Reity O'Brien stories from The Center for Public Integrity

Majority of Supreme Court members millionaires

2013-06-14T14:14:04-04:00

At least five and perhaps as many as eight of the nine members of the U.S. Supreme Court are millionaires according to recently released financial disclosures, and only two hold any consumer debt.

Assets on the forms are reported in a range making it impossible to say precisely how much each justice is worth, but suffice to say, none of them are hurting financially.

Ruth Bader Ginsburg boasts the highest potential net worth at $18.1 million with Stephen Breyer a close second at $17.1 million. Both were appointed by former President Bill Clinton.

However, Ginsburg’s actual net worth may be as low as $4.4 million and Breyer’s as low as $5 million. Federal officials are also exempt from disclosing the value of their homes, making an accurate calculation even more difficult.

After collecting nearly $2 million in book advances, Justice Sonia Sotomayor's assets rose to between $1.7 and $10.3 million, ranking her No. 3 in terms of highest potential net worth. Sotomayor is an appointee of President Barack Obama.

Chief Justice John Roberts, an appointee of former President George W. Bush, possesses one of the court’s most complex financial portfolios. His net worth is valued between $2.8 million and $6.6 million, ranking him No. 4.

As for the rest:

Antonin Scalia, appointed by former President Ronald Reagan, reported a net worth between $1.9 and $4.2 million, ranking him No. 5.

Obama appointee Elena Kagan's assets total between $815,000 and $2.1 million, according to the Center’s analysis, putting her at No. 6.

Clarence Thomas, an appointee of President George H.W. Bush reported between $1.8 million and $715,000, ranking him seventh.

Samuel Alito has not yet filed his 2012 report and sought an extension, but in 2011 the George W. Bush appointee reported between $380,000 and $1.1 million in wealth putting him at No. 8 for maximum potential wealth.

Anthony Kennedy, appointed by Reagan, reported assets of between $330,000 and $700,000, placing him at No. 9.

Salaries plus perks

Justices make good money, though with their backgrounds they could easily earn much more in the private sector. Roberts, as chief justice, earns $223,500 per year, while the eight associate justices make $213,900.

But there are perks. Judges rake in tens of thousands of dollars from speaking fees, professorships and book deals.

Most of Ginsburg’s assets are held in mutual funds and retirement accounts. In 2012, Ginsburg earned nearly $26,000 for taking part in two separate university-sponsored events, including a two-week Wake Forest School of Law summer seminar held in Venice, Italy, and in Vienna, Austria.

The bulk of Breyer’s holdings are in mutual funds, retirement accounts and bonds. But one of Breyer’s two largest reported assets is a $1 million to $5 million stake in Pearson, the publishing company that owns the Penguin Group and The Financial Times. The justice collected between $15,000 and $50,000 last year in dividends thanks to his stock holdings in that company.

Breyer enjoyed a windfall last summer when he sold his stock in Amgen, Inc., the pharmaceutical company that was party in a case that came before the Supreme Court in its most recent term. In late September, just a month after he realized between $15,000 and $50,000 in gains by selling his Amgen holdings, the court docket noted that Breyer was no longer recused from proceedings related to the case.

Investing in China

Also notable is Breyer’s holdings in Tai Shan Fund which invests in tech companies in China, Hong Kong and Taiwan and is part of a Boston-based capital management firm led by investor Thomas Clafflin, according to a Bloomberg report.

Roberts has invested heavily in technology and telecommunications companies — some of which have had business before the high court. He also owns a mix of bonds, retirement accounts, mutual funds and shared ownership of a cottage in County Limerick, Ireland.

The top justice owns up to a total of $750,000 in shares of Time Warner, Microsoft and Texas Instruments and up to $200,000 in T-Mobile and Sirius XM Radio stock, according to his report.

Roberts recused himself from a patent dispute involving Microsoft, which the software giant lost in a unanimous 8-0 decision in 2011.

As the Center for Public Integrity reported last week, Justice Sonia Sotomayor’s disclosure is notable for the nearly $2 million she received in book advances and promotion for her memoir, My Beloved World, published by Knopf Doubleday.

One of Sotomayor’s most valuable assets is her former New York City residence, now a rental property valued between $1 million and $5 million, though she carries a mortgage on the property. Unlike most of her colleagues on the bench, Sotomayor reported a handful of liabilities in her disclosure, including between $250,000 and $500,000 for the rental. Her debts for four credit cards were each less than $15,000.

Scalia reported a debt of less than $15,000 for a loan on a life insurance policy.

Scalia also reported receiving between $5,000 and $15,000 in rent for a property he owns in Charlottesville, Va. His report also shows that he has investments in gold-related securities totaling between $80,000 and $215,000.

Scalia reported earning $26,500 in 2012 for teaching at five different universities, including John Marshall Law School and the University of Southern California. Scalia also reported receiving nearly $64,000 in book royalties. Last year, the justice co-authored Reading Law: The Interpretation of Legal Texts with legal scholar Bryan Gardner.

Well-traveled justices

Scalia traveled frequently in 2012. In the “Reimbursement” section of his financial disclosure, he reports 28 trips to various schools and organizations to deliver speeches and lectures.

In most cases, the justice was provided or reimbursed for transportation, food and lodging. (Federal officials are not required to report how much they were reimbursed, either in exact amounts or in dollar ranges.) In September and October, Scalia gave speeches and lectures at five events hosted by the Federalist Society, a conservative nonprofit that advocates reform of the legal system.

Scalia reported giving a speech at an Aug. 25 event hosted by “Friends of Abe,” a low-profile conservative group organized by actor Gary Sinise and whose members reportedly include singer Pat Boone and actor Jon Voight.

Scalia also reported receiving one gift in 2012. According to his disclosure report, the justice accepted a $1,000 shotgun from the National Wild Turkey Federation.

The bulk of Kagan’s assets were invested in mutual funds and retirement accounts, including some from the University of Chicago, where she was a law professor in the 1990s.

Thomas reported investments in gold- and silver-related securities valued at somewhere between $60,000 and $200,000, according to his report.

Though Kennedy was the high court’s least wealthy justice for the third consecutive year, his report indicates that 2012 was a year of jet setting for the moderate judge. Between January and November of last year, Kennedy traveled to Las Vegas, Palm Springs, Aspen, Maui, London and Paris for various speaking and teaching arrangements.

Sonia Sotomayor courts riches from book deal

2013-06-07T17:16:09-04:00

When they aren’t busy handing down landmark decisions, professing the law or attending the opera, U.S. Supreme Court Justices can make millions in book deals.

The high court’s authors raked in nearly $2 million in publishing advances, appearances and royalties during 2012, with Justice Sonia Sotomayor taking home the lion’s share, according to new personal financial disclosure documents reviewed by the Center for Public Integrity.

Sotomayor collected more than $1.9 million in advances and promotion for her memoir, My Beloved World, published by Knopf Doubleday.

As the third woman and first Hispanic justice appointed to the Supreme Court, Sotomayor’s rags-to-riches tome became a No. 1 New York Times bestseller after its January release.

See Sotomayor's full disclosure filing here.

The publishing industry was also good, but not as good, to Justices Stephen Breyer and Antonin Scalia.

Breyer made roughly $30,890 in book royalties, while Scalia — his ideological adversary on the bench — collected nearly $64,000.

Scalia co-wrote Reading Law: The Interpretation of Legal Texts last year with Bryan Gardner, legal scholar and editor and chief of Black’s Law Dictionary. Breyer wrote Active Liberty: Interpreting Our Democratic Constitution, released in 2007, and 2010’s Making Our Democracy Work: A Judge's View.

Lobbyists helping banker recoup land Saddam 'stole'

United States — 2013-06-05T10:16:46-04:00

A Michigan financial adviser says Saddam Hussein long ago stole a chunk of his land that now houses a U.S. and Iraqi military installation — and he wants the real estate back.

What to do?

Hire a pair of well-connected lobbyists in Jason Poblete and Mauricio Tamargo, partners at the D.C. and Coral Gables-based firm Poblete Tamargo who both once worked for the federal government.

Their mission: Help Walid Habboo, who fled Iraq in the early 1970s to escape persecution and now works for Wells Fargo Advisors in Farmington Hills, Mich., recoup a disputed 35- acre plot in southeast Baghdad that Habboo says once belonged to his family.

Poblete and Tamargo registered to specifically lobby Michigan’s congressional delegation on Habboo’s behalf regarding issues that involve “confiscated property and related claims against the Republic of Iraq,” according to U.S. Senate disclosure filed Friday and an interview with Poblete.

The two men have also served as his lawyers for about a year.

“For a U.S. citizen to resolve a property claim in a foreign country, it’s a pretty tall order,” said Poblete, who served as a staffer for Rep. Bill Thomas, R-Calif., and the House Administration Committee before joining the private sector in 2003.

Lobbyists-for-hire typically represent corporations, unions or moneyed special interest groups. Picket signs, petitions and public meetings account for more traditional methods for private citizens attempting to voice frustration to federal lawmakers.

But for international cases like Habboo’s, retaining a lobbyist might be the only way for U.S. nationals to resolve the issues, Poblete said.

“People like the Habboo family are usually the last people dealt with because they don’t have the clout to reach into this process.” Poblete said. “A lot of these Iraqi-American families haven’t had the recourse that a lot of big companies have had.”

Habboo, a U.S. citizen, and his family are Chaldean Christian, a sect of Assyrian Christians who have sometimes faced violent marginalization in Iraq.

Habboo, who when reached by phone directed questions to his lobbyists, argued through them that Hussein’s regime expropriated land from his family. This includes a large tract called Camp Rustamiyah, an Iraqi military academy that was captured by U.S. armed forces during the Iraq War.

The United States officially turned over the training facility to the Iraqi military in March 2009, although many U.S. military forces and privately-contracted soldiers still populate the base, according to a U.S. Army document obtained through a Freedom of Information Act request made by Habboo’s legal counsel and reviewed by the Center for Public Integrity.

The U.S. Army’s heavily-redacted response, dated Nov. 26, revealed that the base houses about 3,000 soldiers. Additional U.S. personnel, according to the document, include:

600 employees of the government contractor Kellogg, Brown and Root
136 interpreters
24 Army Air Force Exchange Service personnel
40 Iraqi police advisers

Tamargo, Habboo’s other personal lobbyist, is no stranger to the reams of bureaucratic red tape that can block U.S. citizen from resolving a property claim in a foreign country.

From 2001 to 2009, Tamargo chaired the U.S. Department of Justice Foreign Claims Settlement Commission, which evaluates claims similar to those of Habboo and adjudicates how much U.S. citizens are owed by a foreign government. He's also a former chief of staff and general counsel to Rep. Ileana Ros-Lehtinen, R-Fla.

Tamargo, who with Poblete has met with the Iraqi ambassador other Iraqi emissaries in Washington, D.C., would not disclose his client’s asking price for the land. But he says he’s hopeful that they will settle the claim with the Iraqi government amicably — and without involving the DOJ commission.

“We’re hoping that we can persuade the Iraqi government to simply settle the matter before it’s something that has to go to the Foreign Claims Settlement Commission or any kind of tribunal,” Tamargo said.

Senators investigating Apple own company stock

Apple Inc. — 2013-05-23T10:31:05-04:00

Two senators serving on a subcommittee that Tuesday grilled Apple Inc. executives over the company's offshore tax practices are themselves owners of Apple stock, either directly or through a spouse, according to interviews and a review of federal disclosure documents by the Center for Public Integrity.

Sen. Heidi Heitkamp, D-N.D., owns the most Apple stock among the 14 members of the Senate Homeland Security and Governmental Affairs Committee's Permanent Subcommittee on Investigations, with her holdings worth at least $250,001 and up to $500,000, according to personal financial disclosure documents for calendar year 2012. She also earned up to $5,000 in Apple stock dividends last year, records show.

