2.⁠ ⁠How to buy the White House

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1:24Hello and welcome to the second episode of The Rest is Politics US with me, Anthony Scaramucci. And me, Katty Kay. So Katty, we're recording on Thursday morning, the day after we met in person for the first time ever on Morning Joe yesterday. It was nice to finally meet you, Katty, after all these years. See that? I was wondering whether we finally met, which is a weird way to meet somebody, right? You meet them on a TV set in a live program for about 10 minutes. But I was wondering whether you were slightly regretting your decision to go into this venture. No, obviously you leave a very good first impression.

1:58I was very happy to have makeup on when I met you, Kat. You see that? I could hide the bags under my eyes for 10 minutes. But it was great to be with you. What are we going to talk about today? I want to pick up on something that you had referenced last week that caught my attention about this idea that everything in America, and particularly in American politics, can be traced back to money and to donations. So in the first half of this program this week, we're going to discuss the millions. Actually, you know what? Let's make that billions of dollars because this election is going to cost billions of dollars that are pumped into presidential campaigns.

2:34This year's race expected to be the most expensive race ever. And we're going to get a better idea of the kind of mysterious, murky, dark world of campaign financing and political mega donations. We'll get into PACs and super PACs and Anthony's going to tell you what they mean because he has a great history in this. And then in the second half, I want to go south of the border and look at Mexico, where there is an election coming up next month that honestly, hardly anyone here in America is talking about. But of course, it could have huge consequences for this election in November, because whoever is elected the next president of Mexico is going to control, to some extent, the border with the United States.

3:12And we know that that's a big issue in the US election. So before that, though, Anthony, campaign financing, and I think we should declare your own background and interest in this and tell the listeners how you became a mover and shaker, not just in the world of Republican campaigns, but also in the world of Democratic fundraising as well. Okay. So I think I've told you my background, but I'll just repeat it for this podcast briefly. I am not even an outer borough person. So Trump is an outer borough person. So what does that mean in New York parlance? Well, Cady, I'm sitting in my office right now, which is in midtown Manhattan.

3:47You could probably hear the traffic going by. Well, he wasn't born where the action is in the Island of Manhattan. He was born in Queens. Okay. I'm from Nassau County. So that's even further out. Okay. So maybe that's the Midlands for the UK or something like that. I just want to explain how out of it I actually am. And I had my first job interview at Goldman Sachs. I was wearing a hundred percent polyester Caddy Kay. And the partner at Goldman Sachs said, I can't bring you to Goldman like this. You got to go buy natural fiber clothing. I was fully flammable for my first job interview. So yes, I went to Harvard, posh school, but my dad was a crane operator.

4:27So you have to understand my connection into all of this came through politics. When I got the job at Goldman Sachs, we want to go meet rich people and we want you to open accounts for rich people. Well, I had never been inside a country club, never swung a golf club or a tennis racket. And so the way to do this, Caddy, was through politics. And I made my first political donation at the age of 29 in 1993 to Rudolph Giuliani for mayor. I was young Republicans for mayor. Why is this important? Because wealthy people gravitate to politics. They go to these events. It helped me build my business. When Rudy won, I got a parking pass on my car.

5:09I could park on two wheels on Madison Avenue on a fire hydrant. No problem. I had the most exclusive parking pass in New York City. You'd made the big time with your natural fiber. Now, Trump has a chip on his shoulder for being an Adderboro person. I could care less. If they don't want to let me into a country club or anything like that, it doesn't bother me. Trump didn't get into the exclusive country club out here on Long Island. he built 18 golf courses. You don't like me, I'm going to go run for president so that you have to deal with me. I'm trying to explain to you the differences in people's personalities, but what's important about this as it relates to fundraising is that is where the action is in the United States.

5:49Very wealthy people go to these fundraisers to name drop politicians, but also to influence politicians. We had limits in fundraising back in the day. In January of 2010, the Supreme Court passed a very famous case in the United States. It was Citizens United versus the Federal Election Commission. And in that decision, Justice Scalia said, well, you know, it's a First Amendment right. You've got a billion dollars. You can spend all of it on a political campaign. That's your exercise of your First Amendment right. And so we set up these things called political action committees. and people like me, Katty Kay, a billionaire, Elon Musk, can dump tens of billions of dollars theoretically into a political action committee to do whatever we want to affect policy.

6:41Now, the nuance is there has to be a Chinese wall between that and the political campaign itself, and the campaign is still limited in terms of hard dollar donations to the campaign. Why this is monumental is that it has absolutely skewed the policies and the legislation over the last 14 years. If you want chlorinated chicken in the United States, and you don't have that in the UK, but if you want it, you go to these fundraisers, you light up these congressional representatives, the senators, et cetera, and then they'll show up and they'll pass legislation to help big food, big pharma, big military.

