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“Where There’s Smoke, There’s Money”: Tobacco Giant Reynolds American Inc Funded Conservative Nonprofits

Tobacco giant Reynolds American Inc. last year helped fund several of the nation’s most politically active — and secretive — nonprofit organizations, according to a company document reviewed by the Center for Public Integrity.

Reynolds American’s contributions include $175,000 to Americans for Tax Reform, a nonprofit led by anti-tax activist Grover Norquist, and $50,000 to Americans for Prosperity, a free-market advocacy outfit heavily backed by billionaire brothers Charles and David Koch.

The tobacco company’s donations are just a fraction of the nearly $50 million that those two groups reported spending on political advocacy ads during the 2012 election cycle, almost exclusively on negative advertising. Federal records show that Americans for Prosperity alone sponsored more than $33 million in attack ads that directly targeted President Barack Obama.

But the money, which Reynolds American says it disclosed in a corporate governance document at the behest of an unnamed shareholder, provides rare insight into how some of the most powerful politically active 501(c)(4) “social welfare” nonprofits are bankrolled.

Reynolds American is the parent company of R.J. Reynolds Tobacco, which makes Camel and Winston brand cigarettes.

“The shareholder specifically requested that we disclose information about 501(c)(4)s, and in the interests of greater transparency, we agreed,” Reynolds American spokeswoman Jane Seccombe said.

Large corporations — tobacco companies or otherwise — almost never release information about their giving to such groups, and it’s most unusual for the groups themselves to voluntarily disclose who donates to them.

These groups, which obtain their nonprofit status because they say their “primary purpose” is not political activity, are generally under no legal obligation to detail their funding sources. Super PACs and other recognized political committees, by contrast, must report the names of their contributors who give more than $200 and the amounts they give.

Yet during the 2012 election cycle, various social welfare nonprofit organizations, emboldened by the U.S. Supreme Court’s Citizens United v. Federal Election Commission decision in January 2010, spent more than $250 million to promote or attack federal political candidates, according to the nonpartisan Center for Responsive Politics. The source of most of that money remains a mystery.

Reynolds American’s other contributions last year to 501(c)(4) groups include $100,000 to the Partnership for Ohio’s Future, an organization run by the Ohio Chamber of Commerce that spent several million dollars in a failed 2012 ballot initiative campaign to uphold a law limiting public workers’ collective bargaining rights. It also gave $12,500 to the National Taxpayers Union, a 501(c)(4) group that backed Republican candidates last year with modest expenditures.

Ohio Chamber of Commerce Executive Vice President Linda Woggon told the Center for Public Integrity she wasn’t aware that Reynolds American planned to disclose its donation to Partnership for Ohio’s Future.

But Woggon said she did not have a problem with officials there doing so, adding that “the decision is up to the company.”

Americans for Prosperity, which in 2011 reported to the IRS it received more than $25.4 million in contributions and grants, “leaves it up to our supporters” to decide whether to reveal their donations,” spokesman Levi Russell said.

“It’s their right, and we respect it,” he said.

Officials at Americans for Tax Reform, which in 2011 reported to the IRS that it received nearly $4 million in contributions and grants, did not reply to several requests for comment.

Within the tobacco industry, Reynolds American competitor Lorillard, which manufactures Newport brand cigarettes, has no nonprofit donation disclosure policy in place.

Ronald Whitford, the company’s associate general counsel, said Lorillard “could look at possibly enhancing disclosure in the future.”

Altria, the world’s largest tobacco company, does make contributions to politically active nonprofit organizations, spokesman Bill Phelps said — but he would not name any beneficiaries.

Altria’s corporate policy only requires it disclose its contributions to 501(c)(4) nonprofits in narrow circumstances, none of which applied to its 2012 donations, Phelps said.

For example, Altria, which makes Marlboros, the top-selling cigarettes, would publicly disclose a contribution if a nonprofit used at least $50,000 specifically for “political activities” as defined by the Internal Revenue Service — but only if the nonprofit informed Altria of this fact.

The IRS considers political activity to be the “participation in, or intervention in, any political campaign on behalf of (or in opposition to) any candidate for public office.”

