Observations of an expat: Money talks

Money talks. And nowhere does it shout louder than in the political arena of the United States of America.

The roll call of companies turning against the president and his acolytes is impressive. A truncated and growing list includes: American Express, Mastercard, Morgan Stanley, Goldman Sachs, JP Morgan, Stripe, Apple, Amazon, Google, the PGA, Deutsche Bank, Signature Bank, Hallmark, Verizon, Comcast, AT and T, AirBnB, New York City, the Koch Organisation….

Several on the above list deserve special mention. Deutsche Bank has been (now was) the Trump Organisation’s bank for years. It is owed $340 million by the company. But that is not all, President Trump has personally guaranteed every penny of the loan which is interest only. This means that when the loan falls due in 2023 and 2024 he will have to stump up the full amount.

New York City building projects have been a Trump cash cow dating back to the early days of the business his father created. They have simply cancelled all contracts with the Trump Organisation. That will hurt the bottom line.

The Koch Organisation has been America’s leading contributor to conservative causes since Fred Koch financed the start of the ultra-conservative John Birch Society in 1953. Between 2009 and 2016 his sons Charles and David gave a staggering $889 million to the Republican Party, individual Republican politicians and conservative think tanks.

The Koch Organisation started going off Trump a few years ago. But after the attack on Capitol Hill they also turned against his Congressional supporters. They have warned those Republican congressmen and senators who either objected to the Electoral College vote or voted against impeachment that the Koch Organisation’s contributions to their electoral war chests will likely be axed.

They need the money. To run for a seat in the House of Representatives costs an average of $1.6 million and you have to raise that money every two years because that is the length of your term of office. Senators hold their seats for six years, but the average cost of a campaign is $12 million. Elizabeth Warren’s last run for office cost $42,506,349.

Of course, congressional campaigns pale into financial significance compared to the cost of a presidential race, which rises almost exponentially every four years. In 2004 the total cost of the presidential campaign was $4.1 billion. By 2016 the candidates were spending $7.5 billion. The number crunchers are still going through the expenses of the 2020 campaign, but all the signs are that it will be another record breaker.

The candidates would have you believe that most of the money comes from tens of thousands of everyday folk sending envelopes filled with five, ten and twenty dollar bills. That is a fair chunk of the money but the biggest slice comes from corporate America and other special interest groups.

The amount that corporations can donate to politicians is – unlike in most Western democracies – unlimited. There was an attempt in 2010 (Citizens v. Federal Election Commission) to restrict political spending by corporate America, but the Supreme Court threw it out.

Contributions to Political Action Committees – or PACs – give big business access to Washington’s corridors of power. Their key people are assigned ambassadorships, seats on advisory councils and even cabinet posts.  At the very least a CEO is guaranteed that a senator or congressman will answer their phone call and listen to their problems.

Most businesses are unconcerned whether a politician is a Democrat or Republican. They are profit-driven, not ideologically-driven.  Often a large company will give equally to opposing camps. Their first priority is political stability as a requirement for economic growth. And to ensure stability they need a government that respects the constitution and the rule of law.

Donald Trump and his supporters have demonstrated contempt for the US constitution by not only refusing to accept the result of the November presidential elections, but actually going to the extreme of trying to overturn the vote. This is politically destabilising which is bad for business.

The Trumpists are thus faced with a dilemma: Their voters support Donald Trump and his destabilising libertarian we-don’t-give-a-damn-about-the law-and-the-constitution policies. But they need the cash from pragmatic businesses to buy the television, radio and newspaper advertising that has become a dominant feature of American elections. The likely scenario is that most of them will end up following the money.

* American expat journalist Tom Arms is LDV's foreign affairs editor and author of the forthcoming book “America: Made in Britain.”

