Audio of program currently available (June 5, 2006) as link from http://www.woi.org/archive.html

Excerpt of Nicholas Johnson's Comment

Transcript of Katherine Perkins-Ed Fallon Exchange Regarding Money in Politics Begins Here

And see:  Marc Hansen, "Old-School Democrats' Views Often Align with Fallon's," Des Moines Register, June 1, 2006, and David and Sherry Borzo, "Fallon is Still a Winner," Des Moines Register, June 11, 2006

Katherine Perkins: Let's talk with Nick in Iowa City next. Hello, Nick.

Nicholas Johnson [26:23]: Hi. Well, I've got a little different take on this.

But I would add to what you just said that it's not just tax breaks, it's also the prices we pay. The reason we pay exorbitant prices for pharmaceuticals, the reason we pay the prices we do for gasoline, is the payback that in a study I did was documented at between 1000-to-1 and 2000-to-1. You give a million dollars in soft money you get back a billion dollars in benefits of some kind as a result of governmental action.

Now I don't see any way that we as citizens are going to resolve this problem by picking between a Democrat and a Republican candidate for office. Because if you've got a Democrat who's funded by big money, and you've got a Republican who's funded by big money, what are they going to do [to these big money contributors], poke 'em in the eye with a sharp stick? No, they're going to listen to them, and they're going to, if they're honorable they're going to give 'em their 1000-to-1 payback. That's what they invested the money for. It wasn't a "contribution" it was an "investment."

I think this is one of those areas where, as the saying has it, "when the people will lead their leaders will follow." And I think until the ctiizens take charge of this issue and say, "We've had enough! We will not support any candidate who takes special interest money, who takes large campaign contributions, who takes PAC contributions. We don't care what the party is. We don't care what the other issues are." This is the number one issue, and until we can solve this we're not going to get what we want in terms of the environment, and health care, and education, and whatever else your special issue may be.

Now it happens that Ed Fallon . . . [28:20]

KP: Nick, I'm sorry, I've got to have to cut you off here, because we're going to have to take some more calls.

Ed Fallon: It's an excellent point.

KP: It's a good comment. Thanks for sharing it. Nick joined us from Iowa City. He called 1-800-262-0640.

Did you want to pick up on anything?

EF: Just a brief response. I agree with you 100 percent, Nick.

I can give you example after example. I mean MidAmerican Energy is a company that has also been very gracious with contributing to a handful of powerful political leaders. They've gotten all sorts of favors from state government because of that.

Some of the, well, you've got Iowa Select, the head of Iowa Select, corporate hog confinement operator. A tremendous payback in terms of policies that favor that industry.

* * *

[Katherine Perkins' hour-long "Talk of Iowa" interview dealt with a range of topics related to Iowa Representative Ed Fallon's Democratic primary campaign for governor. The excerpts below involve those portions that concern the role of money in politics. The program is copyright by WOI-AM 640, Ames, Iowa, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of WOI.]

Katherine Perkins [KP]:  Let’s talk a little bit more about the campaign and how long you have been at it.  You stepped on my doorstep back in 2003.  I was surprised by that.  You told me that you believed that a grassroots campaign for governor in Iowa could be successful.  Talk a little bit about the approach you have taken in this campaign.

Iowa Representative Ed Fallon [EF]:  Well, it is a little bit different, but I have to maintain my principles. And back in 1992, one of my principles was that it was wrong to accept donations from political action committees, and paid lobbyists and big donors.

So, how do you run a campaign for governor with that type of restriction?  Well, what I found out, actually, is that putting those self-imposed limitations on my campaign financing has actually become a tremendous asset.  It’s brought more people into my campaign who understand that money in politics is a big problem. They understand that our elections have essentially become auctions. They understand that it is important to elect people who clearly make it very clear that they are not for sale.  A lot of folks contributing to my campaign have never contributed before.  Actually, a fellow in Story County here, he’s a farmer, said he had never contributed to a campaign before -- and he gave me 20 bucks, and a few months later sent me another 20, so maybe it has become a habit now –- supporting candidates he can actually believe in.

