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Tuesday
Apr052016

Brazilian Politics, Players, Panama and Perpetual Motion

There is no simplifying Brazil’s political or economic situation. Anyone “certain” about the outcome is sure to get smacked in its crossfires sooner or later. Corruption might be bi-partisan in the United States, legalized in many cases, but in Brazil, it’s the full multi-party monty. Eduardo Cunha, the Lower House speaker gunning for President (and political rival) Dilma Rousseff’s impeachment,  has just been fingered by the Panama Papers for stashing millions in Switzerland.

He was also under Carwash corruption investigations. No one so tainted, should risk throwing stones so blithely at a sitting, elected president. Brazil’s new Attorney General, Jose Eduardo Cardozo, said as much, yesterday, on the grounds there are no legal reasons to impeach her, and that doing so would be to “rip up the constitution.”

The domestic and international implications associated with Brazil’s internal turmoil transcend the walls of the Planalto Palace in Brasilia, a planned city that belies its far less organized and cohesive government.

The majority of national and foreign press outlets have considered the impeachment of Dilma Rouseff a foregone conclusion, a question of when, not if. Last week’s defection of the PMDB party, led by wannabe President, Michel Temer, the current Vice President hand-picked by PT (Worker’s Party) leader, Dilma Rouseff was deemed another sign of her pending removal. Waiting in the wings of power, Temer had written a letter on December 7, 2015, that went viral and became the butte of many jokes in Brazil. He complained that Dilma didn't trust him enough to give him real latitude in her government. She was right. Score one for female intuition at least.

But that impeachment conclusion is based on a lattice of shaky alliances whose loyalties, like Temer’s and the party he represents that historically sides with power not policy, can not be fully trusted.  And even so, Temer isn’t on solid ground.

Individual PMDB deputies don’t have to vote with their party’s leader, in the case of impeachment proceeding, or on anything for that matter. Brazil’s major newspapers lean pro-impeachment and thus, tend to overplay that stance publicly, skewing popular opinion and downplaying the horse-trading strategies of Dilma’s supporters. Brazilian newspaper, O Estado de São Paulo (Estadão), released their own math on April 2 regarding the impeachment situation in the House of Representatives.

According to their research, which only applies to 442 out of 513 deputies, 261 deputies are pro impeachment, 117 are against it, and 44 are undecided or waiting for more party direction. Even if one takes what politicians say in secret to a right-leaning paper for granted, these figures are actually better for the government than the opposition. Moving forward on impeachment requires 342 votes - which aren’t there.  The real situation can be recapped as follows:

1) There are 261 votes pro-impeachment (the core of the right-wing opposition plus some new deputies from the PMDB and some smaller party deputies);

2) There are 117 votes against impeachment (the core of left-wing parties plus loyal PMDB and small parties deputies);

3) There are 135 votes to be disputed (considering 55 undecided, 71 not localized and 9 that didn’t answer). So, by this report, the opposition needs 60% of the votes in dispute to secure impeachment.  Obviously, this is possible, but it is not certain.

On the other hand, Lula is building deals with small parties, and therefore:

1) It is possible that the Worker’s Party (PT) will support the Brazilian Republican Party (PRB) in the Rio de Janeiro mayor election. By doing this, it is possible to turn most of those 12 and 5 votes that are pro-impeachment and undecided (maybe more in other parties because the PRB deputy is a popular evangelical church leader and owner of the second most important TV open channel in Brazil – Record TV);

2) The government is taking advantage of wobbly PMDB positions to negotiate with PP, PSD and PR deputies on the fence (examining the undecided votes of these three parties, gives 22 votes, and pro-impeachment votes could also change).

Separately, there’s Supreme Court Judge Marco Aurelio de Mello’s latest declaration. He just announced that Dilma could appeal to the Supreme Court in case of an impeachment, and that if this impeachment is made without proof of crime, she could win the appeal. He has opposed the overzealous nature of prosecutor, Sérgio Moro’s Carwash investigations.  Moro has the media fawning over him - he’s thin, attractive and clean-shaven (as compared to hefty, scruffier, former President “Lula”) But, he’s only an ambitious b-level judge (despite acting as a prosecutor), multiple slots below Marco Aurelio de Mello. Another wrinkle? If Dilma is found guilty of corruption, so would Temer be, as he’s been in her government since 2011.

Dilma denies any wrong-doing. It’s also not clear which law she ostensibly broke, and if breaking that particular law is an impeachable offense. Her oft-cited “pedaladas fiscais” actions (moving money into the public till from public banks) would be illegal under the Fiscal Responsibility Law. But, only if the monies remained there at the end of the fiscal year. They didn’t. She moved them back beforehand. This is sketchy, but common, and not necessarily illegal. However, her moves would not be illegal with respect to Public Budget Law, the operating law regarding responsibility crime and, consequently, impeachment.  

