Foundation, a john and polly guth charitable fund. The clements foundation. Park foundation, dedicated to heightening Public Awareness of critical issues. The herb alpert foundation, supporting organizations Whose Mission is to promote compassion and creativity in our society. The bernard and audre rapoport foundation. The john d. And catherine t. Macarthur foundation, committed to building a more just, verdant, and peaceful world. More information at macfound. Org. Anne gumowitz. The betsy and jesse fink foundation. The hkh foundation. Barbara g. Fleischman. And by our sole corporate sponsor, mutual of america, designing customized individual and Group Retirement products. Thats why were your retirement company. Welcome. At the state of the union speech, theres always more than meets the eye. Just out of sight is the reality of how we are governed. The house of representatives, where congress gathers to hear the president , used to be known as the peoples house. But money power owns the lease now and runs the joint from hidden back rooms. Youre looking at the most expensive Congress Money can buy. The house races last fall cost over 1 billion. It took more than 700 million to elect just a third of the senate. The two president ial candidates raised more than a billion a piece. The website politico added it all up to find that the total number of dollars spent on the 2012 election exceeded the number of people on this planet some seven billion. Most of it didnt come from the average joe and jane. 60 of all super pac donations came from just 159 people. And the top 32 super pac donors gave an average of 9. 9 Million Dollars. Think how many teachers that much money could hire. Well never actually know where all of the money comes from. Onethird of the billion dollars from outside groups was dark money, secret funds anonymously funneled through fictional social welfare organizations. Those are front groups, created to launder the money inside the deep pockets. And dont let anyone ever tell you the money didnt make a difference. More than 80 of house candidates and 2 3 of Senate Candidates who outspent their general election opponents won, and were present and counted as the new congress prepared to hear the president. Remember, money doesnt necessarily corrupt legislators, but it certainly tilts them. Members of congress, i have the high privilege and distinct honor of presenting to you the president of the united states. So lets share some snapshots from the state of the union. Thats speaker of the house john boehner, of course. Hes led his party to protect wall street from oversight and accountability. The finance, insurance, and Real Estate Industries gave him more than 3 million last year. Eric cantor is the republican majority leader in the house. Among his biggest donors, goldman sachs, masterminds of the mortgagebacked securities that almost sank the world economy. Cantors also the Third Largest recipient of money from the National Rifle association in the house, which is one reason hes such a big gun there. Senator robert menendez, democrat of new jersey, may be in hot water. Hes currently under investigation for allegations that he improperly intervened with Government Agencies on behalf of a big donor. And theres fred upton, republican from michigan, chairman of the house energy and commerce committee. What a coincidence. The oil and gas industry is one of his top donors, helping him raise the 4 Million Dollars he spent last year to win reelection. Senator Kirsten Gillibrand and senator chuck schumer, democrats of new york, have wall street as a constituent and patron. Her biggest contributors include jpmorgan chase, morgan stanley, goldman sachs, and law firms that have advised them. His top donors include securities and investment firms, lawyers and legal firms, and lobbyists. And there are fleeting glances of some familiar faces here tonight seen recently on our broadcast. Senator Mitch Mcconnell of kentucky, the republican leader in the senate, republican orrin hatch of utah, and democratic senator max baucus of montana. All cited by the New York Times as suspects in that mysterious migration of half a billion dollars from taxpayers over to the bottom line of drug companies, especially the pharmaceutical giant amgen. Would it surprise you to learn that over the past five years, amgen has been one of the top ten donors to mcconnell, baucus, and hatch . As for our president by attending a fundraiser on the average of every 60 hours during his bid for a second term, he once again broke the record for bringing home the bacon. Although the money power that controls congress could thwart everything obama proposed in his state of the union address, there was not a single word in that speech about taming the power of private money over public policy. And so it goes. The golden rule of politics. He who has the gold, rules. Can we do anything about it . My two guests think we can. They say that if anybody should own the politicians, we the people should. Dan cantor is a former community and Union Organizer whos executive director of the working Families Party. Thats a third party that began in new york state and has now spread to five others. Since its launch 15 years ago, hes helped lead the partys efforts to elect progressive candidates throughout the state and worked to increase new yorks minimum wage and raise taxes on the rich. Jonathan soros is one of those who would pay more. Hes a lawyer, investor, and philanthropist working on economic change and social goods. A senior fellow at the Roosevelt Institute exploring the role of corporations in society, and cofounder of the super pac friends of democracy, which aims to counter the influence of money in