Campaign Finance Reform

Making Super PACs Illegal.... How?

A new Washington Post- ABC News poll shows that almost 7 out of 10 voters believe that super PACs, the independent expenditure only committees created in the wake of the Supreme Court’s disastrous Citizens United decision, should be illegal. Super PACs are not responsible for all problems with American democracy, however, they do amplify those troubles so it is no surprise that the public is crying out in opposition to them. Unfortunately, due to the Court’s backwards interpretation of the first amendment, we cannot legislate away super PACs today. However, there are some very important steps that every level of government – from your city council to the White House - should take right now to mitigate the impact of super PACs before the 2012 election.

There are three main problems with super PACs: unlimited money, corporate money, and secret money.

Unlimited Money: Super PACs are allowed to raise unlimited funds from any given single source, which allows corporations and the ultra wealthy to directly translate economic success into political power. PennPIRG and Demos’ recent report Auctioning Democracy found that 96% of all super PAC funds came in contributions of $10,000 or more from just 1,096 sources. Forget the 1%, that political elite is actually the equivalent of .000351% of the population. In other words, unless you have $10,000 stashed away in a cookie jar to give to a political campaign, your contribution may be severely minimized.

The "Dirty Thirty" Corporations that Spend More on Lobbying than Taxes

Taxes and democracy are two oft-maligned activities that Americans dearly depend on. "Indeed it has been said," noted Winston Churchill, "that democracy is the worst form of government except all those other forms that have been tried from time to time." He might just as easily have been talking about the responsibility of paying taxes.

Two years ago the Supreme Court's misguided Citizens United decision struck down long-standing Congressional limits on the political power of large corporations by vastly expanding the legal metaphor that "corporations are people." Now there is fresh evidence that corporate influence over Congress makes it easy for those same corporations to avoid their civic duty of paying taxes.

A new report identifies thirty Fortune 500 corporations that pay less in federal income taxes than they spend on federal lobbying.

You read that right. These companies - dubbed the "Dirty Thirty" - exploited loopholes in the tax code so aggressively that all but one of them enjoyed a negative tax rate over the three year period of the study, while together spending nearly half a billion dollars to lobby Congress on issues including tax policy. Instead of paying for the public structures such as roads, police and education which make their profits possible, they collected $10.6 billion in tax rebates from the federal government. Had these thirty companies paid the statutory 35 percent corporate tax rate, the Treasury would have collected an additional $67.9 billion.

Every dollar in taxes avoided by these Fortune 500 companies is a dollar that must be cut from public programs, added to the national debt, or paid in the form of higher taxes by ordinary taxpayers.

The companies in the Dirty Thirty include household names like General Electric, Verizon, Mattel, Wells Fargo, Dupont and FedEx. There's no avoiding how the story at each of these companies represents a mockery to both our tax system and our democracy.

Caperton vs. Massey Coal and Pennsylvania's elected judiciary

So you would almost have thought it didn't happen, but there was a major US Supreme Court decision about the problems that arise when the judiciary is too indebted to political contributors - or, perhaps more importantly locally, "other electoral assistance". For folks who have not followed the case, basically a large West Virginia coal company attempted to force a competitor out of business by buying all the land around its competitor and blocking road access to their holdings. Courts ruled the action illegal and awarded a $50 million judgement to smaller competitor. Massey then spent $3 million dollars to help elect West Virginia Supreme Court of Appeals Justice Brent Benjamin. Benjamin later voted unsurprisingly to reverse the $50 million judgment against Massey. His election to the bench turned out to an investment with a $47 million direct profit to Massey Coal.

Dougherty and Local 98 Begin to Cooperate with the Board of Ethics

If you read YPP semi-regularly, you know that John Dougherty and his union (Local 98) have been trying to overturn Philadelphia and Pennsylvania (and really, all of the US) campaign finance law. A couple weeks ago, one reason why they were trying to hide how they spent their cash became a little clearer.