With all the scrutiny, no offical charges of corruption (that could describe deputies across the political spectrum) have yet been levied against Dilma. This is why many anti-impeachment demonstrators are calling the entire escapade a coup or “gulpe” as well as an anti-democracy, purely politically-motivated act.

None of that makes Dilma a great president, something many people on the left and right agree upon – for different reasons. She also had to contend with battered commodity prices and lower demand from China, which compromised Brazil’s economy. But it makes removing her more akin to a political coup (without the military involvement of the 1964 coup) than a measure of national justice. 

Still, the main conversation in Brazil’s streets revolves around speculation over Dilma’s survival or demise. Betting against Dilma is also a pro-market, investor-friendly sport. The market rallies when her prospects worsen. It has been tha way since she ran for her second presidential term in 2014. She won by a narrow margin, hence the anger in Brasilia. The environment, as esteemed economist, and former Finance Minister Luiz Carlos Bresser-Pereira, told me during a private meeting at his São Paulo home, “shows more hate than I have witnessed at any other time during my career.”

The idea of removing a left-wing government with a growing public debt to GDP ratio is embraced by the upper, business and new middle class (or upper middle class.) Current levels of social spending are seen as unnecessary even if they had helped tame inequality and provided services that all Brazilians enjoy.  Public debt to GDP stands at 66% up from 54% last year, and is predicted to grow to 70% (which would be about 34% lower than the 104% debt to GDP ratio of the United States.)

Right now, universities are free in Brazil. Engineers, economists, lawyers, and doctors can earn a top notch education without incurring the kind of crippling debt that similar students in the US face (and that Bernie Sanders is campaigning to remove.) With Dilma gone, Tuition subsidies would be cut. That’s one problem that students, regardless of their political ideologies would be hard-pressed to embrace. Health care, which is universal in Brazil , though the wealthier use private care as in many European countries, would be cut. Subsidies to the poor would be chopped as well.

Brazil’s inequality would grow, So would unrest, demonstrations and unemployment.  Even if Dilma is impeached and Temer remains somehow distant from being painted with the same brush of corruption being used against her, and embarks upon his austerity path – or ‘bridge to the future’ - economic conditions would still falter. That would make his position shakier with respect to the population (only a smattering of whom ever voted for him) and to interally hostile Machiavellian environment that characterize Brazil’s government. 

The alluring idea to those that want Dilma out, is the prospect of smooth sailing to a less left, more financially liberalized Brazil that would welcome foreign capital with even more open arms. But without her, waters could get much rougher. The anger of Brazilians could galvanize as the economy weakens.

This ramification may not be in the minds of most Brazilians, though strong opinions about her abound. The students in Porto Alegre, Brazil’s southern most important city, with whom I participated in a pro-democracy demonstration last Thursday (that drew the largest crowds yet, including people old and young, plus new additions to that cause) admit her many weaknesses (lying to them, being an ineffective negotiator, lacking the charisma of Lula, etc.). But they are equally skeptical of the politicians on ‘the other side’ and fearful of the future of the economy under their policies.  That said, one of my taxi drivers called her ‘that bitch.’ 

As more demonstrations are planned, and the numbers of pro-democracy citizens rise on the realization that any shifting in government leaders means the same corruption (or more), just different faces, deputies could think twice about their votes.  Dilma could keep her job by a sliver.

Because it’s Brazil though, every bit of this is in flux.  House of Cards isn’t popular here for no reason.  Meanwhile, the only thing that remains certain is uncertainty.

 

Monday
Mar142016

Think Brazil’s scandals have nothing to do with US banks? Guess again.

This weekend, millions of Brazilians took to major city streets (again) to protest the hydra of corruption gushing from Petrobras, Brazil’s largest oil company and the government amidst deepening economic recession. Calls for the impeachment of sitting Workers’ Party (PT) president (and former Chair of Petrobras), Dilma Rousseff filled the air.  (I can’t wait to see the frenetic state of things when I swing by there  in two weeks for talks and book research.)

It’s tempting to consider the spectacle as isolated to Brazil’s unique brand of political-corporate collusion, where pillaging state-run companies to line pockets of power players is standard practice.  But that doesn't do the whole story justice.  

In the US, bartering government contracts or certain legislation for billions of dollars of political donations falls under the umbrella of legalized bribery, better known as campaign contributions, including via SuperPacs, the elite’s favorite political currency thanks to Citizens United. Political stars leave Washington for cushy corporate board posts or lucrative speaking engagements, sometimes en route back to DC.

It’s similar in Brazil, where former President “Lula” allegedly bagged $8 million in post-presidential speaking gigs from six companies. Bill Clinton nabbed about $105 million since he left the White House. Exact comparisons of how much of either of those sets of fees were connected to companies practicing corporate corruption will be a topic for my book, or another time. One country’s public sector scandal is another country’s private sector cost of doing business. Let’s not pretend otherwise.

