Huffington Post published this piece by me yesterday, as part of its Shadow Conventions series

To grasp the harms caused when money dominates politics, start with for-profit colleges. This industry tripled in size during the last decade, spurred by deceptive recruiting practices, after its lobbyists loosened federal rules aimed at protecting students and taxpayers from fraud. It has become a monster, a league of Wall Street corporations and private equity-owned firms that get 86 percent of their revenues — $32 billion a year — from taxpayers.

While some for-profit colleges are honest and work to educate their students, many charge sky-high prices, spend more on advertising than teaching, have high dropout rates, and leave students with worthless credits and insurmountable debt. For-profits now account for 10 percent of U.S. college students but almost half of student loan defaults. They risk a student loan crisis not unlike the subprime mortgage disaster.

Why does Washington tolerate such rampant misuse of taxpayer money? As Senator Dick Durbin (D-IL), recently explained, reforms are blocked because for-profit colleges “own every lobbyist in town.” Last year, the industry spent over $10 million on lobbying, and much more on public relations. They hire well-connected operators like former Senate Republican Leader Trent Lott, former House Democratic Leader Dick Gephardt, and former Obama Communications Director Anita Dunn. The lobbying is backed with campaign contributions: In the current cycle, for-profit colleges have given $2.4 million to federal candidates. They’ve contributed over $500,000 to Mitt Romney or the pro-Romney Super PAC.

The House GOP votes almost unanimously to overturn efforts by the Obama administration to cut federal funding to predatory schools. They are joined by many House Democrats who, like Republicans, get donations from the for-profits. The for-profit colleges also buy support in the non-profit advocacy world, giving grants to cash-strapped organizations that then defend their wealthy patrons from attacks. And the for-profits help pay for education forums sponsored by mainstream journalism outlets — another effort to buy influential friends.

In short, many of these businesses take taxpayer money, run shoddy operations that ruin students’ lives, and then use some of that taxpayer money to pressure Washington to keep the money flowing, without restrictions.

For-profit colleges represent one of the most egregious abuses of our democracy, but the corruption of the system — when special interests combine expensive lobbying operations with heavy campaign spending — produces bad policy outcomes in numerous other areas, from energy to health care, banking to taxation.

There is a growing movement to reduce such harmful effects through bold structural reforms: revision of the campaign finance system; broader disclosure of contributions to and spending by candidates and organizations; stronger limits on the revolving door that moves lobbyists in and out of government; overturning the Citizens United decision and limiting the role of corporations in elections.

I strongly support these efforts, with the caveat that we should tread very carefully with measures that directly regulate speech about politics and public policy.

But citizens and institutions in our country should also dramatically ramp up efforts to use the money in politics angle to win specific issue fights and produce smarter, uncorrupted policy decisions.

First, there needs to be much more support for aggressive investigative journalism — by traditional news outlets and innovative non-profits — that exposes revolving door hires, connections between campaign donations and legislative votes, outright bribes, and other signs that conflicts of interest have led to policy results that hurt our citizens.

Second, people and organizations should do much more to take the facts revealed through such investigations and bring them to bear on the legislative and political process.

So often, when members of Congress vote, they know that their lobbyist benefactors are watching, and that taxpayers and people harmed by those interests will barely take notice.

We need to increase public outrage about how corruption of politics affects people’s daily lives — contaminated tap water, higher cell phone bills, egregious bank fees. We need to make corruption an ever-present theme that pushes our elected representatives to act in the public interest, despite all the money spent by special interests to influence them.

This should not be an ideological or partisan cause. Certainly, the progressive policy agenda would benefit greatly from reducing the power of special interests. But genuine grassroots conservatives — beyond the Beltway establishment conservatives whose agenda is often purchased by corporate donations — should also support policies that empower individuals, cut wasteful pork barrel spending, and emphasize small businesses and genuine free markets over crony capitalism.

When politicians who support tax breaks for big oil companies get campaign help from those companies, pro-environment groups and citizens should, on the eve of the next big vote, speak loudly to let those politicians know that people are watching and are ready to hold their representatives accountable.

