Organized Money Strikes

No sooner had the Supreme Court issued its partisan 5-4 decision last January, setting aside a century of restrictions on corporate involvement in political campaigns, than Republican strategists started figuring out how to open the floodgates to organized money. Since the notorious Citizens United vs. the Federal Election Commission ruling, hundreds of millions of dollars have been targeted at congressional and state races to punish Democrats and much of it is untraceable.

The Center for Public Integrity (CPI) on Oct. 4 reported that former Bush White House strategist Karl Rove and former Republican National Chairman Ed Gillespie have helped conservative groups coordinate at least $300 million in ads and get-out-the-vote drives. Rove and Gillespie launched American Crossroads, which plans to spend $52 million this year to help a few dozen GOP Senate and House candidates with TV ads and get-out-the-vote drives, and they have met with other groups, such as the US Chamber of Commerce, which has a $75 million election budget and has drawn fire for soliciting money from foreign corporations; the American Action Network, headed by former Sen. Norm Coleman, R-Minn., which plans to spend $25 million; and the Business Industry Political Action Committee, which aims to spend $6 million to boost the “pro-business” vote.

Republican partisans have built a huge lead of almost five to one in ad spending compared with their Democratic counterparts, according to the Campaign Media Analysis Group, which reported that GOP-affiliated groups spent $24.8 million on Senate and House ads from Aug. 1 to Sept. 20 while Democratic rivals spent just $4.9 million. The Chamber of Commerce alone has aired 8,000 attack ads against Democrats through Sept. 15, United Steelworkers President Leo Gerard said.

Many of the independent groups are set up under IRS rules as tax-exempt non-profit “501(c)” organizations that are not required to make their donors’ names public. Those groups are not supposed to spend more than half of their funds on nonpolitical activities, but the rules are vague enough to allow attack ads to be categorized as grassroots lobbying.

American Crossroads opened in March as a “Section 527” group, which can accept unlimited donations and can spend all its money on political advocacy, but it must disclose its large donations and donors monthly. After it brought in less than $1.3 million through May, a second group was opened as Crossroads GPS, a 501(c)(4) organization, which can accept unlimited donations and doesn’t have to disclose its donors at all. As of Sept. 20, the two groups had pulled in just over $32 million, CPI reported.

The US Chamber of Commerce’s $75 million war chest is twice as much as it spent on the 2008 campaign and most of it is aimed against Democratic members of Congress. Bill Miller, the Chamber’s political director, told CPI the corporate community was frustrated by financial services reforms, health care reform and the specter of both “cap and trade” to control pollution and “card check” legislation that would make it easier for unions to organize. One of its major contributors is Rupert Murdoch’s News Corp., owner of Fox News, which reportedly has given $1 million to the Chamber for its political drive.

The Citizens United ruling also opened the door for foreign involvement in political campaigns, either by laundering the money through American subsidiaries or, as ThinkProgress.org reports on page 12, through contributions to organizations such as the Chamber of Commerce.

Americans for Prosperity is a 501(c)(4) group that plans to spent $45 million this year, mainly on House candidates, and is closely linked with David Koch, the co-chairman of the Kansas-based energy giant Koch Industries. Koch also heads the board of Americans for Prosperity Foundation, a sister 501(c)(3) group.

The Commission on Hope, Growth and Opportunity was launched this summer by veteran GOP operative Scott Reed, aiming to raise $25 million to help about two dozen GOP candidates. Reed told CPI the “big three stepping into the batter’s box” were the financial services industry, the energy industry and the health insurance industry.

Conservatives say the new rules also allow Democrat-affiliated groups such as labor unions to raise money, but nobody seriously expects organized labor to beat organized money in fundraising. For one thing, unions must get member approval to use general funds for political activity and their political committees are required by labor law to disclose all sources of income that add up to more than $5,000 — but most of their political contributions come from hourly workers, not billionaires. The best hope for Dems is that the AFL-CIO and allied unions can beat organized money at the ground game of getting out the vote.

Robert Reich noted in his blog that, according to the FEC, only 32% of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97% of groups disclosed their donors. In 2008, almost half disclosed.

In a keynote speech marking the 40th anniversary of the founding of Common Cause (Oct. 6), Reich said the US was “now approaching a perfect storm” with the concentration of wealth and income in the hands of the superrich, the increasing influence of money in politics and the erosion of confidence in government.

Reich, the new chairman of Common Cause’s board, is counting on a public reaction against the concentration of money in politics, because the alternative is the loss of democracy.

“The two greatest world powers are the authoritarian capitalism of China and the plutocratic capitalism of America. Democratic capitalism is a figment of someone’s historical imagination,” he said. But he added, “I have tremendous faith that out of this perfect storm will come a renewed commitment to clean up politics and save our democracy.”

As long as independent groups don’t have to disclose their contributors, they are little more than money launderers and the Chamber of Commerce’s protests that foreign money is a small portion of its general fund is a flimsy defense.

Mom-and-pop businesses on Main Street might well wonder why the Chamber of Commerce was doing Wall Street’s dirty work in fighting financial services reform after bankers wrecked the economy; siding with the very health insurance companies that are fleecing small businesses that provide health insurance for their employees; taking the side of energy companies in fighting the Democrats’ efforts to curb pollution; and promoting more “free trade” agreements to send manufacturing jobs overseas. Even Bush-era tax cuts for rich people who clear more than $250,000 a year are beyond the reach of most small businesses that the Chamber claims to represent.

The very least Congress should do is to force these groups’ to disclose their financial backers, but Republicans — marshaled by the Chamber of Commerce and other right-wing groups — once again managed to stop the Disclose Act with a filibuster in September, despite the support of 59 Democrats and independents for the bill. To show how low the GOP has fallen, Reich noted that nearly 10 years ago 48 of the 54 Republican senators supported campaign finance disclosure.

The massive flow of corporate money against Democratic members of Congress should convince the Obama White House and Democratic leaders that their efforts to appease Wall Street and Big Business in drafting reform bills over the past two years were pointless. Big Business hates the Democratic reforms, as modest as they are. Dems might as well welcome their hatred and return to their populist roots.

In the meantime, progressives won’t do their causes any favors by sitting out the midterm election on Nov. 2. Letting Republicans take control of the House and/or the Senate will only hurt the people who depend on government intervention against big business and the global economy. — JMC

From The Progressive Populist, November 1, 2010


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