Makers, Takers, Movers and Shakers

When the push-pull of government revolves around money.

The Makers and the Takers, a memorable phrase from last year’s Republican playbook, contrasted those who invent things, build businesses and create jobs with those who “take” government benefits, sometimes referred to as the 47 percent.

In politics, the Makers could also be the Movers and Shakers. They shake the money tree for the benefit of politicians aligned with their philosophical or business interests. Would-be Movers and Shakers can be found in government, especially at federal regulatory agencies and in congressional staff positions. They are learning the ropes with the goal of moving to higher-paying private posts, whence to shake agency branches with the expectation that golden apples will fall.

Money is the common thread, and a question to consider is whether amounts spent on elections, lobbying, earmarks, tax benefits and regulatory favors are so large as to cast the government into serious disrepute.

The issue was debated in Washington recently by Trevor Potter, a former Federal Election Commission chairman (and, last year, counsel to Stephen Colbert’s Super PAC) and C. Boyden Gray, who was counsel to George H.W. Bush as vice president and then president. The debate was framed around the Supreme Court’s 2010 decision in the Citizens United case, which extended free-speech guarantees to corporations that might want to voice their opinions about candidates for political office.

One may recall that President Obama called out the Supreme Court in his 2010 State of the Union address, arguing that Citizens
“will open the floodgates for special interests—including foreign corporations—to spend without limit in our elections.” Justice Samuel Alito was seen shaking his head and, lip readers averred, whispering “not true.” With the presidential election year now history, Gray argued that the wily southern politician Haley Barbour, former governor of Mississippi, had correctly predicted there would be no flood of corporate cash.

The Super PACS, which must disclose donors, raised only 20 percent of their cash from corporations, Gray said. The big spenders in 2012 were wealthy Republicans seeking to unseat Obama, notably Las Vegas casino magnate Sheldon Adelson (backing Newt Gingrich) and conservative Christian businessman Foster Friess (Rick Santorum). After dropping tens of millions on Gingrich, Adelson declared he was in for many tens more to defeat Obama. “But none of this worked,” said Gray, discounting money as a factor.
“Adelson lost and the Republicans lost. The only real winners were the TV stations, where execs were high-fiving each other over the flow of cash all season long.”

Potter, a Republican like Gray,  took the opposite view. The court strayed far from its stare decisis doctrine, Potter observed, ignoring many precedents upholding government limitations on political speech. “And they don’t even believe it themselves,” he said of the Justices’ rejection of limits on political speech, noting that many strictures are still in place: the Hatch Act for federal workers and other limits on students, prisoners, members of the armed forces, and foreign interests, the subject of an even more recent Supreme Court ruling. 

Potter added that no one actually knows how much money corporations are spending on political campaigns. Groups organized under sections of the tax law that don’t require disclosure of donors spent hundreds of millions of dollars in the last election cycle, including the U.S. Chamber of Commerce, and American Crossroads and Crossroads GPS, both under the leadership of former George W. Bush adviser Karl Rove. Such a group sponsored advertisements opposing confirmation of Chuck Hagel as Defense secretary. “Who knows who’s supporting this?” Potter said.

The real problem about money and government, Gray argued, lies with regulatory agencies that are captive to the industries they oversee. The Food and Drug Administration and the Environmental Protection Agency offer two cases in which the promise of private sector employment can influence staff, he said. In particular, he pointed to  a new report by the nonprofit Project on Government Oversight, arguing that the Securities and Exchange Commission suffers from such manipulation. The title tells the story: “Dangerous Liaisons: Revolving Door at SEC Creates Risk of Regulatory Capture.” The SEC, of course, disputes the thesis, saying hiring from Wall Street is the only way it can acquire the expertise to oversee complex financial shenanigans.

The problem lies not only in the agencies but also with Congress, where members and staffers routinely move to law firms and corporations doing business with government agencies. Medicare just suffered a $500 million hit—ironically  in the fiscal cliff law that raised tax rates to reduce budget deficits—as a result of pressure from dozens of well-connected lobbyists for Amgen, the giant biotech firm. They won a two-year delay of Medicare
price restraints.

Unfettered campaign contributions and behind-the-scenes influence-peddling both connote a government for sale. But then, crony capitalism is what most Makers, Movers and Shakers are all about.

NEXT STORY: Regulatory Reformer