Lloyd Blankfein, Chairman and CEO of Goldman Sachs, speaks at the Clinton Global Initiative, in New York. (AP Photo/Craig Ruttle)
Billionaire Pete Peterson once thought it would be a good idea to make rich CEOs the public face of his long-standing campaign to slash Social Security.
Guys like Lloyd Blankfein of Goldman Sachs and GE’s Jeffrey Immelt have indeed won many a battle in Washington. And so it was perhaps understandable for Peterson to assume these corporate chieftains could deliver victory on austerity.
But as Congress heads toward yet another budget showdown, America’s most powerful CEOs are finding that their enormous wealth can also be a double-edged sword.
Last year Peterson put up the initial $5 million to create the Fix the Debt campaign, a PR and lobby machine led by more than 135 CEOs of major corporations. Honeywell CEO David Cote says he organized fellow corporate leaders to chip in the rest of the organization’s $45 million initial budget. MORE
Image: Center for Media and Democracy/ Progressnow
In 1971, Lewis Powell, who would become a Supreme Court justice the following year, penned a memo calling on the American business community to aggressively engage in shaping the country’s political discourse and regulatory landscape. The “American economic system is under broad attack,” he wrote. He said the time had come to fight back. “Business must learn . . . that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination — without embarrassment and without the reluctance which has been so characteristic of American business.”
For Powell, it was all about organizing and planning over the long-term to sway public opinion and shape public policies. “Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations,” he wrote. MORE
A petition to the Securities and Exchange Commission to require more sunlight around corporate political spending has garnered hundreds of thousands of public comments, and almost all of them are in support of the rule change. Of the 643,599 public comments on the proposal to require that public companies disclose use of corporate resources for political activities to shareholders, more than 99.7 percent were in support of such a rule.
Since the Supreme Court’s 5 to 4 Citizens Unitedruling in 2010, corporations have been free to spend as much money as they want on independent expenditures in support of or opposition to political candidates. While some of these expenditures are subject to existing disclosure rules, many keep their spending hidden by funneling the money through tax-exempt groups like the U.S. Chamber of Commerce, Karl Rove’s Crossroads GPS, the Koch Brothers’ Americans for Prosperity, and Pat Boone’s 60 Plus Association. Legislation to require meaningful disclosure of who is really behind these ads has been blocked by Congressional Republicans since 2010.
Supporters of transparency have urged the SEC to use its rule-making authority to solve part of the problem. In 2011, ten professors of law petitioned to the Commission, urging it to require public companies to disclose all significant political spending so shareholders can hold their companies accountable. MORE
Noa Bashuk uses a tablet to follow along with her teacher in an eighth grade Spanish class at Autrey Mill Middle School in Johns Creek, Ga. on Thursday, May 9, 2013. (AP Photo/John Bazemore)
Major electoral contests – governor’s races in New Jersey and Virginia, and wins by mayors-elect Martin Walsh in Boston and Bill de Blasio in New York City – caught progressives’ attention a week ago. Voters concerned about the future of public education, however, might want to pay more attention to what happened last week in Bridgeport, Conn. As this website and Salon both noted, that city’s school board race was among the top “under-the-radar” races to watch. Indeed, Bridgeport is a microcosm of education policy battles taking place across the country, and its activities have broad implications for many districts and states confronting similar issues.
Bridgeport is the largest school district in Connecticut – one of the nation’s wealthiest states and also the one with the largest achievement gaps – and among its lowest-performing (it ranks 159 out of 162 districts based on average student math and reading test scores). This should not be a surprise; Bridgeport was hard hit by the deindustrialization wave that swept across New England in the 1970s and 1980s and has since struggled to recover. In 2010, median household income in the racially mixed city was $34,658. In New Canaan, whose schools post the state’s highest average test scores, median household income among the town’s residents, 95 percent of whom are white, was $141,788.
