Resurrecting Democracy

A Reversal for Fortune- Obama and the SuperPACs

                                                Robert A. Levine  2-13-12

The Citizen’s United ruling by the Supreme Court two years ago, equating donations of money with free speech, changed the political landscape for campaign fundraising, fostering the emergence of SuperPACs as the main conduit for wealthy contributors. President Obama’s recent change of heart regarding the pursuit of funds for Democratic SuperPACs to compete with Republican entities has provided another issue that allows him to be skewered by his opponents. The latter, of course, who are collecting sums at a breathtaking pace from their stable of affluent donors, do not acknowledge their hypocrisy in criticizing Obama for doing the very same thing.

However, Obama did previously take a strong stand in opposition to the SuperPACs. This position apparently changed when he became convinced that his unwillingness to seek financing for his own SuperPACs would place him at a competitive disadvantage in his current campaign for re-election. While the SuperPACs of the Republican candidates are engaged mainly in internecine warfare at the moment, they are still managing to fire regular broadsides at the president.

The organization tied to Mitt Romney, Restore Our Future, raised $18 million from two hundred donors in the second half of last year, with 10% of the billionaires in America contributing. Newt Gingrich’s campaign is being kept alive by one man, Sheldon Adelson, the hotel and gambling magnate, with him and his wife having donated $10 million to the Gingrich SuperPAC, Win Our Future. The SuperPAC of Rick Santorum, the Red, White and Blue Fund, is being supported by Foster Freiss, a wealthy backer of conservative causes. Though the Republican candidates and SuperPACs are fighting each other now, their antipathy for Obama will drive them to unite around the ultimate nominee, which means that all of their financing and vitriol will be directed at the president. In fact, Adelson has apparently already communicated his intention to donate money to support Romney if he is the nominee. And Karl Rove’s Republican SuperPAC, American Crossroads, collected $51 million last year, with an objective of an additional $200 million to be used in this year’s elections.

Did Obama have any alternative to trying to generate funds for his own Democratic SuperPAC? Obviously, there is some heavy financial artillery arrayed against him. But one of Obama’s strengths in the 2008 campaign resided in his ability to attract multiple donors to contribute small amounts for him over the Internet and through other channels. This time around, he already collected over $224 million for his campaign and the Democratic Party in 2011, with the efforts continuing this year. So he will not exactly be facing his Republican opponent “unilaterally disarmed” as Jim Messina, his campaign manager, claimed. However, direct donations to the presidential campaigns by any individual are capped at $2500 for this election cycle and $30,800 to party committees. There are no limits on donations to the SuperPACs, allowing huge sums to be harvested from a small number of contributors. This includes individuals, corporations, unions and other entities, making fundraising a lot simpler.

The SuperPACs are an invitation to corruption, with special interests able to buy support for their favored candidates with enormous sums. If President Obama had stuck to his guns in denouncing the SuperPACs and refused to use them in his current campaign, he would have held the moral high ground against his Republican opponent. Obama’s position would have elicited sympathy and backing from much of the electorate, fed up with the way special interests use money to dominate the political conversation. What’s more, it would have bolstered Obama’s standing with independent voters who strongly favor restrictions on campaign financing. And perhaps his viewpoint would have generated even more donations from an angry public to counter the SuperPACs. Now, Obama is just another candidate trying to raise as much money as possible to enhance his presidential race.

Obama’s current reversal mirrors a similar occurrence during the 2008 election cycle. Though John McCain and Obama had previously agreed on public financing for the presidential campaign, Obama reneged on the agreement when he realized that his fundraising would far surpass his opponent’s. It appears that whatever ideals Obama espouses when not under pressure, in the heat of an election battle he’s willing to do whatever he thinks is necessary to help him get elected. That’s what politicians do.

Resurrecting Democracy

www.robertlevinebooks.com

Weakening the STOCK Act- Stock and Trade of the House Republicans

                           Robert A. Levine

Once again, House Republicans have been unwilling to take a strong stand against insider trading. Though a revised version of the STOCK Act (Stop Trading On Congressional Knowledge) was passed yesterday by the House by an overwhelming margin, it was only after Republicans had weakened the bill. In December, Republican Spencer Bachus from Alabama, Chairman of the House Financial Services Committee postponed voting on a bill that would have prohibited insider trading by members of Congress. This was despite the fact that the bill had over a hundred co-sponsors and overwhelming public support. Today the Washington Post reported today that Bacchus is under investigation by the Office of Congressional Ethics for possible insider-trading violations. How’s that for having the fox in the henhouse?

