Tag: terry mcauliffe

Politicians and Their Friends

The Sunday Washington Post has a lengthy story on Terry McAuliffe’s highly successful “business” career. McAuliffe, of course, is the longtime Democratic fundraiser and “first friendof Bill Clinton who is now the Democratic nominee for governor of Virginia.

How did a lifelong political operative make many millions for himself? The Post reviews:

The pitches to potential investors in a new electric-car company have been unabashed about its promise: It will enjoy “billions” in government subsidies and tax credits, will rise to a dominant position in the U.S. electric-car industry and, perhaps most critically, has a politically connected founder with the savvy to make it all happen….

The prospectus, along with other documents reviewed by The Post, shows how GreenTech fits into a pattern of investments in which McAuliffe has used government programs, political connections and access to wealthy investors of both parties in pursuit of big profits for himself.

That formula has made McAuliffe a millionaire many times over, paving the way for a long list of business ventures, including his law firm, from which he resigned in the 1990s after profiting — along with his partners — from fees paid by domestic and foreign clients seeking results from the federal government.

A review of McAuliffe’s business history shows him often coming out ahead personally, even if some investments fail or become embroiled in controversy.

Or as McAuliffe told the New York Times:

”I’ve met all of my business contacts through politics. It’s all interrelated,” he said. When he meets a new business contact, he went on, ”then I raise money from them.”

And how did Bill Clinton meet his very good friend? Was it in high school? College? At Oxford? The local Kiwanis Club? No, President Clinton was down in the dumps after his electoral thumping in 1994 and needed to get in gear for his reelection campaign. Harold Ickes, “his politically astute deputy chief of staff,” urged him to meet McAuliffe, who had been a fundraiser for President Carter, when he was 23 years old, and Dick Gephardt. McAuliffe quickly recommended renting out the Lincoln Bedroom, and that worked so well that they became fast friends, maybe even “best friends.”

Money in Politics, Virigina Edition

Bruce Bartlett has a good opinion piece on money in politics in Forbes.  He mostly focuses on self-funding candidates who rarely win even when they contribute large sums to their own campaigns.  The recent Democratic gubernatorial primary in Virginia, which Bartlett mentions, saw Terry McAuliffe spend over $7 million and lose badly.  McAuliffe financed his bid in the usual way by attracting contributions. His success at fundraising may have cost him votes in the end.

Despite the McAuliffe example and others mentioned by Bartlett, people still believe “only money matters in politics” or “money buys elections.” The truth is, money matters but not all that much. Other factors, like circumstances, partisanship and the quality of  the candidate, have more effect on the outcome of any election. It is true that incumbent members of Congress generally raise more than their challengers and almost always defeat them. But if you take into account the quality of a challenger, money has little effect on the outcome of a race.

We hear little these days about money buying elections. The people who complain about the power of money to subvert democracy are almost always on the left. If money buys elections, is Obama’s presidency a subversion of democracy? After all, the current president is the most successful fundraiser in American history, and not all of his money came from small contributors. But Obama didn’t buy the election of 2008. He was running against an unpopular administration with the economy mired in a deep recession. Obama was a skillful candidate who ran an effective campaign. John McCain could have matched Obama’s fundraising and the Republican still would have lost.

Money is overrated in politics. Just ask Terry McAuliffe.

McAuliffe-nomics

Good news for Virginia taxpayers! Turns out that gubernatorial candidate Terry McAuliffe, longtime Democratic fundraiser and former national chairman, understands the power of tax cuts. At a forum on Wednesday, he said that $1.25 million in tax cuts could generate $80 million in economic activity. I’m not sure even Art Laffer or Christina Romer would claim that much return on tax cuts. But here’s McAuliffe:

At George Mason University yesterday, McAuliffe said Virginia’s appeal to Hollywood filmmakers could improve the state’s economic picture. McAuliffe said he became familiar with the potency of the film industry while serving as chairman of the Democratic National Committee.

During a roundtable discussion with local filmmakers and producers at George Mason, he unveiled a proposal to offer additional tax incentives and other benefits to film crews making movies in Virginia. He said the state has been losing out to such states as North Carolina and Georgia, which offer greater benefits and have seen their film industries flourish.

He pointed to the HBO miniseries “John Adams,” about the nation’s second president, as an example of a film project that had benefited the state. The miniseries, filmed partly in Williamsburg and at the College of William and Mary, cost Virginia $1.25 million in tax breaks, but it boosted the local economy by $80 million and created 3,500 jobs, he said.

Unless … wait a minute. Could it be that McAuliffe only favors targeted tax cuts, tax cuts that would direct economic activity in a particular direction, tax cuts that would in fact help his Hollywood fundraising friends? Hard to say. He’s not calling for tax increases during his gubernatorial campaign, but of course he helped President Clinton raise taxes and he supports President Obama’s tax-spend-and-borrow policies. According to this liberal blogger, McAuliffe tells liberals privately that he can’t run for governor of Virginia on a tax-increase platform … if you get my drift.

But hey, if a $1.25 million tax break can generate $80 million of economic activity, what could a $125 million tax break do for Virginia?