Lost in the widening scandal over the IRS targeting of conservative political groups: The fact that most of them were not the big political players of 2012.
Elsewhere in the Sunlight network
- Surge of immigration lobbyists fueled by push for high-skilled foreign workers Sunlight Reporting Group
- Health group airs ad backing Obama EPA nominee Sunlight Reporting Group
- Apple lobbies on taxes more than any other subject Sunlight Reporting Group
- Reporter's notebook: How we came up with that campaign finance maze Sunlight Reporting Group
- 2016 preview? Three videos by GOP groups all target Hillary Clinton Sunlight Reporting Group
As often happens, Washington’s big story of the moment--that the Internal Revenue Service targeted dark money groups that filed for nonprofit status if they had the words "tea party" or "patriot" in their monikers--misses the big point.
Of course the IRS should never be used for political purposes; it should apologize for giving an extra scrutiny to groups requesting non-profit status if they appeared to be Tea Party affiliates. Our question is: Why did they pick on the little guys when they’ve got so many larger, more legitimate targets for scrutiny?
Of the roughly 1,040 Pentagon procurement programs--the $99.3 billion part of the Defense budget devoted to purchasing new equipment--some 212 of them, worth $21.4 billion, fund the work of a single company.
The Army wants $551 million to buy surface-to-air missiles from Lockheed Martin. The Navy wants to spend $157 million the aerospace giant's KC-130J tanker plane. The Air Force has $291 million worth of JASSM missiles on its wish list. Altogether, defense procurement programs worth $6.9 billion name Lockheed Martin as their sole contractor. And they're not the only one: 14 companies, including Boeing, Raytheon and Northrop Grumman, were the only contractor listed on programs totaling $100 million or more.
Congress is now in the midst of its secretive spending process, with members of the Appropriations Committees of the House and Senate considering programmatic and language requests submitted by their colleagues--increases or decreases in the amount spent, or changes in emphasis in each program in the federal budget. Unlike an earmark, which directed money to a single, named recipient, a programmatic request refers only to a specific program in the the federal budget.
Some requests ask for additional funding for programs with hundreds of thousands of individual beneficiaries like loans and other aid for low income housing. And some requests can benefit a handful of contractors, or even just one.
Defense Appropriations Subcommittee Chairman C.W. "Bill" Young, R-Fla., instructed colleagues to "include the applicable account and line number in the beginning of the program request description (i.e. RDTE A Line 30)." That particular account refers to the Army's Research, Development, Test and Evaluation budget; line 30 is for medical advanced research, which, according to the Army's budget justification documents for the program, includes 8 separate projects ranging from treating combat injuries to breast cancer.
In contrast, line 4 of the Navy Procurement budget refers to advanced funding for Virginia Class submarines. The Navy's budget justification lists Connecticut-based Electric Boat, a subsidiary of General Dynamics, as the prime contractor (four other companies--Kollmorgen, Lockheed Martin, BAE Systems and Stanley Associates, provide components for the submarine). In 2012, during the last round of Pentagon budgeting, one of the company's home state lawmakers, Sen. Richard Blumenthal, included that line item in his programmatic requests, which he disclosed online. Blumenthal requested an additional $777.6 million to expedite work on an additional submarine. The Navy's current budget justification notes that "Advance Procurement includes $778M required to fund the 2nd FY14 SSN as proposed as a FY13 Congressional Add."
Chances are Blumenthal wasn't the only member of Congress who requested the additional funding. But because neither the Senate nor the House discloses programmatic requests, it's impossible to say how many other members of Congress added their names to the request for additional funding for the Virginia Class Submarine.
Programmatic and language requests can direct hundreds of millions of dollars to programs that benefit a specific company. But unlike earmarks, many of which went to obscure firms like Kuchera Defense Systems, companies that have their own programs are generally among the biggest defense contractors. Lockheed Martin, for example, is the sole contractor listed for procurement programs totaling a proposed $6.9 billion, an increase of $1.3 billion over the programs' budget in the last fiscal year. Boeing is the sole contractor listed on $5.8 billion worth of programs, a drop of $95 million from last year. Raytheon was listed on $2.2 billion worth of programs, Northrop Grumman for $1.7 billion, and United Technologies for $1.2 billion. Not every dollar budgeted for those programs will go to those contractors--part will pay for oversight of the project within the military and other expenses, some will go to subcontractors, but if the Pentagon buys an extra submarine, or ups the number of replacement engines for the Joint Strike Fighter it acquires, the firm that provides those items will benefit accordingly.