It is not clear whether they are dropping their objections to our campaign finance laws, but this is promising:

...Despite a months-long legal battle, Ethics Board Executive Director said during a meeting today that on Monday a union official contacted him directly and invited him to come to the union's Spring Garden Street offices and review the vouchers. Creamer, and another staffer, did that for two hours yesterday.

Today - actually, during the ethics board meeting - two yellow envelopes containing still more vouchers arrived at the ethics board's Sansom Street offices.

So what do the vouchers reveal? Creamer won't say because he's not done looking at them. But he did say: " We hope their present level of compliance and cooperation will continue."

Good to see.

"Ripped from the headlines" - The nonstop drama of campaign finance law

Against the backdrop of Local 98's constitutional lawsuit to overturn the city and state's campaign finance disclosure requirements (oral arguments on the motion to dismiss were heard in federal court last week) and ongoing wrestling over enforcement (see, e.g., Tommy St. Hill's 'stolen' laptop), this Thursday the American Consitution Society and Cozen O'Connor's Adam Bonin are hosting a talk on the future of campaign finance reform.

Can Campaign Finance Reform Actually Work?

"Post-Watergate reforms of the federal campaign finance system appear to be threatened by increasingly expensive campaigns and the usage of independent organizations, like 527's. Here in Philadelphia, we have just gone through our first Mayoral election governed by campaign finance limits. What system will actually work to reduce the influence of amassed wealth on the political process, is reform even necessary, or do we need to rethink federal and state campaign finance systems from scratch?"

We are joined by two guests with unique perspectives on this topic. In over thirty years of practice, Robert Bauer has represented national party committees, candidates, political committees, individuals, federal officeholders, corporations, trade associations and tax-exempt groups on various issues of campaign finance law, including serving as counsel to two presidential candidates. Through his work on The Committee of Seventy, Philadelphia's principal political reform organization, Zack Stalberg has worked to make government more efficient, fair and transparent by promoting reforms to demand ethical conduct of public officials and promote governmental efficiency.

Featuring:
Robert Bauer, Partner and Firmwide Chair, Political Law Practice, Perkins Coie LLP
Zack Stalberg, President and CEO, The Committee of Seventy

Date: Thursday, June 5, 2008
Time: 5:00pm - 6:00pm
Cozen O'Connor, 1900 Market Street

There is no cost to attend this event. CLE credit availability pending (1.0 hrs). Cost of CLE credit will be $25. Contact: Adam Bonin, abonin@cozen.com.

I'm going, because I am a dork. And because I really want to but have never met Zack Stalberg. And because it's good to learn about campaign finance law before the current Supreme Court makes it a historical memory.

YPP-er Taking on Johnny Doc and Saving Campaign Finance

Last week, the Ethics Board and the City answered John Dougherty’s attempt to destroy Pennsylvania campaign finance law. As I said way back when, I have little doubt that Dougherty will (again) lose in Federal Court, because Federal District Court judges aren’t prone to overturning the Supreme Court. So, it was pretty cool to read a brief for the Ethics Board, clobbering George Bochetto, et. al. Even cooler was that one of the authors of it was someone many us know… (See the IBEW complaint here, and the Ethics Board response here.)

Doc will lose in Federal Court. In fact, his case will probably be dismissed without ever getting to trial. However, things in Court go slowly, and that was likely their motivation to begin with, right? Just delay showing how ol’ Johnny Doc spends his money till he is done winning in the State Senate. Great.

Of course, once you get to an ever more conservative Supreme Court, who knows exactly what would happen. And, if Doc gets Pennsylvania campaign finance destroyed? So be it. Campaign finance might be important, but getting John Dougherty into the State Senate is paramount, baby!

The funniest thing about the IBEW complaint is in just how bad it is. Generally, for example, when you are writing a brief in Federal Court, you would mention all the really important cases. But, the IBEW complaint actually just skips over cases as if they don’t exist. Its kind of hilarious. The other thing you generally do in briefs is to note a rule that the Supreme Court has given (in this case for PACs), and then relate that rule to your case. But, they don’t do that either, and instead don’t seem to understand the difference between PACs, individuals, corporations, political parties and candidates.

