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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Karl Rove's Crossroads Groups Double 2012 War Plan to $240 Million

—By Andy Kroll

| Fri Sep. 9, 2011 7:15 AM PDT

Lost in the build-up to President Obama's big jobs speech Thursday night was a bomb of an announcement, first reported by Peter Stone of iWatch News, from American Crossroads and Crossroads GPS, the conservative independent expenditure groups that are two of the heaviest hitters in the political money game. Founded in 2010 with help from Bush guru Karl Rove, the Crossroads groups are now trumpeting a new fundraising target to double their planned haul of $120 million for the 2012 elections. Yes, you read that right: the Crossroads groups say they will raise a whopping $240 million to vanquish President Obama, help GOPers win the Senate majority, and strengthen their House majority.

Here's some context for that $240 million target. In the 2010 election cycle, American Crossroads, a super PAC that discloses its donors, and Crossroads GPS, a 501(c)4 that doesn't disclose, spent an estimated $43 million, according to the Center for Responsive Politics. That same cycle, all outside spending groups, excluding party-affiliated committees, spent just over $300 million.

To help them reach their eye-popping fundraising goal, the Crossroads groups have tapped one of the most successful GOP fundraisers of them all, Mississippi Gov. Haley Barbour. A former DC lobbyist, Barbour helped rake in a record-setting $115 million as chair of the Republican Governors Association from 2009 to 2010.

"Both Governor Barbour and Karl Rove are prodigious fundraisers and brilliant strategists, and we are honored to have them both engaged with us," Steven Law, president of both American Crossroads and Crossroads GPS, said in a statement. "We are reaching high in our fundraising goals because we believe this is going to be a destiny-shaping election for our country."

Michael Beckel, a spokesman for the Center for Responsive Politics (and a Mother Jones alum), a non-partisan group that tracks money in American politics, described American Crossroads as "the top dog" in the 2010 midterm elections. He said that Crossroads' new goal would blow past anything seen two years ago. "It looks like this arms race is ramping rather quickly."

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Mitt Romney Airbrushes His Bain Capital Record

—By Andy Kroll

| Thu Sep. 8, 2011 8:11 AM PDT

Mitt Romney

It didn't take long—just six minutes into the 98-minute debate—for the moderators at Wednesday night's Republican presidential debate to take aim at Mitt Romney's record at Bain Capital, the powerful private equity firm Romney helped start. Here's that exchange:

NBC's Brian Williams: "Bain Capital, a company you helped to form, among other things, often buys up companies, strips 'em down, gets 'em ready, and resells them at a net job loss to American workers."

Mitt Romney: "That might be how some people might want to characterize what we did, but in fact we started businesses at Bain Capital, and when we acquired businesses, in each case we tried to make 'em bigger, make 'em more successful and grow.

"The idea that somehow you can strip things down and [that] makes them more valuable is not a real effective investment strategy. We tried to make these businesses more successful. By the way, they didn't all work. When it was all said and done, we added tens of thousands of jobs to the businesses we helped support."

Some quick background: Private equity firms like Bain are known for raising money from outside investors; using that money to buy up struggling companies; restructuring the companies (think layoffs, slashing worker benefits, and selling off pieces of the business); and finally selling the (supposedly) leaner, meaner businesses for a profit. One particularly infamous type of private equity deal is the leveraged buyout, in which a private equity firm will borrow a huge amount of money to buy a company, thereby weighing down the purchased company with debt.

[Read more in the MoJo blog]

6 Hot-Button Issues the GOP Presidential Hopefuls Dodged in the Debate

—By Andy Kroll

| Wed Sep. 7, 2011 8:56 PM PDT

In Wednesday night's Republican presidential debate, moderators Brian Williams of NBC and John Harris of Politico grilled the candidates a range of hot-button issues, lingering longer on some—immigration, for instance—than others. But plenty more issues got neglected altogether, including the GOP candidates' positions on the growing power of money in politics and red-hot social issues such as abortion and gay rights.

Here's a rundown of key issues left untouched in Wednesday's debate:

Campaign finance: In this post-Citizens United political landscape, outside spending and independent groups such as super-PACs are playing an increasingly influential role. What do the candidates, many of whom benefit from affiliated super-PACs, think about the rise of independent and dark-money outfits such as Karl Rove's Crossroads GPS? Would they support new regulation demanding disclosure of political spending?

Abortion: Still the most divisive social issue in the land. What are the candidates' positions on the Supreme Court's Roe v. Wade decision? Do they support efforts at the state level, as seen in Virginia, South Dakota, Kansas, and elsewhere, curbing abortion rights or targeting the doctors who provide them?

Evolution: Only former Utah Gov. Jon Huntsman mentioned evolution, which he said philosophy and science support. How many of the other GOPers, in a show of hands, believe in evolution? If not, why?

