- — Combating Kleptocracy: Beneficial Ownership, Money Laundering, and Other Reforms
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at 6/18/19 4:16pmTestimony of Sheila Krumholz
Executive Director of the Center for Responsive Politics
Before the United States Senate Committee on the Judiciary
Combating Kleptocracy: Beneficial Ownership, Money Laundering, and Other Reforms
June 19, 2019Chairman Graham, Ranking Member Feinstein, and members of the Committee, thank you for allowing the Center for Responsive Politics to submit this written testimony to the U.S. Senate Committee on the Judiciary regarding our political system’s susceptibility to the influence of foreign kleptocrats operating behind a veil of secrecy through shell companies, LLCs, and other opaque vehicles.
The Center for Responsive Politics is a nonpartisan nonprofit research organization tracking money in U.S. politics and its effect on elections and public policy. Our vision is for Americans across the ideological spectrum to be empowered by access to clear, unbiased information about money’s role in politics and policy so they can use that knowledge to strengthen our democracy. Our mission is to produce and disseminate peerless data and analysis on money in politics to inform and engage Americans, champion transparency, and expose disproportionate or undue influence on public policy.
Congress enacted the Federal Election Campaign Act to deter the use of wealth to unduly influence or corrupt government, and to ensure a democratic system of integrity worthy of the voters’ trust and confidence.
Federal campaign finance law prohibits foreign nationals from directly or indirectly engaging in activity to influence U.S. elections. This ban broadly extends to foreign governments, foreign political parties, corporations, associations, foreign partnerships, and foreign citizens with the exception of those holding dual U.S. citizenship and “green card” holders admitted as lawful permanent residents of the United States.
The Federal Election Commission (FEC) has specified that the prohibition on foreign nationals influencing U.S. elections also makes it unlawful for partnerships and limited-liability companies to attribute any portion of a political contribution to a partner who is a foreign national. Since the unique structure of LLCs often requires the entities to disclose only minimal information necessary for incorporation, LLCs have become attractive vehicles to move funds through different opaque entities like “shell” companies in elaborate, complicated financial transactions funneling money into U.S. elections without ever disclosing its source. Due to lax disclosure requirements, foreign actors who are prohibited from spending in U.S. elections may create LLCs to function as conduits for quietly influencing U.S. elections. LLCs and other shrouded groups that spend millions of dollars on U.S. elections without disclosing their funding sources can effectively act as proxies for foreign kleptocrats whose influence on U.S. elections is, under federal law, prohibited.
We know that money from anonymous sources is flowing into U.S. elections, and the methods through which it is funneled continue to increase in complexity and opacity. Direct spending in U.S. federal elections reported by groups that do not disclose their donors has exceeded $1 billion since the Center for Responsive Politics began tracking political spending by nondisclosing groups in 2006. This direct spending by groups that do not disclose donors is increasingly augmented by money funneled through partially disclosing groups that keep some donors hidden or are funded by other more opaque groups, bringing the total spending by groups that do not fully disclose their financiers to more than $2 billion. In the 2018 election cycle alone, groups that do not fully disclose their donors reported more than $539 million in spending to the FEC, setting a record for reported spending by these groups during non-presidential years. Furthermore, last cycle, shell corporations, and other groups that do not disclose their donors funneled more than $176 million to political committees that are required to disclose their donors.
These dark money structures create opportunities for actors who want to undermine American democracy. While the prohibitions on foreign nationals spending or engaging in activities connected to influencing U.S. elections may be the letter of the law, foreign kleptocrats represent an increasingly dangerous threat to our political system. This is especially true given insufficient U.S. oversight of hidden entities such as shell companies and lack of beneficial ownership disclosure requirements, leaving the individuals or interests behind those groups unknown to the public.
This covert foreign interference in the U.S. political system poses a serious threat to our sovereignty and reputation abroad. The U.S. must be a leader on this issue, setting an incontrovertible example of functional democratic systems and oversight. We cannot ignore these weaknesses that have been allowed to creep into the funding of U.S. elections.
The number of LLCs giving to outside groups surged in 2016 to more than 4,000 – nearly quadruple the number in 2012. The funds they gave to groups spending in U.S. elections also increased precipitously in recent election cycles. In the 2016 election cycle alone, more than $45.5 million came from LLCs at the federal level, nearly double the $24.1 million from LLCs in the last presidential election cycle four years earlier. LLCs continued to pour money into U.S. elections in the 2018 election cycle with more than $23.5 million in contributions from LLCs at the federal level. The scale and sophistication of these operations presents grave challenges to the integrity of the American political system.
History provides us with many examples of illegal donations by foreign corporations and nationals laundering money through those who are legally eligible to contribute – evasions that have eroded public trust in the system. Among the most troubling are campaign finance violations that involved attempts by foreign individuals, corporations, and even governments to influence electoral outcomes. Covert foreign interference in the U.S. political system is an issue that supersedes partisanship and has impacted both sides of the aisle. Dating back to the mid-1990s, large donations to both parties from straw donors tied to foreign actors stirred scandal across the ideological spectrum.
In 2017, the Department of Justice sentenced Mexican businessman Jose Susumo Azano Matsura for illegally funneling hundreds of thousands of dollars in campaign contributions through shell corporations and straw donors supporting a Democratic mayoral candidate in San Diego’s 2012 election. And earlier this year, fugitive Malaysian financier Jho Low, who is wanted in a multibillion-dollar money laundering scandal stemming from a Malaysian state-owned investment fund, was indicted for his role in allegedly making illegal foreign contributions to Barack Obama’s 2012 re-election campaign and a super PAC supporting it through straw donors. Low has not only been charged in relation to his alleged illegal foreign contributions in support of Obama, but has also been tied to suspicious transfers funneling money into President Donald Trump’s joint fundraising committee.
Sources of money flowing into inaugural committees have also been obfuscated by opaque vehicles such as LLCs and other tactics hiding the interests or actors behind donations. One recent example is an LLC called the BH Group, which was created four months before it made a seven-figure donation to the 58th Presidential Inaugural Committee. Through investigative work, the Center for Responsive Politics has traced the company to a network of secretive nonprofit organizations and political operatives. However, the ultimate source of funding continues to be hidden, leaving the American public in the dark about the interests and individuals using their money to shape U.S. politics and policy, and the motives driving their political activities.
Lack of transparency in money flowing into the U.S. political system is also evident in LLCs and opaque offshore accounts effectively acting as conduits for foreign interests spending on influence campaigns required to be reported under the Foreign Agents Registration Act (FARA). Release of CRP’s reports revealed a complex network of LLCs, offshore accounts, shell corporations, and other veiled entities financing foreign influence operations targeting the U.S. in the lead-up to Ukraine’s recent presidential election. Following that, foreign agents spearheading operations submitted an amendment to FARA disclosures admitting that a Ukrainian politician was the ultimate beneficiary of the influence campaign.
Given our findings, it stands to reason that a lack of sunlight in financial transactions and corporate disclosures behind entities funneling considerable sums into the U.S. political systems poses a significant threat to national security. Taking steps to ensure transparency in spending to influence elections and policy in the U.S. is essential to American sovereignty.
More rigorous beneficial ownership disclosure requirements to make the ownership of shell companies more transparent would provide a vital tool to expose foreign kleptocrats forming U.S. companies for the purpose of influencing U.S. elections.
Without additional disclosure requirements for opaque entities such as shell companies and LLCs, crucial details on the identity of those actually pulling the strings in U.S. electoral and issue campaigns may remain hidden, and Americans will be left in the dark about corrupt foreign interests that use money and secrecy to wield influence over our democracy.
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- — Boeing executive out, Raytheon lobbyist in to lead Pentagon
- at 6/18/19 12:08pm
The Pentagon (Via Department of Defense)
The Pentagon is going through a shakeup at the top, but the influence of major defense and aerospace companies holds firm.
Patrick Shanahan, a former Boeing executive who served as acting secretary since February, withdrew his nomination and resigned from his Pentagon post Tuesday. Mark Esper, current Secretary of the Army and a former Raytheon lobbyist, will serve as the new acting Secretary of Defense.
Esper worked as vice president of governmental relations for Raytheon from 2010 to 2017 before taking the Trump administration job. He was a registered lobbyist for more than a decade, representing the Aerospace Industries Association of America and then the U.S. Chamber of Commerce before lobbying on behalf of the defense giant.
Esper has a distinguished military background. Having served as a rifle platoon leader in the Gulf War, his battalion helped make up the “left hook” of 350,000 troops that drove Iraqi forces out of Kuwait.
Following his military service, Esper worked for Sen. Chuck Hagel (R-Neb.) and worked his way up to director for national security affairs for Senate Majority Leader Bill Frist (R-Tenn.) before leaving for the private sector.
During his time with Raytheon, Esper focused on providing input on defense spending authorization bills crucial to the company’s bottom line, working specifically on acquisition policy and missile systems in 2016. Raytheon posted record federal lobbying spending during Esper’s tenure, peaking in 2013 when it shelled out more than $7.6 million.
Esper is one of many lobbyists to take a spin through the revolving door into — and out of — the Trump administration. Other high profile examples include Environmental Protection Agency Administrator Andrew Wheeler, a former oil and gas lobbyist, and Federal Aviation Administer Dan Elwell, a former American Airlines lobbyist who has communicated with his ex-colleagues as a government official.
The current Army undersecretary is Ryan D. McCarthy, a combat veteran and former Lockheed Martin executive who worked on the F-35 Joint Strike Fighter.
As a former executive of a rival aerospace manufacturer, Shanahan raised eyebrows when he criticized Lockheed Martin over the F-35 fighter jet, which has been marred by setbacks and accidents but remains a focal point for the Pentagon.
Shanahan worked for Boeing for three decades before joining the Pentagon to serve under then-Defense Secretary James Mattis.
Shanahan’s withdrawal came several hours after USA Today revealed that the FBI was “examining” a violent 2010 domestic dispute between Shanahan and then-wife Kimberley. President Donald Trump said Shanahan removed himself from consideration to spend more time with his family.
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- — Primary challengers looking to repeat AOC magic face uphill battle in 2020
- at 6/18/19 11:38am
Marie Newman, who this cycle is running as a primary challenger against Illinois Rep Dan Lipinski (D) for the second time, speaks at a campaign event in Washington, D.C. on Jan. 17, 2018. (Photo By Bill Clark/CQ Roll Call)
After a midterm cycle featuring a number of high-profile upsets, a few House Democrats are already facing primary challengers in advance of 2020. But candidates looking to repeat the success of Reps. Alexandria Ocasio-Cortez (D-N.Y.) or Ayanna Pressley (D-Mass.) have a tough path forward.
Incumbents nearly always have an advantage when it comes to fundraising, and a new policy from the Democratic Congressional Campaign Committee makes it more difficult for primary contenders to find consultants and contractors. Still, several challengers think they have what it takes to pull off upsets of their own.
Justice Democrats, the group that propelled Ocasio-Cortez to power, has backed two candidates so far: middle school principal Jamaal Bowman, who declared his challenge to Rep. Eliot Engel (D-N.Y.) on Tuesday, and 26-year-old lawyer Jessica Cisneros, who announced last week that she will challenge longtime Rep. Henry Cuellar (D-Texas).
Justice Democrats have been eyeing Cuellar, who is considered a relatively conservative Democrat, as a target for a primary race since at least January. The congressman from Laredo received a grade of 93 percent from the NRA last year and voted with President Donald Trump nearly 70 percent of the time during the 115th Congress, according to FiveThirtyEight — though this year, he hasn’t sided with the president on a single bill.
Cisneros is campaigning on the Green New Deal, Medicare for All and a $15 minimum wage. She has said she will not take corporate PAC money, in contrast to Cuellar, who took in more than 62 percent of his contributions from business PACs in 2018.
