Time again to look at the past week through the lens of deleted tweets from U.S. politicians caught by Politwoops.
The bipartisan group of senators known as the Gang of Eight is planning a sequel to their Senate approach to immigration reform. There, they met in secret to carefully craft a comprehensive immigration reform bill, then allowed it to be gutted and replaced by a comprehensive immigration reform amendment crafted by Sens. Bob Corker, R-Tenn., and John Hoeven, R-N.D.
Call it the gangster approach to governing.
Now National Journal reports that the Gang of Eight, minus charter member Marco Rubio, R-Fla., has enlisted 50 business and trade association lobbyists to push House Republicans to pass the bill. Sens. John McCain, R-Ariz. and Charles Schumer, D-N.Y., are leading the charge.
"This is a political campaign," McCain said. "We’ve gotta have communications. We gotta have coordination. We gotta have advertising." As tourists visiting the nation's capital are delighted to find each summer, lobbyists are only too happy to provide communications, coordination and advertising free of charge and with no strings attached.
McCain is better known for blasting the iron triangle of "special interests, lobbyists and campaign finance." As chair of the Indian Affairs Committee, he helped unravel the Jack Abramoff lobbying scandal. Now, he's openly employing the techniques of former Rep. Tom DeLay, R-Texas, who as House Majority Leader "stood for a blurring of the line between lawmakers and lobbyists so that lobbyists are now considered partners of politicians and not merely pleaders," as the Washington Post put it. To help pass a bill he favors, the maverick turns, like a Washington wheeler dealer, to the lobbyists he thinks can get it done. Which says as much about how Washington works as it does about McCain.
Senate Democrats unveiled their version of the DISCLOSE Act today. (We wrote about the House bill, introduced last month, here.) Senator Whitehouse was joined by approximately 35 of his Democratic colleagues on legislation that has been described as a pure disclosure and disclaimer bill, with none of the controversial provisions that caused the DISCLOSE Act to fail in the Senate by one vote in 2010. The Senate’s laser-like focus on disclosure and disclaimer provisions mirrors Sunlight’s recommendations in our draft Stop Undisclosed Payments in Elections from Ruining Public Accountability Act (the SUPERPAC Act). By focusing on disclosure and disclaimer provisions only, with no carve outs for select groups or bans on certain types of contributions, the 2012 version of the DISCLOSE leaves opponents of the previous bill with little or nothing to object to--unless they believe our elections should continue to be paid for by dark money.
Specifically, the bill will create robust reporting requirements for Super PACs, corporations, unions and nonprofit organizations that decide to make campaign expenditures. It will also require ads to contain disclaimers by the top officials of such groups, similar to the stand by your ad mandates required of candidates.
Voters have been bombarded with campaign ads largely paid for by outside groups, with much of that money totally undisclosed. The Supreme Court’s Citizens United decision, while touting the importance of disclosure, created a system in which money laundering could be used to funnel unlimited secret money into our political system. The DISCLOSE Act is a crucial step to address the corrupting influence of that money on our elections and our elected officials.
Senator Schumer has promised to hold a hearing on the bill in the Rules Committee next week. It will be interesting to see how his colleagues, including John McCain, Olympia Snowe, Lisa Murkowski and others who have expressed concern about the impact of the Citizens United decision, will react to this leaner version of DISCLOSE. We hope they recognize that the bill does nothing more, and nothing less, than lift the cloud that has been obscuring money in politics so that all citizens can know who is paying for our elections.
The Federal Election Commission is the supposed enforcer of the nation’s campaign finance and disclosure laws. But, with commissioners evenly divided between Democrats and Republicans, the FEC has long lived up to its reputation as being an agency designed to fail. Based on the witnesses it invited to testify about proposed rules regarding disclosure of independent expenditures and electioneering communications, it seems the agency is not only designed to fail, but is setting itself up to do so.
The FEC would probably argue that the five witnesses who testified represented a cross-section of ideas and positions, from the Chamber of Commerce to the AFL-CIO; the Alliance for Justice Action Campaign to the Center for Competitive Politics and the James Madison Center for Free Speech. But in terms of the positions they advanced on whether the FEC has the authority to draft new disclosure rules in light of the Citizens United Case, the group spoke with one voice—and the message they delivered was a resounding “no.”
