“Shadowy Billionaires”: The Men Who Own The GOP And Your Democracy
Have you heard of William Dore, Foster Friess, Sheldon Adelson, Harold Simmons, Peter Thiel or Bruce Kovner? If not, let me introduce them to you. They’re running for the Republican nomination for president.
I know, I know. You think Rick Santorum, Newt Gingrich, Ron Paul and Mitt Romney are running. They are – but only because the people listed in the first paragraph have given them huge sums of money to do so. In a sense, Santorum, Gingrich, Paul and Romney are the fronts. Dore et al. are the real investors.
According to January’s Federal Election Commission report, William Dore and Foster Friess supplied more than three-fourths of the $2.1 million raked in by Rick Santorum’s super PAC in January. Dore, president of the Dore Energy Corp. in Lake Charles, La., gave $1 million; Freiss, a fund manager based in Jackson Hole, Wyo., gave $669,000 (he had given the Santorum super PAC $331,000 last year, bringing Freiss’ total to $1 million).
Sheldon Adelson and his wife, Miriam, provided $10 million of the $11 million that went into Gingrich’s super PAC in January. Adelson is chairman of the Las Vegas Sands Corp. Texas billionaire Harold Simmons donated $500,000.
Peter Thiel, co-founder of PayPal, provided $1.7 million of the $2.4 million raised by Ron Paul’s super PAC in January.
Mitt Romney’s super PAC raised $6.6 million last month – almost all from just 40 donors. Bruce Kovner, co-founder of the New York-based hedge fund Caxton Associates, gave $500,000, as did two others. David Tepper of Appaloosa Management gave $375,000. J.W. Marriott and Richard Marriott gave a total of $500,000. Julian Robertson, co-founder of hedge fund Tiger Management, gave $250,000. Hewlett-Packard CEO Meg Whitman gave $100,000.
Bottom line: Whoever emerges as the GOP standard-bearer will be deeply indebted to a handful of people, each of whom will expect a good return on their investment.
And this is just the beginning. We haven’t even come to the general election.
Nonprofit political fronts like Crossroads GPS, founded by Republican political guru Karl Rove, are already gathering hundreds of millions of dollars from big corporations and a few wealthy individuals like billionaire oil and petrochemical moguls David and Charles Koch. The public will never know who or what corporation gave what because, under IRS regulations, such nonprofit “social welfare organizations” aren’t required to disclose the names of those who contributed to them.
Before 2010, federal campaign law and Federal Election Commission regulations limited to $5,000 per year the amount an individual could give to a PAC making independent expenditures in federal elections. This individual contribution limit was declared unconstitutional by the District of Columbia Court of Appeals in a case based on the Supreme Court’s grotesque decision at the start of 2010, Citizens United vs. Federal Election Commission.
Now, the limits are gone. And this comes precisely at a time when an almost unprecedented share of the nation’s income and wealth is accumulating at the top.
Never before in the history of our Republic have so few spent so much to influence the votes of so many.
By: Robert Reich, Robert Reich Blog, Published in The Huffington Post, February 21, 2012
Who Needs “Poor People”: Records Show How Wealthy Shape Presidential Race
Groups known as “Super PACs” raised more than $42 million to back Republican U.S. presidential contenders in 2011, according to campaign filings that show how new donation rules are allowing a relatively few wealthy Americans to shape the race.
The reports filed with the Federal Election Commission (FEC) late on Tuesday offer a vivid picture of the impact of a 2010 U.S. Supreme Court decision that allows unlimited donations to political action committees (PACs), groups that are legally separate from the candidates they support.
The reports showed why the Super PAC supporting Republican frontrunner Mitt Romney, called Restore Our Future, has been such a force in the campaign – largely by running attack ads against Newt Gingrich, Romney’s top Republican rival.
Restore Our Future hauled in $30 million in 2011, and had nearly $24 million in the bank at the end of the year.
The group spent a big chunk of that during the past month in Florida, where its ad barrage against Gingrich was widely credited with helping Romney to victory in Tuesday’s primary. Florida was the latest contest in the state-by-state battle to pick a Republican nominee to challenge Democratic President Barack Obama in the November 6 election.
