Money & Politics

On the Money: The ‘McCutcheon’ Effect

Every week Moyers & Company producer Gail Ablow shares her must-read money and politics stories.

Activists rally for a constitutional amendment overturning the Citizens United Supreme Court decision on Friday, January 21, 2011 in Washington, DC. (Flickr/ Brendan Hoffman)

Activists rally for a constitutional amendment overturning the Citizens United Supreme Court decision on Friday, January 21, 2011 in Washington, DC. (Flickr/ Brendan Hoffman)

The only form of corruption the Supreme Court cares about is almost impossible to prosecute –> In the McCutcheon decision last week, Chief Justice Roberts wrote for the majority that the First Amendment protects a donor’s right to give money to an unlimited number of candidates. He further determined that the only corruption of concern to the government should be “quid pro quo” – outright bribery or its appearance. Paul Blumenthal and Ryan Reilly at Huffington Post point out that this narrow definition will make it extremely difficult to build a case against a potentially corrupt congressman or senator because of a provision in the Constitution that says that any “speech or debate” in the House or Senate by a member of Congress “shall not be questioned in any other place.” It has hampered recent cases by preventing prosecutors from introducing into evidence anything a member of Congress did on the job.

John Roberts gets the parties started –> According to early reporting by Politico’s Jake Sherman and Anna Palmer, the McCutcheon decision is already inspiring political parties to dream up ways to get big donors to donate even more. They write, “In the past, a donor of this magnitude would have to choose two recipients for their largess. Now, they can offer joint events with top leaders from the House, Senate and the RNC, according to Republican insiders.” Those sources also estimate that there are dozens of donors who will want to pony up more cash and spend it more broadly on races other than the top tier. But getting mega-donors to outdo themselves will require political perks, write Sherman and Palmer. Democratic lobbyist Tony Podesta predicts that Democrats will have a harder time since President Obama has banned federal lobbyists from contributing to the DNC over the next two years.

How to reverse a Supreme Court attack on democracy: fight for voting rights –> If you are fuming about the Supreme Court decision in McCutcheon v. FEC, law professor Rick Hasen suggests channeling your anger into protecting voting rights. He writes in The Guardian, “…the American public – all of it – should be just as exercised by the assault on voting rights as it is by the court’s new views on money in politics.” The same wrecking ball swung by the five conservative justices in McCutcheon toppled a key provision of the voting rights act last summer in Shelby County v Holder. Hasen implores people to make Congress pass new laws protecting voting rights, beginning with the Voting Rights Amendments Act (VRAA) introduced by Senator Patrick Leahy (R-VT) and Representatives John Conyers (D-MI) and Jim Sensenbrenner (R-WI).

Wall Street targets GOP critic of big money and big banks for primary defeat > On The Nation’s blog, John Nichols writes about Rep. Walter Jones (R-NC), who is trying to work across party lines to reform campaign laws and change the way that campaigns are financed. He has co-sponsored a proposed constitutional amendment, as well as a proposal to develop public financing for congressional races. He supports the Government By the People Act to provide “matching funds” and he’s the only Republican co-sponsor of the Empowering Citizens Act which would renew public financing for presidential elections. When it comes to doing Wall Street’s bidding, however, he’s not towing the party line, which makes him the target of a Republican primary challenge from Taylor Griffin who is backed by powerful Republican lobbyists in DC. Lining up behind Griffin are JPMorgan Chase, Bank of America, Wells Fargo and former RNC chairman and Mississippi Governor, Haley Barbour.

Prolific donors are behind Perry’s marketing tool > A Texas Tribune investigation by Alexa Ura examines Governor Rick Perry’s methods for promoting jobs and development in the state. His chief marketing tool, a quasi-governmental agency called TexasOne, allows many wealthy donors and corporations that have contributed millions to Perry’s political campaigns to also donate to TexasOne – from $1,000 to $250,000 annually. This is legal and TexasOne says people contribute simply because they are interested in the state’s economic development. Ura found, however, that the biggest TexasOne donors have also benefitted personally. She writes, “Since 2003, seven of the 12 top givers have also been beneficiaries of millions of dollars in awards from state economic development programs championed by Perry and that some of their executives have obtained gubernatorial appointments to influential state government boards.” While Perry’s office insists that political giving doesn’t influence its decision making, critics say it fits a pattern of pay-to-play politics.

The short guide to capital in the 21st century –> French economist Thomas Piketty’s book, Capital in the Twenty-First Century, was published in English last month and people are buzzing that it’s the most important economics book of the year, if not the decade. It makes a compelling case that income inequality is no accident and that it requires government action to rein in capitalism’s excesses. The epic tome is also 696 pages long and if you haven’t cracked it open yet, Matthew Yglesias at Vox.com provides a very helpful and very short, backgrounder. For example:

Can you give me Piketty’s argument in four bullet points?
• The ratio of wealth to income is rising in all developed countries.
• Absent extraordinary interventions, we should expect that trend to continue.
• If it continues, the future will look like the 19th century, where economic elites have predominantly inherited their wealth rather than working for it.
• The best solution would be a globally coordinated effort to tax wealth.

He goes on to provide further explanations, strengths and weaknesses of Piketty’s argument and links to reviews – all in 13 short paragraphs. It will give you a toe-hold until you have time to pick up the book and plow through it yourself — in its original French, of course.

Dig Deeper

The Hounding of Brendan Eich Gives New Cover to Defenders of Dark Money, by Alec MacGillis, New Republic

Rich people rule!, by Larry Bartels, The Washington Post

Steve LaTourette’s SuperPAC spends $44K to oppose his successor’s Tea Party challenger: Matt Lynch, by Sabrina Eaton, Cleveland Plain Dealer

Dems seek to demonize justices, by Alexander Bolton, The Hill

GOP pro–gay marriage funder’s other agenda: Bombing Iran, by Eli Clifton, The Nation

Elizabeth Warren, Kingmaker? Inside the Massachusetts senator’s fight to keep the Senate blue in 2014, by Erika Eichelberger, Mother Jones

Nothing Really Compares to the Koch Brothers’ Political Empire

This post originally appeared at The Huffington Post.

As billionaire conservatives Charles and David Koch become a focus of Democratic Party attacks for their big spending in the 2014 elections, conservatives have argued back that the Kochs’ “dark money” is puny compared to the shadowy funds spent by an array of wealthy liberal interests and individuals.

Businessman Tom Steyer listens during a meeting to announce the launch of a group called Virginians for Clean Government at Virginia Commonwealth University in Richmond, Va., Wednesday, Sept. 25, 2013. The group was formed to explain the impact of CONSOL Energy not paying royalties to their family and neighbors as well as speaking out against Ken Cuccinelli's acceptance of $111,000 in CONSOL contributions. (AP Photo/Steve Helber)

Businessman Tom Steyer listens during a meeting to announce the launch of a group called Virginians for Clean Government in Richmond, Va., Wednesday, Sept. 25, 2013. (AP Photo/Steve Helber)

Fingers have been pointed at labor unionsbillionaire investor George Sorosbillionaire environmentalist Tom Steyer and the Tides Foundation as the supposed liberal counterparts to the Kochs.

But the numbers just don’t add up. And these progressive groups tend to operate in the sunshine of public disclosure, unlike the Kochs’ semi-secret political empire.

Let’s start with the misunderstanding — or the deliberate expansion — of the term “dark money.” MORE

Why Paid Sick Days Are a No-Brainer

Walt Disney word, minnie mouse, disney characters, vacation

The Walt Disney Company, like many businesses, opposes paid sick leave. (AP Photo/John Raoux)

This post first appeared on In These Times.

If you go to Disneyland, you might want to stop Mickey and Minnie from hugging your kid. The Walt Disney Company, like many businesses, opposes paid sick leave. The result, nationwide, is that millions of people show up for work every day sick as a dog (Pluto?), because staying home means losing essential pay or even their jobs. One sick person can infect hundreds, even thousands, with air or food-borne infectious diseases such as flu, colds, Hepatitis A and gastrointestinal illnesses, such as norovirus.

