By Frank Rich / The New Yorker / April 22, 2012
If you want to appreciate what Barack Obama is up against in 2012, forget about the front man who is his nominal opponent and look instead at the Republican billionaires buying the ammunition for the battles ahead. A representative example is Harold Simmons, an 80-year-old Texan who dumped some $15 million into the campaign before primary season had ended. Reminiscing about 2008, when he bankrolled an ad blitz to tar the Democrats with the former radical Bill Ayers, Simmons told The Wall Street Journal, “If we had run more ads, we could have killed Obama.” It is not a mistake he intends to make a second time. The $15 million Simmons had spent by late February dwarfs the $2.8 million he allotted to the Ayers takedown and the $3 million he contributed to the Swift Boat Veterans demolition of John Kerry four years before that. Imagine the cash that will flow now that the GOP sideshows are over and the president is firmly in Simmons’s crosshairs.
His use of the verb killed was meant in jest, of course, much as Foster Friess ($1.8 million in known contributions, and counting) was joking when he suggested that “gals” could practice birth control by putting Bayer aspirin between their knees. America’s billionaires are such cards! And we had better get used to their foibles and funny bones. Whatever else happens in 2012, it will go down as the Year of the Sugar Daddy. Inflamed by Obama-hatred, awash in self-pity, and empowered by myriad indulgent court and Federal Election Commission rulings, an outsize posse of superrich white men will spend whatever it takes to have its way with the body politic and, if victorious, with the country itself. Given the advanced age of most of this cohort, 2012 may be seen as the election in which the geezer empire struck back.
This isn’t quite what was supposed to happen. When the Supreme Court handed down its five-to-four Citizens United decision in 2010, pre-vetting Mitt Romney’s credo that “corporations are people,” apocalyptic Democrats, including Obama, predicted that the election would become a wholly owned subsidiary of the likes of Chevron and General Electric. But publicly traded, risk-averse corporations still care more about profits than partisanship. They tend to cover their bets by giving to both parties. And they are fearful of alienating customers and investors. Witness, most recently, the advertisers who fled Rush Limbaugh, or the far bigger brands (McDonald’s and Wendy’s, Coke and Pepsi) that severed ties with the conservative lobbying mill responsible for pushing state “stand your ground” laws like the one used to justify the shooting of Trayvon Martin in Florida. While corporations and unions remain serious players in the campaign of 2012, their dollars don’t match those of the sugar daddies, who can and do give as much as they want to the newfangled super-PACs.
Sugar daddies—whom I’ll define here as private donors or their privately held companies writing checks totaling $1 million or more (sometimes much more) in this election cycle—are largely a Republican phenomenon, most of them one degree of separation from Karl Rove and his unofficial partners in erecting a moneyed shadow GOP, David and Charles Koch. At last look, there were 25 known sugar daddies on the right (or more, if you want to count separately the spouses and children who pitch in). You’ve likely heard of Sheldon Adelson, the Vegas tycoon who is Benjamin Netanyahu’s unofficial ambassador to the GOP. But you may be less familiar with Irving Moskowitz, the bingo entrepreneur who funnels his profits into East Jerusalem settlements. Or Robert Mercer, the hedge-fund master of “flash trading” who poured a clandestine $1 million into ads attacking the “ground-zero mosque” and nearly another $3 million into a scale-model railroad in his Long Island mansion. Or Steven Lund, the co-founder of Nu Skin, which became “direct selling” sponsor of the Romney-run 2002 Winter Olympics after having spent much of the nineties settling complaints over false advertising and other unscrupulous practices with the Federal Trade Commission and six different states’ attorneys general.
