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Money, Power & The American Dream

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Hat tip to one of my Facebook friends, Bruce Bartlett who advised Presidents Reagan and GHW Bush on tax policy, including Reagan’s tax reform of ’86, for letting me know about this video documentary.

The first 20 minutes or so describe the lives and luxury of the uber wealthy. But don’t be deceived into thinking this video is a rant against the wealthy. It’s not.

This video is an expose on how politics and wealth intersect…and how that intersection affects middle and working income and poor families.

This hour-long video needs to be seen by every voter of conscience, from whatever party, before casting their votes. It shows quite clearly how our system is broken, why it’s broken and how beloved nation has begun to fail to live up to its potential. Neither party is spared judgement.

I urge everyone to put aside everything else and take the time to watch the entire video documentary and to think about our nation, her well-being, and all her people before the election.

The US is not, nor has it ever been, pre-Revolutionary France or Russia wherein a few very wealthy held all the power and opportunity while everyone else struggled to survive, thrive and paid all the national bills.

John Winthrop and his Massachusetts colonists created the first free schools because the colonists knew education was vital to economic health, demanded that everyone help those who suffered hardships because doing so was the message of Jesus, and required each family pay a income proportional tax so the colony could pay for its needs and wants. Winthrop believed that only through building a strong, cohesive, educated community could the colony become the shining city on the hill that Reagan and many other politicians have cited rhetorically.

As you can see in this documentary, Winthrop’s dream of a shining city – Jesus’ shining city – is not just under attack but is threatened with having its lights extinguished. Yes, the political system is broken because of money in politics and the wealth that can be made through the use of and manipulation of political power. But much worse is erosion of the traditional social values of social cohesion, caring for the poor, and education of which Winthrop spoke and this nation held for over 300 years.

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Do Lobbying and Campaign Contributions Help Corporate Fraudsters?

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Logo Image of the non-partisan Sunlight FoundationThe non-partisan Sunlight Foundation posts about the correlation between corporate fraud and lobbying, presenting findings that should concern every American.

[B]eing politically engaged appears to help firms and individuals get away with fraud for longer and, even when they are detected, reduce the severity of punishment.

The “Corporate Lobbying and Fraud Detection” paper studied lobbying from 1998 to 2004, comparing the 239 firms that had committed financial fraud with those who hadn’t. The researchers found a few very interesting things:

– On average, firms that committed fraud spent $3.48 million lobbying a year between 1998 and 2004, as compared to $1.97 million for firms that did not commit fraud. (So fraudulent firms spent 77% more, on average.)
– Firms that committed fraud increased their lobbying expenses after committing the fraud, by about 29%, on average.
– Overall, 17% of the frauds were detected by regulators (as opposed to analysts, stakeholders, insiders, etc.). But among the firms who lobby, just 12% of the frauds were detected by regulators.

Yu and Yu “conjecture that lobbying has a strong effect on detection by regulators.”

The “Political Contributions and the Severity of Government Enforcement” paper looks at punishment instead of detection: How harshly are perpetrators of financial fraud dealt with?

Fulmer and Knill find that “contribution from a PAC in the first year of the fraud results in the accused individual being banned for 2.90 fewer years, having probation for 4.99 fewer years, being imprisoned for 5.81 fewer years and 75% less likely to receive both prison time and an officer ban.”

If the executive gives directly, the punishment is also going to be lighter, according to the calculations of Fulmer and Knill. The ban from being an officer will be 3.64 years less, probation will be 1.59 years less, prison time will be 4.11 years less, and the probability of both prison and a fine will be 56% less.

CEOs who contribute the largest amounts of money get off even lighter.

Both papers offer striking findings, though it’s hard to pinpoint whether it’s the lobbying and contributions that are affecting regulatory enforcement, or whether companies and executives who are politically active also tend to be companies and executives who are the most sophisticated in dealing with government generally.

