Investigating the intersection of politics, lobbying and public policy at RepublicReport.org.
Strum, Ruger & Co. CEO Mike Fifer presents National Rifle Association Executive Vice President Wayne LaPierre with a jumbo-sized check in January 2012. (Screenshot from YouTube.)
As President Obama announces a set of reforms to deal with gun violence in America, the gun lobby is mobilizing to defeat it. The gun industry-controlled advocacy group, the National Rifle Association, has a new ad accusing the president of being of a “hypocrite” for having armed security for his own family.
Meanwhile, gun manufacturers like Strum, Ruger & Co.—a Connecticut-based maker of rifles and pistols, and a major benefactor to the NRA, as I reported last month—have stepped up to provide direct advocacy.
The New Hampshire Business Review reports today that Ruger is now asking its customers to contact lawmakers to fight reform. Ruger has launched an advocacy section of its website, which reads: “Given the forces assembling against us, merely relying upon lobbying efforts is insufficient. Law-abiding firearms owners must stand up and be heard.”
Typically, gun and ammunition companies prefer to hide behind ideological groups like the NRA to pursue lobbying campaigns. But the stakes are apparently too high this time around.
The threat of gun control has been integral to the soaring profits of gun companies in recent years, since NRA-stoked fears of gun confiscation have sent a record number of Americans to the stores to purchase weapons. As Business Week noted, “Since Obama’s inauguration the [Ruger’s] stock price has risen more than 400 percent, making it a better investment than gold, which is up 113 percent.”
Yet, actual gun control laws are a direct hit to industry profits in the long haul. The dynamic is actually explained best by Ruger in a letter to shareholders in 2009 (emphasis added):
While some of the demand for our products is due to our successful launch of new products over the past 18 months, a substantial portion of the current demand appears to be based on two concerns: that the change in Federal administrations might lead to a so-called assault weapons ban, and general concerns over personal security and property protection as the economy worsens. It is uncertain how long these concerns will drive demand, and whether the demand will taper off slowly, or decline precipitously. There is some precedent from 1994, when similar concerns drove up demand for a period of time. It is important to note, however, that following the enactment of the 1994 assault weapons ban, demand declined significantly and quickly.
A graph charting the decline in gun sales after the assault weapons ban can be found here.
Politics has always been a big part of the gun lobby’s business model. From lobbying to nullify lawsuits against gun companies, to extracting huge tax subsidies from states, and of course quashing gun control laws and research into gun safety, the gun industry’s heightened activism extends far beyond the Second Amendment and well into concerns about quarterly profits.
That’s why Ruger’s CEO Mike Fifer—paid $4.51 million in fiscal year 2011—announced a deal to provide at least $1 dollar to the NRA with every new gun purchase over a year ago. It’s also why his company is now sidestepping the NRA and getting very political.
Business interests also recently ralllied against the Securities and Exchange Commission proposal to force publicly traded coroporations to disclose political spending, Lee Fang wrote in his last post.
A new rule, sparked by shareholder complaints, would compel publicly traded corporations to disclose much of their political spending to investors. The Securities and Exchange Commission announced last month that it will release a rule-making in April of this year.
The proposal arrives on the heel of the first post–Citizens United presidential and congressional election, which was the most opaque in recent history. The Huffington Post’s Paul Blumenthal reported that over $416 million was spent in the last election from sources that do not disclose donors.
Lobbyists, especially those guiding large amounts of undisclosed corporate cash into the election, are not pleased with the SEC proposal. Trade groups that lobby for Walmart, Chevron and major Fortune 100 companies are registering their disapproval on the SEC’s open comment website.
As we reported last September, trade associations and other nonprofit groups, not Super PACs, have been the preferred legal vehicle for many big businesses eager to take advantage of the post–Citizens United political environment. This is because 501(c)(6) trade groups can mimic the activities of a campaign committee (buying campaign ads, hiring GOTV staff) without the requirement to reveal donors. These trade groups—essentially lobbying coalitions for certain industries or similarly sized companies—are protesting the disclosure rule with a novel argument: there is no no need for new transparency requirements, we’re already regulated.
A letter sent to the to the SEC last week, from a coalition of twenty-nine business trade groups, including the US Chamber of Commerce, the National Mining Association, the Retail Industry Leaders Association and the Missouri Insurance Coalition, makes an appeal for the status quo. The business trade group letter argues that current campaign finance laws—which minimally cover expenditures, the rough amount spent on a television or radio advertisement, but allow for complete secrecy in terms of the source of the money—are already “very substantial”:
Political and lobbying activities are already subject to very substantial disclosure regimes. At the federal level, Congress has enacted detailed legislation governing disclosure of political expenditures, which has been implemented in even more detailed regulations issued by the Federal Election Commission. Similar disclosure obligations are in place at the state level.
Harry M. Ng, the General Counsel for the oil and gas industry lobby, the American Petroleum Institute (API), wrote to the SEC in September of last year to make a similar appeal. API says the proposal would “effectively duplicate or “excessively complicate” current rules. “Existing federal campaign finance laws already regulate corporate political activity in federal activities,” Ng wrote. Though API does not disclose donor information, ExxonMobil, Chevron, Conoco-Phillips and other major oil corporations are dues paying members.
