked. The League also sent us the 1987 statement of its then President, Nancy M. Neuman. That was the period of the George H.W. Bush-Michael Dukakis race.

Ms Neuman’s statement of the time says, among other things: “Between themselves, the campaigns had determined what the television cameras could take pictures of. They had determined how they would select those who would pose questions to their candidates … They had determined that they would pack the hall with their supporters. And they had determined the format. The campaigns’ agreement was a closed-door masterpiece. The agreement was a done deal, they told us. We were supposed to sign it and agree to all of its conditions. If we did not, we were told we would lose the debate … In Winston-Salem, they went so far as to insist on reviewing the moderator’s opening comments.

“It turned out that the League had two choices. We could sign their closed-door agreement and hope the event would rise above their manipulations. Or we could refuse to lend our trusted name to this charade.

“The League of Women Voters is announcing today that we have no intention of becoming an accessory to the hoodwinking of the American public.”


Obama can keep the change?October 5, 2012

Romney, this timeOctober 5, 2012

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What could US Election money be linked to according to you? With similar money being spend in India and comparing which one is more expensive ? Spending money on feeding lakhs of poor children should be seen in the light of the priority it assumes as these children would otherwise could not have schooling and also would have added to the numbers of malnoursihed. The same malnourishment which developed nations led by US supposedly endeavour to eradicate through their pet institutions like World Bank and IMF.
Besides what could be more relevant in India than the lives of these poor children who are the future of the country. Should the money be compared with the number of Grand Prix or world cups we could have held? Of course the same could be used to help poor in US but for an article written primarily for an Indian reader isnt it more meaningful if connected with things closer home.
If you have empathy and humaneness, you do not need expertise for anything.

from:  SREENI N K
Posted on: Oct 20, 2012 at 10:08 IST

@Srini: I wonder at the "logic" of linking U.S election money to feed
Poor Indian children. Politicians of all hues in India have been making
careers out of this noble task of serving the Indian poor for the last
six decades. Perhaps just mocking and criticizing out of context
(without even suggesting remedies)does not call for "expertise". To
each, his own.

from:  Jay Ravi
Posted on: Oct 19, 2012 at 15:56 IST

@sreeni nair K: The point I wanted to make was that the noble task of
feeding under-priveleged Indian children is NOT the responsibility of
any country other than India. I am sure there are millions of poor in
the U.S who could have used the election money in better ways. The right
to mock and criticize is balanced by possible recommendations and
positive thinking. Neither require "expertise".

from:  Jay Ravi
Posted on: Oct 19, 2012 at 15:30 IST

>> In India, the party *owns* the member <<

@Mr. Thomas George

If you had understood the least bit of Sainath's article it would have been clear that in US CORPORATES OWN ALL PARTIES AND MEMBERS and people are reduced to mere pawns who can at best select from the list of evil.

An you call this "better system than India".

from:  Madhu
Posted on: Oct 19, 2012 at 12:05 IST

P sainath has rightly brought to focus the money at stake in US election like in India. Mr Jay Ravi whose comments appear above must understand that good journalists are like mirrors who reflect the happenings in society giving the true picture and they are no experts to provide solutions or suggestions and mid day meal scheme is not free entitlement but a right to good living and that the givento children. Only illogical persons could make such comments against this article

Posted on: Oct 19, 2012 at 09:57 IST

The article is misleading. Although I find the $1.2 Billion figure incredible (wonder if the author got it right), I presume he includes all the money spent by special interest groups. Often, these are ideologically driven (anti/pro abortion, anti/pro republican or democratic principles), and have no direct relation to the candidate. However, two things to note: whatever is done is done legally, with full disclosure (after all, the author is able to ascertain the figures). Second, candidates do not enrich themselves while in office by favoring any entity donating to the campaign. Can Mr. Sainath say the same about the so-called largest democracy? Finally, Sainath makes a statement about how $1.2B can fund the mid day meal program for a year. How about the (undisclosed) amount Indian politicians spend on elections and swindle after getting elected? How many decades of meal program can that amount buy?

from:  Bala Raj
Posted on: Oct 19, 2012 at 07:21 IST

The suggestion that India should have debates like this defeats the purpose of the entire article, as to how the entire debate in US is a non-debate.
It is mere televised bonhomies to pull the wool over the common man.
It is disturbing that recently it has become common to say 'Prime Ministerial' candidate when it is antithetical to the concept of Parliamentary democracy. Some vested interests have implanted the concept and it is taking root. It may not be beneficial to a country like India.