The challenge is when you don’t have a lot of money. We have already raised close to 500,000 bucks, which is incredible considering the limitations. But I think it shows just how concerned Iowans are about the current approach to funding campaigns.

What I realized I had to do -- and I was inspired by Paul Wellstone, and when Wellstone was killed in a plane crash on October 25 of 2002, that was kind of the issue that really pushed me to look at running for governor.  And it ended up landing me at your door, and actually on many doors in Ames.  I probably door-knocked a larger percentage of Ames per capita than any other city in the state.  But I did door-knock from one end of the state to the other.  Again, that is not a usual strategy.  But, I find it works really well because it put me in direct touch with people who I could get a better sense of what concerns they had and they could meet me face to face.  Wellstone had a grassroots campaign against a powerful incumbent.  He was outspent six to one.  I don’t mind being outspent. I’ve done that.  I don’t want to be outspent terribly, that is why it is important to have grassroots support financially. But it is as important to have people working as volunteers and spreading the message in their own circles. And I think when you start early enough and give people a chance to get to know you, you have that opportunity to build that base of support.

KP: How do people react to you just walking up to them and striking up a conversation about your campaign, or actually passing an Irish hat, as I know you have done.

EF:  It is not an Irish cap, but it has served that purpose very well many times.  I try to be -– I don’t get in your face -– I really try to be low-key.  If I’m in a cafe, a public place, and people have come in there to read the paper and have a cup of coffee, I’m almost apologetic if I go up and meet them.

I say, "Excuse me, allow me to introduce myself. I’m Ed Fallon, I am running for governor, but I don’t want to interrupt you. But if you’d like to ask any questions of somebody who wants to be governor, I would be happy to listen."

So, I find that approach, respectful of other people’s time, is appreciated.  The other thing I do is I am almost always on time. I very rarely am late, and I try to be there precisely on time.  Case in point today, I think I arrived here right at 9:00, Katherine.  Maybe made you a little nervous. But to me it is really important to respect people’s time and their space and I find that most Iowans don’t mind having a conversation with someone that would like to be governor.  Part of the challenge is that we are all busy. So sometimes you catch people when they are on the run.  I remember in Iowa City door-knocking, a woman had just come back from work and she was tired and didn’t really have time for me. But after I left, she felt bad about that, so she drove around the neighborhood until she found me and brought me back to her house where we had a nice, tall cold drink and a conversation that must have lasted about a half hour.

KP:  So, now you have been working on raising, is it $75,000 ?

EF:  Yes, and we are getting close to accomplishing that.  I think as we look at our budget, we are probably going to need to raise another $10,000 to make sure we come out where we need to in order to be able to pay for our remaining media ads and also the printing and postage we need for the last week -– the last push.  Again, that is smaller money that most candidates raise.

But you know I think part of it is, Katherine, is spending your money wisely.  I look at some of the expenses my opponents are engaging in and I just wonder why donors would feel good about that.  I mean I don’t fly around the state, we drive in old cars, 135,000 miles, it will be 136,000 before the end of the day, actually.  And we stay with friends and supporters -– me and my staff -– whenever we travel, we stay with people we know.

KP:  That sounds like a Chuck Grassley ad.

EF:  Well, maybe, but a different party and some significant differences on issues.

We think our website is really hot stuff,  and we’ve gotten a lot of good comments about it. It was done by a volunteer.  So, again, a lot of it is how you spend your money.  One of my opponents, I know, three-fourths of his money -- $781,000 -- was spent on out-of-state consultants.  I won’t do that. I will spend it in Iowa, and I will spend a lot less and get a better bang for the buck.

KP:  This is a much harder row to hoe though, and we’ve already kind of talked a little bit about that -– asking people to pay for your campaign.  How do you keep it up?

EF:  You mean physically?

KP:  Well, physically, mentally, emotionally, all of that.