The pro-Romney group’s bankroll dwarfed the PACs supporting other Republican contenders, as well as the group that backs Obama. Priorities USA, the pro-Obama group, raised $4.2 million last year and had $1.5 million in the bank on December 31.
The funding disparity between the groups suggests the PAC supporting Romney could help the former Massachusetts governor overcome the Obama campaign’s formidable fund-raising advantage if the two meet in November’s general election. Contributions to candidates’ campaigns are limited to $2,500 per donor.
Obama’s organization continued its dominance in the race for cash among candidates’ campaigns, raising $130 million for the year. That topped the Romney campaign’s $57 million, which led the Republican presidential field.
Tuesday’s filings also revealed the growing warchests that independent Republican groups are building with the presidential and congressional races in mind.
American Crossroads and its affiliated group, Crossroads GPS, raised a total of $51 million in 2011.
“A HUGE EFFECT ON THE RACE”
Super PACs were forged from the 2010 Supreme Court ruling that erased longstanding limits on corporate and union money in federal elections as an unconstitutional restriction of free speech.
The ruling unleashed a flood of money into a political system coming off the most expensive presidential election in U.S. history in 2008, when candidates spent more than $1 billion. It also opened the door for wealthy individuals to prop up candidates by writing a check.
“Super PACs have fundamentally changed the way campaigns are run, and it’s had a huge effect on the race,” former Michigan Republican Party chairman Saul Anuzis said. “If you can find one donor who is willing to play in a big way, it can have an unbelievable impact.”
For the first time, the FEC reports revealed many of the wealthy donors behind the Super PACs.
Harold Simmons, a billionaire Dallas banker and chairman of Contran Corp, gave American Crossroads $5 million and Gingrich’s group $500,000. Contran gave another $2 million to the Crossroads group.
Peter Thiel, billionaire co-founder of the payment service PayPal, gave the Super PAC backing Texas congressman Ron Paul $900,000. Foster Freiss, a billionaire investor from Wyoming, founded the Red, White and Blue Fund that backs former U.S. Senator Rick Santorum and donated $331,000.
The reports did not include the donations by billionaire casino owner Sheldon Adelson and his wife, Miriam, who poured a combined $10 million – $5 million each – into the pro-Gingrich group in January, after the period covered in Tuesday’s reports.
One of Adelson’s step-daughters gave Gingrich’s group $500,000 in 2011, and another gave $250,000, the reports showed.
The first check from the Adelsons came as Gingrich headed into a critical showdown with Romney in South Carolina. It helped pay for a movie and ads criticizing Romney’s work as head of the private equity firm Bain Capital – an issue that helped propel Gingrich to a big South Carolina upset victory.
By last weekend, the pro-Gingrich PAC had spent a total of $8.5 million – much of it, it appears, from the Adelson family.
‘SUPER-RICH PEOPLE’
“Super PACs are allowing a relative handful of super-rich people to have a disproportionate and magnified influence on elections,” said Fred Wertheimer, president of Democracy 21, a watchdog group dedicated to reducing the influence of money in politics.
Super PACs and other outside groups spent about $42 million on the presidential race through the end of January, according to independent expenditure reports filed with the FEC. Romney’s group has spend more than $17 million, compared with $8.5 million for Gingrich.
The filings also shed light on the scrambling by supporters of former House of Representatives speaker Gingrich in recent weeks.
Gingrich’s allies at Winning our Future raised just $2.1 million in 2011. But like Romney’s Super PAC, it raised and spent millions more in January. Much of that money went toward attack ads in South Carolina and Florida.
The flood of money drowned Gingrich in negative ads in Florida, where Romney’s Super PAC outspent Gingrich’s group by nearly 3-to-1 and aired ads questioning his conservative credentials, record in Congress and temperament as a leader.
Romney won Florida easily on Tuesday, beating Gingrich by about 15 percentage points to take a big step toward winning the Republican nomination.