Large achievement gaps in Bridgeport and other Connecticut cities led Gov. Dannel Malloy to advance a series of education policies, from substantial new investments in pre-K programs and in low-income school districts to tying teacher tenure to student test scores. The gaps have also drawn the attention of prominent self-proclaimed reformers, including NYC Mayor Michael Bloomberg and former chancellor of the Washington, DC public schools Michelle Rhee as well as her Students First advocacy group. As such, Bridgeport has become an epicenter of increasingly heated battle over not only education policies, but also which voices should be central to the discussions about them. MORE
WikiLeaks once again provided a valuable public service, releasing a working draft of the Trans-Pacific Partnership’s (TPP) chapter on intellectual property. The chapter has many of the provisions that critics had feared.
Specifically, there are several provisions that will increase protectionism in the prescription drug market, pushing up prices in the countries that sign the agreement. There are also provisions that would strengthen copyright protection, increasing the responsibility of third parties to assist copyright holders in enforcing their copyrights.
The greater protection for prescription drugs takes a variety of forms. For example, there is wording that would require countries to allow patents for new combinations of existing drugs. This has been a hotly contested issue internationally.
Republican gubernatorial candidate, Virginia Attorney General Ken Cuccinelli, delivers his concession speech with his wife, Teiro, during a rally in Richmond, Virginia, on Nov. 5, 2013. Cuccinelli was defeated by Democrat Terry McAuliffe. (AP Photo/Steve Helber)
Tuesday, as he conceded defeat in the Virginia governor’s race, Ken Cuccinelli II (R) told supporters that he had come closer than polls had indicated “despite being outspent by an unprecedented $15 million.” While he and his conservative supporters now lament that money cost them the victory they felt they deserved, they have long been the defenders of the system of campaign finance non-regulation in Virginia and nationally.
Because of the Old Dominion’s anything goes system, candidates can accept millions of dollars from any individual or corporation seeking to ensure their victory. While Gov.-elect Terry McAuliffe raised over $32 million, Cuccinelli himself reported at least $19 million in donations — including hundreds of thousands from fossil fuel companies who preferred a climate-change denier to a candidate focused on green energy.
In campaign post-mortems, conservatives from Linda Chavez to Ralph Reed both echoed the candidate’s concession and blamed Cuccinelli’s loss on money. Jenny Beth Martin, national coordinator for Tea Party Patriots Inc., the nation’s biggest tea party group, lamented that the pro-corporate US Chamber of Commerce went from making seven-figure investments in the 2009 campaign for Gov. Bob McDonnell (R-VA) but spent nothing on Cuccinelli. “Just think what would have happened if the business and donor classes of the Republican Party would have helped.” Ben Domenech blamed the “donor class” as “sore losers” who threw a “temper tantrum” by not opening up their wallets for a more conservative nominee.
As Zack Beauchamp noted Thursday, Cuccinelli got “killed in the fundraising race,” in large part because business leaders did not care for his anti-corporatist stances against a tax increase to increase transportation funding and corporate welfare. Cuccinelli embraced anti-government populist ideas — as well as socially conservative ones — but not the priorities of some business interests. Had Cuccinelli embraced their agenda, as McDonnell did in 2009, others in the business community might well have supported him as enthusiastically as the energy sector did.
In an October press release called “Big Money,” the Cuccinelli campaign highlighted a fundraising appeal, sent by the chairman of the University of Virginia Council of Foundations to a hedge fund manager, explaining that he hoped to enlist a large number of UVA alums to support McAuliffe. “The more influential names we have associated with our shared voice the more likely we are going to have the future governor’s ear,” he wrote.
Therein lies the problem. If money really is the determining factor in who wins elections, candidates who agree with powerful moneyed interests like the Chamber will always have the upper hand over those who do not. And as Virginia saw with McDonnell’s Star Scientific scandal, those wealthy benefactors will be the ones with the freest access to the politicians they bankroll. And if states are the laboratories of democracy, as the late Justice Louis Brandeis suggested, the experiment of unlimited money in Virginia might be a warning sign to conservatives nationally that “anything goes” campaign finance laws may not always work out in their favor.
