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George Zornick | The Nation

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George Zornick

George Zornick

Action and dysfunction in the Beltway swamp. E-mail tips to george@thenation.com

BREAKING: Shots Reportedly Fired at Washington State High School

Washington state news outlets are reporting that shots were fired inside a high school outside Seattle late Friday morning. KIRO in Seattle reported that around 10:45 a.m. Pacific time, 911 calls and tweets started rolling in about a shooting at Marysville-Pilchuck High School in Marysville, Washington:

 

Aerial footage on KIRO shows emergency vehicles massed outside the school, while students are being led away from the building in an all-too-familiar procession. A caller to KIRO said her son relayed that a male shooter opened fire near the cafeteria. 

The Seattle Times is reporting that seven people are injured, and the gunman is dead of a self-inflicted wound. CBS News says that three people are at a local hospital with gunshot wounds, and one more is expected. Police have not confirmed any information about the shooting. 

In less than two weeks, Washington state will vote whether to implement universal background checks on weapons sales. Outside groups have spent millions of dollars to influence voters to either pass or reject a background check system very similar to what failed in the Senate early last year. 

Mitch McConnell Reminds Everyone He Tried to Privatize Social Security

Mitch McConnell

Senate Minority Leader Mitch McConnell (AP/J. Scott Applewhite)

With less than two weeks to go in the Kentucky Senate race, minority leader Mitch McConnell made the unusual choice to bring up his past support for privatizing Social Security. In a speech before the Louisville Rotary Club, McConnell recalled how hard he worked to get then-President George W. Bush’s plan through Congress in 2005. Ace Kentucky reporter Joe Sonka flagged the remarks:

“After Bush was re-elected in 2004 he wanted us to try to fix Social Security,” said McConnell. “I spent a year trying to get any Democrat in the Senate—even those most reasonable Democrat of all, Joe Lieberman—to help us.”

The Bush plan, unveiled in his 2005 State of the Union speech, would have allowed workers under 55 to divert half of their payroll taxes away from Social Security and into a private retirement account. This would have created an even larger shortfall in the Social Security Trust Fund and further hobbled the insurance program—something many people suspected was a feature, not a bug, for Bush and the conservative think tanks pushing his plan.

There was immense backlash to Bush’s proposal, and Republicans never brought it up to a vote. It has since remained taboo even for many Republicans; Representative Paul Ryan dropped the idea from his budgets after the GOP took over the House.

McConnell has been very quiet on the campaign trail about his role in the congressional debate, even though he was no doubt quite active as the majority whip at the time. This appears to be the first time he brought it up since the race began.

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It’s a dangerous move for McConnell, who is already being hammered by Democrat Alison Lundergan Grimes over bread-and-butter economic issues. She just released an ad featuring McConnell’s remarks to a Koch-network donor conference in which he promised not to allow a Senate debate over raising the minimum wage, enacting student-loan relief, nor extending unemployment benefits:

Sonka asked McConnell after the speech if he would once again push for Social Security privatization if he became majority leader of the Senate. McConnell said only, “We’re not in the majority yet. We’ll have more to say about that later.”

It would not be surprising if video if McConnell’s remarks Thursday end up in another campaign ad very soon.

 

Read Next: Mitch McConnell will say anything for a ham.

Did Elizabeth Warren Just Change Her Tune on Running for President?

Elizabeth Warren

Democratic Senator Elizabeth Warren of Massachusetts (AP Photo/Timothy D. Easley)

Senator Elizabeth Warren gave an interview to People magazine for this week’s issue and was asked for roughly the thousandth time if she planned to run for president. But her answer to this query was different than all the others:

But is the freshman senator from Massachusetts herself on board with a run for the White House? Warren wrinkles her nose.

“I don’t think so,” she tells PEOPLE in an interview conducted at Warren’s Cambridge, Massachusetts, home for this week’s issue. “If there’s any lesson I’ve learned in the last five years, it’s don’t be so sure about what lies ahead. There are amazing doors that could open.”

She just doesn’t see the door of 1600 Pennsylvania Avenue being one of them. Not yet, anyway. “Right now,” Warren says, “I’m focused on figuring out what else I can do from this spot” in the U.S. Senate.

As a veteran Warren-watcher, I can say with certainty this is more ambiguous than she’s ever been on the subject. “I don’t think so,” “amazing doors that could open,” and “right now” are the traditional vernacular of a someone flirting with a campaign—-and someone who wants you to know it.

