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  February 1, 2018

How Did Trump Win? Follow the Dark Money


A major new study says a last-minute infusion of "dark money," coupled with declining unionization rates, were among the key factors that handed Donald Trump the biggest upset in US political history. We speak to co-author Thomas Ferguson of the University of Massachusetts
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biography

Thomas Ferguson is a political scientist and author who studies and writes on politics and economics, often within an historical perspective. He is a Political Science professor at the University of Massachusetts Boston. He is also a a contributing editor of The Nation. He is also the author of several books, the recent of which is Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political System


transcript

AARON MATÉ: It's The Real News, I'm Aaron Maté. It's been over a year since Donald Trump pulled off what is likely the biggest upset in U.S. political history, but we have yet to fully understand how it is that a reality television host with no political experience managed to do it. The widespread perception is that it was a combination of Russian meddling and a last minute October surprise from then FBI director James Comey. Well, a new study takes a much deeper look than has been done to date and a very different picture emerges. It points to, among other things, a major last minute infusion of secretive dark money on Trump's behalf. The study is put out by the Institute for New Economic Thinking and it's called, "Industrial Structure and Party Competition in an Age of Hunger Games: Donald Trump and the 2016 Presidential Election."

I'm joined by one of its three co-authors. Thomas Ferguson is professor emeritus of political science at the University of Massachusetts, Boston. Welcome Professor Ferguson. Before we get into the overlooked factors that you found, let's look at the dominant narrative, which is that it was indeed Russian meddling and Comey that helped sway voters to turn on Clinton, who was leading in the polls, and vote for Trump. What is your though on that?

T. FERGUSON: This is the real heart of the problem with both the Comey and the Russian internet story -- it's that when you actually look at what happened, not only did Hillary dip in the polls, but at the very same time the chances of the Democrats taking the Senate collapsed. When you've got two collapses, not one, and they very closely tracked each other, as we show in a figure in our paper, so, what's going on there? Well, when you look, first of all, you can take the Senate one very straightforwardly. There's no doubt about what happened. Mitch McConnell and company were going to donors and saying, as nice articles in Bloomberg and elsewhere on this that we cite, they're saying, "You guys can't afford to lose both the presidency and the Senate. So, you better help us."

They did. An enormous wave of cash came in for the Senate and the other thing we discovered when we looked was we created a day by day ... Paul Jorgensen, Jie Chan and I created a day-by-day file of contributions into the Trump campaign and included dark money. You say, how do you know it's dark money? Obviously, it's not all provided. The answer is very straightforward. We'll see this cash coming in from an entity, usually has kind of a fake charitable name attached, and then you will see the cash coming out but no cash going in. That's what they're legally allowed to do because everybody knows these are not charities. They are in fact there to do politics. And so, you can tell the dark money easily. When we look at the dark money for Trump in the final weeks we were astonished, 'cause Trump had -- and there's actually a clip of Trump saying he wouldn't take dark money.

DONALD TRUMP: They're raising all of this money and they're gonna spend it on the campaign and we have ... The candidates aren't supposed to be involved in all that stuff but they have all this money going. Nobody even knows who the people are. Nobody knows where they are. Nobody knows what they're doing with the money. It's a whole big scam.

T. FERGUSON: Well, he had a bigger wave of dark money than Romney did in 2012. That's what we used as comparison. We thought two Republican presidential campaigns with a lot of dough. That should be pretty fair. In that sense, the real problem with the Comey or the Russian story, just to repeat is, hey, you've got two waves of collapses and two big waves of money. More than likely than not what you're seeing in both cases is the sound of money talking. It's that simple.

AARON MATÉ: You are known for having developed the investment theory of politics, the theory that it is big business, big corporations and elites who play the most decisive role in the outcome of elections, in this case in terms of seeing Trump as an investment, how did so much money come into him if it was widely perceived that he was gonna lose?

T. FERGUSON: Well, I think I've made the joke elsewhere, it might be the greatest out of the money options in world history and one you could take up cheap. But seriously, the story, never mind my take, my colleagues and I have a pretty careful analysis of the money in the Trump's campaign. And what we basically find is in the early stages he did attract a lot of individual money from small donors, and overall his campaign was remarkable. I never saw anything like it in the Republican party, unless it were maybe the Goldwater '64 campaign -- and I know that this immediately betrays that I'm as old as the Egyptians on that point. But I mean, that was full of small donors too. But I mean, normally Republican campaigns are not full of small donors. They are dominated by big donors but Trump in the early stages of the campaign was just by himself, pretty much. Financing his campaign along with this big wave of small money. In May, he's actually telling reporters, we cite in the paper, that he doesn't need the usual billion dollars to run.

