Investigating the intersection of politics, lobbying and public policy at RepublicReport.org.
Students and veterans helped deliver big campaign victories for the Democratic Party in recent elections. Now, some Democratic lawmakers are thanking them by trying to ensure that predatory businesses can rip them off and saddle them with a lifetime of debt.
TheNation.com has learned that a small group of House Democrats, led by Representatives Rob Andrews of New Jersey and Alcee Hastings of Florida, are organizing an effort within the caucus to protect the for-profit career college industry from any meaningful regulation. The two congressmen are among the largest recipients of campaign cash from the industry. Campaign finance data compiled by TheNation.com show Hastings has received $54,500, and Andrews $78,547, from for-profit college executives and political committees.
Unlike non-profit private or public universities, proprietary career colleges exist to make money; lot's of it. For-profit colleges take in some $33 billion in taxpayer money annually, funds designed to help veterans and students afford college. For many critics, the entire industry is built upon fraud. Multiple investigations show systematic deception in the industry -- recruiters lying to students about job placement rates, students graduating with incredibly high debt with few employment prospects, and marketing campaigns that obscure what is often a low-quality education.
Students that have gone to for-profit colleges are not only more likely graduate with high levels of debt -- for-profit students hold $31,190 dollars in debt on average, compared to $17,040 at private, nonprofit institutions and $7,960 at public colleges -- they are also three times as likely to default on their loans.
As Adam Weinstein reported for Mother Jones, for-profit colleges have also targeted returning soldiers to take advantage of their GI benefits. “Some for-profits have cleaned out students' military benefits while also signing them up for thousands of dollars in loans without their knowledge. A vet who enrolled at the largely online Ashford University after being told the GI Bill would cover his tuition ended up owing the school $11,000,” Weinstein noted.
In 2010, the Department of Education proposed modest rules to mandate that taxpayer money would only go to for-profit schools that could demonstrate that a reasonable number of their students were able to gain jobs after graduation. An intense lobbying effort followed. Career colleges, including the University of Phoenix, Kaplan Higher Education, Devry Inc., The Art Institute (owned by Education Management Corporation), Corinthian Colleges, Grand Canyon University, among others, pushed back through a sophisticated influence campaign. Think tanks and other NGOs were co-opted by industry, dozens of lobbyists were hired, and for-profit colleges pumped campaign contributions into the accounts of lawmakers opposed to the rule. The industry also flooded the department with astroturfed letters. The Obama Administration finally issued a much-watered down version of the rule. Then, the for-profit colleges sued and persuaded a judge to strike it down.
This year, the Obama Administration has promised to re-propose the regulation, and today will reconvene a meeting with stakeholders to move forward with a new version of the “gainful employment&rdquot; rule. During debate over the last version of the rule, virtually every House Republican, joined by a number of Democrats, worked to defeat the regulation. The process seems to be repeating itself this year, with Andrews and Hastings circulating a “Dear Colleague” letter asking other House Democrats to sign a document asking the administration to back down. The letter, obtained in draft form by by TheNation.com, asks lawmakers to contact David Opong-Wadee, a staffer to Hastings, if they would like to join the anti-gainful employment regulation group.
Notably, the Association for Private Sector Colleges and Universities, a trade association for the industry, has given only to two House Democrats in the last three months: Hastings and Andrews.
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If Third Way’s attacks on Senator Elizabeth Warren make the group sound like a stalking horse for Wall Street executives, there might be a reason for that.
At a demonstration today outside the think tank’s downtown DC office, Third Way senior vice president Matt Bennett conceded to Progressive Change Campaign Committee (PCCC) co-founder Adam Green that “the majority” of Third Way’s donor support comes from the group’s board of trustees, most of whom are from the finance sector.
As TheNation.com and others have pointed out, the majority of Third Way’s trustees are finance industry executives, many of whom might have a vested interest in using a surrogate to attack Warren. Warren, whom Time magazine calls the “new sheriff of Wall Street,” has demanded greater regulation of the industry. Many of the trustees listed on the Third Way website hail from an assortment of private equity firms and other investment businesses. Others work indirectly, like Third Way trustee Thurgood Marshall Jr., whose professional website at the public affairs firm Bingham Consulting lists his work as “government relations” on issues concerning, among others, “banking regulations.”