Heitkamp was one of six committee members to not attend Tuesday's hours-long hearing, during which Apple Chief Executive Officer Tim Cook defended his company against accusations of tax dodging. Attendee or not, the senator's stock holdings do not pose a conflict with her committee service, a spokeswoman said.

“Senator Heitkamp was selected to serve on the Homeland Security and Governmental Affairs Committee because of her unique position being from a border state and her past experience as a state attorney general working along aside law enforcement," spokeswoman Whitney Phillips said. "Her position on this committee is in no way impacted by her personal financial holdings.”

Sen. Tom Carper, D-Del., chairman of the Homeland Security and Governmental Affairs Committee and an ex officio member on its Permanent Subcommittee on Investigations who attended the hearing and asked questions, reported that his wife, Martha Ann, owned up to $100,000 worth of Apple stock during 2012. The stock also generated up to $2,500 in dividends last year, federal records show.

Officeholders generally disclose their assets and earnings in broad ranges.

Carper's committee office confirmed the senator's wife currently owns Apple equities, but spokeswoman Jennie Westbrook declined to answer specific questions about the stock holding.

(Update, 10:19 a.m., May 23: Westbrook followed up with a statement regarding Carper's Apple holdings, which reads: “In his role as chairman of the Homeland Security and Governmental Affairs Committee, Chairman Carper continues to make it a top priority to conduct thorough and proper oversight. Neither Chairman Carper’s financial holdings nor his family’s influence his policy and oversight work on the committee or in the Senate. This is underscored by the fact that he actively participated in Sen. [Carl] Levin’s hearing on this important matter.”)

Sen. Tom Coburn, R-Okla., another ex officio subcommittee member, also reported trading in Apple stock options during 2012, earning up to $50,000 from the transactions, according to his newly released personal financial disclosure document.

The same document also states that Coburn's Apple holdings at the end of 2012 were worth $1,000 or less — an indication he may no longer have Apple holdings. Representatives for Coburn, who also did not attend Tuesday's hearing, could not be reached for comment.

In addition to Carper, Sens. Carl Levin, D-Mich; John McCain, R-Ariz.; Claire McCaskill, D-Mo.; Ron Johnson, R-Wis.; Rob Portman, R-Ohio; and Kelly Ayotte, R-N.H. attended Tuesday's hearing. These senators reported no Apple stock holdings in 2012 outside of what might exist in broad-based mutual funds that many of them reported.

Another committee member in attendance, Sen. Rand Paul, R-Ky., was granted a 90-day filing extension for his 2012 disclosure paperwork after asking for more time. It is therefore unknown whether Paul, who defended Apple during the hearing, owned Apple stock during 2012. During 2011, he did not, federal records show.

In 2011, Apple stock, which today closed at $441.35 per share, ranked among the most popular holdings by all members of Congress — just below the stock shares of other massive companies such as General Electric, ExxonMobil, Pfizer and Bank of America, according to the Center for Responsive Politics.

Canada buoyed by former U.S. ambassador

2013-05-17T10:27:07-04:00

Since U.S. Ambassador to Canada David Wilkins moved back home from Ottawa in 2009, he’s reclaimed his role as liaison between the U.S. and its northern neighbor.

But this time, Wilkins — the Bush Administration’s top diplomat in Canada from 2005 to 2009 — is working for the Great White North, lobbying the U.S. federal government on behalf of Canadian business and government entities.

And last week, Wilkins parlayed his former ambassadorship into a job lobbying Congress on behalf of the Toronto-based Investment Industry Association of Canada, according to reports filed with the U.S. Senate.

Does Wilkins’ latest circuit through the international revolving door create conflict of interest or the appearance of one? No, Wilkins told the Center for Public Integrity, saying he “respectfully disagreed” with such a notion.

“As U.S. ambassador, I advocated for the U.S.-Canada relationship,” Wilkins said. “I do the same thing today, but in the private sector.”

The South Carolina native has lobbied on behalf of handful of Canadian interests since 2009, when he joined the Washington-based firm Nelson Mullins Riley & Scarborough, LLP as partner and chair of the public policy and international law practice group.

Last year, the provincial government of Saskatchewan spent $400,000 to hire Wilkins and his associates to advocate for province’s energy exports and cross-border food safety. That same year, the Canadian Association of Petroleum Producers spent $240,000 for Nelson Mullins to lobby Capitol Hill regarding Canada’s oil sands industry, records indicate.

Additionally, Wilkins has sat on the board of the Toronto Island-based Porter Airlines since April 2009, according to a Financial Post report.

Wilkins is not the only former U.S. diplomat to represent a foreign entity on Capitol Hill.

Jim Blanchard, an ambassador to Canada during the Clinton administration, advocated for the Forest Products Association of Canada in in 2009.

The Republic of India hired Robert Blackwill — a Bush Administration ambassador to India — to lobby Congress and federal agencies on the U.S.-India civil nuclear agreements, records show.

Wilkins says he has not breached any ethical standards by lobbying for Canadian industry because he has not engaged in any lobbying issue that he was “actively involved” with as ambassador.

The bulk of his pro-Canada advocacy has been devoted to facilitating meetings and lining up press opportunities when Canadian officials visit Washington, Wilkins said.

“There is no conflict of interest, because I’m not advocating on any position that I was actively involved in as a U.S. ambassador.”

The Province of Alberta had, however, hired Wilkins to lobby Congress on "issues impacting Alberta's forestry industry" — an area with which he became familiar while for a time overseeing the decades-long U.S.-Canada lumber trade dispute as ambassador.

Since 2010, Alberta has spent $480,000 for Nelson Mullins lobbying services, including those of Wilkins. Officials from the Alberta and Saskatchewan governments did not reply to requests for comment.

Wilkins said that his most recent work for a Canadian client, the Investment Industry Association of Canada, was consigned to a “one afternoon deal,” meet and greet with the association’s President and CEO Ian Russell and members of the House Financial Services Committee.

“When it came to Congress, we needed to have Nelson Mullins provide us with a little bit of help to meet the right congressional leaders,” Russell said.

During typical visits to Washington, D.C., IIAC officials meet with individual regulators in the Securities and Exchange Commission and the Commodity Futures Trading Commissions, but this trip was focused on educating members of Congress on the association’s agenda of regulatory reform and Canada’s securities markets, he said.

Wilkins, who works out of a Greenville, S.C., office, said was not present for those meetings and said that the lobbyist registration form filed on behalf of IIAC was submitted in “an abundance of precaution” to ensure transparency in Nelson Mullins’ dealings — however limited — with Canadian trade group.

“We were not advocating for any specific law or bill,” Wilkins said of the visit. “I don’t anticipate any ongoing lobbying effort.”

Mixed martial arts take fight to Capitol Hill

2013-05-08T10:18:03-04:00

Once mired in blood and disrepute, professional mixed martial arts now ranks among the world’s fastest growing sports. And its advocates are likewise ramping up their activity in another combative arena: Capitol Hill.

Ultimate Fighting Championship, MMA’s leading promotion company, last year spent $620,000 lobbying on a variety of issues affecting its business, making it the No. 3 spender among sports leagues and recreational entities and eclipsing the government affairs efforts of other well-established and conventional industry contemporaries, according to the Center for Responsive Politics.

UFC outspent former heavy-hitters such as Major League Baseball ($310,000) and the National Basketball Association ($125,000) last year. The National Football League remains the top lobbying spender in the live entertainment industry, but the league’s total spending fell from $1.6 million in 2012 to $1.4 million in the previous year, according to federal disclosures.

UFC is continuing its aggressive advocacy this year, spending $80,000 on federal lobbying in the first quarter of 2013, records filed with the U.S. Senate indicate.Video piracy is among UFC’s chief concerns.

Though some of UFC’s live competitions — in which fighters spar for victory in an octagonal cage — are now available with a basic cable subscription, the company still relies on pay-per-view broadcasts for much of its revenue. When bootleggers surreptitiously film and post fights to the internet for free, UFC loses money, according to Makan Delrahim, an attorney at the Washington office of Brownstein Hyatt Farber Scheck who represents UFC.

“Or even worse, [copyright law violators] are charging $9.99,” for access to the illegally-captured fights, Delrahim said. “My clients are deprived of the economic benefit that intellectual property laws allow.”

Before lobbying on behalf of the UFC, Delrahim served as deputy assistant attorney general to the Department of Justice’s anti-trust division and chief counsel to the Senate Judiciary Committee.

“Anybody who believes in property rights supports this issue,” he said, “It’s a bipartisan issue."

And MMA, it turns out, attracts a bipartisan fan base. Senate Majority Leader Harry Reid, a Nevada Democrat, and U.S. Reps. Duncan Hunter of California and Jim Jordan of Ohio, both Republicans, are fans, according to Delrahim.

UFC has also lobbied on Internet gambling regulation— the group is now sponsoring an online poker tournament, with a grand prize of trip to Las Vegas to watch a UFC fight in July — and educating members of Congress about mixed martial arts, federal records show.

“We just want to be sure that people who may not be watching it every night know what it is,” Delrahim said. “And don’t react in an immediate kneejerk reaction, thinking that it’s some sort of nefarious sport.”

Mark Gonzalez, managing partner at the Washington-based One World MMA, a much smaller outfit that hosts professional and amateur fights , said his operation has opted to influence legislation on a more grassroots level.

It takes “big money in order to lobby anybody here in DC,” Gonzalez said. Instead of traditional routes, Gonzalez said he works directly with DC Boxing and Wrestling Commission to influence the safety regulations and licensing rules that affect his organization.

Several other emerging or niche sports and recreation brands have also recently doubled down on federal lobbying.

Feld Entertainment — the company that produces the Ringling Brothers and Barnum & Bailey circus, Monster Jam monster truck shows and Disney On Ice — also outspent both MLB and the NBA last year. the $350,000 it spent places it No. 7 on the list of top lobbying spenders among sports and recreation outfits.

Just this past quarter, Feld Entertainment spent $35,000 to lobby Congress, the U.S. Department of Agriculture and the Food and Drug Administration on laws related to the conservation of endangered species — namely the elephants and big cats that star in the company’s traveling circus. Ringling Bros. in particular has been a target of animal rights activists, who accuse the circus of animal cruelty.

Feld Entertainment lobbied against the Traveling Exotic Animal Protection Act, a House bill introduced last year that would have banned animals performing within 15 days of travel, which the company argued would effectively dismantle its circus’ operation. Ringling Bros. currently gives its animals anywhere from 24 to 72 hours of rest between travel, said Tom Albert, the company’s vice president of governmental affairs.

“Our point is that there was no science behind it,” he said of the bill, which has not been reintroduced in the current Congress. “It was sort of an arbitrary number that was picked precisely because it would keep animals from performing.”

Feld Entertainment’s past lobbying efforts helped pass the Asian Elephant Conservation Act of 1997, which set a up a federal fund to support faltering elephant populations. That law established a model for funds supporting other endangered species, Albert said.

“Given the very difficult economic and budgetary climate, our little coalition has been remarkably successful in advocating for support for those funds,” Albert said.

Though hardly a niche sport, NASCAR has also stepped further into the political fray in recent years, increasing its total federal lobbying expenditures to $150,000 in 2012 from $90,000 in the previous year, according to the Center for Responsive Politics.

Lobbying is “not a terribly active space for us,” NASCAR spokesman Marcus Jadotte asserts, although the association did spend $30,000 in last year to block a bipartisan amendment that would have slashed the military’s budget for sponsoring professional sports.

NASCAR — and the military recruiters whose logos still whiz past fans in Daytona and Dover — won that race in a close 216-202 vote.

NASCAR does not plan to rev up its political involvement any further by forming a PAC or endorsing candidates.

“Absolutely not,” Jadotte said. “As a business, we’re not involved in endorsing candidates."

