I spent last weekend in Iowa, watching my son play basketball, but I also conducted some political research. I found many Iowans still are hedging. One finally said to me, “I wish I could know who bought them, then I would know who to vote for.” If you care about equity, read on.

In the informal polling, my son talked with students and young people. He found that those who had once been crazy for Kucinich had switched to Obama. As he put it, “I don’t know anyone my age who is not voting for Obama.” Hatred for Hillary Clinton is especially high, he said. Maybe that explains why one of his former classmates outed Hillary’s planted question in Newton, Iowa and another former classmate he played basketball with is one of Obama’s state coordinators.

Where once I thought Obama would probably place third or fourth in Iowa, he now has a chance to win it. Clinton will not win it. The best she can hope to do is to make a respectable showing. The Iowa press seems to delight in uncovering her latest gaffe’s, whether not picking up a restaurant tip or planting questions. In a state where one of the most important attributes of a candidate is the ability to personally connect with voters, most people I talked to described her as scripted, evasive and a few epithets that are unprintable.

But a poor Iowa showing will mean more to Clinton than just the loss itself, it will cement the Iowa voters’ impression in the minds of voters across the country, because when the network hacks start sticking their microphones in the faces of those Iowans, “scripted,” “evasive” could well emerge as important soundbites. Meanwhile the pollsters will be doing their work, uncovering the same opinion. If Howard Dean’s unfortunate yell in Iowa doomed his campaign, the voices of Iowans could well impact Clinton’s.

Political Cynicism

Many Iowans have taken a cynical view of the whole affair, some of them looking forward to the day when they “get their state back” and the outsiders, their satellite trucks and sign-plastered SUVs go home. When I asked several Iowans if any of the candidates had been to town, they just rolled their eyes, as if tired of the entire spectacle. This has led to a deeper cynicism heard not only in Iowa but across America: all politicians are in the pockets of special interest groups.

It’s difficult to know how many voters share this cynicism, which after all has been a growth industry for researchers and editorial writers since the nineteenth century. A March study by the PEW Research Center for the People and the Press found:

A majority of Americans do not believe that “most elected officials care what people like me think.” In both cases, this represents a substantially higher level of skepticism about government than in 2002 or 2003. The 34% who believe elected officials care about the views of average Americans is on par with a 20-year low of 33% in 1994.

Here is the graph, which you will notice shows this cynicism has grown since You Know Who took office, an albatross that will hang from the necks of all the Republican candidates:

So clearly, my admittedly unscientific Iowa sample agrees with the researchers. So in the interest of not only answering that voter’s question, but enlightening the rest of America here is another Strange Death of Liberal America exclusive report on “following the money.” Which groups are paying for these candidates and are there any of them we should be worried about?

Who Has the Money

The degree to which money has come to dominate politics is a major reason for voter cynicism. As long as four decades ago, Hubert Humphrey lamented the role fund raising had come to play in politics, referring to it as:

The most disgusting, demeaning, depressing, disenchanting, debilitating experiences in a politician’s life.

Since then, the role of money has only increased, mainly because today’s media-driven campaigns require huge sums to buy advertising time. The 2008 campaign promises to set a record for spending.

For the Democrats, Hillary Clinton and Barack Obama dwarf all the other candidates in raising money. Here’s the chart courtesy of opensecrets.org:

This chart raises a chicken and egg question: are the candidates who seem to be dominating the polls dominating them because they have the most money or is the money flowing to them because they are dominating the polls? Let me suggest a third, even more ominous explanation that comes from systems thinking: campaign finance is a reinforcing loop in which money can help create an early lead, which unless the candidate trips badly can in turn attract more money. This reinforcing loop can force less-well-financed candidates to roll the dice and spend more than they have in hopes of attracting more. Yet, even here well-financed candidates can rack up more debt in anticipation they will have more money coming in. The resemblance of this system to the stock market be apparent to any astute readers. Like playing the stock market, large investors stand to make more money than small investors.

