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Obama v. Romney: Money is everything in the 2012 presidential election

Few issues galvanize the American electorate like money: who has it, who doesn’t, and what various people are doing to get it. In the 2012 presidential race, money may become the determining factor in the outcome.

If so, this is not good news for the Democratic incumbent, President Barack Obama. The champion fundraiser of 2008, who was able to refuse taxpayer money for his campaign because he was flooded with donations from the little people, is now locked in a fierce battle with a challenger who has made money the main pillar of his bid for the White House.

Mitt Romney, the all-but-crowned Republican nominee, is a very wealthy man — one of the richest, they say, ever to run for president. He touts his success at every opportunity, saying, in effect, that his ability to make money makes him uniquely qualified to lead the country.

But questions are now being raised about how he got his money, what he has done with it, and how the laws of the land seem to be in favor of Romney and other fat cats.

On Thursday, the Boston Globe broke the story that Romney remained CEO of Bain Capital three years longer than he's claimed. That sparked a firestorm of criticism, and prompted Obama's deputy campaign manager Stephanie Cutter to call Romney "the most secretive candidate to run for president since Richard Nixon," Politico reports.

The news comes after a trail of trouble-raising issues about Romney's finances. These are highlighted sharply by an investigative report in this month’s Vanity Fair. A lack of transparency in his financial dealings, says author Nicholas Shaxson, has made it difficult to unravel the tangled web of offshore accounts, tax havens, and questionable accounting practices that have allowed Romney to amass, and keep, his wealth.

No one is suggesting that Romney has done anything illegal, exactly.

“Romney … is certainly a remarkable financial acrobat,” writes Shaxson. “But careful analysis of his financial and business affairs also reveals a man who, like some other Wall Street titans, seems comfortable striding into some fuzzy gray zones.”

One of the things that have bothered many is Romney’s ability to avoid the high taxes that the rest of us are liable for.

Romney himself has said: “I pay all the taxes that are legally required, not a dollar more.”

So if there is anything wrong with one of the country’s richest men living comfortably in a 15-percent tax bracket, then the trouble is with the laws.

But here Shaxson quotes Lee Sheppard, a contributing editor at the trade publication Tax Notes.

“When you are running for president, you might want to err on the side of overpaying your taxes, and not chase every tax gimmick that comes down the pike. It kind of looks tacky,” says Sheppard.

But legal “gimmicks” and loopholes have been a major currency of this election. Just look at the mess that campaign finance has become.

Much has been written about “Citizens United,” the celebrated — some would say notorious — Supreme Court decision that opened the gates for unlimited and largely unregulated campaign spending.

Corporations are now, for the purposes of law, considered to be people, with the same First Amendment rights as individuals. This means that any attempt to regulate their spending for political activism is tantamount to curtailing their right to freedom of speech.

This dos not play well with liberals.

“I’ll believe corporations are individuals when Texas executes one,” is now a popular banner at rallies that oppose Citizens United.

Those for and against the ruling break down neatly along party lines.

Republicans tend to favor the Citizens United ruling, which allows their wealthy corporate patrons to give them unlimited amounts of cash.

Democrats, who rely more on small donors and grassroots campaigns, are usually opposed.

In an in-depth article on Citizens United published in the New Yorker this spring, author Jeffrey Toobin points to the motivation of Chief Justice John Roberts, who wrote the opinion. Toobin writes:

“So, as the chief justice chose how broadly to change the law in this area, the real question for him, it seems, was how much he wanted to help the Republican Party. Roberts’s choice was: a lot.”

Both sides of the political spectrum use the rhetoric of patriotism to justify their position.

The Republicans drape themselves in the flag and brandish the Constitution, suggesting that those who are trying to hamper the unfettered flow of cash into their coffers are simply ogres aiming at cutting down American freedoms.

Democrats rail against the “buying and selling of democracy,” and emphasize that the electoral process is being perverted by the unregulated amounts of corporate money flooding the system.

Romney’s campaign is now raising more money than Obama’s; in June he received $106 million, to Obama’s $71 million.

But this is just the tip of the iceberg. Super PACs, the political action committees that support various candidates, are where the real money is — and, by some estimates, Republican Super PACs are out-raising Democratic ones by a factor of eight or more.

According to the Center for Responsive Politics, which operates a research group tracking campaign finance, conservative Super PACs have so far spent more than $109 million, as opposed to just $23 million for the liberals.

The two largest committees — Restore Our Future, a Romney vehicle, and Priorities USA Action, which supports Obama — have raised $16.5 million and $14.5 million, respectively.

The vast majority of Super PAC money goes to the attack ads that are saturating the airwaves and trying the patience of voters everywhere.

Just as troubling, and perhaps even more absurd, are the “social welfare” organizations, which enjoy tax-exempt status and the ability to keep their door list secret.

Republican strategist Karl Rove, who co-founded American Crossroads GPS, insists that this is legitimate, even laudable.

“[Crossroads GPS is] a social welfare organization because it spends the vast preponderance of its money in furtherance of its social welfare goals. It's an issue advocacy group,” he told Fox News.

But some are not buying it.

Robert Draper, an author and contributor to the New York Times magazine, called the “social welfare” label “preposterous” on Wednesday’s Diane Rehm show on NPR.

“All (these organizations) are doing is running attack ads,” he said.

Crossroads GPS has released two spots since last Friday’s Labor Department report, which stated that only 80,000 jobs were added in June.

One, titled “Excuses,” faults Obama for poor economic growth; the other savages him for overspending.

Rove and company have recently unleashed a $2.5 million ad buy in Montana, Ohio, and Virginia, urging support for the “New Majority Agenda.”

Jonathan Collegio, communications director for Crossroads GPS, told NPR’s Diane Rehm that his goal was to raise $300 million for the organization in 2012.

The Supreme Court recently declined to revisit its decision in Citizens United, rejecting a case filed by the state of Montana.

Justice Stephen Breyer, who considered the Citizens United ruling a mistake, wrote the dissent to the court’s decision in the Montana case:

“Montana’s experience, like considerable experience elsewhere since the court’s decision in Citizens United, casts grave doubt on the court’s supposition that independent expenditures do not corrupt or appear to do so,” he wrote.

Indeed.

It could be many years, and many more campaigns, before any rational limits are finally imposed on political finance. In the meantime, brace yourselves for the nastiest, and most expensive, campaign in history.