Therefore, by its own rules, Altria would not disclose contributions that a 501(c)(4) used to fund so-called “issue advertisements” that are sometimes barely distinguishable from ads that directly advocate for or against a politician.

Politically active nonprofit groups such as Americans for Prosperity and Crossroads GPS, which was co-founded by GOP strategist Karl Rove, together spent millions of dollars on these kinds of communications last year.

Reynolds American’s written corporate policy on nonprofit donation disclosure is similar to that of Altria. But the policy “represents the minimum disclosure threshold,” said Seccombe, the company spokeswoman.

Reynolds American specifically acknowledged its donation to Americans for Tax Reform “because of expected stakeholder interest, not because the contributions were intended to be used or were in fact used for ‘political activity’ as that term is meant for purposes of the Internal Revenue Code,” Seccombe added.

She declined to speculate on which 501(c)(4) organizations Reynolds American will donate to this year. But officials will release information on its 2013 donations early next year, she said.

The company’s actions, although limited and hardly in real time, “set a precedent” and are “to be commended,” said Bruce Freed, president of the Center for Political Accountability, which tracks and advocates for political transparency by corporations.

“We just haven’t seen this with other companies related to their giving to (c)(4)’s,” Freed said.

 

By: David Levinthal, The Center for Public Integrity, May 31, 2013

June 4, 2013 Posted by | Campaign Financing, Citizens United | , , , , , , , | Leave a comment

“Never Ever, Ever, Ever…”: Grover Norquist’s Pledge Used To Be Politically Expedient, Now It’s Not

A few words to ponder as we sail toward the fiscal cliff. Those words would be: “That was then, this is now.”

Strip away the false piety and legalistic hair-splitting offered by Republican lawmakers rationalizing their decision to abandon a pledge that they will never ever, ever, ever vote to raise taxes, and that’s pretty much what the explanation boils down to.

Rep. Peter King says he understood the pledge, propounded by the almighty Grover Norquist and his group Americans for Tax Reform, to obligate him for only one term. Apparently, he thought it had to be renewed, like a driver’s license.

Sen. Lindsey Graham says that if Democrats agree to entitlement reform, “I will violate the pledge … for the good of the country” — a stirring statement of patriotism and sacrifice that warms your heart like a midnight snack of jalapeño chili fries.

In other words: bull twinkies. If you want the truth of why a trickle of GOP lawmakers is suddenly willing to blaspheme the holy scripture of their faith, it’s simple. The pledge used to be politically expedient. Now it is not.

This is not, by the way, a column in defense of the Norquist pledge. The only thing dumber than his offering such a pledge was scores of politicians signing it, an opinion that has nothing to do with the wisdom or lack thereof of raising taxes and everything to do with the fact that one ought not, as a matter of simple common sense, make hard, inflexible promises on changeable matters of national import. It is all well and good to stand on whatever one’s principles are, but as a politician — a job that, by definition, requires the ability to compromise — you don’t needlessly box yourself in. Never say never.

Much less never ever, ever, ever.

So this revolution against “he who must be obeyed,” however modest, is nonetheless welcome. It suggests reason seeping like sunlight into places too long cloistered in the damp and dark of ideological rigidity.

But it leaves an observer in the oddly weightless position of applauding a thing and being, simultaneously, disgusted by it. Has politics ever seemed more ignoble than in these clumsy, self-serving attempts to justify a deviation from orthodoxy? They have to do this, of course, because the truth — “I signed the pledge because I knew it would help me get elected, but with economic ruin looming and Obama re-elected on a promise to raise taxes on the rich and most voters supporting him on that, it’s not doing me as much good as it once did” — is unpretty and unflattering.

In this awkward about-face, these lawmakers leave us wondering once again whether the vast majority of them — right and left, red and blue, Republican and Democrat — really believe in anything, beyond being re-elected.

There is a reason Congress’ approval ratings flirted with single digits this year. There is a reason a new Gallup poll finds only 10 percent of Americans ranking Congress “high or very high” in honesty and ethics.

Lawyers rank higher. Advertisers rank higher. Even journalists rank higher.

