Lobbyists Exploit Provision Allowing them to “Honor” Lawmakers


USA Today–certainly not well-regarded as a source for hard-hitting journalism–has a surprisingly good piece that looks at how lobbyists are able skirt campaign finance regulations by contributing funds to “honor” lawmakers. The paper writes:

Despite a ban on gifts to lawmakers and limits on campaign contributions, lobbyists and groups that employ them can spend unlimited money to honor members of Congress or donate to non-profits connected to them or their relatives. The public – until now – had little insight into the scope of this largely hidden world of special-interest influence.

For the first time, those contributions are being tracked due to ethics rules adopted in 2007. What USA Today found in their comprehensive review wasn’t pretty: lobbyists and their corporate backers are using the loophole to influence lawmakers.

Two specific examples from the article:

Last year, the telecommunication industry gave more than $72,000 to non-profits and charities in honor of Rockefeller, who advocated legislation to provide legal immunity to phone companies that participated in the government’s anti-terrorism eavesdropping program. The largest donation came from AT&T. At the time, Rockefeller chaired the Senate Intelligence Committee and helped broker a deal on the bill, which passed last year.

Rep. Joe Barton of Texas, the top Republican on the House energy committee, asked an energy company to donate to a foundation that bears his name. His daughter-in-law, Amy Barton, is the unpaid director.

Utility giant Exelon gave $25,000 to the non-profit last June and $50,000 in 2006, according to federal records and interviews with company officials.

Barton wrote to Exelon CEO John Rowe, seeking the money, says David Brown, Exelon’s top lobbyist. The company is one of the nation’s largest producers of nuclear energy. Barton has long advocated on the industry’s behalf, pushing for the opening of a nuclear-waste repository at Yucca Mountain, outside Las Vegas.

Headlines: AIPAC Launches Campaign to Prevent Peace Talks; Maine Legalizes Same-Sex Marriage

Democracy Now Headlines: AIPAC Launches Campaign to Prevent Peace Talks; Maine Legalizes Same-Sex Marriage

Headlines from DemocracyNow.org, a daily TV/radio news program, hosted by Amy Goodman and Juan Gonzalez, airing on over 650 stations, pioneering the largest community media collaboration in the US.

Estimates of Afghan Toll Rise in U.S. Bombing

Estimates of the dead from Monday’s U.S. bombing of the Afghan province of Farah are now reaching as high as two hundred. Images released from the area show villagers sorting through the rubble of the devastating attack. An unidentified village elder said he had lost dozens of relatives.

Villager: “We have discovered dead bodies of fifty two people. There might be still more bodies undiscovered. These martyred people were civilian residents of this area. All these fifty two martyred are either my nephews, nieces or my grandchildren.”

The Red Cross has confirmed “dozens” of civilians were killed, including many women and children. The attack could prove to be the deadliest U.S. bombing of Afghan civilians since the U.S. invasion of 2001. Meeting with Afghan President Hamid Karzai in Washington, Secretary of State Hillary Clinton expressed U.S. regret.

Secretary of State Hillary Clinton: “I wish to express, you know, my personal regrets and certainly the sympathy of our administration on the loss of civilian life in Afghanistan. We deeply regret it. We don’t know all of the circumstances or causes. And there will be a joint investigation by your government and ours. But any loss of life, any loss of innocent life is particularly painful.”

The U.S. military is suggesting it has evidence showing the victims were actually killed by Taliban grenades, but hasn’t offered any proof.

Obama Hosts Karzai, Zardari at White House

Karzai was in Washington along with Pakistani President Asif Ali Zardari. The two leaders later met President Obama, who said they all face the same enemy in the Taliban.

President Obama: “The security of Pakistan, Afghanistan, and the United States are linked. In the weeks that have followed, that truth has only been reinforced. Al Qaeda and its allies have taken more lives in Pakistan and Afghanistan and have continued to challenge the democratically elected governments of the two presidents standing here today. Meanwhile, Al Qaeda plots against the American people and people around the world from their safe haven along the border.”

Zardari and Karzai’s visit to Washington comes as lawmakers take up an Obama administration request for $2.3 billion dollars in aid to Pakistan and more than $800 million dollars in military assistance for Afghanistan. In a split with Democratic leaders, House Appropriations Chair David Obey is proposing the U.S. condition the funding on the Afghan and Pakistani governments’ ability to meet several benchmarks.

At Least 12 Killed in Iraq Bombings

In Iraq, at least twelve people were killed Wednesday in two separate bombings in Baghdad. Most of the victims died in an attack on a crowded vegetable market, killing eleven people and wounding at least thirty-seven. A local grocer witnessed the bombing.

