Honolulu Star-Advertiser

Monday, June 24, 2024 78° Today's Paper


As economy and politicians falter, the rich jump in to run

MIAMI — When Jeff Greene, aka the Meltdown Mogul, recently brought his Democratic campaign for the U.S. Senate to a poor Miami neighborhood rife with the kinds of subprime mortgages that he became a billionaire betting against, did he:

A) Arrive in a Cadillac Escalade SUV, before stumping for energy conservation;

B) Tell the crowd that he was "fed up and frustrated" with Washington while suggesting job-creation ideas previously proposed by Washington politicians;

C) Receive a raucous welcome as an outsider who could turn Florida around.

The answer? All of the above, of course.

Call it the Great Recession paradox. Even as voters express outrage at the insider culture of big bailouts and bonuses, their search for political saviors has led them to this: a growing crowd of uber-rich candidates, comfortable in boardrooms and country clubs, spending a fortune to remake themselves into populist insurgents.

The number of self-financed candidates has crept up the past few election cycles, and this year seems to be on pace for another uptick. Through just the second quarter of the year, at least 42 House and Senate candidates — seven Democrats and 35 Republicans — in 23 states had already donated $500,000 or more of their own money to their campaigns, according to the most recent data available from the Center for Responsive Politics. That list does not even include governors’ races, and the roster promises to grow as the campaign season progresses and spending escalates.

Historically, self-financed candidates have tended to lose. The National Institute on Money in State Politics recently found that of those candidates who received more than half of all campaign contributions from themselves or an immediate family member, only 11 percent won from 2000 to 2009.

This year might be different, with a down economy making it harder for traditional candidates to raise money, and with anti-incumbency fever at record levels.

"They’re running in a more favorable context," said Jennifer A. Steen, a professor of political science at Arizona State University, who has studied self-financed candidates. "So we should expect them to do better."

Having gobs of personal cash to toss into a race seems to be especially potent in California and Florida, with their expensive media markets. The governors’ races are a prime example. In California, Meg Whitman, a Republican and former chief executive of eBay, has swamped all other self-financed candidates, using $90 million of her own money to trounce Steve Poizner, who contributed $24 million from his own pocket, in the Republican primary.

And in Florida, Rick Scott, the former head of Columbia/HCA Healthcare — a hospital chain that paid $1.7 billion in fines for fraudulently billing government programs like Medicare — has become so visible on television that his latest ads start with him saying "me again." Scott has shocked the Republican establishment by becoming the clear front-runner after spending more than $20 million on advertisements.

Greene, though, is the biggest surprise so far. A Democrat who had been a Republican; a brash, gold-watch-and-Prada-sunglasses-wearing investor with friends like Mike Tyson and Heidi Fleiss, even he admits he has been surprised by how quickly his campaign has picked up support. He entered just before the filing deadline in April. Democratic officials laughed him off initially. Not anymore.

Recent polls show that Greene, 55, has pulled roughly even in the primary with Rep. Kendrick B. Meek, the Miami Democrat who had been the party favorite, although Gov. Charlie Crist still leads as an independent in a three-way general election.

Greene’s campaign finance report filed last week starkly illustrates the impact of his wealth. He took in just $3,036 in outside contributions, while lending himself — and spending — $5.9 million in the second quarter, not far off from what Meek has raised in 18 months.

Greene insists that for self-financed candidates, now is the moment.

"If 2008 was the year of change, 2010 is the year of frustration," he said in an interview.

His approach, like that of many other rich candidates, is simple: tap into voter anger ("I’m fed up," Greene tells crowds) then argue that only those who have succeeded in business can drive economic recovery, without kowtowing to special interests.

So Linda E. McMahon, a Connecticut Republican who made her fortune with professional wrestling before her Senate run, has recently produced a television advertisement declaring that "politicians have had their chance, and blown it" while her jobs plan "is backed by experience."

Greene, in turn, told the crowd in Liberty Square, the poor Miami neighborhood, "My whole life I’ve created jobs, I mean, literally thousands of jobs. And that’s why I’m running."

Sara Smith, president of the Liberty Square Resident Council, said she welcomed Greene’s campaign to the area, which Meek has represented in Congress since 2002.

"We’re looking for candidates who are going to go up the road and help us," Smith said.

Some skeptical voters, burned by an economy that has often worked for the few, not the many, are asking how voting in the extremely wealthy would actually lead to broad-based improvement.

After all, while Carly Fiorina, a Republican who is challenging Sen. Barbara Boxer in California, declares on her website that she will "fight for every job" if elected, as chief executive of Hewlett-Packard in 2003, she cut about 18,000 jobs.

Greene’s claims have also come under scrutiny. In an interview, he said hundreds of people were hired to work on buildings he invested in since he started buying properties in the 1970s in Massachusetts, where he grew up. Most of his fortune, estimated at $1.4 billion by Forbes in 2008, comes from derivatives that let him profit from the collapse of subprime mortgages.

Greene described this as an underdog’s victory: "I went up against the big banks and won," he said — even though he first needed two of those banks, Merrill Lynch and JPMorgan Chase & Co., to grant him special status as an institutional investor, rather than as an individual.

Ultimately for many voters, it will come down to trust. Can these privileged candidates be trusted more than traditional politicians to fight for those who are struggling?

Greene, again, is an extreme test case. He speaks often on the stump about working as a busboy at the Breakers resort in Palm Beach to help pay for college. These days, he lives in an oceanfront mansion when he is not on one of his yachts or his plane with gold seat-belt buckles.

In Century Village — a Boca Raton retirement complex and a petri dish for Democratic Florida opinion — the mix brought both calculated support, and disdain. Marvin Manning, who introduced Greene to about 150 retirees, said his lack of political experience might be "for the best."

But Adelle Pastman, 73, said Greene seemed to be treating the Senate as just another acquisition.

"I just don’t like that a person has so much money that they feel they can politic themselves into office," she said.

Pastman winced at the thought from behind large glasses just before Greene put on his Pradas and drove away in his SUV.


Comments are closed.