Democracy's Daily Posts from

2008-01-15T16:17:00.000-08:00

Senator Ensign: Show us the Money
I was in Reno, Nevada yesterday with former Nevada Common Cause Board Chair Jim Hulse and a group of activists who were calling on Senator Jim Ensign to explain his obstruction of a bill to require U.S. Senators to tell us who they are taking money from -- now.

Watch a video of our event here

Currently, Senators file campaign finance disclosure reports on paper. The paper reports are scanned into a computer, printed out, and then retyped to be placed on the Federal Election Commission website. This process takes about four months and costs about $250,000 in taxpayer dollars.

Senator Ensign has objected to a vote on the bill. He says he would like to attach an amendment that would require non-profit groups to disclose their donors if they file an ethics complaint against a sitting Senator. This amendment is controversial -- and appears more to be a ploy to prevent the electronic disclosure bill from passing.

This bill had been held up by an anonymous Senator for months. But then the Senate rules changed to forbid "secret holds." At that point, Senator Ensign stepped up to offer his amendment. See the real footage from the Senate as Senator Feingold explains the situation

My question for the Senator is this: "On whose behalf are you stopping timely disclosure of campaign finance information? Are there constituents from Nevada who have asked him to block this bill?"

For past Commonblog coverage of this issue, go here.

2007-12-12T10:29:00.000-08:00

Ameriquest Shows How Big Money in Politics Hurts Real People

When I head home for the holidays, my relatives sometimes have a hard time grasping what I do as a "reformer" and how that impacts their daily lives. This year, I'll point them to a recent story in the Seattle Times that describes how 96-year old Francis Taylor is about to lose her home of more than 40 years when banks foreclose on loans she took out from the now defunct lender Ameriquest.

After inventing the "sub-prime" mortgage industry, the collapse of which now threatens to throw the country into a recession, Ameriquest has gone into bankruptcy and sold its remnents to Citifinancial. The company settled a lawsuit with 49 states recently for $325 million out of claims of predatory lending. They also recently paid a fine for violating the do not call list. Greed has no bounds, certainly not privacy in your own home (that they plan to take away from you.)

The sad thing is, things didn't have to work out this way. Years ago, consumer advocates saw the crisis coming and urged state governments to put stricter regulations in place. Today's Sacramento Bee reminds us how the California legislature failed to enact reforms back in 2001. Ameriquest and others said this would make it harder for first time homeowners to buy their first abode, but it turns out that almost all of Ameriquest's loans went to existing homeowners -- many of whom the company probably knew could not make the payments and would end up losing their houses.

But rather than casting a skeptical eye toward Ameriquest's arguments, California legislators went to Hawaii on trips financed by Ameriquest. They ate $170 worth of cookies, supplied by Ameriquest lobbyists.

Common Cause has documented here and here how the mortgage industry spent millions lobbying Congress and doling out campaign contributions to try to get a federal law passed that would have pre-empted states from protecting folks like Francis Taylor. One small, but telling part of the story is how Ameriquest owner Dawn Arnall bundled hundreds of thousands of dollars for president Bush's campaign and was then rewarded by being made ambassador to the Netherlands. No wonder many observers are saying that the new mortgage relief plan announced by the White House appears more aimed at bailing out the industry and preventing more sweeping reforms than at helping strapped homeowners.

The good news is that there are things we can do to make this better. Congress, to its credit, recently enacted ethics legislation to cut down on lobbyist funded trips. California legislators could do the same, but it would mean giving up those nice cookies in Hawaii.

Even more significantly, congress and the states could enact full public financing of campaigns as several states have now done. That would mean that politicians wouldn't have their hands outstretched to take campaign cash from the mortgage industry. Had they done so a decade ago, Francis Taylor might still have her house, and the house you live in might now be going down in value as the entire county's real-estate market goes down the tubes.

All too often, business groups fight political reforms that would weaken their grip on decisionmakers. But as the Ameriquest, and others like Enron who have gone before them (not to mention the whole Savings and Loan crisis -- remember that?) when greed goes unchecked by a government that looks out for the common good, we all wind up suffering.

2007-12-05T19:52:00.000-08:00

I could not make this up if I tried.

Yesterday, the Public Policy Institute of California (PPIC) hosted a panel discussion among former and current elected officials in California. The topic was how to improve public confidence in the legislature. The PPIC has found in recent surveys that only 34 percent of Californians approve of the legislature's performance.

Former Senate leader John Burton said that the problem was that politicians don't really get to know each other. As reported in the Sacramento Bee, he told a story about he and another member bonded while eating diner at a lobbyist sponsored event and watching a topless dancer. These opportunities came to an end upon passage of a reform measure that prevented lobbyists from spending more than $10 per month wining and dining legislators.

"You find out your kid plays Little League baseball, you find out that your daughter's in ballet, you find out you have things in common," Burton said. "But then something called Proposition 9 came in and said nobody could buy anybody anything more than $10 per month per person."

Former Governor Pete Wilson said that legislators don't get along well because they are too sober:

"It may have something to do with the fact that when John, Willie and I were all in the Assembly, there was a great deal more drinking in the Legislature,"

Former Assembly Leader Willie Brown said that the problem is with reforms that put an end to backroom deals and made government more open and accountable:

"Unfortunately, much of that is done now where everybody in the world can see," Brown said. "When Randy Collier was the chair of the Senate Finance Committee and I served as the chair of Ways and Means, we had a private arrangement of the conference committee writing the budget. ...

"Some would say reforms set in the early '70s where they started requiring open conference committees, where they started requiring recorded votes, where they started requiring a number of things that inhibits good judgment," he added. "The results were that you now had this clear and present danger out there trying to operate and produce a result where every member is trying his or her best to protect his or her relationship with his or her constituency, and the results were stalemate or gridlock."

Imagine that. Legislators are more concerned about protecting their relationships with their constituents than they are at cutting back room deals with other politicians over a drink and a cigar.

It may be true that one reason for public dissatisfaction with the California legislature (as well as Congress) is that nothing seems to get done other than partisan bickering. It might even be the case that when exposed to the glare of sunshine, legislators are less likely to cut compromises that might sell their constituents short and that this leads to more gridlock.

But the solution to gridlock is not to allow lobbyists to grease the skids for special interest legislation to flow more easily. It is to create an elections process that allows voters to remove legislators who can't get things done, rather than further insulating them.

Former Assemblymember Jim Brulte had a better idea. Wouldn't it improve the legislatures standing with the public if they gave up the self-interested task of drawing their own political districts? That would be one step toward a more functional legislature.

2006-11-30T20:42:00.000-08:00

Derek Signs Off

This will be my final entry to Democracy's Daily Posts. After three years since founding TheRestofUs.org, I'm moving on to tackle new challenges, including writing a book titled "The Recall's Broken Promise-- How Big Money Still Runs California Politics." I'll also be consulting to democracy groups on various campaigns and raising my second daughter, who is due in 3 weeks.

Thanks for all the tips and comments that readers have generated over the years. You can contact me in the future at cressman(at)PoplarInstitute.org.

2006-09-12T08:13:00.000-07:00

Independent Expenditures Explode
Over the past year, California has seen a tremendous increase in so-called political independent expenditures. This is where a powerful donor spends money to praise or trash a candidate with their own ads or mailings rather than giving a contribution to the candidate to spend as they wish. This rise in independent spending is in part a reaction by donors to recently implemented limits on how much they can give a candidate directly. However, some of the independent expenditures we're now seeing dwarf the amounts that donors used to give to candidates even when there were no restrictions in place.

I've been asked to testify about independent expenditures before the California Assembly Elections Committee on September 12. You can read my complete testimony here, but this is a brief overview of what I'll be saying:

The underlying concept of one person, one vote, that promises political equality and gives legitimacy to majority rule is threatened when a few donors fund massive independent expenditures. The U.S. Constitution’s guarantee of a republican form of government erodes when elected representatives are accountable to a relatively small number of narrow interests as opposed to the public at large. If a handful of people have a louder voice than the rest of us, then the electorate does not have the balanced information from all perspectives that it needs to make an informed decision and the goals of the First Amendment are undermined.

Some examples:

1) Independent expenditures allow a few fat cats to unduly influence election outcomes. In the 2006 primary election for governor, developer Angelo Tsakopoulos and his family contributed $8.7 million to a committee set up by the firefighters union called Californians for a Better Government. This committee then ran ads that expressly promoted Phil Angelides for governor. It is likely that this expenditure played a decisive outcome in the race.

2) Because large expenditures unduly influence elections, they also unduly influence legislation. Also in the 2006 primary election, car dealers financed an independent expenditure campaign to promote Alex Padilla for the California Senate. Mr. Padilla was running against Cindy Montanez, who as an Assemblymember had sponsored a car buyers’ bill of rights that gave consumers two days time to return used car. The car dealers thus identified Ms. Montanez as detrimental to their financial self-interest and spent at least $122,000 to promote her opponent. While the legislature may occasionally do stupid things, legislators themselves are not stupid people. Legislators are smart enough, I submit, to figure out that if they too stand up to the car dealers that they might fall victim to a large independent expenditure in a future election. Interestingly enough, as the 2006 legislative session ended Senator Torlakson gutted a bill that had previously dealt with air quality issues and replaced it with a last minute increase in vehicle document preparation fee that car dealers charge customers from $45 to $55. This favor to the car dealers is like raising the car tax by $10, only the money doesn’t even go to the state to cover public expenses but instead goes into private interests’ bank accounts.

3) Because large expenditures unduly influence elections, they can also unduly influence other government decisions. This summer, while they were negotiating a contract with Governor Schwarzenegger, the prison guards’ union publicly announced that it might spend $10 million on independent expenditures to influence the upcoming governor’s election. Governor Schwarzenegger knows that the guards’ track record of damaging Diane Feinstein and aiding Gray Davis in previous elections demonstrates that they are a powerful interest. This threat of an independent expenditure completely undermines Governor Schwarzenegger’s pledge not to accept contributions from public employee unions that he is negotiating with.

4) Because corporations can make large expenditures to unduly influence elections, they give inappropriate political advantage to citizens who organize their interests through business corporations. This spring, the U.S. Chamber of Commerce financed ads that promoted Arnold Schwarzenegger’s accomplishments as governor. Because these ads avoided the magic words of telling viewers to vote for Schwarzenegger, the Chamber did not have to disclose the funding sources, although clearly the Chamber relies heavily on contributions from business corporations. Some media reports estimate $10 million was spent. It is wholly appropriate for citizens who want to support a pro-business regulatory climate in California to make political contributions as individuals and to form political associations and organizations to pool their contributions together. But it is inappropriate for these individuals to make contributions or expenditures to influence elections using money from the corporate treasury, which comes from customers who are making an economic purchase from the corporation but who do not necessarily support the corporation’s political agenda.

Fortunately, there are several options available to California to deal with these problems of massive independent expenditures.

1) Repeal contribution limits for candidates. This non-solution tends to be a favorite approachy among many officeholders who would much prefer to have big money flowing into their own campaigns instead of independent committees who they cannot control. Even when a committee is trying to help a candidate, their message and tactics may not fit well within the overall strategy of a candidate and may in fact be counter-productive. Plus, it’s just downright uncomfortable to have other folks out there talking about you. But, some discomfort is par for the course when you offer yourself for public service. It’s a noble act to be willing to serve, but even nobler to have the confidence that voters will support you even when critics assail you through independent expenditures. Raising or eliminating contribution limits to candidates is akin to having the state start selling crystal meth at a discount in order to prevent private drug dealers from selling it. The donor influence is still there, both on election outcomes and on legislation, only it is more corrosive and less obvious.

2) Ban corporate independent expenditures. For the last century, federal law has banned corporate contributions to federal candidates. It is high time that California caught up with this basic reform. Courts have long upheld these rules. Further, in the case Austin v Michigan Chamber of Commerce, the Supreme Court of the United States upheld a complete ban on independent expenditures by corporations precisely because they can accumulate vast sums of wealth that bear no relation to political support for the corporations ideas. Proposition 89 on this November’s ballot would ban corporate expenditures to independent campaigns to $1000.

3) Place similar contribution limits on independent committees as exist for candidate committees. California’s current system of unlimited contributions to independent committees is an open invitation to evade the candidate contribution limits. Federal law applies a $5000 limit on contributions to a political action committee that conducts independent expenditures. Congress is currently considering legislation that would extend these limits to so-called 527 committees that promote, support, attack, or oppose candidates but currently accept unlimited individual contributions. Congress has already required these committees to disclose their donors and banned corporations from funding TV ads that attack or promote candidates near elections even if they fall short of an independent expenditure. While California is leading the country in tackling global warming and other issues, we are embarrassingly far behind the federal government and other states in dealing with this problem of independent expenditures. Prop 89 would place a $1000 limit on contributions to independent expenditure committees.

4) Provide public funds to match independent expenditures. Disclosure, contribution limits, and corporate bans would go a long way toward reducing the undue influence of big-money independent electioneering. But they would not eliminate the problem. Just as current court rulings allow a wealthy individual to spend an unlimited amount on their own candidacy; they also allow a wealthy individual to spend an unlimited amount on their own independent expenditure. So, California could prevent Angelo Tsakopoulos from making a large contribution to the firefighters’ independent committee, but it could not prevent Tsakopolous or anyone else from unlimited spending as an individual and unduly influencing election outcomes. California could make things more fair by ensuring that candidates who are targeted by massive independent expenditures can respond. This session, the Assembly wisely passed AB 583, which would have provided candidates who entered a binding system to accept no private contributions would receive a limited amount of public funds to respond to independent expenditures that attacked them or promoted their opponent. Think of it as opening a free methadone clinic next to every drug dealer. Unfortunately, the Senate did not consider the bill. Proposition 89 contains similar provisions for matching funds and offers an immediate, and workable, solution to the challenges posed to democracy of large independent expenditures.

2006-09-05T13:01:00.000-07:00

California Welcomes Future Abramoff Scandals
The Los Angeles Times gets kudos for keeping a watchful eye on the California legislature as it conducted all sorts of mischief in the final hours of the legislative session last week. This story details a bill pushed through after midnight on the last day of business that will allow politicians to raise money from lobbyists and other interests for so-called officeholder expenses accounts.

An officeholder expense account is basically a slush fund that a politician can use to travel, eat fancy dinners, give gifts, or make contributions to charities in their district that will make them more popular people. If these things were truly necessary to do their jobs, they could ask their employer (that's us, the voters) to pay the tab. But instead, they want to hit up special interests for yet more cash to cover the bill.

Here is a link to the summary of the bill, which includes links to the legislators who voted to give themselves this privilidge (it passed the Senate 36-0).

This bill amends the California Political Reform Act, the basic rules for money in CA politics. Prop 34, which passed in 2000, amended the PRA to say this about campaign contributions raised after a campaign is over:

§ 85316. Receipt of Contributions After the Date of the Election.

A contribution for an election may be accepted by a candidate for elective state office after the date of the election only to the extent that the contribution does not exceed net debts outstanding from the election, and the contribution does not otherwise exceed the applicable contribution limit for that election.

This little piece of law effectively prohibits officeholders from continuing to raise campaign money once in office. Now, most politicians get around this by starting a new campaign to run for re-election immediately after winding up their old campaign. This means that they get to keep raising money round the clock, and can keep using their campaign account for travel and meal perks if they want to. But, if you are a termed out politicians, like Kevin Murray (who sponsored this bill), you can't just run for re-election so it's harder to keep raising your slush fund.

The right solution would be to prohibit all officeholders, not just termed out ones, from raising slush fund money. Really, we should prohibit them from raising any money at all until the year of the election -- there's just no need for permanent campaigns. Instead, the legislature opted to let all politicians, even termed out ones, raise money for expenses that are questionable at best.

Powerlobbyist Jack Abramoff got himself into trouble for (among other things) illegally arranging travel junkets for members of congress. Abramoff also used a restaraunt he owned to wine and dine politicians. California may make it easier for the future Abramoff's of the world. They'll simply be able to cut a politician a check, which can then be used for travel and meal perks at the legisltors fancy.

2006-08-30T10:39:00.000-07:00

Dodging Disclosure
Reporter Brian Joseph of the Orange County Register has uncovered a disturbing trend: politicians are now routinely accepting pledges for contributions at their fundraising event rather than demanding checks ahead of time to come in the door. (see his story here.)

What's the problem, you ask? Well, this in-effect creates a system where donors can signal their support for a legislator, but wait to hand over the check until later. This creates two potentially troubling situations:

1) At a minimum, this arrangement delays disclosure of the contribution. California law has among the tightest disclosure requirements in the country. All large contributions must be reported within 24 hours of receiving them once you are within 90 days of an election. But, neither the politician nor the donor has to report the pledge. As we are nearing the end of the California legislative session, special interest swindles are thick in the air. So are political fundraisers. But, it becomes impossible to track which lobbyists are giving contributions to legislators at the same time they are asking those legislators for special treatment for their clients, because the check will come in long after the session is over.

2) This secondary market of pledges instead of checks actually creates a system where the donor can wait to see if a legislator does what they want before they make good on their pledge. A politician can figure out how they should vote on an issue by hosting a fundraiser, seeing who makes pledges (possibly among competing interests), and then quickly calculate what position would earn them the most campaign cash. All this can happen, mind you, without any explicit agreement by donor or politician to exchange a vote for a contribution.

The practice highlights one of the weaknesses of relying upon disclosure as a way to combat corruption from campaign contributions. The disclosure model presumes that large contributions can be corrupting and that the best way to guard against this is to require all contributions to be reported so that the media and the public can then see if there are any connections between donors and actions by legislators. Setting aside the impracticality of monitoring these conflicts among thousands of donors and thousands of legislative acts, this pledge system shows how easy it is to evade disclosure laws.

The better solution is to set tougher limits on what big donors can give to politicians. Better yet would be to provide candidates a system where by they would be prohibited from accepting any contributions if they instead agreed to a rigid system of public financing for their campaigns.

Opponents of these hard-hitting campaign finance reforms often argue that they can undermine disclosure because donors seek other ways of helping politicians rather than giving them money directly. For instance, donors give money to bogus front groups which run ads praising or trashing a candidate, but don't actually contribute to them. The solution, of course, is to require similar disclosure and limits on those front groups. But, as this example shows, donors can find may ways to avoid disclosure even absent tough limits on contributions. Bottom line: if disclosure is effective in its own right, fat cats will dodge it to then ruin its effectiveness.

2006-08-23T10:03:00.000-07:00

Reform Measure Passes in Alaska
On Tuesday, August 22, voters in Alaska overwhelmingly approved a campaign finance ballot measure. With 87% of the precincts reporting, Measure 1 had support from 74% of the voters. (click here for updated results.) This article has more details on the measure.

This measure lowers contribution limits to candidates from $1000 to $500 and tightens the rules on who must register as a lobbyist. The effort was led by Alaska PIRG in response to the legislature's recent move to increase these limits. The Alaska legislature had enacted the $500 contribution limit after AKPIRG and other reformers had gathered enough signatures to place an initiative on the ballot in 1996. Governor Frank Murkowski introduced and then signed a law in 2003 to double those limits. Measure 1's passage reverses that.

Interestingly, voters also canned Frank Murkowski as Governor. He had come under heavy criticism for appointing his daughter as U.S. Senator when he vacated that post to become Governor in 2002.

This may be a sign of things to come. There are reform measures on the ballot in California (Prop 89 to enact public financing and tighten limits on private contributions), Oregon (Measures 47 and 48 to amend the Oregon Constitution to allow for contribution and spending limits and then enact a tough set of limits) and Colorado (to tighten ethics laws and ban gifts from lobbyists to legislators.)

Likewise, other incumbents have been losing in primaries, including Joe Lieberman in Connecticut, Cynthia McKinney in Georgia, and Joe Schwarz in Michigan. Voters may be in a mood to clean house.

2006-07-24T09:24:00.000-07:00

Cunningham Scandal: Rep. Harris Under Investigation, Guilty Plea From MZM Employee

As Jim Stratton reported last week in the Orlando Sentinel, federal investigators recently questioned the former top political aide to Florida Congresswoman Katherine Harris about her relationship with defense contractor Mitch Wade, one of the men who bribed former congressman Duke Cunningham. The report signals that the federal investigation into the aftermath of the Duke Cunningham scandal has turned its sights on Harris.

Duke Cunningham's guilty plea to bribery and other charges last November signaled the beginning, not end, of a widespread federal investigation into possible corruption by members of Congress and government contractors. As prosecutors delved into the dealings of the men who bribed Cunningham, several aspects of their relationships with other members of Congress emerged which were eerily similar to their relationship with Cunningham, including massive campaign contributions from the contractors to the congressmembers and congressional earmarks from the members to the government contractors.

One such member was Katherine Harris.

At the time he pleaded guilty to bribery and corruption charges this past February, Wade also pleaded guilty to making illegal campaign contributions to Rep. Harris and Virginia Congressman Virgil Wade. Wade and his employees had given $50,000 to Harris, $32,000 of which Wade illegally funneled through his employees to skirt federal contribution limits. Just as Cunningham rewarded Wade and fellow defense contractor Brent Wilkes for their campaign contributions and outright bribery, Harris had attempted to earmark $10 million for Wade's company MZM.

At one point, Wade and Harris had dinner in a posh D.C. restaurant. At the dinner, Wade offered to host a fundraiser for Harris's campaign for U.S. Senate. (This on top of the $50k she'd already received from MZM.) A few weeks later, Harris amended the list of earmarks she had requested from House leadership to include the $10 million for Wade. The quid pro quo nature of the Wade/Harris dealings raised the strong possibility of bribery.

Harris's explanation of these circumstances to her staff was so changing and inconsistent that many members of her staff resigned. One such staffer, top political strategist Ed Rollins, thought the circumstances sufficiently damning to recommend that Harris get a lawyer. Rollins was the subject of the federal interview mentioned earlier. Rollins, a longtime GOP operative, said he assumed more interviews with other Harris staffers would be forthcoming.

In related news, Richard Berglund, a former employee for Mitch Wade at his defense contracting firm MZM, pleaded guilty last Friday to making illegal campaign contributions to Harris, as reported in the St. Petersburg Times.

In short, the Cunningham fallout has only just begun. Three of the four co-conspirators named by both Cunningham and Wade in their guilty pleas remain unindicted, including big kahuna Brent Wilkes.

Nor is Harris the sole member of Congress who received $50,000 or more in campaign contributions from Wade and Wilkes while steering them various government contracts worth tens of millions. In addition to Harris and Cunningham, other members of this group, include Virgil Goode (VA), Jerry Lewis (CA), Duncan Hunter (CA), and John Doolittle (CA). Doolittle alone received upwards of $130,000 from Wilkes and his associates, in turn steering $37 million in federal tax dollars to Wilkes company PerfectWave Technologies.

Stay tuned.

2006-07-17T15:09:00.000-07:00

Rich Buy Political Influence on Both Sides of the Atlantic

As Jim VandeHei and Chris Cillizza report in the Washington Post, a network of wealthy liberal donors is spending tens of millions of dollars to create a network of think tanks and other organizations to support liberal political ideas and leaders. The group, which calls itself the Democracy Alliance, vets left-leaning groups for possible donations, steering money only to those which meet both its ideological and secrecy requirements.

Yes, secrecy requirements. Many of the donors don't want their names revealed to the public. So much for political courage. In other words, they want the power but none of the accompanying responsibility.

Across the pond, as the BBC reports, a scandal involving Prime Minister Blair's chief fundraiser (and tennis partner) is shaking English politics. Lord Levy, apparently known as Lord Cashpoint for his fundraising prowess, has been arrested on suspicion of offering peerages to wealthy donors in exchange for undisclosed loans to Blair's Labour Party.

The English scandal and its numerous American counterparts highlight the constant struggle democracies face in maintaining the power of the electorate within the system of government. Private individuals and groups will always seek to coopt the people's government for their own purposes, if possible, often using their financial power as a means to do so.

2006-07-12T14:45:00.000-07:00

Politicians Divert Campaign Cash to Personal Use

As WTVF (Nashville) investigative reporter Phil Williams reports, Tennessee state representative Mary Pruitt has been using campaign funds to rent out campaign office space ... from herself, paying herself more than $11,000 rent in the last two years on a $28,000 property. (Check out the video links to the right.)

The office in question is a house in East Nashville. Other than being owned by Rep. Pruitt, it has very little going for it in the way of being a campaign office: it is boarded-up, the electricity is shut off, and neighbors say they never see any activity. Abandoned, in other words.

If Pruitt was paying fair market value for legitimate campaign expenses, that would be legal. But from all appearances, Ms. Pruitt's payments to herself are neither fair market value for the house nor are for a legitimate campaign expense. She is using her position as public servant to line her own pocket.

600 miles and a level of government away, another politician is engaged in the same brand of ethically questionable, and possibly illegal, self-enrichment. As Jonathan Weisman and Jeffrey Birnbaum report in the Washington Post, Congressman John Doolittle has paid his wife some $170,000 from his federal political committees over the last several years for fundraising.

Just as it is in Tennessee with state Rep. Pruitt, such an arrangement is allowed if Mrs. Doolittle is being paid fair market value for legitimate campaign expenses. Otherwise, big political donors could steer money into the bank accounts of officeholders, essentially putting people that are supposed to be public servants on their private payroll.

Fundraising seems a legitimate campaign expense, so the question is whether Julie Doolittle is getting paid fair market value. It doesn't look like it:

The Doolittle arrangement pays Mrs. Doolittle 15% of every donation received by Doolittle's PAC. Only one other member of Congress - New York Congressman John Sweeney - pays a family member on commission for campaign work, and Sweeney pays 10%, which Sweeney's spokesperson insists is "standard" in the industry. A national association of fundraisers has also said the Doolittle arrangement violates its ethical guidelines.