from:  Jayakrishnan
Posted on: Oct 18, 2012 at 23:44 IST

Elections in most democracies, is big business and raising money and not going bankrupt, is as much an art as a Science! This Aricle deals with money spent by Obama and Romney. Throw into the pot money spent by the five GOP candidates,you get s sense of how big this business is! How all this is funded and whether or not it produces real benefits to the people are serious questions. In India, huge sums are spent by hundreds of politicians at the State and the Centre. Without black money, none of this would be possible. The sheer logistics of holding a mass rally in some remote area, requires huge sums. How long can democracies afford this model merits serious reflection. Can the entire process be done through computers and canvassing being limited to soft sell on the web? Maybe!

from:  sridhar
Posted on: Oct 18, 2012 at 23:12 IST

Well,the article delineates how 'democracy' has gone down the tubes in one of the premier democracies of the world.Today,its just hypocrisy.The transformation of the Presidetial debate from a matter of immense electoral and public importance into a undesirable farce is despicable.Where does money spring from, for all these financial companies and corporates to fund the campaigns that the PACs and Super PACs keep churning out day in - day out? Its all about the 'symbiotic existence' of the government and the top 1%, and how it hoodwinks the public. This is, to me, kind of a quid pro quo, where the government bails out the companies by saddling the public with additional taxes. The OCCUPY uprising signposted that the people are not ready to take things lying down anymore. Both Romney and Obama are not sagacious enough to make solid statements even at this stage I observe. All this apart, whoever wins the election will have a strenuous time ticking off the items in the corporate wish-list

from:  Raghunath
Posted on: Oct 18, 2012 at 21:54 IST

Despite being exposed threadbare, many comment writers here seems to be in blithe awe of American "system".

from:  Madhu
Posted on: Oct 18, 2012 at 19:01 IST

Good article. I live in US and have been wondering about the campaign
funding and it's impact on legislation. I haven't come across a frank
analysis of campaign funding in the the US Media. I think US Media is
ignoring this because most part of the campaign money is spent for
advertising in the US Media and they do not want to disturb that.
Worldwide,Democracy has become quid-pro-quo (Corporates will fund
politicians and politicians will pass laws favorable to corporates).
The biggest loser is the common man. The good thing is that the power
to elect is still with the people but the sad thing is that they are
being bribed and brainwashed. The Hindu and Mr.Sainath should be
appreciated for neutral analysis and educating the public.

from:  Subbu Padharthi
Posted on: Oct 18, 2012 at 18:34 IST

However, unrelated as it may seem to India. This has great implications for India. The
current attempt by Obama to push FDI in India, etc. Indian laws has more holes than
swiss cheese and due to the purchasing parity of its citizens, ruled by the corrupt,
could benefit these corporates more than any Indian.
They would just want and try to India a banana republique until INdians can no longer

from:  Bharat
Posted on: Oct 18, 2012 at 18:32 IST

I've never understood why the world is so obsessed with the US presidential
elections. Let's recall that most policies of both parties and their presidents have
been more or less identical barring some token social issues.

With the amount of money flowing to both sides from mostly the same sort of
sponsors, you can only expect the presidents to do the bidding of their sponsors. The entire US political system is a farce in the name of democracy. It has had better days, earlier.

from:  Vivek
Posted on: Oct 18, 2012 at 17:27 IST

Indian democracy needs Prime Ministerial debates like that of US presidential debates. The political parties in India must announce their PM candidates before the next general elections and the potential PM must discuss his proposed government policies. The Election Commission must moderate the debates and the debates must be telecast live on All India Radio and Television.

from:  Shyam
Posted on: Oct 18, 2012 at 13:34 IST

The lesson that most of our leaders pass on to us, "America can do no
wrong" and "Let's ape America" should probably stop at least now.
America should be known for its classic double-standards, one for
itself and its actions and the other for the rest of the world. The
best example from the article itself is of nuclear energy. I think we
Indians should place our national interest and welfare of our people
paramount and then decide accordingly.Why is a country like Australia
which says no to nuclear power for itself wish to export uranium to
India? The answer is obvious.
The stance taken by the League of Women Voters deserves all praise.May
be we should rise as citizens to hear to the call of such

from:  Neetika
Posted on: Oct 18, 2012 at 13:31 IST

President Obama tried to take on the vested interests by passing the Health Care reform package. And tried to extricate US from the wars in Iraq and Afghanistan. But the recession ushered in by Wall Street, sauteed to near perfection by a decade of war in the middle east, set the agenda for 2009. Obama's presidency was reduced to firefighting. So I would not say that President Obama is running the agenda of lobbyists. It is unfortunate that he is yet to break the gridlock in the Congress and Senate between Democrats and Republicans. Their economic and social agendas are so different.

from:  Anand
Posted on: Oct 18, 2012 at 11:17 IST

Excellent craft by P Sainath but in riddles.

