The controversy over the Internal Revenue Service's handling of applications for non-profit status from Tea Party groups has put a spotlight on a subject with which we at the Sunlight Foundation Reporting Group are all too painfully familiar: The migraine-producing complexity of the nation's campaign finance system. To shed some light on the ongoing debate, we've decided to share what we know.
As often is the case with systems worthy of Rube Goldberg, it's easier to draw than to describe.
Exactly one year ago the Sunlight Foundation unveiled our Political Action Committee (PAC) Name Generator and today we revisit it with some shocking revelations. The project showcased the absurdity of the naming culture for these political funds. The agreeable names shield them from scrutiny - who isn't in favor of common sense, truth or America? As if our anemic disclosure laws and the impotent Federal Election Commission do not allow for enough obfuscation!
It was an enormously fun project to work on and we weren't the only ones who enjoyed playing with it - we ended up getting hundreds of thousands of visitors. As the anniversary approached we decided to research if any actual PACs had adopted one of the meaningless, random names we created. So we ran every possible result from our generator against the list of all 41,203 committees scraped from the Center for Responsive Politics.
At first this seemed a rather silly exercise because our beloved generator includes some rather unlikely results such as "Honest Workers for Snow Days," "Taxpayers for Twirling Towards Freedom" and the perfectly concise "Just Another Really Really Well Funded Grassroots Organization for Short, Pithy and Informative Names for Political Action Committees."
Yet, to our surprise, we found dozens of matches. In fact, based on filing at the FEC, many of these all-American groups were created after we launched our PAC Name Generator! To the right of this text you'll see screenshots of their official filing documents with the date highlighted - each organization's name is also a possible result from the generator. To anyone who wants to check our work or happens to enjoy scrolling, here are all possible name generator results.
A tool that we created to shed light on how these organizations cower behind a circus of patriotic gobbledygook is fueling the creation of even more murky committee names! What hath we wrought!
Special thanks to Ethan Phelps-Goodman for pulling the real committee names and to Jeremy Carbaugh for matching them up with fake names. Below is the widget and embed code for those who wish to provide inspiration to the unimaginative PAC treasurers around the country:
In the first two months of 2011 groups associated with a coalition opposing the implementation of new rules for debit “interchange” fees that banks charge to businesses had already contributed over $500,000 in political action committee money to dozens of lawmakers, including backers of a bill that would delay the rules from going into effect.
The Electronic Payments Coalition is opposing a new rule proposed by the Federal Reserve as part of the Dodd-Frank financial reform bill that would cap debit “interchange” fees at 12 cents per transaction. This amounts to a more than seventy percent reduction in cost per transaction.
Interchange fees have become an increasing profit center for banks and credit network companies. In the past, credit networks like Visa and MasterCard have set the fees, while the banks issuing cards reaped the profits, which topped $45 billion in recent years. Electronic network operators like Visa and MasterCard gain business by setting higher fees, which then entice banks to issue more cards on their respective networks so that banks can profit from the fees.
It is no surprise then that the coalition opposing limits on interchange fees consists of the network providers, the biggest banks, and their trade groups. Credit unions and smaller community banks have also joined the coalition. These smaller, more locally focused banks fear that the rule may affect their much smaller profits and benefit the bigger banks that can weather a haircut over interchange fees. This is despite the fact that the rule applies only to fees paid to banks with profits of $10 billion or more.
The majority of the PAC contributions flowing to lawmakers in the early months of 2011 have come from the trade companies associated with the credit unions and community bankers. The Credit Union National Association (CUNA) contributed $146,500 and the Independent Community Bankers Association (ICBA) contributed $163,500 to lawmakers. This accounts for more than half of all the PAC contributions to lawmakers.
The Huffington Post’s Zach Carter explained that the ICBA has a direct stake in the interchange fee rules as the trade group issues its own debit card and rakes in profits from the interchange fees charged to merchants.
