Mojo - May 2013

Cigarette Maker Funded Dark-Money Conservative Groups

| Fri May. 31, 2013 11:49 AM PDT

When we use the term "dark money," we're usually referring to politically active nonprofit groups—like the kind at the center of the recent IRS scandal—that spend millions on political campaigns yet don't disclose their funders. Think Karl Rove's Crossroads GPS, Koch-backed Americans for Prosperity, and pro-Democrat Patriot Majority. Rarely, if ever, does the public learn who bankrolls these organizations.

This week, though, we got one such glimpse. As the Center for Public Integrity reported, Reynolds American Inc., the corporation behind Camel and Winston cigarettes, funded several high-profile dark money groups in 2012. Reynolds doled out $175,000 to Americans for Tax Reform, conservative activist Grover Norquist's anti-tax group. The company also gave $50,000 to Americans for Prosperity, $45,000 to the US Chamber of Commerce, and $100,000 to the Partnership for Ohio's Future, an Ohio Chamber-backed group that supported restricting the worker bargaining rights.

Here's more from CPI's Dave Levinthal:

The tobacco company’s donations are just a fraction of the nearly $50 million that those two groups reported spending on political advocacy ads during the 2012 election cycle, almost exclusively on negative advertising. Federal records show that Americans for Prosperity alone sponsored more than $33 million in attack ads that directly targeted President Barack Obama.

But the money, which Reynolds American says it disclosed in a corporate governance document at the behest of an unnamed shareholder, provides rare insight into how some of the most powerful politically active 501(c)(4) “social welfare” nonprofits are bankrolled.

Reynolds American is the parent company of R.J. Reynolds Tobacco, which makes Camel and Winston brand cigarettes.

“The shareholder specifically requested that we disclose information about 501(c)(4)s, and in the interests of greater transparency, we agreed,” Reynolds American spokeswoman Jane Seccombe said.

Large corporations—tobacco companies or otherwise—almost never release information about their giving to such groups, and it’s most unusual for the groups themselves to voluntarily disclose who donates to them.

After the Supreme Court's 2010 Citizens United decision, which freed corporations to pump vastly more money into American campaigns, businesses faced two options. They could donate to super-PACs, which can raise and spend unlimited sums of money but must disclose their donors. Or they could fund politically active nonprofits, which can dabble in politics but don't name their donors. In the wake of Citizens United, we heard countless warnings about a "flood" of corporate cash into politics through big-spending super-PACs. But that flood never quite materialized: For-profit corporations accounted for just over $1 of every $10 raised by super-PACs in the 2012 election cycle. Instead, it was a small band of millionaires and billionaires that gave super-PACs most of their dough.

What the relatively small Reynolds American Inc. donations suggest is that corporations chose the nonprofit route and so avoided scrutiny of their political giving in today's big-money era. In this case, Reynolds' donations were disclosed only because a pesky shareholder asked for them to be. That's not the case for most corporations, whose giving remains a secret.

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Sorry, There's Been No Economic Recovery for Poor and Minority Households

| Fri May. 31, 2013 8:17 AM PDT

There has been lots of cheery news about the economic recovery lately. A new report out Thursday from the Federal Reserve puts that in check. American households have rebuilt less than half of the wealth they lost during the recession, according to the study. And most of the wealth that has been recovered went to rich white people.

"A conclusion that the financial damage of the crisis and recession largely has been repaired is not justified," says the report. "Most families have recovered much less than the average amount."

The financial crisis destroyed some $16 trillion in household wealth. Americans have only recovered 45 percent of that amount, according to the Fed report. But when you break down that wealth recovery by income level, it gets worse. The Fed estimates that 62 percent of that wealth people have regained since the depths of the recession has come in the form of higher stock prices. And 80 percent of stock wealth is held by people in the top 10 percent of the income distribution. "Recent gains in the stock market mean that the recovery of wealth is nearly complete for white and Asian households and older Americans," Ylan Mui reported at the Washington Post Thursday.

But many families have not experienced any recovery at all, and some are still losing wealth, William Emmons, chief economist at the St. Louis Fed’s Center for Household Financial Stability, told the Post. "The families that lost homes are not the families making money off stocks," Mui notes. Though the number of foreclosures has dropped off a lot, it is still more than double what it was pre-crisis.

The report found that the most vulnerable households tended to be either relatively young and/or black or Hispanic, and not well-educated. Those families had low savings and high debt and had gained most of their wealth through their homes.

It gets worse. Because the housing market is improving overall, there is less of an incentive for the government to push any new measures to help underwater homeowners. Prominent economists say that allowing initiatives that would reduce borrowers' loan principle balances is the single most important thing the administration could do to help the Americans who lost all that home wealth. But for more than a year, the head of the Federal Housing Finance Agency (FHFA), which oversees the government-backed home-loan giants Fannie Mae and Freddie Mac, blocked initiatives that would have done just that. President Barack Obama has nominated a new FHFA director, but as a report released Friday by the Progressive Policy Institute notes, it might be too late: "US housing markets have come roaring back to life, and while that's great news, it has probably closed the window for principal reduction."