Josh Israel is a senior investigative reporter for ThinkProgress at the Center for American Progress Action Fund. Previously, he was a reporter and oversaw money-in-politics reporting at the Center for Public Integrity, was chief researcher for Nick Kotz’s acclaimed 2005 book Judgment Days: Lyndon Baines Johnson, Martin Luther King Jr., and the Laws that Changed America and was president of the Virginia Partisans Gay & Lesbian Democratic Club.
Sen. Wendy Davis (D-Fort Worth) begins a filibuster in an effort to kill an abortion bill, Tuesday, June 25, 2013, in Austin, Texas. The bill would ban abortion after 20 weeks of pregnancy and force many clinics that perform the procedure to upgrade their facilities and be classified as ambulatory surgical centers. (AP Photo/Eric Gay)
In the dog days of summer, the “war on women” erupted into a full-fledged conflagration, as heated battles to roll back reproductive rights in the US Congress and in state legislatures across the nation were met with protests from women’s rights groups and grassroots uprisings. While the religious right had, over the years, used its influence to restrict access to abortion and contraception and push for feticide and personhood laws, nothing quite like the anti-choice legislative frenzy seen this past summer had taken place before the Koch brothers entered the war, bringing reinforcements from their legion of wealthy associates.
In North Carolina, thousands of activists gathered weekly, throughout the legislative session, at the state capitol in Raleigh for Moral Monday protests of a host of right-wing measures ranging from voter ID laws to rollbacks of reproductive rights. Many were arrested for trying to enter the capitol building.
And in Texas, the state capitol building in Austin was crammed with protesters as state Sen. Wendy Davis (D-Fort Worth) earned her place in Lone Star history with her 11-hour filibuster of a draconian anti-choice bill, SB 5, which, after being stopped by Davis and her pro-choice allies with a dramatic run-down of the clock, ultimately passed into law as HB 2 in a subsequent special session called by Republican Gov. Rick Perry.
Back in Washington, DC, the Republican-controlled House of Representatives passed HR 1797, a bill that would ban abortion after 20 weeks post-conception.
To the untrained eye, it seemed that a sudden wildfire of anti-choice bills had engulfed the legislative agenda, but in truth the assault had been years, even decades, in the making. It wasn’t until three years ago, however, that conditions became so hospitable for the arsonists who trained their flame-throwers on these fundamental freedoms. MORE
“We’ve found through our experience that timid supplications for justice will not solve the problem,” declared the Rev. Martin Luther King Jr. in 1967 as he announced the civil rights movement’s pivot toward the economic justice message of the Poor People’s Campaign. “We’ve got to massively confront the power structure.”
With those words, King spoke a language every bit as American as his “I Have a Dream” message of four years earlier. There are times for optimism and hope, and there are times for acknowledgment of an overwhelming challenge and the radical demand that it be addressed. Often they merge, and in these moments, great movements fundamentally redirect the nation. Tom Paine knew that. So did Frederick Douglass, and Jane Addams, and A. Philip Randolph. There is a rich American tradition of recognizing that some crises cannot be answered by tinkering at the edges of the problem. At such times, the people have responded with a boldness that ushered in new political parties or a New Deal, new understandings of the rights of citizens and the responsibilities of governments. And they have amended the Constitution, not once or twice but 27 times. MORE
In 2010, a wave election propelled tea party-endorsed candidates into statehouses across the country. Last week, the Economic Policy Institute issued the first comprehensive report surveying the impact that conservative legislation has had on workers’ rights in the past two years.
“The Legislative Attack on American Wages and Labor Standards, 2011–2012” reveals the existence of a multifaceted, nationwide campaign to not only deprive working people of the right to join a union, but also keep wages low and make it harder for people to take their employers to court when they’ve been wronged. Moyers & Company caught up with the report’s author Gordon Lafer – a political economist at the University of Oregon’s Labor Education and Research Center – to discuss his findings. Below is a lightly edited transcript of our conversation.