Making things worse, Julie Doolittle gets paid for every single donation received by Doolittle's PAC. An analysis by TheRestofUs shows that nearly 60% of the donations for which Julie Doolittle received a commission in 2004-5 came from people or groups who were already Doolittle donors. More than half the battle in fundraising is finding donors. So Julie D. got paid more than $120,000 in that period for doing half the work.

Further undermining the notion that the payments were fair market value are the committee assignments Congressman Doolittle has. In 2002, he won a seat on the powerful House Appropriations Committee, a spot which guarantees easy campaign money from interest groups. Doolittle doesn't need someone to raise money - it gets thrown at him by all the wealthy interest groups in the nation's capital.

And yet, he pays his wife 15%.

It just doesn't wash. Just like Pruitt, Doolittle is using his public office to line his own pocket. That the payments are made to his wife changes nothing. It is ethically wrong, possibly illegal, and should be stopped.

2006-07-07T15:45:00.000-07:00

Nebraska Pol Booted From Office for Campaign Finance Violations

The Nebraska Supreme Court has convicted Regent Dave Hergert on impeachment charges related to violating the state's campaign laws and lying to cover it up, as WOWT of Omaha reports. With today's ruling, Hergert is immediately removed from office.

In order to level the playing field for candidates whose positions aren't backed by wealthy interests, Nebraska offers candidates the option of receiving some public money for their campaigns, if they agree to a voluntary spending cap. Candidates whose opponents exceed the spending cap get public funds with which to compete.

For the system to work, candidates who opt to exceed the spending caps must estimate their projected spending and inform the relevant state commission when they reach a certain spending threshold, so that the commission may disburse funds to their opponent.

Hergert opted out of the program, choosing to exceed the overall spending limit of $50,000 (for both primary and general). But, he underestimated how much he would exceed the limit and failed to notify the commission when he did so, which had the effect of depriving his opponent of some of the public funds to which he was entitled. Hergert spent much of the under-reported money attacking his opponent, who because he did not receive the funds, was unable to respond effectively.

After the election, Hergert reported spending twice his original estimate. In other words, he broke the law and lied about it in order to win the election.

Recognizing the potential damage to the public financing program that would occur if Hergert's
actions went unpunished, the Legislature first called on him to resign, and ultimately impeached him. Today's conviction by the Supreme Court was the last step of the process.

Nebraska candidates who don't represent positions with the backing of wealthy interests deserve just as much a shot at public office as those that do. Today's decision by the state Supreme Court helps maintain that opportunity, leaving democracy in Nebraska a stronger institution tomorrow than it was yesterday.

2006-07-05T16:23:00.000-07:00

More Illegal "Straw" Contributions in the Cunningham Scandal

As Lindsay Nair reports in the Roanoke Times, on last Thursday, federal authorities accused another MZM official of funneling illegal "straw" campaign contributions through MZM employees to Rep. Virgil Goode (VA). Earlier this year, when former MZM CEO Mitch Wade pleaded guilty to bribing former congressman Duke Cunningham, he also pleaded guilty to making straw contributions to both Goode and Rep. Katherine Harris (FL).

"Straw" contributions are contributions to political candidates or parties which have been funneled through an intermediate donor to disguise the true source of the funds, often so that the true source may make further contributions without running afoul of contribution limits.

The MZM official accused last week, Richard Berglund, is a former district manager for the company. The charging document accuses Berglund of being an illegal conduit of Mitch Wade's contributions to Goode and of illegally directing his own money to Goode through two different employees.

As to that charging document: the account in the Roanoke Times and the Richmond Times-Dispatch seem to conflict with that offered by the Washington Post as to its exact nature. The Times and Times-Dispatch are describing it as an indictment, while the Post describes it essentially as an "information" - a statement of facts about the illegal activities of someone cooperating with investigators.

If the latter report is accurate, Berglund may be implicating others involved in possible illegal campaign activity. With Mitch Wade pleading guilty earlier this year, it seems likely that Berglund's help would entail naming others involved in the scheme.

Regardless, last week's accusation against Mr. Berglund shows that federal prosecutors are still digging into possible campaign corruption by Duke Cunningham and the rest of the Gang That Couldn't Cheat Straight. Three men named as accomplices in the guilty pleas of Duke Cunningham and Mitch Wade have not yet been indicted, Brent Wilkes foremost among them. These men have contributed more than $1 million to various federal officials. And there is still a pretty stack of public officials who currently use the Members' elevator in the Capitol who have received tens of thousands of dollars from Wilkes, Wade, and their employees, some of whom doled out millions in federal contracts to the men.

Stay tuned.

2006-06-30T09:50:00.000-07:00

Former Alabama Governor Convicted of Bribery and Corruption Charges

As Sallie Owen and Bill Barrow report in the Mobile Register, on Thursday, a jury found former Alabama Governor Richard Siegelman guilty on six counts of corruption-related charges in connection with $500,000 in campaign contributions he received from HealthSouth CEO Richard Scrushy, who was also convicted. In return for the $500k, Siegelman put Scrushy on the state Certificate of Need Review Board, which oversees hospital expansions.

Siegelman and Scrushy still protest their innocence and promise to appeal what Scrushy's lawyer calls "the worst miscarriage of justice since General Sherman burned Atlanta". (Apparently he hasn't been watching the World Cup matches.)

The $500k went to Siegelman's campaign fund to support a failed lottery initiative. As we've seen in other states with the initiative process, politicians have figured out that a great way to advance themselves as candidates is to push a ballot measure. At the same time, bigtime donors have figured out that a great way to curry favor with politicians is to give a ton of money to their ballot initiative committees. And when you put the two together, you have a perfect peanut butter cup blend of systemic, if not personal, corruption.

This is not the first time Siegelman has stuck his thumb in the eye of Alabama democracy. In 1989, when he was the state attorney general, Siegelman interpreted Alabama's limit on corporate contributions of $500 per candidate as permitting corporations to funnel unlimited funds through PACs. The ruling served as spring rain for PACs in the state, which doubled in number in the years that followed, allowing wealthy corporations to multiply their campaign donations many times over.

Yesterday's decision by a jury of his peers suggests that Mr. Siegelman's cavalier attitude towards the representation that his fellow Alabamans deserve may have finally caught up with him.

2006-06-28T16:49:00.000-07:00

Effect of Recent Supreme Court Decision on CA Campaign Reform Initiative

As Joan Biskupic reports in USA Today, on Monday, the U.S. Supreme Court issued a decision in Randall v. Sorrell striking down Vermont's law limiting political contributions and spending. Three justices support both spending and contribution limits, three justices want to get rid of both, and three want to have the latter but not the former. Given that they can’t agree among themselves what the U.S. Constitution says, you might think they would defer to the state of Vermont to figure it out for themselves. Nope.

While the decision likely signals an end to the modestly more expansive approach recently used by the Court in reviewing the constitutionality of campaign finance laws, the Court's ruling leaves intact the basic constitutional framework which has been in place since its seminal (and near-criminal) 1976 decision Buckley v. Valeo.

The $64 million (remember when that seemed like a lot?) question is: how will the Court's decision affect current or prospective campaign finance reforms? Specifically, how is the forthcoming campaign reform ballot measure sponsored by the California Nurses Association, which the California Secretary of State recently certified for the November ballot, affected?

The short answer, at least as to the Nurses' initiative, is not much. A look back at Buckley is informative:

Buckley Paradigm
The Buckley Court reviewed the federal reforms passed in the wake of Watergate. The decision made a fateful and oft-ridiculed distinction between limits on campaign spending and limits on contributions to campaigns.

The Court viewed spending limits as a direct infringement on the free speech rights of candidates, and thus any attempt to limit spending must pass a very strict scrutiny. Such review must find that the government has a compelling interest which is met through a law drawn as narrowly as possible. In a moment of colossal myopia, the Buckley Court found that the only permissible compelling governmental interests in campaign finance law were to prevent corruption or the appearance of corruption. This reading ignored the right to a small-r republican form of government - representative democracy, essentially - explicitly guaranteed by the Constitution (see our amicus brief in Randall). In the Court's view, limiting campaign spending did neither, and was thus unconstitutional.

Contribution limits, on the other hand, did not prevent donors from expressing their support for a candidate, and received a middle tier of scrutiny. Limiting political contributions directly reduced both corruption and the appearance of corruption, according to the Court, and could pass constitutional muster if they were not too low. The Court also approved, even encouraged, voluntary public financing programs.

Randall
So - spending limits no, contribution limits yes, public financing yes. On its face, this week's decision by the Supreme Court did nothing to change that. Spending limits are still no, although 87% of the public thinks we need them. Contribution limits are still fine, but must be carefully drafted. Public financing, ballot measure spending, and independent expenditure committees weren't discussed in the opinion.

But the Court's decision to strike Vermont's contribution limits arguably signaled a shift from its recent jurisprudence. As recently as 2000, in the case Nixon v. Shrink, the Court had upheld Missouri's campaign finance law, which included contribution limits of $1,075 per election for statewide offices and $275 per election for state legislative races. What was different about Vermont?

Vermont's contribution limits were $200 for state representative, $300 for state senator, and $400 for statewide office. Whereas most limit regimes apply per election, which allows donors to give the max to a candidate once for the primary election and again for the general election, Vermont's limits were per election cycle, giving donors only one bite at the apple. Vermont's limits were not indexed for inflation either, meaning their effective value would gradually drop.

In striking these limits, the Court looked at five factors:

1) The contribution limits appear to significantly restrict the amount of money available to challengers to run competitive elections.
2) The same low limits are imposed on political parties, harming the right to association.
3) The law's treatment of some volunteer expenses as campaign expenditures chills volunteer activity, especially in concert with the low contribution limits.
4) The limits are not adjusted for inflation.
5) The record does not show past corruption sufficiently to justify such stringent limits on constitutional rights.

California Nurses' Campaign Reform Initiative
The California Nurses campaign reform initiative has two main parts: 1) a program of voluntary public financing for qualifying candidates for public office, and 2) a very nearly comprehensive series of reforms - including limits on contributions to candidates, parties, and independent expenditure committees among others - aimed at creating a level playing field for California candidates and ballot measures to compete with those backed by financially powerful interests.

While the Randall decision should have no effect whatsoever on the public financing program, an analysis of its effect on the second part of the initiative is a bit more complex.

First off, the contribution limits: the measure limits contributions to candidates to $500 per election for legislative races and $1,000 per election for statewide races; contributions to parties are limited to $7,500 per year. These are not only significantly higher than Vermont's limits going toward the first and fifth concerns listed above, but also address the Court's second and fourth concerns. As to the volunteer expenses, the ballot measure is silent, which should adequately address that issue. So, if we are to believe the Court's sincerity in laying out those five factors, the measure's contribution limits are constitutionally sound.

These limits apply to individuals, corporations, and unions alike.

But as most Californians could attest, limits on contributions to candidates alone will not take back our electoral processes from the financially powerful interests in this state. As this year's Democratic gubernatorial primary demonstrated, wealthy interests will resort to independent expenditure committees to influence elections. The Tsakapouloses (father Angelo and daughter Eleni) spent nearly $8 million on behalf of their business partner, Phil Angelides. Other IE committees spent millions in the June 2006 primary in support and opposition to candidates.

And the ballot initiative process, created as the people's answer to a legislature dominated by special interests, has also been made captive by the state's financially powerful. The pharmaceutical industry alone spent $80 million on two initiatives last year. Tobacco companies, energy companies, gaming tribes, and developers have all spent tens of millions of dollars in recent years on initiatives. Even labor unions have gotten into the act, spending over $120 million in 2005 opposing Governor Schwarzenegger's special election initiatives.

Tha ballot process has been further corrupted by the new technique pioneered by Cruz Bustamante and perfected by Arnold Schwarzenegger, in which candidates for public office use ballot measure committees to evade the state's contribution limits. Bustamante, Schwarzenegger, and Phil Angelides have all used these committees, which are currently not subject to any limits on the size of contributions they can receive, to advance themselves as candidates.

The Nurses' initiative takes on all these issues, addressing them to the fullest extent allowed by constitutional doctrine. The effect of the Randall decision on any of these reforms is unclear, perhaps especially so because the Randall Court addressed none of these issues directly. But a look at where things stood constitutionally prior to Randall suggests that the Nurses' initiative, while important cutting edge policy, remains on sound footing.

1) Independent Expenditure Committees
IE committees are currently allowed to raise and spend money without limit to influence candidate elections in California. As state GOP chairman Duf Sundheim recently pointed out in a discussion we had on the radio program Insight, these committees currently are a huge loophole in California's scheme of contribution limits. Mr. Sundheim recommended a constitutional amendment to allow for mandatory limits on how much anyone can spend on an election, including candidates and independent actors. That’s a good idea. But, the Nurses’ initiative does take some good measures to address the problem.

The Supreme Court has upheld a ban on corporate contributions to IEs in the case Austin v. Michigan Chamber of Commerce. More recently, and perhaps more importantly, the Supreme Court upheld the 2002 Bipartisan Campaign Reform Act's ban on soft money to political parties in the case McConnell v. FEC. In McConnell, the Court found that limiting contributions to parties was a necessary and constitutional way to prevent evasion of BCRA's contribution limits.

As IE committees have been used to evade contribution limits in California, limiting contributions to such committees is a constitutional way of preventing such evasion. The Nurses' initiative does just that, limiting contributions to IE committees to $7,500 per year as part of its overall limit on aggregate contributions by a person or entity to $15,000 per year.

2) Candidate-controlled Ballot Committees
Lt. Gov. Cruz Bustamante was fined $260,000 by the Fair Political Practices Commission for using a ballot committee to evade contribution limits. In just three short years, Gov. Arnold Schwarzenegger has raised tens of millions of dollars into his ballot committees, much of it spent to raise his profile as a candidate. State Treasurer and current gubernatorial candidate Phil Angelides used his ballot committee to send out flyers touting his support for pre-school in the days before the June primary. Assembly Speaker Fabian Núñez is raising $25,000 a piece into his ballot committee from corporations with financial interests in legislation before the Assembly.

You would be hard pressed to make a distinction between the influence gained with a $50,000 contribution to a candidate's campaign committee as opposed to a candidate's ballot committee. Clearly, politicians from both parties are eviscerating California's contribution limits with their ballot committees. The FPPC recognized this when they passed a regulation applying the contribution limits on candidate committees to ballot committees controlled by candidates.

The Nurses' initiative limits contributions to candidate-controlled ballot measures to $10,000 per person. While the original FPPC regulation was struck as unauthorized in the Political Reform Act by a Sacramento County Superior Court judge in a lawsuit by Governor Schwarzenegger and his business ally funders, McConnell would seem to allow for this type of regulation if it is necessary to prevent the evasion of contribution limits. Loyola Law Prof. Rick Hasen, the Campaign Legal Center's Paul Ryan, and others have this point better than I.

3. Ballot Measure Spending
California's love-hate relationship with the ballot initiative process has been a lot more hate than love lately. As wealthy interests have turned the process into a playground for the rich, voters have turned increasingly hostile towards any ballot measure, even those whose general intent is backed by a majority of Californians. While corporate interests have played the predominant role in the corruption of this process, labor unions and wealthy individuals have done their fair share as well.

The Buckley paradigm has traditionally been interpreted to prohibit any attempt to check the influence of big money on the initiative process - there are no candidates to corrupt, after all. But, the ban on corporate contributions to IE committees in Austin also didn't involve candidates. In the Austin case, the Court ruled that the very nature of corporations - that they are designed and given public tax breaks in order to generate profits - created such a risk of overwhelming the political process that corporate political spending could be seen as inherently corrupting, and could thus be limited or even prohibited even when no candidates are involved.

The same rationale applies to corporate spending in California's ballot initiative process. Pharmaceutical, tobacco, energy, financial services, and development corporations have used the massive profits generated by their corporate form to completely overwhelm the California initiative process. While labor unions have done so on a smaller level, there is less of an argument to be made, if any, under current constitutional doctrine that the spending by those groups can be limited because these groups are formed in part for political purposes.

The Nurses' initiative is written accordingly. Corporations are limited to spending $10,000 a year from the corporate treasury on ballot measures. Both for-profit and non-profit corporations are free to create a PAC which can spend unlimited sums on ballot measures. Spending by labor unions and wealthy individuals on ballot measures isn't limited, because there is no readily apparent constitutional basis for doing so.

So what is the upshot of Randall on these provisions? While respecting the Buckley paradigm, the Nurses' initiative is ground-breaking in a couple of areas. In so doing, the measure makes some reasonable assumptions based on the factual record of big money in California politics over the last 30 years (which has never been squarely considered by a court) and on current constitutional doctrine.

Most experts will say that the Randall decision signals that the current Court is less open to campaign finance regulation. Opponents of the Nurses' campaign reform measure will likely cherry-pick Randall's language to argue that the whole thing is folly, that the Court won't uphold any of it.

But that does not mean that any of the Nurses' initiative will be stricken (and even if any provisions are stricken, it isn't fatal to the whole measure - the measure contains a well-written severability clause). California has seen big money pour into its elections on a level unmatched even at the national level at the time of the Buckley decision. This can only help. Likewise, constitutionally, the Court recognized only three years ago not only that contribution limits are constitutional, but that loophole-closing techniques to prevent their evasion are also constitutional.

The facts are behind the measure. The law is behind the measure. Standing between the measure and its enactment will be a whole host of special interests, all of whom have two things in common - a desire to maintain their stranglehold over California policy and politics, and the ability to spend millions to do so.

2006-06-26T09:30:00.000-07:00

News From the Nation's Capitol

Reports from Washington D.C. on two fronts show a federal government intent on preserving the power of wealthy interests in our country's political landscape.

As Toni Locy reports for the AP in the Washington Post, today the U.S. Supreme Court struck down Vermont's law which set limits on the size of permissible political contributions and on how much candidates could spend on a campaign. And as the judicial branch was busy siding with wealthy interests over the rest of us, the legislative branch was busy sitting on its hands on lobbying reform, as reported by Jeffrey Birnbaum and Jim VanDeHei in the Washington Post.

Vermont
From its outset, the case (Randall v. Sorrell), promised to be an important one. Vermont was the first state to pass a law limiting spending on political campaigns since the 1976 Supreme Court decision Buckley v. Valeo. The Buckley court had ruled that money is speech and that therefore the only constitutionally permissible interests in regulating such speech were the corruption or appearance of corruption of candidates. This meant that while limits on political contributions were OK, there was not much room constitutionally for limiting spending.

But the vacancies on the Court created by death of Chief Justice Rehnquist and resignation of Justice O'Connor put two new justices into the mix, neither with a well-defined record on campaign finance. While the Supreme Court had upheld low contributions limits only a few years previously in Nixon v. Shrink and had generally been moving in a direction of more respect for campaign finance reforms, it was possible that Vermont's contribution limits were now also in play.

In a split ruling with six separate opinions, the Court struck Vermont's limits on spending and contributions. In doing so, the Court did not hold that contribution limits are unconstitutional per se; rather, that Vermont's ($200 for state reps; $400 for statewide candidates) were too low to pass constitutional muster. The Court gave short shrift to Vermont's spending limits, saying that nothing had changed since Buckley, and that Vermont's interest in limiting the amount of time candidates spend fundraising was not a constitutionally protected interest.

The upshot of the ruling is unclear, but we can probably expect a series of legal attacks on contribution limits in states and municipal jurisdictions around the country. Equally important, Americans will continue to see massive spending on political campaigns.

No Lobbying Reform For You!
The failure of Congress to pass lobbying reform comes as little surprise, despite the repeated assertions of many congressional leaders in the wake of the Abramoff scandal that they would pass such reforms. Most members of Congress are hooked on the campaign cash from lobbyists and the wealthy interests they represent, which gives them the insulation from electoral accountability which members seek.

Screw your constituents over on health care? Who cares? The pharmaceutical and insurance industry will make sure you stay in office. Fail to address the growing gas prices? No worries! The petroleum companies and automakers will line your campaign coffers with enough cash to win your next six elections.

Putting It All Together
There is a connection between the Supreme Court's decision and Congress's refusal/inability to pass lobbying reform: money's stranglehold on our government. Under the U.S. Constitution, Congress is supposed to serve as the people's check on the Supreme Court. Instead of fulfilling that duty, Congress signed off this year on two new Supreme Court justices, both of whom sided with wealthy interests in today's decision. A decision, by the way, which benefits those members of Congress with the backing of wealthy interests - all of them, in other words. Every single member.

It becomes ever clearer that the American people no longer receive much in the way of representation in our nation's capitol. The legislative branch has become a fully functioning branch of corporate and wealthy America with the fervent and consistent backing of the judicial branch. Our constitutional rights to a representative government have been auctioned off piecemeal by the judicial branch, nominated by the executive branch and approved by the legislative.

Representative democracy in the USA is ... well, it isn't representative. And if a democracy is no longer representative, is it even still a democracy?

2006-06-23T09:20:00.000-07:00

North Carolina House Approves Ban on Personal Use of Campaign Funds

As Dan Kane reports in the Raleigh News and Observer, the North Carolina House has passed a tentative bill prohibiting the use of money from a candidate's campaign account for personal purposes. The bill sailed through the House 107-8, and will likely receive final approval soon upon the insertion and acceptance of an amendment relating to the bill's effective date.

The bill was introduced in response to reports that various lawmakers had spent thousands of dollars of campaign funds for personal purposes, including cars, gifts to their children, computers, vacations, and cold hard cash.

In light of the eight votes against the bill, I suppose it bears repeating that the money these lawmakers are spending on themselves comes from campaign contributors, many of whom have financial interests which are impacted by the decisions of the state legislature.

When public officials take private money, it compromises their independence and the integrity of representative government. When it comes in the form of campaign contributions from wealthy contributors, it undermines the ability of the rest of us to elect people who represent us.

For those who agree with the eight who opposed the bill, their path of recourse is simple: if they want to make money from private interests, they should stay in the private sector. Is that so hard?

2006-06-20T09:44:00.000-07:00

Abramoff Scandal Brings Down Former Bush Administration Official

As William Branigin reports in the Washington Post, David Safavian was found guilty today on four felony charges of obstruction of justice and lying to federal investigators about his relationship with former lobbyist and corruption king Jack Abramoff.

Safavian, a former lobbyist himself, became the chief of staff at the General Services Administration (GSA) in 2002. The GSA is the property management agency of the federal government.

Abramoff sought Safavian's help in obtaining two federal buildings in the Washington D.C. area for one of Abramoff's clients. Around the same time, Safavian accompanied Abramoff, Congressman Bob Ney, and other staffers and lobbyists on a lavish golf trip to Scotland, all on Abramoff's dime.

Federal law currently prohibits federal officials and staffers from accepting travel paid for by lobbyists. This no doubt contributed to Safavian's decision to lie to GSA and other federal investigators when asked about the trip and his efforts to help Abramoff obtain the federal properties.

In 2003, Safavian was nominated by President Bush to serve as the chief procurement officer at the Office of Federal Management and Budget, a position from which he has since resigned.

Each count on which Safavian was convicted today carries a maximum sentence of five years and $250,000 fine, which means Safavian may be looking at as much as 20 years in the pokey, where no doubt his procurement skills will be highly valued. How many cigarettes do you think a trip to Scotland costs?

While our justice system is slowly but to date effectively working its way through the Abramoff and other corruption investigations, our legislative branch continues to flounder. In a moment of high disdain for democracy and the current public disaffection with government, Congress is preparing to pass a bill which would sanction travel by members of Congress and their staffers paid for by private interests.

This is the Congressional response to the Abramoff scandal - legitimize the very techniques he used to corrupt both process and person alike.

This effort is backed by Republican and Democrat alike, further proving that when it comes to screwing over the American people in favor of wealthy interests, the political parties get along just fine thank you very much. The rest of us should expect the number of "educational" and "fact-finding" trips to Oahu and other hotbeds of policy debate to multiply in the years ahead.

And if a corporate lobbyist or two just happen to be sitting next to a Member of Congress on the plane as they fly to a resort on the corporate dime - well, hell: that's just democracy.

2006-06-19T12:52:00.000-07:00

Corporate Donation Strategy Exposes Fallacy in "Money is Speech" Theory

Defenders of wealthy hegemony of American politics repeat ad nauseam the mantra that money is speech, therefore regulating political contributions should be unconstitutional. A look at corporate America's political contributions exposes this theory for the self-serving propaganda that it is.

Corporate PACs have contributed predominantly to Republican candidates since the Democrats lost control of the House in 1994, but this year, polling shows Democrats with a sizeable lead nationally. Although it is unclear whether the Dems' lead in the polls will translate into electoral victories in a sufficient number of individual races for the Dems to take over one of the two houses of Congress, that uncertainty has some corporations steering a greater percentage of their political contributions to Democrats, as Brody Mullins reports in the Wall Street Journal.

Corporate PACs make political contributions to ensure that friendly politicians are in office in a position to help the corporation's bottom line. It doesn't matter what a candidate's party affiliation or political philosophy is, as long as the corporation can count on the politician come vote time.

If Democrats control Congress, and are in a better position to help corporations, they will get more money. If Republicans are in control, they will get more corporate money. In other words, just like any investment strategy, corporate America is hedging its bets with political contributions.

But is that free speech? Essentially, they're saying: "We want to make more money." No kidding - who doesn't? The rest of us don't have millions to dole out to candidates to make sure that Congress passes laws that put more money in our pockets. Does that mean we don't get the same amount of "free speech" as wealthy interests, be they corporate or otherwise?

The current regime, backed by the wealthy and powerful on the left and right of American politics, offers a sliding scale of protection, dependent solely on a person's wealth. My guess is that most Americans have a different notion of what the First Amendment means.

2006-06-09T09:17:00.000-07:00

Independent Spending Tarnishes Golden State Politics

Campaign spending by independent expenditure committees for and against candidates in the run-up to Tuesday's California primary was massive. IE committees, which are not subject to Prop 34's contribution limits, cannot coordinate in any fashion with candidate campaigns or their spending is treated as a campaign contribution subject to limits.

