Andy Kroll

Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, Salon, and TomDispatch.com, where he's an associate editor. He can be reached at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Flashback: Obama's Treasury Secretary Pick Claimed Deregulation Did Not Cause the Financial Crisis

—By Andy Kroll

| Wed Jan. 9, 2013 10:51 AM PST

Jack Lew.

President Barack Obama is expected to nominate Jack Lew, the wonky White House chief of staff and former director of the Office of Management and Budget, as the new secretary of the US Treasury. The current secretary, Tim Geithner, plans to step down soon.

Here's a crucial piece of information about Lew: He has said he doesn't believe financial deregulation was a major cause of the financial crisis. In 2010, Lew testified before Congress that the deregulation of Wall Street in the Clinton era—the repeal of Glass-Steagall, say, or the ending of real regulation of complex derivatives—wasn't a critical factor. "The problems in the financial industry preceded deregulation," Lew told members of the Senate budget committee in September 2010. He added that he didn't "personally know the extent to which deregulation drove it, but I don't believe that deregulation was the proximate cause."

Lew knows that period of deregulatory zeal well, having served as President Bill Clinton's director of the Office of Management and Budget from May 1998 to January 2001. Lew has spent much of his career in government, is a savvy negotiator and budget wonk, and is respected by Republicans and Democrats. Republicans, though, have been grumbling about him more recently—after all, in 2011, he outsmarted the congressional GOP in intense budget talks. And liberals have criticized Lew for his post-Clinton work for the mega-bank Citigroup, where he ran a unit that profited off shorting the housing market.

Lew's 2010 claim that deregulation wasn't a major cause of the financial crisis is disputed by many experts as well as the government's own investigatory body, the Financial Crisis Inquiry Commission. In its final report (PDF), the commission stated that "widespread failures in financial regulation and supervision proved devastating to the stability of the nation's financial markets."

The commission went on to conclude, "More than 30 years of deregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve chairman Alan Greenspan and others, supported by successive administrations and Congresses, and actively pushed by the powerful financial industry at every turn, had stripped away key safeguards, which could have helped avoid catastrophe."

Obama, Lew's boss, has said before that deregulation played a major part of the financial meltdown. In October 2008, Obama, then the Democratic candidate for president, said "we know that it's because of deregulation that Wall Street was able to engage in the kind of irresponsible actions that have caused this financial crisis."

Upon signing the Dodd-Frank financial reform bill, which was chock-full of new regulations, in July 2010, Obama noted the failure of the regulators and the banks: "It was a crisis born of a failure of responsibility from certain corners of Wall Street to the halls of power in Washington. For years, our financial sector was governed by antiquated and poorly enforced rules that allowed some to game the system and take risks that endangered the entire economy."

It's clear Obama believes deregulation played a role in the crisis. Apparently, he's fine with a treasury secretary who's a former Clintonite not eager to acknowledge the Clinton era's mistakes.

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Revealed: The Massive New Liberal Plan to Remake American Politics

A month after President Obama won reelection, America's most powerful liberal groups met to plan their next moves. Here's what they talked about.

—By Andy Kroll

| Wed Jan. 9, 2013 4:06 AM PST

It was the kind of meeting that conspiratorial conservative bloggers dream about.

A month after President Barack Obama won reelection, top brass from three dozen of the most powerful groups in liberal politics met at the headquarters of the National Education Association (NEA), a few blocks north of the White House. Brought together by the Sierra Club, Greenpeace, Communication Workers of America (CWA), and the NAACP, the meeting was invite-only and off-the-record. Despite all the Democratic wins in November, a sense of outrage filled the room as labor officials, environmentalists, civil rights activists, immigration reformers, and a panoply of other progressive leaders discussed the challenges facing the left and what to do to beat back the deep-pocketed conservative movement.

[Read the full article]

GOP Sen. Ted Cruz: "I Don't Think What Washington Needs Is More Compromise"

—By Andy Kroll

| Mon Jan. 7, 2013 8:00 AM PST

Sen. Ted Cruz (R-Texas).

The 112th Congress that ended last week as one of the least productive of any Congress in 70 years. The Huffington Post found 219 pieces of legislation that were passed by the last Congress and signed into law, down from 383 during the 2009-2010 session and 460 from 2007-2008. At the same time, a small fraction of Americans—just 18 percent in a December Gallup survey—approve of the way Congress is doing its job.

Yet Sen. Ted Cruz (R-Texas), an tailored suit-wearing tea party favorite and rising star in Republican politics, says the way forward for Congress is less, not more, compromise.

