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Anonymous Donors Underwrite Campaign Against Democracy

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Anonymous Donors Underwrite Campaign Against Democracy

In Citizens United v. Federal Elections Commission (FEC), the Supreme Court ruled that corporations and unions enjoy the same First Amendment rights as individuals, giving them the green light to flood elections with independent political spending. Though most prominent, publicly-traded companies have stayed out of the fray, a surprising number of 501(c)-designated organizations have quickly surfaced to take advantage of the ruling and the Court’s new attitude toward money in politics.

As TARP Expires, Cost Lower than Anticipated

The Troubled Asset Relief Program (TARP), the $700 billion government fund to purchase assets and equity from large banks, officially ended at the beginning of October. In 2008, the Bush administration enacted the program following years of unregulated and reckless private banking actions that precipitated one of the most severe economic downturns in the nation's history. TARP has been an extremely contentious and politically toxic issue since its inception. However, recent reports have indicated that the cost of TARP will be much lower than originally anticipated.

New Jersey Governor Cancels Nation’s Largest Job Creation, Economic Recovery Project

New Jersey Governor Chris Christie made national headlines last week by announcing that he is canceling the nation’s largest public works project – and sacrificing nearly 50,000 jobs in the process. The Access to the Region’s Core (ARC) tunnel project would double the existing rail-commuting capacity from New Jersey to New York City with a nine-mile tunnel under the Hudson River to midtown Manhattan.

Anonymous Donors Underwrite Campaign Against Democracy

Clean and Fair Elections * Cristina Francisco-McGuire

 

In Citizens United v. Federal Elections Commission (FEC), the Supreme Court ruled that corporations and unions enjoy the same First Amendment rights as individuals, giving them the green light to flood elections with independent political spending. Though most prominent, publicly-traded companies have stayed out of the fray, a surprising number of 501(c)-designated organizations have quickly surfaced to take advantage of the ruling and the Court’s new attitude toward money in politics. Unlike 527's, which are subject to strict disclosure laws, these 501(c) groups are not required to disclose the identities of their donors unless contributions are specifically earmarked for electioneering – an attractive benefit if one plans on spending millions of dollars to sway electoral races.

Accordingly, 501(c) groups outside the Republican and Democratic parties, financed largely by privately-held companies and wealthy individuals, have outdone themselves for this year’s midterm elections; spending to influence the outcomes of races has increased exponentially compared to the same period in 2006. By the end of last week, two major Karl Rove-backed GOP groups – 501(c)4 Crossroads GPS and its sister 527 organization, American Crossroads – spent $18 million combined on attack ads. This week, Republican groups are spending an unprecedented $50 million on advertising. Generally, Republican-leaning organizations have outspent their Democratic counterparts on TV ads by a 6 to 1 margin.

At the same time, disclosure has plummeted and less than a third of donors have been revealed to the public -- a shocking figure compared to 2006’s 96% disclosure rate. News outlets have been able to glean some information about donors, but not much:

  • Though the 527 group American Crossroads has raised a significant amount of money, Karl Rove and Ed Gillespie (chairman of the Republican State Leadership Committee) formed a 501(c)4 - a designation typically reserved for social welfare groups - spin-off called Crossroads GPS in June, that gives donors the cloak of anonymity that a 527 and its disclosure rules cannot. Results have been predictable: Crossroads GPS brought in more money in its first month than American Crossroads was able to raise in four. Reports also show that wealthy individuals have cut six- and seven-figure checks to Crossroads GPS, and the group recently received a check for several million dollars from a single anonymous donor.
  • Another individual, declining to be named, gave $1 million to the Tea Party Patriots in September.
  • Americans for Prosperity, co-founded by billionaire oil and gas magnate David Koch, is presumably funded by him and his billionaire brother, Charles Koch. The Koch brothers have outspent industry leaders like ExxonMobil to fund organizations that deny climate change and work to obstruct the regulation of carbon emissions. They are currently leading the Prop 23 campaign in California to reverse AB 32, California's Global Warming Solutions Act.
  • Americans for Job Security (AJS), a "501(c)6 tax-exempt business league," sidesteps disclosure by reporting all of its revenue as membership dues. However, "membership" ebbs and flows in step with the electoral cycle: AJS reported $0 in membership revenue for 2007, but "membership dues and assessments" skyrocketed to $12.2 million in time for the 2008 elections. AJS spent $6 million on ads during the primary season alone, and are spending millions more to influence the general election.

