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Lee Fang

Lee Fang

Investigating the intersection of politics, lobbying and public policy at RepublicReport.org.

Sorry, There’s No Evidence Big Business Has Abandoned the Tea Party or GOP

Rep. Tom Graves (R-GA) poses with Tom Donohue to accept an award from the U.S. C

The current conventional wisdom floating around the media, seemingly extrapolated largely from quotes to the press from businessmen and their surrogates, is that “Big Business [is] trying to unseat the Tea Party.” However, there’s no evidence that this is happening.

Remember the first time Tea Party House Republicans held a gun to the US economy, refusing to pay America’s debts unless Democrats accepted a wide-ranging set of demands, and as a result, business leaders promised to spend big to defeat hostage-taking radicals?

“We’ll get rid of you,” said Tom Donohue, president of the US Chamber of Commerce to the Tea Party lawmakers.

That was 2011, during the first debt ceiling stand-off. And the following election year, none of the threats materialized.

In 2012, the Chamber ended up spending millions in undisclosed business funds to help elect Todd Akin, Ann Marie Buerkle, Dean Heller, Connie Mack, Denny Rehberg and other lawmakers who supported taking the debt ceiling hostage. Political action committees for the largest corporate interests in America, including General Motors, Goldman Sachs, Deloitte, the American Bankers Association and Honeywell, gave several million in direct donations to Tea Party hostage-takers, helping many survive the election last year and repeat their antics this year.

Now, it seems big business is bluffing again and advancing a false narrative that they are flexing their political muscle against the Tea Party. The storyline, boosted by ThinkProgress, Bloomberg, National Journal and the Associated Press, among others, is that corporate America has lost influence with the GOP and is helping to defeat lawmakers who threatened to push America into default.

So far, the spin makes the business community appear moderate, though there is nothing backing it up. Despite making statements and sending letters voicing their concern, the Chamber has failed to spend a single penny in advocacy against the Tea Party hostage-takers. It hasn’t rescinded any of its so-called “Free Enterprise Awards,” either. (The award has been given to many Tea Party lawmakers, including repeat hostage-takers like Representatives Steve Scalise (R-LA), Tom Graves (R-GA), and Morgan Griffith (R-VA), who encouraged a debt default by comparing it to a second American Revolution.)

Contrast this with how the Chamber behaved in 2009, when Democrats controlled the House of Representatives. By November of that year, twelve months before the midterms, the Chamber launched an onslaught of attack advertisements against House Democrats who did not vote their way, after months of issue ads in targeted districts.

Then, after helping the Tea Party seize the House and several governors’ mansions during the midterms, business groups pumped funds into an effort to gerrymander the Tea Party into permanent rule. CitiGroup and the US Chamber—both of which now complain about flirting dangerously close to default—provided huge donations to the RSLC, the political committee devoted to gerrymandering seats to the House GOP and Tea Party caucus’ advantage.

Will we see a reversal? Next year, there are a handful of high-profile primary races in which establishment Republicans are challenging incumbents, but none of them are proof that there is a concerted effort by business to drive out the Tea Party. Representative Justin Amash (R-MI) is being challenged on social issues and for his outspoken views on foreign policy, not on the debt ceiling. Representative Kerry Bentivolio (R-MI) has been a target for a primary well before his vote to shut down the government, largely because he is seen as a political novice who doesn’t know how to raise money. Representative Walter Jones (R-NC) is facing an establishment challenge, once again, but because he is an outsider within the party for his persistent votes to regulate Wall Street and crack down on political corruption.

Finally, Representative Scott DesJarlais (R-TN) may lose his seat because of revelations that he pressured a patient with whom he was having an affair to seek an abortion—not for his vote over the debt ceiling.

In fact, in terms of primary challenges, it looks like well-heeled GOP interest groups will successfully oust Boehner Republicans to make way for additional Tea Party–style politicians. Politico reports that Republican Representatives Mike Simpson (R-ID), Pete Sessions (R-TX), Lamar Smith (R-TX) and Bill Shuster (R-PA) face challenges from the right next year. Challengers in these races are calling for more debt ceiling hostage-taking. The Club for Growth, a pro-government shut down group funded largely by wealthy investors and businessmen, is leading the charge.

Here’s the reality: the large political action committee and trade associations that control much of corporate America’s campaign spending decisions will help the Tea Party and House GOP win re-election next year.

Big business political operatives lean Republican, and will stick with the party even if Republicans disrupt the economy for political reasons. Over the years, congressional Republicans waged a multifaceted effort to place partisans in their party in charge of the most influential lobby groups within the Beltway.