The lack of paid sick days hurts families. A kid comes home with a sore throat, and soon everyone in the house is in bed. Or should be. But unable to take a paid day off, parents send germ-laden children to school — where they extend the chain of infection.

According to the Centers for Disease Control and Prevention (CDC), the poor and poorly educated — already more vulnerable to some diseases — are most likely to hold jobs without paid sick days. An NIH study found, “Lack of paid sick leave appears to be a potential barrier to obtaining preventive medical care.” No paid sick leave is also linked to less screening for cancer, diabetes and other diseases that, when caught early, may have better outcomes, according to the CDC, which grants its employees 13 annual paid sick days.

The choice between losing a job and caring for yourself, your family and public health is not one that people should have to make. And, in most countries, they don’t. At least 145 nations mandate paid sick days for short- or long-term illnesses; 127 provide a week or more annually. But in America, 40 percent of private-sector workers and 80 percent of the lowest-paid workers have no paid sick days. That category includes workers in food, hospitality, healthcare, childcare and nursing homes — the very people in closest contact with the public, and with especially susceptible populations.

Every few months, we hear of another cruise ship that returns to dock because thousands of passengers, confined in a closed environment, have infected each other and crewmembers with norovirus, which causes violent diarrhea and vomiting. Well, those of us in contact with schools, workplaces, public transportation, nursing care and restaurants are on the equivalent of our own personal infection cruise — without the luxurious amenities.

Six US cities and Connecticut recently voted to ensure paid sick leave, with other fights underway. This growing movement is opposed by corporations such as Disney and by large financial interests connected with the American Legislative Exchange Council (ALEC). Largely funded by corporations, trade groups and right-wing foundations — including those linked to the notorious Koch brothers — ALEC creates “model” legislation that is introduced, often verbatim, by state legislators around the country. In fact, ALEC’s fingerprints are all over preemptive bills passed in 10 state legislatures that bar cities and counties from enacting their own paid-leave standards.

The debate balances on the fulcrum of economics. Employers argue that paid sick leave cuts into profitability. Proponents, backed by numerous studies, counter that the effect on profits is small, non-existent or even positive. Indeed, “presenteeism” (sick workers showing up) costs employers $180 billion annually in lost productivity. During the 2009 H1N1 flu pandemic more than 8 million sick workers reported for work between September and November, according to the Institute for Women’s Policy Research, and may have infected 7 million coworkers.

Food-borne illness costs chain restaurants millions and ravage public relations. In 2008, after the health department traced more than 500 cases of norovirus to one worker at a Chipotle in Kent, Ohio, the chain gained notoriety for serving its customers a complimentary side order of diarrhea. Chipotle did not respond to inquiries about its sick-leave policy, but workers at three Chipotle locations in Manhattan told In These Times they receive no paid sick leave.

Arguing that paid sick leave is bad for profits is like asserting that bathroom breaks, minimum wages, safety standards and a 40-hour week hurt profits. Or that abolishing child labor and slavery cuts into revenue. So what? Even if paid sick leave did reduce profits, sometimes the bottom line is that the bottom line is not the point. There are greater goods, including public health.

Terry J. Allen, an In These Times senior editor, has written the magazine’s monthly investigative health and science column since 2006.

The Supreme Court’s ‘McCutcheon’ Decision Nuked Campaign Laws in These 11 States (Plus DC)

NY Campaign Finance
Supporters for fair elections gather at the Capitol in Albany, New York on Tuesday, March 11, 2014. (AP Photo/Mike Groll)

This post originally appeared at Mother Jones.

On Wednesday, the Supreme Court’s five conservative justices struck down the so-called aggregate limit on campaign contributions — that is, the total number of donations within federal limits an individual can make to candidates, parties and committees during a two-year election cycle. Before the court’s decision in McCutcheon v. FEC, there was a $123,200 ceiling on those legal donations; now, a donor can cut as many $2,600 checks to candidates and $5,000 checks to parties as he or she wants. (The $2,600 and $5,000 figures are the maximum direct contributions a donor can give.)

The court’s decision specifically dealt with the federal aggregate limit, but legal experts say McCutcheon will also void similar campaign finance laws in 11 states and the District of Columbia. “The McCutcheon opinion is right from the Supreme Court and what the Supreme Court said is state aggregate limits on top of the federal limit are unconstitutional today, unconstitutional yesterday, unconstitutional 20 years ago,” says David Mitrani, an election lawyer who specializes in state campaign finance law.

Mitrani says the impact of McCutcheon on state-level laws will vary depending on how low a state’s aggregate limit was. Rhode Island and Wisconsin, for instance, limited donors from giving more than $10,000 per calendar year to state political committees. “There are going to be pretty big changes in how money flows into those states,” Mitrani says. In New York state, however, Mitrani says he doesn’t expect as big of an impact when the existing aggregate limit was set at $150,000 a year.

Here are the 11 states (plus DC) where aggregate limits are now likely gutted thanks to the Supreme Court’s McCutcheon decision:

  • Connecticut

    Limits individuals to $30,000 per election cycle (primary and general) to all committees

  • District of Columbia

    Limits individuals to $8,500 per elected office per election year (“election year” includes both primary and general election)

  • Indiana

    Limits corporations and labor organizations to $22,000 per calendar year to all committees

  • Kentucky

    Limits contributors to $1,500 to all PACs per calendar year

  • Louisiana

    Limits contributors to $100,000 to committees per four-year election cycle

  • Massachusetts

    Limits individuals to $12,500 to all candidates per calendar year

  • Maryland

    Limits contributors to $10,000 to all committees per four year cycle (would’ve increased to $24,000 in 2015)

  • Maine

    Limits contributors to $25,000 to candidates per calendar year

  • New York

    Limits contributors to $150,000 per calendar year to all committees. Corporations are limited to $5,000 per calendar year to all committees

  • Rhode Island

    Limits individuals to $10,000 per calendar year to committees

  • Wisconsin

    Limits individuals to $10,000 to committees per calendar year

  • Wyoming

    Limits individuals to $25,000 candidates and PACs per two-year cycle

Can We Safeguard Our Democracy After McCutcheon?

Supreme Court Chief Justice John Roberts waves after giving the commencement address on Friday, May 24, 2013, at LaLumiere School in LaPorte, Ind. (AP Photo/South Bend Tribune, James Brosher)
Supreme Court Chief Justice John Roberts waves after giving the commencement address on Friday, May 24, 2013, at LaLumiere School in LaPorte, Ind. (AP Photo/South Bend Tribune, James Brosher)

The Supreme Court’s evisceration of our campaign finance rules is a powerful argument for the cleansing properties of sunlight. We should respond to McCutcheon by pushing for the full and timely disclosure of every penny donated to advance a political agenda.

If America’s wealthiest can offer unlimited dollars to shape our politics, the least we can do is force them to own their activism. It’s time to get rid of the loopholes for sham “social welfare” organizations and trade groups. It’s time to wipe out the dark money, and force those wealthy few to publicly stand behind their positions.

That’s not only a good and timely idea – it may also be the only viable tool we have left to protect our democracy, at least for the foreseeable future.

When the Supreme Court handed down its decision in McCutcheon, Sam Steiner, a fellow at Yale Law School, wrote that the court’s conservatives have “no idea how money works in politics.” It’s a common criticism. As Justice Stephen Breyer noted in his dissent in McCutcheon, the conservative bloc’s decision in the case rested “upon its own, not a record-based, view of the facts.”

But it’s more likely that the justices know exactly how money works in politics. Several studies have shown that the court’s conservatives are far more likely to engage in “judicial activism” than their liberal counterparts. In Citizens United, they went so far as to order the litigants to re-argue their case on First Amendment grounds, prompting former Justice John Paul Stevens to write, “Five Justices were unhappy with the limited nature of the case before us, so they changed the case to give themselves an opportunity to change the law.”