Joshua Holland: Your report looks at a wide array of state laws — passed or proposed — that undermined workers’ rights in 2011 and 2012. You say that this is an unprecedented assault on working people.
Reading your report, it struck me that this is exactly what people mean when they say that political inequality follows economic inequality: You have these growing fortunes on the one hand and then declining political clout on the other hand. It just seems like this is a cycle that keeps continuing.
To what degree is this a result of the 2010 wave election, when Republicans took a number of statehouses?
Gordon Lafer: What you’re saying is very important, and what’s even more important than just thinking about the wave election is that 2010 was the year that the Supreme Court said that corporations can spend unlimited amounts of money on politics [in its Citizens United decision]. MORE
Cindy Black, right, and Jill Hill park a car with a giant apple on top that promotes a yes vote on I-522 in Washington state -- which would require genetically engineered foods to be labeled as such -- on Oct. 17, 2013 in Tacoma, Washington. Ahead of Election Day, campaigns on both sides of Initiative 522 have bombarded the airwaves in one of the most costly initiative battles, funded in large part by outside money, in state history. (AP Photo/Ted S. Warren)
Today is Election Day and outside money is flooding campaigns in small towns and big cities across the country in amounts not seen in past off-year elections.
The New York Timespoints to the cash that the billionaire Koch brothers have thrown into local races to help sway voters in Iowa, Kansas, Ohio and Texas.
In Coralville, Iowa (population: 20,000), the Koch brothers’ Americans for Prosperity (AFP) jumped into the race to elect the town’s next mayor and city council with an aggressive campaign — including direct mail, newspaper advertising and knocks on doors — focused on the tiny town’s finances.
It’s just one local race AFP has tried to swing — often with success — since the Citizens United decision in 2010. MORE
Ted Cruz recently visited Iowa, where he went hunting with Rep. Steve King. (AP Photo/Nati Harnik)
Ted Cruz has made it abundantly clear that he doesn’t care for the ways of Washington.
From the moment of his arrival in the nation’s capital, the brash Texas senator has challenged the Washington establishment and old order, declaring political war on Democrats, many of his fellow Republicans, Beltway insiders, the executive branch and pretty much everything else. More than any than other politician, Cruz was responsible for the recent government shutdown and brinksmanship that brought the country to the edge of default. Evidently, he rejects governing on any terms but his own.
“I made promises to the people of Texas that I would come to Washington to shake up the status quo,” Cruz told The New York Times in February. “That is what I intend to do, and it is what I have done in every way possible in the responsibilities that have been granted to me.”
Well, it turns out he’s not out to shake up Washington in “every way possible.” When it comes to political money, the old ways that he so often derides seem to suit Senator Cruz just fine.
So-called Leadership PACs, for example, are a staple of the status quo, as vehicles for soliciting Washington influence-money and for creating cozy relations between members of Congress and Washington lobbying interests seeking government favors. Here’s how they work: While a donor can give $5,200 to a member’s campaign committee during a six-year election cycle, the same donor can give an additional $30,000 during the six-year period to the member’s Leadership PAC. These Leadership PACs can then be deployed to support other candidates, but are more often used to pay for political and other expenses incurred by the member, other than his campaign expenses.
Cruz apparently likes this particular old way of doing business so much that it took him less than a week after he was elected to create his very own Leadership PAC – the Jobs, Growth and Freedom Fund. Even before he was sworn in as a senator, Cruz was playing the Washington money game.
And from whom did Senator Cruz solicit and receive contributions for his Leadership PAC?
How about representatives of such Washington establishment players as the American Bankers Association, Lockheed Martin, Intel, Northrop Gruman, CSX Corporation, Altria Group (parent company of Phillip Morris) and Comcast? And add to that list representatives of Union Pacific Corporation, FMR Corp (Fidelity Investments), the National Association of Broadcasters, Burlington Northern Santa Fe Corporation, Norfolk Southern, Compass Bancshares, among others.
