Bill Moyers
November 16, 2012
Trevor Potter on Big Money’s Election Effect

BILL MOYERS: Since the election last week those of us concerned about the amount of money in politics have been told repeatedly, “Get over it: your concern’s overblown, Citizens United is a boogeyman, and big money didn’t make all that much difference.” Really? That's not what Trevor Potter thinks. And he's the expert on how money works its will. You may have caught him the other night, advising his client Stephen Colbert, on what to do about the super PAC they had created for Stephen last year in a clever effort to expose the potential for campaign finance corruption.

STEPHEN COLBERT: Can I somehow give the money to myself and thereby hide it forever from all eyes and use it in the way I wish?

TREVOR POTTER: Actually, you can.


BILL MOYERS: Colbert Nation is in good legal hands with Trevor Potter. He knows how the system works. He advised George H. W. Bush and John McCain on their campaigns for the White House. He helped draft the McCain-Feingold Campaign Reform Act, chaired the Federal Election Commission, and founded the Campaign Legal Center. That's a non-partisan group working with other campaign finance reformers to counter the influence of that six billion dollar election.

Welcome back Trevor.

TREVOR POTTER: Thank you very much, nice to be here.

BILL MOYERS: So, did the money matter or not?

TREVOR POTTER: Well, let me give you an analogy that you would appreciate on the east coast, which is if you have a hurricane, and there's still buildings standing at the end, and you come out and say, "I'm still alive," do you stop worrying about hurricanes? No. And I think that's where we are.

The tidal wave of money was there. It left lots of Democrats standing. It was nowhere near what the super PACs hoped it would be on the Republican side in the senate races. And obviously they didn't elect Governor Romney. But I think they had a huge influence on the race. And they undoubtedly learned lessons which they will put into effect in the next elections.

BILL MOYERS: I've heard so many people say since the election, "Well, this proves that big money didn't make all that much of a difference because it was sort of a wash.”

TREVOR POTTER: I think there are a couple ways that actually made a big difference this year. The first one which is very counterintuitive is it may have actually badly injured Romney. And the reason for that is that after Citizens United you had these so-called candidate super PACs.

And in the Republican primaries last spring you had Romney who is widely the leader and assumed to have it wrapped up. And then you had two other candidates who came up, had millions of dollars spent on their behalf by super PACs, and kept the race open. They were the Gingrich candidacy and his super PAC and the Santorum one. What it meant was that instead of wrapping things up in February, Romney waited, had all of these primaries where he was attacked.

And he ended up the primary season somewhat wounded because these Republican super PACs had run really vicious ads against him presaging the Obama attacks. And he was broke. Now if that hadn't happened, if we had had not had super PACs Romney would've raised the money and the other candidates would not have. They raised no money themselves virtually. The millionaires, billionaires funded them. Each of them had one billionaire who kept them in the race. If that hadn't have happened they would've had literally no money to pay for gas for a car.

BILL MOYERS: Are you saying that they--

TREVOR POTTER: And they would've been out.

BILL MOYERS: --that billionaires kept the Republican primaries going?

TREVOR POTTER: Yes. Absolutely. What happened this year is the billionaires kept Santorum and Gingrich going for months in a way that the public never would've.

And they attacked, used the billionaire's money to attack Romney. He had to spend his money to defend himself and raise a lot of money through his super PAC to defend himself. But the result was the election took much longer to get a Republican nominee than the Republicans had hoped. And Romney was broke starting.

If you look at a lot of what the Democrats are saying now it is, "We had an advantage because we were sitting there lying in wait for them." Obama had no opponent. He had raised hundreds of millions of dollars that he could spend on advertising to define Romney in the early summer. And the Romney campaign couldn't hit back because it didn't have the money.

BILL MOYERS: So, do you realize what you're acknowledging or even conceding that although the billionaires may not have gotten what they wanted, the Republican nominee, they set the agenda by spending money on these candidates who eventually had to drop out?