Cuellar starts the primary race with a clear fundraising advantage. Cisneros announced on Twitter that she received $100,000 in donations from more than 4,000 donors within 48 hours of her campaign’s launch. But Cuellar raised $410,000 in the first quarter of 2019, leaving him with $2.8 million on hand.
Engel, who easily fended off three primary challengers in 2018, had $180,000 in cash on hand at the end of the first quarter. His district includes portions of the Bronx and Westchester County and borders the district that Ocasio-Cortez won in 2018.
Meanwhile, a familiar primary is taking shape in Illinois’ 3rd Congressional District, as Marie Newman takes on Rep. Dan Lipinski (D-Ill.), one of only a few House Democrats who opposes abortion rights.
Newman, then a relative unknown, challenged Lipinski in the 2018 Democratic primary and lost by 2 points. This time, she has been endorsed by three presidential candidates and out-raised Lipinski in the first quarter, hauling in $210,000 to the incumbent’s $128,000. Lipinski still has the advantage when it comes to cash on hand, with $425,000 as of the end of the first quarter.
Both Lipinski and Cuellar are conservative Democrats representing relatively liberal districts. During the 2018 general election, Lipinski garnered 73 percent of the vote over a Holocaust denier. Since the district’s current boundaries were established in the early 1990s, it has never been represented by a Republican. Cuellar, who has not faced a primary challenger since 2006, won his race with nearly 85 percent of the vote in 2018. Hillary Clinton carried his district by nearly 20 points in 2016.
Historically, competitive primary challengers have emerged from across the political spectrum, and have not been limited to progressive groups such as the Justice Democrats. Current presidential candidates Beto O’Rourke (D-Texas), Seth Moulton (D-Mass.) and Eric Swalwell (D-Calif.) all entered Congress after successful primary challenges. So did Engel, who knocked off a longtime incumbent in 1988, and Cuellar, who was elected the House after beating the more liberal incumbent Ciro Rodriguez in the 2004 primary by a margin of just 58 votes.
This election cycle, however, challengers face an additional hurdle. The DCCC announced in March that it will not contract with pollsters, consultants or other vendors who work on behalf of primary challengers, on the basis that protecting incumbents was the party’s best path toward maintaining a majority in the House of Representatives.
The DCCC spent nearly $300 million supporting Democratic House candidates during the 2018 midterms. Among the committee’s top contributors were the official committees of Cuellar and former Rep. Joe Crowley, who was ousted by Ocasio-Cortez.
The vendor policy received pushback from liberal corners of the party, with critics noting that Democrat incumbents are more likely to be male and white compared to their challengers. On Twitter, Ocasio-Cortez called it “extremely divisive (and) harmful.” Newman felt an immediate impact, telling Politico in April that four consultants left her campaign due to the policy.
Even as new primary challengers have emerged the months since, the DCCC has indicated that the policy is likely to stay. In April, Justice Democrats launched a countersite called DCCC blacklist, designed to identify vendors who were open to working with primary challengers. The site has nearly 30 organizations listed.
Justice Democrats executive director Alexandra Rojas told the Washington Post in May that she was encouraged by candidates’ efforts in spite of the policy.
“The DCCC implemented their policies to prevent progressive primary challengers like Alexandria Ocasio-Cortez and Ayanna Pressley from going ‘mainstream’ in 2020, but it looks like the exact opposite is happening,” Rojas said.
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- — Defeated in court, California offshore drilling company turns to lobbying
- at 6/17/19 3:06pm
(Mark Rightmire/Digital First Media/Orange County Register via Getty Images)
As the Trump administration pushes to dramatically expand fossil fuel production nationwide, a little-known California company looking to drill off the Los Angeles coast has found a new voice in Washington.
DCOR LLC, an oil company operating seven offshore drills in Southern California, recently inked a contract with Chris Jones of Baker & Hostetler, a prominent legal and lobbying firm, entering the influence scene for the first time in the company’s 20-year history. The filings show that Jones will lobby on “federal policy issues related to oil and natural gas exploration.”
The move comes two weeks after a federal judge ruled the company couldn’t conduct fracking at two proposed drilling locations near Ventura, California. This was the second legal defeat the company faced in less than a year. In November 2018, the same district court judge, Philip Gutierrez, prohibited the Trump administration from approving fracking permits until scientific inquiries into the process’s effects on the environment were completed.
The company argued that the restriction imposed undue financial hardships on its operations.
The company’s new venture into federal lobbying could be aimed at keeping pressure on policymakers to put out revised regulations that would allow the company to begin drilling off the coast.
Local leaders have expressed overwhelming opposition to that idea. And California environmental activists celebrated the court decision, citing fracking’s potentially catastrophic effects on oceanic environments and applauding the judge’s decision to wait for scientific results.
Some along the California coastline know the risks of offshore drilling all too well. In 1969, a platform malfunction at Dos Cuadras, an offshore oil field near Santa Barbara, released as many as 500,000 barrels of crude oil into the Santa Barbara Channel, causing environmental and economic devastation for hundreds of miles.
DCOR is one of dozens of energy companies across America looking to profit from the Trump administration’s decision to repeal Obama-era moratoriums on offshore drilling. Trump’s decision to open nearly all coastal waters for drilling consideration in January 2018, including the California coastline, was reportedly the culmination of years of lobbying efforts by oil companies.
Despite legal challenges, the Trump administration is holding firm on the issue, appealing a recent decision by a federal judge in Alaska who ruled that the president exceeded his authority in repealing the Obama-era regulations.
Speaking to NPR, Interior Department spokeswoman Molly Block commented, “Given the recent court decision, the Department is simply evaluating all of its options to determine the best pathway to accomplish the mission entrusted to it by the President.”
DCOR is the first company to attempt to open a fracking operation off the California coast in more than 10 years. The company already manages nine traditional drilling platforms off the coast of Southern California, including the rig in the Dos Cuadras field that caused the 1969 spill.
Public records obtained by an environmental advocacy group in 2015 show dozens of safety violations at platforms owned by the company, including corroded wellheads and valves, damage that significantly increases the risk of causing more leaks.
The man charged with representing DCOR’s case in Washington, Chris Jones, has a history of working with high-powered interests, having previously lobbied for Facebook, Alibaba and PricewaterhouseCoopers. He has previously served in prominent positions for Reps. John Myers (R-Ind.), Mike Ferguson (R-N.J.) and David McIntosh (R-Ind.).
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- — FEC chair makes another go at regulating online political ads
- at 6/17/19 2:04pm
FEC Commissioner Ellen Weintraub, (Joe Raedle/Getty Images)
Federal Election Commission Chair Ellen Weintraub is proposing rules that would require some online political ads to attach a disclaimer describing who is paying for them.
The proposed rules — similar to measures introduced by the FEC last year — would subject paid online ads to similar disclaimer rules as print, television and radio ads. Increasingly popular social media ads, including those engaging in electioneering communications that mention a candidate shortly before an election, are currently exempt from including disclaimers under federal law.
“Americans deserve transparency when it comes to internet communications, especially as we face the growing threat of online disinformation campaigns and false political advertising,” Weintraub wrote in her memorandum.
The proposed rules will be discussed at the FEC’s Thursday meeting. Amid ideological deadlock, the commission has struggled to agree on how to regulate online ads since it was revealed that Russian actors purchased Facebook ads under fake accounts to influence the 2016 election.
Hampering progress on new rules is the fact that the FEC is currently short two commissioners — and all of the current commissioners’ terms expired long ago — but President Donald Trump and Congress have not filled the vacancies.
Online political ad spending has consistently risen during each consecutive election cycle. Candidates running for federal office alone spent $72 million on digital ads reported to the FEC during the 2018 election cycle. Candidates seeking the presidency in 2020 have already spent nearly $40 million between Facebook, Google and Twitter ads, using the platforms primarily to build a list of supporters they can continually solicit for campaign contributions.
In response to election meddling, the social media giants released their own political ad databases and required political advertisers to put “paid for” disclaimers on ads. These disclaimers are limited and disclose little information about the buyer. And social media executives themselves have endorsed measures to mandate disclaimers in federal law. A digital advertising trade group has released its own guidelines for political advertisers, asking that online ads include a “political ad” icon a viewer may click on to get more information.
Weintraub’s proposal includes some elements that could be attractive to her Republican colleagues by providing advertisers several options as to how they can present their “paid for by” disclaimer within online ads. The rules allow advertisers to use mechanisms such as hyperlinks or hover-over actions to act as a home for a disclaimer as long as the information is no more than one action — or click — away from the user.
The FEC received more than 314,000 public comments between 2017 and 2018 on proposed rules to online ads and held hours of testimony. The “one-click” language was preferred by some conservative groups as a way to promote greater transparency without burdening free speech. Other groups have expressed concern that most users will not click on disclaimers to learn more about the ad buyer.
The new proposed rules are being introduced as a bipartisan group of lawmakers push a bill that would bring political ads purchased on social media outlets into the same regulatory realm as print and broadcast ads. Supporters of the bill say action from Congress is necessary because the FEC failed to finalize rulemaking to address transparency of online political ads.
Several other measures have been introduced to shine a light on online political ads, though these bills would likely die in the Mitch McConnell-led Senate, where recent transparency-related bills have not received a vote.
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- — Retirement bill close to passing Congress with widespread support from trade groups, financial firms
- at 6/14/19 1:11pm
(via flickr – 401(K) 2012)
Last month, the House of Representatives passed the most significant piece of retirement savings legislation in the last 13 years with wide bipartisan support, the result of years of consistent lobbying efforts by the financial planning sector.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 passed the House 417-3. It puts in place various provisions to make it easier and more transparent for individuals to save for retirement.
The SECURE Act is derived mostly from the Retirement Enhancement and Security Act, a bill that has been carried through three congresses, but never passed. Since it was introduced, the financial planning industry has been pushing lawmakers to pass it into law.
More than 546 unique lobbying reports to the House and Senate have been filed on the bill from 89 different firms and organizations. Most of those firms or organizations pushing for the bill handle retirement assets and long-term financial planning. Some of the most frequent influencers include Nationwide, American Benefits Council, State Street Corp and Prudential.
“While access to worksite retirement plans is common for many in the workforce, there is still a significant portion of the working population that lacks access. The gap in workplace retirement plan coverage is most pronounced among employees of small employers.” said Principal Financial Group Vice President of retirement and income solutions Joni Tibbetts during Senate Financial Services Committee testimony last month. Her company and many of the other ones lobbying the bill stand to attract more customers if they have easier access to 401(k) plans as the legislation would provide.
Since many companies offer their employees 401(k) plans, the list of influencers wasn’t just limited to those directly dealing with the retirement process. The Girl Scouts, Boy Scouts of America, Boeing and Jewish Federations of North America have all lobbied the bill.
Many of the same firms are continuing to push for the bill this year as well. Aegon NV, Allstate, Nationwide, State Street, Prudential and Northwestern Mutual all filed reports indicating they were lobbying the bill.
The SECURE Act, which is now being considered by the Senate Financial Services committee, is slightly different than the Retirement Enhancement and Security Act that the groups have been lobbying for over the past year.
The only difference is that the SECURE Act doesn’t contain a clause that would allow parents to remove funds from 529 education savings plans (a college fund) to pay for private schools, religious schools or homeschooling. Democrats forced that provision out, and Republicans in the House agreed to pass the bill without it.
Without the private schooling provision, there’s almost enough support to pass the bill in the Senate through unanimous consent. However, at least two senators, Pat Toomey (R-Pa.) and Ted Cruz (R-Texas), have told Financial Services Committee Chair Chuck Grassley (R-Iowa) they would object. Unless they change their positions, the only two options are to lump the legislation into another bill or wait to bring it up for a roll call vote before the full Senate.