There’s certainly more research to be done in looking at how these companies’ lobbying and contribution activity changes around the time they commit fraud. For example, do they start lobbying on SEC issues? Do they start giving more to members on committees who have budgetary authority over the SEC?

Still, the correlations are strong enough to be troubling. They highlight yet another reason why we ought be concerned about the role of money in politics.

If this research angers you as much as it does me, then I recommend you join RootStrikers.

Our republic is dangerously out of balance. Well-financed special interests routinely bend the levers of power to benefit the few at the expense of our general welfare.

Political bribery has been legalized by the courts, and both major parties have been co-opted and corrupted by the system.

The result: The upper 1% have done well. The other 99% of us have been left behind. And now we’ve reached a breaking point.

Rootstrikers aims to restore power over American politics and government to 100% of the people. We hope patriots of all political persuasions will join us to help build an unstoppable grassroots movement that demands and delivers lasting reforms.

Henry David Thoreau wrote, “There are a thousand hacking at the branches of evil to one who is striking at the root.” Together, we must strike at the root of America’s problems.

Nothing in Washington DC will ever change until we, The People, truly take back our country by demanding an end to the corrupting influence of money, via lobbying, donations and SuperPacs, in the political process.

Corporations Are Not Persons!

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Wall St. Protest against corporate influence in politicsJamie Raskin, a professor of constitutional law at American University Washington College of Law, wrote in 2009 for NPR that the Citizen’s United case was a gross miscarriage of justice. That corporations are not “persons” but are artificial entities created by states and the federal government for legal purposes, such as patent and trademark protection, taxes, suit adjudication, and other legal purposes. Certainly not for privileges and rights guaranteed to natural persons under the 1st, 4th, 5th and 14th Amendments.

However, organizations such as the Center for Competitive Politics – a so-called conservative 501(c)3 – has made it their mission to overturn 200 years of judicial law that barred corporations from massively influencing elections and public policy.

The following is an excerpt from Professor Raskin’s NPR editorial in 2009, before the decision on Citizens Untied vs FEC was handed down.

A corporation is not, nor has it ever been, a constitutional person with voting rights; it is not, not has it ever been, a democratic citizen; nor has it ever been a constituent member of “We the People ” The founders did not mention the word “corporation” in the Declaration of Independence or the Constitution, and only a handful of corporations were even in existence at the time the Constitution was written.

The corporation is not a membership organization but an “artificial entity,” as the Supreme Court has called it, chartered by the state or federal governments to serve public purposes. Legally speaking, it has no independent constitutional standing outside of the rights of the people who own it — and they already have the right as citizens to contribute and spend on campaigns. The idea now being promoted that CEOs have a First Amendment right to take other people’s money out of corporate treasuries to spend on politics is outlandish.

Chief Justice John Marshall wrote in the Dartmouth College case that, “A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of creation confers upon it, either expressly, or as incidental to its very existence.”

In our time, Justice Byron White pointed out that we endow private corporations with all kinds of legal benefits — “limited liability, perpetual life and the accumulation, distribution and taxation of assets” — in order to “strengthen the economy generally.” But he emphasized that a corporation has no right to convert its economic resources into political power. As he put it, “The state need not permit its own creation to consume it.” Chief Justice William Rehnquist agreed.

The sovereign actors of American democracy — we, the people — have also understood that business corporations, which are magnificent agents of capital accumulation and wealth maximization in the economic sphere, pose extreme dangers in the political sphere. Our best leaders have wanted business to prosper but never to govern.

We should be as clear-eyed today as Abraham Lincoln was in 1864 when he said that “as a result of the war, corporations have become enthroned, and an era of corruption in high places will follow. The money power of the country will endeavor to prolong its rule by preying upon the prejudices of the people until all wealth is concentrated in a few hands and the Republic is destroyed.”

And we should be as passionate in defense of popular government as Thomas Jefferson, who wrote in 1816: “I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to a trial of strength and bid defiance the laws of our country.”