In the nineties, a mid-career John Boenher helped oust US Chamber president Richard Lesher—a moderate who sided with Democrats at times—to pave the way for Tom Donohue, a known GOP loyalist. During the George W. Bush era, Rick Santorum, Tom DeLay, Grover Norquist, Ed Gillespie and others created the “K Street Project” to install GOP operatives into key business lobbying positions.

Tom Perriello, a former one-term House Democrat from Virginia who was one of the first to be targeted by the US Chamber in attack ads aired a year before his re-election, says business leaders are too cozy with the GOP. Now the leader of the Center for American Progress Action Fund, he tells me that he’s “disappointed but not particularly surprised in the business community’s failure to force the Republicans to act reasonably on the CR, default or immigration, for that matter.… there seems to remain a broad cultural and political aversion [among lobbyists] to do anything that seems to help the Democrats and President Obama in particular.”

Still, Perriello thinks a change could be on the horizon. Many traditionally Republican business groups in Virginia have sat out the gubernatorial race, partially out of disgust for Ken Cuccinelli’s Tea Party extremism. Even GOP corporate lobbyists like John Feehery have been vocal in calling for the business community to do more to challenge the Tea Party.

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But right now, it’s too early to say if 2014 will be any different than the last few congressional elections. The evidence suggests in fact that radicals are gaining ground within the GOP while facing little accountability. When it comes to taking on the Tea Party, business leaders have a lot of bark and no bite.

Katrina vanden Heuvel says JPMorgan's $13 billion fine was well-deserved.

 

Predatory Lenders Fight Regulators With Offer of $500 Visa Gift Cards

Lenders are offering Visa giftcards to stop "reckless regulators." (Courtesy of

Visitors this weekend to Townhall.com were welcomed with a pop-up advertisement soliciting a petition against the Obama administration. “Help us send 1 million letters to stop reckless regulators,” the ad beckons, atop images of President Barack Obama and Attorney General Eric Holder.

The advertisement is sponsored by Consumers for Choices, a new group whipping up right-wing anger at the Obama administration for supposedly using his “Reckless, Elitist, Overzealous Regulators” to destroy “small-dollar” and tribal lenders. Visitors to the Consumers for Choices website, which is being advertised on conservative news portals like Townhall, are encouraged to contact their local representatives to send an angry pre-written letter. Consumers for Choices says their supporters will be automatically entered into a weekly raffle, with a grand prize $500 Visa gift card.

The advocacy website repeatedly references Western Sky Financial, an online installment loan company that recently suspended lending after being sent cease-and-desist letters from government agencies. Left unsaid on the Consumers for Choices site are the types of loans offered by the company, which feature interest rates of 355 percent.

A single $5,075 loan from Western Sky cost $40,872.72 to pay back—more than eight times the original amount.

A commercial from the company featured a Native American woman exclaiming, “Making the six monthly payments is good for your credit profile!”

New York Attorney General Eric Schneiderman recently sued Western Sky Financial, CashCall Inc. and other online lenders for violating New York state usury laws, which cap interest at 16 percent for such loans. In August, the Department of Justice began investigating a broad range of banks that handle payments for payday and installment lending companies accused of deceiving customers and charging predatory interest rates.

Regulators say predatory lenders are pairing to Native American groups to exploit tribal sovereignty.

Western Sky, which operates on a reservation in South Dakota but markets its loans through national television and Internet advertising, says its location on tribal land prevents authorities from using state law to regulate its business. The Consumers for Choice site takes that argument a step further, declaring, “With your help, we can tell our elected leaders to put a stop to baseless attacks on tribal business and eliminate government fraud!”

Though the website contains no information about the type of loans in jeopardy of being eliminated, there is plenty of incendiary language designed to incite readers into action. Consumers for Choice warns of “elitist Federal regulators” seeking to deny “access to much-needed credit and funding for the average American family.”

The Consumers for Choice site, registered in August shortly after the New York State and Department of Justice probe began, also does not disclose any information about who is behind the effort. The Contact Us page lists an address for Aristotle, a political website company.

The only names listed on the site are Republican members of Congress who have issued supportive blurbs.

“I applaud the efforts of Consumers for Choice to promote free market principals and help make the general public aware of how federal and state regulators are now working to limit consumers and small businesses ability to access consumer credit,” reads one message from Senator Jerry Moran (R-KS). Similar quotes are provided from Representatives Dennis Ross (R-FL), Dave Schweikert (R-AZ) and Tom Graves (R-GA). In August, thirty-one House Republicans signed a letter to the government, accusing the Department of Justice of “intimidating” banks for working with online lenders.

