Every
Friday, the Brennan Center will be compiling the latest news concerning the
corrosive nature of money in New York State politics—and the ongoing need for
public financing and robust campaign finance reform. We’ll also be linking to
dispatches from around the country highlighting the national scope of this
crisis. This week’s links were contributed by Syed Zaidi.
For more stories on an ongoing basis, follow the Twitter hashtag #moNeYpolitics and #fairelex.
For more stories on an ongoing basis, follow the Twitter hashtag #moNeYpolitics and #fairelex.
New
York Campaign Finance and Ethics News
1. Last month, Reform NY applauded New York
State Attorney General Eric Schneiderman’s promise to investigate non-profit
“social welfare” organizations that are overtly active in politics. Fundraising
groups can legally operate as tax-exempt 501(c)(4) organizations as long as
they spend less than 50 percent of their budget on political activities. Schneiderman
has launched a probe into two dozen non-profits, requesting that the
organizations disclose their revenues and expenditures. These organizations
include conservative ones such as Crossroads GPS, American Action Network, and American
Future Fund, as well as their liberal counterparts like Priorities USA, American
Bridge and America Votes. According to Bloomberg News, America Votes is the
only group that has responded to Schneiderman’s request thus far. Schneiderman
may revoke a non-profit’s ability to operate in the state if it makes a false
claim about its functions or refer the group to the IRS.
National
Campaign Finance and Ethics News
1. In picking Paul Ryan, Mitt Romney seems
to be trying not only to rally the Republican base, but also to further boost
campaign fundraising numbers. After the Romney campaign publicly declared Paul
Ryan as his running mate, it
raised over $ 2 million by the end of the day. Paul Ryan is one of the top
political fundraisers in Congress with a war chest of $ 5.4 million, $ 2 million more than the
next House member. Donations from banks, insurance companies and energy
conglomerates populate his FEC forms and inform his policy positions. Ryan is a
fervent
opponent of Dodd-Frank and has called for its repeal. He
has received more than $ 10,000 from Wells Fargo and Goldman Sachs each for his 2012 Congressional
election campaign. Ryan’s budget plan, popular among House Republicans, would
replace traditional Medicare with a voucher based system that would benefit
private insurers. Insurance
employees and their families have donated $ 815,328 to Ryan’s reelection
efforts over the
span of his career. Lastly Ryan has been an ardent critic of environmental
regulations. Campaign finance records reveal that he
has raised $ 41,750 from several sources including the PAC of
ConocoPhillips, Exelon Corp., and Wisconsin Energy Corp just as of this week,
and $ 65,000 from Koch Industries over his tenure in Congress. Top contributors
to Ryan’s Prosperity PAC are
outlined by the Fiscal Times.
2. TV stations will soon have to disclose
purchases of air time by groups jockeying over political ads. A Federal Communications Commission ruling
requires[g1]
affiliates of ABC, CBS, Fox and NBC in the top 50 U.S media markets to upload
agreements with political advertisers onto an online database. Advertising
agreements are already available to the public upon request in the form of hard
copies at local stations. However the new ruling modernizes the process and
ensures greater access. The rule is now in effect despite complaints and lawsuits
to halt the effort by the National Association of Broadcasters. The agency should
revamp its website to make it searchable by groups buying advertising time,
rather than solely by individual TV stations to make the compilation of records
less tedious.
3. The principle that everyone
whether rich, poor, weak or powerful is equal before the law is a keystone of
American democracy, but judicial elections for state courts continue to
undermine the promise of judicial impartiality and fairness. Ninety-five
percent of all cases in the U.S. are heard before state courts, whereas only 5
percent are decided by federal courts. Thirty-nine states elect their high
court judges. A Center
for American Progress report indicates that judicial campaigns now involve enormous
sums. In 1990 candidates for state Supreme Courts raised $ 3 million, whereas
in 2000 these very same races raised more than $ 45 million. From 2001 to 2003
the U.S. Chamber of Commerce spent heavily on state judicial elections, with
its preferred candidate winning 87 percent of the time. Conservative groups spent
$ 8.9 million on state Supreme Court elections in 2010, compared to $ 2.5
million spent by liberal organizations. This injection of campaign funds into
the courtroom is eroding justice as well. The report examines 403 cases where
individuals sued corporations in six states, and concludes that the courts
ruled in favor of corporations 71 percent of the time. The high courts that have seen the most
campaign spending are much more likely to rule in favor of big businesses and
against individuals who have been injured, scammed, or subjected to
discrimination.
