Ken Vogel knows what it is like to get tossed out of a good party. Among us campaign finance reporters, Vogel is known as a fearless crasher of political fundraisers and invite-only donor schmoozefests, from which he is usually—but thankfully not always—ejected. As the chief investigative reporter for Politico, the hyper-competitive town organ for Washington, DC, Vogel has for years chronicled the rapidly increasing flow of money into American politics and the eccentric, grouchy, madcap millionaires and billionaires who, in Vogel's telling, "are—in a very real and entirely legal way—hijacking American democracy."
1) Bill Clinton told donors that a controversial new pro-Obama nonprofit group could be used to influence the 2014 midterms—despite the nonprofit's pledge to be issue-only
Vogel reports on a January 2013 private speech by Clinton to a group of Obama fundraisers on behalf of Organizing for Action (OFA), the rebooted version of Obama's 2012 campaign. Launched at the start of the president's second term, Obama officials said OFA would focus strictly on issues—gun control, immigration, raising the minimum wage. But that's not how Clinton saw it:
"This is a huge deal, this midterm election," said Clinton. "And I think even more important, this question is whether we can use the techniques that actually gave people the chance to debate health care, debate economic policy, understand what happened in the Recovery Act, all these things that were an issue last time, understand why the welfare reform act was wrong, and the Medicare Act was wrong. Can we use that to actually enact an agenda in the Congress and then go into the midterm and protect the people who voted for it?"
2) Josh Romney invited all of his dad's biggest rainmakers to a future Romney White House inauguration ceremony
On the eve of the 2012 Republican Party convention in Tampa, Vogel got inside a reception for major Romney donors and fundraisers (also known as bundlers). At one point in the shindig, Josh Romney, one of Mitt's sons, appeared to go a little overboard when thanking his dad's money-men:
"My dad will be the next president of the United States of America and you are all invited to the inauguration," [Romney] proclaimed to rousing cheers before backtracking sheepishly, as if wondering whether the complicated campaign and ethics rules forbade inviting big donors to the inauguration. "I don't think I'm really allowed to do that," he said, looking offstage to his right, perhaps for guidance from a campaign official familiar with the rules, before letting his exuberance and sense of kinship with the campaign's rich supporters takes over. "But it's a big place, so you all can come."
3) Romney's inner circle flirted with using a legally dicey big-money committee for his first presidential run
Top aides secretly hatched a plan to boost Romney's 2008 campaign by forming a so-called 527 committee, a big-spending precursor to super PACs. They called it Turnaround America and enlisted a well-connected fundraiser named Phil Musser to run the group. But the plan didn't get far:
Musser laid it all out in a PowerPoint presentation, and he spent a few months crisscrossing the country on his own dime, delivering it to Romney's richest backers. Several liked the plan and made tentative commitments. But most got cold feet after they checked with their lawyers, who explained that it could expose them to legal risk. The plan was too far ahead of its time, and Musser scrapped it before he ever filed the paperwork, leaving no trace that more than two years before the Citizens United decision Romney's allies had foreseen the power of what would become super PACs.
4) Obama privately suggested he'd push for a constitutional amendment to overturn Citizens United during his second term
Obama made waves during an August 2012 Reddit "Ask Me Anything" forum by voicing support for a constitutional amendment to roll back the effects of the Supreme Court's Citizens United decision. It turns out that such a radical move, favored by many activists on the left, had been on the president's mind for quite a while.
Vogel quotes the president stumping for an amendment during a February 2012 Q-and-A at a private Seattle fundraiser:
"Now, I taught constitutional law," Obama continued to [Bill] Gates et alia. "I don't tinker with the Constitution lightly. But I think this is important enough that citizens have to get mobilized around this issue, and this will probably be a multiyear effort. After my reelection, my sense is that I may be in a very strong position to do it."
Obama added that a reelection victory "may allow me to use the bully pulpit to argue forcefully for a constitutional amendment." So far, the president has done no such thing.