Eleven U.S. Senators, Sheldon Whitehouse, Jeanne Shaheen, Al Franken, Jeff Merkley, Tom Udall, Sherrod Brown, Michael Bennet, Chuck Schumer, Barbara Boxer, Bernard Sanders and Kirsten Gillibrand, beg to differ. They submitted comments to the Commission urging the agency to “use its rulemaking authority to implement broad disclosure and disclaimer requirements.”
Surely, if it had wanted to, the Federal Election Commission could have found one witness to testify that the agency has the authority to draft new disclosure and disclaimer rules to ensure transparency in post-Citizens United world. It could have found one witness to suggest how the agency could draft rules that would, as the Supreme Court stated in the Citizens United case, “[enable] the electorate to make informed decisions and give proper weight to different speakers and messages.”
In truth, even with a balanced panel of witnesses, the agency probably would have failed to adopt comprehensive disclosure and disclaimer rules. But, by silencing the voices that favor transparency, the FEC willingly abdicated all responsibility to foster open and honest debate.
Correction: The FEC does not have to invite any group to testify, rather, the agency publishes notice "to advise interested persons and to invite their participation." Nevertheless, it seems pro-transparency groups would have received a chilly reception at the hearing. As one FEC commissioner stated, "all discussion of this critical issue [of disclosure and disclaimer rules] was banned from the NPRM." Moreover, Commissioner Weintraub's motion to advance Chris Van Hollen's proposed rulemaking on disclosure of Independent Expenditures by non political committees deadlocked at the FEC while the motion to make rules allowing corporations and unions to make Independent Expenditures passed by a vote of 5-1. It remains that the agency is unwilling to proffer pro-disclosure rules. Hopefully, Congress will pass the DISCLOSE Act, thereby requiring the FEC to act.
The New York Times looked at this week’s Super PAC filings with the FEC and demonstrated—again—what we knew would be the result of the Supreme Court’s Citizens United decision: The specter of hundreds of thousands of dollars of hidden money influencing our elections and those who will be elected.
The times notes that, “some checks came from sources obscured from public view, like a $250,000 contribution to a super PAC backing Mr. Romney from a company with a post office box for a headquarters and no known employees.” But, while the public remains in the dark, it would be naïve to think that the identity of the donor (or donors) of that generous contribution is unknown to Mr. Romney. So, what does he or she want? Favorable tax treatment? Fewer regulations for a pet industry? A bailout? An ambassadorship? It is possible that the money came from a generous citizen who simply believes Romney would be the best man for the job. But the system of secret dark money now in place means the voters will never know.
The Supreme court relied heavily on the theory that transparency would cleanse the unlimited money that would shape our elections as a result of their decision in the Citizens United case, noting, “A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today.” Unfortunately, the Court failed to realize that such a system of disclosure does not yet exist.
There is a solution. Sunlight proposed the SUPERPAC Act as one way to shine more light on the dark money infecting our elections. It would impose a regime of disclosure and disclaimers that would lift the veil of secrecy under which large donors may hide. But Congress needs to act. So far, we’ve heard talk. House Democrats say they will re-introduce a slightly paired down version of the DISCLOSE Act, a bill that failed to be enacted last year. And on the other side of the Capitol, Senator Schumer has promised hearings on disclosure by Super PACs.
These are important steps. (Although, arguably they should have happened well before the election season got under way.) Disclosure legislation is a critical tool in the fight against the undue influence secret money has on our campaigns and our elected officials. Unless Congress acts, we can be sure that we have only seen the tip of the dark money iceberg that is undermining the fundamentals of our democracy.
Two of the world's shortest congressional business meetings took place today between 11:37 and 11:41am.
The Joint Committee on the Library, which oversees the Library of Congress, was gavelled into order at 11:37, and in the ensuing two action-packed minutes, Senator Chuck Schumer was unanimously elected as the committee's chair, and Rep. Gregg Harper was elected vice-chair. The Committee then adopted its rules from the 111th Congress for the 112th Congress and adjourned at 11:39.
