mykeystrokes.com

"Do or Do not. There is no try."

“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

May 16, 2013 Posted by | Campaign Financing, Internal Revenue Service | , , , , , , , | Leave a comment

“A Big Problem Is Brewing”: This Could Be A Career Ender For Michele Bachmann

With a special investigator soon to be appointed by the chief justice of the Iowa Supreme Court, the ethics cloud hovering over Rep. Michele Bachmann could quickly become a major problem for the Tea Party hero, experts tell Salon.

“This is very serious,” said Craig Holman, a government ethics lobbyist at liberal-leaning watchdog group Public Citizen. “It’s not Watergate, or at least not yet, but these are a series of allegations that are each serious on their own, and when you put them all together, this could be a career ender for Michele Bachmann.”

Ken Boehm, chairman of the conservative-leaning National Legal and Policy Center, told Salon that we should wait to see what investigators find — indeed, no wrongdoing has been reported so far — though he acknowledged the escalating scrutiny could be a major headache for the congresswoman down the line.

The Iowa investigation, looking into whether the campaign improperly paid a state senator, is just one of at least three different probes examining a range of allegations related to Bachmann’s failed presidential campaign, including charges that she improperly used campaign funds to promote her book, that her campaign “launder[ed]” money, and that one of her staffers stole an email list from a home-school organization.

Two former staffers, including her former chief of staff, have agreed to testify against Bachmann, which Holman said is “very unusual” and something that will push investigators at the Federal Elections Commission and the Office of Congressional Ethics, each of which reportedly has its own investigations into the campaign, to take the matter seriously.

OCE can’t issue penalties itself, but instead refers matters to the House Ethics Committee, where the range of potential punishments is huge, from a letter of censure to expulsion from the House, though the committee has a reputation for partisan gridlock and could easily sidestep the matter. FEC violations, meanwhile, come with civil fines, but the commission is even more notoriously ineffectual than the Ethics Committee.

The real punishment, even if no wrongdoing is found, would likely instead come in November of next year, when Bachmann will face off against Democrat Jim Graves, whom she beat by less than 4,500 votes in 2012. The race presents real challenges for Graves, as turnout will be lower without a presidential race, and the district remains the most conservative in Minnesota.

But Professor Larry Jacobs, who runs the Center for the Study of Politics and Governance at University of Minnesota, says the ethics questions are a “big problem” for Bachmann. “There are a lot of things a conviction politician like Michele Bachmann can withstand, and being attacked by Democrats is definitely one of them. But the kind of krypton that will disable her is having her convictions challenged,” he told Salon.

Some supporters will no doubt stick by her, and refuse to believe the veracity of any charges (see: Glenn Beck), but others may not. “These charges are particularly damaging because they cut to the core of her greatest strength among her followers, which is her authenticity. This cloud of questions has now enveloped her in the ‘usual politics’ label and what I’ve heard from her supporters — and this is obviously not a scientific sample — is, ‘she’s just like the rest of them,’” Jacobs added.

For his part, Graves isn’t ready to make an issue of the ethics questions — yet. “We aren’t going to make any assumptions,” he told Salon. “We’re confident in the bipartisan process responsible for investigating this matter. The truth will set you free — or otherwise. I’m just disappointed at how long this issue has had to go on, creating another distraction from the real needs and concerns of Minnesotans.”

Bachmann’s core supporters will probably never vote for a Democrat, but they might stay home, which could be trouble in a low-turnout race like midterms generally are. Still, Jacobs guesses that Bachmann hangs on for another cycle, but barely. And if the ethics questions get worse, that prediction might change.

 

By: Alex Seitz-Wald, Salon, May 2, 2013

May 3, 2013 Posted by | Politics | , , , , , , , , | Leave a comment

“Post Office Box 72465”: A Pervasive Mess With An End Run Around Campaign Finance Laws

To grasp the clear and present danger that the current flood of campaign cash poses to American democracy, consider the curious case of Post Office Box 72465. It demonstrates that the explosion of super PAC spending is only the second-most troubling development of recent campaign cycles.

Box 72465, on a desert road near Phoenix, belongs to a little-known group called the Center to Protect Patient Rights. According to reports by the Center for Responsive Politics and the Los Angeles Times, the center funneled more than $55 million to 26 Republican-leaning groups during the 2010 midterm election.

Where is the money from? The Times found links to the conservative Koch brothers, yet because the center is a nonprofit corporation, it is impossible to know. Such groups must disclose how they distribute their money, not who donates to them.

This privacy makes sense in the context of ordinary nonprofits. But in the ­push-the-envelope world of modern campaigns, in which such groups spend millions of dollars on thinly disguised campaign ads, the result is an end run around the fundamental principle of campaign finance law: that voters are entitled to know who is trying to influence elections.

Even the Supreme Court understands this: Disclosure, it wrote in its otherwise appalling 2010 Citizens United ruling, “permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

Except when, as in the case of the Center to Protect Patient Rights, the identities — and motives — of those giving are hidden from public view. The center sent almost $13 million to the American Future Fund, a Des Moines-based group that ran campaigns against two dozen Democrats in 2010. Rep. Bruce Braley (D-Iowa) was targeted with what the Times described as “a $2-million fusillade” of radio ads, robo-calls and mailers.