A look into Florida state business records, where Consumers for Choices Inc. is registered, provides more clues.

On August 30, 2013, an attorney named Andrew L. Asher filed documents to change the name of “Floridians for Good Government, Inc.” to “Consumers for Choices, Inc.”

Asher is attorney with Jenkins Hill Consulting, a lobbying firm that represents a trade association for installment lenders called the American Financial Services Association.

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The group spends about $6 million a year, with a large portion of its budget devoted to advocacy and government relations. Last week, AFSA held its annual meeting at the Mandarin Oriental Hotel in Washington, DC, where member companies, along with their lobbyists, met with lawmakers and were treated to a private talk on “inside politics” by Fox News Sunday host Chris Wallace.

Katrina vanden Heuvel urges New Yorkers to vote de Blasio—on the WFP ticket.

GOP Congressman Explains Why He Wants to Defund a Health Program He Supports


Lee Fang catches up with Representative Mike Pompeo (R-KS).

Kansas Republican Congressman Mike Pompeo has a problem. The program he’d like to use to help solve the healthcare crisis in America is … part of Obamacare already.

Though his party has made opposition to the healthcare law its defining issue, the Affordable Care Act is full of Republicans’ ideas, from the individual mandate to state-based exchanges to the unnecessary exclusion of congressional staff from the ordinary federal insurance marketplace.

The law also includes billions to expand and operate federal health centers, a program that has traditionally enjoyed years of Republican support. President George W. Bush called loudly for boosting such centers. Though Bush doubled spending “from $1.34 billion for FY 2002 to $2.1 billion in FY 2008,” Obamacare invests another $11 billion. Federal health centers typically provide comprehensive services—from primary to specialty care, including dental and mental health—regardless of their patients’ ability to pay.

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(Since health centers are funded by the discretionary budget, the shutdown has acutely impacted health centers more than any other aspect of health reform. The National Association of Health Centers also reports that the sequester alone threatens care for 900,000 patients.)

For Pompeo, an ardent opponent of Obamacare, the congressman has gone on record stating that health centers are the best solution for caring for people who cannot afford health insurance. At a town hall last year, he pointed to GraceMed and Hunter Health Clinic, two centers in his district, as examples of the right path for reform.

It’s not clear if the congressman has ever acknowledged that the two clinics received substantial funding from the law he would like to repeal. Hunter Health Clinic received $1.67 million and GraceMed $525,000 from the Affordable Care Act.

On Capitol Hill last week, we caught up with Pompeo after a vote to ask him if he supports repealing even ACA money for health centers. The conversation was about as productive as the last two weeks of congressional CR negotiations.

Asked if he supports the health reform money already going towards health centers, Pompeo replied, “I’ve supported the community health centers very consistently, I’ve been out there, they’re great people. Have you been out there? Have you been to GraceMed in Wichita?”

After telling him I had not, but would be happy to travel there, I asked again. “I’ve said I support community health centers. We need to get rid of the Affordable Care Act. It’s a disastrous piece of legislation,” Pompeo replied.

After more prodding, Pompeo reiterated his stance, telling us: “I support the community health centers. The Affordable Care Act doesn’t make sense. It’s going to bankrupt America. It’s gonna be a really bad outcome.”

So health centers are great, but money for them is going to bankrupt America?

Although Pompeo’s reasoning may be difficult to follow, his approach is not unique.

As I’ve reported, many Republican lawmakers have attempted to repeal Obamacare with one hand while asking for health reform cash with the other. Freedom of Information Act requests revealed letters from lawmakers—including Paul Ryan, Hal Rogers, and Jeff Denham, among others—asking the administration to approve ACA grants, in some cases health center funding, for their constituents.

Some have been brazen enough to use health reform funding announcements as props to gain friendly media attention. Congressman Michael Grimm has presented jumbo-sized check to announce an ACA grant in his district. Senator Jerry Moran posed at the groundbreaking ceremony for an ACA-funded clinic in his state.

Katrina vanden Heuvel opines that the right is still setting the terms of the shutdown debate.

Evan Bayh Uses the Government Shutdown to Shill for the Medical Device Lobby

 

 

 

 

 

 

 

Senator Evan Bayh. (Reuters/Kevin Lamarque)

On Fox News Sunday this morning, former Senator Evan Bayh voiced his support for a proposal by Senator Susan Collins, Republican of Maine, to temporarily repeal the medical-device tax in exchange for temporary funding of the government and increasing the federal debt limit through January. Bayh told host Chris Wallace that Collin’s proposal doesn’t go far enough. “Clearly a permanent repeal would give more certainty to the business community,” said Bayh.

