The Defenders of the Wine Cave Are Missing the Point

Legal or not, most Americans think that the campaign finance system is inherently flawed and needs to be rebuilt.

Kathryn and Craig Hall, owners of Hall Rutherford Winery, stand inside the “wine cave” dining room where they held a fundraising dinner for Democratic presidential candidate Pete Buttigieg, Friday, Dec. 20, 2019, in Rutherford, Calif.  They say their most expensive bottle of wine costs $350 and wasn't served at the fundraiser. (AP Photo/Terence Chea)

Kathryn and Craig Hall, owners of Hall Rutherford Winery in California, stand inside the “wine cave” dining room on Dec. 20, 2019, where they held a fundraising dinner for Democratic presidential candidate Pete Buttigieg.

Photo: Terence Chea/AP

The wine cave has touched a nerve. Celebrities, billionaires, and everyday health care executives have found common ground in the defense of Pete Buttigieg’s recent fundraiser held in a Napa Valley wine cave

The arguments are varied but revolve around a similar theme. Buttigieg, responding to Sen. Elizabeth Warren’s criticism of the fundraiser at last week’s presidential debate, himself put it in terms of electoral efficacy: “We need the support from everybody who is committed to helping us defeat Donald Trump.”

He also justified big-dollar fundraisers by saying they’ve gone on for decades and that it’s unfair for Warren “to denounce the same kind of fundraising guidelines that President Obama went by, that Speaker Pelosi goes by, that you yourself went by until not long ago, in order to build the Democratic Party and build a campaign ready for the fight of our lives.”

Actor Jane Lynch framed it as a question of equity: 

And one of the donors in the cave took to the Washington Post to downplay the affair. “Of the roughly 50 folks in attendance, plenty were people of means,” wrote Kaiser Permanente Vice President Bill Wehrle:

The whole experience fell well short of proving Warren’s suggestion that “billionaires in wine caves” will pick the next president.” Nor is it an example of “corruption” — a word some Democratic candidates use far too casually to describe political and policy opponents in either their or the other party. Let’s save that term for folks who plainly belong in a jail cell and those who’ve taken up residence in one already.

Here Wehrle articulated one side of the debate over money in politics: The only true form of corruption is that which breaks the law. From this perspective, Super PACs receiving unlimited amounts of money from individuals and corporations is not corruption; nor is a campaign “bundler” soliciting a maximum campaign contribution from a wealthy donor “to get on the campaign’s radar now”; nor is billionaires like Trump or Michael Bloomberg buying their way into presidential contention.

However, that’s not how most people see things. A recent poll found that 54 percent of Americans see “corruption in our political system” as an extremely serious problem, more than any other issue, including rising health care costs, climate change, and unauthorized immigration. A 2015 New York Times survey discovered that 85 percent of Americans believe our campaign finance system needs either “fundamental changes” or to be “completely rebuilt.” Notably, Wehrle was able to attend the wine cave event because he’s given the maximum legal contribution of $2,800 to Buttigieg. Only about 140,000 Americans, or 0.06 percent of the U.S. adult population, gave the maximum to any candidate in 2016. And while Wehrle states that he is “neither a billionaire nor a millionaire,” public records indicate that he has equity in his home of at least $1 million. (Wehrle did not immediately respond to a request for comment.)

But Wehrle’s central point is the most important one: Yes, the guests in the wine cave may generally be “people of means,” as he called them, deploying the politically correct verbiage suggested by billionaire Howard Schultz, but they have the same concerns as everybody else, and they have every right to fight for what they believe in:

Our host was the celebrated and pioneering female winemaker Kathryn Hall and her husband, Craig. She served as ambassador to Austria under Presidents Bill Clinton and George W. Bush. Hall is wealthy and has a beautiful home, and she chooses to use both to advance candidates and causes she believes in. 

It’s unclear whether the wine cave defenders are willfully misrepresenting the terms of the debate, or they genuinely don’t understand the criticism of a system that revolves around candidates financed largely through high-dollar fundraisers. If they are truly confused, a closer look at the history of the co-hosts of the shindig may clear things up. 

The wine cave in question was named after, and the event was hosted by, a man at the center of the savings and loan scandal in the 1980s, the largest giveaway to the financial industry in U.S. history until the 2008 Wall Street bailout. This was Craig Hall, 69, a billionaire several times over. (An invitation to the event said that the dinner would be held in the “Hall Chandelier Room Wine Cave.”) Hall is a longtime political donor, who, with his wife Kathryn, has given at least $2.4 million to Democratic candidates and causes since the 1980s. As Buttigieg hinted, he hosts an annual event for House Speaker Nancy Pelosi at the winery. 

But Pelosi is not the first speaker he’s lavished money on. In the 1980s, he was a major donor to Democratic Rep. Jim Wright of Texas. 

Hall first made his money both in the health care industry and in real estate. By the late ’80s he was badly overextended, with federal creditors looking to foreclose on his empire. Hall asked Wright to intervene on his behalf, and Wright did so, strong-arming regulators to go easy on Hall. When Wright’s machinations became public, it contributed to his resignation as speaker of the House. 

The story of the S&L crisis is a particularly ugly one. Both parties, with many of the same donors, collaborated to allow the problem — and the eventual cost to taxpayers — to grow for years so that it would not become an issue in the 1988 presidential election. As soon as the voting was over, Americans found out that they were on the hook for hundreds of billions of dollars. The government had to allocate $364 million just for depositors in an S&L owned by Hall himself, who eventually paid $100 million to settle a federal lawsuit. Just a few years later, Clinton named Kathryn Hall as ambassador to Austria. Yet the political donations behind this were, for the most part, completely legal and hence not “corrupt” by the narrow definition. 

