Why Democrats Taking Secret Money Risk the High Cost of Copying Republicans

It is telling that per­haps the most stri­dent critic of a deci­sion last week by some top Democ­rats to amass secret dona­tions is a cam­paign finance cru­sader who is now out of power. For­mer U.S. Sen­a­tor Russ Fein­gold refused secret cam­paign cash from “non-profit” out­side groups this past fall. And last week, he told Huff­Post that Demo­c­ra­tic oper­a­tives who’ve now decided to fol­low the GOP’s lead by form­ing their own inde­pen­dent fundrais­ing groups were “play­ing with the devil.”

Feingold’s out­rage sounds like a shout from a bygone age. As Janine explores in Shadow Elite, the new era is all about adapt­ing, line-blurring, rein­vent­ing, brand­ing and rebrand­ing, push­ing the lim­its of accept­abil­ity, and quickly assim­i­lat­ing your opponent’s tac­tics. Democ­rats for years have been try­ing to do just that — co-opting cer­tain Repub­li­can ideas and strate­gies. Many pas­sion­ate lib­er­als insist that, after last year’s Cit­i­zens United Supreme Court deci­sion opened the door to unlim­ited, undis­closed cor­po­rate con­tri­bu­tions, and the GOP bar­relled right through, it’s high-time for Democ­rats to charge ahead them­selves with groups (mod­elled after Karl Rove’s Cross­roads.) But Fein­gold is right to warn about the con­se­quences of mir­ror­ing your oppo­nent, not just for Democ­rats but for democ­racy itself. Other instances of Demo­c­ra­tic co-opting have led to dis­as­trous results.

It goes back to the Clin­ton admin­is­tra­tion and its New Demo­c­rat embrace of cer­tain aspects of the Rea­gan rev­o­lu­tion, under the guise of “Rein­vent­ing Gov­ern­ment”. The Clin­ton White House sanc­ti­fied the already entrenched prac­tice of con­tract­ing out gov­ern­ment ser­vices to limit the head­count of the fed­eral work­force. This might have given the polit­i­cally expe­di­ent appear­ance of aus­ter­ity but not the real­ity. Con­tract­ing accel­er­ated and assumed new incar­na­tions dur­ing the Clin­ton years, and exploded dur­ing the Bush era. This has left us with a gov­ern­ment in which some pri­vate com­pa­nies are increas­ingly per­form­ing not just gov­ern­ment work but inher­ently gov­ern­men­tal func­tions, and over­sight is severely lack­ing. Iron­i­cally, out­sourc­ing often costs more, not less — hardly the “rein­ven­tion” and “effi­ciency” that vot­ers were sold on. Mean­while, tax­pay­ers are only dimly aware that they are pay­ing into a pub­lic sys­tem that is both bloated and some­times dic­tated by pri­vate agen­das. Behe­moth com­pa­nies are now thor­oughly enmeshed with gov­ern­ment, and their activ­i­ties are often beyond the reach of accountability.

In this envi­ron­ment, reg­u­la­tors and their work have been deval­ued, and some reg­u­la­tory agen­cies like, say, the Min­er­als Man­age­ment Ser­vice, which over­saw off­shore drilling, began look­ing more like a lob­by­ing group for the very indus­try it was sup­posed to be polic­ing. MMS and var­i­ous other reg­u­la­tors were drained of their exper­tise by pri­vate busi­nesses able to offer for­mer reg­u­la­tors (or would-be reg­u­la­tors) far big­ger salaries. BP, for instance, can plau­si­bly argue that there are few peo­ple within the gov­ern­ment who know enough about their busi­ness to effec­tively under­stand their operations.

Clinton-era Democ­rats also were eager to show vot­ers that they would pro­mote a strong econ­omy as much as their Repub­li­can rivals. So they assim­i­lated var­i­ous pro-growth and pro-business poli­cies, and the results of some of these poli­cies, as any­one with a 401K knows, were dire. What was good for Wall Street was believed to be good for Amer­ica. The goal for inter­est rates was to keep them as low as pos­si­ble (too low, for too long, crit­ics say.) The player with most con­trol over rates was the Repub­li­can Fed­eral Reserve chief Alan Greenspan, but Trea­sury Sec­re­tary Robert Rubin and his deputy Lawrence Sum­mers, both Democ­rats, were solidly sup­port­ive. Rubin and Sum­mers also pleased Wall Street inter­ests by push­ing to dereg­u­late banks and by let­ting exotic finan­cial deriv­a­tives grow unchecked.

This helped innoc­u­late the Demo­c­ra­tic lead­er­ship from charges of not being on the side of busi­ness, and yet the laissez-faire approach is largely to blame for let­ting banks engage in risky gam­bles on an epic scale. The com­mit­ment to “free mar­ket” prin­ci­ples also made Democ­rats wary of crit­i­ciz­ing out­sized pay prac­tices on Wall Street and cor­po­rate Amer­ica, though it was clear even then that some of these prac­tices offered exec­u­tives incen­tives to engage in dan­ger­ous behav­ior or to hide lia­bil­i­ties. All told, it is lit­tle sur­prise that many on Wall Street became gen­er­ous donors to Demo­c­ra­tic causes.

So now some Democ­rats are fol­low­ing the GOP’s lead on secre­tive dona­tions, abdi­cat­ing the moral high ground after rail­ing about the influ­ence of stealth financ­ing since the mid-term elec­tion rout last fall. The deci­sion may well help the party win, but at what cost? We can imag­ine that this choice might fur­ther inflame the out­landish con­spir­acy the­o­ries that have dogged the Obama admin­is­tra­tion. If Democ­rats do pre­vail in 2012, pol­icy deci­sions will surely be scru­ti­nized by those (rightly) won­der­ing if they can trace them back to some shad­owy con­trib­u­tor. More fun­da­men­tally, the move fur­ther blurs the lines between the par­ties. To the oper­a­tives behind the deci­sion who insist that accept­ing secret money doesn’t com­pro­mise Demo­c­ra­tic core val­ues, we have some rec­om­mended read­ing right here in the com­ment sec­tion of the Huff Post. While many fiercely defended the move, say­ing, as one com­menter did, that Democ­rats “can’t bring a knife to a gun fight,” oth­ers said, in effect, what’s the dif­fer­ence between a Repub­li­can and Demo­c­rat again? Remind me.

By Linda Keenan and Janine Wedel

Pub­lished in The Huff­in­g­ton Post, May 5, 2011.

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