October, 2011

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Time: Judges Are for Sale — and Special Interests Are Buying

Monday, October 31st, 2011

The flood of influence buying is not limited to politicians.  Time Magazine shows how the judiciary is now being bought and paid for.

Time

The Occupy Wall Street movement is shining a spotlight on how much influence big-money interests have with the White House and Congress. But people are not talking about how big money is also increasingly getting its way with the courts, which is too bad. It’s a scandal that needs more attention. A blistering new report details how big business and corporate lobbyists are pouring money into state judicial elections across the country and packing the courts with judges who put special interests ahead of the public interest.

A case in point: West Virginia. In 2007, the West Virginia Supreme Court, on a 3-2 vote, threw out a $50 million damage award against the owner of a coal company. Funny thing: the man who would have had to pay the $50 million had spent $3 million to help elect the justice who cast the deciding vote. The West Virginia ruling was so outrageous that in 2009 the United States Supreme Court overturned it. But that was unusual. In most cases, judges are free to decide cases involving individuals and groups that have paid big money to get them elected.

So who is paying? The new study – by New York University Law School’s Brennan Center for Justice, the National Institute on Money in State Politics, and the Justice at Stake Campaign, a non-partisan reform group – found that a small group of super spenders plays the biggest role, using their money to buy the kind of judges they want hearing their cases. These super spenders are the usual suspects: mainly big business, corporate lobbyists, and trial lawyers. Also high on the list: a disturbing category called “unknown.” In many states, disclosure laws are so weak that special interests can buy judicial elections without the public even finding out.

There is also a lot of one-issue money sloshing around. In 2010, three Iowa Supreme Court justices who ruled in favor of gay marriage were voted out of office – after a bitterly fought campaign dominated by money from out-of-state groups like the National Organization for Marriage and the American Family Association. Much of the special interest money is used for attack ads, which leverage hot-button issues to demonize judicial candidates. Has a sitting judge ever reversed a criminal conviction because the law was not followed? Then they must be soft on crime – and not care about victims.

Why does all this matter? Because as money floods into judicial elections, we are getting courts that are filled with judges whose first loyalty is not to justice – or to the general public – but to insurance companies, big business and other special interests. It’s not hard to guess what insurance companies want their judges to do. They want them to rule against people who have been injured – even when they deserve compensation, and they want damage awards to be slashed. Big business wants weak enforcement of laws against discrimination and pollution. On the other side of the political spectrum, trial lawyers want verdicts for plaintiffs – and large damage awards.

The report’s authors have some suggestions for minimizing the impact of payola. They want to see more public financing of judicial campaigns, although it is unclear how much the current United States Supreme Court will allow. (The conservative majority has been recklessly striking down campaign finance rules in recent years.) Many reformers think that the answer lies in ending the direct election of judges, and switching to a system (which some states already have) of appointing judges. That takes away the problem of elections, but special interests can shift their strategy to lobbying governors to appoint sympathetic judges.

Clearly, this is not a problem with easy solutions. But there need to be solutions. The American ideal of justice requires neutral judges, whose only commitment is to the law. Judicial elections that are dominated by special interest money make a mockery of that ideal.

Politico: A new way to buy real influence

Wednesday, October 26th, 2011

Good news for rich people, corporate power players and labor bosses who want to buy some real influence with members of Congress: It just got a lot easier

Politico

Up until recently, individuals could give a couple thousand bucks to candidates or $5,000 to political action committees each election, while companies and labor unions could give $5,000 — but only through their PACs. For members raising millions of dollars each election cycle, it’s usually not enough to buy influence.

Now, meet the super PAC, which allows for super giving: unlimited amounts, some that can be delivered in secret. Operatives from both parties have aligned these new groups with nonprofits that allow big checks to be taken in and then spent on any campaign in secret.

So now, if you want to get the attention of a member of Congress, you can kick in major dollars to one of these super PACs — and people who follow money in politics worry that’s when bad things can happen. A single, secret $1 million check — which could become common in the world of super PACs — can really get someone’s attention, especially if they’re a member of Congress on the fundraising treadmill.