According to Public Citizen, only one in ten Republican-aligned groups that produced election ads during the 2010 primary disclosed its funders as required under the Bipartisan Campaign Finance Reform Act of 2002 (BCRA) - though Democrat-leaning groups did not fare much better, with a paltry 50% disclosure rate. The public is currently suffering from an unprecedented lack of information regarding the undue influences on political races, and bringing these anonymous donors to light will help voters make more informed choices at the polls.

To address the ways these practices undermine democracy, Progressive States Network is working with the Brennan Center to help legislators expand disclosure requirements in their states. Improvements would not only include basic reporting on independent political expenditures, but also basic reporting on the financial backers of these outside groups. For more information, please contact Cristina Francisco-McGuire, Election Reform Policy Specialist, at cfm@progressivestates.org or (212) 680-3116 x118.

As TARP Expires, Cost Lower than Anticipated

Accountable Government * Altaf Rahamatulla

 

The Troubled Asset Relief Program (TARP), the $700 billion government fund to purchase assets and equity from large banks, officially ended at the beginning of October. In 2008, the Bush administration enacted the program following years of unregulated and reckless private banking actions that precipitated one of the most severe economic downturns in the nation's history. TARP has been an extremely contentious and politically toxic issue since its inception. In fact, an October 2010 Pew survey indicates that almost half of all Americans would be less likely to vote for a candidate who "supported the government providing major loans to banks during the 2008 financial crisis."

However, recent reports have indicated that the cost of TARP will be much lower than originally anticipated as the government recently "negotiated a plan with the American International Group to begin repaying taxpayers." The Treasury Department currently estimates the program will cost less than $50 billion.

The Impact of Federal Economic Recovery Efforts: According to a study by Alan Blinder, a former Vice-Chair of the Federal Reserve, and Mark Zandi, the chief economist of Moody's Analytics, federal recovery and state fiscal relief efforts, including TARP and the American Recovery and Reinvestment Act (ARRA), saved the economy from declining even further and spurred GDP growth.

The authors found, "if policymakers had not reacted as aggressively or as quickly as they did, the financial system might still be unsettled, the economy might still be shrinking, and the costs to U.S. taxpayers would have been vastly greater." Zandi and Blinder estimate that without these federal initiatives, an additional 8.5 million Americans would be without jobs in addition to the 8 million workers who lost their jobs since the recession started; they also estimate the nation's GDP would have been almost $1.4 trillion lower in the second quarter of 2010 than it was.

The following graph depicts the change in real GDP as a result of financial stabilization and recovery efforts. The graph appears in a recent Center on Budget Policy Priorities publication, Chart Book: The Legacy of the Great Recession, which comprehensively tracks economic circumstances in recent years.

Though TARP successfully staved off further financial collapse, the government could have taken further steps to prevent corporate malfeasance, increase accountability and transparency, limit executive compensation, and rein in the harmful banking practices of institutions that received public funds through the program.

The Need for Further Federal Action: Nevertheless, stubbornly high unemployment rates and continued state fiscal woes merit further federal efforts to incite job creation and state fiscal relief. President Obama's announcement last month of a proposed $50 billion infrastructure initiative is definitely a start, but more concerted policy efforts are needed to alleviate economic and fiscal pain.

New Jersey Governor Cancels Nation’s Largest Job Creation, Economic Recovery Project

Unemployment & Retraining * Tim Judson

 

New Jersey Governor Chris Christie made national headlines last week by announcing that he is canceling the nation’s largest public works project – and sacrificing nearly 50,000 jobs in the process. The Access to the Region’s Core (ARC) tunnel project would double the existing rail-commuting capacity from New Jersey to New York City with a nine-mile tunnel under the Hudson River to midtown Manhattan.