The latter requires some pushing and prodding of Senate Majority Leader Mitch McConnell (R-Ky.) who would decide when the bill could come up on the floor.
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- — Census lobbying continues amid concerns about citizenship question, funding
- at 6/14/19 11:09am
via flickr – US Census Bureau
The U.S. census has been performed every decade since 1790. But tensions boiled over in Washington this week about the Trump administration’s efforts to add a new question — and the billions of federal dollars over the next decade that will be affected by it.
While onlookers await the Supreme Court’s ruling on the legality of the decision, lobbyists from research and advocacy groups are also making their case to the Census Bureau with the hopes of at least influencing the implementation of proposed changes.
The decennial census is a constitutionally mandated population survey used to determine the allocation of federal funds across communities and the boundaries of congressional districts during redistricting. The Trump administration announced in 2017 that it planned to add a question about citizenship to the survey. Commerce Secretary Wilbur Ross said the move was necessary to help the administration enforce the Voting Rights Act.
Not everyone was convinced of that rationale, though.
Half a dozen groups sued the administration on the basis that asking about citizenship might discourage Latinos, immigrants and members of other minority groups from filling out the survey. If this were the case, the count would be skewed, and the federal funding and political representation associated with it would not be apportioned equally to all Americans. Several studies have found the question would lead to an undercount of approximately 4 million people.
The Supreme Court heard arguments on the case in April and is likely to release its decision later this month.
Then, at the end of May, came the evidence found on the hard drive of longtime Republican strategist Thomas Hofeller, who died last August. Research the political consultant conducted in 2015 concluded in clear terms that adding such a question would benefit Republicans and non-Hispanic whites.
Hofeller certainly had GOP strategists’ ear: The Republican National Committee paid him $127,000 for “redistricting consulting services” during the 2010 election cycle, and an additional $64,000 on the issue in 2011.
With the revelation of Hofeller’s writings, Democrats are eager to determine whether his ideas swayed the Trump administration’s policy. However, without documentation of how the Department of Commerce decided to add the citizenship question, no one can definitely say whether Hofeller’s work was the reason.
The discovery also added urgency to subpoenas for documents pertaining to the decision the House Oversight Committee had issued in April, but the Trump administration claimed executive privilege Wednesday and declined to release them. The committee voted the same day to hold Ross and Attorney General William Barr in contempt of Congress, though Democrats signaled Thursday that they are more likely to file a lawsuit over the documents than hold two cabinet members in criminal contempt.
House Democrats aren’t the only ones upset about the proposed addition of the citizenship question to the census.
Groups that have lobbied the Census Bureau opposing the citizenship question this year include the Insights Association, the Leadership Conference on Civil & Human Rights, the League of Women Voters of the U.S., Monterey County, Calif., the NAACP and the National Association of Latino Elected and Appointed Officials (NALEO) Educational Fund.
“Barring swift intervention, data from the 2020 Census will be inaccurate and incomplete. For the next decade it will make political representation less democratic, misdirect the flow of federal funding, and force businesses, policymakers, scientists, and the country to rely on erroneous population data,” said Alex Padilla, NALEO commission co-chairman in a statement.
The Bureau announced earlier this week that it will begin testing the effect of the citizenship question on response rates through a trial questionnaire sent to nearly half a million households. The results of that experiment will help the Bureau determine the number of staffers it needs to track down the households that do not respond to the official survey in 2020.
More employees allows the Bureau to be more thorough, potentially mitigating the undercount that the new question is expected to create. To hire more employees, however, the Bureau needs more funding — so several of the groups that lobbied in opposition of the citizenship question have also lobbied for increased funding for the 2020 census. The Bureau has said it expects the census to cost $15.6 billion.
Aside from the citizenship issue, why else do groups lobby on the census?
The Census Bureau is also tasked with measuring trade, so it is the target of lobbying for organizations such as the Pacific Coast Council/Customs Brokers, the World Shipping Council and the American Association of Importers and Exporters. The American Library Association has also lobbied the Bureau this year — because the census will be available online for the first time in 2020, libraries expect to see increased demand for their technology services.
Several bills about the census have also been introduced this legislative session. The 2020 Census Improving Data and Enhanced Accuracy Act (H.R. 732) was sponsored by a number of Democratic lawmakers and would require the executive branch to notify Congress of planned changes to census methodology. The Census Accuracy Act of 2019 (H.R. 1320), sponsored by Rep. Steve King (R-Iowa), would codify the citizenship question into law. A few liberal causes lobbied on H.R. 732, while no one has lobbied on H.R. 1320. Neither piece of legislation is expected to pass.
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- — Trump won’t rule out violating ban on foreign contributions in 2020
-
![[+]](img/ib-marked_nm.png "mark as new")
at 6/14/19 8:44am
(AP Photo/Charles Rex Arbogast, File)
President Donald Trump created a firestorm Wednesday when he told ABC’s George Stephanopoulos he would consider accepting damaging information about his 2020 opponent from a foreign government.
“It’s not an interference, they have information — I think I’d take it,” Trump said. “If I thought there was something wrong, I’d go maybe to the FBI — if I thought there was something wrong.”
Trump doubled down on his statement Friday morning in an interview with Fox & Friends, saying he would report attempts from foreign actors to give the campaign information to the FBI — only after listening to what they had to say.
“Of course, you have to look at it, because if you don’t look at it you’re not going to know if it’s bad,” Trump said.
Trump’s interpretation of such a situation is at odds with federal election law, which bars campaigns from soliciting or accepting “anything of value” from foreign nationals or foreign governments. Valuable information, including opposition research, could be considered an in-kind contribution that would violate the ban on campaign contributions from foreign nationals. Accepting the information and corroborating it could provide the campaign with a thing of value.
FEC Chair Ellen Weintraub, the commission’s lone Democrat, released a statement Thursday reiterating that any acceptance of “foreign dirt” is a violation of federal election law.
“It is illegal for any person to solicit, accept, or receive anything of value from a foreign national in connection with a U.S. election,” Weintraub said. “This is not a novel concept. Electoral intervention from foreign governments has been considered unacceptable since the beginnings of our nation.”
Trump’s comments come on the heels of special counsel Rober Mueller’s report on Russian interference in the 2016 presidential election. In the 448-page report, Mueller dedicated an entire section to the infamous 2016 Trump Tower meeting between Trump campaign officials and actors of the Russian government purporting to offer damaging information about Hillary Clinton.
Mueller declined to charge Donald Trump Jr. for illegally soliciting a thing of value from a foreign national, saying he could not establish the value of the information being offered by Russian lawyer Natalia Veselnitskaya through a third party. The value of the information must surpass a $2,000 threshold for a criminal charge or $25,000 for a felony charge — Mueller concluded that Veselnitskaya ultimately did not deliver on her promise of providing damaging information.
Brendan Fischer, director of federal reform at the nonpartisan Campaign Legal Center, said the FEC could still pursue civil penalties against Trump Jr. because the agency does not have to prove that violations were committed willingly nor establish the value of the opposition research.
Trump’s comments drew a wide range of reactions from lawmakers, with 2020 Democrats quickly pouncing.
Former vice president and current presidential frontrunner Joe Biden took to Twitter Wednesday saying, “An American President should not seek [foreign] aid and abet those who seek to undermine democracy.”
Rep. Eric Swalwell (D-Calif.), another presidential hopeful, published an op-ed in The Atlantic saying impeachment should be pursued. Swalwell’s support now means that the majority of Democrats on the House Judiciary Committee are in favor of launching proceedings.
A number of Republicans also criticized the president’s statements, with Sen. Joni Ernst (R-Iowa) rejecting Trump’s comment that all politicians accept information from foreign actors.
“No, we don’t. Let’s stop there. No we don’t.”
Sen. Mitt Romney (R-Utah) said it would “be wrong and unthinkable that any candidate for president would accept such information” that might influence an election from foreign sources.
Sen. Lindsey Graham (R-S.C.) said he privately told the president to reach out to the FBI if a foreign source is offering something “you think is inappropriate”. Along with Reps. Kevin McCarthy (R-Calif.) and Jim Jordan (R-Ohio), Graham also compared Trump’s hypothetical to the Clinton campaign’s hiring of Fusion GPS, a Washington, D.C., firm which retained the services of former British MI6 operative Christopher Steele.
Jordan sent out a tweet Wednesday, saying, “Talk about taking foreign help. Hillary Clinton hired a foreign spy. He talked to Russians and put together an oppo research document.”
While accepting an-kind contribution from a foreign entity is prohibited, paying a company at market rates for opposition research services — even one that works with foreign nationals — is legal under federal election law.
The post Trump won’t rule out violating ban on foreign contributions in 2020 appeared first on OpenSecrets News.
- — Supreme Court justices continue to rack up trips on private interest dime
- at 6/13/19 4:05pm
(Supreme Court in Washington, DC, June 15, 2017. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
Supreme Court justices continue to take trips across the globe on the dime of private individuals and other entities, raising questions about whether those sponsoring the trips could have influence over those serving on the high court.
The Supreme Court’s nine justices disclosed taking a combined 64 trips in 2018 in which various aspects such as transportation, food and lodging were reimbursed by others, according to annual financial disclosures released Thursday by the Office of Government Ethics.
Since 2004, when OpenSecrets first began tracking Supreme Court financial disclosure data, justices have disclosed taking 1,306 trips reimbursed by others.
Justice Ruth Bader Ginsburg disclosed taking more trips than any other justice in 2018, totaling 14. She visited Tel Aviv, Israel where she was awarded a lifetime achievement award by the Genesis Prize Foundation. Shortly following the award ceremony, she disclosed being provided transportation, food and lodging as a tourist and guest of billionaire Israeli businessman Morris Kahn.
Kahn has had business before the Supreme Court before. The high court handed Kahn’s company Amdocs Limited a win in November 2017 when it declined to take up a patent-related case.
The financial disclosures, which also reveal investments and other sources of income, offer vague information about reimbursements and gifts given to justices. They don’t include any estimated monetary value of the services provided, making it difficult to ascertain how much influence third parties could be garnering.
“Once again, the justices took dozens of trips across the country and around the world last year in which a third party paid for their dining, airfare and accommodations, with the public left in the dark about how lavish these trips may have been,” Gabe Roth, executive director of Fix the Court, an organization that aims to bring increased transparency to the Supreme Court, said in a statement on the disclosures.
Justice Stephen Breyer disclosed a dozen trips, three of which were supported by the wealthy Chicago-based Pritzker family. Breyer took two trips related to his position on the Pritzker Prize for Architecture jury, which honors architects each year. Breyer has served on the Pritzker jury since 2011 and became chair in 2018. He also disclosed taking a one-week trip to Ireland and Spain as part of the “Pritzker Fly-Around Program,” which paid for his transportation, lodging and meals. Breyer has taken 219 reimbursed trips since 2004, more than any other sitting justice.
Justice Samuel Alito disclosed six trips, including trips to Rome, Italy and Zurich, Switzerland for university conferences. Disclosing 13 trips, Justice Sonia Sotomayor traveled to a number of universities for award ceremonies and conferences. Among her seven disclosed trips, Justice Elena Kagan gave a number of speeches at universities.
New Justices Neil Gorsuch and Brett Kavanaugh each disclosed four trips. Gorsuch took a trip to Padua, Italy as part of a George Mason University educational program. He was the only justice to report a gift — a watercolor painting by Appeals Court Judge Terrence O’Brien valued at $1,000. Three of Kavanaugh’s trips were related to Federalist Society events.
Clarence Thomas took two paid-for trips, including one to the Texas chapter of the Federalist Society in Fort Worth, Texas. Chief Justice John Roberts also took two trips, during one of which he gave a lecture at the University of Minnesota Law School.