Witness: “The truck entered the market and people were slaughtered. What did porters, grocers and farmers do to deserve to be killed?”

Violence has recently increased around Baghdad, with last month being the deadliest in more than a year.

U.S. Military Drops Case Against Officer Who Refused Iraq Deployment

The U.S. military has dropped its attempt to retry to Ehren Watada, the first Army officer to refuse deployment to Iraq. On Wednesday, a federal appeals court granted a military request to withdraw an appeal of a lower-court ruling that said a second court-martial would have violated Watada’s right against double jeopardy. Watada’s first court-martial ended in a mistrial. Watada’s attorney says he intends to leave the military and attend law school.

AIPAC Launches Campaign to Prevent Peace Talks

The pro-Israeli government lobby group AIPAC has launched a new campaign to prevent the Obama administration from pressuring Israel to engage in peace talks. AIPAC is urging lawmakers to sign on to a Congressional measure that urges Obama not to dictate how Israel negotiates with Palestinian leaders. The administration says it supports a two-state solution, though it hasn’t called for a full Israeli withdrawal from the Occupied Territories where a Palestinian state would be created. Israel opposes the two-state solution and wants to retain Jewish-only settlements in the Occupied West Bank.

Israel Rejects UN Report

Meanwhile the Israeli government has rejected the findings of a UN report that found it deliberately and recklessly attacked UN facilities and personnel during its three-week assault on the Gaza Strip. Speaking at UN headquarters Wednesday, Israeli President Shimon Peres said Israel rejects the report’s every word.

Israeli President Shimon Peres: “We have the regard for the Secretary-General. We don’t accept one word of what the board writes. They didn’t have to write it. They were unfair. They were one-sided.”

Group: Israel Interrogating Gaza Patients

Meanwhile in Israel and the Occupied Territories, an Israeli medical human rights group says a growing number of Palestinian patients have been interrogated by Israeli agents before leaving the Gaza Strip for medical care. The Israeli chapter of Physicians for Human Rights says at least 438 patients were interrogated while trying to leave Gaza between January 2008 and March of this year.

Senate to Hold Torture Memo Hearing

Back in the United States, Senator Sheldon Whitehouse has announced plans to convene the first Congressional hearing on the torture of foreign prisoners since last month’s release of Bush administration memos authorizing the torture. As chair of the Senate Judiciary Subcommittee on Administrative Oversight and the Courts, Whitehouse says he plans to call on witnesses including former FBI agent Ali Soufan and former State Department lawyer Philip Zelikow.

Post-9/11 Rules Impeded Swine Flu Response

U.S. health officials have confirmed they were delayed in responding to the swine flu outbreak because of Bush administration rules imposed after the 9/11 attacks. The Financial Times reports Mexican officials sent samples from infected patients in mid-April. But U.S. restrictions on imported biological materials meant the samples first had to be sent for analysis in Canada. American scientists had already analyzed several swine flu cases without realizing it was the same virus. There have now been two confirmed swine flu deaths in the U.S., both in Texas.

Probe: FBI Terror List Harms National Security

A Justice Department probe has found the FBI’s “terrorist watch list” has endangered national security by retaining some 24,000 names without justification while excluding many who have been investigated. In addition to risking national security, the probe fond the watch list has also caused lengthy delays at airports, along highways and other travel areas in the United States.

Maine Legalizes Same-Sex Marriage; New Hampshire to Follow

Maine has become the fifth state to legalize gay marriage. On Wednesday, Democratic governor John Baldacci signed a measure backing sex-same marriage following its approval in the Maine legislature. New Hampshire is expected to follow suit as early as today. New Hampshire lawmakers have sent Democratic Governor John Lynch a similar measure to sign into law.

Senate Passes Stripped-Down Mortgage Bill

The Senate has approved a foreclosure assistance bill providing limited help for struggling homeowners. The measure would protect mortgage service companies from lawsuits in return for taking part in federal loan modification programs. It would also give renters of foreclosed properties at least ninety-days eviction notice and spend some $2.6 billion dollars on curbing homelessness. Last week, the Senate dropped a key amendment that would have allowed bankruptcy judges to reduce mortgage payments for debt-strapped homeowners.

Study: Subprime Firms Spent $370M on Lobbying

Meanwhile a new study shows the top twenty-five companies responsible for subprime mortgages spent nearly $370 million dollars in lobbying over the past decade. According to the Center for Public Integrity, the companies originated an estimated $1 trillion dollars in subprime loans between 2005 and 2007. Most of them are now out of business.

Thousands Evacuated in California Wildfires

In California, wildfires have erupted around Santa Barbara County. More than 8,000 residents have been evacuated as firefighters try to contain the blaze.