When it’s revealed that a top congressional aide received a $500,000 bonus from his defense contractor employer just before coming to Capitol Hill, constituents should demand that the congressman who hired that aide bend over backwards to be skeptical of the claims of that defense company the next time Congress faces a decision.

New Yorkers who think hydraulic fracturing by energy companies would create toxic water and air pollution should press Governor Andrew Cuomo not to be swayed by the millions of dollars the industry spends there on lobbying and campaign contributions.

And citizens should speak up at town hall meetings this fall and ask candidates whether they stand with wealthy for-profit colleges or whether they stand instead with the veterans, low-income people, and others in their community whose dreams have been crushed by these predatory schools.

Corruption in government usually ranks as an important issue when it is asked about specifically, though it is not as top-of-mind as jobs or the economy.

Particularly, corruption does less well in polls when respondents are asked to volunteer priorities.  However, only 2% thought corruption was not an important issue.  In addition, corruption, like job creation, is one of the few issues that supporters of both presidential hopefuls prioritize the most.

This poll comes at a time when SuperPACs, non-profits, and other outside groups hold increasing sway over the campaigns.  And half of that SuperPAC money comes from 22 donors.  Amid new FEC guidelines for disclosure, outside groups openly tout their ability to get around the rules.  Our current campaign finance system and Congressional deadlock has American faith in Congress plummeting to historic lows.

Still, while Americans see corruption as a top issue, it is unclear whether either candidate will make it a key issue in their campaign.  So far, both candidates have made their ideas for the economy along with attacks on their opponent’s ideas for job creation, the centers of their campaigns.  It is likely that the campaigns will continue to build on this message, but this poll indicates that a campaign willing to incorporate government corruption has waiting the wide, bi-partisan support of the American public.

Washington Post:

Roll Call: Judges Will Rule on Texas Voter ID
The war over this election’s voting rules is heating up, drawing crowds this week to a closely watched federal court trial in Washington, D.C., where a three-judge panel is hearing arguments for and against a contested Texas voter ID law.

Salon: A rich man, poor man election
Over the long term, the rich have been getting richer and the poor poorer. In the short term, the poor took the brunt of the impact of the Great Recession, and were only kept afloat through government assistance. However, as tax rates have fallen to historic lows, it has become more and more difficult for the federal government to find the resources necessary to ameliorate widening inequality.

Roll Call: FEC Gridlock No Help to Obama Campaign
…Obama’s big plans for campaign finance reforms never quite panned out. Despite repeated pleas to Obama from watchdog groups to strengthen or even appoint new commissioners to the Federal Election Commission, the president had other priorities. Now Obama, swamped by unrestricted spending on behalf of his GOP opponent, has asked the FEC for help.

USA Today: 25% of Romney bundlers hail from finance sector
Republican presidential candidate Mitt Romney depends on a wide network of venture capitalists, hedge-fund managers and other Wall Street bankers to raise the hundreds of millions he has amassed in his bid to oust President Obama, a USA TODAY analysis of his fundraising operation shows.

Public Campaign: Scott Brown: Subsidies My Big Oil Donors Get Don’t Exist
Over the weekend, Sen. Scott Brown (R-Mass.) said that “Oil companies don’t get subsidies.” That’s, of course, not true.
Big Oil gets billions in subsidies every year and then rewards supportive members of Congress through campaign cash from their PACs and executives—and Brown is a recipient of that largesse.
In fact, Brown has taken $227,860 in contributions from the oil and gas industry during his Senate career, according to data from the Center for Responsive Politics.

The Hill: Senate Dems offer new version of DISCLOSE Act to fight Citizens United ruling
Sen. Sheldon Whitehouse (D-R.I.) and eight other Senate Democrats proposed new legislation on Tuesday that seeks to counteract the 2010 Citizens United case in which the Supreme Court ruled that the government cannot limit political spending by corporations, unions or other groups.

NY Times: Partisanship Disguised as Charity
For all its right-wing political muscle, ALEC has long enjoyed tax-exempt status as a nonpartisan charity under section 501(c )(3) of the tax code, which is supposed to bar it from influencing legislation as a substantial part of its activities. And because it is a charity, its donors are allowed to deduct contributions from income taxes.
This outrageous situation has to be reversed.