7:22And the little guy, Cady, has been left out of this equation over the last 14 years. And I'll just leave you with this one last thought. Harry Truman said when he got the job of the presidency, he said, you know, this is the only job that every single eligible voter in the United States actually votes on. You know, the other jobs are a representative in my district, a senator in my state, or local politicians. The presidency is the one job where everybody votes on it. And Truman said that he was a lobbyist, therefore, for everybody. We don't have that anymore. There's no lobbyists for the little guy in the country, and it has affected the political system.

8:02So that is a great explanation of why Citizens United is so important. And I think it's also worth looking at some of the numbers that have resulted in that. Because what happens, my understanding, Anthony, is that with these superbacks, you get all of these wealthy billionaires who can dump, as you say, all of that money there. In America, it's called dark money. We don't really know where it comes from. It doesn't have to be declared. It's not like campaign funds that have to be declared. You have to say, has this come from small donors? Has this come from other people? The dark money in America has increased by 900 % since Citizens United was passed.

8:40I think that gives people some sense of the impact on the political system of these wealthy individuals. But it's also, I don't think Americans even understand how out of whack the sums are in their politics compared to other countries. Donald Trump raising$50 million at one fundraiser in Florida last month almost seems kind of normal by American standards. You look at other countries though, and you look at like 2019 and Alistair's going to jump on me because I've probably got this number wrong, but as far as my research tells me, Boris Johnson spent$21 million in today's money, the equivalent of 2019.

9:25A year later, Joe Biden, in his presidential campaign, not even the super PACs, this is just his presidential committee, spent$1.6 billion. That is a multiple of 76 times. So I don't know whether the United Kingdom has bargain basement democracy or whether the US is spending a whole lot of money on something that is not necessarily working any better. But that's 76 times. You know what the difference is? It's the difference between buying a latte at Starbucks and buying a DeLonghi Italian espresso machine. That's the difference. That's how out of whack American politics is in terms of its money.

10:04No wonder that... So let's say you're running for neighborhood dog walker. Anthony Scaramucci wants to become the town dog walker. The day before the interview, I go and buy you a cup of coffee. But my wealthy neighbor down the road, he buys you a freaking DeLonghi Espresso machine. Whose dog are you going to look after better? Is he going to operate the DeLonghi Espresso machine for me? Because I would be absolutely clueless on how to operate it. But if he's operating it for me, I'm going with him. But let me make this point to UK listeners, and perhaps some of the American listeners will get this as well.

10:39There are 535 people in our Congress, 100 in the Senate, 435 in the House, one president. There are 536 people that are controlling 26 % of the GDP of the United States, 8 % of the world's GDP. So I just want to put that into perspective for people. You've got 536 people that are descended on every year. You said it's 900%. There's$26 billion in lobbying spent on descending on Washington. Boeing started in Seattle. They moved their headquarters to Chicago County. It wasn't close enough, so they brought it to Virginia to sit outside the Pentagon and lobby that government. Okay. And why is it going up exponentially?

11:32Because it works, Caddy. And these people, unfortunately, they want to stay in power more than they necessarily want to serve the public. And so the public is getting processed food, seed oils, chlorinated chicken. It's getting drug therapies that some are working, some are not working, but there's been a laxity in standards by the FDA, at least most people feel that way. And there's been no audit of the Pentagon in 50 years, Caddy. And so we have trillions of dollars going into the Pentagon, but we don't account for it. And all of this can be traced back to campaign finance spending and lobbying.

12:15And I think it's very, very important for people to understand this because these are the things that go on inside of Washington that the average American or the average British citizen perhaps is cynical about or disinterested or apathetic. But if they understood it, they would say, you know what, we probably could come up with better ideas and more efficient incentives for our politicians. The incentives are so misaligned to treat the man on the street or the woman on the street properly in the current society. I mean, they must be, you know, every member of Congress I speak to pulls their hair out about campaign finance as well, because members of Congress, because of the large sums of money, you have to raise a lot of money.

12:59Unless you have your own money and you're willing to spend it, you have to raise a lot of money. And it's taking up to about 30 to 40 % of their time is what members tell me routinely is spent on raising money, not on legislating for the American people, not on doing the job they were elected to do. I don't want to interrupt you, Katty, but I think they're underselling that. I think it's closer to 50 or 60, but they're embarrassed to tell you that larger number. Yeah, I think you may be right. But what it means as well is it's not just the little person, me with my latte, trying to get you to walk my dog properly up against my wealthy neighbor.

13:34It's if I'm running for politics, there is starting to be a kind of favoritism, if you like, amongst the party to have wealthy candidates running, right? Because if you are a wealthy candidate running and you're prepared to give your own money, then the party's not going to have to support you with its own finances in order to get you to win that election that you're in. So you look at, there's a good case of this actually just across the border from DC in Maryland, where there's a democratic primary going on for the Senate. And there's a Congressman David Trone, who is super wealthy and has made it very clear to voters that he is prepared to spend his own money if they elect him as the Democratic candidate.