Shockingly, the Ethics Board noticed the ‘deficiencies’ in Doc’s argument, and took them on, and will win big.

But, the best part of the Ethics Board response is that taking away all the legal standards and precedent that is ignored, they perfectly summarize what this case is really about: John Dougherty thinks the only person who should be able to tell him what to do is… John Dougherty:

For its part, COPE does not dispute that these are substantial government interests – nor could it, given that the Supreme Court endorsed them in Buckley and has reaffirmed that ever since. Instead, COPE maintains that it should get to decide for itself whether a particular expenditure is for express advocacy or issue advocacy, with the latter wholly exempt from state and local and (since the statutes are in relevant part identical) federal reporting and disclosure rules. The argument advanced by COPE, however, would put the fox in charge of the henhouse, resting the decision to report and disclose solely in the discretion of those with reasons to evade disclosure.

......

I am listening to the WHYY debate now between Doc, Larry Farnese and Anne Dicker, and Doc was asked about a number of things: the FBI searching his house, the conflicts of interest, etc. Doc's response is what Doc's response almost always is when he gets asked questions that he doesn't like: That he does a lot of good things. He does, of course, do plenty of good stuff- charities, etc. He was a little more forthcoming than he generally is, but... to me, it just is not nearly enough, and doesn't answer what we need to know.

Stop Me If You Have Heard This Before: John Dougherty Tries to Kill Campaign Finance Laws

Today, my favorite local politico, John Dougherty, filed suit against the City, the Board of Ethics, the Attorney General and others, attempting to overturn a piece of Pennsylvania's very limited campaign finance laws. (See the complaint he filed here.)

John Dougherty, suing to overturn campaign finance laws? Hey, at least this time he is not just suing Philly! This time, he is going after the State, too. Specifically, he is suing in Federal Court, asserting that it is unconstitutional to force his IBEW Committee, COPE, to disclose how it spends its cash to influence elections.

Basically, Doc only wants to have to disclose when COPE specifically advocates for him a candidate who is running for office. Why? Because, when he has a pile of cash in his committee, he would like to keep it nice and secret, so long as he does not specifically mention his a candidate's name.

Gosh, it sure is amazing how John Dougherty becomes such a stanch defender of the first amendment every time he is running for office.

We will have much more on the specifics of this case, soon. But, here are a quick couple of thoughts:

1)I suppose Doc wanted to make sure that in his battle with the indicted Vince Fumo, progressives don't cast any votes for him. Mission accomplished.

2)Dougherty, the 'progressive' who backed Rick Santorum, joins other stalwarts such as Wisconsin Right-to-Life, and ultra-right wing Kentucky Senator Mitch McConnell in trying to get Federal Courts to remove limits on how money is spent in our elections. I don't know if the suit will be successful- I doubt it- but there is no question that under the new Supreme Court, campaign finance laws are in danger from a concerted right-wing effort, as was shown in in the recent Wisconsin case. Congrats, Doc, on joining the movement. Next you can tell us why we need a flat tax, to privatize social security, and to invade Iran.

3)What, exactly, does Doc have to hide? I mean, it would seem that a guy running for Senate who also controls a political committee with tons of cash would probably want to allay fears that he is doing anything underhanded. But, hey, when you want things secret, you want them secret.

More soon.

Update:

The story is now in the Inquirer, and it is actually worse than I thought:

"It's a very, very important and fundamental First Amendment issue in this country," Bochetto said of the right to advocate for a cause in an election.

J. Shane Creamer, chairman of the Ethics Board, said he had not seen the lawsuit late yesterday afternoon but took issue with the type of spending Bochetto was contending should be exempt from reporting.

"We're talking about T-shirts and hats that they purchased that said 'Candidate X for City Council,' 'Candidate X for Mayor,' " Creamer said.

