President aims to take the money and run

Here’s what President Obama wants you to believe about his relationship to the Supreme Court’s Citizens United ruling and the toxic torrent of corporate cash polluting our politics: “it’s complicated.”

In their ruling, the justices determined that corporations had a free speech right to anonymously contribute as much as they wanted to third-party political action groups that worked in support of candidates, as long as those PACs had no formal connection to the candidate.

On the one hand, the president blasted the court’s ruling less than a week after it was issued, with the justices seated right in front of him, in his January 2010 State of the Union speech, for opening “the floodgates for special interests – including foreign companies – to spend without limit in our elections.”

On the other hand, his campaign decided two years later to “level the playing field” with Republicans and encourage Super PAC support for the president, by allowing cabinet members and senior White House officials to cooperate with a Super PAC that supports their boss.

On yet another hand, the president insisted he would support a constitutional amendment to undo Citizens United.

And on yet still another hand, when the president had the opportunity to actually do something to shed some sunlight on the secretive stash of corporate donations unleashed by Citizens United, by issuing an executive order requiring government contractors to reveal all their political spending, he balked.

When you follow the president’s actions, rather than listen to his words, it’s not complicated at all.

The president and his Democratic Party colleagues are determined to “take the money and run.”

For nearly a year, President Obama had floated the idea of issuing an executive order requiring government contractors to disclose all their political contributions – including contributions to PACs and organizations like the US Chamber of Commerce – when they submit a bid.

The biggest contractors, for the most part, are defense contractors like Lockheed Martin, which smother the politicians in contributions to keep the weapons contracts flowing. In the 2012 cycle, Lockheed’s PAC has spent more than $2 million in contributions that we know of, 59 percent to Republicans and 41 percent to Democrats.

Its contributions go beyond an attempt to win a single weapons contract. What they and the other contractors have been able to do is to purchase the country’s entire debate over defense spending, so that few of our representatives ever raise a peep about whether the expensive defense systems are necessary.

Republicans howled at the President Obama’s proposal, accusing him of attempting to politicize the bidding process. President Obama wanted to know who had made the contributions, the Republicans charged, so he could award bids to the highest-contributing bidders.

While President Obama stewed, the Republicans passed measures in May 2011 to block[m1]  an executive order if it was issued.

The venerable Public Citizen organization made a suggestion that would sidestep the Republicans’ stated objection.

Why not, Public Citizen said, limit the disclosure requirement to the winning bidder?

But the president backed off – either because he didn’t want a fight with Republicans or because his fundraisers reminded him he had a tough campaign ahead and the little people they dote on with their solicitation emails weren’t going to be able to foot the bill.

On the most critical issue facing our political system, the president of the United States is incapable of leveling with the American people.

President Obama may want to do the right thing, but he is trapped in a system controlled by big money that is bigger than he is.

The first step to fight back against that system won’t come from Washington. It will come from building a grassroots movement to undo Citizens United. Read more about it, and our proposed constitutional amendment, which is easy to understand and will withstand any legal challenge, here.

 

 

Citizens United / Congress / Martin Column - 04/13/2012

The Supreme Court Shot the Sheriff

"Corporations are people." Two years ago, that's what five justices of the United States Supreme Court gaveled into our Constitution, ruling in the now-infamous Citizens United case that spending money is a form of "freedom of speech" and that when corporations put up money to elect people, they are just exercising their First Amendment rights.

Two months ago, the Montana Supreme Court said wait a minute. It upheld a state law, enacted by Montana voters through the initiative process in 1912, that bars corporations from trying to influence elections. The justices of the Montana Supreme Court argued that the Montana law is different than the federal law that the US Supreme Court threw out, relying on what they described as an especially disturbing history of corporate corruption in Montana government.

When it comes to constitutional law, you can't get closer to the Gunfight at the O.K. Corral than this, as I recently explained.

That's a better analogy than you think.

The campaign finance laws, designed over decades to slow down the accretion of political power by special interests, were like a lazy sheriff in a western gold rush town - barely able to keep up with the legal and illegal maneuverings of outlaw corporateers, while average citizens became increasingly like bystanders in their own democracy.

Then the Supreme Court rode into town and shot the sheriff.

Now we are back to the Wild West, with corporate gunslingers targeting anyone - officials and civilians – who are in the way of their profits and prerogatives. Corporate money, often disguised and hidden behind a fortress of deception, has charged through the Republican presidential primaries, not to mention an untold number of state elections throughout the country. The full fury of this greed-driven onslaught will become apparent in the fall, as Wall Street and the .01 percenters weigh in not just to defeat President Obama (who has not cooperated enough) but any number of other candidates on ballots nationwide, not to mention initiatives put on the ballot by real, live citizens detouring corrupt legislators by taking matters into their own hands.

You can already sense defeat among government officials trying to figure out what defenses, if any, are left against the corporate hordes - the CEOs in their sky-high boardrooms quietly counting dollars and deciding which politicians have earned their financial support (or can be bought); the lobbyists with unlimited expense accounts to wine, dine and drive the quid pro quo; the vast underground of consulting firms and PR flacks that follow corporate orders.

No one could have imagined that Montana, with a population barely larger than a big city, would rise to challenge the United States Supreme Court. The Montana court ruling is an inspiring attempt to evade the deathly embrace of Citizens United and, at the same time, inescapably a courageous challenge to the ideologues now re-writing the nation's laws. It can be found here (PDF).

