Alex Park

Alex Park

Writing Fellow

Alex Park is a recent graduate of the UC-Berkeley Graduate School of Journalism. His work has been published in PBS/MediaShift, New America Media, allAfrica.com, Time.com, and the Believer.

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A recent graduate of the UC-Berkeley Graduate School of Journalism, Alex Park is an investigative journalist with an interest in global agriculture. He has blogged in South Africa and reported on Cyprus, and in college he published an award-winning paper on a 2008 period of anti-immigrant violence in South Africa, since cited in academic works. Currently, his interests lie explaining complex social systems—be they governments, conflicts, trade patterns, or waves of immigration—for a general audience. His work has been published on PBS/MediaShift, New America Media, allAfrica.com, the Believer, and Time.com

New Study: Lobbying Doesn't Help Company Profits—But It's Great For Executive Pay

| Fri Jul. 11, 2014 3:00 AM EDT

Who really profits when companies drop millions on lobbying? A new paper by Russell Sobel and Rachel Graefe-Anderson of the Mercatus Center at George Mason University suggests a surprising answer: Corporate America's record expenditures on political influence may be doing little for the companies doing the spending, but a lot for their executives' pocketbook.

"Our main finding suggests that the top executives of firms are the ones who are able to capture the benefits of firm political connections," the paper says. The researchers mined a trove of PAC contributions and lobbying data from the Center for Responsive Politics and matched it with a variety of standard corporate performance indicators. They found that no matter how much lobbying or political contributions a company pays for, there's almost no significant rise in the company's overall performance—but executive compensation does rise significantly. The only exceptions were the banking and finance industries, where companies also appear to gain some benefits.

Regardless of who benefits, influence spending still registers in the billions of dollars: As the chart below shows, the amount of money spent on lobbying annually more than doubled to $3.3 billion between 1998 and 2013. In 2012 alone, the two leading spenders, the pharmaceuticals and insurance sectors, dropped more than $409 million on lobbying and more than $107 million on political contributions.

 

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The Legacy of the Hobby Lobby Case: Protecting Anti-Gay Discrimination?

| Wed Jul. 9, 2014 6:49 PM EDT
A protester patiently awaits the Hobby Lobby decision outside the Supreme Court

In his majority opinion in the recent Hobby Lobby case, Supreme Court Justice Samuel Alito took pains to frame the ruling, exempting companies from complying with Obamacare's contraceptive mandate if it violated the religious beliefs of their owners, as a narrow one. But gay and civil rights groups have long warned that a decision permitting such a religious exemption could have broad ramifications, potentially allowing employers to discriminate against gays. Now, their fears may be coming to pass.

"What we've seen since last week's decision came down is that opponents of LGBT equality have pushed a misreading of that decision as having broadly endorsed discrimination against people, including LGBT people in the workplace," says Ian Thompson, a legislative representative for the American Civil Liberties Union.

Cecile Richards, president of the Planned Parenthood Action Fund, told Mother Jones that the Hobby Lobby ruling "opens the door for corporations to discriminate against anyone that doesn't look, sound, or share the religious beliefs that they do. This isn't a business agenda; it's an extreme social agenda and it is deeply unpopular with the American people."

How Hobby Lobby Undermined The Very Idea of a Corporation

| Thu Jul. 3, 2014 2:50 PM EDT
Justice Alito signs his oath card in the Justices Conference Room

Here's one more reason to worry about the Supreme Court's Hobby Lobby decision, which allowed the arts and crafts chain to block insurance coverage of contraception for female employees because of the owners' religious objections: It could screw up corporate law.

This gets complicated, but bear with us. Basically, what you need to know is that if you and some friends start a company that makes a lot of money, you'll be rich, but if it incurs a lot of debt and fails, you won't be left to pay its bills. The Supreme Court affirmed this arrangement in a 2001 case, Cedric Kushner Promotions vs. Don King:

linguistically speaking, the employee and the corporation are different “persons,” even where the employee is the corporation’s sole owner. After all, incorporation’s basic purpose is to create a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, who own it, or whom it employs.

That separation is what legal and business scholars call the "corporate veil," and it's fundamental to the entire operation. Now, thanks to the Hobby Lobby case, it's in question. By letting Hobby Lobby's owners assert their personal religious rights over an entire corporation, the Supreme Court has poked a major hole in the veil. In other words, if a company is not truly separate from its owners, the owners could be made responsible for its debts and other burdens.

"If religious shareholders can do it, why can’t creditors and government regulators pierce the corporate veil in the other direction?" Burt Neuborne, a law professor at New York University, asked in an email.

That's a question raised by 44 other law professors, who filed a friends-of-the-court brief that implored the Court to reject Hobby Lobby's argument and hold the veil in place. Here's what they argued:

Allowing a corporation, through either shareholder vote or board resolution, to take on and assert the religious beliefs of its shareholders in order to avoid having to comply with a generally-applicable law with a secular purpose is fundamentally at odds with the entire concept of incorporation. Creating such an unprecedented and idiosyncratic tear in the corporate veil would also carry with it unintended consequences, many of which are not easily foreseen.

In his opinion for Hobby Lobby, Justice Samuel Alito's insisted the decision should be narrowly applied to the peculiarities of the case. But as my colleague Pat Caldwell writes, the logic of the argument is likely to invite a tide of new lawsuits, all with their own unintended consequences.

Small wonder, then, that despite congressional Republicans defending the Hobby Lobby decision as a victory for American business against the nanny state, the US Chamber of Commerce—the country's main big business lobby—was quiet on the issue. Even more telling: Despite a record tide of friends-of-the-court briefs, not one Fortune 500 weighed in on the case. In fact, as David H. Gans at Slate pointed out in March, about the only sizeable business-friendly groups that did file briefs with the court were the US Women's Chamber of Commerce and the Gay and Lesbian Chamber of Commerce. Both sided against Hobby Lobby.

The IRS Is Coming For Your Offshore Bank Account

| Tue Jul. 1, 2014 6:00 AM EDT
Where corporate America's money went

It's always been a pretty simple arrangement for America's superrich: Park your money in a country whose banks know how to keep a secret and then underreport your assets to the IRS. Without a way to independently verify how much money you have abroad, the taxman had to take your word for how much money you had stashed in a Swiss vault or in a sunny haven like the Cayman Islands. But as of yesterday, the US government will require foreign banks to report their American clients' assets, or face 30 percent tax penalties on some offshore deposits.

The move is part of the Foreign Account Tax Compliance Act (FATCA), which was introduced in 2010. Since then, more than 80 countries have agreed to open their ledger books to the feds. After some complicated last-minute negotiations, even Russia and China have started to cooperate.

Companies and individuals have long used offshore banking to keep their taxes low: Last year, American multinationals kept an estimated $2 trillion (yes, with a "t") abroad, according to a Bloomberg analysis. In recent years, tech companies have become some of the most enthusiastic offshore depositors. Between 2010 and 2013, Microsoft more than doubled its foreign stockpile to $76.4 billion, while Apple increased its pot abroad more than fourfold to $54.4 billion.

But while big US companies have stowed a massive pile of cash abroad, US banks hold even more money for foreign clients. According to Tax Justice Network, a British-based advocacy and research group, out of the $21 to $32 trillion kept offshore globally, about 22 percent is kept in the United States—a fact that's not lost on countries complying with FATCA, some of whom are embracing the law because it means they'll get to learn a few things about their own citizens' holdings in the US.

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