BusinessWeek: How the Mormons Make Money
As a religious organization, the LDS Church enjoys several tax advantages. Like other churches, it is often exempt from paying taxes on the real estate properties it leases out, even to commercial entities, says tax lawyer David Miller, who is not Mormon. The church also doesn’t pay taxes on donated funds and holdings. Mitt Romney and others at Bain Capital, the private equity firm he co-founded in 1984, gave the Mormon Church millions’ worth of stock holdings obtained through Bain deals, according to Reuters. Between 1997 and 2009, these included $2 million in Burger King (BKW) and $1 million in Domino’s Pizza (DPZ) shares. Under U.S. law, churches can legally turn around and sell donated stock without paying capital-gains taxes, a clear advantage for both donor and receiver.

iWatch News: Have you heard about super PACs?
After months of reporting on super PACs and Citizens United, we wanted to know what the average person thought of these new outside spending groups. We spent the Fourth of July at the National Mall in Washington, D.C. to see what people had to say about campaign finance.

Boston Globe: Mitt Romney stayed at Bain 3 years longer than he stated
Government documents filed by Mitt Romney and Bain Capital say Romney remained chief executive and chairman of the firm three years beyond the date he said he ceded control, even creating five new investment partnerships during that time.

New York: Financial Regulator Adopts, Kicks the Rotting Corpse of ‘Clown Question, Bro’ Meme
“Let’s not even talk about 2008 and the financial collapse and the real reason Dodd-Frank came along in the first place. Let’s talk about how MF Global (as some would suggest) got caught trying to steal. Let’s talk about JPMorgan’s losing streak. Let’s talk about Barclays’ balk. Do we need Dodd-Frank? That’s a clown question, bro.”

New York Times:

Washington Post: Obama campaign shrugs off reports of Romney’s fundraising advantage
The Obama campaign on Tuesday shrugged off reports showing that Republican challenger Mitt Romney outpaced the president by $35 million in contributions last month, even after firing off a dire message to donors warning of defeat in November if fundraising doesn’t improve.
And a reminder from Sunlight Foundation: Romney  surging, but Obama well ahead in campaign cash
For Mitt Romney, the magic number is $158 million. That’s how much he’ll have to outraise President Barack Obama over the last four months of the campaign to surpass the president, the record holder for campaign fundraising.

Business Insider: This Is The Swank Wyoming Resort Where Dick Cheney Is Hosting An Exclusive Fundraiser For Mitt Romney
If this week’s high-dollar donor events are any clue, Romney is poised for another huge fundraising month. The candidate will hobnob at the homes and country clubs of deep-pocketed donors in Aspen and Jackson Hole this week, including at a private event hosted by former Vice President Dick Cheney at his Wyoming mansion.

The Washington Post: Vast ‘shadow campaign’ said to have aided Gray in 2010
A secret $653,000 effort funded by one of the District government’s most prominent contractors corrupted the 2010 mayoral race and helped Vincent C. Gray get elected, the city’s top federal prosecutor said Tuesday.

The Nation: Romney’s Donors Share His Love of Offshore Tax Havens
And perhaps not so mysteriously, some of the biggest abusers of offshore tax havens—along with some of the chief facilitators of this practice—seem to have gravitated to Romney’s re-election effort. Of the his campaign’s top eleven contributors, seven are financial firms with significant offshore tax haven activity.

According to the activist group ColorOfChange:

“Over the last few weeks, we have closely followed the issues surrounding the American Legislative Exchange Council (ALEC) and have heard from numerous stakeholders expressing their views,” said Larry Burton, CVS Caremark Senior Vice President for Government Affairs, in an email to ColorOfChange. “As a result, after careful consideration of the available information, CVS Caremark has discontinued its membership in ALEC.”

“We’ve not contributed to ALEC this year, nor do we intend to,” said Tim Scully, MillerCoors VP of Government Affairs in a phone conversation with ColorOfChange staff. “We’ve not renewed our membership nor do we have any plans to renew our membership.”

