Category: Campaign Finance

Dear Group,

It has started. Any of you who watch television have repeatedly seen two ads in support of of McMorris Rodgers. First, there was the “Apple Stand” ad paid for out of CMR’s personal campaign coffer. Now we have the DaVita Corporation’s “Not All Heroes Wear Capes” Ad “Paid For By DaVita, Inc.” According to the 30 second ad, Congresswoman Cathy McMorris Rodgers is making “Heroic efforts in the halls of Congress to empower everyday heroes like nurses and doctors to provide better coordinated health care.” McMorris Rodgers smiling image appears twice. The words “Cathy McMorris Rodgers,” are enthusiastically intoned three times accompanied by dramatic music. The consumer of this propaganda is exhorted to support “The Patients Act,” no bill number, no detail…clearly, there is no expectation the viewer will scurry to their computer to look it up. The whole point is to embed CMR’s multi-syllabic name in the mind of the viewer. (If you’re curious enough to want to look at the “Patients Act” there is a link way below in the P.S.s.)

First, recognize this ad as a product of the decades long push by the Republican Party to unleash the power of the wealthy to produce and market propaganda to the public. This ad is an “independent expenditure,” part of the “First Amendment Right of free speech” accorded to “corporate speech,” The “right” of corporations as “persons” to spend any amount at any time influencing elections comes to us courtesy of a 5-4 majority on the Supreme Court with the Citizens United decision of 2010 and the cases that followed it. As long as the ad is “independent” of the candidate, i.e. the candidate’s campaign supposedly cannot coordinate the “independent” ads with the efforts of the campaign, such ads are now perfectly legal right up to the day of the election. Expect to see many more of them. 

DaVita’s “Not all heroes wear capes” ad is slick, but DaVita, Inc. certainly can afford it. DaVita, Inc. is a huge company with nearly 19 billion dollars in assets and 664 million dollars in net income in 2017. You can read about it here in Wikipedia. DaVita’s dialysis centers are everywhere. There are three in Spokane alone. Nationwide 70 percent of the dialysis market has been cornered by just two companies, DaVita and Fresenius. (Fresenius also has three dialysis clinics in Spokane.)

YOUR TAX DOLLARS?

McMorris Rodgers is all about the “free market,” right? McMorris Rodgers preaches about “freedom” and “transparency” when it comes to health insurance and health care every chance she gets. DaVita is a corporation competing in a “free market” for health care dollars, right? Well, not quite.

This is very big business, big business paid for by you and me. Treating end stage kidney disease takes up one percent of the entire U.S. federal budget. The End Stage Renal Disease Program (ESRD), enacted in 1972 under Richard M. Nixon (remember he was a Republican before Republicans became Libertarians), extended Medicare benefits for renal dialysis to those under sixty-five. In 1972 there were about 10,000 people in the U.S. dependent on the new technology of dialysis to stay alive. Today there are nearly half a million (thanks mostly to renal disease associated with diabetes and high blood pressure). 90% percent of today’s dialysis patients have their dialysis paid for by ESRD under Medicare.

DaVita is dependent on continued payment of our tax dollars through Medicare for its existence and profit. DaVita takes those tax dollars and uses them to shore up support for McMorris Rodgers with their inane “Not All Heroes Wear Capes” ad put before the electorate’s passive eyes on their television screens.

The ad money is probably peanuts compared to the salary of Kent Thiry, DaVita’s CEO, or to the money DaVita spends on corporate entertainment, some of which has featured Thiry riding into a packed convention hall on a horse, or compared to the money made by holders of DaVita stock. 

So how do you feel about your tax dollars fueling inane ads for the electorate to passively ingest? Consider it a courtesy of the Republican Party’s unified efforts to trash campaign finance law. Remember these ads every time McMorris Rodgers speaks of “the ‘free’ market” and “transparency.”

Keep to the high ground,

Jerry

P.S. If you enjoy John Oliver’s commentary and have 24 minutes to watch his monologue on DaVita, click here, for the youtube video. He delivers a well-deserved skewering.