Here’s how great the status quo is: the US Chamber of Commerce alone has spent at least $69 million in corporate money on candidate ads since the Citizens United decision without revealing a single penny of donor information. For API, they made nearly half a million in anonymous transfers of corporate money to groups sponsoring campaign advertisements in 2011. In other words, the groups protesting the SEC’s transparency rule are perhaps the perfect examples of why current campaign finance laws are woefully inadequate.
Despite the lobbyists’ claims, existing disclosure laws are paltry and have not been adapted to reflect the Citizens United era of corporate spending. Current Federal Election Commission rules barely even cover expenditures, since ads that do not mention candidate names (even if they are clearly designed to influence a political race) do not need to be registered, and expenditures that do mention a candidate are only catalogued if they fall within thirty days of a primary or sixty days of a general election.
Crony capitalism—the buying of political influence for financial gain in the marketplace—carries risk, so there’s a reason shareholders may want to know how companies are spending their money. Walmart, which pays for lobbying representation from the Chamber and the Retail Industry Leaders Association, has exposed itself to what could be significant liability for allegedly bribing officials throughout Mexico.
Furthermore, under current disclosure rules, companies are likely wasting millions of dollars of investor money by continuing to dump very large sums into undisclosed attack ad efforts. The Chamber, which has long been associated with partisan political campaigns on behalf of the GOP, lost millions last year trying to elect long-shot Republican Senate candidates in Hawaii, Maine and Florida. And what if a company sends money to an undisclosed attack group, and that attack group uses those funds to elect a politician who supports policies that negatively impact that company? Shareholders are left in the dark about these decisions.
Advocates for the rule are gaining momentum. Over 320,000 comments, from academics, political leaders, public interest groups and individual citizens have been received by the SEC “More than 150,000 CREDO members took time out of their busy schedules to submit a public comment to the SEC to help end the corrosive flood of anonymous corporate money into our political system,” said Becky Bond, Political Director of CREDO Action.
It’s still quite possible that the business lobby prevails. Last year, the Chamber and API successfully pressured Obama from enacting a proposed executive order that would have disclosed government contractor donations to secret money groups.
Both Democratic and Republican senators have protected contributors with filibusters. (Reuters/Jonathan Ernst.)
As momentum builds to reform the horrendously broken rules of the Senate, a cadre of Washington D.C. politicos are fighting back, arguing that the filibuster in its current form must be preserved.
Last week, Steven Duffield, in an opinion column for The Washington Examiner, pleaded for the status quo, claiming “Senate liberals want to gut” the filibuster, which he called a “long-standing protection for minorities.” Duffield, bylined simply as “vice president for policy at Crossroads GPS,” didn’t point to any examples of filibusters protecting the rights of minorities or marginalized groups. He listed other complaints, like the charge that rules reform will allow the Senate to “rubber stamp” Obama’s nominees to the Supreme Court.
In reality, the proposed reforms do not affect appointments to the Supreme Court. And a more comprehensive reading of the filibuster’s history would show that when it comes to civil rights for oppressed minority groups, the filibuster has actually served as a great obstacle for justice.
Maybe Duffield is alarmed about rules reform—which would limit anonymous holds, allow for a “talking filibuster” and expedite deliberations for some nominees—for another reason: his pocketbook.
Two years ago, I took a screen shot and saved a tidbit from Duffield’s now-deleted consulting website. Duffield’s firm, still lobbying and called Endgame Strategies, was quite candid in it’s pitch to potential corporate clients to use “backbench Senate Republicans” to block legislation (emphasis added):
Managing Holds and Filibusters. Your organization has an interest in a bill that has proven controversial and you require advocacy before those legislators—often backbench Senate Republicans—who may exercise their prerogatives to delay or obstruct. Endgame Strategies will give you new ways to manage your interests in a legislative environment that gives great power to individual senators.
Duffield, a former Senate aide to Arizona Republican Jon Kyl, literally sold filibusters, anonymous holds and the other forms of obstruction. In 2011, he reported at least $230,000 in lobbying fees. Current rules allow a senator to secretly block any legislation or nominee and then, without actually performing a talking filibuster, require a three-fifths majority vote—twice—to proceed eventually with a regular majority vote, a process ripe for abuse by well-connected political operators of both parties.
I’ve detailed before how lobbyists, even agents for foreign governments, have secured Republican filibusters at a shocking rate. The cottage industry around monetizing filibusters has grown rapidly since Obama’s first election. From 2009 to 2010, there were more filibusters filed than during the 1950s through 1960s combined, as The Nation’s Katrina vanden Heuvel observed.
The interesting dynamic for me is, how money in politics has incentivized this contraction of democratic governance. Here are just a few examples of how powerful industries have usurped the normal gears of government, and used Senate obstruction to push policies that punish ordinary Americans and the environment:
• Senator David Vitter (R-LA) placed holds on Obama EPA nominees to delay scientific assessments on the health risks of formaldehyde, which is produced by some of his largest campaign contributors.