“If you look at it in the simplest way, the role of the Super PACs has been to prop up candidates who in the past would have been forced out of the race because they ran out of resources,” said Anthony Corrado, a campaign finance specialist at Colby College in Maine.
The pro-Romney Super PAC fired back in Florida with a withering barrage of attacks on Gingrich as a Washington insider who peddled his influence to make $1.6 million from mortgage giant Freddie Mac.
Those attacks, and two strong debate performances by Romney, halted Gingrich’s momentum and fueled Romney’s runaway win in Florida on Tuesday.
SHADOWING THE CAMPAIGNS
The only restriction on Super PACs is that they are not allowed to coordinate their actions with the candidates they back. Romney has cited the restriction repeatedly when he has been asked to tell his Super PAC to pull down controversial ads.
In reality, however, most of the Super PACS are run by former staffers for the candidates who know what works for the campaigns without being told.
“I’ve known Newt for 12 years. I can dance with the campaign without coordinating with the campaign,” said Rick Tyler, a longtime Gingrich staff member who now runs the pro-Gingrich Winning Our Future group.
“I’m carefully watching what he’s saying in the public record,” he said. “It’s not hard for me to follow.”
Gingrich has been the target of more than $16 million in negative ads, while $5 million has been spent to hammer Romney, the FEC reports said.
The $57 million raised by the Romney campaign led the Republican candidates in the money chase in 2011. Gingrich raised nearly $13 million and Texas Governor Rick Perry, who has dropped out of the race, raised nearly $20 million.
By: John Whitesides, Reuters, February 1, 2012
A “Historian” By Any Other Name: Freddie Mac Hired Newt Gingrich As It Reshaped Strategy
Within months after taking over as chief lobbyist at mortgage lender Freddie Mac in 1999, Mitchell Delk hired a prominent Washington insider to advise him on how to build support among conservatives on Capitol Hill: Newt Gingrich, the former speaker of the House of Representatives.
A key part of Delk’s strategy, as outlined in Federal Election Commission records, was to build goodwill in Congress by holding fundraising events for influential members of House and Senate committees that had oversight of Freddie Mac.
Gingrich had experience in such matters as an architect of GOPAC, one of the Republican Party’s most important political action committees.
Gingrich’s activity at Freddie Mac has been under scrutiny during his run for the 2012 Republican presidential nomination, as rivals have accused him of lobbying for Freddie Mac.
The former speaker has rejected such allegations, and his first $300,000-a-year contract with Freddie Mac, released this week by his campaign, states that he would not “engage in lobbying services of any kind.”
But the contract, together with the FEC records describing Delk’s revamping of Freddie Mac’s lobbying shop, sheds light on how Gingrich could avoid the lobbyist label and still be valuable to the mortgage lender as a strategist.
Gingrich’s contract says the former House speaker would work with Delk and other Freddie Mac officials on “strategic planning and public policy.”
And, it calls on Gingrich to contribute to the lender’s “corporate planning and business goals.”
“He was a consultant for us, and … not a lobbyist,” Freddie Mac spokesman Doug Duvall said, declining to comment further on the lender’s arrangement with Gingrich.
Gingrich’s campaign has offered few specifics about his work for Freddie Mac, for which he earned as much as $1.8 million during two contract periods. It said late last year that part of his job was to help Freddie Mac build bridges to conservatives.
He has called himself a “historian” who advised the mortgage lender on issues such as its lending policies.
Gingrich joined Delk’s government affairs shop at a time when the former Freddie Mac senior vice president was hiring several former members of Congress and congressional aides for his lobbying team.
At the time, conservative Republicans on Capitol Hill were seeking regulations to rein in the profits of government-sponsored lenders such as Freddie Mac.
Delk, who did not respond to phone calls seeking comment, successfully fought back against such legislation by hiring dozens of outside consultants and spending as much on lobbying as many major corporations.
FEC INVESTIGATION
However, his lobbying team came under investigation by the FEC in 2003.
The FEC probe found that under Delk’s guidance, Freddie Mac improperly used corporate resources to put on 85 fundraising events that raised about $1.7 million for federal candidates.
The majority of the events were for Republicans, the FEC found.