Bennett explained to Green that the majority of donors to his group “write us personal checks,” so much of the Wall Street money to Third Way comes from individuals, not institutions. To be sure, Third Way also counts on other corporate donors. As we’ve reported, many companies maintain ties to Third Way, which was formed as a bulwark against economic progressivism within the Democratic Party, to advance their interests in Washington. For instance, both Qualcomm and Humana list their donations to Third Way as part of each company’s lobbying budget.
Third Way sparked the demonstration by authoring an opinion piece in the Wall Street Journal last week titled “Economic Populism is a Dead End of Democrats.” Third Way’s Jon Cowan and Jim Kessler explicitly called out Warren’s proposals for expanding Social Security through taxes on higher income individuals. Though polls show rampant support for these policies, many critics believe there were ulterior motives for the opinion column. Expanding Social Security would not only end up expanding benefits for seniors, but would also force Third Way’s trustees to pay slightly more in taxes.
A transcript of the exchange is below:
GREEN: If you included the financial industry sector people, as individuals on your board, what percent would be Wall Street money?
BENNETT: Here’s the thing about defining Wall Street money. As we’ve said, our major donors are on our website. Many of them are in the finance sector, they write us personal checks. This is not from their institutions, many of them are retired or have left their institutions, in fact most of them. That is the majority of our financial support, coming from trustees.
GREEN: Is there a ball park? A percentage?
BENNETT: I’m not going to get into that.
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There’s a lot of news this week on the American Legislative Exchange Council and the related network of state-based think tanks, the State Policy Network.
Almost a year ago, when I was at a small upstart blog called Republic Report, we first sent a letter to corporations involved with ALEC, asking them to leave the organization, given its role in crafting the Stand Your Ground law in Florida. The Guardian unveiled a trove of documents revealing that ALEC has suffered tremendously from the negative press around those efforts, which involved a group of left-of-center organizations, including the Center for Media and Democracy and Color of Change. Many businesses actually did leave ALEC.
While ALEC seems down, they’re not out. According to the documents obtained by The Guardian, ALEC and its allied organization, SPN, have redoubled their efforts to expand and find new funding streams. The documents suggest fundraising off of gambling efforts, efforts to push worker retirement accounts into dubious 401(k)-style plans, and other corporate giveaways that ALEC and SPN can spin into legislative templates and advocacy. Specific corporations and lobbying organizations are listed as prospective donors. The money just never stops.
This is the inherent difference between right-leaning organizations and their counterparts on the left. Large corporations view their right-wing giving as a strong return on investment. For almost every major conservative issue campaign, at least on economic policy, the wealthy and powerful ultimately benefit, meaning their donations to groups like ALEC and their cohorts are well-served. If corporate donors give to the left, as they sometimes do, they risk higher taxes, more empowered workers and less influence over elections. So it should be no surprise the the vast majority of corporate wealth in politics flows to the right and far right.
This pattern has repeated itself for many decades, though it has accelerated in recent years. During the course of my research on how the conservative movement rebuilt itself in the aftermath of the 2008 elections, I found myself digging through many historical files that show this dynamic repeating itself like an endless feedback loop.
On the occasion of Nelson Mandela’s passing this week, it is worth remembering that many American conservative organizations opposed his struggle by fighting against sanctions and divestment from the apartheid regime that oppressed him.
For ALEC, that meant partnering with corporations that faced calls for South African divestment and creating template legislation to block the pro-Mandela movement.
Below is a camera phone picture of one Legislative Update from ALEC describing its campaign in the 1980s to block South African divestment. During this period, ALEC’s corporate membership included a number of businesses with interests in South Africa, including IBM:
For more on how the recent history of the conservative movement, including the role of ALEC and SPN, my book The Machine: A Field Guide the Resurgent Right delves much deeper. Also, The Nation has a thorough investigation of SPN/ALEC in the April 15 edition, which you can find here.
Allison Kilkenny takes a closer look at the effects of Chicago school closures.
If Third Way is truly concerned about electing Democrats, they chose a strange fundraising firm to partner with.