• According to a new report from Public Campaign Action Fund, Republican Senate Leader Mitch McConnell (R-KY) has collected a hundreds of thousands in funds from the same industries he has protected with filibusters, particularly from oil companies and the finance sector. McConnell has led filibusters to protect oil subsidies, to block efforts to mitigate the mortgage crisis, and against campaign disclosure reforms.
• Senator Richard Shelby (R-AL) placed a “blanket hold” on every Obama nominee to force the administration to accept a Northrop Grumman contract to build a $35 billion refueling tanker in Mobile, Alabama. Northrop Grumman is a major Shelby donor.
• Senator John McCain (R-AZ) blocked the nomination of one of Obama’s most important Department of Labor nominees for months, which many believe led the US Chamber of Commerce to aggressively support McCain during a contentious primary with a Tea Party–backed candidate in 2010.
• Senator Mary Landrieu (D-LA), a close ally of the oil and gas industry, temporarily blocked Obama’s nominee for the Office of Management and Budget to extract an administration promise to allow more oil drilling leases in the Gulf of Mexico following the Deepwater Horizon catastrophe.
• Senator Bob Corker (R-TN) filibustered the Federal Aviation Administration reauthorization bill in order to demand a policy that prevents FedEx drivers from unionizing. FedEx is Corker’s third-highest campaign donor.
At the nexus of all of this obstruction are lobbyists who are making a small fortune negotiating these tactics.
Another politico complaining about changing the filibuster, Martin Gold—a lobbyist for Covington and Burling who represents Qualcomm, BP, Amazon.com, BAE Systems, the Principality of Liechtenstein, among others—told Investor’s Business Daily recently that rules reform is “unprecedented and unwise.”
Gold’s somber warning contrasts pretty sharply with the giddy language used to describe a government affairs seminar he led in 2011. The American League of Lobbyists promoted the event with the following language: “Can you turn Congressional rules and procedures into a tactical advantage for achieving your policy goals? Absolutely!”
The National Rifle Association is one of the most powerful lobbying groups in Washington. See how the organization helps the gun industry reap even greater profits following gun-violence tragedies.
Last year, shortly after the shooting of then-Congresswoman Gabby Giffords, a financial analyst asked Mike Fifer—CEO of one of the largest gun companies in America—if the incident would lead to a wave of new gun sales. “The commentary from the NRA that President Obama might be coming out with some sort of speech on some sort of gun control,” asked the analyst, “has that stirred gun owners and prospective gun owners to go visit the stores?”
Gun companies, like almost any profit-driven enterprise, must keep pace with investor demands. Unlike most consumer businesses, however, people generally only need to buy their product once. Guns are very durable, and a well-maintained one can last a lifetime.
That’s where the National Rifle Association comes in.
NRA-stoked fear about the government coming to seize America’s guns has been a useful marketing tool to the gun industry, which must continually encourage gun-owners to buy more and more weapons.
This dynamic drives rather macabre incentives. Horrific gun violence leads to calls for gun control, which in turn leads to NRA-organized fear-mongering and conspiracy theories that inevitably results in more gun sales. What the financial analyst pondered last year with the Giffords shooting is playing out with Newtown—and the NRA and the gun industry is earning what is likely to be an unprecedented fortune.
While pundits and politicians debate the possibility of new gun restrictions in the wake of the Newtown massacre, the NRA is playing it’s now-familiar role spreading paranoia, and Americans are flocking to stores to stock up on weapons—lots of them.
From Alaska to Florida, gun sales across the country are going through the roof, with thousands buying up ammunition, high-powered semiautomatic rifles and other weaponry out of concern that the federal government will enact new regulations on gun ownership. In Tennessee, officials say gun purchases likely hit an all-time high. Walmart has reportedly run out of semiautomatic rifles in five states.
And though the NRA has been roundly mocked for its public relations effort this week, officials are watching what is sure to be a flood of new cash.
Here’s why: For every gun or package of ammunition sold at participating stores, a dollar is donated to the NRA. The NRA’s corporate fundraising division has several special retail partnerships called “Add-A-Buck,” “NRA Round-Up,” and “Shooting for the Future.” In some cases, these deals allow for customers to contribute a dollar or two to the NRA at the point of purchase; others, like one with Sturm, Ruger & Co., the company led by Mike Fifer, require automatic contributions to the NRA with every purchase. Many of these retail deals are linked to the NRA’s 501(c)4 affiliate, which can, unlike other affiliates of the NRA, spend that money on political advertisements and lobbying.
This year alone, Midway USA, an ammunition company, has given the NRA $1 million through the Round Up program.
I’ve sent a message to the NRA inquiring how much the group has raised since the tragedy in Newtown from these retail partnerships, and will update this post if they respond with a figure. The NRA does not disclose donor information.
