“Awwwwwkward”: Meet Ted Cruz’s Tax-Dodging Sugar Daddy
Hedge fund CEO Robert Mercer is all in for the conservative Texas Republican Ted Cruz, and the billionaire will have unusually substantial influence in how his contributions get spent.
But the billionaire also has some baggage—like, the avoiding billions in taxes kind of baggage.
His alleged failure to pay those taxes led to substantial congressional scrutiny in 2014—and it’s not clear the investigation is over.
This, and some of Mercer’s side projects, could present interesting challenges for Cruz’s campaign. Especially since Cruz has been a vocal opponent of those who “give favors to Wall Street” and engage in “crony capitalism.”
On the one hand, Mercer’s support is fantastic for Cruz for all the obvious reasons (having a billionaire in your corner is nice). On the other hand, Mercer’s hedge fund—Renaissance Technologies—recently faced an unflattering congressional investigation, the results of which indicated that it used complex and unorthodox financial structures to dramatically lower its tax burden.This drew scorching bipartisan criticism from investigators on the Senate Permanent Subcommittee on Investigations.
“Renaissance profited from this tax treatment by insisting on the fiction that it didn’t really own the stocks it traded—that the banks that Renaissance dealt with, did,” said Sen. John McCain during a hearing on the issue, per Mother Jones. “But, the fact is that Renaissance did all the trading, maintained full control over the account…and reaped all of the profits.”
In his opening statement for that hearing, then-subcommittee chair Sen. Carl Levin, a Michigan Democrat, said that Mercer’s business avoided paying more than $6 billion in taxes between 2000 and 2013.
Since then, Levin has retired from the Senate and Republican Sen. Rob Portman has taken his place as subcommittee chair. When I called the subcommittee’s Capitol Hill office to see if any investigation into Renaissance was still underway, the person who answered the phone said he couldn’t comment on active investigations. I then asked if that meant the investigation was in fact active.
“I can’t say whether it’s active, I can’t say whether it’s inactive, I can’t even say whether we’ve investigated them,” he said.
Later, Portman’s spokeswoman, Caitlin Conant, emailed to say that the committee doesn’t comment on its work beyond what’s in the public record. Renaissance Technologies didn’t respond to a request for comment on whether they’re currently being investigated.
Given this probe into his company’s books, it’s no surprise Mercer has invested heavily in keeping financial industry watchdogs from gaining political power. However, you’d think this might conflict with his candidate’s populist zeal.
“[M]y criticism with Washington is they engage in crony capitalism,” Cruz told Bloomberg Politics. “They give favors to Wall Street and big business and that’s why I’ve been an outspoken opponent of crony capitalism, taking on leaders in both parties.”
But the Cruz campaign doesn’t seem to see any problems with the arrangement. When I asked Rick Tyler, the campaign’s senior communications adviser, if he was worried about potential conflicts, he said, “No way.”
Mercer has long backed conservative candidates, and he’s spending heavily on Cruz through a new breed of super PACs started by the super rich.
An anonymous Cruz source told Bloomberg on Wednesday that a franchise of pro-Cruz super PACs—formed just this week—will have raised $31 million by end of the day on Friday. There are four super PACs, called Keep the Promise, Keep the Promise I, Keep the Promise II, and Keep the Promise III.
This is not normal; presidential candidates usually give their imprimatur to one such group, which then rakes in contributions and makes independent expenditures to help the candidate. After all, there are legal limits on how much donors can give to presidential candidates, but no limits on how much they can give to these PACs.
One longtime campaign lawyer said the widespread Republican donor buyer’s remorse exists from the 2012 general elections—when a few powerful super PACs spent massive sums of money to get Mitt Romney elected, and were left empty-handed on Election Night. As a result, billionaires are starting their own PACs to fund political campaigns to have more control on how their money gets spent.
It’s worth noting that this explanation doesn’t make sense to everyone. Dan Backer, an attorney who’s worked extensively with Republican and Tea Party groups on campaign finance issues, said he thought having multiple super PACs could make life unnecessarily difficult for everyone involved.