Recent poll data seems to suggest that the poll ranking of candidates is almost identical to their finances. However, I created a new category which shows how much each candidate has spent per poll percent and the results are interesting, to say the least:

This chart shows that Chris Dodd is the leading vote buyer by far along with Bill Richardson. Obama spent double what Clinton has spent for her poll percentage. The most interesting aspect of this chart is to project how Kucinich or Gravel might do had they the finances of the other candidates. Those who have their calculators out will also notice the CNN totals do not equal 100% which means that 6% did not choose any of the candidates–enough for third place. In a contest where the number of candidates has made debates all but impossible, one has to ask the question of whether Dodd, Biden and Richardson–who have the highest dollars spent per poll percent–are essentially being kept in the race by money.

Where Is It Coming From

The question is whose money? That’s where we go next.

This chart reveals several important–and potentially damaging–findings about the Democrats’ Presidential campaign. When you throw in Hillary Clinton’s PAC and “other” monies, her percentage per dollar does not look quite so overwhelming since 12% has been bought for her. But it is Dodd and Biden’s amounts that should raise a few eyebrows for they essentially tell us both these candidates are literally being kept in the race by special interest groups. Why would special interest groups want to keep two candidates in the race who together are receiving only 5% of the CNN poll?

The Dodd Campaign

The first place to look for an answer is to heed Deep Throat’s advice and “follow the money.” and the first person to start with is Chris Dodd. Who is bankrolling his campaign and why? The donors list for Dodd reveals that his major bankroller is none other than SAC Capital Advisors, which is headed by Steven Cohen, a Connecticut hedge fund trader Business Week called “the most powerful trader on Wall Street you’ve never heard of.” Cohen has contributed $339,000 to the Dodd campaign, more than double that of the next-highest contributor, Citigroup.

SAC ranks number 72 on the 2008 campaign donors list with $427,000, which means almost all its money is going to Dodd. While others such as Citicorp are spreading theirs around. This is also considerably more than SAC has ever contributed to a single candidate, according to opensecrets.org. It is also one of the largest individual amounts contributed to ANY candidate. Stevie Cohen’s $339,000 would put him third on Hillary Clinton’s donor list and second on Barack Obama and John Edwards.

In a profile of Cohen, Business Week likened Cohen’s secretiveness to that of Howard Hughes. The article leaves little doubt that Cohen is both one of the most powerful and dangerous men on Wall Street. What makes him so feared and powerful is his ability to control much of the action on the Street.

The billionaire, who earned an estimated $128 million last year and $428 million in 2001, according to Institutional Investor, has a finger in funds other than his own.

Business Week uncovered possible involvement by Cohen in several scandals including the infamous ImClone deal that landed Martha Stewart in jail. The article concludes:

What makes Stevie mad? Simple: Not getting preferential treatment. Several analysts say that SAC traders often pressure them for upgrades, downgrades, information, or insight into trading flow. And sometimes getting the information first doesn’t seem to be enough.

Cohen’s involvement in politics is curious. He was a major bank roller of Joe Lieberman’s maverick campaign. In 2004 he contributed to the campaign of one George W. Bush. In short, Chris Dodd’s major campaign contributor is a questionable hedge fund trader who has supported maverick Democrats and President Bush.

Stevie Cohen, as he is known, is obviously someone who loves to throw wrenches into the regular Democratic Party, which given his resources makes him one of the Party’s most dangerous characters. As a hedge fund trader, he has to know that Chris Dodd’s chances of being President are about as good as my chances of making as much money as Stevie Cohen.

There seems little likelihood Cohen is engaging in this little escapade to earn Chris Dodd’s loyalty, because he has contributed to Dodd’s campaigns in the past. Perhaps in the beginning Cohen may have hoped Dodd would become a Presidential Lieberman, but now the only rational reason for his continuing to bankroll Dodd is to keep him on the stage with the other candidates. The more candidates on the stage, the less likely the Democratic Party will have a real debate.

Obviously, Cohen’s $339,000 is a small bit of Dodd’s total war chest, but “securities and investment” firms are the major source of Dodd’s funds and many of those firms have had recent problems. Among them are Bear Stearns, which landed on the nation’s front pages for its involvement in subprime mortgage hedge funds and currently faces several legal actions for its hedge fund activities. Another is the Royal Bank of Scotland, which was involved in the Enron scandal. Then there is Citigroup which also was involved with Enron and aggressively lobbied for the law that helped to create the current mortgage crisis.