In the past, Warren has been much more unequivocal. (Examples: “I’m not running for president, and I plan to serve out my term,” and “I am not running for president. Do you want to put an exclamation point at the end of that?”)

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It is certainly possible Warren just got sloppy during the umpteenth iteration of this question, and used looser language than normal while speaking with a non-political reporter. But it’s also true that she’s been increasingly explicit in her criticisms of the Democratic establishment and its relationship with big banks. She told Salon last week that the Obama administration “protected Wall Street. Not families who were losing their homes. Not people who lost their jobs. And it happened over and over and over.”

Warren’s Senate office did not immediately return a request for comment.

UPDATE, 10/23: Warren's office responded to our query: "Nothing has changed," said her press secretary Lacey Rose.

Read Next: Hillary Clinton’s midterm schedule makes it clear: she’s running.

Secretive, Deep-Pocketed Shadow Campaigns Pervade Midterms

Demonstrator

Demonstration outside the Supreme Court in Washington, Oct. 8, 2013 (AP/Susan Walsh)

Campaign-finance operations are mutating at a frightening pace; each successive election since the Supreme Court’s Citizens United decision has birthed new varieties of independent expenditure groups that deliver even more access for wealthy donors and corporations. This year, single-candidate expenditure groups are pervasive and represent perhaps the apex of this evolution.

Single-candidate expenditure groups are Super PACs or nonprofits that spend unlimited money to support just one candidate (or to attack only that candidate’s opponents). They are a descendant of the candidate-specific groups like Priorities USA that formed to support just one candidate for president in 2012—but now most Congressional candidates in tight races have one at their side.

These are extremely attractive options for donors because they offer the ability to evade campaign-finance limits entirely: if you are a coal magnate that wants to give Mitch McConnell money, you can’t donate more than $5,200 to his campaign this cycle under FEC rules. But if you turn to the Kentucky Opportunity Coalition, the 501(c)(4) that is exclusively supporting McConnell, you can give as much as you want. You don’t have to worry about giving money to a national Republican Super PAC that may or may not spend your money on McConnell’s race—you can effectively fund a shadow McConnell campaign in Kentucky.

Moreover, corporations and labor unions that are forbidden from contributing directly to candidates can freely give to these candidate-specific groups. And in the case of the Kentucky Opportunity Coalition and many other similar outfits, the public will never know because those groups are not required to disclose their donors.

“This is the future unfolding before our eyes, and it’s as dangerous as anything that’s going on in money in politics,” said Fred Wertheimer, president of the campaign finance reform group Democracy 21. “It is the end product of a Supreme Court that apparently set out to destroy the nation’s anti-corruption campaign-finance laws.”

A new report from the Brennan Center for Justice lays out how these groups are spending much more than they have in the past, while also disclosing less. Through the end of September, the ten biggest “buddy groups,” as they are sometimes called in the campaign-finance world, have spent $26 million in contested Senate races. Only four of these groups fully disclose their donors; many offer no disclosure at all:

While these groups did exist in 2012, they are far more common for members of Congress in the 2014 midterms. But the truly ominous turn is how many of them now are dark-money outfits that don’t disclose donors. Ian Vandewalker, the author of the Brennan Center report, noted that dark-money single-candidate groups weren’t significant spenders in past Senate races.

Republicans appear to have a monopoly on the biggest of these groups, though the Brennan Center concludes that the Senate Majority PAC, run by former staffers of Senate majority leader Harry Reid, is probably elbowing out candidate-specific PACs for Democrats by serving as a catch-all for endangered Democrats. It is also almost wholly funding Put Alaska First, listed above, which is the second-biggest candidate-specific spending group in the midterms.

In some races, like Colorado, Iowa and Louisiana, buddy groups aren’t very active. In others, like Kentucky and Alaska, they are the biggest non-party spenders in the game, the report shows:

The Brennan Center also says single-candidate spending groups “are a major factor in House races this cycle.” Three of the thirteen toss-up House districts have seen “significant” spending by single-candidate groups, and in two of those races single-candidate groups “dominate” the outside spending.