Banks Are Doing Better Than Ever. The Middle Class, Not So Much.

| Thu May. 30, 2013 7:44 AM PDT

The nation's banks are reporting record profits, according to new numbers out Wednesday from the Federal Deposit Insurance Corporation (FDIC). Most of the rest of us aren't faring quite so well.

Bank profits topped $40.3 billion in the first three months of the year, according to the FDIC, attesting to a strong recovery... in the banking sector. "The banks are back," Moody’s Analytics chief economist Mark Zandi told the Washington Post Wednesday. "Only four years after the banking system was literally looking into the abyss, it is highly profitable again." The biggest banks, including Wells Fargo, Bank of America and Citigroup, accounted for most of the industry's profits. Here's what that looks like, via the Post:

The wider economy hasn't shared the banking sector's return to prosperity. Yes, the unemployment rate has dropped a little. Consumer confidence is up. The housing market is healthier. But the current share of the population that is employed is still well below what it was before the recession. Here is a chart from the Center on Budget and Policy Priorities:

The housing market hasn't bounced back at the same pace as bank profits, either. As Derek Thompson pointed out at The Atlantic earlier this year, overall business investment is growing, but companies are still reluctant to invest in housing. Here is what that looks like—the red curve is residential housing investment; the blue curve is non-housing investment:

The new FDIC numbers also show that loan balances at banks shrunk in the first three months of the year. As Isaac Boltansky, a banking analyst with Compass Point Research and Trading, told the Post, that's "a sign that the broader economy still has room for improvement." Indeed.

Trump Starts His 2016 Dance

Thu May. 30, 2013 7:27 AM PDT

Uh-oh, here we go. Donald Trump—his hair and his ego—is reprising his carnival barker role:

Donald Trump declined to say on Wednesday whether he was running for president in 2016 but said that "people in this country are desperate for leadership."

The billionaire businessman told Neil Cavuto on Fox News: "Whether it’s me — or, frankly, let it be somebody — but somebody has to come along and straighten out this country. We’re in trouble."

The New York Post reported on Monday that Trump has spent $1 million to research his political standing in certain states. He told the Oakland County Republican Party’s Lincoln Day Dinner in Michigan last week that it was "highly unlikely" that he would seek the White House in 2016.

Perhaps it's time to feel nostalgic for the 2012 Republican presidential campaign. Ah, remember when Trump headlined a telephonic town hall meeting for Michele Bachmann, showing that he really has an eye for political talent? So what's next? Herman Cain returns with his 9-9-9 plan?

 

Bachmann's Right: The Founders Would "Hardly Even Recognize" America Today

| Wed May. 29, 2013 3:45 PM PDT

Michele Bachmann has said some crazy things over the years. When her goodbye speech today warned that America is "becoming a nation our founders would hardly even recognize today," we had to agree.

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Anti-Defamation League, Mayor of Culver City Respond to JCPenney's Hitler Teakettle Billboard

| Wed May. 29, 2013 10:34 AM PDT

It's not quite summer, but the silly stories have started, and you may have heard about a certain JCPenney billboard located east of the 405 freeway in Culver City, California. It looks like this:

hitler tea kettle

And it reminded a lot of people of...

The kettle was designed by architect and New Jersey Hall of Famer Michael Graves, who has a long history of designing consumer products that do not resemble a saluting Hitler, including this teakettle from 1984. After the Hitler-kettle story went viral, JCPenney took to Twitter to reassure the public there was no intended connection between the product and the Nazi leader. Here's one of JCPenney's damage-controlling Tweets:

Hitler tea kettle jcpenney tweet
JCPenney/Twitter

JCPenney elected to stop selling the item on its website, and took down the billboard on Tuesday—but not before all the Hitler hoopla caused a sales spike in the now notorious kettles.

Still, Jeffrey Cooper, the Democratic mayor of Culver City, remains upset at JCPenney for not initially noticing the resemblance. "I am disappointed JCPenney actually put the billboard up in the first place and more outraged that they actually attempted to defend it," he says in an email. "As a Jew, I am offended, [and] as an elected official, I am mad that the city I represent is linked to this."

Others were more forgiving. "JCPenney did the right thing by responding to public concerns and removing the tea pot from their product line," the Anti-Defamation League, one of the major groups that monitors anti-Semitism, says in a statement sent to Mother Jones. "We take JCPenney at their word that any resemblance to the Nazi dictator was completely unintended."

Michael Graves did not respond to a request for comment.

Anti-Consumer Tea Partier Nominated For Consumer Protection Job

| Wed May. 29, 2013 8:05 AM PDT
Former Rep. Ann Marie Buerkle (R-NY)

Last week, President Barack Obama nominated a former member of the congressional tea party caucus with an anti-consumer legislative record to a seat on the Consumer Product Safety Commission. If confirmed, Ann Marie Buerkle, who served a single term as a Republican congresswoman from upstate New York, will join the five-member bipartisan commission for a seven-year appointment. 

