Investigating the intersection of politics, lobbying and public policy at RepublicReport.org.
Election judge watches a voter cast their ballot. (Reuters)
As part of what advocates call the “next step” of the Affordable Care Act, California voters will consider an initiative next year that will empower regulators and consumer advocates to challenge health insurance premium rate hikes.
Though healthcare reform, better known these days as Obamacare, gives the government the ability to shine a spotlight onto insurance rates, it does not in itself enable regulators to block them. That power resides with the states. Currently, about thirty-four states have some laws on the books to give regulators the authority to block unjustified rate hikes; California is not one of them. And while advocates in California are optimistic about the prospects of reform, the health insurance lobby has wasted no time in preparing to defeat the measure.
Californians Against Higher Healthcare Costs, a political group created to defeat the rate review initiative, describes itself as a “coalition of doctors, hospitals, health insurers, and California employers.” Though the group bills itself as a diverse coalition, our review of disclosures with the California secretary of state’s office show that, since last year, the organization has received 99.27 percent of its funds from health insurance companies and health insurance political action committees. Health insurance interests such as UnitedHealth, Anthem Blue Cross, HealthNet and Kaiser Health Plans have raised $1,366,120 to fight the rate review. In addition, the California Hospital Committee on Issues has donated a mere $10,000.
The group has retained a number of consultants to help defeat rate review, including Thomas W. Hiltachk, a Sacramento attorney known for creating deceptive corporate campaigns for oil and tobacco companies. The media company retained by the insurers, Goddard Claussen (now known as Redwood Pacific Public Affairs), gained infamy for helping insurance companies block health insurance reforms in the past, including the advertising campaign known as “Harry and Louise” that many believe helped sink President Clinton’s attempt to overhaul the health care system.
In previous years, thousands of Californians have faced yearly premium hikes as high as 59 percent.
Topher Spiro, the vice president for health policy at the Center for American Progress, told The Nation that “every insurance commissioner should have the authority to reject premium rates that are excessive. If insurance companies can publicly justify their proposed rates with an actuarial analysis that stands up to independent scrutiny, they should have nothing to hide or fear.”
Carmen Balber, the executive director of Consumer Watchdog, the leading supporter of the rate review initiative, says the health insurance companies will spent “tens of millions” to defeat the 2014 measure “because their profits are at stake.” Balber points out that last year, Mercury General Corp. chief executive George Joseph spent $16 million on an initiative to unravel car insurance regulations, outspending opponents some 65 to 1, but was defeated.
“California voters are smarter than the insurance industry gives them credit for,” says Balber, arguing that no matter how much insurers spend, the public will see through the insurers’ “smoke screen” of advertisements.
Representatives for Californians Against Higher Healthcare Costs did not respond to a request for comment.
The initiative is designed to create an intervener process to allow the public, including advocates like Consumer Watchdog, to challenge insurer rate hikes. When a similar measure to empower the California insurance commissioner to review and regulate rate hikes was proposed in the legislature, insurers and their allies, including several dark money organizations, spent millions of dollars on lobbying and campaign contributions to prevent it from passing. Even with Democrats in control of the legislature and the governor’s office, the bill failed. Now, the voters will have a chance to rein in health insurance companies.
Lee Fang writes about the hypocrisy of GOP lawmakers on Obamacare.
“I, sitting at my desk, certainly had the authorities to wiretap anyone, from you, or your accountant, to a federal judge, to even the president if I had a personal email.” —Edward Snowden, Booz Allen Hamilton whistleblower, during his interview with The Guardian.
Could the sprawling surveillance state enable government or its legion of private contractors to abuse their technology and spy upon domestic political targets or judges?
This is not a far off possibility. Two years ago, a batch of stolen e-mails revealed a plot by a set of three defense contractors (Palantir Technologies, Berico Technologies and HBGary Federal) to target activists, reporters, labor unions and political organizations. The plans— one concocted in concert with lawyers for the US Chamber of Commerce to sabotage left-leaning critics, like the Center for American Progress and the SEIU, and a separate proposal to “combat” WikiLeaks and its supporters, including Glenn Greenwald, on behalf of Bank of America— fell apart after reports of their existence were published online. But the episode serves as a reminder that the expanding spy industry could use its government-backed cybertools to harm ordinary Americans and political dissident groups.
The episode also shows that Greenwald, who helped Snowden expose massive spying efforts in the United States, had been targetted by spy agency contractors in the past for supporting whistleblowers and WikiLeaks.
Firms like Palantir—a Palo Alto–based business that helps intelligence agencies analyze large sets of data—exist because of the government’s post-9/11 rush to develop a “terror-detection leviathan” of high-tech companies. Named after a stone in the Lord of the Rings that helps both villains and do-gooders see over great distances, the company is well-known within Silicon Valley for attracting support from a venture capital group led by libertarian billionaire Peter Thiel and Facebook’s Sean Parker. But Palantir’s rise to prominence, now reportedly valued at $8 billion, came from initial investment from In-Q-Tel, the venture capital arm of the CIA, and close consultation with officials from the intelligence-gathering community, including disgraced retired admiral John Poindexter and Bryan Cunningham, a former adviser to Condoleezza Rice.