FEC investigators concluded that at least one major contribution to a Republican entity came directly from Freddie Mac funds and that some fundraisers were held in Freddie Mac’s offices – both violations of FEC rules.
In 2006, Freddie Mac agreed to a $3.8 million settlement for violating federal election rules, the largest civil fine the FEC had ever levied.
Delk, who resigned from Freddie Mac in 2004, was not charged in the case. Delk’s lawyer in the case, Ken Gross, said Gingrich’s name “never came up in connection with (the FEC) case.”
Vin Weber, a former Republican representative from Minnesota who also was hired as a Freddie Mac consultant, said he never worked directly with Gingrich on Freddie Mac matters.
He said the mortgage lender did not want congressional arm-twisting but hoped to “create a positive buzz for Freddie Mac.”
Weber said someone like Gingrich could provide an important service without lobbying.
“I wouldn’t ask him to pick up the phone (to call a member of Congress), because that is really not necessary. He is circulating all the time with members of Congress,” said Weber, who is supporting Mitt Romney in this year’s race for the Republican presidential nomination.
Former New York Representative Susan Molinari, another Romney supporter, also was hired by Freddie Mac during Delk’s tenure. She did not return phone calls or emails.
Republican Michael Oxley, who was House Financial Services Committee chairman and attended at least 19 Delk fundraisers, said that at the time he did not know Gingrich worked for Freddie Mac.
Oxley “may have seen him from time to time at a social thing,” said Peggy Peterson, a spokeswoman for Oxley.
Gingrich signed a second contract with Freddie Mac in 2006. The lender ended its relationship with outside consultants in 2008, when the U.S. Treasury placed Freddie Mac and Fannie Mae in conservatorship.
Republicans have blamed the government-sponsored lenders, which sustained $14.9 billion in losses when the U.S. housing market crashed, for a major role in the subprime lending crisis.
By: Marilyn Thompson and Samuel Jacobs, Reuters, January 28, 2012
Unlimited Contributions Give “Super PACs” Power To Change Presidential Race
With the South Carolina primary less than a week away, residents of the state are being bombarded with a barrage of political advertisements funded by Super PACs.
“It’s coming in fast and furious,” said Randy Cable of South Carolina’s conservative talk radio station WORD.
Cable said that Super PACs are buying up a majority of his station’s air time.
“They’re a game changer,” Cable told Rock Center Special Correspondent Ted Koppel in an interview scheduled to air Monday night.
This election season is the first presidential race to feel the influence of Super PACs, political action committees that can receive unlimited money from individuals, corporations and unions. Some of these Super PACs have morphed into powerful outside organizations working solely on electing a presidential candidate of their choosing. While a campaign supporter can only donate $2500 directly to a presidential candidate, he or she can donate unlimited amounts of money to a Super PAC supporting the same candidate.
“The Super PACs are outspending the candidate committees two to one at this point in time,” Cable said. “The ones that are buying the most [air time] are going to have the biggest impact. You know, just like in the world of business and advertising, politics goes the same way. Those that spend the most have the biggest impact.”
Every major GOP presidential candidate has a Super PAC supporting their campaign. Super PACs are supposed to operate independently of the candidates, meaning they can’t communicate directly with the politicians and their campaign staff. Super PACs have been effective even with the communication barrier, because they are often run by people who already know how the candidates think. A look at whose running the Super PACs reveals a roster of former staffers and advisers to the presidential candidates.
Carl Forti, a former political director for Mitt Romney, helped launch the ‘Restore Our Future’ Super PAC in 2010. The Super PAC supports Romney’s campaign for president.
Koppel asked Forti, “Some of the research I’ve read on you and your organization suggests that you may by the end of this political year have spent four hundred million dollars on the campaign. Is that fair? Does that seem reasonable?”
Forti responded by saying, “Potentially. Well, that seems a little high probably, but between the different entities it may be three hundred, three-fifty.”
Of those criticizing the millions raised by Super PACs, Forti said, “There’s a lot of criticism leveled at Super PACs, but we’re just operating under the laws as provided.”