EF:  Well, I was a religion major in school after I was a music major. I thought about going into the ministry. But I moved to a neighborhood where I could afford to live -– the inner city of Des Moines.  I thought that was a good place for me to live out my concerns and my spiritual values and my concerns for poverty and justice and equality.  As I became more involved in my neighborhood I saw the injustices in my community. The average black young man has a better chance of spending four years in prison than four years in college.  That really bothers me.  When I saw housing for the poor torn down, when I saw a lot of basic issues of justice neglected, that kind of inspired me to run.

And as I began to serve in the legislature I took a page from Minet Doderer -- a recently deceased former State Representative and a real mentor to me -- when she was asked where she represented, she would say she represented the people of Iowa. I thought that was really important. And it kind of got me thinking, if anyone calls me I am not going to say, "Call your own state representative." I am going to take your concern and see what I can do about it. So that kind of put me in touch with people all over the state. And I ended up doing an awful lot of work in rural Iowa where I heard a lot of the same concerns that I was experiencing in my inner city Des Moines district.  I mean, schools closing, grocery stores closing, abandoned houses, declining population, a sense of hopelessness, a lot of the stuff we experience in the inner cities of Iowa are the same issues facing people in rural communities. And I think that is one reason I have been well received in rural communities, because I think we have some of the same concerns.  So, to me, my battle for justice and fairness and more integrity in government has been a – it’s not just for my constituents and immediate legislative district -- it’s been for Iowa.

I think Iowans in general are ready for a government that more reflects those values.

KP:  What about the general election.  You are going to be up against a very well financed opponent.  How do you decide which donations to take, which not?

EF: Well, again, I will stick with my principles.  There is going to be enough interest in this election that I believe I can raise enough money to be competitive with Jim Nussle.  Again, I won’t raise as much.  I don’t think any Democrat will raise as much as Nussle.  He is going to cash in on many of his special interest connections as [U.S. House of Representatives] budget chair. But, I do believe the best way to beat Jim Nussle is to show a strong, positive alternative.  I will not run a negative personal attack campaign based on innuendo and smears.  I think that is wrong. I think it destroys people’s confidence in the process and it distracts from the issues.  Just on the issues themselves, I can distinguish myself pretty powerfully from Mr. Nussle.

And I think I really sense as I travel from one end of Iowa to the other every week, I sense that people are really ready for a change.  They want to see a government that is more accountable.  As a legislator for 14 years, I have voted my conscience on every piece of legislation. Sometimes you are told you can't vote your conscience and win. But I’ve done that. I’ve been able to get re-elected.  I’m confident that if Iowans vote their conscience on election day, I can win and we can do a lot of good things for the state.

KP:  Representative Fallon, we have talked a lot about how you have financed your campaign.  Let’s just talk a little bit about specifically campaign finance reform.  What kinds of things would you like to see implemented in state policy with regards to this issue?

EF:  We are at an exciting time with this issue, because all over the country we see examples of states that are adopting a clean election system and we see examples of where they are working.  Maine and Arizona have had a clean election system for awhile.

How it works is this: You have to go out -- actually it is voluntary, you don’t have to do it, you can still run a conventional campaign funded with special interest money -- but what people are opting to do, in much larger numbers, is choosing to run under a voluntary system where they go out and collect five-dollar donations from a large number of people.  That money goes into a pool. There is also money in that pool from the general fund and from fees and fines. And out of that pool candidates get a limited amount of money to run a basic campaign.  They won’t have a lot of money for negative TV ads --  which is a really good thing -- and they won’t have a lot of money for one vacuous slick mailing after another.  But they do have enough money to run a campaign that allows them to keep in touch with their potential electorate.

That’s really encouraging.  In Maine, 80% of the state law makers in Maine have been elected using the clean election system.

Maine was the first state to establish a universal health care system.  Maine legislators will tell you it is not a coincidence.  If you can get a system in place where law makers are representing the people who elected them, not the money, not the special interests, you are going to start seeing an agenda that is more in touch with what the people want.

KP:  So, you have to opt to meet a certain threshold for raising money, those five dollar donations, before they’d be able to dip into that pot?