In the first quarter of 2013, all five companies have disclosed lobbying on the procurement budget (to see the disclosures for Lockheed Martin, click here and here; for Boeing here and here; for Raytheon here, for Northrop Grumman here and for United Technologies here).
To view or download a complete list of Pentagon procurement programs that list only one recipient in the budget justification, click here. The data comes from a spreadsheet we downloaded from the Comptroller of the Defense Department; we looked up each line item in the procurement budget justifications--available from the Army, Navy, Air Force and Defense Department--to look for contractor names. As always, if you find errors, please contact us and let us know. Note: We only looked in the procurement budget for Defense, so this by means exhausts the number of federal programs that primarily benefit one company.
U.S. Navy photo by Chris Oxley.
By making a programmatic request asking for additional funding for line 3 of the Army aircraft procurement budget, a member of Congress can direct taxpayer money to General Atomics. Increasing funding for line 7 of the Army missile procurement budget does the same for Raytheon. Line 19 of the Navy's weapons procurement funds a program supplied solely by Lockheed Martin.
Yesterday, we started exploring programmatic and language requests--the mechanism that allows individual members of Congress to ask the Appropriations Committees to provide additional funding for different programs in the President's Budget. House members face their next deadline for submitting requests, via an online system, tomorrow.
Unlike earmark requests, which Congress declared a moratorium on after Republicans captured the House in 2010, programmatic requests are not directed to a single recipient, but rather affect set levels and priorities for specific programs. The requests are not disclosed to the public.
In a letter sent to members, Rep. C.W. "Bill" Young, R-Fla., chair of the Defense Appropriations Subcommittee, instructed members to include the account and line number for each request. A spreadsheet listing all of them is available here. In addition to the spreadsheet, the Defense Department and the service branches publish thousands and thousands of pages of justifications for each program (you can access them all from the bottom of this page). These include descriptions like this one:
The F-35 Joint Strike Fighter program will develop and field a family of aircraft that meets the needs of the United States and its international partners. ... Its advanced avionics, data links and adverse weather precision targeting incorporate the latest technology available. The highly supportable, affordable, state-of-the-art aircraft commands and maintains global air superiority.
They also list the contractor--or contractors--that work on each program, like the F-35. That plane actually has more than one manufacturer involved. Lockheed Martin is the project lead while United Technologies' subsidiary Pratt & Whitney builds the engines (they're listed in the budget justification) and Northrop Grumman and BAE Systems also contribute to the project.
The F-35 in its various configurations can be found in the Airforce and Navy budget justifications--Navy Procurement Lines 5 to 8 (for carrier and short vertical take-off and landing configurations) and Air Force Procurement Lines 1-3. A member of Congress requesting additional funding for the Joint Strike Fighter is also requesting additional funding for Lockheed Martin and its partners.
There are 1,062 total procurement programs listed in Pentagon budget justifications. Sunlight has slogged through about 680 of them, of which about 145 list just one contractor. In other words, requesting additional funding for those 145 programs could benefit just one company. Generally, it's the bigger contractors that have programs all to themselves, companies like Lockheed Martin, Boeing and General Dynamics.
Some go so far as to spell out that a program is devoted to a single company, like this entry from a Fiscal Year 2013 budget justification for upgrades to an Air Force surveillance plane: "Delivery Orders were awarded on 31 July 2009 for the replacement portion of the RASP hardware and software subsystem along with Central Computer Subsystem upgrades and on 1 June 2010 for the replacement portion of the OWS computer. The contract is Sole Source to Northrop Grumman under the Joint STARS System Improvement Program II (JSSIP) contract."
Tomorrow, we'll look at a programmatic request referencing that line item.
The instructions are written in obscure Washingtonese that only an insider could understand: "Please include the applicable account and line number in the beginning of the program request description (i.e. RDTE A Line 30)." The sentence is in a letter from House Defense Appropriations Subcommittee Chair C.W. "Bill" Young, and explains one of the requirements for filing "programmatic and language requests," due starting today.
For most reporters, that kind of obscure language tends to make news antennae twitch. In this case, there's good reason: Through these requests, a member of Congress, or group of members, can express own spending priorities, such as more money for community health centers or for various loan and aid programs that support low income housing. They may also give members a way to direct money to big contributors.
