Tea Party Candidates Who Got Rich Off Big Government

One uses taxpayer money to rail against taxes, another’s tainted by Medicaid fraud, a third secretly pocketed thousands from a government contract. John Avlon on three candidates making a mockery of the movement’s message.

Hypocrisy, the unforgivable sin in politics, is threatening to cast a shadow over the Tea Party. The movement built its momentum by rallying citizens against out-of-control government spending. But now a handful of self-funded gubernatorial candidates are undercutting its message because they got rich off government programs.

In New York, businessman Carl Paladino is gaining ground on Rick Lazio in the September Republican primary from the right as the self-nominated Tea Party candidate. You might know Paladino best for a series of racist and pornographic emails that were uncovered soon after he announced his candidacy. But his real scandal has to do with taxpayer dollars and common sense.

These three cases do not amount to an indictment of the Tea Party movement overall as much as a reminder of its frailties.

The Buffalo News discovered that this self-styled scourge of big government is one of its biggest beneficiaries—he is the state government’s largest landlord in Western New York. Paladino is slated to earn $10.1 million from 37 government leases this year, and he holds $85.3 million in state contracts. For New Yorkers suffering under one of the nation’s highest tax burdens, this lopsided transfer of public treasury to private pockets is insulting. But it’s no wonder Paladino is such a strong advocate of tax cuts: He’s gotten at least $12 million in tax breaks over the past decade. Yes, it takes a special kind of chutzpah to use taxpayer money to rail against taxes. Buffalo News columnist Rod Watson earned his props when he called Paladino “the biggest proponent of government involvement in the private economy since Karl Marx.”

In Florida’s Republican gubernatorial primary, Tea Party-backed candidate Rick Scott has pulled ahead of state Attorney General Bill McCollum in recent polling. Scott’s got plenty of lucre to spend after receiving $10 million in severance and $300 million in stock options following his dismissal by the board of the hospital conglomerate he founded, Columbia/HCA. Nothing wrong with entrepreneurs making a fortune in America, but Scott and Co. parted ways amid an FBI probe that ultimately uncovered the largest Medicaid fraud in the nation’s history, totaling $1.7 billion in civil and criminal penalties.

As the Orlando Sun-Sentinel reported, “Among the fraudulent practices uncovered: billing Medicare and Medicaid for unnecessary lab tests, creating false diagnoses to claim a higher reimbursement and charging for marketing and advertising costs that were disguised as community education. The company even billed the government for tickets to the Kentucky Derby and country-club dues.” Not much that’s conservative or populist there.

Under Scott’s leadership, Columbia/HCA was found to have been keeping two sets of books, one with the fraudulent revenue included and another accounting for actual profits if their claims were rejected. Scott has long said he did not know about the existence of such practices—and he was never charged—but some of the whistleblowers who first brought the case to light have said they believe that he must have known. Irony isn’t enough to keep “accountability in budgeting” off the top of the “issues” page on Scott’s campaign website. And still somehow the specter of welfare queens is more emotionally offensive to people than businesses bilking taxpayers out of more than a billion dollars.

John Avlon: 10 Congressmen Who Should Be Fired In Georgia, Nathan Deal is the outlier in this troika—he’s not a self-funded millionaire and he’s facing a tough primary runoff challenge from the right next week in the race for governor. But the former congressman touts the endorsement of fellow Georgian Newt Gingrich, his House seat was filled by a Tea Party-backed candidate, and he has been wielding right-wing red meat with his support for ending “birth-right citizenship.” Deal’s strong support of low taxes and small government hasn’t stopped some self-dealing on the taxpayers’ dime, however.

Earlier this year, the Board of Congressional Ethics found, by a vote of 6-0, that Rep. Deal had violated House Rules and Standards of Conduct. At issue was a Georgia corporation named Recovery Services and co-owned by Deal that did inspections on salvaged vehicles for the state, making $1.4 million a year on a no-bid contract, of which Deal was pocketing an undisclosed $75,000 salary as well as at least an equal amount in dividends. When a new director wanted to open the process to bidding to increase efficiency and reduce costs tied to the $1.7 million that had been allocated to the program—an impeccable fiscally responsible impulse—Deal’s response was heavy-handed. According to the official report, he “sought to preserve a state vehicle inspection program that had generated significant personal benefit for him and a business partner.”

Even worse, Deal made it clear in closed-door meetings that he was appearing not in his capacity as a private citizen but as an elected official, bringing his congressional chief of staff to the meetings and allegedly getting the lieutenant governor to make his presence felt. Deal was crafty enough to avoid further congressional discipline over the affair by resigning his seat in order to run for governor, but seeking to preserve a government contract for the purpose of one’s own enrichment would seem to violate every principle that falls under the “low-tax, small government” umbrella. His case didn’t get the press that Charlie Rangel or Maxine Waters’ scandals have received to date, but imagine if they were running for governor.

In the end, these three cases do not amount to an indictment of the Tea Party movement overall as much as a reminder of its frailties.

Usually the hypocrisy in populist movements is small and unintentional if richly ironic—incidents of the “Don’t Touch My Medicare” variety (a sign I really did see at a rally in D.C.). It’s the defense contractor worker protesting government spending or the militia member living off state disability payments. Those are forgivable, human-scale sins compared to the cojones it takes to run for office with money gained from the government largesse you’re campaigning against.

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The case of these three candidates is, in a way, a validation of the central complaint raised by the Tea Party crowd: It is a reminder of just how many taxpayer dollars have been injected in the workings of the larger private economy, for better or worse. Running a hospital does not qualify one for criticism under the blanket of crony capitalism, but unless the administrators don’t treat people paying with Medicare or Medicaid, they probably shouldn’t base a campaign around the evils of government programs. There has always been interplay between government and business, even more so when the government sensibly stops trying to do everything wholesale and delegates service delivery to the private sector. It’s easy to rally around absolutism, but it rarely translates well to the real world.

The Tea Party’s forgotten Founding Father, James Madison, spent a lot of time warning Americans about the dangers of faction and how best to harness man’s impulse toward self-interest. It’s a point that can sometimes get lost in all the self-righteous screaming about which party or faction or person best represents the Founding Fathers’ principles. Or, as another oft-cited—and unfortunately politicized—document reminds us, “let he who is without sin cast the first stone.”

John Avlon's new book Wingnuts: How the Lunatic Fringe is Hijacking America is available now by Beast Books both on the Web and in paperback. He is also the author of Independent Nation: How Centrists Can Change American Politics and a CNN contributor. Previously, he served as chief speechwriter for New York City Mayor Rudy Giuliani and was a columnist and associate editor for The New York Sun.