Campaign Finance

How to Take Congress Back from the Banks

Bob Fertik — Thu, 30 Apr 2009 22:00:00 -0400

Bankruptcy "cramdown" reform was defeated in the Senate today, which caused Sen. Dick Durbin to accurately declare, "banks own the place." Glenn Greenwald, Jane Hamsher and Howie Klein explain how. So what do we do about it?

Chris Bowers thinks we must retreat until broader cultural change occurs:

If you want broad progressive change in America, it is essential to look beyond the electoral and legislative realm. Surely we must maintain our efforts on the political front, but the leading edge of progressive change is coming in other areas. Things like the network neutral Internet, increasing immigration, increasing acceptance of the LGBT community, and shifting religious identification are making the country more progressive than any single or combination of political campaigns over the past two decades.

But Scarecrow wants to fight and reminds us we already own the banks:

Are we really that helpless against an industry that has tanked the US economy and whose largest members are de facto wards of the state?

Excuse me, but if the amount of bailout funds, for which we received preferred shares, already provided the largest banks were converted to the equivalent amount of voting stock, the US would virtually own the major banks. Moreover, if the US government reversed or reduced its policy of guaranteeing bank loans, or stopped bailing them out through pass-throughs from AIG, the major banks would face serious problems instead of crowing about how they don't need federal bailouts.

Scarecrow blames President Obama for not exercising the government's ownership rights:

For some unexplained reason, Obama feels he must assure the Wall Street Journal that he doesn't want to intervene in the banking industry, even though the industry has put millions of people out of work, destroyed their economic security and is now crippling efforts to reform them. But grownup Americans get it even if the Republican crazies can't or won't, so just stop apologizing and get on with what needs to be done.

We need a champion, Mr. President. You have leverage and you have a bully pulpit, and the public is rightfully furious at the banks. These are weapons. Use them.

We should definitely push President Obama to use our ownership stake in the banks to pressure them to stop blocking the changes we need to make.

But we should also take aim at the specific way the banks (and every other industry) "own the Senate," as Durbin said.

First, we must prohibit lobbying by any corporation that gets Federal money, whether contracts or TARP. As Jane Hamsher writes,

Let's just be clear on this: money that went to banks through TARP was used to lobby these Senators. TARP recipients simply hid behind lobbying organizations like the MBA and the ABA who did the dirty work of screwing mortgage holders out of badly needed relief to the benefit of the banks, once again.

Second, we need to pass clean elections (public funding) of Congressional races.

Third, we need to restore the Founding Fathers' definition of bribery. As Atrios writes,

the system of legalized bribery we have in this country is so part of how our government runs that unless someone is literally funneling cash into their bank accounts (and sometimes not even then) it's just seen as business as usual.

I would expand the definition bribery so it meaningfully includes any money given to a campaign for legislation.

What America needs more than anything else is a legal definition of "bribery" that reflects the "original intent" of the Founders - paying money to an elected or appointed official to get a special benefit, regardless of whether it goes into his pocket or his campaign. It should not require a freezer full of cash (like William Jefferson) or a fee-for-service list (like Duke Cunningham) to trigger a bribery investigation.

Update 1: David Sirota notes,

Bankruptcy judges currently have this "cramdown" power to renegotiate mortgage terms on vacation homes and investment properties. Vacation homes and investment properties are disproportionately owned by very rich people.

and rightly asks

can someone please ask Democratic proponents of cramdown (who I do genuinely applaud for their courage) why they didn't just make this point over and over again? The bought off whores who voted against this bill were allowed to make this debate into one about whether it is "fair" to let people renegotiate loans they agreed to. That's a shame, because the real question is whether it is "fair" to let judges help rich people keep their vacation homes but not let those same judges help regular people keep their primary residences.

The answer, of course, is "framing." Republicans wage every battle by first identifying a winning frame, then repeating it ad nauseum. Democratic leaders - especially progressives - still haven't learned this essential strategy. Maybe netroots hero Darcy Burner can use her new position at the American Progressive Caucus Policy Foundation to change this?

