Money for nothing

Pub date August 19, 2008
WriterG.W. Schulz


Speaker of the House Nancy Pelosi seems to be feeling pretty confident in her reelection prospects this November, despite an independent challenge by high-profile peace mom Cindy Sheehan.

But that hasn’t stopped the San Francisco Democrat from raising big bucks from scores of interest groups who are contributing to her campaign committee and to the political action committee she controls, known as PAC to the Future.

Most of the money she’s raising is going toward assuring her continued power in Washington by giving it to the campaigns of other Democratic members of Congress, particularly those facing tough election battles that could threaten the party’s House majority.

Pelosi’s reelection committee has raised $2.36 million over the past two years, hundreds of thousands more than the average House member, according to federal campaign disclosure records and data maintained by the Center for Responsive Politics.

Her PAC raised an additional $585,000 during the current election cycle and spent $769,000, much of which has also gone to other candidate committees in payments of $5,000 and $10,000.

Many newly elected Democrats in the House represent conservative constituencies, and with her blessing they sometimes vote with Republicans to distance themselves from the party’s perceived liberal leaders like Pelosi, according to a new book published this month, Money in the House: Campaign Funds and Congressional Party Politics (Perseus, 2008). Democratic leaders in the meantime have continued a phenomenal fundraising spree to help protect those House members.

"Speaker Pelosi’s extraordinary financial commitment to her party, and especially to her party’s vulnerable members, illustrates the overriding emphasis congressional parties and members place on money," writes author Marian Currinder, a senior fellow at Georgetown University’s Government Affairs Institute. "And her encouragement of selective ‘opposition votes’ demonstrates the complexity of governing in a highly partisan and highly competitive political environment."

Even the day-to-day reelection expenses of Washington’s unrivaled leading lady are outsize, as Pelosi’s spending records show. In June 2007, she celebrated her 20th year in Congress with a glitzy fundraiser held in the capital’s Union Station that cost at least $92,000 and featured a performance by soul singer Patti LaBelle.

The bill included $25,393 for a slick video production; $61,105 on catering, rentals, and securing the site; $2,000 for hairstyling and wardrobe assistance insisted on by LaBelle; $2,824 on flower arrangements; and $1,396 for chocolates from a Pennsylvania-based confection maker.

Pelosi spent at least $650 from her campaign on makeup for the steady string of appearances she made after being sworn in as House speaker in January 2007. An annual fundraiser held this year at the Westin St. Francis in San Francisco cost $23,454 for catering and other expenses.

As for the top contributors to Pelosi’s reelection committee, they include several members of the Gallo family, proprietors of the E&J Gallo Winery, who gave a total of $23,000 through maximum individual donations of $4,600. The Modesto-based company has long made contributions to both parties, particularly enriching candidates who show a willingness to scale back or even throw out the federal estate tax, which affects the inheritances of the wealthiest American families.

The Corrections Corporation of America gave $2,300 to Pelosi and $2,700 to her PAC. CCA is part of a storied group of for-profit privatization companies in Nashville, Tenn. that are closely tied to former Republican Senate majority leader Bill Frist and includes the Hospital Corporation of America and Ardent Health Services.

Just this year, the state of California hired CCA to house 8,000 inmates at six of the company’s facilities; a significant portion will go to a new $205 million CCA complex under construction in Arizona.

The nation’s largest private jail company suffered bad publicity during the 1990s due to a series of high-profile escapes and inmate killings inside its prisons. It teetered on the edge of bankruptcy after overbuilding jails without having enough inmates available to fill them, but the George W. Bush administration helped save the company with a new homeland security agenda that called for confining rather than releasing undocumented immigrants while they awaited deportation or asylum-request proceedings. The company’s revenue jumped nearly a half-billion dollars over the last five years and its lobbying activities in Washington, DC have increased similarly.

The entertainment industry has ponied up its share to Pelosi as well. The maximum $4,600 donation came from Aaron Sorkin, powerhouse writer behind the long-running TV series The West Wing and the 2007 film Charlie Wilson’s War. Christie Hefner, a regular donor to Democrats and heiress to Playboy Enterprises, contributed $1,000.

Steven Bing, a Hollywood producer who inherited a real estate fortune, and billionaire Las Vegas developer Kirk Kerkorian gave thousands to Pelosi over the last two years. Kerkorian has given to both parties, but he and Bing share a special relationship after having fought a nasty tabloid war.