“All you’re doing is multiplying your reporting and compliance burden for no good reason,” he said. “At first blush, it just strikes me as a little weird.”
Regardless, the operating assumption seems to be that having a cadre of super PACs will give mega-donors like Mercer more power over the dynamics of the presidential election. Saul Anuzis, a Michigan Republican operative who started a Mercer-funded super PAC in the 2014 midterms, indicated as much in an interview with Mother Jones. He told the magazine that he expected to see “more and more super-PACs starting that are donor-centric or district-centric.” In Cruz and Mercer’s case, that prediction seems remarkably prescient.
In 2010, 2012, and 2014 the billionaire spent significant money trying (unsuccessfully) to take out Oregon Democratic Representative Peter DeFazio, who has made his support of higher Wall Street taxes a signature issue. And DeFazio has used the fact that he’s a Mercer target to burnish his fiscal-progressive bona fides.
Mercer helped Lee Zeldin defeat former Securities and Exchange Commission prosecutor George Demos in a 2014 Republican House race primary. Mercer also helped Zeldin win the general election, where he defeated a Democratic incumbent who was a vociferous defender of Dodd-Frank.
But his areas of interest are broader than just elections. He singlehandedly paid for a $1 million TV ad campaign opposing the so-called Ground Zero Mosque. And his affinity for conservative causes seems to go back to his early days doing research for the Kirtland Air Force Base’s weapons lab in New Mexico.
Mercer hinted at his political evolution in a 2014 speech he gave to accept the Association for Computational Linguistics lifetime achievement award. He described rewriting a computer program so that it worked more efficiently, and then said that his bosses at the lab decided to just make the program do more complicated computations.
“I took this as an indication that one of the most important goals of government-financed research is not so much to get answers as it is to consume the computer budget, which has left me ever since with a jaundiced view of government-financed research,” he said.
Excepting Zeldin, Mercer’s chosen candidates haven’t fared particularly well. The billionaire spent $1 million to help pay for the 2012 Republican National Convention, and also gave Karl Rove’s Crossroads GPS significant funds to try to boost Republicans’ fortunes. And he spent $200,000 on Wendy Long’s Senate race. Who’s Wendy Long, you ask? Right.
There’s a kind of funny flip in the media narrative here, too. After Cruz announced that he would run, a Politico sub-hed blared that he was “months behind his competitors in recruiting mega-donors and bundlers.” If the storied $31 million materializes, then those concerns were probably meritless.
But, to paraphrase the poet, with new money comes new problems. And it remains to be seen how a cozy alliance with a guy whose hedge fund allegedly dodged $6 billion in taxes could play out for the senator.
By: Betsy Woodruff, The Daily Beast, April 10, 2015
“Squirt Gun Rambo’s”: When Fake Guns Are Banned And Real Guns Are Protected
Three years ago, Tampa was getting ready to host the Republican National Convention, and local officials took a variety of steps to improve public safety for those attending the event. Among the items prohibited in the area outside the convention center? Water guns – but not real guns. The former was deemed a possible threat to public safety, while the latter was protected by state law.
A similar issue came up recently in Tennessee.
The Tennessee House of Representatives passed a bill Monday night that makes it illegal to take a squirt gun – but not a real gun – within 150 feet of a school.
The new ban was included in a larger bill that would nix any local laws prohibiting people with gun permits from taking guns to parks.
The headline in The Tennessean read, in all seriousness, “House bill bans fake guns – not real guns – near schools.”
What’s especially striking about this story are the circumstances that led state lawmakers to take a look at gun policy in the first place.
As Rachel noted on the show last night, the National Rifle Association’s annual conference starts this week in Nashville, and Tennessee’s Republican-led state government was looking for a way to approve a “thank-you” gift to the NRA in the form of new state policy. The legislature set aside several days of legislating on the issue, which affectionately became known as “gun week.”
As part of the process, lawmakers wondered what to do about a guy known locally as “the Radnor Lake Rambo,” who has a habit of walking around outside courthouses and schools while wearing a bulletproof vest and carrying an assault rifle, which tends to freak people out.
