2010 - %3, October

O'Donnell's "Independent" Expenditure Campaign

| Fri Oct. 1, 2010 3:09 AM PDT

Last week, Mother Jones ran a story about the campaign manager for Christine O'Donnell's unsuccessful 2008 Senate campaign in Delaware, noting that this aide, Jon Moseley, once wrote an article claiming that Obama is a secret Muslim. The article reported that tea partier O'Donnell's current Senate campaign has made payments to Moseley. After the story was published, Moseley sent Mother Jones an angry email insisting that he was not involved in her 2010 Senate bid and that the payment in the Federal Election Commission records this year was for money O'Donnell owed him from the 2008 effort. He wrote, "I have no relationship with Christine O'Donnell's current Senate campaign... I have not communicated in any way with Christine O'Donnell or her campaign since June 2008, except concerning her campaign paying off expense reimbursements from 2008, which they ultimately did."

But days later, a Virginia tea party group sent out an email alerting members to a bus trip being organized to transport volunteers to Delaware to campaign for O'Donnell in mid-October. Who should be organizing the trip but Moseley himself.

Moseley, a longtime conservative policy advocate, has set up a website to "support Christine." He claims it is an "independent expenditure" effort that is "not affiliated" with her campaign—which means it's not covered by the campaign contribution and spending limits that apply to the actual O'Donnell campaign. Independent expenditure campaigns are common, with unions, business groups, and ideological outfits routinely mounting them to support or block candidates by airing ads or running get-out-the-vote projects. All this is legal, as long as these groups do not coordinate their activities with candidates and their campaigns. (For example, a labor union could not ask a candidate where it would be best for it to focus a get-out-the-vote push.) 

Moseley's effort appears geared toward shipping out-of-state volunteers to Delaware. For $55, Virginia residents can hop aboard a bus in Springfield and head to Delaware for the day to knock on doors and hand out flyers for O'Donnell. Another bus will be coming from York, Pennsylvania. But the group's website describes the project in a way that makes it seem as if it's being coordinated with O'Donnell's campaign, which would be a violation of federal election laws.

On the bus sign-up website, Moseley writes that after the buses meet people arriving by car at a mall in Delaware:

we will go where we are needed to campaign.

We will do whatever Christine's campaign needs us to do. [emphasis added] Are you physically limited? Activities MIGHT include walking neighborhoods to pass out literature, yard signs, bumper stickers, etc. You might also stand still handing out literature at a grocery store or high traffic location if you are physically limited. We also hope to attend a rally with the candidate.

THIS IS AN INDEPENDENT EXPENDITURE and not affiliatied [sic] with any campaign. Led by Jonathon Moseley, formerly Christine O'Donnell's 2008 campaign manager, but who is not currently associated with the Christine O'Donnell campaign. This bus trip is not associated with any organization. Organizers are using their own private time -- any other employment or associations are coincidental and not related. This project will * NOT * donate any money to any candidate or campaign, except possibly to BUY for our own use literature, yard signs, or bumper stickers to be distributed by our participants at cost.

The line about doing "whatever Christine's campaign needs" suggests that Moseley knows what the campaign wants. And how could he without communicating with the campaign? Perhaps this is a case of loose rhetoric. But it could be enough to draw the interest of the Federal Elections Commission. Neither Moseley nor O'Donnell's campaign returned calls for comment.

On the website, Moseley also provides some information about himself. He claims to have been instrumental in the "swiftboating" of Sen. John Kerry during the 2004 presidential campaign. His brother-in-law apparently owns the publishing house that released Jerome Corsi's book Unfit for Command, which was part of the smear campaign that attacked Kerry's military record in Vietnam. Moseley claims to have helped get the the book published by working with Ohio talk show host Paul Schiffer, who took credit for helping bring together Swift Boat Veterans for Truth. Earlier this year, Moseley worked on Schiffer's failed congressional campaign.

Moseley's current work for O'Donnell doesn't seem as sophisticated (or elaborate) as the Swift Boat campaign, which was conducted by an independent expenditure group looking to boost George W. Bush's reelection chances. It's focused on a campaign basic: finding out-of-state tea partiers willing to put boots on the ground for O'Donnell, turning her Senate bid into a national cause.

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Wall Street's Sigh of Relief

| Fri Oct. 1, 2010 3:00 AM PDT

How will we know if the financial reform bill passed in July has worked? A few months ago I mentioned four metrics to watch for:

  • Borrowing rates for large banks
  • Derivatives trading
  • Leverage ratios
  • Industry profitability

Of these, the most important and the easiest to measure is the last one: industry profitability. Once you cut through all the chaff and all the technical details, you're left with a simple truth: a safer, less leveraged banking sector is inherently less profitable than the casino trading and finance-oriented one we have right now—the one that accounted for an astonishing third of all corporate profits in the United States during the Bush era. If profits stay at pre-bubble levels, it almost certainly means that financial reform failed.

It's too early to tell how reform will turn out, of course, but recently we got a disturbing glimpse. The people in the best position to know how the new regulations are going to affect the banking sector are the bankers themselves, and bankers don't seem to be very worried. Researchers at an IBM think tank, the Institute of Business Value, did a survey of top financial executives recently and asked them how the new regs were likely to affect them. Results are at the right: a mere 13% of them thought industry returns would decrease significantly. The vast majority thought returns would be the same or only slightly less.

It's a small sample—only 54 executives—and maybe they're just being overoptimistic. But it's a bad sign that they aren't a little more worried. (Another bad sign: asked about their top concerns, the #3 answer was figuring how to get around the new regulations.)

Of course, there's more to banking regulation than just Dodd-Frank. There are also the new capital standards recently adopted by the Basel Committee, and at first glance they seemed gratifyingly stiff. But they were announced two weeks ago, on Sunday the 13th, and when markets opened on Monday the 14th bank stocks shot up. Yet again, the people who are in the best position to judge the real effect of the new regulations didn't seem too worried.

For now, then, things don't look so good. Both Dodd-Frank and Basel III are improvements, but the best evidence so far—namely the reaction of people with money at stake—suggests that it won't be long before Wall Street is back to business as usual. It's been an opportunity lost.

We're Still at War: Photo of the Day for October 1, 2010

Fri Oct. 1, 2010 2:30 AM PDT

U.S. Army Pfc. David Boucher, with 3rd Platoon, Alpha Company, 1st Battalion, 503rd Infantry, 173rd Airborne Brigade Combat Team, provides security in Chak district, Wardak province, Afghanistan, Sept. 24, 2010. U.S. Army photo by Pfc. Donald Watkins