EF:  Right, I believe, I can’t remember the threshold. I want to say it is almost 2000 five-dollar donations if you are running for governor in Arizona. And we have a governor in Arizona, Janet Napoletano, who got elected without single penny of special interest money.

KP:  Are Iowans going to go along with the idea of using taxpayer dollars to fund political campaigns?

EF:  Again, it is not all that much, when you consider the $5.3 billion dollar [State of Iowa] budget, and the price tag of maybe three to five million a year, that’s about a dollar and a half per Iowan. That’s not that much when you consider the amount of money being spent -– you know, pay back to corporate interests, special interests -– I mean if you add up all the special interest tax breaks collected over the past decade it comes out to over a billion dollars this year alone.  That’s huge. A billion dollars in tax breaks versus three to five million for a public financing mechanism for clean elections? It’s a bargain.

Again, I think a lot of these tax breaks and giveaways are happening simply because of the current influence of special interest money in politics.

Katherine Perkins: Let's talk with Nick in Iowa City next. Hello, Nick.

Nicholas Johnson [26:23]: Hi. Well, I've got a little different take on this.

But I would add to what you just said that it's not just tax breaks, it's also the prices we pay. The reason we pay exorbitant prices for pharmaceuticals, the reason we pay the prices we do for gasoline, is the payback that in a study I did was documented at between 1000-to-1 and 2000-to-1. You give a million dollars in soft money you get back a billion dollars in benefits of some kind as a result of governmental action.

Now I don't see any way that we as citizens are going to resolve this problem by picking between a Democrat and a Republican candidate for office. Because if you've got a Democrat who's funded by big money, and you've got a Republican who's funded by big money, what are they going to do [to these big money contributors], poke 'em in the eye with a sharp stick? No, they're going to listen to them, and they're going to, if they're honorable they're going to give 'em their 1000-to-1 payback. That's what they invested the money for. It wasn't a "contribution" it was an "investment."

I think this is one of those areas where, as the saying has it, "when the people will lead their leaders will follow." And I think until the ctiizens take charge of this issue and say, "We've had enough! We will not support any candidate who takes special interest money, who takes large campaign contributions, who takes PAC contributions. We don't care what the party is. We don't care what the other issues are. This is the number one issue, and until we can solve this we're not going to get what we want in terms of the environment, and health care, and education, and whatever else your special issue may be.

Now it happens that Ed Fallon . . . [28:20]

KP: Nick, I'm sorry, I've got to have to cut you off here, because we're going to have to take some more calls.

EF: It's an excellent point.

KP: It's a good comment. Thanks for sharing it. Nick joined us from Iowa City. He called 1-800-262-0640.

Did you want to pick up on anything?

EF: Just a brief response. I agree with you 100 percent, Nick.

I can give you example after example. I mean MidAmerican Energy is a company that has also been very gracious with contributing to a handful of powerful political leaders. They've gotten all sorts of favors from state government because of that.

Some of the, well, you've got Iowa Select, the head of Iowa Select, corporate hog confinement operator. A tremendous payback in terms of policies that favor that industry.

You’ve got another hog confinement entity that gave $50,000 just to Patty Judge over the last several years.  Again, huge paybacks.

Look at the insurance industry.  You know, somehow we can’t seem to fix the insurance crisis in this state, the health care crisis, and yet the insurance companies got a tax break a few years ago that now totals close to 100 million bucks a year.

There is one example after another and Nick is exactly right.  People have got to start making this a key issue in every election.

KP:  Let’s talk a little bit more about business and economic development.  You’ve been a very vocal critic of the Iowa Values Fund.  What’s wrong with providing incentives for businesses to locate, expand or stay in Iowa?

EF:  Well, if you believe in the free market economy, a lot.

And again, if you look at the history of this type of intervention, it doesn’t work.

What works is investing in the basic services that make for a high quality of life, whether that is education, health care, environmental protection, bike trails, culture, art.  We rank 46th in the nation in terms of funding for culture and the arts. That must change.  As a musician, I am committed to seeing that change, because I know how valuable the creative community can be to the overall economy.