To add to the above article, the American Constitution Society produced a paper on corporate Constitutional history ((pdf), proving unequivocally that the founders never intended for corporations to have the same rights under the Constitution as natural persons. In fact, they argued against corporations having these same rights.

The paper states:

James Wilson – signer of the Declaration of Independence, member of the Continental Congress, a drafter of the Constitution, and one of the nation’s first six Supreme Court justices – expressed a prevailing view at the time that corporations were to be limited and constrained: A corporation is described to be a person in a political capacity created by the law. . . . It must be admitted, however, that, in too many instances, those bodies politick have, in their progress, counteracted the design of their original formation. . . . This is not mentioned with a view to insinuate, that such establishments ought to be prevented or destroyed: I mean only to intimate, that they should be erected with caution, and inspected with care.22

James Madison viewed corporations as “a necessary evil” subject to “proper limitations and guards.”23 Thomas Jefferson hoped to “crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.”

“[T]hroughout the greater part of our history,” the American people, state and federal governments, and the Supreme Court knew that corporations remained subject to democratic control.25 President Andrew Jackson warned of partisan activity by the second Bank of the United States corporation: “[T]he question is distinctly presented whether the people of the United States are to govern through representatives chosen by their unbiased suffrages or whether the money and power of a great corporation are to be secretly exerted to influence their judgment and control their decisions.”26 President Martin Van Buren spoke “of the dangers to which the free and unbiased exercise of political opinion . . . would be exposed by any further increase of the already overgrown influence of corporate authorities.”27

These warnings continued as corporations became dominant in our economy. “Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters,” wrote President Grover Cleveland.28 Theodore Roosevelt sought to end “a riot of individualistic materialism” and remediate the “total absence of governmental control [that] led to a portentous growth in the financial and industrial world both of natural individuals and of artificial individuals – that is, corporations.”29 He successfully called on Congress to enact federal restrictions on corporate political contributions, stating: “Let individuals contribute as they desire; but let us prohibit in effective fashion all corporations from making contributions for any political purpose, directly or indirectly.”30

As noted by this paper, the Founders and subsequent Supreme Court majorities did not intend for corporations to have the rights and privileges the current SCOTUS increasingly has given them. Citizens Untied was the first in a line of decisions that has stripped natural citizens’ rights away while increasing the power and influence of corporations. If democracy is to remain for all American citizens – rather than for artificial legal entities – voters must make their voices heard by demanding a Constitutional amendment eliminating the ability of these artificial legal entities from donating or contributing to political campaigns – effectively removing money from politics; thereby returning politics to the people – and striking down corporate personhood once and for all.

Related information:

Get Money Out Campaign
Free Speech for People Amendment
Reclaiming Democracy – Restoring Citizen Authority over Corporations

Businesses Pan SuperPACs

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How money affects politics - Ben Franklin and ClockThe Committee for Economic Development, a broad coalition of businesses from every business sector, has published their new report on money’s influence in politics. Here is an excerpt from their release:

Hidden Money: The Need for Transparency in Political Finance

The CED reports warn that the rollback of campaign spending and transparency reforms (strengthened in the wake of Watergate) presents a serious threat to jobs and the economy, public faith in the corporate sector, and the vitality of our democratic institutions. During the 2010 election, the first after the Citizens United decision, it is estimated that some $600 million was spent on independent political campaigns, a significant portion of which came from unknown sources. That figure is expected to skyrocket during the 2012 presidential election.

“A secret flow of hundreds of millions of dollars from companies to campaigns is bad for business’s reputation, bad for innovation, bad for job growth, and bad for our democracy,” said CED President Charles Kolb. “Corporate America can take the lead in the corporate campaign spending crisis by sending one message to every business, big and small: ‘Don’t Give, But If You Do, Disclose.'”

The three reports, After Citizens United, Improving Accountability in Political Finance; Hidden Money: The Need for Transparency in Political Finance; and Partial Justice: The Peril of Judicial Elections, make several recommendations:

Don’t Give – But If You Do, Disclose: Simply put, corporations should not contribute to third party groups. If they do, they should make contributions public and subject to board approval and oversight.