Thus, for Craig and Kathryn Hall it is not simply about supporting “candidates and causes [they] believe in.” They clearly understand the link between success (or non-failure) in business and influence with powerful politicians. 

The question isn’t really about the giving. As Lynch put it: “Billionaires in wine caves have as much right to say who gets to be president as waitresses in diners and plumbers in my bathroom.” And that’s absolutely fair: A billionaire ought to have just as much say as a plumber — that is, one vote — as to who becomes president. The question is about access and influence. The problem isn’t the wine cave, it’s that billionaires and health care lobbyists are in there together with a presidential candidate, while waitresses and plumbers are barred from the room (unless a pipe breaks or a glass needs to be refilled). It’s the influence that is the problem.

That big donors give to get influence with candidates, not merely out of altruism, might seem axiomatic, but it’s the central question on which the debate hinges. On Sunday night, Axios reported that a top Buttigieg bundler, H.K. Park, his former colleague at the defense consulting firm Cohen Group, said the quiet part out loud in an email to at least one potential donor, arguing that an early investment — the Buttigieg campaign literally calls contributions “investments” — would garner more influence with the campaign than a later one. “If you want to get on the campaign’s radar now before he is flooded with donations after winning Iowa and New Hampshire, you can use the link below for donations,” Park, who has raised at least $25,000 for the Buttigieg campaign, wrote. 

In a statement to Axios’s Jonathan Swan, Buttigieg campaign spokesperson Sean Savett said the campaign had not approved the email, then defended it as innocuous. “The campaign did not see or authorize the language in this email,” he said. “But it is ridiculous to interpret it as anything more than asking potential supporters who may be interested in Pete to join our campaign before caucusing and voting begins.”

Later, to HuffPost, Savett said: “The email in question is not from our campaign,” going on to justify it as necessary to winning. “The stakes in this election are clear and stark — we have one shot to defeat Donald Trump. Pete believes we can’t go into the fight of our lives with one hand tied behind our back.”

Of course, Buttigieg has already tied some hands behind his back, precisely based on the reasoning that some contributions are either corrupting or electorally damaging, undermining the claim that it’s necessary to take all financial comers for the sake of electability. Indeed, his campaign explicitly refuses to take money from fossil fuel executives, registered lobbyists, or corporate political action committees. 

In 2010, while running for state treasurer, Buttigieg refused money from banks and limited it from bank employees. “Very early on in this campaign, I made a decision that I wasn’t going to accept any money from a bank that could be doing business with the state treasurer’s office. I think it creates a conflict of interest. It creates an appearance at the very least that can smell like pay-to-play. It’s not good for the state,” Buttigieg said then. 


Debate Exposes Pete Buttigieg’s Electability Problem: He Was Crushed in His One Statewide Race

The media and the Buttigieg campaign have responded to the wine cave assault not with an exploration of the connection between high-dollar donations and policy results, but by searching for the safer ground of hypocrisy.

They’ve gone after Warren, who announced early in her presidential campaign that she would no longer hold high-dollar fundraisers or do “call time” with wealthy donors. This decision — a reversal from her previous campaigns for Senate — led her campaign treasurer to quit in protest, arguing that financing the campaign would be impossible. As evidence of Warren’s supposed hypocrisy, reporters have pointed out that before she had a new policy, she had an old policy, under which she hosted a fundraiser at a winery in Boston in 2018, at which attendees who gave at least $1,000 received a souvenir bottle. Others have gone after Sen. Bernie Sanders, who has done much to mainstream the idea of small-dollar fundraising, noting that he held a big-dollar fundraiser — minimum contribution $250 — at a Beverly Hills home in 2015 and has repeatedly attended such events for the Democratic Party. 

But for a campaign to be able to rely on small donors to run a national or statewide campaign is a new phenomenon, and one that should be encouraged. Warren has responded by saying that she wants to focus on what she’s doing now, not what she did previously. Indeed, if Buttigieg would similarly swear off high-dollar fundraisers, that wouldn’t make him a hypocrite, it would be something for progressives to celebrate. Is Barack Obama a hypocrite for supporting marriage equality after long opposing it? Is the entire Democratic Party hypocritical for evolving on the issue? 

Of course not. Under pressure from social movements, and often in alliance with them, politicians shift their positions in a more progressive direction. Franklin D. Roosevelt, famously and probably apocryphally, told a group of activists, “You’ve convinced me. Now go out and make me do it.” 

Warren raised millions through small donors in her 2012 Senate race and set a precedent by rejecting a Super PAC, but she also held big-dollar fundraisers. In 2015 and 2016, despite a high-dollar event or two, Sanders showed that a national campaign could indeed be financed by small dollars. It became clear to Warren that it was not just possible in 2020, but likely a political imperative to do so: Running in the progressive lane while soliciting major donors would undercut her in the primary. She has since said that she will continue forgoing big donors if she makes it to the general election. Republicans will have far more resources than Democrats no matter how many wine caves they deign to appear in, but swearing off such fundraisers could have its own electoral advantage, undercutting Trump’s populist appeal by establishing one side as the party of regular people and the other as the party of the rich. You can’t sell that from a wine cave.

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