This is the third year that Congress will go through the appropriations process without earmarks, the line items in spending bills that allowed a member to direct money to urgent local priorities -- or political cronies, depending on one's point of view. But it turns out, there's another way for members to ask for additional funding above and beyond what President Barack Obama requested in the budget he submitted to Congress last week, more than two months late.
Beginning in 2009, House and Senate rules required members to disclose their earmark requests online. In this case, because programmatic and language requests are not earmarks--they do not specify individual recipients--disclosure rules do not apply.
Bob Rapoza, executive secretary of the National Rural Housing Coalition, which is pushing for more money for low income housing along with Rep. Rubén Hinojosa, D-Texas, explained how the system works: Members circulate "Dear Colleague" letters asking support for funding. "By signing onto it, members are agreeing to send a programmatic request," he said. Rapoza added that, "All the programs we support have never been in an earmarked account. All the money is distributed on a competitive basis."
To borrow the jargon of social media, think of it as "liking" a request to spend taxpayer dollars: More signers mean more programmatic requests, which means a better chance to secure the funding. In his instructions, Young asks each member co-sponsoring a programmatic request for the Defense appropriations bill to "use identical language" and to include "a scanned copy of the group request letter."
And given the nature of the Pentagon's budget request, it's entirely possible for a member or group of members to steer money to a single recipient. That's where that Washingtonese we started with comes in. "RDTE A Line 30" refers to funding for the Army's Research Development Test and Evaluation budget. Line 30 refers to a specific program--Medical Advanced Technology--that the Army describes in its budget justification book, available here. In 24 pages of budget numbers and program descriptions, one finds that some components of the project are "congressionally directed," others are described as congressional interest items. The recipients include a multitude of military and government research institutions. Other programs, however--particularly in the procurement section of the Defense budget--list just a single recipient.
Tomorrow, we'll take a closer look at those.
Investigative journalists Donald L. Barlett and James B. Steele are in Washington, D.C., today to talk about their new book, The Betrayal of the American Dream. I've read it, and if there's one takeaway from I can share without spoiling it, it's this: The roots of the current economic insecurity felt by millions of Americans go well beyond the issues and programs promoted by politicians of either party. And as we kick off the Republican Convention (which Sunlight Live will cover), the Democratic Convention (ditto) and launch into the fall campaign season, it's unlikely that either candidate will address them.
Betrayal describes the impact of a series of policies adopted by Washington on middle class and working class Americans; the work focuses more on the stories of the victims than on those who made the policies. Some of their earlier works--America: What Went Wrong (published in the Philadelphia Inquirer, which distributed for free more than 225,000 reprints of the series; the book went on to be a best-seller), America: Who Really Pays the Taxes and America: Who Stole the Dream (full disclosure: I was fortunate enough to work as their researcher on that book), go into great depth about how special interests used lobbying, campaign contributions and the revolving door to get their way in Washington.
I thought of Barlett & Steele recently when historian Niall Ferguson touched off a firestorm by writing a Newsweek cover story called "Hit the Road, Barack" (alternative title suggestion: 2008 John McCain supporter prefers Romney over Obama). Ferguson wrote, as part of his brief against a second term for the incumbent, "Welcome to Obama’s America: nearly half the population is not represented on a taxable return—almost exactly the same proportion that lives in a household where at least one member receives some type of government benefit. We are becoming the 50–50 nation—half of us paying the taxes, the other half receiving the benefits."
In a rebuttal to Ferguson's piece, Matthew O'Brien of the Atlantic responded:
It is true that 46 percent of households did not pay federal income tax in 2011. It is not true that they pay no taxes. Federal income taxes account barely account for half of federal taxes, and much less of total taxes, if you count the state and local level. Many of those other taxes can be regressive. If you take all taxes into account, our system is barely progressive at all. But why do almost half of all households pay no federal income tax? Because they don't have much money to tax. Here's the breakdown from the nonpartisan Tax Policy Center. Half of these households are simply too poor -- they make under $20,000 -- to have any liability. Another quarter are retirees on tax-exempt Social Security benefits. The remaining households have no liability because of tax expenditures like the earned-income tax credit or the child credit.
Left unsaid by either writer is what's led to this state of affairs. Barlett and Steele point to multiple causes, starting with changes to the Internal Revenue Code stretching back decades that favored corporations and the wealthy. They also cite trade policies that led U.S. manufacturers to seek cheaper labor around the world (in some cases, the U.S. government supplied money and other incentives to foreign businesses to build industries that displaced U.S. workers), changes in the social contract that weakened or altogether eliminated benefits for workers, and deregulatory efforts that upended entire industries. These policies enacted without concern for their effects on the middle class, or were sold to Americans as policies that would make us all better off.
