Sandy Johnson stories from The Center for Public Integrity

Corzine gave $5 million to help candidates win office; now he's being grilled by Congress

New Jersey,United States — 2011-12-08T11:27:14-05:00

Jon Corzine, a one-time wizard of the financial world, testified Thursday he doesn’t know where a billion dollars in investor funds went in the collapse of MF Global, the investment firm he ran until last month.

Corzine returned to the Capitol where he once served as a powerful U.S. senator from New Jersey for the first of three scheduled appearances before congressional committees.

"I simply do not know where the money is, or why the accounts have not been reconciled to date," Corzine said in prepared testimony. He said he cannot say whether there were operational errors at MF Global or whether banks or other companies are holding funds that should have been returned. Corzine resigned as CEO on Nov. 3, days after the firm collapsed in the eighth-largest bankruptcy in U.S. history.

Corzine made his mark on Wall Street, rising to become co-CEO of behemoth Goldman Sachs. After losing a power struggle with Henry Paulson, who later became Treasury secretary under George W. Bush, Corzine turned to elective politics. He was elected to the Senate in 2000 and left to successfully run for governor of New Jersey in 2005. He was defeated by Chris Christie in 2009 and returned to the world of finance.

Over the years, Corzine has been a prolific campaign contributor. He gave at least $5.3 million in political donations going back to 1984, according to an analysis by iWatch News of CQMoneyline data. The donations were from his personal fortune, not his campaigns.

His largest recipients were the major Democratic campaign committees, whose job is to help elect other members of his party. The Democratic National Committee (at least $1.8 million), Democratic Senatorial Campaign Committee (at least $1.4 million), and Democratic Congressional Campaign Committee (at least $140,000) all received large chunks from Corzine, who took full advantage of old campaign limits that were not as restrictive as those in place now to donate large sums of money.

Among members of Congress, Corzine was particularly friendly to Montana Sen. Max Baucus (at least $34,000), New Jersey Rep. Rush Holt (at least $24,000) and Senate Majority Leader Harry Reid of Nevada (at least $18,000).

His failure at MF Global also puts a crimp in the campaign treasury of President Obama. As iWatch News reported, Corzine had already become a $500,000-plus bundler for the president’s re-election, the top level disclosed by the campaign, before his personal fortunes went south. It is widely believed Corzine had hoped to get a high-level position in the administration if Obama wins a second term.

Some of these erstwhile friends in Washington are now grilling Corzine on the MF Global collapse. A few blocks away from the Capitol, federal regulators and the FBI are investigating the case as well.

FEC deadlocks on Super PAC ad coordination with candidates

2011-12-01T17:27:59-05:00

The Federal Election Commission deadlocked Thursday on whether wheel-heeled Super PACs can coordinate advertising with candidates.

As The Associated Press reported:

“The commission deadlocked 3-3 along party lines after a lengthy and heated debate over how much coordination between elected officials and super political action committees would be against the rules.

“American Crossroads is the Republican super PAC that sought an opinion from the FEC, following allegations two months ago that Democratic Sen. Ben Nelson of Nebraska unlawfully coordinated with his party on an issue ad. In essence, Crossroads asked whether Nelson could legally produce such an ad and whether it could do the same.”

Coordination is taboo between candidates and these outside groups, and it will continue to be so after the FEC vote. In an election cycle where outside groups will raise far more money than the candidates themselves, the issue is certain to rise again.

“The result of today’s deadlock is that American Crossroads did not get the green light it sought from the FEC to fully coordinate ads with candidates,” said Campaign Legal Center FEC program director Paul S. Ryan. “Instead, any ads run by American Crossroads that feature federal candidates will be subject to legal scrutiny and may be deemed illegal.”

In reality, ads flood the airwaves from outside groups, especially attack ads. The Washington Post reported Thursday that more than $23 million has been spent on negative campaign TV ads already in the 2012 election. Of that amount, the Karl Rove-affiliated American Crossroads and its sister group, Crossroads GPS, accounted for nearly half. The Post analysis also showed that 70 percent of the ads thus far have been negative in nature.

The Center for Public Integrity’s iWatch News has produced numerous reports on the outside groups and activities that suggest coordination or at least tight links—mainly on the fundraising side.

Last week, the Center reported that lobbyist Tom Loeffler, who briefly chaired the campaign of GOP presidential candidate Jon Huntsman, had quietly moved to a Super PAC that supports Huntsman, to lead its fundraising. Our Destiny PAC in late November then spent an astonishing $1.5 million on ads touting Huntsman in New Hampshire.
Similarly, top Romney campaign fundraiser Steve Roche jumped to Restore Our Future to help spearhead the Super PAC’s multimillion-dollar fundraising operation. Romney himself attended a fundraiser for his Super PAC in July in New York. The Romney-affiliated Restore Our Future raised $12.2 million in the first half of this year. By contrast, the Romney campaign itself hauled in $18.3 million during the second quarter, a performance that fell somewhat short of early expectations (yet far exceeded other GOP candidates).
Two Democratic groups, Priorities USA Action and Priorities USA, spent $100,000 earlier this fall on ads attacking Republican Mitt Romney, painting a dark picture of “Mitt Romney’s America.” The two groups were created by two former White House aides soon after they left the Obama administration earlier this year.
And a rematch in Kentucky’s 6^th District, illustrates how outside groups pour millions of dollars into competitive races, in this case for a single seat in the U.S. House of Representatives.

