Politics

One Governor’s Audacious, Unprecedented Effort To Use Personal Wealth To Re-Create The Legislature

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Illinois Gov. Bruce Rauner (R) may be pushing campaign finance and political spending into uncharted waters as he asserts himself in the first major battle of his tenure. Hanging over the legislature’s otherwise ordinary political wrangling to avert a budget catastrophe is a mammoth war chest, which the state’s governor has begun to deploy in an effort to re-create the legislature into one more sympathetic to his controversial agenda.

Rauner is a very rich man who carries with him the backing of a still-wealthier network of friends and supporters. These networks, which helped him raise a record sum in his initial run for office, are now funneling millions into his campaign fund and a pair of super PACs. Experts are calling this development an unprecedented use of money in politics, while raising concerns that the state of Illinois is flirting with plutocracy.

“To have individuals first get elected and then govern with wealth is a new development in our system,” said Trevor Potter, former chairman of the Federal Election Commission (FEC) and current president and general counsel of the Campaign Legal Center.

“In the past, there were people like the Rockefellers that used their fortune for campaigns, but, as far as I know, once they were elected, they acted as other officials did and worked within the system rather than using their wealth to create a new political base. People like [former U.S. Senator] Jay Rockefeller didn’t then use their money to attempt to create a political machine beyond their government position. That’s new, and I don’t know what that says for the United States.”

Rauner himself has donated $250,000 to a super PAC aimed at perpetuating his agenda, and more than half of the tens of millions in his campaign fund comes from his personal coffers. In his most overt use of his money yet, he recently sent out contributions to every Republican legislator, totaling $400,000, just weeks before a crucial May 31 budget deadline.

In Rauner and his network, the United States may have the first-of-its-kind and ultimate incarnation of a major political coalition that wields the bulk of its might from the unencumbered spending permitted by the U.S. Supreme Court’s 2010 Citizens United v. FEC decision and subsequent ruling in SpeechNOW.org v FEC. Up until now, there has always been a thin — if sometimes superficial — curtain separating executive power from the profligate “independent expenditure” groups that have come into vogue in the last five years. While the Koch Brothers have built a complex and far-reaching political operation that promises to unleash nearly $1 billion in the lead-up to the 2016 election cycle, neither Charles nor David Koch actually occupies a seat of elected power. And although other governors and mayors have aligned themselves with — or even started — super PACs, those operations were either primarily dependent on funding from outside donors, or were concerned with furthering agendas beyond their direct regulatory purview. With Rauner, the money itself, unencumbered by limits, is now controlled by the head of the state government.

“There is a difference here, with this money, that is both qualitative as well as quantitative,” explains Kent Redfield, a professor emeritus of political studies and public affairs at the University of Illinois at Springfield. The Democrats who have long-controlled the state have historically spent their money much closer to elections, he notes, and, “by doing it now, Rauner is trying influence state representatives and senators via a permanent campaign of spending.”

The Few, The Proud, The Wealthy

The wealth of Rauner and his network is being deployed through a variety of means. The most explicit is the governor’s campaign fund, which still retains about $20 million. Rauner contributed more than half of this himself — $10.5 million — after the November election, and it’s from this pool that the $400,000 in Republican legislative contributions originated. On top of this, a super PAC called “Turnaround Illinois” was recently formed by two of Rauner’s former campaign aides, with the goal of supporting “needed reforms”, and “to oppose those who stand in the way.”

That PAC reflects the name of the governor’s legislative agenda, “The Illinois Turnaround,” and Rauner is one of only two disclosed donors to the fund, contributing $250,000 to it at the end of April. He has also publicly embraced its mission, stating, “Since we won the election, there have been many donors, both in Illinois and around the United States, who believe strongly in the vision that we have for turning Illinois around and believe very strongly in our leadership and have offered to send financial support. So we’ve created that PAC to begin to receive those contributions.” Political observers predict that Turnaround Illinois will concentrate its energy and resources on the state’s Republicans, who currently hold roughly 38 percent of the seats in the General Assembly.

However, for any real change to take place, the governor will have to convince some members of the Democratic supermajority to cross the aisle and support his controversial proposals. Generating that goodwill appears to be the mission of Illinoisans for Growth and Opportunity (IllinoisGO). This super PAC is not explicitly connected to the governor, though it has been widely speculated as a Rauner “front group,” perhaps due to the fact that one of its three board members told the press in March that the organization’s purpose is, “to give [Rauner] support… It’s to try to make clear some of the things he’s doing.” The PAC’s stated purpose is to protect Democrats who make “difficult, yet responsible choices” from “special interest attacks.”

“IllinoisGo is aimed at people like me,” says Illinois Rep. Will Guzzardi (D). “It is intended to pose the threat of running and supporting more centrist, corporate Democrats who are comfortable with what the governor is trying to do.”