In the case Harris v. Quinn, the court's five conservative justices ruled that home-care workers in Illinois—such as the lead plaintiff, Pam Harris—cannot be forced to pay dues to a union if they're not union members because they are not full-fledged public employees like cops, firefighters, and teachers.
But there's good news for organized labor: The court did not deliver the killer blow to public-employee unions as some warned it might. The court declined to overturn the 1977 decision in Abood v. Detroit Board of Education, the opinion that upheld the model of public-employee unionism. Had the court tossed out Abood, it would've essentially made right-to-work—one of the conservative movement's favorite anti-union policies—the law of the land and dramatically damaged the ability of unions such as SEIU, AFSCME, and others that represent public workers to collect dues and engage in political and issue advocacy.
SEIU President Mary Kay Henry slammed the court's decision in Harris. "No court case is going to stand in the way of home care workers coming together to have a strong voice for good jobs and quality home care," she said in a statement. "At a time when wages remain stagnant and income inequality is out of control, joining together in a union is the only proven way home care workers have of improving their lives and the lives of the people they care for."
Pam Harris, the lead plaintiff in the case, and Harris' legal team, the National Right to Work Foundation, hailed the decision. "We applaud these home-care providers' effort to convince the Supreme Court to strike down this constitutionally-dubious scheme, thus freeing thousands of home-care providers from unwanted union control," Mark Mix, president of the National Right to Work Foundation, said in a statement.
However, Justice Samuel Alito, who wrote the majority's opinion in Harris, left open the possibility for a future challenge to Abood. Alito noted that the "Abood court's analysis is questionable on several grounds."
In other words, the fight over public-employee unions is far from finished. "The court's opinion in Harris is very much in the mold of opinions by the conservative Roberts Court majority: Issue a relatively narrow ruling on the conservative side, but lay the groundwork for a broader conservative ruling in the future," says Rick Hasen, a law professor at the University of California–Irvine. "In Harris, the court sets itself down the path of overruling Abood but does not take that step yet."
For more on Harris, read the below explainer.
Forget Wisconsin Gov. Scott Walker and his fellow union-bashing governors. Forget the partisan Republican attacks on organized labor. The gravest threat today to public-employee unions—which represent cops, firefighters, prison guards, teachers, nurses, and other city and state workers—is a Supreme Court case named Harris v. Quinn, which could be decided as early as this Tuesday. And, strangely enough, it is the court's most sharp-tongued conservative, Justice Antonin Scalia, who could ride to organized labor's rescue.
The case pits several of the nation's mightiest labor unions, such as the Service Employees International Union (SEIU) and the American Federation of State, County, and Municipal Employees (AFSCME), against their longstanding foe, the National Right to Work Legal Defense Foundation, which helped bring the case. National Right to Work is funded by some of the biggest names in conservative philanthropy: the Bradley family, the Waltons of Walmart, Charles Koch, and DonorsTrust and Donors Capital Fund, two dark-money ATMs. Labor officials see Harris as an effort by the deep-pocketed conservative movement to wipe public-employee unions off the map—and to demolish a major source of funding and support for the Democratic Party. "This is an attempted kill shot aimed at public-sector unions," says Bill Lurye, AFSCME's general counsel.
The origins of Harris date to July 2003, when the Illinois legislature passed a bill recognizing certain home-care providers as "public employees" and designating a Midwest branch of SEIU to exclusively represent those workers. Before that, these workers were deemed independent contractors with no union representation, even though the Illinois government paid them with federal health-care funds. In June 2009, Gov. Pat Quinn, a Democrat, went one step further. By executive order, Quinn declared the state's disability-care providers, another type of home-care worker, eligible for exclusive union representation. (Ultimately, the disability providers voted against unionizing.)
Organized labor hailed these moves. Unions see a huge opportunity in the rapidly growing population of elderly Americans—what SEIU president Mary Kay Henry calls the "silver tsunami." Labor leaders believe that organizing home-care workers across the country could slow the decline in union membership.
