“The Real IRS Problem”: The Post Citizens United Explosion Of Undisclosed Political Campaign Spending
Americans of all political stripes should be outraged at the recent revelation that the Tea Party was unfairly targeted by the IRS before last year’s election. The IRS should never base its decisions on political preferences or ideological code words, regardless of what bureaucratic challenges it may face. But the lesson that the right is drawing from the IRS’s misdeeds — the lesson that threatens to dominate the public conversation about the news — is wrong.
We’re seeing a knee-jerk reaction, particularly from the Tea Party and their allies in Congress, that is threatening to turn the IRS’s mistakes into an indictment of “big government” writ large. Some are already trying to tie the scandal to the Right’s favorite target, Obamacare, and to the Benghazi conspiracy theory.
The danger of this frame is that it will discourage the IRS from fully investigating all nonprofit groups spending money to influence elections. And it will distract from the core problem behind the IRS’s mess: the post-Citizens United explosion of undisclosed electoral spending.
Before the Supreme Court’s decision in Citizens United, only a limited number of nonprofit 501c(4) groups could spend money to influence elections — those who did not take contributions from corporations or unions. But Citizens United lifted restrictions on corporate spending in elections, setting the stage for individuals and companies to funnel unlimited money through all corporations, including c(4)s and super PACs in an effort to help elect the candidates of their choice. Spending by c(4)s has exploded since Citizens United, since the decision allowed any c(4) nonprofit corporation that didn’t spend the majority of its money on electoral work to run ads and campaign for and against candidates. And c(4)s, as long as they follow this rule, don’t have to disclose their donors under the laws currently in place.
The IRS, then, was forced to play a new and critical role in policing this onslaught of electoral spending. IRS officials clearly made poor choices in how to confront this sudden sea change and those mistakes should be investigated and properly addressed. But strong oversight of this new wave of spending remains critically important and clearlywithin the IRS’s purview.
If we let understandable concerns about bad decisions by the IRS lead to weakening of campaign finance oversight, our democracy will be the worse off for it. Instead, we should insist that the government strengthen its oversight of electoral spending — equally across the political spectrum. We should pass strong disclosure laws that cover all political spenders, including c(4)s. And we should redouble our efforts to overturn Citizens United by constitutional amendment and reel back the flood of corporate money that led the IRS to be in this business in the first place.
By: Michael B. Keegan, The Blog, The Huffington Post, May 15, 2013
“Focusing On The Wrong People”: The Real IRS Scandal Is Secret Money Influencing US Elections
The IRS is under siege for investigating conservative political groups applying for tax-exempt status. But the real problem wasn’t that the IRS was too aggressive. It was that the agency focused on the wrong people—“none of those groups were big spenders on political advertising; most were local Tea Party organizations with shoestring budgets,” writes The New York Times—and wasn’t aggressive enough. The outrage that Washington should be talking about—what my colleague Chris Hayes calls “the scandal behind the scandal”—is how the Citizens United decision has unleashed a flood of secret spending in US elections that the IRS and other regulatory agencies in Washington, like the Federal Election Commission, have been unwilling or unable to stem.
501c4 “social welfare” groups like Karl Rove’s Crossroads GPS, the Koch brothers’ Americans for Prosperity and Grover Norquist’s Americans for Tax Reform—which don’t have to disclose their donors—spent more than $250 million during the last election. “Of outside spending reported to the FEC, 31 percent was ‘secret spending,’ coming from organizations that are not required to disclose the original sources of their funds,” writes Demos. “Further analysis shows that dark money groups accounted for 58 percent of funds spent by outside groups on presidential television ads [$328 million in total].”
IRS guidelines for 501c4 groups state that “the promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office…a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity.” It’s ludicrous for groups like Crossroads GPS—which spent at least $70 million during the last election—to claim that its primary purpose is not political activity. Only the likes of Karl Rove would believe that running attack ads against President Obama qualifies as social welfare.
So what did the IRS do about this blatant abuse of the tax code by some of the country’s top corporations and richest individuals? Virtually nothing. “When it comes to political spending, the IRS is more like a toothless tiger,” wrote Ken Vogel and Tarini Parti last year in a story headlined, “The IRS’s ‘feeble’ grip on big political cash.”