Details aside, establishment corruption is a global virus. It may fester in a certain spot for longer periods or in greater concentration for awhile, but it’s omnipresent. It morphs to adapt to its environment and leaders. It moves like liquid. Because it links money and power, its also snakes through banks and political parties of all persuasions all over.  For now, the scene is Brazil, but the corruption under scrutiny is bigger than Brazil.

Broken Promises

(A version of the next section appeared in the February Issue of Strategic Intelligence where you can see sneak peaks of Artisans of Money and follow my colleagues, Jim Rickards and Tres Knippa.)

Things once looked so promising for Petrobras, Brazil’s state-run mega-oil company. In July 2006, the discovery of a massive pre-salt layer, 300 kilometers off the coast had the potential to transform Brazil into a leading oil producer.

The notion of “oil autonomy” even played a prominent role in Brazil’s 2010 presidential campaign. That platform helped secure the presidency for Lula’s protégé, Dilma Rousseff, who also happened to chair Petrobras’ board of directors from 2003 to 2010. Petrobras was destined to become the biggest oil company in the world.

Naturally, everyone wanted a piece of it. Multinational banks wanted to finance it.  Speculators and pension fund managers bet on its success. Two years after the US financial crisis cratered the global banking system,  the energy sector provided mega banks fresh opportunity to manufactured and leverage debt. Subprime mortgages had gone cold. Oil was hot.  Petrobras was really hot.

On September 24, 2010, Petrobras raised $70 billion in the largest share issue ever. Three of the Big Six US banks, Bank of America/Merrill Lynch, Citigroup, and Morgan Stanley, while simultaneously facing multi-billion dollar fraud suits in the US were global book runners. Brazilian bank, Banco Bradesco lead the offering. Banco Itau was another global book runner.

Brazil’s Enron: The Unraveling of Petrobras: 2014

In the energy and finance sectors, the bigger they are, the more crimes they’ve committed. Just as US energy company Enron imploded in a haze of fraud in 2001, Petrobras followed suit. In March 2014, Brazilian investigators discovered certain Petrobras employees had taken kickbacks for awarding lucrative contracts. Petrobras sourced the bribe money the old–fashioned way - cooking its books; inflating contract payments and artificially inflating asset levels. Potential fraud totaled $30 billion over a 15-year period and became the focus of national probes and international lawsuits.

 On March 17, 2014, Brazilian Federal Police arrested two men as part of "Operation Carwash," a federal investigation into associated money laundering activities. Paulo Roberto Costa, former head of Petrobras’ refining and supply department, and Alberto Youssef, infamous Brazilian money launderer, were convicted and later sentenced to 12 and 8 years in prison respectively for having masterminded the web of corruption. They were also allegedly involved in money laundering operations for the PMDB (Brazilian Democratic Movement Party) and right wing PP (Progressive Party).

Costa’s role in the corruption was international. In 2006, under his direction, a sketchy US acquisition took place. Petrobras purchased Houston-based refinery company, Pasadena, for $1.2 billion, about 30 times its worth. The purchase began at ten times its prior value, or $360 million for 50% of Pasadena, to be shared with Belgium energy firm, Astra. By July 2012, Petrobras paid an extra $820.5 million for its stake. 

On July 23 2014, Brazil’s public-spending watchdog organization, Union Accounting Tribunal (TCU) determined that Petrobras had overpaid for Pasadena. The kicker? Dilma had approved the purchase while Minister of Energy and president of Petrobras’ board of directors. It was a decision that was either crooked or dumb, or both.

Three months later, on October 29, 2014, Veja Magazine published illegally leaked testimony from Youssef accusing Rousseff and Lula of knowing details about Petrobras’ corruption 48 hours before the Presidential election. She won again anyway, but by a much slimmer margin. Petrobras didn’t do so well. During 2014, Petrobras stock dropped by 37.9%.  The decline continued.

More Unraveling and International Ire: 2015

By early 2015, not only was Petrobras mired in scandal, but also its foreign investors were livid. Lawsuits for billions of dollars of losses due to investors having been “misinformed” about Petrobras' true condition were stacking up.

Certain American banks were not blameless. Though they will argue it in the courts, they helped inflate Petrobras' debt burden without appropriate due-diligence, and advised clients to invest in Petrobras. Just like with Enron: big banks helped the firm become the sham it was and shareholders paid the price. That government corruption was also involved was either the cake or the icing depending on your point of view.

In New York, US Judge Jed Rakoff consolidated all the lawsuits against Petrobras and its bankers – Citigroup Global Markets, JP Morgan Securities and Morgan Stanley - into one large class action.

The nine largest Petrobras’ American Depository Shares (ADS) holders claimed losses of more than $50 million each. Amongst claimants were US pensions funds already engaged in suits against US banks for subprime related fraud, such as the Ohio Public Employees Retirement fund. The Bill and Melinda Gates Foundation sued Petrobras. So did Pimco. The list is pretty long. Your pension fund may very well be on it.