The “business community” Bayh referenced also happens to be huge clients of Bayh’s lobbying firm, a conflict of interest that was not disclosed during the discussion.

After leaving the Senate, Bayh became a partner at McGuireWoods, which represents Allied Medical Supply, the American Orthotic & Prosthetic Association, the Cook Group, Eleka Instruments and other medical-device interests.

When Democrats, including Bayh, passed the Affordable Care Act three years ago, they enacted a 2.3 percent excise tax on medical device companies to pay for the law. As Citizens for Tax Justice notes, many major medical-device companies pay no tax at all. For instance, medical product giant Baxter International had a 2008–10 average federal income tax rate of negative 7.1 percent, according to CTJ’s report.

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The unraveling of the tax would increase the deficit by billions, a fact that runs counter to the GOP’s purported goal of reducing government red ink. Nevertheless, the fight to repeal the medical-device tax reveals how special interest groups have gamed the current political extremism in Washington for financial gain. As TheNation.com reported earlier this month, a letter demanding a repeal of the tax from seventy-five House Republicans was actually authored by a lobbying group for the medical-device industry.

Leading ‘Clean CR’ House Republican Explains His Limitations: Party Loyalty


Lee Fang interviews Rep. Peter King (R-NY).

The quagmire in Washington, DC, seems to be the result of party loyalty.

Enough Republican lawmakers have signaled publicly that they would support a continuing resolution (CR) without any policy riders attached (like Obamacare defunding), a legislative package that would ultimately end the government shutdown. They’ve received a lot of attention, yet nothing has happened.

In fact, the government could be on its way to opening back up if the faction of Republican politicians in the House who say they would pass a so-called “clean CR” sign onto a legislative maneuver offered by Democrats called a discharge petition. As The Washington Post reported, 195 Democrats have signaled support for the petition—which, added with the House Republicans who have indicated that they would pass a clean CR, would be enough to move the proposal forward.

We talked to several members of the GOP “clean caucus,” but found answers to be elusive. Representative Frank Wolf, asked about his prior position on supporting a clean continuing resolution, growled, “When I say something, it’s what I mean.” As we asked if he would sign the discharge petition that would force a vote on a clean CR, the Virginia Republican turned and walked away.

Representative Peter King, Republican of Long Island, is perhaps the most visible opponent of the shutdown. He has railed regularly in the media against followers of Senator Ted Cruz, calling him a “con man” and the entire strategy Cruz is leading “doomed to failure.”

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As Slate’s Dave Weigel pointed out, King floated the idea that as many as twenty-five moderate Republican lawmakers would join him in a vote against a rule that allowed the Obamacare-defunding CR, the budget bill that sparked the shutdown. But when the vote came up, King delivered only a single moderate vote, other than himself.

Although King knocked the idea of signing the clean CR discharge petition on Fox News Sunday, telling host Chris Wallace that “it’s not going anywhere,” we asked the congressman to further explain his unwillingness to embrace the plan.

 

 

While King brushed aside criticism, every other lawmaker of the clean caucus we spoke to refused to comment on the discharge petition.

King stressed that he knows how to “get things done” and said he was working on a plan to end the crisis.

“I’m only one guy, I only have so much power,” said Representative King, one more time explaining why the discharge petition would be too dangerous for him politically. “I’d lose a lot of credibility.”

In a certain twist of irony, the discharge petition supported by Democrats forces a vote on a bill originally sponsored by Congressman James Lankford, a Tea Party–backed lawmaker who fully supports taking both the debt ceiling and government funding bills hostage in exchange for a slew of drastic policy demands. If the petition gains enough signatures, Lankford’s bill, which maintains government funding but includes automatic government spending cuts, would be swapped out for a clean CR.

We caught up with Lankford at the Weyrich Lunch on Wednesday—a meeting ground, as reported by TheNation.com this week, where many of the conservative advocacy groups behind the shutdown effort conduct strategy sessions. Lankford, who mentioned he visits the group “about every couple of months or so,” said he would not be signing the discharge petition. “I would love to see some Democrats co-sponsoring my bill,” he said with a grin.

George Zornick says we’ve begun talking about Afghanistan again, but for the wrong reasons.

GOP Lobbyist: Business Needs to ‘Step Up’ Against the Tea Party


Lee Fang interviews John Feehery Tuesday.