Gay Rights: There's was no mention of Don't Ask, Don't Tell; the Defense of Marriage Act; benefits for same-sex partners; or any other contentious gay rights issues. Where do the candidates stand on these issues? How many would reinstate Don't Ask, Don't Tell? (Michele Bachmann and Rick Santorum have previously said they would.)

Gun rights: Not much debate, if any, on the Second Amendment on Wednesday night. Where do the candidates stand on an individual's right to bear arms? (Rick Perry once shot a coyote with a laser-sighted pistol while on a job, so you can imagine where his head's at.)

Shariah law: It's the religious issue that whips hard-line right-wingers into such a frenzy, the (misplaced and overblown) fear that Islamic law is creeping its way into America's legal system. Newt Gingrich has warned that jihadists are pushing "to replace Western civilization with a radical imposition of Shariah." Herman Cain has raised the specter of Shariah law in America too. Do the other candidates feel the same way? Do they see Shariah law as a threat, and if so, why?

Santorum Gets It All Wrong on Poverty in America

—By Andy Kroll

| Wed Sep. 7, 2011 5:47 PM PDT

Rick Santorum.

GOP presidential candidate Rick Santorum, a devout Catholic, was asked by NBC's Brian Williams at tonight's Republican debate how he would tackle the issue of poverty in America. One in seven Americans, Williams noted, currently live in poverty.

For his part, Santorum trumpeted his record as a US senator in reforming America's welfare programs to serve fewer people and so nudge lower-income people into the jobs market. Santorum then claimed that, as part of his reform effort, poverty reached its "lowest level ever in 2001."

Bzzt. Sorry, Rick. According to the US Census Bureau (PDF), poverty actually rose in 2001, to 32.9 million Americans from 31.6 million. Percentage-wise, that's an increase to 11.7 percent of Americans from 11.3 percent. In fact, most of the government's poverty measurements—by family, race, ethnicity, location—increased in 2001. Santorum may want voters to believe that he helped shrink poverty, but no one did.

Unmasking Dark Money Is Good for Democracy—and for the Bottom Line

—By Andy Kroll

| Wed Sep. 7, 2011 9:35 AM PDT

It's one of the most overlooked pieces of Supreme Court Justice Anthony Kennedy's now-famous opinion in last year's Citizens United decision: While Kennedy and the court's majority backed unlimited political spending by corporations, they also stressed the importance of disclosure; that, in part thanks to the Internet, companies should disclose how much they spent and who they supported or attacked. Shareholders could then use those disclosures to determine the value of particular ads and gauge whether corporate political spending was in their best interests.

That that disclosure hasn't happened. Nearly half of the money spent by outside political groups in the 2010 elections was "dark money," meaning that the fundraisers themselves remained anonymous.

But if that corporate spending helped clinch elections around the country, it also took something of a toll on the corporations themselves, according to a new report by Public Citizen and Harvard Law School. Looking at the political activity and market value of big, publicly-traded companies on the S&P 500, researchers found that companies that were more involved in politics had weaker price/book ratios than less politically active companies. The study suggests that stock prices for politically active companies are lower than they would be if the same companies were less politically active.

John Coates, a Harvard law and economics professor, found that, in every election cycle between 1998 and 2004, corporations who had more active political action committees (PACs) and more aggressive lobbying efforts had lower price/book ratios. Coates discovered an even stronger connection in the 2010 elections: in that cycle, politically active firms were 24 percent more undervalued than their peers. Even taking into account a number of variables—recent profits, sales growth, size, leverage—Coates spotted a correlation between political activity and lower company value.

The report's authors also looked at the effect of disclosure: How does the market value of big, politically active companies with policies for disclosing political spending compare to active companies without them? Looking at 80 S&P 500 corporations, the Public Citizen and Harvard team found that companies pledging to disclose their political spending had, on average, 7.5 percent higher price/book ratios than those keeping their spending in the dark. The takeaway here: Disclosing corporate spending doesn't hurt shareholders, and in fact might boost a company's market capitalization.

There are, of course, plenty of caveats. For starters, the authors stress that they're not claiming a cause-and-effect here—that either less political spending or more disclosure directly causes higher company value. They're just pointing out what they believe is an important connection. They also list off previous academic studies suggesting that corporate lobbying (and, to an extent, PAC giving) reaps benefits in the form of tax breaks, more favorable trade policy, and more.

That in mind, this new research could allay fears that shining some sunlight on corporate spending will damage business. "Many people would agree that disclosing political activities is the right thing for publicly-traded companies to do," Harvard's Coates said in a statement on Wednesday. "Our study provides new evidence that it is also the thing that smart companies do."

This post was edited for clarity after publication.