In addition to the much-discussed $10,000,000 ad campaign on behalf of Phil Angelides by the Tsakopoulos clan, IE committees spent tens of millions of dollars across the state on legislative and statewide office races, often propping up or attacking candidates in Democratic races on either side of the Business/Labor divide.

Much of the spending came from committees who took contributions far exceeding the limits on contributions to candidates. For example, Angelo Tsakopoulos contributed $6,130,000 to his pro-Angelides committee, far above the $22,300/election limits on contributions to Angelides' official candidate committee (his daughter Eleni chipped in another $2.5 million). Leaders for an Effective Government, an IE committee which spent nearly half a million bucks supporting AD 12 candidate Fiona Ma and opposing her opponent Janet Reilly, took in $50,000 from a realtors' PAC this year, far more than the $5,000 limit on PAC contributions to candidate committees. The California Alliance for Progress and Education, which spent $2 million supporting mostly business Dems in Senate races, took $400,000 from the dentists PAC and $500,000 from the realtors.

So what gives? The IE committees evaded Prop 34's contribution limits like the Germans sidestepped the Maginot Line. Are contribution limits just an elaborate illusion, an artifice forever doomed to irrelevance by independent spending?

The short answer is no. While the US Supreme Court has ruled that we cannot regulate how much an individual spends independently of candidates, it has not prohibited regulating contributions to IE committees. Federal law has limited contributions to IE committees for years, for example.

Setting aside for the moment the Court's curious deference to the so-called free speech rights of rich people at the expense of the constitutional rights of the rest of us to political voice and representative government, this means that California could limit contributions to IE committees just as we do to candidate committees. Angelo Tsakopolous would still be able to spend his millions, but he could not hide behind the sheltering public image of the firefighters, nor could PG&E and gaming tribes hide behind names like the African American Political Empowerment PAC.

In other words, a financially powerful interest could still spend their millions, but they would have to put their name on the ads, mailings, etc., which would significantly curtail the effectiveness of the ads. This solution is not ideal - a much better answer would be for the Supreme Court to stop shortchanging the political rights of 99% of the population so that the richest 1% can continue buying electoral hegemony - but it is better than the mad spending we saw this year from disguised sources.

So why didn't Prop 34 put limits on contributions to IE committees? It's easy enough to do, as shown by the California Nurses Association in their campaign finance ballot measure, the signatures for which are currently being vetted for this November's ballot. Section 91105(a) of the measure limits contributions to IE committees to $1,000/year, a limit given teeth by Section 91105(g)'s limiting a donor's aggregate contributions to all IE committees to $7,500/year.

Prop 34 was former state Senate President Pro Tem John Burton's baby, put on the ballot by the legislature as Prop 208 ( a citizen-initiated pro-reform measure) worked its way through the courts. Prop 34's contribution limits were 10-40 times higher than Prop 208's. As Lance Olson, who drafted the measure, has said, Prop 34 was not designed to check the flood of money, but rather to direct money through the parties.

In other words, Prop 34 is an artifice - John Burton's artifice, along with all the members of the legislature who put the measure on the ballot (Assembly vote, Senate vote). It is not a reform measure in intent, design, or effect, and should not be used as the standard for judging the effectiveness of all reforms.

(Perhaps not coincidentally, John Burton seeded the Leaders for Effective Government committee that played such a large role in the Ma/Reilly race with nearly $700,000 in 2000. That same cycle, the committee weighed in on behalf of state senate candidate Nell Soto with nearly $200,000 in IEs.)

Mr. Burton's political spending is not the problem - the spending of his committee accounted for just a few drops of the IE deluge we saw this year. Clearly, there are other interests in California that are willing and able to spend tens and hundreds of millions of dollars to get their allies and candidates into public office. That being said, Mr. Burton's law is a stinker, the effect of which should not serve as a rationale for stepping backwards, but rather for showing the way ahead.

Electoral influence is very nearly a zero sum game. As wealthy interests gain more influence, the public's power and voice in government diminishes accordingly. This undermines the quality of representation in government, with the corresponding erosion of public interest in elections and government and the problems which attend such disinterest.

IEs are just the latest technique for the financially powerful to dominate elections in California. There are constitutional steps available to check that influence. If the voters have enough faith to show up at the polls this fall, they may have a chance to vote on one such step.

2006-06-02T17:08:00.000-07:00

CA Gov's Race: Angelides Exploits Loophole Created by Schwarzenegger

As Dan Morain reports in the Los Angeles Times, California democratic gubernatorial hopeful Phil Angelides is using a number of committees to evade California's campaign contributions limits.

This week, Angelides' "Yes on 82, Standing Up for California" committee is sending mailers out to voters encouraging them to vote yes on Proposition 82 on Tuesday's ballot. The mailers, replete with warm-n-fuzzy photos of Angelides with kids, do not mention the fact that Angelides happens to be on the same ballot, but their intent is clear: to boost Phil Angelides the week prior to a tight primary election against fellow candidate Steve Westly, who has spent more than $30 million of his own fortune on the race to date.

Angelides' Yes on 82 committee got all of its money from another Angelides' committee - Standing Up for California, which received most of its money in donations over California's legal contribution limits for gubernatorial candidates - a vertiginous $22,300 per election (the primary and general ballots count as separate elections). Its donors include Steve Bing ($250,000), the Laborer's Political League ($250,000), and Eleni Tsakapolous ($250,000).

The irony is, until Governor Schwarzenegger filed a lawsuit against California's state watchdog last year, this kind of blatant evasion of California's contribution limits was illegal. But because Schwarzenegger wanted to raise unlimited donations to finance his special election last year, he took the Fair Political Practices Commission to court to strike its regulation applying candidate contribution limits to the ballot committees they control.

Schwarzenegger was ultimately successful, paving the way for Angelides, who could easily be Schwarzenegger's opponent this fall, to use his Standing Up For California slush fund to boost his electoral chances.

A longtime Democratic fundraiser and insider, Angelides is clearly the more sophisticated manipulator of the loopholes in California's campaign finance laws amongst the democratic primary candidates. Not only is he using his ballot slush fund to evade contribution limits, but Angelides is also benefiting from a massive "independent" tv ad campaign (nearing the $10 million mark) by his mentor, patron, and partner Angelo Tsakapolous (the father of the aforementioned Eleni).

Westly, on the other hand, has not learned the myriad ways that California's campaign laws, written by politicians to pre-empt a previous reform-minded law, allow wealthy interests to dominate elections in the Golden State. Westly's massive spending of his own fortune on a blizzard of tv ads was initially effective, but in the long run may turn out to be a boorish bull-in-the-china shop approach that ultimately loses to Angelides' political insider finesse.

One thing is for sure, California's elections continue to be bought and sold by the very rich in this state. Much like the citizens of Tokyo watching Mothra and Godzilla battle it out in the skies above, the rest of us stand burnt-out and aghast at the current political battle of the airwaves.

The city may be destroyed, ablaze and in ruins, but we simply do not have a horse in this race. That is still a privilege which belongs only to the select few whose lucre is capable of feeding these heaving beasts. But it will be we who inherit their mess.

2006-06-01T09:33:00.000-07:00

FEC Fails to Act on 527s ... Again

As Thomas Edsall reports in the Washington Post, the Federal Elections Commission voted 4-2 yesterday to leave open the 527 loophole through which billionaires and labor unions poured hundreds of millions of dollars into the 2004 presidential elections.

This is the FEC's second swing and a miss at the issue. The Commission also punted in early 2004, saying that it didn't want to affect campaign law prior to the 2004 presidential election. This ruling allowed liberal barons like George Soros and Peter Lewis and conservative tycoons like Bob Perry and T. Boone Pickens to donate millions over federal campaign limits to 527 groups, which spent a significant chunk of that money on ads which otherwise would have been subject to contribution limits. (527s are named after a section of the federal tax code under which they are created.)

In 2005, a court ordered the FEC to either 1) explain its earlier ruling better or 2) re-issue rules consistent with the Bipartisan Campaign Reform Act's prohibition of "soft money". The FEC chose option 1, with the practical result described by FEC Chairman Michael Toner (one of the two dissenters, along with Commissioner Hans Van Spakovsky):

"Absent Congressional action," Mr. Toner said, "no one should be surprised if 527 soft-money spending in '06 and '08 becomes one of the driving forces in determining which candidates are elected."

Big money's lawyer-lieutenants are hailing the FEC's inaction, declaring it a victory for sweetness and light over the oppressive forces that would offer equal democratic opportunity to Americans regardless of the size of their wealth and income. As ever, they seek to dress the torrents of millionaire and billionaire green pouring into American politics in a patriotic redwhiteandblue, but their appeals to the First Amendment are typically and tediously hollow.

Even muffled by the flag draped around their legalistic sentiments, their conception of the Bill of Rights comes through loud and clear: you got the bills, you get the rights.

Free speech belongs to us all, not just the rich. The same holds true for our rights to a representative democracy. Yesterday's vote by the FEC supposes and supports just the opposite, making it not at all clear to me that the Commission deserves a third swing at enforcing our country's campaign laws.

2006-05-31T14:52:00.000-07:00

Bush Pioneer Noe Pleads Guilty to Illegal "Straw Donations" to Bush '04

As Steve Eder and Mike Wilkinson report in the Toledo Blade, embattled coin collector and political donor Tom Noe pleaded guilty today in federal court to three charges of illegally funneling campaign contributions to President Bush's 2004 campaign through illegal "straw donors".

Noe still faces charges related to the alleged fraud and embezzlement of millions of dollars of public funds from the state of Ohio.

The initial indictment against Mr. Noe on the illegal straw donations charged that Noe had directed some $45,000 of his own money through 24 donors to Mr. Bush's 2004 presidential campaign. These donations helped Noe achieve "Pioneer" status, a status bestowed on those Bush fundraisers who brought in upwards of $100,000 for the President's re-election effort.

When the charges surfaced against Noe, many politicians returned or disgorged campaign contributions from Mr. Noe, although some (like CA Gov. Arnold Schwarzenegger) did so reluctantly. President Bush returned the $4,000 he received directly from Noe and his wife, but has yet to return the donations that Tom Noe has now admitted to funneling to the president illegally.

President Bush must disgorge those illegal campaign contributions now. If his committee no longer has the funds to do so, the RNC (to whom the White House steered all questions about the Noe contributions) should disgorge an equal amount. To hold on to this money is to not only benefit from a federal crime, but to acquiesce and approve of its commission.

The White House or RNC should resist seeing this as just the latest move in the ongoing political gamesmanship over corruption between Democrats and Republicans, and recognize that this is about the rule of law, by which all Americans must abide. Democrats should lay off the partisan rhetoric for once and let the Administration do what's right.

On the California front, state treasurer candidate Claude Parrish has refused to give back Tom Noe's campaign contribution of $5,000. He too stands in support of breaking the law for electoral advantage as long as he maintains this money.

2006-05-26T14:40:00.000-07:00

Former Jefferson Aide Sentenced to Eight Years for Bribery

As Matthew Barakat reports for the Associated Press, Brett Pfeffer, a former aide to embattled Louisiana Congressman William Jefferson, was sentenced to eight years in prison today for his role in a bribery scheme involving telecommunications contracts in Africa.

The fairly stiff sentence paints a dark picture for Mr. Jefferson, who stands accused of demanding bribes in return for using his office to help out a tech venture in Africa.

Pfeffer and Vernon Jackson, the CEO of a tech company called iGate, have pleaded guilty this year to bribing Jefferson. Both Pfeffer and Jackson allege that Jefferson demanded an ownership stake in a tech venture in Africa in return for helping the venture get a loan from the Import-Export Bank and nail down contracts in Africa.

An FBI affidavit in support of a warrant for a search conducted of Jefferson's congressional office over last weekend states that the FBI has Jefferson on tape receiving a suitcase filled with $100,000 in $100 bills from the owner of the investment company Pfeffer worked for. $90,000 of the money was later found in a freezer in Jefferson's Louisiana home.

2006-05-26T09:33:00.000-07:00

California Dems Prove the Fattest Cats of 2006

So far. As Dan Morain reports in the Los Angeles Times, with California's June 6 primary just around the corner, the cash is flying fast and furious into candidate accounts, independent expenditure committees, and ballot measure campaigns.

The two Democratic gubernatorial candidates, state controller Steve Westly and state treasurer Phil Angelides, have spent nearly $60 million between the two of them to date. Just as interesting as how they spend their money is where they get it.

Westly is far and away the fattest of the two cats, with $34.5 million in contributions to his own electoral effort to date, $2 million of which he ponied up yesterday. It's difficult to imagine how attuned to the needs of regular Californians a guy can be when he can write himself even one $2 million check, much less 17 of 'em.

If Westly wins the primary and continues to fund his own campaign, he will likely join the elite ranks of candidates who have spent upwards of $50 million of their own fortune trying to buy public office. This includes NYC mayor Mike Bloomberg (around $70 million in 2001 and 2005) and New Jersey Governor Jon Corzine (both U.S. 2002 Senate race and 2005 gubernatorial race).

Far behind Westly, but still completely removed from the realm of your average Golden Stater, Angelides kicked in $1.5 million to his campaign this week. Angelides contributed another $1 million to his campaign in January 2006, when he forgave a 2002 $1 million loan (page 4) he had made to Friends of Phil Angelides, one of four different committees he currently controls. (The other three are Angelides 2006, Standing Up for California, and Yes on 82, Standing Up for Our Kids.)

Friends of Phil Angelides gave $8.4 million to Angelides 2006 in May-June 2003 (page 172). As a way of background, in 2002, California had adopted Prop 34, which put into place limits on campaign contributions, where as before there were none. By contributing money from his pre-34 committee (Friends of Phil Angelides) to his post-34 committee (Angelides 2006), Angelides was able to use the unlimited contributions which he had raised from friends like developer Angelo Tsakapolous prior to the change in the law.

So when Angelides forgave the $1 million this year, he in essence contributed another $1 million to his gubernatorial effort, bringing his total contributions to $2.5 million. Painful to walk through, but true nonetheless. Add in the $100,000 from River West Investments, Angelides' development company, and the total creeps up further.

In addition to the more than $600,000 Mr. Tsakapolous contributed to Phil's pre-34 committee (much of which ended up in his current gubernatorial account), he and his family have helped Angelides' gubernatorial bid with more than $200,000 in contributions to Angelides 2006 and a much ballyhooed $8.7 million in contributions to an independent expenditure committee supporting Angelides. As Tom Chorneau and John Wildermuth report in the San Francisco Chronicle, $2 million of that money came just this week.

In addition to Westly, Angelides, and Tsakapolous, another famous California Dem is throwing his considerable financial weight around, this time towards a ballot measure. Rob Reiner, actor/director and until recently, head of the California First 5 Commission, has contributed some $5.5 million to the Yes on Prop 82 committee along with his wife and father.

Prop 82 is Reiner's baby, hatched while he was still serving on the First 5 Commission. That Commission spent $23 million on "Preschool for All" ads while Reiner's folks were collecting signatures to put Prop 82, the "Preschool for All" initiative, on the ballot. The $23 million ad campaign appears to have violated California's prohibition on spending taxpayer dollars for campaign purposes, leading to much furor and eventually causing Reiner to resign from the Commission.

Reiner has stayed low since his apparently illegal activity was brought to light, but Prop 82's eroding approval ratings prompted him to sink another $1.65 million into the campaign this week, as reported by Peter Hecht in the Sacramento Bee. Reiner's heart might be in the right place, but his approach to democracy is outright hubris: he thinks if he's got a good idea, he should be able to purchase its implementation.

So, mammon is funding the hubris which these men must possess to believe that they are entitled to greater say and political opportunity than the rest of us. Westly and Angelides have both announced their support for public financing of elections, which helps level the playing field so that candidates like themselves don't have the enormously unfair advantages they themselves currently possess.

But, the proof will be in the pudding. While the legislative version of publicly financed elections (AB 583) appears close to demise, the California Nurses Association have likely put on the November ballot a measure which would implement a program of public financing for elections, in addition to lowering the contribution limits for privately financed candidates, placing limits on contributions to independent expenditure committees, and placing an aggregate cap on all contributions a person can make to candidates, parties, and committees in a given cycle.

If Angelides and Westly are serious about their support for true democratic reform, they will not hesitate to chip in some of their millions towards the nurses' initiative. If they do not do so, Californians will have a much clearer picture of what these men truly stand for. From where I sit, as of now, it appears to be themselves.

2006-05-25T10:00:00.000-07:00

ENRON TRIAL: GUILTY

As Mark Babineck reports for the Houston Chronicle, a Houston jury found former Enron CEOs Ken Lay and Jeffrey Skilling guilty on charges of fraud and conspiracy. Lay was convicted on all six counts against him; Skilling was convicted on 19 of 28 counts. It took the jury six days of deliberations to make their decision.

After the jury announced its verdict, Judge Sim Lake, who presided over the Lay/Skilling trial, found Lay guilty on three counts of banking fraud in a separate trial.

Sentencing was scheduled for September 11. The NY Times reports that the fraud and conspiracy charges carry a sentence of 5-10 years.

The guilty charges come after sixteen weeks of trial and four and half years after Enron went bankrupt. Enron, an energy trading firm, rose to power on a tide of energy deregulation at the federal and state level. The more deregulated the market, the more opportunities there were for Enron to game the system to pull in massive profits.

First, Enron convinced the Federal Energy Regulatory Commission (FERC) to deregulate the natural gas markets in 1993. After achieving that, Enron turned its attention to state energy markets.

Enron spread around millions in campaign contributions at the state and federal level to get deregulation-friendly legislators into office and appointed to FERC. It worked: more than 20 states deregulated their energy markets in the 1990's, in large part in response to Enron's lobbying. (See our case study on Enron in Connecticut here.) But deregulation often created more havoc than good. Rolling blackouts hit California in 2000-1, for example, costing the state billions of dollars -- costs which were passed on to consumers and taxpayers.

Enron was a bully. Ken Lay and Jeff Skilling saw opportunities for profit, and then threw their financial weight around with campaign contributions to make sure people friendly to their agenda got into office. While Lay and Skilling got their way, the rest of us got screwed.

Today's convictions may provide some measure of comfort for those whose livelihoods or life savings were destroyed by the reckless and fraudulent behavior of Mssrs. Lay and Skilling, but it does nothing to prevent future Lays and Skillings from engaging in similar public-screwing behavior.

Until we change our campaign laws to make sure representatives get into office who are there to represent the public, not SOBs rich enough to put $100,000 in a candidate's pocket, the American public should expect a government which gives them poor regulatory oversight, shoddy accounting standards, and more economic collapses like Enron.

2006-05-24T09:28:00.000-07:00

V.P. Cheney in CA - "Lord, Tonight's All About Raising Money"

As Mark Barabak reports in the Los Angeles Times, Vice President Dick Cheney came to California this week to raise money for three congressional candidates. The beneficiaries included Brian Bilbray, who is vying to fill Duke Cunningham's recently vacated seat (CA-50), and current Reps. John Doolittle (CA-4) and Richard Pombo (CA-11).

Both Doolittle and Pombo are facing what appears to be significant opposition in the primary for the first time in years, so Mr. Cheney's visit only two weeks before the June 6 primary was likely intended to send a signal to district Republicans how the White House feels they should vote. But signal-sending aside, the real reason for the Veep's trip was described by a local pastor in the invocation before the Pombo event.

"Lord, tonight's all about raising money."

Indeed, elections have become increasingly about raising money, and almost exclusively from the nation's upper crust, rather than constituents. So it was refreshing to see that ticket prices to Doolittle's fundraiser were $250, rather than the $1,000 or $2,000 prices you normally see at fundraising events in Washington D.C.

That being said, Cheney's visit is a reminder that the Beltway's answer to falling approval ratings is to raise more money than God and then to blow your opponents out of the water by outspending them, rather than outarguing them on the issues. And for every $250 fundraising event in the district*, there are 10 more events in D.C. where the corporate lobbyists and PACs are all giving $2,000 or $5,000.

The system of funding campaigns has given a clear and decisive advantage to wealthy interests over average Americans when it comes to electing our representatives. Until we change that system, the rest of us will be on the outside looking in at our democracy just as surely as we would be standing on the outside looking in at a fundraiser charging $2,000 for admission.

*Doolittle represents a district that includes a portion of suburban Sacramento. The fundraiser was held at the downtown Hyatt, which is not in his district, but is close enough to be easily reachable by many of his constituents.

2006-05-23T14:05:00.000-07:00

Corruption Update - Katherine Harris, William Jefferson, Brent Wilkes

First up, Congressman William Jefferson of Louisiana, who is facing scrutiny for seeking and receiving bribes from a tech company called iGate in connection with an African business deal. Both iGate's CEO and a former Jefferson staffer have already pleaded guilty to bribing Jefferson, whose protestations of innocence have grown perceptibly less strident in recent days.

Over the weekend, FBI agents raided Jefferson's congressional offices, apparently an historic first. The FBI also revealed that they have a video of Jefferson accepting a suitcase filled with $100,000 in cash ... $90,000 of which FBI agents later recovered from Jefferson's freezer, where it was hidden in aluminum foil and food packages.

Apparently those serial numbers have use beyond liar's poker. Who knew?

Second up, our favorite Florida diva, Rep. Katherine Harris, who is under fire for accepting $32,000 in illegal campaign contributions from Mitch Wade shortly before seeking $10 million in federal funds for Wade's company MZM. Wade pleaded guilty earlier this year to bribing former congressman Duke Cunningham. Since the Wade guilty plea, the wheels have come off the Harris campaign, with a downright bizarre series of public appearances and the flight of nearly all her campaign staff.

Harris has not quite been able to get her story straight on her relationship with Wade. After Wade pleaded guilty, it was revealed that Wade and Harris had had dinner together in early 2005. Wade, gentleman that he is, picked up the entire $2,800 tab, which Harris neglected to report in her gift filings. Harris, gentlewoman that she is, asked Congress for $10 million for Wade's company a couple months later.

It's all so civilized.

And now, as Jeremy Wallace reports in the Sarasota Herald Tribune, it has come to light that Harris had dined with Wade in 2004 at the same posh Washington D.C. restaurant, Citronelle. Harris forgot to report that gift on her ethics filings too.

This may not seem like much to Joe or Jane America, but a troubling pattern of misinformation has emerged regarding Ms. Harris's involvement with a confessed briber of members of Congress.

And last, the New York Times published an informative graphic over the weekend on Brent Wilkes, the other defense contractor in the Duke Cunningham case. The NYT's numbers on campaign contributions are off ... significantly off in some places ... but we'll forgive them that in exchange for bringing some illumination to the myriad ways in which Wilkes and Wade used campaign contributions to get the kind of representation in Congress that only money can buy.

Check out our Corruption Files for more info.

2006-05-18T10:14:00.000-07:00

House Ethics Panel No Longer Dormant

As Jonathan Weisman reports in the Washington Post, the House Ethics Committee announced yesterday it will open three separate investigations after a year and a half of sitting on their hands in the face of multiple scandals involving House members. The Committee will examine possible wrongdoing by both Congressmen Bob Ney (R-OH) and William Jefferson (D-LA), in addition to a separate inquiry into the constantly expanding Duke Cunningham scandal.

Bribery is at issue in each case. In their separate sworn guilty pleas, four men have accused Ney of accepting bribes in exchange for taking official actions which benefited the bribers or their clients.

Two men - former Jefferson staffer Brett Pfeffer and iGate CEO Vernon Jackson - have accused Jefferson of demanding an ownership stake in a tech venture in exchange for help obtaining loans for the venture from the US Import-Export Bank, among other official actions.

The blast radius from the explosive Duke Cunningham scandal seems to grow wider every day, with each new revelation raising the specter of bribery of a different member of Congress.

The Committee also announced that were Tom DeLay not retiring from office on June 9, that he would have been investigated too. Better late than never perhaps, but that doesn't put the horse back in the barn.

All these scandals have been ongoing for the better part of the Committee's 16-month snooze, yet a self-serving bipartisan impasse effectively shut down the only ethical enforcement possible in what is supposed to be the most small-d democratic institution in the federal government.

Democrats and Republicans alike are responsible for the calamitously low public trust in government in the U.S. In the Pennsylvania primary held this week, more than a dozen incumbents lost .... in the primary, demonstrating a decidedly throw-the-bums-out attitude among American voters.

In other words, the Ethics Committee's renewed interest in doing their duty is welcome, but it may come too late. The same smelling salts which awoke the Committee from their idle torpor may serve to clean house come November.

2006-05-12T13:28:00.000-07:00

Brent Wilkes Fax to Cunningham Raises ?s About Reps. Duncan Hunter, Jerry Lewis

As Dean Calbreath and Jerry Kammer report in the San Diego Union Tribune, then-Congressman Duke Cunningham received a desperate letter via fax from Brent Wilkes on July 6, 1999. Wilkes is one of the defense contractors whose bribery payments to Cunningham put Cunningham in prison for 8 years.

In 1999, Wilkes was trying to obtain a contract from the Department of Defense for his company ADCS to convert documents in the Panama Canal Zone. He had given over $100,000 in campaign contributions to key members of Congress over the previous year in pursuit of the contract, including $26,000 to the Chairman of the Defense Appropriations Subcommittee, Congressman Jerry Lewis (CA-41).

The DoD didn't want the document conversion, so Wilkes was forced to resort to congressional pressure to make it happen.

But that pressure had not yet been brought to bear when Wilkes wrote the letter (scroll down to page 75) to Cunningham. Wilkes' tone is assertive and emphatic:

WE NEED $10M MORE IMMEDIATELY
IF NECESSARY TAKE MONEY OUT OF [blacked out] PROGRAM
DEOBLIGATE MONEY IF NECESSARY
. . .
THIS IS VERY IMPORTANT AND IF YOU DO NOT RESOLVE THIS OTHERS WILL BE
CALLING ALSO, i.e. [blacked out] [blacked out] ETC.