This is the sad pass to which years of congressional grandstanding, fact spinning, cookie-jar pilfering and assorted harumphing and pontificating have brought us. And while a certain cynicism toward its leaders functions as a healthy antigen in the body politic, it cannot be good for either the nation or its leaders that so many of them are held in plain contempt.

The moral malleability exemplified by the likes of King and Graham will not help. Perhaps we should ask them to sign a new pledge: “I will always tell you what I think and what I plan to do in plain English, regardless of whether you like it or it benefits me politically.”

But no lawmaker would make that pledge. And who would believe them if they did?

 

By: Leonard Pitts, Jr., The National Memo, December 10, 2012

December 11, 2012 Posted by | Politics | , , , , , , , , | Leave a comment

“Unicorn’s And Other Fables”: Grover Norquist’s Latest Plot To Drown Government…Monthly Debt Ceiling Fights

There’s two ways to look at Grover Norquist. He’s either the most powerful unelected man in the world or an amazing self-promoter who is about to be proven obsolete. Norquist obviously feels he’s the former. For nearly two decades, he’s held Republicans to a pledge to never raise taxes. Now he wants them to force the president to cede to their wishes on a monthly basis.

The President of Americans for Tax Reform is urging Republicans to use the debt ceiling to exact spending cuts or continue the Bush tax cuts for incomes over $250,000.

“The debt ceiling that Obama’s plans bump into every month or so for the next four years provides plenty of ‘leverage’ for the GOP to trade for spending cuts — as done in 2011 — or continuing the lower rates,” Norquist wrote Wednesday in The Hill.

Nearly 6 out of 10 Americans want to end the Bush tax breaks for the rich. But enough Republicans in the House and Senate have signed Norquist’s American Taxpayer Pledge that he’s certain that the negotiations on the so-called “fiscal cliff” can end without taxes going up.

After an electoral college landslide, many — including the White House — believe that the president has the leverage in negotiations. But the debt ceiling, which we will hit in February, does give Republicans a chance to make demands on the president.

When President Obama asked Speaker Boehner to raise the debt limit, Boehner reportedly said, “There is a price for everything.”

In 2011, Republicans, for the first time ever, used the debt limit to force cuts — something they never asked for in the dozens of times they raised the limit for the last three Republican presidents.

Though senators Lindsey Graham, Saxby Chambliss and other Republicans have said they would break their pledge with Norquist, the lobbyist seems unfazed. He told Slate’s Dave Weigel that he has no concerns that his pledge is about to crumble.

“I’ve talked to Lindsey Graham on the phone after some of his pronouncements, and he’s said, ‘Oh, I would need 10-1 [ratio of cuts to tax hikes], and it would have to include permanent, unalterable entitlement reform.’ I said, ‘Lindsey, if that’s what it’s going to take to get you to raise taxes, I’m not going to worry about you,” Norquist said. “You are not in danger of being offered a silver unicorn, because unicorns don’t exist.”

The Washington Post’s Greg Sargent keeps insisting that the GOP is just trying to present an appearance of compromise. Some Republicans are making news with their alleged willingness to buck Norquist — but votes speak louder than words.

Unlike many Republicans, Norquist would be pleased if the so-called sequester goes into effect. He’s a Republican who believes the Department of Defense isn’t sacred when it comes to spending cuts.

The question is, how many Republicans would be willing to risk the cuts to Defense along with responsiblty for a middle-class tax increase by holding out for a deal that honors Norquist’s pledge?

And if the president won’t agree, will they doom the United States’ credit and cause unprecedented “uncertainty,” which Republicans claim to hate, by holding the debt limit hostage on a monthly basis?

Even if Republicans were to go down that path, the president would have to adopt a strategy advocated by former president Bill Clinton often called “the 14th Amendment option.”

The amendment includes the sentence, “The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion shall not be questioned.”

In 2011, Clinton said that “without hesitation” he would invoke the 14th Amendment “and force the courts to stop me.”

President Obama nixed that plan, saying his lawyers didn’t see the validity in it. But if Republicans decided to use the debt ceiling to keep him on an “allowance,” it wouldn’t be hard to imagine him deciding that it was worth going to court.