Is the GOP’s hostage-taking on Capitol Hill really drawing divisions between congressional Republicans and corporate America? “Republicans Are No Longer the Party of Business” blares a headline this week in Bloomberg Businessweek.

The Republicans’ stated refusal to raise the debt ceiling has provoked angry letters from the National Association of Manufacturers and the US Chamber of Commerce. But with all the grumbling over the debt ceiling, there hasn’t been any truly visible action, or outside advocacy. Not a single campaign advertisement and no paid media, weapons of choice for the business lobby to pressure lawmakers, have been run against a Tea Party lawmaker. That might change, says one corporate lobbyist with strong ties to the party.

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John Feehery, a former senior aide to Dennis Hastert and Tom DeLay, is now a lobbyist for Quinn Gillespie, where he represents a range of interests, from News Corp. to AT&T. We ran into Feehery on Capitol Hill yesterday, who explained to us, “I think the business community has to step up to work to nominate Republicans who have a belief in the Constitution as it’s supposed to work out.”

The Chamber, Feehery says, needs to “understand that they’re under the gun.” Asked if the Chamber or other business groups will run campaign advertisements against the Tea Party lawmakers, Feehery said, “They haven’t so far…my own view is that if you want to fix the country, you have to fix the Congress.”

Bryce Covert tell us what the Democrats should demand from Republicans during the shutdown.

Meet the Evangelical Cabal Orchestrating the Shutdown


The Conservative Action Project is a right-wing group that has contributed to the recent government shutdown. (Reuters/Jonathan Ernst)

At Ebenezer’s Coffeehouse, a small shop next to Union Station and around the corner from the Heritage Foundation, “fair trade” coffee is dispensed and Christian books are available for customers to read.

A group of political operatives and evangelical firebrands behind the strategy to shut down the government over healthcare reform couldn’t have picked a more unassuming meeting place. Though the more famous “Wednesday meeting” is across town at the offices of Grover Norquist’s Americans for Tax Reform, the shutdown plotters often meet at a weekly lunch held on Wednesday at the event space of Ebenezer’s. (The group also meets regularly on Wednesday mornings at the offices of the Family Research Council.)

This other Wednesday group is a convening of the Conservative Action Project, an ad hoc coalition created in the early years of the Obama administration to reorganize the conservative movement.

The coalition is managed by Heritage and the Council for National Policy. The latter organization, dubbed once as “the most powerful conservative group you’ve never heard of,” is a thirty-year-old nonprofit dedicated to transforming the country into a more right-wing Christian society. Founded by Tim LaHaye, the Rapture-obsessed author of the “Left Behind” series, CNP is now run by Christian-right luminaries such as Phyllis Schlafly, Tony Perkins and Kenneth Blackwell.

Yesterday, The New York Times revealed in great detail how the Conservative Action Project has orchestrated the current showdown. The group initially floated the idea of attaching funding for Obamacare to the continuing resolution, and followed up with grassroots organizing, paid advertisements and a series of events designed to boost the message of senators like Ted Cruz.

Though the Heritage Foundation, through its 501(c)(4) Heritage Action sister organization, has played a lead role in sponsoring advertisements and town-hall meetings, tax disclosures reviewed by TheNation.com show that the Council for National Policy has provided a steady stream of funding for the organizing effort.

In my new book published this year, The Machine: A Field Guide the Resurgent Right, I profiled how the Conservative Action Project came about, and how its existence sparked a schism within the conservative movement. The group has played a background role in several high-profile political debates.

It was this rival Wednesday group that gave rise to the farcical “Ground Zero Mosque” conspiracy in 2010. The Conservative Action Project also played a consequential role in whipping up opposition to a number of key Obama judicial nominees, including judges David Hamilton and Goodwin Liu. Through rapid-fire memos and coalition advocacy, the Conservative Action Project can claim large responsibility for the fact that Obama has been deprived more than any modern American president of appointing judges of his choice for the federal bench.

But like the quagmire that GOP leaders find themselves in today, the hard-charging Conservative Action Project has bristled at establishment criticism in the past. Notably, it was the Conservative Action Project that first courted controversial Senate candidates like Christine O’Donnell and Joe Miller. For my book, I spoke to Colin Hanna, a Conservative Action Project leader, who told me that through weekly meetings with Republican legislators, his coalition members were able to persuade Republican campaign committees to generally back off and allow their insurgent candidates to compete in GOP primaries. O’Donnell later went on to cost the GOP one of its most prized Senate seats.