There’s no reason to believe that a majority that almost always rules in favor of the US Chamber of Commerce doesn’t know what eviscerating our campaign finance rules means. Rather, they’ve been working to create the world they want to see. Ari Berman wrote that the Roberts court has consistently “made it far easier to buy an election and far harder to vote in one.” (Ironically, just eight months after gutting the Voting Rights Act in Shelby County v. Holder, John Roberts wrote in McCutcheon that “there is no right more basic in our democracy than the right to participate in electing our political leaders.”)

But even as the 5-4 majority trampled longstanding campaign finance rules designed to check the influence of the wealthiest Americans, they left open one avenue to restrain our slide toward plutocracy: In both Citizens United and McCutcheon, they suggested that disclosure requirements would be enough to prevent the corruption of our electoral process.

Conservatives have long championed that position as an alternative to limits on political spending. For two decades, Senate Minority Leader Mitch McConnell (R-KY) preached that disclosure was the Holy Grail of campaign finance reform — the perfect way to balance the rights of the wealthiest to engage in politics with the public’s interest in not having the voices of ordinary citizens drowned out by megaphones wielded by billionaires.

As an editorial in the Lexington Herald-Leader pointed out, in the late 1980s, McConnell co-sponsored legislation — with his current nemesis Harry Reid (D-NV) — that “would have required disclosure of independent groups or individuals who intended to spend more than $25,000 promoting or attacking a candidate.” In 1996, he “supported public disclosure of all election-related spending, including spending by independent groups and contributions to political parties.” A year later, he would write, “public disclosure of campaign contributions and spending should be expedited so voters can judge for themselves what is appropriate.” As recently as 2007, McConnell threw his weight behind an amendment that “would require organizations filing complaints before the Senate Ethics Committee to disclose their donors so the public could have more transparency.”

But a few years – and a couple of key campaign finance cases – later, and McConnell now argues that disclosure rules are “un-American.” In a relatively short span, they became a Democratic “plot” to rig elections.

The DISCLOSE Act, which would require greater transparency – and bar foreign companies and firms that received bailout funds from funding campaigns — has been blocked twice by Senate Republicans in the past four years, and Mitch McConnell led the opposition. Dan Froomkin reported for The Huffington Post that 14 of the GOP senators who filibustered the bill in 2012 had expressed support for a similar measure in 2000, and many would have voted for it “were it not for enormous pressure applied” by Mitch McConnell.

The Herald Leader called out McConnell’s “hypocrisy” on the issue, and it is obviously that. But it’s also just a savvy politician reacting rationally to a changing electoral landscape. Our system of public campaign financing is in tatters, the floodgates of private money are wide open and the big donors lean heavily toward his party.

Conservatives know how powerful disclosure rules can be. Donors don’t want to be linked to groups pushing unpopular causes. They fear becoming entangled with divisive social issues – they want to support politicians who will cut their taxes, roll back regulations and oppose minimum wage hikes, but often those same politicians hold views on things like women’s rights or equality for gays and lesbians that fall embarrassingly outside today’s mainstream.

The prospect of having their names and brands attached to their political activism scares a lot of deep-pocketed donors. In a rare interview with Forbes, Charles Koch defended the lengths to which he and his brother David go to hide the names of their fellow funders and obscure their own political activities through a network of murky front groups as a necessary evil. “We get death threats, threats to blow up our facilities, kill our people,” he said. “So long as we’re in a society like that, where the president attacks us and we get threats from people in Congress, and this is pushed out and becomes part of the culture… then why force people to disclose?”

The hyperbole is consistent with billionaire Tom Perkins calling modestly populist rhetoric a precursor to a “progressive Krystallnacht.” But strip away the melodrama, and what Koch is really saying is that he and his brother and other wealthy donors are entitled to use their fortunes to shape our political discourse without facing any criticism from their fellow citizens. And that’s a “right” you won’t find in any constitution.

As our colleague John Light points out, the influence of money in politics controls all other issues – the interests of large-dollar donors usually trump the popular will. A constitutional amendment explicitly authorizing Congress to regulate political spending is a great idea, but an exceptionally tough lift. And with the court’s current makeup, even the few remaining hard limits on political spending are in danger.

Disclosure is the only avenue they’ve left open to us, and if we seize it with enough energy — if we use it as leverage to get some real transparency in our elections — then we might just find a silver lining to the dark clouds that McCutcheon and Citizens United represent.

What Might America’s Plutocrats Do After ‘McCutcheon’?

Last October, a few days after Shaun McCutcheon’s lawyers made his case in front of the Supreme Court for why he believes it’s his right to donate money to as many candidates and political action committees as he wants, Bill interviewed Yale legal scholar Heather Gerken. They talked about what might happen if McCutcheon got his way.

Gerken told Bill why she’s worried the decision the Supreme Court announced yesterday will encourage the richest Americans to invest even more heavily in Congress, and how it could tilt the playing field more firmly in their favor. “It’s not just a seat at the table on Election Day,” Gerken says. “It’s a seat at the table for the next four-to-six years when they’re governing… It means that Wall Street is going to be controlling the congressional agenda and Main Street is not.”

Watch the four-minute clip:

BILL MOYERS: I read some research last evening that in the last election cycle there were 1,219 of the wealthiest donors who reached or almost reached the limit now prevailing.

HEATHER GERKEN: Yes. Well, I will just say those numbers actually could increase for the following reasons. Reaching a limit of $123,000 isn't really that influential.

That's the point of the limit, that even if you reach the cap of it, you're not going to be the person who gets a seat at the table automatically. So $123,000 is just not that much money in politics nowadays if you're thinking about how much is spent for all the campaigns.

However, if you're someone who can fund an entire senatorial campaign, if you're someone who can give a chunk of the president, what the presidential campaign needs, you're get a seat at the table. So those numbers may underestimate the number of people who are going to want to do this. But when you can spend $3.5 million, you can get a lot more influence and people still start to say, hmmm, that sounds like a really good use of my money.

BILL MOYERS: Well, you say seat at the table, but don't you really mean they can set the agenda, they can buy the ads that determine what we talk about in a campaign? They can actually destroy an opponent with spending money in negative advertising? It's more than a seat at the table.

HEATHER GERKEN: It's actually worse than that though. I worry not just about their ability to influence the election, but they're going to influence the governance agenda. So if you know that the people who are funding your campaign are against this legislation or in favor of this legislation, it's going to be very hard for party leaders not to pay attention to that fact. So it's not just a seat at the table on election day. Is a seat at the table for the next four to six years when they're governing.

BILL MOYERS: It means they can in effect buy the policy outcomes they want for the legislative process because the incumbents they have supported with $3.5 million or more are going to be paying attention to them when they come to the table?

HEATHER GERKEN: It's not the direct kind of thing, bags full of money in exchange for votes, but it's actually more pernicious in a way because it shapes the whole background of politics about what's allowed to be talked about and what isn't allowed to be talked about, about what kind of votes are going to happen and what kind of votes aren't going to happen. So what it means is Wall Street is going to be controlling the congressional agenda, but Main Street is not.

BILL MOYERS: But, the majority in the court would disagree with you because remember in Citizens United they said well, if corruption were the issue here, if we could, if you could prove a corruption, Ms. Gerken, we would listen to you. But you can't prove corruption. This is just the politicians give gratitude to their donors, but it's not a quid pro quo and you can't demonstrate that it is buying these policy outcomes.

HEATHER GERKEN: That's right. The Supreme Court in Citizens United changed the standard. So it used to be in fact that what Justice Kennedy called ingratiation and access, that was corruption. And that was corruption under Supreme Court precedent. In the early 1990s, in the early 2000s that's exactly the definition because the rest of the Supreme Court, the majority that once held understands that politics is more complicated than, you give me money, I give you a vote.

They understand that corruption can run through a system in a way that's far more pernicious and deeper but subtle. Justice Kennedy has a much narrower view of what constitutes corruption. And that has been the source of deregulation in Citizens United.