“It was almost a feeling of helplessness because there was no way to identify who the source of the funds was,” Braley said. He won by two percentage points, after a 29-point margin two years earlier.

The gusher of secret money that nearly toppled Braley promises to be even more abundant this year — and the groups behind the undisclosed cash remain determined to do whatever it takes to keep the sources hidden.

In March, ruling in a lawsuit brought by Rep. Chris Van Hollen (D-Md.), a federal judge found that the Federal Election Commission was wrong to exempt nonprofits and other groups that run “electioneering communications” — advertising that names specific candidates within a short time before the election — from having to reveal their donors.

It says something about the FEC that the agency charged with overseeing campaign reporting would come out against disclosure.

Luckily, U.S. District Judge Amy Berman Jackson disagreed. “Congress intended to shine light on whoever was behind the communications bombarding voters immediately prior to elections,” she wrote. The federal appeals court in Washington refused to stay the ruling while an appeal was underway.

The response from the U.S. Chamber of Commerce was telling: It would switch its way of influencing elections rather than reveal its donors. The chamber, which has made itself a major political player, plans to spend more than $50 million during the 2012 campaign.

At a breakfast with reporters this week, chamber officials said that, in reaction to the ruling, the organization would conduct its political spending through independent expenditures that explicitly support or oppose particular candidates.

Such is the perverse mess that is the current campaign finance law. Under the Citizens United ruling, corporations, such as the chamber, can make unlimited independent expenditures. The upshot is that advertising like the chamber’s can be even more brutal — because it won’t have to pretend to be merely “educating” voters — and just as opaque.

Meanwhile, the American Future Fund, the organization that ran ads against Braley, has brazenly asked the FEC to approve a different end run. The group contends that if its ads merely mention “the administration” or “the White House,” they would not be attacking a “clearly identified candidate” and therefore not subject to disclosure requirements.

This would be laughable — if it were not such a scary illustration of the lengths to which these groups will go to avoid letting voters know who is trying to buy their elections, and the unfortunate likelihood that they will succeed.

 

By: Ruth Marcus, Opinion Writer, The Washington Post, May 31, 2012

June 2, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

Democratize The “Mother’s Milk Of Politics”: How To Beat Citizens United

We are about to have the worst presidential campaign money can buy. The Supreme Court’s dreadful Citizens United decision and a somnolent Federal Election Commission will allow hundreds of millions of dollars from a small number of very wealthy people and interests to inundate our airwaves with often vicious advertisements for which no candidate will be accountable.

One would like to think that the court will eventually admit the folly of its 2010 ruling and reverse it. But we can’t wait that long. And out of this dreary landscape, hope is blossoming in the state of New York. There’s irony here, since New York is where a lot of the big national money is coming from. No matter. The state is considering a campaign finance law that would repair some of the Citizens United damage, and in a way the Supreme Court wouldn’t be able to touch.

The idea is that to offset the power of large donors, citizens without deep pockets should be encouraged to flood the system with small contributions that the government would match. Gov. Andrew Cuomo (D) has pledged to a state overhaul of this sort, based on the one already in force for New York City elections. In his state of the state address in January, Cuomo spoke of how urgent it is to “reconnect the people to the political process and their government.” He could make himself into a reform hero across the country if he and the Legislature created a model law for other states, and the nation.

The New York City program is straightforward: The government gives participating candidates $6 in matching funds for every dollar raised from individuals who live in the city, up to the first $175. At a maximum, this means a $175 contribution is augmented by $1,050 in public funds. That’s a mighty incentive for politicians to involve more citizens in paying for campaigns. In the city system, participating candidates have to live within certain spending and contribution limits. In a new statewide system, there are likely to be no spending restrictions but lower limits on contributions.

The beautiful thing is that this approach should answer most of the criticisms offered by those who defend the Citizens United world. I say “should” because advocates of current arrangements will find a way to oppose any reforms. But the New York Revolution, if it happens, would undercut many of their arguments — including their constitutional claims.

The New York reform does not limit anyone’s capacity to participate. It creates incentives for more people to participate. It does not reduce the amount of political speech. It expands the number of people speaking through their contributions. It does not protect incumbents. On the contrary, it opens the way for candidates who might otherwise be driven from the competition by established politicians with access to traditional funding sources.

In short, it makes our democracy democratic again.

And it works. A study of the New York City program published recently by Michael Malbin, executive director of the nonpartisan Campaign Finance Institute, and his co-authors Peter W. Brusoe and Brendan Glavin concludes that the evidence “suggests that multiple-matching funds can stimulate participation by small donors in a manner that is healthy for democracy.”

In particular, they discovered that the reform substantially increased involvement by residents of poor and minority neighborhoods. Suddenly, politicians are hanging around with people other than those with yachts, private jets and complicated tax breaks. Malbin and his colleagues put it more soberly: A matching-funds approach means politicians “spending time with a more diverse set of constituents than he or she would if all of his or her fundraising engaged the upper middle class and rich.”

