Tuesday, September 1, 2015

A New Plan for American Cities To Free Themselves of Wall Street’s Control--Collective bargaining, but for workers that would be socialism, right?

A New Plan for American Cities To Free Themselves of Wall Street’s Control

Arbitrary financial fees are sucking cities and states dry. But they can change the terms if they band together and bargain collectively.
In August 2014, the Los Angeles City Council debated whether to call for the renegotiation of the city’s financial deals. A report by the labor-community coalition Fix L.A. found that the city had spent more than twice as much on banking fees in fiscal year 2013 as it had on street services.
To try to balance its budget, Los Angeles had enacted hundreds of millions of dollars in cuts over the previous five years. City jobs had been slashed by 10 percent, flood control procedures had been cut back, crumbling sidewalks were not repaired and alleys were rarely cleared of debris. Sewer inspections ceased entirely; the number of sewer overflows doubled from 2008 to 2013.
The campaign slogan wrote itself: “Invest in our streets, not Wall Street!”
At the city council debate, Timothy Butcher, a worker with the Bureau of Street Services, got up and said, “I don’t know a whole lot about high finance. I’m just a truck driver. But I do know, if I go to a bank and they give me a bad deal, I don’t deal with that bank any more. And I don’t understand why the city can’t use the same kind of concept on some of these big banks, saying, ‘Hey, help us out or, you know, we’re not going to deal with you any more.’ ”
The City Council approved the resolution unanimously.
It was a blow against both the austerity agenda and the iron grip of Wall Street on American cities. State and local governments in the United States rely on Wall Street firms to put together bond deals, manage their investments and provide financial services. For this, banks charge billions of dollars in fees each year. Public officials believe they have little choice but to cough up. When there are revenue shortfalls, cities typically impose austerity measures and cut essential community services, but Wall Street gets a free pass—payments to banks are considered untouchable.
Public officials assume (wrongly) that financial fees are set in stone because they are based on so-called market rates. However, market rates aren’t preordained by God. Banks set them, and public finance officials simply don’t demand anything substantively lower.
So, what if cities took a page from the labor movement and bargained collectively over interest rates and other financial deals?
The simple reason why anti-union politicians are waging a war on collective bargaining by workers is that it works: There is power in numbers. The basic idea behind such bargaining is to shift the balance of power in the employer-employee relationship and empower workers to negotiate with owners on a more equal footing.
But collective bargaining does not have to be limited to the workplace. Student organizations such as United Students Against Sweatshops have forced university administrations to negotiate over labor standards for their merchandise vendors. Consumer unions press retailers over issues like pricing and safety standards. Community organizations are able to negotiate community-benefit agreements with major corporations in their cities and win benefits such as local hiring policies and community investment standards.
Similarly, public finance officials in cities, states and school districts across the country could apply collective bargaining practices to their financial relationships with Wall Street. While there is no established mechanism for them to do so, there are some creative options worth exploring. For example, cities could establish a nonprofit or publicly funded agency to set guidelines for municipal finance deals and refuse to do business with any bank that does not comply. (More on this later.)
This may sound pie-in-the-sky, but the reality is that American taxpayer dollars are a tremendous source of bargaining power. Just three U.S. cities— New York, Los Angeles and Chicago— together with their related agencies and pension funds, do nearly $600 billion of business with Wall Street every year, more than the gross domestic product of Sweden. Wall Street wants a piece of that action. If it has to jump through a few hoops to get it, it will. This gives public officials the leverage to demand lower interest rates and fairer terms, freeing up scarce funds for community services like parks, libraries and schools.
Runaway fees
Over the last few decades, the banking industry has shifted its profit model away from interest. Big banks’ profits now rely heavily on fees—the money charged for creating loans, packaging them into securities, selling them and servicing them. This structure incentivizes banks to push more complex and expensive deals, like adjustable-rate mortgages and variable-rate bonds, that require fees and add-ons.
Banking fees do not have to bear any relationship to the actual cost of providing services. Banks charge whatever they can get away with, which is why fees have shot up as banks have consolidated and customers’ choices have narrowed. For example, in 2007, Bank of America raised its ATM fee for non-customers from $2 to $3. In all likelihood, the bank’s costs hadn’t suddenly risen 50 percent, despite a spokesperson’s claim that the fee hike would offset “significant” expansion and upgrade of its machines. Banks also arbitrarily raised prices on credit enhancements for municipal borrowers after the financial crash.