When Third Way’s president and senior vice president of policy published a Wall Street Journal opinion piece this week decrying the economic positions of Bill de Blasio and Elizabeth Warren, namely, taxing the rich and expanding entitlement programs, their arguments rested on (weak) grounds that such ideas are bad for Democratic Party electoral prospects.
Earlier this week, TheNation.com obtained the latest disclosure forms for Third Way and reported that the think tank relies on a corporate lobbying firm called Peck, Madigan & Jones—a company featured by The Hill as among the “Top Lobbyists” of 2013—to raise more than half a million dollars a year. What makes Peck, Madigan & Jones such a top player on K Street?
Peck, Madigan & Jones’s largest client is the US Chamber of Commerce, a corporate trade group that represents large corporations like AIG, Bank of America and Dow Chemical. The Chamber, through its financial policy and legal affiliates, has paid Peck, Madigan & Jones $570,000 this year alone.
While the Third Way op-ed made a point of claiming that progressive economic policies wouldn’t play well with voters in Colorado, in 2008, their fundraisers’ client ran nasty attack ads against a Third Way leader in the state. When Third Way co-chair Senator Mark Udall (D-CO) first ran for the Senate, the US Chamber sponsored an advertisement against him on energy policy, declaring, “Every time he’s blocked American energy production, he’s made the tyrants and sheiks happy. But we’ve paid the price.”
Last year, Third Way co-chair Senator Claire McCaskill (D-MO) faced a barrage of attacks from the Chamber. One ad during the election last year instructed viewers, “Call Claire McCaskill. Tell her Missouri doesn’t need government-run health care. Support the repeal. We need jobs!” Watch it:
As The Huffington Post’s Luke Johnson reported, other Third Way co-chairs have commented on the growing controversy over the Wall Street Journal column. Representatives Joseph Crowley (D-NY), Allyson Schwartz (D-PA) and Ron Kind (D-WI)—all Third Way co-chairs—have distanced themselves from the arguments laid out in the piece.
We noted earlier this week that several Third Way trustees gave campaign money to Mitt Romney. But it might be even more problematic for the group that it has ties to the US Chamber, an organization that is dedicated to unseating Third Way leaders.
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Fox Business, an affiliate of Fox News, has responded to the rise of worker protests across the country by inviting on a finance industry trader to trash them.
The network aired several segments this week designed to criticize efforts to raise the minimum wage. In one, guest Jonathan Hoenig made a range of strange and misinformed comments, including a declaration that “every prominent economist over many, many decades has agreed [that] the minimum wage is discrimination.”
In reality, more than 100 economists have called for raising the minimum wage to benefit workers. Nobel laureate Joseph Stiglitz signed onto a letter last year arguing that “a minimum wage increase would provide a much-needed boost to the earnings of low-wage workers.”
Hoenig then argued, “Only about 4 percent of people making the minimum wage are actually supporting a family full-time.” The Economic Policy Institute notes that over a quarter of those who would be affected by increasing the minimum wage are parents, and a third are married. Also, one in every five children in the United States has a parent who would benefit from a federal minimum wage increase.
Finally, Hoenig said his opposition to increasing the minimum wage stems from his belief that doing so would prevent workers from becoming the CEO of McDonald’s and other fast-food chains. One has to wonder if Hoenig, a financial investment advisor based in Chicago, has ever bothered to meet with the McDonald’s workers in his city who are gainfully employed, yet, homeless.
Gabriel Thompson goes on NPR to discuss how Walmart is exploiting its warehouse workers.
Third Way, a centrist think tank that portrays itself as a Democratic group, has some advice for the party: avoid economic populism at all costs. In a column for The Wall Street Journal today, the group argues that the party should steer clear of creating a strong safety net, and criticizes Mayor-elect Bill de Blasio’s call for universal pre-K funded through an upper-income tax increase as a foolhardy idea for national Democrats.
As many have noted today, in reaction to the column, Third Way’s attacks on Social Security and Medicare fail on the merits. It’s bad policy, and it’s equally bad politics.
But for Third Way, a group founded in 2005 that is highly active on Capitol Hill, the think tank is merely defending the special interest groups that allow it to exist.
