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

Written by admin on 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

Written by admin on 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

Written by admin on 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

Written by admin on 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

Written by admin on 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.

 

Bloomberg: Secret Campaign Money Will Lead to Political Scandal, Group Says

Written by admin on September 28th, 2011

Executives from major corporations to unions expect that the unfettered flow of cash into elections will eventually lead to scandal.  They’re right.

Bloomberg

Undisclosed campaign money that began pouring into political groups during last year’s congressional elections will, without reform, only grow and lead to scandal, a group of business leaders and university professors said yesterday.

An estimated $500 million was spent to influence congressional elections in 2010 by non-profit groups, trade associations, labor unions and corporations with no trace of where the money came from or how it was used, according to the report by the Committee for Economic Development.
This lack of transparency poses a grave threat to our democracy,” concluded the report, which was signed by 32 business leaders and university professors, including representatives from Citigroup Inc., Avaya Inc. and Prudential Financial Inc.
The group says the Federal Election Commission watered down disclosure rules against the advice of the U.S. Supreme Court, opening new routes for secret money to get into elections. It is calling on Congress to pass legislation to require disclosure of all money spent to influence elections and discouraging its members from giving to such groups.
“The system we have now takes good men and women who are elected and corrupts them,” said Edward Kangas, the former chairman and chief executive officer of Deloitte Touche Tohmatsu, at a panel discussion yesterday about the committee’s reform proposal.
Executives from pharmaceutical companies Merck & Co. and Pfizer Inc., and from American Electric Power Co., also spoke at the event in support of more disclosure.
Citizens United
The Supreme Court, in a 2010 case known as Citizens United, allowed corporations and unions for the first time to spend unlimited money on ads advocating the election or defeat of a candidate.
In the decision, the high court expressed confidence that interested voters could easily discern the identities of those paying for campaign ads.
“With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters,” Justice Anthony Kennedy wrote for the 5-4 majority.
Disclosure Requirements
The FEC, however, loosened requirements for disclosure of donors, making groups report the names of contributors only if they are paying for a particular ad, the group said.
The FEC, the agency responsible for implementing campaign finance law, has eviscerated the disclosure regulations applied to campaign advertising,” the report said. “Instead of promoting transparency, the agency has added a new element of secrecy in campaign finance.”
The risks to companies of publicly supporting a political candidate became clear immediately after Citizens United when Target Corp. made a $150,000 donation to MN Forward, a business advocacy group which in turn ran ads supporting a gubernatorial candidate who opposed gay marriage. Gay rights groups boycotted the company and Target CEO Gregg Steinhafel apologized.


That incident showed that “there’s a big risk for companies to go out and be so public politically,” said Barbara Bonfiglio, senior corporate counsel at Pfizer. “It’s just not a place that too many companies are going to be comfortable playing in.”
However, they may be comfortable if their donations aren’t made public, said Fred Wertheimer, president of Democracy 21, a Washington-based group that advocates for limits to money in campaigns.

Electioneering Communications
In the 2010 election cycle, 308 non-party groups reported spending money to influence voters, and only 166 of those reported where the money came from. The U.S. Chamber of Commerce, which reported $31 million in “electioneering communications” spending to the FEC, won’t name any of the companies or individuals who gave it the money.
Independent groups are already raising money for the 2012 elections, with their sights set even higher.
American Crossroads and Crossroads Grassroots Policy Strategies — created with support from Karl Rove and Ed Gillespie, former aides to President George W. Bush — set an initial goal to raise $120 million for 2012 and then doubled that target earlier this month.
They gathered $71 million in 2010, according to spokesman Jonathan Collegio. Crossroads GPS keeps its donor list secret.
Priorities USA and Priorities USA Action, two groups founded by Bill Burton and Sean Sweeney, former aides to President Barack Obama, are trying to raise $100 million to help keep the president in the White House.

 

Bloomberg: Election Spending to Exceed $6 Billion Thanks Partly to Jim Bopp

Written by admin on September 22nd, 2011

Campaign spending has increased exponentially in part because of the efforts of Jim Bopp.

Here’s more information about him from Bloomberg

Bloomberg

Attorney James Bopp Jr. has spent 30 years fighting limits on campaign spending, and next year’s political landscape could be transformed by his labor: An election season in which at least $6 billion is likely to be spent, more than $700 million higher than 2008.