4. In 2010 voters were understandably
dissatisfied with the Washington establishment, and choose to elect 89 new
members to the House of Representatives. Unfortunately analysis
by the Sunlight Foundation demonstrates that the freshman have become just as
cozy with special interests as their experienced colleagues. Although the freshmen
project an image of being political outsiders, more than half have served in
political offices, and a disproportionate number are millionaires, similar to
the rest of Congress. In 2010, business PACs with lobbying staff donated $
14.89 million to these Representatives who were challenging incumbents at that
stage. This cycle, the same PACs have contributed over $ 26.66 million to their
campaigns. Leadership PACs–PACs associated with high-ranking members of
Congress—have propped up some of the candidates to the tune of $ 9.59 million.
Furthermore outside groups such as Super PACs, nonprofits, labor groups and
party committees have spent $ 1.78 million in the districts of these 89
incumbents. Representative Diane Black (R-Tennessee) is emblematic of her
class. She touts her background as a small business owner and registered nurse,
when in reality she is a veteran Tennessee state legislator and a millionaire
with a net worth of $ 49 million. Her assignment to the powerful Ways and Means
Committee, and House Budget Committee has brought in donations from the
healthcare industry, hospitals and insurance companies. In total she has
received $ 566,000 from PACs thus far in 2012.
5. Super PACs have dominated the news since
the Citizens United decision, but
non-profit “social welfare” organizations are also wielding excessive influence
over the political process. The two richest non-profits, Crossroads GPS and
Americans for Prosperity, headed by Karl Rove and the Koch brothers
respectively, have surpassed spending by all Super PACs combined. Non-profits
are a popular outlet for wealthy donors that hope to elect their preferred
candidate and remain hidden from public view. ProPublica’s
analysis of spending data demonstrates that these two conservative
non-profits also outspent political parties, unions, trade associations and
political action committees. Crossroads GPS has poured $ 41.7 million, while
Americans for Prosperity has spent $ 18.2 million on TV ads in favor of
Republican presidential candidates. "First of all, it shows how much
desire there is for secrecy among huge donors who want to be able to spend
money to influence this election without leaving any fingerprints," Fred
Wertheimer of Democracy 21 asserts. "Secondly, it shows that so far, there
is an enormous advantage being played in this election by just two groups that
are exercising undue influence in the elections."
6. Many
Super PACs have also paired up with non-profits, in an effort to keep their
donors anonymous. The Las Vegas-based It’s
Now or Never Super PAC has raised $ 171,900 thus far for Utah and Nevada state
political offices, with $ 160,900 from the It’s Now or Never 501(c)(4)
non-profit. Although the Super PAC and non-profit share the same
leadership, location and even name, the key difference is that the non-profit
does not have to disclose its donors, so the source of the Super PAC funds cannot
be tracked. The Fight for the Dream Super PAC, which is active in Pennsylvania
GOP primary races, has a similar set-up, deriving donations from an affiliated
non-profit called Restore the Dream. According to Paul Ryan, senior counsel at
the Campaign Legal Center, the use of 501(c)(4) groups as “straw donors” may
run afoul of federal prohibitions on non-profits engaging in electoral politics
as their primary purpose. "If the (c)(4) is only serving the purpose of
being a conduit for funds to the super PAC, then the (c)(4) is breaking federal
tax law," he stated. Furthermore both groups have also failed to file
their July quarterly reports electronically with the FEC.
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