Wal-Mart Reaches Settlement in Worker Trampling Death

The retail giant Wal-Mart has reached a settlement to avoid charges for the death of a worker crushed by a stampede of shoppers last December. Thirty-four-year-old Jdimytai Damour was killed after a crowd of 2,000 broke down store doors and ran him over shortly before the store’s opening. Wal Mart will pay nearly $2 million dollars and pledge to improve safety at its New York stores.

Poll: Majority Support Legalizing Marijuana

A new poll has found a majority of Americans support marijuana legalization. According to Zogby, fifty-two percent of Americans say it “makes sense to tax and regulate” marijuana.

Chair of N.Y. Fed Scrutinized for Shares in Goldman Sachs

And in financial news, each of the twelve regional Federal Reserve banks have been found to have directors who are either board members of banks or who own shares in bank holding companies. Consumer advocates say directors of Fed banks shouldn’t have any financial ties to the institutions they’re supposed to regulate. Scrutiny is focusing on Stephen Friedman, the chair of the Federal Reserve Bank of New York. Earlier this week the Wall Street Journal revealed Friedman was given a waiver to hold shares in his former company Goldman Sachs even after it became a regulated bank-holding firm. Friedman was also found to have bought the shares in Goldman Sachs before he was granted the legal waiver. The shares are now estimated to be worth more than $2 million dollars.

Headlines: U.S. Soldiers Accused of Proselytizing in Afghanistan; Vice President Biden to Headline AIPAC Conference

Democracy Now Headlines: U.S. Soldiers Accused of Proselytizing in Afghanistan; Vice President Biden to Headline AIPAC Conference

Headlines from DemocracyNow.org, a daily TV/radio news program, hosted by Amy Goodman and Juan Gonzalez, airing on over 650 stations, pioneering the largest community media collaboration in the US.

NYT: US Concerned over Safety of Pakistani Nukes

The New York Times reports senior US officials are increasingly concerned about new vulnerabilities for Pakistan’s nuclear arsenal, including the potential for militants to snatch a weapon in transport. Concerns have intensified in the last two weeks since the Taliban entered Buner, a district sixty miles from the capital, Islamabad. The US is currently spending $100 million a year on a secret program to help Pakistan build stronger physical protections around their nuclear weapons facilities, but the Times reports the US does not even know the location of all of Pakistan’s nuclear sites. Meanwhile, The Guardian reports Pakistan is continuing to expand its nuclear bomb-making facilities. Commercial satellite photos show two plutonium-producing reactors are nearing completion at Khushab, about 160 miles southwest of Islamabad. Pakistani President Asif Ali Zardari is scheduled to visit President Obama in Washington on Wednesday.

Obama Seeks Sharp and Independent Mind to Replace Souter

Supreme Court Justice David Souter officially told President Barack Obama Friday that he plans to resign, giving Obama his first chance to make an appointment to the nation’s highest court. Obama said he will seek somebody with a sharp and independent mind.

President Obama: “I will seek somebody who is dedicated to the rule of law, who honors our constitutional traditions, who respects the integrity of the judicial process and the appropriate limits of the judicial role. I will seek somebody who shares my respect for constitutional values on which this nation was founded and who brings a thoughtful understanding of how to apply them in our time.”

The media has been busy speculating about Souter’s possible replacement. Names mentioned include Solicitor General Elena Kagan, Stanford professor Kathleen Sullivan, appellate judge Diane Wood, Massachusetts Governor Deval Patrick, and New York Federal Appeals Court justice Sonia Sotomayor, who would be the first Hispanic Supreme Court justice.

Obama May Revive Bush Administration’s Military Commission System

The New York Times is reporting President Obama is moving toward reviving the Bush administration’s military commission system for prosecuting prisoners at Guantanamo. On the campaign trail, Obama criticized the military commissions system, saying, “by any measure, our system of trying detainees has been an enormous failure.” But Obama administration lawyers are now reportedly concerned that they would face significant obstacles to trying some Guantanamo prisoners in federal courts. The American Civil Liberties Union said continuing with the military commission system would be a retreat from Obama’s promise to return the country to the rule of law.

Sri Lankan Army Shells Hospital, 64 Killed

In Sri Lanka, at least sixty-four people died Saturday after the Sri Lankan army shelled a makeshift hospital inside a civilian safe zone. Sri Lanka has rejected calls for a ceasefire as it attempts to eliminate the Tamil Tigers. Tens of thousands of civilians remain trapped in the conflict zone. Another 200,000 civilians are living in displacement camps.