In March Sen. Jon Tester, D-Mont., introduced the Debit Interchange Fee Study Act, a bill to delay the implementation of the new rules for one year while the Fed conducts a further study of their impact. In the two months preceding the introduction of the bill Tester received $9,500 in PAC contributions from five of the twenty biggest members of the coalition. Tester is the fourth highest recipient of Electronic Payments Coalition PAC money among senators.
Sen. Tom Carper, D-Del., is the top recipient of money from top coalition members in the Senate. Carper, an original cosponsor of Tester’s bill, received $13,000 over January and February. Carper is known as a bank friendly Democrat as his home state of Delaware is home to many banks taking advantage of the state’s low tax rates.
Rep. Shelley Moore Capito, R-W. Va., introduced an identical bill in the House of Representatives. Capito, the Chair of the Subcommittee on Financial Institutions and Consumer Credit, received $5,000 from coalition members in the first two months of the year.
The top recipient of PAC money from coalition members was House Financial Services Committee Chairman Spencer Bachus, R-Ala. Bachus, an opponent of the Dodd-Frank law, received $71,000 in contributions from coalition members in January and February. Bachus explained his opposition to the fee rules in a letter to Federal Reserve Chairman Ben Bernanke, "Hastily written rules may end up doing more harm than good to consumers and have negative effects on competition in the marketplace." A previous Sunlight Foundation report showed that Bachus received more than sixty percent of his campaign contributions from the finance, insurance, and real estate sector.
The other top recipients include party leaders like Speaker John Boehner, Majority Leader Eric Cantor, and Majority Whip Kevin McCarthy; key committee members such as, Ways & Means Committee Chairman Dave Camp and Financial Services Committee members Patrick McHenry and Steve Stivers.
Already in 2011 coalition members are increasing their lobbying presence as the campaign against the debit fee rules ramps up. The major coalition partners hired twenty-four lobbying firms in 2010 that listed lobbying on the interchange fee rule in their disclosure forms. Eighteen of those firms were registered with the two major credit network companies, MasterCard and Visa.
These firms include some of the biggest in Washington including Akin Gump, Ogilvy Government Relations, Quinn Gillespie, Sidley Austin, and Williams and Jensen.
Sixty-eight of the seventy-nine lobbyists for these eighteen firms registered with Visa or MasterCard previously worked in government, according to data obtained from the Center for Responsive Politics.
Former Reps. Dick Gephardt, Donald Sundquist, and Robert Walker are all registered with Visa. MasterCard retains the law firm of Clark Lytle & Geduldig, which is also registered to lobby for the Electronic Payments Association, the American Bankers Association, and the Financial Services Roundtable. One of the firm’s partners, Sam Geduldig, is a former senior staffer on the House Financial Services Committee.
Visa has continued to beef up their lobbying practice with two new registrations this year. The company hired FIRST Group in January and Hollier & Associates on the first of April.
The Federal Reserve stated recently that it will fail to meet the April 21 deadline to issue the new rules due to the 11,000 comments from the public on the rules.
In his final State of the Union address President Jimmy Carter dedicated five paragraphs to a discussion of nuclear energy and safety. It would take twenty-four years before another President discussed nuclear energy in a State of the Union again. Since then, no State of the Union has been without a call to build more nuclear plants.
This period, stretching from the middle of the first decade of the 21st century to now, has been referred to as the “nuclear renaissance.” Republicans and Democrats have both supported the construction of new nuclear power plants. This cross-party agreement, and the so-called “nuclear renaissance,” may come apart as the crisis at the Fukushima Daiichi nuclear plant in Japan continues.
On March 11 the Fukushima Daiichi nuclear power plant suffered major damage from a 9.0 earthquake and the ensuing tsunami. In the following days the plant’s condition has deteriorated dramatically. Evidence has emerged of partial meltdowns in three reactors at the plant. Explosions have occurred at three reactors, while a fire broke out at a fourth. A small, dedicated group of workers remains at the site in an attempt to avoid a full meltdown at the plant. Traces of radioactivity are being found as far as Tokyo, although not at harmful levels yet.
