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“Cozy Bedfellows”: Romney Spending Big At Top Benefactors’ Hotel Chain

Like all presidential candidates, Mitt Romney is perpetually on the road; trans-American speechmaking, fundraising and all-around stumping are requirements of any campaign for the White House. Tiring stuff.

When it’s time for a few hours’ sleep, Romney may not pull out his very own down pillow — as George W. Bush did when he was on the trail — but he does appear to have a preference in hotel chains: Marriott International, a company with deep personal, political and financial ties to the candidate.

Romney’s campaign has spent more than $475,000 in travel expenses at Marriott-owned hotels during the 2012 campaign — more than three-and-a-half times what he’s spent at second-place Hilton Hotels and 39 percent of the campaign’s total lodging expenditures, according to Center for Responsive Politics research.

The money, however, doesn’t flow one way: current Marriott International Chairman J.W. Marriott, Jr. and brother Richard Marriott — the chairman of a Marriott International offshoot, Host Hotels and Resorts — each have maxed out in contributions to Romney’s campaign. More significanly, they’ve donated $1,000,000 apiece to pro-Romney Super PAC Restore Our Future.

Romney was literally born into his connections with Marriott. His was given his first name, Willard, as a tribute to J. Willard Marriott — the hotel chain’s founder and a friend of Romney’s father. Romney’s business affiliations with the hotel giant were built in the 1990s and continue, to a lesser extent, to this day. He served 10 years on Marriott’s board of directors prior to his successful 2002 run to be governor of Massachusetts. Romney rejoined the board in 2009 before announcing his resignation in January 2011, three months before forming a presidential exploratory committee.

According to personal financial statements released this month, Romney has between $101,000 and $250,000 invested in Marriott International.

“[Romney] was on our board for twelve years, and so I’ve gotten to know him and watch him in action and been very impressed with him,” J.W. Marriott, Jr., told Bloomberg Television in a June 5 interview.

Romney is not alone in his links to the resort industry. President Obama also has a hotel connection: Penny Pritzker, who’s a billionaire Hyatt executive and a co-chair of President Obama’s 2012 reelection campaign, has donated the legal maximums of $5,000 to his reelection campaign and $30,800 to the Democratic National Committee. 

One member of Hyatt’s ruling family has strayed from the clan’s Democratic leanings, though: Thomas Pritzker — Penny Pritzker’s cousin and executive chairman of Hyatt Hotels– has contributed thousands to Republican candidates during this election cycle.

While the Marriott brothers’ $2 million in gifts to Restore Our Future is the biggest political funding effort linked to the company, the company’s PAC and employee contributions also trend Republican. Workers at the corporation have given $107,880 to Romney’s campaign in the 2012 race, according to CRP research; by comparison, Obama’s campaign has received just $15,170 from Marriott International employees. Marriott’s corporate PAC has sent 63 percent of its nearly $175,000 in 2012 donations to Republicans.

 

By: Dan Glaun, OpenSecrets Blog, June 7, 2012

June 10, 2012 Posted by | Election 2012 | , , , , , , , | Leave a comment

“A Rigged Democracy Produces A Rigged Economy”: Citizens United, Democracy For Sale

When the Supreme Court struck down the core of our country’s campaign finance laws in 2010, in the landmark Citizens United case, most of America didn’t take notice. After all, politicians already looked too cozy with the wealthy donors who bankrolled their elections. How much worse could it get?

Plenty. Even as super PAC spending was set to break the $100 million mark before Memorial Day, it was easy to consider corruption less pressing than issues like finding a job. But this election cycle is showing us how a rigged democracy produces a rigged economy — and how the ironically named Citizens United decision now stacks the deck against the 99 percent of Americans still working too hard to make ends meet.

How have things gone from bad to worse?

First, these “independent expenditures” are proving to be anything but independent. Restore Our Future is known openly as former Gov. Mitt Romney’s PAC, and he’s its chief fundraising draw. The PAC is staffed by former Romney aides, and its treasurer is Romney’s former general counsel from 2008. Oil billionaire Harold Hamm gave $985,000 to the “independent” PAC one month after Romney named him as chairman of his Energy Policy Advisory Group.