Norquist has never been shy about his disdain for government. He’s often joked,” I just want to shrink it down to the size where we can drown it in the bathtub.” But he’s never faced a predicament like expiring tax cuts and a president with the political capital to fight to keep some of them expired.

Soon we’ll find out how much power he actually has.

 

BY: Jason Sattler, The National Memo. November 28, 2012

November 29, 2012 Posted by | Debt Ceiling | , , , , , , , , | Leave a comment

“Putting The Nails In The Coffin”: Has Grover Norquist And His Anti-Tax Pledge Reached The End Of The Road?

Yet another prominent Republican has added his name to the list of those for whom the allure of the Grover Norquist “Taxpayer Protection Pledge” has lost its luster.

Senator Saxby Chambliss (R-GA) has announced that he will no longer honor his commitment to the Norquist pledge wherein he promised not to raise taxes under any circumstances whatsoever. Appearing on a local Georgia television program, Chambliss said, “I care more about my country than I do about a 20-year-old pledge. If we do it his way then we’ll continue in debt, and I just have a disagreement with him about that.”

While Chambliss expects Norquist to push back on his defection by supporting a primary challenge to Senator Chambliss when he stands for re-election in 2014, Chambliss has decided to take his chances, noting, “But I don’t worry about that because I care too much about my country. I care a lot more about it than I do Grover Norquist.”

While Saxby Chambliss’ sentiment is admirable, is it possible that he has done the math and concluded that the Norquist modus operandi of going after any Republican that dare defy him just doesn’t pack the punch it once possessed?

Judging from the 2012 election results, there is reason to believe that Grover Norquist’s days of bullying candidates into doing his bidding may be a thing of the past.

Going into the elections, 279 Congressional incumbents—along with 286 challengers—had signed the anti-tax pledge. However, at a time when the polls point to an overwhelming number of Americans favoring a rise in the tax rates for the nation’s very wealthiest, some 57 Republican House incumbents or challengers who signed the pledge went down to defeat while 24 GOP sitting Senators or those seeking a seat lost in their race.

Included among the high profile, pledge-signing losers were Senator Scott Brown (R-MA), former Wisconsin Governor and cabinet member Tommy Thompson (R-WI) and two-time loser Linda McMahon (R-CT). Over in the House, long time Congressmen Dan Lungren got beat after a constituent publically challenged him for signing the pledge while two GOP incumbents who had received direct funding from Norquist’s organization, Americans For Tax Reform, in an effort to save their seats, were unsuccessful.

Meanwhile, GOP Senate leaders such as Bob Corker (R-TN), John McCain (R-AZ) and Tom Coburn (R-OK), have become more vocal in their opposition to Grover Norquist and his tactics as has leading conservative voice, Bill Kristol.

Adding what might be the final nail in the coffin for Mr. Norquist’s brand of political blackmail is the fact that the likely GOP frontrunner for the party’s presidential nomination in 2016, Gov. Jeb Bush—while highly supportive of keeping taxes low—has steadfastly refused to sign the tax pledge saying, “I don’t believe you outsource your convictions and principles to people.” The younger Bush follows in the footsteps of his father, President George H.W. Bush, who earlier this year made his own feelings completely clear when he remarked, “The rigidity of those pledges is something I don’t like. The circumstances change and you can’t be wedded to some formula by Grover Norquist. It’s – who the hell is Grover Norquist, anyway?”

Good question—who the hell is Grover Norquist, anyway?

While he has managed to become more famous than most, at the end of the day, Grover Norquist is a lobbyist.

In fact, according to Jack Abramoff—the disgraced lobbyist who went to jail after entering a guilty plea to three criminal felonies involving defrauding American Indian tribes and corrupting public officials—Mr. Norquist’s organization served as a conduit for funds that flowed from Abramoff’s clients to surreptitiously finance grass-roots lobbying campaigns.

