Kathleen Falk, right, and Wisconsin Gov. Scott Walker.
When she had to confront Wisconsin's powerful unions, Kathleen Falk bargained hard and won millions in concessions. Faced with a similar situation, Wisconsin Gov. Scott Walker "dropped the bomb," as he later put it, and stripped workers of their bargaining rights. Now, Falk is trying to strip Walker of his job.
For three straight years, from 2009 to 2011, Falk and negotiators from eight public-sector unions met in county government conference rooms or labor halls, ready to lock horns. Falk was executive of Dane County, Wisconsin's second-largest county and home to the state capital, Madison. Each time they met, the unions agreed to cuts for the county's 2,200 employees—a 5 percent pay cut one year, a 3 percent cut the next year, and new co-pays and higher deductibles the year after that.
The unions stung from the nearly $10 million in concessions. But looking back, what mattered to union negotiators, leaders, and rank-and-file members was that Falk met them at the table, looked them in the eyes, and negotiated. "It was going to be a tough pill to swallow," recalls Dian Palmer, president of Services Employees International Union's Healthcare Wisconsin chapter. "But there were no recalls for Kathleen Falk, because we worked together and got it done."
On November 1, more than 100 wealthy political donors, including former New York Stock Exchange CEO Dick Grasso, streamed into the luxurious Conrad Suite at the Waldorf-Astoria on Manhattan's Park Avenue for a lunchtime fundraiser. The event was a smashing success, raising six figures for Mitt Romney—three times what had been expected. Save for the candidate himself, no one could have been more pleased than Ken Langone, the legendary investment banker who had organized the fundraiser and who, armed with a fat Rolodex and the pugnacity of a by-the-bootstraps billionaire, wants nothing more than to defeat Barack Obama in 2012.
The 76-year-old Home Depot cofounder looks how you'd imagine a self-proclaimed "fat cat" might: tall, broad-shouldered, and jowly, with a crown of white hair and a penchant for crisp collars. Langone, who dug ditches as a young man, is a legend in corporate America, and his vast network of business titans could prove crucial to Romney if he faces the cash-flush Obama political machine. (At the start of this year, Obama had raised $88 million to Romney's $32 million.) "You'd be hard-pressed to find a major CEO that wouldn't take his call," says his friend Anthony Carbonetti, a former bundler for Rudy Giuliani. "Everyone takes his call—because they want to know what he has to say."
Langone is a prodigious donor, having given millions to New York University and New York City charities, including the Harlem Children's Zone. He's also given hundreds of thousands to conservative groups, like the Republican National Committee, Karl Rove's American Crossroads super-PAC, and the American Action Network, the dark-money outfit run by former Minnesota Sen. Norm Coleman. Langone strongly backed his friend Ross Perot for president in 1992 and was a bundler for Giuliani in 2008.
On the campaign trail, Rick Santorum has highlighted his track record of opposing campaign finance strictures. He hails the Supreme Court's Citizens United decision that allows corporations and unions to spend unlimited funds on independent political ads and other messaging as "a return to ancient First Amendment principles." He reminds voters of his Senate vote against the "oppressive" 2002 McCain-Feingold bill. But during his first Senate campaign in 1994, Santorum sounded much like a campaign finance reformer, advocating the type of restrictions he now says strangle free speech.
At the time, federal law capped political action committee contributions to candidates at $5,000 a year. Although hardline conservatives and libertarians opposed any restriction on PAC contributions, Santorum urged tougher limits on PAC donations during his bid to unseat Sen. Harris Wofford (D-Penn.).
In an October 1994 interview with a Pittston, Pennsylvania, TV station—the transcript of which was obtained by Mother Jones—Santorum called for lowering the PAC donation limit to $1,000. "I think that would reduce the cost of campaigns, because the availability of money just wouldn't be there," he said. It was a position Santorum had articulated as early as April 1994, according to opposition research records and news clips compiled by Wofford's campaign and the state Democratic Party.
