Smart v. Stupid
Meg Whitman high bids Calif. governor's race
If Whitman buys her way into office, will Halliburton be next?
I don’t think they auction jobs on Ebay, but if they did, it might look a lot like the California governor’s race. Former Ebay CEO Meg Whitman is bidding up the contest using record amounts of her own money. Whitman has already invested $91 million of her personal fortune. Chris Cilizza thinks she’ll spend as much as $150 million before it is over. She stands a pretty good chance of buying the governorship because she’s willing to pay whatever it takes. In the primary, she spent $80 per vote.
“Who cares?” you might say. Well, you should. Whitman is pioneering a new model corporations can use to buy an elected office. You can bet they’re watching closely. And recently, our own Supreme Court just made buying an office much easier.
Our fifty governors have enormous influence on corporate profits. Governors are gatekeepers for corporate income taxes, investment tax breaks, waste and sewage rules, overruling local zoning and a hundred other regulatory hurdles for corporations.
Governors decide which corporations are courted and which are snubbed. In the energy industry, governors have veto power over whether drilling and mineral licenses are offered or granted. And they have control over whether regulations are enforced (like in California) or overlooked (like in West Virginia.) Sure, governors can’t do everything they want, but they are free to not do almost anything they don’t want. Owning one could be very profitable stuff.
So let’s just imagine that a major defense company or energy company wants to own a governorship, maybe in a future oil producer like Virginia, an old line coal state like West Virginia, or a state with a huge defense presence like Florida or California. Using the Whitman model, here’s what they do:
1. Corporation X creates a highly overpaid executive position, say, Vice President for Community Affairs and pays him $20 million a year. Using a complicated deferred compensation strategy they insure that the money is well invested.
2. Corporation X gives this corporate ambassador a modest budget of funds to invest in local projects for the purpose of establishing a community profile – essentially buying name recognition. That’s his entire job.
3. After a few years or so, the now well-known employee files for public office, resigning from the company on announcement day “to avoid any conflict of interest.”
4. Candidate X self-finances, using the substantial wealth provided by Corporation X. He runs a low cost campaign by not spending much on television or radio advertising.
5. Due to a recent Supreme Court decision, Citizens United, Corporation X is free to spend an unlimited amount on issue advertising. And by the way it’s a tax-deductible business expense. The airwaves are flooded with support ads by mysterious groups with people-focused names (like Citizens United.) The real funder, Corporation X, is never named.
6. Using this Manchurian Candidate strategy, and by overwhelming name recognition, Corporation X buys a governorship and installs Candidate X.
Just to be clear, there is no evidence that this is what Whitman is up to. I’m not saying she is, just that her model can be used to do it. And it looks an awful lot like Cheney and Halliburton, doesn’t it?
As much as we all hate campaign financing, all those gifts are like votes of cash. A candidate must convince people to open their wallets in order to get elected. Donations are a test of electability. Sure, corporations already have too much influence on elections, but you ain’t seen nuthin’ yet. When a single candidate or corporation can buy an office, the very notion of democracy falls right off the table.
The worst news is that Whitman doesn’t even have to win to prove the strategy. If she just does well, big corporations might decide it’s worth the gamble. If they do, future elections may just turn into contests between Corporation X and Corporation Y. That, my friends, could be the greatest tragedy of our lifetimes.
Jimmy Zuma splits his time between Washington, D.C. and Tucson. He writes the online opinion journal, Smart v. Stupid. He spent 5 years in Tucson in the early ‘80s, when life was a little slower, swamp coolers were a little more plentiful, Tucson’s legendary music scene was in full bloom, and the prevailing work ethic was “don’t - unless you have to.”