The list of 25 does not include donors whose names we may never know: those who are legally allowed to remain anonymous when giving to patently political “social welfare” nonprofits like Rove’s Crossroads GPS. That particular Rove money drop reported to the IRS last week that nearly 90 percent of its first $76.8 million haul (from June 2010 through December 2011) had come from two dozen donors giving $1 million or more, including two contributions of $10 million each. While Obama has his own super-PAC–“social welfare” nonprofit combo, the proceeds totaled only a pathetic $6.7 million last year. A paltry $100,000 contribution is all it takes for a Democratic donor to get priority access to the White House, according to the New York Times. George Soros is on the sidelines, and Obama so far has claimed only two sugar daddies of his own: Bill Maher and DreamWorks co-founder Jeffrey Katzenberg. Their products may at times emit noxious fumes—let us briefly recall Maher’s 1989 big-screen turn in Cannibal Women in the Avocado Jungle of Death—but even the biggest show-business bombs can’t roil the environment like, say, Harold Simmons’s vast Texas site for dumping radioactive waste.
The convictions sugar daddies share with each other and Romney.
During the primaries, the Republican sugar daddies fanned out to support various contenders, gladly bestowing tens of millions in mad money on the vainglorious crusades of Newt, the Herminator, and the two Ricks. But today these donors are starting to coalesce around Mitt. In retrospect, Romney, a one-percenter incarnate, is their natural candidate. And, for all intents and political purposes, they will own him if he makes it to the White House. The Center for Responsive Politics has calculated that just 10 percent of Romney’s donors for 2012 have been from among the hoi polloi (those contributing $200 or less)—compared with 52 percent for Santorum, 48 percent for Gingrich, and 45 percent for Obama. The only Americans fired up and ready to go for Mitt are those who can and will give to the max, all keenly mindful of the dividends certain to accrue to them in a Romney administration.
Though the sugar daddies do differ on some issues—in some surprising cases departing from conservative orthodoxy on immigration, same-sex marriage, and abortion—those anomalies are trivial next to the convictions they share with one another and with Romney. Indeed, the sugar daddies fill in the vacuum of core beliefs that so many have found elusive in the Etch-a-Sketch candidate. Many of them have in common the practice of “vulture capitalism”—to use the term Rick Perry wielded when attacking Mitt’s record at Bain Capital. The fundamental principles of vulture capitalism, whatever the respective business arenas or prey, are inviolate: Anything and anyone is expendable in pursuit of a profit, starting with the powerless, and any brushes with the law along the way, not to mention civil or criminal financial penalties, are simply the price of doing nasty business. Like corporate donors, sugar daddies tend to seek favors to serve their particular special interests (notably the golden oldies of oil and finance) and dedicate themselves to fighting and avoiding taxes. But their ethos departs from the corporate model. Precisely because they are lone wolves responsible to no one but themselves—not independent shareholders, let alone the communities they plunder—they can be “more ruthless than Wall Street,” as the Newt Gingrich super-PAC put it in its ad attacking Romney’s Bain career. Vulture capitalists are throwbacks not so much to the relatively modern bankers and industrialists whom FDR set out to police in the Great Depression as to the more primitive titans and robber barons of the Gilded Age that Teddy Roosevelt took on a generation earlier.
As many have noted, it was ludicrous of Perry and Gingrich to pillory the man from Bain when their own campaigns were backed by sugar daddies whose ruthlessness (and fortunes) far surpassed Romney’s. Adelson, who with his family showered more than $16 million on Newt, is not only an entrepreneur in the business that wrote the Ur-text of vulture capitalism—gaming—but runs a company that is under scrutiny from both the Department of Justice and the Securities and Exchange Commission over bribery accusations in his casino outposts in Macao. Simmons, a career-long Perry backer, was not only a pioneer in the corporate sport of hostile takeovers just as Romney was getting in the game, but then went on to become the “king of Superfund sites.” His greasing of Texas legislators earned him the right to dump nuclear toxins wherever he damned well pleases. Another sugar daddy—a home-construction tycoon named Bob Perry (unrelated to Rick except by donations)—leveraged millions in political contributions to influence the creation of a Texas Residential Construction Commission, a sham state “regulatory” agency that shielded shoddy home builders from lawsuits until the Texas legislature finally killed it in 2009. Bob Perry is only the 24th-biggest home builder in America, but he has had the means to donate some $72 million to political causes since 2000. You have to wonder what mischief some of the 23 ahead of him might be up to.