Of course, there are other ways for the gun industry to contribute to the NRA. There are multimillion-dollar corporate sponsorships for the NRA Foundation, lucrative advertising deals in NRA newsletters, and gun company underwriting for NRA trade shows. The retail partnership ensures that when gun issues are in the news, both the NRA and gun makers are flush with money.
The NRA has evolved over its 141-year history, but over the last decade, the group has become largely beholden to the gun industry. That transformation became complete in 2005, when the NRA successfully lobbied for the Protection of Lawful Commerce in Arms Act, a law that “essentially blocks federal lawsuits brought by municipalities wishing to hold gun manufacturers accountable for the bloodshed their products helped create.” The law ensures gun companies cannot be held liable for the crimes committed with their products, as explained by Jarrett Murphy in the September edition of The Nation.
The election of President Barack Obama has only reaffirmed this special, profit-driven relationship between the gun industry and the NRA.
Accusations that Obama will “take away our guns,” as the NRA’s David Keene warns, have led a rally on Wall Street that has some gun stocks up over 400 percent since 2008. It’s quite a feat of marketing, since the Obama administration has only deregulated gun ownership over the last four years.
That’s why Fifer, in another candid conversation with investors last year, revealed that some in the for-profit gun industry were quietly hoping for a second Obama term. “I think half the people in the firearms industry, if asked, would hope he’s not President, but then will secretly go out and vote for him again.”
The NRA won't be the only group using fear to its advantage. Read Melissa Harris-Perry's latest column for more.
Billionaire David Koch’s prime political organization, Americans for Prosperity (AFP), having failed in its $125 million quest to oust President Barack Obama, is now aiming at a slightly less sophisticated political target: victims of Hurricane Sandy.
Hurricane Sandy was the second most costly in American history, leaving 100 lives lost, over $50 billion in devastation and tens of thousands of damaged or destroyed homes. Legislative efforts to help those who survived Hurricane Sandy’s wrath will reach a major stumbling block.
Earlier this week, AFP, which is chaired by Koch and believed to be financed by several other plutocrats from the New York City region, released a letter warning members of Congress not to vote for the proposed federal aid package for victims of the storm that swept New Jersey, New York City and much of the surrounding area in October. An announcement on the group’s website says that the vote next week for the Sandy aid package will be a “key vote”—meaning senators who support sending money for reconstruction could face an avalanche of attack ads in their next election. Already, opposition to the bill is growing, although it passed one procedural hurdle last night.
There is some legitimate criticism with aspects of the legislation, including the fact that some of the money will go to non-Sandy related reconstruction efforts in disaster areas. For AFP, however, the whole bill must die and victims of the storm deserve no help from the government.
Koch’s top deputy in New Jersey, a surly gentleman named Steve Lonegan, who heads the local AFP state chapter, called the aid package a “disgrace.” “This is not a federal government responsibility,” Lonegan told reporters. “We need to suck it up and be responsible for taking care of ourselves.”
It seems particularly cruel that the Koch political machine would use its vast network of paid activists and professional operatives to kill this bill. For one thing, this is David Koch’s community. From his Upper East Side apartment, Koch lives only a subway ride away from the devastation in Red Hook. Notably, Koch’s group gave away free gasoline during the election in a wide-scale anti-Obama stunt, yet had nothing to give to the victims of the storm. Now, Koch, one of the richest men in the world, is actually trying to take something away from them.
There’s another wrinkle to this political assault on the aid request that makes it even more heartless. (No, it’s not the rather arbitrary decision to target this piece of federal funding over others. Recently, Defense Secretary Leon Panetta identified $74 billion in unnecessary military spending, but AFP has not demanded that the government immediately axe these funds.)
The other tragedy of Koch’s decision to target Sandy aid is that his company is one reason we will increasingly face extreme weather events like hurricanes, flash floods, droughts and fierce storms. The Koch brothers, David and Charles, sit atop one of the world’s largest privately held conglomerates. Koch Industries is a sprawling company with interests in commodity speculation, timber, oil refining, ethanol production, chemicals, pipelines, consumer products, and fertilizer, among others. The Koch empire, by one estimate, has an annual carbon footprint of 100 million tons.
Not only does Koch’s business contribute to climate change through massive carbon emissions, as Greenpeace reported, Koch is the largest financier of climate denial political organizations and media groups. (As an aside, unlike AFP, Greenpeace ignored partisan politics and sent many of its workers to Queens to assist with relief efforts.)
Steve Lonegan, the AFP New Jersey staffer now crusading against federal support to his disaster-stricken state, led the effort to persuade Governor Chris Christie to reject a New England regional system to reduce carbon emissions. In a self-discrediting opinion column for The Times of Trenton last year, Lonegan mocked the overwhelming scientific data that projects global warming will lead to increased hurricanes (emphasis added):
It’s disturbing enough to realize the leading supporters of this reckless, irresponsible [cap and trade] scheme not only advance their argument under the banner of wild-eyed claims about increased rates for hurricanes and tornadoes due to global warming, for which there is no valid scientific proof—such increased rates have occurred regularly over the centuries.