Update 2: Adam Green highlights the absense of any progressive mobilization for cramdown, and contrasts this with the successful mass mobilization for Net Neutrality.

In rebuttal, Bowers reiterated the need for broad cultural change before political change is possible. But how would cultural change ever result in a successful Senate vote for cramdown? It would have to produce 80 progressive Senators to overcome the unavoidable 20-odd Democratic Corporatists, which is pretty much impossible given the culture of all the Red States. The only way to win these battles is to ban lobbying by contractors, separate Corporatists from their Corporate donors through "clean elections" and redefine bribery as the Founding Fathers intended.

Update 3: Bob Borosage says we need a real grassroots movement to push Obama to the left:

what Obama has been missing has been an independent, obstreporous citizens' movement demanding fundamental reform. Roosevelt had the labor movement, the Townsend Clubs, Huey Long, socialists and communists challenging him from the left. Johnson had the civil rights movement forcing his hand...

The New Deal we remember - Social Security, the Wagner Act, Fair Labor Standards, the SEC and Glass Stegall, progressive taxation - came not in the first 100 days, but as Roosevelt, under pressure from his left, geared up for re-election. The Voting Rights Act surely would not have been passed with Selma, and many other sacrifices transforming public opinion to enable Johnson to act...

The country would be far better served with an angry populist movement that indicts Wall Street but demands greater support for working families and Main Street. But anyone building that movement will have to understand that they might earn respect, but they won't be loved in the White House.

UVA Students Show What's Wrong With Campaign Financing

davidswanson — Tue, 14 Apr 2009 09:17:28 -0400

This is a great video on the problem, but skimps on the solution, just mentioning public financing at the end. Public financing without free media is only half the solution, and such a clean money system must be made mandatory. A plan to do it can be found in my forthcoming book.

Politicized Accounting: No End to the Scams

dlindorff — Tue, 07 Apr 2009 11:55:46 -0400

By Dave Lindorff

The accounting profession might seem like the last place that you’d
find serious political hanky-panky going on, and it’s probably not on
very many people’s A-list of fun subjects to read about, but the
Financial Accounting Standards Board, a quasi-governmental body that
has statutory authority to regulate and establish the rules by which
public companies, including banks, do their books, has just caved in to
pressure from those banks and from the large number of members of
Congress who pocket huge piles of campaign swag and perks from those
banks and other public companies, and gravely undermined the integrity
of corporate balance sheets.

This may sound incredibly arcane, but what the FASB has done is
declare that assets held by companies (including banks) on their books
will no longer have to be valued at their current market value. Under
new guidelines, effective retroactively to March 15, these assets can
now be valued at what the corporate managers think (or pretend to
think) they will be worth at some time in the future when they might
try to sell them.

Think about it for a minute. Say you own a house, which you might
have bought 10 years ago for $200,000, using a $180,000 mortgage.
Today, depending on where you live in the country, that house might be
worth as little as $100,000. If you still owe $100,000 on your
mortgage, that would give you a net worth of 0 (a lot more than what
Citibank and Bank of America are worth today). Now let’s say you want
to go out and buy a $20,000 car on credit. The auto dealer, before
extending you a car loan, will want to know what your net worth is.
Under market-to-market accounting rules, you would have to say that
your net worth is 0, and you probably wouldn’t get a loan—especially if
your employment, like that of many Americans, is iffy, and you’re
carrying a big balance on your credit cards. But under the new FASB
guidelines, if you were to be treated like a bank, you could estimate
the value of your house as $200,000 (the price you paid for it), or
perhaps even $250,000 (the price you “expect” it to get when you decide
to sell it). You have no real way of knowing whether your house will
ever return to being worth $200,000. For all you know, it could fall
further over the next five years to $75,000 or $50,000, but that
doesn’t matter. You, the owner, are saying that your “reasonable
expectation” is that this asset of yours is “worth” $200,000. And
bingo, thanks to the magic of modern FASB-approved accounting, your net
worth, instead of being 0, is now $100,000. You can buy your car.

This is what the FASB is now saying banks and other companies can do.

