Can little Ukraine teach big America how to deal with our oligarch problem?
Viktor Medvedchuk was the Rupert Murdoch of Ukraine. He ran a rightwing television network and owned TV stations across the country, while simultaneously being one of the richest men in that nation. He promoted hate and division, tax cuts for the rich and gutting the Ukrainian social safety net, and supported some of Ukraine’s most toxic politicians.
Like many of today’s American oligarchs, he owned hundreds of politicians, who consistently voted in Parliament, state, and local governments to protect his businesses, wealth, and influence.
Then came Volodymyr Zelenskyy, who successfully campaigned for president on a Teddy Roosevelt-like anti-corruption platform and, like both Teddy and Franklin Roosevelt, declared outright war on politically active oligarchs.
As a result, today Medvedchuk is hiding out in Russia, his media properties having been sold to smaller companies that are not oligarch-owned or -influenced. Without the persistent rightwing poison Medvedchuk’s TV and other media properties had spread daily throughout Ukraine, the country is now looking at a more democratic future than does America.
Essentially, what Ukraine’s president and parliament did with their 2021 “deoligarchization” (yes, they actually call it that) law was to say to Ukraine’s billionaires:
“You may be rich, and you may have whatever political opinions you want, just like every Ukrainian. But because average Ukrainians don’t have access to millions or billions to sway public opinion or buy politicians, we will no longer allow you to use your vast riches to corrupt our nation to your own advantage at the expense of average working people.” (My words, not Zelenskyy’s.)
In 2021 the Ukrainian president declared a campaign to “de-oligarchize” his nation, having correctly diagnosed his country’s political and economic crises as tracing back to the corruption of Ukrainian politics by that nation’s morbidly rich.
“In order to succeed, Ukraine must become a rule of law democracy that works in the interests of the many, rather than the few,” Zelenskyy declared on May 18, 2021, fully nine months before the Russian invasion.
His campaign against Ukraine’s oligarchs was as big a threat to Putin’s network of rich enablers as were the EU’s sanctions or Robert Mueller’s prosecutions of them. Some speculate it was the final straw for Putin, provoking his February, 2022 invasion. It was getting a lot of favorable publicity in Russia, and that threatened Putin and the oligarchs who keep him in power.
Zelenskyy had made clear his goal of eliminating from Ukrainian political life the vast power and influence of that country’s oligarchs.
“There is no limit to our ambition,” he said in that 2021 statement. “Every Ukrainian is acutely aware of their country’s vast untapped potential. In order to realize this potential, we must create a fair and functional system that protects the rights of the entire population rather than safeguarding the interests of the oligarchs. The foundations of this system are currently beginning to take shape. …
“Our ultimate objective is to destroy the traditional oligarchic order and replace it with a fairer system that will allow Ukraine to flourish.”
The law, which went into effect June 7th of last year, defines oligarchs as people who meet three out of four criteria, and limits their behavior in six ways that essentially reduce their political influence to that of average Ukrainians.
An oligarch, by the Ukrainian definition, is somebody who:
— Has “significant” influence over mass media,
— Controls a business that exercises monopoly influence over a part of the economy,
— Involves themselves in politics through funding politicians, political parties, political campaigns, or think tanks, etc. (the phrase used is “takes part in political life”), or,
— Has a net worth of greater than $89 million.
Ukrainian oligarchs, under the new law:
— Are included on an official register published by the government,
— May not hold political office, may not fund political parties, or have influence over any meaningful part of “political life,”
— May not purchase state assets that are privatized, and
— Must disclose their assets in what the Financial Times calls “exhaustive declarations.”
— Government officials are also required to report any meeting with an oligarch on the government’s list.
America once had a similar tradition and Americans want it back. So much so that they bought hook, line, and sinker the sales pitch from a professional con man who knew how frustrated working people are by our American oligarchs and their seizure of the GOP.
In the 2015 Republican primary, Donald Trump tapped into this longing, promising he would end the political corruption by oligarchs and the corporations that made them rich.