Check out OpenSecrets’ list of Supreme Court justice trips, dating back to 2004.
For more information about the justices’ reimbursements, gifts and finances, check out their 2019 financial disclosures:
- Samuel Alito
- Stephen Breyer
- Ruth Bader Ginsburg
- Neil Gorsuch
- Elena Kagan
- Brett Kavanaugh
- John Roberts
- Sonia Sotomayor
- Clarence Thomas
The post Supreme Court justices continue to rack up trips on private interest dime appeared first on OpenSecrets News.
- — Companies’ political spending contradicts Pride support
- at 6/13/19 1:14pm
Participants seen at the LA Pride Parade on June 9, 2019 (Chelsea Guglielmino/Getty Images)
This month’s Pride festivities mark the 50th anniversary of the Stonewall riots, a series of protests by New York City’s LGBTQ community that many point to as the beginning of the modern gay rights movement. Across America, rainbows dominate storefronts and adorn flags at parades and festivals.
Corporations are feeling the spirit too. Many of the nation’s largest enterprises are marking the occasion by launching rainbow-branded products, pledging to donate portions of their profits to LGBTQ advocacy groups or highlighting their own corporate success creating welcoming workplaces.
But beyond the press releases and branded content, many of these same companies’ PACs are giving hundreds of thousands of dollars to political candidates who oppose measures favored by the LGBTQ community.
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InfogramThroughout the 2016, 2018, and first quarter of 2020 election cycles, 17 major companies’ PACs, all of whom actively promote their involvement with Pride organizations or LGBTQ advocacy groups, gave more than $17 million dollars to representatives who recently opposed the Equality Act. The 2019 House bill incorporated the LGBTQ community into federal civil rights law, making sexual orientation and gender identity prohibited categories for discrimination and guaranteeing equal access to federal services. Many of those opposing the bill — all Republicans — said it would have violated religious liberty and forced people of faith to violate their conscience.
Many of these 166 representatives have also opposed other legislation aimed at eliminating discrimination against the LGBTQ community in education, voting, housing, the courts, the military, and other fields, often leading the dissent against these bills.
Telecommunications giant AT&T, one of the first companies to adopt a nondiscrimination clause including sexual orientation and a principal sponsor of advocacy groups The Trevor Project and LOVELOUD Festival, has also contributed over $3 million to representatives who opposed the 2019 bill through its employee-funded PAC.
Through its official PAC, AT&T has contributed tens of thousands of dollars to Rep. Bill Flores (R-Texas), who suggested in 2015 that the Obergefell v. Hodges Supreme Court decision which legalized gay marriage nationwide was an example of “the breakdown of the family” that contributed to the then-ongoing 2015 Baltimore riots.
Flores’ statement came in an interview with Tony Perkins, then-head of the Family Research Council, a think tank that promotes the belief that “homosexual conduct is harmful to the persons who engage in it and to society at large and can never be affirmed.”
The PAC has also contributed $65,000 to the campaign of Rep. John Shimkus (R-Ill.), a staunch opponent of LGBTQ protections who has only voted in favor of measures favored by the LGBTQ community people, which he later admitted was accidental.
Aerospace and defense company Northrop Grumman — which co-sponsored DC Pride in 2019 — gave $2.7 million to 159 of these candidates in the three cycles through its PAC and was a major donor to several officials who led the charge against LGBTQ-friendly initiatives.
Northrop-affiliated PACs have contributed over $57,000 to House Minority Leader Kevin McCarthy (R-Calif.), who reportedly urged Republican representatives to vote down an amendment that would have prevented federal contractors from discriminating against members of the LGBTQ community. They have also given $17,000 to Republican Conference Chairwoman Liz Cheney (R-Wyo.), the daughter of former vice president Dick Cheney whose public opposition to gay marriage caused a family rift with sister Mary, who married wife Heather Poe in 2012.
All these companies contribute to candidates across partisan and ideological lines, and the mere fact that they donated to representatives opposing LGBTQ-friendly bills does not necessarily equate to an endorsement of such beliefs. Most corporate PACs give to incumbent members of both parties.
Most of the businesses surveyed had partisan contribution splits hovering around 50-50, giving slightly more to one party but nonetheless contributing substantial amounts to candidates opposing and supporting bills tailored to aid the LGBTQ community.
That broad pattern of giving has caused headaches for companies in the past, particularly those that contributed to Rep. Steve King (R-Iowa) as the congressman came under increased scrutiny over his controversial comments.
Lockheed Martin, which regularly appears in D.C. Pride as a corporate sponsor and parade participant, contributed more than $2.7 million to candidates who opposed the Equality Act through its PAC. This includes Rep. Kay Granger (R-Texas), who supported ratifying a constitutional amendment banning same-sex marriage and has voted against every piece of legislation proposing additional protections for the LGBTQ community, and Rep. Mike Rogers (R-Ala.), who came under fire in 2014 for allegedly making homophobic remarks to an Alabama real estate group in 2014. Both have received $60,000 dollars from the aerospace company since 2014.
Both Lockheed and Northrop have gone to great lengths to publicize their diversity initiatives, especially their designation as one of the “Best Places to Work for LGBTQ+ Equality” by the Human Rights Campaign.
Other industries are also publicly supporting Pride while financially backing politicians who opposed bills designed to support the LGBT community.
Ernst & Young, PWC, and Deloitte, three of the nation’s premier financial services firms and major sponsors of NYC Pride 2019, have collectively contributed almost $5.3 million to these candidates through their PACs.
While Ernst & Young advertises itself as “advocating for diversity and inclusivity,” company-affiliated PACs nonetheless contributed $20,000 to the campaign of Rep. Darin LaHood (R-Ill.), who, while in the Illinois state Senate in 2015, voted against a ban on gay conversion therapy, the widely-discredited practice of attempting to “cure” LGBTQ persons.
Even companies generally perceived as left-leaning have contributed significant sums to candidates opposed to additional legal protections for the LGBTQ community. Google‘s PAC, for example, has contributed $60,000 each to McCarthy and Rep. Cathy McMorris Rodgers (R-Wash.), who opposed reauthorizing the Violence Against Women Act in 2013 because the bill included provisions specifically tailored to protect the LGBTQ community.
Many members of the LGBTQ community have decried the increasing visibility of corporate sponsors in Pride celebrations nationwide, with numerous op-eds condemning what they see as major businesses paying lip service to actual issues while profiting from rainbow-branded memorabilia.
Apple recently reintroduced its Pride Edition Apple Watch, the rainbow cloth band available separately for $49. Coca-Cola is promoting a variety of rainbow-branded clothing options available on their site and Microsoft is selling a limited-edition Pride keyboard for $149.
Requests for comment from the Human Rights Campaign and all companies were unanswered by press time.
The post Companies’ political spending contradicts Pride support appeared first on OpenSecrets News.
- — Trump 2020 campaign ad payments hidden by layers of shell companies
- at 6/13/19 10:42am
UNITED STATES – JULY 21: Donald Trump, Republican nominee for president, speaks in the Quicken Loans Arena on the final night of the Republican National Convention in Cleveland, Ohio, July 21, 2016. (Tom Williams/CQ Roll Call)
The Trump 2020 campaign funneled money to a shell company tied to ad buyers at the center of an alleged illegal coordination scheme with the National Rifle Association (NRA) as recently as May 2019, according to new government records analyzed by OpenSecrets.
The previously unreported ad buys for Trump’s re-election campaign routed through a secretive limited-liability company known as Harris Sikes Media LLC were revealed in Federal Communications Commission (FCC) records in OpenSecrets’ political ad database.
The Trump campaign stopped reporting payments to ad buyers at American Media & Advocacy Group following allegations that the company facilitated illegal coordination between the campaign and the NRA through American Media’s affiliates National Media Research, Planning & Placement and Red Eagle Media Group. The companies share a storefront and employ many of the same individual ad buyers.
Trump’s 2020 campaign quietly continued to funnel money to the same individuals through payments Harris Sikes Media.
With no public-facing facade and no individual ad buyers listed on FCC records other than those who also authorized ads for through National Media affiliates, Harris Sikes Media appears to operate as a shell company.
A representative of National Media confirmed to OpenSecrets that Harris Sikes is affiliated with the firm, describing it as a “firewall entity” used as a way to distance teams of buyers from campaigns so there is no conflict. In multiple instances, the Trump campaign and NRA made ad buys at the same local radio station within days of each other in FCC filings that list the same individual ad buyers at different National Media affiliates, including Harris Sikes Media.
Shared vendors are one of the factors the Federal Election Commission (FEC) considers when determining if communications may constitute illegal coordination between a campaign and outside group supporting it.
Despite multiple FCC records of political ad buys through Harris Sikes totaling tens of thousands of dollars throughout 2018 and as recently as May 2019, the Trump campaign has not reported any transactions with the firm to the FEC since June 2017.
But National Media chief finance officer Jon Ferrell signed records of ad buys submitted under the guise of Harris Sikes Media to the FCC under the penalty of perjury as “agent of Donald Trump for President, Inc.” Other media buyers authorizing campaign ads under the guise of Harris Sikes Media also continue to be listed on FCC records for outside groups supporting Trump.
Payments for ad buys from May 2019 are not required to be disclosed to the FEC until the Trump campaign’s next quarterly report is due on July 15. However, a financial arrangement set up by Trump’s 2020 campaign may mean the payments revealed in FCC records reviewed by OpenSecrets won’t be reported to the FEC at all.
In the two years since the last reported disbursements to Harris Sikes Media, Trump’s campaign has reported significant payments to another obscure firm called American Made Media Consultants, a Delaware incorporated limited-liability company set up by Trump campaign manager Brad Parscale and controlled by Trump campaign officials.
Trump campaign representatives said AMMC was created to act as a clearinghouse for media spending that would otherwise be done by outside vendors who typically take commissions on media or ad buys. The Washington Examiner reported that the group was created after a push from Parscale for more “transparency” over the Trump campaign’s ad buys, in part as an attempt to subdue media controversy over Parscale’s firm being paid to handle the campaign’s media buying.
Parscale says he has no financial stake in AMMC and the Trump campaign has claimed no one working on the campaign benefits financially from AMMC. Several top Trump campaign officials — including Parscale, who pushed for AMMC’s creation — have been paid salaries through Parscale Strategies, which is also a Trump campaign vendor.
AMMC reportedly has an independent managing board, but the lack of transparency around how the entity is run and structured makes its composition difficult to determine from the outside looking in.
The model of presidential campaigns using in-house media buyers was pioneered by Mitt Romney’s 2012 campaign, which deployed a similar arrangement buying ads under the umbrella media firm dubbed American Rambler that was run by top campaign aides.
Taken to the next level going into the 2020 election, this structure has enabled the Trump campaign to avoid disclosing precise details about its spending, allowing it to report millions of dollars in disbursements to AMMC without every disclosing the identities of any underlying sub-vendors to the FEC.
Campaign finance regulations are silent on the concepts of disclosing sub-vendors in this context but the FEC has issued some guidance on the issue.
FEC advisory opinions dating back to 1983 indicate that a campaign may report disbursements to vendors hired for media services without reporting that vendor’s payments to sub-vendors.
In the opinions, the FEC advised that services actually provided vendors or sub-vendors must match the purpose of disbursements disclosed by the campaign, even if the sub-vendor is not disclosed.
There are some circumstances where a committee could violate their reporting obligations if they are intentionally trying to obfuscate the recipient. For example, the FEC found in 2002 that one campaign violated disclosure requirements by contracting directly with a vendor but reporting payments to a firm that served merely as a “conduit for payment” in an attempt “to conceal” the true vendor due to stigma associated with that vendor’s ties to onetime Ku Klux Klan Grand Wizard David Duke.
In the wake of a federal court case touching on some of these issues earlier in 2019, campaign finance experts have drawn a distinction between “creating a false trail to hide the purpose of the documents versus using an umbrella vendor and having an umbrella vendor doing specific things that should be individually reported but aren’t.”
Trump’s campaign has reported recent payments to AMMC for purposes such as “media placement,” which echo the details of earlier disbursements to Harris Sikes Media. But the lack of transparency around the campaign’s payments makes it nearly impossible for the public to determine whether the campaign is paying Harris Sikes Media through AMMC or if they have deployed some other payment structure entirely. The Trump campaign and representatives of the firms had not responded to request for comment on the issue at the time of publication.
Many ads by the NRA and America First Policies purchased through National Media affiliates during the 2020 election cycle focus on issue advocacy rather than electioneering, meaning they are not subject to the same rules barring coordination as ads that use the terms “vote for” or “vote against.” However, Trump is often still prominently featured with some FCC disclosures even listing the issue in the ad as “pro-Trump,” increasingly blurring the line between ads supporting Trump’s agenda and his campaign as the 2020 election nears.
The post Trump 2020 campaign ad payments hidden by layers of shell companies appeared first on OpenSecrets News.
- — Your email is for sale — and 2020 candidates are paying up
- at 6/13/19 9:17am
Both Donald Trump and Barack Obama have made campaign bucks by renting out their email lists. Meanwhile, 2020 Democrats are paying up to build their own lists. (JIM WATSON/AFP/Getty Images)
In a crowded campaign season where candidates spar to access coveted donor bases, building a robust list of email addresses of potential donors could be the winning ticket.
The Democratic National Committee’s (DNC) requirement that candidates reach 65,000 unique donors to earn a spot on the presidential debate stage created a rush for individual contributions. Political consultants say the scramble for donors created a historically expensive market for digital ads, many designed to obtain the email address and/or cell phone numbers of potential donors. The intense concentration has some candidates spending more than $35 to earn a single $1 donor through Facebook ads.
But campaigns have also spent cold hard campaign cash to acquire access to contact information of potential supporters, particularly in early primary states. Most campaigns get the majority of their online contributions through emails, even as other methods such as text message solicitation pick up steam.
“Email is still king for the average campaign,” said Greg Berlin, a founding partner at Democratic digital consulting firm Mothership Strategies. “However, campaigns with significant notoriety are able to capture donations from a much wider variety of online sources: direct donate ads, search, texting and organic social.”
FEC filings reveal that 2020 presidential contenders have shelled out significant sums to “rent” email addresses from fellow candidates or political consultants in an effort to reach new supporters, many of whom are unaware of the trades taking place between consulting firms and campaigns.
A simple list of emails may be worth thousands, if not millions of dollars. Because acquiring a past donor’s email address does not guarantee a contribution for another candidate, marketing firms that buy up the lists from campaigns, and neophyte candidates who need cash will typically make a deal called “revenue sharing.” For every contribution the campaign scores from a donor based on a shared email, the consulting firm or email owner gets a cut.
Federal candidates and groups have already spent at least $6.7 million to rent or acquire lists including email addresses or other contact information through the first quarter of 2019, according to expenditures described in FEC filings.
Klobuchar (left) has disclosed acquiring lists from various sources. (Photo By Tom Williams/CQ Roll Call)
Sen. Amy Klobuchar (D-Minn.) spent a whopping $625,547 with Democratic consulting firm Rising Tide Interactive for “list acquisition” and $30,000 and $25,000 to the Iowa and New Hampshire Democratic parties for email lists, respectively. With nearly $4 million in leftover campaign money from her 2018 Senate race, Klobuchar could easily afford to make the early investment, as could fellow senators seeking the nomination.
The state parties in early primary states are making serious money by renting out their supporters’ contact information.
Sen. Elizabeth Warren (D-Mass.) paid $30,000 to the Iowa Democratic Party, $25,000 to the New Hampshire Democratic Party and $13,500 to Democrats.com to rent lists of contacts. Sen. Cory Booker (D-N.J.) also reported paying the Iowa Democratic Party $30,000, this time for “voter file” information, which typically includes names, addresses and phone numbers of registered voters.
In preparation for a presidential run last cycle, former Vice President Joe Biden’s American Possibilities PAC paid $34,329 to two companies for “list acquisition.”
Former Rep. John Delaney (D-Md.), who began his White House bid in 2017, paid a total of $132,013 to several Iowa candidates during the 2018 cycle for their email lists. Those include unsuccessful Iowa gubernatorial candidate Fred Hubbell and Rep. Cindy Axne.
These closed-door agreements between campaigns and email owners occur unbeknownst to donors. When voters sign up to receive campaign updates or give a few bucks to their favorite candidate, they don’t often know their contribution may be divided up or their emails shared. And these transactions aren’t always labeled as such in FEC filings, potentially leaving millions of dollars in list-sharing activities unaccounted for.
Nobody’s list is as large as that of President Donald Trump, whose campaign has built up a massive following by spending big on social media. Using a head start, Trump’s campaign has outspent all of the 2020 Democrats combined on digital ads, shelling out $19 million compared to the main Democratic presidential contenders’ $18 million since May 2018.
Trump’s campaign manager Brad Parscale told Fox News in January the campaign has “already harvested really what we need off Facebook.”
Trump has built a massive list primarily through digital ads. (AP Photo/Evan Vucci)
“So, the way you have to look at this is, we try to harvest and bring people in to become direct contacts,” Parscale told Fox News. “Cell phone numbers, email addresses, things that we can have direct contact. A good candidate might have four to five million by Election Day. We’ll probably [have] 40, 50, 60 million.”
Political groups and candidates are eager to get their hands on Trump’s massive list of contacts. Luckily for them, those email addresses and cell phone numbers are already up for sale. The New York Times reported in October 2018 that the Trump campaign signed a contract with Virginia-based consultant Excelsior Strategies to rent contact information of Trump supporters.
The list sharing appears to already be in effect. Excelsior Strategies paid the Trump campaign $548,107 in February for “list rental revenue.” Parscale called the deal a “win-win” because Republican candidates and groups would get access to potential supporters and the Trump campaign would make more money.
Those contacts could be crucial for Republicans hoping to build a small dollar donor base in the 2020 election. Social media giants allow advertisers to narrowly target users to find likely supporters, but political consultants still use a mix of traditional list rental and social media advertising to build their lists.
“Digital advertising to list build is like drilling for oil,” said Michael Duncan, a Republican consultant at Cavalry LLC. “You dig a lot of holes and when you hit a gusher, you turn up the budget. The email prospecting universe is helpful in that those emails are already validated.”
While candidates have expressed frustration with the DNC debate rules that have forced campaigns to cut staff budgets and ramp up digital spending, Duncan said the rules will ensure the eventual Democratic nominee has a massive list of potential donors.
“The candidates might hate it, but by incentivizing candidates to invest in digital donor prospecting, they are building an even larger centralized database,” Duncan said. “So whether you’re Andrew Yang or you’re Bernie Sanders, if you get to that 65,000 number, you’re benefiting whoever the nominee is.”
List sharing isn’t new … or looked down upon
Like Trump, Barack Obama had quite the large list of supporters too. And by his second term, he was eager to rent it out.
The Obama campaign gave data to the DNC in 2013 but reportedly did not give out email addresses. Obama’s campaign instead rented those email addresses out to Organizing for Action, a 501(c)(4) launched by former Obama operatives, and earned $2.6 million between 2013 and 2014.
In the two years following Obama’s second presidential race, his campaign raked in millions of dollars renting out supporters’ contact information. Much of his golden listserv went to AB Data, a marketing consulting firm that, among other services, rents contact information, including physical addresses, to other groups looking to reach potential donors.
AB Data rented Obama lists in the 2018 cycle. Candidates then paid AB Data for “direct marketing.” For instance, gun control group Giffords — run by former Rep. Gabby Giffords (D-Ariz.) — has continued to pay them into 2019. Giffords’ husband Mark Kelly is currently running for Senate in Arizona.
Obama’s campaign raked in millions of dollars by renting out its massive list, as did his 2012 opponent Mitt Romney. (AP Photo/Mandel Ngan, Pool)
Obama’s 2012 opponent, Mitt Romney, also leaned on list rentals. Romney’s defunct campaign made nearly $2.7 million in the 2014 cycle by sharing its list with Granite Lists, Newsmax Media, Targeted Victory and FSL Connect, LLC. The campaign made another $2.8 million between 2015 and 2016 selling the list to the same companies.
Granite Lists paid the most — $945,813 — in the two years after his presidential campaign. The New Hampshire direct marketing company has continued to pay Romney’s presidential campaign into the 2020 cycle — spending about $45,300 just this year.
Billing itself as the go-to for Republican lists, Granite Lists offers a number of deals. Customers may select a number of donor lists ranging from Paul Ryan, Scott Walker and Mitt Romney to “anti-Elizabeth Warren” donors. For example, one list includes 35,938 emails of donors who gave at least $15 to Ron Johnson, offering 1,000 email addresses for $120.
News outlets are getting in on the action, too. Through the first quarter of 2019, the Democratic Congressional Campaign Committee (DCCC) paid Kos Media, LLC, the company that runs the Daily Kos political blog, a total of $29,408 for “list rental.” The Daily Kos sends emails to a segment of its list on behalf of partner organizations that give its audience the opportunity to sign up to join the partner organization, said Carolyn Fiddler, Daily Kos communications director.
Nonprofit news outlet Mother Jones also took in list rental money, receiving $32,000 from left-leaning groups to start the new year.
The practice was worthwhile for some media outlets last cycle, too. A host of left-leaning groups paid weekly magazine The Nation a total of $231,402 for “list rentals” during the 2018 cycle. Caitlin Graf, vice president of communications at the magazine, said the company sends out dedicated emails on behalf of its sponsors but does not give out its readers’ information to sponsors.
A new group called Bold Conservatives PAC reported paying Newsmax Media $17,800 for “list rental to identify supporters,” among other things, last year. Newsmax’s advertising kit notes that sponsors can pay for email alerts sent by the news company.
The business of selling lists is a lucrative one. Democratic activist John Hlinko was paid more than $2 million by pro-Democratic groups for his email lists in the 2018 cycle alone. He runs the group Left Action, which has 1.3 million followers on Facebook and primarily posts anti-Trump memes. Like many other candidates and groups, Left Action uses petitions to obtain email addresses of politically-active Democrats.
The group has continued to make money in the 2020 cycle. The National Democratic Training Committee PAC paid a total of $204,000 to Left Action for “list rental” as it attempted to reach potential Democratic candidates.
List rental is particularly useful for new groups looking to build an audience right away. But it will also be important in the 2020 election as Democrats and Republicans fight for small donors, which are becoming crucial to building and sustaining a major campaign.
The post Your email is for sale — and 2020 candidates are paying up appeared first on OpenSecrets News.
- — After leaving prominent trade group, alliance of food giants hires first lobbyists
- at 6/12/19 12:55pm
Mars, Inc. is one of four companies that make up the new Sustainable Food Policy Alliance. (via flickr – user Like_the_Grand_Canyon)
A new alliance of major food companies hired two former congressional staffers as lobbyists to petition the federal government on food and agricultural issues.
The Sustainable Food Policy Alliance was founded by Danone North America, Mars, Nestlé USA and Unilever USA last year after the four companies left the Grocery Manufacturers Association — the predominant food lobby group in Washington — in 2017 amid disagreements over the trade association’s stance on key policy issues.
Danone is a French multinational corporation whose subsidiaries include brands such as Horizon Organic, while the Amsterdam-based Unilever includes popular brands such as Ben & Jerry’s. Nestle, one of the largest food companies in the world, owns dozens of brands including Häagen-Dazs and San Pellegrino. Mars, the only private company of the four, has numerous candy brands.
Since its launch in July 2018, the Sustainable Food Policy Alliance has spoken on a range of environmental issues. In October, the group submitted comments to the Environmental Protection Agency expressing concerns about the Trump administration’s proposed Affordable Clean Energy Rule, which would replace the Obama-era Clean Power Plan.
In April, the organization released a climate policy proposal that advocated for a federal carbon pricing system, as well as other measures aimed at reducing carbon dioxide emissions in accordance with the goals the U.S. had set as part of the 2016 Paris Agreement. The group’s proposal was fairly consistent with the four companies’ previous public statements on environmental issues — Nestlé and Unilever have spoken in favor of carbon pricing before, while Danone independently pledged to achieve net zero carbon emissions by 2050, and Mars announced last year it would invest $1 billion in fighting climate change.
At the same time, some of these previous sustainability efforts have been met with criticism. Nestlé in particular has encountered backlash from environmental activists over its continued collection of spring water, an issue on which the company has continued to lobby this year.
The Alliance has also issued comments on proposed labeling of genetically engineered foods, a subject on which its members sometimes conflicted with the positions held by the Grocery Manufacturers Association. In 2017, the Association successfully campaigned for the FDA to extend the time allocated to companies to comply with new nutritional labeling rules, to the chagrin of companies such as Mars, which had already modified their labels to follow the new rules. The candy company left the trade association shortly thereafter.
The loss of several of its high-profile members was only one of several controversies for the Grocery Manufacturers Association in recent years. The group also faced criticism over campaign finance violations in 2013, when it failed to disclose its donors as it advocated against a ballot initiative concerning GMO labeling in Washington state. The Association was initially slapped with an $18 million fine, which would have been the largest in the history of campaign finance, but the amount was reduced to $6 million by an appeals court last year.
The Association, which spent more than $14 million on federal lobbying in 2013 when GMO labeling was considered as an amendment to that year’s farm bill, has seen its lobbying efforts have fallen off substantially in recent years. The organization, which named a new president last summer, spent less than $2 million on federal lobbying in 2018 and just $370,000 during the first quarter of 2019, on pace to be its slowest lobbying year since 2006.
The Sustainable Food Policy Alliance, meanwhile, is looking to grow its influence. The group’s initial lobbying disclosure, dated April 29, did not specify bills the group might lobby on. Both of the lobbyists it hired, Joel Leftwich and Grant Leslie of the Glover Park Group, have been through the revolving door: Leftwich served as the majority staff director to the Senate Committee on Agriculture, Nutrition and Forestry until 2017, while Leslie was formerly an aide to Secretary of Agriculture Tom Vilsack as well as two Democratic senators.
The four individual companies have also continued to maintain their own robust lobbying operations. Unilever spent $480,000 in the first quarter of 2019 lobbying in favor of banning animal testing and giving the FDA additional authority to regulate personal care products. Mars and Nestlé spent $430,000 and $315,000, respectively, during the first quarter, and both lobbied on issues including the implementation of President Donald Trump’s 2017 tax law and the 2018 Farm Bill. Danone has lobbied comparatively little so far this year, spending only $90,000 in the first quarter.
The post After leaving prominent trade group, alliance of food giants hires first lobbyists appeared first on OpenSecrets News.
- — Raytheon-United Technologies merger would create influential defense giant
- at 6/11/19 11:27am
(JIM WATSON,NOVA SAFO/AFP/Getty Images)
The proposed merger between Raytheon and United Technologies could result in a defense manufacturing giant topped only by Boeing, but the combined lobbying and campaign finance operation of the potential $74 billion company could be a powerful force in Washington as well.
Between Raytheon and United Technologies, the two gave a combined $3.6 million to candidates in the 2018 cycle. The two companies’ 2018 contributions were split 54 percent to Republicans and 46 percent to Democrats.
Among fellow defense industry giants, Raytheon and United Technologies ranked fifth and sixth in 2018 contributions, giving with $2.4 million and $1.2 million respectively. The current top three include Northrop Grumman ($4.3 million), Boeing Co ($3.8 million), and Lockheed Martin ($3.5 million). There’s a relatively a large gap to get to No. 4 , General Dynamics, which contributed $2.4 million in the 2018 cycle.
Defense industry PACs typically contribute to lawmakers with certain committee assignments and geographic proximity to the company. Rep. John Larson (D-Conn.) represents the district currently home to United Technologies. The company and its affiliates comprised his second highest donor group over the last three election cycles. Larson is chairman of the Social Security subcommittee of the House Ways & Means Committee.
Rep. Richard Neal (D-Mass.), chair of the House Ways & Means Committee, receives hefty contributions from both Raytheon and United Technologies. His district is home to many of United Technologies’ workers. The company and its affiliates contributed $10,000 to his campaigns in each of the last three election cycles. Massachusetts-based Raytheon also gave the same amount over that time except for 2018 when it was evident Democrats would retake control of the House and Neal would chair a powerful committee. In 2018, Raytheon and its affiliates increased its contributions to Neal to $36,650.
Lobbying by the defense sector was a $126 million industry in 2018, with more than 770 lobbyists courting lawmakers. Last year, United Technologies spent $10.2 million on lobbying while Raytheon spent less than half that amount at $4.6 million. A whopping 95 percent of United Technologies’ lobbyists in the first quarter of 2019 were members of the revolving door.
If the merged firm retained the same lobbying profile, the combined $14.7 million force would account for 12 percent of the defense sector and 15 percent of its lobbyists. That would bring it into range to be one of the top 20 lobbying spenders alongside other major corporations such as Northrop Grumman ($14.4 million), Boeing ($15.1 million), Facebook Inc ($12.6 million), and Amazon.com ($14.4 million).
The planned merger is set to take place over the next year, but antitrust regulators must sign off first. While most analysts don’t believe it’s likely to get held up, President Trump left the door open when asked about the merger on CNBC Monday morning.
“When I hear they’re merging, does that take away more competition? It becomes one big, fat, beautiful company,” Trump said. “But I have to negotiate, meaning the United States has to buy things.”
While interest groups and corporations — particularly those aiming to get a merger approved — have increasingly hired Trump-tied firms, Raytheon and United Technologies have so far only hired one firm with White House connections.
The post Raytheon-United Technologies merger would create influential defense giant appeared first on OpenSecrets News.
- — 2020 Democrats scramble for donors ahead of debate deadline
- at 6/11/19 8:36am
Senators Elizabeth Warren, D-Mass. and Sen. Kirsten Gillibrand, D-N.Y. (Tom Williams/CQ Roll Call)
Facing the prospect that they might not qualify for the Democratic National Committee’s upcoming debates, 2020 presidential hopefuls are getting creative in their race to find donors. Not all candidates are happy about the rules, however, and many are finding that amassing small-dollar supporters is itself an expensive process.
Per DNC rules set in February, in order to be eligible for the first DNC debate, candidates need either at least 65,000 individual donors, including at least 200 in each of 20 states, or 1 percent support in three national or early state polls. Twenty candidates currently qualify under these rules, but others — including Rep. Seth Moulton (D-Mass.), Gov. Steve Bullock (D-Mt.), former Sen. Mike Gravel (D-Alaska) and mayor of Miramar, Fla., Wayne Messam — have failed to meet either threshold.
Bullock was set to qualify based on polling until the DNC declared last week that one of the three polls in which he hit 1 percent — a Washington Post/ABC poll from January — did not count on the basis that the poll question was too open-ended. The Montana governor, who was the only Democrat to win a 2016 statewide race in a state that went for Trump, has turned the slight into a last-minute fundraising pitch on Facebook, where he spent more than $16,000 on advertisements last week.
“Governor Steve Bullock is the MOST POPULAR Democratic Governor in the country — but the DNC just unmasked a rule that could block just him from taking the Presidential debate stage,” one ad says. “Will you rush just $1 to help Steve Bullock get to the first debate?”
Even if Bullock, Moulton, Gravel or Messam manages to hit 65,000 donors before the end of the day tomorrow, DNC rules still cap participation in the debates at 20 candidates and the party has discretion as to who will participate, with preference going to candidates who met both qualifications.
Six candidates qualified for the debates on the basis of polls but do not have 65,000 donors: former Gov. John Hickenlooper (D-Colo.), former Maryland Rep. John Delaney (D-Md.), Sen. Michael Bennet (D-Colo.), New York Mayor Bill de Blasio and Reps. Tim Ryan (D-Ohio) and Eric Swalwell (D-Calif.).
Hickenlooper, who declared his candidacy in early March, raised $2 million during the first month of his campaign, 90 percent of which came from individual contributions greater than $200. Bennet, De Blasio, Ryan and Swalwell did not declare that they were running until April, and thus did not report fundraising statistics for the first quarter.
Delaney, who announced his presidential candidacy in July 2017, has self-financed his campaign to a tune of $16.4 million while struggling to pick up grassroots supporters. Through the end of the first quarter of 2019, he raised just $1.7 million from outside donors.
In an attempt to pick up enough supporters to qualify for the debates, the former Maryland congressman, whose net worth was estimated to be $232 million in 2015, announced in mid-March that he would personally donate $2 to charity for every $1 donation his campaign receives. Delaney told the New York Times that he was likely to lose money in recruiting donors regardless, and that he preferred to give money to nonprofits over a digital marketing firm.
More recently, Delaney has turned to constituencies that have generally received little attention in American electoral discourse. Since May 30, his campaign has run Facebook ads aimed the Filipino and Sri Lankan communities. He spent nearly $9,000 on Facebook ads last week.
Social media has been a key source of small-donor fundraising for Democrats over the last few election cycles due to online fundraising platforms such as ActBlue, which recorded more than 42 million donations during the 2018 midterm cycle.
Online advertisements are costly, though. Sen. Kirsten Gillibrand’s (D-N.Y.) campaign announced Monday that she had reached the 65,000 donor threshold over the weekend. The achievement came after a fervent digital push as her campaign spent more than $200,000 on Facebook ads between June 2 and 8. The campaign has spent $640,000 on Facebook ads alone since its formal launch in March.
Gillibrand is not alone when it comes to heavy spending on digital advertising — former Vice President Joe Biden and Sens. Kamala Harris (D-Calif.), Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) have each spent more than $1 million on Facebook ads already. All told, the 24 Democratic presidential candidates have spent nearly $12 million on ads on the site.
Although Biden, Harris, Sanders and Warren are among the candidates who have qualified for the debates based on both metrics, they — along with other 2020 hopefuls — are already preparing to meet the requirements for the DNC’s third round of debates, which will take place in September. At that point, the DNC will require that candidates receive contributions from at least 130,000 donors and hit at least 2 percent in four polls conducted between June 28 and August 28.
A few candidates have already met that donor threshold. Sanders’ campaign reported that the Vermont senator received contributions from 223,000 donors within 24 hours of the campaign’s launch. Former Rep. Beto O’Rourke (D-Texas) got 128,000 donors on his first day. Warren, Harris and mayor Pete Buttigieg have all said they reached 130,000 donors.
California entrepreneur Andrew Yang tweeted in late May that he needs only 20,000 additional donors to meet the higher benchmark, and Biden’s campaign likely surpassed it as the former vice president drew nearly 97,000 donors on the first day of his campaign alone.
Those candidates, along with Sens. Cory Booker (D-N.J.) and Amy Klobuchar (D-Minn.), both of whom have regularly polled at or above 2 percent, will likely make the stage in September.
But other candidates have more to worry about. The four who have not qualified for the first debate will face an uphill climb, as will motivational speaker and wellness guru Marianne Williamson, who managed to crack 65,000 donors but has never reached 2 percent in polling and Rep. Tulsi Gabbard (D-Hawaii), who has hit the 2 percent threshold in only one poll.
Several candidates, including Gov. Jay Inslee (D-Wash.) and former mayor of San Antonio and Secretary of Housing and Urban Development Julián Castro, have already begun using the 130,000 figure as a new fundraising tactic in their latest digital ads. Inslee has also run ads critical of the DNC after the organization declined his request to host a debate focused solely on climate change despite support from half a dozen candidates.
The first round of DNC debates will take place on June 26 and 27 at 9 p.m. EST, with 10 candidates speaking each night. The DNC will host a second round of debates with the same qualification requirements in July before increasing the requirements for its debates in September.
The post 2020 Democrats scramble for donors ahead of debate deadline appeared first on OpenSecrets News.
- — Koch brothers float possibility of backing congressional Democrats in 2020 primaries
- at 6/7/19 3:15pm
Charles Koch (Patrick T. Fallon for The Washington Post via Getty Images)
Americans for Prosperity (AFP), the Koch brothers-backed political organization that has spent tens of millions of dollars supporting Republican candidates in the last several election cycles, says it is open to supporting candidates of any political party, according to an internal memo from AFP CEO Emily Seidel obtained by CNBC.
Since its founding in 2004, AFP has been known as one of the most influential conservative organizations in the U.S. During the 2018 midterm cycle, the group — and its super PAC, AFP Action — spent a combined $15.3 million on independent expenditures aiding Republican candidates. AFP also engages in other forms of advocacy, including significant local organizing and issue ads, which do not have to be disclosed to the FEC.
Over the last two decades, the Koch network’s major groups — AFP and Freedom Partners — have cumulatively spent about $120 million in independent expenditures supporting Republican candidates or opposing Democratic candidates, according to OpenSecrets data. They have not spent a single dollar supporting Democratic candidates during that time.
AFP founder David Koch and his brother Charles have given millions of dollars from their personal fortunes to Republican candidates and causes over the last few decades. In recent years, however, the Koch brothers have come into conflict with President Donald Trump on issues including trade and immigration, and they reportedly told other major conservative donors this winter that they will not back the incumbent president in 2020.
The latest memo nonetheless reflects a surprising shift in the Koch network’s priorities. However, AFP’s stated support for politicians of any party appears to be limited to incumbent candidates facing primary challengers.
“AFP or AFP Action will be ready to engage contested U.S. Senate, U.S. House, and state-level primary races, including Republican, Democrat, Independent or otherwise, to support sitting legislators who lead by uniting with others to pass principled policy and get good things done,” the memo says.
AFP has usually concentrated its spending on general elections, but spending during the primaries could allow the group to extend its influence into districts where one party dominates.
Some progressive candidates excelled in safe Democratic districts in 2018, with Rep. Alexandria Ocasio-Cortez (D-N.Y.) knocking off the more moderate incumbent Joe Crowley in a district that skews D+29, according to the Cook Partisan Voting Index. Rep. Dan Lipinski (D-Ill.), whose stance on abortion separates him from most Democrats, narrowly fended off a primary challenge in a D+6 district in 2018 and will face one again in 2020.
This isn’t the first time the Koch network has signaled that it is open to backing Democrats. Seidel and Charles Koch told donors last July they would support Democrats who reflected their policy model, but AFP did not explicitly support any Democrats during the 2018 midterms. The group actively campaigned against several moderate Democrats including former Sens. Claire McCaskill (D-Mo.) and Bill Nelson (D-Fla.), both of whom lost their races. The organization did briefly run digital ads thanking former Sen. Heidi Heitkamp (D-N.D.) for voting in favor of a financial deregulation bill. AFP did not campaign for Heitkamp’s Republican challenger, but she lost anyway.
Although AFP has never backed a Democratic candidate, the Koch Industries PAC made donations to a handful of conservative Democratic incumbents during the 2018 midterm cycle, including Reps. Henry Cuellar (D-Texas) and Collin Peterson (D-Minn.).
This week’s announcement, however, may suggest a tangible shift in strategy for AFP. In addition to renewed openness, the group announced it will launch four issue-specific PACs focused on economic opportunity, free speech, free trade and immigration reform. AFP has previously fought for Right to Work laws and been involved with issues of free speech on college campuses. It has also opposed tariffs, advocated for embracing immigration as a way to supplement an aging labor force and supported criminal justice reform with the goal of reducing mass incarceration.
Charles Koch announced in May that a number of Koch-led organizations will undergo restructuring. Freedom Partners will cease to exist, while other groups including the Latino-focused Libre Initiative will move under AFP.
Seidel’s memo said AFP will begin to announce the candidates it will support in the coming weeks.
The post Koch brothers float possibility of backing congressional Democrats in 2020 primaries appeared first on OpenSecrets News.
- — Latvian banker accused of aiding North Korea hires ex-Trump official as lobbyist
- at 6/7/19 1:08pm
An administrative building of the ABLV Bank in Riga, Latvia. (Alexander Welscher/picture alliance via Getty Images)
A Latvian national accused of laundering billions of dollars for the world’s most dangerous regimes has a powerful new friend in Washington.
Bryan Lanza, deputy communications director for the Trump 2016 presidential campaign, agreed to lobby on behalf of Ernests Bernis, the Latvian citizen and majority shareholder of ABLV Bank, which allegedly laundered money for North Korea’s nuclear program as well as corrupt politicians in Russia, Azerbaijan and Ukraine.
Lanza, the managing director of lobbying firm Mercury Public Affairs who “is in regular contact with White House officials,” revealed in the document that he will advocate on Bernis’s behalf through the company ASG Resolution Capital regarding the liquidation of ABLV, Latvia’s third largest bank, which collapsed in 2018 following proposed sanctions from the U.S. Treasury Department.
Treasury detailed the bank’s central role in allegedly facilitating widespread public corruption across Eastern Europe. That includes the theft of more than $1 billion worth of financial assets from Moldovan banks and financial transactions undertaken for nationally and internationally recognized criminal groups. Most notably, the bank had done business with five entities designated by the United States and United Nations as North Korean assets, including some who have been actively supporting the rogue nation’s missile programs.
The Treasury decried the bank’s total lack of risk mitigation or compliance practices, saying that while it could not be certain the bank knew it was facilitating criminal transactions, that ignorance proved the bank abdicated professional responsibility for its own actions. The Treasury cut all ties between the bank and the U.S. market, isolating the bank from American customers and blocking the flow of dollars to the institution.
The Treasury’s announcement came amid the bank’s efforts to expand into the American market.
Following the report’s release, ABLV plummeted toward collapse, losing more than 20 percent of its deposits in less than a week as investors scrambled to withdraw their money before the bank froze its assets. The bank denied all wrongdoing and promised to “rebut this outrageous defamatory information” but could not survive the loss of the deposits, beginning the process of voluntary liquidation in June 2018.
But as of May 2019, the Treasury has not accepted the proposed liquidation plan. Bernis, who owns 43 percent of ABLV shares and would profit handsomely from the liquidation, is likely seeking to influence the Trump administration on the matter.
The man he chose to represent him, Bryan Lanza, has translated his prominent positions on the Trump campaign and transition team into a successful, albeit controversial, lobbying career.
Lanza appeared often on CNN between October 2017 and May 2018 as a Trump surrogate, attracting significant controversy for attacking Robert Mueller’s investigation into Russian election interference while simultaneously representing a Russian firm seeking to pressure the U.S. government into dropping the sanctions imposed on it.
That business, EN+ Group, was majority-owned by Oleg Deripaska, a close confidant of Russian president Vladimir Putin who was sanctioned by the Treasury in April 2018 for racketeering, money laundering and potential ties to organized crime and assassinations of his business rivals. Lanza lobbied the U.S. government on behalf of EN+ as the firm restructured the business to reduce Deripaska’s ownership just below the required limit for the removal of sanctions and transferred millions of dollars in shares to Deripaska’s children. EN+ was removed from the sanctions list in January 2019.
Lanza’s group attracted significant attention in 2016 for its work lobbying on behalf of the European Centre for a Modern Ukraine, a nonprofit with ties to former Russian-backed Ukrainian president Viktor Yanukovych. Mercury, along with Skadden Arps and the Podesta Group, was recruited to improve Yanukovych’s image by future Trump campaign chairperson Paul Manafort, who was himself a lobbyist for another Yanukovych-tied nonprofit. When Manafort pleaded guilty to failing to register as a foreign agent, Mercury came under harsh criticism for failing to register its own lobbying work with the Department of Justice.
Lanza has agreed to lobby for a number of other international clients, including Chinese telecom ZTE and the Libyan and Turkish governments.
Lanza has been a stalwart in conservative circles for decades, having also served as communications director for Citizens United, the conservative political committee that served as the plaintiff in the landmark 2010 Supreme Court case which, combined with decisions in other litigation enabled the rise of super PACs.
The post Latvian banker accused of aiding North Korea hires ex-Trump official as lobbyist appeared first on OpenSecrets News.
- — Banking groups lobby Congress to enable banking services for cannabis companies
- at 6/7/19 9:50am
Photo by Get Budding on Unsplash
Trade groups believe it’s high time to push for legislation that would make life easier for the budding cannabis industry.
The SAFE Banking Act, which would enable banks and credit unions to do business with cannabis-related businesses in states where marijuana is legal, is poised to pass the House after overwhelmingly advancing through the House Financial Services Committee and being waived through the House Judiciary Committee.
Naturally, groups representing the cannabis industry are pushing for the bill, which they say would help grow the industry in the U.S. and make it significantly safer. Members of the National Cannabis Industry Association descended on Capitol Hill in late May for an annual lobbying blitz. The trade group ramped up its lobbying spending to an all-time high of $560,000 last year.
Overall, the industry reported spending a record $2.7 million on lobbying in 2018. It’s on pace to surpass that number this year, shelling out more than $900,000 through the first quarter.
But pro-cannabis groups aren’t the only ones pushing for the bill. The country’s largest banking associations are also lobbying in support of the SAFE Banking Act, joining an even 50 organizations lobbying on the measure.
A longstanding lobbying powerhouse, the American Bankers Association, is supporting the bill, stating it provides “much needed clarity for banks in states where cannabis is legal.” The group has already spent more than $2.4 million on lobbying through the first quarter of 2019, deploying 65 lobbyists and 37 members of the revolving door club.
Most financial institutions avoid the cannabis industry due to the risk of prosecution from the federal government, which considers cannabis a Schedule 1 drug. Thus, most cannabis companies use cash for all transactions, which has led to a number of robberies in pot-legal states.
The Credit Union National Association, which regularly spends upwards of $4 million on lobbying each year, also lobbied on the bill and testified in support of the measure, arguing that financial institutions can safely provide services for cannabis companies.
“In terms of safety, statistics show that cash-only businesses increase the risk of crime,” Oregon-based Maps Credit Union executive Rachel Pross told the House Financial Services Committee. “This is especially true in the cannabis sector given the lack of access to basic financial services.”
Another major trade group with longstanding influence in Washington, D.C., Independent Community Bankers of America, is also pushing for the measure. On behalf of the trade association, Gregory Deckard, chairman and CEO of Washington-based State Bank Northwest, testified that state-backed banks created specifically to serve the cannabis industry would not be feasible, citing a 2018 California study.
Few major banks have publicly thrown support behind the bill, though financial services behemoths Wells Fargo and Citigroup lobbied lawmakers over provisions in the bill in the first quarter of 2019. It’s clear some members of the banking industry see potential in legalized marijuana, as Citigroup has reportedly begun to reconsider its role in cannabis-related banking.
The House version of the SAFE Banking Act has a whopping 206 co-sponsors, including 180 Democrats and 26 Republicans.
Republican opposition to marijuana has mellowed in recent years. Former House Speaker John Boehner (R-Ohio), formerly a staunch critic of marijuana legalization, now sits on the board of Acreage Holdings and stands to make millions off of his stake in the marijuana company. Acreage Holdings lobbied in support of the SAFE Act in the first quarter of 2019, arguing that current federal law “results in a lost opportunity for the US economy.”
Sen. Cory Gardner (R-Colo.), a Republican representing the first state to legalize recreational marijuana along with Washington, has pushed several cannabis-friendly bills but has unsuccessfully sought to get Senate Republican leadership to endorse his legislation. He introduced the SAFE Banking Act in the Senate alongside Sen. Jeff Merkley (D-Ore.). Gardner joins Alaska senators Lisa Murkowski and Dan Sullivan, along with Kentucky’s Rand Paul and North Dakota’s Kevin Cramer, as the five Republican co-sponsors. In Alaska, which legalized marijuana in 2014, a major credit union recently began offering financial services to cannabis companies.
The trade groups pushing the bill are major Republican donors — affiliates of the American Bankers Association contributed $2.2 million to Republican congressional candidates in 2018 — but their support may not be enough to influence Republican leadership.
Senate Banking Chair Mike Crapo (R-Idaho) has bluntly said he won’t commit to moving the legislation forward. The Republican-held Senate Appropriations Committee in 2018 blocked an amendment that would similarly allow financial institutions to do business with cannabis businesses. Senate Majority Leader Mitch McConnell has blocked similar legislation from Gardner, despite knowing that the Colorado senator faces a tough re-election in a pot-friendly state.
If the SAFE Banking Act falters, cannabis banking advocates have another option to fall back on. House Democrats plan to include similar protections in their proposed annual spending bill.
The post Banking groups lobby Congress to enable banking services for cannabis companies appeared first on OpenSecrets News.
- — Public and industry backing probably won’t help the DREAM Act in the Senate
- at 6/6/19 3:36pm
(Aurora Samperio/NurPhoto via Getty Images)
The DREAM Act, which would provide a path to citizenship for immigrants brought to the United States illegally as children, passed the House of Representatives this week, with seven Republicans joining a unanimous Democratic caucus in voting yes.
But the bill — formally known as the Dream and Promise Act of 2019 (H.R. 6) — faces a bleak outlook in the Republican-held Senate, and a certain veto from President Donald Trump if it manages to arrive at his desk.
Senate Majority Leader Mitch McConnell (R-Ky.) said the upper chamber is unlikely to vote on the House’s version of the bill. He said he would like to see broader immigration legislation that would force some liberal Democrats to compromise on increased spending for border security.
Although Congress has not passed major immigration reform since the 1980s, lobbying on the issue remains strong. More than 400 organizations have lobbied on immigration so far in 2019. A record 647 groups lobbied on immigration in 2013, when a different version of the DREAM Act was under consideration.
The fight over the DREAM Act dates back nearly two decades. The first version of the bill was introduced by Sen. Dick Durbin (D-Ill.) and former Sen. Orrin Hatch (R-Utah) in 2001, but various similar bills have repeatedly stalled over the last 18 years.
The most recent version passed by the House this week would allow roughly 2.5 million undocumented immigrants who came to the U.S. as minors, including members of the Deferred Action for Childhood Arrivals (DACA) program, to gain citizenship if they meet certain requirements. It would also allow hundreds of thousands of other immigrants who have been in the country under Temporary Protected Status (TPS) or Deferred Enforced Departure (DED) to gain permanent residency. A poll conducted in May by the Global Strategy group found that 77 percent of likely 2020 voters supported creating a path to citizenship for DACA recipients.
Pro-immigrant nonprofit groups that lobbied on the bill included the National Immigration Law Center (NILC), J Street and FWD.us.
“The passage of the Dream and Promise Act is a testament to the work, commitment and growing power of immigrant communities and the movement for immigrant justice,” said Marielena Hincapié, executive director of the NILC, in a statement. “This victory, eight years in the making, is more urgent now than ever before.”
Both the NILC and FWD.us ran Facebook ads in the days preceding the vote, and FWD.us flew out DACA recipients to Washington to meet with legislators earlier this year.
The DREAM Act also had a number of supporters in the corporate sphere. In February, leaders of more than 100 major companies published an open letter to Congressional leaders in both parties encouraging them to protect Dreamers, or DACA recipients. The U.S. Chamber of Commerce, the nation’s largest business lobbying group, also favored H.R. 6.
“Our communities, businesses, and economy are all made stronger by the many contributions of Dreamers and TPS recipients, said Neil Bradley, executive vice president and chief policy offer of the U.S. Chamber of Commerce, in a statement after the bill passed the House.
The American Hotel and Lodging Association (AHLA) was another group that lobbied on H.R. 6. The AHLA wrote a letter to McConnell and Senate Majority Leader. Chuck Schumer (D-N.Y.) in 2018 noting that the hotel industry is a significant employer of DACA recipients.
Few groups appeared to oppose the bill. NumbersUSA, a nonprofit organization that advocates for substantially reducing immigration levels, spent $120,000 lobbying so far this year, weighing in on H.R. 6 as well as policies regarding asylum-seekers at the border and other immigration issues. The group also spent nearly $15,000 on anti-DREAM Act ads on Facebook in the two days leading up to the vote, targeting voters in 25 Democratic-held House districts.
None of the groups that bought Facebook ads in anticipation of the House vote are continuing to run ads, a reflection of the bill’s near-certain death in the Senate.The post Public and industry backing probably won’t help the DREAM Act in the Senate appeared first on OpenSecrets News.
- — Could a competitive Senate race shake up Michigan in 2020?
- at 6/6/19 2:08pm
Michigan Republican Senate candidate John James (Bill Pugliano/Getty Images)
Detroit businessman John James has announced that he will challenge Sen. Gary Peters (D-Mich.) in 2020 in what is likely to be a closely watched race in a battleground state.
Although James — a political newcomer who put up a better-than-expected performance against Sen. Debbie Stabenow (D-Mich.) in 2018 — is considered perhaps Republicans’ best chance at flipping the Senate seat, some strategists have expressed concern regarding the potential spillover effects of a competitive Senate race in Michigan.
Michigan’s results in the last few elections make the state a target for both parties in 2020. In 2014, Peters beat Republican Terri Lynn Land, the former Michigan Secretary of State who was unpopular even in her own party. Peters’ margin of 13 percentage points was a decisive victory in a year when most Democratic congressional candidates struggled.
In 2016, however, President Donald Trump carried the state by a margin of about 10,000 votes, the first time since 1988 that Michigan chose a Republican in a presidential election. The state swung left again in 2018, with Stabenow and Gov. Gretchen Whitmer both winning statewide races.
Trump endorsed James during the Republican senatorial primary in 2018, calling the West Point graduate and Iraq veteran “a star.” James reportedly received serious consideration to be the new U.N. ambassador before Trump nominated Kelly Craft for the role in late February.
Politico reported in May, however, that some Trump allies had concerns about James’ potential impact on the 2020 presidential race on the basis that a competitive statewide Senate race might drive up voter turnout among Democrats. Midterm turnout in Michigan in 2018 was the highest in 56 years, with 58 percent of eligible voters showing up at the polls. That allowed Democrats to flip the governorship and two U.S. House seats.
The presidential race in Michigan is expected to be close again in 2020. A poll of 600 likely Michigan voters conducted by the Glengariff Group in late May found that five Democratic primary candidates — former Vice President Joe Biden, Sens. Bernie Sanders, Elizabeth Warren, Kamala Harris and Mayor Pete Buttigieg — led Trump in a head-to-head matchup.
A tight race is likely to drive up spending by Democrats and Republicans, and both James and Peters seem to be preparing for that possibility. James proved to be a strong fundraiser in 2018, raising $12.4 million, including $5.2 million from donors who gave less than $200. He has work to do to catch up with Peters, who raised $4.2 million through the first quarter of 2019.The incumbent raised $10 million during his 2014 campaign, only $1.6 of which came from small donors.
James has also pledged to donate 5 percent of the money he raises during the campaign to charity. He is not the first candidate to donate campaign money, although other notable politicians who have pledged to donate in recent years have done so for specific reasons.
Warren promised in May to donate money she had received from Beverly Sackler, whose husband ran Purdue Pharma, one of the country’s largest opioid manufacturers that is facing lawsuits in 48 states and the District of Columbia. Presidential candidate and former Maryland representative John Delaney announced earlier this year that he would donate $2 to charity for every new donor his campaign received in an effort to reach the 65,000 donors necessary to make the first Democratic debate stage.
The post Could a competitive Senate race shake up Michigan in 2020? appeared first on OpenSecrets News.
- — Could a competitive Senate race shake up 2020 in Michigan?
- at 6/6/19 2:08pm Michigan Republican Senate candidate John James (Bill Pugliano/Getty Images)
Detroit businessman John James has announced that he will challenge Sen. Gary Peters (D-Mich.) in 2020 in what is likely to be a closely watched race in a battleground state.
Although James — a political newcomer who put up a better-than-expected performance against Sen. Debbie Stabenow (D-Mich.) in 2018 — is considered perhaps Republicans’ best chance at flipping the Senate seat, some strategists have expressed concern regarding the potential spillover effects of a competitive Senate race in Michigan.
Michigan’s results in the last few elections make the state a target for both parties in 2020. In 2014, Peters beat Republican Terri Lynn Land, the former Michigan Secretary of State who was unpopular even in her own party. Peters’ margin of 13 percentage points was a decisive victory in a year when most Democratic congressional candidates struggled.
In 2016, however, President Donald Trump carried the state by a margin of about 10,000 votes, the first time since 1988 that Michigan chose a Republican in a presidential election. The state swung left again in 2018, with Stabenow and Gov. Gretchen Whitmer both winning statewide races.
Trump endorsed James during the Republican senatorial primary in 2018, calling the West Point graduate and Iraq veteran “a star.” James reportedly received serious consideration to be the new U.N. ambassador before Trump nominated Kelly Craft for the role in late February.
Politico reported in May, however, that some Trump allies had concerns about James’ potential impact on the 2020 presidential race on the basis that a competitive statewide Senate race might drive up voter turnout among Democrats. Midterm turnout in Michigan in 2018 was the highest in 56 years, with 58 percent of eligible voters showing up at the polls. That allowed Democrats to flip the governorship and two U.S. House seats.
The presidential race in Michigan is expected to be close again in 2020. A poll of 600 likely Michigan voters conducted by the Glengariff Group in late May found that five Democratic primary candidates — former Vice President Joe Biden, Sens. Bernie Sanders, Elizabeth Warren, Kamala Harris and Mayor Pete Buttigieg — led Trump in a head-to-head matchup.
A tight race is likely to drive up spending by Democrats and Republicans, and both James and Peters seem to be preparing for that possibility. James proved to be a strong fundraiser in 2018, raising $12.4 million, including $5.2 million from donors who gave less than $200. He has work to do to catch up with Peters, who raised $4.2 million through the first quarter of 2019.The incumbent raised $10 million during his 2014 campaign, only $1.6 of which came from small donors.
James has also pledged to donate 5 percent of the money he raises during the campaign to charity. He is not the first candidate to donate campaign money, although other notable politicians who have pledged to donate in recent years have done so for specific reasons.
Warren promised in May to donate money she had received from Beverly Sackler, whose husband ran Purdue Pharma, one of the country’s largest opioid manufacturers that is facing lawsuits in 48 states and the District of Columbia. Presidential candidate and former Maryland representative John Delaney announced earlier this year that he would donate $2 to charity for every new donor his campaign received in an effort to reach the 65,000 donors necessary to make the first Democratic debate stage.
The post Could a competitive Senate race shake up 2020 in Michigan? appeared first on OpenSecrets News.
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