Immediately thereafter, the Joint Committee on Printing, which oversees the Government Printing Office and public printing generally, came into order at 11:39. At that time, Rep. Gregg Harper was duly elected as committee chair, and Senator Chuck Schumer was elected vice-chair. After adopting the Committee's rules from the 111th Congress as its own, and a short statement from the new chair, the JCP adjourned at 11:41.
Both committees have important tasks to take up during the 112th Congress. They collectively share responsibility (along with the Committee on House Administration and the Senate Rules Committee) for how congressional information is made available to the public. As a starting point, we hope these two committees will update their websites that have fallen into disuse.
We hope that they will work diligently to make public information available online, in real time, and in machine readable formats. Several years ago, we released a report with recommendations on this point, and there's still a lot to do. I testified earlier this year on allowing bulk access to legislative data, and I hope this issue will be addressed in the near future.
The JCL will have particular involvement with the selection of the new director for the Congressional Research Service. As this panel discussion hosted by the Advisory Committee on Transparency identified, there is much to do to bring CRS into the 21st century, including making CRS reports publicly available.
The JCP will likely spend much of its time this year identifying ways to operate more effectively and efficiently. We hope that the effort involves releasing public documents online, in digital formats that can be easily manipulated by computers. And, of course, we're hoping for action on the Constitution Annotated as well.
They received billions in help from the federal government to stay afloat during the worst days of the financial crisis and they've--mostly--paid it all back since. Now the top six biggest recipients of money from the Troubled Asset Relief Program--the Treasury Department program adopted in 2008 to shore up troubled banks--are contributing to the campaigns of congressional office seekers across the political spectrum.
Of the top fifteen recipients of campaign contributions from employees and political action committees of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo, five are running for office in New York state, Wall Street's home base, and five are Republican candidates seeking election to the Senate. This is based on data collected from the Center for Responsive Politics.
These six banks were the biggest recipients of money from the bailout fund created by the Emergency Economic Stabilization Act of 2008. Bank of America and Citigroup each received $45 billion, JPMorgan Chase and Wells Fargo received $25 billion each and Goldman Sachs and Morgan Stanley both received $10 billion. Only Citigroup has failed to fully repay the money to the Treasury Department. Citigroup still owes $14 billion.
While the high number of contributions sent to New York pols and key individual lawmakers may be predictable, the presence of a number of Republican candidates seeking to become freshmen senators in the 112th Congress is not. Republicans have successfully used public anger against the bank bailouts to their advantage during the run-up to this fall's midterm elections.
Rob Portman, a former congressman, U.S. Trade Representative and director of the Office of Management and Budget in the George W. Bush administration running for the Senate in Ohio, is the leading recipient of big bailout bank money among GOP Senate aspirants, having raised $97,592 from the six banks.
Portman, who stated he would have voted for the bailout bill, has not run directly against the bailouts, but has taken a position that the bailout money that has been paid back to Treasury should be used to pay down the deficit.
Other GOP Senate aspirants among the top fifteen recipients of big bailout bank contributions include California's Carly Fiorina ($94,850), Illinois' Mark Kirk ($81,275), Delaware's Mike Castle ($66,000) and Missouri's Roy Blunt ($65,642).
Blunt, Castle and Kirk currently serve in the House of Representatives and all three voted in support of the bailout on October 3, 2008. They also all voted against the financial reform bill in 2010.
Fiorina, as a top advisor in the 2008 presidential campaign of Sen. John McCain, defended McCain's support of the bailout bill, but is now running against the bailout. In a recent debate Fiorina attacked her opponent, Sen. Barbara Boxer, for voting for the bailout and receiving campaign contributions from banking executives. The latter attack came despite the fact that Fiorina received more in contributions over the course of 2009-2010 from the six big bailout banks than Boxer.
The top recipient of contributions from the six big banks is Sen. Kirsten Gillibrand with $241,000. Gillibrand is running in her first Senate election after being appointed to take the seat of Secretary of State Hillary Clinton. Gillibrand has long relied on these big banks to provide funds for her campaigns. All of the banks, save for Bank of America, rank as top career donors to Gillibrand's campaign efforts.
The second-biggest recipient of contributions from these six banks is Sen. Richard Shelby, the ranking member on the Senate Committee on Banking, House and Urban Affairs. Over the 2010 election cycle Shelby received $127,050 from the big bailout banks.
