From Whom The Money Flows

Why support must continue long after winning elections.

Pasted below are screenshots from showing 2017–18 campaign committee* fundraising by the two most senior members of the powerful Ways and Means Committee in the US House of Representatives. Until the Democrats flipped the House in November, Republican Kevin Brady was the Chairman and Democrat Richard Neal the Ranking Member (the most senior member of the minority party). After the flip, Neal is now the Chairman and Brady the Ranking Member. First let’s look at Brady’s fundraising:

The largest contributors are all businesses or professionals with matters before Congress and operations that extend well beyond Brady’s district north of Houston, Texas. Nearly 60 percent came from PAC’s:

Now let’s look at Neal’s fundraising:

Four of the five largest contributors are companies with matters in front of Congress and all have interests or operations well beyond Neal’s district in southern Massachusetts. More than 75 percent came from PAC’s:

Notice how four of the five “Top Industries” supporting two members of two different parties are the same (Insurance, Pharma, Health and Securities). Notice also how small are the dollars despite the enormous power Neal and Brady hold over a country of ~320 million people and >$20 trillion of GDP. Donors may contribute $5600 per election cycle. If you formed your own PAC, just you and ten others contributing just $5600 each to Brady would make your PAC his largest contributor. Just 17 would make your PAC Neal’s largest contributor. (Based on that kind of math we have long thought a federal version of GFC could make a difference in Washington.) Notice also how independent expenditures are of no value in these cases. Sitting legislators need money donated directly to them. The press is far too fixated on big independent spending from corporations, unions and plutocrats. When it comes to influencing sitting legislators, the big money is small — but directly donated.

Financial support for Brady and Neal was probably very different when they first ran for Congress (31 years ago for Neal, 23 years ago for Brady) but once special interests know who’s going to win, they start building relationships. For a live example, start watching the fundraising patterns of members just elected this past November to Congress. Even though the House flipped, new members will raise money from old — and the same — special interests.

It’s no different in the California State Legislature. Newcomers have already hired Sacramento-based fundraisers to hold events that’ll largely be attended by insiders. The principal differences relate to dollar amount ($9700 per state election cycle, $5600 per federal election cycle) and the matters that come before the elected bodies (eg, government employees other than the military receive relatively little of the federal budget but very large amounts of California’s budget so government employees are big political players in Sacramento but not in Washington).

This is why winning elections isn’t enough and good-government organizations are permanently needed to help liberate legislators from special interests. We would love to see more good-government organizations form direct donation PAC’s such as GFC Courage Committee and/or bundle direct donations as we do via GFC Network Committee. In our view the only way California can ever reform its structural issues and maintain those reforms is through direct donations that liberate state legislators to do the right thing.

*Both Brady and Neal also sponsor “Leadership” PAC’s to which donors may contribute up to $5,000 per year and from which in 2017–18 they raised $1.45mm and $760k from the usual suspects.