As I’ve written, Koch’s political machine has largely used “conservative” and populist political efforts to advance their bottom line. Koch Industries makes a fortune by avoiding having to repay society for contributing millions of tons of carbon dioxide into the atmosphere. Before AFP fought efforts to regulate carbon emissions, the group (then known as Citizens for a Sound Economy) blasted efforts to curb acid rain and asthma-causing dust from factories, using much of the same rhetoric and hard-edge tactics. It lost those battles; but in recent years, it has won major policy debates, especially on climate change.
In this instance, there’s no payout to Koch Industries. Instead, it appears the fight over the Sandy relief money is yet another proxy battle with President Obama and his party. If the bill is significantly sliced apart, or even blocked, Democrats will have a difficult time finding the funds to pay for other programs over the course of next year.
Regardless of the politics though, it’s just kind of sad that a man worth $31 billion would spend his money this way.
The American Legislative Exchange Council, a conservative nonprofit that helps corporate lobbyists author “model” legislation for state-level lawmakers, is also a forum for industry to gain access to state regulators.
Greenpeace’s Connor Gibson posted quite a few ALEC documents on his organization’s blog that reveal an unseemly effort by coal lobbyists to thwart air pollution standards. But there’s a twist to this already-familiar campaign against EPA rules. The files, obtained from an ALEC meeting earlier this month, show Indiana Department of Environmental Management Commissioner Tom Easterly presenting his own plan for how to block federal regulations for greenhouse gas emissions.
Rather than working to “implement federal and state regulations to protect human health and the environment,” as his mission statement claims, here we have Indiana’s top clean air official offering coal lobbyists recommendations on how to best block rules curbing pollution. Greenpeace noted:
In a USB drive branded with the logo of the American Coalition for Clean Coal Electricity (ACCCE), a folder labeled “Easterly” contains a presentation titled “Easterly ALEC presentation 11 28 12” explaining current EPA air pollution rules and how Tom Easterly has worked to obstruct them. The power point is branded with the Indiana Department of Environmental Protection seal. In the latter presentation, Easterly ended his briefing to ALEC’s dirty energy members with suggestions for delaying EPA regulation of greenhouse gas emissions at coal plants.
Easterly’s presentation, which is posted on his Indiana Deptartment of Environmental Management commissioner webpage, even offered a template state resolution that would burden EPA with conducting a number of unnecessary cost benefit analyses (which the federal government has done through the Social Cost of Carbon analysis) in the process of controlling GHG emissions.
David Flannery, an attorney for several coal-fire utility companies who has sued the federal government over cross-state pollution rules, presented alongside Easterly. Contacted by The Nation, a spokesperson for Easterly declined to reveal the other participants in the meeting. But, a sponsor list obtained by Greenpeace shows that the event was underwritten by Peabody Coal, ACCCE (a trade association for the coal industry), and several other industry groups with a stake in blocking new EPA rules on emissions.
An attached promotional flier from ALEC said companies could pay for the privilege of becoming part of the task force sponsoring the proposed legislation. Asked why a top clean-air regulator would give pollution lobbyists tips for blocking new rules, Easterly’s office told us, “The commissioner regularly meets with and presents information to groups that are interested in environmental affairs.”
As Greenpeace notes, Easterly’s office also published a “State of the Environment” report last year that advances bogus climate-change-denier arguments.
We’ve seen many, many examples of regulators bending over backwards to provide favors to the companies that they are in charge of regulating, only to be handed lucrative jobs with those same firms after they retire from public office. ALEC has been successful as a ghostwriting front because it poses as a nonprofit charity interested in promoting conservative ideals (a farce, by the way, since the group promotes big government and opposes free trade when it suits corporate interests). In this instance, it seems ALEC is expanding its role and is playing lobbyist match-maker with state regulators.
For more on ALEC, read John Nichols on how the organization has helped stifle progress on gun control.
Over the last four years, Congress and the Obama administration have only enacted laws that have deregulated gun use in America. It’s no secret why. As pundits love to note, the gun lobby is incredibly influential. But as we consider the potential for reform in the wake of the tragedy today, one of the first questions we should ask this time is: who does the gun lobby really represent?
The National Rifle Association portrays itself as an organization that represents “4 million members” who simply love the Second Amendment. The truth is much more murky.
In reality, the NRA is composed of half a dozen legal entities; some designed to run undisclosed attack ads in political campaigns, others to lobby and collect tens of millions in undisclosed, tax-deductible sums. This power has only been enhanced in the era of Citizens United, with large GOP donors in the last election reportedly funneling money to the NRA simply to use the group as a brand to pummel Democrats with nasty ads. (As The Huffington Post’s Peter Stone reported, even the Koch network now provides an undisclosed amount to the NRA.)
Despite the grassroots façade, there is much evidence to suggest that corporations that profit from unregulated gun use are propping up the NRA’s activities, much like how the tobacco lobby secretly funded “Smokers Rights’” fronts and libertarian anti-tax groups, or how polluters currently finance much of the climate change skepticism movement.