As public opinion on nuclear energy collapses, the nuclear industry’s lobbyists in Washington have begun to take their case to lawmakers.
According to BusinessWeek, the Nuclear Energy Institute and lobbyists for Exelon have held meetings with lawmakers and staff on Capitol Hill on March 14 to explain that reactors in the United States “can withstand disasters such as the earthquake and tsunami that crippled nuclear reactors in Japan.”
Having invested large sums of money in lobbying and campaign contributions over the past seven years, the industry is not without its share of allies.
Lobbying, PAC Contributions
An analysis of the lobbying expenses of electric utilities operating a majority of the nation’s nuclear reactors and the main industry trade group show a doubling on lobbying spending since 2004. The industry’s lobbying jumped from $27 million prior to the nuclear-friendly Energy Act of 2005 to nearly $54 million in 2010.
Not all of this lobbying has been directly focused on growing the nuclear industry, but the key bills spurring much of the lobbying activity have included major government support for nuclear power plant growth.
The industry’s lobbying team is filled with former government officials, sixty-eight percent of them, including twelve former congressmen. Among them, former Sens. Trent Lott and John Breaux lobby for Entergy, former Rep. Dick Gephardt works for Progress Energy, and former Sen. Don Nickles holds Southern Co. as a client.
These connections undoubtedly help connect industry policy priorities to the congressional process drafting legislation on energy and climate issues.
Over the same period, the industry increased its spending on campaign contributions through political action committees (PAC). According to data obtained from TransparencyData.com, contributions increased from $3.5 million in the 2004 cycle to approximately $4.5 million in both the 2008 and 2010 cycles.
These contributions, while favoring Republicans overall, track closely with party control of Congress and the White House. Industry contributions did not shift to the Democrats until after the 2008 cycle swept the party into the White House and large majorities in both the House and the Senate.
Much of the shift to Democratic campaigns came as President Barack Obama had promised to overhaul the nation’s energy policy with legislation aimed at reducing fossil fuel use to mitigate the effects of climate change. This would include increased support for nuclear energy.
The new Democratic president’s push for more nuclear energy came after the nation’s biggest nuclear power company strongly backed his candidacy.
Illinois-based Exelon was one of the biggest corporate backers of then-Sen. Obama’s 2008 presidential run. The company’s director, John W. Rogers, served on Obama’s finance committee and bundled $193,598 to the Illinois senator’s campaign, according to the Center for Responsive Politics. Rogers also sat on the president’s Inaugural Committee and donated $50,000 to the 2009 Inauguration. ComEd CEO Frank Clark bundled $75,100 in contributions to the Obama presidential campaign. (ComEd is a subsidiary of Exelon.)
Former White House Chief of Staff Rahm Emanuel made millions when he joined an investment bank in Chicago and shepherded through the merger deal between PECO Energy and Unicom that created Exelon.
Exelon operates seventeen nuclear reactors in the United States, the most of any company in the nation.
Focus on legislation, subsidies
While the industry has touted the “nuclear renaissance” there have always remained concerns of cost overruns in the construction of new plants. Alleviating this problem through loan guarantees, which some describe as subsidies, has been the key policy that Congress and two presidents sought to implement to help increase the country’s nuclear capacity.
In 2005, Congress enacted and President George W. Bush signed the Energy Policy Act of 2005. The Energy Policy Act included $18.5 billion in loan guarantees for companies building new nuclear reactors. This was the first foray in government policy to aid the nuclear industry during the “renaissance” period.
During the first two years of the Obama administration energy companies focused on the attempt by Congress and the White House to rewrite the nation’s energy policy with a focus the reduction of fossil fuel use and the increase in renewable, or non-emitting, forms of energy production. The White House made it very clear that this would include nuclear energy.