Money!

With oil prices diving and scandal escalating, Petrobras needed money to make interest payments. Petrobras owes about $135 billion in loans and bonds (some estimates are lower) to banks and investors. China, Brazil’s largest trade partner came to its rescue last spring. On April 1, 2015, Petrobras signed a $3.5 billion financing agreement with the China Development Bank as part of a broader oil cooperation agreement with China. (On February 26, 2016, China Development Bank produced another lifeline –a $10 billion loan in return for oil supply that covers all Petrobras’ debt needs this year.)

China’s generosity stoked a competitive urge amongst US-Euro banks. There’s a reason for the phrase “throwing good money after bad” especially when it’s other people’s good money. On June 1, 2015, Petrobras issued $2.5 billion worth of a 100-year “century” bond with an annual yield of 8.45%. Deutsche Bank and J.P. Morgan coordinated operations for the first century bond issued by a Latin American company since 1997.

Foreign investor demand rendered the issue 5 times over-subscribed. Yet, mid-scandal Petrobras projections were based on crude oil prices of $60 and $70 per barrel for 2015 and 2016 when in fact oil prices closed 2015 nearer to $35 per barrel.

Big Banks were there to collect when the music stopped, too. On June 3, 2015, two years after Bank of America called Petrobras the “most indebted company in the world,” Petrobras invited it to run a $5 billion asset sale.

On July 17, 2015, Petrobras selected five banks to lead the IPO of BR Distribuidora, Petrobras’ fuel distribution unit that controls Brazil's largest gasoline network. They were Citigroup, Banco Bradesco, ItaúUnibanco, Banco do Brasil and BTG Pactual. 

You’ll notice that all three major US bank participants in the 2010 share issue bagged lucrative roles in Petrobras’ demise; Citigroup in the IPO spin-off, JPM Chase in the century bond issue, and Bank of America in the assets sales.

The US-lead suit against Petrobras and its bankers will get increasingly hostile.  On October 6, 2015, banks challenged the plaintiffs’ claims and tried to get the case dismissed. Rakoff said “No.” The suit is awaiting a trial date. (Petrobras Securities Litigation, U.S. District Court, Southern District of New York, No. 14-09662.)

Petrobras has denied all allegations and claims to be the victim of a plot against it by contractors and corrupt politicians. On October 20, 2015, a pro-government commission cleared Dilma of wrongdoings, but that ship remains in the harbor. Both Dilma and Lula could be called for testimony as the US case unfolds.

Other Problems

On December 22, 2015, newly appointed Minister of Finance, N. Barbosa, announced Petrobras didn’t need a government injection – just higher oil prices. The next day, Brazil's antitrust authority, CADE, opened its own investigations into contract rigging associated with the 21 companies and 59 execs already under criminal probe.

Petrobras’ problems have hampered Brazil on multiple levels beyond scandal and an estimated $30 billion in GDP losses. Due to ongoing investigations, Petrobras stopped payments to other firms, including rigging companies. That sent some into bankruptcy and others to the brink, a factor that will depress their share prices and cause more defaults in 2016. Related sectors remain imperiled, including the steel, construction and banking sectors.

In addition, Brazil’s pension funds are in crisis. Unemployment and inflation, over 10 percent for the first time in 12 years, are rising sharply, despite high interest rates fashioned to contain inflation. Debt, defaults, jobs losses, lawsuits and currency devaluation don’t paint a rosy picture.

Three investigations about Lula’s connections with two companies prosecuted in Carwash Operation (OAS and Odebrecht) were opened on February 11, 2016, involving his country estate and beachfront apartment as well as other family holdings. On March 4, 2016, police stormed Lula’s home to take him in for questioning. Because it’s Brazil, the drama drove the Real and local markets higher; the idea of an imminent end to Dilma seen (by markets and many Brazilians, including her former supporters) as a preferred alternative to the opposition party’s own equally corrupt leader.

Dilma has proven resilient so far, but political instability over her Petrobras relationship and alleged “dipping” into state bank funds to pay other expenses, will continue to darken the doorstep of Brazil’s political system. We have 30 days to see whether her other coalition partner, the more centrist PMDB party, backs away from her, signaling a major reshuffling in Brasilia. Yet it’s not like members of the opposition party are scandal-free. Which brings us back to the trio of money, power and corruption, it may have geographical or cultural nuances, but its stench is universal.

 

Thursday
Feb042016

Election 2016: A Battle of Billionaires (Except for Bernie Sanders)

This Piece Originally Appeared in TomDispatch.

Speaking of the need for citizen participation in our national politics in his final State of the Union address, President Obama said, “Our brand of democracy is hard.” A more accurate characterization might have been: “Our brand of democracy is cold hard cash.”