The heart of the problem is the chance for corruption: big donors are using these groups to supercharge their influence over candidates. The Brennan Center looked at the donors to candidate-specific Super PACs, which must disclose donors, and found seventy-six donors who maxed out to a candidate’s campaign while also donating to a buddy group. For the dark-money groups, it’s reasonable to expect roughly the same pattern.

Looking at buddy groups that accept individual contributions, the Brennan Center found that 99 percent came from double-dipping donors. Only one group had less than 70 percent of donations from such donors.

Federal election law puts donation limits in place to limit potential corruption of candidates by powerful donors, but buddy groups are laying waste to that principle. “It’s as obvious as can be that if someone can give a million dollars, in essence, to directly support a candidate, the million dollars creates the opportunity for quid pro quo,” Wertheimer said.

Moreover, significant corporate and labor union money is no doubt flowing into these groups, which would otherwise be forbidden. Much of the corporate money is hidden; it’s true across the campaign finance world that corporations much prefer 501(c)(4) groups that don’t disclose donors, as opposed to Super PACs.

Even if these buddy groups were operating independently of campaigns, there would be the opportunity for serious corruption. But election law allows these groups to be run by former aides to the candidate. The official campaign and the buddy group are also allowed to share vendors, including for strategy and messaging, and the candidates can raise money for the buddy group. Campaign materials can also be used by buddy groups—that’s why Mitch McConnell put up wordless b-roll of the senator smiling that later became widely mocked.

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The Kentucky Opportunity Coalition, to extend the example, is run by Steven Law, a former top McConnell aide. In 2012 The Washington Post said Law and McConnell “remain a powerful combined force in Washington.”

Sometimes single-candidate groups can be a family affair. The Post reported earlier this year about some unusual arrangements in the primary campaigns: for example, Mike Turner, running for a House seat from Oklahoma, had by his side a buddy group funded mainly by his mother and grandfather. Ben Sasse, a Republican who is likely the next senator from Nebraska, was boosted in the primary by a buddy group where the sole funder was his 87-year-old great uncle.

Priorities for Iowa, which is solely backing Republican Senate candidate Joni Ernst, is run by a consulting firm that also employs a consultant for Ernst’s official campaign, the Brennan Center report notes. They claim there’s a “firewall” in place, but many analysts find this common defense laughable.

“This is a charade. Everyone who’s involved knows what’s going on,” said Wertheimer about single-candidate groups generally. “The idea that this is independent from the candidate’s campaign and therefore you don’t have to worry about campaign limits is absurd.”

 

Read Next: Here’s something your state can do to fight corporate money in politics.

The Elephant in the Room With Leon Panetta

Leon Panetta

Former Secretary of Defense Leon Panetta. (AP Photo/Susan Walsh)

In his widely read blog of Beltway goings-on, Chris Cillizza made the following fairly obvious point about former defense Ssecretary Leon Panetta’s Obama-bashing media tour:

What’s fascinating about this gripe with Obama is how much it plays into a) the argument that Hillary Clinton made against him in the 2008 presidential primary and b) the argument Hillary Clinton will likely make when (sorry, if) she runs for president in 2016. That argument, in short: I have been there and done that. I know what it takes to move the levers of power in Washington—and I am willing to do whatever it takes to make them move.

In addition, Panetta’s criticisms mainly involve Obama’s reluctance to use military force—also a fault line between Clinton and Obama, particularly on the matter of arming the Syrian rebels.

But the Beltway press shouldn’t be afraid to explicitly ask if Panetta is serving as an agent of Clinton’s official-but-not-yet-official presidential campaign. It’s not just that his criticisms dovetail with Clinton’s and are no doubt politically convenient for her as she attempts to draw a difference with the Obama administration—there are explicit ties to the shadow Clinton campaign that should make this question fair game.

Panetta has taken up residence at Beacon Global Strategies, where he is a senior counselor. He has deep ties to the group’s leaders; Jeremy Bash, Beacon’s founder and managing director, was Panetta’s chief of staff at both the CIA and the Pentagon. Another founder and managing director is Philippe Reines—one of Hillary’s closest allies and someone widely understood to still be managing her public profile.

Reines helped found Beacon after years spent with Hillary. He joined her Senate office in 2002 and later moved to the State Department when she became secretary. He is Clinton’s “chief personal defender,” in the words of New York magazine, who reported in a profile earlier this year that in addition to running Beacon, Reines’s “second full-time job” is working for Hillary. When she decides to run, Reines will be part of the campaign. In many ways, he already is.