P.P.S. DaVita’s ad is just one more manifestation of corporations using money from your tax dollars to foist ads to you on TV. Think of the all the drug company ads for Viagra brought to you courtesy of your tax dollars funneled through Medicare, Part D (Part D is a product of the George W. Bush administration, no less)

P.P.P.S If you really want to dig around in the weeds well beyond what DaVita’s ad actually wants you to remember you can delve into the what they call the “Patients Act.” If took some sleuthing for me to determine they were referring to H.R.4143 – Dialysis PATIENTS Demonstration Act of 2017. The bill itself makes some sense, but is, of course, financially to the benefit of DaVita by steering some more tax dollars its way.

Dear Group,

Thursday, May 31, McMorris Rodgers held a town hall in Pullman, WA. In spite of its middle-of-a-work-day timing (3-4PM) and minimal advertising (a Facebook post the prior Saturday and a posting in an obscure corner of her website), about forty people attended. She experienced some stiff questioning but stuck to her now familiar talking points.

McMorris Rodgers must feel her seat in jeopardy and time is short, so she must make the most of a trip like this. A poorly advertised hour long town hall will add to the tally she will later tout as evidence of her constituent outreach. Overheard in the hall was reference to McMorris Rodgers’ un-advertised visit to a Pullman company, Schweitzer Engineering Laboratories (SEL) SEL a far more important constituent of McMorris Rodgers and the Republican/Libertarian Party than the forty people at the town hall.

Why? It is going to cost a lot of money for McMorris Rodgers to try to keep her seat in the upcoming election. The money directly under her control, the Cathy McMorris Rodgers For Congress coffer, will not cover it. She will need major backing from the Republican national apparatus. Thanks to concerted efforts by the Republican/Libertarian machine to subvert campaign finance law, extremely wealthy donors are much freer to fill the national coffers than they were prior to 2010 and Citizens United. The flow of a lot of that money is opaque to us (through “non-profits”), but, thanks to remnants of campaign finance law that have so far survived from the early 1970s, we still have a small window through which to see how it all works.

Why look at McMorris Rodgers and her visit to Schweitzer Engineering Laboratories (SEL)? The founder, technically a Schweitzer “employee,” and, probably, a holder of a large portion of the “employee ownership,”  Edmund O. Schweitzer III, happens to share his name with his company. That fact makes personal campaign contributions easier to associate with the company. Furthermore, unlike many in the Koch donor group, Mr. Schweitzer and his wife choose to make at least some of their political contributions to candidates and PACs whose donors must be disclosed on the Federal Elections Commission website to comply with still extant campaign finance law.

On December 19, 2017, Mr. Schweitzer and his wife wrote checks totaling $594,600, all to various Republican interests you can see by clicking the link. Is it a coincidence that the U.S. House of Representatives passed the Tax Cuts and Jobs Act the same day? You tell me. Of course, we have no way of knowing the net worth or annual income of the Schweitzers, but the financial benefit to them from the Tax Cuts and Jobs Act must have been substantial. They have been major Republican contributors for many election cycles, but their donations usually have come earlier in the year. Were they withholding their contributions contingent on passage of the Tax Cuts and Jobs Act?

The Republican/Libertarian legal attack on campaign finance law removed the cap on total political donations a wealthy person can give. (See McCutcheon v. FEC, 2014) At least so far, though, they have not succeeded in trashing some important remnants of campaign finance law from the 1970s. As a bizarre result the mega-rich can only only give $5400 per person per election cycle directly to the candidate ($2700 for the Primary and $2700 for the General Election, $10,800 grand total for a couple like the Schweitzers). The record of the Schweitzers’ contributions at FEC.gov shows that, although $320,800 of the $594,800 flowed through entities attached to McMorris Rodgers’ name (CMR, Cathy), only $10,800 went to her personal campaign coffer, Cathy McMorris Rodgers for Congress, the only one she directly controls. 

Think about that for a moment. Since Citizens United in 2010 and its subsequent well-orchestrated kin, the Republican Party apparatus has been able to consolidate far more monetary power at the top, while candidates remain limited, currying favor with the national machine by appealing to the big donors in their districts, but able to keep only a small part of the proceeds under their own control. It should come as no surprise that Republican Congresspeople toe the Republican Party line unless they are secure in a gerrymandered voting district. (To be sure, Democrats do this, too. They have no choice. The Republicans used the courts to change the rules in favor of the Party with the wealthier donors…themselves.)

