Watchdog Blog

The Real Dirt on Presidential Fundraisers

The newspapers lit up this week with revelations that Norman Hsu, a top fundraiser for Hillary Clinton, not only may have violated campaign finance laws by laundering contributions through family members but is also a fugitive facing jail time.

While the press enjoyed a reprieve from the dog days of August, partisans delighted in the chance to score some points. Michelle Malkin, Washington’s reigning queen of indignation and a stand-in host on the “fair-and-balanced” network, gleefully taunted, “What say you now, Hillary?” on her blog. Malkin later opined that even Clinton’s pledge to return Hsu’s contributions could not erase the “stain.” Oooooooh.

Clinton’s troubles are about the same as the unpleasant circumstance Mitt Romney faced in mid-August when news broke that a Maryland grand jury had returned a 23-count indictment against a co-chairman of his national finance committee. Ouch. Malkin’s blog item scolding Romney for his failure to perform due diligence on the co-chairman, Alan B. Fabian, is available here. (Oops. Curiously, a review of Malkin’s archive was unable to unearth any such item.)

Aside from the fact that partisans will use campaign finance scandals for their own advantage, here is what the Hsu and Fabian episodes really show: Our campaign finance system attracts unsavory fundraisers - and candidates have little incentive to ferret out the bad apples. In reality, their true incentive is to remain blithely ignorant of their donors’ histories.

Intel Withdraws Class Action Ballot Initiative

A big win for the little guys! This week, Intel and its big-business allies at the California Chamber of Commerce and the misleadingly-named “Civil Justice Association of California” (CJAC) withdrew their ballot initiative aimed at rolling back Californians’ rights in court. The “time wasn't right,” said Intel spokesman Chuck Mulloy.

Why such an abrupt surrender? Perhaps it was the 30,000 faxes citizens organized by the Foundation for Taxpayer and Consumer Rights sent to Intel’s board of directors. Perhaps it was the sluggish fundraising. Or maybe the flurry of countermeasures filed in response, from a competing initiative enshrining the right to the class action to the “No Say, No Pay” act that would force top executives to disclose how much they pay themselves and allow their shareholders to dock their pay. Terrifying! Intel might also have been smarting from the initiative’s tendency to remind consumers of its egregiously racist advertisement. Or maybe it was simply the fact that this unpopular measure had no chance of passing.

Whatever the cause, we congratulate the Foundation for Taxpayer and Consumer Rights for its success, and Californians for keeping their constitutional rights!

Our Watchdog Mascot

Because so many have asked about our new Watchdog Blog mascot Brandice, I
figured it would be best to give him an introduction.

A playful but pugnacious poodle, Brandice is a very smart dog, snapping at
the slightest sign of wrongdoing. He likes to chew over the details of
public policy, as well as tin cans and pigs ears.

Gagging the Government on Auto Safety

Don’t Quote NHTSA on That…What’s happening at the National Highway Traffic Safety Administration (NHTSA)? Depending upon whom you ask you might get no answer at all—or at least no answer for use on the record. NHTSA seems to have pulled the proverbial shade on any kind of transparent, open door communication policy between the press and its staff, leaving crucially important safety information unavailable for on-the-record publication and consumers in the dark about agency dealings.

Perhaps an example is in order.  Given a situation like the I-35 bridge collapse catastrophe, if a reporter seeks on-the-record information, two options apparently exist: contact the office of NHTSA administrator Nicole Nason (trained in law, not engineering), or pursue the questionably ambiguous process of obtaining special permission to speak on the record with a real expert, after what can only presumably be a nip/tuck job by higher-ups of all the expert’s statements. Forget contacting the now inappropriately titled communication staff—the policy applies to them, too. The other “choice” involves use of information without official attribution; a process frowned upon by responsible publications around the country.

No More Campaign Cash from Lobbyists

I just learned from on rssrai on MyDD that a Gallup Poll released today shows that more Americans believe that the presidential candidates should NOT take money from lobbyists:

Eighty percent of Americans say that candidates for president (generically) should refuse to accept campaign contributions from Washington lobbyists; only 18% say it is okay to accept these donations.

Wow.  We are in really good company.

Gallup also asked how people felt about Hillary Clinton taking cash from Washington lobbyists with stunning results:

Even Clinton's base supporters -- rank-and-file Democrats -- say the New York Senator should refuse to accept campaign contributions from lobbyists. Sixty-nine percent of Democrats say Clinton should refuse lobbyist contributions -- not much different than the 71% of Republicans and 75% of independents who share this point of view.

On previous occasions, when asked, Senator Clinton has said that she will continue to take campaign contributions from lobbyists who “represent real people”.  I guess folks aren’t buying that anymore.