In another episode that enraged the Republican establishment, Republican Study Commission employees were caught encouraging conservative advocacy groups to attack the debt-ceiling deal negotiated by President Obama and Speaker Boehner in 2011. The story, reported by Politico, noted that RSC employee Wesley Goodman e-mailed a listserv, “We need statements coming up to the Hill every hour of the day in mounting opposition to the plan.” Goodman now officially works for the Conservative Action Project, according to his LinkedIn profile.

Many of the leaders involved in this effort are well-known Christian conservative icons, including “Christian Zionist” and former presidential candidate Gary Bauer and Liberty Counsel’s Mat Staver, an activist famous for his over-the-top attacks on the gay community.

The group has engaged in clashes with libertarian-leaning GOP leaders, particularly Norquist. That is not to say the group is not well connected with well-heeled interest groups.

The board of the Council for National Policy, the Conservative Action Project’s sponsor, features Michael Grebe, an influential Republican lawyer who leads the Bradley Foundation—a GOP money machine with close ties to Republican National Committee chair Reince Priebus and Governor Scott Walker. The Heritage Foundation’s Ed Meese and Becky Norton Dunlop, both well-respected among mainstream Republicans, are said to be prime players in the effort.

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Kevin Gentry, a key employee of Koch Industries’s lobbying subsidiary Koch Public Sector, has served on the board of CNP. Gentry now helped to run the new $250 million fund for conservative advocacy groups called Freedom Partners and manages the twice-annual secret gatherings for Charles Koch’s cohorts. (It was at a CNP gathering that Charles Koch once compared himself to the theologian Martin Luther.)

One CNP official has a surprising connection to President Obama and the shutdown. Since 2009, a consultant named Patrick Pizzella has helped to ensure that the Conservative Action Project achieves its goals. For a fee of $133,333, he’s been the highest-paid full-time employee since 2009, when the effort began.

In August of this year, President Obama nominated Pizzella to be a member of the Federal Labor Relations Authority. The FLRA acts as a miniature National Labor Relations Board for federal workers, helping to arbitrate disputes between federal employees and labor unions. Two months later, 800,000 federal employees now find themselves at home because of Pizzella’s political project.

For more on the Conservative Action Project, The Machine can be ordered from Amazon here, and information on purchasing an e-book can be found here.

Mitch McConnell’s making a play for unlimited campaign financing—Katrina vanden Heuvel is worried the Supreme Court will support him.

The Hidden Danger in the Supreme Court’s ‘McCutcheon’ Case


Chief Justice of the United States, John G. Roberts Jr. (AP Photo/Keith Srakocic)

If the Supreme Court moves to strike down certain campaign finance limits this term, as many expect the Roberts Court will do, could the conservative majority also pave the way for dismantling a whole host of anti-bribery and campaign finance laws across the country?

This week, when the court convenes for its new term, justices will hear oral arguments for McCutcheon v. Federal Election Commission, a case that challenges the aggregate contribution limits from individuals to traditional political committees.

Conservative legal strategists, including one of the groups that successfully propelled the original Citizens United decision, would like to use the McCutcheon case to go beyond the issue at hand. Just as Citizens United morphed from a case about restrictions on corporate-funded campaign movies into a decision that removed limits on all corporate and union spending on campaign expenditures, right-wing attorneys are hoping to harness McCutcheon to redefine how the government regulates multiple forms of corruption. If the conservative legal groups are successful, the ramifications could be widespread.

The case this week originates with Shaun McCutcheon, an Alabama businessman and frequent GOP donor who wants to overturn the FEC’s restrictions on how much one person can give to federal candidates and political parties every two years. Under current FEC guidelines, an individual’s total giving can amount to no more than $48,600 in donations to candidates and $74,600 in donations to political parties—for a total of $123,200. He is joined by the Republican National Committee in arguing that the the biennial cap should be removed.

Though McCutcheon isn’t challenging the limit one may give to a single committee—currently $2,600—proponents of existing law, like the Sunlight Foundation, argue that removing the aggregate cap will lead to wealthy donors’ spending millions of dollars on dozens of campaign accounts, and would amount to a new system where candidates will solicit seven-figure contributions that are bundled through multiple campaign committees.

Under current, post–Citizens United law, Super PACs funded with unlimited contributions may not coordinate in any way with candidates. McCutcheon would unravel the campaign finance system one step further by allowing individuals to make hefty donations to accounts that work directly with candidates. Further, Republican Senate leader Mitch McConnell’s attorney, who has been granted the ability to make oral arguments in the case, would like to press even beyond McCutcheon’s initial demands and strike down contribution limits for candidate accounts altogether.