“People who don’t want to disclose have an agenda and that is probably not a good agenda,” former DCCC Chairman Tony Coehlo (Calif.) said. “If they did have an agenda that was good, why not disclose it and that’s what I think gets us in trouble.”

Former Democratic Rep. Artur Davis agreed.

“The fact [is] that people are going to move from things that were borderline illegal that are now just disclosable,” said Davis, a prolific fundraiser for party leaders when he was in Congress. “What you have now is a wide open door for political money to be pumped into the process. The nature of the money is money that cares about one narrow set of issues.”

And there’s reason to believe super PACs are about to become the norm. Leaders are usually out in front on fundraising innovation. Leadership PACs started at the top and now even freshmen have them.

In the past few weeks, Speaker John Boehner and House Majority Leader Eric Cantor have endorsed new super PACs, while House Minority Leader Nancy Pelosi and Senate Majority Leader Harry Reid have been aggressively fundraising for their favored super PACs — likely the start of a practice about to explode.

Former Sen. Norm Coleman (R-Minn.), who helped set up the House Republican super PAC, Congressional Leadership Fund, said in an interview with POLITICO that he sat down with Democratic operative John Podesta, founder of Center for American Progress, before forming the Congressional Leadership Fund.

“The path was already laid out for us,” Coleman said. “We saw what Pelosi did with hers and then we began to move forward.”

There are limits to how much lawmakers can coordinate with these super PACs. But, as Rep. Tom Cole (R-Okla.) explained, the distance between outside groups and candidates is mostly on paper.

“When your old consultants and your best buddies are setting them up, you can pretty much suspect there’s been a lot of discussion beforehand,” Cole said of the involvement senior leaders will have with the committees.

The former National Republican Congressional Campaign Chairman is no stranger to fundraising — and doesn’t see super PACs as a good thing.

NY Times: Without ‘Super PAC’ Numbers, Campaign Filings Present an Incomplete Picture

Tuesday, October 25th, 2011

The third-quarter campaign finance filings are in. The numbers have been crunched.

And now we know who is winning the 2012 fund-raising race. Right?

NY Times

Wrong. That’s because 2012 is the first presidential campaign waged in the era of “super PACs,” groups unleashed by court rulings that struck down limits on contributions to outside groups as long as they do not directly coordinate their expenditures with candidates.

And unlike the campaigns, which were required to submit their latest quarterly contribution and expenditure reports by midnight last Saturday, the first time most super PACs will have to disclose their full numbers is Jan. 31, more than three months from now.

“With the candidate filings, we are only seeing a fraction of the total money raised for the presidential race,” said Ellen S. Miller, executive director of the Sunlight Foundation, a group that advocates more transparency in campaign spending. “The money being raised by super PACs — which very much are working for individual candidates — is completely secret at the moment and those that have to report won’t do so until the end of January of next year.

Under the current likely election calendar, that means that a clear picture of super PAC fund-raising will not be available until after the Iowa caucuses and the primaries in New Hampshire, Nevada, South Carolina, and Florida are already over — a span of skirmishes that has often proved decisive in presidential nominating contests.

“It’s like watching a videotape of a bank robbery,” Ms. Miller said. “After the fact.”

All but a few of the presidential candidates are now backed by super PACs, most of them organized by close allies or former aides and financed by their top donors. In some cases, they appear to be planning to spend substantial amounts of money. The pro-Perry Make Us Great Again, according to early planning documents, hopes to raise and spend as much as $55 million through next April on advertising, polling, research, social media efforts and more.

And through June 30, the last date on which super PACs were required to file with the Federal Election Commission, the pro-Romney group Restore Our Future raised $12.3 million, more than most of the other Republican candidates have raised for their actual campaigns.

The disclosure requirements for such groups make it difficult to evaluate each candidate’s true fighting weight when it comes to money and to determine what financial interests are indirectly supporting certain candidates. While the campaigns can’t coordinate expenditures with the super PACs — for example, on the content or timing of a television advertisement — the super PACs can spend millions of dollars on their behalf, effectively providing the candidates a boost that they might not afford to pay for out of their own war chests.