“The presumption is the gloves will be off in 2012,” said Sheila Krumholz, a campaign finance analyst who developed the spending estimate for next year’s presidential and congressional races independently of her Center for Responsive Politics. “It’s safe to say that groups on the left and right have Jim Bopp to thank for their new-found freedom.”

Of 31 lawsuits challenging campaign finance regulations tracked by the Washington-based Campaign Legal Center, Bopp filed 21, including a case that led to creation of independent groups that raise unlimited sums of money to run political ads. Today, the Republican National Committee member will argue a case in a U.S. appeals court in St. Louis to overturn a Minnesota state law banning corporations from donating to candidates and political committees.

During an interview at his Terre Haute, Indiana, office, the white-haired, 63-year-old lawyer was unapologetic about his defense of free speech. The founding fathers “didn’t trust the government to write the laws because the government would write the laws to protect itself from the citizens criticizing it,” said Bopp, seated behind a two-foot-high stack of successful case files yet to be stored in office cabinets.

Citizens United

Bopp in 2007 introduced the Citizens United v. Federal Election Commission case, which three years later resulted in the repeal of restrictions on the roles of corporations and labor unions in political campaigns, then leading to an explosion of spending by independent, outside groups.

The Center for Responsive Politics, the Washington-based group led by Krumholz that tracks political money, said spending by independent groups for the 2010 midterms was $305 million, compared with $69 million in 2006. She estimates that figure will reach $450 million in the 2012 presidential cycle.

Scott Thomas, a former Democratic FEC chairman now with Dickstein Shapiro LLP in Washington, said Bopp’s cases have almost gutted the 2002 campaign finance act intended to rein in outside groups and the influence of wealthy donors.

“We should now call the statute, ‘The Federal Election Campaign Act paid for and authorized by Jim Bopp,’” Thomas said in an interview.

An Indiana native, Bopp’s tenacity in attacking campaign finance laws is matched by his loyalty to his home state.

Hoosier Fan

He earned his bachelor’s degree from Indiana University. After getting his law degree from the University of Florida, he returned home and has never considered relocating — even when a Chicago firm offered him a job. A photo of the Hoosiers’ game- winning shot against Syracuse University to win the 1987 NCAA basketball title adorns his wall alongside an autographed photograph with former President George W. Bush.

Clad in a green polo shirt and sipping coffee from an American flag-emblazoned mug, the father of three daughters said “we thought it was a more culturally conservative area to raise our children, and we weren’t forced to move because clients were willing to come to me in Terre Haute even though they were in D.C. or other places.”

To help pay his legal fees, Bopp set up the James Madison Center for Free Speech in 1997 with the help of Senate Republican Leader Mitch McConnell of Kentucky.

Legal Fees

The center, also based in Terre Haute, reported donations of $579,935 from 2008 to 2010, of which $578,091 went to Bopp for legal fees, according to Internal Revenue Service filings. Donors have included an arm of the Susan B. Anthony List, a Washington-based anti-abortion organization, and the American Justice Partnership, created by the National Association of Manufacturers to lobby for state limits on civil lawsuits.

Board members include David Norcross, former Republican National Committee general counsel; Wanda Franz, former president of the National Right to Life Committee; and Betsy DeVos, who raised at least $100,000 for Bush’s 2004 re-election and, with her husband, donated $2 million to outside groups that ran ads attacking Democratic nominee John Kerry.

Bopp’s rise as a leading opponent of campaign finance laws was a two-step process. In 1976, the then-28-year-old attorney was offered a job at the Indiana Right to Life Committee. Two years later, he was hired as general counsel for the National Right to Life Committee. From that position, he helped the anti- abortion community incrementally challenge abortion rights — a tactic he adapted to the field of campaign finance law.

First Case

His first challenge of campaign regulations was a case in 1983 that overturned FEC limits on voter guides, including fliers the National Right to Life Committee distributed in churches before the 1980 presidential election.

Since then, his advocacy has repealed state laws that provide additional funds to candidates whose opponents spend more, tossed out state restrictions on judicial elections and overturned limits on interest group advertising in the weeks running up to an election.

His cases laid the groundwork for creation of so-called “Super PACs,” political committees that take unlimited donations and operate independently of candidates and which were fueled last year by new labor and corporate cash.

“It’s so complicated to win big victories that you have to go after these cases piecemeal,” said David Bossie, president of Citizens United, the Washington-based advocacy group that hired Bopp to bring the case that bears its name.