BILL MOYERS: Yes, if we saw a baseball player before he bats hand a wad of cash to the umpire, we'd know that that's corruption. But we don't see the donor handing, the politician, the incumbent senator or congressman handing a decision to the donor, we never see that.

HEATHER GERKEN: We never see it, but we see it in the aggregate. Just take a look at what happened when we had the biggest financial crisis in history. Wall Street was right there helping write the legislation, working on all kinds of pieces of blocking things they didn't want. Look at what happened when we had health care, something at the core of the interests of the American people, the insurance industry was right there. Those are the people who have the money. Those are the people who are capable of setting the agenda when they can give this much money. And they're the reason why legislation looks like it does nowadays.

According to an analysis of 2012 campaign spending by the Sunlight Foundation, more than a quarter of all disclosed donations last year — $6 billion dollars in all — came from just 31,385 individuals, only one ten-thousandth of the population.

At the top of that pyramid are an even more rarified group: the 1,000 individual donors who gave at least $134,300 during the 2012 election cycle. They’re highly partisan, and they skew heavily toward Republicans.

An “Army of Lobbyists” Is Quietly Fighting for Budget-Busting Corporate Tax Breaks

Piles of U.S. currency. March 2007. (AP Photo/PGR-HO)

Piles of U.S. currency. March 2007. (AP Photo/PGR-HO)

An army of corporate lobbyists is trying to push a huge package of tax cuts through Congress without drawing public attention.

The 55 cuts, known on Capitol Hill as “extenders,” expired at the end of 2013 but in the past have been renewed retroactively on a bipartisan basis with little fanfare. Altogether, according to the Congressional Budget Office, they could cost the federal government $46 billion in revenues in 2014 and as much as $700 billion over the next 10 years. While some of the breaks would help working people, 90 percent of them would benefit the bottom lines of large, US-based multinationals.

A report released on Monday by Americans for Tax Fairness and Public Campaign calculates that, “1,359 individual lobbyists swarmed Capitol Hill to press members of Congress on the issue between January 2011 and September 2013.”  Lobbyists appeared “12,378 times in quarterly lobbying reports in the period studied – each report representing from one to dozens of contacts with members of Congress and their staffs during the quarter it was filed.”

Arguably the most controversial of these tax breaks is known as the Active Financing Exception loophole (AFE), which allows companies to avoid paying taxes on interest and dividends earned on overseas cash. Lobbying for the AFE has been especially intense.

Dubbed the “GE loophole” by critics, the report says that General Electric “employed 48 lobbyists to work on tax extenders and… the AFE” — more than any other corporation. The authors note that while ”it is not possible to know how much the AFE saves GE,” the loophole played a significant role in the company paying “less federal income taxes than an average American family pays in one year” on profits of $27.5 billion earned between 2008 and 2012.

According to the report,  “58 percent of the lobbyists who worked on tax extenders have passed through the revolving door – they have worked for Congress or the executive branch.”  They include former Sen. John Breaux (D-LA) — who sat on the Senate Finance Committee — and former Senate Majority Leader Trent Lott (R-MS).

The tax study was released on the same day that Sen. Carl Levin (D-MI) released a report detailing how Caterpillar Inc. “used complicated corporate maneuvers to avoid $2.4 billion in U.S. taxes by parking profits in a unit in Switzerland.” According to a report by ISI Research, S&P 500 companies currently have $1.9 trillion parked in offshore tax havens.

While Republicans have insisted that everything from an extension of unemployment benefits for the long-term jobless — which would cost the government about half of the total value of the tax cuts — to Hurricane Sandy relief funds must be paid for with “offsets” in spending elsewhere, lawmakers from both parties appear ready to pass the package of costly “extenders” on their own.

Just weeks after opposing the unemployment extension, Senate Minority Leader Mitch McConnell (R-KY) said of the tax cuts, “I think occasionally these packages have been paid for, but most Republicans believe that existing tax policy should not be paid for.” As Danny Vinik reported for New Republic, “McConnell alone has received more than $100,000 in total from the top 10 companies who have lobbied most intensely” for the corporate tax loopholes.

For more information, visit Americans for Tax Fairness.

An Activist Court’s Ideology: More Money, Less Voting

President Lyndon B. Johnson meets with Martin Luther King, Jr. on Aug. 6, 1965 upon signing the Voting Rights Act. Credit: Yoichi R. Okamoto, Lyndon Baines Johnson Library and Museum

President Lyndon B. Johnson meets with Martin Luther King, Jr. on Aug. 6, 1965 upon signing the Voting Rights Act. Credit: Yoichi R. Okamoto, Lyndon Baines Johnson Library and Museum

This post originally appeared at The Nation.

In the past four years, under the leadership of Chief Justice John Roberts, the Supreme Court has made it far easier to buy an election and far harder to vote in one.

First came the Court’s 2010 decision in Citizens United v. FEC, which brought us the super PAC era.

Then came the Court’s 2013 decision in Shelby County v. Holder, which gutted the centerpiece of the Voting Rights Act.

Now we have McCutcheon v. FEC, where the Court, in yet another controversial 5-4 opinion written by Roberts, struck down the limits on how much an individual can contribute to candidates, parties and political action committees. So instead of an individual donor being allowed to give $117,000 to campaigns, parties and PACs in an election cycle (the aggregate limit in 2012), they can now give up to $3.5 million, Andy Kroll of Mother Jones reports.

The Court’s conservative majority believes that the First Amendment gives wealthy donors and powerful corporations the carte blanche right to buy an election but that the Fifteenth Amendment does not give Americans the right to vote free of racial discrimination.

These are not unrelated issues—the same people, like the Koch brothers, who favor unlimited secret money in US elections are the ones funding the effort to make it harder for people to vote. The net effect is an attempt to concentrate the power of the top 1 percent in the political process and to drown out the voices and votes of everyone else.

Consider these stats from Demos on the impact of Citizens United in the 2012 election:

·  The top thirty-two Super PAC donors, giving an average of $9.9 million each, matched the $313.0 million that President Obama and Mitt Romney raised from all of their small donors combined — that’s at least 3.7 million people giving less than $200 each.

·  Nearly 60 percent of Super PAC funding came from just 159 donors contributing at least $1 million. More than 93 percent of the money Super PACs raised came in contributions of at least $10,000 — from just 3,318 donors, or the equivalent of 0.0011 percent of the US population.

·  It would take 322,000 average-earning American families giving an equivalent share of their net worth to match the Adelsons’ $91.8 million in Super PAC contributions.

That trend is only going to get worse in the wake of the McCutcheon decision.

Now consider what’s happened since Shelby County: eight states previously covered under Section 4 of the Voting Rights Act have passed or implemented new voting restrictions (Alabama, Arizona, Florida, Mississippi, Texas, Virginia, South Carolina, and North Carolina). That has had a ripple effect elsewhere. According to The New York Times, “nine states [under GOP control] have passed measures making it harder to vote since the beginning of 2013.”

A country that expands the rights of the powerful to dominate the political process but does not protect the fundament rights of all citizens doesn’t sound much like a functioning democracy to me.

On the Money: ‘McCutcheon’ Decided

Every week Moyers & Company producer Gail Ablow shares her must-read money and politics stories.

The Supreme Court building in Washington, DC. Photo Credit: iStock

The Supreme Court building in Washington, DC. Photo Credit: iStock

The moment that Supreme Court watchers had anticipated finally arrived Wednesday, as the Supreme Court struck down “aggregate limits” on political contributions in a 5-4 ruling in McCutcheon v. FEC.