Buried inside the annual report for Third Way is a revelation that the group relies on a peculiar DC consulting firm to raise half a million a year: Peck, Madigan, Jones & Stewart. Peck Madigan is no ordinary nonprofit buckraiser. The group is, in fact, a corporate lobbying firm that represents Deutsche Bank, Intel, the Business Roundtable, Amgen, AT&T, the International Swaps & Derivatives Association, MasterCard, New York Life Insurance, PhRMA and the US Chamber of Commerce, among others.
The two organizations complement each other well. Peck Madigan signs as a lobbyist for the government of New Zealand on the Trans-Pacific Partnership free trade deal; Third Way aggressively promotes the deal. Peck Madigan clients push for entitlement cuts, and so does Third Way.
Notice that Humana, a major health insurance company, lists its $50,000 donation to Third Way not as a donation to a think tank but as part of its yearly budget spent on lobbying activity, up there with the Florida Chamber and other trade associations. The company views financial gifts to Third Way as part of its strategy for increasing its profit-making political influence.
What’s more, Third Way’s leadership has tenuous connections to the Democratic Party it hopes to shape. Daniel Loeb, a hedge fund manager listed as a trustee on Third Way’s 2012 annual disclosure, bundled $556,031 for Mitt Romney last year. Third Way board member Derek Kaufman, another hedge fund executive, also gave to Romney.
There is a long and storied tradition of corporate, right-wing interests seeking to shape the economic policies of the Democratic Party. The DLC, another Third Way–style group that folded in 2011, was funded by none other than Koch Industries. Richard Fink, a strategist to the Koch brothers who helped found what is now known as Americans for Prosperity, was on the DLC’s board.
Washington’s Big Business–friendly press has greeted the Third Way column as a “game changer.” But these arguments aren’t new, and neither are the strategies. Large corporations have many ways of finding useful surrogates, and Third Way is a prime example.
UPDATE: Daily Kos’s Hunter has a nice post noting how Third Way’s hatred of Senator Elizabeth Warren may relate to the fact that Third Way’s board is made up almost entirely of investment bankers and other Wall Street executives. Also worth considering, the anti-privatization drive of those “economic populism” types might rub some Third Way board leaders the wrong way—especially the one who sits on Correction Corporation of America’s board.
More Lee Fang: how the Turkey Lobby blocked child-labor regulations.
When Congress moved to regulate most child labor in 1938, an exception was carved for the agriculture industry. Children as young as 12 are allowed to engage in dangerous farmwork, which has lead to dozens of deaths and serious injuries for America’s rural youth. Though the Obama administration’s Labor Department moved better regulate child farm labor, industry pressure forced officials to back down. Mariya Strauss published a deeply reported investigation into the matter for The Nation earlier this month.
Like most economic issues, the child farm labor regulation came down to a contest of money and influence in Washington. Children and their advocates have little political resources, while the big agriculture industry hires lobbyists, bundles donations to lawmakers and shapes media coverage through slick public relation campaigns.
A little-known fact about the annual presidential pardon of a Thanksgiving turkey is that the bird is provided by the industry trade association for turkey farms, including Cargill, Perdue Farms, Dakota Provisions and Willmar Poultry Company. The industry group, the National Turkey Federation, presented Obama with two white turkeys, Popcorn and Caramel. While the event certainly provided light-hearted publicity for the turkey industry, it’s worth taking a look at the National Turkey Federation’s agenda.
Lobbying reports show the group has contacted lawmakers over immigration legislation and rules concerning animal drug use. Perhaps more surprising, and counter to the National Turkey Federation’s family-friendly public image, is the work the group has done to orchestrate opposition to the Obama administration’s child farm labor regulations. The annual report from the group celebrates its role in blocking the rule (emphasis added):
Department of Labor (DOL) Withdraws Proposed Rule on Child Agriculture Workers: The DOL withdrew its proposed rule on Child Labor Regulations in reponse to thousands of comments filed by NTF, other agriculture groups, and farm families across the country. The proposed rule included provisions that defined “parental exeption,” which would have dramatically affected rural communties and family-owned farms.”