Bittersweet Victory

The victory was somewhat bittersweet. When the case reached the Supreme Court, Citizens United hired former U.S. Solicitor General Theodore Olson to argue the case rather than Bopp. While “disappointed” by that decision, Bopp said, he thought “we certainly accomplished a lot in the case.”

Bossie, who made the switch, said he did so after learning of Olson’s record of winning more than 75 percent of his cases before the Supreme Court.

In today’s case, Bopp will argue against laws banning corporate donations to candidates before the U.S. Court of Appeals for the Eighth Circuit. A federal judge in Virginia in May threw out a federal ban in a separate case now on appeal in the Fourth Circuit. Bopp is also challenging requirements that interest groups running political ads disclose donors and expenditures.

He’s been financed by people who don’t like these rules,” said Trevor Potter, a Republican former FEC chairman who is president of the Campaign Legal Center, which supports campaign finance limits. “There are plenty of people who evidently would like money in politics to be secret.”

Not About Money

Bopp said his mission isn’t about money; it’s about free speech and inclusion in the political process. “We have the First Amendment,” he said. “The whole idea of that was to ensure robust participation by citizens in our democracy.”

Bopp’s successful advocacy has led others to join the mission, said Bradley Smith, another Republican former FEC chairman who founded the Alexandria, Virginia-based Center for Competitive Politics to dismantle campaign regulations.

“Jim had been a lonely guy out there, litigating and litigating,” Smith said. “People started putting money into it. I don’t think Jim is as lonely as he used to be.”

 

Bloomberg: Supercommittee Pits Lobbying Firms’ Clients Against One Another

Written by admin on September 5th, 2011

The bipartisan congressional supercommittee charged with finding $1.5 trillion in budget savings is leaving Washington lobbying firms in a quandary, seeing their clients pitted against one another in a competition for government cash.

Bloomberg

The bipartisan congressional supercommittee charged with finding $1.5 trillion in budget savings is leaving Washington lobbying firms in a quandary, seeing their clients pitted against one another in a competition for government cash.

Major defense contractors such as Boeing Co. (BA) and Lockheed Martin Corp. (LMT) have a dozen or more lobbying firms working for them, many of whom also represent the health-care industry, another likely target of budget cuts. While firms often deal with conflicts of interest, the supercommittee represents an unusual challenge, said Clyde Wilcox, a government professor at Georgetown University in Washington.

“This actually is going to be much more like a zero sum game,” Wilcox said. “If someone wins, someone loses.”

Trying to protect clients by stalling action — a classic lobbying tactic — isn’t an option for most because the committee’s failure to meet a Nov. 23 deadline would trigger $1.2 trillion in across-the-board spending cuts in both defense and non-defense spending beginning in 2013.

Lobbying firms will probably try “to finesse any conflicts of interest” and go about business as usual, said Jeffrey Berry, a political science professor who specializes in lobbying at Tufts University in Medford, Massachusetts.

“What they do behind the scenes is not highly visible,” Berry said. For instance, the firms wouldn’t run major advertising campaigns that prompt a client to “say, hey, why are you lobbying for them when you should be solely concerned with our interest?’” Berry said.

Lobbyists’ Bottom Line

If all else fails, “I suspect that they’ll be rational businesspersons and make a decision based on their long-term financial interest,” Berry said. “They have a bottom line, just like their clients.”

The 12-member panel, whose work has taken on greater urgency since Standard & Poor’s downgraded the U.S. credit rating in August, will be the central focus of political and lobbying activity for the next few months.

Akin Gump Strauss Hauer & Feld LLP, which Washington’s Center for Responsive Politics ranks as the second-largest lobbying firm with 2011 revenue of $17.7 million, is among those with competing client interests. The firm’s more than 100 clients include companies in insurance, energy, finance and chemicals. The roster also includes Chicago-based Boeing and New York-based Pfizer Inc. (PFE), the world’s biggest drugmaker with stakes in the future of Medicare, the government program for the elderly.

Akin Gump

Akin Gump is also a law firm and as a result has a set conflict of interest policy, said Joel Jankowsky, a senior executive partner at the firm in Washington. Even so, some clients may first look to their industry trade groups to take their case to Congress rather than his lobbyists, he said.

“It’s largely a question of what they decide their strategy is going to be and whether or not they want us to engage on their behalf,” Jankowsky said.