 In the current bill, Republican Representative Eric Cantor of Virginia and the House Republican leadership eliminated a provision  that would have regulated the collection of intelligence gleaned from political insiders; ie members of Congress, senators and other federal officials. This valuable knowledge can be passed on to hedge funds, mutual funds and other financial industry personnel who use it to determine investment strategies. The Senate had previously approved the bill with a provision that required “political intelligence consultants” to register as lobbyists and divulge their activities. Republican Senator Grassley of Iowa, who had crafted the amendment on political intelligence, was quite angry over the House Republicans’ actions, saying- “It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision.” But Congressman Cantor wanted further study of the issue by the Government Accountability Office which could delay action for up to a year.

 According to Democratic Representative Louise Slaughter of New York, one of the originators of the STOCK Act, Wall Street and those involved in the political intelligence industry had been lobbying against the Grassley measure. They were concerned that the required registration would have compelled transparency from investment advisors regarding clients to whom they transmitted political intelligence. And Wall Street and their lobbyists were successful in their efforts to gut the bill of the troublesome provision.

 Once again, ethics has taken a back seat to Wall Street’s needs and political expediency. What’s new?

 Resurrecting Democracy

www.robertlevinebooks.com

The Federal Election Commission and Citizens United

                                                        Robert A. Levine   2-3-12

 With the increasing role Super PACs are playing in the 2012 Republican primaries, and will play in the general election, isn’t there some entity to police the donation of unlimited funds to these groups and make these donations more transparent? Theoretically, for awhile, there was; the Federal Election Commission (F.E.C.).

 Congress established the F.E.C. in 1974 as an independent regulatory agency. Its mission was to enforce the provisions of campaign finance law for federal elections, including the public disclosure of information, the limits and prohibitions on contributions, as well as to supervise the public funding of presidential campaigns.

To insure a balanced political approach by the Commission (as well as future gridlock), it was to consist of six members, with no more than three permitted from the same party, and with four votes necessary for any action. The Commission was structured this way to supposedly ensure bipartisan, or nonpartisan, rulings, (and to be certain that no decisions would be overly detrimental to either of the two major parties). The members were to be appointed by the President and confirmed by the Senate to serve six year terms, with a rollover of two new appointees every two years.

 Critics of the F.E.C. point to the balance between Republicans and Democrats as being responsible for its inability to force adherence to campaign finance regulations over the years and for seeming to be supportive of the interests of the two major parties. When the Commission has acted, it is usually long after the fact, the elections being over and the winners ensconced in their offices, the penalties often minor. Currently complicating the picture, the terms of five of the six F.E.C. commissioners have expired. Though President Obama could appoint new members, Senate Republicans would undoubtedly block their confirmation.

 The original Federal Election Campaign Act in 1971 along with its subsequent amendments produced guidelines with the objective of legally limiting campaign contributions. As ways to evade these regulations were found, a further attempt to control runaway contributions, the Bipartisan Campaign Reform Act of 2002 (McCain-Feingold) was enacted. This was subsequently emasculated by the Supreme Court in the Citizens United decision two years ago.

 The impotence of the F.E.C. and indeed any government agency to limit campaign contributions has become more evident (and tragic) since the Citizens United ruling. Special interest money has been surging into so-called Super-PACs and independent organizations, some of them masquerading as social welfare advocates, to run attack ads against political opponents. The Supreme Court held that unlimited contributions by corporations and unions, as well as wealthy individuals, to these so-called “independent” organizations are permissible, based on the concept that political spending was a form of free speech. The use of 501(c)(4) non-profit affiliates by these organizations allows some donors to remain anonymous while they covertly influence elections with vast amounts of money. In those SuperPACs where donors are revealed periodically, it is often after the election has taken place, so that voters are not aware of where the money in support of a candidate came from.

 While the F.E.C. can still monitor and limit contributions that go directly to political parties and candidates, unrestricted spending on campaigns by outside organizations makes this power of scant value. It is possible that SuperPACs and independent groups will collect and spend more during the current election cycle than the candidates and the political parties themselves, as occurred in the media blitz during the recent Florida G.O.P. primary. The ability of these organizations, by utilizing special interest money, to shape politics in America is a grave threat to the democratic process.

 The impotence of the F.E.C. to control campaign spending is another symptom of the dysfunction in Washington. The two parties continue to be unable or unwilling to agree on how to bring the nuclear arms race of campaign financing under control. Unfortunately, overturning Citizens United may take a constitutional amendment or a change in the composition of the Supreme Court, both of which seem unlikely. Until Americans understand the ramifications of Citizens United and pressure politicians to limit the influence of special interest money, spending on federal elections can be expected to escalate indefinitely.