During the Republican primary election, Trump said of his GOP competitors:
“They will be bombarded by their lobbyists that donated a lot of money to them. Again, Jeb raised $107 million dollars, OK? They’re not putting that money up because it’s a wonderful charity. Well, it is a charity, but for them, not for America.”
That was in July of 2015 when he was considered a long-shot, fully five months before President Obama said, “I continue to believe Mr. Trump will not be president.”
Trump argued that normal, corruptible politicians would have to bend to the will of their campaign donors, even when that meant sending jobs overseas and otherwise screwing average Americans:
“So their lobbyists, their special interests and their donors will start calling President Bush, President Clinton, President Walker. Pretty much whoever is president other than me. Other than me. And they’ll say: ‘You have to do it. They gave you a million dollars to your campaign, two million, five million.”
Across the auditorium heads were bobbing as Trump tossed out the punch line he used in hundreds of speeches:
“And the plant will be built in Mexico and [that’s how] we just lost lots of plants all over our country.”
Political bribery was a felony crime in the United States virtually from the beginning of our republic until just the past 40+ years.
Those laws were strengthened repeatedly at both the federal and state levels over the past 150+ years, including hundreds of prohibitions on oligarchs, corporations, and their officers bribing politicians.
The 1907 Tillman Act, much like Ukraine’s de-oligarchization law, made it a federal crime for any wealthy executive of a large corporation to give any money or other support of any sort to any candidate for federal office.
Numerous state laws echoed the Tillman Act and other anti-oligarch, anti-bribery, and anti-corruption laws.
For example, Wisconsin’s law was quite explicit:
“No corporation doing business in this state shall pay or contribute, or offer consent or agree to pay or contribute, directly or indirectly, any money, property, free service of its officers or employees or thing of value to any political party, organization, committee or individual for any political purpose whatsoever, or for the purpose of influencing legislation of any kind, or to promote or defeat the candidacy of any person for nomination, appointment or election to any political office.
“Any officer, employee, agent or attorney or other representative of any corporation, acting for and in behalf of such corporation, who shall violate this act, shall be punished upon conviction … by imprisonment in the state prison for a period of not less than one nor more than five years … and if a domestic corporation it may be dissolved … and if a foreign or non-resident corporation its right to do business in this state may be declared forfeited.” [emphasis mine]
Five Republicans on the Supreme Court, however, struck down that and literally hundreds of other state and federal anti-bribery laws in their corrupt 2010 Citizens United decision.
In the wake of that decision, state courts were forced to strike down similar anti-bribery laws in Alaska, Arizona, Colorado, Connecticut, Iowa, Kentucky, Minnesota, Montana, North Carolina, South Dakota, Tennessee, Texas, West Virginia, and Wisconsin.
As a result, today Democrats like Joe Manchin, Kirstin Sinema, Josh Gottheimer, and the entire Republican caucus in both the US House and Senate and virtually every Republican in every state house and senate in America are regularly on the take.
A political network organized by rightwing billionaire oligarchs is believed to have more employees and a larger budget than the entire GOP. And it’s just one of several, each run by different groups of American oligarchs, sometimes even using money or other resources from foreign countries (Russia, for example, is alleged to have funded the NRA).
This is a genuine crisis for American democracy. The poison of big money is seeping through the veins of our political system in ever-larger quantities. If not stopped, this process can be fatal.
No democratic republic in history has ever survived as a functioning democracy more than a few generations once political bribery is either legalized or simply becomes widespread due to weak law enforcement.
This story of how wealthy oligarchs corrupt political systems is so ancient it’s at the core of the decline and fall of the Roman empire.
Historically we’ve usually seen this phenomenon in Third World countries with a weak rule of law, but more recently it destroyed or is eroding democracy in Russia, Hungary, The Philippines, India, Sri Lanka, Venezuela, Brazil, Peru, and South Africa (which, with the “gift” of American corporate lawyers to help write their new constitution three decades ago, institutionalized corporate personhood and the right of corporations to fund elections, as I document in Unequal Protection: How Corporations Became Persons).