So Panetta’s very close ties to Clinton’s non-campaign campaign should naturally raise the question if he, too, is an explicit part of it.

Note that Panetta first made a splash with his tough criticisms of Obama during a September 21 interview with 60 Minutes, in which he blasted the president for not arming the Syrian opposition sooner. “I think that would’ve helped,” he said. “And I think in part, we pay the price for not doing that in what we see happening with ISIS.” The “paying the price” line made headlines around the country the next day.

That very same Sunday, Bill Clinton appeared on CNN—and made the exact same point, and made it clear that Panetta and his wife were on the same page. “I supported two years ago the proposal that Hillary and Secretary Panetta and then–CIA director General Petraeus made to give more robust armed support to the Syrians,” he told Fareed Zakaria.

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With Reines managing Hillary’s public image, and Panetta and Bill Clinton making the same point on the same day, the question of coordination is unavoidable.

That’s not to say Panetta’s criticisms shouldn’t be considered on their merits, nor that there’s anything wrong with this coordination. But it’s crucial context in which to understand his position—that perhaps he’s not just a reluctant critic trying to call out policy failures, but also a political actor working for someone else’s electoral gain.

 

Read Next: Hillary Clinton’s midterm schedule makes it clear: she’s running.

Why Can’t Republican Candidates Say Whether They Want Boots on the Ground?

Hagan and Tillis

North Carolina Democratic Senator Kay Hagan, left, and Republican Senate candidate Thom Tillis before a live televised debate Tuesday, October 7, 2014 (AP Photo/Gerry Broome, Pool)

It was a busy night on the campaign trail Tuesday, as candidates in several key races faced off in debates. Moderators frequently asked whether candidates thought President Obama should commit US ground troops to the fight against ISIS—and most Republican candidates dodged the question with notable clumsiness.

In North Carolina, which has the third-highest military population among US states, incumbent Democratic Senator Kay Hagan is opposed to troops on the ground. In Tuesday’s debate, moderated by ABC’s George Stephanopoulos, she noted the United States “has many domestic needs at home” and said Iraqi and Syrian soldiers should wage the fight. Then Stephanopoulos put the question to her opponent, Thom Tillis:

STEPHANOPOLOUS: When I was speaking to House Speaker John Boehner last week, he told me that if other nations don’t step forward, the United States would have no choice but to put boots on the ground. Do you agree?

TILLIS: I think one of the reasons that many nations are afraid to step forward is because this president is afraid to lead the world. Normally in crises like these, the president is considered to be the leader of the free world. He rallies nations together to put down terrorist threats like ISIS. But now our allies, our friends across the world, really don’t know where this president stands because he telegraphs his plan to our enemies, he gives strength to the terrorists by telling them what we’re not going to do. He should have everything on the table and he should build some credibility and Senator Hagan should be right there with him.

There’s a small glimmer of an answer in there; Tillis seemed to be suggesting it was best not to say one way or the other whether ground troops should go. Stephanopoulos did not follow up, but Hagan immediately noted that Tillis didn’t answer the question.

In Colorado’s Senate debate on Tuesday, Republican Representative Cory Gardner was directly asked to “describe the circumstances in which you would support American boots on the ground in Syria and Iraq,” and answered with a word salad of attacks on Udall and Obama’s foreign policy. (Democratic incumbent Mark Udall opposes troops on the ground.) Gardner’s answer in full:

GARDNER: Look, our foreign policy is in the situation it is today because of the failure of leadership at the White House. And the president has said his policies are going to be on the ballot this November. Mark Udall voted with those policies 99 percent of the time. The president said we have no strategy when it comes to dealing with ISIL. The president said they were junior varsity actors. The president said we will lead from behind, and that’s Mark Udall’s plan, too, because he agrees with him 99 percent of the time. We must make sure that we protect the safety and security of American families. That’s why I have supported efforts to make sure that we take out the terrorists. But Senator Udall believes the Islamic State is not an imminent threat to our nation. Senator Udall believes that they are not plotting against our country. We had people arrested at Denver International Airport for conspiring with the Islamic State. In Chicago for conspiring with the Islamic State. And Senator Udall doesn’t even show up at the Armed Services hearing when it talks about emerging threats. Senator Udall is absent.