Cash, mountains of it, is increasingly the necessary tool for presidential candidates. Several Powerball jackpots could already be fueled from the billions of dollars in contributions in play in election 2016. When considering the present donation season, however, the devil lies in the details, which is why the details follow.

With three 2016 debates down and six more scheduled, the two fundraisers with the most surprising amount in common are Bernie Sanders and Donald Trump. Neither has billionaire-infused super PACs, but for vastly different reasons. Bernie has made it clear billionaires won’t ever hold sway in his court. While Trump... well, you know, he’s not only a billionaire but has the knack for getting the sort of attention that even billions can’t buy.

Regarding the rest of the field, each candidate is counting on the reliability of his or her own arsenal of billionaire sponsors and corporate nabobs when the you-know-what hits the fan. And at this point, believe it or not, thanks to the Supreme Court’s Citizens United decision of 2010 and the super PACs that arose from it, all the billionaires aren’t even nailed down or faintly tapped out yet.  In fact, some of them are already preparing to jump ship on their initial candidate of choice or reserving the really big bucks for closer to game time, when only two nominees will be duking it out for the White House.

Capturing this drama of the billionaires in new ways are TV networks eager to profit from the latest eyeball-gluing version of election politicking and the billions of dollars in ads that will flood onto screens nationwide between now and November 8th. As super PACs, billionaires, and behemoth companies press their influence on what used to be called “our democracy,” the modern debate system, now a 16-month food fight, has become the political equivalent of the NFL playoffs. In turn, soaring ratings numbers, scads of ads, and the party infighting that helps generate them now translate into billions of new dollars for media moguls.

For your amusement and mine, this being an all-fun-all-the-time election campaign, let’s examine the relationships between our twenty-first-century plutocrats and the contenders who have raised $5 million or more in individual contributions or through super PACs and are at 5% or more in composite national polls. I’ll refrain from using the politically correct phrases that feed into the illusion of distance between super PACs that allegedly support candidates’ causes and the candidates themselves, because in practice there is no distinction.

On the Republican Side:

1. Ted Cruz: Most “God-Fearing” Billionaires

Yes, it’s true the Texas senator “goofed” in neglecting to disclose to the Federal Election Commission (FEC) a tiny six-figure loan from Goldman Sachs for his successful 2012 Senate campaign. (After all, what’s half-a-million dollars between friends, especially when the investment bank that offered it also employed your wife as well as your finance chairman?) As The Donald recently told a crowd in Iowa, when it comes to Ted Cruz, “Goldman Sachs owns him. Remember that, folks. They own him.”

That aside, with a slew of wealthy Christians in his camp, Cruz has raised the second largest pile of money among the GOP candidates. His total of individual and PAC contributions so far disclosed is a striking $65.2 million. Of that, $14.28 million has already been spent. Individual contributors kicked in about a third of that total, or $26.57 million, as of the end of November 2015 -- $11 million from small donors and $15.2 million from larger ones. His five top donor groups are retirees, lawyers and law firms, health professionals, miscellaneous businesses, and securities and investment firms (including, of course, Goldman Sachs to the tune of $43,575).

Cruz’s Keep the Promise super PAC continues to grow like an action movie franchise. It includes his original Keep the Promise PAC augmented by Keep the Promise I, II, and III. Collectively, the Keep the Promise super PACs amassed $37.83 million. In terms of deploying funds against his adversaries, they have spent more than 10 times as much fighting Marco Rubio as battling Hillary Clinton.

His super PAC money divides along family factions reminiscent of Game of Thrones.  A $15 million chunk comes from the billionaire Texas evangelical fracking moguls, the Wilks Brothers, and $10 million comes from Toby Neugebauer, who is also listed as the principal officer of the public charity, Matthew 6:20 Foundation; its motto is “Support the purposes of the Christian Community.”

Cruz’s super PACs also received  $11 million from billionaire Robert Mercer, co-CEO of the New York-based hedge fund Renaissance Technologies. His contribution is, however, peanuts compared to the $6.8 billion a Senate subcommittee accused Renaissance of shielding from the Internal Revenue Service (an allegation Mercer is still fighting). How’s that for “New York values”?  No wonder Cruz wants to abolish the IRS.

Another of Cruz’s contributors is Bob McNair, the real estate mogul, billionaire owner of the National Football League’s Houston Texans, and self-described “Christian steward.”

2. Marco Rubio: Most Diverse Billionaires

Senator Marco Rubio of Florida has raised $32.8 million from individual and PAC contributions and spent about $9 million. Despite the personal economic struggles he’s experienced and loves to talk about, he’s not exactly resonating with the nation’s downtrodden, hence his weak polling figures among the little people. Billionaires of all sorts, however, seem to love him.

The bulk of his money comes from super PACs and large contributors. Small individual contributors donated only $3.3 million to his coffers; larger individual contributions provided $11.3 million. Goldman Sachs leads his pack of corporate donors with $79,600.