While rules are lax on their actual fund-raising, once super PACs spend money they are required to disclose most of these expenditures within a day or two, including details of how the money was spent and which candidate the expenditure was meant to help.

Some campaign finance experts do not believe that the relative secrecy around super PACs will make much of a difference. The most important factor in how each of the candidates fare in the Republican primary, they say, will be the candidates themselves.

“I would not underestimate the importance of the candidates’ own numbers,” said Sean Parnell, an advocate for less regulation of campaign money and political advertising. “While there are going to be independent voices out there, talking about Rick Perry and Mitt Romney and whoever else, it’s still up to the candidates to decide how to present themselves to voters, to design their messages.”

One advantage that super PACs offer is the freedom to let candidates focus on positive advertising and messages while leaving it to allied super PACs to handle attacks, effectively allowing one side to “go negative” in the campaign, with less mud splashing back on the candidate. (The corollary is also true: Since the super PACs cannot coordinate their efforts and expenditures with the candidates they are supporting, the outside groups run the risk of muddling the message or plans of the candidates they are trying to help.)

Still, the chief advantage is financial: Unlike the campaigns, which can only receive $2,500 from each donor during primary season, super PACs can raise money in unlimited amounts, allowing just a handful of a candidate’s deep-pocketed donors to quickly inject millions of dollars into a campaign battle. A candidate who appears to be well-financed might in reality be severely outgunned by an opponent’s super PAC — without even knowing it. And a candidate who is lagging in fund-raising might still be made competitive by the work of an allied super PAC financed by a small group of donors.

Bloomberg: Secret Cash Baiting Officials Leaves No Trace in U.S. Attack Ads

Monday, October 24th, 2011

We have oceans of cash entering the campaigns with no accountability.  All in the name of free speech.  And tax free to boot!

Bloomberg

Spending Climbs

The outside groups operate independently of individual candidates’ campaigns and of the Democratic and Republican parties. At the same time, they are often set up and run by people with close ties to the political organizations.

Spending reported to the FEC by independent committees rose four-fold to $305 million during the 2009-2010 election cycle from the 2005-2006 period, about half of it from secret donors. That was almost a 10th of the total of $3.7 billion spent on the election, according to the Center for Responsive Politics, a Washington nonprofit that tracks data reported to the campaign monitoring agency.

That amount may understate the organizations’ impact on the last election by 50 percent or more. Media purchases by independent groups exceeded $450 million, estimated Kenneth Goldstein, president of Arlington, Virginia-based Campaign Media Analysis Group, a unit the advertising company WPP Plc. (WPP) The total may have been as high as $560 million, according to the Campaign Finance Institute, a Washington nonprofit.

Disclosure Gaps

The figures differ because a significant portion of these groups’ ad purchases didn’t count as political under the rules of the FEC. The agency requires that independent committees report as campaign spending those ads that explicitly urge a vote for or against a particular candidate. They also have to disclose buying commercials that identify a candidate and run within 60 days of a general election or within 30 days of a primary. This means many ads about policy issues that are critical of candidates don’t have to be reported.

The flood of secret cash buying politically oriented advertising will only increase and will lead to scandal, said the Committee for Economic Development, a group of business leaders and university professors, in a report last month. Spending normally jumps in a presidential election year.

‘Most Expensive Campaign’

“This will be the most expensive campaign in American history,” said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California in Los Angeles. The independent groups “are going to be funded at greater levels than the candidates’ own campaign committees. That means the candidates’ voices, particularly in campaigns for Congress, are going to be drowned out.”

The fundraising goals of two of the biggest committees backing Republicans have surged. Crossroads GPS and its sister group, American Crossroads, doubled their initial target to $240 million, after raising $71 million last year. The organizations were founded by Karl Rove, the White House political adviser to President George W. Bush, and Ed Gillespie, a former chairman of the Republican National Committee.

While it’s too soon to project the impact on voting in 2012, research shows negative commercials have staying power, said John Petrocik, a political science professor at the University of Missouri in Columbia. Attack ads now, he said, are “creating a backdrop, a drumbeat that is simply going to get louder.”