In West Virginia, Democratic challenger Natalie Tennant has plainly said she opposes troops on the ground and, in Tuesday’s debate, reiterated her opposition and cited the pain of having sent her husband off to war. She did give a mini-evasion to the moderator’s question—he noted she opposed ground troops, but asked what future situation might justify them. That’s a tough hypothetical to answer, and Tennant basically said she would need more information.

When the moderator put the same question to the Republican candidate, Representative Shelley Moore Capito, she evaded the question of ground troops entirely:

CAPITO: The visuals of ISIS beheading two Americans and threatening to behead another, and British journalists and aid workers, is just jarring to all of us. I think that because of the president’s weak policies in Iraq, we find ourselves in a position where this terrorist group has been fomenting, raising money, raising membership. I find it frightening in terms of what could happen on our homeland. That has to be what you think about. There is nothing more valuable for us as Americans than our servicemen and women, and I appreciate [Tennant’s] husband’s service to our country. I take these decisions very seriously. I did vote to have the president train the Syrian rebels because I feel like we need a coalition of people that will stop the terrorist group from further growth.

In Georgia’s Senate debate on Tuesday night, the moderator repeatedly pressed Republican David Perdue on whether he wants ground troops in Iraq and Syria, and this is the closest Perdue came to an answer: “If we put boots on the ground, that better have a chance to win. Right now we don’t have that.” (I have no idea what that means.)

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In Virginia’s Senate race last night, Republican Ed Gillespie said only that Obama should not have ruled out ground troops, and incumbent Senator Mark Warner agreed.

But in most races, Republican candidates are working off the same script: avoid calling for ground troops at all costs and simply step around the question. The similarly scripted attacks on Obama’s alleged incoherence on ISIS seem rather strange given that fairly massive dodge.

 

Read Next: No, ISIS is not a threat to the US.

Trumka Wants a More Populist Approach From Democrats

Richard Trumka

AFL-CIO President Richard Trumka. (AP Photo/Alex Brandon)

The midterm elections are twenty-seven days away, and AFL-CIO President Richard Trumka has been keeping a relentless road schedule campaigning for Democratic candidates. One thing he’d like to see more of: talk about basic economic fairness issues.

“I think more populism, or more focus on the economic issues, would be helpful,” he told a small group of reporters at the AFL-CIO headquarters in Washington, DC. “I think it would help drive turnout as well. I think the candidates that focus only on negative things, doing everything negative, have a real danger of having their base go flat.”

Trumka said that in talking to workers on the campaign trail, he frequently confronts a problem that has bedeviled Democrats in many past midterms: apathy. Union members wonder why it matters if they vote.

“They say that at the plant gate, at doors, on the telephone,” Trumka said. “I try to explain to them that the economy is not like the weather. Those that are in power, and those that want to be in power, want us to believe the economy is like the weather—there’s nothing you can do about it, so don’t bother. But the economy…it’s nothing but a bunch of rules. And those rules decide the winners and losers, and those rules are made by the men and women we elect. That’s why this election is important.”

The dire situation in the Middle East, the Ebola outbreak and scandals at the Secret Service and the Veterans Affairs department have no doubt clouded the picture and increased apathy, Trumka acknowledged. But the AFL-CIO is trying to break through with an active on-the-ground operation.

Trumka said the AFL-CIO is “about where we were” at this point in the 2010 midterms—which could be taken as an ominous sign, since Democrats got blown out at the polls that year.

But he did claim to see an uptick in volunteers and electioneering on the ground in key states, and he believes voters are beginning to focus on the upcoming races. He also appeared buoyant about Alison Lundergan Grimes’ chances of unseating Senate Minority Leader Mitch McConnell; at one point he declared outright that she would win.

The AFL-CIO is doing things differently from 2010 in some key ways. They launched an independent expenditure committee, the Workers’ Voices PAC, that allows the union to communicate directly with voters. (Strict campaign finance laws on unions generally only permits political communication with members). The AFL-CIO is also getting involved in key statehouse races and hoping to avoid the tide of state-level anti-worker legislation that emerged after the 2010 elections.

Wisconsin Governor Scott Walker and Maine Governor Paul LePage, two leaders in that fight, are on the ballot this year, and the AFL-CIO is very active in both races. Trumka had just come from campaigning in Maine for Democratic candidate Mike Michaud.

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But Trumka said he was equally worried about the Republican candidates running for governor who, like Walker and LePage did in 2010, are staying quiet about their anti-worker ambitions.