While UFC has changed its rules over the past decade to make the sport safer, more athletic and more palatable to a broader fan base, its intense violence and that it is not a team sport has impeded its reach beyond a niche audience, according to Marie Hardin, associate director of the John Curley Center for Sports Journalism at Penn State University.

“You have to wonder if part of this is simply the growing pains of a very fast growing sport in the United States,” Hardin said.

As MMA grows in popularity, there will be “more legislative eyeballs” monitoring the sport, she said.

“It’s going to come under more scrutiny.”

Correction: The article originally stated that Rep. Duncan Hunter represents a North Carolina district. The congressman represents a California district.

E-cigarette maker fires up lobbying efforts

2013-04-18T16:36:08-04:00

The cigarette, a product so politically passé that even the wiliest of Mad Men stopped selling it, is looking for second shot on Capitol Hill.

But like Don Draper, the maligned cancer stick has assumed a sleek new identity — the electronic cigarette — that capitalizes on societal pressure to quit smoking yet faces increased governmental scrutiny.

NJOY, the leading e-cigarette manufacturer, has hired a team of congressional staffers-turned-lobbyists to do its bidding on Capitol Hill, according to records filed with U.S. Senate.

Jeff Shockey and John Scofield — formerly senior staffers on the House Appropriations Committee — lead Alexandria, Va.-based firm Shockey Scofield Solutions LLC that will lobby Congress and the Food and Drug Administration on behalf of NJOY. Scofield also worked as an aide to former Sen. Mark Hatfield, R-Ore., and Rep. Frank LoBiondo, R-N.J., while Shockey once worked for former Rep. Jerry Lewis, R-Calif.

Mike Ference, who until late 2012 served as policy director to House Majority Leader Eric Cantor, R-Va., is also a partner at the firm and will lobby for NJOY. Ference also formerly worked at lobbying powerhouse Podesta Group and served as an aide to Sen. Jim Inhofe, R-Okla.

Scofield, NJOY’s lobbyist, declined to comment on his client’s specific legislative or government influence goals. Representatives at NJOY’s Arizona-based headquarters did not respond to requests for comment. And NJOY’s Senate filing notes only that it intends to lobby on “FDA administration of P.L. 111-31,” a tobacco control law, and “the Family Smoking Prevention and Tobacco Control Act,” offering no additional details.

But the leading e-cigarette manufacturer’s decision to hire Beltway insiders — and place former Surgeon General Richard Carmona on its board — suggests NJOY and its upstart contemporaries intend to aggressively defend their business interests at the federal level.

It’s no wonder: Government regulators are skeptical of e-cigarettes, health lobbyists aren’t convinced they’re safe and established tobacco companies are attempting to gobble up market share.

Smaller-time e-cigarette manufacturers’ lobbying has already heated up in foreign capitals, and domestically, in statehouses such as that in Oklahoma. And NJOY’s entry into the federal-level fray follows some low-level lobbying by other e-cigarette interests, such as CB Distributors, a wholesaler to convenience stores. The now defunct Electronic Cigarette Association, a trade group formerly headed by current U.S. Rep. Matt Salmon, R-Ariz., lobbied four years ago in support of laws banning the sale of e-cigarettes to minors.

Modern e-cigarettes — small plastic tubes that seek to deliver the look, feel and nicotine buzz of traditional smokes — have been subject to little federal regulation since they entered the U.S. market from China in 2007.

NJOY, formerly Sottera Inc., successfully sued the FDA in 2009 to be regulated as a tobacco product, a move that freed the e-cigarette industry from stringent regulation and allowed it to double its market share annually, according to a Forbes report.

The FDA originally announced that e-cigarettes would be regulated as a “drug delivery device,” which requires each product to meet the same safety and efficacy standards as nicotine patches, gums and other smoking cessation products before reaching consumers. Health advocates and lobbyists are concerned and have themselves lobbied the federal government on smoke-free workplace laws, the regulation of e-cigarettes and online tobacco sales.

The American Heart Association spent more than $136,000 lobbying the federal government on tobacco-related issues, including the regulation of smokeless tobacco products last year, Senate filings reveal.

“There are no requirements for ingredient disclosure. No regulation at all for safety,” said Bronson Frick, a lobbyist for the self-explanatory Americans for Nonsmokers’ rights. “It’s best to think of e-cigarettes as hundreds of individual products, because they are all manufactured differently.”

This rising popularity and scant government oversight has provoked a backlash from public health advocates like Frick, who worry about the e-cigarette industry’s lack of quality control and marketing tactics.

“We are very troubled that e-cigarette companies have been making ‘quit smoking’ claims without any sort of reaction from the FDA,” according to Erika Sward, a lobbyist for the American Lung Association.

Though most players in the e-cigarette industry appear to be smaller, fly-by-night operations, well-established tobacco companies have begun to carve out a space in the e-cigarette market, Frick said.

Lorillard, the maker of Newport cigarettes, launched its own electronic bluCig and an accompanying national ad campaign that features actor Stephan Dorff (of 1998 movie “Blade” fame) urging potential e-smokers to “take their freedom back” and “rise from the ashes.”

Cigarette king Reynolds American has also sponsored a new "Transform Tobacco" campaign, which aims to reduce the harm caused by smoking by offering a line of “smokeless” products.

As part of this strategy, the company hopes to engage government, public health officials and other tobacco manufacturers in developing tobacco and nicotine-based products, “that are scientifically shown to reduce the risks associated with the use of existing tobacco products, particularly cigarettes.”

But Frick argues that tobacco companies “claim to be in line with society, yet they haven’t given up their old tricks either,” listing the tobacco industry’s continued opposition to cigarette taxes and smoke-free workplace laws as examples.

Tobacco interests spent nearly $27 million on federal-level lobbying efforts during 2012, collectively hiring 173 lobbyists, according to the Center for Responsive Politics. That represents an uptick in the tobacco industry’s lobbying expenditures from 2010 ($19.6 million) and 2011 ($22.5 million), the Center’s research notes.

“The FDA has the ability to regulate e-cigarettes,” Frick said. “With traditional tobacco companies involved, it becomes a question of whether the FDA will back down in the face of industry lobbying or enact some real regulations to ensure public safety.”

Dem senator: Campaign finance laws a 'mockery'

2013-04-10T10:30:17-04:00

Campaign finance law is a “mockery,” a Democratic senator declared today during a hearing on Capitol Hill, while also urging federal officials present to criminally investigate politically-active nonprofits, shell corporations and super PACs.

Sen. Sheldon Whitehouse, D-R.I., chairman of the Senate Judiciary Committee's subcommittee on crime and terrorism, cited several “areas of mischief” regarding politically active nonprofits, known in Internal Revenue Service parlance as 501(c)(4) organizations.

Several such organizations spent into the millions of dollars directly advocating for or against political candidates during the most recent election cycle — activity not seen in U.S. politics prior to the Supreme Court's 2010 Citizens United v. Federal Election Commission decision.

Among Whitehouse's complaints about these nonprofits:

Discrepancies in reporting to the IRS and to the Federal Election Commission
Discrepancies between reported and actual political activity
Characterizing political TV ads as “educational activities” or “legislative activities”
Characterizing as non-political donations made to other groups that spend it on political advertising
Disbanding and reforming under other names before the reporting is due for the disbanded organization

Whitehouse suggested the DOJ explore a new legal avenue for prosecuting nonprofits and super PACs active in elections — specifically, fraudulent claims about their political activity in federal filings.

Whitehouse pressed Mythili Raman, the assistant attorney general for DOJ’s criminal division, on what he considered the department’s failure to investigate potential false statements.

“Are you rethinking deferring these matters to the IRS where it is not a tax specific underlying issue and something as simple as making a false statement? Are you satisfied with the state of play right now with the lack of prosecution in this area?” the senator asked.

Raman said the DOJ “could and would” prosecute the laundering of political contributions to super PACs through anonymous shell corporations.

“But not yet?” Whitehouse interrupted.

“Not yet,” Raman said. “Without discussing ongoing investigations, we can assure you that we are incredibly vigilant about the use of these organizations as an end-run around contribution limits.”

Sen. Ted Cruz, R-Texas — the only other committee member present — provided conservative counterweight to the hearing, pointing to the risks of additional campaign finance regulation to free speech rights.

Cruz at one point asked Raman: “In the department of Justice’s opinion, what is the government interest in regulating the independent expenditures of public citizens?”

Raman replied: “What I’m suggesting is that there is a risk, from what we have seen, of bad actors using the anonymity that is given to them when they declare as 501(c)(4)’s to hide the identities of their donation. We need to be able to determine when those donors are acting with bad intent and frankly when a campaign or an election official maybe knowingly allowing that kind of donation to occur, intending to be influenced in some corrupt way. That is our job.”

Whitehouse ended the hearing by urging DOJ officials to be more proactive and show less deference to the IRS on campaign finance enforcement matters.

Easter has friends on K Street

2013-03-30T16:15:25-04:00

The Easter Bunny — that cotton-tailed purveyor of egg-shaped confections — will deliver his annual baskets of goodies this Sunday.

But not without some help from K Street lobbyists.

Organizations linked to the Easter holiday and its furry mascot have ramped up their efforts to influence lawmakers, according to federal lobbying data compiled by the Center for Responsive Politics.

Consider the National Confectioners Association, the trade group for all things cream-filled and candy-coated, which spent a record $420,000 on federal lobbying in 2012.

The association hired 20 lobbyists last year to push Congress for sweet deals on bills such as the Free Market Sugar Act and the Free Sugar Act of 2011. Nine of those lobbyists have previously worked for the federal government in some capacity. Among them is William J. Morley, of the D.C.-based Altrius Group, who also lobbied on behalf of the Central American Sugar Association and the American Chamber of Commerce in Columbia.

No traditional Easter table scape would be complete without an array of pastel-dyed eggs.

United Egg Producers, an agricultural cooperative, made $90,000 in federal lobbying expenditures in 2012, reflecting a $40,000 increase from the previous year.

A less fragile, but equally protein-rich element of an Easter buffet is the ham — a pork product with vocal advocates in Washington.

Smithfield Foods, a top producer of Virginia ham, hired 13 lobbyists spent nearly $1.4 million on political advocacy in 2012. The company’s political action committee donated $117,000 to federal candidates in the past election cycle, Federal Election Commission filings show.

The National Confectioners Association also has its own political action committee, which during the 2012 election cycle contributed nearly $46,000 to 28 different federal candidates from both parties.

As for the people donating to the National Confectioners Association’s PAC, the list stops just short of Willy Wonka himself.

Several members of Baltimore’s Goetze family, of Cow Tail and Caramel Cream fame, contributed at least $17,000 to the PAC between 2011 and 2012. An employee of Just Born, Inc., maker of the conjoined neon marshmallow “Peeps,” donated $500.

Asher’s Chocolates executives each made $1,000 donations to the pro-candy trade group’s PAC. The company manufactures an Easter basket centerpiece: the solid chocolate bunny.

Candy maker Jelly Belly, meanwhile, still remains one of the few corporations to directly donate money to a super PAC, helping bankroll Republican causes.

Among sugar-free organizations with reference for Easter, the Easter Seals Society, which aids people with disabilities, routinely spends between $200,000 and $300,000 each year on federal lobbying.

Corporations, pro-business nonprofits foot bill for judicial seminars

2013-06-07T12:50:57-04:00

Conservative foundations, multinational oil companies and a prescription drug maker were the most frequent sponsors of more than 100 expense-paid educational seminars attended by federal judges over a 4 1/2-year period, according to a Center for Public Integrity investigation.

Among the seminar titles were “The Moral Foundations of Capitalism,” “Corporations and the Limits of Criminal Law” and “Terrorism, Climate & Central Planning: Challenges to Liberty & the Rule of Law.”