There are some components of the Values Fund that make a lot of sense: the job training money, some tax credits, other things that have been folded into the Values Funds to kind of get other lawmakers to buy into it. But the basic premise that you give a whole bunch of money -- you know, $35 million per year -- to a board in Des Moines to dole out to a handful of lucky companies doesn’t work.  And you’ve got plenty of examples of companies that have taken money, failed, and in some cases those jobs that they were supposed to create are still being counted towards the total number of jobs anticipated to be created.

I look back at Ronald Reagan [and "trickle down economics"]. It didn’t work back then.  I look at Maytag. I feel awful for the families of Maytag, but the state and taxpayers in general gave them about $24 million bucks over the past 10 years.  And where did that get us? Well, it got the retiring CEO a $19 million dollar severance package.  Those workers certainly didn’t benefit, and the taxpayers certainly didn’t benefit.  So, to me, the history of companies that take money and fail or take money and don’t need it, is wrong, and we have to stop that approach if we are going to be able to fund the basic services that really matter and do more for small businesses.  I would like to see us do more for renewable energy and for local  businesses that will stay in Iowa to help them get a start.

KP:  So are you saying that the State shouldn’t do anything to try and keep large manufacturing facilities located in Iowa?

EF:  Yes, other than what we need to do for quality of life and having a strong place for people to live. Let’s be realistic about this.  When NAFTA was signed years ago -- and I would of, as president, vetoed that . . ..

KP:  Are you announcing another grass roots campaign?

EF:  No. But as governor I will use my pulpit to criticize these trade treaties that have done nothing but decimate our manufacturing base.

There are plenty of manufacturing companies that are in Iowa and are probably going to stay in Iowa.  We need to do what we can to help them.

But, let’s be realistic about some of the big entities.  Offering Whirlpool a hundred million bucks, that was a bad idea.  And I am glad that Whirlpool turned it down.  I visited with small manufacturing companies that have roots in Iowa, that benefit from Iowa’s quality of life -– they will probably stay.  We ought to be trying to help them. But doling out big money to big companies with a history of leaving and moving to Mexico -– that’s just a bad idea.

KP:  Now, as governor you are not going to have the power to just eliminate the Iowa Values Fund.  The majority of Iowa lawmakers seem to believe in it.  What, realistically, could you do as governor to get the State to invest money elsewhere, to realign its priorities for investment?

EF:  A lot of Iowa lawmakers are critical of the Iowa Values Fund – quietly.  That often doesn’t make it out into the public ear, but I hear about it all the time in the legislature.  And I think there are a majority of legislators in both parties who are ready to see a shift in focus for economic development.  There may be some disagreement about the details of that, but with the oversight committee, and possibly the auditor, and more and more scrutiny from the media going over the Values Fund, not only is the Values Fund likely going to be changed, that's true regardless of who gets to be the next governor.

It is going to become a huge issue this fall depending on which Democrat wins the nomination.  Because, interestingly, Jim Nussle is on the same page as me on this issue.  I am not sure why, but I am going to guess that the opinion polls show that most people don’t like trickle down economics. I think it is going to be really difficult for a candidate like Mike Bluen who has championed the Values Fund to be able to defend it against Nussle, again, who will have public opinion on his side and more and more public scrutiny of the Values Fund.  Politically, it is going to be a hot button issue, depending on who gets the nomination. But politically, once the campaign is over and the legislature reconvenes, it will be an issue that I think will be restructured one way or the other.

KP:  How do you compete with other states that are willing to offer these large incentives to big companies to locate there?

EF:  You compete at a game you can win.  We can’t beat that game.  I mean, Washington State offered Boeing -- the number that comes to mind is $3 billion. It was a huge amount of money.  Florida offered a firm 500 million bucks to relocate from California.  Our entire Values Fund, all of its components combined, over 10 years, is $500 million.  We can’t do that.

What we can do is become the best place to live, the best place to educate a kid. We can have the best health care system, we can clean up our water, we can put some restrictions on corporate hog confinements so the quality of life in rural Iowa is more attractive.  We can start doing things to help small businesses.