The network underwriting all of this activity is small in quantity, but large in net worth. Though there is some question as to whether or not Rauner himself technically qualifies as a billionaire (his tax returns for 2012 and 2013 claimed incomes of about $53.5 million and $60.8 million, respectively), there is no doubt that his backers easily clear the ten-figure hurdle.

Ken Griffin, 2014’s highest earning hedge fund manager, contributed $8 million to Rauner’s campaign last December, seven weeks after the gubernatorial election was over and certified. Infamous real estate tycoon Sam Zell, whose disastrous 2007 purchase of the Tribune Company resulted in the cultural and financial bankruptcies of some the country’s most venerated media institutions, recently gave $4 million to Turnaround Illinois. On April 15, IllinoisGo, the Democratic leaning PAC, reported a $1 million contribution from Sam Zell’s wife, Helen.

By Rauner’s own admission, he is himself not a member of “the 1 percent” but rather of the “0.01 percent,” a descriptor that easily applies to the small clique of funders who helped put him in office and are now opening their checkbooks to further his agenda. Along with Zell and Griffin (who told the Chicago Tribune in 2012 that the ultra-wealthy have “an insufficient influence” on the political process), Rauner and the Illinois GOP’s most important allies include John Arnold (#714 on the Forbes list of the wealthiest people alive) and Richard Uihlein, (a major donor to Tea Party candidates throughout the United States who is sometimes referred to as the, “Koch of Illinois”).

According to Rich Miller of Capitol Fax, a widely read Illinois-focused political blog, all of this combines with the fact that “for the first time in memory, the Illinois Republican Party ended a year with more than twice as much cash on hand [as] Madigan’s Democratic Party of Illinois… That advantage is mostly due to contributions from Rauner himself.”

The “Madigan” referenced by Miller is Michael J. Madigan, Speaker of the Illinois House of Representatives and the man primed to serve as Rauner’s arch-nemesis. That role is not a new one for a man who has, with the exception of a brief two-year period in the mid-1990s, occupied the speakership since 1983. Madigan is regularly hailed as the most powerful individual in Illinois state politics, unafraid to go to war with Republicans and Democrats alike; he famously led the charge in the 2009 impeachment of then-Governor Rod Blagojevich.

For almost the entirety of his tenure, Madigan’s coalition has enjoyed an overwhelming advantage in political representation and power. Some Republicans see Rauner and his fortune as a necessary corrective, offering a means by which they might cut through the Gordian Knot that is the Speaker’s “unmatched sway over state spending.”

“The Governor’s money may make some people uncomfortable,” offers Republican State Senator Jason Barickman, “but the reality is that the speaker has controlled millions of dollars that have found their way into races all over the state for years. Today there is a balance to that, a counter to that… the injection of a huge amount of pro-business cash changes the political landscape.”

The Checks Were In The Mail

Until recently, the Governor’s cash had remained in the bank, serving as a specter rather than an actual instrument. That changed two weeks ago when Rauner sent out $400,000 in checks to Republicans in the state legislature. The timing of the gesture did not seem arbitrary, as it came just before a superficial — if strategic – call by Speaker Madigan to vote on the governor’s so-called “right-to-work” proposal to create zones where workers could opt-out of unions. The proposal, which was designed to fail, did not attract a single “yes” vote. At Rauner’s request, several Republican lawmakers voted “present” rather than “no.”

Republican David Harris was one of seven representatives to abstain from voting on the bill altogether. “It wasn’t one the governor had proposed or talked about,” he tells ThinkProgress. “It was the speaker’s interpretation of what the governor thinks. It was separated out, but labor reform is part of an overall agenda for helping Illinois.”

With the two sides locked in a game of chicken, the Illinois political world is starting to make predictions on the value of the governor’s private spending spree.

“It’s unclear to me what impact, exactly, the money will have,” says one Democratic consultant who spoke on the condition of anonymity. “I’m not convinced that spending a ton of money on down ballot races is all that effective. For the most part, organizing on a local level can beat this money.”

On a national — or even state — level, unbridled super PAC spending offers a larger strategic impact. In those contests, there are simply too many doors to knock on, too many voters to connect with face-to-face. Whether the impact is as significant at the state level remains an open question. It’s not clear yet whether that impact can be as large at the state level.

“A race for state representative covers about one-and-a-half wards, which equates to about 90,000 – 100,000 people,” says the Democratic consultant. “And, of that population, only about 7,000 will actually vote. We know that the best way to win a voter is through one-on-one interaction, which we can do. That has a much greater impact on a voter than seeing some TV thing.”