First, as to the blacked out names: As we picked up looking at the letter (as did a reader of Laura Rozen's War and Piece), the two names at the end of the letter aren't entirely blacked out. The first name clearly begins DUN and is about 13 characters long. The second name is less discernible, but appears to begin with J and end with S, and take up about 11 characters.

As Peter Pae reported in the Los Angeles Times and Calbreath and Kammer report in the SDUT, federal investigators are looking into Rep. Jerry Lewis as part of the Cunningham scandal. From 1993-2005, Lewis received $88,252 from Wilkes and his associates, #3 in Congress behind Cunningham and Rep. John Doolittle, both of whom admittedly steered millions of dollars in federal contracts to Wilkes. He served as chair of the most important committee for Wilkes' efforts to get federal defense earmarks. Lewis is likely the second blacked-out name.

Wilkes' campaign contributions also shed light on the identity of the first blacked-out name. Coming in at #5 on the Top 10 congressional recipients of Wilkes' campaign contributions is . . . Congressman Duncan Hunter, who received $43,200. As Representative of the 52nd Congressional District of California, Hunter is Brent Wilkes' representative in Congress. Er, official representative. Um, the guy Wilkes would have voted for.

Hunter was taking money from Wilkes as early as 1994, when Wilkes worked for Audre Inc., a document conversion firm based in the San Diego area. After receiving more than $7,000 in contributions from Audre employees, Hunter helped facilitate some $190 million in congressional funding for document conversion, Wilkes' bread-and-butter.

So, Hunter and Lewis.

Who the ETC. are remains uncertain, but we would suggest that a look at the recipients of campaign contributions from Wilkes is a good place to start looking.

Second point, the tone of the fax: what is Wilkes doing using ALL CAPITALS in a communication to a SITTING CONGRESSMAN? Very few members of Congress have the sort of temperament which permits the use of such emphasis, let alone the demanding tone which Wilkes uses. And Wilkes even orders Cunningham to "deobligate" funds from other programs if he has to, never an easy task in the horsetrading atmosphere of Congress: you pay Peter at Paul's expense.

The fax was sent in 1999, prior to any actual bribes which Wilkes paid to Cunningham, at least that have been reported. Why is Cunningham so under Wilkes' sway that Wilkes can treat Duke like his boy? Did Wilkes already have something on Cunningham? Where is the leverage coming from?

Third, why does Wilkes seem to threaten Duke with the possible involvement of Lewis and Hunter? Generally, if you start a statement with "If you do not X," and complete it with "others will Y", it's a threat. Again, see for yourself, but Wilkes seems to be using the potential involvement of Lewis and Hunter as a pressure point against Cunningham. So what if Lewis and Hunter carry the earmarks for Wilkes?

Campaign contributions obviously played a role in Wilkes' efforts to get contracts, as did outright bribery eventually. And recent reports have federal investigators examining whether prostitutes played some role in the Cunningham scandal. Was Wilkes already running some form of incentive-based bribery ring as early as 1998 or 1999, in which carrots were meted out or sticks avoided based on the direct help from members of Congress? And was that a zero-sum game, in which only so many opportunities were available and a Member was s.o.l. if he didn't come through in time?

Wilkes was well-connected within intelligence circles, particularly the CIA. Did Cunningham and other members of Congress equate pressure from Wilkes with pressure from the Agency? A phone call to the right person would tell them whether that was true. Did someone in the CIA vouch for Wilkes?

What is clear is that the Cunningham investigation has to date raised many more questions than it has answered. Federal investigators appear to be doing a thorough job of exploring possible corruption beyond Cunningham. Time will help determine whether their efforts are ultimately successful.

2006-05-11T17:22:00.000-07:00

Show Me The Money - Missouri Senate Guts Campaign Limits

As Josh Flory reports for the Columbia Daily Tribune, the Missouri Senate passed an ethics "reform" yesterday which would repeal the state's limits on how much money wealthy interests can give to candidates for public office.

Current Missouri law limits contributions to $1,275 to a candidate for statewide office, $650 to a candidate for the state Senate and $325 to a candidate for the state House. The law passed by the Senate yesterday would abolish those limits.

The purpose of such contribution limits is to check the influence of wealthy interests in determining who gets elected to office, in order to make Missouri government more representative of the people and viewpoints of all Missourians, not just the rich Missourians.

The Senate vote can be seen as a vote to make government less representative and to increase the voice of wealthy interests at the expense of the average, middle- and working-class Missourians.

The Senate did make a feeble effort to dissociate money from political decisions by placing a "blackout" on campaign contributions during the legislative session and to end contributions to candidates from political parties.

These "reforms" are so naive as to be laughable: money is money to a politician looking to get re-elected. Both the pol and most wealthy donors are sophisticated enough to understand that a $10,000 contribution given 2 days after the end of the legislative session means the same thing as a $10,000 contribution given 2 days before the end of the session.

And the ban on party contributions means nothing without a limit on contributions to the candidates for office. If anything, the action of the Senate strengthens the tie between the donor and the politician, increasing the chances of corruption, not to mention depriving regular folks of their rightful say in the process.

Less than 10 years ago, Missouri was at the forefront of campaign finance reform in America, when its citizens fought for and won fairly low contribution limits. Now, the legislature is repealing that hard-fought progress, and using cynical rationales and skulduggery in the process.

Hopefully, the upcoming election will serve as a reminder to the legislature that they serve the will of the people, not at the whim of the financially powerful.

2006-05-11T16:30:00.000-07:00

Kentucky Governor Ernie Fletcher Indicted

As Joe Biesk reports for the Associated Press, Kentucky Governor Ernie Fletcher was indicted today (Thursday, May 11) on misdemeanor charges of politically discriminatory hiring practices, official misconduct, and conspiracy in furtherance of the first two charges.

Kentucky law prohibits the consideration of political affiliation in state hiring. The grand jury indicted Fletcher for doing just that - looking at political affiliation and campaign contribution history of potential hirees as a way to positively screen for those who would be political supporters.

Last year, Fletcher pardoned nine people in relation to the scheme, and issued a blanket pardon covering all others involved ... except himself. It's good to see Mr. Fletcher taking the high road.

Fletcher, of course, calls the charges politically motivated. This is somewhat ironic given that the indictments level the same charge at Fletcher's hiring practices. It's unclear which side has truth on their side. We'll keep an eye on things to see how they pan out.

2006-05-09T17:25:00.000-07:00

CA Congressman Calvert Has Some Explaining to Do

The Wall Street Journal recently broke the news that federal investigators are looking into whether Duke Cunningham briber Brent Wilkes, who used to throw poker parties for members of Congress and the intelligence services at high-priced D.C. hotel suites, provided prostitutes for the attendees of those gatherings.

These scandalous revelations raise the possibility that Wilkes, whose willingness to bribe and conspire to break the law to obtain federal contracts has been shown in court documents strewn across the Cunningham investigation, used prostitutes as a hook to coerce or manipulate members of Congress into steering him federal contracts.

Since the WSJ story, a number of members of Congress have scrambled to deny attending the poker-n-prostitution parties. But an old police report suggests that one Californian congressman may face some heightened scrutiny.

Representative Ken Calvert (CA-44) (see our file on him here) was already under scrutiny for his connections to the Duke Cunningham bribery scandal, which include some $10,500 in campaign contributions arranged by Brent Wilkes and a "fact-finding" trip to Saudi Arabia which Calvert took with Cunningham. Oh, and by the way, on the way to Saudi Arabia, they stopped off in Greece to pick up Thomas Kontogiannis, another one of the guys who Cunningham pleaded guilty to being bribed by. (Kontogiannis overpaid Cunningham for his boat by $400,000.)

But now there's more. Our whistleblower tip line recently reminded us that Mr. Calvert has a history with prostitutes. This 1993 police report describes an incident where a Corona, CA police office found Calvert in a parked car with his pants unzipped and a prostitute's head in his lap. Calvert's response at the time: "We're just talking that's all, nothing else."

The recent revelations that Wilkes and Wade used prostitutes to gain influence and access with key members of congress and the intelligence services cast Calvert's 1993 run-in with the police in a different light. While no charges were apparently filed against the congressman, the incident does raise some questions that demand an answer.

1) Did Calvert ever attend any of the Wilkes/Foggo poker parties?
2) Did Calvert ever accompany Wilkes on any flight, whether for fundraiser or other purpose?
3) Did Calvert do anything to help Wilkes in exchange for campaign contributions, bribes, or other perks including sexual favors? Did Wilkes ever lobby Calvert to take any action?

This is more than a sex scandal. Wilkes is also linked to Dusty Foggo, a childhood friend of his, who recently resigned from the #3 post at the CIA. The story that may emerge is one of old buddies using a variety of tactics, some legal and some not, to cajole or pressure members of Congress in order to make money and influence national policy.

The possibility that members of Congress compromised the integrity of their office or perhaps our national security - and done so because someone had dirt on their sexual activities - is both frightening and serious. While no evidence has been yet put forth showing that this took place, sufficient red flags have been raised as to merit a response from our elected representatives, particularly those with extensive Wilkes contacts, particularly those with a history with prostitutes.

Calvert is one such official. While Calvert likely wishes the 1993 police report was long forgotten, it is yet relevant, especially in light of the direction of the federal investigation and the seriousness of the potential harm. His constituents deserve a clearing of the air.

2006-05-08T12:53:00.000-07:00

Ney Aide Pleads Guilty to Corruption Conspiracy

As Pete Yost and Mark Sherman report for the Associated Press, a former aide to Ohio Congressman Bob Ney pleaded guilty today to corruption and conspiracy charges in relation to the Jack Abramoff scandal. The aide, former Ney chief of staff Neil Volz, faces up to five years in prison and up to a $250,000 fine, depending on his assistance to federal investigators.

After working for Ney from 1995-2002, Volz went to work as a lobbyist, first with Jack Abramoff and then at Alexander Strategy Group (ASG). ASG was a lobbying firm set up by Ed Buckham, Rep. Tom DeLay's onetime chief of staff, to trade on the contacts he and at least a dozen other lobbyists developed as congressional staffers to make a boatload of cash as lobbyists.

In the "criminal information" (a statement of the facts underlying a guilty plea) Volz signed in connection with his guilty plea, he admits offering gifts to Ney in exchange for Ney taking actions to benefit Abramoff's and eventually Volz's lobbying clients.

At least four people to plead guilty in connection with the Abramoff corruption scandal have now mentioned Ney in their guilty pleas, including Michael Scanlon, Tony Rudy, Jack Abramoff, and Mr. Volz.

Ney's response to today's events was curious: " ... After reviewing today's plea agreement against Neil Volz which is thin at best, the congressman is more confident than ever that he will be vindicated in this matter," said Ney spokesman Sean Walsh.

Ney is confident in his innocence after he reads the plea deal? What kind of confidence must that inspire in his constituents.

The legal case against Ney grows stronger with each new guilty plea corroborating his complicity in the corruption scheme. Bribery cases are often difficult to prove because they require a specific agreement to exchange money or gifts for official acts, not an easy thing without a wire or a person on the inside. In this case, we have four people on the inside who have now sworn to Ney's involvement in the scheme.

While prosecutors have yet to make their legal case against Ney, the verdict as to his fitness for office is in: he should resign, as we advocated in January after Jack Abramoff pleaded guilty to bribing Ney. The standards for holding office and for staying out of jail are not the same, at least as far as we're concerned.

Ney had no problem taking the gifts, the trips, and the campaign contributions. He had no problem standing on the floor of Congress and making statements to benefit Jack Abramoff's associates, nor writing letters on behalf of Abramoff's tribal gaming clients. Put plainly, he gets what he deserves. It's too bad the same can't be said for his constituents.

2006-05-05T11:54:00.000-07:00

CIA Chief Porter Goss Resigns – Did Connections to Cunningham Bribery Scandal Bring Him Down?

CIA head Porter Goss resigned today. Goss, a former congressman from Florida, promoted Dusty Foggo to the position of Executive Director of the Central Intelligence Agency.

Foggo is currently the subject of an internal investigation by the CIA into whether Foggo used his position to steer intelligence contracts to his longtime friend Brent Wilkes, one of the defense contractors who bribed Duke Cunningham. One of Wilkes’ companies, Archer Logistics, received a $2-3 million contract to provide water and other supplies to CIA agents in Iraq.

Foggo and Wilkes have been friends since high school. They named their children after one another. When Foggo was working with the Contras in the 1980’s, Wilkes ferried members of Congress down to Central America to see their operations.

It is unclear how Foggo, whose CIA career has focused mainly on procurement, advanced to the #3 position within the agency. Some have suggested that his advancement may have been facilitated by members of Congress upon whom Foggo had dirt – some kind of embarrassing or incriminating information which provided Foggo with leverage. In possible support to this notion, recent reports have indicated that when Goss elevated Foggo to Executive Director of the CIA, Goss placed an unusual blackout on nonclassified information in Foggo’s file.

It is also possible that in addition to campaign contributions and outright bribery, Wilkes used the same m.o. to advance his own interests with members – getting them to steer him and his companies federal contracts.

Recent reports state that the ongoing federal investigation into bribery of members of Congress has expanded to include whether Wilkes and his associate Mitch Wade provided members of Congress with prostitutes as part of their scheme to obtain federal contracts. Foggo has since admitted to attending poker parties with members of Congress and other CIA officials at Washington D.C. hotel suites rented out by Wilkes, but denied that he had seen prostitutes in attendance.

The speculation and rumor which has swirled around the Cunningham investigation since its inception are slowly gaining credibility due to the recent revelations relating to prostitution and Goss’ resignation. Dean Calbreath of the San Diego Union-Tribune reports that up to half a dozen members of Congress may be implicated. House Intelligence Committee Chairman Peter Hoekstra, himself a recipient of $4,000 in campaign contributions from Wilkes and his associates, says he is not surprised by the federal inquiry into the use of prostitutes by some of those mentioned.

What is clear is that the federal inquiries have shaken some nerves in our nation's capitol. If you follow the money from Wilkes and Wade, it is painfully evident that federal investigators have plenty of leads to chase, and that the conviction of Duke Cunningham, as eye-opening and damning an indictment of business-as-usual in the Beltway as it was, may have only been the beginning.

The refusal of politicians like Rep. John Doolittle, CA Governor Arnold Schwarzenegger, and President Bush to disgorge the campaign contributions they received from Brent Wilkes and his associates becomes less acceptable with every new revelation about Wilkes' methods and every head that rolls. Their refusal constitutes more than just passive acceptance of money from Wilkes, but is an active endorsement of the acceptability of his methods.

They should give up the money from Wilkes and his associates immediately, or wholeheartedly and publicly embrace the platform of bribery, possible coercion, and prostitution which Wilkes' contributions represent.

2006-05-04T14:21:00.000-07:00

Connecticut Clean Money Bill Gets Cindarella Save

As Christopher Keating and Elizabeth Hamilton report in the Hartford Courant, at three minutes to midnight on Wednesday night, the Connecticut Legislature passed a bill which makes important fixes to the state's 2005 clean elections law. The session ended at midnight.

When the Connecticut Legislature passed the clean elections law last December, it became the first state legislature to pass a clean elections law which applied to itself. Arizona and Maine also have clean elections - elections where qualifying candidates can receive public funds to campaign in return for a promise to abide by a spending limit and to forego private financing - but the programs in those states were passed via the ballot initiative process.

But the Connecticut law had some potentially fatal flaws. The Legislature had included a provision which would have permanently invalidated the law if a judge had temporarily enjoined the law for three days or more. Because the law had a higher standard for candidates from third parties to receive public funds, it was a sure thing that the law would be challenged and likely enjoined for at least three days, effectively nullifying the law.

The effort to fix the flaw soon became a litmus test for how serious the Legislature was about enacting such a positive reform. Institutional desire for self-reform is normally rare and tenuous, calling into question whether the fateful provision was intentionally inserted as a poison pill to kill the whole bill.

While it is unclear whether last night's bill will effectively solve the issues presented by the problematic provisions of the original law, the Legislature and its leaders have answered some of the concerns about their sincerity in passing the law last year, and should be commended.

2006-05-03T10:29:00.000-07:00

CEO pleads Guilty to Bribing Congressman William Jefferson

As Allan Lengel reports in the Washington Post, iGate CEO Vernon Jackson pleaded guilty today in federal court to two corruption charges: bribing a public official and conspiring to bribe a public official. The surrounding facts make clear that the public official in question is Louisiana congressman William Jefferson.

The bribery scheme involved kickbacks to Jefferson for helping obtain loans from the US Import-Export Bank and contracts with African nations for a tech business named iGate. Jefferson had broached the possible deal to former aide Brett Pfeffer upon hearing that Pfeffer was working for an investment company.

After Pfeffer pursued the deal, he approached Jefferson for help obtaining loans and getting the contracts. Jefferson demanded a 5-7% stake in the venture, in addition to employment for family members. Jefferson even went to Africa to pursue the deals on behalf of his paymasters. See our Corruption Files for more details.

Jackson's plea is the second implicating Rep. Jefferson in a bribery scheme, coming nearly four months after a former Jefferson aide named Brett Pfeffer implicated Jefferson in his guilty plea to bribery. While Pfeffer's guilty plea provided sufficient evidence of Jefferson's involvement in the scheme for us to call for the congressman's resignation, today's guilty plea makes even more likely an eventual finding of guilt against Jefferson.

Louisiana law might not allow sufficient time for an election to replace Jefferson prior to the upcoming November elections. But Jefferson's constituents still might be better served by Jefferson's immediate resignation and the ensuing lack of representation for six months than they are by a person who sells his office for personal financial enrichment.

Former congressman Duke Cunningham, who has since pleaded guilty to a bribery scheme and resigned from office, initially announced that he would not seek re-election when the story broke that he'd received a sweetheart house deal from a defense contractor. It is possible that Jefferson will try the same stalling tactic to put off what seems increasingly inevitable: his conviction on corruption charges and ouster from Congress.

Regardless, the people of Louisiana's 2nd Congressional District, who very much need a representative they can count on right now, deserve better than the status quo.

2006-05-02T14:59:00.000-07:00

ACLU Opposition Kills Rhode Island Campaign Finance Law

As Chelsea Phua reports for the AP, last Wednesday a federal court struck down a Rhode Island law which checked the influence of corporations and wealthy individuals on the state's ballot initiative process. The court's decision came in a lawsuit filed by the American Civil Liberties Union (ACLU) against the law, alleging that it infringed on the First Amendment's right to free speech.

The parts of the law which were struck down included 1) a ban on corporate contributions to groups advocating for/against ballot initiatives and 2) a $10,000 limit on contributions from individuals or groups to organizations advocating for/against initiatives. Just as a reminder, corporation aren't citizens and can't vote, and only a small fraction of Americans can afford to give even $1,000 towards an initiative, much less $10,000.

But the ACLU isn't concerned with the rights of ordinary Americans in this case.

The ACLU has a long history of supporting the rights of the financially powerful to use their wealth to influence elections at the expense of the voice of regular Americans in determining our elected representatives and in determining our laws through the ballot initiative process. This opposition to reform is disguised as a defense of First Amendment rights, but in reality it benefits only those who are able to give hundreds of thousands, if not millions, of dollars.

In other words, the ACLU advocates a multi-tiered system of First Amendment rights - those with money get more say, while the rest of us get run over by the very Constitution which is supposed to protect our rights. If this sounds familiar, it's because it's the exact same argument that financially powerful people on the right use to suppress the electoral voice of regular Americans.

Money isn't speech. Speech is. Nothing in the Rhode Island law precluded anyone from speaking their mind about a ballot measure to friends or coworkers or family members or people on the bus. Nothing in the Rhode Island law checked anyone's right to speak their mind in letters to the editor, in a blog, on a sandwich board, or at the top of their lungs in the town square.

To the extent that money provides a way to communicate ideas and arguments to a wider audience, those means should be available to people regardless of their wealth. The sooner the ACLU and their fellow financial elitists get that, the better.

2006-04-28T15:26:00.000-07:00

Duncan Hunter: Silent on Attendance at Duke's Hooker Parties

As KFMB Channel 8 of San Diego reports, Congressman Duncan Hunter is refusing to say whether he attended any of the Duke Cunningham poker-n-prostitute parties held in posh Washington D.C. hotels like the Watergate.

Yesterday, the Wall Street Journal reported that federal investigators have expanded the Duke Cunningham bribery investigation to include queries into the procurement of prostitutes for Cunningham by the two defense contractors which bribed Cunningham, Brent Wilkes and Mitch Wade.

In light of that revelation, we called on all recipients of campaign contributions from Brent Wilkes and Mitch Wade to clarify for their constituents that they were never provided with any sexual partners by Wade or Wilkes. We focused on some of the politicians in the Top 10 recipients, particularly Idaho Senator Larry Craig, Representative Duncan Hunter, Rep. Jerry Lewis, and Rep. John Doolittle, all of whom steered federal dollars to Wilkes either directly or as chairman of a committee which approved the funding.

Well, we're still waiting to hear back from Craig, Doolittle, and Lewis, but Hunter has responded ... with silence on the question of whether he attended any of Duke's pajama parties with prostitutes. He also had this to say about Duke: "The congressman knows Mr. Cunningham very well and refuses to believe he would be unfaithful to his wife."

Time will tell whether Hunter is covering his ass or that of his friend Duke. But in the meantime, Hunter should step forward and make absolutely clear to his constituents that he in no way compromised either his representation of his district or the national security of the United States with his involvement with Wilkes and Wade.

2006-04-27T09:25:00.000-07:00

Cunningham Scandal Expands ... To Other Members of Congress?

As Scot Paltrow reports in this morning's Wall Street Journal, federal investigators have expanded their inquiry into the bribery case involving former Congressman Duke Cunningham and two defense contractors, Mitch Wade of MZM Inc. and Brent Wilkes of Wilkes Corporation, Group W, and Automated Document Conversion Services (ADCS), among others.

Investigators are now pursuing whether Wade and Wilkes procured prostitutes for Duke Cunningham, in addition to the millions in gifts and cash they gave to Cunningham in exchange for his help getting them hundreds of millions in federal defense contracts.

Cunningham and Wade have each pleaded guilty to bribery and corruption charges, but Brent Wilkes has not even been indicted yet. Amongst those following this case closely, there has been much speculation that the illegal activity by Wilkes was not limited to bribing Cunningham, but included other acts potentially involving other members of Congress, a notion borne out by the expanding federal investigation.

The million dollar question is this: were other members of Congress involved in similar immoral behavior with Wilkes and Wade?

Cunningham wasn't the only member of Congress to receive large sums of campaign contributions from Wilkes and Wade. Others include:

Rep. Duncan Hunter - CA 52, who received at least $43,200 from Wilkes and his associates. Hunter directed millions for document conversion services for Wilkes in the 90's.

Senator Larry Craig - ID, who received at least $43,000 from Wilkes and his associates. Craig earmarked $3 million for Wilkes for digitizing and converting documents in 2002.

Rep. Jerry Lewis - CA 41, who received at least $86,252 from Wilkes and his associates. Lewis was chairman of the House Subcommittee on Defense Appropriations from 1999-2005 when Wilkes and Wade obtained the bulk of their defense contracts.

Rep. John Doolittle - CA 4, who received at least $118,000 from Wilkes and his associates. Doolittle earmarked $37 million in federal funds for Wilkes' company PerfectWave Technologies.
These men all showed a willingness to help Wilkes and Wade. Was this willingness predicated not only on campaign contributions, but also upon something much more sordid?

Wilkes is a longtime pal of CIA official Dusty Foggo. When Foggo was stationed in Central America in the 80's, Wilkes ferried members of Congress down to see Foggo and the Contras. In other words, Wilkes is no stranger to the world of dirty tricks. Central America is apparently well known in certain circles as a haven for wealthy Americans wanting to get sexed up - the Western Hemisphere's Morocco, if you will.

These facts suggest another question: Were members of Congress coerced into providing contracts to Wilkes and Wade in return for silence about the members' sexual depravity?

Today's revelations demand an answer from those elected officials with whom Wade and Wilkes were close: Reps. Hunter, Lewis, and Doolittle, and Senator Craig should all make clear to their constituents that they engaged in no such immoral behavior in connection with Wilkes or Wade as apparently did Cunningham.

Our national security has been compromised in part by greed. Americans have a right to know how far it has been compromised, and whether these public officials traded their office for a piece of ass.

2006-04-25T16:16:00.000-07:00

Brent Wilkes' Money Still Good in San Diego

As William Finn Bennett reports in the North County Times, the campaign contributions of one of Duke Cunningham's alleged bribers is still playing a role in San Diego politics.

Earlier this year, Cunningham pleaded guilty to receiving some $2.4 million in bribes from four men in exchange for using his public office to benefit them. One of those men has been identified as Brent Wilkes of Poway, CA, a suburb of San Diego. (Another, Mitch Wade, has pleaded guilty to bribing Cunningham and making illegal campaign contributions to Representatives Virgil Goode - VA and Katherine Harris - FL.)

Wilkes owned a number of corporations outright and held a controlling interest in others, including the Wilkes Corporation, ADCS, Group W Travel, Group W Advisors, PerfectWave Technologies, Archer Logistics, and Al Dust Properties. Most of these companies sought defense contracts from the federal government, which is why Wilkes sought help from Cunningham.

To increase his chances of getting government contracts, Wilkes directed more than $1.2 million in political contributions from himself, his employees, and business associates to candidates, parties, and committees at the federal and state level from 1993-2005. Because the contributions stretch over such an extended period, not all of the recipients are still in office.

One such recipient, former California Congressman Brian Bilbray, is running to replace Duke Cunningham, whose seat has been empty since he resigned in November 2005. Bilbray has disgorged $6,000 of the $12,550 (by our count) that he received in Wilkes-related contributions, but not all.

