Why wealthy political investors will keep pouring money into politics—until they’re stopped
-By Robert Reich
December 12, 2012- I keep hearing that the billionaires and big corporations that poured all that money into the 2012 election learned their lesson. They lost their shirts and won’t do it again.
Don’t believe that for an instant.
It’s true their political investments didn’t exactly pay off this time around.
“Right now there is stunned disbelief that Republicans fared so poorly after all the money they invested,” said Brent Bozell, president of For America, an Alexandria, Maryland-based nonprofit that advocates for Christian values in politics.
“Congrats to @KarlRove on blowing $400 million this cycle,” Donald Trump tweeted. “Every race @CrossroadsGPS ran ads in, the Republicans lost. What a waste of money.”
Rove’s two giant political funds—American Crossroads, a super PAC, and Crossroads Grassroots Policy Strategies, a so-called nonprofit “social welfare organization” that doesn’t have to report its donors—backed Mitt Romney with $127 million spent on more than 82,000 television spots. Rove’s groups spent another $51 million on House and Senate races. Ten of the 12 Senate candidates they supported lost.
The return on investment for American Crossroads donors turned out to be just 1 percent, according to an analysis by the Sunlight Foundation, a Washington-based group that advocates for open government.
Among Rove’s investors was Sheldon Adelson, the billionaire who owns the Las Vegas Sands Corporation.
Adelson invested more than $100 million in the election, mostly on Republicans who lost—including $20 million that went to Romney’s super PAC, Restore Our Future; $15 million to another super PAC that almost single-handedly kept Newt Gingrich’s Republican primary campaign going; and about $50 million to nonprofit Republican fronts such as Rove’s Crossroads GPS.
Adelson wasn’t alone, of course. Texas industrialist Harold Simmons invested $26.9 million; Chicago Cubs owner Joe Ricketts invested close to $13 million; a network organized by billionaire industrialists Charles and David Koch invested $400 million.
But if you think these losses mean the end of high-stakes political investing, you don’t know how these people work.
You see, if and when they eventually win, these billionaires will clean up. Their taxes will plummet, many laws constraining their profits (such environmental laws preventing the Koch brothers from more depredations, and the anti-bribery Foreign Corrupt Practices Act that Adelson is being investigated for violating) will disappear, and what’s left of labor unions will no longer intrude on their bottom lines.
And they have enough dough to keep betting until they eventually win. That’s what it means to be a billionaire political investor: You’re able to keep playing the odds until you get the golden ring.