The Citizens United Supreme Court decision in 2010 allowed the unique political action committees to form. In the case of Citizens United against the Federal Election Commission, the Supreme Court ultimately ruled that the government could not limit political spending by corporations.
Some of this election year’s most negative advertising has come from Super PACs, giving candidates a way to effectively attack an opponent without having the blame pinned directly on them.
At a press conference held Monday morning in South Carolina, Republican presidential candidate Jon Huntsman cited the negative tone of this year’s campaign when he announced he was dropping out of the race.
“This race has degenerated into an onslaught of negative and personal attacks not worthy of the American people and not worthy of this critical time in our nation’s history,” Huntsman said.
Political analysts say that an anti-Newt Gingrich ad run by ‘Restore Our Future’ during the lead-up to the Iowa Caucuses significantly impacted Gingrich’s one-time lead. Gingrich finished fourth in the caucuses.
“We learned in Iowa, if you unilaterally disarm, you might as well not run. If you allow other candidates to have a scorched earth, multimillion dollar ad campaign and there’s nothing that responds, they simply, by constant defamation drive you down,” Gingrich told Koppel.
Following Gingrich’s finish in Iowa, a Super PAC supporting the former Speaker of the House called ‘Winning Our Future,’ received a $5 million donation from wealthy casino owner Sheldon Adelson. In South Carolina, ‘Winning Our Future’ has launched anti-Romney advertisements.
While Gingrich has publicly denounced the negative advertisement, the Super PAC supporting him continues to run the ad that paints Romney as a greedy businessman and attacks his record from his days at venture capital firm Bain Capital.
“We’re now entering a world where until the laws are changed, every serious campaign will have one or more Super PACs. They will spend an absurd amount of money and it will virtually all be negative. That’s a fact,” Gingrich said. “Given the playing field right now, you have no choice.”
The power of the Super PAC has been mocked by comedian Stephen Colbert, host of Comedy Central’s ‘The Colbert Report.’ Colbert created his own Super PAC and recently handed over control of it to Jon Stewart, renaming it ‘The Definitely Not Coordinated with Stephen Colbert Super PAC.’
Colbert handed over control to form an exploratory committee about a possible presidential run in South Carolina. His Super PAC also launched a satirical anti-Romney advertisement that likened the former Massachusetts governor to a serial killer, implying that Romney killed businesses.
Colbert talked to Koppel shortly before he relinquished control of his Super PAC.
“It would be stupid to be in the 2012 campaign or want your voice heard in the 2012 campaign and not have a Super PAC,” Colbert said. “I mean, the RNC, the DNC, those organizations really don’t mean much anymore. Karl Rove has more money than the RNC.”
Back in South Carolina, the advertisements seem to be getting nastier by the day as the million dollar donations continue to pour in.
“These Super PACs don’t have reputations to protect, so I think that there is a tendency for them to get nastier in the ads that they run and they don’t have the same restraints operating on them as candidate committees do,” said Ellen Weintraub, a commissioner for the Federal Election Commission.
Weintraub and the FEC are tasked with regulating the Super PACs. Weintraub said that a key difference between the PACs and the candidate committees is that the Super PACs do not have to disclose their donors as often. The first time that many of the Super PACs will disclose their donors will be at the end of January, which means that voters will have cast their vote in several key primaries before knowing who is behind the advertisements that flooded their televisions and radios.
“At some point, you have to step back from the regulations, you know, take your face out of the book and see the forest for the trees,” Weintraub said. “And I think for a lot of people out there, seeing the massive amounts of money that are being raised and spent by groups in the candidates’ names effectively on the outside, and seeing that these groups do appear to have some kind of connection to the candidates. I think it’s going to raise a lot of questions for the public.”
So how do political advertisements get so nasty? Unlike consumer advertisements, political ads do not have to be vetted by the Federal Trade Commission.
“I mean it’s actually more difficult to sell somebody white bread than it is to sell a president getting into the White House,” said Linda Kaplan Thaler, an advertising executive.
Thaler is behind campaigns like Wendy’s advertising campaign and the Toys R’ Us popular jingle, ‘I Don’t Want to Grow Up.’ Thaler said that when it comes to consumer advertising, it’s about building a love for the brand. With politicians, it’s different.