That a past recipient of Wilkes' political contributions is again running for office is neither unique or surprising. Wilkes contributed to a number of state-level candidates in California who were the most likely to succeed local congressman with whom Wilkes already had gold star access, such as Duke Cunningham ($525k in bribes, $106k in campaign contributions), Duncan Hunter ($43k), and Jerry Lewis ($86k).

For example, Cunningham finally resigned, the candidates usually mentioned as possible replacements for Cunningham included Charlene Zettel, George Plescia, Mark Wyland, Bill Morrow, Bilbray, and Howard Kaloogian. All but Kaloogian had received Wilkes-related contributions.

Another example is former California Assembly Minority Leader Kevin McCarthy, who was widely seen as the heir apparent for California Congressman Bill Thomas, currently the chairman of the powerful House Ways and Means Committee. When Thomas announced his retirement earlier this year, McCarthy announced his candidacy to replace Thomas. McCarthy received $5,000 through Wilkes.

McCarthy's replacement as Minority Leader: George Plescia, who received $19,000 through Wilkes, launched his campaign from Wilkes' headquarters, and married Wilkes' director of government affairs.

In other words, Wilkes was developing a farm team to replace his current stable of members of Congress with whom he had gained access through campaign contributions. Even if these other politicians were not in Wilkes' pocket like Cunningham, the intent behind Wilkes' contributions was the same as it was with the dollars he dished to Duke: to buy access to gain government contracts.

We've called on all recipients of Wilkes-related contributions to disgorge those contributions. Check out our campaign here.

2006-04-24T16:51:00.000-07:00

Ken Lay Takes the Stand

As Mark Babineck and John Roper report in the Houston Chronicle, Ken Lay finally took the stand today in the federal trial against him and his fellow former Enron CEO, Jeffrey Skilling.

Lay's m.o. from the get-go has been to portray Enron's demise as the result of the illegal self-dealing machinations of Enron finance whiz Andy Fastow and the investor panic which ensued the revelations that Enron's financial sheet was off by billions of dollars. Under this version of events, Lay is as much a victim as all the Enron investors and employees whose pensions and livelihoods were ruined.

On the stand today, Lay tried to reinforce this narrative. He challenged the acocunt of Enron whistleblower Sharon Watkins, who first brought the questionable side deals to Lay's attention. Watkins asked Lay to avoid using Enron's then-current accounting firm (Arthur Andersen) and law firm (Vinson and Elkins), because they had signed off on the sketchy deals.

Lay agreed to look into the matter, but ignored Watkins' plea that he use an independent firm to do so. This was not the action of a man interested in actually verifying and ensuring the accuracy of the financial reporting done by his company, but rather that of a man interested in appearing to do so.

Appearances are deceiving though, in Layworld, where his selling of Enron stock at a time he knew of the company's precarious financial position is not the self-dealing flee-the-ship move that it seems, according to Lay. Rather, he just needed to pay some bills. And Jeff Skilling quitting his job as Enron CEO at the same time? Well, that was because of personal reasons, not because the company was about to tank in the largest U.S. bankruptcy to date.

Pending judicial nullification of some sort, the jurors will ultimately decide whether Ken Lay's story holds up, or is just another whopper in a long series of whoppers in the Enron saga. This is both fitting, and somewhat ironic. When Lay wanted to push energy deregulation at the federal and state level, he did so in large part by passing out massive amounts of campaign cash so that Congress and various state legislatures were favorably disposed to doing so.

In other words, in the pursuit of his own financial benefit, Lay leveraged his company's massive cashflows and his own personal fortune to bypass the will of the people on his way to the bank. Facing jail time, Lay has no other choice than to put his freedom in the hands of his fellow citizens. His hat in hand, he must trust in the people whose bank accounts he helped to empty, and whose democratic institutions he showed so little regard for.

2006-04-24T10:59:00.000-07:00

Congressman Mollohan (WV) Steps Down From Ethics Committee

As Chris Cillizza reports in "The Fix", his column for the Washington Post, Congressman Alan Mollohan stepped down from the House Ethics Committee on Friday. Pressure has built on the West Virginia Democrat since the Wall Street Journal reported that Mollohan had steered some $250 million to nonprofit groups he helped create.

At least some of the directors of the nonprofits used their extravagant salaries (paid for with your and my tax dollars) to make campaign contributions to Mr. Mollohan. This looks eerily similar to the scheme set up by Duke Cunningham and his bribers, in which the Duke steered federal contracts to companies which in turn contributed more than $100,000 to Cunningham's political committees, not to mention $2.4 million in outright bribes to Cunningham.

Mollohan also has a joint investment with at least one director of one of the nonprofits, which raises further questions about the propriety of Mollohan steering those groups federal funds.

Replacing Mollohan is Congressman Howard Berman, who represents a district in north Los Angeles (thanks to his brother Michael).

From a practical standpoint, Mollohan's departure doesn't amount to a hill of beans. The Ethics Committee has been paralyzed by a standoff between Republicans and Democrats for over a year. The parties have each refused to consider any ethics complaints, using the excuse that the other party is using the Ethics Committee for partisan maneuvering. And if that means that the ethics machinery grinds to a halt, well, so be it say the Dems and Reeps.

Because of the self-dealing by members of Congress and the inherent conflict in having Congress police itself, reform-minded folks have called for an independent congressional watchdog to look at ethics complaints. Unsurprisingly, the vast majority of people in Congress have resisted the idea, and have thrown the notion of an independent watchdog onto the scrap heap of other reforms which were introduced in the wake of the Cunningham and Abramoff scandals, only to be watered down by the House and/or Senate.

In short, Congress will continue to leave the rest of us undefended against its own self-dealing, increasing the likelihood that the other violations will go undiscovered, uninvestigated, and unpunished.

2006-04-20T09:23:00.000-07:00

Wisconsin's Jensen Ten
Earlier this week, TheRestofUs.org called on ten Wisconsin legislators whose name had come up in the trial of former Wisconsin politico Scott Jensen to demand a vote on a bill to strengthen ethics and campaign finance enforcement. Unbelievably, yesterday, one of the Assembly leaders said he thinks the ethics bill is "unlikely to be brought up," because he's heard "nothing at all" about it from other members.

That seems like something that could change. Wisconsin politicians seem to think the fact that one of their own finally got caught and went to jail means that there is no problem with the current system. If Wisconsin citizens disagree, the should let their representatives know -- LOUDLY. Here's a clip from the Wisconsin Radio network with more.

2006-04-19T17:15:00.000-07:00

Congressman Doolittle's Fundraising Violates Ethical Code

As David Whitney reports in the Sacramento Bee, the commission Congressman John Doolittle pays his wife for fundraising for Doolittle's political committees violates the ethical code of a national association of professional fundraisers.

Doolittle's wife Julie started fundraising for her husband several years ago. Her business, Sierra Dominion Financial Services, currently has only two clients: Doolittle and Doolittle's PAC. In the past, Sierra Dominion also worked for convicted lobbyist Jack Abramoff on one of his side projects.

John pays Julie 15% of every contributions she raises for John. (I am dropping the honorifics here, because this is little more than a husband receiving through his wife a kickback of 15% for every campaign contribution he receives.) So, if a crooked donor wanted to put money directly into Doolittle's pocket to gain influence with Doolittle the congressman, he could. Just make a campaign contribution.

One Doolittle donor, Brent Wilkes -- one of the guys former congressman Duke Cunningham says bribed him -- arranged for at least $118,000 in campaign contributions to Doolittle. Julie D's 15% means the Doolittles' bank account took in about $18k from a guy who's in the business of bribing members of Congress.

It's bad enough that members of Congress can take $4k an election from wealthy interests, not to mention another $5k a year for their leadership PACs, not to mention a chunk of whatever support the party throws their way come election time -- but for a sitting member of Congress to personally benefit financially from campaign contributions stinks of outright corruption of that member, as opposed to larger worries about a corrupt system.

2006-04-19T13:26:00.000-07:00

Notes From California Clean Money Hearing

Much like the gladiators of the Roman Forum, clean money went to do battle today at the Capitol in Sacramento, receiving a hearing before the Senate Elections Committee. While the committee members have as yet only cocked their thumbs, like their imperial counterparts of yore, those thumbs are clearly trembling in anticipation of passing judgment and the lions are salivating.

Today the California Senate Elections Committee heard AB 583, the latest version of a bill by Assemblymember Loni Hancock, which would provide public funds for qualifying candidates for public office. Earlier this year, AB 583 passed not only the Assembly elections and appropriations committees, but to the surprise of many political observers, the Assembly itself.

The Elections Committee, comprised of Democrats Debra Bowen, Kevin Murray, and Gloria Romero and Republicans Jim Battin and Chuck Poochigian, gave a chilly reception to the bill, although did not vote on it.

Opposition to the bill was led by Senators Murray and Battin, who focused mostly on the possible use of independent expenditures as a way to frustrate the bill's purposes. Along with Senator Romero, they also raised a number of gratuitous sidepoints and red herrings to provide further smokescreen for their basic opposition to change the system under which they all were elected. None even began to offer a counterproposal to dealing with corrupting role of big money in politics.

Helping Hancock defend the bill was Mark Spitzer, a former state senator and current Corporations Commissioner in Arizona, a state which has used a clean money system with some success for several years. Spitzer's presence was positive and his knowledge and experience impressive, but his lack of knowledge about the cost of California campaigns was seized on by Battin as an excuse for why the Arizona experience is not particularly applicable to California.

The effectiveness of any public financing program lies largely in its details: where the threshholds are set for qualifying signatures, how much funding is initially provided, how supplementary funds are dispersed for those clean money candidates who face massive opposition spending from independent expenditure committees or wealthy self-financing candidates. That discussion should be part of any deliberative process, but one couldn't help getting the sense that Senators Battin, Murray, and Romero were more interested in finding a way to torpedo the bill than they were in figuring out ways to get it to work.

In sum, AB 583 doesn't stand a snowball's chance of passing the Senate Elections Commitee as that committee is currently comprised. Three members expressed thinly-veiled hostility to the bill, while the absence of a fourth member spoke volumes about his assessment of the bill's prospects. While a vote on the bill was put over until a future hearing, it is clear that when the vote does occur, AB 538 will be tossed to the lions.

Waiting in the wings is a clean money initiative sponsored by the California Nurses Association. If sufficient signatures are gathered to place the initiative on the ballot, it will not be subject to the imperial thumbs of various legislative committees, but rather to a vote of the people. As such, supporters of reducing the influence of big money on California elections should take heart. This one ain't over yet.

2006-04-18T11:51:00.000-07:00

Enron Update - Skilling Gets Cross-Examined

As Mark Babineck reports in the Houston Chronicle, former Enron CEO Jeffrey Skilling is being cross-examined this week in the trial against Skilling and fellow former Enron CEO Ken Lay.

While Skilling and Lay face charges arising from a different series of actions, the case against both men generally boils down to the charge that they lied to investors about Enron's financial health while knowing that the energy company was in dire financial straits.

After two months of testimony from government witnesses, Skilling took the stand last week to testify he knew nothing about the illegal transactions which eventually torpedoed Enron. In the government's cross-examination of Skilling this week, Skilling continues to assert the same.

After Skilling is done, the defense will put on a few character witnesses for Skilling, followed by a few witnesses for Lay, after which Lay will take the stand to defend himself, possibly as early as next week.

2006-04-17T11:14:00.000-07:00

Former Illinois Governor Convicted on Corruption Charges

A jury convicted former Illinois governor George Ryan on charges of racketeering, mail fraud, false statements, and tax evasion today, as Matt O'Connor and Rudolph Bush report in the Chicago Tribune.

As Secretary of State of Illinois, Ryan arranged state deals that benefited his cronies, who in turn directed money, gifts, and benefits to Ryan and his family. Ryan then lied to federal investigators about the schemes while he was governor. Ryan also diverted state resources and employees to his political campaigns.

Also while Ryan was Secretary of State, his office traded driver's licenses for bribes with people who couldn't legally obtain licenses. The recipient of one such license was involved in a car crash that killed six children. The driver couldn't understand the warnings (in English) from fellow truckers that a piece of metal was dangling dangerously from his truck. The metal fell and punctured the gas tank of the van in which the children were riding, causing a fiery explosion.

One of the charges against Ryan was that he gutted the investigative arm of the Secretary of State's office, which precluded an investigation of the car crash.

2006-04-14T10:05:00.000-07:00

Interesting Insights on California Campaign Finance Reform
Ned from TheRestofUs.org was on Capital Public Radio's Insight program yesterday along with former Senate Pro Tem John Burton, current Chair of the California Republican Party Duff Sundheim, Donna Gerber of the California Nurses Association, John Sims of McGeorge Law School, Shane Goldmacher of Capitol Weekly, and Armando Viramontes of Assembly Member Loni Hancock's office. You can listen to it here: http://www.capradio.org/programs/insight/default.aspx?showid=1826&programid=10

The group discussed two main topics of interest. First, whether or not California should adopt clean money campaign finance systems similar to what Maine and Arizona have done. Donna Gerber put in a plug for the ballot initiative that the Nurses Association has filed (with input from TheRestofUs.org) and are currently gathering signatures to qualify for the ballot. It lowers limits on what big donors can contribute to parties and PACs, bans corporations from contributing to candidates and ballot committees, and provides qualified candidates the option of giving up all private contributions in exchange for a limited amount of public campaign funds. Read more about it here: http://www.cleanmoneyelections.org/

Armando Viramontes spoke about AB 531, a legislative bill that provides the clean money option but not the measures to limit big money for all candidates and ballot measures. Due to the strong demand for reform that was created by the backlash against Arnold Schwarzenegger's fundraising for his special election last year, this clean money bill has sailed through the Assembly and has a real chance of clearing the Senate as well. If you live in California, now would be a good time to contact your state Senator to express support. The bill may head to a big committee vote as soon as next Tuesday.

Duff Sunstein was clearly invited to the show to act as the opponent, but he actually expressed support for the concept of campaign finance reform and had some interesting comments. He noted that because of the Supreme Court's ruling in 1976 called Buckley v. Valeo, big donors can still spend money to influece elections by creating their own TV ads even if they don't make contributions to candidates. He and law prof. John Sims agreed that both the Nurses initiative and the Hancock bill would be upheld by the courts, but Sunstein argued that the money would just flow out of the system. Sims said that what we really need is a constitutional amendment to overturn the wrongheaded Supreme Court ruling in Buckley.

Ned helped set the record straight by noting that the Nurses initiative included a limit on how much someone could contribute to an independent campaign to support or smear a candidate. He also reminded listeners that the Supreme Court is revisiting the issue of spending limits in a case right now, with a ruling expected by June. (read the brief submitted by TheRestofUs.org and other reform groups here.)

It's quite possible that the Supreme Court will again rule against mandatory spending limits and that future court rulings could even strike down limits on independent expenditure campaigns. If so, Duff Sunstein may be right about the need for a campaign finance amendment to the US Constitution. The rest of us should give credit to the head of the California Republican Party for his bold prediction.

John Burton, by the way, said that he hated fundraising while in office and that the only two people he knew who liked it were Gray Davis (recalled as Governor of California after voter disgust with his fundraising) and Alan Cranston (former CA Senator who left office in a cloud after being one of the Senators named in the Keating Five Scandall.)

2006-04-12T17:39:00.000-07:00

Who Cares?

We get a lot of e-mails from citizens who are fed up with a government that doesn't seem to listen. Here's one we got today that seems to put the finger of what a lot of people are feeling:

Who cares about us anymore? The gov't used to be about us, the people, now it's about themselves. They really don't care about what our feelings are about anymore. It's about what they can get and take for themselves. Look at our older people, our homeless, we still have alot of this going on here in our home towns, states and our nation and still the gov't does nothing about it. Many people are on fixed incomes, but, does the gov't care? NO! All they care about is helping other countries and themselves. They get good benefits and wages, so why bother with the little people, who put them there. They need get rid of all the OLD people that have been in the white house for too many years and put some new blood in there that care for us people. I really don't care who anymore, as long as they care for the peoples interest and not just their own.

I am sick of the different parties in gov't. They should be there just for us and our well being. We work hard for our money and we pay our taxes to pay to the gov't so they can take care of us and our homeland. But they spend so much money on going to mars and other planets that mean nothing to us. We need to put the money for our homeless and poor and those who need medical assistance (insurance). Here in the United States of America!!!!!!

How can I put my trust in our gov't, when they can't take very good care of us???

I need some answers! I have so much to say, but I don't think anyone will listen.

Mike J
Stanislaus County

2006-04-10T14:57:00.000-07:00

Campaign Finance Reform Under Attack in Arizona

State Representative Russell Pierce is pushing an amendment to basically undo most of Arizona's campaign finance laws. His idea is to increase contribution limits from around $300 to $5000, repeal public financing for candidates who refuse to take any private dollars, allow lobbyists to give candidates cash "loans" that might not be paid back, and repeal restrictions on contributions by corporations.

The House Appropriations Committee will consider this idea Tuesday afternoon at 1:30 p.m.

Readers in Arizona may want to ask the members to vote NO on the strike everything amendment to Senate Concurrent Resolution (SCR) 1013.

(For details of this 38-page measure, please click on this link www.azclean.org)

Below are the phone numbers and e-mails of the legislators on the committee.

Chairman Representative Russell Pearce Email: rpearce@azleg.gov Tel: (602) 926-5760

Vice Chairman Lucy Mason Email: lmason@azleg.gov Tel: (602) 926-5874

Representative Andy Biggs Email: abiggs@azleg.gov Tel: (602) 926-4371

Representative Tom Boone Email: tboone@azleg.gov Tel: (602) 926-3297

Representative Judy Burges - Email: jburges@azleg.gov Tel: (602) 926-5861

Representative Eddie Farnsworth Email: efarnsworth@azleg.gov Tel: (602) 926-5735

Representative Pamela Gorman Email: pgorman@azleg.gov Tel: (602) 926-4002

Representative Trish Groe Email: tgroe@azleg.gov Tel: (602) 926-5408

Representative Laura Knaperek Email: lknaperek@azleg.gov Tel: (602) 926-4225

Representative Jerry Weiers Email: jpweiers@azleg.gov Tel: (602) 926-5894

Representative Amanda Aguirre Email: aaguirre@azleg.gov Tel: (602) 926-4430

Representative Jack Brown Email: jbrown@azleg.gov Tel: (602) 926-4129

Representative Olivia Cajero Bedford Email: ocajerobedford@azleg.gov Tel: (602) 926-5835

Representative David Lujan Email: dlujan@azleg.gov Tel: (602) 926-5829

Representative Albert Tom Email: atom@azleg.gov Tel: (602) 926-5862

2006-03-31T09:22:00.000-08:00

Tony Rudy ♥s Former FEC Chairman Brad Smith

Tony Rudy, a former staffer for Tom DeLay and lobbying colleague of Jack Abramoff, pleaded guilty today in federal court to conspiracy. While working for DeLay in 2000, Rudy took cash from Abramoff in exchange for defeating an internet gambling bill opposed by Abramoff's clients.

But Rudy's work on behalf of financially powerful interests did not stop at conspiracy and corruption. He was also a man of letters, as demonstrated by his review on Amazon.com of a book by former FEC Chairman Brad Smith titled Unfree Speech: The Folly of Campaign Finance Reform.

Rudy penned his review in 2001, just a few months after leaving the payroll of DeLay, who is currently under indictment for violating Texas campaign finance law. At the time, he was working at Greenberg Traurig, where Jack Abramoff was turning the practice of giving money to politicians into an art form, albeit an illegal one.

Rudy's review begins thus: "Freedom!"

In the review, which is positively glowing, Rudy takes the media and reformers to task for their hypocrisy. Channeling the founding fathers, Rudy proffers a solution for problems dealing with political speech: more political speech.

Rudy does not offer any solutions to bribery, corruption, conspiracy, or the current erosion of democracy under the steady onslaught of campaign contributions from the nation's upper crust. Perhaps Mr. Smith will find the erudition and will to write a book about the Abramoff scandal, and Rudy can take on those problems in another review. Or maybe even the foreword.

2006-03-30T16:46:00.000-08:00

Senate Passes Lobbying Bill; Votes Down Independent Ethics Office

As Jeffrey Birnbaum reports here (ethics office) and here (lobbying bill) in the Washington Post, the Senate passed a watered-down lobbying bill this week, while voting 67-30 against the creation of an independent office of public integrity.

Congress made a lot of noise about lobby reform in the wake of the Jack Abramoff scandal. Abramoff, a lobbyist par putrescence, had used campaign contributions from himself and his clients to gain access and influence with key members of Congress and within the Bush Administration. This campaign cash was supplemented by a string of lucrative job placements for the staffers of key members when they left the public payroll. Abramoff also had his clients funnel cash to nonprofits which were run by the staffers and often used to further the political agenda of the staffer's former employers.

The lobbying bill passed by the Senate would do nothing to limit the ability of lobbyists to influence public officials with campaign cash, far and away the largest factor not only in allowing the creation of Jack Abramoff but in putting our government into the pockets of financially powerful interests.

What the Senate bill does do:
1) Prohibits lobbyists from buying meals for members of Congress. (yes, they could do this before)
2) Prohibits lobbyists from giving gifts to members of Congress. (yup, this too)
3) Increases lobbyist reporting from twice a year to four times a year.
4) Provides disclosure of "grassroots" lobbying efforts.

What the Senate bill doesn't do:
1) Reduce the size of campaign contributions lobbyists and their wealthy employers can give to members to curry favor.
2) Require lobbyists and members of Congress (and their staffs) to disclose when they meet and what they talk about.
3) Prohibit privately-paid travel by members of Congress.
4) Create an independent office of public integrity to ensure ethics and reporting rules are enforced.

So, lobbyists and their wealthy employers will still throw their cash around to make sure their guy or gal gets into office. Once there, the lobbyists and their employer can still meet in secret with the member without the public ever knowing the extent of influence any given interest had in crafting or opposing legislation.

In other words, under the Senate bill, it will be business as usual in Washington. Thanks for nothing.

2006-03-29T11:28:00.000-08:00

Abramoff Sentenced to Nearly Six Years in Florida Case

As William Braingin reports in the Washington Post, former lobbyist turned pariah Jack Abramoff was sentenced to 5 years, 10 months by a federal court in Florida today in connection with Abramoff's purchase of the SunCruz casino company. Abramoff and his partner Adam Kidan were convicted for wire fraud for faking a $23 million wire transfer in order to obtain further loans to finance the purchase of SunCruz.

The SunCruz deal was the subject of the remarks made in the Congressional Record by Ohio Congressman Bob Ney on behalf of Abramoff. In a separate set of charges to those for which he was sentenced today, Abramoff pleaded guilty to bribing a member of Congress. While the member was not named explicitly, surrounding facts made clear that the congressperson was Ney. Ney, who in addition to receiving campaign contributions from Abramoff and his clients also took golf trips to Scotland on Abramoff's dime, has not yet been charged.

Other members of Congress who received campaign contributions from Abramoff and his clients and took official actions on his or their behalf also have not faced charges to date. This list includes Rep. Tom DeLay and Rep. John Doolittle.

2006-03-28T11:06:00.000-08:00

West Virginia's 527 Reform

As Tom Searles reports in the Charleston Gazette, West Virginia is the first state to regulate 527 organizations, the outside groups which spent hundreds of millions to influence the 2004 presidential election.

527 groups are explicitly formed under a provision of federal tax code to influence elections. While they broke into the nation's awareness during the 2004 presidential elections, 527 groups operate to influence both federal and state elections.

At the federal level, the most recent campaign finance law - the Bipartisan Campaign Reform Act of 2002 (BCRA) - didn't explicitly deal with 527 groups, choosing instead to punt the issue to the regulatory agency responsible for implementing the BCRA: the Federal Elections Commission (FEC). Although 527 groups were already amassing millions to influence the upcoming presidential election, the FEC chose not to regulate the groups' electioneering activity.
The upshot of this legislative and regulatory palsy was to turn the 2004 presidential election into a battleground for billionaires, as Democrat richies like financier George Soros funded groups like the Media Fund and Republican richies like Ameriquest owner Dawn Arnall funded groups like the Progress for America Fund.

President Bush and Senator John McCain have both called for the regulation of 527s at the federal level, and Republicans in Congress are considering 527 reform ostensibly as part of lobbying reform, although the reality is as a substitute for lobbying reform.

But 527 groups also operate at the state level to influence state elections. In a 2004 state Supreme Court race in West Virginia, a group called "And For The Sake Of The Kids" ran ads blasting Supreme Court justice and candidate Warren McGraw. Only weeks before the election, the public found out that $2.4 million of the $3.5 million the group spent came from the CEO of Massie Energy. McGraw lost the election.

Perhaps to protect their own hide, members of West Virginia's state legislature saw fit to act to prevent Massey and others from using their millions to buy election outcomes in the future. The legislature passed a fairly common sense law which treats 527 organizations as federal tax law treats them: as groups who are trying to influence election outcomes.

The legislature passed a bill limiting contributions to such 527s to $1,000 per election, and upped disclosure requirements as well. A 527 apparently would have to run electioneering ads within 30 days of the primary and 60 days of the election in order for the new regs to kick in. The law would only apply to 527s which operated to influence West Virginia state-level elections: federal law arguably pre-empts regulation of 527 groups which operate to influence federal elections, even if in the individual states.

Check out our Deep Six the 527 Loophole campaign for more info on 527 groups, including links to a searchable database of 527 groups and contributors.

2006-03-27T09:29:00.000-08:00

Abramoff Funneled $1M to DeLay Aide Through Sham Nonprofit; DeLay's Wife Gets $100,000

As Jeffrey Smith reports in the Washington Post, at the same time he was aide and consultant to Congressman Tom DeLay, Ed Buckham (and his wife) received more than a third of the money his nonprofit group the U.S. Family Network received from donors, most of whom were clients of Jack Abramoff.