For cities and states, which deal in large dollar amounts, this nickel-anddiming hits particularly hard. A 1 percent fee on a $200 million bond is a lot more money than a 1 percent fee on a $200,000 mortgage. That explains why the city of Los Angeles paid $334 million in publicly disclosed fees for financial services in fiscal year 2013, according to the Fix L.A. report. This amount did not include principal or interest on any debt, and neither did it include fees that are not publicly disclosed, like the astronomical fees hedge funds and private equity firms charge pension funds to manage investments.
In Illinois, a preliminary analysis by researchers at the Service Employees International Union (SEIU)—full disclosure: where I used to work—found that the state’s pension funds spent approximately $400 million in publicly disclosed fees in 2014 alone. New York City Comptroller Scott Stringer has released a report showing that nearly all of the returns from the city’s five pension funds over the past 10 years—approximately $2.5 billion—have been eaten up by fees. An investigation by the International Business Times found that New Jersey’s pension funds paid more than $600 million in financial fees in 2014.
Every dollar that banks collect in fees from state and local governments and pension funds is a dollar not going toward essential neighborhood services. It’s not just the streets and sewers of Los Angeles. Illinois is teetering on the edge of a government shutdown. Already, Gov. Bruce Rauner has slashed funding for college scholarships for low-income students, taken a hatchet to vital healthcare programs like Medicaid, and cut state funding for CeaseFire, a highly regarded violence-prevention program with a proven track record.
Most public officials still resist acknowledging that these fees are a problem. When Gov. Rauner tried to cut the municipal share of state income tax revenue by 50 percent this spring, the Illinois House of Representatives responded with a first-of-its-kind resolution urging the state to match any such cuts with proportional cuts to financial-service fees. SEIU also proposed a reduction of financial-service fees during its contract negotiations for state workers, but this was roundly rejected by the Rauner administration.
Of course, Rauner has personally profited from these fees in the past. Before deciding to run for office, he was the managing director of a private equity firm that did business with Illinois pension funds, GTCR LLC.
But even public finance officials who don’t have direct industry ties typically drag their feet on fee reductions. The Los Angeles City Council’s efforts to pressure banks into renegotiating or terminating costly financial deals were met with stiff resistance from the city’s financial officers.
There are a number of reasons why finance staff can be reluctant, if not obstructionist, in efforts to curtail banking fees. One is the revolving door between public finance jobs and Wall Street. Another is the fact that public officials can be outflanked by smoothtalking bankers making dishonest and deceptive sales pitches. But perhaps the biggest reason is that officials truly believe they got the best deal they could. Los Angeles’s finance staff point out that even though they paid $334 million in fees in 2013 alone, they actually did better than many of their peers.
When Councilmember Paul Koretz called for a vote on the motion in Los Angeles, he skewered the City Administrative Officer’s (CAO) office, saying: “Our lack of success in negotiating thus far could partly be a factor of CAO saying that, ‘Hey, this is a fine deal and we’ve done as well on this as anything else we could do.’ ”
Changing the rules
Under the current system, Wall Street sets the rules of the game and public officials think they have no choice but to play on those terms. They may negotiate around the margins and get a fee lowered by half a percentage point, but they do not typically push back on the illogic of the underlying fee structures.
Cities that consider taking a stand against Wall Street are routinely told that if they do, their credit ratings will be downgraded, and banks and investors will stop doing business with them. In reality, the public finance officials who claim they have no choice but to pay high fees and accept onerous terms from Wall Street banks are like elephants afraid of mice. The notion that Wall Street could sustain a prolonged boycott against a city or state as punishment goes against the very nature of banking. U.S. taxpayer dollars are among the largest pools of capital in the world. If there is money to be made, there will always be a bank that will step in to get that business.
Similarly, threats about credit rating downgrades are baseless. Rating agencies are concerned with a borrower’s ability to pay back its bondholders. If anything, negotiating lower fees with banks would free up money and make cities and states less likely to default.
Some cities and states are already blazing the trail. In 2010, then-Massachusetts State Treasurer Timothy Cahill moved state deposits out of Bank of America, Citigroup and Wells Fargo because the banks’ credit card operations did not comply with the state’s usury law, which caps interest rates at 18 percent.
In 2012, the city of Oakland initiated a boycott of Goldman Sachs because the bank refused to renegotiate a deal that had put the city on the losing side of a risky interest-rate bet costing $4 milion in annual fees and payments.
And earlier this year, the Board of Supervisors of Santa Cruz County, Calif., voted not to do any new business for the next five years with banks convicted of felonies. The boycott affects the five banks, including JPMorgan Chase and Citigroup, that pleaded guilty to illegally rigging foreign exchange rates.
