Temptation Sits By the Side of the Road ... “There Is An Opportunity”
The announcement by the crypto industry earlier this month that it was going to play in four U.S. Senate races – two primary and two general elections -- was extraordinarily brazen.
They have $85 million to spend and they haven’t yet decided who to support. It is out there ready to be spent on behalf of any who agree with what the industry calls “clear rules and consumer protections”.
Should the incumbents feel targeted? “I wouldn’t say that there’s a target on their backs,” the head of U.S. Policy at Coinbase told the New York Times. “What I would say is, there is, I think, an opportunity, and there is an important time period between now and the election … to make some decision.”
One crypto super PAC, Fairshake, had just spent $10 million to defeat Katie Porter in the California Senate primary, who afterward said the race had been “rigged by billionaires”. The response from Fairshake, “Thank you, Katie Porter, for giving Fairshake credit for your loss.”
It reminded me of a conversation I had a long time ago with the chief lobbyist for the Illinois Medical Society. He explained the society’s influence this way: “We’re willing to try to beat people. When Ann Willer was defeated, she came back [to the Capitol] and told everyone how the docs had gotten her. Thank you, Ann! The message gets around. We’re willing to organize and contribute and not lie down when someone bangs us on the head. At the same time we will help those who have been with us. We stay with our friends.”
When one incumbent is defeated, every other incumbent gets the message. There is a price to pay for being on the wrong side. In the words of the chief executive of Coinbase, “In 2024 it will become clear that being anti-crypto is bad politics.”
The stakes are particularly high. The two general election Senate races targeted by the crypto industry are those in Ohio and Montana. Both seats are held by Democrats. Both states voted Republican in the last two presidential elections. In the narrowly divided Senate the winners of those races will determine which Party will have the majority.
The Times went on to report, “Two people familiar with the industry’s plans said all lawmakers running in targeted races, as well as in a number of other districts and states, would soon be receiving industry-related questionnaires asking them to document their stances on crypto issues.”
Questionnaires from interest groups has been a fact of life for candidates since the late 1980s when the resources and power necessary to win elections shifted from the political parties to single interest groups and their PACs.
When I first ran for state representative in Illinois in the 1970s, getting enough votes to win depended on being endorsed and actively supported by the local county political party. An endorsement brought with it the support of all the party’s allies in addition to the precinct captains who had knocked on doors in their own neighborhoods in many elections and knew how to turn out their voters
By the final time I ran for the legislature, some twenty-plus years later, political power had shifted and elections had changed. The county party could no longer deliver the votes necessary to get elected.
Within a couple of days of filing for office, I was inundated by questionnaires from political action committees who wanted to know my position on detailed, specific issues that affected their interests. Topics not usually discussed around kitchen tables. Resources required to win depended on my answers.
What contributed to the change? Television was replacing door knockers. Campaign finance laws and court decisions were limiting what parties – but not other players -- could do.
When word of mouth dominated, political power rested on the ability to mobilize labor to knock on doors, and the power structure took the form of political patronage machines that were very effective at sending your neighbor to your front door asking for your vote.
Since television became dominant, political power has rested on the ability to mobilize capital to pay for advertising. The changeover began when candidates who used media to carry their messages began to beat candidates who relied on party organization.
At first, television was the instrument of “reform.” It allowed candidates to bypass the political bosses and their ward organizations and present themselves directly to the voters. There was a tradeoff, however. Without access to the party’s doorknockers, candidates turned to interest groups to fund media-based campaigns.
It was not long before a new political power structure developed. One made up of the interest groups, money donors and media consultants who pay for and create the persuasive messages delivered on small screens of all kinds. A power structure that is more centralized and less accountable than the old.
When the parties were strong, groups aligned themselves with the Party they were comfortable with. The groups and the Party were mutually supportive, each contributing to the collective strength. Unions were a bulwark of the Democratic Party. I was a Democrat and pro-labor. That was enough. As a candidate I was beneficiary of all of the Party’s alliances.
That all changed. By the last time I ran, after being out of office for 10 years, I was in the position of having to cobble together just for myself a coalition of interests large enough to get elected. It was me and the interest groups. The questionnaires began to arrive a week after I filed the papers to run.
Among its 55 questions, the state AFL-CIO wanted to know if I would repeal the Scaffolding Act, support a state-run workers’ compensation insurance fund, and remove exemptions to the Prevailing Wage Act. The dentists asked who should be allowed to treat the temporomandibular joint. The bankers wanted to know if I would vote to allow banks to sell insurance, sell securities, and provide travel services.
The rest of the more than 40 questionnaires were equally specific. The cover letters made it clear that to be considered for endorsement I had to fill out, sign, and return the questionnaires. A “yes” or “no” commitment for a specific future vote was required. Although most groups were discrete in their choice of words, it was clear that help in my campaign was contingent on my commitment to vote for their interests.
Interests that endorse and support you really do expect you to vote for all of their interests all of the time. And they can be crass and blunt about expressing that opinion.
One day I was talking with the president of the state AFL-CIO who was standing by the third-floor rail in the Capitol rotunda outside the House chamber. A crucial vote in the House of Representatives was being lost because a Democratic member was “defecting,” and the president was furious. “Doesn’t he know he is ours? We supported him. We put him in there. He can’t do that.”
Even though Kathleen in her first term in the Wisconsin Senate disagreed with the trial lawyers on only one of their many issues, they refused to support her campaign for reelection. One previous donor wrote cryptically in response to a fundraising letter, “Can no longer help. Very disappointed with Vinehout.”
Even as an incumbent running for reelection, you still have to fill out the questionnaires. It is not enough that you have a record. With a new term, new commitments are required. As one organization leader put it when asked why he was sending a questionnaire to an incumbent who had been an ally, “I like to think of it as renewing our vows once every four years. A series of ‘I dos’ to remind us why we got married in the first place.”
Voters and interest groups are entitled to know what candidates think about a wide range of issues as part of making up their minds about whom to support. That is what campaigns are for. There is an uncomfortableness, however, about answering detailed questionnaires from single interest groups, an uncomfortableness that is not present at neighborhood gatherings where those present also ask you about what you think about issues and decide whether to vote for you or not based on how you answer.
The differences are significant. The neighborhood gathering provides an opportunity for discussion and interaction that the questionnaire does not. And their concerns go beyond narrow economic advantage. They want to know what your vision is for the community: for schools, transportation, health care, housing, public safety, and the environment.
Those with single interests, on the other hand, just want a commitment on their specific goals. They don’t care what else you might do. As the billionaire, former mayor of New York City once told Senator Pat Toomey, R-PA, “If you support reasonable background checks, I will support you, even though we have nothing in common on any other issue.”
That is the problem with Crypto and every other single interest playing in politics. Only their interest matters. Nothing else. The politician, the candidate, the office holder is left to figure out how to make enough single interests happy to get elected and then also have the freedom once in office to make decisions that benefit the community.
As power -- the ability to select candidates and provide the resources to elect them -- has shifted from the political parties to single interests, the overall welfare of the community which requires a balancing of competing interests is more difficult to achieve. The politician charged with resolving conflicts is married to one side before the election. Compromise is not permitted.
There is no easy answer. The advice of Jesse Unruh, an old-time politician from a vanished generation, Speaker of the California Assembly and “Big Daddy” of California politics, requires a certain attitude, but I must admit, appeals. “If you can’t take their money and look them in the eye and vote no, you don’t belong in this business.” Marriages don’t have to last.