While Palantir boasts that its government-backed technology is geared towards helping the military track terrorists, stolen e-mails from HBGary Federal show the firm and its senior executives were eager to use its platform on behalf of the Chamber, one of the largest corporate lobbying associations. In the fall of 2010, the Chamber had received unflattering attention, first from a New York Times piece about allegedly laundered money from AIG, and then from my reporting at the Center for American Progress’ ThinkProgress blog about foreign funds flowing to the Chamber’s 501(c)(6) entity used to run campaign advertisements. The Chamber’s attorneys at the firm Hunton & Williams, at the time already busy prosecuting a group of activists for impersonating the Chamber, sought out the help of Palantir to develop a team to go after the Chamber’s critics. As I reported later for TheNation.com, Palantir eventually connected with Berico and HBGary Federal, and along with the Chamber’s attorneys, the group began plotting a campaign of snooping on activists’ families and even using sophisticated hacking tools to break into computers:
The presentations, which were also leaked by Anonymous, contained ethically questionable tactics, like creating a “false document, perhaps highlighting periodical financial information,” to give to a progressive group opposing the Chamber, and then subsequently exposing the document as a fake to undermine the credibility of the Chamber’s opponents. In addition, the group proposed creating a “fake insider persona” to “generate communications” with Change to Win, a federation of labor unions that sponsored the watchdog site, US Chamber Watch.
Even more troubling, however, were plans by the three contractors to use malware and other forms of malicious software to hack into computers owned by the Chamber’s opponents and their families. Boasting that they could develop a “fusion cell” of the kind “developed and utilized by Joint Special Operations Command (JSOC),” the contractors discussed how they could use “custom malware development” and “zero day” exploits to gain control of a target’s computer network. These types of hacks can allow an attacker not only to snoop but to delete files, monitor keystrokes and manipulate websites, e-mail archives and any database connected to the target computer.
In January of 2011, Hunton and Williams, which had met with the Chamber to discuss the proposals, sent by courier a CD with target data to the contractors. The targets discussed in e-mails included labor unions SEIU, IBT, UFW, UFCW, AFL-CIO, Change to Win, as well as progressive organizations like the Center for American Progress, MoveOn.org, Courage Campaign, the Ruckus Society, Agit-Pop, Brave New Films and others. […]
The tactics described in the proposals are illegal. However, there were no discussions in the leaked e-mails about the legality of using such tactics. Rather, the Chamber’s attorneys and the three contractors quibbled for weeks about how much to charge the Chamber for these hacking services. At one point, they demanded $2 million a month.
By December in 2010, the attorneys from Hunton & Williams approached the three contractors about developing a similar plan to go after WikiLeaks on behalf of Bank of America, which was concerned that many of their private documents were about to be published by the whistleblower website. HBGary Federal’s Aaron Barr discussed his reasoning on why it was especially critical to take down Glenn Greenwald, noting in one e-mail: “I think we need to highlight people like Glenn Greenwald. Glenn was critical in the Amazon to OVH [data center] transition and helped WikiLeaks provide access to information during the transition. It is this level of support we need to attack. These are established professionals that have a liberal bent, but ultimately most of them if pushed will choose professional preservation over cause, such is the mentality of most business professionals. Without the support of people like Glenn WikiLeaks would fold.” The team of contractors created a similar proposal for Hunton & Williams, again suggesting the idea of planting a false document and launching cyber attacks.
The contractors looked forward to the private sector money. One Palantir official wrote: “We are the best money can buy! Dam it feels good to be a gangsta.” However, they never had a chance to launch either attack plan.
The proposal fell apart when HBGary Federal’s Barr attracted the attention of LulzSec, a splinter group of Anonymous hactivists. LulzSec hacked into HBGary’s e-mail system and dumped thousands of private messages online, including the e-mails detailing the plan to go after both the Chamber’s perceived opponents and supporters of WikiLeaks. (A timeline of the scandal can be found here.)
Twenty House Democrats called for an investigation into the scandal, but the Republican-held chamber did little to look into the story. However, Congressman Hank Johnson did manage to briefly question NSA officials about the three defense contractors.
In the wake of the scandal, HBGary Federal shut down, but its sister firm, HBGary, was later sold to another military contractor, ManTech International for $23.8 million. Berico retained an influential DC lobbyist; Palantir increased their spending on lobbyists. Both companies managed to escape much scrutiny.
Although some media outlets have reacted to the Snowden story with apprehension that such a young employee of a government contractor would have such wide-ranging spy capabilities, the disclosure presents other questions. Journalist Tim Shorrock, who also blogged recently about the rise of Palantir, reported that some 70 percent of the nation’s intelligence gathering budget is spent on private contractors. Could any of these firms, which number in the hundreds, use their terrorist-seeking espionage weapons against their fellow Americans? If what Snowden claimed is true, he could have spied upon judges and journalists and sold that information to powerful domestic or foreign interests. At one point during the discussions about how to use their technologies to attack activists, Barr had met with Booz Allen Hamilton senior vice president Bill Wansley. The disclosure of the Palantir-Berico-HBGary proposals suggest other abuses could be lurking out there, from a rogue employee to a carefully planned effort to spy on activists.
Riot police use teargas to disperse the crowd during an anti-government protest at Taksim Square in central Istanbul May 31, 2013. (REUTERS/Osman Orsal)
Turkish citizens rising up to protest the policies of Prime Minister Recep Tayyip Erdogan’s government have faced arrests, water hoses, tear gas and in some cases have even been detained for using social media to discuss the demonstrations. And while attention has turned to Turkey’s media establishment, which has refused to cover much of the protests, another influential group has sat largely on the sidelines: American elected officials.