In a way, this fox-in-a-chicken-house move is not truly Obama's fault. The commission has five members, and no more than three can be from the same party. So when it's time to pick a GOPer for such a position and there's a Democrat in the White House, it is the responsibility of Republican congressional leaders. Buerkle was the choice of Senate minority leader Sen. Mitch McConnell (R-KY), who has been stealthily placing conservative loyalists in the far reaches of the federal regulatory apparatus.

Buerkle spent her brief time in Congress battling measures that would help consumers file complaints about a defective product with the CPSC and supporting proposals that would make it more difficult to remove dangerous products from the market. She opposed a bill that would have prevented convicted fraudsters from advertising non-publicly traded securities; she fought measures that would have empowered the Consumer Financial Protection Bureau to protect seniors from abusive practices. And, by the way, she's a climate-change denier.

Buerkle's nomination has many consumer activists scratching their heads, but not for the obvious reasons. That Republicans would pick someone hostile to the agency as a commissioner isn't surprising. McConnell has all but said his stealth nominees are basically there to gum up the works for a Democratic administration. But what's curious about Buerkle's selection for the job is that she has said she still hasn't given up on the idea of running for her old seat in upstate New York next year.

In 2010, Buerkle narrowly defeated incumbent Rep. Dan Maffei (D) in a wave of tea party activism, with heavy backing from the National Rifle Association, which has given her an A-rating for her pro-gun views. The district, though, leans Democrat, and in 2012, she lost to Maffei in a hotly-contested rematch. She hasn't ruled out another run against him, and there's no telling whether she's now truly committed to making mischief on the CPSC or intending to put in a short stint before returning to the electoral battlefield.

Buerkle also recently started hosting a new radio show on WSYR in Syracuse, and she notes that she will need private sponsors to stay on the air. That poses a potential conflict of interest for her commission post, which involves regulating private companies. Some of these firms might see sponsoring her radio show as a way of currying favor with the commissioner.

Obama has to nominate a Republican to the commission—which now has two Democratic members and one Republican—if he has any hope of getting a new Democrat to fill one of two current vacancies. Last year, he nominated Michigan trial lawyer Marietta Robinson to fill the Democratic vacancy, and the Senate held a hearing on the nomination. But the nomination went nowhere, as Republicans resisted. Now that Obama has put forward a GOP nominee, Robinson might have a shot at getting confirmed—though the price is putting a tea partier where she can cause some serious disruption.

Flashback: Virginia Gov. Candidate Cuccinelli Investigated "Sextravaganza"

| Tue May. 28, 2013 10:19 AM PDT

Virginia attorney general Ken Cuccinelli (R) believes the Constitution gives states the right to ban gay people from having sex.

Controversial Virginia Republican lieutenant governor candidate E.W. Jackson, as I reported last week, began his career as a social conservative crusader as an anti-anti-AIDS activist in Boston, where he fought against public health initiatives that promoted condom use and sterilized needles. And Jackson's extreme views on such issues as LGBT rights ("If we need a gay rights bill, then we need an adulterers' rights bill, we need a cohabitators' rights bill, a pedophiles' rights bill, and a sadomasochists' rights bill") and Islam (he's against it) have launched a flurry of stories on the potential impact of Jackson's extremism on Ken Cuccinelli, the Republican running for governor. Cuccinelli has tried to distance himself from Jackson, but he has a problem: his own past as a social conservative activist is not that different from Jackson's.

In 2005, for example, Cuccinelli, then a state senator, sent a volunteer to investigate a mostly-female planning meeting for an event to be held at George Mason University by "Pro-Choice Patriots," a student group, and dubbed the "Sextravaganza." This gathering was designed to promote healthy sexual activity—dispensing information on date rape, AIDS, and contraception. But Cuccinelli condemned the plan to hold such an event at a public school, warning that "Sextravaganza" would promote "every type of sexual promiscuity you can imagine."

"This whole thing is really just designed to push sex and sexual libertine behavior as far, fast and furiously as possible," he told the Washington Post at the time, adding, "Do we need to establish some statewide standards here? It's pathetic we even need to have this discussion, but apparently we do."

Cuccinelli, like Jackson, was a fierce fighter for what they called traditional family values. In 2004, the Washington Times reported that Cuccinelli was leading the fight against, in his words, "homosexuals and AIDS [education]." He was doing so by pushing a resolution asking Congress to pass a constitutional amendment defining marriage as between a man and a woman:

"[The resolution would] enshrine in the Constitution effectively what is Virginia law today, and that is that marriage is between one man and one woman and that there are no analogous relationships under law," said Kenneth T. Cuccinelli II, Fairfax County Republican and the bill’s sponsor.

Mr. Cuccinelli and others worry recent protests on the topic are part of an overall strategy by homosexuals, who he thinks plan to "dismantle sodomy laws" and "get education about homosexuals and AIDS in public schools." On Friday in a 79-18 vote, the House passed a bill that affirms the state’s ban on homosexual "marriage." It is expected to pass the Senate.

Cuccinelli may find it tough to separate himself from Jackson, given that the two were both fierce leaders in the culture war fights of the 1990s and 2000s.