In a “special thanks” to their donors, the National Rifle Association Foundation lists Bushmaster Firearms Inc., the company that makes the assault rifle reportedly found with the shooter responsible for the mass murder today in Newtown, Connecticut. How much Bushmaster Firearms Inc. (a firm now known as Windham) contributes is left unsaid.
The Violence Policy Center has estimated that since 2005, gun manufacturers have contributed up to $38.9 million to the NRA. Those numbers, however, are based on publicly listed “sponsorship” levels on NRA fundraising pamphlets. The real figures could be much bigger. Like Crossroads GPS or Americans for Prosperity, or the Sierra Club for that matter, the NRA does not disclose any donor information even though it spends millions on federal elections.
And like other industry fronts, the NRA is quick to conceal its pro–gun industry policy positions as ideological commitments.
Take, for example, “The NRA Civil Rights Defense Fund.” It’s a pro–gun rights legal fund “involved in court cases establishing legal precedents in favor of gun owners.”
And who helps pick which impact-litigation cases the NRA will become involved with? Folks like James W. Porter II, a board member of the NRA Civil Rights Defense Fund, who doubles as an attorney whose private firm specializes in “areas of products liability defense of firearms manufacturers.” His last client, according to a search of the federal court docket, was Smith & Wesson Corporation.
Is the NRA working for casual gun-owners, many of whom, according to polling, support tougher restrictions on gun ownership— or is the NRA serving the gunmaker lobby— which is purely interested in policies that will promote greater gun sales and more profits? Any gun control policy debate should begin with this question.
The NRA never walks alone. Read John Nichols on ALEC's efforts to thwart honest gun policy debate.
In a surprise that caught most observers off-guard, Michigan, the birthplace of the modern labor movement, will become a so-called right-to-work state in just a few days. The Nation’s John Nichols put up a post explaining how Governor Rick Snyder (R) quickly announced the bill earlier this week, rammed it through both legislative chambers within a day, and is on track to sign in it soon.
The measure, which will unravel unions in Michigan and likely lead to wage and benefit cuts down the road, has been long sought by powerful corporate interests and a small group of politically active billionaires.
How were they able to achieve such a success, in a historically union-friendly state like Michigan?
By most accounts, Snyder and his allies took everyone by surprise. On Tuesday evening, Snyder called a press conference to say he would be reversing himself, and would be throwing his weight for the first time behind making Michigan a right-to-work state. The day Snyder unveiled his new position on the controversial law, several business lobby groups endorsed the bill, and a $1 million television and radio ad campaign began airing in local media to encourage the public to support it. The Michigan Freedom Fund, the group airing the ad, was founded on November 5th by a campaign operative named Greg McNeilly. He is known locally for his work as GOP gubernatorial candidate Dick DeVos’s campaign manager in 2006, and as an employee to a DeVos company. [See the ad here]
In the last few years, conservatives have made significant contributions to political organizations that have pushed the state to the right on core economic issues, and explicitly pushed right to work as a top goal (see the graph above):
• Americans for Prosperity–Michigan, the group founded by the billionaire Koch brothers, has a relatively new chapter in Michigan that has produced pamphlets extolling right-to-work reforms. This week, the group set up a heated tent outside the capital to support Snyder’s law and bused activists to Lansing to counter labor protesters.
• The Mackinac Center is a right-wing think tank in Michigan that issues pro-“right to work” reports, sponsors an anti-labor legal foundation and produces an array of other content, from a Pininterest page to short videos explaining why Michigan should adopt right-to-work. The center has gone on a media tour, touting Snyder’s move this week on CNN, Fox Business and much of the Michigan press. Notably, the group recently started two of its own media outlets, Michigan Capitol Confidential and Watchdog Wire Michigan.
These organizations are part of a more aggressive political force that is adept at controlling the twenty-four-hour news cycle and managing coalitions. Unlike ordinary business lobbies that simply support right-to-work, these advocacy groups go out and shape public opinion through broad messaging and content development, which in turn is used for organizing around policies.
Both AFP and the Mackinac Center are backed financially by the billionaire DeVos family, which has sought to control public policy debates through state-level nonprofits. Donors Trust, the nonprofit foundation used by wealthy conservative donors to anonymously finance activism on the right, has heavily funded AFP and Mackinac in the last three years. Doug DeVos chairs a nonprofit that has mobilized influential executives in the state to support right to work in Michigan.
The model isn’t new. In Wisconsin, Governor Scott Walker (R-WI) relied heavily on Americans for Prosperity Wisconsin and a state-based think tank called the MacIver Institute to build political support for his effort to curtail union rights. In Ohio, Governor John Kasich (R-OH) worked closely with another business-backed group, the Buckeye Institute, for his attempt to crush local unions.
On the left, the only comparable group in Michigan is Progress Michigan. Progress Michigan, which is backed by several local unions, brought together a coalition of progressives to oppose right-to-work, and demonstrated at the capital in Lansing this week. Although Progress Michigan has leveraged a sizable local union membership base to make up for its small budget, as the chart I created above shows, it hasn’t been able to compete financially with the right.