politics. An irony well discuss later. Dan and jonathan are on the front lines of the fight to make new york state a National Model for the Public Financing of political campaigns. Welcome to you both. Thank you so much. Glad to be here. What an odd couple you are. Jonathan, youre a lawyer, a man of means, youre active in finance, among other things. Daniel, you are a street fighter who cut your teeth organizing labor. In fact, new York Magazine once called you the very model of a grassroots political boss. What is, briefly, the working Families Party . So working families is a Political Party organized under the laws of new york more or less in an alliance with the democrats. We try to yank the democrats in what we think to be a sensible, humane, progressive direction. We get about 5 of the vote state waid, but in some target races we can get as much as 15 , 20 , 22 . Who funds you . So its a variety of individual donors. We raise, we do a lot of doorknocking. Thats about 25 of our donations. Unions, individuals, you know, we scuffle, we do fundraising events. Its not a high donor operation, but we try to keep, you know, keep the doors open. So jonathan, what drew you to this rabble rouser . Well, dan and i first worked together probably about a decade ago as we were taking on the question of rockefeller drug laws in new york state. And then he came back to me, you know, a little over a year ago. Dans been working as part of a terrific coalition of groups, the new york Fair Elections coalition, that have been promoting Campaign Finance reform for a number of years in new york state. He knew that i had a lot of interest in this issue for a long time. And so we what, where does, whered that interest come from . My first real job out of college, i ended up spending almost two months in moldova, the republic of moldova, working with a usaidfunded foundation dealing with their first ever parliamentary elections. I was there on the ground for two months. That was my first taste of really how rules matter in the way that elections are conducted and how sometimes the unwritten rules matter, too the unwritten rules . Such as . Well, so there were, there werent great rules about Campaign Finance in moldova. You know, their first ever elections, there was, you know, a lot of use of state funds in electioneering. Folks who were sitting in the parliament were, an existing parliament were running around in state cars doing their campaigning. This has been a communist governed country . Communist governed country. And then i had a great, i had a great teacher in law school, lani guinier, who really opened my eyes to a number of issues related to democratic process. And its been a set of issues that ive cared about ever since. What are you after in new york state . So were after a comprehensive system of Campaign Finance reform. I got involved in this really actively after Citizens United on the belief that there is still despite the Supreme Courts rulings that there is a suite of reforms that would be transformative in the way that money flows in and around politics. And thats now on the table in new york state. It starts with disclosure obviously. But it really focuses around what were calling citizen funding, a form of Public Financing that allows candidates the opportunity, gives them the option to run for Public Office without dependence on large contributions and independent expenditures. Thats really what were, what were seeking to achieve. I mean, i think his point about rules is really worth underlining, right. Better rules produce Better Outcomes whether its in elections or for that matter in the finance industry. Theres economic inequality, youve talked a lot about that on this show over the years. But theres also political inequality. And this effort is an attempt to deal with at least that second one a little bit. But if you deal with political inequality, we have a system that should be one person, one vote, not one dollar, one vote, youll affect other things besides the elections themselves. The we have a nonvirtuous system right now in which wealth gets power, uses the power to increase its wealth. You know, Justice Brandeis famous comment about how you can have a great concentrations of wealth or you can have a democracy, but you cant have both. So were at a moment in this society it seems to us which we have to make a decision. And we need to create a system that voters themselves will have more kf in because right now when you knock on doors, people are, theyre pretty cynical that things can change. Isnt the governor of new york, governor cuomo, on your side . Listen to what he said in his state of the state speech in january. We must enact Campaign Finance reform because people believe that campaigns are financed by someone else at exorbitant rates implement a Public Finance system based on new york city. It works well in new york city. It will work well in new york state. Do you think hes serious . I do think hes serious. How will he prove hes serious . Well, hell prove his seriousness by getting this bill passed in the coming legislature. I think we can have confidence that the governor will be able to pass something that is called Campaign Finance reform in this state. The real test and measure is going to be whether it includes this citizen funding. How would public funding work . Well, it can work a lot of different ways. For obvious reasons its most useful to point to new york city when youre in new york state. Here we have a system in the city if youre running for Citywide Office or for city council, any contribution up to, you qualify to get into the system, its voluntary. Then any contribution up to 175 is matched six to one by the public . By the