He said open talk about dismantling unions “has subsided for the election, and right after the election it will raise its ugly head. If certain governors win, they’ll use it as a false mandate to say, ‘see, going after workers is what this populace wants me to do.’ Even though they don’t run on it,” Trumka said. “I wish all of them would say their real agenda; then the American public would really get to vote on which agenda you want.”

Read Next: Why voting and movement building go hand-in-hand

Gay Marriage Is a Reality in 5 States After a Supreme Court Ruling

Marriage Equality Activists

Protesters rally for marriage equality at the Supreme Court on the day DOMA was ruled unconstitutional. (AP Photo/Charles Dharapak)

​The US Supreme Court decided on Monday not to review any lower-court rulings that allowed same-sex marriage in Indiana, Oklahoma, Utah, Virginia and Wisconsin. It’s likely the final word on the matter in those states, and marriages are expected to begin there immediately.

Lower courts have unanimously struck down bans in those states, and since the Supreme Court denied petitions for review, it’s the end of the legal road for opponents of gay marriage in those states. Accordingly, marriage licenses to same sex couples can now be issued. County clerks in Indiana are preparing today to sign them, and Virginia Attorney General Mark Herring tweeted that marriages can begin at 1 p.m. there:

The appeals courts that decided the cases in those five states also have six other states in their judicial districts: Colorado, Kansas, North Carolina, South Carolina, West Virginia and Wyoming. That means gay marriage is essentially a foregone conclusion there. Once that happens, thirty states will allow same-sex marriage.

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The Court’s decisions surprised some analysts who expected the justices to take up the issue. But Justice Ruth Bader Ginsburg said recently the Court was unlikely to get involved until lower courts were conflicted on gay marriage, and as noted, the lower courts were unanimous in striking down the bans in those six states.

In United States v. Windsor, the Court struck down part of the Defense of Marriage Act and asserted some logic suggesting banning gay marriage was unconstitutional, but as Chief Justice John Roberts noted in his dissent, the Court didn’t actually take up the question of whether states could ban it. It may yet—and until it does, gay marriage isn’t cemented into the nation’s laws—but it’s increasingly looking like American jurisprudence is moving in that direction.

 

Read Next: What does it mean when a top Republican runs as an ally of marriage equality?

The Blotch on Eric Holder’s Record: Wall Street Accountability

Eric Holder

(Reuters/Jonathan Ernst)

Attorney General Eric Holder will announce Thursday he is stepping down from the post he has held for nearly six years—making him one of the longest-serving attorneys general in American history.

Holder was the first African-American to hold the position and will surely be remembered as a trailblazer for civil rights. From sentencing reform to combating voter suppression to investigating some of the country’s most violent police forces, Holder made huge progressive strides. It’s no coincidence Holder called the civil rights icon Representative John Lewis on Tuesday before his resignation became public. White House officials are already pushing out narratives about Holder’s “historic legacy of civil rights enforcement and restoring fairness to the criminal justice system.”

But there is one area where Holder falls woefully short: prosecution of Wall Street firms and executives. He came into office just months after widespread fraud and malfeasance in the financial sector brought the American economy to its knees, and yet no executive has faced criminal prosecution. Beyond the crash, Holder established a disturbing pattern of allowing large financial institutions escape culpability.

“His record is really badly blemished by his nearly overwhelming failure to hold corporate criminals accountable,” said Robert Weissman, president of Public Citizen. “Five years later, we can say he did almost nothing to hold the perpetrators of the crisis accountable.”

Advocates for financial accountability often point to the Savings and Loan crisis as a counter-example: despite much smaller-scale fraud, 1,000 bankers were convicted in federal prosecutions and many went to prison.

Holder has tried to explain his lack of prosecutions relating to the 2008 collapse by claiming the cases were too hard to prove—but many experts disagree. The Sarbanes Oxley Act, for example, would provide a straightforward template: it makes it a crime for executives to sign inaccurate financial statements, and there is ample evidence that Wall Street CEOs were aware of the toxicity of the sub-prime mortgages sold by their firms.