From pension buyouts to PTSD, how America's veterans are faring on Veterans Day

2011-11-21T21:07:53-05:00

On Veterans Day, 11-11-11, the nation pauses to honor the 24 million living American veterans who served in wars dating back to World War II. Of those, more than 2 million veterans did tours of duty in Iraq and Afghanistan.

The federal government doesn’t always adequately protect the military veterans who protected their nation. The Center for Public Integrity has held the government accountable over the years for treatment of veterans.

For Veterans Day, the Center has compiled some of its coverage of soldiers and veterans:

Military retirees in need of quick cash can fall victim to a form of payday loans called “pension buyouts” that cost them mightily over time.
Children who attend Pentagon-run schools are left behind even as their parents fight in Iraq and Afghanistan. The military says 39 percent of its schools are “failing,” and another 37 percent are in “poor” physical shape.
ANALYSIS: A new kind of house call pioneered by the Veterans Affairs Department may save billions in medical costs and be a model for health care reform.
The Pentagon’s traumatic brain injury and psychological health center for veterans has been hindered by unfocused leadership, slow hiring, and poor accounting, the GAO says.
About 20 percent of veterans serving in Iraq and Afghanistan have experienced post-traumatic stress disorder, PTSD, an anxiety disorder which develops after experiencing a life-threatening event.
The VA wasted $300 million in the last decade as it attempted to improve its information technology.
VA medical centers, which treat 5 million veterans each year, are in hot water for failing to follow sterilization and sanitation rules.
One VA official billed the taxpayers $130,000 for commuting to his job in Washington. Another VA appointee was overpaid $41,000 and commuted to Washington from Arkansas.

New ads reflect spending power of Super PACs, 501(c)(4) groups

2011-12-01T17:05:26-05:00

President Obama’s allies, zeroing in on Republican Mitt Romney as a 2012 opponent, are spending $100,000 on ads painting a dark picture of “Mitt Romney’s America.”

The ads are produced by Priorities USA Action, the super PAC affiliated with a similarly-named 501(c)(4) group, Priorities USA. This political double play is one of the new tactics of the big money groups that have emerged since the Supreme Court last year opened the way for wealthy individuals, corporations and labor unions to make unlimited contributions.

Priorities USA Action and Priorities USA, co-founded by former White House press aide Bill Burton, have a target of raising $100 million for the 2012 elections.

The Republican counterparts — the super PAC American Crossroads and its affiliated 501(c)(4), Crossroads GPS — aim to raise almost $250 million.

The super PACs can take unlimited contributions but they must be reported to the Federal Election Commission. The 501(c)(4)s, registered with the IRS rather than the FEC, need not disclose any of their donors or the amount of their contributions. These groups, often formed in pairs, are the newest twist in campaign fundraising.

“The fact that so far 501(c) (4)s are only reporting a fraction of what they’re spending — and nothing at all about their donors — underscores the wholesale inadequacy of our disclosure requirements,” Sheila Krumholz, the executive director of the Center for Response Politics, told iWatch News, which reported on the proliferation of these groups earlier this week.

Donors have been confused about the different missions of all the new groups and how they interact. The Democratic groups held briefings this fall to better explain how the various groups work.

Some longtime GOP fundraisers say the fundraising successes of their various new groups hark back to so-called “soft money” that once flooded into the political parties by the millions.

“Much of those funds that used to flow to the national party committees as soft money have found their way to these c4s and super PACs for the electoral process,” said Mel Sembler, the former Republican National Committee finance chairman.

Back to the anti-Romney ad run by Priorities USA Action. It resurrects his “corporations are people” comment to a questioner last summer. And a Romney quote on the mortgage crisis: “Don’t try to stop the foreclosure process, let it hit the bottom,” he said.

Another super PAC, called Make Us Great Again, is spending $380,000 on ads that tout the background and achievements of Texas Gov. Rick Perry.

Special interests woo Super Congress members with campaign cash

2011-10-27T07:54:11-04:00

The 12 members of the deficit-cutting Super Congress might be the most popular people in Washington. As they deliberate how to identify more than $1 trillion in spending cuts, special interests are determined to protect their pet programs — and one way to do so is with campaign contributions.

The committee held a rare public meeting Wednesday, and the debate centered on potential savings from the Defense Department budget, given President Obama’s decision to withdraw all troops from Iraq by year’s end. Any cuts to defense spending won’t sit well with defense contractors like Lockheed Martin and Honeywell, who — among others — have been trying to bullet-proof themselves with campaign contributions.