For a revealing glimpse of the legal drama, read this –>A civil day on the bench for opinions on the impolite world of campaign finance” by Mark Walsh of Scotusblog.com, who was in the courtroom yesterday morning and relates Chief Justice Roberts’ reading of the decision. “Money in politics may seem repugnant to some, but so too does much of what the First Amendment vigorously protects,” Roberts said. “If the First Amendment protects flag burning, funeral protests and Nazi parades — despite the profound offense such spectacles cause — it surely protects political campaign speech despite popular opposition.” Walsh concludes with a glimpse of Justice Breyer summarizing the dissent in a tone that is “steely” but not angry:

‘Today the Court overrules Buckley and strikes down a similar ceiling [on overall contributions] as unconstitutional…The Court substitutes for the current two-year overall contribution ceiling of $123,000, the number infinity.’

He pauses and a few people chuckle at that. ‘If the Court in Citizens United opened a door, today’s decision may well open a floodgate.’

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A Blistering Dissent in ‘McCutcheon’: Conservatives Substituted Opinion for Fact

Supreme Court Justices, from left, Chief Justice of the United States John Roberts, Associate Justices of the Supreme Court Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan applaud State of the Union Address,12 Feb 2013 (Rex Features via AP Images)

Supreme Court Justices, from left, Chief Justice of the United States John Roberts, Associate Justices of the Supreme Court Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan applaud State of the Union Address,12 Feb 2013 (Rex Features via AP Images)

Central to the Supreme Court’s campaign finance decisions in the John Roberts era is that the government’s only legitimate interest in this area is preventing direct, quid pro quo corruption — a donor demanding that a specific law be passed, or killed, in exchange for cash — or the appearance of direct corruption.

In the McCutcheon decision announced on Wednesday, the court struck down a limit on how much cash an individual could give to all federal candidates during an election cycle. The five conservative justices allowed that the rich showering friendly candidates with unlimited amounts of money might drown out the voices of the majority and distort our fragile democracy, but not blatantly enough to justify the spending limit.

In the majority opinion, Chief Justice Roberts wrote that “government regulation may not target the general gratitude a candidate may feel toward those who support him or his allies, or the political access such support may afford.”

The conservative majority passed on an opportunity to strike down a limit on how much a donor can give to an individual candidate — perhaps because in Citizens United, they’d accepted the proposition that unlimited donations to “independent” third party groups didn’t lend the appearance of corruption — but Justice Clarence Thomas, in his concurring opinion, wrote that “limiting the amount of money a person may give to a candidate does impose a direct restraint on his political communication,” and moved to strike that provision down as well.

The court’s four-member minority issued a blistering dissent, written by Justice Stephen Breyer. He charged that the majority’s “conclusion rests upon its own, not a record-based, view of the facts.”

Its legal analysis is faulty: It misconstrues the nature of the competing constitutional interests at stake. It understates the importance of protecting the political integrity of our governmental institutions. It creates a loophole that will allow a single individual to contribute millions of dollars to a political party or to a candidate’s campaign.

Taken together with Citizens United, Breyer writes that McCutcheon “eviscerates our Nation’s campaign finance laws, leaving a remnant incapable of dealing with the grave problems of democratic legitimacy that those laws were intended to resolve.”

He goes on to dissect the claims on which the court’s ruling rest. He first takes issue with the idea that the government only has an interest in preventing a direct exchange of cash for votes.

In the plurality’s view, a federal statute could not prevent an individual from writing a million dollar check to a political party (by donating to its various committees), because the rationale for any limit would “dangerously broade[n] the circumscribed definition of quid pro quo corruption articulated in our prior cases.”

This critically important definition of “corruption” is inconsistent with the Court’s prior case … and it misunderstands the constitutional importance of the interests at stake. In fact, constitutional interests—indeed, First Amendment interests—lie on both sides of the legal equation.

In reality, as the history of campaign finance reform shows and as our earlier cases on the subject have recognized, the anticorruption interest that drives Congress to regulate campaign contributions is a far broader, more important interest than the plurality acknowledges. It is an interest in maintaining the integrity of our public governmental institutions. And it is an interest rooted in the Constitution and in the First Amendment itself.

Consider at least one reason why the First Amendment protects political speech. Speech does not exist in a vacuum. Rather, political communication seeks to secure government action. A politically oriented “marketplace of ideas” seeks to form a public opinion that can and will influence elected representatives….

The First Amendment advances not only the individual’s right to engage in political speech, but also the public’s interest in preserving a democratic order in which collective speech matters.

What has this to do with corruption? It has everything to do with corruption. Corruption breaks the constitution­ally necessary “chain of communication” between the people and their representatives. It derails the essential speech-to-government-action tie. Where enough money calls the tune, the general public will not be heard. Insofar as corruption cuts the link between political thought and political action, a free marketplace of political ideas loses its point. That is one reason why the Court has stressed the constitutional importance of Congress’ concern that a few large donations not drown out the voices of the many….

The “appearance of corruption” can make matters worse. It can lead the public to believe that its efforts to communicate with its representatives or to help sway public opinion have little purpose. And a cynical public can lose interest in political participation altogether.

Breyer then wonders how the conservatives could square McCutcheon’s narrow definition of “corruption” with its conclusion, in the 2003 case McConnell v. FEC, that money — and the access it purchases — has a pernicious influence on the political process.

The Court in McConnell upheld these new contribution restrictions under the First Amendment for the very reason the plurality today discounts or ignores. Namely, the Court found they thwarted a significant risk of corruption—understood not as quid pro quo bribery, but as privileged access to and pernicious influence upon elected representatives.

In reaching its conclusion in McConnell, the Court relied upon a vast record compiled in the District Court. That record consisted of over 100,000 pages of material and included testimony from more than 200 witnesses. What it showed, in detail, was the web of relationships and understandings among parties, candidates, and large donors that underlies privileged access and influence. The District Judges in McConnell made clear that the record did “not contain any evidence of bribery or vote buying in exchange for donations of nonfederal money.”

Indeed, no one had identified a “single discrete instance of quid pro quo corruption” due to soft money. But what the record did demonstrate was that enormous soft money contributions, ranging between $1 million and $5 million among the largest donors, enabled wealthy contributors to gain disproportionate “access to federal lawmakers” and the ability to “influenc[e] legislation.”

“We specifically rejected efforts to define ‘corruption’ in ways similar to those the plurality today accepts,” writes Breyer.

He then takes on the conservatives’ second rationale: that the problem the aggregate limit was supposed to address — huge donors funneling money indirectly to a candidate in order to get around the limit on contributions to a single campaign — isn’t an issue today.

The plurality is wrong…. In the absence of limits on aggregate political contributions, donors can and likely will find ways to channel millions of dollars to parties and to individual candidates, producing precisely the kind of “corruption” or “appearance of corruption” that previously led the Court to hold aggregate limits constitutional. Those opportunities for circumvention will also produce the type of corruption that concerns the plurality today. The methods for using today’s opinion to evade the law’s individual contribution limits are complex, but they are well known, or will become well known, to party fundraisers.

He offers three concrete examples of how a wealthy donor might be able to get millions of dollars to a single candidate without running afoul of the law under McCutcheon.

But perhaps the dissent’s most withering criticism of the ruling is that, as in Citizens United, it was decided according to the majority’s beliefs, rather than the factual record.

In the past, when evaluating the constitutionality of campaign finance restrictions, we have typically relied upon an evidentiary record amassed below to determine whether the law served a compelling governmental objec­tive. And, typically, that record contained testimony from Members of Congress (or state legislators) explaining why Congress (or the legislature) acted as it did….

If we are to overturn an act of Congress here, we should do so on the basis of a similar record….

Determining whether anticorruption objectives justify a particular set of contribution limits requires answering empirically based questions, and applying significant discretion and judgment. To what ex­tent will unrestricted giving lead to corruption or its appearance? What forms will any such corruption take? To what extent will a lack of regulation undermine public confidence in the democratic system? To what extent can regulation restore it?

