Investing in a politician's future
Rep. Eric Cantor holds a news conference on Capitol Hill.
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Stacey Vanek-Smith: It seems everybody's a little short on cash these days -- I know I am -- except of course for presidential candidates: Barack Obama raised $72 million in the month of June. John McCain took in $27 million.
Fundraising has become as much a part of a lawmaker's job as public policy. Marketplace's Steve Henn gives us the story in part one of our special report "PAC Men."
Steve Henn: If you're young, ambitious and a member of Congress, a Leadership Political Action Committee is this season's must have fundraising accessory.
Lawmakers first formed these loosely regulated accounts 30 years ago as a way of raising cash from lobbyists and other special interests. The money is then passed around to lawmakers facing tough election fights. Understanding PACs is crucial to understanding how Washington works.
Fred Wertheimer: They are an arm for the member of Congress to use in gaining power.
Fred Wertheimer is the founder of Democracy 21, a campaign finance reform group.
Wertheimer: They are a very important vehicle for lobbyists to curry favor with the members.
Wertheimer says when companies and lobbyists give to a Leadership PAC they are making an investment in a politician's future.
So how does this work? Take Congressman Eric Cantor, Republican of Richmond, Virginia.
Fred Barnes: He's serious. He's helpful. He's not just out for himself. He can raise a ton of money.
Fred Barnes from the Weekly Standard is excited about Cantor's prospects. Cantor became a leader in Congress -- Chief Deputy Whip -- just a few years after he was first elected. He consolidated his power with the help of private equity investors, hedge fund managers and other big donors to his PAC. Barnes says Congressman Cantor led the fight to keep their taxes low.
Barnes: That's probably not a nationally popular issue, but right now, it's not a problem.
Henn: And that probably doesn't hurt his fundraising either.
Barnes: Well, it certainly hasn't hurt his fundraising. Certainly, people in hedge funds...
Turns out Eric Cantor is a fundraising machine. He used his leadership PAC to throw parties for investors and lobbyists at resorts in Beverly Hills, fine restaurants in New Orleans and ski resorts in Aspen. He says it's all for a good cause.
Eric Cantor: Wherever we go, obviously we are trying to raise the most money so we can help our cause and we can return the Republicans back to the majority.
And he's been generous with the money his PAC brings in. According to Federal Election Commission filings, in the last election he wrote out more than 200 checks to colleagues totaling $1.3 million.
Cantor: We want deliver on the promise to make sure we are helping Republicans.
And Fred Barnes says his Republican colleagues in Congress would jump at the chance to return the favor one day.
Barnes: Of Republicans in the house, I would say that Eric Cantor has by far the best prospects of being the next Republican Speaker of anyone. In fact, there is nobody close.
In Washington, I'm Steve Henn for Marketplace.