US Soldiers Accused of Proselytizing in Afghanistan

Al Jazeera has revealed US soldiers are being encouraged to spread the message of their Christian faith among Afghanistan’s predominantly Muslim population. Soldiers have been filmed with Bibles printed in Afghanistan’s main Pashto and Dari languages. In one recorded sermon, Lieutenant-Colonel Gary Hensley, the chief of the US military chaplains in Afghanistan, is seen telling soldiers that as followers of Jesus Christ, they all have a responsibility “to be witnesses for him.”

Lieutenant-Colonel Gary Hensley: “The special forces guys, they hunt men, basically. We do the same things as Christians: we hunt people for Jesus. We do. We hunt them down, get the hound of heaven after them, so we get them into kingdom. Right? That’s what we do. That’s our business.”

The Pentagon has not yet responded to Al Jazeera’s report. Regulations by the US military’s Central Command expressly forbid “proselytizing of any religion, faith or practice.”

NATO Troops Kill 12-Year-Old Afghan Girl

In other news from Afghanistan, NATO-led troops opened fire on a civilian car Sunday killing a twelve-year-old Afghan girl. The girl and her family were driving to a wedding. Two other members of her family were injured. Meanwhile, at least twenty-five people died in Afghanistan today in a series of bomb attacks.

Justice Dept. Drops AIPAC Espionage Case

The Justice Department has dropped espionage charges against two former employees of AIPAC, the American Israel Public Affairs Committee. The men, Steven Rosen and Keith Weissman, were charged with obtaining classified information and passing it to the Israeli government. The charges were dropped, even though a former Pentagon analyst, Lawrence Franklin, had already pleaded guilty to disclosing classified information to AIPAC. Franklin is currently serving more than twelve years in prison.

Vice President Biden to Headline AIPAC Conference

Despite the espionage charges, AIPAC remains one of the most well-connected lobbying groups on Capitol Hill. AIPAC’s annual conference began yesterday in Washington. Speakers at the event include Vice President Joe Biden, John Kerry, the chair of the Senator Foreign Relations Committee and most of the House and Senate leadership. California Congresswoman Jane Harman is also participating in AIPAC’s conference. Congressional Quarterly recently reported Harman was overheard on an NSA wiretap in 2005 telling a suspected Israeli agent she would lobby the Justice Department to reduce espionage charges against two AIPAC officials. In exchange for Harman’s help, the suspected Israeli agent reportedly pledged to help lobby Nancy Pelosi to appoint Harman chair of the House Intelligence Committee after the 2006 congressional elections.

Mexican Officials: Worse of Flu Epidemic May Be Over

Health officials in Mexico said Sunday the worst of the swine flu epidemic may be over. Many experts say the new H1N1 virus might be no more severe than the normal flu. The number of infections in Mexico has been decreasing since April 24. Here in the United States, cases of swine flu are now confirmed in more than half of US states. But officials said most cases were mild.

Nepalese Prime Minister Prachanda Resigns

Nepal’s Prime Minister Prachanda resigned earlier today after a crisis sparked by his sacking of the country’s army chief. Prachanda is the leader of the Maoist movement in Nepal. His resignation is seen as a possible blow to a 2006 peace pact that ended a decade-long civil war that pitted the army against the Maoists.

Jimmy Carter: Bush’s Latin American Policy Was a “Disaster”

Former President Jimmy Carter met with Bolivian President Evo Morales in La Paz Friday and praised Bolivia’s new constitution.

Jimmy Carter: “Into a democracy of freedom, more equality for previously deprived people is a very good trend. Now, of course, in a new constitution, there’s a guarantee of a certain level of indigenous participation, not quite as much as they wanted, but a very good step in the right direction.”

Jimmy Carter also expressed support for President Barack Obama’s recent moves to ease travel and financial restrictions on Cuban Americans.

Jimmy Carter: “The policies of President Bush in the last eight years was a disaster for Latin America, and he tightened up the restraints on any accommodations with the Cuban people in an unnecessary way. I don’t think there’s any doubt that Obama has made clear moves, that if his ideas are reciprocated by Raul Castro and Fidel Castro, they will have a new relationship with Cuba. I’ve always felt that the economic embargo should have been abolished.”

Martinelli Wins Election in Panama

In other news from Latin America, the right-wing supermarket chain owner Ricardo Martinelli has been elected president of Panama.

11 Arrested at Port of Tacoma Protest

In Tacoma, Washington, eleven antiwar protesters were arrested Saturday when they blocked a convoy of Stryker vehicles bound for the Port of Tacoma. The Port Militarization Resistance project said more protests are scheduled this week.

Seven Arrested for Protesting Military Recruiter’s Use of Video Games

Seven people were arrested at a mall in Philadelphia Saturday protesting the military’s use of video games for recruitment purposes. The demonstration targeted the Army Experience Center, a 14,000-square-foot facility at a Philadelphia mall, where teenagers as young as thirteen can play video games made by the Pentagon.