Not exactly the voices of ordinary citizens and grassroots America.
In his new book, Extortion: How Politicians Extract Your Money, Buy Votes and Line Their Own Pockets, Peter Schweizer, a fellow at the Hoover Institution, describes Leadership PACs as instruments for “a form of legal extortion designed to extract campaign contributions.”
Leadership PACs have long been considered political slush funds designed first and foremost to benefit the members of Congress who control them rather than to support other candidates. They are certainly not viewed as a means for challenging the old ways or the Washington establishment, which is the principal funder of most Leadership PACs.
Cruz is certainly not taking on the old ways with his strong defense of secret money in American politics. In October, when Cruz put a hold on Thomas Wheeler’s nomination as a commissioner of the FCC, the federal agency that oversees the broadcasting industry, he said he wanted to know Wheeler’s views about whether the FCC had the authority or intent “to implement the requirements of the failed congressional DISCLOSE Act,” according to a Cruz spokesman. Cruz dropped his hold on Wheeler this week after Wheeler reportedly agreed not to make disclosure of political ads by broadcasters a priority for the agency.
But Cruz seems almost obsessed with the DISCLOSE Act, intended to close loopholes that have allowed hundreds of millions of dollars in secret contributions to be spent in federal elections; earlier in the year, he claimed that it raised “grave constitutional concerns for speech protected by the First Amendment.”
Cruz might want to brush up on his First Amendment law. By an 8 to 1 vote, the Supreme Court in the Citizens United case upheld disclosure requirements for corporations and others who make independent campaign expenditures. Justice Anthony Kennedy, writing for the court, said in upholding disclosure: “Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”
Campaign finance disclosure requirements were first upheld as constitutional by the Supreme Court in 1976 in Buckley v. Valeo, on the grounds that they “deter actual corruption and avoid the appearance of corruption,” and aid voters “in evaluating those who seek federal office.”
Conservative Justice Antonin Scalia provided one of the most powerful defenses of disclosure in Doe v. Reed, a 2010 case involving a referendum petition. Scalia wrote in a concurring opinion, “Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed.”
So what, then, are we to make of Cruz’s “war” on the status quo? Leadership PACs and secret money play a central role in the exercise of power in Washington – and on both subjects, the Texas senator is on the side of powerful, wealthy interests at the expense of ordinary Americans.
Not that it’s stopping him from donning populist garb. In Iowa last week, Cruz, who is flirting with a president run, styled himself as a Beltway outsider. “I’m convinced we’re facing a new paradigm in politics; it is the paradigm of the rise of the grassroots. It has official Washington absolutely terrified,” he said.
But back in Washington, Cruz is already playing the insiders’ influence-money game, and competing with the best of them.
Fred Wertheimer is the founder and president of Democracy 21, a nonprofit, nonpartisan organization that works to strengthen our democracy and promotes government integrity, accountability and transparency measures to accomplish its goals.
In America, we expect that our courts are fair and impartial — that their primary interest is to serve justice under the law. But increasingly, state high courts are falling prey to the same out-of-control, post-Citizens United election spending that has plagued legislative and executive races during the past two election cycles.
A supporter looks on during a news conference by the Iowa State Bar Association in Des Moines, Iowa. In 2012, the Iowa State Bar Association had to take a bus tour to counteract a smear campaign of Justice David Wiggins by out-of-state conservative politicians who opposed the Iowa Supreme Court.
Thirty-eight states elect their state Supreme Court justices and, despite the courts’ supposed insulation from politics, during the 2011-2012 cycle huge sums of money poured into these elections. A new report by the Brennan Center for Justice, Justice at Stake and the National Institute on Money in State Politics finds that over $56 million was spent on state high court races across the country. A significant chunk of this money came from special interests one would expect to find operating at the national level, such as the Koch brothers-funded Americans for Prosperity and the National Rifle Association-linked Law Enforcement Alliance of America. The spending was concentrated among a small handful of interest groups and political parties — the top 10 spenders shelled out $19.6 million of the $56.4 million total.
