If you thought India has a problem with election funding, then here's all about America's shameful, super PACs!



First of all, congratulations to our Chief Election Commissioner Dr. Quraishi for yet again managing the elections with the least reports of rigging; congratulations also to Akhilesh for becoming an icon overnight for the Indian youth through sheer hard work. I shall write on him very soon! This time, I want to write on something that is spoken about every time that elections are held anywhere in India – the question of election time funding. Of course, it’s shameful the way black money dominates election funding in India. But then, if you thought American Presidential elections – the nomination fight for which is underway currently in the USA – are clean, then here are some facts which will make you think again!

Actually, throughout history, elections have never been democratic in the true sense with money power significantly dominating the outcome instead of ability, one way or the other. There has been rarely an election where power-variables have not played their role. Almost all elections around the world are manipulated to one extent or the other with money, power, rigging, hacking or even fixing. The upcoming American Presidential election is no exception either. Clearly a strange paradox – on one hand, the American election system is considered one of the most transparent electoral processes; on the other, this very election rarely has been fair to its masses.

Unlike in India, where election funding is mostly clandestine and is funded primarily with black money, the US electoral system has been legally endowed with formal procedures to direct cash flows into the system, especially for election campaigns. On hindsight, it might appear that therefore, the elections held in the US would be quite transparent and money would play a moderate role in deciding the final winner. Unfortunately, the fact is that irrespective of how transparent the election process might be, money power is quintessential for any political party or any Presidential candidate to perform well in the elections – that in itself undermines the true essence of democracy! Today, the underlined fact is that globally, it is money that makes one win the elections, (and this has been proved through various studies). Period!

US election laws allow Political Action Committees (PACs) – organizations that campaign in favour or against political candidates – to raise money for financing the election process. In the veil of being non governmental organisations, the so called PACs have been known to generally redirect money obtained for electioneering to specific political lobbying and political purposes. However, now a new kind of PAC – called the ‘Super PAC’ – has come into existence. These infamous Super PACs gained legal backing and dubious prominence after two court judgments in 2010; the first by the US Supreme Court and the second by Federal Court of Appeals for the D.C. Circuit. Post these judgments, a Super PAC is allowed to be the recipient of an unlimited sum of money from individuals, corporations, or unions and further can keep their names anonymous – provided the Super PAC remains independent and away from the direct control of any political party/candidate it is supporting! As is quite evident, the latter part of the ‘direct control’ requirement can be quite easily fudged over, thus ensuring that the Super PAC model has given the perfect opportunity for political parties and candidates to sidestep the existing campaign finance rule, which enforces that no individual can give more than $2,500 to candidates during the nomination race and another $2,500 during the actual elections. Apparently, contributions to Super PACs can be unlimited (as they’re ostensibly ‘independent’ of the candidates). Even though officially the Super PACs seem to be independent bodies with no connections to respective candidates and political parties, it’s anybody’s guess that no sensible and wealthy American would leave out on an opportunity to gain the most out of this system. Also, needless to say, many of these Super PACs are in reality run by the candidates’ own acquaintances and former associates!

For example, Restore Our Future, a Super PAC supporting Mitt Romney (currently the leading Republican candidate) raised over $12 million during the first half of 2011; another Super PAC supporting Obama has raised around $4.4 million for campaigning. Putting things into perspective, the existence of the Super PACs is a big question in itself. Aren’t these Super PACs, which are dominated by the top 1% richest Americans, cheating the rest 99 per cent again? And isn’t this in itself hazardous to the American political landscape, owing to the fact that the nation recently saw a protest by the masses against these top 1 per cent lobbyists, who not only dominate the American economy but blatantly channelize taxpayers’ money towards the Wall Street?

What is most disturbing is the stand of Barack Obama himself, who in the last election was quite proud of the way he had raised campaign funds. Unlike the last season, where Obama relied on the 99 per cent general population and their small donors, this time he is all set to reverse the trend! Some of the key fundraisers for Obama among many others include the likes of Jon Corzine, former CEO of MF Global (Corzine also happens to be the ex-governor of New Jersey); Fred Eychaner, a Chicago based media tycoon; Jeffrey Katzenberg, CEO of DreamWorks; and movie producer Harvey Weinstein. A Super PAC that supports Obama (dubbed ‘Priorities USA Action’) was made richer by $2 million from Jeffrey Katzenberg’s funding alone! Strikingly, Jon Corzine’s MF Global filed for bankruptcy in October 2011, and Corzine is facing an FBI probe for allegedly misappropriating his clients’ funds. In another similar case, Steve Spinner (advisor of Department of Energy) who was a generous donor to Obama’s campaign, secured a bailout package of close to half a billion dollars for a defunct solar energy firm Solyndra. In other words, the connections between donors and the candidates or parties being supported can never be independent. The world of campaign funding works on explicit quid pro quos and direct controls.

A study by the Center for Public Integrity reveals that after elections, 80 per cent of top supporters are gifted important administrative posts. For example, Donald Gips, who secured around $500,000 for Obama’s campaign spree was made the ambassador of South Africa; additionally, the company he owns secured contracts worth $14 million in stimulus.

The same goes for other candidates too. Mitt Romney got an enormous $5 million from just 25 individuals! Another prolific individual funding Romney is Harold Simmons, who pumped in $5 million this year over and above the $7 million last year (to the PAC supporting Romney). Even superseding Simmons is Sheldon Adelson – Las Vegas casino owner – who provided above $10 million to Winning Our Future, the Super PAC supporting Newt Gingrich. Newt Gingrich’s deep connections with mortgage firms Freddie Mac and its sister concern Fannie Mae (Gingrich received above of $1.6 million from Freddie Mac as ‘consulting fee’) came in handy when these two companies were reduced to insolvency during the real estate bubble burst, and were later bailed out by the federal government costing the state exchequer a staggering $124 billion. The lobbyists who are supporting Romney also include investment firms like Goldman Sachs, Morgan Stanley, Bank of America, JP Morgan Chase, Citigroup, Credit Suisse, PriceWaterhouseCoopers among others. It is well known that some of these firms are feverishly fighting bankruptcy or are on the verge of receiving bailout packages!

America’s 1% top wealthy are not only omnipresent but are quite influential when it comes to electing (read: selecting) the powers that be. The influx of money and mushrooming of Super PACs are not only allowing a select few to control the entire election process but come as an insult to those millions who recently came out on the streets for the ‘Occupy Wall Street’ campaign. Shamelessly, President Obama didn’t even wait for a year of the campaign starting, before acquiescing to Super PACs; and – more shamelessly – asking money from those very corporations who have been immune to the hardships of American masses. The disgust towards these Super PACs is growing by the minute. In a March 2012 Washington Post-ABC News poll, almost 70% of respondents said that Super PACs should be banned and made illegal.

All in all, this current Super PAC issue not only signals towards the possibility of many more protests in the future similar to ‘Occupy Wall Street’ but also paves the way for corporations to immorally lobby for bailouts in the near future – something that is again against the populist expectations. The great American election is actually meant for 50 rich individuals at the maximum, who dictate terms at the Wall Street and whose diktat is followed verbatim by the American President. And that is a huge shame!

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