These actions are first steps. However, they would be significantly more effective if cities and states joined together. When Oakland—a mid-sized city of 400,000 people—boycotted Goldman Sachs, Goldman didn’t flinch. But if several cities, states and school districts banded together and threatened a boycott, the banking behemoth would be forced to take notice.
Power in numbers
In an ideal world, the federal government would establish standards for protecting state and local officials against predatory financial deals. In the same way that there is a Consumer Financial Protection Bureau, there is a dire need for a Municipal Financial Protection Bureau whose top priority would be to protect taxpayers’ interests. Even though there are already agencies with oversight over municipal finance—such as the Municipal Securities Rulemaking Board and the Securities and Exchange Commission—protecting cities and states from abuse is not their priority. And they have close ties to the financial services industry.
Because federal regulation has proven woefully inadequate, and the chances of effective congressional action in the near future are slim to none, cities and states need to step up.
If just New York, Los Angeles and Chicago banded together and threatened to withhold their collective $600 billion of potential annual business with Wall Street, they wouldn’t have to simply accept the so-called market rates. They have enough bargaining power to set their own.
Together, they could refuse to sign contracts that prevent them from publicly disclosing fees. If they also get their state governments and pension funds on board, they could alter fee structures for things like bond underwriting. They could require any bank that pitches products to sign a fiduciary agreement, meaning they are legally required to put taxpayer interests ahead of their own.
Santa Cruz County Supervisor Ryan Coonerty has already said he is reaching out to other jurisdictions across the country to urge them to join in refusing to do business with felonious banks. If public officials were to coordinate their demands and present a unified front, they could force the banks to take them seriously.
My organization, the Roosevelt Institute’s ReFund America Project, works with community-labor coalitions in cities nationwide that are calling for a reduction in bank fees and an end to predatory municipal finance deals. Last summer, ReFund America and Local Progress—a network linking local elected officials with unions and progressive groups—led a small meeting called “A Progressive Vision for Municipal Finance.” We brought together organizers, policy experts and public officials to discuss various proposals for fixing municipal finance. Among those present were four city councilmembers and three representatives from mayors’ offices. These officials expressed strong interest in developing a bargaining vehicle that would allow cities to take collective action to stand up to Wall Street.
One idea was the creation of a nonprofit or public agency to set municipal finance guidelines. Individual cities and states could subscribe to these guidelines and the agency would in effect become the gatekeeper for banks wishing to do business with them. The more subscribers the agency had, the more bargaining power it would hold. Strict controls would help ensure the agency remained scrupulously independent of Wall Street. That organization could even be the precursor to a national Municipal Financial Protection Bureau.
People over profit
Together, American cities, states and pension funds hold untold power. If they flex their muscles and organize around coordinated demands, they can radically transform taxpayers’ relationship with Wall Street.
In 2012, a community leader from Oakland attended the Goldman Sachs shareholder meeting in New York City and urged CEO Lloyd Blankfein to renegotiate its interest rate swap with the city to avoid library closures and layoffs. He said it was “an issue of morality.” Blankfein responded, “No, I think it’s a matter of shareholder assets.”
This is the mentality that led Rolling Stone’s Matt Taibbi to call Goldman Sachs “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
It’s not just Goldman. All of municipal finance has become an extractive industry, pumping billions away from the communities that need them most. Morality is an externality that financial firms seldom concern themselves with. The financial sector’s fee-based business model is designed to maximize profits, not to protect taxpayers.
Banks may not have a moral compass, but their business contracts with our state and local governments can and should. After all, our cities, states and school districts are not simply fodder for Wall Street’s insatiable greed. Our elected leaders have a duty to protect us from predatory financial practices. Cities and states can force banks to charge drastically lower fees, do away with arbitrary fee structures and eliminate onerous terms that divert billions of dollars away from the most vulnerable members of our society into bonus checks for our nation’s wealthiest few.
Governors in states like Wisconsin, Michigan and Illinois are waging war on collective bargaining and telling taxpayers that empowering publicsector unions robs state coffers, but the real drain on public treasuries is the billions in fees paid to banks every year. And unlike money that goes into workers’ pockets, most of these fees are not recycled back into the local economy but sent to offshore tax havens or invested in complex financial schemes. The irony is that collective bargaining is one of the most effective tools available to public officials who truly want to do right by taxpayers—and cast off Wall Street’s tentacles.