Now that the right-to-work fuse has been lit, establishment groups on both sides of the ideological divide have entered the fray, including local chambers of commerce and the Tea Party on the right, and unions on the left. Working America, the AFL-CIO affiliate, has helped mobilize people for protests today. But in terms of shaping the ideological debate—it’s important to realize that the anti-labor forces have worked for years through groups like Mackinac and AFP to set the stage.
While liberals grimaced when Synder outspent his Democratic opponent in 2010 and rode the Tea Party wave into the governor’s office, he was also capitalizing on a political infrastructure that was years in the making. The increased funding to groups on the right has helped Republicans not only to gain more seats but also to advance broad policy changes.
For the chart above, I found budget numbers using annual tax disclosures, Americans for Prosperity’s Independent Auditor’s Report, and data from the Michigan Campaign Finance Network. Only the Mackinac Center has posted 2011 reports online. For AFP and Progress Michigan, I combined the budget information of both their c3 and c4 tax entities.
Update: The Mackinac Center’s Tom Gantert replied in a comment to note that I did not include the Center for Michigan in the story. Although the Center for Michigan has run a few blog posts critical of right-to-work, the center’s news site is largely neutral on the issue. I did not compare every single political group in the state that has ever weighed in on the issue, only the ones actively taking a leadership role in shaping the debate. A search of Labor Department L-M records does not reveal any labor union support for the Center for Michigan.
Michigan labor won't go down without a fight. Read Allison Kilkenny's report, "Thousands Expected to Protest Anti-Worker Legislation in Michigan."
Grover Norquist speaking at CPAC 2011 in Washington, DC. Courtesy: Gage Skidmore
“Americans for Tax Reform is a wonderful-sounding name.… As far as I’m concerned, it’s a front organization for Grover Norquist’s lobbying activities.” —Former Senator Warren Rudman (R-NH)
Rather than acting as a principled taxpayer or anti-tax “activist,” as he’s referred to in the media, Grover Norquist has often used his nonprofit to further the interests of his financial backers.
Last week, we showed how two billionaire-backed nonprofits provide over two-thirds of funds to Norquist’s foundation, Americans for Tax Reform.
But that other third is important in understanding Norquist’s priorities on Capitol Hill.
One aspect of the pledge is the promise not to raise rates; the other is to not cut tax credits (unless balanced with more rate cuts). In practice, the second part of the pledge is simply a promise to sustain any corporate tax subsidy under the sun.
Although Norquist talks like other conservatives about opposing government waste, tax credits are economically equivalent to subsidies. The only difference between a multimillion-dollar targeted tax credit for an oil refinery in Rosemont, Minnesota, and a Department of Energy grant to the same refinery is the agency that administers the money. Yet in Norquist’s world, regardless of the policy merits, every targeted tax credit is like a “tax cut” that must be protected.
Here’s an example of how this works. Take General Electric, which faced withering, bipartisan criticism last year when it was revealed that the company, thanks to a myriad of tax credits and other tax subsidies, had paid no federal income taxes in 2010. Norquist was there to defend the company in a chat with The Washington Post, arguing absurdly that removing billions in tax rebates to GE would just be a tax on consumers. Cutting GE’s tax credits, after all, would break the Norquist pledge.
In a recently posted 2011 giving report, General Electric says it made a contribution of $50,000 to Norquist’s foundation that year.
Consider that—GE gave more to Norquist in 2011 than it paid the IRS for income taxes in 2010, a year the corporation made $14.2 billion in profits.
Though Norquist claims to protect all tax credits, he seems to divert a great deal of his attention towards powerful K Street interests.
A quick search on Norquist’s foundation website shows countless action alerts to protest attempts by lawmakers to shutter wasteful energy subsidies, including billions in tax credits to oil and gas companies. One post claims removing nearly $100 billion in tax subsidies for oil companies amounts to a “tax hike on energy producers and families.”
Disclosures reviewed by The Nation show that, from 2008 to 2011, the American Petroleum Institute, a trade association for oil and gas companies like Chevron and ExxonMobil, gave $525,000 to Americans for Tax Reform.
Norquist’s pledge (and his foundation’s advocacy) transformed billions in taxpayer handouts into “tax cuts” that cannot be removed. In other words, Norquist is simply providing ideological cover for his benefactors in the oil industry.
Sometimes, Norquist’s relationship with K Street has led to advocacy beyond taxes. As Republic Report noted last summer, Norquist’s foundation regularly receives large payments from the pharmaceutical lobby group PhRMA—and Norquist deviates from his market values to oppose efforts to import cheaper Medicare drugs from Canada. Whatever happened to free trade?
By now, these sorts of grants and conflicts of interest should come as no surprise. Norquist is somehow the only corporate lobbyist in town who gets to avoid being tagged with the term. It’s a career that’s spanned almost two decades.
Norquist’s first official lobbying gig was a contract to represent France-Albert Rene, the leftist leader of the Seychelles, a small island nation off the coast of Africa. In one of the first exposes of Norquist’s coin-operated conservatism, Tucker Carlson, in a piece for The New Republic, called out the foreign influence peddling, referring to Norquist as just another “cash-addled, morally malleable lobbyist.”
