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Boykin: Tough Lessons For the Self-Financed Candidates

The most important takeaway message from tonight’s election results might have nothing to do with the Tea Party, or for that matter about the two major political parties.

The real question is about the influence of money in politics.

There’s two ways to approach this question. The first is to look at the self-financers who are spending hundreds of millions of dollars to win election. The second more difficult way is to look at the hidden money that subtly influences political races under the radar screen.

The Self-financers

With three prominent Republican businesswomen each trying to buy a 6-year membership into one of the most exclusive clubs in America – the U.S. Senate – it’s tempting to see this election as the year of the self-financed candidate.

But if polls prove right, former eBay CEO Meg Whitman , former HP CEO Carly Fiorina , and former WWE CEO Linda McMahon will all go down in defeat tonight, despite spending collectively nearly $200 million of their own money.

What went wrong?

Alexandra Grablewski | Riser | Getty Images

Self-financed candidates usually don’t win.

Over the past decade, only 11 percent of self-financed statewide candidates have won election, according to the National Institute on Money in State Politics.

We can even see those trends in the 2010 primary elections. Billionaire Jeff Greene spent $23 million but still lost the Democratic Senate primary in Florida to Rep. Kendrick Meek. And Craig Miller, the former CEO of the Ruth's Chris Steak House chain, lost his bid to win the Republican nomination for Florida's 24th congressional district despite spending half a million of his own money on the race.

The trends may continue tonight. Florida gubernatorial candidate Rick Scott has dumped $73 million of his own money into his campaign but is still running neck-and-neck against Democrat Alex Sink in a southern state that hasn’t elected a Democratic governor in 16 years. And Tom Ganley, who leads all House candidates in out-of-pocket spending, “appears bound to lose” his race in Ohio’s 13th Congressional District to Democrat Betty Sutton, according to the New York Times’s election guru Nate Silver.

One notable exception is Wisconsin, where Democratic Senator Russ Feingold, a champion of campaign finance reform, finds himself in the ironic position of trailing in the polls behind businessman Ron Johnson, who has spent millions of dollars of his own money on the race.

The real danger, however, is not about individuals buying individual elected offices for themselves. Voters are usually smart enough to see when a candidate is trying to buy an election. Thus, when self-financed candidates do win, it often comes at a high price. Billionaire New York City Mayor Mike Bloomberg had to spend $100 million of his own money to win re-election last year for a simple mayor’s race, and even then the popular incumbent just barely beat his underfunded Democratic challenger Bill Thompson.

Somebody should have told that to Meg Whitman, who has spent $140 million of her own money on her failing campaign against a 72-year-old establishment politician, and Linda McMahon, who has spent $40 million of her own cash on her losing campaign against an obviously flawed Democratic nominee.

The Hidden Money

The fate of Whitman, McMahon and Fiorina will surely become a prominent media story line right behind the question of who controls the House and Senate. But some pundits and corporate political interests will wrongly cite those expected defeats as evidence of the innocuous role of money in politics. If millionaires can’t buy their way into the Senate, then why are we afraid of corporations spending millions of dollars on TV ads, they’ll ask.

Your Money Your Vote - A CNBC Special Report
Your Money Your Vote - A CNBC Special Report

That argument is a bit of a distraction.

The real influence of money won’t be reflected in those three expensive races but rather in dozens of less expensive contests in which a million dollars here or there can make a huge difference.

Since the Supreme Court’s decision in Citizens United v. F.E.C. in January, we’ve seen an avalanche of unregulated and largely unaccountable money flowing into the midterm elections. Without strict campaign finance rules, there’s no good way to monitor where that money’s coming from, who it’s going to, or what kind of impact it has on the election. The real question of the election, therefore, is not about the failure of three Republican businesswomen, but about the success of numerous political organizations that have spent millions of dollars to buy our government, district by district.

Would Sharron Angle have been a contender against Harry Reid without the millions of dollars poured into the Nevada campaign by undisclosed donors? Would Libertarian Rand Paul be a serious candidate in Kentucky were in not for the influence of outside money? And would Republicans be in position to pick up the 39 seats they need to take over the House of Representatives without careful national targeting of resources by independent groups?

For Meg, Linda and Carly, maybe money can’t buy you the public’s love if you run for office yourself. But for billionaires, millionaires and corporations that want to buy a compliant government to reduce their tax and regulatory burden, it can sure give you a whole lot of influence.