“I write to confirm that, although HP appears to have worked with ALEC in the past, HP is not currently a member of that organization,” said Gregg R. Melinson, VP of Government Relations and Deputy General Counsel for HP, in an email to ColorOfChange.

“[W]e are no longer a member of ALEC.  Best Buy was a member of ALEC in 2011 and did not renew its membership in 2012,” said Susan Busch, Best Buy Senior Director of External Relations, in an email to ColorOfChange.

These five companies join at least 20 others, including Dell, Wal-Mart, Amazon.com, and Coca-Cola, in leaving ALEC, the corporate front group behind state legislation including Stand Your Ground and disenfranching voter ID laws.

Are DC's downed power lines a product of too much money in politics?

The Washington, DC, area experienced incredibly severe storms on Friday night, the kind that, with an unprecedented number of downed trees, can only lead to extensive power disruptions — 1.5 million were without power for at least part of the weekend. Yet three days later, 25 percent of households and businesses in the area still don’t have power — and some aren’t expected to get it back until next Friday (or even later!), a full week after the storm. This is happening amid a record-setting heatwave that isn’t just inconvenient and sticky. 100-plus degree days without access to air-conditioning can be deadly.

Pepco is the company that provides most electricity to the area; with what essentially amounts to a natural monopoly on power services to Washington and parts of Virginia and Maryland, consumers don’t have a choice in who provides their power. This doesn’t mean Pepco necessarily has great service (as most any DC area resident can attest). Yet for the past few years, Pepco has repeatedly lobbied to increase their fares, which DC public advocates dismiss as unfair, given the company’s poor track record. Pepco ranks in the bottom 25 percent of  utility companies, based on day-to-day reliability.

One way to fix this problem would be to move power lines underground, an admittedly expensive endeavor that could cost anywhere from $3.5 million to $11 million per mile.

Local politicians, like customers, are fuming at the utility company. “Nobody will have their boot further up Pepco’s backside than I will,” said Maryland Governor Martin O’Malley (D).

Yet, Pepco, like so many other major corporations, is guilty of exchanging money for power for even more money. Pepco is a top donor to area politicians including Maryland Reps. Steny Hoyer and Donna Edwards, as well as D.C. Representative Eleanor Holmes Norton.

O’Malley himself has a complicated relationship with the power company, as Washington Examiner columnist Mark Newgent documented two years ago. Right after O’Malley called for investigations into another atrocious power outage in Maryland, the company and its executives, board members, and PACs donated nearly $20,000 to his campaign. Less than a month later, O’Malley approved a $21 million contract for Pepco to do work on BWI-Marshall Airport.

Meanwhile, Pepco is one of the “Dirty 30,” one of 30 Fortune 500 corporations that pay less in federal income taxes than they do on federal lobbying efforts, according to a report from U.S. Public Interest Research Group and Citizens for Tax Justice. Pepco has an effective federal tax rate of negative 57.6 percent — meaning the company gets more in refunds, rebates, and credits than it pays in taxes each year. Pepco makes $508 million each year from taxpayers, while spending $3.8 million annually on lobbying. The company has lobbied on tax issues in the past, including one filibustered bill that would have ended the requirement that government entities withhold three percent of payments to vendors.

Currently, Pepco is asking the D.C. and Maryland Public Service Commissions for permission to increase rates for customers by 4 to 5 percent. You have to wonder just how much of your tax dollars are going to fund Pepco’s lobbying efforts to charge you even more for its terrible service.

Will Attorney General Eric Holder be a victim of the influence of corporate money in politics?

One person who is probably happy about the attention the Supreme Court is getting for its pending Obamacare decision is Attorney General Eric Holder, who, by any measure, is having a really bad week. Later today, the House of Representatives is likely to hold him in contempt of Congress because he has refused to hand over documents related to “Operation Fast and Furious” to the Oversight and Government Reform Committee.