While Vice President Joe Biden and some administration officials have criticized Turkey’s government and its response to the protests, few lawmakers are raising alarm. A ProQuest news search of the last five days fails to turn up a single story quoting a member of Congress criticizing Erdogan, or his increasingly authoritarian reaction to the protests. Part of the reason might relate to the fact that Turkey is a strong US ally in the region, and lawmakers are hesitant to disturb US-Turkish relations. But the self-imposed silence from American politicians could also be seen as a result of aggressive outreach from the Turkish government, which, since 2007, has retained at least six lobbying firms to shape public opinion and court elected officials.
Turkey maintains an active effort to fly lawmakers to visit the country. Though Congress banned foreign-funded travel in years past, many foreign entities set up nonprofit organizations to organize “Mutual Education and Cultural Exchange Act” (MECEA) trips for elected officials to legally visit foreign destinations on the nonprofit’s dime. Lawmakers and officials of both parties regularly attend events organized by Turkey’s government.
The website LegiStorm, which collects congressional data, shows that in the last twelve months, Representatives Henry Cuellar, Aaron Schock, Mo Brooks and Jan Scharkowsky, along with dozens of staff, have visited Istanbul through trips sponsored by Turkish MECEA groups. The visits to Turkey are so routine that last weekend, a delegation of state-level lawmakers from New Mexico even witnessed some of the demonstrations. Minority Leader Nancy Pelosi and Mississippi Senator Roger Wicker, along with a bipartisan group of lawmakers, have been featured at press events with Turkish government officials in Washington DC this year.
The MECEA trips and congressional ceremonies have been organized by staffers from Turkey’s various lobbying firms, according to filing with the Department of Justice’s FARA website. Turkey’s government pays two former Democratic Congressmen, Dick Gephardt (through his corporate lobbying firm, the Gephardt Group) and Al Wynn (through his law firm, Dickstein Shapiro), to influence Washington. Others on the payroll include David Mercer, a prominent Democratic aide, a team of about twenty from the firm PR giant Fleischman-Hillard, 30 Point Strategies and the Caspian Group. Some of the MECEA-organizing nonprofits also retain influential lobbying consultants, like the firm Brown, Lloyd and James (known for previously representing Muammar Qaddafi and Bashar al-Assad’s wife).
The ties between US corporations and the Turkish government are another potential reason lawmakers have been slow to show solidarity with the protesters. Business and diplomacy are on display at the American Turkish Council, one of the most influential Turkish nonprofits geared toward congressional outreach. The council is funded by the Turkish government’s investment agency and a number of corporations with economic interests in Turkey, including Lockheed Martin (makers of the F-35, which is partially assembled in Turkey), TUSKON (a Turkish business lobby group) and Chevron (which maintains major drillings interests in the Black Sea).
At its annual conference this week at the Washington DC Ritz-Carlton, the American Turkish Council discussed US-Turkish relations with corporate executives and political leaders from the two countries. Biden received an award, as did House Homeland Security Committee Chair Representative Mike Rogers, according to a schedule posted online.
Read Allison Kilkenny on the groups showing solidarity with #OccupyGezi.
Detainees inside a holding cell at the Northwest Detention Center in Tacoma, Washington. The facility is operated by The GEO Group Inc. under contract from US Immigrations and Customs Enforcement, and houses people whose immigration status is in question or who are waiting for deportation or deportation hearings. (AP Photo/Ted S. Warren)
Earlier this year, one of the largest private prison corporations in the country sent out a statement to reporters claiming that it would not lobby in any way over the immigration reform debate. A new disclosure shows that the company, the Boca Raton–based Geo Group, has in fact paid an “elite team of federal lobbyists” to influence the comprehensive immigration reform legislation making its way through Congress.
The Geo Group currently manages several immigrant detention facilities for the federal government, and has faced questions about its role in shaping policies that may lead to more incarceration. In February and March, Pablo Paez, the Geo Group’s vice president of corporate relations, told media outlets, including the Financial Times and The Nation, that his firm would steer clear of immigration reform politics. See statement below (emphasis added):
“The GEO Group has never directly or indirectly lobbied to influence immigration policy. We have not discussed any immigration reform related matters with any members of Congress, and we will not participate in the current immigration reform debate.”
Geo Group’s quarterly lobbying disclosure tells a different story. A disclosure filed in April shows that the company turned to Navigators Global to lobby both houses of Congress on “issues related to comprehensive immigration reform.” Navigators Global, a corporate government affairs firm founded by several Republican aides, has been retained by the Geo Group since 2011, though previous lobbying disclosures show the firm primarily worked on federal appropriations. The latest disclosure, however, shows that their scope of work on Capitol Hill shifted in the first three months of this year to include the immigration bill, which passed the Senate Judiciary Committee in May. See screenshot of the disclosure below:
The private prison industry has developed close ties to leading members of Congress, including those in the so-called Gang of Eight leading the immigration reform discussions. Senator Marco Rubio, who is perhaps the most visible Republican on the issue, has received generous campaign donations from the industry, including from Geo Group.
The new disclosure suggests an even greater bind to the company because Cesar Conda, Rubio’s chief of staff, was the founding partner of Navigators Global. As we reported, he has continued to receive payments from the firm through a stock buy-out agreement reached after Conda entered work for Rubio.
Demands for an “enforcement-first” approach to immigration reform could dramatically benefit private prison operators. Conservative lawmakers have called for new criminal penalties for immigrants, mandates to local law enforcement to check the status of those suspected of being undocumented, and an expansion of current guidelines classifying undocumented immigrants as “criminal aliens”—all policies that could lead to more people being detained in private prisons, thus more profit for the industry. It’s no wonder Geo Group is now directly lobbying on the bill.