His main super PAC, Conservative Solutions, has raised $16.6 million, making it the third largest cash cow behind those of Jeb Bush and Ted Cruz. It holds $5 million from Braman Motorcars, $3 million from the Oracle Corporation, and $2.5 million from Benjamin Leon, Jr., of Besilu Stables. (Those horses are evidently betting on Rubio.)

He has also amassed a healthy roster of billionaires including the hedge-fund “vulture of Argentina” Paul Singer who was the third-ranked conservative donor for the 2014 election cycle. Last October, in a mass email to supporters about a pre-Iowa caucus event, Singer promised, “Anyone who raises $10,800 in new, primary money will receive 5 VIP tickets to a rally and 5 tickets to a private reception with Marco.”

Another of Rubio's Billionaire Boys is Norman Braman, the Florida auto dealer and his mentor. These days he’s been forking over the real money, but back in 2008, he gave Florida International University $100,000 to fund a Rubio post-Florida statehouse teaching job. What makes Braman’s relationship particularly intriguing is his “intense distaste for Jeb Bush,” Rubio’s former political mentor and now political punching bag. Hatred, in other words, is paying dividends for Rubio.

Rounding out his top three billionaires is Oracle CEO Larry Ellison, who ranks third on Forbes’s billionaire list.  Last summer, he threw a $2,700 per person fundraiser in his Woodside, California, compound for the candidate, complete with a special dinner for couples that raised $27,000. If Rubio somehow pulls it out, you can bet he will be the Republican poster boy for Silicon Valley.

3. Jeb Bush: Most Disappointed Billionaires

Although the one-time Republican front-runner’s star now looks more like a black hole, the coffers of “Jeb!” are still the ones to beat. He had raised a total of $128 million by late November and spent just $19.9 million of it.  Essentially none of Jeb’s money came from the little people (that is, us). Barely 4% of his contributions were from donations of $200 or less.

In terms of corporate donors, eight of his top 10 contributors are banks or from the financial industry (including all of the Big Six banks). Goldman Sachs (which is nothing if not generous to just about every candidate in sight -- except of course, Bernie) tops his corporate donor chart with $192,500. His super PACs still kick ass compared to those of the other GOP contenders. His Right to Rise super PAC raised a hefty $103.2 million and, despite his disappearing act in the polls, it remains by far the largest in the field.

Corporate donors to Jeb’s Right to Rise PAC include MBF Healthcare Partners founder and chairman Mike Fernandez, who has financed a slew of anti-Trump ads, with $3.02 million, and Rooney Holdings with $2.2 million. Its CEO, L. Francis Rooney III, was the man George W. Bush appointed ambassador to the Vatican. Former AIG CEO Hank Greenberg’s current company, CV Starr (and not, as he has made pains to clarify, he himself), gave $10 million to Jeb’s super PAC. In the same Fox Business interviewwhere he stressed that distinction, he also noted, “I’m sorry he is not living up to expectations, but that’s the reality of it.” AIG, by the way, received $182 billion in bailout money under Jeb’s brother, W.

4. Ben Carson: No Love For Billionaires

Ben Carson is running a pretty expensive campaign, which doesn’t reflect well on his possible future handling of the economy (though, as he sinks toward irrelevance in the polls, it seems as if his moment to handle anything may have passed). Having raised $38.7 million, he’s spent $26.4 million of it. His campaign received 63% of its contributions from small donors, which leaves it third behind Bernie and Trump on that score, according to FEC filings from October 2015.

His main super PACs, grouped under the title “the 2016 Committee,” raised just $3.8 million, with rich retired people providing the bulk of it.  Another PAC, Our Children’s Future, didn’t collect anything, despite its pledge to turn "Carson’s outside militia into an organized army."

But billionaires aren’t Carson’s cup of tea. As he said last October, “I have not gone out licking the boots of billionaires and special-interest groups. I’m not getting into bed with them.”

Carson recently dropped into fourth place in the RealClearPolitics composite poll for election 2016 with his team in chaos. His campaign manager, Barry Bennett, quit. His finance chairman, Dean Parke, resignedamid escalating criticism over his spending practices and his $20,000 a month salary. As the rising outsider candidate, Carson once had an opportunity to offer a fresh voice on campaign finance reform. Instead, his campaign learned the hard way that being in the Republican hot seat without a Rolodex of billionaires can be hell on Earth.

5. Chris Christie: Most Sketchy Billionaires

For someone polling so low, New Jersey Governor Chris Christie has amassed startling amounts of dosh. His campaign contributions stand at $18.6 million, of which he has spent $5.7 million. Real people don’t care for him. Christie has received the least number of small contributions in either party, a bargain basement 3% of his total.