Saturday, July 4, 2015

The Dark Politics of Dark Money

The Dark Politics of Dark Money

In the United States, money spent on candidates, politics, or public policy is protected speech under the First Amendment. What happens when protected speech is wrapped in a cloak of secrecy? How to reconcile Citizens United, which gave corporations the same rights as individuals with regard to political speech while shielding them for any accountability for that speech?
This is the story of how one government agency struggled with these questions and how it was defanged before it could implement rules to force nonprofit organizations who are spending on political campaigns to disclose donors. It is also a story about the unbridled freedom given to political nonprofits in the absence of campaign-finance laws or Internal Revenue Service rules regulating disclosure.
In late 2013, after years of consideration, the Internal Revenue Service proposed a rule regarding the political activity of social welfare organizations classified by the agency as 501(c)(4) organizations: If tax-exempt organizations engage in direct campaign activity, they must disclose the identity of donors funding that activity in a format similar to what is required of political action committees. Disclosure would be required in a more compressed time frame than the current 18-month delay, providing voters the ability to understand who is paying for the blizzard of political ads and literature on their doorsteps, televisions, and mailboxes.
When the IRS released the proposed rule for public comment, a political firestorm erupted over the definition of “political activity.” More than 150,000 comments regarding the rule were filed with the agency, as groups such as the American Conservative Union claimed the IRS was plotting to suppress conservative political activism. The proposed rule was quickly withdrawn, so the definition could be narrowed to one that targeted all groups—liberal and conservative—that spent a large portion of their revenue on direct campaign activity.
While liberal advocacy groups had pushed for rules on campaign financing and “dark money”—political contributions from undisclosed sources—conservatives manufactured a crisis to pressure IRS Commissioner John Koskinen into delaying a transparency rule that would apply to dark money in the 2016 election cycle.
The rule the agency had put on hold was intended to mitigate the impact of the Supreme Court’s Citizens United v. Federal Election Commission decision, which permits corporations to spend unlimited funds on political campaigns. In the majority opinion, Justice Anthony Kennedy wrote: “The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” (Emphasis added.)
A Scandal Is Born
In response to Kennedy’s nod toward disclosure, legislators in the House and Senate worked throughout 2010 to pass the DISCLOSE Act, which would have mandated reporting and disclosure for groups making independent expenditures for or against candidates. The bill passed the House in June 2010 but failed by one vote to overcome a unanimous Republican filibuster in the Senate.
Absent campaign-finance law, and with a deadlocked Federal Election Commission incapable of acting, the IRS was the last defense against opaque and unrestricted political money. Yet as Republicans in Congress blocked efforts to address campaign-finance transparency, nonprofits were inundating the IRS with applications for tax-exempt status, many for social-welfare groups. And media outlets were focused on “Tea Party” groups forming around the country.
Against this backdrop, one IRS case manager in the Los Angeles office forwarded an application to the agency’s Cincinnati office for review, expressing concern that the organization applying for nonprofit status was not being established for social-welfare purposes, but instead for political campaign activity. The Cincinnati office, which oversees nonprofit applications, agreed to review the case.
That questionable applicant was a Tea Party group, whose application triggered the reviewer’s concern over its involvement with direct campaign activity relating to specific candidates.
As applications stacked up, the IRS identified areas with potential for abuse, and began to flag applications that followed a similar format, issuing a “BOLO” (Be On the Lookout) alert for new applications with similar features or organizations with similar names.