And so, by June the campaign has a different tack. And Priebus and Manafort and these people are all out trying to raise cash and they do raise money. They raised a substantial amount around the time of the convention. That money doesn't keep coming though, and so, by the end of July they got a fairly serious problem. When Bannon and Conway take over, then the dam breaks and we sort of show you there's a big wave of money from casinos and especially from private equity. And if you look at private equity, those are the odd folks out on just about everything. These are people who have often personally not wonderful relations with the rest of the business community and certainly not with the business round-table types. And my suspicion is, is that they knew that Bannon -- I don't try to read minds and neither do my colleagues, but if I had to guess -- I'd say they knew they didn't like Hillary Clinton.

They knew Bannon and Conway were conservatives to their stripe, which is basically cut the stake to everything except the military expenditure down to just about nothing. And de-regulate and cut taxes, the other obvious inference there. And so, they piled in, at any rate, they did it. And the other point to make and you should remember this when anybody says its Comey and/or the Russians. It's very obvious that the Trump campaign was very well targeted. The day after Bannon takes over, in the Washington Post there's a -- we quote it -- there's an article that just says, they will now concentrate on a few industrial states where they think they can actually win over voters, poor, poorer voters, and they did that. And whereas, famously the Clinton campaign was campaigning all over the place in places that probably didn't matter.

AARON MATÉ: Well, you know what? Professor on that point, let me say -- and by the way in terms of investment, investor confidence in the Trump campaign, I'm sure was boosted when Robert Mercer, the hedge-fund billionaire, he was the one who brought in Kellyanne Conway and Steve Bannon, essentially,

T. FERGUSON: Careful, it was following a conversation between Rebekah, his daughter, and Trump. And there's no reason to think there probably weren't some other contacts there but that's the one that's been heavily written up.

AARON MATÉ: Right. So, the Mercer family endorses, essentially, the Trump campaign and brings in its people, Bannon and Conway and after that is when you have the rise in dark money that you tracked. But let me ask you about in terms of messaging, you have Trump meanwhile trying to appeal to working-class voters in a way that Clinton did not. And as a sample of that, this is Trump speaking in Pennsylvania in June 2016.

DONALD TRUMP: Globalization has made the financial elite who donate to politicians very, very wealthy. I used to be one of them. Hate to say it but I used to be one. But it's left millions of our workers with nothing but poverty and heartache. When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians have proven, folks, have proven: they do nothing. For years, they watched on the sidelines as our jobs vanished and our communities were plunged into depression-level unemployment.

AARON MATÉ: So, that's Donald Trump, then candidate Trump, speaking in Pennsylvania in June 2016. Now, along with Pennsylvania, Trump also won the key battleground states of Wisconsin and Michigan. And Professor Ferguson you point out, and this is a factor that has not gotten any attention, is that these three states were all targets of major anti-union drives before the campaign.

T. FERGUSON: Targets of cesspool anti-union drives meaning that they show, I think, in the top eight states a loss of the union members under the Obama administration. When they're in power. 2009 to '16. They're right in that very highest levels and if you do simple math ... The margin in those states is something 70,000 votes sometimes, or fewer. And you gotta wonder if the union rights had just been the same, knowing the rate at which unionized workers vote Democratic rather than un-unionized workers, it would have been a different race perhaps. I mean, there's a lot of other ... It's a hard call, 'cause there's a lot of other things that weren't constant too, but that does seem to be quite striking.

And more broadly, I have to tell you that whenever I hear Democratic Party politicians talking about bringing back the Democratic Party, making a big fight in states and local areas ... the truth of the matter is that for much of the United States where there's a Democratic Party, if you have no unions you have not much of a Democratic Party unless it's built on some ethnic organization, some of the Hispanic organizations in Texas or something like that. And I mean, there's an awful lot of self-deception in the discussions about rebuilding the Democratic party. It can't be done, I suspect, in any normal Midwestern, northeastern state while unions continue to just bleed members. It's just not gonna happen. It's like a round square.

AARON MATÉ: Well, that is a good segue to the next part of our discussion where we're gonna talk about the other unusual feature of the 2016 campaign, which was the extraordinary success of Bernie Sanders despite unanimous corporate opposition. The study is called, "Industrial Structure and Party Competition in an Age of Hunger Games: Donald Trump and The 2016 Presidential Election." My guest is Thomas Ferguson, professor emeritus of political science at the University of Massachusetts, Boston. Professor Ferguson thank you.

T. FERGUSON: Thank you.

AARON MATÉ: And thank you for joining us on The Real News.



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