TREVOR POTTER: Oh, I think that's entirely true. The billionaires in many ways drove the Republican primary race. It was their advertising. If you look at the spending candidates weren't raising the money for these ads. The super PACs funded by billionaires were. And in both the Gingrich and Santorum cases just one billionaire each doing it. So you have two billionaires speaking to each other—

BILL MOYERS: Could you get me one?

TREVOR POTTER: And the collateral damage is Governor Romney. So I think Republicans are looking back at this and saying, "We, the party, lost control of the primary process," meaning a billionaire or two, not the people I mean, there're are people out there saying, "Well, this is the voice of the people. And isn't it wonderful to have everyone involved." This is one billionaire speaking to another billionaire or two billionaires attacking a multimillionaire in the person of Mitt Romney.

So it's a very small conversational ambit. But it clearly changed the race. So that's one way where I think they had a huge effect.

The other is if I were a Democrat and I were looking forward, I would say, "We were lucky this time. We dodged a bullet. We had Barack Obama. He's an incumbent president. He had no primary challenge. He started raising money in April of 2011." So he had a whole year before Romney was really even beginning to think about the general election to raise and stockpile money.

Even so he just spent the Republicans to a draw because the Republican super PACs raised and spent three times as much as the Democratic super PAC, the one that Obama supported. And that's what the president out there as an incumbent urging cabinet secretaries to fundraise for it, urging Democratic donors to support it.

And even with that the Republican super PACs outspent the Democratic one, three to one. So if you look forward you don't have an incumbent president. You have a contested Democratic primary. You may have a divisive one as you did Obama versus Clinton in 2008. They're going to be where Romney was this year. They're going to be broke. They're not going to have a list of four million volunteers ready to go.

They're not going to have those hundreds of offices all over the key states and Ohio and elsewhere because they won't have had the money to open them. And the Republican nominee is going to be sitting there again I think with substantially more super PAC support. So just because this time Obama as an incumbent was able to spend them to the draw should not suggest to anyone that that's what happens next time.

BILL MOYERS: I read in a couple of places that by the week of the election President Obama had attended 221 fundraisers, far more than any other incumbent president in our history, in 24 states. I mean, the time that is used to raise this money had to figure into our reckoning of its impact, right?

TREVOR POTTER: This is actually a disaster for the country, this being the fact that we don't have presidential public funding. And instead we have the incumbent president of the United States spending that much time out trying to raise money for his campaign instead of worrying about the economy, national affairs and international affairs. You may recall the, one of the debates Romney went after Obama saying that after the Libyan incident you left Washington and you went to Nevada.

That was for a fundraiser. That's what they're doing. And if you think of that many fundraisings here's an interesting statistic for you. Back in 1984 Ronald Reagan was the incumbent president of the United States. He had a reelection. His campaign had to raise matching funds in the primary. And he had to raise money for the party even though he was taking the federal grant as everyone has until this year in the general election. Ronald Reagan attended in that year four fundraisers.

BILL MOYERS: Compared to 221--

TREVOR POTTER: Compared to 221. So we have a president, and this is not an attack on Obama,


TREVOR POTTER: This is an attack on whoever's there. We have a president who is to some extent not doing their job because they have to be off fundraising. The Romney people felt the same way. Romney was heard to be complaining in his campaign that he couldn't go out and meet voters and do the things he thought he had to do as a candidate because he had to spend all his time in closed rooms with small groups of wealthy people to fundraise.

In order to get his ads up for his campaign he couldn't campaign. There's a great irony here. And so you have two issues here. One is the time that the president is spending doing this rather than his job and what happens to a candidate when the only people they meet, and talk to and take questions for months on end are a small group of our society who have a lot of money and certain views. And I think the Romney 47 percent comments reflect what he knew the donors think because he'd spent so much time hearing things like that from this small group of Americans.

BILL MOYERS: Did those Republicans donors, those guys in the room and the big Republican donors in particular get no return on their money this year?

TREVOR POTTER: I think they did get a return. And that's what we're going to see in the future. They didn't elect all the members of the Senate they wanted. They did do, save some members of the Senate, some Republican Congress people who were under attack. But the real point is that these groups have a lobbying agenda. They have a legislative agenda in Washington. And they now have a Republican party that is incredibly grateful for the time and money that was spent in this election.