As for those who object to “taxpayer financing of elections,” consider that a candidate doesn’t get a dime unless he or she raises money from willing private donors. Besides, the Malbin paper notes, “political and civic participation are public goods” and elections “are, after all, the public’s business.” Conservatives fond of vouchers in so many other areas should see this as an opportunity to create Democracy Vouchers.

It will take courage for incumbent politicians to risk establishing a bold new system that could put some of them in danger. But in the course of our history, New York has been a proudly innovative place. A nation looking for a way out from under the money regime created by Citizens United badly needs the example of politicians who believe in democracy enough to democratize the mother’s milk of politics.

 

By: E. J. Dionne, Jr, Opinion Writer, The Washington Post, April 22, 2012

April 23, 2012 Posted by | Campaign Financing | , , , , , , | Leave a comment

“What Happened In Iowa Won’t Stay In Iowa”: Super PACs Are A Dangerous New Weapon

The barrage of commercials tells the story: This is a presidential election without meaningful contribution limits or timely disclosure, outsourced to political action committees whose spending often dwarfs that of the candidates they support.

The PACs’ benign, intentionally uninformative names belie the brutal nature of their attack ads and the closeness of their relationships with the candidates, despite the requirement that they operate independently.

The leading example, in terms of financial firepower and ferocity of assault, is “Restore Our Future,” the Mitt Romney-supporting super PAC that has unleashed a $4 million barrage against Newt Gingrich. (It worked. Gingrich complained of being “Romney-boated,” a reference to the Swift boat attacks on John Kerry in 2004.)

The committee is run by Carl Forti, political director of Romney’s 2008 campaign. Its treasurer is Charles Spies, the Romney 2008 general counsel. Its fundraiser, Steve Roche, headed the Romney 2012 finance team until jumping to the super PAC last summer. And to underscore the flimsiness of the PAC’s supposed independence, Romney himself has spoken at “Restore Our Future” events.

Yet up-to-date information about who is bankrolling this effort will not be available until the end of January, by which point four states will have voted and Romney may have the nomination wrapped up.

The last time “Restore Our Future” disclosed its donors to the Federal Election Commission was six months ago, when it reported raising $12 million. The committee would have had to update the information by Jan. 15 but — as have several other super PACs — it managed to postpone that two more weeks by changing its filing status from quarterly to monthly.

Of course, “Restore Our Future” isn’t alone — nor is the super PAC a Republican phenomenon. Rick Perry supporters have formed the “Make Us Great Again” PAC. Gingrich has “Winning Our Future.”

In New Hampshire, the “Our Destiny” PAC backing Jon Huntsman, and reportedly funded by the candidate’s wealthy father, has a new ad calling on voters to “stop the chameleon.” (That would be Romney.) On the Democratic side, Bill Burton and Sean Sweeney, former aides to President Obama, launched “Priorities USA,” which has already aired anti-Romney ads.

The rise of these groups erodes the twin pillars of a functional campaign finance system: limits on the size of contributions and timely information about who is writing the checks.

“The establishment of the candidate-specific super PAC is a vehicle to completely destroy candidate contribution limits,” says Fred Wertheimer, president of the campaign finance reform group Democracy 21, which is releasing a report on the phenomenon. “It is a vehicle that will spread to Congress and it will lead us back to a system of pure legalized bribery, because you will be back, pre-Watergate, to unlimited contributions that are going for all practical purposes directly to candidates.”

Bonus points: The super PAC funds the dirty work of attack ads while the candidate gets to remain above the fray, not required to appear on camera to say that he or she approved this message.

“I view the super PAC as the evil twin of the candidate’s campaign committee,” Federal Election Commission member Ellen Weintraub told me.

The emergence of these entities is the unanticipated but logical outgrowth of the Supreme Court’s ruling in Citizens United v. FEC. The uproar over the opinion involved the justices giving the all-clear to unlimited corporate independent expenditures on behalf of candidates, and this is still a potential problem.

But as a practical matter, most publicly held corporations are squeamish about being associated with such direct advocacy. Instead, the real-world impact of Citizens United, in combination with lower-court rulings, was to usher in the era of the super PAC.

“By definition, an independent expenditure is political speech presented to the electorate that is not coordinated with a candidate,” Justice Anthony M. Kennedy wrote in the majority opinion, dismissing the notion that such spending could be corrosive.

Did he really mean to clear the path for independent expenditure committees backing a particular candidate — and bankrolled by the candidate’s father or run by his former top aides?

“How can it possibly be true that to give more than $2,500 to a candidate is potentially corrupting but to give millions to an outside group that is acting on the candidate’s behalf is not?” Weintraub asked.

Absent legislative intervention (unlikely) or regulatory action (even less likely), the super PAC is a dangerous new force in American politics. What happened in Iowa won’t stay in Iowa.

 

By: Ruth Marcus, Opinion Writer, The Washington Post, January 3, 2012

January 5, 2012 Posted by | Campaign Financing, Democracy, Election 2012 | , , , , , , | Leave a comment

%d bloggers like this: