Watchdog Blog

Editorials, Conn.'s Experience Suggest Pro-Public Funding Sentiment

Barack Obama's $150 million haul in September so dramatically exceeded the $84 million grant he would have received had he opted in to the presidential public funding system that many pundits have declared the system moribund.

But a recent spate of newspaper editorials, the successful implementation of a public funding system in Connecticut and general disgust with the current regime among politicians suggest that sentiment in favor of public funding lives on, and may be increasing.

JAMA Editorializes Against Preemption in Wyeth Case

The Journal of the American Medical Association has joined the New England Journal of Medicine (published by the Massachusetts Medical Society) in urging the Supreme Court not to grant immunity to pharmaceutical companies for lapses in FDA-approved prescription labels. 

Public Citizen Files Complaint for Violations of Franking Privilege

U.S. Rep. Peter Roskam (R-Ill.) appears to have abused his franking privileges and violated U.S. House of Representative rules against using taxpayer funds to pay for political mailers promoting himself within 90 days of the general election, Public Citizen charged today in a complaint filed with the House Commission on Congressional Mailing Standards.

Members of Congress are allowed to distribute mass mailings to their constituents at taxpayer expense touting their legislative records ("franked" mail), but not within 90 days of an election. A bipartisan Commission on Congressional Mailing Standards, known as the "Franking Commission," is responsible for oversight and regulation of the franking privilege in the House of Representatives.

McCain-Feingold Reality Clashes With WSJ Narrative

The Wall Street Journal's editorial board on Wednesday leveled an oft-repeated but misleading attack on the law commonly known as McCain-Feingold. The Journal, an opponent of campaign finance reform, took a measure of satisfaction in arguing that John McCain's fundraising deficit is due to the very legislation he sponsored: 

The ultimate irony – perversity, if you're a Republican – is that the great champion for today's system is none other than John McCain. Having pushed for the government to limit money in politics, he is being outspent – and, should the polls hold, beaten – thanks in part to the laws he worked tirelessly to put on the books.

What the Journal and other drive-by critics of campaign finance reform miss is that McCain-Feingold was not really intended to limit money in politics and certainly was not intended to limit campaign contributions to candidates. The law actually doubled the maximum amount an individual could contribute to candidates, from $1,000 to $2,000 per election (a figure since adjusted for inflation to $2,300). 

What McCain-Feingold did was stop the political parties from accepting corporate or union contributions, which candidates were already prohibited from doing. An honest attack on McCain-Feingold would have to start with a claim that the country was better off with the political parties trading favors in exchange for corporate and union contributions of hundreds of thousands – and sometimes millions – of dollars (in 2002, for example, Fannie Mae and Freddie Mac lavished $4.2 million in soft money on the two major parties). 

If the Journal wants to make that argument, we would welcome the debate.

Whistleblower Trapped in Arbitration

An opinion issued earlier this month by the 2nd U.S. Circuit Court of Appeals shows how willing the courts can be to uphold binding mandatory arbitration clauses even if the courts find elements of them unfair.

The case involved Linda Guyden, who was hired by Aetna Inc. in January 2004 as the company's internal audit director. Guyden soon concluded that Aetna's internal audit department was ineffective, leaving the company susceptible to violating the Sarbanes-Oxley Act of 2002. After receiving unsatisfactory responses from various members of Aetna's senior management team, Guyden took her concerns to the firm's CEO in August 2004. A week later, the firm's chief financial officer gave Guyden a withering performance review that conflicted with a positive review he had given her only a month earlier. Along the way, Guyden won an intra-company battle to hire an outside auditor. In November, ten days before Guyden was slated to present the outside auditor's report to the firm's audit committee, she was fired.

Bush Taxman Calls for Making Corporate Returns Public

In an op-ed in Saturday’s Washington Post, former IRS Commissioner Mark Everson offered an interesting short-order proposal to respond to the financial crisis. Along the way, he articulated a rebuke to the sanctity of corporations that one might not expect to hear from a former Bush administration official.

To increase businesses' transparency, "a proper starting point is to make corporate tax returns available to the public, not just to the IRS," wrote Everson, who served as commissioner of the IRS from 2003 to 2007, following a six-month stint as a deputy director of the Office of Management and Budget.

Bad Court Ruling Could End Checks on Industry Funded 'Science'

Yesterday, the Washington Post noticed a disturbing trend that we have been following for a long time – the corporatization of scientific research ostensibly conducted by unbiased and trustworthy sources like, in this case, the Food and Drug Administration. Science has been twisted to serve corporate ends for decades – see the tobacco industry's "studies" showing that smoking is not dangerous. Most of the time, these justifications for unhealthy or dangerous products are given precisely the credibility they deserve – none. Perhaps realizing this, the new trend is to funnel money behind the scenes to get disreputable science published by reputable sources.

Voters Still in Line Behind Wall Street

Back in early July, we sent a request with a few of our partners in reform to every candidate running for Congress this fall urging them to sign the Voters First Pledge, a simple statement of support for legislation for a new system of pubic funding for congressional campaigns.  So far, nearly 220 candidates have made the pledge - but there are still many others who have yet to tell us where they stand.

So, we've sent yet another letter to candidates who haven't responded and have asked our members and activists to make sure the candidates in their districts know this is an issue they shouldn't ignore.  It's frankly hard to understand why a candidate wouldn't want to commit to change business as usual in Washington today.  The urgent need for reform is summed up neatly in the letter:

As the nation faces its worst financial crisis since the Great Depression, now is the time for bold reforms to both the financial and political systems. Wall Street and powerful financial interests should not be funding campaigns for Congress if we want a political system that truly works for the American people. Public confidence in Congress is at an all-time low, and voters assume that both incumbents and challengers are under the undue influence of special interests.

Seeking big donations does not end with the campaign season - from their first day in office members of Congress must continue to dial for dollars.  The result?  Policies that favor Wall Street and not Main Street.  Public funding of campaigns would allow our elected officials to get off the fundraising treadmill and truly represent the interests of ordinary citizens.

Obama's Other Shoe Drops

There was much attention this weekend to the Obama campaign’s claim that it raised a whopping $150 million in September. This figure dwarfed the $84 million grant the campaign would have needed to live with for September and October if Obama had opted to participate in the public funding system, as McCain did.

But Obama evidently raised much more than even that. This weekend, Obama's joint-fundraising committee – which solicits money in Obama's name and funnels most of it to the Democratic Party – reported that it vacuumed up $69 million. The $69 million appears to be largely in addition to the campaign's purported $150 million bonanza, but we will not know for sure until the campaign issues its official September report, which is due tonight.

Contributors to Obama's joint committee are allowed to give up to $30,800, in contrast to the $2,300 maximum they can give to Obama's official campaign committee. More than 600 people wrote checks of at least $25,000 to the joint committee last month, the New York Times reports.

As we wrote on Thursday, Obama's rival for the presidency, John McCain, also has made significant use of these joint-committees, which are technically legal but make a mockery of the intent of campaign finance laws. McCain's joint committees reported last week that they raised $87 million between July and September, bringing their joint-fundraising total to $150 million.

The Other Bad News for Consumers: Forced Arbitration

Due to the extensive coverage of the recent economic meltdown and the presidential race, it's been easy to miss some other news very relevant to consumers and corporate accountability.  Over at Tortdeform, they have some excellent posts about issues covered by the New York Times. 

First, Kia Franklin relayed the news that a recent Department of Health and Human Services study cited 94% of nursing homes for violations of federal health and safety laws.  This underscores the need for legislation banning forced arbitration, which nursing homes use to immunize themselves from the accountability when they violate the law or hurt their residents through negligent treatment or abuse.  (Follow up on the Times story from Tortdeform here.  Read more about the nursing home arbitration bill here.)

Next, Justinian Lane recaps a study by two law professors about the reluctance of companies to use arbitration when dealing with one another.  The professors cited in the story have been following this issue for some time now, and their results have consistently shown the hypocrisy of corporations that tout arbitration as a fair, efficient, less costly method of dispute resolution between companies and consumers, or employers and employees, but not between one another.

McCain's 'On-the-Side' Fundraising Rises to $150M

During last night's debate, John McCain attacked Barack Obama for abandoning his pledge to accept public funding for the general election if his opponent did so. While we wish Obama had opted in to the public system, it's also worth noting that McCain left out a few inconvenient truths about his on-the-side fundraising.

When McCain accepted an $85 million public funding grant, he agreed to stop raising money except for modest amounts to pay for book-keeping. But McCain kept raising big money. The only difference was that he focused his effort entirely on raising checks for special "joint fundraising committees," which funnel most of the money they receive to the Republican Party. Lax campaign finance rules are allowing McCain to rake in contributions of up to $67,800 for these committees (slightly down from $70,100 while his official committee was still in business). That's nearly 30 times the maximum that Obama's campaign committee can receive.

Last night, about the same time McCain attacked Obama for his fundraising, 10 of the Arizona senator's joint committees reported that they have raised $87 million since the beginning of July, bringing their total to $150 million.

McCain's methods are technically legal, and indeed Obama has mimicked them by setting up a committee in his name to raise money for the Democratic Party. But aside from circumventing the public funding agreement, they defeat the overall campaign finance system's goal of prohibiting large contributions directly to politicians. The system permits larger contributions to party committees to facilitate party building. But by personally raising money for these committees so close to an election, McCain and Obama have erased the line separating party and candidate.