Michelle and Barack Obama greet attendees at the Inaugural Ball. Southern Company helped fund the event and is now up for a loan from the administration. (AP Photo/Carolyn Kaster.)
President Obama’s inaugural committee struggled to raise money for the festivities earlier this year—perhaps that’s normal for the second time around, especially when the first inaugural was so hyped and so historic. The sluggish fundraising came even though the committee allowed corporate contributions, unlike the first inauguraiton, and also made a major retreat on donor transparency: the inaugural committee released only the donor name, and not his or her employer, city, state and amount donated. (The Center for Responsive politics has still only matched 60 percent of the names released by the committee to an employer, and it has no idea how much the person donated.)
But as the inaugural approached, two major corporations stepped up to the plate. The week of the ceremony, the inaugural committee disclosed donations from Southern Company, one of the country’s largest utilities, and United Therapeutics, a $1.5 billion pharmaceutical company.
The committee didn’t disclose how much money was given, but a Southern Company spokesman told the Sunlight Foundation shortly thereafter that the donation was for $100,000. The utility normally backs Republican candidates—it gave 73 percent of its 2012 money to the GOP—but was now apparently trying to make amends with the winner.
That makes sense, because Southern Company has substantial business before the administration. As the operator of some of the country’s dirtiest coal plants, it has serious interest in any new EPA regulations on greenhouse gas emissions. And it has doggedly been trying to win federal approval for an $8.3 billion loan guarantee for two new nuclear plants in Georgia.
Lo and behold, earlier this week—just one month after the inauguration—this happened:
Southern Co. expects to reach a final agreement with the Obama administration on a loan guarantee for its new nuclear-power plant by the middle of the year, a senior company executive said Thursday in the latest positive sign for the proposed $8.33 billion deal.
Joseph “Buzz” Miller, Southern’s executive vice president for new nuclear development, said “there has been movement” in negotiations with the Department of Energy, and the company is “newly optimistic that sometime middle-year, that we can close on the loan guarantee.”
The development was first flagged by Tyson Slocum at Public Citizen, who has been tracking the Southern Company donation. He raises the obvious and very pertinent question here: is this sudden “movement” and “newly optimistic” attitude a direct result of a major contribution to Obama’s struggling inaugural committee? It’s certainly a reasonable conclusion to draw, and it requires some degree of naiveté about Washington to believe these are just entirely unrelated coincidences. At the very least, this creates a terrible perception problem.
This gets to the heart of Obama’s embrace of outside corporate money to get himself elected (remember his campaign’s official endorsement of outside money groups) and the subsequent embrace of corporate money to get himself inaugurated in due splendor. The Obama team made the case that it was a necessity to keep up with the avalanche of outside money that would be marshaled by Republicans—that it would be outrageous to unilaterally disarm. This strategic argument was accepted by many progressives, and it’s not without some merit. But the question always was—what is part two?
These companies that give Obama money aren’t doing it because they think he’s just a great guy. They want access and influence, and in order to keep the money flowing, the administration must offer some degree of it, or the money will quickly dry up.
Note, as well, that United Technologies, which gave a late inaugural donation along with Southern for an as-yet unknown amount, is currently seeking FDA approval for an oral drug to treat pulmonary arterial hypertension. It already makes the injectable version, but the FDA rejected its application for the oral drug in October because the agency wasn’t convinced the drug was actually effective.
Naturally the FDA should only base its decisions on the public good, not outside political calculations. People should have no fear that this is occurring, but these inaugural donations no doubt create that perception, and undermine public faith in how the administration is operating.
Similarly, nuclear loan guarantees are risky business—a CBO report in 2011 raised serious questions about undue risk to taxpayers, and a White House–mandated report released just this month called for greater oversight of the program, though it also scaled back the earlier risk assessment. Southern shouldn’t have a bigger voice in this conversation just because they have the money. (Slocum is calling for all negotiations to be halted until a full record of communications between Southern and the administration is released, so the public can be certain there has been no undue influence.)
This issue is all the more pertinent because even though the election is over, the Obama administration continues to court big corporate dollars by converting Obama for America into Organizing for Action, a 501(c)(4) group that can accept unlimited, undisclosed corporate contributions. (Officials say the new OFA will voluntarily disclose donors every quarter, and give a range of the donation, but not an exact amount.)
Just yesterday, White House press secretary Jay Carney was grilled by reporters over a New York Times report that OFA informed donors that $500,000 would win a personal meeting with Obama. Carney struggled to explicitly deny that assertion. Again: these donors aren’t paying a half-million dollars just to get their photo taken or see the Oval Office. They almost certainly want something, and for the system to work, there must be some kind of understanding that they might get it.