Leading the list of sponsors of the 109 seminars identified by the Center were the conservative Charles G. Koch Charitable Foundation, The Searle Freedom Trust, also a supporter of conservative causes, ExxonMobil Corp., Shell Oil Co., pharmaceutical giant Pfizer Inc. and State Farm Insurance Cos. Each were sponsors of 54 seminars.

Other top sponsors included the conservative Lynde and Harry Bradley Foundation (51), Dow Chemical Co. (47), AT&T Inc. (45) and the U.S. Chamber of Commerce (46), according to the Center’s analysis.

Sponsors pick up the cost of judges’ expenses, which often include air fare, hotel stays and meals. The seminars in the Center’s investigation took place from July 2008 through 2012.

The Center identified 185 federal district and appeals court judges who reported attending one or more of the seminars over the period, according to disclosure forms, or about 11 percent of the more than 1,700 federal judges in the United States.

Two schools — George Mason University, located in Virginia just outside Washington, D.C., and Northwestern University based in Evanston, Ill., — hosted more than two-thirds of the seminars.

Roughly three-fourths of the more than 800 sponsors listed in documents were individuals, including a number of judges who took trips, raising the possibility that they may have offset the cost of the sponsorships with their donations. Most of the remaining underwriters were companies and foundations.

Determining exactly how much was paid by which sponsor is difficult to determine — amounts are not required to be reported under the disclosure rules.

Judicial conferences are billed as educational retreats intended to improve judges’ understanding of the law and economics. Judges and seminar hosts say the conferences, which feature lectures and panel discussions, provide helpful information that refines their legal expertise.

But they’ve long drawn scrutiny for how they are funded and organized.

Since the 1990s, critics have complained that many of the privately funded conferences serve state and federal judges a steady dose of free-market, anti-regulation lectures that could influence judges’ rulings from the bench.

Those concerns quieted in 2007, when the Judicial Conference of the United States, a group of senior circuit judges who oversee the U.S. Courts, implemented a policy requiring judges and seminar hosts to disclose information about the conferences.

Well-traveled jurists

The most-traveled judges, according to reports filed online by the judges, were U.S. District Judge Charles R. Wolle of the Southern District of Iowa and Chief Judge Thomas B. Bennett of the Northern District of Alabama Bankruptcy Court. Each reported attending nine seminars.

Wolle is a “senior status” judge, meaning he is semi-retired. He did not respond to requests for comment.

The next-most-traveled judges were:

U.S. District Judge Manuel L. Real of the Central District of California and Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals 9th Circuit, covering the Western states, who each took eight trips;
E. Grady Jolly, a federal appeals court judge for the 5th Circuit which includes Texas, Louisiana and Mississippi, and U.S. Bankruptcy Judge Michael B. Kaplan of the District of New Jersey, who each took six trips;
U.S. District Judge Kenneth M. Hoyt of the Southern District of Texas, Chief Magistrate Judge Thomas J. Shields of the Southern District of Iowa and senior-status U.S. District Judge Frederic Block of the Eastern District of New York, each of whom took five trips.

O’Scannlain declined to comment for this story. In an email, Kaplan wrote that the “seminars offer a valuable opportunity for new judicial appointees to enhance their knowledge and skills in complex areas of the law,” including economics.

Wolle, Real and O'Scannlain are all listed as seminar sponsors, though records do not indicate how much they contributed.

The Center identified instances where judges who attended seminars underwritten by certain firms and trade groups later issued rulings in the funders’ favor.

EPA loses case

In April 2009, for example, Jolly traveled to Northwestern University to attend the “Criminalization of Corporate Conduct” seminar sponsored by the American Petroleum Institute, the U.S. Chamber of Commerce and 13 other funders.

Last August, Jolly wrote the majority 2-1 opinion declaring that the Environmental Protection Agency broke the law when it rejected a Texas emissions cap generally supported by the fossil fuels industry.

Jolly, who did not respond to requests for comment, sided with two of the petitioners in the suit — the American Petroleum Institute and the U.S. Chamber.

Charles Geyh, an Indiana University law professor who specializes in judicial ethics, is skeptical that rulings are directly influenced by corporate sponsors of seminars, but noted, “in a cynic’s view that would smack of corruption.”

“Even if it has no effect in terms of the decisions judges make, the perception of influence matters a great deal,” he says. “It looks as if [corporations] are buying influence, even if it’s not true.”

Another attendee of the 2009 “Criminalization of Corporate Conduct” seminar was U.S. District Judge Carl J. Barbier, the Eastern District of Louisiana jurist presiding over a high-profile BP civil trial, which is being held without a jury in New Orleans.

Barbier is in charge of considering whether BP owes billions of dollars in fines for gross negligence leading to the 2010 Deepwater Horizon oil platform explosion and spill. The disaster killed 11 people and contaminated a large swath of the Gulf Coast.

In 2011, Barbier dismissed a wrongful-death claim in a suit brought against ExxonMobil and Chevron USA by the widow of a worker who was exposed to radioactive materials found on the companies’ equipment.

Barbier’s ruling in favor of the oil companies came two years after he attended the corporate conduct seminar, funded in part by ExxonMobil and the American Petroleum Institute, according to documents. The judge did not respond to requests for comment.

Corporate U?

George Mason University’s Law & Economics Center hosted 45 seminars while Northwestern University’s Judicial Education Program hosted 29. A total of 136 federal judges reported attending conferences conducted by the schools during the 4 1/2-year period analyzed by the Center for Public Integrity.

The remaining top five conference hosts, including The Sedona Conference and the Foundation for Research on Economics and the Environment (FREE), collectively organized 28 conferences.

The Koch Foundation and The Searle Freedom Trust supported most of the conferences organized by George Mason and Northwestern. The energy industry was a sponsor in roughly three-fourths of the conferences hosted by Northwestern.

Billionaire brothers Charles and David Koch, major supporters of conservative causes, and their foundations have given millions to George Mason University. As the Center recently reported, the George Mason University Foundation received $4.4 million in 2011 from the Charles Koch Foundation, making up 15 percent of its revenue that year.

The school is the top recipient of Koch foundation money since 1985. George Mason also houses several free market and libertarian research centers, including the Institute for Humane Studies, which received $3.7 million from the Koch foundations, and the Mercatus Center, whose board of directors includes Charles Koch.

Officials from the Charles G. Koch Charitable Foundation did not return phone calls seeking comment for this report.

The Judicial Conference disclosure policy doesn’t require seminar hosts to reveal how much donors contribute to conferences. But corporate-giving reports and nonprofit tax records shed some light on the costs.

Oil industry support

In 2011, for example, ExxonMobil reported giving $20,000 to George Mason specifically for its judicial training program. The oil company gave an additional $30,000 to the university’s Law & Economics Center, which hosts the conferences. Between 2003 and 2007, the ExxonMobil Foundation gave the think tank $150,000.

ExxonMobil officials did not respond to requests for comment.

Another seminar funder, Donors Trust, gave George Mason’s Law & Economics Center nearly $450,000 in general support in 2010. As the Center reported, Donors Trust helps conservative foundations and individuals give money anonymously to nonprofits that may take controversial positions.

A representative of Donors Trust declined to comment for this story.

The Searle Freedom Trust, a foundation advocating “economic liberty” which regularly donates to conservative groups like the Cato Institute and the American Enterprise Institute, contributed a combined $400,000 to George Mason’s judicial education programs in 2010 and 2011.

The school conducted conferences on antitrust law as well as “Corporations and the Limits of Criminal Law,” both funded by AT&T, BB&T, BP America, Cigna, Coca-Cola, Dow Chemical, FedEx Corp. and others.

“The Moral Foundations of Capitalism” was funded by the same group, and was the most popular George Mason conference, drawing at least 10 federal judges.

BP spokesman Scott Dean says the company has no record of ever directly contributing to the seminars but he did say BP gave the law school and the Law & Economics Center more than $37,000 between 2001 and 2008.

Seminars at Northwestern are hosted by the school’s Searle Center on Law, Regulation, and Economic Growth. The think tank, according to its website, was founded in 2006 thanks to a “generous grant” from Daniel C. Searle, the late pharmaceutical industry executive.

In 2009, the foundation gave $200,000 to Northwestern’s Searle Center for its judicial education program.

Another Northwestern seminar funder, The Lynde and Harry Bradley Foundation — a major supporter of conservative organizations, including the Heritage Foundation — gave $210,000 to the Searle Center between 2008 and 2010.

Records show corporate sponsorship at Northwestern was highest from 2008 through 2010, when a man named Henry Butler — now in charge of George Mason University’s Law & Economics Center — ran the Searle Center.

Daniel Rodriguez, dean of Northwestern University’s School of Law, says corporate sponsorships at the school “ended the moment Butler left." Rodriguez, who became the dean of Northwestern's law school last year, says the school recently decided to terminate the programs. He says he's against corporate sponsorship of judicial seminars.

“These programs should be free from any real or perceived conflict of interest,” he says.

Some history

In the late 1990s and early 2000s, advocacy groups and media outlets raised concerns about judges attending privately funded conferences conducted in vacation destinations like Arizona, Montana and Florida.

Critics claimed that the undisclosed trips created conflicts of interest and cast doubt on the ability of judges to decide cases without bias.

Seminars hosted by the Foundation for Research on Economics and the Environment (FREE) attracted the most attention.

FREE, a Montana-based think tank championing “free-market environmentalism,” drew criticism for its ideologically conservative seminars. In 2011, for example, FREE hosted “Terrorism, Climate & Central Planning: Challenges to Liberty & the Rule of Law.”

Critics complained that judges spent their free time golfing, fishing and horseback riding at the conference’s Montana resort location. They worried that judges were being wined, dined and entertained by FREE’s funders, which included Koch Industries and Texaco Inc. (now part of Chevron Corp.).

Media scrutiny prompted members of Congress in 2000 to introduce legislation that would prohibit judges from accepting “anything of value in connection with a seminar.” The bill, which died in committee, was opposed by the Judicial Conference, which claimed it restricted judges’ free speech rights.

Similar legislation failed again in 2003.

In 2007, the Judicial Conference implemented a policy designed to provide “greater transparency” by setting up disclosure requirements for both judges and seminar hosts.

“Instead of banning anything,” says Geyh, the policy “was a way to mollify those who recognized the perception problem without causing the ones who treat [the conferences] as a First Amendment issue to go ballistic.”

Buying influence?

Even with the new policy, the seminars still have critics.

“These seminars are taking place because large corporate interests are hoping to influence the outcome of cases involving themselves or likeminded entities,” says Nan Aron, president of the Alliance for Justice, a liberal organization that first raised concerns about judicial education conferences in a 1993 report titled “Justice for Sale.”

Russell Wheeler, former deputy director of the Federal Judicial Center, an education and research agency for the federal courts, says it’s possible that funders could be truly dedicated to improving judges’ understanding of the law.

But, he says, “You’ve got to be pretty naïve to believe that.”

“It’s the funders that create the problem,” says Stephen Gillers, a New York University law professor who specializes in legal ethics. “The money comes from interests that have matters before the courts, and they’d like to have those matters settled in their favor.”

Many of the seminars are conservative in nature, especially those hosted by George Mason. But there are a few exceptions. A June 2010 conference sponsored by the Open Society Institute, a foundation founded by liberal investor George Soros, focused mainly on human rights law.

(The Center for Public Integrity has received funding from Soros’ Open Society Foundations.)

Events hosted by the Sedona Conference, a nonprofit whose seminars address legal issues like antitrust law and intellectual property, have been funded primarily by law firms.

Speaking from the right

According to The Center for Public Integrity’s analysis, the person who spoke at more judicial conferences than any other was Butler, a professor and prominent conservative formerly of Northwestern and now executive director of George Mason’s Law & Economics Center.

He has taught judicial seminar courses with titles like “Economic Thinking” and “Economics of Insurance.” A former Republican candidate for Congress — he lost a 1992 bid — Butler was a “Koch Distinguished Professor of Law and Economics” at the University of Kansas.