The Washington Post reports,

“The federal probe has brought a string of bribery-related charges and plea deals. The possible misuse of tax-exempt groups is also receiving investigators’ attention, sources familiar with the matter said. Among the organizations used by Abramoff was Norquist’s Americans for Tax Reform. According to an investigative report on Abramoff’s lobbying released last week by the Senate Indian Affairs Committee, Americans for Tax Reform served as a “conduit” for funds that flowed from Abramoff’s clients to surreptitiously finance grass-roots lobbying campaigns. As the money passed through, Norquist’s organization kept a small cut, e-mails show. A second group Norquist was involved with, the Council of Republicans for Environmental Advocacy, received about $500,000 in Abramoff client funds…”

Mr. Norquist has denied any wrongdoing in the Abramoff matter and neither he nor his organization(s) have ever been charged for any offense related to the same.

With Saxby Chambliss’s new found independence and willingness to once again exercise his own judgment and regain control of his own vote when it comes to tax matters, expect other legislators—on both the federal and state level—to now join in.

The Norquist era has come and gone—and thank Heaven for that.

Whether you support tax increases for some or detest the very notion of anything short of a decrease in taxes, we elect leaders to think for themselves and to serve the needs of their constituents. Unless you are an elected official from a district that Grover Norquist calls home, Mr. Norquist, and his Americans For Tax Reform, are not a constituency—they are a special interest lobby.

The time has come for a little GOP courage. While Mr. Norquist may have been able to impose his will on Republican incumbents who fear a primary challenge from the right courtesy of Grover Norquist, the reality is that there are only so many such challenges Mr. Norquist can afford to mount. Therefore, the more GOP elected officials who reject the notion of handing over their vote to the likes of Grover Norquist, the lower the odds that these politicians will pay the price for their defection come election season.

The clock on Grover Norquist’s fifteen minutes of fame has expired—and the sooner Republican incumbents and candidates figure this out, the sooner they will be able to impress the voters with their willingness to think for themselves and for their constituencies rather than turning control over to a lobbyist.

How can that possibly be a bad thing?

By: Rick Ungar, Op-Ed Contributor, Forbes, November 23, 2012

November 24, 2012 Posted by | Taxes | , , , , , , , , | 3 Comments

“A Stupid Poopy Head”: Is it Game Over For Grover Norquist?

Two meetings in Washington today tell the story of the decline of Grover Norquist, the conservative activist who is seeing his near-iron grip on GOP tax policy over the past two decades slipping. One is Norquist’s weekly “Wednesday Meeting,” a gathering of “more than 150 elected officials, political activists, and movement leaders” who plot strategy and coordinate messaging every week. After big losses at the polls in last week’s election and a fracturing conservative base just as Congress heads into its most important tax negotiations in years, it’s safe to assume that this morning’s meeting was tense.

There was a time when almost every single elected Republican in Washington and even state capitals would sign Norquist’s anti-tax pledge, which binds elected officials to a promise not to raise taxes under any circumstance. As recently as last year’s negotiations over the debt ceiling, Norquist had fealty from a majority in the House of Representatives, including Speaker John Boehner and the entire GOP leadership. “60 Minutes’” Steve Kroft labeled Norquist “the most powerful man in Washington.” Those who violate his pledge could long expect to face attack ads aimed at unseating them, bankrolled by Norquist’s massive war chest. Americans for Tax Reform spent almost $16 million on independent expenditure ads in 2012. Crossing the group has always increased the likelihood of a primary challenge.

But times are changing. Today’s second interesting meeting is taking place a few blocks away from Norquist’s downtown D.C. headquarters, at the White House, where President Obama is meeting with a dozen CEOs of the country’s biggest corporations. How did Norquist react to news of Obama reaching out to the business community, which he aims to represent in Washington? Not positively. Norquist told the Washington Post the CEOs were “acting like a group of trained seals” for Obama, posing for a “photo op” to give the president cover.

You’d think Norquist would be happy that Obama is giving an audience to the titans of the private sector, but no. That’s because the meeting, which gives the president a chance to win some business support for his agenda without any input from Norquist, represents a threat to his personal power. Is his petulant reaction — he invoked the term “poopy head” on national TV on Monday — a sign that he’s losing his once awesome power over the nation’s capital? Maybe.