Fourth Grader Questions Rice on Torture

Former Secretary of State Condoleezza Rice has been questioned again over her support of the Bush administration’s interrogation techniques and use of waterboarding–this time by a fourth grader. During an event at the Jewish Primary Day School in Washington, Misha Lerner asked Rice what she thought about the things President Obama’s administration was saying about the methods the Bush administration had used to get information from prisoners. Rice answered by repeatedly defending President Bush, saying he only authorized policies that were legal in order to protect the country. Misha’s mother, Inna Lerner, said the question her son had wanted to ask Rice was “If you would work for Obama’s administration, would you push for torture?” But Misha’s teachers wanted him to soften it and take out the word “torture.”

NYT Threatens to Close Boston Globe in 60 Days

In media news, the New York Times Company threatened last night to notify federal authorities of its plans to shut down the Boston Globe in sixty days if the unions representing workers at the Globe did not agree to a series of major financial and contract concessions. The Times issued the ultimatum at 10:00 p.m., but negotiations kept taking place past the midnight deadline.

World Press Freedom Day Marked

UN Secretary-General Ban Ki-moon marked World Press Freedom Day Sunday by saying the number of attacks on journalists around the world remains “shockingly high.” At least eleven media workers have been killed so far this year, including the prominent Sri Lankan journalist Lasantha Wickrematunge.

Thousands March in May Day Protests

Immigrant rights activists and workers held rallies across the country Friday to mark May Day. In Los Angeles, six separate immigration marches took place. Juan Jose Gutierrez helped organize one of the marches.

Juan Jose Gutierrez: “There has never been better conditions than now. We need to send a strong message to our president: we supported him, and now we are waiting for him to keep his promise of an immigration reform this year.”

John Edwards Faces Federal Investigation

In political news, federal investigators have launched a probe of former presidential candidate John Edwards to determine if he misused any campaign money in an attempt to cover up an extramarital affair.

Filipino Poet Al Robles Dies

The Filipino poet and community activist Al Robles died in San Francisco on Saturday. In 1996 the poet Russell Leong said of Robles, “Perhaps no one has listened as closely to the voices of the Filipino American community during the last thirty years.”

Augusto Boal, Founder of the Theater of the Oppressed, Dies

And one of Latin America’s most famed dissident artists, Brazilian playwright Augusto Boal, has died at the age of seventy-eight. Boal was the developer of the Theater of the Oppressed. In 1971 the Brazilian military dictatorship imprisoned him for four months. After his release, he was forced into exile for fifteen years. Augusto Boal joined us in the firehouse studio in 2007.

Augusto Boal: “And I only have one dream. It’s to dream all my life. That’s my only dream. I would like to go on dreaming. And if I can dream of things, well, I dream of solidarity among men and women, black and white, solidarity among countries, and solidarity to create ethics. What we think sometimes, we don’t think that there is a difference between moral and ethics. Moral is mores. It’s customs. And it was moral in this country, my country–slavery. It was moral. It was moral to buy a human being. So I’m not moralist, because I know that in moral there are horrible things. But I am ethical. We need to create an ethos. In Greek, it means the tendency to some kind of perfection. And my kind of profession is solidarity, is dialogue, is democracy–real democracy, not one that we see? That’s my–I want to–not to accomplish, because to accomplish–not to accomplish, to go on. To go on. There is a poet, a Spanish poet, Antonio Machado, who says, ‘The path does not exist. The path you make by treading on it. By walking, you make the path.’ So we don’t know where the path leads, but we know the direction of the path that we want to take. That’s what I want, and not to accomplish, but to follow.”

Recent Congress Members go from Capitol to Lobbying Firms


Yesterday, USA Today reported that 16 of the 62 lawmakers who left Congress last year took jobs with lobbying firms.

In recent years, the so-called “revolving door” has received attention from watchdog groups and Congress itself. However, Public Citizen says the fact that these lawmakers are able to move into these jobs reflect “an utterly failed revolving-door restriction.”

Under current rules, former House members are barred from lobbying their former colleagues for a year after leaving office, while Senators must wait two years. However, nothing stops them from working for lobbying firms to advise clients on the Congressional process or how to obtain contacts with the administration. Similarly, they can work as state lobbyists. Public Citizen says, “They can’t call or visit a congressional office for a lobbying purpose but can do all the work on a lobbying campaign.”

According to Public Citizen, between 1998 and 2004, 43% of former lawmakers became lobbyists.

Michigan Lobbyists Spend over $34 Million in 2008


Spending by Lansing lobbyists seeking to influence politics rose by 6% in the last election, reaching a record of $34,075,809.