One catches glimpses from time to time suggesting all is not going as planned. Surveying an IRS report on the 400 income tax returns reporting the highest gross adjusted income, Forbes noted that this tiny fraction of taxpayers reported 16 percent of all capital gains. At the other extreme, Pew Research Center reported that median net worth--not income, but total assets amounted in a lifetime--plunged 28 percent for middle class households between 2001 and 2011. "Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future," the report stated.
These trends didn't start in 2000, but long before, and Barlett and Steele have spent decades documenting them. In the first part of America: What Went Wrong, published more than 21 years ago, Barlett and Steele addressed the same tax numbers that Ferguson blames on Barack Obama's America, and O'Brien offers as an unremarkable fact of life. In the midst of a 1,600-word passage in which they analyze tax statistics--yes, you read that right, 1,600 words in a newspaper article on tax statistics--they documented the exploding incomes of those at the top against the much more sluggish growth of incomes for those in the middle. They predicted:
Because of the dramatic increase in their numbers, the over-$500,000 group is accounting for a larger share of overall income tax collections at the same time their individual payments have fallen off sharply. In 1980, they paid $2.8 billion in taxes, or 10 percent of total individual income taxes. In 1989, they paid $59.4 billion, or 14 percent of the total. If this trend continues, those at the top will pay an ever-mounting share of the taxes. But that's because everyone else will be falling further behind. Consequently, they will have less income to be taxed.
That's precisely what's happened. The top 1 percent of tax filers, with average income of about $960,000, paid a staggering 37 percent of federal income taxes. The bottom 50 percent of taxpayers paid just 2 percent.
In that same lengthy passage on tax statistics, Barlett & Steele noted the squeeze that middle class families faced:
In 1970, a Philadelphia family with income of $9,000 to $10,000--median family income that year was $9,867--paid a total of $1,689 in combined local, state and federal income and Social Security taxes. In 1989, a Philadelphia family with income of $30,000 to $40,000--median family income that year was $34,213--paid $8,491 in combined local, state and federal income and Social Security taxes. Thus, while these taxes consumed 17.8 percent of a middle-class family's earnings in 1970, by 1989 they took 24.3 percent of the family's income. When real estate taxes, sales taxes, gasoline taxes and other excise taxes and local levies that have gone up are added in, the middle-class family's overall tax burden rises to about one-third of family income.
As to those on the bottom:
Almost half of all Americans who had jobs and filed income tax returns in 1989 earned less than $20,000. Of the 95.9 million tax returns filed that year by people reporting income from a job, 47.2 million came from people in that income group. They represented 49 percent of all such tax filers. Between 1980 and 1989, the average wage earned by those in the under-$20,000 income category rose $123--from $8,528 to $8,651. That was an increase of 1.4 percent. Over the decade, the average salaries of people with incomes of more than $1 million rose $255,088--from $515,499 to $770,587--an increase of 49.5 percent. That, it should be stressed, was their increase in wages and salaries alone.
Here's the most astonishing thing about that last passage. In 1989, 49 percent of Americans with income from wages and salaries reported income under $20,000. Thirty years later, that number looks slightly better: In 2009, according to statistics from the IRS, 45 percent of returns reported the same level of income (you can download the data by clicking here). But that doesn't take into account the impact of inflation. So $20,000 in 2009 is worth only $11,559.78 in 1989 dollars. In other words, the filers of some 52 million tax returns and their dependents didn't improve or stay even--they fell further behind, seeing their real earnings drop by 42 percent.
In all the speeches and punditry we'll hear at the conventions, that fact is unlikely to be mentioned by either party.
You heard it here first (and here more recently): President Barack Obama is all but beating the pants off of Mitt Romney when it comes to fundraising. There's no contest. Romney's not even close. In fact, despite out raising Obama by $26 million in July, Romney fell even further off the pace he'd need to maintain to match Obama's money machine--he's about $132 million behind with three full months of fundraising to go.
A number of stories have suggested the opposite, that Romney is outpacing Obama, with one report--from Jane Mayer in the New Yorker--suggesting that Obama is being out raised because he isn't very good at fundraising. This would be the same Barack Obama who raised more money than any presidential candidate ever before in 2008, who's appeared at more than 200 fundraisers since he launched his 2012 campaign in April 2011 (according a tally kept by CBS News' Mark Knoller), who's done everything from offer small donors a chance to dine with him for a $3 contribution to guaranteed dinner access for couples with a cool $71,600 to burn.