… For another thing, a comparison of the plurality’s opinion with this dissent reveals important differences of opinion on fact-related matters. We disagree, for example, on the possibilities for circumvention of the base limits in the absence of aggregate limits. We disagree about how effectively the plurality’s “alternatives” could prevent evasion. An evidentiary proceeding would permit the parties to explore these matters, and it would permit the courts to reach a more accurate judgment. The plurality rationalizes its haste to forgo an evidentiary record by noting that “the parties have treated the question as a purely legal one.” But without a doubt, the legal question—whether the aggregate limits are closely drawn to further a compelling governmental interest—turns on factual questions about whether corruption, in the absence of such limits, is a realistic threat to our democracy….

The justification for aggregate contribution restrictions is strongly rooted in the need to assure political integrity and ultimately in the First Amendment itself. The threat to that integrity posed by the risk of special access and influence remains real. Part III, supra. Even taking the plurality on its own terms and considering solely the threat of quid pro quo corruption (i.e., money-for-votes exchanges), the aggregate limits are a necessary tool to stop circumvention. And there is no basis for finding a lack of “fit” between the threat and the means used to combat it, namely the aggregate limits.

The plurality reaches the opposite conclusion. The result, as I said at the outset, is a decision that substitutes judges’ understandings of how the political process works for the understanding of Congress; that fails to recognize the difference between influence resting upon public opinion and influence bought by money alone; that overturns key precedent; that creates huge loopholes in the law; and that undermines, perhaps devastates, what remains of campaign finance reform.

How to Vote Against the Koch Brothers

Wisconsin Gov. Scott Walker and his wife Tonette cheer as Republican vice presidential nominee, Rep. Paul Ryan addresses the Republican National Convention in Tampa, Fla., August 2012. (AP Photo/David Goldman)
Wisconsin Gov. Scott Walker and his wife Tonette cheer as Republican vice presidential nominee, Rep. Paul Ryan addresses the Republican National Convention in Tampa, Fla., August 2012. The Koch brothers have made supporting the governorship of Scott Walker a personal priority. (AP Photo/David Goldman)

This post first appeared in The Nation.

The Koch Brothers don’t actually run for office — at least not since David Koch’s amusingly ambitious 1980 bid for the vice presidency on a Libertarian Party ticket that proposed the gutting of corporate taxes, the minimum wage, occupational health and safety oversight, environmental protections and Social Security.

That project, while exceptionally well-funded for a third-party campaign, secured just 1.06 percent of the vote. The Kochs determined it would be easier to fund conservative campaigns than to pitch the program openly. Initially, the project was hampered by what passed for campaign-finance rules and regulations, to the frustration of David Koch, who once told The New Yorker, “We’d like to abolish the Federal Elections Commission and all the limits on campaign spending anyway.”

Who's Buying our Midterm Elections?

The FEC still exists. But the Supreme Court’s decision in Citizens United v FEC and the general diminution of campaign finance rules and regulations has cleared the way for David Koch and his brother Charles to play politics as they choose. And they are playing hard — especially in Wisconsin, a state where they have made supporting and sustaining the governorship of Scott Walker a personal priority.

Two years ago, David Koch said of Walker: “We’re helping him, as we should. We’ve gotten pretty good at this over the years. We’ve spent a lot of money in Wisconsin. We’re going to spend more.” The Palm Beach Post interview in which that quote appeared explained, “By ‘we’ he says he means Americans for Prosperity (AFP),” the group the Kochs have used as one of their prime vehicles for political engagement in the states.

AFP and its affiliates are expanding their reach this year, entering into fights at the local level where their big money can go far — and where the Koch Brothers can influence the process from the ground up.

As Walker prepares to seek a second term, AFP is clearing the way in supposedly nonpartisan county board and school board races that will occur Tuesday.

Consider the case of Iron County. Elections in the northern Wisconsin county have always been down-home affairs: an ad in the Iron County Miner newspaper, some leaflets dropped at the door, maybe a hand-painted yard sign.

This year, however, that’s changed. Determined to promote a controversial mining project — and, presumably, to advance Walker’s agenda — AFP has waded into Tuesday’s competition for control of the Iron County Board.

With dubious “facts” and over-the-top charges, the Wisconsin chapter of the Koch Brothers-backed group is pouring money into the county — where voter turnout in spring elections rarely tops 1,500 — for one of the nastiest campaigns the region has ever seen. Small-business owners, farmers and retirees who have asked sensible questions about the impact of major developments on pristine lakes, rivers, waterfalls and tourism are being attacked as “anti-mining radicals” who “just want to shut the mines down, no matter what.”

Iron County is debating whether to allow new mining, not whether to shut mines down. And many of the candidates that AFP is ripping into have simply said they want to hear from all sides.

But those details don’t matter in the new world of big money politics ushered in by US Supreme Court rulings that have cleared the way for billionaires and corporations to buy elections.

Most of the attention to money in politics focuses on national and state races. But the best bargains for billionaires are found at the local level — where expenditures in the thousands can overwhelm the pocket-change campaigns of citizens who run for county boards, city councils and school boards out of a genuine desire to serve and protect their community.

That’s why it is important to pay attention to Tuesday’s voting in Iron County – and in communities such as Kenosha, where the group has waded into local school board races. The Kenosha contest goes to the core issues of recent struggles over collective-bargaining rights in Wisconsin, pitting candidates who are willing to work with teachers and their union in a historically pro-labor town versus contenders who are being aided by the Koch Brothers contingent in Wisconsin.

But it is equally important to pay attention to the efforts by citizens, working at the local level, to upend the big money and to restore politics of, by and for the people.

The month of March started with a grassroots rebellion in New Hampshire, where dozens of towns called on their elected representatives to work to enact a constitutional amendment to overturn the high court’s Citizens United decision.

Clean-politics advisory referendums are on ballots across Wisconsin. Belleville, DeForest, Delavan, Edgerton, Elkhorn, Lake Mills, Shorewood, Waterloo, Waukesha, Waunakee, Wauwatosa, Whitefish Bay and Windsor will have an opportunity to urge their elected representatives to support an amendment to restore the authority of local, state and national officials to establish campaign finance rules ensuring that votes matter more than dollars. The initiative is backed by groups like Move to Amend and United Wisconsin. “The unlimited election spending by special-interest groups, allowed by the Supreme Court’s Citizens United ruling, has drowned out the voices of ordinary people,” says United Wisconsin Executive Director Lisa Subeck. “Urgent action is needed to restore our democracy to the hands of the people.”

That urgency is especially real in rural communities — places like Iron County. That’s why the Wisconsin Farmers Union is calling for a “yes” vote. “Citizens of all political stripes — Republicans, Democrats and independents — agree that we need to curb the corrupting influence of money in politics,” says WFU Executive Director Tom Quinn. “Voting yes…will send a clear message that we the people are ready to take back our democracy.”

 

The Koch Brothers and the Danger of American Plutocracy

Americans for Prosperity Foundation Chairman David Koch addresses attendees of the Defending the American Dream Summit in Orlando, Fla., Friday, Aug. 30, 2013.(AP Photo/Phelan M. Ebenhack)

Americans for Prosperity Foundation Chairman David Koch addresses attendees of the Defending the American Dream Summit in Orlando, Fla., Friday, Aug. 30, 2013.(AP Photo/Phelan M. Ebenhack)

This post originally appeared on Robert Reich’s blog.

Charles and David Koch should not be blamed for having more wealth than the bottom 40 percent of Americans put together. Nor should they be condemned for their petrochemical empire. As far as I know, they’ve played by the rules and obeyed the laws.

They’re also entitled to their own right-wing political views. It’s a free country.

But in using their vast wealth to change those rules and laws in order to fit their political views, the Koch brothers are undermining our democracy. That’s a betrayal of the most precious thing Americans share.

The Kochs exemplify a new reality that strikes at the heart of America. The vast wealth that has accumulated at the top of the American economy is not itself the problem. The problem is that political power tends to rise to where the money is. And this combination of great wealth with political power leads to greater and greater accumulations and concentrations of both — tilting the playing field in favor of the Kochs and their ilk, and against the rest of us.

America is not yet an oligarchy, but that’s where the Kochs and a few other billionaires are taking us.