Norquist later started his own lobbying firm, called Janus-Merritt Strategies, and signed up an elite set of clients, including most famously, Fannie Mae.
In the late nineties, Microsoft invited representatives of Americans for Tax Reform to travel to Washington State for a three-day presentation (which included tickets to a Mariners game as well as dinner and entertainment at Seattle’s Teatro ZinZanni). Two days after returning from the trip, the foundation sent a letter to House Republicans urging them to cut deeper into the anti-trust division’s budget at the Department of Justice, the same unit pursuing Microsoft in a high-stakes legal case.
Microsoft, The Washington Post noted, had paid Norquist $40,000 as a registered lobbyist for the company.
The pattern repeats itself like clockwork. Phillip Morris pays Americans for Tax Reform; Norquist campaigns against cigarette taxes. Cell phone companies pay Americans for Tax Reform; Norquist campaigns against cell phone taxes and fees.
Early in the Obama administration, Norquist sent a letter to FedEx, demanding that the company back off of an anti-UPS campaign website it hosted to fight off a measure that would enable FedEx employees to join a union.
It was a surprising move for a conservative like Norquist, who has praised draconian efforts to curb organizing rights in states like Wisconsin. Yet its less surprising given the fact that UPS, through its charitable foundation, gave Americans for Tax Reform $25,000 only months after the letter.
The most sordid examples come from the Senate investigation of Jack Abramoff’s lobbying. As the Associated Press reported, one of Abramoff’s clients, the Mississippi Choctaw tribe, worked out an arrangement in which Norquist would transfer $1.2 million in Choctaw money through his foundation, Americans for Tax Reform, for other Abramoff efforts. In exchange for laundering the money, Norquist kept a cut of $50,000 from two of the transfers.
Somehow, Norquist emerged from the Abramoff scandal largely unscathed.
Check out Lee Fang’s previous post about the two billionaire-backed non-profits that finance 66 percent of his budget.
The “American” in American Petroleum Institute, the country’s largest oil lobby group, is a misnomer. As I reported for The Nation in August, the group has changed over the years, and is now led by men like Tofiq Al-Gabsani, a Saudi Arabian national who heads a Saudi Arabian Oil Company (Aramco) subsidiary, the state-run oil company that also helps finance the American Petroleum Institute. Al-Gabsani is also a registered foreign agent for the Saudi government.
New disclosures retrieved today, showing some of API’s spending over the course of last year, reveal that API used its membership dues (from the world’s largest oil companies like Chevron and Aramco) to finance several dark money groups airing attack ads in the most recent election cycle.
Last year, API gave nearly half a million to the following dark money groups running political ads against Democrats and in support of Republicans:
• $50,000 to Americans for Prosperity’s 501(c)(4) group, which ran ads against President Obama and congressional Democrats.
• $412,969 to Coalition for American Jobs’ 501(c)(6) group, a front set up by API lobbyists to air ads for industry-friendly politicians, including soon to be former Sen. Scott Brown (R-MA).
• $25,000 to the Sixty Plus Association’s 501(c)(4), which ran ads against congressional Democrats.
Jack Gerard, the president of API, was a close ally to the Mitt Romney campaign. Like the US Chamber of Commerce, API is one of several large trade associations that has spent heavily in support of Republican candidates.
The disclosures also show that in 2011, API spent over $68 million for public relations/advertising with the firm Edelman, $5.4 million on “coalition building” with the firm Advocates Inc, and $4 million with DDC Advocacy for “advocacy.” DDC is the firm led by Sara Fagen, the former Bush White House aide ensnared in the DOJ purges scandal. DDC now works with corporations to help them communicate with workers on how to vote.
API’s Saudi leadership is perhaps one of the most salient examples of how the Supreme Court’s Citizens United decision has opened the door to foreign influence.
For many years, trade associations like API courted foreign businesses to forge industry-wide lobbying coalitions. But because of a court decision in 1990 (Austin v. Michigan Chamber of Commerce), trade associations could participate in elections only by spinning off regulated political action committees, subject to strict disclosure and contribution limits. The foreign leadership of trade associations had a clear firewall against interfering in American elections.
Justice John Roberts and the conservative court changed that. The court’s decisions in 2007 (in a case called Wisconsin Right to Life v. FEC) and 2010 (Citizens United v. FEC) to deregulate soft money allowed trade associations to behave akin to campaign committees, funneling corporate cash to attack ad and electioneering efforts—except without the disclosure requirements. That cleared the way for a substantial loophole. A foreign national cannot administer a Super PAC or candidate committee, but they can run a trade association like API that can now run candidate ads or finance third party campaign efforts. The foreign corporate money given to a trade association, from a Saudi oil firm or a French chemical company, for example, can now find its way into an attack ad. The lobbyists and companies, and perhaps many of the politicians, know where the money for the ads is coming from—but the American people have no clue.
Editorial intern Nicholas Myers assisted with the research for this post.
For more on API's cash game, check out Lee Fang's August report.