Rich Miller isn’t quite so sure. “The legislative Democrats have been on top so long, and their strategies have worked so well, that they may not understand what a sophisticated and well-funded advertising strategy might do to them,” he writes. “We’ll find out soon enough, I suppose.”

Budget Breakdown

At the heart of the dispute between the governor and the General Assembly are differing financial plans that would close the gap on a deficit that may reach a staggering $12.7 billion by the end of fiscal year 2016. Predictably, the two sides are offering very different visions for the changes needed to avert catastrophe.

While Democratic leaders argue for tax increases concentrating on the state’s wealthiest residents, Rauner is so far standing firm on a vow to veto any proposed budget that doesn’t offer deep structural changes in the form of pension cuts and labor reforms.

As political contests go, there is nothing particularly unique about these competing philosophies and battle lines. However, the problems needing redress are extraordinarily egregious by any standard. Illinois’ bond grade is the worst in the country, and its coffers contain less than 40 percent of the assets needed to meet outstanding and impending pension obligations. The governor’s bid to curb the efficacy of unions is in line with a national effort by the GOP to systematically weaken one of the Democratic Party’s most important allies. It’s also playing out in a state where unions are both historically important and contemporaneously numerous, comprising roughly 5.5 percent of the country’s total organized labor force.

While Rauner’s ascendency could ultimately help restore stability to the state’s beleaguered finances, the nature by which it has been accomplished makes some analysts nervous.

“Rauner is using money as a substitute for the power that, over the last half-century, came from party patronage and traditional fundraising, both of which were dominated by Democrats,” adds James D. Nowlan, a former state legislator who literally wrote the book on Illinois politics.

“What you have to understand is that Illinois is about 40 years behind the rest of the country when it comes to campaign finance reform,” explains David Melton, executive director of the Illinois Campaign for Political Reform. “Prior to 2009, there were no contribution limits on the state and local level.”

The disastrous tenure of Rod Blagojevich was the precipitating cause that finally motivated the Illinois General Assembly to put a ceiling on some forms of political contributions. At the time, a number of state reformers were disappointed that the legislation hadn’t gone far enough, though what existed represented, at the very least, a start. Individual contributions to PACs were capped at $10,000 per campaign cycle. Unions and corporations were limited to $20,000 in giving, while other political action committee and candidate political committees topped out at $50,000 in giving (these numbers are adjusted for inflation biannually.) Furthermore, the legislature established that, “no natural person, trust, partnership, committee, association, corporation, or other organization or group of persons forming a political action committee shall maintain or establish more than one political action committee.”

A mere three years later, this reform came undone. In Personal PAC v. McGuffage, the U.S. District Court for the Northern District of Illinois threw out all limits on super PAC contributions, citing the Citizens United decision as precedent. Were those reforms still in effect, Rauner’s giant pile of money probably wouldn’t be nearly as large.

“What we have now is an arms race,” sighed Melton, “With candidates in each cycle upping the money to an order of magnitude ten times larger than what was in the past. The whole thing reflects the ever increasing effort by a few very wealthy people to exert an outsized political influence.”

Richard Hasen, the chancellor’s professor of law and political science at the University of California Irvine School of Law, is one of the foremost experts on campaign finance in the country, and he sees the developments in Illinois as being a part of a broader national trend in the post-Citizens United era. “Undoubtedly, there has been a broad psychological shift in which wealthy individuals are now more willing to spend their money openly in order to affect political outcomes,” he said.

Rauner’s attempt at mixing governance with money also has particular significance in Illinois, where both Blagojevich and his predecessor George Ryan (R) were sent to prison over corruption-related charges.

Elected executives commonly use whatever means are at their disposal to try and exert influence over the legislature. In Chicago, legendary Mayor Mayor Richard J. Daley oversaw an extensive patronage network that doled out jobs in exchange for political support. His son, Mayor Richard M. Daley, inherited that same network upon his own ascendency to mayor, struggling with it again and again during his 22 years in office.

When Rauner was still just a candidate, he was often lauded for the promise inherent in his money. “Because he is independently wealthy, Rauner will not be beholden to the special interests that have helped to corrupt Springfield,” wrote one endorsement. He was seen as a break from Illinois’ endemic corruption, though according to Redfield, this “fresh start” is, in fact, testing the limits of the governor’s ability to legislate from the executive branch. “What’s going on in Illinois raises the specter of linking big money with political office in ways that would threaten the idea of separation of power,” he tells ThinkProgress. “Rauner says that he doesn’t have to answer to anyone, but I’m not sure that’s a sentiment I want in a representative democracy.”

As the state’s budget war continues to rage, it’s unclear how successful the governor will be, exactly. “The money that he has access to and is giving allows him greater power than he’d have otherwise, certainly,” says James Nowlan. “We don’t know yet if this will result in a fundamental transformation. That’s what the battle is about.”