Mitt’s own coterie of Wall Street vulture capitalists is second to none in rapaciousness—starting with the hedge-fund gambler John Paulson, who collaborated with Goldman Sachs on his megabet against the entire American housing industry before the crash. Another Romney hedge-fund patron, Paul Singer, is notorious for slick trafficking in Third World debt, with results that leave the destitute masses of countries like the Congo in a far sadder state than the hapless Goldman clients (those “muppets” we’ve been hearing about) on the losing end of Paulson’s big score. Romney also has an affinity for fellow Mormons who’ve made sugar-daddy fortunes by peddling dubious “health products” sold by “multilevel marketing” schemes (a.k.a. pyramid selling) in which retail sales are secondary to the commissions tied to roping more suckers into the sales force. In addition to Lund of Nu Skin, there’s Frank VanderSloot, the Professor Marvel behind Melaleuca, an Idaho-based company that promises to help “moms be moms” and “earn a corporate income from home,” even if they don’t have the financial cushion of, say, Ann Romney. Though a promotional video on its website features women who claim to have earned as much as $500,000 selling goods like dietary supplements (which purport to remedy clogged arteries and arthritis), the average Melaleuca peddler makes just $87 per year. An industry critic, Robert L. FitzPatrick, elucidated for Mother Jones how companies like Melaleuca and Nu Skin are perfect examples of the vulture-capitalist business model: They set “the average person upon his neighbor to get at his assets, savings, and investments.” Romney, meanwhile, has applauded VanderSloot for having “vision and sense of social responsibility” that are “second to none.”
What they specifically want from Mitt and his party.
What these sugar daddies specifically want from Mitt and his party, besides the usual conservative bullet points (codified in Paul Ryan’s tax-cutting, government-shredding budget), is clear enough: the widest possible regulation-free berth for any vulture businesses they have a hand in, from nuclear waste to “health” nostrums, from new houses to financial products created from those homes’ subprime mortgages. A particularly large wish list is likely to emanate from the Koch brothers, whose privately held business interests are many. Such has been their zeal to protect their gas and oil holdings that they shoveled nearly $25 million into organizations fueling climate-change denial from 2005 to 2008—nearly three times what ExxonMobil spent on such spin during that period, in Greenpeace’s accounting. To preserve another profit center, a Koch subsidiary has also backed the recently disbanded Formaldehyde Council, which argued that formaldehyde is “a natural part of our world” rather than “a complete carcinogen,” which is how it is classified by the Occupational Safety and Health Administration. osha, of course, is exactly the kind of federal agency that would lose funding and gain Koch apparatchiks as staff members in a Romney administration.
Because most sugar daddies are actual people, not corporations, their feelings get hurt when these embarrassing facts are pointed out. The Koch brothers’ lawyer Ted Olson has gone so far as to argue that criticism of his clients by the president and others is akin to the oppression (his word) suffered by the McCarthy era’s innocent victims—who, some may recall, often lost their jobs and sometimes were jailed for their beliefs. In truth, the sugar daddies often have more in common with Joe McCarthy himself and bullies like the columnist Walter Winchell who enabled his witch hunts. VanderSloot and the Kochs have a long history of trying to intimidate (often with costly legal actions) the publications or websites that report on them. After Jane Mayer published her 2010 New Yorker examination of the Koch brothers’ often covert role in the tea-party uprising, the Daily Caller, a Washington-based outlet sponsored by Foster Friess and run by Tucker Carlson, assigned a reporter to slime her. (The investigation was spiked once other outlets got wind of it, with even the New York Post rallying to her defense.)