The modern campaign finance system is defined by the seminal case Buckley v. Valeo, which in 1976 determined that candidates can spend unlimited amounts, but legislation to cap donation amounts is important to safeguard against undue influence. The decision declared that Congress was well within its power to enact “contribution ceilings,” which the court held were “a necessary legislative concomitant to deal with the reality or appearance of corruption inherent in a system permitting unlimited financial contributions.”

Here’s where conservative legal groups see an opening.

Paul Sherman, one of several attorneys to file a friend-of-the-court brief in support of  McCutcheon, would like to not only do away with aggregate biennial contribution limits but also the entire “appearance of corruption” standard created by Buckley v. Valeo. As Sherman notes in his brief, the “appearance of corruption” standard has been used beyond contribution limits and has been cited by lower courts to uphold many other good government laws.

In 2011, a federal appellate court upheld a North Carolina ban on lobbyist contributions to state candidates using the appearance-of-corruption standard created by Buckley. The standard has also been used in federal court to justify lobbying disclosure rules and “pay-to-play” guidelines, among many other ethics laws.

The standard, Sherman argues, is “premised on the notion that some modes of peaceful political speech and association … may be prohibited based purely on the fact that the public is disturbed by those modes of speech and association.” For Sherman, this makes the appearance-of-corruption argument inconsistent with the First Amendment.

Another portion of Sherman’s brief, which may be more appealing to political liberals, Sherman writes that the government has no duty to conceal the appearance of corruption because such information is vital for the voting public to evaluate their elected representatives.

Sherman and two other attorneys filed their brief on behalf of the Institute for Justice, a nonprofit organization founded with “initial seed funding” from Charles Koch, along with “generous” contributions from his brother, David. Over the last decade, Sherman’s group has also received $2.2 million from the the Walton Family Foundation, the charitable arm of the family that founded and still own much of Walmart.

The wealthy benefactors of the Institute for Justice—already heavy political contributors who have attempted to influence policy to advance their financial interests—stand to gain if Sherman’s claims find their way into the final decision on McCutcheon. If the appearance-of-corruption standard is swept away along with the aggregate contribution cap, other rules on lobbying and money in politics stand on shaky ground and will be next to face legal challenges.

“Repercussions could be widespread,” Sherman wrote in a column for Forbes.com in September. Noting that if the Supreme Court picks up his organization’s arguments on the appearance-of-corruption standard, the “narrow” issue of aggregate campaign limits could transform into “end our nation’s failed, decades-long experiment with campaign finance laws.”

Legal experts say the McCutcheon case may very well lead to a weakening of the appearance-of-corruption standard. “The appearance-of-corruption argument has been in intellectual trouble for a long time,” says Rick Hasen, a professor of law and political science at the UC–Irvine School of Law. Hasen favors strengthening existing conflict-of-interest rules to justify ethics law.

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The Roberts Supreme Court appears to be whittling down campaign finance into an unrecognizable nub,” says Ciara Torres-Spelliscy, an assistant professor of law at Stetson University College of Law and a Brennan Center fellow. Noting that in the Citizens United case, the Court ignored “expansive notions of a distorted democratic process that’s poisoned by the public’s perception that access can be bought and sold,” Torres-Spelliscy says “it is possible” that McCutcheon explicitly weakens the appearance-of-corruption standard.

Could Sherman’s brief influence the Supreme Court’s thinking?

Sherman’s Institute for Justice is one of three conservative legal nonprofits filing amicus briefs in support of McCutcheon that also provided briefs in support for the Citizens United case, though his was the only one to have received a citation in Justice Kennedy’s decision three years ago.

Referencing Yeats's Byzantium, Jessica Valenti tells us that the US is “No Country for Young Women.”

Congressman Agrees With Caller: Fighting Obamacare Is Like Fighting Slavery


Congressman John Fleming. (Courtesy of John Fleming)

Congressman John Fleming, a conservative Republican who represents Louisiana’s northwest border with Texas, is one of the Tea Party members driving the shut down debacle over health reform.

Yesterday, he appeared on the Rusty Humphries radio show to discuss the shut down, and was welcomed to the program with a call from a listener, Nick. Nick had a question. Wasn’t the Republican effort to fight “slavery and segregation” in the past akin to the Republican effort against Obamacare today? The caller asked if Republicans are fighting for a similar “moral victory” against healthcare reform that was eventually achieved against slavery.

Fleming responded, “I think your caller is precisely correct.” The congressman went on to list his party’s demands.