While Shelby voted against the bailout legislation in 2008, he played an instrumental role in opposing the financial regulatory bill advocated for by President Obama, Senate Banking Committee chairman Chris Dodd and House Financial Services Committee chair Barney Frank. Many in the financial sector, particularly the six big banks, opposed pieces of, if not the entirety of, the financial regulatory bill and worked to strip it of as many provisions as possible.
Shelby focused sharply on a provision designed to liquidate firms that were no longer solvent instead of bailing them out with Treasury funds. Shelby declared the liquidation fund to be a proposal for bailout forever and won concessions from the Democrats in the debate over the provision.
The other candidates hailing from New York state include freshman congressmen Scott Murphy ($105,050) and Mike McMahon ($103,350), senior senator and long-time Wall Street booster Chuck Schumer ($99,100) and Reshma Saujani ($88,200), the Democratic primary challenger to Rep. Carolyn Maloney.
Murphy, who won a 2009 special election to the upstate seat formerly occupied by Gillibrand, has long ties to the financial industry having worked for Bankers Trust and Advantage Capital Partners, a venture capital firm. McMahon, whose Staten Island district houses many employees in the financial sector, fought hard for the bank's positions on derivatives during the debate over the Dodd-Frank financial reform bill.
Saujani is the only non-incumbent candidate for the House ranked in the top fifteen recipients of big bailout bank contributions. Earlier this year Saujani, a Wall Street banker, touted her Street cred by stating that she was, "running on my Wall Street record, not from it.” Saujani, in defending Wall Street, said, "Instead of browbeating Wall Street, I want to invite them to help create jobs."
Despite the in flux of contributions from the financial sector that have buoyed her campaign, Saujani suddenly backtracked on her statement that she would not browbeat Wall Street. In a recent debate with Maloney, Saujani attacked the congresswoman for failing to make the financial reform bill tougher and for hosting fundraisers with Wall Street lobbyists during the crafting of the reform bill.
The other four candidates ranking in the top fifteen recipients of big bailout bank contributions include Senate Majority Leader Harry Reid ($74,250), Connecticut congressman and former Goldman Sachs banker Jim Himes ($69,320), Senator Richard Burr ($67,680) and Republican Minority Whip Eric Cantor ($66,100).
Burr, Cantor and Reid voted for the 2008 bailout. Himes was elected to Congress in 2008 after the vote had taken place. Both Reid and Himes supported the financial reform bill, while Burr and Cantor did not.
Senators selected to work to combine the House and Senate financial regulation bills in a conference committee are some of the top recipients of campaign contributions from the finance, insurance and real estate sector (FIRE). In total, these twelve senators have received over $57 million from the FIRE sector over the course of their careers, according to data obtained from Center for Responsive Politics.
|Senator||Career FIRE Contributions|
|Schumer, Charles E (D-NY)||$16,708,236.00|
|Dodd, Chris (D-CT)||$14,067,712.00|
|Shelby, Richard C (R-AL)||$5,635,030.00|
|Chambliss, Saxby (R-GA)||$3,507,960.00|
|Corker, Bob (R-TN)||$3,188,550.00|
|Johnson, Tim (D-SD)||$3,150,865.00|
|Reed, Jack (D-RI)||$2,918,732.00|
|Lincoln, Blanche (D-AR)||$2,612,159.00|
|Harkin, Tom (D-IA)||$2,534,445.00|
|Crapo, Mike (R-ID)||$1,809,715.00|
|Gregg, Judd (R-NH)||$1,070,249.00|
|Leahy, Patrick (D-VT)||$637,282.00|
New York's Charles Schumer, D-N.Y., is the leading recipient among the Senate conferees with $16.7 million in contributions over his career. Schumer has long been an ally of the New York-based financial industry, but has been remarkably quiet as Congress has focused on reforming Wall Street. Schumer remains in support of the bill despite hometown pressure from industry friends, campaign contributors and Mayor Michael Bloomberg.
His support for the financial reform bill goes against a long history of supporting deregulatory actions for Wall Street. In the late 1990s and 2000 Schumer enthusiastically supported measures that ended the Glass-Steagall separation between commercial and investment banks and the enforced deregulation of derivatives trading.