Butler’s resume cites his “professional affiliations” with the conservative Federalist Society and the Mont Pelerin Society, which decries society’s loss of freedoms “fostered by a decline of belief in private property and the competitive market.”

Butler declined to be interviewed for this story. In response to emailed questions about George Mason’s judicial seminars, he wrote, “You seem to have a well-established theme to your story, accordingly we don't see any advantage in collaborating with you.”

Daniel Polsby, dean of the George Mason University School of Law, also declined to answer questions for this story other than to say: “We're very proud of the activities and programs of the Law & Economics Center” via email.

Another frequent seminar instructor is Terry L. Anderson, president of the Property and Environment Research Center, a conservative think tank “dedicated to improving environmental quality through property rights and markets.”

Anderson, a senior fellow at the conservative Hoover Institution, has regularly led “Free Market Environmentalism” lectures at conferences hosted by both George Mason and Northwestern.

Green energy’s ‘false promise’

In January 2011, Anderson was one of four lecturers who spoke at George Mason’s “Advanced Institute on Environmental Economics” conference, which was funded in part by ExxonMobil, BP America and Shell Oil.

The other three speakers were Andrew Morriss, co-author of the book “The False Promise of Green Energy”; Robert K. Fleck, an economics professor who has received thousands of dollars in research grants from the Charles G. Koch Charitable Foundation; and Jason Johnston, a former fellow with the Koch-funded, Anderson-led Property and Environment Research Center and a critic of efforts to reduce greenhouse gas emissions.

“I don’t express views” during lectures, says Anderson. He says his talks are based strictly on economic analysis. “None of my lectures are aimed at changing any judge’s opinion” about a case before them in court.

George Mason law professor Todd J. Zywicki, another regular judicial program speaker, has taught judges about issues like mortgage markets and consumer credit.

He is a senior scholar at the school’s conservative Mercatus Center, and has ties to the Goldwater Institute, a libertarian think tank, and the Competitive Enterprise Institute, which is “dedicated to advancing the principles of limited government, free enterprise, and individual liberty." Zywicki did not respond to a request for comment.

George Mason “is known to stage conferences that have a conservative economic perspective,” says Gillers, the NYU law professor.

One frequent attendee of George Mason’s judicial seminars, Judge Bennett of Alabama bankruptcy court, told the Center “I’m not going to be snowed by anybody’s presentation.” He said he finds the seminars “infinitely invaluable.”

“You can accumulate information much more quickly than if you sit in your office and read stuff,” he says.

Bennett dismisses criticism of George Mason’s judicial conferences — even though he acknowledges that they often feature conservative voices.

“I believe they put on a fairly balanced program,” he says, noting that he doesn’t pay attention to who funds the conferences. “I’ve been to George Mason seminars where they’ve had people who are not conservative. It’s all in the eye of the beholder.”

Stacked panels?

Northwestern’s 2009 seminar titled “Criminalization of Corporate Conduct” included a speaker panel that was very corporate-friendly — something George Mason’s Henry Butler openly acknowledged during his presentation summing up the day’s events.

Butler noted “a question can be raised” about the panels’ balance and “do we have enough people here that are representing the prosecutor’s perspective.” (His remarks are posted on YouTube.) “And I certainly can plead guilty to that accusation.”

“On the other hand,” he continued, “I have to explain to you that we’ve had difficulty in the past getting the U.S. attorneys to participate in these programs.”

The December 2010 “Climate Change Litigation” session hosted by George Mason’s Law & Economics Center was sponsored in part by BP America, ExxonMobil and Shell Oil and featured four speakers.

Two were attorneys who have represented corporate clients like Koch Industries and ExxonMobil. A third speaker, Johnston, the former Property and Environment Research Center fellow, spent part of his presentation criticizing the American civil courts system for making American companies less competitive on the international stage.

Butler, who moderated the panel, acknowledged the imbalance as he introduced a last-minute replacement for the fourth panelist.

"Eric Mayer is going to be pro-public nuisance, climate-change litigation cases, and the other three are basically going to express some skepticism," Butler said in his introduction, identifying Mayer, a lawyer who has represented plaintiffs as well as corporate defendants.

The announcement drew laughs from panelists and audience members.

"This may seem unbalanced,” Butler continued, “but Eric is not daunted by this challenge at all.”

Donor names disappear

The “transparency” policy regarding judicial trips may be weak, but the names of the corporations, foundations and individuals that pay for the conferences at least are available to the public.

Now, even that bit of sunshine is clouding over.

In 2012, George Mason’s Law & Economics Center began listing “xyz corp.,” as a sponsor before listing itself as the only donor on official disclosure documents. However, the think tank does provide a list of donors on its website.

The 2007 Judicial Conference policy allows such reporting if the support comes from general revenues or from endowments or gifts “not raised for the particular educational program or for the purpose of educating judges.”

Geyh, the Indiana University law professor, says the policy enables conference hosts to shield their donors and make it tough for judges to identify potential conflicts before attending seminars.

“It does raise transparency issues,” he says. “It strikes me as some semantic game-playing with the rules.”

John Dunbar contributed to this report.

Democrats praise super PAC in new video

2013-01-30T10:28:34-05:00

House Majority PAC released a video today that features Democratic members of Congress praising the super PAC for “fighting back” against conservative groups — and helping them get elected in 2012.

“I wouldn’t be here today if it weren’t for the tremendous help of the House Majority PAC,” says Rep. Elizabeth Etsy, D-Conn., one of the 40 House Majority PAC-backed candidates who won on Election Day.

House Majority PAC’s four-and-a-half-minute video showcases infomercial-style testimonials from seven new members of Congress. A disclaimer at the bottom of the screen reads that each politician is “not asking for funds or donations.”

The ad, titled "We Make The Difference," also chronicles and contrasts the past two election cycles. In the 2010 midterm election, an avalanche of spending by outside groups helped Republicans reclaim the U.S. House of Representatives. In 2012, Democratic-aligned groups jumped headlong into the super PAC game.

“As long as Karl Rove, the Koch brothers and Crossroads exist, it’s important that progressives fight back,” Andy Stone, the organization’s spokesperson, told the Center for Public Integrity, referencing the former Bush adviser who helped launch super PAC American Crossroads and Crossroads GPS, its politically active nonprofit sister group.

Campaign finance law prohibits federal politicians from soliciting more than $5,000 per election for super PACs, although the groups may accept donations of unlimited amounts.

Ultimately, House Majority PAC spent nearly $31 million during the 2012 election. Its biggest donors were Chicago media mogul Fred Eychaner, who gave $4.25 million to the group, and former hedge fund manager James H. Simons who contributed $1.5 million to the super PAC.

The video — and its assortment of cameos by public officials — presents a clear appeal to deep-pocketed donors, said Paul S. Ryan, senior counsel to the Campaign Legal Center.

“A donor to House Majority PAC would have every reason to believe that a huge contribution to the super PAC would give them just as much favor with the officeholder as cutting a huge check directly to the officeholder would,” Ryan said.

House Majority PAC intends to use the online video to promote the group’s success in 2012, Stone said.

The ad’s targeted audience?

“Interested parties.”

Expenditure Profile: Waterfront Strategies

2013-01-25T13:41:29-05:00

Rank: 3

Clients’ expenditures: $81 million*

Website: None

Principals:

Raeylnn Olson (president)

Clients:

Majority PAC
House Majority PAC
Patriot Majority USA
League of Conservation Voters
End The Gridlock
Women Vote!
AFSCME
Defenders of Wildlife Action Committee

Background:

Waterfront Strategies is a media buying firm that serves primarily Democratic-aligned super PACs and nonprofits. The firm was the preferred vendor for Majority PAC and House Majority PAC — the super PACs aimed at securing Democratic seats in the U.S. Senate and U.S. House of Representatives.

Waterfront billed more than $81 million for political ad buys for Citizens United-related groups in the 2012 election, yet very little information about the firm is publicly available.

The same cannot be said for GMMB, a well-known political consulting firm which shares a Georgetown address with Waterfront and was the chosen advertising agency for President Barack Obama’s 2008 and 2012 campaigns.

Waterfront is an “internal branch” of GMMB, according to a Huffington Post report from June. The group was incorporated in Delaware and lists its president as Raelynn Olson, a managing partner at GMMB.

Through Dec. 5, Waterfront purchased nearly $35 million in advertising time on behalf of Majority PAC, and $27 million for House Majority PAC. Another top client of the 2012 election cycle was the League of Conservation Voters, Inc., a nonprofit that supports mostly pro-environment Democrats.

Last Updated: Jan. 18, 2013

* Total consists of independent expenditures made to the firm in the 2012 election cycle as reported to the Federal Election Commission.

Expenditure Profile: Mundy Katowitz Media

2013-01-25T13:40:27-05:00

Rank: 4

Clients’ expenditures: $59 million*

Year founded: 2002

Website: munkato.com

Principals:

Carole Mundy (partner): Oversees the firm’s media planning and placement for multistate and national programs from its Roslyn, N.Y. office.
Janet Katowitz (partner): A former operative with the Michigan Senate Democratic Caucus, Katowitz manages the firm’s day-to-day operations at its Washington, D.C., office.

Clients:

Priorities USA Action
FSA PAC
LCV Victory Fund
Progress for Washington

Background:

Founded in 2002, Mundy Katowitz Media (MKM) is a media buying firm that serves Democratic-aligned candidates and indepdent political spending groups. Its top client during the 2012 election was Priorities USA Action, the super PAC supporting President Barack Obama’s re-election.

MKM — run by veteran Democratic operative Janet Katowitz — billed $57 million for advertising time on behalf of Priorities USA Action during the 2012 election cycle. The firm’s other clients included LCV Victory Fund, the super PAC arm of the pro-environment League of Conservation Voters, and FSA PAC, another pro-environment group that placed ads favoring Democrats.

The firm’s other named partner is Carole Mundy, who runs the firm’s New York office.

Media buyers like MKM traditionally collect a commission of up to 15 percent, regardless of their client’s success rate on Election Day.

Katowitz told a group of American University students in 2004 that media buying is “shrouded in mystery” and the reason? "it’s a very lucrative industry.”

Last Updated: Jan. 18, 2013

* Total consists of independent expenditures made to the firm in the 2012 election cycle as reported to the Federal Election Commission.

Expenditure Profile: American Media and Advocacy Group

2013-01-25T13:39:39-05:00

Rank: 5

Clients’ expenditures: $27 million*

Principals: Unknown

Year founded: 2012

Website: None

Clients

American Action Network
Congressional Leadership Fund
Ending Spending Action Fund
The Government Integrity Fund Action Network
Citizens for a Working America Inc.
Character Counts Political Action Committee Inc.

Background:

American Media and Advocacy Group was a favorite media buyer for several top conservative Citizens United-related groups active in the 2012 election.

Through Dec. 6, American Media was paid more than $27 million to buy advertising in several battleground states. The lion’s share of those receipts — nearly $18 million — came from the American Action Network, the conservative nonprofit run by Norm Coleman, the former U.S. senator from Minnesota, and its super PAC arm, the Congressional Leadership Fund.

The firm also purchased nearly $7 million of media time on behalf of the Ending Spending Action Fund, the super PAC run by TD Ameritrade founder Joe Ricketts, whose family owns the Chicago Cubs.

Despite its high-profile clientele, American Media toiled in relative obscurity during the 2012 election. The firm has no website and little information about the group has been published. Federal Election Commission reports show it shares office space and administrative staff with a network of political consulting groups in an Alexandria, Va.

Among them is the well-known bipartisan political consulting group Purple Strategies, run by longtime Republican strategist Alex Castellanos. Representatives at Purple Strategies failed to reply to the Center’s repeated inquiries regarding its affiliation with American Media.

Last Updated: Jan. 18, 2013

* Total consists of independent expenditures made to the firm in the 2012 election cycle as reported to the Federal Election Commission.