Here is an example, Katherine, I visited with a redemption center in Cedar Rapids recently.  Actually I spent part of the morning working there, sorting cans.  It is the largest redemption center in the state.  These folks have been trying to make a living on a penny per can since the mid 1970s and the state has done nothing to change that.  We ought to raise that to three cents a can.  We would not only see a thousand jobs become viable, but we would probably see an increase.  We’d probably see redemption centers sprouting up all over the state.  And that wouldn’t cost the taxpayers a penny.  But, you know, those kind of innovations make a lot more sense to me that dropping a hundred million bucks in Whirlpool.

KP:  You recently won the endorsement of the Sierra Club and you’ve long been a champion for the environment.  Iowa is making changes to regulations and standards for clean water in the state but we are also hearing that it may come at a great cost to local government.  What would be your environmental goals as governor, and how would you balance the monetary costs associated with achieving those goals?

EF:  That’s a good question.  For some environmental issues, there really is no monetary impact.  One that I have worked really hard on is trying to control urban sprawl and promote more responsible growth and development.  That would actually save money, because right now a lot of tax dollars are being wasted extending infrastructure further and further out, abandoning infrastructure left behind, and creating a lot of subsidies using tax income and financing and tax abatement. We could actually save money and redirect that to other environmental concerns if we were growing our cities and towns more responsibly.

Water quality is a big issue that is going to take some resources because it is going to have to be a public-private partnership.  Again, I am happy that the state is finally making a commitment to that of $18 million this year.  It’s about time.  The last time we had a significant investment in the environment, really, was in the late 1980s with the Groundwater Protection Act and the Leopold Center.  And again, the State has reneged on any more commitment to those areas.

So, to me, it is going to involve some money.  But, if you want to think about it in economic terms, look at all the jobs connected with good water quality: canoeing, hunting, fishing, all the industries that are associated with those opportunities -– boating.  There’s tremendous room for improvement in terms of that sector of our economy with better environmental stewardship.

KP:  Now, you’re a state law maker who's been fairly involved in local issues around the state, for example, the controversy over the Values Fund is one, the location of livestock confinements is another.  Are you at all concerned about giving the impression that you are anti-business?

EF:  Oh no, not at all.  My whole focus has been on trying to help, particularly small businesses.  One thing I have been doing in my 50 county rural working tour is spending time with somebody at a local business.  And sometimes we just get so carried away getting a tour of the business that I don’t actually get to do any work.  That was the case with J & P Cycles in Anamosa -– very, very impressive.  Almost 300 employees, great business, national and international recognition.  That’s the kind of business we want to keep here in Iowa.

I think again, we do that with focus on quality of life and infrastructure.  The jobs that big businesses bring to Iowa are great.  I’m glad we have insurance company jobs in Iowa.  I’m glad Well Fargo has set up shop in Des Moines.  My problem is I think in many cases we assume that these companies need a big handout to locate.  What I think they really need is a competitive tax structure, which we have, and they need a great work force.  We have a great work force and we need to make sure we maintain that workhorse by making Iowa the most attractive place in the world to live.

How many other places -– look around the nation -– long commutes, high crime rates, air quality that is poor, unfriendly streets and unfriendly people.  That’s a reality that more and more Americans are going to flee.  And if we can make sure that we preserve the quality of life that offers an alternative to that, we are going to be a destination place for a lot of people.

[Note: This material is copyright by the Des Moines Register, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Des Moines Register.]

Fallon also stuck to his guns on campaign financing and wouldn’t let himself be influenced by big corporate interests. Thank you, Ed, for putting it all on the line, and showing us that a grass-roots message of honest and open government will resonate with voters.

I hope we have not heard the last of Fallon in Iowa elections. And I hope that Democratic candidate Chet Culver will take Fallon’s message to the election this fall: integrity in government, and not allowing big money to buy influence from our lawmakers to help their bottom line.

David and Sherry Borzo
Des Moines