At the top of the list were six multi-client firms. These firms are not required to disclose spending or their client lists:

“While multi-client firms report their overall spending and name their list of active clients, they are not required to report how much they spent in representing their individual clients. Therefore, what is disclosed gives a limited picture of what was spent by whom, and for what issues.”

Similarly, other shortfalls in Michigan’s lobbying law prevent further disclosure:

“A lobbyist’s spending for travel and accommodations for a public official doesn’t have to be reported unless it exceeds $700. A lobbyist’s food and beverage spending for a public official isn’t reported unless it exceeds $53 in a month or $325 for a calendar year. Gifts, such as tickets for entertainment, are not reported as long as they are less than $53 in a month.”

Overall, while the numbers show us that there are significant amounts of money being spent to influence state politics, citizens are not able to find out exactly how that process is functioning due to limits in state law.

Billions in Political Contributions Bought Financial Deregulation that Led to Current Crisis


An important new report–“Sold Out: How Wall Street and Washington Betrayed America“–shows that the financial sector invested more than $5 billion over the past decade in lobbying and campaigning for deregulation and other policy changes that led to the current financial crisis. The report was prepared by jointly by Essential Information and the Consumer Education Foundation, two nonprofits that have a long history of working to expose corporate crime.

The following excerpt for the report’s executive summary gives a good summary of what the report covers:

“Blame Wall Street for the current financial crisis. Investment banks, hedge funds and commercial banks made reckless bets using borrowed money. They created and trafficked in exotic investment vehicles that even top Wall Street executives — not to mention firm directors — did not understand. They hid risky investments in off-balance sheet vehicles or capitalized on their legal status to cloak investments altogether. They engaged in unconscionable predatory lending that offered huge profits for a time, but led to dire consequences when the loans proved unpayable. And they created, maintained and justified a housing bubble, the bursting of which has thrown the United States and the world into a deep recession, resulted in a foreclosure epidemic ripping apart communities across the country.

But while Wall Street is culpable for the financial crisis and global recession, others do share responsibility.

For the last three decades, financial regulators, Congress and the executive branch have steadily eroded the regulatory system that restrained the financial sector from acting on its own worst tendencies.”

Government Enabled Crisis

While the report’s authors argue that the report has one overriding message–that financial deregulation led directly to financial meltdown–it is clear that the United States government supported the changes due in large part to lobbying and campaign contributions from the financial industry. The changes were made with bipartisan support in response to pressure from the financial sector.

According to the report, the financial sector (finance, insurance, real estate) spent a staggering $5.1 billion over the past decade to influence the political debate. This includes $1.7 billion on candidates in federal elections and $3.4 billion on lobbying federal officials.

By industry, the break down and totals include:

  • Accounting firms spent $81 million on campaign contributions and $122 million on lobbying;
  • Commercial banks spent more than $155 million on campaign contributions, while investing nearly $383 million in officially registered lobbying;
  • Insurance companies donated more than $220 million and spent more than $1.1 billion on lobbying;
  • Securities firms invested nearly $513 million in campaign contributions, and an additional $600 million in lobbying.

Moreover, the election spending went to both parties. 55% went to Republicans, while 45% went to Democrats. In the 2008 election, Democrats took in over half of the contributions from this sector, reflecting the changing political winds. This should also be seen as an effort to shape upcoming legislation, in which the financial sector hopes to preserve many of the practices that led to the current crisis.

Similarly, many of the lobbyists employed by the financial sector were formerly Congressional and presidential staffers. At the same time, those who were tasked with implementing regulatory changes were drawn from the financial sector. The report cites Treasury Secretaries Robert Ruben and Henry Paulson as examples.

Twelve Regulatory Changes Led to Economic Crisis

The report cites twelve specific regulatory changes that eroded the regulatory system and paved the way for the current crisis. These are elaborated on in the 231-page report as well as in the executive summary, but they are reprinted briefly below:

  1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
  2. Regulatory rules permitted off-balance sheet accounting — tricks that enabled banks to hide their liabilities.
  3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives — which became the basis for massive speculation.
  4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
  5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
  6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal “risk-assessment models.”
  7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
  8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
  9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
  10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
  11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks. 12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.

The report argues that along the way many critics warned that these changes could lead to financial disaster, but those critics were drowned out by the money coming into Washington.

Changes Offered

While the majority of the report focuses on the failings of the government and Wall Street, it does offer some ideas that could be implemented to change the system. It makes a series of recommendations in the areas of “Restitution,” “Regulation,” “Reform,” Responsibility,” and “Return.”

Among the changes, it says that the government must demand that taxpayer money handed over in the financial industry bailout is paid back fairly. On the bailout, the report also says that it should be reworked to allow for greater oversight and disclosure.