 Resurrecting Democracy

www.robertlevinebooks.com

 

Menendez Relents- Highlights Blue Slipping and Senate Holds

Menendez Relents- Highlights Blue Slips and Senate Holds

                                                Robert A. Levine  1-16-12 

New Jersey Democratic Senator Robert Menendez has relented and is no longer blocking the appointment of Judge Patty Shwartz to the United States Court of Appeals for the Third Circuit. His obstruction was apparently due to Menendez’s antipathy to Shwartz’s long time boy friend, federal prosecutor James Nobile, who had investigated Menendez for possible corruption charges in 2006. Menendez’ blockade came despite Judge Shwartz having been designated unanimously well qualified by the American Bar Association, the highest rating possible. New Jersey’s other Democratic Senator, Frank Lautenberg, praised Judge Shwartz when she was nominated, as did judges and lawyers with whom she had worked. Before he changed his mind, Menendez claimed he had misgivings about Shwartz’s knowledge of constitutional issues.

 This imbroglio highlights the arcane Senate rules and rituals that allows lone senators toblock appointments and hold up legislation. In the case of judicial appointments, home state senators are given the courtesy of certifying the nominee before he or she comes up before the Senate Judicial Committee, a custom known as “blue-slipping.” If both senators from the nominee’s state do not “blue slip” the candidate, the Chairman of the Judicial Committee will not schedule the hearings necessary to make a recommendation to the Senate. And the individual senator holding up the nominee is under no obligation to provide reasons, which can be personal or political in nature. 

Menendez’ resentment of Shwartz’s companion was evidently enough to impede the judicial nomination of someone to the bench who was eminently qualified. This obstruction should be seen in light of the fact that many federal judgeships are now vacant, delaying cases and increasing the workload of the current justices. Some of these vacancies have been the result of the Republicans blocking Obama’s nominees for political reasons, but to have a Democrat responsible for the obstruction was unusual. Menendez’ turnabout and agreement to support Judge Shwartz came after a meeting and lengthy discussion with her, which was obviously a face-saving measure that permitted him to change his mind. He had been excoriated in the media and by other politicians for his stance.

 The glacial pace that is the norm in Washington and the difficulty Congress has in getting important things done are partially the result of vestigial Senate traditions that are unseemly for a modern government. These include the “hold,” the filibuster and pro forma sessions. The Senate “hold” is the practice that allows individual senators to prevent a bill from reaching the floor of the Senate for a vote, with no explanation required. Similarly, senators can block the appointment of officials for government agencies that the president has nominated and sent to the Senate for confirmation. Thus a single senator has the ability to throw a monkey wrench into the gears of government by slowing down or obstructing the entire body of the Senate. As seen with Menendez, the motivation can be personal animosity or revenge, and a senator can poke a finger into the eye of a president from the same party.

 Senators are very protective of the privileges that evolved in past sessions and provide them with inordinate power and stature, making reform difficult. But for government to function efficiently, cryptic Senate rules and traditions that are not legally binding, and impede the institution from conducting its business, must be adjusted in consonance with the new digital world where speed can be critical. Certainly, there is no rationale for the Senate “hold” or “blue slipping” and eliminating them should be part of future reform measures. 

Resurrecting Democracy

www.robertlevinebooks.com

Amnesia or Forgiveness? American Voters' Disregard of Ethics Violations

Amnesia or Forgiveness? America Voters’ Disregard of Ethic Violations

                                    Robert A. Levine    1-11-12

In the current Republican presidential primaries, Newt Gingrich has garnered significant levels of support despite past ethical “missteps.” He was involved in the House banking scandal with bad checks in the late 80s and early 90s. The House Ethics Committee levied a $300,000 fine on him in 1997 for using non-profit organizations for partisan political purposes. He excoriated President Clinton for sexual improprieties while he himself was married and having an affair with a much younger woman. There was also a sweetheart deal Gingrich made with a publisher in 1994 that gave him a $4.5 million advance. The pattern of unethical behavior is clear, yet has been disregarded by many voters.

By voting for them again, Americans repeatedly seem willing to forgive politicians’ ethical lapses, questionable conduct and frank hypocrisy, or are citizens simply amnesic?            

Almost daily, there are revelations about elected officials at municipal, state and federal levels who are guilty of ethical transgressions or frank felonies. Democracy is supposed to act as a check on officeholders who utilize their positions for venal purposes. Periodically, the voters sit in judgment of those they have elected and are able to dismiss them. And those who have committed egregious offenses can be recalled through petitions and special elections. But that rarely happens.