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7 Comments

  • John Marriott 16th Jan '21 - 7:57am

    I have never understood how political parties are allowed to obtain so much money to fight campaigns. Many countries fund their political parties if they achieve a specific level of popular support. We theoretically have a limit on how much a party or candidate can spend in any specific election, although it would appear that the rules can be bent, particularly in the case of the seat the Tories managed to prevent Farage winning or the onslaught on the West Country Lib Den seats that Schapps and his youthful recruits led back in 2015.

    However, when it comes to donations and spending, in the ‘Land of the Free’ is, as they say, it’s “a whole new ball game”. Quite frankly, the amounts donated and spent and the reliance on business interests etc is obscene. I’ve watched some of the TV advertising the Republicans and, to a lesser extent, the Democrats use and it provides a whole new definition to the term ‘negativity’.

    By all means allow limited donations; but you’re not telling me that these big corporations or those organisations with a vested interest donate out of the goodness of their heart. They say “money talks”. In politics it certainly does on both sides of the pond. It’s a pity, therefore, as far as yours truly is concerned, as it think I have mentioned before (several times), if that’s the case, all mine seems to say is “Goodbye”!

  • “Dominium” the manufacturers of the Voting machines are suing various pepole and organisations for defamation, including the Prtesident and have received their first grovelling apology from a right wing media outlet. In addition the Georgia adminstration are seriously looking at criminal proceedings against Trump for interference and undue influence in their election process, apparently even a self serving pardon would not cover this. One can see him asking Putin for asylum!

  • Steve Trevethan 16th Jan '21 - 12:49pm

    Thank you for your important article!

    Thank you for pointing out the the U. S. A. Is somewhere between a low grade democracy and a plutocracy with some democratic attributes.

    How would you rate the U.K. on a democracy scale, say 0-10 ?

  • Richard Underhill. 16th Jan '21 - 4:52pm

    Leading up to the 2016 federal election Donald Trump said that he is/was “too rich to steal”. He is currently fundraising but bankers are shying away from him, including Deutsche Bank, to whom he owes $300 million+ according to the Times, a Murdoch paper.
    Rupert Murdoch likes to back winners. He is not an obvious supporter of trade unions, nor is he obviously a socialist, but he backed Tony Blair before 1997.
    After the lunchtime news today16/01/2021, BBC tv showed a programme called HardTalk interviewing an American man who described himself as a Liberal Democrat on the basis that he had voted for Hillary Clinton presumably in the 2016 presidential campaign. There was no mention of her victorious previous campaign for Senator in New York. She is certainly a Democrat, but her writings admit earlier support for Barry Goldwater (AUH2O). President Obama gave her an important job. To win the nomination she needed the support of super-delegates.
    The interviewee on HardTalk claimed to have supported Nazis, Communists and McCarthyites in support of the the First Amendment to the US Constitution. Other US lawyers may differ.
    There is also the issue as to whether impeachment can be applied to an ex-President after another has been inaugurated. Donald Trump has been impeached twice, but a decision will need 75% of the elected Senators. The Vice-President has a casting vote, but they are under threat of physical violence, but Donald Trump was supported by the Ku Klux Klan and the National Rifle Association, some of whom sell guns and ammunition to the mentally ill.

  • Alex Macfie 16th Jan '21 - 5:04pm

    I wish people would stop calling destabilising we-don’t-give-a-damn-about-the law-and-the-constitution politics “libertarian”. Liberty, by definition, cannot interfere with anyone else’s liberty, and therefore is founded on the rule of law. What the “Trumpists” want is freedom for themselves (but not anyone else) from the consequences of their actions. That’s not liberty, it’s licence.

  • John Marriott 17th Jan '21 - 2:02pm

    Blair and Obama have more in common than you think. Both offered a ‘breath of fresh air’ and started with incredible goodwill. Both failed to grasp the nettle of real reform and I think we know the rest.

  • @Steve Trevethan. I would put Britain at about 7 out of 10 on the democracy and fair elections table. This is because of the absence of PR in general elections. It forces people into tribes and means that a large percentage of the votes are against a political party rather than for it. This is divisive and bad for democracy.

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