Since Election Day, many in the media and Republican establishment have whipped themselves into a frenzy over the foreign financing of President Clinton’s re-election. Meanwhile, the more mundane details of who, precisely, paid for the 1996 elections and what they expect in return has been kept largely out of the public eye. Thanks to the deep pockets of a handful of business, labor and ideological interests, the 1996 campaign rang up the most expensive tab in U.S. history. By the end of October, the Republican and Democratic party committees had combined to raise upwards of $200 million in soft money during the 1996 election cycle, three times what the two parties raised in 1992. The dizzying mountains of soft money that poured into party coffers, combined with contributions to presidential and congressional candidates, mean that political paybacks hidden within legislation — a device of subterfuge the 104th Congress turned into an art form — are surer bets next year than the Evita soundtrack. Forget Mochtar Riady and the Macarena. Herewith, a scorecard to the real winners in the 1996 election, and the havoc they intend to wreak in ’97.
Just when it seemed that the FDA, public censure, and Al Gore’s speech at the Democratic National Convention had finally dethroned him, King Tobacco staged his own palace coup. In 1996, tobacco reigned supreme among individual campaign contributors, with Philip Morris giving a total of $2.7, 78 percent of which went to Republicans. Of the total, $2.1 million came in the form of soft money, with the rest coming through PACs and individual executive donors. Not far behind PM, cigarette manufacturer RJR Nabisco spent a total of $1.75 million on the campaign, with Republican committees and candidates receiving 81 percent. After a year’s worth of public pummeling, the tobacco industry now has its sights set on blocking Clinton’s promise to regulate tobacco as a drug, perhaps in exchange for an industry agreement to restrict cigarette advertising aimed at minors. Cheers went up along Tobacco Road when archenemy FDA commisioner David Kessler announced his resignation on November 25. So, with a potentially more lenient FDA; a tobacco-funded, Republican-controlled Congress; and a Democratic leadership that includes pushovers Dick Gephardt and David Bonior, the stage is set for a Joe Camel comeback. Cigarette executives have good reason to light up this holiday season.
Try, Try Again
If the GOP yanked most consistently from the udders of Big Tobacco, then trial lawyers proved once again to be the Democrats’ most reliable cash cow. The Association of Trial Lawyers put out $2.1 million in total contributions, with only 17 percent of that money going to Republicans. The ATLA’s PAC ranked as the most generous industry PAC in the ’96 election cycle, churning out more than $1.5 million to congressional candidates, nine out of ten of whom were Democrats. And according to a report by the Center for Responsive Politics, they played their horses well: of the 45 House candidates who received $10,000 or more from the trial lawyers this year, 33 won their races; the ATLA also got behind 10 victorious senators. Of course, the ATLA’s chief witness remains the Lawyer-in-Chief himself: all told, Clinton raked in $3.8 million from the legal sector. Like tobacco, trial lawyers have had a rough time of late, as both houses of the 104th congress passed tort reform legislation that placed a ceiling on the amount of punitive damages plaintiffs can receive. Clinton eventually vetoed the bill. Look for a more pliant Congress this time around.
Perhaps the most notable result of the 1996 campaign was the emergence of the securities and banking industry as arguably the most powerful force in money politics. When all was said and done, the finance industry — which includes securities firms, banks, insurance and real estate companies — had invested $60 million in the federal election, tops among all categories of donors. Clinton pulled in $2.2 million from the financial sector; in fact, the accounting firm Ernst & Young was the top single donor to both the Clinton and Dole campaigns. The American Bankers Association PAC spent more than $1 million on congressional candidates — 73 percent of them Republicans — with terrific success: All but four of the 28 House and Senate candidates who received more than $10,000 from the ABA won seats in the 105th. That’s not to mention the $5.7 million given by the PACs of individual commercial banks this cycle. Among the most deisred prizes for the banking industry is the elimination of the New Deal-era Glass-Steagall act, which prohibits banks from entering the securities and insurance industries. Banks want Congress to override those restrictions, opening the way for “common ownership” of such businesses. If that happens, consumer protection laws could crumble under the weight of these new financial trusts.
Financial institutions also hope to make a killing with the privatization of Social Security and Medicare — and Washington looks poised to bring Social Security to the table in the next year. (See “The End of Social Security as We Know It?” Mother Jones, November/December 1996.)
Also last year accounting firms successfully lobbied Congress to pass legislation restricting shareholder lawsuits, such as those filed by bilked investors during the Savings & Loan scandal of the 1980s. Together with members of the high-tech industry, accounting firms also helped defeat California’s Proposition 211, which would have broadened shareholders’ ability to sue. And with the day of financial services deregulation drawing nigh, accounting firms are anteing up to their favorite politicians to ensure they get their share of the booty. Accounting firms also loathe Republican supply-side hysteria over a “fairer, flatter” tax code, since simplification would simply mean less work for CPAs. It’s no surprise that the American Institute of Certified Public Accountants, the PAC which represents the big six accounting firms and other companies, was among the year’s most active PACs, pouring $1,040,175 into congressional campaigns.
Reach Out and Elect Someone
In 1995 alone — while the telecommunication deregulation legislation was being drafted — regional and long distance companies gave members of Congress more than $4 million. But early versions of the GOP bill favored cable companies and Baby Bells, which scared long-distance companies as well as content providers.
Putting their trust, and their money into Clinton, Hollywood successfully lobbied the administration and members of Congress to make sure they got their piece of the pie. (See “Bill’s Big Backers,” Mother Jones, November/December 1996.)
The final version of the bill also paid obeisance to long-distance phone companies, who were given authority to market joint local and long-distance service immediately, thus countering the natural competitive advantage of the Baby Bells in local areas. The long-distance companies hope the next Congress will help prevent mega-mergers among regional telephone companies that might threaten their dominance over the long-distance market.
Satisfied that the administration had done its part in preserving the interests of content providers, Hollywood and the long-distance companies repaid Clinton handsomely: Walt Disney Co. and DreamWorks SKG ranked among the top six soft-money contributors to the Democrats; AT&T and MCI also rewarded legislators and the president with sizable campaign contributions. (For a list of other goodies received by the telecom companies, see “Channel Surfer,” Mother Jones September/October 1996.)
Who else will reap the windfall from the 1996 campaign’s big-money sweepstakes? A number of other industries, ranging from pharmaceuticals to the high-tech sector, promise to quietly extort favors from the men and women they helped elect. What remains to be seen is whether the 105th Congress will learn from the public chastening its predecessor suffered. What also remains to be seen is whether the electorate’s disgust with the rampant influence of special-interest money in politics leads to concerted campaign finance reform. For now, though, the toll from the most expensive campaign in history is only starting to be paid. K Street is awakening. Brace yourselves, for here we go again.
Romesh Ratnesar is a reporter/researcher for The New Republic.