The new rules for derivatives trading included in the Senate bill remain a serious sticking point in the coming conference committee. Senate Banking Committee chairman Chris Dodd, D-Conn., has already attempted once to eliminate a provision in the bill, penned by conference committee member Sen. Blanche Lincoln, D-Ark., ($2.61 million), requiring banks to spin off their derivatives trading portofolios. Dodd is the second largest recipient of FIRE campaiagn contributions on the conference committee with $14 million for his career.
Dodd is also connected to Wall Street with seven of his former staffers currently lobbying for financial organizations. Organizations represented by Dodd's former staffers include Goldman Sachs, Genworth Financial, MBIA, National Association of Mortgage Brokers and New York Bankers Association.
One former Dodd staffer turned financial industry lobbyist runs a financial lobbying firm with the former senior advisor to Dodd's Republican counterpart on the Banking Committee, Sen. Richard Shelby, R-Ala., the third highest recipient of contributions from the FIRE sector on the conference committee ($5.63 million).
Andrew Lowenthal and Lendell Porterfield run a bipartisan lobby shop providing clients with instant access to the Senate Banking Committee and, with both of their former bosses on the financial reform conference committee, the final chance to change the sweeping regulatory bill.
Recently joining Lowenthal and Porterfield as a partner in their firm is Dwight Fettig, a former Legislative Director to Sen. Tim Johnson, D-S.D., the sixth highest recipient of FIRE contributions appointed to the conference committee ($3.15 million). Johnson stands to become the next chairman of the Banking Committee after Dodd retires this year. The credit card industry, largely based in his state, has always counted on the support of the senior South Dakota senator.
Johnson, a career recipient of $391,400 in campaign contributions from the credit card industry, was one of ten Democrats to vote against an amendment to the financial reform bill capping “swipe fees” for debit card transactions. “Swipe fees” are charges to merchants for purchases made by customers using debit cards and often drive up retail prices for consumers. Credit card companies and banks are still lobbying hard to remove this provision from the bill. Johnson, however, is only one of four conference committees members to vote against the amendment making it unlikely the provision will be removed.
The conference committee will have to decide which portions of the House and Senate bills will be placed into a final version to be voted on and signed by the President. The House and Senate must pass bills with identical language. To do so, conference committees including members from both chambers meet to craft a compromise between the House and the Senate. The House has yet to name conferees.
The remaining members on the conference committee include Democrats Jack Reed, D-R.I., ($2.92 million), Tom Harkin, D-Iowa, ($2.53 million) and Patrick Leahy, D-Vt., ($637,282) and Republicans Saxby Chambliss, R-Ga., ($3.51 million), Bob Corker, R-Tenn., ($3.19 million), Mike Crapo, R-Wyo. ($1.81 million) and Judd Gregg, R-N.H., ($1.07 million).
As the 2010 election cycle heats up, voters will be exposed to the usual bombardment of campaign ads—many of them negative, and many engaging in deception, distortion or half-truths—that have become a staple during election years. What is likely to be new this year, thanks to the Supreme Court's decision in the Citizens United case, is that a great many of those ads will be funded by corporate and union interests. And, if Congress doesn’t act to ensure that there is a centralized government database disclosing information about who is paying for these ads, there is a significant risk that voters will have no idea who is shaping the debate and even influencing the outcome of the elections.
As I noted here, the Congressional response to the decision has been the introduction of the DISCLOSE Act. The provisions of that bill that aim to uncover the real money behind political ads are crucial to ensure that those who pay for the ads are accountable for what they say, and that voters have the ability to evaluate the messages they hear.
But, for those disclosures to be of the most value to the public, Congress should amend the DISCLOSE Act to require that the Federal Election Commission make that information available to the public online, in a searchable, sortable format, within 24 hours of receipt. Moreover, the FEC should be mandated to ensure that all of the disclosure information is available no later than this fall—when the 2010 election cycle will begin in earnest.