The report says that further regulation of Wall Street is clearly needed as voluntary regulation has not worked. Among the measures, it suggests banning derivatives, barring further mergers of financial industry titans under antitrust laws, and breaking up industry monopolies once the economy has recovered. It further argues that CEOs should be held accountable for their actions. The economy should also shift from being so dominated by the speculation of the money industry to a focus on real and tangible goods.

Finally, the report argues that Americans need to “revolt” and demand an end to “business as usual” on Wall Street and in Washington.

Explosive Growth in Number of Lobbyists Seeking to Influence Climate Legislation


In recent years, the number of lobbyists seeking to influence federal legislation on global warming has grown at an incredible pace. According to the Center for Public Integrity, the number of lobbyists have increased 300% in the paste five years. Now, more than 770 companies and organizations are represented by some 2,340 lobbyists seeking to represent their clients’ views on the issue, spending over $90 million.

With the Obama administration pledging action on global warming, it will have to contend with lobbyists advocating a wide variety of policies, some of which are antithetical to those of other lobbyists.

Major Lobbyists

There are several major lobbyists seeking to have their clients’ interests represented in any legislation aimed at targeting global warming. Moreover, they include former members of Congress and Congressional staffers.

The make-up of lobbyists is also changing from the past debates on global warming. In 2003 when the U.S. Senate first voted on climate-related legislation, 150 business and interest groups were opposed by just 8 environmental groups. Now, a wide variety of groups–likely recognizing that some form of legislation is increasingly likely–are seeking to shape it to their benefit.

The Center for Public Integrity has produced a chart showing the sectors lobbying on the legislation:


Manufacturers–many of whom like the coal industry group American Coalition for Clean Coal Electricity–are seeking government money to develop technologies to address global warming.

Carbon Markets

Among Obama’s plans to curb global warming is the development of a market-placed cap on carbon pollution. Under such a “cap-and-trade” system, companies would see their carbon emissions “capped” at a certain level. If they reduced their emissions more than that cap, they would be able to sell excess emissions credits to companies that are not able to reduce their pollution as quickly.

A number of major financial companies–JP Morgan, Goldman Sachs, and Merrill Lynch–are all seeking involvement in such a market, which the federal government estimates could grow to $2 trillion within five years.

Lobbyists Present Potential Problems, but Also Show Opportunities

The Center for Public Integrity and many environmental groups caution that lobbyists could derail a new agreement to fight global warming, either by defeating it outright or watering it down with compromises between the numerous factions seeking to shape the debate.

However, the fact that there are so many lobbyists on the issue also means that Congress is finally taking it seriously. This means that there is a potential for making progress and it also shows how the issue has moved from the margins to the center of political debate.

Ehlers Denies Report that Lobbyists are Funding Congressional Portrait

Vern Ehlers Says Lobbyists Are Funding His Congressional Portrait, But Refuses Disclosure

West Michigan Congressman Vern Ehlers is denying a report that lobbyists are funding a commemorative portrait of him that will be hung in the US Capitol Building.

According to The Hill, Ehlers is one of three members of Congress who are currently raising money for portraits. The money will be given to the US Capitol Historical Society who will then commission the paintings. Ehlers–along with Jerry Lewis and Don Manzullo–has established a committee to fund a Congressional portrait. Ehlers and his chief of staff are coordinating donations, and according to the article, have received a $5,000 donation from Verizon.

Watchdog Group Questions Fundraising

In The Hill, the watchdog group Public Citizen questioned the fundraising, saying the portraits are another way through which major corporations, business groups, and lobbyists can purchase influence. Craig Holman of Public Citizen was quoted saying, “Note that there are few, if any, private funders for these portraits that do not have business pending before Congress” and that “This is an influence-peddling opportunity identical in nature to special interests hosting dinners and receptions that honor a member of Congress before whom they have pressing business.”

Ehlers Denies Lobbyists Raising Money, but Disclosure Limited

The Grand Rapids Press reported Wednesday that Ehlers’ spokesperson is denying that lobbyists are raising money to pay for Ehlers’ portrait.

Ehlers’ spokesperson, Kevin Chapman, says in The Press that “Vern has strong integrity” and that “He is one of the most independent thinkers in Congress, and he absolutely does not allow fundraising activities to influence his decision-making as a legislator.”

However, the response is essentially one that asks for constituents to simply trust Ehlers. Ehlers is portrayed as a man of integrity, but there is no way to verify that claim. This is especially true because Ehlers’ office is refusing to disclose donors, saying only that 90% are from West Michigan and that “the vast majority of donors to Vern’s portrait fund do not have pressing business before Congress.” Without knowing who the donors are, there is no way to tell if they are influencing legislation.