UPDATE: On June 6, a spokesman from Geo Group emailed me to say: "Contrary to the assertions made in your story, our statement as well as the disclosure itself stipulate that our company’s discussions with lawmakers have been related to the Federal Government’s existing Alternatives to Detention program." But as the lobbying report filed on April 18, 2013 clearly indicates, the Geo Group's lobbying firm told the federal government that they had lobbied for both "issues related to alternatives to detention within ICE" and "issues related to comprehensive immigration reform." So either the organization's disclosure to the federal government is inaccurate, or the spokesman's most recent claim is inaccurate. But they cannot both be true.
The exterior of the Internal Revenue Service building in Washington, Friday, March 22, 2013. (AP Photo/Susan Walsh)
The additional questions provided by the IRS to Tea Party and some Democratic-leaning groups seeking social welfare 501(c)(4) status appears to have been an inappropriate level of scrutiny. But is the current controversy swirling around Washington obscuring much, much bigger issues around the 501(c)(4) tax status?
The real scandal has been the blatant abuse of 501(c)(4) status by dozens of lobbyists and operatives who have set up such tax-exempt organizations as political slush funds to conceal money in political campaigns. Since the Citizens United decision, 501(c)(4) groups, have operated as Super PACs—raising and spending tens of millions in corporate funds—without disclosing a dime of their contributors. IRS rules state that the primary activity of such groups cannot relate to political advocacy, yet examples abound of 501(c)(4) groups spending well over 50 percent of their funds on attack ads, political action committees and other clearly political expenses. These potential violations of the law have gone on for several years now, with very little interest from the Beltway media or Capitol Hill Republicans, many of whom owe their election to spending by bogus 501(c)(4) organizations.
Here are just five examples of bogus 501(c)(4) groups that deserve more scrutiny under the law:
The American Action Network is a 501(c)(4) nonprofit run by corporate lobbyists like Vin Weber (of Sallie Mae) and Tom Reynolds (of Goldman Sachs). Citizens for Responsibility and Ethics in Washington found that on its tax returns, “AAN reported spending a total of $27,139,009 on all activities from July 2009 through June 2011—$1,446,675 on its 2009 tax return and $25,692,334 on its 2010 tax return—making political activity 66.8 percent of its total spending.” Since IRS rules for primary activity have been interpreted to mean that 501(c)(4) groups cannot spend more than 49 percent of their funds on political endeavors, American Action Network appears to be skirting the law. The group spent more than $745,000 to help elect Senator Ron Johnson (R-WI), one of the lawmakers now calling for hearings into the IRS narrowly on grounds that the agency inappropriately targeted Tea Party groups.
The Commission on Hope, Growth and Opportunity is a 501(c)(4) organization reportedly set up by lobbyist Scott Reed, which told the IRS when it applied for social welfare status that it would not spend money on political campaigns. In fact, Reed boasted to reporters that he had sought big donations from the health insurance, energy and banking industry to run ads against Democrats. According to disclosures, CHGO broke the primary activity threshold and spent 53 percent of its funds during the midterm elections on political advertising. The group spent big on defeating lawmakers like John Spratt (D-SC).
The American Justice Partnership is a 501(c)(4) group run in part by Republican consultants Dan Pero and Cleta Mitchell. In 2010, the group spent 77 percent of its funds moving money to political attack ad groups like the American Future Fund or to political action committees like the “Michigan Republican Party Admin Account.” Part of the remainder of the funds appears to have been spent on consulting fees to the board members of the group.
The American Future Fund is a 501(c)(4) group set up by a number of Republican operatives, and has aired millions of dollars in attack ads against President Obama and Democratic candidates for Congress. In 2010, the group spent 15.3 million of its 21.3 million expense budget on media consultants. AFF reportedly used its funds on television attack ads, direct mail against candidates and political telemarketing. In other words, the group spent 71 percent of its funds on political purposes.
The 60 Plus Association is a front group designed by Republican operatives to appeal to senior citizens. The group’s budget swelled during the 2010 midterm campaign. Through June of 2010, the group spent about $15.5 million, $11.5 million of which went to media-buying and direct mail firms for campaign advertisements—74 percent. One set of ads deceptively claimed congressional Democrats voted to cut $500 billion from Medicare, failing to note that actual cuts were to Medicare Advantage, not to regular Medicare beneficiaries. As Jim Martin, the head of the group told me last year, though the organization touts itself as a voice for seniors, the group openly solicited corporate donors as well.
It’s clear why these Republican operatives used 501(c)(4) organizations as tools to move millions in political money. Big publicly traded corporations have been eager to exploit the Citizens United decision but have avoided Super PACs because Super PACs face regular disclosure requirements. 501(c)(4) never have to disclose donors. For instance, health insurer Aetna accidentally revealed that it had provided $3 million to the American Action Network, a fact the company apparently wanted to keep secret.
The IRS 501(c)(4) system is horribly broken, but it seems the scandal surrounding added scrutiny for Tea Party groups will not fix any of the problems. The IRS should focus on big players that skirt the law, especially the ones proven to have passed the 50 percent threshold, as I’ve documented above.
And there are many ways to fix systemic issues with the IRS that go beyond investigating sham groups. For one, the minimal disclosure system for 501(c)(4) groups is only in paper/CD format and is displayed to the public over a year after the money is spent. That’s why we still have little to no data on new Democratic groups, like Priorities USA, that recently began mimicking Republican 501(c)(4) organizations that were so active in the 2010 election cycle. Moreover, PublicResource.org’s Carl Malamud has a proposal to digitize all the 501(c)(4) disclosures so the public and press can review them, and well, make a decision about “primary purpose” for themselves.