Court opened door to $933 million in new election spending

2013-01-22T23:36:46-05:00

The Supreme Court’s Citizens United decision unleashed nearly $1 billion in new political spending in the 2012 election, with media outlets and a small number of political consulting firms raking in the bulk of the proceeds.

Spending records released by the Federal Election Commission show that throughout the 2012 election, corporations, unions and individuals that could take advantage of the high court’s ruling were responsible for about $933 million of the estimated $6 billion spent during the contest.

Nearly two-thirds of the new money — about $611 million — went to 10 political consulting firms, according to a Center for Public Integrity analysis. All but one of the top 10 recipients bought advertising in various media markets on behalf of super PACs and nonprofits. Eighty-nine percent of the expenditures made to the top 10 went to spots attacking candidates, the data show.

“For some in the industry, it has been a definite boon,” said Dale Emmons, president of the American Association of Political Consultants. “This election appears to have set a new benchmark on the amount of money that could be spent, because there were no limits on what could be spent.”

The 2010 Citizens United decision and a lower-court ruling allowed unlimited donations to super PACs and nonprofits, independent groups that used the funds primarily to fund ad campaigns.

Media buyers keep only a fraction of the total spending — usually 15 percent, according to Federal Communications Commission records, with the rest going to media outlets.

The winners

The top recipient of independent spending among media buyers was Mentzer Media Services, the Towson, Md.-based media placement firm run by longtime GOP consultant Bruce Mentzer.

Mentzer attracted nearly $204 million from conservative super PACs and other outside groups. In a tough year for Republicans, only 26 percent of the candidates who were supposed to benefit from the ads won their races, according to a Center for Public Integrity analysis.

The firm was the preferred vendor for the pro-Mitt Romney super PAC Restore Our Future, which paid Mentzer nearly $132 million to purchase air time in presidential battleground states.

A Mentzer employee who answered the phone declined to comment on the firm’s involvement in the 2012 election.

Second was Crossroads Media, which was paid about $163 million to buy media time for conservative super PACs and nonprofits in 2012. The firm is run by Michael Dubke, the former president of Americans for Job Security — a pro-Republican nonprofit and one of Crossroads’ top clients.

Waterfront Strategies, which worked for Democratic groups, ranked third, at $81 million.

Democratic-aligned Mundy Katowitz Media, fourth on the list, was the preferred vendor for the pro-Obama super PAC Priorities USA Action, placing more than $57 million in television ads for the group.

American Media & Advocacy Group, a favorite of conservative groups, ranked No. 5 at $27 million.

Target Enterprises — a Los Angeles-based media buyer for conservative super PACs — was paid $17 million, ranking it No. 6. The firm had a dismal success rate, coming in dead last among firms catering to super PACs and nonprofits. Seven percent of its preferred candidates won on Nov. 6.

A woman who answered the phone at Target Enterprises Tuesday said both principals of the company were “mid-flight” and unavailable for comment.

The Center analyzed FEC data compiled by the Sunlight Foundation and the Center for Responsive Politics. The $933 million in spending came from super PACs, nonprofits, and to a lesser extent, “527” organizations that were the favorite independent spending vehicle in past elections.

FEC coordination law a ‘joke’

The Citizens United decision opened a huge new potential market for consultants, but there was a catch. Consultants who work for candidates — but also work for “independent” groups that support those same candidates — have to be careful.

The high court’s decision did not affect the ban on donations to candidates from corporations and unions, nor did it affect contribution limits from individuals. Instead, it focused on spending by independent groups, unaffiliated with candidates.

As long as super PACs act independently of the candidate, there is no danger of corruption, the high court reasoned.

But sometimes the separation between the campaign and the like-minded super PAC or nonprofit can be hard to discern.

Waterfront Strategies, for example, in its FEC filings lists the same address as GMMB — a well-known Democratic media consulting firm and the preferred vendor for President Barack Obama’s 2008 and 2012 campaigns.

Waterfront was the beneficiary of $81 million paid by some of the biggest Democratic outside spending groups — including Majority PAC, a super PAC backing Democrats running for Senate, and the League of Conservation Voters.

The Huffington Post reported that Waterfront is an internal branch of GMMB. It was incorporated in Delaware, and its president is listed as Raelynn Olson, GMMB's managing partner.

Both Waterfront and its parent company, GMMB, worked to elect Democrat Richard Carmona in his unsuccessful bid for Arizona’s open U.S. Senate seat. Majority PAC hired Waterfront to purchase airtime for ads supporting Carmona and attacking his Republican opponent, then-Rep. and now Sen. Jeff Flake. Carmona’s campaign hired GMMB for its ad buys in the same race.

One Majority PAC ad used the same childhood photo of Carmona that was featured in an official Carmona campaign ad.

GMMB did not reply to requests for comment.

Setting up spinoffs is more about “optics” than skirting coordination rules, said Paul S. Ryan, senior counsel for the nonpartisan Campaign Legal Center.

Under current law, as long as a firm assigns each client separate consultants — and those two don’t coordinate their activities — that constitutes a satisfactory firewall, according to Ryan.

“That’s a pretty ridiculous and modest constraint on campaign coordination,” Ryan said.

Texas two-step

American Media & Advocacy, which also has no website, received nearly $27 million to buy media for super PACs and other outside groups.

The organization worked for the Congressional Leadership Fund, a super PAC that paid for ads attacking Pete Gallego, a Democrat who defeated Republican Francisco Canseco in the race for U.S. House of Representatives in Texas’ 23rd District. The firm also worked for Canseco’s campaign.

Records show that at least one of American Media’s buyers purchased media in the San Antonio market for both the Congressional Leadership Fund and the Canseco campaign.

Records show that American Media shares an Alexandria address with the high-profile, bipartisan consulting group Purple Strategies. Purple Strategies failed to respond to the Center’s repeated inquiries about any affiliation that it might have with American Media & Advocacy Group.

American Media and Advocacy is “well aware of the FEC coordination rules, including the common vendor rules,” said Jim Kahl, the group’s attorney, “and they have procedures in place to comply with them.”

In Ohio, American Media & Advocacy Group was paid by the Congressional Leadership Fund to purchase ads slamming Democrat Betty Sutton in the House race for District 16. American Media was also working for Sutton’s Republican opponent, Rep. Jim Renacci.

The same person was listed in records as buying media in the Cleveland market — at the same TV station in at least one case — for both the Renacci campaign and the Congressional Leadership Fund.

Candidates and super PACs can avoid charges of coordination altogether by sending up smoke signals in cyberspace.

For example, one of Target’s top clients was Freedom PAC, a super PAC that paid the firm nearly $3.4 million for ad buys supporting Rep. Connie Mack, the unsuccessful Republican candidate in the Florida Senate race.

Freedom PAC released an ad containing some of the same footage that was on the Mack campaign’s YouTube channel.

Under FEC coordination rules, campaign committees and the outside groups that boost their candidates may share material as long as it is publicly available.

“It’s a pretty big joke that anyone would really believe that these groups are truly independent from the candidates,” Ryan said. “They’re not.”

Donor profile: AFSCME

2013-01-30T21:55:35-05:00

Ranking: 12

Total contributions to super PACs: $8.2 million*

$3.9 million to Workers’ Voice (pro-Democratic), formerly known as AFL-CIO Workers’ Voices PAC
$1 million to Majority PAC (pro-Democratic)
$660,000 to America Votes Action Fund (pro-Democratic)
$575,000 to American Bridge 21st Century (pro-Democratic)
$565,000 to House Majority PAC (pro-Democratic)
$530,000 to Moving Ohio Forward Action Fund (pro-Democratic)
$250,000 to Priorities USA Action (pro-Barack Obama)
$125,000 to Iowans for Intergrity in Leadership (pro-Democratic)
$100,000 to Fair Share Action (pro-Democratic)
$100,000 to Patriot Majority PAC (pro-Democratic)
$100,000 Committee to Elect an Effective Valley Congressman (pro-Howard Berman)
$54,900 to Working for Us PAC (pro-Democratic)
$50,000 to The American Worker (pro-Democratic)
$50,000 to Sierra Club Independent Action (pro-environment)
$50,000 to Ohio Families United (pro-Democratic)
$42,500 to Defend Our Homes (pro-Democratic)
$10,000 to Protecting America's Retirees (union-aligned)
$8,650 to Connecticut's Future PAC (pro-Democratic)
$5,000 to Young Democrats of America (pro-Democratic)

Notable federal hard money and 527 contributions:

Nearly $2.1 million in PAC donations to Democratic candidates during the 2012 election cycle, according to the Center for Responsive Politics
$2.3 million in PAC donations to Democratic candidates during the 2010 election cycle

Notable state-level contributions (see here):

$104,000 to Democratic candidates in Texas (2012)
$14,000 to Democratic candidates running in Kansas (2010)

Total spent on federal lobbying 2007-2012 (see here): $15.6 million

Lobbying issues: Education, federal budget, environment, labor, health care

Biography:

The American Federation of State, County & Municipal Employees represents more than 1.4 million laborers, ranging from clerical government workers to nurses in public hospitals. The organization is made up of 3,400 local unions and affiliates in 46 states.

AFSCME is a member of the greater umbrella organization, the AFL-CIO, whose super PAC arm — Workers’ Voice — received nearly $4 million in contributions from the union this election cycle.

Overall, AFSCME gave $8.2 million to super PACs in the 2012 cycle — spending made possible thanks to the Supreme Court's 2010 Citizens United decision, which allowed unions, corporations and wealthy individuals to make unlimited contributions to outside groups that expressly advocated for the election or defeat of federal candidates.

Lee Saunders, who was elected as AFSCME's president in June, is an Ohio native and the product of a union family — his father was a bus driver and his mother was a community organizer in Cleveland. Saunders is the first African-American to head AFSCME.

Saunders stepped into the role just a few weeks after the failed AFSCME-backed effort to unseat Wisconsin’s Republican Gov. Scott Walker in a recall election. The contest attracted nearly $64 million in outside spending.

AFSCME spent heavily in the 2012 election, aiming more than $2.5 million in independent expenditures and voter turnout efforts against the presidential candidacy of Republican Mitt Romney.

The union’s other top targets included Sen. Dean Heller, R-Nev. — AFSCME spent nearly $2 million attacking him — and the Wisconsin Senate race, where the union spent $1.8 million to take down Republican candidate Tommy Thompson.

After sustaining the blow of Gov. Rick Snyder’s passage of Michigan’s right-to-work law in December, AFSCME and other big labor players plan to ramp up their efforts for upcoming gubernatorial elections, Politico reported.

“You’ve got governors in this country, you’ve got ultra-conservatives who are trying to hurt us,” Saunders told C-SPAN in July. “They don’t want to see working families have a fair shake.”

Last updated: Jan. 30, 2013

*2011-2012 election cycle. Source: Center for Responsive Politics and Center for Public Integrity analysis of Federal Election Commission records. Totals include contributions from individuals, family members and corporations that are controlled by the individual super donor.

Rove-affiliated groups spend $175 million, lose 21 of 30 races

2012-11-14T11:47:47-05:00

If Karl Rove was an NFL coach and not a political strategist, he would probably be looking for a new job about now.

Organizations co-founded by the GOP’s most effective fundraiser spent more than $175 million only to see President Barack Obama win a second term and Democrats actually gain seats in the U.S. Senate.

According to a Center for Public Integrity review of spending records, Rove’s super PAC, American Crossroads, went 3-10 during the 2012 election cycle, while Crossroads GPS, its nonprofit counterpart, went 7-17. The two groups, which were both active in a handful of contests, had a combined 9-21 record.

When asked by Fox News host Chris Wallace on Election Night if his groups’ spending was “worth it,” Rove was unapologetic: "Look, if groups like Crossroads were not active, this race would have been over a long time ago.”

Meanwhile, Jonathan Collegio, the spokesman for the two Crossroads organizations, has maintained that “sub-optimal candidate quality” contributed to Republican losses in the Senate and that his groups will be a “permanent entity on the center-right.”

“By leveling the financial playing field, conservative super PACs kept this race close and winnable all the way until the end,” Collegio told the Center for Public Integrity. “Our contributors are of course disappointed with the results, but satisfied with the impact we had.”

Democratic super PACs fared far better, especially Majority PAC, launched by former aides to Senate Majority Leader Harry Reid, D-Nev. The organization had a 14-3 record.

House Majority PAC, a group focused on aiding House Democrats, also appears to have backed more winners than losers. Thirty-five of its preferred candidates won while 31 lost. Democrats are leading in four of five undecided contests where the group also invested money.

“If you look back to 2010, there were lots of races where Democrats were overwhelmed by outside money at the last minute,” said House Majority PAC spokesman Andy Stone. “We aimed to reduce the disparity in outside GOP money to outside Democratic money, and we cut it in half from 2010 to 2012.”

Zach Gorin, the spokesman of Majority PAC, stressed that it was important for Democrats to compete in the fundraising arms race against groups like American Crossroads and Americans for Prosperity, which has ties to conservative billionaire brothers Charles and David Koch.

"At the beginning of the cycle, the conventional wisdom was that Democrats would surely lose their majority in the Senate,” Gorin said. “But our growing financial momentum in the lead-up to November ensured that we would not only be able to compete with Karl Rove and the Koch brothers on the air in Democratic seats, but also bring the fight to them in red states, as well."

The Democratic super PACs may have played a role, but they had an easier task than their Republican counterparts. Democratic candidates for Senate, for example, collectively outraised their Republican counterparts by more than $35 million in the seven most hotly contested races. A similar dynamic held true in the presidential contest, where Obama’s campaign outraised his Republican rival Mitt Romney by more than $240 million.

In addition, Republican Senate seats in Missouri and Indiana, which were expected to be Republican pickups, appear to have suffered from “sub-optimal” candidates, in Collegio’s words.

Rep. Todd Akin, the GOP Senate candidate in Missouri, saw his standing in the polls drop after he said women who were victims of “legitimate rape” rarely get pregnant.

Comments about rape also contributed to the defeat of Indiana Republican Richard Mourdock, who, during a late October debate, said that pregnancies resulting from rape shouldn’t be aborted because they were “something that God intended to happen.”

In addition to Indiana, Majority PAC’s 14 “wins” included victories in Montana and North Dakota, states where Obama lost the popular vote to Romney.

Super PACs and nonprofits, which proliferated after the controversial 2010 Supreme Court’s Citizens United ruling, are allowed to accept contributions of unlimited size from individuals, corporations and unions. This money can be used on advertisements, officially called “independent expenditures,” but spending cannot be coordinated with campaigns.

The scorecards of the Democratic Senatorial Campaign Committee and the National Republican Senatorial Committee mirrored those of their aligned super PAC and nonprofit allies, even though they face limits on fundraising.

Party committees can only accept limited contributions from individuals and PACs, and while some of their spending can be coordinated, they also operate arms devoted strictly to independent expenditures.

The NRSC’s independent spending supported nine GOP Senate candidates, seven of whom lost on Election Night. Eleven of 13 candidates the DSCC made independent expenditures on behalf of won.

The Democratic Congressional Campaign Committee and National Republican Congressional Committee had more mixed results.

The GOP managed to retain control of the U.S. House of Representatives though its advantage appears to have dropped by a handful of seats. As of press time, the Associated Press had still not called nine races.

“The money was not decisive in a lot of races,” said Kyle Kondik, an analyst at the Center for Politics at the University of Virginia. “Candidates matter too.”

Despite the Crossroads organizations not having “a very good record to point to,” Kondik says that Rove “still does have a lot of cachet on the right.”

Conservative attorney Dan Backer, too, predicts Rove is here to stay.

“Karl Rove is not retiring anytime soon,” Backer said.

Andrea Fuller contributed to this report.

Mystery firm is election's top corporate donor at $5.3 million

2013-05-29T16:11:35-04:00

Update (Nov. 5, 4:10 p.m.): This story has been updated to include comment from William S. Rose, Jr., of Specialty Group Inc.

The biggest corporate contributor in the 2012 election so far doesn’t appear to make anything — other than very large contributions to a conservative super PAC.

Specialty Group Inc., of Knoxville, Tenn., donated nearly $5.3 million between Oct. 1 and Oct. 11 to FreedomWorks for America, which is affiliated with former GOP House Majority Leader Dick Armey.

FreedomWorks’ super PAC has spent more than $19 million on political advertising including $1.7 million on Oct. 29 opposing Tammy Duckworth, a Democrat running for Congress in Illinois against tea party favorite Joe Walsh, a first-term incumbent.

The buy was more than four times greater than the group’s previous largest single expenditure.

Specialty was formed only a month ago. Its “principal office” is a private home in Knoxville. It has no website. And the only name associated with it is that of its registered agent, William S. Rose Jr., a lawyer whose phone number, listed in a legal directory, is disconnected.

Rose released a press release Monday saying the company was created to "buy, sell, develop and invest in a variety of real estate ventures and investments."

In the six-page statement, Rose said he was a "disappointed, yet staunchly patriotic, baby boomer" with concerns about the administration's handling of the terrorist attack on the U.S. diplomatic mission in Benghazi, Libya, as well as the Department of Justice's botched "Operation Fast and Furious" gunwalking program.

Specialty is the biggest and most mysterious corporate donor to super PACs, but it is not unique.

A new analysis by the Center for Public Integrity and the Center for Responsive Politics shows that companies have contributed roughly $75 million to super PACs in the 2012 election cycle.

Super PACs, which were created in the wake of the controversial U.S. Supreme Court’s Citizens United decision in 2010, can accept donations of unlimited size from corporations, unions and individuals. They spend the funds mostly on negative advertising.

The Centers’ analysis found that 85 percent of money from companies flowed to GOP-aligned groups, 11 percent went to Democratic groups and the remainder went to organizations not aligned with either party.

Prior to Citizens United, corporate spending on candidate advertising was not allowed. The decision raised fears that massive donations from corporate treasuries would flood the election in 2012.

In fact, the largest amounts have come from wealthy businessmen. However, about 11 percent of the $660 million raised by all super PACs through mid-October has come from company treasuries — mostly privately held businesses, sometimes organized as limited partnerships or limited liability companies.

Yet a few high-profile companies haven’t been afraid to jump into the partisan fray.

In mid-October, oil and gas giant Chevron donated $2.5 million to a super PAC close to House Speaker John Boehner, R-Ohio, called the Congressional Leadership Fund, which has aired a bevy of ads attacking Democratic House candidates.

Oxbow Carbon, the energy company owned by billionaire William Koch, the lesser-known brother of conservative industrialists David and Charles Koch, and Contran Corp., the business of Republican super donor Harold Simmons of Texas, have both steered significant sums to the coffers of super PACs.

Oxbow Carbon has donated $4.25 million to GOP super PACs, making it the No. 2 corporate donor to super PACs, while Contran, No. 3, has donated more than $3 million to Republican-aligned groups.

Another top corporate donor is a retirement community in central Florida known as The Villages — a Republican stronghold where Paul Ryan held his first campaign rally the day after GOP presidential nominee Mitt Romney named him as his running mate.

Developer H. Gary Morse created The Villages more than 50 years ago, and this election cycle, more than a dozen companies connected to Morse and The Villages have collectively steered $1.6 million to GOP super PACs. That’s in addition to the $450,000 that Morse and his wife Renee have donated from their personal funds.

Notably, Morse is also the Florida co-chairman of the Romney campaign, and during the Republican National Convention, Morse’s Cayman Island-flagged yacht, named “Cracker Bay,” was the site of a soiree for some of Romney’s top donors and fundraisers.

Other high-profile corporate donors include:

The Apollo Group, a for-profit education company, which gave $75,000 to the pro- Romney Restore Our Future and another $5,000 to JAN PAC, the super PAC of Arizona’s Republican Gov. Jan Brewer;
Convenience store giant 7-Eleven, which donated $25,000 to Hoosiers for Jobs, a super PAC that supported Sen. Dick Lugar, R-Ind., during his failed primary campaign;
Hamburger chain White Castle, which gave $25,000 to the Congressional Leadership Fund;
Defense contractor B/E Aerospace, which gave $50,000 to Restore Our Future;
Payday lender QC Holdings, which gave $25,000 to Restore Our Future; and
Weaver Holdings, the parent company of the Indiana-popcorn company known for its brands “Pop Weaver” and “Trail’s End,” sold by Boy Scouts across the country, which has donated $2.4 million to American Crossroads, the super PAC founded by GOP strategists Karl Rove and Ed Gillespie.

Only a few other Fortune 500 companies have joined Chevron, which ranks third on the elite list behind only Exxon Mobil and Walmart, in making contributions to super PACs, and none have given as much as the energy giant.

Caesar’s Entertainment Corp., for instance, ranked by Fortune at No. 288, has given $150,000 to Majority PAC, a group that is spending to help Democrats retain the majority in the U.S. Senate.

“Fortune 500 companies are the least likely to be the ones who will be out in front giving publicly,” said Rick Hasen, a law professor at the University of California-Irvine. “They want to have influence over elections and elected officials, but they don't want to alienate customers.”

By category, companies in the finance, insurance and real estate sector donated more than $15 million, “general business sector” firms gave about $14 million and energy sector companies contributed more than $11 million, according to the analysis.

Unions, by contrast, have donated about $60 million to super PACs, from their treasuries or political action committees.

The top union donors include the National Education Association ($9 million), the United Auto Workers ($8.6 million) and the AFL-CIO ($6.4 million). All of these groups have spent heavily on Democratic candidates.

Additional corporate money may be flowing through politically active nonprofits that don’t disclose their funders.

“I strongly suspect that most of the corporate money is hiding in plain sight in trade associations like the U.S. Chamber of Commerce,” said Ciara Torres-Spelliscy, a professor at the Stetson University College of Law.

For its part, the Chamber — which collects dues from companies such as Aetna, Chevron, Dow Chemical and Microsoft — has reported spending more than $35 million on political ads, which have overwhelmingly favored Republican politicians.

Facts about Specialty Group Inc. are scant.

Records filed with the Tennessee Secretary of State’s office show it registered on Sept. 26, listing Rose, a 61-year-old attorney as its agent. Rose’s $634,000 home — about a 30-minute drive from downtown Knoxville — is listed as its “principal office.”

Yet the company’s money has made a huge impact.

After the cash infusion from Specialty, FreedomWorks produced numerous advertisements, including one that blasts Duckworth as a crony of former Illinois Gov. Rod Blagojevich, who was impeached and sentenced to 14 years in federal prison following a corruption scandal.

Duckworth is a double amputee and Iraq War veteran. She headed Illinois’ Department of Veteran Affairs and later served in President Barack Obama’s U.S. Department of Veterans Affairs.

FreedomWorks’ new ad features grainy footage of Duckworth and audio of her saying, “Gov. Blagojevich has charged me with the mission of taking care of my buddies, and that is what I’m doing.” But it leaves out the fact that when she said “buddies,” she was referring to other veterans and members of the military.

FreedomWorks for America treasurer and legal counsel Ryan Hecker says the organization only supports candidates who are “ethically right.”

Anton Becker, Duckworth's campaign press secretary, says it’s conservative outside groups who are peddling "lies."

When asked for details about Specialty Group and the source of its contributions, Hecker expressed ignorance, and doubted that voters care about where the money came from.

“We are in compliance with the law, and we are doing what we can to report to the Federal Election Commission,” he said. “If there’s an issue with Specialty, it’s their issue. It’s not our issue.”