This is a bit like saying that the Beatles weren't very good at songwriting, the Yankees aren't very good in the postseason or that Gilligan's Island didn't have much success in syndication.
It's true that in the last few months, Romney, the Republican National Committee and Romney's joint fundraising committee have reported better totals than Obama, his joint fundraising committee and the Democratic National Committee. It's also true that in 2004, after he clinched the nomination in early March, Sen. John Kerry and the DNC raised, on average, some $22 million more a month than George W. Bush and the RNC did. But like Obama in 2011, Bush spent much of 2003 raising money, building what proved to be an insurmountable cash advantage. Obama still has that same huge cash advantage.
Writing in the Washington Times, Luke Rosiak points to some of what that money is buying:
The Obama campaign had a payroll of $3 million in July, including 858 staffers in 46 states. In May, it had 700 staffers across 44 states and spent $2.6 million. The Romney team, by comparison, spent $1.7 million on payroll for 326 staffers, many of whom work part time and all of whom have Massachusetts addresses.
Just to reiterate, Obama has 858 staffers preparing for the fall campaign, doing, among many other things, voter outreach, strategic messaging, coordinating volunteer canvassers looking for likely Obama voters and all the other things campaign staffers do. Romney is competing with 326 staffers.
More from Rosiak:
The Obama campaign spent $40 million on television ads, and recently bought 600 ads in 20 of the nation’s top 50 markets, chiefly in Ohio, Colorado, Florida, Virginia and Nevada, broadcasting records show. The Romney campaign, for its part, spent $21 million, and has bought 250 ads in 17 of those markets, focusing on Ohio, Florida and Virginia but also the District.
The top 50 markets are of course just a subset of the country; the Washington Post's Mad Money ad tracker shows that the Obama campaign has spent more than $85 million on ads, while Romney's campaign has spent $51 million--some of which was directed at his opponents in the Republican primaries.
That leaves one area where Romney and Republicans have an apparent advantage: super PAC fundraising. Republican oriented groups are out raising and outspending their Democratic counterparts. But again, a comparison to 2004 is instructive. That year, Democratic 527s (the pre-Citizens United version of the super PAC) raised more than twice as much as their Republican counterparts--$395 million to $167 million, according to the Center for Responsive Politics. Yet despite the huge cash advantage, Bush defeated Kerry and Republicans held the House and Senate. It remains to be seen whether super PACs will be more effective in 2012 than the 527s were in 2004--super PACs have a freer hand after the Citizens United decision than the old 527s had--but their ability to sway a national campaign is by no means certain.
Just ask President Kerry.
They benefit from Washington fundraisers held at lobbying firms that represent bailed out companies and banks as well as the special interests that cut deals with Obama administration to support health care reform. They vote with their leadership on symbolic bills that have no chance of becoming law, but send election-year messages to single issue voters. Many have sponsored bills that provide tax breaks for a single company (often a campaign contributor), while others have launched caucuses to represent special interests. They tout projects in their districts made possible by federal largesse.
They're the House freshmen class that rode an anti-incumbent wave to Washington, promising to end business as usual on Capitol Hill. But a Sunlight analysis of their fundraising, proposed legislation, press releases and other data shows that the 89 new members--some 20 percent of the body--that took their oath of office for the first time on January 5, 2011, have much in common with their predecessors:
Incumbent advantage: Through the second quarter of 2010, the 89 challengers who would go on to win in November collectively raised $54.6 million. Through the same period in 2012, they'd raised more than twice as much, about $120 million.
Lobbying access: The freshmen have held fundraisers at lobbying shops and townhouses of companies with significant interests before the federal government. And some have done legislative favors for special interests. For example, 26 freshmen introduced some 224 miscellaneous tariff bills--reductions in the taxes that companies that import goods must pay.
Follow the leaders: On largely symbolic votes pushed by the congressional leadership, some 90 percent or more of freshmen lent their names as cosponsors to bills that had little chance of becoming law, including bills to repeal the Patient Protection and Affordable Care Act, place limitations on abortion, and one that would require the government to mint coins celebrating the Pro Football Hall of Fame. Some 78 freshmen cosponsored the latter bill, including five Democrats.
Bringing home the bacon: While earmarks are officially banned, but many freshmen bragged about taxpayer dollars coming to their districts for universities, defense contractors and business developments. First termers issued growing press releases about Federal Aviation Administration grants to subsidize small local airports in their districts, flood control projects and federal funding for road construction.
Special interest advocacy: Freshmen members joined, or in some cases started, caucuses to promote the interests of particular industries, products or contractors. One freshmen member, Rep. Rick Crawford, R-Ark., co-founded both the Congressional Chicken Caucus and the Congressional Rice Caucus in the 112th Congress.
These and other findings will be detailed over the next two weeks, as the Sunlight Reporting Group rolls out a series of analyses, stories and posts profiling the freshmen of the 112th Congress. Dan Drinkard Lee Drutman, Breanna Edwards, Jake Harper, Becca Heller, Kevin Koehler, Kathryn Lucero, Anupama Narayanswamy, Ryan Sibley, Nancy Watzman and Lindsay Young contributed to the reporting and research.
Despite their reputation for rocking the boat, the freshmen class elected in 2010 appear to have fit the mold more than broken it; 52 of them had previous elective or government experience, with 38 having served in a legislative body. The House of Representatives counted 150 members who disclosed assets and liabilities that added up to more than a minimum of $1 million, the freshmen accounted for 11 of them.
Like their more established colleagues, they are raising money from political action committees, including those organized by groups that lobby the federal government. As challengers, they collectively raised $14.9 million from such PACs over the entire 2010 election cycle. As incumbents, and with some of the biggest fundraising months yet to be reported, they've almost doubled that, raising nearly $30 million.
They've also done favors for those interests. Rep. Tom Reed, R-N.Y., introduced bills to reduce tariffs on low expansion laboratory glassware and stoppers, lids and other closures. That legislation will benefit Corning Inc., Reed's top contributor to his congressional campaigns. Corning actively lobbied Congress for the tax breaks.
Nor are freshmen strangers to K Street--in fact, they've often gone there to raise money. Rep. John Runyan, R-N.J., a former offensive lineman for the Philadelphia Eagles, benefited from a fundraiser held at the offices of BGR Group, which represents, among others, Pharmaceutical Research and Manufacturers of America, one of the biggest supporters of the Affordable Care Act. The law and lobbying firm of David & Harman held a birthday reception for Rep. Jeff Denham, R-Calif., at their D.C. offices a few blocks from the White House; the firm count Troubled Asset Relief Program beneficiaries General Motors and Lincoln National Corp. among their clients. And Rep. Tim Huelskamp, R-Ark., who got a 100 percent voting score on "limited government" issues from the conservative Club for Growth, had a breakfast fundraiser at the offices of Alston & Bird, which lobbies for, among others, the American Hospital Association, another backer of the health care reform act.
In some ways, Huelksamp is emblematic of the conflict between rocking the boat and representing a district. In June 2011, while visiting the Siemens Wind Nacelle factory in Hutchinson, Kan., the freshmen Republican, who received a 100 percent score on his voting record from the anti-big government Club for Growth, highlighted all the jobs the private business will create and promising more to come.
"The industrial diversity of the First District of Kansas continues to amaze me," a press release issued by his office quoted him as saying. "Learning that this new plant is projected to create 400 jobs in Kansas is definitely welcome news, and we must find ways to make sure that other job creators have the confidence and assurances they need to expand their operations, too."
True to small government creed, Huelskamp added that, "Employers in other parts of the state have told me time and time again that what they need from Washington is more regulatory, economic, and tax certainty; I will continue to work for that as their representative in Congress."
Left out of Huelskamp's press release was just how the Siemens Wind Nacelle plant came to be located in Hutchinson. The Economic Development Administration, part of the Commerce Department, spent $1.7 million of funds from the American Recovery and Reinvestment Act--President Obama's stimulus bill--to build the facility Siemens chose as its factory. The stimulus will also improve rail access to the site.
Huelskamp's constituents are pressing him to do more for the local wind energy industry. Tax credits to support wind power are set to expire at the end of 2012. Despite being pressured by the former head of the Hutchinson/Reno County Chamber of Commerce, Huelskamp indicated opposition to energy subsidies that end up distorting the market. Earlier, however, he did tell the Wichita Eagle that "We need to make sure such phase-outs are strategic and as seamless as possible."
Spoken like the true incumbent he now is.
Want to know how to follow the money in an age of Super PACs, 501(c)s and unlimited contributions? Tomorrow at 2 p.m., the Poynter Institute and the Sunlight Foundation are offering a Specialized Reporting Webinar to teach you to do just that, sponsored by the Robert R. McCormick Foundation. As a bit of a preview, here are a few thoughts on what we've seen so far, and what to look for in 2012:
1) Contributions are only half the story. We know the names of big donors, like Sheldon Adelson, Harold Simmons and Jeffrey Katzenberg. We need to pay more attention to what they want in return. Paul Begala, the Democratic consultant recently told NPR, "Jeffrey Katzenberg is our largest donor. He gave us $2 million. He's not going to sell any more tickets to Kung Fu Panda 2 if Obama gets a second term. He's just doing it because he believes in his country." In fact, Vice President Joe Biden personally negotiated a bigger share of the box office for U.S. studios from Chinese theaters--and consulted with Katzenberg throughout the negotiations. Katzenberg may not sell more tickets, but thanks to Biden he'll make more money on those that he does sell. You have to follow more than the money going to the politicians.
2) Hard money is still king. As of this writing, our super PAC tracker shows that super PACs collectively have raised $212 million in the 2012 election cycle (to find the latest number you can download the data here). That's obviously a lot of money, but consider that, according to the Federal Election Commission, regular political action committees--the Clark Kent-ish squares which accept contributions of no more than $5,000 a year from individuals--have raised $839 million, according to the FEC. That's almost four times as much. And politicians and parties aren't faring too badly either: House campaigns have raised $606 million while Senate campaigns have raised $341 million (latest numbers are here). Presidential campaigns have reported raising $459 million, while the six political party committees, from the Democratic National Committee to the National Republican Congressional Committee, have raised $599 million. That's a combined total (candidates for office and parties) of $2 billion, nearly ten times what super PACs have raised. Keep your eyes on the hard money.
President Barack Obama has attended more than 160 fundraisers since entering office, and Mitt Romney has begun raising as much money, sometimes more, than Obama. Sure, super PACs are raising a lot of money and have had a huge impact--the candidacies of Newt Gingrich and Rick Santorum wouldn't have gotten nearly as far as they did without them. But don't ignore the hard money.
3) Lots of money is undisclosed--but necessarily the money you're thinking of. George Soros and the Koch Brothers have more than support for drug legalization in common. They're pursuing the same strategy--pumping money into grassroots, get-out-the-vote activities, as are other big donors. In Wisconsin's recall election, 2.5 million Badger staters went to the polls to cast votes for Gov. Scott Walker or his opponents; in 2010, in the regularly scheduled election, 2.1 million turned out. The increase is in part the result of a huge amount of get out the vote spending by both sides (my colleague Kathy Kiely wrote about an example here). There's a tremendous amount of under-the-radar grassroots organizing going on, and a huge amount of this activity occurs outside party channels and outside of disclosure channels. Labor unions, of course, did this for years. Now informal networks of tea party activists and nonprofits like Americans for Prosperity are in the ballgame. And what this allows for is...
4) The most important messaging won't be broadcast. Yes, there will be way too many television, cable and radio commercials loaded with lies, damned lies and statistics, and paid for by (see number 2 above) groups that do not disclose their donors, but the most important messages might be aired as part of those get out the vote operations. In 2004, the campaign of George W. Bush pioneered data mining techniques which, as the Washington Post reported, they used to crunch consumer and other data, developing 32 separate voter profiles, and targeting messages to each type of voter. The campaign also built an army of volunteers to deliver some of those messages in person. Result: they turned out an additional 10 million voters, and Bush was reelected.
We already know that the Obama campaign has its data mining operation up and running, and will try to reprise or surpass its huge 2008 volunteer effort. The Romney campaign has is focusing on digital persuasion--Zac Moffatt, the campaign's digital director, explains how they're reaching the millions of adults that have tuned out broadcast TV at the Personal Democracy Forum. Romney's campaign has paid Moffatt's company, Targeted Victory, more than $5 million, according to the Center for Responsive Politics.
Of course super PACs and big donors have had and will have a huge impact, as will the onslaught of ads by shadowy groups that don't disclose their donors, but those staid and steady Washington interests, the political action committees, are funneling many millions more into the coffers of congressional campaigns. Reports on the fundraisers with the likes of Anna Wintour or Donald Trump should serve to remind how critical raising hard money is to candidates. And while we no doubt will be inundated with ads from nonprofits that don't disclose their donors, both campaigns and nonprofit groups will have messaging operations that won't be broadcast, but will be heard.