The electorate is far too lenient in the way it indulges ethically-challenged politicians. Sitting officeholders have been re-elected by their constituents while criminal charges were pending and the evidence of guilt was overwhelming. And ethics violations often seem to mean nothing to the voters, even when affirmed by established ethics committees or independent watchdog groups.

In addition to Gingrich, examples abound. Mary Jo Kopechne drowned at Chappaquidick when Democratic Senator Ted Kennedy was apparently driving drunk and went off a bridge into the water. He left the scene of the accident without reporting it and did not go to the police to try and rescue the woman. Yet in spite of his conduct, his constituents in Massachusetts saw fit to send him back to Washington repeatedly.

Republican David Vitter, a family values religious conservative from Louisiana was involved with prostitutes both before and after his election to the Senate in 2004 and was re-elected in 2010 after all the information regarding this became public.

Republican Senator John McCain of Arizona was rebuked by the Senate Ethics Committee for his actions as one of the Keating Five in the late 1980s. McCain and the others interceded with federal regulators of the banking industry on behalf of Charles Keating and the Lincoln Savings Bank after having received hundreds of thousands of dollars from Keating. The senators were able to block the closing of the corrupt bank, costing taxpayers billions of dollars. Yet McCain was successfully re-elected four times afterwards and secured the Republican nomination for president in 2008. 

Democratic Congressman William Jefferson was returned to Congress in 2006 by his constituents in Louisiana after $90,000 in unexplained bills were found wrapped in aluminum foil in his freezer and he was accused of various criminal schemes. He was subsequently found guilty of multiple counts and sentenced to thirteen years in prison          

In the House Banking Scandal from 1988 to 1991, hundreds of Congressmen wrote overdrafts on their House bank accounts. No penalties or fees were assessed and many of those involved were subsequently re-elected.

There were also dozens of Senators and members of Congress who took money from Jack Abramoff to vote certain ways, or to help Abramoff’s clients deal with federal agencies. Both Republicans and Democrats participated in these schemes, among them Senators Harry Reid, Conrad Burns and Byron Dorgan. Congressmen included Tom DeLay, Denis Hastert, J.D. Hayworth, Roy Blount and Patrick Kennedy.

These are only a small fraction of federal legislators involved in unethical activities over the years. Executive branch members have also been compromised, as well as numerous officials at lower levels. But this problem of corruption is not being addressed by voters. They do not hold elected officials to high standards, perhaps reinforcing perverse conduct by politicians.  It is time that Americans became more discerning when they vote and less forgiving of corrupt behavior by officeholders. Character is far more important than a candidate’s ideology. Past actions usually predict politicians’ future performance.

Resurrecting Democracy

www.robertlevinebooks.com

 

Ethics and Politics in a Centrist Third Party

Ethics and Politics In a Centrist Third Party

                                    Robert A. Levine  1-3-12 

“If there be no penalty annexed to disobedience, the resolutions or commands which pretend to be laws will, in fact, amount to nothing more than advice or recommendation.”

                                    The Federalist Papers, Number 15, Alexander Hamilton 

In a recent dialogue in the New York Times on the need for a centrist third party, I listed ethical conduct as one of the necessary hallmarks of this new party. Many respondents asserted that it is not realistic to expect politicians to have ethics guide their actions, since being honest and upright will not help them win elections and would in fact hinder them. They also noted that even if candidates and officeholders in this new party began their careers untainted, politics would soon force them to dirty their hands.

I disagree. The electorate has become accustomed to double-dealing and deceit from politicians and now accepts this as the norm. But if a centrist third party made integrity one of its defining characteristics and showed citizens how this could be accomplished, the party would be applauded and rewarded with votes. Americans are appalled by the corruption and partisanship of the Republicans and Democrats and many of them would be happy to support a new party that emphasized ethics. Integrity, transparency and pragmatism are the ways this new entity could differentiate itself from the current parties.

Legislating ethical reform does not work when legislators are constantly seeking ways to subvert the laws they have enacted and when they value the veneer of respectability more than ethical conduct. From its inception, this new party would have to have a strict code of conduct that its members agreed to observe and that the leadership enforced, unlike the Republicans and Democrats who generally ignore ethical lapses. Self-policing and transparency from the party would ensure integrity, particularly if there were onerous penalties for deviant behavior. Just as a culture of corruption in an organization can spawn more corruption, a culture of integrity is likely to foster ethical behavior.