Late last year, Judge Jed Rakoff of the Federal District Court of Manhattan wrote an essay in The New York Review of Books bluntly titled, “The Financial Crisis: Why Have No High-Level Executives Been Prosecuted?” He suggested a doctrine of “willful blindness” at Holder’s Justice Department and said “the department’s claim that proving intent in the financial crisis is particularly difficult may strike some as doubtful.” A federal judge will generally not proclaim people guilty outside the courtroom, but Rakoff came close with that statement. The fact he wrote the essay at all stunned many observers.

In recent years, the Justice Department has obtained some large-dollar settlements with Wall Street firms like JPMorgan Chase and Bank of America. But the headline-grabbing amounts end up being significantly less after factoring in tax accounting and credits for actions already being undertaken by the bank. There is also a lack of transparency around how these penalties are being paid to aggrieved consumers.

Holder himself suggested in Senate testimony last year that some firms really are too big to jail:

“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy,” Holder said.

He later walked that back in subsequent testimony, saying “Let me be very, very, very clear. Banks are not too big to jail.” But the data suggest otherwise.

Under Holder, the Justice Department has greatly expanded the use of deferred prosecution agreements with large corporations, from financial firms to agricultural giants. These are arrangements that take the place of criminal prosecutions—instead, the offending corporation admits wrongdoing, pays a fine (that is usually a small fraction of yearly profits), and agrees to remedy internal problems that lead to the crime. In return, the government agrees not to prosecute.

Public Citizen did an analysis of these agreements at the Department of Justice and found that Holder made them a routine affair:

There isn’t much transparency over which bad actors are awarded deferred prosecution, and which are not, and advocates are alarmed by the precedent.

“[Holder] ensconced the de facto ‘too-big-to-fail’ doctrine by which large financial institutions were effectively immunized form criminal prosecution simply by virtue of being so big,” said Weissman.

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This was brought into sharp relief when Justice allowed HSBC to enter deferred prosecution for wide-ranging multibillion-dollar money laundering at the bank on behalf of large illegal drug operations and also terrorist groups.

“The facts are unbelievable. Epic-level money laundering on behalf of narco-traffickers, un-denied by the corporation,” Weissman said. “And no criminal prosecution, and no responsibility for the executives.”

It did seem that Justice became more responsive to these criticisms after Obama was re-elected, and Weissman hopes that continues after Holder. “With a clean slate, Obama should apply a litmus test: a new nominee has to clearly show their willingness to hold accountable the institutions and individuals on Wall Street who devastated Main Street,” he said. “And they have to be crystal clear that they are abandoning the too-big-to-jail doctrine.”

Read Next: Eric Holder’s voting rights legacy

How the Koch Network Exploited the Veterans Affairs Crisis

Pete Hegseth

Captain Pete Hegseth, right, and Captain Flagg Youngblood, testify on Capitol Hill in Washington, Thursday, July 1, 2010, before the Senate Judiciary Committee hearing for Supreme Court nominee Elena Kagan. (AP Photo/Pablo Martinez Monsivais)

As the scandal over waiting lists at Veterans Affairs hospitals exploded earlier this year, there was widespread outrage—and justifiably so, as the country learned that more than 100,000 veterans waited over ninety days for care or never received it.

An ever-present force in this debate was a group called Concerned Veterans for America. Its leader, Peter Hegseth, frequently appeared on cable news segments about the scandal, and CVA was often mentioned on the floor of the Senate.

Though the group doesn’t disclose its donors, it has for a long while been clear the group is funded in part, or perhaps even in full, by the Koch brothers. Any remaining doubt can now be erased thanks to audio from the secretive Koch donor retreat this summer, obtained by The Undercurrent and reported here.

Hegseth addressed the crowd and not only confirmed that the Koch network “literally created” CVA but explained giddily “the central role that Concerned Veterans for America played in exposing and driving this crisis from the very beginning.”

Most notably, during his roughly ten-minute speech, Hegseth outlined how the group was turning legitimate grievances over Veterans Affairs care into a political weapon to attack both the Obama administration and the idea of government-provided healthcare.

When Kevin Gentry, vice president of the Charles G. Koch charitable foundation, introduced Hegseth to the assembled donors, he noted that “you all helped build a group called Concerned Veterans for America.”

At various points, Hegseth took pains to express his gratitude to the people funding his operation. “Concerned Veterans for America is an organization this network literally created to empower veterans and military families to fight for the freedom and prosperity here at home that we fought for in uniform on the battlefield,” he noted.