So as McMorris Rodgers visits Schweitzer Engineering Laboratories hat in hand she is begging for only a relative pittance that can accrue to her personal campaign fund ($10,800)…and a massive cash infusion for the Republican/Libertarian Party. The vast Party apparatus will use that money to further its agenda of deregulation, privatization, tax cuts for the rich, cuts to “entitlements,” and mind-bending propaganda and gerrymandering to keep the whole enterprise on track. 

What is McMorris Rodgers role here? I imagine she is sincere about her positions and her rhetoric. She has lasted this long because she is actually convinced of the righteousness of the Republican/Libertarian credo AND she projects warmth, sincerity, and motherliness to her constituents. With so much money sloshing around at the top of the Republican Party and relatively little in individual campaign coffers it is no surprise there are very few mavericks among Republican members of the House. Any hint of individual thought or lack of fealty and in two years such a maverick will be weeded out by a well-funded challenger from the right more dedicated to the party line. This is how McMorris Rodgers can sincerely tear up about the plight of the Dreamers, claim she is fighting for them, refuse to sign the discharge petition, and concoct a bill that won’t offer them eventual citizenship, while using the excuse she will work only on a bill that has a chance to become law. (One might ask her to explain, then, why she votes session after session for gun and abortion legislation, repeals of the Affordable Care Act and bills like the REINS Act and the Balanced Budget Amendment that have no chance in the Senate.)

She may hold a sparsely advertised town hall, but Cathy’s trip to Pullman was more to worship at a local shrine of the Republican/Libertarian wealth machine.

Keep to the high ground,

Jerry

P.S. Schweitzer Engineering Laboratories is a part of small family dynasty.  Edmund O. Schweitzer III is the son of Edmund O. Schweitzer, Jr. who founded E. O. Schweitzer Manufacturing in 1949. The original Edmund O. Schweitzer, was a co-founder of S&C Electric in Chicago, Illinois, USA. Do you suppose the recent near doubling of the estate tax exemption from 5.5 million to 11.12 million (part of the “Tax Cuts and Jobs Act”) further enriched this dynasty?  Schweitzer Engineering Laboratories is in many ways a benign example of private enterprise (far more benign than the fossil fuel industry, for instance). I pick on it here only as a traceable example of the corrosiveness of money in politics.

P.P.S. It seems likely the Schweitzers are major Republican donors based on traditional Republican fiscal prudence and “free market” advocacy. It is unlikely they are passionate about free access to guns, limiting gay marriage, limiting access to birth control or abortion, keeping transgender students in the “right” bathroom, or deporting the Dreamers. Nonetheless, their money will push these issues in order to keep the Republican/Libertarians in power to further dismantle campaign finance law, reduce any and all regulation, privatize and limit social programs, and generally enrich Ayn Rand’s captains of industry.

P.P.P.S. I am not aware of any national Republican efforts to remove the $2700/person/election cap on campaign contributions to individual candidates. Is that because they’ve run out of legal tricks or is it because the national party is happy with the money, and therefore the power, at the top?

In Part I of Citizens United we covered the background, the personalities, and the Orwellian naming of the group Citizens United. Part II offered an anatomy of the decision, the political underpinning of the Supreme Court’s workings on the case. Today I want to emphasize the importance of the decision in Citizens United v. FEC and its followup.

McCain-Feingold (2002) was the last gasp of bipartisan acknowledgement that the influence of extreme wealth in manipulating voters is a problem. It limited electioneering communication in the months preceding elections and capped the amount of money an individual was allowed to donate. John McCain (R-AZ), the Senate Republican whose name is attached to the law, is now one of only a handful of relatively principled, thoughtful Republican Congresspeople remaining…and he is battling brain cancer (and was recently dismissed as “dying” by a White House spokesperson).

