Rich’s Stealth Campaign

Rich’s Stealth Campaign

Howard Rich is pouring big money into leveraging our electoral system to serve his libertarian agenda.


Howard Rich is not a household name, and he is trying hard never to become one. But this New York-based real estate magnate and big-money player may well do more this fall to bring down state and local zoning and environmental regulations and to restrict state spending than any fifty conservative officeholders.

You won’t find Rich’s name on any official political contribution records. The estimated $11 million to $14 million he’s kicked in (so far) for state initiative campaigns in Arizona, California, Idaho, Missouri, Montana, Nevada, Oklahoma, Oregon and Washington comes through a cluster of organizations almost as obscure as he is. Among them: the Fund for Democracy, which he acknowledges is his personal front and which is located in the same lower Manhattan building that he lists as his address; Americans for Limited Government (ALG), which he chairs; Club for Growth State Action, which Rich also chairs and which shares ALG’s Chicago address; Montanans in Action, Oklahomans in Action, America At Its Best (or, according to some of its state filings, America at it’s Best), Colorado At Its Best (ditto), U.S. Term Limits, which he heads as president, and a handful of others.

But if this is some cross between self-effacement and stealth, the measures he’s bankrolling are mostly stealth. California’s Proposition 90, the Protect Our Homes Initiative on the November ballot, is advertised as a way to stop state and local governments from seizing private property by eminent domain and delivering it to private developers. It’s supposedly a response to last year’s Supreme Court decision, in Kelo v. New London, in which the Court ruled 5 to 4 that a city could condemn even viable homes and businesses for private urban redevelopment projects.

In fact Proposition 90, like similar measures in Arizona, Idaho, Nevada and Washington, is a Trojan horse. Its major target has nothing to do with Kelo or eminent domain. It’s aimed at “takings”–the alleged depreciation of property values through land-use regulations for any purpose but health or safety. Under the proposed measures, if a city were to decide that it doesn’t want any bar or liquor store within a mile of a school or college campus, or to shut down a porn shop as a public nuisance, the owners of that commercial property could sue for the depreciation of their property values–and sue not merely for its current value but for what it would have been worth if it had been converted. Similarly, if a state decides that, to prevent erosion or protect habitat, a vulnerable hillside should not be the site of a new housing development, or that a forest should not be clearcut, the owners of the property could demand compensation running into the millions. In effect, Proposition 90 and its siblings, which are opposed by a wide array of cities, counties and planning and environmental groups, would all but close the door to most future environmental and land-use controls.

Of the roughly $3.7 million raised so far for Proposition 90, much of it to pay signature-gathering firms, only a small fraction comes from within California. The rest, some $3.4 million, has come from the Fund for Democracy, Montanans in Action, Club for Growth State Action, Colorado At Its Best and Americans for Limited Government. In Arizona, Rich’s Fund for Democracy and Americans for Limited Government have so far kicked in $1.1 million. In Idaho, the total is $412,000. In Missouri, where the petitions were ruled invalid, the Rich groups spent $2.3 million on the effort. In Washington the total so far is $260,000. In Montana a state judge ruled that petitions for three Rich measures were gathered through “deceit, fraud and procedural noncompliance.”

Since the funding for most of Rich’s tax-exempt organizations doesn’t have to be publicly reported, there’s no way to know if it’s all Rich’s money or if some comes from others. In Nebraska there’s a TABOR (Taxpayers Bill of Rights) ballot measure that, like similar measures proposed in Michigan, Montana, Nevada, Oklahoma and Oregon, would limit increases in state spending to increases in the cost of living and population, a certain path to the erosion of labor-intensive public services, whose cost (e.g., for health and education) always rises faster than inflation. Last year in Colorado, voters, with the support of Republican governor Bill Owens, opted to suspend a key provision of that state’s TABOR because it pinched schools, higher education and other services so badly. Nearly all funds for Nebraska’s TABOR come from America At Its Best, whose address is the post office box of a law firm in Kalispell, Montana. According to the Nebraska secretary of state’s office, all of the funds for America At Its Best come from Americans for Limited Government, Club for Growth State Action, the Fund for Democracy and the National Taxpayers Union.

Howie Rich, an unreconstructed libertarian, is hardly the first deep-pocketed person to pursue his agenda through ballot measures. Financier George Soros has put a few million into drug-law-liberalization initiatives; actor-director Rob Reiner funded two major child-welfare measures in California; and this year there’s Hollywood producer Steve Bing, whose $40 million contribution to Proposition 87, an initiative to impose a tax on oil extracted in California, is almost certainly the biggest individual contribution of all time. (Still, next to the approximately $65 million kicked in to date by Chevron, Occidental and other energy companies to defeat Prop 87, it’s barely adequate.)

But unlike Bing or Reiner, Rich operates through interlocking “nonprofit” front groups that don’t disclose their funding sources, or much else, except in the vaguest terms. It’s the perfect cover–and cost-effective, too; Rich understands that buying ballot measures in the two dozen states that allow them is often more successful, and ultimately cheaper, than buying legislation.

So who is Howie Rich? In SEC filings, he describes himself as “involved in general securities management, venture capital, real estate and business consulting.” But his real passion is that libertarian agenda–term limits, spending caps, popular recall of judges (another campaign he’s funding this year in Colorado), school vouchers and property rights. In an e-mail he wrote, “private property is the cornerstone of our freedom.” He was happy to “help local activists across the country to protect essential freedoms.” Those local groups “often face an uphill climb against well funded special interest groups.” Ah, yes.

Rich, of course, is not the only black hat here. He’s just taking advantage of a porous set of campaign finance regulations that allow contributors to hide behind phony fronts. And he’s taking advantage of an initiative process designed a century ago to curb the power of big money in politics but that is now being deftly exploited by precisely those interests. In most large states only big money can buy the signature gatherers, lawyers, pollsters and consultants needed to get anything on the ballot. Ordinary voters can’t. The system is made for the Rich.

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