Bochetto said that even expenditures on items that are that specific are not subject to public scrutiny if they were not done with input from a particular campaign.

In other words, John 'the progressive' Dougherty is actually suing in Federal Court to effectively overturn the Supreme Court's decision in 2003 (FEC v. McConnell), which upheld the McCain/Feingold ban on soft money, regulated PAC's, etc.

Normally, that wouldn't be a concern and it means that it is overwhelmingly likely that he will lose initially- Federal District Judges aren't prone to ignoring Supreme Court decisions. However, and this is the catch: The newly far-right court has indicated that despite their very recent ruling in McConnell, they might be willing to hear it again, given their new progressive justices, Sam Alito and John Roberts.

So, with any luck (and this is largely irrelevant for this race, because Supreme Court appeals would take a couple years), when the far right talks of heroes in the fight to get unlimited money back into politics, our very own John Dougherty just might join Mitch McConnell and others as a true, blue hero.

Councilman Kelly, the FBI, and Campaign Finance Limits

Well Councilman Jack Kelly is in the news again for factors unrelated to his recent razor thin electoral win. Federal investigators are looking at alleged deals in his office involving two brothers who are real estate developers, large scale landlords and coincidentally friends and large campaign contributors to the councilman. As is always the case in such instances, Kelly is providing "full cooperation" with Federal investigators.

The case hinges around questions about the connection between Kelly's chief of staff, Christopher G. Wright, and the two brothers, Hardeep and Ravinder Chawla. According to the Inquirer , Wright recieved a $1000 Christmas check from the Chawla brothers.

City's Campaign Finance Law Survives

On Friday, the Supreme Court ruled that the City's embattled (and celebrated?) campaign finance legislation is legal under the PA Constitution. With the defeat of the Fattah-Dougherty challenge, we no longer have to worry about whether we will have unregulated money back in our elections.

When the General Assembly rewrote Pennsylvania's campaign-finance laws in 1978, it was silent on the issue of contribution limits. In its recent decision, the state's top court basically had to consider what the Legislature's silence meant.

Did it mean the state was prohibiting campaign-contribution limits in any Pennsylvania races or did it leave the law open for municipalities to enact their own limits, as dozens of municipalities have done across the country?

In its majority opinion, written by Justice Max Baer, the state's top court ruled that it cannot be inferred that the state General Assembly's silence meant it was prohibiting Philadelphia and other cities from enacting their own campaign-finance ordinances.

Now, before the next municipal election season heats up, we should think seriously about improving the law. For example, there is the whole overarching issue of public financing of elections... Maybe we can use the District Attorney race as a pilot program to evaluate it?

Within the law itself, there are additional improvements, too. For example, in the federal law, donation limits are in place for each election cycle. For the City law, they are in place for each calendar year. We should align ourselves with the federal law. And, if there is more concern about the Tom Knox self-funding, we could change what happens to campaign contributions when someone self funds, by letting them triple, instead of double.

Finally, in general, it is good for believers in local control anytime the Court sets a precedent that when the State does not speak about an issue, Philadelphia has the power to act.

John Dougherty and Chaka Fattah Still Aiming at the City's Campaign Finance Law

Marcia Gelbart reminds us that today in the PA Supreme Court, arguments are being held to determine whether or not Philadelphia has the power to make its own campaign finance laws.

I have said a lot about this, for a long time.

But, let's just review real quick:

1) If you care about the City, and believe in its power to govern, it is probably not a good idea to argue that the City should not have power to do things like this. These kinds of arguments spill into the State taking away our power to regulate a lot of different areas (like, billboards/zoning, guns, smoking, education, casino placement, etc). These things don't happen in individual vacuums. They all contribute to the idea that anytime it feels like it, the State should take away our power to self-govern. To have two people who wanted/want to be Mayor at some point still arguing this is bizarre.

2) Lessening the influence of big money from Philly politics is a good thing. That is what this bill does, despite some imperfections that should be fixed.

Sigh.

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