On Sunday, Cruz said on Fox News that bipartisanship and deal-making is not the way forward for Congress. Here's his full comment:

I think the fiscal cliff deal was a lousy one, but moving forward with the debt ceiling and those who believe in limited spending and solving the debt...I don’t think what Washington needs is more compromise, I think what Washington needs is more common sense and more principle.

Cruz's dim view of compromise in Congress clashes with what Americans say they want. A December NBC/Wall Street Journal poll found that, on the fight over the so-called "fiscal cliff," 65 percent of respondents wanted Congress to compromise on a deal to stop from going off the cliff. (Cruz said he would've voted against the deal that ultimately passed.) Indeed, Americans have told pollsters over and over and over in recent years that they want more compromise.

Cruz, of course, is no moderate. He is, as Mother Jones reported in October, "the thinking man's tea partier," an authentic conservative with no qualms for gumming up the works in Congress in defense of what he believes to be right and true. With his latest comment, Cruz appears to be well on his way to doing just that.

Powerful Tea Party Group's Internal Docs Leak—Read Them Here

FreedomWorks bills itself as a grassroots outfit, but it's bankrolled mostly by big-money donors.

—By Andy Kroll

| Fri Jan. 4, 2013 4:02 AM PST

This story has been updated. Click here for the latest.

FreedomWorks, the national conservative group that helped launch the tea party movement, sells itself as a genuine grassroots operation, and for years it has battled accusations of "astroturfing"—posing as a populist organization while doing the bidding of big-money donors. Yet internal documents obtained by Mother Jones show that FreedomWorks has indeed become dependent on wealthy individual donors to finance its growing operation.

Last month, the Washington Post reported that Richard Stephenson, a reclusive millionaire banker and FreedomWorks board member, and members of his family funneled $12 million in October through two newly created Tennessee corporations to FreedomWorks' super-PAC, which used these funds to support tea party candidates in November's elections. The revelation that a corporate bigwig like Stephenson, who founded the Cancer Treatment Centers of America and chairs its board, was responsible for more than half of the FreedomWorks super-PAC's haul in 2012 undercuts the group's grassroots image and hands ammunition to critics who say FreedomWorks does the bidding of rich conservative donors.

[Read the full article]

Big Oil's Billions in Tax Perks Survive Fiscal Cliff Deal

—By Andy Kroll

| Wed Jan. 2, 2013 2:43 PM PST

Everything was supposed to be "on the table" in the crafting of deal to avert the so-called fiscal cliff. But in the end, congressional Democrats and Republicans skipped over some of the most glaring tax perks and giveaways. Case in point: Congress didn't touch billions of dollars a year in freebies to the oil and gas industry that pad the profit margins of companies such as ExxonMobil and BP.

The final fiscal cliff deal does not touch oil and gas subsidies, confirms Rory Cooper, a spokesman for House Majority Leader Eric Cantor (R-Va.). Ending the costliest tax breaks for oil and gas companies would have raised tens of billions of dollars in revenue. Trimming just a handful of these breaks for the big five companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—would've raised $24 billion over the next decade. President Obama's 2012 budget proposal called for ending 13 breaks benefiting oil and gas companies of all sizes; it would have saved $46 billion over 10 years.

There was a window of time around the November elections when it looked as if these subsidies might, just might, face even the slightest cuts. At the first presidential debate, Mitt Romney, whose closest allies included the head of the oil lobby, said oil subsidies were on the table if corporate taxes were lowered. Rep. Fred Upton (R-Mich.), chair of the powerful House energy and commerce committee, said in a debate that he'd end all energy subsidies, including those for oil and gas. And a week after the election, House Speaker John Boehner (R-Ohio) refused to rule out trimming oil and gas subsidies as part of a fiscal cliff deal.

But oil and gas giveaways have a knack for surviving even the fiercest fiscal showdowns. (See: Congress' 1986 tax-reform battle.) Because they're baked into the tax code, the industry and its lobbyists only have to defend their billions in perks; the wind and solar industries, by contrast, must fight and claw to extend the breaks they receive, which include expiration dates. The fiscal cliff deal also preserved tens of billions of dollars in tax credits for renewable energy production and research.

"We're certainly not asking for anything on Capitol Hill," a staffer with the American Petroleum Institute, the oil industry's top lobbying shop, told the AP in late November. And he wasn't lying: the industry doesn't necessarily want anything new from Congress. It just wants to keep what it already has.

Which is exactly what happened in the fiscal cliff drama. The oil and gas industry preserved its bountiful status quo so that the billions in breaks continue to flow. Game, set, match, Big Oil.