So, one Republican state legislator figured that as long as Tennessee was in the midst of “gun week,” maybe they should do something about the Rambo guy who tends to scare the bejesus out of people. But GOP lawmakers also didn’t want to do anything that might offend the National Rifle Association.
What’d they come up with? A ban on squirt guns. As Rachel explained:
“It’s a ban on fake guns, toy guns, things like squirt guns would be banned specifically anywhere near Tennessee schools. No squirt guns, no fake guns within 150 feet of Tennessee schools.
“Real guns are still OK. But squirt guns and toy guns would be illegal outside of schools under the new law. The ostensible reason for this new language was to respond to the Radnor Lake Rambo guy. The Tennessean newspaper helpfully points out that that guy is actually carrying real guns, so he’d still be OK to keep doing what he’s doing under the new law. But if your personal plan to stop that guy was to sully his bullet proof vest with a squirt from your super soaker, you would be the Tennessee gun criminal now, not him.”
Right. If you stood near a school with a loaded AR-15, that would be legal. If you stood near a school with a water pistol, that’d be illegal.
This, evidently, got a little too weird for the legislature, which decided to slow the whole process down, even if that meant not being able to present the NRA with a legislative gift by tomorrow.
By: Steve Benen, The Maddow Blog, April 10, 2015
“How A President Paul Would Remake Society”: Rand Paul Is Building A Bridge — To The Early 1800s
The official launch of Rand Paul’s presidential campaign this week showcased an interesting blend of proposals, with the junior senator from Kentucky agitating against the forthcoming Iran deal, racially unjust incarceration, and NSA surveillance. The bulk of it, however, was dedicated to a libertarian vision of government — one drastically at odds with the last century of American governance and more.
This vision isn’t just contained to his speeches. Paul’s budget proposals provide a blueprint for how a President Paul would remake society, and the result is eyewateringly radical. When it comes to domestic policy, his views are far to the right even of Paul Ryan, whose budgets would decimate the legacy of the New Deal. It’s a vision of government from the age of Thomas Jefferson, and ludicrously unsuited to the 21st century.
And yet Paul, despite fashioning himself as an outsider, will likely be a contender in the Republican primary, which means his ideas deserve close scrutiny.
Dylan Matthews has done a deep dive into the various Paul budgets of the last three years, and the findings are jarring. “The gap between Paul’s budget and Ryan’s,” he writes, “is nearly as big as the gap between Ryan’s and Democrats.”
On one occasion or another, Paul has proposed completely abolishing the Departments of Education, Housing and Urban Development, and Energy; the Bureaus of Reclamation and Indian Affairs; all foreign aid; and the Earned Income Tax Credit and Child Tax Credit. On the tax side, he proposes a flat income tax and scrapping the tax on estates, capital gains, dividends, large gifts, as well as the Alternative Minimum Tax.
As Matt Bruenig concludes, this would amount to a stupendous redistribution of income from poor to rich, likely unprecedented in American history. The poor would see their taxes massively increased, while the rich would enjoy a corresponding decrease.
In Paul’s dream world, other government departments get merely eviscerated. The Interior Department is cut by 78 percent, State by 71 percent, the General Services Administration by 85 percent, and the Transportation and Agriculture departments by a comparatively modest 49 percent cut each. The military was cut by 30 percent in early budgets, though Paul has since reversed himself on that.
But wait, there’s more! Science gets gored by Paul, with 20 percent of funding taken from the National Institutes of Health, 25 percent from NASA, 20 percent from the U.S. Geological Survey, 62 percent from the National Science Foundation, and even 20 percent from the Centers for Disease Control and Prevention (which, you may recall, recently prevented an outbreak of Ebola in the U.S.).
These aggressive cuts to discretionary spending are the simple result of huge tax reductions combined with a balanced budget. But Paul also appears to be groping as far towards the libertarian “night watchman state” — limited to the police, military, and courts — as he dares. Though Paul’s views, tainted by roots in his father’s very long history of bigoted conspiracy nutbaggery, are far from the austere purity of Robert Nozick, it’s clear Paul thinks most of what the government has done since the 1930s is illegitimate.