Mad at the IRS? Blame congress!
House Energy and Commerce Committee chairman Fred Upton, right, has hired several former lobbyists to his staff. (AP Photo/J. Scott Applewhite.)
In January shortly after being sworn into office, Congressman Rodney Davis, a freshman Republican who eked out a win with a margin of less than a thousand votes in Illinois last year, announced that he had received several plum committee assignments. His legislative portfolio includes subcommittees that oversee commodity regulations, nutritional programs, biotechnology, and, most importantly, the 2013 Farm Bill, which sets agriculture policy for the next five years.
One of his first steps in office? Davis hired Jen Daulby, the director of federal affairs for Land O’Lakes, one of the largest producers of milk and cheese in the country, to be his chief of staff. Disclosures show that just months ago, Daulby led a Land O’Lakes lobbying team that worked on the Farm Bill, genetically modified foods labeling, rules concerning pesticides and hazardous dust, and the new commodity regulations enacted by President Obama’s financial reform law, Dodd-Frank.
What a match.
In other words, Daulby’s past lobbying portfolio perfectly reflects the new responsibilities for Davis’ committee assignments, where he will have wide sway over policy. A former Monsanto lobbyist with previous experience on Capitol Hill for several other lawmakers, Daulby is one of many staffers who rotate back and forth between public service and influence peddling.
On Monday, The Nation posted an investigation of the “reverse revolving door” in Congress, by which lobbyists hired as senior-level congressional staffers receive substantial exit bonuses or other financial rewards from their employers shortly before they assume their new Congressional positions.
In Daulby’s case, Land O’Lakes provided a parting gift of a $35,772 bonus (in addition to her 2012 bonus) in the first few weeks of January. The Davis-Daulby story isn’t all that unusual.
The members of Congress who hire former lobbyists are often outspoken supporters of legislation also heartily endorsed by their new staffers’ previous employers.
Representative Michael McCaul (R-TX), chair of the Homeland Security Committee, hired IBM lobbyist Alex Manning as his cybersecurity subcommittee staff director this year. On behalf of IBM last year, Manning worked to pass the Cybersecurity and Information Sharing Effectiveness Act (CISPA), legislation that provides broad powers to the government and to private corporations to gather private Internet user data. The ACLU—which has rallied against CISPA along with EFF, and many other civil liberties groups—called the bill a “flagrant violation of every American’s right to privacy.”
IBM, which sent nearly 200 executives to Washington to advocate on behalf of stronger cyber security laws like CISPA, has been one of the bill’s strongest supporters. CISPA passed the House in April. Representative Randy Hultgren (R-IL) recently hired Katherine McGuire, a CISPA-supporting lobbyist for the Business Software Alliance, as his chief of staff. Hultgren voted for the bill that passed last month.
Representative Fred Upton (R-MI), who is in his second term as chair of the Energy and Commerce Committee, has a long history of employing lobbyists to staff his committee. When he gained the gavel after the midterm elections, Upton hired Gary Andres, a lobbyist for UnitedHealth Group and other corporate interests, as his staff director. In 2012, Upton announced that America’s Natural Gas Alliance lobbyist Tom Hassenboehler would be his new chief counsel to a subcommittee that oversees environmental regulations. As DeSmogBlog’s Steve Horn noted, Hassenboehler is a climate change denier who worked in previous years to block cap and trade legislation. Disclosures show Hassenboehler was paid by his former employer, a trade group for fracking and natural gas companies, to lobby on a number of environmental regulations, including EPA rules concerning fracking.
This phenomenon isn’t new. In the beginning of the last Congress, at least thirteen freshman lawmakers hired lobbyists as their chiefs of staff. The chiefs of staff for Senators Ron Johnson and Marco Rubio even came from the same lobbying firm.
How, exactly, are these lobbyists-turned-staffers influencing policy? While it is difficult to discern what goes on behind closed doors on Capitol Hill, it is part of the job description of lobbyists-turned-staffers to help lawmakers draft legislation, and the bills they produce reliably include big giveaways to corporate interests. Representative Davis’ office did not respond to a request for comment about his new chief, former Land O’Lakes lobbyist Jen Daulby. But in March, Davis signed onto a bill currently pushed by Land O’Lakes to roll back federal oversight of pesticide use.
Read Lee Fang on the reverse revolving door of bonuses for executives headed to congressional positions.
Senator John Cornyn, who is pushing an amendment guaranteeing federal reimbursement for immigrant detentions. (AP Photo/J. Scott Applewhite.)
One of the most closely watched amendments, offered by Democrats, will be a measure for US citizens to sponsor their same-sex partners for green cards. While pundits say the LGBT-related amendments may determine the fate of the bill, Republicans are also sponsoring amendments that could have far-reaching ramifications.
Senator John Cornyn (R-TX) has an amendment to reimburse “states and municipalities for costs incurred in incarcerating undocumented criminal aliens.” By guaranteeing federal money for immigrant detention, Cornyn’s amendment could incentivize the incarceration of immigrants in both private and public prisons. The amendment even provides for the federal government to make prompt payments: “Any funds awarded to a State or a political subdivision of a State, including a municipality, for a fiscal year under this subsection shall be distributed to such State or political subdivision no later than 120 days after the last day of the application period for assistance.”