Return Democracy to the People: A robust public financing system that provides a multiple dollar public match on low-dollar donations would restore faith in democracy.

Ensure Transparency: Congress should reform laws to include disclosure of electioneering activities, including non-broadcast communications, voter registration and voter turnout expenditures that are not covered by existing regulations.

Judicial Integrity: States should end the election of judges and adopt a non-partisan, independent, commission-based system for recruiting, reviewing and recommending appointees for judgeships.

I watched their latest meeting on money influencing politics on C-SPAN last week. It’s available for viewing on the CED website along with downloads of the final reports.

As of today there are 149 SuperPACs – and more are being formed every day – that receive unlimited secret donations. It’s estimated that somewhere close to $2 billion will be spent on the 2012 elections, with most of that money coming from SuperPACs and other outside organizations. That money will affect who gets elected (72% of those with the largest campaign fund get elected) and what legislation gets written and passed. It allows rent-seeking – the buying of favorable legislation and tax subsidies rather than creating competitive value for customers and shareholders. And it perverts our democratic republic.

We must push to get money out of politics.

Written by Valerie Curl

October 5, 2011 at 2:27 PM

Eliminating Competition

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Many decades ago, GM eliminated competition by buying up patents and locking them away. Microsoft built a reputation of buying out competitors and closing them down.

But the modern way to eliminate competition appears to be using government. It’s much faster and easier – and probably much cheaper – to get a political body or politician to eliminate your competition that having to go through the whole buyout process.

For example, ThinkProgress Governor Scott Walker (R-WI)reports that quietly inserted into Wisconsin Governor Scott Walker’s lengthy budget bill was a little-noticed provision that could destroy – or severely impact their profitability – Wisconsin’s burgeoning craft breweries. The provision prohibits these small breweries from selling directly to restaurants and liquor stores as well as prohibiting them from selling their brews onsite. Walker provided no public hearing on the provision nor did he make public in advance his intent to add it to his budget bill. The provision slipped silently through the Wisconsin legislature because few even knew it was in the budget.

The new provision treats craft brewers — the 60 of whom make up just 5 percent of the beer market in Wisconsin — like corporate mega-brewers, forcing them to use a wholesale distributor to market their product. Under the provision, it would be illegal, for instance, for a small brewer located near a restaurant to walk next door to deliver a case of beer. They’ll have to hire a middle man to do it instead.

But more noteworthy than the provision itself is how it was enacted. The provision was quietly slipped in the massive budget legislation without any consultation from independent craft brewers, who are justifiably outraged by it. One group that clearly did have input, however, is one of the world’s largest beer makers — MillerCoors. […]

Joining MillerCoors in support of the provision are industry associations that have an interest in preserving the current business of beer distributors, including the industry’s lobby, the Wisconsin Beer Distribution Association. But craft brewers see the provision as “a power grab” by MillerCoors that is targeted at them . OpenMarket.org reports:

Craft brewers say that MillerCoors is pulling a fast-one on the states legislature by selling this as a bill that would protect small beer from the brewing behemoth [Anheuser-Busch] InBev’s plan to monopolize the Wisconsin wholesale market. Craft brewers say that this is clearly not InBev’s intent, as they have passed up opportunities to purchase wholesalers in the state no less than 16 times since 2008. They say the real competition that MillerCoors is trying to protect itself against is the growing craft beer market. The restrictions the measure places on any wholesaler wishing to start-up in Wisconsin seem to support the craft brewers’ claims.

So, why did Governor Walker sneak this provision into the budget, when he’s stated that small businesses are the backbone of the economy? Could it be that Miller Coors, a joint venture with foreign-owned SABMiller, donated $22,675 to his campaign?

I’m a big believer in a free market based economy, but I have a question for those who root for the current form of the free market. Is the free market really free when large political donations can be used to buy favorable legislation that essentially prevents market participation or excludes competition in the marketplace?