The billionaires’ other tactic for trying to deflect scrutiny is a Gilded Age standby: philanthropy. It’s all but impossible to attend a cultural event or endure a medical procedure in New York City without encountering the name David H. Koch. In February, a few months after Bloomberg Markets magazine, hardly a left-wing rag, reported that a European subsidiary of Koch Industries had long made an end run on American sanctions and sold petrochemical equipment to Iran, Koch played the philanthropy card with a more sympathetic publication, the Palm Beach Post. He gave its reporter a privileged invitation to his “painstakingly restored” Addison Mizner mansion to talk up his largesse to medical research. Koch’s flack told the reporter that her boss hoped his legacy would not be his political activities but “finding a cure for cancer.” A more likely legacy will be his uninhibited financial support of the union-busting rise of the Wisconsin governor Scott Walker, whose current effort to survive a June 5 recall election may in the end prove the second most consequential political battle of 2012.
“In a sense, David Koch is becoming the Andrew Carnegie of his age,” wrote his Palm Beach Boswell. Not exactly. Carnegie, arguably the least egregious of the Gilded Age titans, offers a stunning contrast to Koch. His philanthropic obsessions led him to give away almost all of his wealth, with a reach unmatched by any of his sugar-daddy descendants. He argued for estate taxes and declared that the “proper use” of money was “for public ends” that “would work good to the community.” He had socialist roots in Scotland, preferred frugality to luxury, and was entirely self-made. The Koch brothers, by contrast, inherited hundreds of millions of dollars from their father, Fred, who also bequeathed them a paranoia and unrestrained hatred for political adversaries that would have been anathema to Carnegie. Fred Koch, a founder of the John Birch Society, published a manifesto, A Business Man Looks at Communism, in 1960. It accused Republicans and Democrats alike, as well as the U.S. Supreme Court, of being under the sway of the Kremlin, and described welfare programs as a plot to attract blacks to cities and “foment a vicious race war.”
It defies rationality that the current crop of sugar daddies is in such a rage at the country that has done so well by them. Their tax rates are at modern lows, the Dow has recently hit a four-year high, and their businesses are booming. “Big U.S. companies have emerged from the deepest recession since World War II more productive, more profitable, flush with cash and less burdened by debt” was how The Wall Street Journal summarized the lay of the land this month. It’s workers whose jobs were shed by those companies and remain unemployed who have a right to be enraged, not the sugar daddies. Economic inequality remains at nearly pre-recession levels as 99 percenters struggle to hold their ground, let alone move up the economic ladder.
Why Obama arouses such violent emotions among sugar daddies.
A Democratic president notwithstanding, much of the government is also on the sugar daddies’ side—and not just the radical Republican House. A 2010 Times study of some 1,450 modern Supreme Court decisions prepared by scholars at the University of Chicago and Northwestern, among them the federal appeals judge Richard Posner, found that the Roberts court has ruled for business interests 61 percent of the time—up from 46 percent in the last five years of the Rehnquist court and 42 percent for all courts since 1953. The notion that Obama is anti-business remains a canard, no matter how much it is repeated by aggrieved CEOs in finance and beyond. The administration has approved fewer rules proposed by federal regulatory agencies than its predecessor did; Obama’s SEC has been notable mainly for its unexpectedly lax policing of Wall Street; his health-care bill, like Romney’s in Massachusetts, was in part modeled on principles originally proposed by the Koch-backed Heritage Foundation; the surviving too-big-to-fail banks are all bigger than they were before the crash and the bailout. The so-called jobs act that the president signed this month, with ample Republican support, was in essence a deregulatory bill further loosening already weak protections for investors. Yet to sugar daddies like Harold Simmons, the president is “the most dangerous American alive” because “he would eliminate free enterprise in this country.”