The Republican leadership wants them to do it again in the midterms in only two years. So they've got chits they can call in. They have earned and purchased influence. If you are a Republican officeholder are you going to listen to Sheldon Adelson when he wants to talk about specific legislative issues when he's spent millions of dollars and you know he can do it again. Of course you are.

Aren't you going to listen to American Crossroads which you hope is going to build a structure for the party in the next elections. Yes. And that's going to be true on both sides. It's not just Republican. If you're the big Democratic super PAC, you are going to have your calls taken by Democratic members when you say this is what we need to do.

BILL MOYERS: I heard you as Steve Colbert's lawyer advise him that he could keep the money he had collected through his super PAC and transfer it to his secret fund, the so-called social welfare fund, and use it for lobbying if he wanted to.

STEPHEN COLBERT on The Colbert Report: Let me see if I can make clear what is happening. I’ve got a 501(c)(4) called Colbert Super PAC SHH! I take the money from the super PAC, I pass it through the 501(c)(4), into a second, unnamed 501(c)(4). I place all the money inside that second unnamed 501(c)(4), and through the magic of your lawyering and the present federal tax code, after I close this and lock it that money is gone forever and no one ever knows what happened to it?

TREVOR POTTER on The Colbert Report: You’ll know, but nobody else will.

TREVOR POTTER: Federal Election Commission rules say that he could have taken the money, written himself a check and gone and bought a yacht. That's permissible. Because what the Congress has done is restricted actual candidates, members of Congress and their challengers, and said they can't use the money to buy a Cadillac, or a yacht or other personal use.

None of these other political monies are restricted. So all these super PACs, they'd have to pay income tax on it. But if they wanted to write themselves a check and take it home they can. But what I was telling Stephen Colbert is if you're not going to do that and everyone's going to know it because that is disclosed, then you can take the money basically off the books, put it in a 501(c)(4) social welfare organization and then move it around. And as we've discussed before these (c)(4)s can use that money for political ads if they want. You just won't know that is was Colbert's money. Or they can use it for lobbying.

BILL MOYERS: So they'll be another invisible influence over the representatives we have sent to Congress that we won't know about funded by super PACs?

TREVOR POTTER: Right. Some of it may be disclosed through the lobbying disclosure provisions. But no grassroots lobbying has to be disclosed that way. So if you run ads or you're generating phone calls in a district or you're sending e-mails, none of that is going to be disclosed.

BILL MOYERS: How do you assess the impact of Citizens United in particular on this election?

TREVOR POTTER: First of all what it tells us is the court really didn't understand how elections work, because they thought this spending would be totally, wholly independent of candidates and parties. And this so-called independent spending was being done by groups that were very close to the candidates and parties. And that's one reason they were so successful in raising all that money is the donors knew they were close to Romney, or Obama or the Republican or Democratic establishment.

So they trusted them with the millions of dollars they got. Then the court said that corporate shareholders would at least know what their corporations were doing. And through corporate democracy they could object if they didn't like it.

The reality is the shareholders don't know. There's no requirement of disclosure to shareholders under the law. And most companies don't tell their shareholders what they're doing. And they certainly don't have an opportunity to object to it in any substantive way or change the corporation's policy. So I think the reform agenda looking forward is going to be shouldn't there be a provision for shareholder democracy, what the Supreme Court talked about in Citizens United.

Should the S.E.C. or Congress or the states that actually charter corporations, shouldn't they have provisions saying that before a corporation uses shareholder money it needs their approval. And Republicans are going to say, "Well, if that's the case shouldn't we have that for labor unions." Well, why not. I mean, if you're going to have someone in charge of a group spending other people's money, and it really is other people's money, then shouldn't they get their approval to do that.

BILL MOYERS: The supreme court said this money's not a problem if it doesn't corrupt. The perception of corruption is also a danger. So it seems to me that you can't avoid the appearance of corruption in the use of secret money to lobby that was given for campaigns?