And 2011-2012 also saw a new high for TV ad spending for state high court races — $33.6 million. The report found that when candidates create their own ads, or when political parties create ads to help a candidate’s campaign, the ads are positive, promoting the candidate. But when special interest groups buy ads in judicial elections, the content promotes a candidate less than half the time, and is more focused on portraying the opposing candidate in a negative light. These groups often have opaque names — Iowans For Freedom, Greater Wisconsin Committee — making it difficult for voters to determine who is behind them. Increasingly, the courts are becoming as much of a target for well-funded groups with an agenda as the other two branches of government.
“The courts are a great target because they can’t fight back on their own,” says Bert Brandenburg, executive director of Justice at Stake, a nonpartisan campaign working for fair and impartial courts. MORE
Investors are hungry for more information about the companies they invest in. Shareholders — the owners of the company — deserve to know where their money is going. Currently, it’s too easy for one person in corporate management to secretly spend company money on pet political projects. Disclosure would empower shareholders to engage in oversight and ensure that political expenditures are in the firm’s interest. And transparency helps investors avoid companies where corporate management consistently engages in risky political behavior.
Top corporate leaders increasingly recognize the value of transparency. For example, Microsoft has made its political activity public since 2007. As Microsoft executive Dan Bross explained, “By not being transparent and open, we’d be increasing the risk to the corporation.” Bross has pushed transparency as a way for corporate America to regain the public’s trust. Now the software giant has made its reports even more detailed, in response to shareholder requests.
Since then, those Dems must have had a change of heart. On Tuesday, nearly all of them flip-flopped, and voted against a House bill that would have undermined the same safeguards the letter opposed.
Here’s some background, which was covered in our August report: The Department of Labor, which oversees the law that sets minimum standards for many retirement plans, is considering a rule that would simply require retirement investment advisers to act in the best interest of their customers. The letter, which was signed by 28 out of the 43 members of the Congressional Black Caucus (CBC) — a group of lawmakers that advocates for low-income people and minorities — and four other Democratic lawmakers, sought to delay and weaken the rule. Consumer advocates and government officials argued the rule could provide much need protection for small investors: MORE
This article will appear in the November 11, 2013 edition ofThe Nation.
George Mason University School of Law Professor Todd Zywicki, who also works for Global Economics Group.
Professor Todd Zywicki is vying to be the toughest critic of the Consumer Financial Protection Bureau, the new agency set up by the landmark Dodd-Frank financial reform law to monitor predatory lending practices. In research papers and speeches, Zywicki not only routinely slams the CFPB’s attempts to regulate bank overdraft fees and payday lenders; he depicts the agency as a “parochial” bureaucracy that is “guaranteed to run off the rails.” He has also become one of the leading detractors of the CFPB’s primary architect, Elizabeth Warren, questioning her seminal research on medical bankruptcies and slamming her for once claiming Native American heritage to gain “an edge in hiring.”
Zywicki’s withering arguments against financial reform have earned him guest columns in The Wall Street Journal, The Washington Times and on The New York Times’s website. Lobbyists representing the largest consumer finance companies in the country have cited his writings in letters to regulators, and the number of times he has testified before Congress is prominently displayed on his academic website at the George Mason University School of Law.
What isn’t contained in Zywicki’s university profile, CV, byline or congressional testimony is the law professor’s other job: he is a director of the Global Economics Group, a consulting business that boasts in a brochure that its experts have been hired by industry to influence the CFPB and other regulatory agencies. Nor does Zywicki advertise Global’s client list, which includes some of the biggest names in the financial industry, among them Visa, Bank of America and Citigroup. MORE