This is nothing new for Cornyn, who began the year fundraising with private prison lobbyists. In previous immigration debates, the senator has proposed legislation to appropriate more funds for immigrant detention facilities. As we’ve reported, the private prison industry has influenced immigration policy in the past and may use its significant clout in Congress to shape the bill debated this week.
Cornyn has a separate amendment to require more drones. Cornyn’s Amendment ARM13593 requires the government to purchase unmanned aerial vehicles for surveillance “along the Southern border for 24 hours per day and for 7 days per week.”
Of course, there are many GOP amendments to increase criminal penalties for immigrants, to exclude them from government services and to develop biometric security and tracking measures. Overall, Republicans have nearly 200 amendments, including one by Senator Ted Cruz (R-TX) to completely remove the path to citizenship for any undocumented immigrant.
But there’s one that exemplifies Republican antipathy to the immigrant community. Senator Orrin Hatch (R-UT), who led the opposition to background check legislation defeated last month, has an amendment that increases the penalties for the possession of firearms in connection with drug-related offenses on federal lands. Get that? One of the senators opposed to even the most meager gun control efforts is willing to increasingly criminalize gun ownership when it comes to immigrants. While I’m sure Hatch would defend his legislation by claiming it keeps guns out of the hands of criminals, couldn’t the same be said about the background check legislation he blocked?
Read Lee Fang on the Koch brothers’ interest in buying the Chicago Tribune and Los Angeles Times, and why this is no ordinary media takeover.
Charles Koch in his office in Wichita, Kansas. (AP Photo/Topeka Capital-Journal, Mike Burley.)
If their bid is successful, the Koch brothers won’t just have a strong influence over the laws we all live under and the climate we pass on to the next generation, they’ll be publishing the news we read. The New York Times confirmed earlier reports that Charles and David Koch are pursuing a bid for the Tribune Company newspapers, which include the Los Angeles Times, the Orlando Sentinel, The Baltimore Sun and many others.
The Kochs, despite financing an unprecedented outside advertising and field campaign, failed to unseat President Barack Obama—a man Charles has referred to as “Saddam Hussein.” In a recent employee newsletter, Charles makes clear he’s not giving up. “As a company, we are committed to doing what is right in every aspect of our business,” wrote Charles. “That is why we will continue doing everything we can to persuade politicians to put what is good for the country first, before it is too late.”
If the Koch brothers treat the papers as they do their other philanthropic and political endeavors, the public will be at a great loss. Here are four reasons why:
1.) Koch Known for Peddling Politics Through Every Aspect of Business, Philanthropy: One way the Kochs have influenced policy is through large grants to universities and students to pursue research relating to the Koch’s view of how society should operate. Unlike most other academic donors, Koch attaches strings to their grants, dictating how faculty are hired and which research programs can be pursued, as was the case with the controversy at Florida State University. Notably, most Koch ‘philanthropic’ activity is coordinated by the Charles Koch Foundation, which is led by Kevin Gentry and Richard Fink, two Koch Industries executives who double as leaders of the Koch corporate lobbying office, known as Koch Public Sector. As Mike Elk reported, Koch took the extraordinary step of encouraging their employees to vote for Republicans in the last two elections. Even during the fight last year over control of the Cato Institute, Koch attempted a takeover by nominating company lobbyists and loyal neoconservatives to the board of the famously libertarian nonprofit. If Charles Koch is to be believed when he said this year that he would do “everything” he can to persuade politicians, how will the Tribune Company papers maintain independence?
2.) Koch Distorts Science for Profit: Some of Koch Industries’ core businesses—fertilizer, chemical plants, coal shipping, fracking, heavy crude oil refining, cement and petroleum coke—contribute millions of tons of carbon dioxide to the atmosphere and are the reason that Koch is the fifth-biggest air polluter in the country. Though this pollution will ruin the lives and property of many Americans, Koch avoids responsibility by funding a large array of propaganda outlets and think tanks dedicated to distorting the science related to Koch pollution in a bid to stave off regulation. Back in the day, this meant funding efforts to claim acid rain (caused in part by Koch pollution) was a “hoax.” Now, Koch sponsors carnivalesque moon bounces for children to encourage their parents to oppose the EPA’s power to enforce the Clean Air Act, a pledge signed by most GOP lawmakers to avoid action on global warming, as well as many think tanks to provide an ideological or academic veneer for their lies about climate science. “If we win the science argument, it’s game, set, and match,” said Tim Phillips, the political operative hired by David Koch to fight efforts to curb carbon pollution, among other goals. How will Tribune Company newspapers continue their award-winning environmental journalism?
3.) Will the Tribune Reporters Continue to Investigate Koch Influence?: Tribune Company reporters have led in the way in uncovering Koch Industries’ influence in politics and policy. In February of 2011, the Los Angeles Times revealed that David Koch met personally with John Boehner on the first day of the new Congress in the speaker’s chambers, and that Koch’s political spending during the midterm elections helped shape the Boehner’s policy agenda. Last year, the paper reported on a Koch-connected nonprofit that skirted California campaign disclosure laws to funnel $11 million to back two major statewide propositions. Will the papers continue to investigate Koch Industries’ outsized influence in society if the Koch brothers purchase the Tribune Company?