The U.S. Family Network, ostensibly set up by Buckham in the mid-90's to promote a "pro-family" agenda in Congress, received more than $3 million from donors, although maintained only a skeletal staff and had a negligible presence on Capitol Hill. Of that $3 million, Buckham and his wife Wendy received $1,022,000 in salaries and consulting fees.

And when Buckham and his wife opened up their own consulting biz, who did they put on the payroll but Christine DeLay, at $3,300/month for three years - some $100,000.

The resulting schematic of the money flow looks like a grotesque Beltway version of a concert setlist:

Abramoff (via Clients) > U.S. Family Network > Buckhams > DeLays > Abramoff Clients > Abramoff

Not exactly John Phillips Souza. While this flowchart does not indicate whether sufficient agreement took place between the parties to constitute bribery, the revenue stream mirrors the exchange of money for policy that bribery entails.

The U.S. Family Network (using the revenue from Abramoff clients) also bought a townhouse out of which the USFN and Tom DeLay's PAC operated, and ran attack ads in Congressional elections against vulnerable Democrats.

The problem here is not so much that there are ways to evade campaign laws, but rather that campaign finance law puts people into office who are more interested in serving Mammon than the rest of us. And as long as those folks are in office, the laws that are on the books to investigate and prevent these sorts of schemes are underenforced.

In other words, the way to stop future Abramoffs is to cure not just lobbying disclosure, but campaign finance laws as well.

2006-03-24T09:49:00.000-08:00

Florida Supreme Court Kicks Redistricting Measure Off the Ballot

As Gary Fineout and Mark Caputo report in the Miami Herald, the Florida Supreme Court threw a redistricting measure off the ballot because it violated the state's single-subject rule for ballot measures and because its description as "nonpartisan" misled voters.

The Florida redistricting initiative was just one part of the recent national debate over redistricting, spurred in no small part by the Tom DeLay-led mid-decade Texas redistricting effort in 2002, but also by increases in technology which have allowed one or both of the two main political parties to turn gerrymandering into an art form in the various states.

In California, the increasing general demographic trend for like-minded voters to live near each other was exacerbated by the districts drawn in 2001 by the state legislature, with the blessing of both parties. In 2004, none of the 133 Assembly and Congressional seats drawn under the 2001 plan switched parties. This bipartisan gerrymander benefited the parties and the apparatchiks favored by the party higher-ups.

Ohio saw a different kind of gerrymander. In that state, Republicans drew districts to maximize the number of Republicans in the state legislature and Congress. (See our report on Ohio here.)

Both forms of gerrymander lessen voter involvement in the selection and election of candidates; both make democracy markedly less representative. Both Ohio and California saw redistricting reform measures on the ballot last year, both of which failed after intense opposition campaigns run and bankrolled by incumbents.

The Florida Supreme Court's decision means that in yet another state, voters will be pushed into districts that likely represent the interests of those drawing the districts rather than citizens, and that voter choice at the ballot will not have the significance which it should.

2006-03-22T18:09:00.000-08:00

NC House Speaker Black Faces Scrutiny for Campaign Contributions from Video Poker Industry

As Kerra Bolton reports for the Asheville Citizen-Times, North Carolina House Speaker Jim Black is facing further scrutiny into his campaign finances, this time for contributions from the video poker industry. On Wednesday, the State Board of Elections heard testimony from witnesses who have contributed to Black, some of whom hardly appear able to make the large contributions they did.

One woman who contributed $1,000 to Black and lives on a fixed income of $1,100 a month testified she found $800 in a drawer and borrowed $200 from her son to make the contribution. Some witnesses testified that they made the contributions with a cashier's check despite having checking accounts themselves. Many of the witnesses said they gave the contributions because of Black's opposition to prohibiting video poker.

Board of Elections chair Larry Leake said he had concerns that the funds were being illegally funneled through the straw donors to evade North Carolina's campaign contribution limits.

Black, an optometrist, was already under fire for receiving checks from the optometrists' trade association which left the payee line blank. Black was to decide who should get the checks and fill in the blank himself.

Contribution limits prevent financially powerful interests from gaining dominion over our government. Those interests rarely accept any form of diminished voice in affairs however, and often resort to legal loopholes and illegal evasion to circumvent limits. That they do so does not undermine the rationale for limits in the slightest, but rather means that the rest of us have to demand strong enforcement of campaign laws along with strong campaign laws themselves to ensure that our government is of the people, not just of the rich.

2006-03-22T07:47:00.000-08:00

Enron Trial Update - Former Treasurer Glisan Testifies

Our apologies for the hiatus since the last update.

As Mary Flood reports in the Houston Chronicle, former Enron company treasurer Ben Glisan testified yesterday in the federal case against former Enron CEOs Ken Lay and Jeff Skilling.

Glisan testified that both Lay and Skilling knew of the financial troubles looming for the company, that they knew of the illegal methods being used to hide those troubles, and that they both misled investors as to the company's financial standing. These allegations are generally the crux of the government's case.

As a treasurer, Glisan might be expected to speak in nearly incoherent financio-babble, but he apparently provided one of the clearest explanations to date of three of the main methods by which Enron cooked the books.

1) Enron disguised loans it received as cash flow, making it appear that its revenues were much higher than they actually were.
2) Enron used several mechanisms (Andy Fastow's infamous Raptors fall into this category) to offload debt from the company, making the company appear much more profitable than it was.
3) Again to boost revenue, Enron pretended to sell its assets to third parties, although the third party was often Enron itself.

Glisan also testified that had the true state of Enron's finances been known, it would have lowered the company's credit rating, a crucial component of Enron's borrow and buy strategy. Had the credit rating slipped and it become more difficult for Enron to obtain loans, Glisan testified that the company would have gone bankrupt.

According to Flood's account, Skilling looked uncharacteristically nervous at points during Glisan's testimony.

2006-03-21T18:59:00.000-08:00

Hugs and Smiles Amidst the Hollywood Hubris - Arnold Stands By Reiner

John Ellis reports in the Fresno Bee that Governor Arnold Schwarzenegger is standing by his "friend" Rob Reiner until there is evidence of wrongdoing.

California law prohibits the use of public resources for campaign purposes. The First 5 Commission spent $23 million in public funds on an ad campaign which supported Proposition 82, a pro-preschool ballot measure of the commission's chairman ... Rob Reiner. In other words, public funds were spent for campaign purposes, in violation of state law.

Schwarzenegger says he will await the results of a state audit before making any judgments. The Guv must have meant until there is evidence of further wrongdoing.

The state audit may reveal something about the intent of those who designed and ran the ads or the collaboration between the First 5 Commission and its consultants and the Prop 82 committee and its consultants (some of whom are one and the same), but it does nothing to change the basic fact that public funds were spent by Reiner's commission in support of Reiner's initiative in violation of California law.

2006-03-20T18:07:00.000-08:00

His Man in Poway - Brent Wilkes' Connections to a 2004 Candidate for Poway City Council

Regular readers of this blog know who Brent Wilkes is by now. Wilkes is unindicted co-conspirator #1 in the federal government's indictment of former congressman Duke Cunningham, a charge supported by the guilty pleas of Mitch Wade and Duke Cunningham. In addition to outright bribery, Wilkes directed more than $1 million in campaign contributions from himself and his associates to federal politicians and committees and more than $180,000 to state-level politicians. Wilkes even contributed heavily to the San Diego mayoral campaign of Ron Roberts.

Wilkes Hosts Campaign Website for Harman
But no election is too small for Wilkes to take an active interest. In 2004, a radiologist named Scott Harman ran for the city council in Poway, CA, the suburb of San Diego where Wilkes lived and his company was headquartered. According to the North County Times, Harman's official website was "electharman.com", which was hosted at the IP address 12.22.219.140 -- one of a series of IP addresses owned by Wilkes company ADCS.

So Wilkes hosted the guy's campaign website. Big deal, right?

Wilkes Starts Up Poway Sports Council with Harman
There's more. The headquarters for Wilkes's companies was a newly built complex at 13970 Stowe Drive in Poway. (It has since been put up for sale.) The building also served as the headquarters for Wilkes' wife Regina's catering business -- Group W Events -- and hosted the "Dinner and a Movie" event with Congressman John Doolittle (check out the menu here), along with the September 2004 ISES event (scroll down for pics).

13970 Stowe also headquartered the Poway Sports Council (PSC) (cached website). In his candidate interview with the NC Times, Harman says he formed a "small company called the Poway Sports Council with three friends to raise money for things such as the Poway Rodeo and San Diego State University's athletic program".

Who were those three friends? Well, according to this article in the San Diego Union Tribune about the PSC hosting a poker tournament fundraiser for the SDSU Aztecs, one was Max Gelwix, who served as the president of the PSC. That same article mentions "a couple of San Diego State boosters" who proposed the poker tournament.

Wilkes was a huge supporter of SDSU, serving on the board of directors of its Campanile Foundation and giving so much money to the university that it named its athletic director's office after him. He is likely one of the boosters mentioned in the SDUT article and one of Harman's "friends" with whom he started the PSC.

So, Wilkes hosted the guy's campaign website. And, Wilkes started up the Poway Sports Council with Harman and Max Gelwix.

Gelwix Endorsement
Check out the SmartVoter guide for Harman. One of his three endorsers: Max Gelwix. The same Max Gelwix that served as President of the Poway Sports Council. The same Max Gelwix who was one of Wilkes's co-hosts for the Dinner with Doolittle. The same Max Gelwix with whom Wilkes owned and operated PerfectWave Technologies. The same Max Gelwix whose campaign contributions Wilkes directed to key members of Congress, including Doolittle. The same Max Gelwix whose company PerfectWave received $37 million in federal funding thanks to earmarks by Rep. John Doolittle.

And check out the NC Times candidate profile again. Harman touts the Poway Sports Council and the fundraising he did for it as part of his candidate qualifications. In essence, Wilkes used the Poway Sports Council in part as a way to boost Harman's candidate credibility and to give Harman an endorsement from an official-sounding local group. Just as he used the Wilkes Foundation to stage the "Tribute for Heroes" gala fêting Duke Cunningham, Wilkes used the PSC to boost the candidacy of Harman.

So why Harman?

Emergency Services
And one more time back to the SmartVoter guide. Harman's #3 priority after "Maintaining quality of life in Poway" and "Insure best quality education for our children"? "Supporting and improving our emergency personnel and services".

One of the angles Wilkes pushed with local and state officials was a technology which provided detailed schematics of buildings for . . . emergency services. In the wake of several school shootings, Wilkes's idea was to draw up detailed plans of schools and possibly other buildings, including exits and entrances and such, and sell it to local and state emergency services agencies. According to sources, Wilkes pushed this technology with several local and state officials, including at least one member of the California Assembly and at least one mayoral candidate in Southern California.

And apparently one candidate for the Poway City Council as well.

Upshot
Scott Harman did not win election to the Poway City Council, but his relationship with Brent Wilkes is another in a long series of examples of Wilkes' efforts to get the right guy into office so that the public dollars would flow his way. Normally Wilkes used campaign cash, as he did with Reps. Cunningham, Doolittle, and Duncan Hunter and Senator Larry Craig. In this case, Wilkes used what appears to be a front group to shore up the credentials of his favored candidate and to provide him with free hosting for his website.

2006-03-17T12:08:00.000-08:00

The Privatization of Public Discourse: Major Media Company Refuses Billboard Ad on Money in Politics

As Nancy Petersen reports in the Philadelphia Inquirer, Clear Channel recently rejected a political ad from congressional candidate Lois Murphy demanding that her opponent, current Rep. Jim Gerlach, return $30,000 he received from Tom DeLay's PAC.

In the last three years, Clear Channel's has contributed a total of $20,000 to DeLay and $1,500 to Gerlach, including:
$5,000 to Tom DeLay's ARMPAC in 2005;
$1,500 to Jim Gerlach in 2005 ($1,000 and $500);
$5,000 to Tom DeLay's ARMPAC in 2003;
$10,000 to Tom DeLay in 2003-4.

The refusal of one of the country's largest media conglomerates to run a political ad due to its support of the politicians taken to task by that ad highlights one aspect of the fallacy underlying the argument that spending money on politics is the same thing as free speech .... it isn't. Speech is speech, money simply allows speech to be distributed (usually).

As long as this ill-conceived constitutional doctrine exists, however, the media companies should provide equal access to their billboards, airwaves, and print space to candidates regardless of political view. Those billboards and airwaves and that print space are the modern equivalent of the town square, after all. They are the arena where ideas and opinion go to do combat.

Allowing media companies to lock voices out of that space because they do not like the message grants those companies the kind of stranglehold on American discourse that once led free-minded souls to dump tea off a ship in Boston Harbor. Like many of King George's futile and stupid acts in the run-up to the American Revolution, Clear Channel's refusal to run the ad smacks of the communications crackdown of a desperate despot, who, seeing the people rising up against an oppressive regime, resorts to tactics even more oppressive.

Media companies have long had a civic responsibility and, in some cases, the legal duty to operate in the "public interest". Under severe and persistent pressure from the financially and politically powerful media companies, this concept has been watered down to the point of having virtually no significance in politics today.

We need to put teeth back into these laws. Media ads are the biggest driving factor behind the ever-spiraling influence of money in politics today. Media companies have not been innocent bystanders as this has occurred, but have fought alongside the other financially powerful interests to protect one of their cash cows.

Exemplifying the media companies' forsaking of the public interest in their pursuit of outlandish profits is the media coverage of presidential conventions. As we reported in 2004, the hours of coverage of the presidential conventions has an inversely proportional relationship to the amount of money spent on political ads by the presidential candidates. As coverage has dropped to a tenth of what was in 1972, revenue from political ads has skyrocketed from $24.5 million to over $1 billion in 2004.

It is tough sometimes to see past our partisanship and recognize a flaw in the system, especially when we perceive its benefit to our cause. But, if our shared cause is democracy in America, it doesn't matter whether you are Tom DeLay's most fervent admirer or his biggest detractor: Clear Channel's actions are a threat to us all.

2006-03-14T16:08:00.000-08:00

John Edwards Fundraiser Fined for Illegal Funneling by FPPC

As the Fair Political Practices Commission reports on its website, today the commission fined Los Angeles trial lawyer and major Democratic fundraiser Pierce O'Donnell $72,000 for making $25,500 in illegal campaign contributions through his employees to the 2001 mayoral campaign of James Hahn. Hahn went on to beat current mayor Antonio Villaraigosa in the election.

O'Donnell was convicted by a trial court in February for the same crimes, for which he was fined $155,000 and barred from participating in political contributions for three years. And the LA Ethics Commission also nailed him for the same crime last week, fining him $147,000.

O'Donnell also drew attention during the 2004 presidential race for the same crime, this time for contributions to the campaign of John Edwards. Edwards eventually returned some $44,000 in contributions from O'Donnell and employees at his firm due to concerns that the contributions may have been illegally funneled "straw donations".

Straw donations are a tough thing to track down without insider information from the "straw donors", who are usually reluctant to spill the beans on what are quite often their employers. Several of the Bush Pioneers - fundraisers for George W. Bush that raise and bundle more than $100,000 for his 2000 or 2004 campaigns - have been indicted for straw donations. Other Edwards donors have also come under scrutiny for the practice.

But under current law, campaigns are not required to divulge which bundlers raised which funds, making it nearly impossible to examine whether straw donations are being made in the absence of investigations into other possible illegal activities. The case of Tom Noe, the Bush pioneer and coin collector indicted for defrauding the people of Ohio of more than $10 million, is a perfect example. Without the investigation into the fraud, his straw donations to president Bush's 2004 campaign wouldn't have turned up.

In light of these difficulties, we recently called on the Justice Department to perform a random audit of both the Edwards bundling program and the Bush Pioneer program.
Current campaign laws are unfair in allowing wealthy donors to influence election outcomes more than the rest of us, but that doesn't mean that enforcement of those laws isn't important.

2006-03-13T12:08:00.000-08:00

Cunningham Aftermath - Florida Rep. Harris In Trouble, Idaho Sen. Craig Coughs Up Tainted Contributions

Senate Campaign of Rep. Harris in Trouble
As Tamara Lytle reports in the Orlando Sentinel, Florida congresswoman and current U.S. Senate candidate Katherine Harris withdrew from a party conference this weekend, citing the need to strategize about a major campaign announcement this week.

Harris has faced tough questions over the last two weeks about her involvement with Duke Cunningham briber and co-conspirator Mitch Wade, who pleaded guilty to funneling $32,000 in illegal campaign contributions to Harris. Shortly after Wade's plea, it was revealed that Harris had requested $10 million in federal funding for Wade's company after a meeting with Wade at which he offered to hold a fundraiser for Harris.

Harris initially refused to give up any of the $50,000 she received through Wade, but seeing the writing on the wall, recently gave the money to charity.

In her statement, Harris said: "I will continue to look to our founding fathers, who pursued their vision with integrity and perseverance, to discern the best course of action for the state of Florida and our nation."

I don't know about that "continue to look to our founding fathers" bit . . . I don't remember anything about Washington and Adams directing earmarks to campaign contributors who promised to hold fundraisers for them. Maybe it was my public education.

Senator Craig Coughs Up Campaign Cash
As Dan Popkey reports in the Idaho Statesman, Idaho Senator Larry Craig has decided to give up the $43,500 he received from resigned-in-disgrace former congressman Duke Cunningham and his alleged co-conspirator Brent Wilkes and his associates.

Like Harris, Craig had requested millions in federal funds for a program benefiting Wilkes's company ADCS shortly after meeting with ADCS lobbyists in 2002. (See Senate Amendment 4419 to HR 5010, a Defense appropriations bill.)

Like Harris, Craig initially refused to cough up the campaign contributions from Wilkes and his associates. Wilkes continued his refusal even after Cunningham pleaded guilty to the bribery scheme and accused Wilkes and three others of bribing him. Craig said he didn't want to appear guilty. Now he's giving it back because he want to avoid looking guilty.

Sounds like the Senator may have more than a perception problem on his mind.

We've called on all officials who have received any campaign contributions from Wilkes or his associates to cough up the cash. Sign the petition if you want to help the Katherine Harrises and Larry Craigs of the world find a little ethical clarity.

2006-03-09T15:03:00.000-08:00

Cunningham Bribery Scandal Expands to Florida Rep. Katherine Harris

Rep. Katherine Harris (FL-13) has drawn increasing scrutiny in the two weeks since former MZM Inc. owner Mitch Wade pleaded guilty to bribing former congressman Duke Cunningham and to funneling $32,000 in illegal campaign contributions to Harris and an additional $46,000 illegally to Virginia Congressman Virgil Goode.

Problem #1: Straw Donations

At $50,000, defense contracting firm MZM was the largest source of contributions to Harris in 2003-4 by a factor of four. Despite being handed the checks personally by Wade, Harris denied knowing that some of the contributions might have been illegal "straw donations". Maybe she should have.

As William March and Keith Epstein report in the Tampa Bay Tribune, Harris had received the same kind of illegal straw donations 10 years previously. During her 1994 campaign for the Florida state Senate, Harris received more than $20,000 from employees of Riscorp Insurance. Four years later, five executives for Riscorp were convicted of illegally funneling nearly $400,000 in straw donations to various state candidates. The company's donations to Harris were exceeded only by its donations to Tom Gallagher, then the state Insurance Commissioner.

A Riscorp memo in the court file states that Harris's campaign manager asked Riscorp to issue the checks from different addresses so that it would be more difficult to trace them back to the company. In order to exculpate herself in the Riscorp scandal, Harris had gone so far as to propose legislation which would limit bundling of contributions by corporations and their subsidiaries.

Ten years later, a defense contractor personally hands her a bundle of checks from his employees and their spouses, and no red flags were raised, no alarm bells went off for Harris.

Why?

Problem #2: Bribery?
Wade handed Harris the checks for her 2004 House campaign sometime in March 2004. In early 2005, Wade had dinner with Harris in Washington D.C. At the dinner, Wade asked Harris to help him obtain funding for a counterintelligence project run and MZM facility in Florida, and coincidentally enough also offered to hold a fundraiser for Harris's campaign for the U.S. Senate.

Several months later, in April, Harris amended her earlier request for project funding to include $10 million for the MZM projects.

In June, the story broke that Wade had bought Cunningham's house only to sell it a few months later for $700,000 less than he paid for it, in effect a gift of $700,000 to Cunningham. As Jeremy Wallace reports in the Sarasota Herald-Tribune, when asked about the MZM contributions to her at the time, Harris said she got them because MZM told her they were planning on opening up a facility in Harris's district.

She neglected to say that she had submitted a request for $10 million in federal funding for the company. That seems a significant detail to omit at the beginning of an investigation into possible bribery by members of Congress.

Why the omission, if she had nothing to hide?

Problem #3: Campaign Contributions Reward the Katherine Harrises of the World
Mitch Wade would have been much less able to buy himself a seat at the dinner table with Ms. Harris if he and his employees could only have given contributions in amounts of a $100. But with campaign contributions limits at $2,000 per election, Wade was quickly able to build up MZM's contributions to a level noticeable by Harris, which bought him at least her ear.

Perhaps more importantly, there would be a much greater chance that the Katherine Harrises of the world would face opponents who represented not the viewpoints of the wealthy and corrupt, but the perspectives of a cross-section of their constituents. Until we change the role money plays in getting people to Washington, we won't be able to do a thing about the way money leaves Washington.

2006-03-08T09:36:00.000-08:00

CA Gov. Candidate Steve Westly Uses Fortune to Bully Opponent

Michael Finnegan reports in the Los Angeles Times that part of California Democratic gubernatorial candidate Steve Westly's strategy is to buy tons of early televisions ads in order to force his opponent, Phil Angelides, to spend down his campaign funds. Westly, an E-Bay millionaire at least 200 times over, is using his fortune to fund his own campaign, kicking in more than $22 million so far.

Westly consultant and longtime Dem strategist Garry South is quoted thus: "Let him spend down his cash," Westly strategist Garry South said. "Unless he has some money tree he can shake at the end, he's going to run perilously short of money."

Well, to a former Gray Davis consultant like South, I suppose it might seem savvy, even wise to nyah-nyah your opponent because he isn't as rich as your candidate. To the rest of us, it looks like another rich guy trying to buy his way into office.

California voters booted Gray Davis not just because he spent more time fundraising than breathing, but because he allowed financially powerful donors to exert enormous influence on state policy. It is not too surprising that a political consultant whose pockets are lined with the lucre of campaigns past and present would take away from the recall the lesson that California voters approve of self-funding multi-millionaire candidates that use their personal fortunes to bully their opponents into submission.

2006-03-07T17:53:00.000-08:00

Fastow Testifies Skilling Gave the Go-Ahead for Off-The-Books Companies

Just a quick note today: As Matt Daily reports for Reuters, former Enron finance honcho Andy Fastow testified today in the trial of former Enron CEOs Ken Lay and Jeffrey Skilling.

Part of Fastow's testimony: "Get as much of that juice as you can," Fastow testified. "The juice was the equity, but we were using the juice to increase earnings of Enron Corp. so we could report the numbers we wanted to report."

2006-03-07T14:19:00.000-08:00

Likely New CA Assembly Minority Leader Received $19,000 from Alleged Cunningham Co-Conspirator/Briber Brent Wilkes and Associates

Jim Sanders reports in the Sacramento Bee that Assemblymember George Plescia has emerged as the consensus choice to replace current Minority Leader Kevin McCarthy, if McCarthy runs as expected for the congressional seat of the departing Rep. Bill Thomas.

Plescia was one of at least 11 California state candidates to receive campaign contributions from Brent Wilkes, one of the alleged co-conspirators of Duke Cunningham. In December, Plescia announced his intent to give to charity $9,200 he had received from Wilkes. In reality, however, Plescia received more than $19,000 from alleged Duke Cunningham co-conspirator and briber Brent Wilkes, his company ADCS, and his business associates and employees.

Plescia's connections to Wilkes don't end there. His wife Melissa (nee Dollaghan) was the governmental affairs manager for Wilkes company, and Plescia kicked off his re-election campaign at the ADCS headquarters. Bill Ainsworth of the San Diego Union-Tribune reports that Plescia says he would consider returning the contributions from Wilkes's employees and associates.

McCarthy, the man Plescia would replace, also received $5,000 in campaign contributions from Wilkes and his company.

Plescia would do himself and the ststure of his new office considerable good by returning all the money he received from any of Wilkes's employees or associates, save perhaps his wife Melissa.

From September 2003 to October 2004, Governor Arnold Schwarzenegger received more than $87,000 from Wilkes and his associates. Schwarzenegger named Wilkes to the Del Mar Fair Board in April 2004 and to the State Racetrack Licensing Commission in May 2005. Wilkes has since stepped down from his appointments at Schwarzenegger's request. TheRestofUs.org called on Schwarzenegger to disgorge the money, but he refused to do so.

Why was Wilkes contributing to state-level politicians? His gig was federal earmarks and defense contracts after all. Well, aside from the possibility that state-level officials often graduate to Congress and that Wilkes was intent on developing a farm team, Wilkes's company ADCS had also signed on with the California procurement division as a possible provider of document conversion services for state agencies. While this could have led to many more contracts, the Union-Tribune reported in December that ADCS had then received only $1,050 for document conversion for the State Lands Commission.

2006-03-02T09:25:00.000-08:00

California Dealin': Senator Murray Gets $20k From Developer Who Benefits From Bill Sponsored by Murray

As Tom Chorneau of the San Francisco Chronicle reports, California State Senator Kevin Murray received $20,000 in legal consulting fees from Anschutz Entertainment Group (AEG) at the same time Murray was sponsoring a bill which would benefit AEG.

AEG is a privately held company owned by Phil Anschutz, which includes a diverse group of holdings, including professional sports teams, media outlets, and sporting and entertainment venues like the Staples Center in Los Angeles. AEG is one of the prime movers and shakers trying to develop an entertainment district/hotspot in downtown LA.