Throughout 2010 and 2011, the IRS continued to wrestle with how it should handle these organizations in general (and Tea Party applications in particular), while the agency faced mounting pressure from House and Senate investigative committees concerning tax-exempt organizations and donor identities. Tea Party applications were particularly problematic, because the term “Tea Party” was identified with groups backing specific candidates or opposing the policies of the Obama administration.
Such activities are not covered by the “primary purpose” rule applicable to social-welfare groups, which restricts tax exemption (and freedom from disclosure requirements) to organizations that “operate primarily to further the common good and general welfare of the people of the community.”
In September 2010, Senator Max Baucus (D-MT) wrote to then-IRS Commissioner Douglas Shulman, asking him to conduct a survey of major 501(c)(4), (c)(5), and (c)(6) organizations involved in political campaign activity to see whether they were in compliance with the “primary purpose” rule. He also requested that the IRS look at whether the organizations “were acting as conduits for major donors advancing their own private interests regarding legislation or political campaigns.”
In 2012, Senator Carl Levin (D-MI) made a formal request for the IRS to produce specific information on the activity of several high-profile organizations, includingKarl Rove’s Crossroads GPS, the liberal group Priorities USA, Americans for Prosperity, and Patriot Majority USA. As dark money spending increased in 2012, Levin pressed harder, criticizing the IRS decision to interpret the word “exclusively” to promote social welfare as “more than 50 percent” of the organization’s activity. He wanted to know how many tax exemptions had been audited to see if organizations engaged in excessive political activity.
After the 2012 elections, the IRS found itself caught between mounting pressure from Congressional Democrats and from groups receiving information requests from the IRS but no letters approving their tax-exempt status. The agency was requesting that applicants provide all donors’ names and addresses (presumably to satisfy the Baucus inquiry), sparking outrage among conservative groups asked for that information.
Unbridled Freedom
At the same time, Congressional Republicans began to hear from big donors who were concerned about the loss of anonymity—and the tax deductions that some of the nonprofits provided. And from “grass roots” groups impatient with the IRS.
One of these groups was KSP/True the Vote, a Texas-based voter-integrity organization originally known as the King Street Patriots—one of the nonprofit applicants selected by the IRS for closer scrutiny, based upon its application and media reports in 2010 in which KSP/True the Vote activists were accused of intimidating voters at the polls.
In 2010, acting under the name King Street Patriots, conservative Texas activist Catherine Engelbrecht accused a voter-registration group, Houston Votes, of being “the New Black Panthers office” in Texas. Claiming to have found thousands of fraudulent voter registrations in the Houston area, Engelbrecht appeared on Fox News, accusing Houston Votes of massive voter fraud. The King Street Patriots also produced a video that warned: “Our elections are being manipulated by the RADICAL LEFT.” Backed by an ominous soundtrack, the video also included a doctored image of an African American holding a sign that read: “I only got to vote once.”
Ironically, one documented case of voter fraud surfaced in Texas in 2010 when County Commissioner candidate Bruce Fleming, who had been endorsed by Engelbrecht, was found to have cast votes in Pennsylvania and Texas in the 2006, 2008, and 2010 elections, boasting that he “had the chance to vote twice against Barack Obama.”
Indeed, KSP/True the Vote’s literature established that they were operating for campaign purposes, as evidenced by a self-published “Legislative Agenda for Texas” in 2011 and their lobbying for stricter voter-ID laws. The state Democratic Party sued, and in 2011 a Texas court ruled that the King Street Patriots was a PAC and not a nonprofit group. The group was ordered to reveal its donors and pay Houston Votes a substantial settlement.
Despite the court ruling and extensive news coverage, when news broke on May 9, 2013, that the IRS may have singled out conservative groups for scrutiny, Engelbrecht was prepared. On May 21, KSP/True the Vote filed a federal lawsuit against the IRS for targeting them. The suit was dismissed in late 2014.