If you’d like to be the next person to ask her about lobbyist campaign contributions, check out our guide to finding the candidates and getting real answers (otherwise known in the rabblerousing trade as bird-dogging).  Of course, we'd also like to ask all of the candidates to stop taking gobs of money from the special interests those lobbyists represent.

Will McCain Run on the Presidential Public Financing System?

Yesterday, McCain became the first candidate eligible to receive funding from the presidential public financing system, having applied to the Federal Elections Commission earlier in the month.  He has not yet said whether he will accept the matching funds. 

It could be a lifeline for his campaign and make the system once again functional in the primary.  However, it is a tough call for McCain’s campaign since the system badly needs updating and he would be the sole candidate running accepting the spending limits in exchange for the federal funds. 

The fact that the system is still being considered in the primary shows it’s not dead yet.   However, it also highlights the real need to breathe new life into the system so that it can be an asset to more of the qualified candidates who could opt in and stay competitive.  Read what must be done to improve it on White House for Sale.

Edwards Agrees to Opt In

Edwards is the latest candidate to agree to use the presidential public financing system if he is the Democratic nominee and the Republican nominee also opts into the system. 

The Washington Post rightly gives Edwards kudos, and notes that he joins Obama and McCain in making the pledge. 

How about the others?

Until now Clinton has hedged, saying she would “consider” it.  Any candidate who says they support public funding of elections has an opportunity to walk the talk now.  Time to bird-dog.

Laura MacCleery on WVOX

Last week, Laura MacCleery, director of Public Citizen's Congress Watch division, spoke to New Yorkers about the recently passed Lobbying and Ethics bill, the role of lobbyists in campaign fundraising, Fair Elections, and presidential bundlers.

Listen to her interview on WVOX.

Romney Should Come Clean About Tainted Bundler

The indictment last week of Alan Fabian continued a rich tradition of major presidential fundraisers – or bundlers – running aground with the law.

If convicted, Fabian will follow in the footsteps of Jack Abramoff, Ken Lay and Thomas Noe, to name a few presidential bundlers who were subsequently convicted of felonies. And Fabian would enjoy a rare distinction among convicted bundlers: He would manage to taint not one, but two presidential candidates, Bush in 2004 and Mitt Romney in the current cycle.

A federal grand jury in Maryland indicted Fabian on nine mail fraud counts, nine money laundering counts, one obstruction of justice count, two bankruptcy fraud counts, and two perjury counts in a scheme that allegedly defrauded several companies and financial institutions of $32 million. Read about it in the Boston Herald and the Boston Globe

For its part, the Romney campaign is providing lessons in how to do the absolute least to make amends when the law comes knocking on a bundler’s door. In the wake of the indictment, the campaign announced that it was returning Fabian’s $2,300 contribution, but not the untold thousands (or hundreds of thousands) that Fabian brought in from other sources. The campaign wouldn’t even say if it would return the money contributed by Fabian’s wife.

“The money he helped raise was donated by people who have not been accused of any wrongdoing, and so there is no reason for returning it,” a campaign spokesman said.

In point of fact, there is plenty of reason to be suspicious of money raised by Fabian if the allegations against him prove true. Corrupt bundlers sometimes hit their fundraising targets by furnishing money to others on the condition that they contribute it to candidates. This shortcut was one of the things that landed Bush bundler Thomas Noe in the slammer. (Stealing from the Ohio’s Bureau of Workers' Compensation fund was the other.)

But there is a more fundamental question that remains unanswered: Who did give to Romney at Fabian’s behest?

The modern era of bundling took root in George W. Bush’s first campaign when the campaign figured out how to track the money arranged by bundlers without having to comply with disclosure requirements that would kick in if the bundler actually handled the checks. Bundlers had the contributors they solicited send checks directly to the campaign with their bundler’s number written on the check. The Bush campaign agreed to provide some information about who its bundlers were but not who the bundlers solicited contributions from.

If Romney really wanted to demonstrate that his Fabian-arranged donors were clean, the least he could do is say who they are.

White House for Sale on Counterspin

Laura MacCleery, director of Public Citizen's Congress Watch division, was interviewed about the White House for Sale project on FAIR's CounterSpin last Friday, August 10th.

Listen to hear Laura explain the role of bundlers and the state of transparency thus far in the 2008 presidential election (roughly two-thirds of the way through the program).

Tying it all together

Yesterday morning, the Washington Post explored how the dash for cash puts pressure on lower level employees and others to pony up when the boss has signed on to financially support a candidate. The Post found that 526 secretaries, administrative assistants and executive assistants have contributed to the presidential candidates in the first half of this year, a roughly four-fold increase from the 127 donors with those occupations who contributed during the same time period four years ago.