Senator Murray's bill, SB 4, would provide public financing to developers of stadiums, theaters, and other "performance" venues by selling naming rights, premium seat licenses, and sponsorship rights. Murray estimates the bill could save a stadium developer $100-300 million on a stadium deal. In 2002, AEG sought to build a professional sports stadium in downtown LA.

Only one group is listed as officially supporting or opposing the bill: AEG, which supported it.

So, Murray takes $20,000 for "consulting" from a company who directly benefits from a bill Murray introduced and pushed. Murray's defense: "everybody does it". What a role model.

There are at least three problems here:

1) A full-time public official is working on the side in a job for a company with interests before the state. In this case, that public official already makes $110,880 a year, two and half times the average household income in California. The company is a behemoth whose financial interests are frequently impacted in myriad contexts by state policy.

The people of California have every right to a legislature and government composed of individuals who work solely in the interest of the public. If Mr. Murray feels he must resort to self-dealing to supplement his six-figure salary, he should resign his office so that his constitutents might be served by a representative who puts their interests and concerns above his/her own.

2) That official received payment from a company whose financial interests directly benefit from acts undertaken by the official in his capacity as a public servant. Even if no explicit arrangement was made between Murray and AEG wherein Murray traded his public office for $20,000 . . . even if no one winked and no one nodded, the effect is the same. Murray got his and AEG got theirs, the taxpayers and voters of California be damned.

In other words, just because corruption may be legal doesn't make it right.

3) Californians are already cynical about their government and the stranglehold various financially powerful interests have over public policy in this state. Self-dealing arrangements like Senator Murray's with AEG, like Governor Schwarzenegger's deal with a publisher of muscle magazines, like Susan Kennedy's consulting contracts with a water company, all exacerbate that cynicism, weakening public participation in democracy in this state.

Such constant elevation of self-interest by those elected to represent the public undermines the core principles of representative democracy. Mr. Murray's "everyone does it" defense provides no comfort for those millions of Californian voters who feel let down by democracy, and no respite for those millions of California taxpayers who feel ripped off by the decisions of their government to benefit the financially powerful.

2006-03-01T12:41:00.000-08:00

Rob Reiner's Commission Taps into California $$ to Boost Ballot Campaign

As Dan Morain reported in the Los Angeles Times last week, a California Commission headed by Rob Reiner may have violated the state ban on using public funds for political campaigns.

The First 5 California Children and Families Commission was created by Prop 10 in 1998 in order to promote early childhood development. The initiative increased the tax on cigarettes, with 80% of the proceeds going to counties and 20% going to the First 5 Commission. Noted actor/director Rob Reiner was the impetus behind the initiative and the Commission's first chairman.

Reiner is also backing Prop 82, a "Preschool for All" initiative which raises income tax on the wealthiest Californians in order to pay for universal preschool. Here's where Reiner gets into trouble. As the Preschool for All campaign was gathering signatures to put what would become Prop 82 on the ballot, Reiner's First 5 Commission spent $23 million to run tv ads with the theme and words "Preschool for All".

In other words, the First 5 Commission used state money to buy ads which supported the signature-gathering drive for Reiner's private ballot campaign. Reiner recused himself from the Commission's decision to run the ads, but considering his influence over the First 5 Commission, the ad campaign in support of Reiner's initiative at least smacks of impropriety, and may have violated California's general prohibition against using public funds for private political campaigns.

The First 5 Commission has also doled out some $230 million in contracts to pr and advertising firms that worked on Prop 10, adding to the sense of cronyism and self-dealing by the Commission. A former member of the California Fair Political Practices Commission has asked the FPPC to investigate, as has state Senator Chuck Poochigian of the California Attorney General.

Reiner has since temporarily stepped down from the Commission pending the vote on Prop 82 in June.

2006-02-28T15:06:00.000-08:00

Supreme Court Hears Vermont Spending Limits Case

As Andrew Miga reports for the AP in the Washington Post, today the U.S. Supreme Court heard an appeal against a Second Circuit ruling that upheld a Vermont campaign finance law which limited contributions to a level affordable by most Americans and which limited campaign spending.

The case, Randall v. Sorrell, offers the Court a chance to reconsider its contorted 1976 ruling Buckley v. Valeo, which did a real number on democracy in the U.S. by 1) equating campaign money directly with speech and 2) instituting a confusing paradigm in which limiting the size of campaign contributions was constitutional, but limiting a candidate's spending or personal contributions to their own campaign was unconstitutional.

Most observers feel the Court was largely skeptical of the Vermont law, although it is often difficult to discern from oral arguments whether a justice is expressing doubt or is playing devil's advocate to shore up their own position. The case was the first campaign finance case heard by Justice Alito and only the second heard by Chief Justice Roberts, which adds another element of uncertainty to the mix.

If the Court refuses to defer to the state of Vermont, a refusal which would highlight the hypocrisy behind more than one justice's espoused notions of judicial restraint in the face of legislation undertaken by the several states, it may be incumbent upon those citizens of the United States who feel that money has gained dominion over our political process to pursue a constitutional amendment which makes it clear to rich man and Justice alike that our government is meant to be of the people, by the people, and for the people.

2006-02-21T15:05:00.000-08:00

Corporations Increase PAC Contributions

As Jonathan Salant reports for Bloomberg, corporations have increased their use of PAC contributions since the implementation of the 2001 Bipartisan Campaign Reform Act (BCRA). In 2005, corporate PACs made $79 million in political contributions, up from $50 million in 2001.

While contributions directly to federal candidates were limited to $1,000 from individuals and $5,000 from PACs since the 1970's, prior to the BCRA, corporations and unions could contribute unlimited amounts directly from their treasuries to the political parties. These contributions, known as "soft money", were prohibited by the BCRA.

However, both corporations and unions are forever trying to use their financial resources to influence public, and sought new ways to do so. Corporate PACs, which raise money from employee contributions to in turn donate to candidates, parties, and other PACs, are one of those ways.

Another way is the now-notorious 527 loophole, which enabled mega-donors to contribute millions of dollars to influence the 2004 presidential election. The donors were primarily Democrats, but few would argue that the Republican Swift Boat Vets for Truth didn't have considerable impact on the outcome of the 2004 race.

And of course, corporations are unrestrained in their ability to spend millions on lobbying efforts.

While some would point to the increased corporate PAC donations as evidence that campaign finance regulation is destined to fail, the truth of the matter is that campaign finance regulation is not designed to prevent the employees or shareholders of corporate America or the men and women in labor union from making political contributions any more than the rest of us. Rather, the idea is to make sure that financially powerful interests don't have more say than the rest of us simply because of their wealth.

The numbers on corporate PACs suggest what most of us likely feel, even with the passage of the BCRA: that we haven't yet ensured that wealth doesn't equate to voice in determining our elected representatives. That being said, the answer is not to throw up our hands and give in to the eternal encroachment upon democracy of wealthy interests, but rather to learn from our mistakes and to continue the fight.

2006-02-20T16:41:00.000-08:00

Of Lobbyists and Leadership PACS

Margaret Talev reports in the Sacramento Bee on another intersection of lobbyists and campaign fundraising: lobbyists as the treasurer of the PACs controlled by members of Congress.

Worth a read.

2006-02-15T15:20:00.000-08:00

ENRON TRIAL UPDATE

As Mary Flood reports in the Houston Chronicle, the prosecution has called its second witness, former head of Enron Broadband Services Ken Rice.

Rice, a protege of sorts of former CEO Jeffrey Skilling, told the jury that he lied ("misled") investors about the financial health of Enron's internet business as a result of pressure from Skilling. Rice made repeated assertions that the broadband part of Enron's business was expanding, even though it was earning no revenues and was laying off employees.

The up-is-down mentality was part of the "pressure-cooker" atmosphere at Enron to meet or beat Wall Street's earnings estimates for the company and to avoid the perception that the company was just a plain old trading company making high-risk investments.

Rice also testified on an issue central to the defense's general contention that the problems of Enron were caused by wacky Andy Fastow's unknown self-dealing with his Raptors (companies Enron used to transfer debt off its books, making it appear much more profitable than its true financial state.) Rice testified that Skilling not only knew about the Raptors, but encouraged their use for off-loading debt from Enron's books.

Two different pictures of Enron's financial health portrayed in meetings in March 2001 epitomize the way Enron played ball. After fudging the numbers twice in 2000 to meet earnings estimates, Rice told Skilling they would have to revise their 2001 projections for Wall Street. At a meeting of Ernon Broadband Services employees on March 15, 2001, Skilling told employees: "It's bad."

Eight days later, on a conference call with analysts, Rice and Skilling reported that EBS had a great quarter, weren't laying anyone off, and were growing dramatically.

The prosecution played a video of the March 15 meeting.

More as it comes.

2006-02-15T12:14:00.000-08:00

Clean Money Passes West Virginia Senate Judiciary Committee

As the AP's Jennifer Bundy reports in the Huntington Herald-Dispatch, on Monday, the West Virginia Senate Judiciary Committee voted 7-5 to approve SB124, a bill providing public financing for qualifying legislative candidates. Senator Andy McKenzie called the proposal "un-American".

Paging Roy Cohn, paging Roy Cohn.

SB124's particulars:
-to qualify, candidates for single-member districts in the House must raise 100 contributions of $5; candidates for multi-member House districts must raise from 125-250 contributions, depending on the number of members in the district; candidates for senate must raise 250 (except in two districts).
-qualifying single-member House district candidates with an opponent would receive $7,500 in public funding for the primary and $7,500 for the general; qualifying Senate candidates with an opponent would receive $20,000 for each.
-funding for single-member House district candidates would be available in 2010; for other candidates in 2012.

The AP story says qualifying contributions are $10, but the bill as listed on the WV leg website says $5. West Virginia's use of varying-membered multi-member districts makes a simple recitation of the details more difficult. You can get all the particulars by clicking the link above.

Next up for the bill: the Senate Finance Committee.

If the bill makes it through, West Virginia would become the second state legislature after Connecticut to pass a system of voluntary full public financing of elections for itself. Arizona and Maine have passed public financing by ballot measure.

2006-02-14T13:38:00.000-08:00

Pombo's Travels, For Better And For Worse

As Nick Juliano reports in the Tracy Press, California Congressman Richard Pombo (CA - 11) is taking some heat for using around $5,000 of taxpayer dollars to pay for a ten day trip he and his family took to various national parks in 2003. Pombo has defended the trip as a legitimate, cheap, and productive fact-finding tour undertaken as part of his job as chairman of the House Resources Committee.

If that is the case, more power to him. Many a congressperson disappears into the backhalls of the Beltway upon election, never to be seen in their home districts again unless for a fundraiser or on C-SPAN. Not Pombo, who in addition to getting out and seeing the areas of the country under his purview as Resources Chair, makes a concerted effort to maintain an active presence in his district. This get-out-and-see attitude is a breath of fresh air in this regard.

However, it is not clear that the main purpose of Pombo's tour of national parks was in his guise as congressman and chair of the Resources Committee. Pombo insists he spent nearly all of his time in the parks with park personnel, yet very few remember his visit. This is strange considering the considerable influence Pombo exerts over the parks' budget and the livelihoods of park employees. If the boss shows up, it's at least water-cooler conversation.

Also strange is Pombo's description of the trip on the Resource Committee website:

This August, my family and I rented an RV and set out to explore the West. We
spent two weeks on vacation, stopping along the way to enjoy the splendor of
many of our national parks.

That doesn't sound like a trip taken primarily for work.

Pombo also rented an RV, as opposed to a passenger car, for the journey. While he says he saved taxpayer dollars by not taking the trip via airplane, it is not clear at all why he chose the more expensive RV over a passenger car. Unless he needed the storage space for plant specimens he collected, the lone explanation seems to be that he wanted to take his family on vacation on the taxpayers' dime.

If Pombo's National Parks 2003 Tour was done to benefit taxpayers, Pombo should have no problem proving it with notes he took about the parks (the facts he found) and receipts for his family's expenses. If he cannot produce such documentation, he should reimburse taxpayers for every dollar we spent on that trip.

Regardless, Pombo should not draw the wrong lesson and stop his get-out-and-see approach. We the people are better served by legislators who get out and experience America and the lives of Americans, rather than hole up in Washington, D.C.

2006-02-13T08:58:00.000-08:00

Guilty Ohio Gov Calls for Ban on Lobbyist Gifts
Ohio Governor Taft called last Friday for prohibiting gifts from lobbyists to elected officials. Taft oughta know the problems associated with this sort of thing. Last summer, he pleaded no contest to failing to report several gifts from Tom Noe, a George W Bush pioneer who had taken Taft golfing several times, which Taft failed to report.

Interestingly, Noe was indicted today on 53 counts including grand theft, forgery, money laundering, tampering with records. You gotta wonder if Taft saw this coming....

2006-02-09T13:22:00.000-08:00

Deep Doolittle - Abramoff Bought Doolittle Chief of Staff Trip to Puerto Rico

As Erica Werner reports for the Associated Press, former lobbyist Jack Abramoff paid for a trip to Puerto Rico for California Congressman John Doolittle's chief of staff, David Lopez. The House of Representatives has a rule prohibiting lobbyist-paid travel by representatives or members of their staff.

Doolittle signed the travel form, which clearly listed Greenberg Traurig, Abramoff's employer at the time, as the organization paying for the trip.

Doolittle was getting cash from Abramoff as far back as 2000, when Abramoff cut a personal $10,000 check to Doolittle's Superior California State Leadership PAC, and kept getting campaign cash from Abramoff clients and associates right up through 2005.

Doolittle returned the favor, writing at least three letters on behalf of Abramoff's Indian gaming clients. When the first letter, which opposed a tribe's request for a casino license, was uncovered, Doolittle insisted that he signed the letter because he was anti-gambling. Abramoff represented a different tribe, whose casino would be in direct competition with the tribe whose casino Doolittle opposed.

Then the AP's Werner found two more letters, one of which took the Bush Administration to task for interfering with a tribe's efforts to open a casino. Oops. Money for nothin', but the checks for free . . .

Doolittle is also neck deep in the Duke Cunningham scandal. Former congressman Cunningham resigned in November 2005 after pleading guilty to accepting bribes from four alleged co-conspirators, one of which was Brent Wilkes. Wilkes, his employees, and business associates contributed more than $100,000 to Doolittle's political committees at the same time Doolittle was steering $37 million in defense contracts towards Wilkes company PerfectWave Technologies.

To make matters worse, Doolittle's wife Julie has handled the fundraising for her husband for the last few years, meaning that 15% of every donation to Doolittle goes into the family bank account.

Doolittle's protestations appear flimsier by the day. And yet, he has a virtual lock on winning his district, in part because the district was drawn to protect him for electoral challenge, in part because of his prolific fundraising.

Those two came together last year, when Doolittle joined LA Congressman Howard Berman, a Democrat, in asking the Federal Elections Commission for the green light to raise unlimited cash to fight Prop 77, the redistricting reform initiative championed by Governor Arnold Schwarzenegger. The FEC, toothless watchdog and handmaiden to the national political parties that it is, gave the pols the go ahead. They went on to raise millions from billionaires around the country, helping to torpedo Prop 77.

You get the idea.

As Doolittle's many connections to his campaign contributors were revealed, Doolittle stayed silent, choosing to hide behind his spokesperson's robotic assertions that Doolittle had done nothing wrong. He broke his silence on Tom Sullivan's show, a fairly conservative talk radio show based in the Central Valley of California. The questions were pattycake, the protestations from Doolittle rang hollow.

They continue to do so.

The many examples of questionable behavior and unsatisfactory explanations have now piled up quite high around Mr. Doolittle. As deep in it as he is, the rest of us are far worse off, facing the juggernaut of campaign cash and gerrymandered districts that have all but taken American government out of the hands of average Americans.

Until Americans demand campaign laws from our representatives that permit the accountability that representative democracy requires, we will all be in deep Doolittle.

2006-02-08T16:20:00.000-08:00

Sen. Domenici Calls for Limiting Campaign Contributions to In-State Donors

In the wake of the Abramoff scandal, the Senate Homeland Security and Governmental Affairs Committee met on January 25 to discuss ethics and lobbying reform. While many inside the Beltway have reacted to the lobbying scandal by suggesting a ban on lobbyist-paid travel or gifts from lobbyists to politicians, a few sober-minded folks have actually diagnosed the real problem with Washington these days: campaign fundraising.

New Mexico Senator Pete Domenici is one such soul, according to OMB Watch, which reports that Sen. Domenici said the real driving factors behind the corruption so well publicized of late are the growing cost of political campaigns and lawmakers' constant chase for campaign cash. He called for limiting campaign fundraising to a politician's home state and for a ban on campaign contributions from lobbyists.

Way to go Senator!, at least as to the first solution. Allowing Texans to influence elections in New Jersey or New Yorkers to influence elections in California corrupts representative democracy. A New Jersey Senator should represent New Jersey, not wealthy donors from Texas. A California Senator should represent California, not wealthy donors from New York. It doesn't take a "political scientist" to figure that one out.

Of course, an elected official should represent all the citizens of their state, so Senator Domenici's idea should be supplemented with limits on in-state contributions so that the financially powerful don't drown out the rest of us come election day. And if the limits are low enough to truly level the playing field for regular folks to take an equal and active part in our democracy, who cares whether lobbyists can contribute to politicians' campaigns? They won't be able to give enough to put a politician in their pocket.

Campaign cash will serve as a pretty decent measure by which to gauge the sincerity of Washington's "reform" efforts. If Congress does something to reduce the influence of financially powerful donors over campaigns, maybe they're serious. If the Beltway just tinkers around the edges of corruption with less travel and fewer gifts, expect the corruption crowd's gravy train to keep on rolling through American democracy.

2006-02-08T15:09:00.000-08:00

ENRON TRIAL - DAY 6

Attorneys for former Enron CEOs Jeffrey Skilling have put prosecution witness and former head of Enron's investor relations Mark Koenig through the ringer for the last three days, as the Houston Chronicle reports.

Defense attorneys have caught Koenig in error on more than one issue, although the importance of those errors or the underlying issues is unclear. For instance, Koenig asserted last week on the stand that Enron had met every earnings estimate from 1997-2000. In reality, Enron missed one estimate by one penny per share during that time period.

Defense attorneys are pursuing a strategy in which they claim Enron's catastrophic downfall was not caused by the massive accounting fraud, of which Lay and Skilling were not only aware, but which they also signed off on. Instead, they appear to be laying the groundwork for the theory that shortsellers (investors whose purchases predict and benefit from a stock's price decreasing) exacerbated the fraudulent behavior of a few lone rogues at Enron.

No big surprises yet. Stay tuned.

2006-02-06T18:18:00.000-08:00

New Majority Leader Against Proposed Reforms

It didn't take long for newly elected House Majority Leader John Boehner to show his true colors. Elected only last Thursday, Boehner has already started to scale back some of the reforms proposed in the wake of the Abramoff scandal. As CNN reports, Boehner has come out against a ban on privately-funded junkets for elected officials.

Lobbyist Jack Abramoff used free trips to Scotland as part of the bribes he offered Ohio Rep. Bob Ney in return for Ney helping Abramoff's clients with legislation and favorable comments in the congressional record. Boehner himself has taken $150,000 worth of free trips since 2000.

It is illegal for lobbyists to pay for travel for members of Congress, but non-profit organizations can do so in the name of "educating" our elected representatives. It is on this basis that Boehner defends the practice of private interests paying for congressional travel.

Well, if an elected official needs to travel somewhere as part of their duties as an elected official, it seems pretty reasonable to have the taxpayers pick up the tab. We pay for office space, right? Staff salaries, pencils, desks . . . heck, we even pay for congressional "franking" privileges, the practice with which members of congress send to their constituents tons of what often amounts to campaign literature, all on the public dime.

Privately-funded travel is just a tiny sliver of the larger problem of financially powerful interests using their wealth to buy more say in government than the rest of us. But, if Boehner's early stance on travel is any indication of which side he thinks his bread is buttered on, don't expect a lick of meaningful reform under his tenure as Majority Leader.

2006-02-03T15:30:00.000-08:00

ENRON TRIAL - DAY 3

As Dan Whitcombe reports for Reuters, prosecutors in the trial against former Enron CEOs Ken lay and Jeffrey Skilling have used their first witness to paint a picture of lies and deceit by the men to cover up the company's shaky finances.

The witness, Mark Koenig, was Enron's chief of investor relations, putting him in position to witness at least two efforts by Lay and Skilling to artificially raise the company's earnings to meet or beat Wall Street's expectations so that the stock price would rise.

Koenig is one of 16 former Enron employees and execs to plead guilty to actions taken during their stint at Enron. Lay and Skilling have, of course, high-priced lawyers which will do every high-priced lawyer trick in the book, including going after Koenig's credibility. Regardless, the consensus among legal observers is that the first week went passably well for the prosecution. Defense lawyers will cross-examine Koenig starting next week.

2006-02-03T14:39:00.000-08:00

House GOP Chooses Rep. John "Any Port in a Storm" Boehner as New Majority Leader

As Larry Margasak and Sharon Theimer reoport for the Associated Press, House Republicans voted Thursday for a new Majority Leader to replace Tom DeLay, who stepped down last year due to both fallout from his indictment for violating Texas campign laws and to his close relationship with the scandalous corruption monger Jack Abramoff.

And the winner was . . (drum roll) . . John Boehner!! That's right, THE John Boehner, representative from Ohio, the man who got in hot water for passing out campaign checks from tobacco companies to members on the floor of the House of Representatives prior to a vote.

Any port in a storm, I guess.

The race was largely between Boehner and Missouri Rep. Roy Blunt, who had served as DeLay's stand-in for the last several months and was widely seen as DeLay's protege and the inheritor of DeLay's legacy. Both Blunt and Boehner followed in Tommy "the Hitman" DeLay's footsteps, using leadership PACs to rake in tons of corporate dough to mete out to impoverished GOP campaigners to build up loyalty and power.

In the aftermath of the Duke Cunningham and Abramoff scandals, both parties have been jockeying to claim the title of the Party of Reform. In one recent crucial move to appease the American public, it was agreed that former members of the House could no longer use the members' gym. Hopefully they take on the pivotal issue of lobbyists using the House drinking fountains next.

While the parties posture, neither has done much beyond diddly squat to address the real problem in Washington D.C.: big money's role in elections has put people in office that care more about themselves or the wealthy interests in this country than they do about their constituents.

Until we get some action on that score, both parties can shuffle corruption clones in and out of leadership positions all they want. It still won't do a cotton-pickin' thing to shift power from the corruption-riddled backrooms of the Beltway to the living rooms of the rest of America, where the power and strength of our democracy belongs.

2006-02-01T15:35:00.000-08:00

CA Gov. Candidates Amass Warchests, Stay Mum on Campaign Reform

As Bob Salladay and Dan Morain report in the Los Angeles Times, the campaign of California Governor Arnold Schwarzenegger is starting off 2006 $410,000 in the hole. Democratic candidates Steve Westly and Phil Angelides start the year with $24 million and $17 million in their respective campaign accounts.

No need to shed any tears for Arnold, who despite fierce oppositions from conservative grassroots organizations to the Governor's recent move towards the middle, faces no opponent in the primary. Angelides and Westly have significantly lower recognition than Arnold and have to compete against each other, which will likely eat up nearly all their current financial advantage.

Regardless of who wins the 2006 Cali gubernatorial race, it will be done on the backs of big money. While Californians may be stuck with that this year, we need not face the same situation in 2010. Several popular campaign reforms are available that would allow regular Californians to wrest control of government and politics out of the hands of the moneyed interests.

A bill (AB 583) adopting one such reform, publicly financed elections for qualifying candidates, recently passed the Assembly and now awaits the Senate. Even though several members of the Assembly who voted for the bill said they did so mostly to keep it alive for discussion in conference committee, that didn't stop the powers that be in the Assembly from stripping the bill's lower contribution limits for privately financed candidates in committee.

If for some reason the politicians elected with big money choose not to pass a bill which would help reduce the influence of big money, there is an alternative in the wings. The California Nurses Association, the same group that gave Arnold hell all last year at his fundraisers, has filed an initiative that would:

-create a clean money program similar to AB 583,
-lower contributions limits for privately financed candidates,
-ban corporate contributions to candidates, and
-ban corporate contributions to ballot initiative committees.

None of the candidates for governor - not Angelides, not Westly, not Schwarzenegger - have indicated whether they support AB 583. Except from Schwarzenegger's endorsement of a ban on contributions during the budget session, none of the candidates has made any proposal for addressing the problem of big money in California elections.

When we hear the candidates pretending to the throne of reform in the next ten months, their silence on the pressing issue of money in politics should be remembered.

2006-02-01T15:06:00.000-08:00

ENRON TRIAL - DAY 1 of Testimony

As the Houston Chronicle reports, the former head of investor relations for Enron, Mark Koenig, took the stand today. Koenig testified that the company purposefully overstated earnings in both the 4th quarter of 1999 and the second quarter of 2000, each time to surpass analysts' expectations and boost Enron's stock price.

Koenig is expected to be on the stand for a few days. As head of investor relations, Koenig monitored the crucial relationship between Enron and Wall Street and to some extent, between Enron and the business press. Koenig's successful ongoing efforts helped ease any possible concerns on Wall Street about Enron's financial and accounting practices.

While Koenig managed Wall Street, Lay managed the government side of things, spreading millions of Enron dollars around to state and federal politicians in campaign contributions, co-opting our representatives into silence or active participation in Enron's global schemes.

With Wall Street and government asleep at the wheel, the company was able to cook its books unto its bankrupt death.

The Chronicle is also blogging the trail. You can check that out here, which has details on Judge Sim Lake dismissing jurors early for the day after hours of somewhat complex financial testimony.

2006-01-30T16:32:00.000-08:00

Edwards Donor Under Investigation for Illegal Campaign Contributions

As David Shepardson reports for The Detroit News, Michigan trial attorney Geoffrey Fieger is under investigation by the Justice Department for illegally funneling campaign contributions to 2004 presidential candidate John Edwards through Fieger's employees and associates.

Fieger claims the Justice Department will indict him for reimbursing "civic-minded" employees who made contributions to Edwards with bonuses, an illegal use of conduit contributors under federal campaign law.

Fieger is not the only trial attorney who has been investigated for making illegal conduit campaign contributions to Edwards. Arkansas attorney C. Tab Turner was also investigated by the Justice Department on the same charge - reimbursing employees for campaign contributions to Edwards.

Edwards fundraisers aren't the only ones trying to cheat by evading contributions limits. Bush Pioneer fundraiser Tom Noe was indicted for illegal conduit contributions in Ohio last October.

2006-01-30T16:21:00.000-08:00

JURY SEATED FOR ENRON TRIAL

As Kristen Hays and Erin McLamm report for the Associated Press, 12 jurors and 4 alternates were seated today to hear the case against former Enron CEOs Ken Lay and Jeffrey Skilling.

Opening statements are expected tomorrow, the same day as the State of the Union address by President Bush is scheduled. We'll be watching to see whether the President mentions Ken Lay, Jack Abramoff, Brent Wilkes, or any other of his fundraisers who are under investigation for fraud or corruption.

2006-01-26T23:00:00.000-08:00

TheRestofUs Files FEC Complaints Against Business Associates of Alleged Duke Cunningham Co-Conspirator Brent Wilkes

As you can read here in our press release, today we filed FEC complaints against Max Gelwix and William B. Adams for violating the federal aggregate contribution limit in 2002. (see the story in the San Diego Union Tribune)

Gelwix is the President of Perfect Wave Technologies, a company started by Gelwix in early 2002 but quickly brought under the control of Brent Wilkes, one of the alleged co-conspirators of resigned-in-disgrace congressman Duke Cunningham. Adams provided the initial $40,000 in start-up funding for Perfect Wave, $15,000 of which was quickly sent to Tom DeLay's Texans for a Republican Majority PAC, $25,000 of which went to the Tribute for Heroes, a gala fete of Duke Cunningham.

Texas prosecutor Ronnie Earle has subpoenaed the records of Perfect Wave and of both Gelwix and Adams as part of his ongoing investigation into TRMPAC's using corporate money to influence the 2002 Texas state legislative races, contrary to Texas law.

As the complaints state, both men contributed $28,000 to federal committees and candidates in 2002, $3,000 more than the statutory limit of $25,000. The men contributed to the exact same nine committees, and almost on identical dates.

Check out the complaints to see who the men gave to:
-the Gelwix complaint;
-the Adams complaint.

2006-01-23T14:27:00.000-08:00

Doolittle's First Interview on Abramoff Since Abramoff's Indictment

Monday afternoon, around 2:00 p.m. PST.

I'm listening to an interview with California Representative John Doolittle on the Tom Sullivan Show as I write this. I'd call it talk radio, but the interview was recorded last week, enabling Doolittle avoid any questions from callers. Not exactly the rough and tumble of talk radio, politics, or democracy for that matter.

Doolittle has refused to answer questions about his relationship with Jack Abramoff up to this point. Doolittle's spokesperson has repeatedly said Doolittle only accepted $4,000 from Abramoff, although California campaign filings show that Doolittle received the largest single personal contribution of any politician from Abramoff -- $10,000 in 2000.

Doolittle has refused to disgorge any money his committees have received from Jack Abramoff, Abramoff's clients and associates, or alleged Duke Cunningham co-conspirators Brent Wilkes and Mitch Wade.

Some of what Doolittle had to say:
-In explaining his silence to date, JD says he has to think about legal ramifications of discussing the Abramoff issue.
If he hasn't done anything, where's the legal risk in speaking the truth to his constituents? Why does he continue to avoid them?

-JD says he's only taken $4,000 from Jack Abramoff and JA's wife.
This is at best a misstatement; at worst an outright lie.

-About Tom DeLay: "He and the former Majority Leader are "very close friends."
No surprise here. Doolittle is one of DeLay's closest allies.

-Campaign Finance Reform: Doesn't want public financing of campaigns. Says Geroge Washington raised campaign cash for House of Burgesses, and that U.S. system of campaign fundraising is best in the world.
Doolittle showed no recognition that 80% of the American public believe that corruption is a serious problem in Washington D.C., nor that a similar percentage think that there's too much money in politics. This is excatly what happens when campaign cash is allowed to dominate elections: representative democracy becomes radically less representative. Doolittle is off the reservation on this one.

-Did he cross the line?: JD says both the person offering a bribe and taking the bribe must intend for the bribee to provide some official act in return for whatever the briber offers.
This is legally right, although it sidesteps the question of whether Jack Abramoff or Brent Wilkes thought they were bribing Doolittle.

-Why not return the Abramoff money?: JD says it's a "matter of principle. (He's) not going to be like the other politicos, fleeing like a scared flock of birds."
Doolittle says, in effect, he is not going to cater to the typical politician's impulse to tend more to appearances than the underlying truth. In the same breath, Doolittle says he doesn't want to give the money back because to do so would create the appearance that he did something wrong.

-Skybox: JA had a sportsbox at the MCI Center, and would make it available to Doolittle and other members for fundraisers. JD didn't use often, but occasionally did. JD has obligation to report in-kind contribution of skybox. Common practice in D.C. for providing entity to provide statement to candidate, although the obligation to report it is candidate's (Doolittle's in this case). Abramoff never sent statement. JD failed to report around a $1,500 value.

-Signatures: "One of the premier restaurants in D.C. area." JD has records showing he paid for meals at Signatures. Always lived within rules. Either reimbursed or paid personally. Never knew he was on JA's list. JD also says $20 for lunch is laughable in D.C. -- "maybe you can eat at Baja Fresh".
Another example of what happens to representative democracy when rich people run the show.

-Who's investigating, have they contacted JD?: DoJ is investigating. "No one (in the last two years) has ever contacted me about it." No campaign records requested. Just sent a letter to US Attorney General today, "if you're concerned about me, investigate me." JD says the public is entitled to know the truth.
Yet refuses to answer questions about Abramoff for weeks? And when he does answer those questions, he does so in a cushy insulated radio interview with a sympathetic host. the letter to the A.G. is a ploy -- the A.G. can't comment on an ongoign investigation. For a guy who doesn't cater to appearances, Doolittle continues to cater to appearances.

-His wife Julie: JuD started Sierra Dominion almost 8 years ago. Various clients - bookkeeping, event planning, some fundraising. At some point, JuD outsourced the bookkepping, freeing up more time to fundraise. She made a list: who do I know to network? JA first on her list; had a gig for her. [Shocking.] Pay conmensurate with that of other clients. Lots of meetings, etc. Fundraiser for JA charity was going to be an elaborate spygame at new spy museum. JD "very offended" his wife has been brought into this. [Who wouldn't be concerned and even resentful that their spouse was brought into this, but whose connections has JuD exploited for her personal gain? Whose campaign contributors has Julie Doolittle made $145,000 from?] Business continued apace in post-Abramoff era. FBI asked for JuD's records, two years ago this May or June.

-Did JD call JA and ask what's going on?: JD never called JA. JuD never called JA. Scandal had progressed too far for JD to call.
Doolittle insists that he is a man who doesn't care about appearances, yet refuses to call his friend Jack when he is in trouble? How about just for an explanation? This was way before Abramoff was even indicted: did Doolittle know something about Abramoff that gave him reason to think that Abramoff was up to something illegal or nefarious?

-Campaign finance law: JD "probably has a different position on this" than colleagues in leadership. Ethics reforms have almost no bearing on Abramoff matter. Talks a bit about shoddy system of distinguishing between right and wrong.
Doolittle has long been out of step with the American public on the need to reduce the influence of big money on politics. He introduced multiple amendments to gut the presidential system of public financing and to completely eradicate all checks on big money flowing into the campaign coffers of the politicians and political parties. Doolittle is right on target when he talks about the ethical discrepancy of a $25 lunch being "wrong" and a $2,000 contribution being acceptable.

-Is this a Beltway issue?: JD thinks it's been made more important because of Duke Cunningham. JD thinks there is a legitimate concern on the part of voters. JD is trying to get the truth out.
Considering Doolittle's silence on this issue, this is laughable.

-Lungren's leadership elections idea?: Designed Democrat attack on Republicans. Exact wrong thing for GOP to do.
Of course the Democrats' hogwash is part of a designed attack on Republicans. And of course the Democrats in Congress don't have clean hands. That doesn't make Jack Abramoff''s money any cleaner. That doesn't make the money from Duke Cunningham's bribers any cleaner.

What wasn't asked (or answered):
-What about the $55,000 Doolittle received from Brent Wilkes and his associates?
-Why did Abramoff give Doolittle the largest single personal contribution from Abramoff to any politician ($10,000)?
-Why has Doolittle's spokesperson (and now Doolittle himself) not told the truth about the $10,000.

2006-01-19T14:12:00.000-08:00

Another Congressman Caught Selling His Vote?

As Matt Kelley reports in USA Today, California Congressman Jerry Lewis received more than $110,000 from Cerebrus, a New York City hedge fund, the day before safely shepherding a defense appropriations bill through the House of Representatives which preserved $160 million in spending for a Navy project in which the firm has a major financial stake.

Cerebrus would later kick in another $20,000 to Lewis' PAC and another $70,000 to the National Republican Congressional Committee (NRCC), which helped propel Lewis to the Chairmanship of the House Appropriations Committee.

In 2003, the year in which Lewis received the Cerebrus contributions, the Navy project in which Cerebrus had a stake was beset by cost overruns and other problems. The problems led to a budget proposal with cost cuts of 10% - $160 million - on the project. $110,000 of Cerebrus contributions later, the defense appropriations bill passed with the entire project budget intact.

Lewis denies any connection between his efforts to maintain funding for the problem-plagued project and the huge financial benefit he received from the hedge fund. His dissociation from reality is not so complete that he believes that the money from Cerebrus to his PAC - which he was able to dole out to campaign cash-needy colleagues - didn't help him win the chairmanship of one of the most powerful committees in . . . well, in the world, really.

Cerebrus, like all hedge funds, represents exclusively wealthy investors and is not subject to all the rules and regulations of most investment firms. The firm, which had never contributed to Lewis prior to 2003, refused comment.

Fittingly, in today's issue, USA Today editorialized in favor of public financing of political campaigns.

In other news, AB 583, a bill providing for public financing of state elections in California, passed through the Assembly Appropriations Committee today. The bill now goes to the Assembly floor, where it must pass by the end of the month or die.

2006-01-19T10:15:00.000-08:00

T Minus 11 Days Until Lay/Skilling Trial

As Reuters reports in the Washington Post, a federal judge in Houston decided several key evidentiary points for the trial of former Enron CEOs/gurus Ken Lay and Jeffrey Skilling, scheduled to begin January 30.

The judge will NOT allow testimony about Ken Lay allegedly covering up an oil trading scandal in 1987, nor will any evidence about Enron's manipulation of the California energy markets in 2000-1 be admitted. The judge ruled the evdience irrelevant to the specific charges against Lay and Skilling.

I'm no legal expert, but if one of the charges against Lay and Skilling is that they covered up Enron's massive account imbalances in an effort to maintain stock price, it sure seems like past cover-ups by either man would be relevant.

The judge also ruled that the defense can't introduce evidence of philandery or the use of drugs or pornogrpahy by the government's witnesses.

The defendants are also still seeking to move the trial from Houston, Enron's hometown, to another city due to what they claim will be their inability to get a fair trial. the judge has so far resisted these efforts.

We'll keep you posted.

2006-01-18T17:31:00.000-08:00

Lobbying Reform Proposal Leaves Massive Loophole

As Jeffrey Birnbaum reports in the Washington Post, the lobbying reform package proposed by House Speaker Hastert in the wake of Hurricane Abramoff leaves a gaping loophole through which lobbyists can still buy access and influence with members of Congress - campaign fundraising.

This probably comes as no surprise to anyone who has witnessed how a politician's eyes will light up and wallet say howdy to campaign contributions. You gotta drag meaningful campaign reform out of these guys. Not the first proposal, not the second, nor the third or twelfth are likely to do anything meaningful to make our elections more fair.

But, that being said, neither will banning campaign contributions from lobbyists. As the massive amounts of money spent by Abramoff's tribal clients demonstrates, it's the wealthy interests behind the lobbyists that carry the financial clout that the pols so desperately crave. For any real good to come out of the Abramoff scandal, the American public will have to demand that their representatives pass reform that actually makes our government more representative of the rest of us, and less so of the Abramoffs and wealthy interests of the world.

If you want to write your Congressman to express your opinion, check out our citizens toolbox for the necessary info.

2006-01-16T19:28:00.000-08:00

Bob Ney Steps Down . . . But Not Far Enough

As Jonathan Weisman reports in the Washington Post, Ohio congressman Bob Ney temporarily resigned as chairman of the House Administration Committee, a plum leadership position which earned Ney the nickname "the Mayor of Capitol Hill", a position he allegedly used to hand out a sweet wireless contractor to a major contributor.

Ney is the unnamed "Representative #1" mentioned in Jack Abramoff's guilty plea who Abramoff admits to bribing in return for campaign contributions and goodies. In addition to wireless contracts, Ney is also allegedly for sale when it comes to inserting comments into the congressional record and backing legislation.

We think the constituents of Ohio's 18th Congressional District deserve a representative who knows the difference between right and wrong to steer clear of the Abramoffs of this world, not to mention a representative that isn't distracted by a federal corruption investigation which by all reports has considerable merit. Ney has made a couple statements to the effect that he might not seek re-election, even if he stays in office until this November.

Enough is enough Bob. The honorable thing to do at this point is to resign from Congress and let justice run its course. The people of Ohio deserve someone looking out for their best interests, not watching over the shoulder for impending indictments.

2006-01-10T12:21:00.000-08:00

DeLay or Not DeLay?

Today, TheRestofUs.org called on all candidates for leadership positions in the upcoming Republican House Leadership elections to disclose daily all the contributions they make to other candidates in the run-up to the elections.

A little background on why these elections are taking place and why we called on these candidates to disclose their contributions to their colleagues:

DeLay Steps Down . . .
Rep. Tom DeLay was House Majority Leader until September of last year (2005), when he was indicted on charges of conspiring to violate Texas campaign finance law's prohibition against corporate contributions to candidates. A few days later, he was re-indicted on charges of money laundering in connection with the same case.

As House Rules require representatives in leadership positions who have been indicted to resign their post, DeLay stepped down from his Majority Leader post. (DeLay's fellow Republicans had voted at the beginning of the year to rescind that rule in order to protect DeLay against the much-discussed impending indictments, but were forced to reinstate the rule after much public outcry.)

. . . Sort of
When DeLay resigned his leadership post however, he did so only temporarily, pending what he assured his colleagues would be a quick victory in the case against him. Much like the Oscars use seat-fillers to take the place of temporarily departed audience members in order to maintain the appearances of a packed house, DeLay used his considerable power and influence to leave himself a caretaker in his recently-departed position: Majority Whip Roy Blunt of Missouri.

But DeLay's comeback efforts were cut short yesterday (January 9, 2005) when the Texas Court of Criminal Appeals denied his request to either throw out the indictments against him or grant him an expedited trial. Having read the tea leaves or goat entrails or stars, DeLay decided over the weekend not to seek restoration to his House Majority Leader position. No doubt his connections to lobbyist turned public whipping boy Jack Abramoff helped cement the decision.

The Seat-Filler
Rep. Roy Blunt was more than just any seat-filler. Starting back in 1999, Blunt had gone to school at the feet of DeLay, who was House Majority Whip at the time. Faster than you can launder $190,000, Blunt and DeLay were swapping money back and forth between their leadership PACs and contributing millions of dollars to state and federal committees and candidates in order to build their power and influence within the donor committee and amongst their colleagues.

(Check out the interesting Associated Press graphic on the Houston Chronicle's website for the grisly details. Titled "Swapping Funds", it is in the right-hand column under Graphics about two-thirds of the way down.)

In late 2002, DeLay moved up in the world, winning election as House Majority Leader. Blunt, DeLay's deputy since 1999, also moved up, winning election to replace DeLay as House Whip (check out the press release section).

How did he do it? Well, in addition to being DeLay's boy, Blunt's ascension was no doubt aided by his contributions to his fellow House Republican candidates. According to the Center for Responsive Politics, Blunt's leadership PAC, fittingly known as the Rely on Your Beliefs Fund, doled out the following contributions to his fellow House Republican candidates:
2000 - $204,429
2002 - $591,762
2004 - $682,039

In the same elections, DeLay doled out:
2000 - $816,391
2002 - $952,355
2004 - $914,000

The student had not quite yet become the master.

Leadership Elections
As the rise of Blunt and DeLay help show, contributions from leadership PACs play an integral role in building support with colleagues when leadership elections roll around, as they will in the first week of February of this year, thanks to DeLay's recent resignation. Leadership PACs also play a role in the continuing efforts of wealthy interests - like Jack Abramoff, Duke Cunningham's alleged co-conspirators Brent Wilkes and Mitch Wade, and all manner of corporate interest - to use their money to buy power and influence in Washington.

Why Daily Disclosure
Unfortunately, leadership PACs are generally required to report no more than monthly. The reports for January won't be filed until February 20, well past the scheduled time for the upcoming leadership elections. February reports won't be available until March 20.

This time lag means that neither the public nor House Republicans will know until after the election how much money the leadership candidates are spreading around in an effort to buy influence and support from their colleagues. This information will be crucial both to those Republicans who are truly interested in cleaning up the way business gets done in Washington and to the public, whose confidence in Congress has been rocked by a series of scandals related to influence-peddling in the nation's capital.

Without voluntary disclosure of these contributions prior to the elections, neither House Republicans nor the public will know whether the new leader is made in the same mold as Tom DeLay, or is truly interested in a cleaner, more ethical, more representative Congress. This is especially true considering Blunt's track record, and even more so considering his main opposition for Majority Leader, Rep. John Boehner of Ohio, also has a leadership PAC from which he doled out some $337,529 to colleagues in the first 11 months of 2005.

DeLay or not DeLay? Only the candidates for House leadership can answer that question. We await their response.

2006-01-10T10:40:00.000-08:00

The movement for independent redistricting is gaining ground in Indiana, although given that the redistricting commissions recommendations require legislative approval it's hard to say how real the proposal is. See
GOP plan: New body should draw maps IndyStar.com

2006-01-05T14:10:00.000-08:00

Jack Who? Politicians Give Up Campaign Cash as Abramoff Pleads Guilty . . . Again

As Jonathan Weisman reports in the Washington Post, Jack Abramoff appeared in federal court in Florida yesterday to plead guilty to fraud and conspiracy. Abramoff pleaded guilty in D.C. federal court the day before to charges of fraud, bribery, and tax evasion.

With Abramoff's guilty pleas, politicians who accepted campaign contributions from Abramoff and his clients have begun a polluted cash dump to rival Love Canal. Yesterday, President Bush, House Speaker Hastert, former majority leader DeLay, and current majority leader Roy Blunt all disgorged contributions they received from Abramoff and his clients.

No word on whether the EPA has any plans to send in the clean-up squads.

The fallout from the Abramoff scandal has gone so far as to spur Congress into action. Lobbying reform is the cry of the day, with three separate drafts underway in the Senate alone (Senators McCain, Frist, and Feingold), and more in the House. As much of the quid Abramoff spread around the nation's capitol took the form of campaign contributions, some of the reform efforts may seek to limit lobbyist political contributions. In its recent campaign finance legislation, the state of Connecticut took similar action.

However, a better answer to this aspect of the Abramoff scandal is to ensure that any interest, whether lobbyist or their much deeper-pocketed employers, can't make contributions in amounts that give them more say in elections or the decisions of our government than the rest of us. But, an amendment to the Bipartisan Campaign Reform Act of 2002 doubled the amount people can give to political candidates to $2,000, a level affordable by relatively few Americans.

The members of Congress most often mentioned in connection with the Abramoff scandal - Reps. Bob Ney, Tom DeLay, John Doolittle, and Richard Pombo (not to mention recently resigned in criminal disgrace Duke Cunningham) - all voted in favor of the amendment to increase contribution limits, but voted against the BCRA itself because of it limited "soft money" (unlimited donations) to political parties.

No surprise that the folks implicated in a money-for-power scandal are the same ones who fought tooth-and-nail against reforms limiting the influence of money in politics.

For those who think that Republicans are the only ones guilty of selling out the rest of us to satisfy their wealthy paymasters, Senator Hillary Clinton's campaign agreed today to pay a $35,000 fine for underreporting its take from a 2000 fundraiser. Not to mention James Traficant, Robert Torricelli, Albert Bustamante, Carroll Hubbard, Carl Perkins, Dan Rostenkowski, etc. (Check out this report on congressional pensions by the National Taxpayers Union for a list of congressional crooks from the 90's for a more complete list.)

2006-01-03T09:15:00.000-08:00

Jack Abramoff to Plead Guilty Today

Lobbyist par putrescence Jack Abramoff is scheduled to appear in federal court today to plead guilty to three to five felony counts of fraud, conspiracy, corruption, and tax evasion, as reported in The Washington Post and Los Angeles Times.

Abramoff is at the center of several overlapping investigations into congressional corruption, fraud, and other illegal activities related to Abramoff's lobbying business and his purchase of Florida casino company SunCruz. His plea agreement opens the door for Abramoff to cooperate with the federal investigation into corruption by members of Congress.

Abramoff's plea comes on the last possible day set for a deal by the federal judge in Florida presiding over the SunCruz case, and after plea agreements by three men indicted for crimes related to various pieces of the Abramoff case, including former Abramoff partners Michael Scanlon (involved in tribal lobbying schemes) and Adam Kidan (involved in the SunCruz wire fraud).

Reports have mentioned some half a dozen members of Congress who are the focus on the federal investigation into possible corruption and influence peddling, including Reps. Bob Ney (OH), Tom DeLay (TX), and John Doolittle (CA) and Senators Byron Dorgan (ND) and Conrad Burns (MT), among others. Also being investigated are former congressional staffers, many of whom were handed lucrative top-flight lobbying positions after leaving the public payroll, and even congressional spouses, some of whom received cushy contracts from Abramoff involving lots of money and little work.

It's not known whether the subjects of the investigation face any additional risk now that Abramoff has agreed to a deal. However, Abramoff was the spider at the center of the far-reaching and intricate web designed to fatten the wallets of himself and his partners in crime while pushing policies favorable to his clients at the expense of the rest of us. If anyone is in a position to spill the beans, it is Jack.

Stay tuned.

2005-12-29T11:21:00.000-08:00

Enron Chief Accountant Pleads Guilty to Securities Fraud

As Carrie Johnson reports in the Washington Post, former top Enron accountant Richard Cuasey pleaded guilty yesterday to one count of securities fraud. Causey faces a sentence of five to seven years, depending on his assistance to the Justice Department Enron Taskforce's case against Ken Lay and Jeffrey Skilling.

Causey's position as chief accountant granted him a good deal of insight and knowledge about Ernon's fraudulent accounting reports, including the self-dealing side deals made by convicted former Enron exec Andy Fastow with Enron. However, the former accountant's benefit to the government's case may be tempered by his credibility or the defense efforts to paint him as a man cutting a deal due to financial and legal pressures.

With Causey's plea, only two defendants are left relating to Enron's massive fraud and the inevitable financial collapse it caused: Lay and Skilling. Their trial is scheduled to begin on January 30.

New Republic on Arnold's failed promise

2005-12-22T15:49:00.000-08:00

New Republic on Arnold's failed promise

Here's an interesting article that lists Schwarzenegger's excessive fundraising as a big reason for his loss of support among independent voters:

"Schwarzenegger lost important support among the state's independent voters, who now make up almost a quarter of the electorate and serve as the swing voters in state elections. According to voting analyst Mark Baldassare of the Public Policy Institute of California, they are primarily white, middle-class suburbanites who are socially liberal and fiscally moderate and who fear that government and the parties have been captured by special interests. In the October 2003 exit polls, 54 percent of them favored a recall, and they backed Schwarzenegger over his nearest rival by 15 percent. But, as Schwarzenegger began touring nationally to raise money from wealthy donors for his initiatives, erstwhile supporters like Derek Cressman, director of the nonpartisan watchdog group TheRestofUs.org, expressed their disillusionment. "He told us that he would not need to take money from special interests," Cressman wrote on his organization's website last February, "Yet now he's become the Donald Trump of campaign cash--he just can't get enough." Schwarzenegger's following among independents fell accordingly. In a mid-June Field poll, only 36 percent of moderates and 35 percent of independents said they would vote for his reelection. "

2005-12-22T13:34:00.000-08:00

Fed Audit Questions $3.8 Million of California HAVA Funds Spent by Shelley

As Greg Lucas reports in the San Francisco Chronicle, federal auditors have reported finding some $3.8 million in California's HAVA funds that were misspent or not properly accounted for under former California Secretary of State Kevin Shelley.

Congress passed the Help America Vote Act (HAVA) in 2002 to assist states in increasing voter turnout, voting access, and the accuracy of vote tabulation. Each state's top elections official was responsible for disbursing the funds received under the program.

As California's Secretary of State, Kevin Shelley was responsible for making sure that funds were spent to further the purposes of HAVA. However, under Shelley's eye, some of the money was spent on activities that promoted his party (Democrat) and that furthered Shelley's own political ambitions.

Shelley resigned earlier this year after a series of scandals which included the misspending of HAVA funds, in addition to illegal fundraising in his public office, illegally laundered contributions to his campaign, and allegations of harassment by a former staffer. The scandals have overshadowed Shelley's very pro-democracy efforts in ensuring voter verified paper trails in California.