In the mid aughts (2000-2010), while polls consistently showed that most Americans regardless of party affiliation favored strict election spending limits, an extraordinarily rich minority led by the Koch brothers strategized legal cases that would roll back monetary limits all the way to the Tillman Act 1907 in the days of Theodore Roosevelt. The Kochs and friends counted on voters’ inattention. They invented and funded organizations with deceptive names like Citizens United and SpeechNow, waving the banner of “free speech” to deceive the gullible (of whom I was one at the time). 

For decades the mega-wealthy had worked to seat a Libertarian majority on the Supreme Court. With the appointment of John Roberts to the Supreme Court in 2003 and his elevation to Chief Justice in 2005 (both by George W. Bush), the goal was within reach.  Roberts, Alito, Thomas, Scalia, and Kennedy, would further the cause of equating money with speech. 

Citizens United v FEC (January 21, 2010) proclaimed that anything goes as long as it is an “independent expenditure.” This ruling bypassed nearly all of the restrictions of election finance in the system we have worked with since the early 1970s. That system, the one Citizens United bypassed, is represented in the upper left crescent in the diagram below. It is the system governed under the Federal Elections Commission, the system on which I focused in Cathy’s Coffers !, II, and III. Citizens United furthered the development of a parallel system of mostly unregulated spending in the SuperPAC circle and simultaneously fueled election spending in the non-profit arena. The only requirement is that the spending be “independent,” a requirement that is both a joke and danger. A joke in that no one can really police such a requirement, and a danger in that “independent” money can wrest control of the message from the candidate, helping to put that control in the hands of those with the biggest monetary mouthpiece, the superPACs and certain non-profits. Significantly, Citizens United v. FEC lifted the restriction on corporate and union electioneering contributions (as long as they are “independent”) that had begun with Theodore Roosevelt in 1907.

SpeechNow,org v. FEC. SpeechNow.org, another deceptively named astroturf organization, already had a case in line. On March 26, 2010, two months after Citizens United, the U.S. Court of Appeals for the District of Columbia Circuit used the Citizens United decision as the basis for a ruling on SpeechNow.org v. FEC.  In SpeechNow the Court of Appeals struck down the federal limits on contributions to federal political committees that make only independent expenditures and do not contribute to candidates or political parties. On the other hand, the Court also ruled such independent expenditure committees (=superPACs) must report their donors to the FEC just like regular PACs (the ones in the crescent on the diagram below). “SpeechNow” sounds like another grassroots, citizen supported organization, doesn’t it? Wrong. You can visit its total of just five donors in the 2009-2010 election cycle here at the FEC. David Keating, one of the five, is also the treasurer for the organization…and the Executive Director of the Club For Growth. The Club For Growth is non-profit whose donors are part of the Dark Money world. The Club for Growth has a reputation of attacking Republican lawmakers “from the Right” to keep them in line (and pull the remaining principled Republican rightward).

On April 2, 2014, in McCutcheon v. FEC, the same five Libertarian judges on the Supreme Court, Roberts, Scalia, Alito, Kennedy, and Thomas pushed the money floodgates wide open. In McCutcheon they ruled that aggregate political spending limits are unconstitutional. In the 2011-2012 election cycle the aggregate contribution ceiling on individuals during stood at $46,200 for federal candidates and $70,800 for national parties, or a $117,000 aggregate limit. That limit was established in 1974 and revised upward by McCain-Feingold in 2002. Mr. McCutcheon, an uber-wealthy Alabamian, apparently felt constrained by these limits. The Libertarian Supreme Court majority agreed, saying such limits were an unconstitutional infringement of free speech rights.

As a result of McCutcheon In the current election cycle (2017-18) more than 19,000 political contributions of a milion dollars or greater have been made. That’s 19 billion dollars…with a b.

Republican/Libertarian big money interests have hoodwinked sleepy, distracted voters with populist-sounding names and appeals to “free speech” and pushed the floodgates of campaign spending wide open.

Keep to the high ground,

Jerry

This diagram is from a 2014 interactive article in the NYTimes. It is a great place to start understanding the effect of money in our politics. The limits on contributions are indexed to inflation, so the illustrated limits are now higher, e.g. $5400 can be given directly to a Candidate’s election committee ($2700 for the Primary and $2700 for the General election), and a conventional political action committee (PAC) can receive $5000 from an individual donor.