14:16He's up against an African-American woman, Angela Also Brooks, who is the kind of darling of the Democratic establishment in Maryland, but she doesn't have money. And you can see if you're Chuck Schumer, the Senate majority leader, you're thinking to yourself, if I get this wealthy guy when it comes to November, then I'm not going to have to support him so much with campaign funds. So the little guy is being squeezed out in terms of representation with elected officials. The little guy is being squeezed out in terms of being able to run for politics potentially because they have to raise so much money.

14:48And you wonder whether, I mean, I hear your point about if Americans thought about this more, they would lobby to change the system. But there is such an entrenched value. And look at the degree to which, I mean, soon that DeLonghi Express machine is going to be a Lamborghini because this is just going up. Now you're talking because I'm a Long Island guy that loves cars. So yeah, I want the Lamborghini. I knew I'd get you there. But this is going up, Anthony. There's no record. You look at the curves. It's a curve that is rising. It's not a curve that shows any signs of the American public saying, we have to change this.

15:22And the Roberts Court, by the way, doesn't look like it's a court that sees anything other than out bribery as a form of campaign finance violation. Well, my short-lived experience in Washington, somebody said to me, well, how did you like the swamp? I said, well, it's not a swamp. It's a gold-plated hot tub. These guys sit in the hot tub together, and if you're willing to play with them, they'll drop you two champagne bottles and Cuban cigars. And if you're not willing to play with them, they'll make up stories to get you out of Washington. And so we have to at least explain it to people so that they know about it, at which point they can at least ask their politicians about it.

16:02And how do you get reform? If you think like an entrepreneur, which I happen to be, entrepreneurs think zero to one. How do you take something that is nothing and turn it into something? And in our politics right now, we need entrepreneurial politicians to think about how to reset the system or how to reform the system. And I'll submit this to you. There are 27 amendments to that constitution. That constitution is approximately 230 years old, which means that you should be getting an amendment every seven to eight years. And yet, we've only had two amendments in the last 30 years. One was a procedural one in 1993.

16:44And of course, the big kahuna amendment was in 1965, the Voting Rights Act. But if we're going to have a constitutional Republican democracy or representative democracy in the United States with a living document known as the Constitution, we have to reset that social contract every generation for a new group of Americans. And some of the things that we would need to do, in my opinion, is to reform this outlandish spending. We have created a separate but equal democracy, and I think it's really going to hurt the country long term. I love your Long Island optimism, Anthony, that this is actually going to happen, because I don't see either of the parties, and we should make this clear, people I think associate money with a Republican party, and that is not the case.

17:32If you look at the current state of the election, actually, it's Joe Biden that has a lot more money on hand, that is money ready to spend than Donald Trump does. And I know because I had a conversation with two Democratic donors last night who had just hosted a fundraiser where they raised$1.4 million for the Biden campaign, and they were surprised they hadn't been asked before. They said it was easy to raise$1.4 million. This is as much on the Democratic side as it is on the Republican side. And I don't see the lobbying in the country to change. I don't see the political will in either party, which is in a kind of arms race of money at the moment to try and change it.

18:10I mean, maybe you're right. Maybe that, maybe that is - No, we agree. No, no, listen, I agree with you. But what I am suggesting, it is changeable. I think what happens in our society is the cynicism pervades and we look at it and say, okay, they have no incentive to change it. I'm just talking about the potentiality of having a reformer that could come in and honestly explain the situation to the American people. And remember, think like an entrepreneur for one second. There's one voting bloc in the United States, 144 million people. They vote the exact same way in every single election. You know who that is?

18:49The non-voter, Caddy. They don't vote. they don't show up at the polls. Imagine an entrepreneurial politician who could go after that market and create a new market of voters. And you don't have to get that many of them to scare the daylights out of the current political establishment. Which, by the way, is what your old boss said he was going to do and did do to some extent in 2016. He brought a whole load of people that hadn't voted before into the electorate. Let's see if he does it this time around. Okay, take us a little bit behind the scenes, Anthony. We've politics of this, but you've been there.

19:23You've been there on campaigns where people were fundraising. You've donated to campaigns yourself. What's it like when you're being tapped up for money or what's it like when you're asking for people to money? How hard is it to get this cash? It's about as horrifying as you would imagine it to be. It is literally like a first century brothel. It's like the stuff that you see - Never been in one, but I can just imagine. I just say, just go to Pompeii and look at the murals. Okay. I mean, this is as horrifying of an experience as you can imagine because they're all loosey goosey with you and they're all flirtatious and flattering.