If you are an investor, or a potential investor, you now have to be
very wary. After all, how are you top establish what a company is
really worth, if the management is able to play games with the value of
its assets? The answer is you really can’t know. Things get much worse
when it comes specifically to banks, which after all, are all about the
assets.

Remember those “toxic” assets—the alphabet soup of debt products
with initials like CDO, CDS, SIV, all composed of diced and sliced debt
that for the most part is close to worthless? Well, thanks to the
FASB’s accommodating change in the rules, instead of valuing those debt
holdings (remember, loans are assets to a bank) at what they are worth
on the market today, the banks are now able to value them at what they
supposedly think they will be worth at some future date when the bank
might want to sell them. This is a wholly fictional figure, of course.
Nobody knows what, if anything, these crap debt instruments are going
to be worth, but it’s a fair bet that most of them won’t be worth any
more a decade hence than they are worth today (and maybe less). But who
cares? The important thing is that now the banks, who have huge black
holes in their balance sheets, can now fill those holes with
artificially inflated assets and make themselves look a whole lot
better financially than they really are.

There’s an irony here. The big banks that hold most of the toxic
debt (and especially the five largest banks that hold 96% of the
garbage) desperately wanted this FASB rule change because they wanted
to prettify their balance sheet in hopes of boosting their share values
and of maintaining the pretense that they are not zombies. But in doing
this, they are undermining a key goal of the Obama administration and
of Treasury Secretary Tim Geithner and Federal Reserve Chair Ben
Bernanke, who wanted to have the government and private investors start
buying those trillions of dollars’ worth of toxic assets off of the
banks’ hands.

Remember, if the banks declare that the toxic assets on their books
are worth some fictitious amount, they have to sell them at that price,
or stand accused of faking their books, i.e. fraud. But investors, like
hedge funds and other institutional investors, are not going to want to
buy those assets at anything but distressed bargain-basement prices,
because even with the government assuming 92 percent of the risk, they
are not going to buy these trash assets unless they see the chance for
a significant upside.

So with the new rule, the banks will end up being stuck holding the
very toxic assets that have sent them into a tailspin in the first
place.

The vote to end market-to-market accounting rules was controversial
even on the five-member FASB board, which ended up narrowly voting 3-2
in favor of the measure. One member who voted against the change,
Thomas Linsmeier, decried what he said was “pressure” on the board to
act. A House committee had threatened to introduce legislation that
would force the change if the FASB didn’t act on its own.

The US budget has long been a work of fiction. Now the books of the
nation’s banks and of many of its public companies will also be pure
works of fiction.

As columnist Jonathan Weil wrote in Bloomberg.com last month as the
FASB was considering making this change in its rules, “The FASB ought
to change its name to the Fraudulent Accounting Standards Board.”

The road to ruin, it turns out, is not paved with good intentions
after all. It is paved by powerful lobbyists buying short-term benefits
at the public’s expense.

By the way, if you think Citigroup is solvent, I have a great deal on a house for you.
________________________

DAVE LINDORFF is a journalist based in Philadelphia. His latest
book is “The Case for Impeachment” (St. Martin’s Press, 2006). His work
is available at www.thiscantbehappening.net

Join the Donor Strike For Publicly Funded Congressional Campaigns

Bob Fertik — Thu, 02 Apr 2009 14:50:41 -0400

Last year we launched the first online donor strike to persuade candidate Obama to deliver on his promise of "change we can believe in." Now I'm glad to see the donor strike idea embraced by our friends at Change Congress.

“I’m pledging not to donate to any federal candidate unless they support legislation making congressional elections citizen-funded, not special-interest funded.”

Corrupt contributions by Wall Street (mostly to Republicans, but also to Democrats) resulted in deregulation of the financial industry, which in turn led to the multi-trillion bailout we are struggling through now. The alternative is simple and cheap: publicly-funded Congressional campaigns.

So join the strike at Change Congress, and then call your Senators and Representatives using their cool whip tool.