TREVOR POTTER: It's one of the real problems with the Citizens United case is that what they effectively said is, "We on high have decided that independent spending in elections cannot corrupt as a matter of fact and theory. We don't want to hear otherwise. It can't do it. And therefore you can have this unlimited spending." So when people look at examples of corruption the court doesn't want to hear it. That's why they turned back a challenge from the state of Montana which said, "We have evidence of corruption in our elections." And they said "We don't want to talk about it. We've already decided the case." So what's going to have to happen here is the, I think we have to build a record over time showing the many ways in which this spending does in fact corrupt or have the potential for corruption.

It may be because it's not really independent and the close ties to the candidates and the parties. It may be that it's not just election spending and an ad that voters are seeing. But it's tied to this lobbying campaign and trying to get something from the members of Congress who were elected by that spending.

BILL MOYERS: What do the reformers do next?

TREVOR POTTER: The whole enforcement problem we have today has got to be addressed. We have a Federal Election Commission that is usually deadlocked three-three which means it can't do anything. That's one reason we have the disclosure gap in this election.

And no one's done anything about the F.E.C. It has five of the six commissioners are in expired terms sitting there waiting for their successors. So I think there's a real opportunity here for the president to take the lead and to say, "We need a functioning F.E.C. I'm going to work with Congress. I'm going to go outside of the system. I'm going to look for people who are not Washington insiders, haven't worked-- for the party committees before."

"I'm going to find people who know something about elections or are independent-prosecutor types who have integrity. And I'm going to nominate them to the Federal Election Commission.”

BILL MOYERS: You've been advocating for campaign reform for a long time. Given what just happened, this hurricane as you say of money, are you going to hang it all up, maybe get a gig on Comedy Central? Are you going to keep at the, at it?

TREVOR POTTER: I'm going to keep at it. And surprisingly as a Republican I've actually come to the judgment that we're going to have to have some sort of citizen funding of elections. We're in an election cycle where not only a handful, literally, of billionaires, I think changed the way the Republican primary came out, were the principal communicators of the general election.

But even if you look past that to all the money that Obama raised, and Romney raised and all those Congressmen and Senators raised, one-third of one percent of the American public actually gave money in recordable amounts to candidates. So 99 point two-thirds percent didn't participate in the system in recordable amounts, which means more than $200 to a candidate.

And what about the rest of the country. They deserve a voice. And I think we're going to have to find a way to do that, whether it is some sort of a tax credit or a tax return to taxpayers. You know, Republicans always say, "We ought to be cutting taxes. We ought to be giving money back to the people." Well, maybe that's exactly what we ought to do, give each citizen, each registered voter $100 or a voucher for $100 dollars and say, "You can give this to the candidate of your choice. It's your money back. You're all paying taxes one way or the other, income tax, gas taxes, social security taxes. You go out and fund candidates and parties that you like." So that's how the 99 point two-thirds percent gets involved. There's something fundamentally flawed about a system where in order to get elected the members of Congress have to rely on the very people who are lobbying them day in and day out. Because that's their principal source of funding, those lobbyists and the interests they represent.

And the problem with super PACs this year is they just upped the ante. Because it used to be a senate race cost, well, who knows, but not much. But then it was millions. The Virginia senate race this year was $80 million, $50 million or so from outside groups, the other $30 from inside.

Well, if you're a senator and you have just been elected, or heaven forbid you're up in two years, what are you thinking. You're thinking I don't have time to worry about deficit reduction and the fiscal cliff. I've going to go to a fundraiser. I have to raise tens of thousands of dollars every day to have enough money to compete with these new super PACs. And it'd be really nice if I could find a billionaire who would help me with my own super PAC.

And that means I need to be nice to a lot of billionaires who often want something from me in order to find the funding for my campaign and hope they'll do a super PAC. So you raise the financial pressure on members and realistically the time pressure for all those fundraisers at the very moment when we face a lot of issues that we'd like them to be focused on instead of their next campaign.

BILL MOYERS: Trevor Potter, thank you for joining us.

TREVOR POTTER: Thank you very much. As always I appreciate it.

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