The gist of the story is this: The federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has been charged with the Sisyphean task of stopping guns from being trafficked from the United States into Mexico and its violent drug war. The ATF, Fortune magazine writes in an explosive new investigation published today, is “hobbled in its effort to stop this flow,” thanks in large part to lobbying efforts by the National Rifle Administration:

No federal statute outlaws firearms trafficking, so agents must build cases using a patchwork of often toothless laws. For six years, due to Beltway politics, the bureau has gone without permanent leadership, neutered in its fight for funding and authority. The National Rifle Association has so successfully opposed a comprehensive electronic database of gun sales that the ATF’s congressional appropriation explicitly prohibits establishing one.

The ATF has spent a good chunk of its time monitoring gun buyers who purchased weapons on behalf of the Sinaloa drug cartel. In December, 2010, a U.S. Border Patrol agent named Brian Terry was killed in Arizona by a group of Mexicans armed with guns — two of which they left behind, both of whose serial numbers showed that the weapons had been bought in Phoenix by a Fast and Furious suspect.

Fortune magazine says there’s an enormous misunderstanding of the Fast and Furious scandal both among the media and politicians:

Nobody disputes that suspected straw purchasers under surveillance by the ATF repeatedly bought guns that eventually fell into criminal hands. [House Oversight Committee Chairman Daryl] Issa and others charge that the ATF intentionally allowed guns to walk as an operational tactic. But five law-enforcement agents directly involved in Fast and Furious tell Fortune that the ATF had no such tactic. They insist they never purposefully allowed guns to be illegally trafficked. Just the opposite: They say they seized weapons whenever they could but were hamstrung by prosecutors and weak laws, which stymied them at every turn.

So now, as even members of Holder’s own party say they’ll vote to hold him in contempt, how did this fundamental untruth become conventional wisdom in the halls of power?

Money and undue corporate influence, of course.

Specifically, money and undue corporate influence wielded by the NRA (which is now being funded in part by the billionaire, dark money-wielding Koch brothers). The NRA recently implicated itself in the debate over Fast and Furious in a letter to House members which said that the Obama administration “actively sought information” from the operation to support a program requiring gun sellers to report multiple rifle sales.

This naturally sent members of House running scared and intensified the debate over holding Holder in contempt. Lawmakers are terrified of going against the NRA, whose political action fund has already raised nearly $10 million to spend on campaign contributions this election cycle (an amount that will certainly increase with the Koch influx), much of it directed at members of the House. This includes the four Democrats who have said they’d vote against the administration — Jim Matheson (UT), John Barrow (GA), Nick Rahall (WV), and Collin Peterson (MN).

Even on the Senate side, the NRA’s influence is evident. Take Sen. Chuck Grassley (R-Iowa), who is quoted extensively in Fortune’s investigation:

The ATF’s accusers seem untroubled by evidence that the policy they have pilloried didn’t actually exist. “It gets back to something basic for me,” says Sen. Charles Grassley (R-Iowa). “Terry was murdered, and guns from this operation were found at his murder site.”

Grassley received $116,489 from the NRA Victory Fund when up for reelection in 2010.

Sometimes money speaks louder than the truth.

New York state will investigate the U.S. Chamber of Commerce for unfair corporate influence in elections.

Yesterday, New York Attorney General Eric T. Schneiderman issued a subpoena targeting a foundation affiliated with the U.S. Chamber of Commerce for illegally funneling $18 million to the Chamber for its political campaigning and lobbying efforts.

The New York Times reports:

The investigation is also looking at connections between the chamber’s foundation, the National Chamber Foundation, and another philanthropy, the Starr Foundation, which made large grants to the chamber foundation in 2003 and 2004. During the same period, the National Chamber Foundation lent the chamber $18 million, most of it for what was described as a capital campaign.

Watchdog groups claim that the grants given to the National Chamber Foundation from the Starr Foundation had subsequently been loaned to the Chamber of Commerce to be used to finance lobbying in Congress and run issue advertising in the 2004 presidential and Congressional elections.