It’s obvious that our Wild West campaign-finance system needs more, not less, scrutiny and much tighter, not looser, regulation. Yet conservative groups are exploiting the IRS scandal to further dilute regulatory agencies that are already on life support. Writes Andy Kroll of Mother Jones:
The IRS’s tea party scandal, however, could hinder the agency’s willingness to ensure politically active nonprofits obey the law. The IRS will likely operate on this front with even more caution, taking pains not to appear biased or too aggressive. That in turn could cause the agency to shy away from uncovering 501(c)(4) organizations that do in fact abuse their tax-exempt status by focusing primarily on politics.
The Rove’s of the world would like nothing more than for the public to believe that conservative groups had too few opportunities to influence the 2012 election and were wrongly persecuted by evil Washington bureaucrats. Yet the 2012 election should have taught us precisely the opposite lesson—that our patchwork regulatory system is far from equipped to deal with the new Gilded Age unleashed by Citizens United. As Rep. Keith Ellison told Hayes last night: “We need to redouble our efforts to bring real campaign-finance reform forward.”
By: Ari Berman, The Nation, May 14, 2013
“Reverse Revolving Door”: Lobbyists Snag Top Staff Positions On Capitol Hill
In January shortly after being sworn into office, Congressman Rodney Davis, a freshman Republican who eked out a win with a margin of less than a thousand votes in Illinois last year, announced that he had received several plum committee assignments. His legislative portfolio includes subcommittees that oversee commodity regulations, nutritional programs, biotechnology, and, most importantly, the 2013 Farm Bill, which sets agriculture policy for the next five years.
One of his first steps in office? Davis hired Jen Daulby, the director of federal affairs for Land O’Lakes, one of the largest producers of milk and cheese in the country, to be his chief of staff. Disclosures show that just months ago, Daulby led a Land O’Lakes lobbying team that worked on the Farm Bill, genetically modified foods labeling, rules concerning pesticides and hazardous dust, and the new commodity regulations enacted by President Obama’s financial reform law, Dodd-Frank.
What a match.
In other words, Daulby’s past lobbying portfolio perfectly reflects the new responsibilities for Davis’ committee assignments, where he will have wide sway over policy. A former Monsanto lobbyist with previous experience on Capitol Hill for several other lawmakers, Daulby is one of many staffers who rotate back and forth between public service and influence peddling.
On Monday, The Nation posted an investigation of the “reverse revolving door” in Congress, by which lobbyists hired as senior-level congressional staffers receive substantial exit bonuses or other financial rewards from their employers shortly before they assume their new Congressional positions.
In Daulby’s case, Land O’Lakes provided a parting gift of a $35,772 bonus (in addition to her 2012 bonus) in the first few weeks of January. The Davis-Daulby story isn’t all that unusual.
The members of Congress who hire former lobbyists are often outspoken supporters of legislation also heartily endorsed by their new staffers’ previous employers.
Representative Michael McCaul (R-TX), chair of the Homeland Security Committee, hired IBM lobbyist Alex Manning as his cybersecurity subcommittee staff director this year. On behalf of IBM last year, Manning worked to pass the Cybersecurity and Information Sharing Effectiveness Act (CISPA), legislation that provides broad powers to the government and to private corporations to gather private Internet user data. The ACLU—which has rallied against CISPA along with EFF, and many other civil liberties groups—called the bill a “flagrant violation of every American’s right to privacy.”
IBM, which sent nearly 200 executives to Washington to advocate on behalf of stronger cyber security laws like CISPA, has been one of the bill’s strongest supporters. CISPA passed the House in April. Representative Randy Hultgren (R-IL) recently hired Katherine McGuire, a CISPA-supporting lobbyist for the Business Software Alliance, as his chief of staff. Hultgren voted for the bill that passed last month.