Second, their size is exploding. Romney’s super PAC alone spent $46 million before Memorial Day — more than all the outside groups combined in the past election cycle. This allowed Romney to outspend Rick Santorum’s grass-roots campaign by 400 percent during the pivotal Ohio primary — which Romney won by just 1 point.

Third, people writing million-dollar checks are not neutral observers without a financial stake in the policy debates of the day. As of mid-May, 15 organizations backed by these individuals had contributed more than $1 million each to Romney through his super PAC. Of those donors, 10 are hedge fund managers or investment holding companies that stand to profit handsomely from tax loopholes and financial deregulation that they are now actively promoting to Romney. This is about a return on investment. Small donors can’t afford to play at this table.

Restore Our Future then funnels these mega-donations into campaign ads with populist themes about job creation. But the real agenda is a disaster for middle-class and working-class Americans.

Consider the “carried interest tax loophole,” a special deal that exempts the fund managers who bankrolled the ad from paying the 35 percent income tax on the bulk of their compensation. Romney’s top donors instead pay a much lower 15 percent, and leave the middle class to pick up the $10 billion tab. A hedge fund manager with $100 million in gains could save as much as $25 million in taxes — not a bad return on the investment in Romney’s candidacy.

As consumers were taking it on the chin at the gas pumps this spring, oil speculators profited from the price spikes. And worse, a leaked document showed the new profits were funneled directly into ads attacking President Barack Obama for trying to close tax subsidies for big oil companies — thanks to Citizens United. This Orwellian twist was lost on most voters, because there’s no obligation to disclose the donors behind these attacks.

Before Citizens United, corporations were banned from making contributions to candidates running for federal office, and individuals were limited in how much money they could contribute. Citing this decision, an appellate court then effectively removed any limits on individual or corporate contributions to candidates, by allowing this money to go to groups clearly identified with the candidate. The court reasoned that contributions given to outside organizations could not be corruptive in the same way that money given directly to the candidates can be.

Now, super PACS are actively accepting unlimited contributions from individuals, unions and corporations. The vast majority of Americans have never had the influence of the powerful — but what was once an uneven playing field now resembles Mount Everest.

A Congress elected by the people can take immediate steps. The DISCLOSE 2012 Act will require super PACs to list their top donors as part of any advertisements and provide for more timely disclosure of all donors after large expenditures.

But the larger burden lies with the Supreme Court. A majority of its nine justices now or in the future must reclaim our democracy from the highest bidder and hand it back to the American people. This tightly rigged political process will only exacerbate the growing insecurity of our working and middle class.

This elections season, we would all be wise to tune out the flood of nasty political spots. But we must not ignore the buying and selling of influence it represents — and how this system silences the voices of the American people.

 

By: Tom Perriello and Amy Rosenbaum, Politico, May 29, 2012

May 31, 2012 Posted by | Democracy, Election 2012 | , , , , , , , | Leave a comment

Big Business Has Been Very, Very Good To Mitt Romney

As the noted philosopher and rock ‘n’ roll irritant David Lee Roth once said, “Money can’t buy you happiness, but it can buy you a yacht big enough to pull up right alongside it.”

I often think of his sage words as I watch the early days of the 2012 political campaigns. For the phrase “buy you a yacht,” simply substitute “buy you an election.” Then behold the havoc wrought by Citizens United and other court decisions that have unleashed a mudslide of corporate cash into our electoral system, much of it anonymous, hurling the average citizen out of the democratic equation.

An estimated $40 million will be spent in those nine Wisconsin state Senate recall elections — most of it from outside, third-party interest groups and twice what was spent last year on all 116 of the state’s legislative races. Most believe President Obama will raise a billion dollars or even more for his reelection bid; enough, as NPR’s Peter Overby observed, to buy up all the TV ads on the Super Bowl — four times.

The Republican nominee may also raise and spend a billion. If it turns out to be former Massachusetts Gov. Mitt Romney, buying that electoral yacht will be a tad easier than for others. Back in 2007, the New York Times estimated his worth at nearly $350 million, and he plowed a reported $44.5 million of his own money into his 2008 presidential campaign.

Certainly, there has been a deep strain of noblesse oblige throughout the history of American governance, the wealthy feeling the urge (and having the disposable income and free time) to come to the aid of their country, both for good and ill. But with Romney, so much a complaisant creature of the corporate culture that dropped us into our current mess without a parachute, we have a tsunami-in-waiting.