It’s also worth noting that in the 2008 election cycle, 46% of Ehlers’ campaign funds came from PACs.

Bailout Recipients Spent $114 Million on Politicking Last Year

Financial and Automotive Firms Receiving Bailout Dollars Spent $114 Million on Lobbying and Candidates Last Year

A new report from the Center for Responsive Politics shows that recipients of federal bailout dollars spent $114 million on politicking in 2008. This includes $37 million on federal campaign contributions and $77 million on lobbying. The return on their investment was a staggering 258,449% based on the $295.2 billion that they have received as part of the government’s bailout program.

The Center for Responsive Politics writes:

“The companies giving the most to fund lawmakers’ campaigns and spending the most on lobbying efforts were also those that received the most TARP money to help them stay afloat. This includes General Motors, which spent $15 million between campaign contributions and lobbying expenditures and got $10.4 billion (more than all other companies), Bank of America (and the investment company it bought last year, Merrill Lynch), which spent $14.5 million to play politics and received $45 billion from the bailout bill; and American International Group (AIG), which spent $10.6 million and was paid out $40 billion. Citigroup was also one of the largest spenders to see a big result: between lobbying expenditures and campaign contributions, the company spent $12.5 million and got $50 billion.”

Much of the bailout money–handed out under the government’s Troubled Asset Relief Program (TARP)–has been distributed with limited transparency. Money is often awarded with only a single-line announcement and no explanation of why they received the money.

The Inauguration: Brought to you by the Wealthy

Barack Obama's Inauguration was paid for by a small number of wealthy donors and fundraisers

While many of us spent today watching Obama’s inauguration, few news sources have reported on where the money for the lavish inauguration festivities comes from. Contrary to what it may seem, it is not public money. Rather, inauguration funds are raised by the incoming administration.

Positive Steps towards Transparency

As he did in his presidential campaign, Obama banned corporate and lobbyist funding for his inauguration. He also greatly expanded disclosure of donor information and improved transparency of what has often been in the past a closed, unregulated process. He also set voluntary limits of $50,000 for individual contributions and $300,000 for bundled contributions.

However, while Obama’s disclosure deserves praise, it does not mask the fact that the inauguration was paid for largely by wealthy donors hoping for a final chance to buy influence with the new administration.

Despite Transparency, Inauguration Still Paid for by a Handful of Wealthy Donors

The group Public Citizen reports that 80% of Obama’s total inauguration contributions ($35.3 million) came from just 211 individual “bundlers.” “Bundlers” are well-connected fundraisers–often corporate executives, lawyers, or other individuals with position of power–who collect contributions from individuals and deliver them to the inaugural committee. Of the 5,632 reported contributions to the inaugural committee, only 113 were “small” contributions of $200.

Among those donating were prominent Wall Street executives:

  • Louis Susman, vice chairman of Citigroup Corporate and Investment Banking and managing director, vice chairman of investment banking, Citigroup ($300,000)
  • Mark Gilbert, senior executive, Lehman Brothers ($185,000)
  • Robert Wolf, chairman and CEO, UBS Americas ($100,000)
  • Jennifer Scully, vice president, private wealth management, Goldman Sachs ($100,000)
  • Bruce Heyman, managing director of the Private Wealth Management Group, Midwest region, Goldman Sachs ($50,000)
  • Kobi Brinson, senior vice president and assistant general counsel, Wachovia ($35,000)

Inaugural Donations Bring Increased Access

Public Citizen president Joan Claybrook stated in a news release, “The inauguration is the last chance for big donors to throw money at the feet of the president.” As shown above, wealthy donors are taking this seriously, and in many ways, Obama is accommodating their desires.

While Obama has said that inauguration donors will not have undue influence, the money donated to the inauguration does buy increased access. Yesterday, USA Today reported that:

“Contributors who gave at least $10,000 to help underwrite the inauguration received two tickets to witness the Democrat take the oath of office, watch the Inaugural Parade and party at one of the 10 black-tie balls attended by Obama and his wife, Michelle. Those who gave $50,000 — or raised $300,000 from other contributors — received a total of four tickets to official inaugural activities.

Donors also were invited to private gatherings, such as a Sunday “welcome brunch” with an entertainment lineup that included singer Carole King and a Sunday evening reception organized by Penny Pritzker, a Chicago hotel executive who was Obama’s top campaign fundraiser. Today, donors can attend a breakfast briefing with policymakers, including Tom Daschle, Obama’s pick to run the Health and Human Services Department.”

In the article, Public Citizen research Alexander Cohen called the donor benefits “unseemly.”

In response, an Obama spokeswoman said donors will not have undue sway: “”The president-elect made it clear throughout his campaign that the people who have power in his campaign are the grass-roots.”