Federal Politics

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Foiling attempts to follow the money

There's endless debate and tinkering with bewildering laws. But with hundreds of millions of dollars sloshing around, American politics is a saleable commodity - just like hamburgers and toothpaste.

When you see Mrs Smith at the Safeway checkout paying for a tube of Colgate, the deal is straightforward, transparent.

And for all the angst about secret donations, the same transparency was present when a Las Vegas casino magnate tried to buy the Republican presidential nomination for a friend.

He might have hidden it, but the billionaire Sheldon Adelson chose not to. In recent years he had spent millions to promote the political ambition of Newt Gingrich. And up until the inevitable collapse of the Gingrich campaign this week, Adelson and his wife had invested an estimated $17 million to get the nomination for him.

That the bid failed is not the point - yet Republican primary voters should be thanked for their eminent good sense. But that there could be such a brazen attempt to purchase the presidency by No. 8 on last year's Forbes list of the richest Americans is what is so fascinating.

Despite the acceptance by many in the US media of Gingrich's self-promotion as a genius and a man of ideas, he is more aptly described as a bombastic windbag.


Even hurling millions of dollars at his campaign was unlikely to prevent the inevitable - it expired like a penny cracker.

After the resignation of most of his campaign team last year, Gingrich's march on the White House was heading down the gurgler. But Adelson, worth an estimated $22 billion, rescued it almost singlehandedly, throwing a lazy $5 million to a Super-PAC campaigning on behalf of Gingrich.

As conservative outliers, Gingrich and Adelson are two of a kind, with much in common politically - but the headline issue that binds them appears to be their support for the state of Israel.

"There is not a better advocate for Israel," the publicity-shy Adelson reportedly said of Gingrich in a call to the editor of a Jewish newspaper in New York last year.

With the 78-year-old billionaire virtually owning the Gingrich campaign - he put up an estimated 80-plus per cent of the funding - the unsettling reality was that Gingrich was a single-issue candidate on behalf of a single contributor.

The first $5 million put up by Adelson was a graphic demonstration of the impact of the 2010 Citizen's United ruling by the US Supreme Court, which radically rewrote electoral funding law - it was 1000 times more than the previous $5000 ceiling on how much Adelson might have donated to a campaign.

The court's ruling that corporations are people and therefore are entitled to donate to political campaigns has opened the floodgates, particularly with the advent of so-called super-PACs, lobbying organisations that purportedly have nothing to do with a candidate - but which generally are staffed by loyal, close associates who campaign shamelessly on their behalf.

The court described such corporate spending as ''independent'' of the political process.

But this is not the case - "such spending links candidates to major funders who want something from government, and this may be corrupting," says Trevor Potter, head of the Campaign Legal Centre, an electoral reform group.

Notwithstanding the new ease with which the rich can contribute, some still go to inordinate lengths to conceal their spending - like the people behind F8 and Eli Publishing, both of Provo, Utah, who were listed as $1 million-apiece donors to a Romney-associated super-PAC.

Reporters who went digging found little at the listed address - the same for both entities.

There was nothing in the public domain to suggest that F8 transacted any kind of conventional business and no listings for books by Eli Publishing on Amazon.

Ultimately there appeared to be nothing legally untoward in the donations - a multimillionaire in Utah simply wanted to stay below the radar.

But in trying too hard to conceal his giving, he drew media attention … and there was another perfectly legal way to stay hush-hush.

Super-PAC contributions are revealed in time, which perhaps explains a new shift by wealthy individuals and corporations, to making unlimited contributions anonymously to tax-exempt organisations, such as the US Chamber of Commerce or the Crossroads organisation.

Both organisations undoubtedly are heavily into politics, but they operate under provisions of the tax rules that do not require them to reveal the identity of their financial backers. Such groups have already spent $28.5 million on campaign advertising, mostly in swing states, according to The Washington Post. And they are expected to spend tens of millions more on congressional contests.

It is instructive to look at spending by Crossroads, run by a group of former George W. Bush advisers, including Karl Rove. Crossroads GPS, its non-profit arm, raised close to $40 million from undisclosed donors in the first quarter of this year - compared with just $10 million raised by its affiliated super-PAC, American Crossroads, which must reveal the sources of its funding.

Tax records reveal that 90 per cent of $76 million raised by the non-profit Crossroads GPS last year was donated in the form donations of $1 million or more the donor-names for which will never be revealed, the Post reports.

Some American analysts argue that in the frontline contest, Obama super-PAC spending will likely cancel out that by the Romney-associated organisations. More pernicious, they warn, will be the super-PACS that need only threaten to inject money into a congressional contest - with the objective of bringing candidates into line with elements of their agenda.

In a country in which members of congress often seem to be more in the service of a range of lobbies than of their constituents, that is not as far-fetched as it sounds.

And some 'far-fetched' is good - which is to say that I'll miss Gingrich's pumped-up self-importance and his claimed ''big'' ideas.

History will record them all as it acknowledges that Gingrich is the presidential bullet that Americans avoided in 2012 - a colony on the moon, children to work as school janitors, a United Nations treaty to make ''the right to bear arms [a] universal right''.

Quite apart from his ideas was how he expressed them.

My favourite - "The thing I find most disheartening about this campaign is the difficulty of talking about positive ideas on a large scale, because the news media can't cover it and, candidly, my opponents can't comprehend it."