When the Illinois labor bill passed in July 2003, no home-care worker was forced into SEIU. But if they chose not to join, the union still was allowed to deduct a small amount of money from their paychecks. Why? It was the union's responsibility to represent every home-care worker impacted by the new law. To pay for representing union and non-union home-care workers, the union began taking what it calls a "fair share" fee. (This money cannot be used for political activity.) The Supreme Court has upheld a union's right to collect fair share fees. (This is where so-called right-to-work laws come in. Such laws ban unions from collecting fair share fees from non-union workers even if the employees benefit from union-negotiated contracts.)
Home-care workers, consumers, and advocates in Illinois say union representation has led to higher quality care, safer workplaces, and more stability. Flora Johnson, an 85-year-old home-care worker in Chicago and SEIU member, says union-funded training sessions taught her how to properly lift a person and how to feed patients without choking them. Johnson points out that the union brought a level of professionalism to her industry. "Before we got the union, it was like we was babysitters," she says. "We had no dignity."
But there was a backlash. In April 2010, a group of Illinois home-care workers, led by plaintiff Pamela Harris, filed a class action arguing that the state had infringed on their First Amendment rights by forcing them to be represented by a union and pay fees. (The suit named two unions, SEIU and AFSCME, as defendants.) A district court and the US Seventh Court of Appeals each dismissed the case.
The case lay dormant until last October. That's when, at National Right to Work's urging, the Supreme Court agreed to hearHarris. Until that point, Harris was narrowly focused on the Illinois home-care workers; it posed no existential threat to the likes of SEIU and AFSCME. But after the high court intervened, National Right-to-Work expanded its argument to threaten all public-employee unions. As SCOTUSblog's Lyle Denniston wrote, Harris "mushroomed…into a major test of the continuing validity of the Abood precedent."
Cueorganized labor's freak-out.Abood v. Detroit Board of Education is the 1977 Supreme Court decision that, in effect, upheld the constitutionality of the public-employee union model. The majority in Abood said these unions did not infringe on the First Amendment by collecting representation dues and collectively bargaining on behalf of public workers.
"This is an attempted kill shot aimed at public-sector unions," says Bill Lurye, AFSCME’s general counsel
During oral arguments in January, the Obama administration contended that overturning Abood would result in "radically reshaping First Amendment law." Yet several of the court's conservative justices appeared to want just that. Writing for the majority in 2012's Knox v. SEIU, Justice Samuel Alito all but invited National Right to Work to challenge Abood. During the oral arguments in Harris, Alito and Justice Anthony Kennedyseemed eager to demolish Abood. The court's four liberal justices questioned National Right-to-Work's arguments at every turn, with Justice Elena Kagan saying that tossing out Abood would lead to a "radical restructuring of the way workplaces are run." John Roberts, who has used his time as chief justice to push a pro-corporate agenda, gave few hints about where he stood on the fate of public-employee unions.
That leaves Justice Antonin Scalia. A conservative who says he interprets the Constitution through an originalist lens, Scalia would make for a strange ally of organized labor. Yet it was Scalia who asked some of the toughest questions of William Messenger, the lawyer for National Right to Work, challenging Messenger's argument that public-employee unions are lobbying organizations focused mostly on influencing public policy. Forcing workers to be represented by a lobbying outfit, Messenger argued, infringes on the First Amendment rights of workers who don't agree with the union's positions.
Scalia didn't appear to be buying it. He seemed to lean more toward labor's argument: that unions exist to better the working conditions of the workers they represent. "Listening to Scalia's voice in oral arguments made me feel like he really doubted that there was a need to go so far right now," says Lee Adler, an expert on public-employee unions at Cornell University. "He couldn’t follow National Right to Work's logic."
The Supreme Court's decision in Harris could cut several ways. It could affirm the lower court's decision—a big loss for National Right-to-Work. It could issue a more narrow opinion, saying, for instance, that Illinois home-care workers aren't public employees and shouldn't be unionized without touching Abood. Or the high court could take that kill shot: Eviscerate Abood and gut public-employee unions.