He’s a supporter of the Lochner doctrine, named after a 1905 Supreme Court case that conveniently discovered an unwritten “liberty of contract” in the 14th Amendment and thus abolished most laws regulating working conditions. He’s a fan of the Supreme Court decisions against the New Deal. His latest budget argues that anything but a flat tax is likely unconstitutional. It seems clear that if he had his druthers, he really would abolish everything but the police, the military, and the courts.
This extreme suspicion of federal government is only matched by his reverence for rich people and businesses; Paul does not touch property law, special legal protections for corporations, or even the wretched mortgage interest deduction. His position would fit reasonably well in the Gilded Age or the pre-World War I era, when “due process” for workers was often non-existent.
But it was Thomas Jefferson who made the most sustained effort to bring the libertarian utopia into being. Fighting against Alexander Hamilton and his allies, Jefferson did about all he could, especially early in his first term, to implement the night watchman state. It didn’t work very well, and he began abandoning the effort by the end of his term — and he was living in an agrarian slave society. Trying it in 2016 is patently preposterous.
By: Ryan Cooper, The Week, April 8, 2015
“The Police Don’t Always Tell The Truth”: The Killing Of Walter Scott Sheds Light On The Problem Of Police Lying
Yesterday The New York Times published a video showing a police officer, Michael T. Slager, fatally shooting a black man, Walter L. Scott, as he ran away from the officer.
The video is disturbing enough by itself. But it becomes even more troubling when we consider how radically at odds the visual evidence seems to be with the police incident report filed on the killing. As the Times notes, Slager “said he had feared for his life because the man had taken his stun gun in a scuffle after a traffic stop on Saturday.” Yet the video shows Scott killed in flight, something like 20 feet away when the final bullet hit. After the shooting, Slager is shown placing an object next to Scott’s prone body. According to the Times, police reports also claim that officers performed CPR on Scott, an assertion not borne out in the video.
The death of Walter Scott will add more tinder to the already blazing political debate over police violence. The apparent contradictions between the incident report and the video highlight an overlapping but distinct problem: The police don’t always tell the truth. Police violence and police lying are two separate problems, although they also reinforce each other. Police violence flourishes in part because of the prevalence of police lying, which is rarely challenged by the criminal justice system.
In the Scott killing, there is good reason to believe that without the powerful counter-evidence provided by the video, which led to Slager being charged with murder yesterday, the police incident report would have been accepted as the official account of the shooting. Indeed, the persuasive power of police testimony extends outside official channels. Prior to the emergence of the video and Slager’s arrest, Slager’s version of events was echoed by the local media in South Carolina as if it were factual.
Police lying doesn’t just act as a shield for police violence, but as a larger source of corruption in the criminal justice system. Criminal cases are always narrative battles: Prosecutors and defense attorneys compete to win cases by presenting the most plausible stories consistent with admissible evidence. The police play a crucial part in this system as a supplier of narrative facts, in the form of both reports and testimony under oath.
As Ohio State law professor Michelle Alexander noted in a 2013 article in The New York Times, there is a powerful social presumption that we should put our faith in cops. “As a juror, whom are you likely to believe: the alleged criminal in an orange jumpsuit or two well-groomed police officers in uniforms who just swore to God they’re telling the truth, the whole truth and nothing but?” Alexander said that this abiding faith in the police is misplaced: “In this era of mass incarceration, the police shouldn’t be trusted any more than any other witness, perhaps less so.”
Alexander’s contention rests on a strong scholarly literature about “testilying”—the practice of police officers committing perjury to secure a conviction, usually against someone they think is guilty. In a classic 1996 article for the Colorado Law Review, Vanderbilt Law professor Christopher Slobogin demonstrated that both “reportilying” (falsifying police reports) and “testilying” are pervasive in many American jurisdictions.