On February 6, 2014, Engelbrecht testified before the House Committee on Oversight and Reform, contending that True the Vote had been singled out for IRS scrutiny because it was a conservative organization. Tearful and angry, she told committee members that “this government attacked [her] because of [her] political beliefs.” Engelbrecht also claimed that KSP/True the Vote was “a citizen-led liberty group,” suggesting that it was a grassroots organization comprised of concerned citizens who “pass the hat” for funding. Engelbrecht’s testimony was featured on all of the major networks that day, establishing her as the face of an IRS oppression “scandal.”
In fact, KSP/True the Vote is a beneficiary of the Citizens United decision. It doesn’t use its nonprofit status to buy campaign ads, but it does receive large contributions to train and place poll monitors in select districts where large numbers of registered Democrats, minorities, and poor people reside.
From its inception in 2009 to 2013, KSP/True the Vote received total donations of $3,406,177, without disclosing any of its donors. Most of the revenue was characterized as payment for non-deductible services rather than tax-deductible donations, because KSP/True the Vote’s tax-exempt status was still in question. In 2013, after receiving its tax-exempt status from the IRS, the organization received more than a million dollars in tax-deductible donations, enabling it to hire a public relations firm, a professional fundraiser, and social media consultants.
Newly armed with tax-exempt status, in 2013 KSP/True the Vote declared its intention to thwart organizations promoting voting rights and fight the “left-wing Hydra” by training citizen-integrity groups, reviewing voter registry files, lobbying legislatures for voter ID-laws, and monitoring polling places in minority districts, or where KSP/True the Vote perceived voter fraud to be occurring, despite the failure to identify any voting fraud in 2012.
During a message-coordination meeting in May 2013 with Breitbart News Managing Editor Stephen Bannon, former Congressman Allen West, leaders of the Tea Party Patriots, Judicial Watch, Election Law Center, and former Ohio Secretary of State Ken Blackwell, Engelbrecht made her case. “The organized left is preparing a massive campaign to promote universal registration and threatening to block citizen observers from the polls,” Engelbrecht declared. She vowed to defeat the Hydra by “attack[ing] the source of its strengths,” which includes unions, the NAACP, Common Cause, Demos, the Center for American Progress, The Nation Institute, and others.
Yet because True the Vote has 501(c)(3) tax-exempt status, the sources of corporate cash flowing into its coffers will not be disclosed to the public, but its donors will qualify for a “charitable deduction” from the IRS.
Dark Money in Sunny California
In 2012, California voters were asked to consider two ballot measures. The first one—a tax increase on the wealthy to help shore up the state’s public schools—was placed on the ballot by Governor Jerry Brown. The second measure would have limited unions’ ability to spend on elections. (The tax measure prevailed; the anti-union proposition was defeated.)
Shortly before the election, the Small Business Action Committee, a state-based PAC, spent $11 million on ads encouraging voters to defeat the tax measure and vote for the union spending limits. Under California law, individual donors to state PACs must disclose their identity. The only disclosure the PAC made was to say the funds came from a nonprofit organization based in Arizona—Americans for Responsible Leadership.
Determined to reveal individuals behind the funding, state officials went to the California Supreme Court to force disclosure under state law. Ultimately, they were able to trace the money trail but unable to unmask any specific donors. The source of the funds spent by the Small Business Action Committee was Americans for Job Security, a group closely aligned with right-wing billionaires Charles and David Koch. Americans for Job Security revealed it had received the funds from the Center to Protect Patient Rights, another organization closely associated with the Koch network of nonprofit organizations.