Representative Fred Upton (R-MI), who is in his second term as chair of the Energy and Commerce Committee, has a long history of employing lobbyists to staff his committee. When he gained the gavel after the midterm elections, Upton hired Gary Andres, a lobbyist for UnitedHealth Group and other corporate interests, as his staff director. In 2012, Upton announced that America’s Natural Gas Alliance lobbyist Tom Hassenboehler would be his new chief counsel to a subcommittee that oversees environmental regulations. As DeSmogBlog’s Steve Horn noted, Hassenboehler is a climate change denier who worked in previous years to block cap and trade legislation. Disclosures show Hassenboehler was paid by his former employer, a trade group for fracking and natural gas companies, to lobby on a number of environmental regulations, including EPA rules concerning fracking.
This phenomenon isn’t new. In the beginning of the last Congress, at least thirteen freshman lawmakers hired lobbyists as their chiefs of staff. The chiefs of staff for Senators Ron Johnson and Marco Rubio even came from the same lobbying firm.
How, exactly, are these lobbyists-turned-staffers influencing policy? While it is difficult to discern what goes on behind closed doors on Capitol Hill, it is part of the job description of lobbyists-turned-staffers to help lawmakers draft legislation, and the bills they produce reliably include big giveaways to corporate interests. Representative Davis’ office did not respond to a request for comment about his new chief, former Land O’Lakes lobbyist Jen Daulby. But in March, Davis signed onto a bill currently pushed by Land O’Lakes to roll back federal oversight of pesticide use.
By: Lee Fang, The Nation, May 9, 2013
“As Maine Goes”: A Bipartisan Call To Overturn Citizens United
When the Maine State House voted 111-33 this week to call for a constitutional amendment to overturn the US Supreme Court’s ruling in Citizens United v. Federal Election Commission, the support for this bold gesture was notably bipartisan. Twenty-five Republicans joined four independents and all eighty-two Democrats to back the call.
Similarly, when the Maine State Senate voted 25-9 for the resolution, five Republicans joined with nineteen Democrats and independent Senator Richard Woodbury to “call upon each Member of the Maine Congressional Delegation to actively support and promote in Congress an amendment to the United States Constitution on campaign finance.”
What happened in Maine this week was a big deal for several reasons:
1. Maine became the thirteenth state to urge Congress to develop an amendment to address the money-in-politics crisis that is unfolding as a result of Supreme Court rulings that that have effectively struck down campaign-finance regulations and ushered in a new era of unlimited spending by wealthy individuals and corporate interests. Maine joins West Virginia, Colorado, Montana, New Jersey, Connecticut, Massachusetts, California, Rhode Island, Maryland, Vermont, New Mexico and Hawaii in calling for an amendment. Washington, DC, has also backed the drive.
2. The swift action by both houses of the Maine legislature, coming less than a month after West Virginia urged Congress to act, confirms the momentum that is building for the movement, which has been backed by almost 500 communities nationwide. Though media coverage has been scant, it is rare in recent history for a grassroots movement to amend the constitution to have attracted so much official support at the municipal, county and state levels nationwide.
3. As in a number of other states, the significant level of bipartisan support in Maine provides a reminder that this movement is attracting support from across the partisan and ideological spectrum.
That final point merits particular attention.
Because of the often narrow and simplistic way in which political debates are covered in the United States—if they are covered at all—there is a tendency to think that all Democrats are reformers, while all Republicans are backers of big money in politics. That’s not the case. Polling has consistently shown that Republicans support for restrictions on corporate spending in elections very nearly parallels that of Democrats. And, while there are too many national Democrats who buy into big-money equations, there are Republicans who have begun to raise the right objections—and point to the right answers. Notably, Congressman Walter Jones Jr., a very conservative Republican congressman from North Carolina, is a cosponsor—along with Kentucky Democrat John Yarmuth—of a constitutional amendment proposal that would overturn key provisions of the Citizens United decision and establish that campaign contributions can be regulated by Congress and state legislatures.
Bipartisan support for reform is more evident in the states. State legislators are active at the grassroots, knocking on doors and meeting constituents face to face. They recognize the deep frustration with a political process that seems to have spun out of control, and they reject the premise that corporations and wealthy individuals have a constitutional right to buy elections.