4.) Koch Finances Hate: Koch’s premiere grassroots organizing group, Americans for Prosperity, has funded rallies where health reform has been compared to the Holocaust. The group routinely invites speakers who are known for spreading hatred and conspiracy theories, including anti-immigrant zealot Russell Pearce (who was given an award by AFP) and leading “birther” Jerome Corsi. AFP was exposed by Politico for helping sponsor shock jocks like Mark Levin. Moreover, Koch has been highly involved in the anti-gay Council for National Policy, a group devoted to promoting the homophobic activism of Focus on the Family, Rev. John Hagee, and the Family Research Council. The Tribune Company papers have served as a watchdog for hate in society; how will their reporters cope with being in league with such extremism? In fact, every September, Koch Industries’ employees celebrate “Founder’s Day,” a celebration of Fred Koch, the founder of Koch Industries and an early leader of the anti–civil rights John Birch Society. Will Tribune Company employees join the festivities honoring a man who warned: “The colored man looms large in the Communist plan to take over America.”
Remember when Wisconsin ended collective bargaining rights for public sector workers? Right-wing lobbies plan to do the same thing in Pennsylvania, Lee Fang reports.
Senator Pat Toomey. (AP Photo/Matt Rourke.)
The Commonwealth Foundation, a right-wing think tank in Harrisburg, is plotting to go after public sector employee unions. In a letter from Senator Pat Toomey (R-PA) on behalf of the Foundation, the think tank announced “Project Goliath,” a new effort to make Pennsylvania the next Wisconsin or Michigan. The Commonwealth Foundation is one of a fifty-nine-state network of similar think tanks that have vastly expanded since 2009. The letter makes clear that conservatives believe that right-wing political infrastructure—the organizing institutes, the partisan media outlets, the rapid response efforts—has helped turn the tide against labor unions. Toomey writes (emphasis added):
I firmly believe the future is in our hands—it’s up to you and me—and it all depends on the level of urgency we give this great new campaign of ours, Project Goliath: Conquering Pennsylvania’s Political Giant. Now is the time to fight back. Like David of the Bible, now is the time to come forward and slay Pennsylvania’s Big Labor Goliath! […] To surprise and discredit Goliath, we will employ two key tactics. First, we are forming an alliance with other successful free-market groups to actively discredit the Big Government Party (a tactic borrowed directly from Wisconsin). Like our friends in Wisconsin and Michigan, many elements of our plan involve a cooperative effort among our allied, but still independent, organizations. […] But the overriding key to our whole plan will be our ability to starve the giant.
The fundraising letter is surprising in its specificity and worth a read:
After the 2008 election, conservative donors began pumping tens of millions of dollars into organizations like the Commonwealth Foundation to reverse what many expected to be a new era of progressive politics. My new book, The Machine: A Field Guide to the Resurgent Right, explores this dynamic in detail—from the Tea Party to these state-based infrastructure-building efforts.
In Michigan, the Commonwealth Foundation’s sister organizations, the Mackinac Center and Americans for Prosperity Michigan, increased their budget to nearly $6 million dollars, easily outspending their left-wing counterparts. This money went to polling, advertising, and outreach efforts to push Governor Rick Snyder to severely undercut labor unions in the state in December by enacting so-called Right to Work.
These groups are centrally coordinated by the State Policy Network, so there’s a familiar playbook that the Commonwealth Foundation seems to be deploying.
As I noted for The Nation: “State Policy Network’s organizations have also operated as fronts for corporations seeking to cloak their business interests under an ideological veneer. The Commonwealth Foundation for Public Policy, a Pennsylvania-based affiliate of SPN that is pushing to pass right-to-work legislation, is financed in part by the Pennsylvania Manufacturers’ Association, a lobbying group that represents US Steel, Hershey Foods, Sun Oil and many smaller firms. The lobbying group even provides office space for the Commonwealth Foundation and its media outlet, Pennsylvania Independent. The foundation has surged in size, with its budget climbing from $890,000 in 2008 to $1.95 million in 2011, the last available figure. The head of the Pennsylvania Manufacturers’ Association, Frederick Anton, has pushed right-to-work legislation for years. But this time, he’s being aided by grassroots organizers from Americans for Prosperity, as well as the media work of Pennsylvania Independent.”
Why haven’t the Democrats been able to pass a climate bill? One reason may be that they employed a PR firm that was close to the coal industry, Lee Fang reports.
Editors' Note: After a review, we've determined that this blog post overstates the role Blue Line Strategic Communications and its founders, Michael Meehan and David DiMartino, played in Clean Energy Works. A coalition comprised of dozens of NGOs, Clean Energy Works was founded in 2009 to campaign for the passage of climate change legislation. The organization was led by Democratic strategist Paul Tewes and a managing committee comprised of representatives from each of the participating groups, which collectively determined the coalition's priorities and strategies. Clean Energy Works subsequently hired several firms to work on the campaign, including Blue Line, which handled strategic communications. While Blue Line played a role in shaping the campaign's messaging, it neither managed Clean Energy Works nor was it in a position to unilaterally determine strategy, as the post suggests.
The post also leaves the impression that Michael Meehan worked for Clean Energy Works. While Meehan worked for groups that were part of the broader coalition, he did not work directly with Clean Energy Works. That account was handled by his partner David DiMartino. As Fang reported, Meehan was a vice president at Virilion, the digital media company that held a $19 million contract from American Coalition for Clean Coal Electricity. Meehan maintains, however, that he never worked directly on the ACCCE account, which preceded his arrangement with Virilion, and had no financial stake in it. Both Meehan and DiMartino, who were not interviewed before publication, contacted The Nation to say that neither of them are registered lobbyists, as the post describes them, but rather communications professionals. They previously worked at BGR Public Relations, part of the BGR Group, which has lobbied on behalf of fossil fuel companies, although both Meehan and DiMartino maintain that they had no role in those efforts.