In the end, the trail of the mysterious $11 million twisted through four separate nonprofit organizations and three states. None of the organizations was required to disclose their donors. The trail went cold at the doorstep of the Center to Protect Patient Rights (CPPR), which sent over $24 million total to Americans for Responsible Leadership in 2012, all of which was intended for political campaigns. Total campaign spending through CPPR in 2012 was at least $60 million, yet CPPR reported no money spent on campaigns or lobbying in that year.
Surveying the Damage
After numerous congressional hearings on the subject, leaked emails, and a mini-scandal involving IRS executive Lois Lerner’s defective hard drives, House Oversight and Government Reform Chairman Darrell Issa released a 224-page report, saying that improper targeting based on organizations’ names had taken place, a conclusion that had already been drawn by the independent auditors reviewing IRS procedures for auditing applications.
The only nonprofit organization stripped of its tax-exempt status by the IRS was Emerge America, a liberal group formed to train Democratic women to run for office. But for corporate funders, tax-exempt status for political activity was only part of what they sought. It was more important to so strongly discredit the IRS as a consequence of the “scandal” that it would abandon all efforts to bring forward meaningful disclosure rules.
In this atmosphere, the National Rifle Association elected not to disclose $66 million spent on the 2014 midterms as political spending. To do so would have forced it to pay taxes on a portion of what was spent under current law. A defanged IRS means never having to say you’re accountable.
In the 2014 midterm elections, dark money expenditures far outpaced traditional PAC spending. According to OpenSecrets.org, nearly $4 billion was spent on the 2014 midterm elections, of which $768 million is attributable to outside spending by PACs and super-PACs, according to FEC reporting.
Those totals still don’t tell the story.
They don’t include tax-deductible dollars flowing into policy shops, social media, and internet sites that influence votes and should be disclosed as political spending.
In 2015, dark money has already paid for a “government transparency organization” to publish 2016 campaign opposition research on a candidate and market it to national newspapers—with no transparency as to who paid for the research and the motive behind publishing it.
The Government Accountability Institute, a 501(c)(3) nonprofit organization, published Clinton Cash, a book attacking Hillary Clinton and the Clinton Foundation. Author Peter Schweizer serves as president of the Government Accountability Institute, and Breitbart News Managing Editor Stephen Bannon is chairman of its board.
Liberal donors have resolved to form their own dark money network for 2016. The Democracy Alliance, a partnership of 100 wealthy liberals—individual and corporate—announced the formation of a network to build competitive organizations across the states. Like their counterparts on the right, they will not be required to disclose their donors, nor will voters necessarily know who is speaking to them when these groups use their money as “speech.”
At least four Republican presidential candidates are currently raising funds via 501(c)(4) organizations. Bobby Jindal has raised at least $3 million for America Next, which has paid for him to travel and speak at various conferences around the nation. Rick Santorum’s Patriot Voices has raised $8 million since 2012. Rick Perry is backed by Americans for Economic Freedom, which was seeded with leftover money from his 2012 bid for the nomination (he has an ultimate fundraising goal of $15 million for 2016). Ohio Governor John Kasich formed Balanced Budget Forever in late 2014, but hasn’t yet launched a robust fundraising effort. And Jeb Bush’s Right to Rise organization is reportedly on track to raise $100 million for his election bid.
The Ready for Hillary group has been raising funds for Hillary Clinton since early 2014, but is about to dissolve and disclose its large donors when they turn over their assets to her campaign.
Others will form as the race for the presidency unfolds. Unless the nonprofit veil of secrecy is pierced, voters will never know who is buying that political speech and for what purpose.
Because the Congress will not act, and the IRS has been subdued, that veil is unlikely to be lifted before the 2016 presidential election.
Calls to the office of the IRS commissioner, to inquire about when a rule for political nonprofits will be issued, went unanswered.

