Andy Kroll

Andy Kroll

Senior 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, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Potential 2016 Contender Martin O'Malley Supports New Bill to Wean Politicians Off Big Money

| Wed Feb. 12, 2014 1:01 PM EST
Maryland Gov. Martin O'Malley.

While Hillary Clinton, the presumptive Democratic nominee in the 2016 presidential contest, has made headlines lately for the big-money-fueled super-PACs lining up in her corner, another potential Democratic contender, Maryland Gov. Martin O'Malley, is embracing the other end of the political money spectrum.

O'Malley, who would likely run to the left of Clinton in 2016, says he supports the Government By The People Act, a new bill recently introduced by Maryland Congressman John Sarbanes intended to increase the number of small-dollar donors in congressional elections and nudge federal candidates to court those $50 and $100 givers instead of wealthier people who can easily cut $2,500 checks. The nuts and bolts of the Government By The People Act are nothing new: To encourage political giving, Americans get a $25 tax credit for the primary season and another $25 credit for the general election. And on the candidate side, every dollar of donations up to $150 will be matched with six dollars of public money, in effect "supersizing" small donations. (Participating candidates must agree to a $1,000 cap on all contributions to get that 6-to-1 match.) In other words, the Sarbanes bill wants federal campaigns funded by more people giving smaller amounts instead of fewer people maxing out.

What makes the Sarbanes bill stand out is breadth of support it enjoys. The bill has 130 cosponsors—all Democrats with the exception of Rep. Walter Jones (R-N.C.)—including Sarbanes and House Minority Leader Nancy Pelosi (D-Calif.) And practically every progressive group under the sun has stumped for the Government By The People Act, including the Communication Workers of America, the Teamsters, Sierra Club, NAACP, Working Families, Friends of Democracy super-PAC, and more. Through efforts like the Democracy Initiative and the Fund for the Republic, progressives are mobilizing around the issue of money in politics, and their championing of Sarbanes' bill is a case in point.

But O'Malley is the first 2016 hopeful to stump for the reforms outlined in the Government By The People Act. "We need more action and smarter solutions to improve our nation's campaign finance system, and I commend Congressmen John Sarbanes and Chris Van Hollen for their leadership on this important issue," O'Malley said in a statement. "Elections are the foundation of a successful democracy and these ideas will put us one step closer toward a better, more representative system that reflects the American values we share."

No other Democratic headliners, including Clinton, have taken a position on the Sarbanes bill. (New York Gov. Andrew Cuomo did include a statewide public financing program in his latest budget proposal. And Clinton, as a senator, cosponsored the Kerry-Wellstone Clean Elections Act.) Yet with nearly every major liberal group rallying around the money-in-politics issue, any Democrat angling for the White House in 2016 will need to speak up on how he or she will reform today's big-money political system.

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JPMorgan Paid $20 Billion in Fines Last Year—So Its Board Is Giving Jamie Dimon a Raise

| Fri Jan. 24, 2014 3:42 PM EST
JPMorgan Chase CEO Jamie Dimon.

The New York Times reported Friday that Jamie Dimon, the silver-haired CEO of JPMorgan Chase, the nation's largest bank by assets, is getting a raise. Dimon is poised to add a few million to the $11.5 million compensation package he took home in 2013.

If you so much as glanced at the news last year, this bit of news may puzzle you. JPMorgan, in many ways, had a miserable 2013. JPMorgan paid $1 billion in fines in the wake of the "London Whale" scandal, in which the bank lost $6 billion on a market-rattling blunder by a trader named Bruno Iksil. The bank also paid $13 billion to settle charges that it'd peddled risky mortgage-backed securities. And it forked over another $2 billion to settle charges for failing to spot Bernie Madoff's ponzi scheme, which Madoff perpetrated largely using JPMorgan accounts. All told, the bank paid out roughly $20 billion in penalties to federal regulators over a slew of screw-ups and failures.

2013 was a rough year for JPMorgan. So why is Dimon getting a raise? The answer, in part, will make your blood boil. Here's the money quote in the Times:

Mr. Dimon's defenders point to his active role in negotiating a string of government settlements that helped JPMorgan move beyond some of its biggest legal problems. He has also solidified his support among board members, according to the people briefed on the matter, by acting as a chief negotiator as JPMorgan worked out a string of banner government settlements this year.