Kerkorian allegedly hired private investigators to sift through Bing’s trash in search of DNA evidence that would link him to a child borne by Kerkorian’s ex-wife, whom he was divorcing, according to a lawsuit filed by Bing. Vanity Fair in July described Bing as part of a skirt-chasing entourage that ran with Bill Clinton and threatened to tarnish Hillary Clinton’s presidential bid with its freewheeling bachelor reputation.

The wealthy Herbert and Marion Sandler, major supporters of and other social justice causes, gave Pelosi a combined $9,200. The couple presided over the meteoric rise of Oakland mortgage lender Golden West Financial, which sold to Wachovia for $24 billion in 2006. The housing crisis led Wachovia to post staggering multibillion-dollar losses this summer, and some business writers have attributed its declining fortunes to the Golden West purchase.

In June, George Zimmer of Fremont, founder of the Men’s Warehouse, gave $2,300. Notable husband and wife political team Clint and Janet Reilly, both active as candidates and donors, contributed a total of $19,200 to Pelosi’s campaign and PAC.

"Essentially, raising money for the party and its candidates is required of leaders," Money in the House author Currinder told the Guardian. "Pelosi wouldn’t have been elected speaker if she wasn’t a stellar fundraiser."

So where is Pelosi’s money going if not to television ads for her own campaign? She divided $250,000 among the campaigns of approximately 70 congressional candidates, and disbursed about $532,000 more to them through PAC to the Future. The beneficiaries included $14,000 to Democrat Chet Edwards of Texas, whose district includes President George W. Bush’s Crawford ranch. Pelosi has publicly recommended him to Barack Obama as a possible running mate.

In addition, about half of the money Pelosi has raised since the beginning of 2007, slightly more than $1 million, went to the Democratic Congressional Campaign Committee in Washington, DC. She also gave to the Democratic parties of key battleground states including Indiana, Mississippi, Louisiana, and Ohio. She singled out Democrat Travis Childers of Mississippi for extra cash totaling $21,000. In May, Childers stunned observers by defeating a Republican in a special election held when a representative vacated his House seat to take over for conservative icon Sen. Trent Lott.

"She has had prodigious success raising funds for individual Democratic candidates, for the DCCC, and for her own campaign and PAC," Thomas Mann, a congressional scholar at the Brookings Institute, told us. "Most party leaders represent safe seats but nonetheless try to set a high standard for raising money to advance their party’s broader objectives."

Pelosi’s Capitol Hill and San Francisco offices directed our questions to her fundraising operations at the DCCC. Her political director there, Brian Wolff, called the war chest "another vehicle for her to communicate with constituents in California." But he conceded that the pressure is on, "especially now that we have so many candidates and incumbents that need help. It definitely falls on her to be able to have a very aggressive fundraising campaign."

Wolff insists, too, that the Democrats revolutionized fundraising by seeking out smaller donations from large numbers of people instead of returning to the same short list of affluent contributors they had in the past.

In general, top donations to Pelosi still have come from lobbyists and lawyers, the real estate industry, insurance companies, banking and securities firms, and Amgen, a major biotech researcher based in Thousand Oaks. Officials from the labor movement’s biggest new power broker, the Service Employees International Union, also gave substantial sums, as did other major unions. But they fell far behind the contributions of large business interests.

Art Torres, chair of the California Democratic Party, told us that health care reform failed in 1990s at least partly because of political spending by drug companies. But he said that Democrats winning the White House and expanding their majorities in Congress would create a greater mandate to overhaul the health care system.

"It’s always been about issues" rather than fundraising, Torres said. "When I’ve talked to her, it’s always been about ‘How can we get this or that legislation through?’<0x2009>"

It’s worth pointing out, however, that the nation’s largest drug wholesaler, McKesson Corp., is based in San Francisco, and donors from pharmaceutical companies gave Pelosi more than $85,000 this cycle. Drug companies have given freely to Democrats in the past, but Democratic officeholders "still voted against their interests every time," Torres said.

Pelosi’s campaign spending on everything but her own reelection shows she doesn’t regard Sheehan as much of a threat. But the antiwar candidate did make it onto the ballot Aug. 8 and the Sheehan campaign has raised approximately $350,000 since December in small contributions after refusing to accept money from PACs and corporations.

"We didn’t have the party infrastructure going into this," said Sheehan campaign manager Tiffany Burns, adding that Pelosi’s campaign expenditures are "just another example of how Pelosi believes she is entitled to this seat."