Update 1: Howie Klein nails it as always:

Today Politico published an opinion piece by virulent anti-democracy Bush Regime shill Hans von Spakovsky, that asks a simple, and highly misleading question: Should taxpayers subsidize pols? What von Spakovsky misses-- quite purposefully-- is that taxpayers do subsidize pols. When Duke Cunningham, Don Young, Jerry Lewis, Tom DeLay, Jack Murtha, Roy Blunt, Thad Cochran, William Jefferson or John Boehner is selling earmarks worth millions for thousands, who is subsidizing that? Duke Cunningham's cars and mansions and yachts and whores cost the taxpayers millions and millions of dollar in earmarks through Jerry Lewis' incredibly corrupt Defense Appropriations Committee. Some estimates are as high as $100 billion dollars a year-- a year-- as the cost of corruption in Congress alone. We bear those costs!

It costs at least a million dollars to run for a House seat, sometimes five times that, and over ten million to run for a Senate seat. Those elections are largely financed by special interests with very specific agendas. The biggest special interest that's gone into perverting our electoral system has been the $2.2 BILLION (since 1990) by the FIRE (Finance/insurance/real estate) sector. What did they want? Deregulation so they could rip off the public. What did they get? TRILLIONS of dollars worth of deregulation. And what did we get? The Bush Depression.

Exactly When Is Political Fundraising a Crime?

Bob Fertik — Fri, 12 Dec 2008 11:47:00 -0500

Pundits are jumping all over Rep. Jesse Jackson Jr. because of this:

Blagojevich made an appearance at an Oct. 31 luncheon meeting at the India House restaurant in Schaumburg sponsored by Oak Brook businessman Raghuveer Nayak, a major Blagojevich supporter who also has fundraising and business ties to the Jackson family, according to several attendees and public records...

That meeting led to a Blagojevich fundraiser Saturday in Elmhurst, co-sponsored by Nayak and attended by Jesse Jackson Jr.'s brother, Jonathan, as well as Blagojevich, according to several people who were there. Nayak and Jonathan Jackson go back years and the two even went into business together years ago as part of a land purchase on the South Side.

For sake of argument, let's put aside any possible excuses and stipulate to the "worst" case - that JJJ directly asked his richest friends to donate to Blago's campaign so Blago would appoint JJJ to the Senate.

I'm no fan of our corrupt campaign finance system - but how exactly is the JJJ-Blago deal different from other political fundraising deals that are completely routine?

Every day Congress is in session, some corporate lobbyist hosts a fundraiser for lawmakers who support a special-interest bill for that corporation, and that corporation's executives show up and write the checks. How exactly is that different from the JJJ-Blago deal?

Here's another example: when Hillary Clinton dropped out and endorsed Barack Obama, it was widely reported that Obama promised to help her retire $20 million in debts by tapping his vast fundraising machine. No one raised an eyebrow over that alleged deal - in fact Obama was criticized in the New York press for failing to act on the deal quickly enough. How exactly is that different from the JJJ-Blago deal?

Our non-public campaign finance system runs on private donors. Some donors want nothing but good government for their money, but many want favors - legislation, jobs, endorsements, etc. Even in its worst light, the JJJ-Blago deal is entirely within the rules of our current system. And every single pundit knows it.

So why is JJJ being scapegoated?

Update 1: Politico just reported how Microsoft gave $9K to Republican incumbents before they lost, then gave $4K to the Democrats who beat them.

“Our philosophy around political giving is based on helping candidates, primarily incumbent candidates, who work toward policies that are important to Microsoft and the tech industry,” said Ginny Terzano, a Microsoft spokeswoman. “The fact of the matter is, that candidate won.”

Duh. Did Microsoft commit a crime?

In going with the winner — even after supporting the loser — Microsoft is hardly alone. Some of the biggest corporate names in the Washington influence game backed Republican incumbents before the 2008 elections, only to donate to their Democratic vanquishers afterward.

AT&T, the American Association for Justice (the trial lawyers’ political action committee), the American Bankers Association, the American Hospital Association, Bank of America, Blue Cross Blue Shield, the Credit Union National Association, General Electric, the lobbying and law firm Holland & Knight, the National Cable & Telecommunications Association, the National Multi Housing Council, Northwest Airlines, Qwest Corp., Wine & Spirits Wholesalers of America and U.S. Telecom are among those who have donated to victorious Democratic challengers since the election results were official.