The move not only undermines the nation’s efforts at jobs creation and to promote economic recovery, it will hinder the state’s efforts to resolve its ongoing revenue crisis by eliminating a unique economic development opportunity estimated to generate nearly $500 million per year in new tax revenues. U.S. Department of Transportation (USDOT) officials have entered into discussions with the Christie administration in hopes of saving the ARC Tunnel, which has been in the works for two decades; the project received the capital infusion needed to move forward with $3 billion from the federal American Recovery and Reinvestment Act (ARRA). Another $3 billion is being contributed by the New York/New Jersey Port Authority, half of which comes from New York State.

Estimates by New Jersey Transit, the state’s public transportation agency, and the Regional Plan Association, which advocates for mass-transit improvements in the tri-state area, predicted the ARC Tunnel would create nearly 3,000 construction jobs and 16,000 permanent jobs for New Jersey residents, and increase property values in the state by $18 billion. New Jersey municipalities would benefit from $375 million in new property taxes, and the state would see $96.7 million per year in new personal and business taxes by 2025. New York City and New York State would benefit to a similar extent, with almost 2,800 construction and 28,000 permanent jobs, and $384 million in additional tax revenue. In addition, New Jersey may have to pay back $300 million or more in ARRA funds it has already spent on the project. The high ratio of permanent jobs stems from the massive expansion in transit capacity and decreased commute times to Manhattan, which are predicted to spur more companies to locate their offices in New York City. The property value estimates are based on housing market analyses for New Jersey communities after other significant transit system expansions and improvements.

Despite the fact that New Jersey is currently slated to pay for less than half of the $8.7 billion project, Christie stated that an assessment he ordered last month predicts cost overruns of $2 billion to $5 billion. The sincerity of the governor’s explanation seems dubious, though, in light of other recent actions and the overwhelming benefits to the state from the ARC Tunnel. For instance, the administration reportedly turned down requests by USDOT officials over the last year to work out an agreement to cover potential overruns. In late September, the New Jersey Turnpike Authority approved an additional $2 billion bond measure for a far less beneficial, $4 billion highway project to widen sections of the state’s two toll roads, the New Jersey Turnpike and the Garden State Parkway. That project is does much less for for New Jersey residents; it will not expand transit system capacity to the same extent, particularly due to unmitigated congestion at existing bridges and tunnels from New Jersey into Manhattan. In addition, the governor refused to make $3.1 billion in payments to the state pension fund this year, likely saddling New Jersey residents with a major liability in the years to come.

Research Roundup

 

Where’s the Stimulus – State and Regional Profiles of the Recovery Act Investment in New York State - The New York Stimulus Alliance released this publication, assessing the allocation of Recovery Act investments throughout New York State and specifically identifies geographic funding distribution and communities that have benefited. The report was prepared for the Alliance by the the Kirwan Institute for the Study of Race and Ethnicity at The Ohio State University. The authors recommend further federal job creation efforts to bolster economic recovery, increase public involvement in allocation decisions, and improve data tracking and transparency mechanisms to ensure equity.

Expanding Opportunities in the Hispanic Community: Solutions for Increased Broadband Access - The National Hispanic Caucus of State Legislators presented its first ever white paper on the status of broadband access, adoption, and digital inclusion in the Latino community. Taking into account that Latinos are least likely to adopt broadband than any other ethnicity, the paper calls into action the full digital inclusion for the Latino community. This white paper's policy framework is set around five issues: digital literacy as an American value; public and private investment investment's central role to fulfil digital inclusion through full access and adoption; digital innovation as a key to economic growth; the Latino community as central to America's digital future; and broadband as an equalizer. Using these five tenets, NHCSL proposes the following policy recommendations: implementation of effective digital literacy programs; the reformation of the Universal Service Fund to include telecommunications services; promotion and adoption of smart grid technologies; and a system of industry transparency.