“We utilized the competitive advantage that only this network provides: the long-term vision to invest and the resources to back it up,” he continued.

Hegseth also created a distinct impression for the audience that CVA was responsible for bringing the VA crisis to the forefront:

Now, unless you’ve been living under a rock for the last couple of months, you know about the crisis at the Department of Veterans Affairs. What you probably don’t know is the central role that Concerned Veterans for America played in exposing and driving this crisis from the very beginning.

After years of effort behind the scenes privately and publicly, the scandal eventually made national headlines when initially in Phoenix it was exposed that veterans were waiting on secret lists that were meant to hide the real wait times veterans had at VA facilities of months and months and months.

Indeed, CVA played a key role in bringing the scandal to the national consciousness. In early April of this year, a doctor from the now-infamous Veterans Affairs hospital in Phoenix retired and went to The Arizona Republic with allegations of falsified data about long wait times for patients.

But despite the story, it remained a local issue. One of the things that helped drive it into the national news was a rally organized by CVA in Phoenix with Republican Representative Dave Schweikert. Not long after, CNN reporter Drew Griffin ran a long investigative piece that sent the story viral.

The scandal surely deserves attention. But Hegseth’s speech is striking for the naked political motivations behind CVA’s advocacy, and what he deems most important:

Perhaps most importantly to this effort, we have created a new line of defense against the march towards socialized medicine, educating veterans and Americans in the process. Veterans have had government-run healthcare for decades. We’ve had the preview of Obamacare, and the scandal has exposed the inevitable result of central planning for all Americans: massive wait times, impenetrable bureaucracy, de facto rationing, wasted tax dollars. It goes on and on.

Throughout this effort, Concerned Veterans for America, along with our network partners, have intentionally broadened the debate to include big government dysfunction generally, further fortifying a new skepticism that AFP and others have brought to what government-run healthcare does.

Even before this year’s scandal, CVA was using problems with Veteran’s Affairs healthcare as a political cudgel against both the Affordable Care Act and vulnerable Democrats. This ad taken against Representative Alan Grayson is a good example, in which a veteran explains his troubles getting care and then says “If you want to know what Obamacare’s going to be like, just look at the VA system.”

CVA operates in the expanding world of 501(c)(4) social welfare organizations that, in reality, are pure political operations. The group’s finances are hard to parse, but it appears much of their spending is on ads targeting Democrats in swing states—late this summer, for example, CVA began a $1.6 million advertising campaign against Democratic Senator Kay Hagan in North Carolina. (Notably, the air time was already reserved by the Koch-affiliated Freedom Partners, but they canceled their buy and turned it over to CVA.)

Finally in his speech, Hegseth claims that Republican senators were working hand-in-glove with CVA to pass the Sanders-McCain legislation this summer on veteran’s healthcare, and that the Koch network alone is responsible for the “market-based” reforms included in the bill:

Ten days ago, the Senate struck a historic deal, a deal that Concerned Veterans for America was central to in every aspect literally ensuring that the language stay focused on real market-based reform, and we pushed the ball across the Now usually deals in the Senate include only one thing: billions and billions of dollars in more spending. Not this one.

This deal, as with the legislation in the House, was instead built on two market-based reforms that were injected by Concerned Veterans for America and advanced the entire point, the entire way.

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He names the accountability measures that allow quick termination of under-performing VA managers, which was initially advanced by Senator Marco Rubio.

Hegseth then says the “crown jewel” of the bill is the ability for veterans to obtain private healthcare if they are waiting too long in the VA system. “The latter reform, which seems like a no-brainer to everyone in this audience, is a huge development, rocking the core of big government status quo in Washington,” he claims.

Here, Hegseth is engaging in some undue bravado. The option for privatized care is for veterans is significant, though only available to veterans who have to wait thirty days or more for care or live more than forty miles from a VA facility. Hegseth doesn’t mention the provision has a sunset of three years or until funding runs out, whichever comes first.

And speaking of funding, the legislation increases the deficit by $10 billion. That would seem to go against much of the fiscal conservatism trumpeted elsewhere in the donor conference.

Nevertheless, the Hegseth speech is an interesting window into how the Koch network operates: funding an ostensible advocacy group that is, in fact, a relentless political operation—and one that can, with the right situation to exploit, do everything from take out political attack ads to help craft legislation.

Read Next: How the Koch brothers and other family capitalists are ruining America

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