Schneiderman’s investigation is significant because it targets the use of tax-exempt groups that funnel money into politics while hiding donors:

The biggest such groups, including Americans for Prosperity, which is backed by the billionaire brothers Charles and David Koch, and Crossroads Grassroots Policy Strategies, which was founded by Karl Rove and other Republican strategists, are expected to spend hundreds of millions of dollars this year on issue advertisements against candidates to sway the outcome of the presidential and Congressional elections.

By targeting the U.S. Chamber of Commerce, Schneiderman is striking at one of the largest political players in the country. In 2011 alone, the Chamber spent $66 million on lobbying and has promised to spend at least $50 million on issue ads on the upcoming elections.

But Lizza’s article doesn’t mention another one of Obama’s big 2008 promises. Here he is in 2008, promising to work on getting big money out of politics:

Let me be clear — this isn’t just about ending the failed policies of the Bush years; it’s about ending the failed system in Washington that produces those policies. For far too long, through both Democratic and Republican administrations, Washington has allowed Wall Street to use lobbyists and campaign contributions to rig the system and get its way, no matter what it costs ordinary Americans.

Yet while in office, Obama has done little to follow through on these promises — instead, he has embraced the failed system, spending more time fundraising than any incumbent president in history and flouting his own rules on lobbyists and government contractors in the White House.

Yesterday, Obama advisor David Axelrod apparently backed the idea of a constitutional amendment to stop the flood of corporate money that has inundated American elections in recent years:

“The long-term implications for our government, our democracy, are very, very grave,” he said during a discussion with John Heilemann of New York magazine at the 92nd Street Y on Manhattan’s Upper East Side. “I hope that one of the things we can do, when we win this election, is use whatever tools are available, up to and including a Constitutional amendment, to turn this back.”

We should applaud any Obama efforts to reform the system he had so harshly criticized. And an amendment — which could take years to pass —  isn’t even the first step. Republic Report has already listed four actions the president could take right now to start to clean up the everyday corruption plaguing Washington. He could issue an executive order mandating campaign disclosure by government contractors, strengthen the Federal Elections Commission, use the Securities and Exchange Commission to empower investors with information about corporate political spending, and press for measures to add transparency to our elections.

And he doesn’t need to work with an obstructionist Congress to do this. So, if fixing Washington is as urgent as both Obama in 2008 and Axelrod this week claimed, what’s stopping the president from working on this issue before he starts a second term?

But that’s not the only way Americans are challenging our special interest-dominated system. Across the country, a number of congressional candidates are running in primaries based largely on the fact that they oppose Big Money. Here’s three particularly outspoken primary candidates, Democrats and Republicans, who are running against corruption:

1. Eric Griego (New Mexico): Griego, a state legislator, is running in the Democratic congressional primary for the open seat in the Albuquerque area of New Mexico. He backs a constitutional amendment to overturn the Citizens United decision and has made a personal commitment that he will not become a lobbyist after leaving office. Additionally, he has promised that if any of his staff leave to become lobbyists, they will not be allowed to lobby his office. Finally, he supports public financing of elections as a way to combat the influence of Big Money. Primary election day is June 5th in New Mexico.

 

2. Bruce Shuttleworth (Virginia): Shuttleworth is a former Navy fighter pilot running in Virginia’s 8th congressional district against Rep. Jim Moran (D-VA). He supports strengthening the STOCK Act to battle congressional insider trading and curtailing the use of earmarks to award taxpayer funds to major donors, an important issue in the Arlington, Virginia area — one of the hubs of the military-industrial complex. The primary is on June 12th.

 

 

 

3. Kenneth Wegner (Nevada): Wegner is running for the state’s new 4th congressional district seat. A conservative Republican and military veteran, Wegner feels that the only way to limit government and make sure it works for the people is to reject Big Money and special interests. He has pledged to support “legislation designed to limit the ability of special interest groups, lobbyists and corporations to donate money to those running for office,” and is going even further, saying that he will not accept any money from Political Action Committees or lobbyists while running for office. He also backs term limits for members of Congress and is a strong opponent of corporate-written trade agreements.

We applaud these primary candidates for bringing the issue of Big Money’s corruption of our politics into the elections in which they are running. We hope that no matter who wins these elections, the lawmakers who enter Congress next year take the issue of corruption seriously.