The evidence of this cancer — installed into our body politic by five corrupt Republicans on the Supreme Court — is now so obvious that it’s turning elections and politicians are openly calling it out.
And if we don’t do something about it soon, America may well go down the authoritarian road Trump tried to pave and the countries listed above are now on.
America has faced a crisis of oligarchy much like today’s twice before.
The first time was in the two decades leading up to the Civil War, when the Cotton Gin enabled a handful of uber-wealthy families in the South to buy up or wipe out their cotton-growing competitors, producing America’s first full-blown fascist oligarchy.
After this handful of super-rich families had taken over the entire political system of the Confederacy, they rose up and declared war on the United States itself, explicitly trying to end America’s experiment with democracy once and for all. (I lay this out in detail in The Hidden History of American Oligarchy: Reclaiming Our Democracy from the Ruling Class.)
America’s second experience with oligarchy stretched from the 1880s and the Industrial Revolution until the Republican Great Depression led Americans to put Franklin D. Roosevelt in the White House in the election of 1932.
As John D. Rockefeller and other oligarchs rose in power and political influence, what little middle class America had collapsed. The richest 1 percent held over half of America’s wealth in 1900; combined into the top fifth of Americans that group owned fully 87 percent of all the nation’s wealth, and the second fifth — arguably the middle class — held the remaining 11 percent. The bottom 40 percent of Americans had zero or negative net worth.
The average American worker during that era earned around $800 annually, and worked a 60 hour week to accomplish that.
Anti-oligarch political pressure built and the Sherman Anti-Trust Act was passed in 1890, but wasn’t seriously used until progressive Republican presidents Teddy Roosevelt (TR) and William Howard Taft used it against John D. Rockefeller and other oligarchs in the 1901-1916 era.
TR famously believed and said:
“There can be no real political democracy unless there is something approaching economic democracy.”
President Wilson used World War I to raise the top income tax rate on multimillionaires up to 91 percent, adding to TR’s and Taft’s somewhat successful efforts to restrain the oligarchs.
In 1920, though, in the wake of the end of World War I and the Flu Pandemic of 1918-1919, Republican Warren Harding campaigned on lowering that top tax rate all the way down to 25% (which he did when elected: his anti-tax campaign slogan was “A return to normalcy”).
He also stopped enforcing the Sherman Act, among others: his pro-oligarchy campaign slogan was: “More business in government (privatization) and less government in business (deregulation).”
The Ronald Reagan of his era, Harding’s policies — continued by Coolidge and Hoover from 1921 to 1933 — led straight to the Republican Great Depression.
Franklin D. Roosevelt came to power in 1933 and openly declared war on the morbidly rich, particularly after they unsuccessfully tried to kidnap and kill him that year in a plot outed by Marine General Smedley Butler (it was appropriately called “the businessman’s plot”).
“They hate me,” he thundered at the Democratic National Convention in 1936, “and I welcome their hatred!”
FDR raised the top income tax rate back up to 91 percent. He put Harry Truman in charge of finding and prosecuting war profiteers, further chastising America’s oligarchs.
From their failed coup plot in 1933 until the election of Ronald Reagan in 1980, our nation’s morbidly rich mostly contented themselves with simply making money and enjoying their mansions and yachts all around the world. It was Great Gatsby all the time.
But in 1971, tobacco lawyer Lewis Powell wrote an infamous memo to his friend who ran the US Chamber of Commerce, recommending businessmen once again involve themselves in politics as they had in the 1920s.
They needed to take over the court system, Powell said, buy legislators, sponsor pro-oligarch professors, and create a political system and network that could act as a shadow government, making America once again a safe place for oligarchs to control the political and media systems.
Richard Nixon put Powell on the Supreme Court in 1972, and Powell then authored the decision in First National Bank that struck down a century of laws restraining corporate and CEO political activism, setting the stage for Clarence Thomas to cast the deciding vote in the 2010 Citizens United decision that finally, fully legalized political bribery.