The President’s budget has included an increase in loan guarantees for nuclear construction in both his FY 2011 and FY 2012 budgets. The proposal would add $36 billion to the program’s already existing $18.5 billion. This priority for the industry has remained stalled in the budget morass of Congress since it was first proposed in 2010. The administration, however, has tapped the $18.5 billion loan guarantee fund to back two new reactors to be built at the Southern Co. operating plant in Georgia.
In 2009 the House of Representatives passed a bill to create a cap and trade system for carbon pricing that also included substantial investment in renewable energy. The Nuclear Energy Institute praised the House’s passage of the bill for “the inclusion of provisions promoting greater use of clean-energy technologies, including nuclear energy.” The climate bill, and spending to increase the nation’s nuclear capacity, ultimately stalled in the Senate.
Post-Fukushima
The future for the nuclear industry suddenly looks far more difficult than the one policy makers saw just two years ago. While the president and congressional Republicans remain dedicated to increasing nuclear power in the country others, some who have supported nuclear energy recently, are calling for a review of all current and future reactors.
The first wary comment came from Sen. Joe Lieberman, who had worked on a Senate energy bill in recent years and supported more funding for nuclear expansion, “I don’t want to stop the building of new nuclear power plants, but I think we’ve got to quietly, quickly put the brakes on until we can absorb what has happened in Japan as a result of the earthquake and the tsunami and then see what more, if anything, we can demand of the new power plants that are coming on line.”
Last week Senate Democrats on the Environment and Public Works Committee questioned Nuclear Regulatory Commission chairman Gregory Jaczko over safety at plants in the United States. Sen. Frank Lautenberg voiced concerns later echoed by other members of the committee, “We’ve got an inferno in front of us and we have to make sure that we do whatever we can to stop it.”
Jaczko has promised a full review of nuclear reactors.
Secretary of Energy Steven Chu has acknowledged that there will be a review of reactors and that the future siting of new reactors may change due to concerns about natural disasters. Chu told Fox News, “Certainly where you site reactors and where we site reactors going forward will be different than where we might have sited them in the past, I would say."
American Freedom. Patriots for Truth. Citizens for a Brighter Future. The Alliance for Children & Families. Champions of American Freedom. Common Sense in America.
These names are so agreeable, so reasonable, so inclusive, so damned American and yet their names reveal nothing about who funded these groups. It could be your coworkers, a couple billionaires, a band of small business owners, a gaggle of big corporations or maybe that nice fellow who says hello every morning. You just don't know.
Update: I guess this is the clarifying press release: Baucus staffers say that the check was returned after it was received. The report filed with the Federal Election Commission below is from Schering-Plough, not Sen. Baucus. Schering-Plough, as a PAC, is required to file their reports electronically. Senators do not file their reports electronically and thus I couldn't access Sen. Baucus' report over the Internet, even though he filed it six days ago. So, nothing to see here, except another reason to support S. 482, the bill to make senators file these reports electronically.
This is from an article about Senate Finance Committee Chair Max Baucus' prolific fundraising from health care organizations:
To avoid any appearance of favoritism, his aides say, Baucus quietly began refusing contributions from health-care political action committees after June 1. But the policy does not apply to lobbyists or corporate executives, who continued to make donations, disclosure records show.This is from the Federal Election Commission's records:
SCHERING - PLOUGH CORPORATION BETTER GOVERNMENT FUND 06/15/2009 5000.00 29934142146
What is Schering-Plough? Here's their explanation straight from their web site: "Schering-Plough is an innovation-driven, science-centered global health care company." And what is Schering-Plough Corporation Better Government Fund? It's a Lobbyist/Registrant PAC.
Time for a clarifying press release.
Clarify disclaimer from Sunlight: The above title "Lies Make Baby Jesus Cry" is not intended to offend your chosen deity. Instead, it is a reference to a famous quote from the popular animated series "The Simpsons." You can watch the video here.
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