Police perjury, Slobogin argues, occurs because “police think they can get away with it. Police are seldom made to pay for their lying.” Not just prosecutors but even many judges see themselves as sharing a common set of goals with the police of making sure the guilty get punished. Working in a shared enterprise, they are loath to challenge police perjury. “Prosecutors put up with perjury because they need a good working relationship with the police to make their cases,” Slobogin notes.
Slobogin documented his case by citing a compelling 1992 study by Myron Orfield of the Chicago criminal justice system showing that a large percentage of judges, prosecutors, and defense attorneys acknowledge the reality of police perjury: “In his survey of these three groups (which together comprised 27 to 41 individuals, depending on the question), 52 percent believed that at least ‘half of the time’ the prosecutor ‘knows or has reason to know’ that police fabricate evidence at suppression hearings, and 93 percent, including 89 percent of the prosecutors, stated that prosecutors had such knowledge of perjury ‘at least some of the time.’”
If officer Slager did fabricate his incident report in the Scott killing, he wasn’t being a bad apple but rather adhering to a dishonesty that is all too common in American police forces. Such is the credence given to police reporting that Slager’s rendition of events was only overturned by the compelling counter-narrative offered by the video, shot by a civilian onlooker.
Videos, including police body cameras, are not a panacea to the problem of police violence. The 1992 Rodney King trial alone should remind us that compelling visual testimony can be overridden by the social trust many jurors give to police. Still, in a society where both the state and many citizens are too credulous about police testimony, videos are often the best way to break the stranglehold of the official narrative.
By: Jeet Heer, Senior Editor, The New Republic, April 9, 2015
“Super-Wacko-Birds”: Another Step In The Evolution Of Super-PACs As Instruments For Donor Control Of Politicians
Ted Cruz has managed to distract attention from Rand Paul’s campaign launch by letting it be known that four Super-PACs have been set up to support his own candidacy, with commitments already in for a cool $31 million. If you boil off all the chattering about the size of the contributions (not really all that much in the larger scheme of things) and the amnesia about the role Super-PACs played in 2012, two things seem to make this noteworthy: how early the money came in, and the structure of the Cruz Super-PACS, which suggest an unprecedented degree of specialization and micro-managing of Grandee dollars.
This latter dimension was explored at Bloomberg Politics (which broke the story on the Cruz Super-PACs) by Julie Bykowicz and Heidi Przybyla:
One of the constellation of committees first reported Wednesday by Bloomberg appears to be underwritten by Republican mega-donor Robert Mercer and his family. Campaign lawyers said the arrangement is unlike anything they’ve ever seen before.
“It’s something to watch,” said Jason Abel of Steptoe & Johnson, who is not involved with the super-PACs. Abel and other lawyers speculated that multiple committees, all of which are named some form of “Keep the Promise,” were created to satisfy the whims of individual donors.
“It appears that setting up multiple super-PACs would allow maximum flexibility for certain donors to push their issues,” Abel said. The Campaign Legal Center’s Paul Ryan suggested that the arrangement creates “different pots of money for donors to fund different things.”
A strategist involved with the committees, who asked not to be named because he’s not authorized to speak publicly, corroborated those theories. Each of the super-PACs—Keep the Promise and three “sub-super-PACs” dubbed Keep the Promise I, Keep the Promise II and Keep the Promise III—will be controlled by a different donor family, and will likely develop different specialities, such as data mining, television advertising and polling, the strategist said.
If that’s accurate, it means another step in the evolution of Super-PACs as instruments for donor control of politicians. The 2012 versions were organizations set up by candidates to serve as conduits for big donor dollars that didn’t just go into the hungry maw of the campaign, much less national “issue organizations,” but went directly into ads or other tangible products. It seems the Cruz Super-PACs will allow even greater targeting of dollars beyond the control of the candidate and his dollar-hungry consultants. Add in the early timing, and it’s plausible that these Super-Wacko-Birds feel they are steering rather than simply maintaining the Cruz campaign. I guess that’s how these people want to roll.
By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, April 9, 2015
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 