In just six weeks after the committee members were named, political action committees for almost 100 special interests ponied up more than $300,000 in contributions to the lawmakers. The donations will continue to pour in until the committee has finished its work shortly before Thanksgiving.

Formed as part of a compromise in late July between Republicans and Democrats in Congress, the committee must come up with $1.5 trillion or more in budget savings, enough to match increases in the government's ability to borrow enough money to pay its bills through the beginning of 2013. The whole Congress is required to take an up-or-down vote on the committee’s recommendations by Dec. 23.

Windfalls of War: A decade of keeping government spending accountable

Afghanistan — 2011-10-07T17:33:30-04:00

UPDATED 10/7/11: Ten years ago, American bombs rained down on Afghanistan, the first thrust of revenge for the 9/11 attacks on the Pentagon and the World Trade Center.

The United States went to war to find and kill terrorist leader Osama bin Laden, who had been given refuge by Afghanistan's Taliban leadership. The Taliban fell quickly; it took another 10 years to kill bin Laden. And still the war drones on.

More than 6,000 soldiers have died in Afghanistan and Iraq. The wars cost taxpayers $2 billion a week. The Pentagon has awarded $206 billion in contracts to support operations in Iraq and Afghanistan.

The bipartisan Commission on Wartime Contracting has concluded that up to $60 billion spent on contracts in Iraq and Afghanistan has been lost to waste, fraud and abuse.

“The need for reform is urgent,” the commission report said. “Contractors’ support…has been unnecessarily costly, and has been plagued by high levels of waste and fraud.”

Over the last decade, the Center for Public Integrity and its website iWatch News have kept a watchdog’s eye on the Bush administration and now the Obama administration. What follows is a compendium of the Center’s best work on the war.

Windfalls of War III (2011)

Pentagon's no-bid contracts triple in 10 years of war
Over a decade of war, the Pentagon has awarded lucrative military contracts without competitive bidding, and the amount has increased from $50 billion in 2001 to $140 billion in 2010.

KBR: The Pentagon’s concierge
KBR, formerly Kellogg, Brown and Root, won the first "concierge" contract for an array of services in Iraq and Afghanistan and parlayed it into a sole-source $37 billion bonanza

One-stop shopping for helicopters...made in Russia
Pentagon contracts to Russian helicopter-makers confound US companies. Pentagon says Afghan and Iraqi pilots are more familiar with Russian choppers.

Taxpayers get hammered by Pentagon’s attempts to do “one-stop shopping”
The air tanker fight shows how competition among defense contractors can drive down the cost of expensive new weapons systems, to the benefit of taxpayers. The Pentagon's competed contracts fell to 55 percent in the first half of 2011.

Pentagon's record of competitive contracts is poor compared to other agencies
Over the past 10 years, the Pentagon has competed about 60 percent of its contract dollars, which stands in stark contrast to other large federal agencies. State Department competed 75 percent; Energy competed 94 percent; Homeland Security 77 percent.

JIEDDO: The Manhattan Project that bombed
After spending $21 billion, Pentagon still doesn’t have a high-tech method to detect or destroy IEDs from a safe distance.

Plus: Watch author Sharon Weinburger discuss her no-bid contractor series on DemocracyNow.

The Iraq War Card (2008)

False pretenses
Following 9/11, President Bush and seven top officials of his administration waged a carefully orchestrated campaign of misinformation about Saddam Hussein's Iraq, making more than 900 false statements

935 false statements: Key false statements by top Bush administration officials

Windfalls of War II (2007)

Baghdad Bonanza
KBR, the global engineering and construction giant, won more than nine times more contract money than the second highest contractor, DynCorps, according to an analysis by the Center for Public Integrity.

Plus: The top 100 recipients of Iraq and Afghanistan reconstruction funds.

Inside the Contracting World (2004)

Winning contractors
More than 150 American companies have received contracts worth up to $48.7 billion for work in postwar Afghanistan and Iraq, according to the latest update of the Center for Public Integrity's Windfalls of War project.

Inside a war-time contract
Over a period of six months, the contracted value of one Iraqi task order of Halliburton subsidiary Kellogg, Brown & Root grew by a multiple of 36 and was modified 21 times, according to previously classified documents.

Halliburton contracts balloon
Despite being under an investigative cloud, Cheney’s former employer gets $4.3 billion in 2003.

Windfalls of War I (2003)

Contractors reap the windfalls of war
More than 70 contractors have won up to $8 billion for work in postwar Iraq and Afghanistan over the last two years, according to a new study by the Center for Public Integrity. Those companies donated more than $500,000 to the presidential campaigns of George W. Bush.

Contracts via Kabul and Baghdad provisional authorities
Three U.S. companies—banking powerhouse J.P. Morgan Chase, oil giant Chevron/Texaco and global telecommunications provider MCI—have won contracts from the provisional governments in Kabul and Baghdad.