Thursday, April 23, 2015

A year of living dangerously.

Hillary Clinton is in, and with her announcement the rest of the Democrats considering running for president in 2016 are out. In a manner reminiscent of the Republican Party of old, Democrats have ceded the nomination to Hillary Clinton. It is not exactly clear why this is the case. She clearly has a large following in the party and has a huge fundraising base, but that was true eight years ago as well. Perhaps it is because she lost a close race for the nomination last time that she is being handed the baton this time. Or perhaps the theory is that as the scorned candidate and cuckolded spouse she has suffered enough, that it is her turn. Whatever the reason, Hillary is off to a rocky start, and it could be a long year.

It used to be that the Republican nomination outcome was pre-ordained. Sure, the GOP went through a primary process, and every so often--1964 comes to mind--the clash between the conservative and establishment wings of the party could be titanic. But the era of the GOP as a tightly controlled cabal where candidates waited their turn and tenure and experience were rewarded is over. This year, the imprint of Barack Obama is evident as well. Tenure and experience are passé. Ted Cruz, Rand Paul and Marco Rubio are first-term Senators, and each mock rather than defer to the establishment candidate, Jeb Bush. John McCain, Bob Dole and George H. W. Bush must look on and shake their heads.

Hillary Clinton, by contrast, will be the candidate of experience. She only announced her candidacy two weeks ago, but already Clinton fatigue has begun to settle in. Hillary has been in the public eye for a quarter of a century, yet she began her campaign with a strategy to remake her image. Her campaign--we knew this already--will be a meta-campaign. It will not be about what she believes in or promises to do, instead everything she says and everything she does will be scrutinized from the perspective of strategy. What she says will not be the focus, but rather why she is saying it. Little or nothing will be taken at face value.

This is because strategy rather than commitment and values are central to the Clinton brand. Bill Clinton emerged from the back woods of Arkansas and won the White House as a "New Democrat". A New Democrat was a phenomenon not of principle but of strategic positioning. In accordance with game theory, in a two party race a candidate should seek to position him or herself as close to the opposing candidate as possible in an effort to capture the "median voter" in the center, and then take by default everyone else on their side of the ideological spectrum. Bill Clinton embraced this strategy and moved as close as he could to the moderate Republican position with the expectation that he could then take all of the votes to the left of that position. Thus it was that voters on the left who voted for Bill Clinton for President in 1992 described the experience as being at a shotgun wedding. Bill Clinton said it best early on in his first term when he pronounced to his cabinet "We're all Eisenhower Republicans now."

Hillary's coronation has not been eagerly embraced by the Democratic left. She has been unable to convince those who have urged Elizabeth Warren to run that she shares the Massachusetts Senator's outrage at the pandering to Wall Street, or those who admire Vermont Senator Bernie Sanders that she is animated by passion for traditional Democrat values, including support for labor and distrust of free trade, charter schools and other hallmarks of now-entrenched New Democrats. In Hillary's remarks declaring her candidacy, she took the obligatory swipes at Wall Street and growing income inequality. But her claims that she would work to repeal of the carried interest exemption that blesses hedge fund and other investment managers with a lower tax rate than Warren Buffet's secretary or perhaps champion campaign finance reform rang hollow, and were quickly dismissed even by Wall Street supporters as a necessary strategy would never be manifest in policy down the road. Hillary's claims that she would take on Wall Street and campaign finance--issues that animate both the right and the left against the entrenched center--only served as a reminder that the Clintons have been the recipients--through campaign contributions, speaking fees and donations to the Clinton Foundation--of literally billions of dollars in largesse from the richest people, corporations and countries in the world.

The issue of money is likely to haunt the Clinton campaign in the months to come. Any hope that Democrats might have had of making hay of the corrosive effects of money on our democracy--whether targeting Citizen's United, SuperPACs, or the $900,000,000 David and Charles Koch have committed to raise for this campaign cycle--will be neutralized by the many manifestations of the ways that the Clintons have enriched themselves and their world.

This week, the New York Times published a story suggesting linkages between the activities of the Clinton Foundation, Hillary's actions as Secretary of State, and Bill Clinton's receipt of a $500,000 speaking fee from a Russian Bank, surrounding the sale of uranium assets by a Canadian company to a Russian company. The story is a product of an agreement reached by the Times, together with the Washington Post and Fox News, with Peter Schweizer, author of the forthcoming book "Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich" to research the information he has compiled regarding connections between political contributions and speaking fees paid to the Clintons, contributions to the Clinton Foundation, and Hillary Clinton's actions as a public official.

A decade ago, Philadelphians saw up close the mixing of philanthropy and politics erupt into a corruption scandal. Vince Fumo was a powerful Democratic State Senator in Pennsylvania who created a charitable organization called Citizens Alliance for Better Neighborhoods. In 2004, Philadelphia Electric Company made a $17 million contribution to Fumo's charity. Federal prosecutors began an investigation into whether the PECO contribution had been given in exchange for Fumo agreeing to support utility deregulation in Pennsylvania. Ultimately, the corruption case could not be proven, but Fumo and two members of his Senate staff were indicted on charges of obstruction of justice for destroying electronic evidence, including e-mail related to the federal investigation.

The parallels with the Clinton foundation are ominous: A charitable organization created by powerful political figures, staffed by political associates, taking philanthropic contributions from people and organizations who can benefit from the actions of the sponsors of the charitable organization, and, of course, the destruction of electronic communications that in the worst light could be seen as bearing on those interrelationships.

While the Times was quick to deny that they had documented any quid pro quo or illegal actions in their scrutiny of the uranium deal, the Clinton campaign asserted in the article that no one "has ever produced a shred of evidence supporting the theory that Hillary Clinton ever took action as secretary of state to support the interests of donors to the Clinton Foundation." That may well be true, but it is not necessarily is the point either. For Americans who are distressed by seeing Republican presidential candidates catering their stances on Israel and Iran to curry favor with casino magnate and mega-donor Sheldon Adelson, or who cannot imagine that the $5 billion of Wall Street money given to Congressional campaigns over the past decade is not linked to the increasing concentration of wealth and power in the finance industry, the magnitude of the Clinton empire is troubling in and of itself.

It is just two weeks into the 2016 Presidential campaign and Democrats have ceded their nomination to Hillary Clinton. They better hope that she and Bill have good answers to the questions that are going to be coming their way. We could be in for a long year.

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