“You know, when it comes to politics, it’s not so much about, you know, that I have to love the candidate I’m voting for. It’s very often, I have to dislike him the least,” Thaler said.
By: Jessica Hopper, Rock Center, January 16, 2012
Mitt Romney, Son Of “Citizen’s United”
First, a confession. If Mitt Romney becomes president I’m partly to blame.
Ten years ago I ran for the Democratic nomination for governor of Massachusetts — which would have given me the opportunity to whip Mitt Romney’s ass in the general election,
I blew it. In the final week of the primary I was neck and neck with the state treasurer, but then my money ran out, which meant my TV ads stopped. Declining the suggestion of my campaign manager to take out a second mortgage on my home, I frantically phoned anyone I could find who hadn’t yet contributed $500, the maximum state law allowed. I didn’t raise beans. In the end, the treasurer won the primary, Romney won the general election and became governor, and I went back to being a professor.
But my fantasy of beating Romney may be nothing more than a fantasy because Romney had — and still has — something I never did (and I’m not referring to his gleaming white teeth, carefully-coiffed hairline, or height). He has money, and he has connections to much more money.
Mitt Romney was then and still is the candidate of big money.
In the last weeks before the just-completed Iowa caucuses, Romney spent over $3 million relentlessly torpedoing Newt Gingrich with negative ads — cutting Gingrich’s support by half and hurtling him from first place to fourth. But Romney kept his fingerprints off the torpedo. Technically the money didn’t even come from his campaign.
It came from a Super PAC called “Restore Our Future,” which can sop up unlimited amounts from a few hugely wealthy donors without even disclosing their names. That’s because “Restore Our Future” is officially independent of the Romney campaign — although its chief fundraiser comes out of Romney’s finance team, its key political strategist was political director of Romney’s 2008 presidential campaign, its treasurer is Romney’s former chief counsel, and its media whiz had been part of Romney’s media team.
“Restore Our Future” is to Mitt Romney’s campaign as the dark side of the moon is to the moon. And it reveals the grotesque result of the Supreme Court’s decision a year ago in Citizen United vs the Federal Election Commission, which reversed more than a century of efforts to curb the influence of big money on politics.
If income and wealth in America were as widely shared as in the first three decades after World War II, we’d have less reason to worry. But now, with an almost unprecedented concentration of money at the very top, Citizens United invites the worst corruption our democracy has witnessed since the Gilded Age.
And Romney and Citizens United were made for each other. Other candidates have quietly set up Super PACs of their own, and President Obama has his Super PAC already busily tapping into whatever reservoirs of big money it can find. But Mitt’s unique ties to the biggest money pits enable him to take unique advantage of the Court’s scurrilous invitation.
The New York Times reports that New York hedge-fund managers and Boston financiers contributed almost $30 million to “Restore Our Future” before the Iowa caucuses. And “Restore Our Future“‘s faux independence has allowed Romney to publicly distance himself from them, their money, and the dirty work that their money has bought.
More than anyone else running for president, Mitt Romney personifies the top 1 percent in America — actually, the top one-tenth of one percent. It’s not just his four homes and estimated $200 million fortune, not just his wheeling and dealing in leveraged-buyouts and private equity, not even the jobless refugees of his financial maneuvers that makes him the Gordon Gekko of presidential aspirants.
It’s his connections to the epicenters of big money in America — especially to top executives and financiers in the habit of investing for handsome returns. And there are almost no better returns than those found in tax benefits, government subsidies, loan guarantees, bailouts, regulatory exemptions, federal contracts, and trade deals generating hundreds of millions if not billions of dollars a year.
Romney, in other words, is the candidate Citizens United created, the creature given life by Scalia, Roberts, Kennedy, Thomas, and Alito all playing Dr. Frankenstein.
Given what the Court has wrought, my conscience is less burdened. Had I whipped Romney’s ass ten years ago I might only have delayed his awakening. But I fear for the country.
By: Robert Reich, Robert Reich Blog, January 5, 2012
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