Tony Podesta, whose Podesta Group ranks third among lobbying firms with 2011 revenue of $13.7 million, said he will do what he always does: advocate for all of his clients and try to persuade panel members that their programs are meritorious. Lobbyists won’t be in the position of suggesting cuts to rival programs, he said.

“It doesn’t feel to me that this is going to be the ’Sophie’s Choice’ of lobbying,” Podesta said.

‘Affordable Medicines’

Boeing and Bethesda, Maryland-based Lockheed didn’t respond to requests for comment on their lobbying of the supercommittee. Lockheed “will continue to work with our customers throughout the process to understand the potential impact to our business,” spokesman Rob Fuller said in a statement.

Pfizer wouldn’t comment on its lobbying plans or potential conflicts, though Chief Executive Officer Ian Read has said his company will fight attempts to cut Medicare payments for medicines. Spokesman Raul Damas said the company “will continue raising awareness” about how the government prescription drug benefit has provided “affordable medicines” for seniors.

The firms downplayed the potential for problems. Patton Boggs LLP, which ranks at the top of the lobbying list with $18.8 million in revenue this year and is also a law firm, has “very formal and thorough mechanisms” for resolving conflicts of interest, said Nicholas Allard, who runs the lobbying, political and election law practice.

Persuasion of the supercommittee might be comparable to the general lobbying always under way on behalf of a range of clients or an omnibus spending bill, said Stewart Verdery, partner and founder of Monument Policy Group. The firm’s clients include Boeing, defense contractor General Dynamics Corp. (GD), drugmaker Eli Lilly & Co. (LLY) and the Pharmaceutical Research and Manufacturers of America, the trade group representing drugmakers.

“It’s akin to working with congressional leadership, which we — as most firms — do all the time,” Verdery said. “They may have a role to play in pretty much everything of importance.”

 

Fund My Mutual Fund: Some Fascinating Stats About Our Corporate Oligarchy

Written by admin on August 31st, 2011

Highly respected  Trader Mark weighs in on Bloomberg’s report on the relationship between CEO pay, taxes paid and lobbying expenditures.

Fund My Mutual Fund

While I realize the Supreme Court has deemed corporations are people too, it is still fascinating to read some facts about said ‘people’  Bloomberg has a story on a study showing the relationship between lobbying dollars and federal taxes paid AND CEO pay versus federal taxes paid.  Remember, this from the ‘people’ who claim their tax burden is so overwhelming they can’t create jobs. 😉  It really shows the level of oligarchy and some would claim fascism (I have called it ‘corporate socialism’ the past few years) when companies spend more on lobbying then they have to pay in federal taxes.  Or when one person in the organization is paid more than the entire federal tax due.

  • Twenty-five of the best-paid chief executive officers in the U.S. earned more in salary and other compensation in 2010 than their companies’ federal income tax expenses as disclosed in public filings, according to a report by the Institute for Policy Studies.
  • The Washington-based nonprofit group’s report, released today, examined 100 publicly traded U.S. corporations with the highest-paid CEOs. It found that companies whose CEOs’ compensation exceeded reported tax expense in 2010 had average global profits of $1.9 billion.
  • Companies in this group, according to the report, included EBay Inc., General Electric Co., Verizon Communications Inc., Boeing Co. and Dow Chemical Co. The tax expense reported in annual financial statements can differ from actual tax payments, which are confidential, for a variety of reasons.
  • The group said its findings underscore the need for an overhaul of the U.S. tax code that would reduce the number of tax strategies available to companies, especially their ability to lower tax payments by parking profits overseas. “Tax reform has to close up some of these loopholes and the offshore system,” Chuck Collins, one of the report’s authors, said in an interview. “We might be able to lower the overall corporate rate by broadening the base.”
  • Eighteen of the 25 companies mentioned in the report operated subsidiaries in countries known as offshore tax havens, Collins said.  The firms, all combined, had 556 tax haven subsidiaries last year.
  • Twenty of the 25 companies on the institute’s list reported spending more on lobbying Congress than they did on federal taxes, the organization said. Data for the report was taken from annual reports and other public filings.  The 25 firms highlighted in this study spent a combined total of more than $150 million on lobbying and campaign contributions last year.
  • The report echoes some elements of a study released in May by Citizens for Tax Justice, a Washington-based nonprofit group backed by labor unions, which said 11 U.S. corporations reported $62 billion in domestic profits while paying a negative 3.6 percent tax rate in 2010.