Did all of these corporations commit crimes?

The biggest corporate and association PACs are constantly hit up for donations by members and senators in both parties as they seek financial backing for ever more expensive campaigns. The organizations respond by showering incumbents and hopefuls with millions in campaign donations, targeting in particular powerful party leaders and committee chairmen.

These are the unwritten rules of our privately-funded campaigns. Everyone knows the rules and everyone plays by them. If JJJ committed a crime, then so did every single fundraiser or donor who made a campaign contribution to directly or indirectly get a quo for their quid.

Robocall to Steny Hoyer by Reverend Lennox Yearwood

davidswanson — Wed, 25 Jun 2008 19:39:17 -0400

Listen to Rev and Call Hoyer. Then Call Rev and Tell Him to Run for Congress in Hoyer's district!

McCain and the Lobbyist--Missing the Story of the Miss

dlindorff — Thu, 21 Feb 2008 10:43:27 -0500

By Dave Lindorff

All the attention in the breaking story about John McCain's 2000 relationship with a blonde young telecom lobbyist has been focussed on the question of whether or not they were "doing it."

As George Stephanopoulos claimed on ABC, the importance of the story depends upon whether McCain is shown to have had a "relationship" with the lobbyist, Vicki Iseman.

But really, who cares whether they were shacking up on the campaign trail? McCain, after all, already double-timed his starter wife and dumped her for a trophy wife, the statuesque and wealthy beer industry heiress Cindy Hensley, so it's not as though he is campaigning on a strong pro-family platform.

No, the reason his aides, back in 1998-2000, started working behind the scenes to keep Iseman away from McCain, and confronted McCain over his dalliances was because McCain, who had a history of corruption, most notably his card-carrying membership in the Keating Five savings and loan scandal, couldn't afford to appear to be backsliding.

It isn't, that is to say, a matter of whether or not McCain was diddling Vicki. It's whether he was delivering for her and her clients, perhaps in return for her delivering for him.

As the New York Times reported in its investigative story on the McCain/Iseman liason, published February 21, the media were reporting back in 2000 on how McCain had been writing letters on behalf of some of Iseman's telecom clients.

The Times article reports that McCain wrote letters in 1998 and 1999 to the Federal Communications Commission urging it to uphold marketing agreements that would allow TV companies like Glencairn Ltd., an Iseman client, to control two stations in the same city. The paper says the senator also introduced a measure in the Senate that would create tax incentives for minority ownership of stations, a measure sought by Iseman on behalf of several media clients. McCain also on two occasions reportedly pushed legislation that would permit a company to control television stations in overlapping markets. That was a measure being sought by Paxson (now Ion Media Networks), yet another Iseman client.

The Times reports that in 1999, Iseman asked Mr. McCain's staff to send a letter to the FCC seeking approval of a television deal being sought by Paxon. McCain sent that letter, and a second one--a level of interference which led to a rebuke from the then FCC chairman.

So what's the story here? Is it whether Sen. McCain is an adulterer? Or is it whether he is a rank hypocrite posing as a Mr. Clean Government?

The problem may be that what McCain was doing shilling for the telecom industry is not illegal, and is not uncommon. In fact, it's what our legislators do. Virtually all of them. The only thing different about McCain is that he claims he doesn't do that, at least not since he saw the light when he nearly went to jail for it, or at least had a near political death experience after hitching his nascent congressional career to a corrupt banker's wagon.

Meanwhile, we see once again what a wussy newspaper the New York Times is, at least where investigative stories about the Right are concerned. Once again, we learn, this time from the New Republic, that the Times and its executive editor, Bill Keller, held, this time for over two months, a political story that the public had a need and right to know about during a critical election campaign. How different might the presidential campaign look now if the Times had run its story in December, when it was ready to go, well ahead of the Iowa caucus and the New Hampshire primary, instead of now when McCain has the Republican nomination all but sewn up?