Obama arouses these kind of violent emotions less because of his actual record than because of who he is (emphatically not one of them) and what he says. His two recent, latently populist campaign speeches—one last December in Osawatomie, Kansas, site of Teddy Roosevelt’s legendary “New Nationalism” address of 1910, and one to the Associated Press in Washington this month—drove the right bonkers. In the first, he attacked those who practice the philosophy that “we are better off when everybody is left to fend for themselves and play by their own rules.” Approve of that laissez-faire philosophy or not, surely it cannot be argued that he misstated it. That’s the vulture capitalism evident in both the careers and public pronouncements of many of the sugar daddies. Obama made the right even angrier in his second speech when he likened their ethos to the Gilded Age creed of social Darwinism. Again he was on the money. As the historian Alan Brinkley has written, social Darwinism appealed to late-nineteenth-century corporate buccaneers because its vulgar application of Darwinism to the marketplace—that the fittest are destined to survive and flourish in business as in evolution—could “legitimize their success and confirm their virtues.” It also eased their guilt about the plight of the poor, since the poor had only themselves to blame for “their own laziness, stupidity or carelessness.” These sentiments are regularly echoed today not just by rising conservative politicians like Chris Christie and Paul Ryan but by none other than Rick Warren, the pastor who presided over Obama’s inauguration. “Certainly the Bible says we are to care about the poor,” he recently told Jake Tapper of ABC News, before asserting that the poor are robbed of their “dignity” and forced into “dependency” if subsidized by a government safety net. The undeserving poor of the Gilded Age are with us still.
If Obama had wanted to make the sugar daddies squeal even more, he would have pointed out that the vulture capitalists of both the nineteenth century and our own don’t actually believe in the unfettered free-market competition they preach. In the Gilded Age, they formed monopolies that eliminated rivals. Then and now, they buy or rent politicians and judges to stack the regulatory deck, bend the rules, and maintain government subsidies exemplified by the “carried interest” tax loophole for hedge-fund tycoons. As Mark Twain, co-author of The Gilded Age, summed up their credo: “What is the chief end of man? To get rich. In what way? Dishonestly if we can; honestly if we must.”
It’s no wonder that in substance and even a bit in style, the 2012 election echoes the climactic Gilded Age election of 1896. John D. Rockefeller Sr., Henry Clay Frick, and their peers were panicked by the prospect of a populist president—in the form of William Jennings Bryan, the Democrat—and rallied around William McKinley, the Republican long cited as a hero by Karl Rove. McKinley’s campaign manager was the hard-driving Mark Hanna, a millionaire businessman who formulated a lasting maxim: “There are two things that matter in politics. The first is money and I can’t remember what the second one is.” Such was his fund-raising prowess that the GOP outspent the Democrats by a margin of 23 to 1 (an estimated $7 million to $300,000). McKinley won with 51 percent of the popular vote, though his assassination at the start of his second term in 1901 would set the stage for the ascent of his vice-president, Teddy Roosevelt, and the Progressive movement. Many of the reforms that Roosevelt would champion—estate and income taxes, more federal regulation of business and the workplace, fair play in labor disputes, protection of the public from contaminated food and drugs—are nearly identical to those opposed by the social-Darwinist sugar daddies of today.
It was also in the years surrounding the 1896 election that legislators in the South, eager to undo Reconstruction, started suppressing the black vote (and that of poor whites too) by erecting barriers like poll taxes and literacy tests. Another version of that scam is also playing out in 2012. Under the pretext of nonexistent “voter fraud,” seventeen states have passed restrictive legislation to deter voting by those at the lower end of the economic scale: minorities, immigrants, the elderly, and students. These copycat bills have largely been modeled on a template endorsed by the American Legislative Exchange Council—the same organization that pushed for “stand your ground” laws. Among this group’s backers, needless to say, are the Kochs.
If the sugar daddies get their way in November, we know what it means for the country. But it’s equally worth contemplating what will happen if they don’t. Obama is talking the talk of the two Roosevelts, whose reformist zeal and political courage helped bring America back from the brink after the privileged plundered it in the Gilded Age and the Jazz Age. But if he is willing to take on those interests as forcefully as they did, he has yet to show it in his actions and governance. Unless and until he does, it’s hard to see how the sugar daddies could lose over the long run, even if Obama wins on Election Day. They have, after all, only just begun to spend.
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