We stand by the post's contention that Meehan's work for Blue Line and Virilion—while Blue Line was coordinating communications strategy for Clean Energy Works in favor of climate legislation and Virilion was working to block the same bill—created an apparent conflict of interest. What is not supported by the evidence is that this conflict influenced Clean Energy Works' strategic decisions and ultimately contributed to the failure of the bill. We apologize for the errors.
Despite holding the presidency and congressional majorities, Democratic leaders failed to pass a climate change bill. (AP Photo/Susan Walsh, File.)
On this Earth Day, we are three years out from the last window of opportunity to pass a climate bill in America. Harvard University’s Theda Skocpol has done the best job so far in diagnosing why, at the outset of the Obama administration with large Democratic majorities in Congress, progressives failed to enact a law regulating or pricing carbon pollution. Her conclusion is that reformers spent too much resources on an “inside game” of lobbyists and dealmakers and not enough on grassroots campaigning, and that reformers failed to make the case about the dangers of global warming.
She’s right, but here’s another reason: The guys who managed the campaign were also secretly working alongside the opposition.
Three years ago, reformers established a group called Clean Energy Works that would manage a coalition of more than sixty organization to develop advertising, field and lobbying to pass a climate bill. New disclosures not only show that Clean Energy Works and its affiliates spent about $37 million on advertising and less than $900,000 on grassroots organizing, but that the firm at the helm of the effort, then called Blue Line Strategic Communications, was in bed with the coal industry.
In the summer of 2009, a consulting firm called Blue Line Strategic Communications was picked to manage Clean Energy Works. The firm was run by David DiMartino and Michael Meehan, two former industry lobbyists and Democratic staffers.
It was Blue Line, according to discussions with those involved in the process, which decided to pass the bill without ever mentioning global warming or any of its effects. The firm ignored the science and the dramatic consequences of inaction and focused instead on stressing the secondary benefits of a clean energy economy, like energy independence and job creation.
It was a novel approach. In nearly every Western industrialized country that has implemented economy-wide carbon controls, reformers have talked about the effects of climate change—crop failures, extreme weather events, desertification and rising sea levels—to get the public on its side. In California, the only state to pass a mandatory cap and trade law, environmentalists aired ads with a narrator discussing the dangers posed by climate change over scenes of devastation and an hourglass, which gave the viewer a sense of urgency. “Warnings couldn’t be clearer: this is the hottest summer on record, forest fires in the west caused by global warming can be seen from outer space,” blared an ad that paved the way for AB 32, the landmark climate change law signed by Governor Arnold Schwarzenegger in 2006.
The strategy from Blue Line and its partners to ignore climate change played into the hands of polluters, which sought to suppress support for the bill by spreading doubt about the consensus over the science. “If we win the science argument, it’s game, set, and match,” Tim Phillips, the political operative hired by David Koch to fight the bill, later told a meeting at the Heritage Foundation.
The American Coalition for Clean Coal Electricity (ACCCE), a front group group financed by the biggest coal mining and coal-based utility companies in America, spent more than $92 million during the first two years of the Obama administration, much of it on lobbying and advertising against bills like Waxman Markey. The group gained infamy when one of its consulting firms was caught forging over a dozen letters from local NAACP groups and senior citizens to key lawmakers, asking them to oppose the bill.
One of the recipients of the ACCCE’s largesse was none other than one of Blue Line’s two partners, Michael Meehan. While Meehan led Blue Line’s pro-cap and trade effort, he also served as vice president to an online marketing firm called Virilion. Disclosures show that Virilion, which also rented office space to Blue Line, helped ACCCE manage its anti–cap and trade marketing budget in exchange for $19 million during the two years in which the legislation was debated.
The conflict was complicated by the fact that Meehan, and his partner, David DiMartino, had been employed by an infamous polluter lobbying firm only months prior to taking up the cap-and-trade job. The pair had worked for the BGR Group, a lobbying firm founded by former Republican National Committee chair Haley Barbour, up until the month they were hired by the coalition of environmental groups. While Blue Line worked closely with the Obama administration and its liberal allies, Blue Line maintained a “strategic partnership” with BGR, which at the time counted coal-fired utility giant Southern Company as a major client.
Of course, this conflict of interest was not the only reason Waxman Markey failed. Senator Harry Reid could have written reconciliation rules into the January 2009 budget in order to pass it with fifty-one votes. President Obama could have been more forceful. The lazy traditional media that failed to report on climate crisis, pervasive corruption in Congress, Citizens United providing polluters a greater bludgeon to defeat reform politicians, the USCAP coalition that saddled legislation with industry giveaways and poison pills, the unprecedented lobbying by polluters, the collapse of moderates within the GOP—there are many, many reasons why a climate bill did not pass. But let’s be clear: reformers had issues from the inside as well.
UPDATE: Someone close to the Waxman Markey reform efforts e-mailed to note that in addition to the coalition money spent on field, individual advocacy groups, including the Sierra Club and several other green groups, spent an undisclosed amount on their own grassroots organizing that would bring the total above the $900,000 referenced above. Still, disclosures show the coalition Clean Energy Works spent a disproportionate amount on advertising and media consultants.
UPDATE: Meehan contacted The Nation to say that he is not a lobbyist but instead works to influence the media on public policy issues. He presents two arguments about conflicts of interest raised by this blog post: Meehan told The Nation that he left BGR because of the company's fossil fuel clients. However, he says he did not leave Virilion because he did not work directly on the coal industry account.
Read Lee Fang on the role deregulation played in the West, Texas chemical plant explosion.