To my understanding for more effective results he must reconsider the
story replacing the President fight with real hidden masters behind OR
the real fund controller : the corporate who have the potential to use
and throw the Presidents and the MPs in any country.

from:  Rakesh Manchanda
Posted on: Oct 18, 2012 at 10:59 IST

Hats off to the stand taken by the League of Women Voters!

from:  Swarna
Posted on: Oct 18, 2012 at 10:46 IST

Dear Mr. Sainath - Equally impressive article to that of 'Hillary - you are just retired and not out.' Under present (world) order of the day and the brazenness exhibited by politicians what according to your wisdom would be fate of civil orderly life?

from:  Margandeyan
Posted on: Oct 18, 2012 at 10:22 IST

The victor will have resources to repay the $1+ billion. What about the
runner-up? In view of what the article "Obama can keep the change"
conveyed, won't the winner be helping out the runner-up repay his
funders too?

from:  Swarna
Posted on: Oct 18, 2012 at 10:08 IST

Govt controls so much of big money so big money wants to control Govt. Its just natural and sad at the same time.

One comment on the numbers you mention that typical each candidate need about 1.2+Billion and you give examples of various corporations that give ~1M each. Adding up to your examples - its about 3-4Millions in corporate donations - so where is the rest of 1.2Billions comes from? Your numbers dont add up to the theory you are postulating. Though I am surprised at the numbers and would generally agree with the premise.

from:  Vijay
Posted on: Oct 18, 2012 at 09:57 IST

Every country has its systems. To me, it seems that the systems in the USA is far superior than those in India. First, there is clear separation of the legislature and executive with separate elections to each of them. In India, legislature is more or less controlled by the ruling party or coalition. Individual senators can support or not support any legislation regardless of who sponsors it. In India, the party *owns* the member, and he cannot decide otherwise even if the party decision is against his constituency. Of course, he can compete from another constituency or get other perks (like governorship, or become head of a sports body or a co-operative) for his "sacrifice".

"Equality of opportunity" vs "Equality of outcome" is the debate in US regardless of whether either man can or intends to do it. In India, we do not have a debate, we have demogoguery and cronyism. The agenda is to disguise cronyism while borrowing heavily to support the "populism" race with your opponents.

from:  Thomas George
Posted on: Oct 18, 2012 at 09:17 IST

Indeed it's an issue in current political scenario and may even have much adverse impact on governement functioning and policy formulation. However it is important for political intellectuals and economists to suggest alternate ways of high funding campaigns.

from:  Ajay Kumar Yadav
Posted on: Oct 18, 2012 at 09:01 IST

I believe India's best interests will be served if you target your
attention on India's internal problems - especially corruption and the
grassroots movement that is targeting the most corrupt. For all the
talk about money in the US elections, the United States still has
relatively strong systems, and checks and balances in place.

from:  Suresh Ramamoorthy
Posted on: Oct 18, 2012 at 04:09 IST

The author is his usual acerbic self with no recommendation or suggestions on how things should be run. In keeping with the Indian commentators' ethos of free entitlement, he
states ..".. in on $6 billion...roughly Rs. 32,000 crore. A sum on
which you could run the mid-day meal programme for 120 million Indian
school children for three years". One may be forgiven in thinking that
the Dravida, Left and the congress parties should undertake this job,
not the US Election kitty.Forget Obama, the GOI is sold on Russian
nuclear reactors while the Russians along with their bullying are
laughing all the way to the bank. It may interest Sainath to realize
that "allowing for variances in scale and form, it sounds a lot like
the way Indian elections" have been going for the last 6 decades. We
readers never see our critical comments on Sainath ever published.
Please prove me wrong.

from:  Jay Ravi
Posted on: Oct 18, 2012 at 03:52 IST

This is mainly because of Citizens United US supreme court verdict,which
gave citizens rights to corporates.

from:  prasbad
Posted on: Oct 18, 2012 at 01:46 IST

Obama cannot be re-elected as he has broken the law and has instigated illegalities in the UK. All for the sake of pre-election unity and donations.

from:  Dthiel
Posted on: Oct 18, 2012 at 00:41 IST
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