As he scurries to the right, running away from his moderate record as Massachusetts governor (although there’s no escaping the irony of this week’s reports that the state’s upgrade to an AA rating from Standard & Poor’s during his tenure was achieved, in part, through tax hikes), it’s illuminating to remember not only how Romney amassed his personal fortune but also how the fundraising apparatus surrounding him probes for yet more ways to scam the system. Not content with the freewheeling liberties already granted by the courts, his money machine relentlessly pursues ever more insidious routes to the fattest wallets and checkbooks.

The opening chapters may be familiar to you. As a June 2007 article in the Times reported, Romney’s personal fortune was amassed from his leadership at the private equity firm Bain Capital. “Mr. Romney’s Bain career — a source of money and contacts that he has used to finance his Massachusetts campaigns and to leap ahead of his presidential rivals in early fund-raising … exposes him to criticism that he enriched himself excessively, sometimes by cutting jobs to increase profits.” The newspaper quoted Boston University business professor James E. Post: “Increasingly, this world of private equity looks like a world of robber barons, and Romney comes out of that world.”

A similar article that same month and year in the Boston Globe noted that Bain Capital specialized in leveraged buyouts and cited MIT Sloan School of Management professor Howard Anderson. Bain, he said, would do “everything they can” to increase the value of the companies it bought. “The promise [to investors] is to make as much money as possible. You don’t say we’re going to make as much money as possible without going offshore and laying off people.”

Stephen Colbert may have summed it up best:

“Mitt Romney knows just how to trim the fat. He rescued businesses like Dade Behring, Stage Stories, American Pad and Paper, and GS Industries, then his company sold them for a profit of $578 million after which all of those firms declared bankruptcy. Which sounds bad, but don’t worry, almost no one worked there anymore.”

Another of the companies sucked into Bain’s gravitational pull was the medical testing firm Damon Corp. that, according to the Globe,

“later pleaded guilty to defrauding the federal government of $25 million and paid a record $119 million fine.

“Romney sat on Damon’s board. During Romney’s tenure, Damon executives submitted bills to the government for millions of unnecessary blood tests. Romney and other board members were never implicated… But court records suggest that the Damon executives’ scheme continued throughout Bain’s ownership… Bain, meanwhile, tripled its investment. Romney personally reaped $473,000.”

But unlike the companies it bought, at Bain itself, even failure could be rewarded — even if your name was Mitt. Take a look at the sweetheart deal Romney got when he took over Bain Capital, a spinoff of consulting firm Bain & Company where he had been an executive. In an arrangement any start-up enterpriser would kill for, as per the Globe, founder Bill Bain guaranteed that if the Bain Capital experiment tanked, “Romney would get his old job and salary back, plus any raises handed out during his absence.” What’s more, if he proved unfit for the task, “Bain agreed to craft a cover story if necessary, promising to bring Romney back to the consulting firm and explain Romney’s return as a matter of his being more valuable to Bain as a consultant.”

Nice. No wonder Romney told an Iowa crowd this week that, “Corporations are people, my friend.” Like Garrett Morris’ Chico Escuela in the early days of “Saturday Night Live,” big business been berry berry good to him. Would that it had been berry berry good to the hundreds fired at companies taken over by Bain Capital.

Yes, corporate people power has served Romney well, especially when it comes to political fundraising. As Huffington Post reported this week, “According to disclosure reports filed at the end of July, 61 registered lobbyists and five lobbyist-linked political action committees contributed $137,650 to Romney’s campaign between Jan. 1 and June 30, 2011. The former Massachusetts governor raised more money from lobbyists during this period than all of his competitors combined … Craig Holman, legislative representative for the watchdog group Public Citizen, told HuffPost that Romney’s lead in lobbyist cash ‘strongly suggests that Romney is the favored candidate for wealthy special interest groups, especially K Street. They clearly think that they can get their foot in the door with Mitt Romney.’”

Then there’s this in the July 20 Washington Post:

“The largest corporate sources of money for Romney are mostly finance industry leaders, including Morgan Stanley and Bank of America. Goldman Sachs employees have given nearly a quarter of a million dollars in contributions… The keys to his success appear to be large donors and contributors from the New York area. Nearly three-quarters of Romney’s money came from donors giving the maximum $2,500 contribution, and one in eight of Romney’s donors live in New York City and its suburbs.”