As it is written, the DISCLOSE Act would require the entities that make electioneering communications to disclose information about who is paying for those ads on their own websites. That’s important, especially for shareholders or members of an organization who have a specific interest in an organization and want to know what type of political activity it is engaging in. But, that system means that if someone wants to know how much money a particular industry sector is spending on independent political ads, they will have to engage in an ad hoc search of myriad websites to come up with a likely incomplete and unreliable result.
The DISCLOSE Act is missing a requirement for a single place that reporters, public interest groups, bloggers and every day citizens can go to find out the big picture about who is shaping the debate in elections. Right now, the FEC provides one-stop shopping so voters can find out about other election-related contributions and expenditures. Congress should amend the DISCLOSE Act to similarly require that the FEC be home to timely, detailed and easily accessible political spending by corporations and unions.
The Supreme Court’s decision in Citizens United v. FEC opened the door to a torrent of new political spending that, with the legislative framework they announced today, Senator Schumer and Representative Van Hollen are trying to stem. Sunlight released its own “legislative framework” in response to Citizens United some weeks ago, and we are pleased that many of our disclosure-related recommendations appear to have been embraced by Sen. Schumer and Rep. Van Hollen.
The “stand by your ad” provisions that will require corporate CEOs to approve of the ads they run in the same way candidates do is clearly necessary to increase accountability. The disclaimers on ads run by shell organizations should also shine some light on the generally shadowy practices of many of these groups and is welcome and vitally important in light of Citizens United.
Disclaimers on ads run by third party groups, however, only get part of the way to full transparency. To be meaningful, disclaimers must be coupled with real disclosure of who is funding the ads. The Schumer/Van Hollen framework addresses this concern with the new reporting of “political broadcast spending” for all corporations, labor unions, nonprofits and 527s. Disclosures outlined seem to cover most of the relevant bases including who controls the political broadcast spending account, the name of donors to the account, and amounts and purposes of expenditures from the account.
We would respectfully offer two words of advice to the legislative drafters as they flesh out these provisions. First, the framework released today does not specify the how or when these disclosures must be made. To be effective, the legislation must provide that disclosures be electronically filed and publicly available online within 24 hours. It’s too easy to game the system and hide expenditures from public view if there is not a hard and fast requirement for real-time online disclosure. Second, the framework suggests reliance on the FEC to make the information publicly available. If the FEC’s cumbersome, clunky, complicated campaign finance disclosures are any indication, the FEC needs a clear mandate to make sure its new disclosures of political broadcast spending are searchable, sortable, and meaningful to the general public.
Sunlight strongly supports the requirement that political expenditures made by a corporation be disclosed within 24 hours on the corporate Web site. We think the framework shortchanges shareholders, however, by requiring only quarterly reporting. It is, after all, their money being spent – they should be alerted immediately to any political spending on the SEC Web site and through the SEC’s comprehensive disclosure database.
The enhanced disclosures of lobbyists’ campaign expenditures is a good start, though again we would note that to be meaningful, the disclosures must be in real time, online and publicly available and a user-friendly, searchable database. But, in order to address the real threat to the balance of political power that is a result of Citizens United, lobbying disclosure should go much further. As I wrote here, the Citizens United case opened the door to coordination and possible coercion by putting in the hands of corporations, unions and their lobbyists the ability to threaten or imply that if a member of Congress doesn’t support their agenda, he will be faced with a barrage of ads opposing him (or supporting his opponent) in the next election. And, while the Schumer/Van Hollen framework rightly strengthens the ban on coordination to prevent such anti-democratic behavior, without a new disclosure requirement mandating that lobbyists report who they met with, there is no effective way to discern the possibility that such coordination took place.
We hope that when the legislation comes to the House or Senate floor, someone will offer an amendment that requires that within 24 hours of a lobbying contact, lobbyists be required to electronically report the name of the official being lobbied, a summary of the action requested, and the name of the lobbyist’s client or employer. (We’d also like to see the 20 percent exemption for lobbyist reporting eliminated so that all corporate and union heads along with anyone who bundles campaign contributions be required to report their meetings with government officials.) This is a vital way to demonstrate that the new expenditures now permitted because of Citizens United are truly independent.
A “legislative framework” is, of course, just the beginning. As the Members of Congress draft the actual legislation, we hope our suggestions will be incorporated so that the strongest possible disclosures will be in place to help shine a light on who is funding our elections.