Like many other court watchers, Cornell's Lee Adler says the fate of Harris—and, potentially, the fate of public-employee unions—rests with Scalia. For the labor movement, Adler says, "He's the great white hope."
Bill and Hillary Clinton spent the final years of the Clinton presidency cash-strapped and buried in legal debts. But they weren't hurting for long: In her final days as first lady, Hillary landed a near-record $8 million advance for her memoir Living History, and by the time her 2008 presidential campaign was in full swing, the Clintons were flush, together having earned $109 million in the previous seven years.
When she left her position as secretary of state in February 2013, she had for the first time in decades something unusual: time off. She had a year or two to do whatever she wanted before deciding whether to run for the White House. In that period, she joined the family foundation and wrote a new memoir. She also hit the speaking circuit—and cashed in, pocketing speaking fees from businesses and trade groups that certainly have an interest in currying favor with a possible president.
Since leaving State, Clinton has made more than 90 speeches and notable appearances. Her hosts have included private equity firms, investment banks, nonprofit galas, trade association conventions, and a slew of colleges and universities. At least two-dozen of those were paid speeches. With her usual fee of $200,000 a speech, Clinton has banked close to $5 million for her speeches and appearances in the last 15 months. (A spokesman for Clinton did not respond to multiple requests for comment.)
Here is a list of Clinton's speeches and appearances:
Hillary's for-profit speaking gigs raise a serious question for a possible presidential candidate: Is she being courted by and/or providing access to the well-heeled companies and industry groups—including Goldman Sachs, the Carlyle Group, Kohlberg Kravis Roberts, the National Association of Realtors, and the US Green Building Council, among many others—that have paid her to speak? "This is a great way for a company to get access to her, to hear what she's thinking, to be remembered if and when she does run for office, and to help her grow that nice little nest egg that she and her husband have been intent on building," says Meredith McGehee, policy director at the Campaign Legal Center.
Spokespeople for several of the companies and organizations that have hosted Clinton as a speaker say her contract prevents them from disclosing her payment, though several point to news reports pegging her usual fee at $200,000 a speech. The New York Times reported last summer that Clinton's typical speech features "pithy reflections" and lessons from her tenure as secretary of state such as "Leadership is a team sport," "You can't win if you don't show up," and "A whisper can be louder than a shout." The cost of travel and the use of private jet, according to the Times, are negotiated as part of her fee.
It's a time-honored tradition for former presidents and cabinet members to exploit their previous government service after leaving office. The month he vacated the White House, Ronald Reagan jetted off to Japan, where he made $2 million for just two speeches, an eyebrow-raising move, given fears among some at the time that the Japanese were gaining undue economic power and influence in the United States. What makes Hillary Clinton's situation different is she may not be done with public office, with a shadow presidential campaign waiting in the wings.
This cash grab between public-service gigs does have some precedent. As Jeffrey Engel, director of the Center for Presidential History at Southern Methodist University, points out, Dwight Eisenhower commanded a hefty book advance and launched a nationwide speaking series between leaving the US Army and joining Columbia University as its president—four years before he would run for president in 1952. Richard Nixon also hit the speaking circuit after he served as Ike's vice president (and lost his 1960 presidential bid) and before he campaigned again for the presidency in 1968.
Clinton's decision to pocket six-figure sums from Big Finance heavyweights and other corporate players might tarnish her public image, says Russ Baker, a Rutgers University political scientist. Baker notes that Clinton's coziness with Wall Street could come back to bite her in a Democratic primary, especially at a time when populist figures such as Sen. Elizabeth Warren (D-Mass.) and New York City Mayor Bill de Blasio are ascendant within her Democratic Party.
"If somebody comes at her from the left, I certainly can imagine [private equity firm] Kohlberg Kravis Roberts being used against her as a battering ram," Baker says. "It plays into a narrative that almost anybody left of her would want to develop, that she's basically part of the Wall Street wing of the Democratic Party."