On the other hand, his super PAC, America Leads, raised $11 million, including $4.3 million from the securities and investment industry. His top corporate donors at $1 million each include Point 72 Asset Management, the Steven and Alexandra Cohen Foundation, and Winnecup Gamble Ranch, run by billionaire Paul Fireman, chairman of Fireman Capital Partners and founder and former chairman of Reebok International Ltd.

Steven Cohen, worth about $12 billion and on the Christie campaign's national finance team, founded Point 72 Asset Management after being forced to shut down SAC Capital, his former hedge-fund company, due to insider-trading charges. SAC had to pay $1.2 billion to settle.

Christie’s other helpful billionaire is Ken Langone, co-founder of Home Depot. But Langone, as he told the National Journal, is not writing a $10 million check. Instead, he says, his preferred method of subsidizing politicians is getting “a lot of people to write checks, and get them to get people to write checks, and hopefully result in a helluva lot more than $10 million.” In other words, Langone offers his ultra-wealthy network, not himself.

6. Donald Trump: I Am A Billionaire

Trump’s campaign has received approximately $5.8 million in individual contributions and spent about the same amount. Though not much compared to the other Republican contenders, it’s noteworthy that 70% of Trump’s contributions come from small individual donors (the highest percentage among GOP candidates). It’s a figure that suggests it might not pay to underestimate Trump’s grassroots support, especially since he’s getting significant amounts of money from people who know he doesn’t need it.

Last July, a Make America Great Again super PAC emerged, but it shut downin October to honor Trump’s no super PAC claim.  For Trump, dealing with super PAC agendas would be a hassle unworthy of his time and ego. (He is, after all, the best billionaire: trust him.) Besides, with endorsements from luminaries like former Alaska Governor Sarah Palin and a command of TV ratings that’s beyond compare, who needs a super PAC or even his own money, of which he’s so far spent remarkably little?

On The Democratic Side:

1. Hillary Clinton: A Dynasty of Billionaires 

Hillary and Bill Clinton earned a phenomenal $139 million for themselves between 2007 and 2014, chiefly from writing books and speaking to various high-paying Wall Street and international corporations.  Between 2013 and 2015, Hillary Clinton gave 12 speeches to Wall Street banks, private equity firms, and other financial corporations, pocketing a whopping $2,935,000. And she’s used that obvious money-raising skill to turn her campaign into a fundraising machine.

As of October 16, 2015, she had pocketed $97.87 million from individual and PAC contributions.  And she sure knows how to spend it, too. Nearly half of that sum, or $49.8 million -- more than triple the amount of any other candidate -- has already gone to campaign expenses.

Small individual contributions made up only 17% of Hillary’s total; 81% came from large individual contributions. Much like her forced folksiness in the early days of her campaign when she was snapped eating a burrito bowl at a Chipotle in her first major meet-the-folks venture in Ohio, those figures reveal a certain lack of savoir faire when it comes to the struggling classes.

Still, despite her speaking tour up and down Wall Street and the fact that fourof the top six Wall Street banks feature among her top 10 career contributors, they’ve been holding back so far in this election cycle (or perhaps donating to the GOP instead).  After all, campaign 2008 was a bust for her and nobody likes to be on the losing side twice.

Her largest super PAC, Priorities USA Action, nonetheless raised $15.7 million, including $4.6 million from the entertainment industry and $3.1 million from securities and investment. The Saban Capital Group and DreamWorks kicked in $2 million each.

Hillary has recently tried to distance herself from a well-deserved reputation for being close to Wall Street, despite the mega-speaking fees she’s garnered from Goldman Sachs among others, not to speak of the fact that five of the Big Six banks gave money to the Clinton Foundation. She now claims that her “Wall Street plan” is stricter than Bernie Sanders’s. (It isn’t. He’s advocating to break up the big banks via a twenty-first-century version of the Glass-Steagall Act that Bill Clinton buried in his presidency.) To top it off, she scheduled an elite fundraiser at the $17 billion “alternative investment” firm Franklin Square Capital Partners four days before the Iowa Caucus. So much for leopards changing spots.

You won’t be surprised to learn that Hillary has billionaires galore in her corner, all of whom backed her hubby through the years.  Chief among them is media magnate Haim Saban who gave her super PAC $2 million. George Soros, the hedge-fund mogul, contributed $2.02 million. DreamWorks Animation chief executive Jeffrey Katzenberg gave $1 million. And the list goes on.

2. Bernie Sanders: No Billionaires Allowed

Bernie Sanders has stuck to his word, running a campaign sans billionaires. As of October 2015, he had raised an impressive $41.5 million and spent about $14.5 million of it.

None of his top corporate donors are Wall Street banks. What’s more, a record 77% of his contributions came from small individual donors, a number that seems only destined to grow as his legions of enthusiasts vote with their personal checkbooks.