"Western Tradition Partnership" – the shadowy entity that was caught violating Montana's anti-corrupt practices act – immediately challenged the Montana decision, and last Friday, United States Supreme Court Justice William Kennedy (chief author of the Citizens United decision) issued an order blocking the Montana court ruling from taking effect until the court decides what to do with the appeal.

At least two of the Supreme Court justices who disagreed with their colleagues in Citizens United are hoping the Court will reconsider that ruling. In Friday's order, Justices Ginsberg and Breyer stated:

Montana’s experience, and experience elsewhere since this Court’s decision in Citizens United v. Federal Election Comm’n, 558 U. S. ___ (2010), make it exceedingly difficult to maintain that independent expenditures by corporations “do not give rise to corruption or the appearance of corruption.” .... [The appeal] will give the Court an opportunity to consider whether, in light of the huge sums currently deployed to buy candidates’ allegiance, Citizens United should continue to hold sway.

Observers of the Court think that's a lost cause. Renowned constitutional scholar Erwin Chemerinsky believes that the U.S. Supreme Court will reverse the Montana Supreme Court by the same five to four majority in Citizens United. Still, Citizens United's impact on America's democracy has already been catastrophic, and support for proposals like ours to amend the Constitution has spread across the United States and transcends partisan labels. At the same time, Justices Scalia, Thomas and Alito are under fire for their close ties to conservative pro-business organizations, further undermining confidence in the impartiality of the nation's highest court. I would not underestimate the power of public opinion to affect the outcome of this showdown – if not now, then in the not too distant future of our country.

 

 

Citizens United / Harvey Column / Uncategorized - 02/21/2012

Betrayals and Bailouts

In the latest betrayal from Freddie Mac, the same clever devils who helped bring us the financial collapse three years ago, there is unfortunately no surprise.

The high rollers who run the company, whose mission is supposed to be to support homeowners, apparently still think it’s a good idea to use our homes as a casino.

That’s the conclusion reached in an investigative report by NPR/Pro Publica, which found that Freddie Mac had placed billion-dollar investment bets that paid off when borrowers couldn’t refinance from high-interest mortgages into more affordable loans.

According to the NPR/Pro Publica report, Freddie Mac increased “these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.”

In effect, Freddie Mac combined high interest mortgages into packages of securities and sold some to speculators, but it kept the ones that would result in the biggest profits so long as the homeowner never refinanced. Freddie Mac stands to lose if its customers refinance and taske advantage of lower rates.

Freddie Mac was betting against homeowners even though taxpayers had bailed out it and its larger sister, Fannie Mae and the government placed the under a conservatorship after the housing bubble burst in 2008 and it faced mounting mortgage losses.

Though Freddie Mac and Fannie Mae are known as government-sponsored entities, they in fact have been private, profit-making entities for four decades.

Congress created Fannie and Freddie as private companies with a public mission ­– supporting homeownership, by insuring the mortgages issued by commercial lenders. But the companies had government officials sitting on their boards, and got breaks on taxes and recordkeeping requirements.

During the real estate bubble, the two firms adopted all the bad behavior of other big financial institutions – and worse. Authorities found that at Fannie Mae, senior executives cooked the books between 1998 and 2004, making it look like they hit profit targets in order to justify $115 million in bonuses. Three top executives eventually reached a $31.4 million settlement [with govt or private private pre-bailout] – without admitting guilt.

Executives at the Freddie Mac and Fannie Mae spent millions on campaign contributions and lobbying, courting both Democrats and Republicans (including presidential contender Newt Gingrich) in a successful campaign to ward off more stringent regulation and tighter reins on their bookkeeping, all the while taking on greater amounts of risk, establishing close ties with one of the worst offenders in spreading toxic loans, Countrywide Bank. Meanwhile executives at the two firms were paid lavishly, even after the bailout.

Republicans love to blame the GSEs for the financial collapse, labeling them do-gooder agencies who went wrong in pursuing too aggressively an agenda of providing housing to low-income people.

In his excellent autopsy of the financial collapse, “The Great American Stick-up,” Robert Scheer finds merit in much of the conservative critique. He labels the Fannie Mae and Freddie Mac “highly culpable” for causing the financial crisis – but not for the reasons Republicans say. While the GSEs used the rhetoric of helping people, their efforts to boost low-income and middle-class wasn’t their primary mission, or the reason for their downfall.

Fannie and Freddie didn’t go under because they were trying too hard to help people; it was because they were doing everything they could to super-charge their profits, just like the Wall Street firms.

Scheer quotes the testimony of a one-time regulator, Armando Falcon, who faced stiff opposition from Republicans as well as Democrats when he tried to rein in Fannie and Freddie. Falcon testified in April 2010 before the Financial Crisis Inquiry Commission, which investigated the causes of the meltdown. “The firms would not pursue any activity…unless there was a profit to be made,” Falcon said. “Fannie and Freddie invested in subprime and Alt A mortgages in order to increase profits and regain market share. Any impact on meeting affordable housing goals was a by-product of the activity.”

 

 

 

 

Executive Pay / Foreclosure / Martin Column - 02/07/2012

The real story behind "make him do it"

By now it’s a familiar story: when the legendary labor and civil rights leader A. Philip Randolph met with FDR before World War II to get the president to take action against discrimination, the president boomed back: “I agree with you, now go out and make me do it.”

Lots of people have been retelling the story as a call to action, comparing Obama to the wise, liberal Roosevelt. It urges supporters of everything from Middle East peace to health care and financial reform to keep the pressure on in order to get President Obama to do what he essentially wants to do, but cannot do—on his own because he’s being forced into unpalatable compromises by political pressures.

Martin Column / President Barack Obama - 09/15/2009