You've Probably Missed This Key Struggle Among Democrats

Debbie Wasserman Schultz is facing a very serious primary challenge. What happens will say a lot about the Democratic Party.

01/29/2016 07:00 am ET | Updated Jan 29, 2016
  • Zach Carter Senior Political Economy Reporter, The Huffington Post

WASHINGTON -- The 2008 financial crisis was the most transformative event in American politics since the end of the Cold War. But while the crash fundamentally changed the way voters think about politicians, leaders in both parties have struggled to adjust their politicking to the populist currents it unleashed. That confusion at the top is forcing Debbie Wasserman Schultz to fight for her job.

Wasserman Schultz is best-known for her tumultuous tenure as chair of the Democratic National Committee. But she's also a congresswoman from a solidly liberal district in Florida. This month she drew a formidable primary challenger in Tim Canova, a law professor who studies big finance with a critical eye.

"On all these issues that I've been writing about for so many years -- trade, banking, money in politics -- she toes the Wall Street line," Canova told The Huffington Post. "People want politicians who will represent them and not sell them out."

The contest between Wasserman Schultz and Canova mirrors the internal conflict that has roiled the Democratic Party in the years following the crash. Sen. Elizabeth Warren (D-Mass.) has vaulted from a bankruptcy scholar to one of the most popular Democrats in Congress -- but many of her top legislative priorities have been thwarted by old party hands. At the presidential campaign level, Sen. Bernie Sanders (I-Vt.) is marshaling the same anti-corporate momentum against former Secretary of State Hillary Clinton, who most party insiders had picked to take the nomination in a walk.

But the Florida race could well reveal more about the Democratic Party than any other contest this cycle, including the one for president. There are no electability considerations for Democrats in Florida's 23rd District, which stretches from just south of Fort Lauderdale to Miami Beach. Whoever wins the Democratic nomination will make it to Congress. It's a question of whether a bald, male, not-quite-so-accomplished version of Warren can defeat a proven fundraiser with deep connections forged over the course of a decade in office. It's a test of whether progressive ideas or corporate money are more central to the Democratic Party's future. 

"The progressive wing of the party -- which really used to dominate the party from Franklin Roosevelt through John Kennedy -- has mostly been taken for granted," Canova said. "Their votes are curried by the New Democrats at election time, but when it comes time to governing, they're really marginalized."

Listen to HuffPost's interview with Canova on the latest episode of the politics podcast, "So That Happened," embedded above. The segment begins at the 57:00 mark.

Many DNC chairs pass through the post without becoming household names. It's never an easy job, but nobody remembers the trials of David Wilhelm or the tribulations of Paul Kirk. Wasserman Schultz has become a national figure by screwing up. She's been panned party-wide for burying presidential debates on holiday weekends when viewership is low, a move broadly seen as an attempt to tilt the scales in favor of Clinton (Wasserman Schultz chaired Clinton's 2008 presidential run). She severely punished the Sanders campaign for exploiting the DNC's own security failures on voter data, only to reverse course a few days later. As soon as that controversy had died down, she said weird things about medical marijuana and abortion rights activists in an interview with The New York Times Magazine.

"For someone who’s the head of a national party, you would think she’d be better at, you know, politics," an anonymous "senior Democrat" told Bloomberg in October.

Wasserman Schultz did not respond to HuffPost's request to comment for this article.

Pacific Press via Getty Images

Canova isn't running for DNC chair. He's running for Congress. Unlike Republicans, Democrats rarely take on other sitting Democrats, according to research from Clark University political scientist Robert Boatright. Ideological contests are even more infrequent -- candidates are far more likely to be targeted for scandal or old age. Literally nobody launched an issues-based challenge against a Democrat in 2014.

Primary challenges are just hard to win. Across every election since Bill Clinton left office, only 21 Democrats have lost a primary in the House and Senate combined -- an average of three per year. Sometimes even when they win, they lose. Ned Lamont knocked out Joe Lieberman in the 2006 Democratic primary, only to be defeated by Lieberman in the general election.

Still, somebody wins those races. While the headlines about the DNC's management have made their way to Florida, Canova is focusing his attacks on Wasserman Schultz's voting record. The issue that convinced him to run, he said, was her vote in favor of President Barack Obama's trade agenda this summer -- particularly a provision allowing corporations to challenge domestic laws and regulations before an international court.

"I've been teaching international trade law for many years," Canova said. "I'm very concerned about the investor-state provisions in the [Trans-Pacific Partnership]."

The TPP became a major progressive cause, bolstered by Warren's very public opposition to the same provision Canova criticizes. But Canova himself is all but unknown in electoral politics. His only tenure in Washington came as an aide to Sen. Paul Tsongas (D-Mass.) in the mid-1980s. The two men got along well, but it wasn't a good ideological fit. Tsongas was one of the pioneers in the Democratic Party's turn toward GOP economic ideas during the Reagan era. Canova, by contrast, was already sharpening his knives against big banks. Two of his letters to the editor on financial policy were published in The New York Times, and he even wrote a feature for the Washington City Paper on the collapse of Continental Illinois -- at the time the largest bank failure in American history and the birth of the phrase "too big to fail." Canova argued (correctly) that deregulation had destabilized American finance, and predicted a rash of upcoming bank failures that are today known as the Savings and Loan Crisis.

Tsongas didn't even try to prevent his aide from publishing articles that conflicted with his own views. At the time, Canova's interests just weren't hot-button issues with the general public. Big-ticket bank deregulation bills were passing with broad bipartisan majorities -- a trend that continued through the 1990s.

What a difference a crash makes. Today, corporate accountability, particularly in finance, is a major organizing principle of Democratic activists. The progressive chatter surrounding the presidential primary has spent nearly as much time on Glass-Steagall as it has on single-payer health care. But the major organizing principle of elected officials -- Republican or Democrat -- is fundraising. And Wasserman Schultz has shined as a fundraiser throughout her career.