20:00The money gets wired or the check gets right and it's bye-bye onto the next transaction. And whether we like it or not, that's exactly what happens. However, why do people do it? Okay. Well, some people are idealists. they do it because they think they're going to affect change, but other people do it because they want the relationship with their political leaders, or they have a big business incentive where they're going to sit before those leaders and lobby for a policy or lobby for a deregulation or make it easier for a plane to get up in the air when they should be making it harder for a plane to get up in the air, or they should make it harder for a drug to pass through the FDA.

20:45And so that's why they do it. And it's very unseemly. And by the way, I've done it. I admit to it. You can see all of my donations online. Go on, tell us. Were those donations you made, like Obama in 2008, you donated to, was that idealism when you donated the Romney campaign? Was that idealism? Were you hoping to get something out of these campaigns that would serve your own business interests, for example? So I think this will either make this podcast incredibly successful, Caddy, or people will be horrified and they'll shut it off right now because I'm going to be very real with you. The Obama donation, I had gone to law school with President Obama.

21:26We were not classmates. I was a few years ahead of him, even though he's older than me. And one of my closest friends knew him. It was 2007. I went to one of the social clubs here in New York to meet him. I think it was the university club. and we were behind stage before he gave his formal remarks. He was then Senator Obama. I had a check in my breast pocket. I went over to the Senator. I said, Senator, I said, you and I didn't really know each other in law school, but I'm about to hand you a big check. Can I lie to my friends and tell them that you and I knew each other in law school? Well, Obama looks at me, had the best smile in American politics since Jack Kennedy.

22:07Forever. Yeah. He lights up. He looks at me. He said, I'll tell you what, if you double the amount of the check, we'll take it back to Hawaii. Okay. And I looked at him. I said, you're done. I had another check in my pocket. I ripped it up. I doubled the amount of the check. And I'm going to tell you right now, I've been to more White House Christmas parties during the Obama administration than the Trump administration, because I've been to zero Trump administration Christmas parties. But that was total idealism. And that was total naivete on my part. I was 44 years old at the time, and I said, I'm never going to meet a president.

22:42I'm never going to know somebody personally that's running for the presidency. So I'm going to write this guy a check, and then I'm going to tell people I did it. And that's how superficial it was. Let's just take from that the message of what you've just been saying. You wrote President Obama a check. You even doubled it. You had a good joke about it. And then you got access. You got invitations to White House Christmas parties. Now, maybe that helped your business. Maybe it didn't help your business. This is unbelievable. It was great name dropping. Exactly. It made you look great with your friends, right?

23:10So actually, you have just given us a prime example of how the system works for a wealthy individual. Just remember, significance matters to a lot of people, not just for their own personal ego, but they want someone to walk into their office and see a picture of them with the president and think, oh, they must be somebody, right? Dom, our producer, is asking me, did I play basketball with him? and my friends swear that we did. Okay. My friends swear that we did, but you know, I don't remember it a hundred percent, but my friend, Jeff Moslow is like, Mooch, what are you talking about? Obama had that great outside shot.

23:46I used to foul the daylights out of him. I said, okay, I don't remember it. Okay. And by the way, every professor at Harvard has said that they taught the guy. Now that was also mathematically impossible. Okay. But I apparently played basketball with him, God bless, but I wrote that check for very superficial reasons. The Romney stuff was different. I was a lifelong Republican. I wasn't in love with some of the policies that Obama had put together in the first term. I returned to my Republican roots and I got heavy into the Romney campaign. I donated to his PAC. I was on his finance team. I got heavy into his campaign, so much so that by the time 2016 came around, I was one of the guys.

24:30I was the chairman of the finance committee for Walker. When he dropped out of the race, I rolled into Bush. Trump wanted me to be the finance chairman. I told him I couldn't do it because I was hosting Wall Street Week at the time for Fox, and I would have had to leave the show, and I didn't want to do that. And so Mnuchin took the job. And Stephen is a very good friend, And still to this day, this is the great thing about politics in America. And you know this, Caddy. I still talk to Trump campaign staffers, current staffers. In fact, I called one last week and he got on the phone. He says, Mooch, is this a butt dial?

25:06What the hell are you doing? I said, no, I'm calling you because I need a favor. And so you know how it works in the war zone of politics. I still have friends on the campaign. I still have friends in the Obama quarters, the Trump quarters, and money is a liquid asset to these politicians. You know, if you give$5 million to Joe Biden, the Republicans light up because they're like, okay, this guy's rich enough. Maybe he'll give me$5 million. And that's how it works. That's the inside baseball or the inside football of the system. Just before everybody wants to go and, you know, slit their wrists because American politics looks like it's just mired in corruption and money and favors that everybody's doing us from Anthony getting to the Christmas parties to chlorinated chicken.