For Clinton, her speaking gigs with Wall Street financiers and Hollywood bigwigs can help lay the groundwork for the massive fundraising effort she'll need to mount if she runs in 2016, says Common Cause policy counsel Steve Spaulding. Clinton's speaking fees are also distinct from, say, a campaign or PAC donation, because the money goes directly to her. And for those hosting Clinton, they get the kind of access that regular people can only dream of, says the Campaign Legal Center's Meredith McGehee. "Here's the problem: You and I, most of the people we know, there's no way in hell we can afford to have Clinton come speak and spend time with us," McGehee says. "This speaking engagement game is a game that favors the wealthy interests, just like our campaign finance system."
In his new book, Stress Test, Geithner denies blocking Warren and describes his relationship with the progressive favorite as "complicated." He praises her "smart and innovative" ideas about consumer protection, which, over dinner in Washington with Warren, he discovers are "more market-oriented, incentive-based, and practical than her detractors realized." In the same breath, though, Geithner jabs Warren for running her bailout oversight hearings "like made-for-YouTube inquisitions [rather] than serious inquiries." (Geithner's not the only one to point out Warren's embrace of the viral video clip: Listen to BuzzFeed reporter John Stanton's comments in this MSNBC roundtable.)
So why did the Obama administration pass over Warren to run the new bureau? Geithner writes, "There was a lot to be said for making Warren the first CFPB director, but one consideration trumped all others: The Senate leadership told the White House there was no chance she could be confirmed." Warren's eventual gig—a presidentially-appointed acting director charged with getting the new bureau up and running—was Geithner's idea, he says:
[Chief of staff] Mark Patterson and I thought about options, and after a few discussions with Rahm, I proposed that we make Warren the acting director, with responsibility for building the new bureau, while we continued to look for alternative candidates. This would give her a chance to be the public face of consumer protection, which she was exceptionally good at, and the ability to recruit a team of people to the new bureau right away, which she wouldn't have been allowed to do if she had been in confirmation limbo.
What stands out in Geithner's retelling is the depth of President Obama's admiration for Warren, and how much Obama agonized over what to do with Warren and the consumer bureau. The bureau was, after all, her idea. Here's what Geithner writes:
The President was torn. Progressives were turning Warren into another whose-side-are-you-on litmus test. The head of the National Organization for Women publicly accused me of blocking Warren, calling me a classic Wall Street sexist. Valerie Jarrett, the President's confidante from Chicago, was pushing hard for Warren, too, and she was worried I would stand in the way. At a meeting with Rahm and Valerie, I told the group that if the President wanted to appoint Warren to run the CFPB, I wouldn't try to talk him out of it, but everyone in the room knew she had no chance of being confirmed. The president, who almost never called me at home, made an exception on this issue. It was really eating away at him. He had a huge amount of respect for Warren, but he didn't want an endless confirmation fight, and he was hesitant to nominate someone so divisive that it would undermine the agency's ability to get up and running, as well as its ability to build broader legitimacy beyond the left.
As soon as Warren got to the CFPB, she began trying to lure away Geithner's own staffers. "She was unapologetic when my team finally confronted her about it," he writes, "and you had to respect her determination to get things done."
A recently unsealed whistleblower lawsuit filed in New Mexico state court makes a series of explosive allegations against appointees of rising GOP star Gov. Susana Martinez, accusing high-ranking officials in her administration of public corruption, mismanagement, and intimidation. It claims that officials at the state's economic development agency engaged in extramarital affairs that could expose the state to sexual harassment charges and that officials tried to silence employees who reported contracting violations and other wrongdoing.
The 22-page complaint—filed February 10 on behalf of two former state employees—claims that a company co-founded by Martinez appointee Jon Barela, secretary of the New Mexico Economic Development Department, secretly benefited from a state tax credit program. The complaint also alleges that aides to Martinez instructed a state employee to use his personal email for sensitive government work to avoid being subject to public records requests; that Barela and his deputy, Barbara Brazil, ignored waste and mismanagement at the state's Spaceport project in southern New Mexico; and that Brazil ran several Dairy Queen franchises she had an interest in "while simultaneously being paid by the State of New Mexico."