When rich individuals (smart business types, not vapid trust-fund types) run for office, there is a temptation to use their personal funds to finance their campaigns. This happened to Meg Whitman when she ran for Governor of California in 2010. A billionaire who had been CEO of eBay and a board director of several companies, she ended up spending $144 million from her personal fortune to finance her campaign...and still lost.
But at least she didn't end up bankrupt. Newt Gingrich can't say the same. Prior to running for President in 2012, Gingrich built a business empire that he affectionately referred to as "Newt, Inc." Between 2001 and 2010, his for-profit Gingrich Group LLC (later renamed the Center for Health Transformation) grossed $55 million. This was in addition to income he earned as head of two think tanks and a paid speaker. If Gingrich had stayed retired from the political arena, he would have probably ended a wealthy man. But when he declared his interest in running for President, his business empire crumbled. Companies that did business with him wanted nothing to do with his political positions as they became publicized. By the spring of 2012, the Center for Health Transformation ended up filing for chapter 7 bankruptcy. It owed between $1 million to $10 million to somewhere between 50 and 99 creditors, but only had $100,000 in assets. His presidential campaign was in similar dire straits, falling into millions of dollars of debt. In perhaps the final embarrassment, his campaign's $500 check for the Utah filing fee bounced.
Sources:
- http://www.salon.com/2011/02/01/us_calif_governor_s_race/
- http://www.washingtonpost.com/politics/gingrich-health-care-think-tank-files-for-bankruptcy-protection/2012/04/05/gIQAvgy2xS_story.html
- http://www.businessweek.com/news/2012-04-11/newt-inc-dot-bankrupt-as-campaign-operates-on-shoestring#p2
- http://www.reuters.com/article/2012/05/22/usa-campaign-gingrich-idUSL1E8GID2320120522
You know, it wasn't that long ago--probably still true in some places--that the whole point of taking public office was to be able to squeeze wealth out of the subject peoples. Into the 19C, British Army officers had to buy their commissions. The London Times carried advertisements selling "livings"--positions as curates or even pastors in the Anglican Church.
ReplyDeleteYour path to a law license will cost you, what, 100k? 200k? More? Would life be any different if we just auctioned them off?
With all due respect to 19th century British army officers and Anglican pastors, I think a system of appointment based on merit is preferable for many reasons to a system of appointment based on spending money.
ReplyDeleteI'd be all for it if becoming a lawyer involved a free education and passing the Bar exam, rather than acquiring $100k or more in student loans and still having to pass the Bar exam.