public. Out of a pool from the general fund from the budget. And that has had a dramatic transformative effect in the way that funds are raised. How so . First of all, the level of small donation, the Campaign Finance institute and the Brennan Center have done some Great Research and produced some beautiful maps showing the difference in the two systems. If you look at a map of state Assembly Races in new york city and how many small contributions there are for those races, there are almost none throughout the entire city. Look at the same map of new york city for city council races, its covered. There are small contributions coming from every neighborhood, even the poorest neighborhoods in the city. People who are running for office are reaching out to their constituents, ordinary citizens, theyre having house parties in peoples living rooms, not large, you know, large check fundraisers. And the statistics are that the people who participate in the system get the majority of their funding from small contributors and only a small minority of what are still large contributions of, you know, 1,000 and up. This is a gigantic change. I mean, people should appreciate who gets to run for office when you have a system like this. Librarians run for office, exteachers run for office. Its not just people who have a rolodex of prospective donors who get to run for office. And its good for the candidates and the voters alike. Theres a lot of middle class and working class people who can put that 10 and 20 and 50 together. Thats worth 70 or 140 or 350 to the candidate. So it makes a house party with 30 people at which you raise 1,000, which takes a couple of hours, its worth 7,000. Thats a real thing that the candidate can then use because we actually need money to run campaigns. They have to have mailers and staff and so on. So if i were to run for the city council or some other office in new york city and i announce that im going to enter this system and i get you to give me how much . 40. And if you give me 40, what happens . Then the city fund gives you 240 on top of that. So thats a 280 contribution. Thats a big contribution. And it means to me as a voter i have a little skin in the game and im going to Pay Attention to you. So it totally changes kind of the relationship between the candidate and the donor, that a lot of small donors and also we, you know, we favor people putting a little money in. We dont, if you cant go out, if youre running for office and you cant find 300 or 400 people to give you 20, you have no business running for office. So were not looking for, its a little bit of private money and then some public money. But then you dont have to just spend your time as an elected official should you win, in the unlikely event that you win, you then dont have to spend your time mostly worrying about how to get those 2,000 and 3,000 checks. But public funding did not stop Mike Bloomberg from spending a small fortune. A large fortune. A large fortune on his three elections. Thats true. But it did allow his opponent to run a credible campaign. And the election was pretty darn close. Using public funding using public funding. So if you look across the country, theres all sorts of evidence of people who spent a lot of money in campaigns, who spent more money than their opponents and lost because having more money and having a lot of money doesnt make you a better candidate. What matters is having a threshold, an amount of money thats sufficient to run a credible campaign. And thats what citizen funding allows you to do. It allows you to get that amount of money that lets you run a credible campaign, be a good candidate connecting with your voters and do it in a way thats focusing your attention on ordinary citizens. But how does it undo the power of big money . Well, so mayor bloombergs an outlier. There arent so many candidates like that. Listen, were never going to keep private money out of politics. Thats the wrong ambition. The goal is to youre not saying we should . We shouldnt and we cant yeah, thats right. But Citizens United makes it impossible. They have opened the gates wide. And it was even before Citizens United as youre well aware the gates were open pretty wide. So the ambition isnt to keep private money out. Its to get enough public money in so that even when you have somebody who is not part of the system spending a lot, the other person gets to a threshold that makes it reasonable, right . You dont, at some point the extra money isnt that valuable. You just have to get to be competitive. And thats what we have found in the states and cities where you have public if i could just add to that. I mean, it really is about reducing the influence of that money. And that takes of the big money . Of the big money. So that takes two pieces. One is create an alternative for candidates to run without reliance on the big money. The second is we need to have some genuine rules about what independent means. So when we talk about the super pacs, now, its widely misunderstood, super pacs are actually fully disclosed. We know where the money comes when it comes through a super pac. As you were pointing out in your opening, theres money that flows into the super pacs that isnt disclosed. So that has to get dealt with. But those super pacs were a far as, right . You have candidates endorsing them, you have candidates showing up at fundraisers and then leaving before the, you know, before the money is asked for. You have Campaign Staff, former Campaign Staff running them. We have no effective rules. This is all legal under what is considered coordination by the federal Elections Committee yeah, we say a super pac is okay if its independent of the campaign. But in practice bu