Written by Valerie Curl

June 11, 2011 at 9:42 AM

It’s about “Pay to Play”

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We all know that Congress no longer really reflects the views and desires and policy needs of the average American voter. We all know special interests buy legislation through lobbying donations, and a variety of special interest and political PACs.

Newt Gingrich

Democrats and Republicans alike sup at the “pay to play” table that Newt Gingrich introduced into the House.

But for the first time, the history of this change has been documented in a new report (pdf) by Thomas Ferguson, INET Conference Bretton Woods.

As means to this end, leaders staged more and more votes not to move legislation, but to score points with some segment of the public or signal important outside constituencies. For the same reason, they sometimes made exemplary efforts to hold up bills by prolonging debate or, in the Senate, putting presidential nominations on hold. Meanwhile, they set formal or informal quotas for congressmen and women – here even conservative Republicans stoutly defended equal rights – for member contributions to the national congressional committees. The national fundraising committees, in turn, poured resources into elections to secure and hold majority control.17 Contests for relatively rare “open seats” that had no incumbent running or races in which incumbents looked unsafe received particularly heavy attention, since those were most likely to sway the balance of forces inside each chamber.

Allusions to Congressional “Leviathans” had been flying around for some years;
here, at last, the real thing was taking shape: centralized parties, presided over by leaders with far more power than in recent decades, running the equivalent of hog calls for resources, trying to secure the widest possible audiences for their slogans and projecting their claims through a mass media that was more than happy to play along with right thinking spokespersons of both parties.18 The members, in turn, scrambled to raise enough money to meet the quotas the leaders set as the price of securing influence in the House or the Senate.

I’m not sure how this “pay to play” scenario can be changed, given the SCOTUS ruling on Citizens United and its current, apparent leanings against Arizona’s public financing law, but it’s clear the American public must demand a change in campaign finances that reflect their interests, not just those of large donors.

Written by Valerie Curl

April 14, 2011 at 9:55 AM

And You Thought National Politics Was About the People

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ThinkProgress, a liberal news organization, reported on the newly confirmed GOP majority assumption of the House. What I’ve been wondering and concerned about ever since reading of the huge donations from corporate America, thanks to Citizens United, was if the newly elected GOP would be working for me or for their uber rich contributors. Guess I have my answer today.

Tea Party Billionaire David Koch Entertains Newly Elected Republicans On The First Day Of The New Congress

Today, as Rep. John Boehner (R-OH) was sworn in as the Speaker of the House for the 112th Congress, ThinkProgress witnessed aBillionaire David Koch of Koch Enterprises group of Koch Industries lobbyists entering the Capitol along with members of Congress and their families. Tim Phillips, a former business partner to Jack Abramoff who now leads the Koch front group Americans for Prosperity, was with Nancy Pfotenhauer, a former corporate lobbyist for Koch Industries. ThinkProgress learned that David Koch, the polluter billionaire who has bankrolled groups organizing the Tea Parties and much of the modern conservative movement, was also in attendance in the Capitol for Boehner’s swearing-in event.

After the ceremony, David Koch walked up to Rep. Frank Guinta (R-NH) — a freshman Republican Koch helped to elect using his front group, Americans for Prosperity — and asked him to confirm that he will be attending a party that Koch is hosting for Republicans. Guinta said he would be at the party, which began at 5:00pm today.

Koch has been one of the most active players in Republican politics in the Obama era. His group Americans for Prosperity helped orchestrate much of the Tea Party movement; he funds many of the top conservative think tanks, like Heritage and the American Legislative Exchange Council; and, he also ran tens of millions of dollars in attack ads to elect the new Republican Congress. As ThinkProgress reported, Koch convened a secret meeting of top business leaders — mostly bankers, industrialists, and oil men — to meet with the U.S. Chamber of Commerce and Glenn Beck to plan the midterm election in June 2010.

ThinkProgress also spoke to Mr. Koch, and will post a video of the interview soon.

Written by Valerie Curl

January 6, 2011 at 8:56 AM

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