Over the last 30 years, political contributions made by financial industry executives increased by 700 percent, according to new analysis by the watchdog Sunlight Foundation. Roughly 5,500 members of the finance, insurance, real estate sector (FIRE) gave $178.2 million to political committees and candidates during the 2010 election cycle, up from $15.4 million in the 1990 cycle.
Giving was concentrated most among securities and investment executives and, although tilted slightly toward Republicans, the finance-industry greenback geyser gushes in both directions of the political spectrum. Although the finance sector gave 54 percent of its cash to Republicans in 2010, it gave 51 percent of its cash to Democrats in 2008.
“Though it’s very difficult to directly measure the influence that finance and other elite donors are having, it seems fair to say that, to the extent that candidates and parties are eager to court these donors, they will want to keep them relatively happy, since they know that without the support of these donors, raising the money needed to compete electorally is more difficult,” wrote Sunlight analyst Lee Drutman.
In recent months, the Sunlight Foundation has zeroed in on what it calls the “1 percent of the 1 percent,” by which it means the very small number of people who participate at the highest level of the out-of-control political-spending arms race that has beset the United States and that has escalated exponentially over the last few years.
This elite class of spenders consists of people who give at least $10,000 per election cycle. In 2010, the average 1 percent of 1 percenter spent $28,913 on politics, which incidentally is more than the $26,364 median annual income earned in the country. Candidates have become dependent on these big spenders, Sunlight reports, often eschewing local fund-raising efforts to court the wealthy donors in the major urban neighborhoods where they live and at events where they gather, like the meeting organized by the oil-magnate Koch Brothers at the Bachelor Gulch Ritz Carlton in Colorado last year.
Diminishing local campaign-finance ties likely matter when it comes to setting a representative’s agenda. Do Manhattan securities traders and Los Angeles movie producers care about local water quality and Main Street business collapse? Probably less than do congressional district residents.
As Sunlight puts it, the result of the narrowly based outsized spending is “a political system that could be disproportionately influenced by donors in a handful of wealthy enclaves,” a fairly safe assessment that the group’s analysts ramp up by adding that their research also demonstrated that “some of the heaviest hitters in the 2010 cycle were ideological givers, suggesting that the influence… on federal elections may be one of the obstacles to compromise in Washington.”
“Unlike the other 99.99 percent of Americans who do not make these contributions, these elite donors have unique access,” writes Drutman. “In a world of increasingly expensive campaigns, the 1 percent of the 1 percent effectively play the role of political gatekeepers. Prospective candidates need to be able to tap into these networks if they want to be taken seriously. And party leaders on both sides are keenly aware that more than 80 percent of party committee money now comes from these elite donors.”
As the political-finance reform group Root Strikers notes, Wall Street has spent $700 million lobbying Washington in the past decade and the oil and gas industry gave $13 million to lawmakers in the last election cycle alone. The group calls for elections to be publicly funded, for all independent expenditures to be limited and open to public scrutiny, and for Americans to vote to restrict the right to spend on politics to citizens, barring the participation of corporations.[ Campaign cash image: PoliticalMuse ]