by Matt Stoller, Wed Jul 26, 2006 at 01:17:20 PM EDT
Corruption in the corporate sector is not just a business story. It is a political story, and it is a bipartisan story. The machinery of the reactionary Democratic Party is heavily lubricated by money provided by corrupt corporations. This is so ingrained in the mentality of the hacks within the party that people like Tom Daschle think nothing of working as a corporate lobbyist in between his Senate position and his possible White House run.
I have to confess, I'm fascinated by these people, the Mike McCurry's and Joe Lockhart's. The Enron Democrats. I like them. I see why they defend their patron saint, Joe Lieberman, with an angry ferocity. They are truly the last of Reagan's era.
The grandfather of this group was Tony Coehlo, a California Congressman who introduced business PAC money into the Democratic Party in the early 1980s as a way of blunting the Reagan Revolution (or furthering it, depending on your point of view). Coehlo's perch was the DCCC, which he turned into a modern party committee, professionalizing it with computers, direct mail, and a television studio. And money. Lots and lots of money. The fuel of his DCCC political machine was cash, and so he recruited moderate Democrats who he could market to business PACs just emerging from a newly energized corporate political sector. Of course these new relationships weakened the ethics of Congress dramatically, and led to horrible legislation. Coehlo resigned in disgrace in 1989, but the informal system of legislative favors in return for campaign contributions has only gotten stronger since his time in Congress.
In some ways, the legacy of Coehlo's political career was the Savings and Loan scandals. Far from being penalized, though, Coehlo got very rich after his time in Congress as an investment banker, and pretty much ran Democratic strategy in 1994. He also was heavily involved in Gore's campaign in 2000, and is still considered a very influential Democratic insider. This well-trod path is the same one that John Breaux, Tom Daschle, and Mike McCurry have followed.
You see, Coehlo didn't just leave a legacy of scandal and business PAC money, he also raised a generation of operatives. His finance chief in 1986 at the DCCC was Terry McAuliffe, who profited heavily from failed telecom company Global Crossing in the 1990s.
Many Democrats are inhibited as reformers by one other factor--Democratic national chairman Terry McAuliffe. He is their main money guy, an ebullient and fabulously successful fundraiser who's close to both Clintons, Gephardt and Daschle and other potential candidates, AFL-CIO leaders and hundreds of fat-cat contributors. McAuliffe is also thick with Gary Winnick, chairman of Global Crossing, the failed telecom company that is now in the cross-hairs of SEC and Congressional investigations. Winnick cut his pal in at the takeoff and McAuliffe reaped up to $18 million on an investment of $100,000. McAuliffe's good fortune was shared by other early investors like the AFL-CIO-affiliated Union Labor Life Insurance Company, which also made spectacular gains from Global Crossing and, according to BusinessWeek, cut in some union officials. Were other deserving Dems befriended in this way? McAuliffe categorically denies ever having suggested to anyone that they invest in the company.
His problem is, Global Crossing looks a lot like Enron: The insiders sold early; the employees, ordinary investors and pension funds got trashed big-time. Global Crossing is the fourth-largest bankruptcy in US history but lacks the sophisticated artistry of Enron's complex financial deceptions. That distinction doesn't help Democrats much. "People are reluctant to make the arguments that need to be made for the Democratic agenda," one of them said. "They don't want to hurt Terry."
See that? Message discipline is not a function of Democrats being stupid. It's a function of corruption and smart people making money through corrupt disunity.
McAuliffe may be more meaningful as symbol of the money culture that engulfs the Democratic Party rather than as suspect financier. In a 1999 interview with the New York Times, he freely discussed the many collateral business deals he entered into with big-time party contributors--real estate projects, credit-card franchises, even tangled transactions with wealthy Republicans. "You help me, I'll help you. That's politics," McAuliffe explained.
The Coehlo generation was raised on the maxim that 'all politics is local', only they lived in Washington, DC, where the local players were the most powerful and richest corporations on the planet. They don't like progressives because their ideals are incompatible with ours.
I see a nobility of spirit in which they struggled to find a politics that worked in a newly right-wing era. I admire their ability to communicate, and to do spin. Politics is not easy, and they were the best of their era. I pity the corresponding self-deception, as the walls they put up to justify what they knew was immoral behavior grew harder and thicker. It must be sad to not recognize one's party or one's country, to see a new system of morality emerge.