Black Employment and Unemployment in September 2010: Unemployment among African-Americans remains substantially higher than for any other major ethnic or racial group -- at 16.1% in September -- according to the latest monthly update from the University of California at Berkeley's Labor Center. That is 70% higher than the national average (9.1%) and 30% higher than for Latinos (12.4%), who are suffering the next-highest joblessness rate. The Labor Center notes that public sector job losses are playing a large role in maintaining high levels of unemployment, with 77,000 Census jobs coming to an end and 76,000 local government layoffs in September. The Great Recession is hitting black men especially hard, with nearly 18.8% out of work. Overall, the number of African-Americans searching for work is nearly 80% higher than it was in December 2007 (9.0%), on the eve of the economic collapse.

 

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Steps Forward

 

WA: Gov. Gregoire Supports Initiative 1098, Progressive Income Tax On Wealthy

AZ: Norquist's "No New Taxes" Pledge Loses Its Sway

US: Sebelius Pressures States To Keep Insurers From Dropping Child-Only Insurance Plans

 


Steps Back

 

US: 76,000 State, Local Government Jobs Cut In September

MO: Tea Partiers Campaigning Against Proposition Mandating Humane Conditions At Puppy Mills

 

 

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Full Resources from this Dispatch

Anonymous Donors Underwrite Campaign Against Democracy

Brennan Center for Justice - Campaign Finance Reform
Public Citizen - Fading Disclosure: Increasing Number of Electioneering Groups Keep Donors' Identities Secret
Washington Post - Interest-group spending for midterm up fivefold from 2006; many sources secret
Washington Post - Who is "Americans for Prosperity"?
Los Angeles Times - Democrats conflicted about election spending gap
The Boston Globe - GOP groups overwhelm Dems with political ads
The New York Times - Donor Names Remain Secret as Rules Shift
The New York Times - Offering Donors Secrecy, and Going on Attack
The New York Times - Hidden Under Tax-Exempt Cloak, Political Dollars Flow
USA Today - Tea Party group gets $1 million anonymous donation
Wall Street Journal - GOP Groups Launch Massive Ad Blitz
Salon.com - Billionaires give 91 percent of funds for Rove-tied group
Politico - Rove-linked group uses secret donors to fund attacks
Politico - GOP's big money men return
Washington Independent - Donors Unknown, Americans For Prosperity Targets Democrats for 'Pork Barrel Spending'
Citizens United v. Federal Elections Commission (FEC)
Progressive States Network - Secretive Energy Industry Giant Funding State-Based Groups Denying Climate Change
Progressive States Network - Polluters Fund Effort at Ballot to Rollback Clean Energy Programs in California

As TARP Expires, Cost Lower than Anticipated

Alan Blinder and Mark Zandi - How the Great Recession was Brought to an End
Center on Budget and Policy Priorities - Chart Book: The Legacy of the Great Recession
Center on Budget and Policy Priorities - States Continue to Feel Recession’s Impact
The New York Times - TARP Bailout to Cost Less Than Once Anticipated
Progressive States Network - Federal Recovery Efforts Saved 8.5 Million Jobs, Stopped Depression
The Washington Post - Treasury Secretary Timothy Geithner tackles five myths about TARP

New Jersey Governor Cancels Nation’s Largest Job Creation, Economic Recovery Project

New Jersey Transit – The ARC Effect: How better transit boosts home values and local economies
Regional Plan Association – The Future of the ARC Tunnel
NJ Spotlight – The Future of the ARC Tunnel: Will Gov. Christie derail the ARC tunnel – the largest public works project in the nation – to bail out the bankrupt Transportation Trust Fund?

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The Stateside Dispatch is written and edited by:

Nora Ranney, Legislative Director
Marisol Thomer, Outreach Director
Fabiola Carrion, Broadband and Green Jobs Policy Specialist
Cristina Francisco-McGuire, Election Reform Policy Specialist
Tim Judson, Workers' Rights Policy Specialist
Suman Raghunathan, Immigration Policy Specialist
Altaf Rahamatulla, Tax and Budget Policy Specialist
Mike Maiorini, Online Technology Manager
Charles Monaco, Press and New MediaSpecialist
Ben Secord, Outreach Specialist

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