The comparison between the Affordable Care Act and slavery is not &ldquot;precisely correct.&rdquot; Healthcare reform vastly benefits communities of color, who disproportionately make up America’s low-income families who will qualify for Obamacare subsidies and Medicaid expansion. The law also invests billions into urban health centers and public health programs designed to help ethnic communities obtain quality care.

Of course, Fleming and the caller also have a curious view of history. It was Democrats, joined by moderate, largely Northern Republicans, who ended legal segregation with President Johnson’s Civil Rights Act of 1964.

Notably, it was in Fleming’s district that another government shut down occurred in 1873. In Colfax, Louisiana, an area now part of Fleming’s district, marauding conservative white militias violently overthrew politicians, massacring freed blacks and local soldiers. Their goal was to disenfranchise black citizens of Louisiana and to end Reconstruction, the post–Civil War effort to integrate freed slaves into society.

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Listen to the interview here:

Partial transcript:

CALLER: Yeah I’m hearing a lot of criticism from the left, talking about how “Obamacare’s now the law of the land, you Republicans need to just get on board.” Yeah, but slavery and segregation used to be the law of the land. They had the stamp of approval from the Supreme Court and they passed the Senate and the House. But they were wrong. They were immoral. Republicans were the ones who kept fighting against it, and that was a big moral victory. We won. Republicans did the right thing, and we’re just doing the same thing. But now, now it’s a black president so now you’re racist because you’re actually trying to get something done that’s good for the economy.

RUSTY HUMPHRIES: Nick, you make a great point.[…]

CONGRESSMAN FLEMING: Well I think your caller is precisely correct. Whenever there’s a bad law, it can be repealed or nullified.

Update: Last week, Fleming said the Affordable Care Act was the "worst law in history" on CNN. "Going back to legislation that approved slavery ... this is even more dangerous than that?" asked host Wolf Blitzer. "Yes. Yes. This affects millions," Fleming responded, according to a transcript.

Tea Party Lawmaker Letter on Med Device Tax Repeal Authored by Lobby Group


Rep. John Boehner. (AP Photo/J. Scott Applewhite)

Today, House Republicans pushed one more step towards a government shut down by coalescing around a continuing resolution that delays the implementation of the Affordable Care Act (ACA) by one year, while permanently repealing one of the primary funding mechanisms for the law, a 2.3 percent excise tax on medical device companies.

While its clear that Democrats will reject any delay of health reform, the move to revoke the medical device tax can be seen as a coup by industry lobbyists. The medical device industry, led by AdvaMed, a trade association that spends $29 million a year, has pushed aggressively to ensure that medical device companies contribute nothing to the financing of the ACA.

After the Tea Party catapulted House Republicans into the majority, seventy-five right-wing lawmakers wrote a letter to Speaker Boehner demanding that a vote to repeal the device tax occur “as soon as possible.” The metadata of the letter shows that it was authored by Ryan Strandlund, a member of AdvaMed’s government affairs team: advamedteaparty

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While repeal proponents claim the tax will hurt innovation and devastate American devicemakers, the reality is, medical device companies already pay very little in taxes and Obamacare will make up for the tax with an increase in demand. An analysis by Citizens for Tax Justice finds most major medical device companies pay a very low effective tax rate, with firms like Abbot Laboratories making use of some 32 tax havens. Moreover, despite the claims of industry lobbyists, the tax will not hamper American companies because it applies to imported devices as well.

The industry has pushed in every way possible to secure a repeal. In the last election, the AdvaMed PAC contributed spent over $300,000, mostly in support for Republican candidates. Individual companies, including Boston Scientific, Medtronic and CareFusion, have sponsored fundraisers and contributed significant amounts to the campaigns of lawmakers leading the tax repeal effort.

Beyond traditional lobbying and campaign contributions, the industry has used a variety of tactics to influence opinions in Congress. A website called no2point3.com was set up by the industry to encourage medical device companies to collect petitions to Congress to repeal the tax. Earlier this month, AdvaMed began purchasing ads in Politico.

Until he left for another lobbying job in June, Speaker Boehner’s deputy chief of staff was Brett Loper, who had worked as AdvaMed’s chief lobbyist and had orchestrated the initial fight against the device tax.

In fact, medical device lobbyists have been close to Congress all week leading up to the vote today. On Monday through Wednesday, over two thousand medical device executives and industry reps converged on Washington, DC, to discuss their government affairs agenda and meet with lawmakers. On the top of the agenda? Repealing the tax on their industry.

Greg Mitchell thinks the way the media has been covering the shutdown is a “disgrace.”

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