The Billionaires' Long Game

By Reich, Robert B | Tulsa World (Tulsa, OK), December 3, 2012 | Go to article overview

The Billionaires' Long Game


Reich, Robert B, Tulsa World (Tulsa, OK)


What's the biggest political lesson of 2012? Some say it's that money doesn't count all that much. Even though billionaires and big corporations poured huge amounts into the 2012 election, they lost big. They learned the lesson and won't try to buy another election.

Baloney.

It's true their political investments didn't exactly pay off this time around.

Republican operative Karl Rove's two giant political funds - American Crossroads (a super PAC) and Crossroads Grassroots Policy Strategies (a so-called nonprofit "social welfare organization" that doesn't have to report its donors) - backed Mitt Romney with $127 million spent on more than 82,000 television spots.

Rove's groups spent another $51 million on House and Senate races. Ten of the 12 Senate candidates they supported lost. The return on investment for American Crossroads donors turned out to be just 1 percent.

Among Rove's investors was Sheldon Adelson - the billionaire who owns the Las Vegas Sands Corp. - who invested more than $100 million in the election, mostly on Republicans who lost.

Adelson wasn't alone, of course. Texas industrialist Harold Simmons invested $26.9 million; TD Ameritrade founder Joe Ricketts invested close to $13 million; a network organized by billionaire industrialists Charles and David Koch invested $400 million. Most of their investments failed.

But if you think these losses mean the end of high-stakes political investing, you don't know how these people work.

If and when they eventually win, these billionaires will earn back many multiples of whatever they invested. Their taxes will plummet. Many of the laws constraining their profits (such as environmental laws preventing the Koch brothers from more depredations, and the anti-bribery Foreign Corrupt Practices Act that Adelson is being investigated for violating) will disappear. And what's left of labor unions will no longer intrude on their bottom lines.

They have enough dough to keep betting until they eventually win. That's what it means to be a billionaire political investor: You're able to keep playing the odds until you get the golden ring.

Looking ahead, Adelson told the Wall Street Journal he's ready to double his 2012 investment next time around. "I happen to be in a unique business where winning and losing is the basis of the entire business," he said. "So I don't cry when I lose. There's always a new hand coming up." He isn't looking back at his losses: "I know in the long run we're going to win. …

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