Of the $18 million raised by his campaign in the second quarter this year, one million came from a single trip to New York in May, including a University Club event crammed to its poshly appointed walls with banking executives.

So it’s not surprising that in the Romney camp, the creative accounting techniques perfected by Wall Street are a specialty. It was again The Boston Globe — which seems to have covered Romney’s political ambitions since they first danced in his head — that wrote back on April 15, “The former Massachusetts governor has become a master of a controversial but legal fund-raising technique that relies on a network of loosely regulated state political action committees to collect those funds.”

Example: Four members of the Marriott hotel family, close friends with the Romneys and fellow Mormons, wrote checks totaling $215,000 to Romney’s campaign, far more than an individual is allowed to give to federal political committees. According to the Globe:

“Romney, more fully exploiting the system he employed in the 2008 election cycle, got around those restrictions by taking in contributions through political committees set up under the rules of individual states. Most of the money was then transferred to Romney’s federal political action committee, Free and Strong America, and used to pay the salaries of top aides, political consultants, and traveling expenses.”

Consider, too, the super PAC Restore Our Future, supposedly independent, but run by former Romney political aides in support of their man’s candidacy. Restore Our Future raised $12.2 million in the first half of 2012. Under the new, relaxed rules it can raise unlimited funds but must disclose who contributes and cannot legally coordinate with the candidates themselves or the candidates’ official campaign committees. Of Restore Our Future’s 90 wealthy donors so far, the ubiquitous Marriotts among them, four gave a million dollars apiece. One was John Paulson, described by the website Politico as “a New York hedge fund billionaire who became famous for enriching himself by betting on the collapse of the housing industry.”

The other three allegedly are corporations but none of them conduct any real business. Two, Eli Publishing and something called F8 LLC, each list the same Provo, Utah, address as trusts set up by the families of two executives at the anti-aging product company Nu Skin Enterprises. Nu Skin founders and fellow Mormons Stephen Lund and Blake Roney were big contributors to Romney’s first White House campaign in 2008. (For what it’s worth, twice in the ’90s, Nu Skin was hauled before the Federal Trade Commission and paid a total of $2.5 million to settle allegations of unsubstantiated product claims.)

The other shell company, W Spann LLC, was even more mysterious. As first reported by Michael Isikoff of NBC News, it was dissolved only months after it was created, and just two weeks before Restore Our Future reported the company’s donation. As Isikoff wrote, “Campaign finance experts say the use of an opaque company like W Spann to donate large sums of money into a political campaign shows how post-Watergate disclosure laws are now being increasingly circumvented.”

After days of media demands and questions, the man behind W Spann finally came forward: Edward Conard, a retired managing director of — surprise — Bain Capital. But he only stepped up after the groups Democracy 21 and the Campaign Legal Center requested investigations by the Justice Department and the Federal Elections Commission. He made his donation “after consulting prominent legal counsel regarding the transaction,” Conard said, “and based on my understanding that the contribution would comply with applicable laws.”

Phony businesses set up for the sole purpose of laundering campaign money and shielding who’s really behind massive contributions? The donors responsible for the dummy corporations all say they have nothing to hide. So why hide it? Maybe to keep their distance, because Restore Our Future could be planning attack ads on Republican rivals and President Obama that will be harsher and more truth bending than anything Romney and his nearest and dearest can officially support.

We need to discover this and other answers before the money machine completely supplants the voting machine, and any last chance to have our voices heard is permanently stilled by cold hard cash.

 

By: Michael Winship, Senior Writing Fellow, Demos, published in Salon, August 12, 2011

August 13, 2011 Posted by | Big Business, Businesses, Campaign Financing, Capitalism, Class Warfare, Conservatives, Corporations, Elections, Financial Institutions, GOP, Ideologues, Ideology, Jobs, Justice Department, Lobbyists, Mitt Romney, Politics, Republicans, Right Wing, Unemployed, Voters, Wall Street, Wealthy, Wisconsin | , , , , , , , , , , , , , , , , , | Leave a comment

   

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