‘Long-Range Artillery’

“That’s your long-range artillery, the preparatory barrage that’s raising the salience of something you are going to come back to,” Petrocik said. “People are going to remember it because it’s been around so long.”

The independent groups say the broadcast messages are part of their mission to inform voters about public issues or hold elected officials accountable. For example, Crossroads GPS, organized as a tax-free “social welfare” group under the U.S. tax code, said its mission is educating Americans on “critical economic and legislative issues,” according to its website.

Many of the ads this year have been by nonprofits that back Republicans, including the Crossroads groups, the Iowa-based American Future Fund and 60 Plus Association, an advocate for the elderly that favors privatizing Social Security, ending traditional Medicare and repealing the estate tax.

Some tax-exempt groups that favor Democrats have broadcast ads attacking Republican House members this year. Washington- based Americans United for Change aired a television spot in April criticizing Republican Representative Chip Cravaack of Minnesota for voting “to end Medicare.”

‘Way Ahead’

In July during the debt ceiling debate, Moveon.org Civic Action ran radio ads in three Republican districts. With a siren in the background, the spot depicted the members “holed up” inside, “holding the economy hostage.”

“By expenditures, we can see conservative groups are ahead,” said Sheila Krumholz, executive director of the Center for Responsive Politics. “By news reports, we hear that conservative groups are in fact way ahead.

“But in the end we don’t really know,” Krumholz said. “We just know that there’s spending happening now, aimed at elections, and a lot of it will never be reported.”

Crossroads GPS, American Future Fund, Americans United and Moveon.org Civic Action are all set up as tax-exempt “social welfare organizations” under Section 501(c)(4) of the Internal Revenue Code. The U.S. Chamber of Commerce, which also supports conservative candidates, is a tax-free nonprofit trade association under Section 501(c)(6). Groups in both categories can raise unlimited amounts from companies, unions and individuals without identifying donors.

Super PACs

American Crossroads is covered by a different provision of the tax code, Section 527, applying to tax-exempt political organizations. It is now known as a super PAC, for political action committee, and can accept unlimited donations from any source. Super PACs have to disclose the names of donors to the FEC. Supporters of Obama and several Republican presidential candidates also started super PACs.

While Crossroads GPS founder Rove declined to be interviewed for this story, he appeared on Fox television in June to discuss the start of a $20 million ad campaign on Obama’s economic record. The messages blamed the president for increases in unemployment, national debt and gasoline prices.

Interviewer Juan Williams asked Rove whether the group’s supporters could ‘live with” a Republican nominee like Representative Michelle Bachmann of Minnesota.

‘Primary Activity’ Rule

“Look, we’re focused on doing what we can to hold the Republican House, to create a Republican Senate and to replace President Obama,” Rove said. Primary voters will pick the nominee, he said. “It’s our job to lay the foundation for a Republican victory in the fall of 2012.”

Jonathan Collegio, a spokesman for Crossroads GPS, said Rove’s comment doesn’t conflict with the group’s tax-exempt status. Rove “informally advises” American Crossroads and Crossroads GPS and was responding to a political question, Collegio said.

Nonprofits under Sections 501(c)(4) and 501(c)(6) can’t have political campaigning as their “primary activity,” according to the tax code.

To keep its tax-exempt status and avoid penalties, Crossroads GPS needs to spend more than half its resources on “issue and policy advocacy” that isn’t “political intervention” under IRS rules, according to an Oct. 10, 2010, legal memo prepared for the organization by Tom Josefiak, a former FEC chairman. Crossroads GPS intends to allocate “much more” than that to “a sustained advocacy effort in furtherance of its ‘social welfare’ purpose,” according to the memo, which Crossroads GPS provided to Bloomberg.

IRS Enforcement

The IRS declines to say what it does to enforce the rule. In September, the campaign watchdog groups Democracy 21 and Campaign Legal Center asked the IRS to investigate the tax- exempt status of four groups that can accept unlimited donations without naming the givers. They include Crossroads GPS and Priorities USA, run by former Obama aides to back his re- election.

“These groups have little if anything to do with promoting social welfare and everything to do with electing and defeating candidates,” said Fred Wertheimer, president of Democracy 21. Spokesmen for the groups dismissed the complaint as frivolous.