“There has to be a way to secure First Amendment rights to speech and still control the amount of dollars spent on campaigns,” says Maine state Senator Edward Youngblood, a Republican who went so far as to appear at rallies calling for a constitutional amendment. “It should be plain to everyone after the election we’ve just had, which broke records for spending, that the system isn’t getting better.”
Youngblood is right, and the group that organized support for reform in his state, Maine Citizens for Clean Elections, wisely reached out to Democrats, Republicans, independents and third-party backers in pursuit of a “multi-partisan” coalition.
The approach has excited national groups such as Public Citizen’s Democracy Is for People Campaign, Move to Amend and Free Speech for People. Indeed, Free Speech for People’s Peter Schurman declared, “This terrific bi-partisan vote is a huge win, not only for Maine, but for all Americans. Republicans, independents, and Democrats alike are clamoring for a constitutional amendment to reverse Citizens United and bring back real democracy. We’re thrilled that Maine is now helping lead the way forward.”
He’s right, especially when it comes to the emphasis on drawing support from all parties for a reform that seeks to restore genuine competition based on ideas—as opposed to a shouting match between billionaires.
By: John Nichols, The Nation, May 1, 2013
“The Morose Middle Class”: At Best, Treading Water And At Worst, Sinking
The Middle Class is in a funk, its view of the future growing dim as fear rolls in like a storm.
An Allstate/National Journal Heartland Monitor poll released Thursday found that while most Americans (56 percent) hold out hope that they‘ll be in a higher class at some point, even more Americans (59 percent) are worried about falling out of their current class over the next few years. In fact, more than eight in 10 Americans believe that more people have fallen out of the middle class than moved into it in the past few years.
The poll paints a picture of a group that is scared to death about its station in life.
By the way, 58 percent of respondents in the poll viewed themselves as either middle class (46 percent) or upper middle class (12 percent).
According to the poll, Americans see a middle class with less opportunity to get ahead, less job security and less disposable income than the middle class of previous generations.
Respondents were most likely (52 percent) to say that losing a job would put them at the greatest risk of falling out of their current class, followed by an unexpected illness or injury in the family.
Most of those polled believe that higher education is the key to staying in the middle class, but many worry about its prohibitive cost and inaccessibility.
And who did most of them say is responsible for making it worse for the middle class? Congress, chief executives of major corporations and big financial institutions.
Of those who blame politicians, there is some evidence that Republicans get more of the blame than Democrats. A CNN/ORC poll released last month found that 32 percent of respondents thought that Democrats favor the middle class compared with 27 percent who believed the same of Republicans. Sixty-eight percent of those polled believed that Republicans favor the wealthy, compared with 24 percent who believed that Democrats do.
This anxiety about a shrinking middle class is understandable.
A Pew Research Center study, “The Lost Decade of the Middle Class,” released in August, found that “since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some — but by no means all — of its characteristic faith in the future.”
According to the report, “Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living.”
The report continued:
“Their downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers. But the middle-income tier — defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median — is the only one that also shrunk in size, a trend that has continued over the past four decades.”
It’s important to note that many of the people who describe themselves as middle class would not be placed under that rubric by most objective observers. For instance, the Pew study found that 35 percent of people making $30,000 and under and 46 percent of those making $100,000 and over self-identified as middle class. (Meantime, six percent of those making $30,000 and under self-identified as upper class, and six percent of those making $100,000 and over self-identified as lower class. Go figure.)
As Pew pointed out, over the last decade, “middle-tier median household income” fell and median net worth plummeted, and people in the middle class said it was becoming harder to maintain their lifestyles.
To add insult to injury, another Pew report, released this week, found that “during the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7 percent of the wealth distribution rose by an estimated 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent.”
As The Washington Post reported in September after the release of a frightening Census report: “The vise on the middle class tightened last year, driving down its share of the income pie as the number of Americans in poverty leveled off and the most affluent households saw their portion grow.”
The wealthy have come surging back, riding record stock market highs, but many in the middle class are at best treading water and at worst sinking.
In his State of the Union speech in February, President Obama said that the “true engine of America’s economic growth” is “a rising, thriving middle class.”
It certainly looks as if that engine has stalled.
By: Charles M. Blow, Op-Ed Columnist, The New York Times, April 27, 2013
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