The horrible cost of a four day hospital stay in Australia

Friday, March 13, 2015

Sanders files bill to strengthen, expand social security. “The most effective way to strengthen Social Security for the future is to eliminate the cap on the payroll tax on all income above $250,000 so millionaires and billionaires pay the same share as everyone else.”

Sanders Files Bill to Strengthen, Expand Social Security

WASHINGTON, March 12 – As boxes of petitions signed by 2 million Americans were hauled into the Capitol today, Sen. Bernie Sanders (I-Vt.) introduced legislation to expand benefits and strengthen the retirement program for generations to come.
The Social Security Expansion Act was filed on the same day Sanders and other senators received the petitions gathered by the National Committee to Preserve Social Security and Medicare.
“Social Security is the most successful government program in our nation's history. Through good times and bad, Social Security has paid out every benefit owed to every eligible American,” Sanders said. “The most effective way to strengthen Social Security for the future is to eliminate the cap on the payroll tax on all income above $250,000 so millionaires and billionaires pay the same share as everyone else.”
Sanders’ measure would make the wealthiest Americans pay their fair share.  Under current law, the amount of income subject to the payroll tax is capped at $118,500. That means someone making millions of dollars a year pays the same amount in payroll taxes as some making $118,500 a year. The legislation would subject all income over $250,000 to the payroll tax.  Doing so would impact only the top 1.5 percent of wage earners, the Center for Economic Policy Research has estimated.
The bill also would subject unearned household income above $250,000 to the same 6.2 percent tax as applies to most earned income. The top 0.1 percent of Americans  gets about half of all capital gains income.
Asking the wealthiest Americans to contribute more into Social Security, would not only extend the solvency of Social Security through 2060, it also would allow Social Security benefits to be expanded for millions of Americans.
“At a time when over half of the American people have less than $10,000 in savings and senior poverty is increasing, we should not be talking about cutting Social Security benefits.  We should be talking about expanding benefits to make sure that every American can retire with dignity,” the senator said.
The bill would:
  • Increase Social Security benefits by about $65 a month for most recipients.
  • Increase cost-of-living Adjustments for Social Security recipients.
  • Provide a minimum Social Security benefit to significantly reduce the senior poverty rate.
Social Security today has a $2.8 trillion surplus and will be able to pay all promised benefits until 2033, after which it will be able to pay around 75 percent of all promised benefits.  The Social Security Expansion Act would increase revenue and extend the solvency of Social Security for the next 45 years. 

Wednesday, March 11, 2015

Bernie Sanders: "The six largest financial institutions have assets of almost 60% of our GDP. If Teddy Roosevelt were President today, you know what he would say? 'Break 'em up.' And he would be right. It's time to break up the large Wall Street banks."

Now my little girl can sleep with a gun that is safe!

Vintage Add

On the little girl’s chest, it says, “Papa says it won’t hurt us!”  Papa’s reasoning, no doubt, “I got a gun that has a child lock on it—now my daughter can sleep with a gun that is safe ”