During that era from the 1930s to the 1980s, employers paid their employees well and offered generous benefit packages, largely because the oligarchs were under control and a third of American workers were union members.
For example, the nation’s largest employer in the 1950s and 1960s, Sears, had a generous stock program for its employees that guaranteed a comfortable retirement. As The New York Times noted in 2018:
“Half a century ago, a typical Sears salesman could walk out of the store at retirement with a nest egg worth well over a million in today’s dollars, feathered with company stock. … If Amazon’s 575,000 total employees owned the same proportion of their employer’s stock as the Sears workers did in the 1950s, they would each own shares worth $381,000.”
America’s middle class in the 1960s and 1970s — created by FDR out of the wreckage of the Republican Great Depression — was wealthy by today’s standards. With a high school diploma and a good union job, you could buy a home, a new car every two years, take a vacation every year, put your kids through college, and in many cases even buy a small vacation home.
The Reagan presidency, however, put an end to that, welcoming massive contributions from Americas oligarchs as they took over the GOP. He lowed the top income tax rate on billionaires from 74% to the 30% range and so extensively shot the tax code through with loopholes that the average American billionaire pays just 3.1 percent in income taxes today.
Reagan begin the process that, over the past 42 years, has seen over $51 trillion transferred from America’s working class into the money bins of the morbidly rich.
The number of Americans in the middle class has, as a result of Reagan’s embrace of America’s oligarchs, collapsed: before Reagan it was over 60 percent of working people; today’s it’s under 45 percent. For many, the American dream has become a nightmare of debt and homelessness.
America’s oligarchs, in other words, have purchased our political system and then used it to further enrich themselves at the expense of working-class people and the poor. The once-middle-class are now the working poor; the once-merely-poor are now the homeless.
Which brings us full circle to Zelenskyy’s anti-oligarch law and the need for America to do something like it. As Teddy Roosevelt famously noted:
“Neither the people nor any other free people will permanently tolerate the use of the vast power conferred by vast wealth … without lodging somewhere in the government the still higher power of seeing that this power … is also used for and not against the interests of the people as a whole.”
America’s oligarchs have never, ever been as rich or politically powerful as now. Three American oligarchs own more wealth than the bottom half of Americans, and oligarchs across the nation are using that money to influence politics to their own advantage.
Over at The New Yorker, investigative reporter Jane Mayer tracks how rightwing billionaires — America’s oligarchs — have helped fund overt efforts to overthrow or significantly alter the very nature of American democracy itself, exposing the threat of great wealth that nation after nation has struggled with in the past and present.
One single American billionaire appears to have essentially purchased the deciding vote for Citizens United, while others proudly own thousands of American politicians.
The biggest obstacle to a Zelenskyy-like de-oligarchization of America is the Supreme Court’s doctrine, laid out in the 5-4 Citizens United decision with Clarence Thomas the tie-breaking vote: that money is the same thing as “free speech” and that corporations have the same rights under the Bill of Rights as do human beings.
Congress is not without options, however, as I’ve discussed here at length in the past. First, though, Democrats who are not in the thrall of the morbidly rich will have to seize a large enough majority to pass such laws out of the House and get them past an oligarch-owned Republican filibuster in the Senate.
When they tried this in 2022 with the For The People Act, every Republican joined in a filibuster that Joe Manchin and Kirstin Sinema — both enthusiastic recipients of oligarch dollars — refused to help senate Democrats set aside.
Which defines the stakes for 2024.
This could be the election that finally determines whether the efforts to fight oligarchy — first led by Lincoln, then both Roosevelts — will succeed, or if America will follow Hungary and Russia down the dirty path to full-blown oligarchy. Whether the American experiment will survive.
Which means it’s all going to depend on us getting everybody we know registered to vote, and maintaining vigilance to make sure we’re not thrown off the voting rolls in Red states.
Tag, we’re it!