Notably, the turkey lobby helped kill the rule by fasely claiming that the labor restrictions would prevent children from working on their own family farms. The Department of Labor rules contained a family exemption.
The National Turkey Federation certainly has the money to make things happen. The group spends over $2.1 million a year, in addition to an affiliated political action committee that doles out over $200,000 to congressional candidates. The NRF also has three registered lobbyists.
Katrina vanden Heuvel writes about the pardoning of the Scottsboro boys. Eighty years too late.
As activists continue to organize demonstrations at McDonalds, Walmart and other low-wage firms, big protests are planned against retailers for mistreating their workers this Black Friday. In response, union-busting consultants are ramping up efforts to marginalize them.
Last night—Worker Center Watch, a new website dedicated to attacking labor-affiliated activist groups like OUR Walmart, Restaurant Opportunities Center, and Fast Food Forward—began sponsoring advertisements on Twitter to promote smears against the protests planned for Black Friday. In one video sponsored by the group, activists demanding a living wage and better working conditions for workers are portrayed as lazy “professional protesters” who “haven’t bothered to get jobs themselves.”
“This Black Friday, just buy your gifts, not their lies,” instructs the Worker Center Watch narrator. Watch it:
Worker Center Watch has no information its website about its sponsors. Yet the group attacks labor activists and community labor groups for lacking transparency. “Hiding behind these non-profits, unions mask their true motivations, circumvent operational requirements and skirt reporting and disclosure obligations,” says Worker Center Watch, referring to labor-supported worker centers like OUR Walmart.
TheNation.com has discovered that Worker Center Watch was registered by the former head lobbyist for Walmart. Parquet Public Affairs, a Florida-based government relations and crisis management firm for retailers and fast food companies, registered the Worker Center Watch website.
The firm is led by Joseph Kefauver, formerly the president of public affairs for Walmart and government relations director for Darden Restaurants. Throughout the year, Parquet executives have toured the country, giving lectures to business groups on how to combat the rise of what has been called “alt-labor.” At a presentation in October for the National Retail Federation, a trade group for companies like Nordstrom and Nike, Kefauver’s presentation listed protections against wage theft, a good minimum wage and mandated paid time off as the type of legislative demands influenced by the worker center protesters.
The presentation offered questions for the group, including: “How Aggressive Can We Be?” and “How do We Challenge the Social Justice Narrative?”
It seems retailers are now experimenting with how aggressive they can be. Today, Parquet’s Worker Center Watch posted a link to a Breitbart News story featuring a video allegedly obtained by someone who infiltrated an Occupy activist group planning to demonstrate against Walmart.
The alarm at how quickly the new organizing model has taken off has sparked anxiety among business executives. Littler Mendelson, a law firm that helps companies defeat labor unions, released a report outlining the challenge for corporate executives. The US Chamber of Commerce, a dark-money group that counts Walmart and McDonalds as members, produced a similar study last week.
Corporations fear that the new wave of activism could have a multiplier effect that goes way beyond better pay and benefits for their workers.
In a webinar hosted this month for business executives seeking a “union-free workplace,” Nancy Jowske explained that the alt-labor model could heavily influence millennials and their perceptions of labor unions. “One of the things to consider about what’s going there with SEIU’s Fight for 15 and all of this is the millennial generation,” said Jowske, a former SEIU organizer turned union-buster, “they are getting a steady diet of pro-union from every possible direction." She added, "this is also a generation that is very class-conscious” and explained that the current alt-labor protests could incite future organizing drives. Jowske also cited a recent In These Times piece to argue that worker centers can be portrayed as “union front groups,” and warned that the alt-labor organizing model could have a long-term impact. For instance, the organizing model appears to help unions and community groups forge close ties that could be later used to deploy activists for political campaigns, workplace NLRB elections and other left-wing causes.
Bryce Covert talks about how women’s eye for the long term makes them valuable workers.
Liz Cheney, running for Senate in Wyoming to oust incumbent Republican Senator Mike Enzi, champions her role in conservative media as a political asset. On her campaign website, she touts her experience in the media bringing “attention to the threats to liberty posed by the Obama administration.”