Andrea Fuller of the Center for Public Integrity contributed to this report.

This story is a collaboration between the Center for Public Integrity and the Center for Responsive Politics. For up-to-date news on outside spending in the 2012 election, follow our Source2012 Tumblr and the hashtag #Source2012 on Twitter.

Donor profile: Joe Ricketts

2013-01-30T21:12:58-05:00

Ranking: 5

Total contributions to super PACs: $13.1 million*

$12.5 million to Ending Spending Action Fund (pro-conservative)
$500,000 to the Campaign for Primary Accountability (anti-incumbent)
$100,000 to Restore Our Future (pro-Mitt Romney)

Notable federal hard money and 527 contributions:

$15,500 to the National Republican Congressional Committee (2012)
$2,500 to Libertarian Party presidential candidate Gary Johnson (2011)
$2,500 to Republican presidential candidate Newt Gingrich (2011)
$100,000 to Citizens Club for Growth (2006)

Notable state-level contributions (see here):

$260,000 to Nebraska Republican Party (2006)
$19,000 to Nebraska Republican Gov. Dave Heineman and Lt. Gov. Ricky Sheehy (2006)

Corporate name: Hugo Enterprises / TD Ameritrade

Total spent on federal lobbying (2007-2012): $440,000

Lobbying issues: Securities and investments

Family: Wife Marlene, sons Todd, Tom and Peter and daughter Laura

Biography:

Online brokerage billionaire and owner John “Joe” Ricketts became a top 10 super donor thanks to a major September spending spree. Ricketts dumped roughly $12.5 million into Ending Spending Action Fund — the super PAC he created to back fiscally conservative candidates.

Ricketts came under attack in May after the New York Times leaked “The Defeat of Barack Hussein Obama ,” a 54-page proposal submitted to Ricketts’ super PAC that would link the president to his provocative former minister, the Rev. Jeremiah Wright.

Ricketts pledged to spend $10 million on advertising to defeat Obama and $2 million to bankroll Republicans in congressional races, the Wall Street Journal reported.

In 1975, Ricketts founded Omaha First Securities, a small investment banking firm, which has since morphed — through four decades of mergers and acquisitions — into TD Ameritrade, Inc., the world’s largest online brokerage. Though he retired from Ameritrade’s board in 2011, Ricketts still owns roughly 9.5 percent of the company, while his wife of 40 years, Marlene, holds an additional 2.5 percent, according to Forbes magazine.

The Ricketts family also holds a 95 percent controlling interest in the Chicago Cubs and Wrigley Field, which it acquired in 2009 through a family trust. Tom Ricketts, Joe and Marlene’s eldest son, serves as the team’s chairman, and the other three children — Laura, Peter and Todd — also sit on its board.

In addition to a financial services giant and a Major League Baseball team, Ricketts’ ventures include a bison meat distribution company in Wyoming and a hyper-local online newspaper in New York City. Ricketts made the 2009 Forbes 400 List of billionaires, coming in 371st place.

Ending Spending has spent nearly $12 million — the lion’s share of its $15 million in independent expenditures this election cycle — attacking the president, according to the Center for Responsive Politics. In one effort, the group released a series of 30-second spots titled “Why I Changed My Vote,” that feature seeming disappointed 2008 Obama supporters.

But not all of the Ricketts clan is dissatisfied with the Obama administration.

Laura Ricketts — the family’s openly gay daughter and Cubs co-owner who launched a pro-lesbian super PAC in July — is one of the president’s top bundlers. The younger Ricketts raked in roughly $500,000 for Obama’s campaign committee this cycle, according to the Center for Responsive Politics. She personally donated to two Democratic-aligned super PACs: $242,500 to LPAC, which is dedicated to "giving lesbians a meaningful seat at the political table," and $200,000 to Women Vote!, which is associated with EMILY's List and backs Democrats who support abortion rights.

Last updated: Jan. 30, 2013

Health insurance PACs have love-hate relationship with health care reform

2012-10-04T14:09:31-04:00

The health insurance industry presented itself as a key ally of President Barack Obama’s health care law while at the same time making hefty contributions to members of Congress who are trying to get rid of it, according to contribution records.

Between January of 2007 and August of 2012, the political action committees of the 11 largest health insurance companies and their primary trade group gave $10.2 million to federal politicians with nearly two-thirds of the total going to Republicans who oppose the law or support its repeal, according to the Center for Public Integrity’s analysis of Federal Election Commission filings.

The 11 top companies, according to the Fortune 500 list, controlled 35 percent of the industry in 2011, according to data from the National Association of Insurance Commissioners. The top industry trade group is America’s Health Insurance Plans.

Much of the money rolled in as health insurance industry leaders lauded the Democrats’ reform efforts.

“We are ready to be accountable to these [new] rules,” Karen Ignagni, AHIP’s president and CEO told the Senate Finance Committee in May 2009, almost a year before Obama’s landmark legislation was signed into law. And a month after Obama’s Affordable Care Act became law in March 2010, Ignagni said her organization was “strongly committed” to [its] “successful implementation.”

Likewise, Ron Williams, then chairman and CEO of Aetna, the country’s fifth-largest health insurance company, also spoke favorably about the bill — at first.

“I believe that President Obama and this Congress have charted a course of change,” Williams said in a June 2009 statement. “I want to make clear that we too are committed to expanding access, controlling costs and improving the quality and value of care people receive.”

But Williams, who left Aetna in April 2011, has since changed his mind. This past June, Williams penned a Wall Street Journal op-ed calling for health care reform at the state level and criticizing the federal law’s mandate.

Cantor, Ryan among top beneficiaries

House Majority Leader Eric Cantor, R-Va., ranks as the top recipient of PAC money from the top insurers since 2007, according to the Center’s analysis. Cantor, a tea party favorite and one of the law’s most vocal critics, has received about $258,000 from AHIP and the top industry PACs.

In January 2011, Cantor introduced the “Repealing the Job-Killing Health Care Law Act,” the first of 33 repeal efforts that have reached the House floor.

That same year, Aetna, Humana, UnitedHealth Group and WellPoint — which together control 28 percent of the health insurance market — maxed out to Cantor, giving $10,000 apiece to his campaign committee. That doesn’t include additional sums that went into the congressman’s leadership PAC.

Behind Cantor, Rep. David Camp, R-Mich., ranks second in health insurance industry contributions. The chairman of the powerful House Ways and Means Committee has pulled in more than $234,000 from these PACs since 2007.

“The American people have told us they don’t want to be forced to buy health insurance that they don’t want and they can’t afford,” Camp declared in February 2010. A year later, Camp sponsored a bill that would cut $11.6 billion in funding for the law.

Rep. Paul Ryan, R-Wis., now the Republican nominee for vice president Mitt Romney’s running mate, is also among the top recipients of funds from health insurance companies and a leader in House’s efforts to repeal the health care law.

The dozen PACs studied by the Center donated $187,000 to Ryan between 2007 and 2012, placing the Wisconsin congressman fourth on the list. Just this year, Ryan, who chairs the influential House Budget Committee, has sponsored two major budget plans that have called for the law’s repeal.

Other top recipients of health insurance PAC money during this period include House Speaker John Boehner ($209,500), Republican House Whip Kevin McCarthy of California ($149,700), Sen. Orrin Hatch, R-Utah, who is the ranking GOP member of the Senate Finance Committee ($151,500), and Senate Finance Committee Chairman Max Baucus, D-Mont. ($142,400).

Why back the repeal?

So if the health insurance industry was in favor of key parts of the law, why is it supporting members of Congress who are so bent on killing it?

Part of the reason is that the legislation’s centerpiece, the requirement that almost everyone sign up for health insurance or pay a penalty, is expected to benefit the health insurance industry. Democrats supported the provision; Republicans despise it — despite its origins as a conservative idea.

More than two decades ago, an individual health insurance mandate was proposed by Stuart M. Butler of the conservative Heritage Foundation. During the 1993 health care debate, Republican lawmakers supported legislation that included an individual mandate. And the idea was endorsed by Republican Mitt Romney during his reforms as governor of Massachusetts.

During Congress' recent debate over health care reform, the industry was "playing supporters because there is nothing the health insurance industry wanted more than an individual mandate to force people to buy their product," says Carmen Balber, who monitors health policy at the nonprofit Consumer Watchdog.

At the time the reform law passed, the Democratic Party controlled the White House and both houses of Congress. By supporting the law, the industry was able to stay in the game on a very complex piece of legislation.

While the industry certainly did support parts of the law — such as the individual mandate — there were plenty of provisions it did not like and would like to see repealed.

AHIP and WellPoint — the industry’s top PAC contributor — did not reply to the Center’s telephone or email inquiries requesting comment. Representatives from Aetna, Amerigroup, Cigna and Humana declined to comment for this story.

Ethan Rome, executive director at Health Care for America Now, a health-care-reform advocacy group, suspects that the industry views support of Republican candidates — who will undoubtedly vote for deregulation — as a long-term investment.

For example, under the new law, insurance companies must spend at least 80 cents of every premium dollar on medical care for individual and small business policyholders — and 85 cents for large groups. That’s a provision the industry would like to see repealed.

Insurers must send policyholders or their employers rebate checks if the ratio drops below those levels.

In recent statements, AHIP claims the provision, known as the “medical loss ratio requirement,” could inhibit innovation and drive up administrative costs because of new reporting requirements.

Indeed, AHIP has lobbied extensively for a new bill that — according to Consumer Watchdog’s Balber — “would effectively gut the medical loss ratio requirement,” by allowing insurance companies to include broker compensation as a medical care cost in the ratio.

This legislation, introduced as H.R. 1206, is sponsored by Rep. Mike Rogers, R-Mich., and was forwarded to the House Energy and Commerce Committee on Sept. 11. Rogers ranks 19th on the Center’s list of top health insurance beneficiaries, receiving $90,500 over the nearly six-year period. AHIP supports Rogers' bill, as do several trade associations representing brokers and agents, claiming broker salaries commissions are not necessarily administrative costs, but rather a “human resource” expense because independent brokers and agents help patients select plans.

But to Balber, factoring insurance broker salaries as a medical cost — and thus, part of the 80 percent requirement — is “absurd.” Such a shift in premium calculation would negate the cost-cutting benefits of the medical loss ratio provision — what she considers the law’s strongest consumer protection.

Looking forward

Since the Democrats’ Affordable Care Act was signed into law, the political environment has changed dramatically.

Democrats no longer hold a filibuster-proof majority in the Senate, the House is controlled by Republicans and the president is in a tight race for re-election.

Despite his party’s unified attack on the health care law, Romney, whose own health insurance reforms in Massachusetts were a model for Obama’s plan, has recently hinted at willingness to compromise on some of its politically popular elements.

“Well, I'm not getting rid of all of health care reform,” Romney, the GOP's presidential nominee, said in a Sept.9 interview with David Gregory on NBC’s Meet the Press.

While the individual mandate is widely viewed as unpopular, the opposite is true for many provisions such as the prohibition on companies refusing to cover patients with pre-existing conditions, the closing of the Medicare Part D prescription drug “donut hole” and the option for young adults to stay on their parent’s plan until age 26.

According to Bob Laszewski, an insurance industry consultant, a Romney administration would not be able to secure enough votes in the Senate to repeal the law, even if it wanted to.

A more realistic legislative outcome is that congressional Republicans will attempt to defund the law through budget reconciliation rules — a scenario that would likely hurt insurance company balance sheets, he said.

GOP defunding efforts would leave insurance companies subject to the law’s politically popular insurance regulations — like covering patients with pre-existing conditions — but without government subsidies that are provided in some parts of the plan.

“If Romney wins, I think you’re going to see the insurance industry very concerned about Republicans trying to choke health care reform,” Laszewski said.

Andrea Fuller, Lydia Mulvaney and Michael Beckel contributed to this report. Graphic design by Paul Williams.