[...]

Mr. Dimon's star has risen more recently as he took on a critical role in negotiating both the bank’s $13 billion settlement with government authorities over its sale of mortgage-backed securities in the years before the financial crisis and the $2 billion settlement over accusations that the bank turned a blind eye to signs of fraud surrounding Bernard L. Madoff.

Just hours before the Justice Department was planning to announce civil charges against JPMorgan over its sales of shaky mortgage investments in September, Mr. Dimon personally reached out to Attorney General Eric H. Holder Jr.—a move that averted a lawsuit and ultimately resulted in the brokered deal. Just a few months later, Mr. Dimon acted as an emissary again, this time, meeting with Preet Bharara, the United States attorney in Manhattan leading the investigation into the Madoff Ponzi scheme.

In other words, as big as those multibillion-dollar settlements were, JPMorgan board members believe the bank's legal problems could've been worse. Blast-a-hole-in-our-balance-sheet worse. And so Dimon's pay bump is a reward for locking horns with bank regulators and federal authorities and hashing out settlement deals that were favorable to the bank. He's getting a raise because he beat the regulators, played them so well, JPMorgan board members seem to be saying, that he deserves to be rewarded for the deals he helped engineer.

There are other factors, too. Despite its legal headaches, JPMorgan's stock price climbed 22 percent over the past year, and the bank recorded profits of $17.9 billion in 2013. But to read that Dimon's savvy negotiating has won him a raise—and don't forget that no top bank executives have gone to jail for actions related to the 2008 financial meltdown—brings to mind the old Dick Durbin quote about banks and Washington: "They frankly own the place."

How a Mexican Citizen Allegedly Funneled $500,000 of Illegal Money into US Elections

| Thu Jan. 23, 2014 10:58 AM EST

This week, the FBI and Department of Justice busted a Washington, DC-based political consultant and an ex-detective turned private security contractor in a money-in-politics scandal seemingly ripped from the pages of All the President's Men.

According to a criminal complaint filed in the US district court in southern California, a wealthy Mexican national allegedly funneled more than $500,000 into local and federal campaigns in the San Diego area. That, of course, is illegal. Federal law bars foreign nationals from making contributions to political candidates. So the Mexican businessman—who is unnamed in the complaint—allegedly used retired San Diego detective Ernesto Encinas, political consultant Ravneet Singh, and an unnamed straw donor to inject his money into several California-based elections.

The Mexican businessman and his co-conspirators are accused of making illegal campaign expenditures in support of four different candidates. To support a San Diego mayoral candidate, the Mexican and the ex-detective set up a super-PAC and guided $100,000 in foreign money through a shell corporation into the super-PAC. In another case, the Mexican businessman gave $380,000 to a straw donor (who was identified as an American citizen in the complaint), and the straw donor then cut checks to assorted campaigns and political committees in the San Diego area.

None of the candidates who received the Mexican businessman's support are named in the complaint, but two of them are believed to be San Diego District Attorney Bonnie Dumanis and former mayor Bob Filner. Dumanis and Filner faced each other in the city's 2012 mayoral primary. In December, Filner was sentenced to 90 days in home confinement, three years' probation, and fines totaling nearly $1,500 for assaulting three women while serving as San Diego mayor.

Then there's Ravneet Singh, the DC consultant who founded the company ElectionMall, which provides digital media services for political campaigns. Around February 2012, the Mexican businessman paid Singh and ElectionMall about $100,000 for Internet ads and key word placements to help elect a San Diego mayoral candidate. The money was transferred into ElectionMall's account by a Mexican company, and the online ad spending never appeared on expenditure records as it should have under state and federal campaign laws.

Later that year, in October, Singh and Encinas, the ex-detective, approached a general election candidate in San Diego's mayoral race candidate offering social media services to the candidate's campaign. When asked how much those services would cost, the complaint says, Singh and Encinas responded that it was "taken care of." Soon after, ElectionMall received another $190,000 from the Mexican-based company. Because the candidate's campaign was never billed, the complaint alleges that Singh, ElectionMall, and Encinas "facilitated illegal in-kind contributions" in violation of campaign law.

You can read the full Justice Department complaint against Singh, ElectionMall, and Encinas below. And you can wonder who will play the Mexican businessman, the ex-detective, and the consultant in the movie.

 
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