American democracy used to depend on political parties that more or less represented most of us. Political scientists of the 1950s and 1960s marveled at American “pluralism,” by which they meant the capacities of parties and other membership groups to reflect the preferences of the vast majority of citizens.

Then around a quarter century ago, as income and wealth began concentrating at the top, the Republican and Democratic Parties started to morph into mechanisms for extracting money, mostly from wealthy people.

Finally, after the Supreme Court’s Citizen’s United decision in 2010, billionaires began creating their own political mechanisms, separate from the political parties. They started providing big money directly to political candidates of their choice, and creating their own media campaigns to sway public opinion toward their own views.

So far in the 2014 election cycle, Americans for Prosperity, the Koch brother’s political front group, has aired more than 17,000 broadcast TV commercials, compared with only 2,100 aired by Republican Party groups.

Americans for Prosperity has also been outspending top Democratic Super PACs in nearly all of the Senate races Republicans are targeting this year. In seven of the nine races the difference in total spending is at least two-to-one and Democratic Super PACs have had virtually no air presence in five of the nine states.

The Kochs have spawned several imitators. Through the end of February, four of the top five contributors to 2014 Super PACs are now giving money to political operations they themselves created, according to the Center for Responsive Politics.

For example, billionaire TD Ameritrade founder Joe Ricketts and his son, Todd, co-owner of the Chicago Cubs, have their own $25 million political operation called “Ending Spending.” The group is now investing heavily in TV ads against Rep. Walter Jones (R-NC) in a North Carolina primary (they blame Jones for too often voting with Obama).

Their ad attacking Sen. Jeanne Shaheen (D-NH) for supporting Obama’s health care law has become a template for similar ads funded by the Koch’s Americans for Prosperity in Senate races across the country.

When billionaires supplant political parties, candidates are beholden directly to the billionaires. And if and when those candidates win election, the billionaires will be completely in charge.

At this very moment, Casino magnate Sheldon Adelson (worth an estimated $37.9 billion) is busy interviewing potential Republican presidential candidates whom he might fund, in what’s being called the “Sheldon Primary.”

“Certainly the ‘Sheldon Primary’ is an important primary for any Republican running for president,” says Ari Fleischer, a former White House press secretary under President George W. Bush. “It goes without saying that anybody running for the Republican nomination would want to have Sheldon at his side.”

The new billionaire political bosses aren’t limited to Republicans. Democratic-leaning billionaires Tom Steyer, a former hedge-fund manager, and former New York Mayor Michael Bloomberg, have also created their own political groups. But even if the two sides were equal, billionaires squaring off against each other isn’t remotely a democracy.

In his much-talked-about new book, Capital in the Twenty-First Century, economist Thomas Piketty explains why the rich have become steadily richer while the share of national income going to wages continues to drop. He shows that when wealth is concentrated in relatively few hands, and the income generated by that wealth grows more rapidly than the overall economy — as has been the case in the United States and many other advanced economies for years — the richest receive almost all the income growth.

Logically, this leads to greater and greater concentrations of income and wealth in the future — dynastic fortunes that are handed down from generation to generation, as they were prior to the 20th century in much of the world.

The trend was reversed temporarily in the 20th century by the Great Depression, two terrible wars, the development of the modern welfare state and strong labor unions. But Piketty is justifiably concerned about the future.

A new gilded age is starting to look a lot like the old one. The only way to stop this is through concerted political action. Yet the only large-scale political action we’re witnessing is that of Charles and David Koch, and their billionaire imitators.

On the Money: In the Shadows

Every week Moyers & Company producer Gail Ablow shares her must-read money and politics stories.

John McCain
Washington, DC-based Citizens for Responsibility and Ethics reports that Senator John McCain (R-AZ) did some slick maneuvering in 2011 to transfer his mailing list from his campaign committee, Friends of John McCain, to his leadership PAC, Country First. (AP Photo/Susan Walsh)

Waning Influence? Part 1: Tracking the “Unlobbyist”→ The Center for Responsive Politics launched a new series on its Open Secrets blog this week. They are investigating an apparent decline in the number of active lobbyists — from 12,433 in 2012 to 12,279 in 2013. After tracking the post-lobbying careers of almost 1,800 people, the CRP sleuths discovered that nearly half of these former lobbyists have not retreated at all: they work at the same firms, hold the same or similar titles and the money spent on lobbying by those firms hasn’t shown the same signs of decrease. In part one of this series, Dan Auble concludes that many of the “unlobbyists” are choosing to fly below the radar. Some of these former lobbyists seem to be following the lead of the staffers and legislators who step through the revolving door to work for lobbying firms — wielding their influence, but officially doing just enough other work to avoid having to register as lobbyists.

Industry Behind Anti-Wage-Hike Letter → A statement went out last week, signed by more than 500 prominent economists and written under the name of Vernon Smith, a Nobel Prize-winning economist at Chapman University in California. They urged Congress to reject President Obama’s proposed minimum wage increase (to $10.10 per hour) calling it “a poorly targeted antipoverty measure.” Most of the economists who lent their signatures, it turns out, were an unwitting front for a lobbying organization. As Eric Lipton reported in The New York Times, the National Restaurant Association drafted the statement, asked a former Treasury Department official to approach Professor Smith, then paid him to use a database of conservative economists in search of supporting signatures. The statement was then distributed through economistletter.com, a website set up by a DC lobbying firm. While a number of the economists, all of whom stand by the argument in the statement, don’t necessarily feel hoodwinked, readers should.

Going Rogue: Once a Reformer, John McCain Exploits Campaign Finance Loophole → Senator John McCain (R-AZ), once known for his efforts to tighten campaign finance loopholes, is now diving through them like everyone else. The staff at CREW (Citizens for Responsibility and Ethics in Washington) report that in 2011 McCain did some slick maneuvering in order to transfer his mailing list from his campaign committee, Friends of John McCain, to his leadership PAC, Country First. Current rules dictate that contributions to PACs from campaign committees are subject to a $5,000 limit. The mailing list, however, was valued at nearly $3 million. So what’s a law-abiding campaign reformer to do? McCain’s team converted the campaign committee into a leadership PAC, Patriot First, which allowed them to transfer funds between the two without limit. The mailing list was passed along the very next day. Less than four months later, the new PAC was terminated and Friends of John McCain was reestablished as a campaign committee. If you can’t beat ‘em…

Revenge of the Republican consultants → After the last election, top Republican consultants were ridiculed by the tea party for spending hundreds of millions of dollars and failing to win the White House and the Senate. Politico’s Kenneth Vogel has a fascinating analysis of the 10 key firms that spearheaded Romney’s campaign – and  collected $1 billion in combined fees. If the measure is how much they won for themselves, they can now laugh at the tea party. According to Vogel, they are among “the highest-grossing and best-positioned players in Republican politics.” For their 2014 work, the firms and their consultants have already been paid nearly $20 million through January. “The consultants are like cockroaches,” conservative pundit Erick Erickson tells Vogel, “they’re always going to survive.”

Ripple Effects: Will McCutcheon Amplify the Role of Big Donors? → Any day now, the Supreme Court may deliver its decision in McCutcheon v. FEC, which will determine whether a limit on aggregate campaign contributions violates the First Amendment right to free speech. Edwin Bender, the executive director of the National Institute on Money in State Politics compared the giving patterns in states that have contribution limits with those that have none. He concluded that a broad ruling in favor of McCutcheon would further increase the influence of big donors and hurt small donors.

In case you missed it, more money links:

A campaign inquiry in Utah is the watchdogs’ worst case By Nicholas Confessore, The New York Times

RNC chair calls for reversal of ‘soft money’ ban to finance conventions By Matea Gold and Philip Rucker, The Washington Post

Koch brothers are outspent by a labor force millions of times their size, but… By Paul Blumenthal and Dave Jamieson, The Huffington Post

Aides aiming for pins: staffers look to join 1 in 7 members who have worked on Hill By David Hawkings, Roll Call

The newest dark money power player: American action network By Zachary Roth, MSNBC

What You Need to Know About Dark Money

If you look up “dark money” in Merriam-Webster, you won’t find a definition, but as of this week, their online unabridged dictionary includes a word that tells a big part of its story — “super PAC.” It’s defined in part as “an independent PAC [political action committee] that can accept unlimited contributions from individuals and organizations (such as corporations and labor unions) and spend unlimited amounts in support of a candidate.” It’s a fitting reminder that four years after Citizens United, the Supreme Court decision that opened the floodgates of campaign cash, dark money may be here to stay.