Given the secretiveness of Stevie Cohen’s activities and Business Week’s admission of his relationships with other hedge fund and securities firms, the big question hanging over Chris Dodd’s campaign is how much has Cohen arm-twisted others into contributing?

Joe Biden

Joe Biden likes to portray himself as an elder statesman type, the old Senate hand whose experience has allowed him to propose a much-discussed option for Iraq. He can seem almost courtly, like a throwback to the school children’s myth that those who strolled the halls of the Capitol had a certain aristocratic air about them. But is this man what he seems?

Biden’s contributors list does not have the foul odor of Dodd’s. Other than Bank of America, virtually all of Biden’s contributors are lobbyists and lawyers, not unusual for a long term senator. His largest contributor is the law firm Simmons Cooper, which has been involved in several high-profile cases including one over the diabetes drug Avandia and mesothelioma cases stemming from asbestos.

Many of these contributors appear on the list of Biden’s Senate campaign contributors, suggesting that in Biden’s case his bank roll is funded by longtime contributors. Curiously, the amounts they have contributed to his Presidential campaign are paltry compared to their contributions to his Senate campaigns, suggesting that even these Biden loyalists probably have doubts about whether he will be President.

But Biden’s appeal and experience mark him as a possible cabinet or even vice-presidential choice. The key to this is the “cash on hand” column which shows Biden is rapidly approaching the point of no return in his campaign. Should he continue to stay in the single digits in the polls, my guess is he may be one of the first candidates to withdraw, especially given that he could play a major role in the Senate over Iraq.

Mike Gravel

Gravel’s finance information makes it clear he is largely financing his own campaign (that’s why he has an asterisk), which is being run on a shoestring–and a very frayed one at that. He has raised a little over $200,000 which is not enough to even buy him respectful television time or build an organization.

Gravel represents a new and troubling breed of candidate, one who essentially has bought his way into the Presidential debates with a little over a quarter of a million dollars. With Gravel’s “success,” I predict that this will inspire others to play the same game in 2012. We could have a stage crowded with quarter million dollar candidates.

What if Gravel had declared and spent nothing, would that entitle him to a place on the stage? Should a place on the stage be decided by money? The answer most Americans would probably give is a resounding “no.” Then is it by percentage in the polls? Gravel, after all, trails most of the field by only a few percentage points.

Before 2012 the Democratic Party needs to have a serious discussion about what constitutes a legitimate candidate. If all you have to do is declare you are running and put up some of your own money, then the Party will become a farce. The Party cannot legally force someone off the ballot if they want to declare themselves a Democrat, but they can decide who will be on that stage. Personally, if someone cannot score higher than 5% or even 3% in the polls, they need to be kicked off the stage.

Gravel was unceremoniously denied a place at the last debate, but he trails both Kucinch and Dodd by only 1% and Biden by 2%. That banishment of Gravel seems a bit arbitrary, especially considering the data on amount spent per percentage point. Gravel has spent considerably less than Dodd or Biden, and while it is clear Kucinich is under-financed he has outspent Gravel by several million dollars for his measly two percent.

Equity demands that either Gravel be reinstated or the Democrats cut off anyone 3% or under. That would remove four people from the stage and make this campaign a bit more interesting. Frankly it also would allow for alternative candidates to emerge, since it is clear a considerable number of Democrats are not satisfied with the current group.

The Bottom Line

Of the eight current candidates who crowd the stage at each democratic Party Presidential debate, one has essentially bought his way on stage. A second appears to have had his way bought on stage by some questionable people, of whom the major figure has thrown wrenches into the democratic Party in the past. A third is on the stage only because his distinguished senate career has attracted some money from donors who have contributed considerably more to his Senate campaigns.

This leaves five candidates, four of whom have little or no PAC or “other financing.” Only one of those candidates has large amounts of contributions from PACs and “other”– Hillary Clinton. Her finances and those of the others will take two more installments of this series to explore. Because of the size and complexity of her donations, Clinton is worth an article by herself.

Stay tuned.

Copyright: Ralph Brauer and Center for Responsive Politics.