According to a Sanders campaign press release as the year began, another $33 million came in during the last three months of 2015: “The tally for the year-end quarter pushed his total raised last year to $73 million from more than 1 million individuals who made a record 2.5 million donations.” That number broke the 2011 record set by President Obama’s reelection committee by 300,000 donations, and evidence suggests Sanders’s individual contributors aren’t faintly tapped out. After recent attacks on his single-payer healthcare plan by the Clinton camp, he raised $1.4 million in a single day.

It would, of course, be an irony of ironies if what has been a billionaire’s playground since the Citizens United decision became, in November, a billionaire’s graveyard with literally billions of plutocratic dollars interred in a grave marked: here lies campaign 2016.

The Media and Debates

And talking about billions, in some sense the true political and financial playground of this era has clearly become the television set with a record $6 billion in political ads slated to flood America’s screen lives before next November 8th. Add to that the staggering rates that media companies have been getting for ad slots on TV’s latest reality extravaganza -- those “debates” that began in mid-2015 and look as if they’ll never end. They have sometimes pulled in National Football League-sized audiences and represent an entertainment and profit spectacle of the highest order.

So here’s a little rundown on those debates thus far, winners and losers (and I’m not even thinking of the candidates, though Donald Trump would obviously lead the list of winners so far -- just ask him).  In those ratings extravaganzas, especially the Republican ones, the lack of media questions on campaign finance reform and on the influence of billionaires is striking -- and little wonder, under the money-making circumstances.

The GOP Show

The kick-off August 6th GOP debate in Cleveland, Ohio, was a Fox News triumph. Bringing in 24 million viewers, it was the highest-rated primary debate in TV history. The follow-up at the Reagan Library in Simi Valley, California, on September 16th, hosted by CNN and Salem Radio, grabbed another 23.1 million viewers, making it the most-watched program in CNN's history.  (Trump naturally took credit for that.)  CNN charged up to $200,000for a 30-second spot.  (An average prime-time spot on CNN usually goes for $5,000.) The third debate, hosted by CNBC, attracted 14 million viewers, a record for CNBC, which was by then charging advertisers $250,000 or more for 30-second spots.

Fox Business News and the Wall Street Journal hosted the next round on November 10th: 13.5 million viewers and (ho-hum) a Fox Business News record. For that one, $175,000 bought you a 30-second commercial slot.

The fifth and final debate of 2015 on December 15th in Las Vegas, again hosted by CNN and Salem Radio, lassoed 18 million viewers. As 2016 started, debate fatigue finally seemed to be setting in. The first debate on January 14th in North Charleston, South Carolina, scored a mere 11 million viewers for Fox Business News. When it came to the second debate (and the last before the Iowa caucuses) on January 28th, The Donald decided not to grace it with his presence because he didn't think Fox News had treated him nicely enough and because he loathes its host Megyn Kelly.

The Democratic Debates

Relative to the GOP debate ad-money mania, CNN charged a bargain half-off, or $100,000, for a 30-second ad during one of the Democratic debates. Let’s face it, lacking a reality TV star at center stage, the Democrats and associated advertisers generally fared less well. Their first debate on October 13th in Las Vegas, hosted by CNN and Facebook, averaged a respectable 15.3 million viewers, but the next one in Des Moines, Iowa, overseen by CBS and the Des Moines Register, sank to just 8.6 million viewers. Debate number three in Manchester, New Hampshire, hosted by ABC and WMUR, was rumored to have been buried by the Democratic National Committee (evidently trying to do Hillary a favor) on the Saturday night before Christmas. Not surprisingly, it brought in only 7.85 million viewers.

The fourth Democratic debate on NBC on January 17th (streamed live on YouTube) featured the intensifying battle between an energized Bernie and a spooked Hillary.  It garnered 10.2 million TV viewers and another 2.3 million YouTube viewers, even though it, too, had been buried -- on the Sunday night before Martin Luther King, Jr. Day. In comparison, 60 Minutes on rival network CBS nabbed 20.3 million viewers.

The Upshot

So what gives? In this election season, it’s clear that these skirmishes involving the ultra-wealthy and their piles of cash are transforming modern American politics into a form of theater. And the correlation between big money and big drama seems destined only to rise.  The media needs to fill its coffers between now and election day and the competition among billionaires has something of a horse-betting quality to it.  Once upon a time, candidates drummed up interest in their policies; now, their policies, such as they are, have been condensed into so many buzzwords and phrases, while money and glitz are the main currencies attracting attention.

That said, it could all go awry for the money-class and wouldn’t that just be satisfying to witness -- the irony of an election won not by, but despite, all those billionaires and corporate patrons.

Will Bernie’s citizens beat Hillary’s billionaires? Will Trump go billion to billion with fellow New York billionaire Michael Bloomberg? Will Cruz’s prayers be answered? Will Rubio score a 12th round knockout of Cruz and Trump? Does Jeb Bush even exist? And to bring up a question few are likely to ask: What do the American people and our former democratic republic stand to lose (or gain) from this spectacle? All this and more (and more and more money) will be revealed later this year.

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