Please join us for the Webinar tomorrow at 2 p.m. -- register here!
The strange case of John Edwards--who has been humiliatingly undressed as a scoundrel and the very opposite of what he pretended to be in two runs for the presidency--sheds some light on the relationship between politicians and donors and serves as a reminder of how close the bond between those who raise money and those who donate it can be.
Forget about the Faulkner-esque fall of the house of Edwards and all it entails, a description of which could stretch on indefinitely through a whole host of tawdry adjectives, deceptive nouns and lying verbs, and focus on the most essential facts. Edwards found himself in a jam and needed a favor--basically, money. A pair of wealthy donors to his campaign--the late Fred Baron, the multimillionaire trial lawyer who was Edwards' national finance chairman, and heiress Rachel "Bunny" Mellon--provided it. The money did not go to directly to Edwards or his campaign, and the campaign did not disclose the payments as contributions, nor what they paid for as expenditures.
The government argued that the payments were in fact for campaign purposes--keeping Edwards as a viable candidate by hiding information from the public. The money from Baron and Mellon exceeded campaign finance limits, and that Edwards' campaign should have disclosed them. Edwards said the payments had no relationship to his campaign, and concerned a private matter.
While Baron and Mellon's money paid for all sorts of things not generally considered to be legitimate campaign expenses, it is amazing to think that a candidate for the nation's highest office could arrange his affairs so that he could benefit from $1 million from some of his biggest donors without having to disclose any of it to the public.
While the jury deadlocked on five of the charges and found Edwards not guilty of the sixth, what's of more interest than the legal question is the behavioral one: That is, when he needed help, Edwards turned not to a political mentor, a family friend or a longtime colleague, but to political donors. It is another example of the dependence politicians have on their big donors and the symbiotic relationships they develop, and how little we actually learn about those relationships, among the most important a politician cultivates in his career. We get glimpses when there's a scandal--associates of Barack Obama's bundler George B. Kaiser sending emails about the orgasms Biden's staff had over Solyndra, George W. Bush's backtracking from his association with Ken "Kenny Boy" Lay after Enron melted down, or Bill Clinton getting a call from mega-donor Alfonso Fanjul in the oval office during a visit from Monica Lewinsky.
But, scandal or no scandal, these figures loom large in the life of every politician, and yet we know little about them. Federal Election Commission filings tell us who gives to candidates, but offer little insight into which donors politicians cultivate and develop longstanding relationships. For example, consider House Speaker John Boehner. A perusal of data in Influence Explorer shows AT&T's employees and PAC collectively are Boehner's top career donor. But dig deeper, and you'll find that the company's CEO since 2007, Randall L. Stephenson, didn't contribute to Boehner until October 2010. In fact, while Boehner received PAC contributions from AT&T dating back to his first run for Congress, in 1990, he didn't receive a contribution from an actual AT&T employee until July 2010.
Compare that to the track record of Richard Farmer, founder of the Cintas Corporation, which is Boehner's ninth most generous career patron. He's given to Boehner's campaign in every cycle since 1992, including $17,900 to the Boehner for Speaker joint fundraising committee in June 2011. Or how about the late Carl Lindner? The mega-Republican donor and founder of American Financial Group--number seven on Boehner's top ten--started contributing to Boehner in the 1994 election cycle, and gave his last donation in July 2011--about four months before he died. Boehner noted his passing on his website. Lindner's family has continued to give; his son Craig donated $45,800 to the Boehner for Speaker joint fundraising committee. When Boehner needs money quickly--and not for anything other than the normal things politicians need money for: supporting a candidate in a tight primary, funding the National Republican Congressional Committee down the stretch, or raising money for his own leadership PAC--which donors does he turn to?
Where does any powerful member of Congress turn? Boehner's predecessor in the Speaker's chair, Nancy Pelosi, ranks among her top career donors, according to the Center for Responsive Politics, the Ernest and Julio Gallo Winery; Gallo family members, including Robert J. Gallo, the company's president, have given to Pelosi year after year; in 2010, winery employees and Gallo family members contributed $256,700, with 93 percent of the total going to Democrats.
Needless to say, the big donors that politicians rely on have interests before government. And they have access to the politicians they support. But what those relationships are, and what they signify in terms of the policies that Presidents pursue and Congresses adopt, is something the public is rarely clued into. So while Edwards may have plumbed new depths in the misdeeds of federal candidates, the actions that led to his trial followed a familiar path for all politicians: in need of something, he turned to his big donors.