Los Angeles Times: Major election spenders to remain secret until after first votes

Friday, October 7th, 2011

Voters won’t know ‘super PAC’ donors until after the first several Republican presidential nominating contests, making it difficult to discern who is spending millions to influence them and why.

Los Angeles Times

Voters in the early presidential nominating states will soon be bombarded with millions of dollars in advertising from independent political organizations whose donors can remain secret until after the first five primaries and caucuses are held.

That is the unintended result of decisions in recent days by state Republican officials to move up several key early contests, putting them ahead of the Jan. 31 financial disclosure deadline for super-sized fundraising committees.

The new committees, known as “super PACS,” are changing the nature of political races by allowing wealthy corporations and individuals to contribute unlimited sums to support a favored candidate, as long as they do not coordinate with the official campaigns. Campaigns, in contrast, operate under sharp restrictions in the size and sources of donations.

The campaigns have begun releasing their fundraising totals for the third quarter, although full accountings are not due until Oct. 15. So far, Texas Gov. Rick Perry appears to be leading the pack with $17 million. Former Massachusetts Gov. Mitt Romney, who led in fundraising before Perry joined the race in August, is expected to report raising somewhere north of $14 million, according a source close to the campaign. Texas Rep. Ron Paul said Wednesday that he had pulled in more than $8 million.

In past presidential cycles, those are the numbers that would have helped determine the credibility and strength of a candidate. But the emergence of new candidate-focused super PACs has lessened the importance of the campaign’s own fundraising, at the same time making it more difficult for voters to discern who is trying to influence them and why.

One election law attorney in Washington representing presidential and congressional candidates calls the new rivers of money “the dark campaign.” Brett G. Kappel, an attorney in the Washington office of the law firm Arent Fox, says the new super PACs are unsettling the traditional norms of presidential fundraising “while providing a dramatically enhanced role for wealthy donors.”

An outgrowth of the Supreme Court’s 2010 Citizens United decision, which allowed corporations and unions to spend unlimited amounts of money on political activity, super PACs such as American Crossroads played a significant role in shaping last year’s congressional elections by campaigning for parties or causes. But this year marks a new phenomenon: the creation of super PACs aligned with specific candidates. So far, groups have formed on behalf of Perry, Romney, Paul, Minnesota Rep. Michele Bachmann and former Ambassador Jon Huntsman Jr., as well as President Obama.

It is unclear how much money will be raised and spent by the new groups. But the amount will be significant. Make Us Great Again, a pro-Perry super PAC formed by a former chief of staff to the Texas governor and one of his top donors, set its early fundraising goal at $55 million, according to a planning document that was first reported by NBC.

A super PAC founded by allies of Mitt Romney reported raising $12.2 million in the second quarter, compared with $18.2 million reported by Romney’s official campaign.

Under the rules set by the Federal Election Commission, super PACs, like other political action committees, are allowed to file campaign finance reports just twice a year during years in which there is not a federal election. That means their next filing report, which will cover their activities from July 1 through Dec. 31 of this year, is not due until the end of January.

The election calendar was to have begun with Iowa’s caucuses on Feb. 6, but a decision by Florida to move its primary to Jan. 31 has set off a cascade of changes. As the calendar currently stands, voters in Iowa, New Hampshire, Nevada, South Carolina and Florida will have participated in Republican caucuses or primaries before super PACs are required to disclose their donors.

Super PACs that have formed on behalf of Perry, Romney and Bachmann do not plan to file campaign finance reports until Jan. 31, their representatives confirmed Wednesday. The others did not respond to inquiries.

“This is the first presidential election we’ve had with corporations and individuals being able to make unlimited contributions, but it won’t be captured in real time,” said Lawrence Noble, a campaign finance lawyer who previously served as the FEC’s general counsel.

The filing requirements are more rigorous during election years, but there will still be delays between donations and disclosure of the funding sources. Super PACs can choose to report either on a monthly basis or in connection with each separate primary. Those choosing to file monthly won’t have to forward their first report for the election year until Feb. 20.