Norquist faces an unprecedented rear-guard attack as the congressional GOP fractures on the tax issue. Last year, there were 238 members of the House and 41 members of the Senate who had signed Norquist’s pledge. This year, there are just 217 in the House — one shy from the 218 needed for a majority — and 39 in the Senate, an all-time low. As the Hill’s Russell Berman reports, while Norquist claims his army is 219 strong in the House, two of those members have since disavowed Norquist’s pledge.

Democrats are hoping to exploit GOP divisions to push for tax increases on the wealthy during the lame duck session of Congress. “More and more people on the hill are realizing that Norquist is a has-been, and the outcome of the fiscal cliff will probably consign him to the footnote status he’s always deserved,” a senior Democratic aide told Salon.

The true scale of the desertion from Norquist’s pledge is actually obscured by GOP losses in the House. At least a dozen of the House Republicans’ top recruits, touted as “Young Guns,” declined to sign the pledge this year. Norquist’s group spent hundreds of thousands of dollars on ads explicitly defending candidates like California Republican Ricky Gill and Georgia Republican Lee Anderson against flak they were taking for signing the pledge. Both lost.

And back in Washington, where signing the pledge was once de rigueur, Republicans have been increasingly bold in rebuking Norquist. Oklahoma Sen. Tom Coburn has long been a sharp critic of the pledge’s inflexibility — “Grover, you’re stupid,” is just a sample — but now he’s being joined by a growing roster of colleagues. “Grover Norquist has no credibility, so I don’t respond to him. He doesn’t deserve being responded to,” said Georgia Republican Sen. Saxby Chambliss. “Simply put, I believe Mr. Norquist is connected with and has profited from a number of unsavory people and groups out of the mainstream,” said longtime Virginia Republican Rep. Frank Wolf on the House floor.

Several members have even retreated from the pledge, such as Minnesota Rep. Chip Cravaack, who was elected in 2010 and had one of the nation’s highest profile races this year. “I have learned, never sign a damn pledge,” he said this spring when asked about Norquist’s pledge. Cravaack still lost. Indeed, the pledge came up in a number of races and there’s some evidence that it proved to be a political liability.

And it’s not just in rhetoric. Norquist faced one of the biggest legislative tests of his power when a subsidy for ethanol production came up for renewal last year. He staunchly opposed it, saying eliminating the tax subsidy would be a de facto tax increase and thus a violation of the pledge. Republicans joined Democrats to kill the subsidy anyway.

Norquist has also been rebuked on looming military cuts that will automatically take effect at the end of the year if Congress and the president fail to reach a budget deal. Republican hawks like Sen. Lindsey Graham of South Carolina have said they’re willing to raise taxes to preserve Pentagon funding. Asked about how this would conflict with the pledge this summer, Graham shrugged and said, “I’ve crossed the Rubicon on that.” Today, even Sen. John McCain said at the Washington Ideas Forum that “fewer and fewer people are signing this [Norquist] pledge.” He said this “somewhat triumphantly,” the Huffington Post’s Sam Stein noted.

Even former President George H.W. Bush and his son, former Florida Gov. Jeb Bush, an early 2016 favorite for the GOP nomination, have disowned Norquist publicly. “The rigidity of those pledges is something I don’t like. The circumstances change and you can’t be wedded to some formula by Grover Norquist. It’s — who the hell is Grover Norquist, anyway?” the senior Bush told Parade magazine in July. “The pledge was presented to me three times. I never signed the pledge,” the younger Bush testified to Congress in June. “I don’t believe you outsource your principles and convictions to people.”

Of course, the tide has been turning against Norquist for some time, and his demise has been predicted before. But this crisis moment in Washington looks a lot like a breaking point for the anti-tax agenda. Speaker Boehner has already indicated willingness to increase revenues and the consensus among Washington power brokers is that taxes on the wealthy will go up one way or the other, even if rates stay the same. Indeed, President Obama has vowed to veto anything that doesn’t. And the problem with a hard-line pledge like Norquist’s is that it intentionally leaves no room for flexibility. So once the dam cracks, it can break wide open.

 

By: Alex Seitx-Wald, Salon, November 14, 2012

November 15, 2012 Posted by | Politics | , , , , , , , , | 2 Comments

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