For a part-time position, Cheney has been paid handsomely: her recently filed candidate disclosure form shows that she received $281,587 from Fox News. In July of this year, Fox ended the contract given Cheney’s bid for office.
Her other sources of income also stem from communications. Assorted speaking fees honoraria and a book advance associated with the book she wrote with her father, former vice president Dick Cheney, resulted in an additional $640,950 in income.
While Liz Cheney has been in the news this week after being rebuked by her sister, Mary Cheney, over her opposition to gay marriage, the disclosure also shows that Liz has been associated with Mary’s consulting firm, Yellowstone Associates, through 2011.
Cheney is not the only candidate to pass through the revolving door between the Republican Party and well-paid positions with Fox News. Disclosures show Rick Santorum was paid $239,153 as a part-time contributor before he ran for president in 2011. Mark Sanford, before he won his special election for a House seat in South Carolina, was paid $130,000 by the network.
Cheney’s campaign had asked for an extension earlier this year for the disclosure that appeared today through the Senate ethics office. The extension was granted, but was due on November 14. Records show the mailing was received on November 19. Her attorney comes from Holtzman Vogel, a law firm that has represented a number of GOP campaigns and secret-money groups, including Americans for Prosperity.
Zoë Carpenter reports from inequality’s frontline.
The break-out success of GasLand and GasLand 2, documentaries by Josh Fox about the dangers of largely unregulated hydraulic fracturing, has prompted the natural gas and drilling industry to adopt an aggressive public relations strategy to combat critics. Last year, at the Warner Theater in Washington, DC, a group of high-profile lobbyists and communications staffers celebrated the development of a pro-fracking movie designed to rebut Fox's documentaries called TruthLand, which premiered in January.
Recently filed tax documents show the link between industry and TruthLand is much stronger than previously reported. The movie was funded with a $1 million grant from a DC-based trade group called America's Natural Gas Alliance, a consortium of fracking firms including Devon Energy, Apache, Noble Energy, Range Resources, XTO Energy, Southwestern Energy and Pioneer Natural Resources, among others.
Notably, the tax form shows the million-dollar grant for the film was given to Chesapeake Energy Corporation, an ANGA member company and prominent fracking corporation. TruthLand has gone to some lengths to conceal its ties to business interests. As Ben Nelson of LittleSis reported, the TruthLand website domain was briefly registered to a Chesapeake's Oklahoma office. Shortly after, TruthLand changed the website address to hide it behind a proxy. Nelson also obtained documents relating to the production of the film, which was led by Republican advertising consultant Fred Davis.
The TruthLand movie has been panned by environmentalists for downplaying the risks of methane leaks and groundwater pollution. But it has been widely distributed thanks to the promotional efforts of several oil companies and Americans for Prosperity, whose founders, David and Charles Koch, are deeply entwined with the fracking industry.
The America's Natural Gas Alliance 990 form also shows the industry has increased spending on media and public relations efforts. Other grants include:
§ $864,673 to Edventures Partners, an education curriculum company that has partnered with ANGA to produce classroom materials that promote the use of natural gas;
§ $25,000 to ASGK Strategies, a political consulting firm founded by White House advisor David Axelrod;
§ $25,000 to Environmental Media Association, "a nonprofit organization dedicated to harnessing the power of the entertainment industry and the media to educate the global public on environmental issues and motivate sustainable lifestyles";
§ $25,000 to Third Way, a centrist Democratic research think tank;
§ $8,500 to America's Promise Alliance, an education nonprofit founded by Colin Powell;
§ $250,000 to IHS Global, a research company that produced a report last year claiming that the fracking industry will support 1.7 million new jobs.
Another interesting discovery from the disclosure relates to how much America's Natural Gas Alliance has contracted with Democratic political consulting firms to build support for their policies. The 990 shows that ANGA paid the Glover Park Group over $2.9 million for "research/advertising" and Dewey Square Group $738,957 for "grassroots communications." Both firms are run by mostly former Clinton administration officials. Though Glover Park Group is well-known as a lobbying firm, the company did not register for its work for ANGA last year.
Michelle Goldberg on why Alec Baldwin is a national embarrassment.