Since her earliest days in Congress, Wasserman Schultz has identified as a member of the New Democrat coalition -- a group of lawmakers who take progressive stands on social issues, but are sympathetic to GOP economic policies.

Signing up with the New Democrats was once seen as a savvy move for ambitious young politicians, allowing them to woo liberal voters on abortion, gay rights and other issues while consolidating a power base among corporate elites.

Sometimes Wasserman Schultz's corporate favoritism is subtle. She voted in favor of the 2010 Dodd-Frank Wall Street reform bill -- but has also voted to repeal key aspects of the law and hamstring regulators from implementing it.

There's nothing subtle about her fundraising success. Wasserman Schultz raised $2.2 million for her leadership PAC in 2014 -- almost double what Nancy Pelosi brought in, and just behind the haul generated by Steny Hoyer, the second-ranking House Democrat. So far in the 2016 cycle, she has received contributions from Goldman Sachs, Comcast, Google, Lockheed Martin, the Major League Baseball Commissioner's Office, the Transport Workers Union and lobby groups representing all kinds of different industries.

This is on top of the money she raises for the DNC itself. She even deploys her own personal campaign fund on behalf of other Democrats, giving $270,000 to the Democratic Congressional Campaign Committee in 2014 -- money that the DCCC in turn spent on House races.

This money doesn't just help put Democrats in office -- it generates loyalty. Everybody who gets a check from a Wasserman Schultz fund knows that he or she owes her something. And there are a lot of debtors. In the last cycle, 96 Democrats got money from Wasserman Schultz's PAC. Twenty-eight Democrats have already received money from her PAC for the 2016 elections.

So not many Democrats highlight the breaches Wasserman Schultz makes with her party. She waffled on the Iran deal when Obama was looking for support. She opposes not only legalizing marijuana for recreational use, but also medical marijuana (Canova highlights her fundraising from the alcohol lobby and private prisons -- two groups that have a financial interest in blocking medical marijuana). She also voted to hamstring the Consumer Financial Protection Bureau's new rules against shady payday lenders, and to help auto dealers charge more to customers of color. When Warren and Pelosi led a revolt against a government funding bill over federal subsidies for risky Wall Street trades, Wasserman Schultz supported the package.

These are common transgressions among Democrats -- Obama wanted the funding bill to pass, and 87 other Democrats joined Wasserman Schultz on the auto dealer bill. Several Democrats outright opposed Obama's Iran deal. And Wasserman Schultz has always supported reproductive freedom and gay rights -- she officiated a same-sex marriage near the Supreme Court last year. But the rest of her record has made progressives eager to see a different face representing the party.

"She's not progressive," said Howie Klein, a former record company president who now runs Blue America PAC, a fundraising group that supports liberal candidates and is backing Canova. "Tim is who he says he is. He's terrific."

Blue America is currently backing only one other challenger to a sitting Democrat in Congress. But a chance to take down the DNC chair was worth the gamble. Klein has been eyeing Wasserman Schultz since 2008 -- before she was tapped to head the DNC -- when she refused to support three Democratic candidates over Republican incumbents.

When Tsongas retired from the Senate in 1985, Canova enrolled in Georgetown University Law Center. He eventually turned to academia, focusing his work on the Federal Reserve, and landing a tenured position at the University of New Mexico. In Albuquerque, he helped lead a successful campaign to reinstate the voting rights of convicted felons who had served their time, convincing a Republican governor to go along with a progressive policy. He has written articles for Dissent and The American Prospect on the Federal Reserve, arguing that its current structure is fundamentally undemocratic. By insulating itself from the dictates of elected representatives in Congress and the White House, Canova argues, the central bank became far too cozy with the very banks it is tasked with regulating. Canova calls for the Fed to finance both state and federal spending by purchasing infrastructure bonds at low interest rates -- a return to policies the Fed pursued in the 1940s, which had largely been scrubbed from economic history prior to Canova's scholarship. In 2011, Sanders named him to an advisory committee on the Fed, alongside liberal economists including Nobel Prize winner Joseph Stiglitz.

The Fed isn't going to finance Canova's campaign. And neither will corporations. "I'm not taking corporate money," he said.

But the campaign support has to come from somewhere. In South Florida, a lot of eyes are on John Morgan -- founder of the plush trial law firm of Morgan & Morgan, home to heavyweight lawyers including former Florida Gov. Charlie Crist. Morgan is a staunch advocate of medical marijuana. In 2014, he bankrolled a Florida ballot initiative to legalize medical weed statewide. The initiative came up 3 points shy of the 60 percent threshold needed for approval. Wasserman Schultz campaigned against the issue, and Morgan has never forgiven her.

Morgan has deep pockets, and his law firm is not a publicly traded corporation, so his dollars won't violate Canova's ban on corporate cash. He has also tweeted support for Canova as a "true progressive" and blasted Wasserman Schultz as a "transactional politician" in the aftermath of Canova's announcement. That has not, as yet, translated into campaign contributions, or to what some insiders say would be still more effective -- an independent super PAC.

The primary election for the Florida House doesn't take place until August, months after the presidential primary. Canova will not benefit from any Sanders supporters looking to turn the tide at the top of the ticket. But even a close race would demonstrate that Democratic voters want to see a different policy course than what their leaders are offering.

"I think there need to be progressive challenges to incumbents around the country, even in primaries," Canova said. "Most of these members of Congress have safe seats for the general election, so if they're not challenged in the primary, what does that say about our democracy? There's no contested election in the primary, there's no real contested election in the fall. They get a free pass the entire time. And of course they're going to keep voting the interests of the big corporations that are funding their campaign."

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