In a somewhat dismissive aside, the Post cited Former Federal Election Commissioner Scott Thomas' reading that pressuring low-paid subordinates isn't even necessarily illegal as long as supervisors don't "facilitate" the donations. Bundlers would, however, be breaking the law if they are reimbursing their employees under the table. The paper seemed to be making light of what seems to be a credible explanation. What are we supposed to think when an employee, who may only take home $20,000 to $30,000 a year after taxes, is forking over as much as a tenth of their paycheck to a candidate?

They talk big, but will candidates deliver the fundraising transparency we need?

Originally posted on Laura MacCleery's diary at MyDD

Last night, Presidential hopeful Barack Obama reiterated once more that he does not take money from lobbyists:

OLBERMANN: Thirty seconds. Senator Obama, I know you and Senator Edwards have taken a firm stand against accepting money from lobbyists, yet you allow them to raise money for you and, as the phrase goes, "Bundle it." What's the difference between those things?
OBAMA: No, no. I do not have federal registered lobbyists bundling for me, just like I don't take PAC money.  (APPLAUSE) And the reason that's important is because the people in this stadium need to know who we are going to fight for. And I want to be absolutely clear that the reason I'm in public  life, the reason I came to Chicago, the reason I started working with  unions, the reason I march on picket lines, the reason that I'm  running for president is because of you... (APPLAUSE) ... not because of the folks who are writing big checks. And that's a clear message that has to be sent, I think, by every candidate.

Click here for full transcript. 

Presidential Candidates Debate Lobbyist Campaign Contributions

At the Yearly Kos convention this past weekend, presidential candidates sparred over accepting contributions from lobbyists (which would include having lobbyists as bundlers). They all agreed, however, on the need for public funding of elections.

Congress Delivers on Lobbying and Ethics Reform!

Finally – real ethics reform passed in Congress!  Yesterday the Senate approved S. 1 – the “Honest Leadership and Open Government Act of 2007” – with a veto-proof majority of 83 to 14. On Tuesday, the House also passed the bill with flying colors by 411 to 8.

This terrific legislation will give the public important new information about the cozy relationships between industry lobbyists and members of Congress, and limit the outrageous gifts and travel junkets that laid the groundwork for the culture of corruption on Capitol Hill.   

Today marks the final chapter of a long struggle. We first kicked off the drive to fix Capitol Hill over three years ago. Back then, our “wish list” of reforms was largely ignored by members of Congress and the media – even laughed at as a political impossibility. Then Jack Abramoff’s world – and that of many prominent members of Congress – started to unravel. 

As the investigations into kickbacks and bribes became indictments, our call for reform – and the increased public disgust with Washington – became more and more difficult to ignore. When Abramoff worked out a plea deal in January 2006 to name those whom he bribed to the FBI, you’d have thought the gig was up. But the leadership of the 109th Congress burrowed into the warm sand like ostriches and ignored the need for reform.  In return for their indifference, the voters changed up the Congress in 2006, citing corruption as a top concern.

But institutional change is hard even for a Congress elected on a promise to “end the culture of corruption.” As the bill moved forward, the “K Street” crowd lobbied hard, warning members not to bite the hands that keep lawmakers fat and happy. Public Citizen’s activists did not back down, sending thousands of faxes, emails and making hundreds of call to the Hill to tell Congress it must see this through. 

Enough is Enough – Kyl Should Stop Blocking OPEN Government Act

Today, Public Citizen sent a letter to Senator Jon Kyl (R.-Ariz.), asking him to allow an important bill to increase access to government information to come to a vote in the Senate.

We’re not the only ones asking for a break. Last week, Sen. Dick Durbin (D.-Ill.), the Democratic whip, sought unanimous consent to bring up the OPEN Government Act again, which would critically improve the Freedom of Information Act (FOIA). The GOP again blocked consideration of the bill for the now-unmasked “Senator Anonymous ” – Senator Kyl (R.-Ariz.). At yesterday’s opening of the Senate session, Senate Majority Leader Harry Reid (D.-Nev.), asked for an end to objections over bringing the uncontroversial, bipartisan bill to the floor. Kyl did not back down.   

It’s time for Senator Kyl to stop obstructing a vote for FOIA and allow the OPEN Government Act to go to the floor. The bill would strengthen the law that provides access to government documents for the press and citizens. Senator Kyl is quibbling over a few parts of the bill, and Senators Leahy (D.-Vt.) and Cornyn (R.-Tx.) have tried to accommodate his concerns.

But there is a limit to how much compromise is deserved here. 

The current bill encourages the timely settlement of cases where the government lacks a reasonable basis to withhold information. The incentive it provides would strengthen FOIA, decrease the cost of litigation and benefit taxpayers. People of modest means should not be penalized when it comes to using FOIA.  In fact, the majority of FOIA requesters are individuals and businesses – taxpayers that deserve real and timely information about the actions of their government.

Senator Kyl should step aside now, and allow the Senate to vote on the OPEN Government Act.