Link to original report here.

  • In 2009, we calculate, major corporate CEOs took home 263 times the pay of America’s average workers. Last year, this gap leaped to 325-to-1

Some neat examples:

  • Verizon, which earned $11.9 billion in pretax United States profits, received a federal tax refund of $705 million. (damn that onerous 35% tax rate!) The company’s chief executive, Ivan Seidenberg, meanwhile, received $18.1 million in compensation
  • The online retailer eBay reported pretax profits of $848 million and received a $113 million federal refund. John Donahoe, eBay’s chief executive, collected a compensation package worth $12.4 million, the study said.

[Oct 7, 2009: Dylan Ratigan – America Being Subjected to “Corporate Communism”]
[Mar 25, 2011: NYT – GE’s Strategies Let it Avoid Taxes Altogether]
[Apr 14, 2011: U.S. Corporate Taxes – 1955 v 2010]

 

New York Times: Lines Blur Between Candidates and PACs With Unlimited Cash

Written by admin on August 28th, 2011

Whatever faint lines existed between PACs and candidates are rapidly becoming meaningless.  Unlimited cash is flowing to the campaigns without accountability.

New York Times (registration may be required)

Most of this year’s presidential candidates are now backed by one or more dedicated Super PACs. Unlike the broad-based independent groups backing multiple candidates that flooded last year’s Congressional elections with negative advertising — playing a role similar to that of traditional party committees — the new groups are each dedicated to the election of a single candidate.

The groups are typically founded by the candidates’ former aides, financed by the candidates’ top donors and implicitly blessed by the candidates themselves. And they are quickly beginning to rival the candidates’ own money operations in size and scope, setting off a fund-raising arms race that is changing the way presidential campaigns are financed and executed.

Restore Our Future is run by three veterans of Mr. Romney’s 2008 campaign team. They were recently joined by a fund-raiser who left Mr. Romney’s 2012 team, according to a report by the nonpartisan Center for Public Integrity. Restore Our Future raised more than $12 million during the first half of the year — more than any actual Republican candidate except Mr. Romney himself.

A pair of aides to President Obama started Priorities USA, the leading Democratic Super PAC, just two months after they left their jobs at the White House in February. And two weeks ago, a onetime consultant to Representative Michele Bachmann of Minnesota took over Citizens for a Working America, a previously existing Super PAC, with plans to focus solely on electing Ms. Bachmann president.

On Thursday, Thomas E. Muir, an executive at the Huntsman Corporation, filed papers to form Our Destiny PAC, a Super PAC devoted to electing Jon M. Huntsman Jr., a former Utah governor and the son of the corporation’s founder.

Make Us Great Again, a Super PAC founded late last month, is backed by Mike Toomey, a prominent lobbyist in Austin, Tex., who is a former chief of staff to Gov. Rick Perry of Texas. Mr. Toomey also owns a private New Hampshire island with Dave Carney, the top strategist for Mr. Perry’s nascent presidential campaign.

Federal Election Commission guidelines adopted in the wake of the Supreme Court decision prohibit independent groups from coordinating expenditures with their favored presidential candidates and limit how much candidates can directly help raise for the groups. And during Mr. Romney’s brief appearance before current and prospective donors to Restore Our Future, he made no appeal for money, according to participants.

Gail Gitcho, a Romney spokeswoman, declined to comment on the event, saying only that “any activity done by our campaign is done within the letter and the spirit of the law.”

In a statement, Jason Miller, a spokesman for Make Us Great Again, said the group would abide carefully by all federal restrictions.

“There is an absolute firewall between Make Us Great Again and the campaign, and there is no communication between the two regarding activities, plans or projects,” Mr. Miller said. “Everybody involved with our efforts, including Mike Toomey, is very careful about this.”

But some advocates for tighter campaign regulation say existing rules on independent groups did not anticipate the emergence of Super PACs so closely tied to a single candidate, leaving so much room to maneuver that the independent groups are able to act as surrogates for the candidates.

“There’s not a big difference between these candidate-specific Super PACs and candidate campaign committees,” said Paul S. Ryan, associate legal counsel at the Campaign Legal Center. “I think it’s a joke. What they are doing is abiding by the very meager restrictions on coordinations on expenditures and solicitations. But that leaves a wide swath of activities that can be fully coordinated under present law.”