A True Tale of the Corruption of Campaign Finance Laws:
Sometimes, you have to use a small story, a parable, if you will, in order to explain the big picture. The corrupt state of our contemporary politics is such an enormous, overwhelming issue. Trying to take in the extent of the influx of outside money and its influence on elections is enough to make most citizens just flip the "off" switch in their brains. When you get past the money flood caused by the loathsome Citizens United decision, you're left with attempting to explain how all the other funds that are raised for our ludicrously long election cycles make it impossible to have anything approaching actual democracy, and that discussion is usually met with the listeners putting their hands over their ears and yelling, "Lalala, I can't hear you." It's just easier to pretend, ya know.
So let's microcosm this for a moment. Let's take a single story about one person in a relatively small town and demonstrate what exactly is happening. For the tale of Ora Leonard is as clear an example of the destructive effects of our campaign finance laws on a personal level. It has the advantage of also being illustrative of the complete cruelty of our mortgage and finance system and the desperation of local governments.
Follow the bouncing ball here for a little while: In Decatur, Illinois, we have the Dennis Ballinger Real Estate Company. Its stated mission is to buy properties in foreclosure proceedings, force them to finish, and then re-sell the property at a profit: "We specialize in the completion of foreclosed residential, commercial and industrial properties and conveying ownership to investors and business owners eager to purchase at below market prices." Charming as that is, Ballinger has another business, Empire Tax Corporation, which buys the unpaid property taxes from Illinois county governments and then pursues the property owner for compensation plus a percentage extra for its trouble. If the property owner doesn't pay the money to the company that it now owes the debt to, the company can take the property. One can see how this would be advantageous to Dennis Ballinger's aforementioned real estate business.
The percentage a tax buyer can charge in "penalties" is set during auctions of the taxes by the treasurers in each county. Other counties in Illinois average a 1%-5% mark-up, like in Champaign County. Madison County averaged the state maximum of 18%. You can see how someone could make a nice bit of change there.
Here's how this works: "The penalty rate goes up by the same percentage every six months. For example, if the winning penalty bid is 18 percent, the property owner has to pay a 36 percent penalty if he pays up within 6-12 months, a 54 percent penalty if he pays up within the following six months, and so forth. A tax buyer can take the property after three years, sometimes sooner." Some might call this "cruelty."
Now let's make this personal: Venice, Illinois, is a small, poor town in Madison County, on the Mississippi River, across from St. Louis. It's heavily African-American. The average income and home prices are a fraction of the state average. That's where 73 year-old Ora Leonard lived in her home on Broadway for over 20 years. She received a letter last year from Ballinger telling her to pay her 2005 property taxes or risk losing her house. Leonard had no idea she owed the taxes, she says, thinking that her escrow account at her bank would still pay. Ballinger bought the taxes, along with her 2009 ones, at an auction of taxes conducted by Madison County Treasurer Fred Bathon. The penalty rate is a bid received by Bathon at the auction. Leonard should owe $3343. But the interest, compounded from 2005 on that bill, as well as other penalties, make it so she owes $6000.
So isn't this just about a poor woman who might lose her house because of greed and the crappy economy? Isn't it about a pretty odious practice that just invites cruelty? What the hell does this have to do with Citizens United or campaign finance at all?
In his campaign for county treasurer, Fred Bathon's number one contributor was Dennis Ballinger. He gave $29,100 to Bathon's campaign. Ballinger's companies made over $200,000 on tax sales due, in large part, to the high penalty rate. If you do math, that'd be one hell of a return on his investment. At the tax auction, the practice is to let buyers bid against each other for what tax penalty they'd buy for. So one buyer might yell, "18%" while another would yell "17" and on down, like Name That Tune. Bathon's practice at the tax auction was to close bidding after the first bid so that the highest rate was always the one imposed.
By the way, the top four contributors to Bathon were registered tax buyers (you have to register as a tax buyer to participate in the auction). By the way, Bathon is now retired, the tax sales under him are under investigation by the state, and the penalty rate for tax sales averages 9% in Madison County. By the way, in Champaign County, candidates for treasurer are barred from receiving donations from tax buyers. The state legislator is working to change the entire system of tax sales so that tax buyers can't contribute at all and so homeowners like Ora Leonard don't have to negotiate a bureaucratic maze to try to get the tax sale canceled.
So let's put this together: A government official deliberately used his authority to directly enrich his highest campaign donors, which caused poor homeowners to either plunge further into debt or lose their houses. That's an absolute direct correlation between money and action. Yet this was just for a couple hundred thousand dollars at a county level with the names and jobs of the donors identified.
Now, up it to a national level. And up the money involved to hundreds of millions, if not billions, of dollars. And the requirement of disclosure of donors to certain groups eliminated by the Supreme Court. And then you realize that it's not just Ora Leonard's house at stake. It's the whole goddamn country.