To demonstrate its commitment to ethics, this fledgling party could utilize a written Oath of Conduct that mandated a different system of financing political campaigns. Candidates would agree not to take payments from any groups or individuals personally, but would direct all donations toward designated party administrative entities. (The funds could then be distributed anonymously according to the donor’s wishes.) Party members would also eschew political action committees and would never use political funds for personal gain. They would promise as well not to accept meals, trips, vacations, fact-finding junkets, or tickets to any events from individuals or organizations that had an interest in current or future legislation or executive actions. Any party member elected to office, appointed to an executive position, or serving on the staff of an elected or appointed official would also agree not to work as a lobbyist for five years after he or she left office. Officials from this party would be free to meet with lobbyists or representatives of special interests as they would with any constituent, but the discussions would be open and they would not accept any favors or funds. (This would not be unilateral disarmament as funds would be solicited from those who believed in this new party’s principles, with small donations also collected over the Internet.)

To give the Oath teeth, candidates and officeholders would sign the document and confirm that they understood its intent, agreeing to forfeit a monetary sum if their pledges were not honored. The amount of the penalty would be set by a party ethics board along with the details of the contract, but would be severe enough to dissuade members from abrogating the agreement. If members did not comply with their contracts and did not pay the penalties, they could be sued by the party. To prevent deceit, members would be required to list their assets with the party if they held an office or government post. Every two years, this would be updated as a further guarantee of financial rectitude. The Oath of Conduct and the willingness of party members to list their assets would prove to the public that this new party was serious about limiting corruption and conflicts of interest. The use of the Oath might seem draconian to some observers, but only robust measures will remove the stain of ethical laxness that most citizens associate with politicians.

Though there might be cynicism regarding this attempt at ethics reform based on past failures, a centrist third party could change the political dynamic in America with self-policing and transparency.

Resurrecting Democracy

www.robertlevinebooks.com

More Congressional "Chutzpah"

More Congressional “Chutzpah”

                        Robert A. Levine  12-8-11 

Congress has done it again, giving their members special consideration other Americans can only dream of. For some time now, Congressional insiders have been able to enrich themselves on the basis of knowledge not available to the public. (Washington officeholders have access to a treasure trove of economic data not available to ordinary citizens.)

 After prime time exposure of Congressional insider trading depicted on CBS’s 60 Minutes recently, there was a sudden moment of understanding by many members of Congress and Senators that public anger demanded a change in standard Washington behavior. It was assumed that legislation would be passed to prohibit Congressional members and staffers from using privileged information to engage in stock trading as is the law of the land for the general population.

 Actually, a bill to ban insider trading by office holders in Washington was introduced seven years ago called Stop Trading on Congressional Knowledge (STOCK) Act by Representatives Louise Slaughter and Brian Baird, both Democrats. However, since it was introduced, this measure has languished in Congress irrespective of whether Republicans or Democrats had majorities, with members of neither party apparently wanting to terminate a potentially lucrative practice. Then, Congressmen and Congresswomen suddenly “got religion” when their insider trading was prominently disclosed, with the story kept alive by the media amid a public outcry.

Unfortunately, Congressional shame and remorse has evidently been short-lived. The House Financial Services Committee Chairman, Alabama Republican Spencer Bachus, on December 7 postponed a vote on legislation that would have proscribed insider trading. After meeting with other House Republicans, he claimed that “a significant number of members of the committee on both sides of the aisle have indicated a desire for additional time to study the issue.” This ignored the fact that the bill to end insider trading had over a hundred co-sponsors and overwhelming public support. Why should we not be surprised by this action? Over the years, it has been shown that Congressional insiders who trade in stocks outperform the market by about 12% annually, a better result than most hedge fund managers. Obviously, the access to privileged information that members of Congress and their staffers are able to acquire has been very profitable for some of them and it is easy to comprehend their reluctance to give it up. And Chairman Bachus was identified as someone who traded in stock options, having done so after having received a Treasury report in 2008 focusing on problems with the economy.

Is it any wonder that Congressional approval ratings are currently in single digits and that the public views politicians with such disdain? Their personal goals and ethics are not aligned with those of other citizens, and they can enact legislation (such as banning insider trading by ordinary Americans) that does not necessarily apply to them.

Chutzpah is a bipartisan characteristic. It is a Yiddish term that denotes acts or conduct of unusual effrontery, arrogance, brazenness, or hypocrisy in disregard of normal standards of behavior and other people’s sensitivities. Members of Congress certainly are imbued with an inordinate amount of chutzpah. On the other hand, the American electorate lets them get away with it.

 Resurrecting Democracy

www.robertlevinebooks.com