In this three-minute video, investigative reporters Kim Barker and Andy Kroll tell Bill how dark money contributes to Washington’s gridlock and why it keeps politicians from acting in the best interest of their constituents.

Watch:

Barker tells Bill, “I would argue that if you’re wondering why your government is so broke and you can’t really get anything passed through Congress, campaign finance has a lot to do with that.”

Kroll adds this analogy on super PAC dark money from a conversation that he had with an unnamed senator.

I had a conversation with a progressive senator who is not a fan of super PACs and at the time did not have his own sort of individual super PAC… And I said, ‘What is this like when you’re going to go up against an opponent who does have a super PAC and does have a motivated one percenter in his corner?’ And he said, ‘It’s like going into a boxing ring. I’m wearing boxing gloves. And the other guy has an Uzi.

Watch the entire interview »

How the States Are Trying to Rein in Dark Money

Activists rally for a constitutional amendment overturning the Citizens United Supreme Court decision on Friday, January 21, 2011 in Washington, DC. (Flickr/ Brendan Hoffman)
Activists rally for a constitutional amendment overturning the Citizens United Supreme Court decision on Friday, January 21, 2011 in Washington, DC. (Flickr/ Brendan Hoffman)

The Supreme Court has eviscerated our already thin federal campaign finance rules, so reformers have turned to the states — the “laboratories of democracy” — to do better.

Their efforts were born of frustration at the lack of movement in Washington. According to Public Citizen, 16 states have now passed resolutions calling for a US constitutional amendment to overturn Citizens United. But the arduous amendment process makes that effort unlikely to come to fruition.

Efforts in Congress seem stymied as well. Campaign finance advocates expect the DISCLOSE Act, which would require corporate disclosure of campaign donations and bar foreign-owned corporations, federal contractors and banks that received bailout funds from donating to political campaigns to be re-introduced at some point. But it’s a long shot — Senate Republicans blocked the measure in 2010, and again in 2012.

Flickr/ Erin and Lance Willett.

Flickr/ Erin and Lance Willett.

Another proposal is the Government by the People Act, which would encourage small-dollar donations and offer new public financing for elections. As of March 6, it had 140 co-sponsors in the House. Maryland Governor Martin O’Malley, a Democrat who is reportedly considering a 2016 presidential run, recently came out in support of the measure.

A major part of the problem is that both major parties rely on dark money to fuel their campaigns — although they don’t do so in equal measure. According to the Center for Responsive Politics, 85 percent of spending by outside groups that didn’t disclose their donors supported conservative causes during the 2012 election cycle. So unless there’s a massive campaign finance scandal, in practical terms, with a highly polarized Congress, there’s little hope in the immediate future of any substantive effort to rein in dark money in federal elections

So it’s at the state level that real efforts are underway to keep the voices of the wealthiest from drowning out those of the majority. Here are some campaigns to keep an eye on…

Waves crash on the pier at Fort Point as The Golden Gate Bridge lights up in the background at dusk in San Francisco, Wednesday, Feb. 4, 2009.(AP Photo/Marcio Jose Sanchez)

Waves crash on the pier at Fort Point as The Golden Gate Bridge lights up in the background at dusk in San Francisco, Wednesday, Feb. 4, 2009.(AP Photo/Marcio Jose Sanchez)

In California, lawmakers came close to passing Senate Bill 27, which arguably would have created the strictest disclosure requirements in the country. Under the bill, nonprofits would have had to disclose their donors when they first reached $50,000 in spending in an election, or when donors gave $100 for explicitly political purposes. The Sacramento Bee reports that the measure failed to reach the required two-thirds supermajority this week, when Republican lawmakers said they objected to the timeline of the bill’s implementation.

Another measure, Senate Bill 52, is California’s DISCLOSE Act. It requires the three largest funders of political ads on TV to be displayed for at least five seconds at the beginning of each spot, and has similar requirements for print and radio. It also directs voters to more information about a campaign’s financing. It passed the Golden State’s senate last year, and grassroots activists are now pushing to gain passage in the assembly.

SB 831 would force non-profits like ALEC to disclose the donors who pick up the tab for lawmakers to go on expensive junkets. The Los Angeles Times reported that the bill was inspired by a trip 18 legislators took last year that was paid for by “the California Independent Voter Project, a nonprofit group funded over the years by tobacco giant Altria Group Inc., Southern California Edison, Eli Lilly & Co., Pacific Gas & Electric Co., the California Beer & Beverage Distributors, the Pharmaceutical Research and Manufacturers Assn., Chevron Corp. and the state prison guards union.”

Gov. Andrew Cuomo delivers speech in support of campaign finance reform at the University at Buffalo Law School in Amherst, N.Y., on Wednesday, June 12, 2013. (AP Photo/The Buffalo News, John Hickey)

Gov. Andrew Cuomo delivers speech in support of campaign finance reform at the University at Buffalo Law School in Amherst, N.Y., on Wednesday, June 12, 2013. (AP Photo/The Buffalo News, John Hickey)

In New York, Governor Andrew Cuomo introduced an ambitious package of campaign finance reforms last summer. It would, as The Huffington Post’s Paul Blumenthal writes , “both target corruption and introduce public financing for state elections. It would also lower campaign contribution limits, close loopholes for corporate donations, limit spending by party housekeeping accounts, increase disclosures and strengthen enforcement.”

According to The New York Times, “The prospect of greater competition is the reason many in Albany have tried to stop public financing.”

But encouragingly, in the last few days the Assembly included the governor’s campaign finance proposal in its version of the budget. The problem, as is often the case in Albany, is the Senate, controlled jointly by Dean Skelos, the Republican leader, and Jeffrey Klein, an independent Democrat.

Because the reform package is part of the proposed state budget, a vote must take place by the end of the month.

Going back to the days when the state fought against the political control of the copper barons, Montana has a rich tradition of regulating campaign spending that creates the “appearance” of corruption. In 2012, the Supreme Court struck down a Montana law that directly conflicted with Citizens United. But that ruling applies to federal elections, and Andy Kroll reports that a group of Republicans is trying to get an initiative on the 2014 ballot that would ban dark money from state contests.

Image: Center for Responsive Politics/ Opensecrets.org. Click to enlarge.

Image: Center for Responsive Politics/ Opensecrets.org. Click to enlarge.

Perhaps the most innovative attempt to combat the influence of dark money is a new initiative called the States’ Unified Network (SUN) Center. The initiative will start out as an informal working group bringing together campaign finance watchdogs from 10 states — New York, California, Alaska, Idaho, Maine, Montana, Maryland, Massachusetts, Washington and Iowa, along with New York City — to collaborate on efforts, The Washington Post notes, to “highlight proposed legislation and standing campaign finance law. They will combine records of campaign donors into a multi-state database. Ann Ravel, chairwoman of the California Fair Political Practices Commission, told the Post, “Ultimately, the group could go in many other directions, such as joining enforcement matters, potentially joining in some sort of pressure groups of states with the federal government.”

The SUN Center has information about several other legislative initiatives underway in Michigan, New Jersey, Arizona, Massachusetts and North Carolina.

And pro-democracy activism isn’t limited to the state level. The Move to Amend coalition lists 383 local resolutions calling for Citizens United to be overturned that have either been passed or are being considered.

As Kim Barker told Bill Moyers this week, “the Supreme Court was naive about how campaign finance really works.” It appears that a growing number of Americans aren’t as easily fooled.

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