Santorum's position on PACs put him at odds with conservative GOPers in the Senate. Led by Sen. Mitch McConnell (R-Ky.), those conservatives in 1994 torpedoed a major campaign finance reform bill, a decade in the works, that would have reduced the PAC contribution limit, though not by as much as Santorum proposed. (Santorum spokesman Hogan Gidley did not respond to a request for comment.)
It's rare that a mega-rich political donor returns a reporter's phone call, let alone opens up about his or her personal beliefs on elections, money in politics, and the fate of America. Yet in an interview with the Chicago Tribune, Kenneth Griffin, the CEO of the powerful hedge fund Citadel and deep-pocketed bank-roller of Republican causes, does just that. The Tribune's 4,000-word interview with Griffin offers a glimpse into the mind of the modern political sugardaddy—and it's a revealing read.
Most eye-catching is Griffin's belief that, contrary to the conventional wisdom, wealthy donors don't have enoughinfluence in politics today. Asked if the "ultra-wealthy" have too much sway, Griffin responds by saying these elites have "insufficient influence." He goes on:
Those who have enjoyed the benefits of our system more than ever now owe a duty to protect the system that has created the greatest nation on this planet. And so I hope that other individuals who have really enjoyed growing up in a country that believes in life, liberty and the pursuit of happiness—and economic freedom is part of the pursuit of happiness—(I hope they realize) they have a duty now to step up and protect that. Not for themselves, but for their kids and for their grandchildren and for the person down the street that they don't even know…
At this moment in time, these values are under attack. This belief that a larger government is what creates prosperity, that a larger government is what creates good (is wrong). We've seen that experiment. The Soviet Union collapsed. China has run away from its state-controlled system over the last 20 years and has pulled more people up from poverty by doing so than we've ever seen in the history of humanity. Why the U.S. is drifting toward a direction that has been the failed of experiment of the last century, I don't understand. I don't understand.
In a move that would give the wealthy oodles of influence, Griffin says donors like himself should not be bound by contribution limits, though he supports disclosing donations. (The existing limit is $2,500 to a candidate per election.) Griffin isn't the only marquee Republican to call for tearing down contribution limits: Mitt Romney has repeated the same idea this election cycle, saying big donors like Griffin and casino tycoon Sheldon Adelson shouldn't have to give to super-PACs, but should give straight to the campaigns they support. As it happens, Griffin has given six figures to a super-PAC supporting Romney's campaign.
Rick Santorum wants the government out of every aspect of Americans' lives—especially the housing market. He pledges to eliminate Fannie Mae and Freddie Mac, the twin government housing giants that help guarantee 90 percent of all new mortgages in America. He wants to "let capitalism work" and allow the housing market to "find its bottom." Only then, he says, will the recovery begin. It's a plan that would make Adam Smith proud.
Yet Santorum wasn't always so opposed to government intervention in housing. In a deal that's gone unreported during his presidential run, Santorum bought his first house in 1983 with a cut-rate government-backed mortgage, according to records compiled by the campaign of Sen. Harris Wofford (D-Penn.), who Santorum defeated in 1994. He received his loan through a state program to boost homeownership among low- and middle-income families. Santorum, in other words, benefited from a program whose missionmirrored that of Fannie and Freddie, the companies he now rails against and wants to dissolve. (Santorum spokesman Hogan Gidley did not respond to a request for comment.)
Santorum, then a law student and a Pennsylvania state Senate aide, landed the mortgage through a program run by the Pennsylvania Housing Finance Agency (PHFA). He used the $41,600 loan to buy and renovate a three-story brick house in Harrisburg, the state capital. According to a 1994 Philadelphia Inquirer story, the interest rate on the government-backed mortgage was 13.08 percent—more than 3 percentage points lower than the market rate at the time.
The PHFA's loan program was the first of its kind in the state. State bonds backstopped the mortgages, only lenders approved by Fannie and Freddie could issue them, and families earning more than $35,000 did not qualify, according to PHFA records. (Santorum's income totaled $27,000 the year he got the loan.) The loan's promise of a low, fixed interest rate was so enticing to working and middle class homebuyers that, as the Inquirer noted, the PHFA's board decided not to publicize the program, fearing a "potential problem" like a mad rush on the day the loans were made available.