This kind of dithering and backpedaling and censorship by Keller, which reportedly followed intense lobbying and threats by McCain and his campaign, recalls Keller's holding (for a year, and until after the 2006 Congressional election!) of a reporter's story about the National Security Agency's illegal warrantless spying program, and his holding and ultimately killing of an already typeset story (a week before the 2004 presidential election) about the remote cueing device on President George Bush's back and in his ear during the 2004 presidential debates.
(See my story on this in FAIR's Extra magazine and in Mother Jones magazine.)

We are left to wonder, what other great stories is Keller hiding from us, perhaps until after Election Day this November?
_______________
DAVE LINDORFF is a Philadelphia-based investigative journalist and columnist. His latest book is “The Case for Impeachment” (St. Martin’s Press, 2006 and now available in paperback edition). His work is also found at www.thiscantbehappening.net

A Plan to Raise More Money Than Republicans Every Election Cycle

George Ortega — Thu, 20 Dec 2007 17:23:54 -0500

In 2006, we were lucky that voters held Republicans accountable for Iraq and corruption. Luck is not the only thing on our side this time. While Republicans usually out-raise us in campaign funding, this election cycle we Democrats have sensed opportunity and reversed the relation. However, if we are to begin winning elections not by chance but because of our ability to consistently out-fundraise Republicans, we must first understand why, aside from rare, anomalous, instances, Republicans routinely raise more cash than we do. Upon analysis, the answer becomes glaringly obvious.

Our money comes largely from the salaries of our wage-earning donors, while Republican money comes largely from the profits wealthy donors earn selling Americans products. The way to end this major fundraising disadvantage is equally obvious; we need to beat the Republicans at their own game by selling our own products. The rest of this diary describes how, if we begin now, we can sell enough products to raise several million dollars for Democratic campaigns by October 2008, and if we keep working beyond November, we can raise $100-200 million dollars for the 2010 elections.

To anyone who thinks we’re already trying to do this with BuyBlue and other "percentage of profit" schemes, let me be very clear that what I’m talking about is not the selling of products by individuals or corporations who donate 1%, or 5%, or even 20% of their profit to the Democratic Party. I’m talking about the big money we can raise by creating companies that donate the full 100% of their profit to helping elect Democrats. Before showing that this is doable by presenting some companies that already donate all of their profits to progressive causes, I’ll briefly describe how product profits would flow from our company to the electing of Democratic candidates.

Let’s say we start a company that sells food products to compete with the food products Philip Morris (they now call themselves Altria and spun off Kraft Foods in March, 2007) sold in North America in 2006 to generate $23 billion in net revenues. Our products are basically equal in quality to competing products, and we sell them for basically the same price. Why would shoppers buy our products over those of Philip Morris? Because, as is printed on each of our products’ labels, and as our legions of bloggers will have plastered all over the Internet and elsewhere, we donate the profits from the sale of our products to organizations fighting global warming (or enhancing education or curing diseases, or addressing any number of other causes that the public broadly supports). So, our company markets the food products, and donates 100% of the profits to the Sierra Club. In October of 2008, the Sierra Club uses that money to pay for a barrage of TV ads that warn Oklahoma voters about Senate candidate and global warming denier, James Inhofe, and explain how dangerous he is to their children and grandchildren’s welfare. The strategy is simple, effective, and legal.

Can we really expect to raise a lot of money for Democratic candidates by creating companies that give 100% of their profit away? Well, first consider that UNICEF (United Nations Children’s Fund), who began selling greeting cards in 1949, has raised over $1 billion for children this way, and that each year their greeting cards generate $130 million in profits. Sounds too "institutional’? Well consider how college buddies Xavier Helgesen, Jeff Kurtzman and Chris Fuchs founded Better World Books in 2002, and have donated all of their $4.24 million in profits to the cause of literacy and education. Sounds like not enough money? Consider that the AAFES (The Army and Air Force Exchange Service), run by our U.S. Department of Defense, has been selling discounted products and services to our military personnel since 1900. It gives its profits back to the soldiers in the form of quality-of-life programs, and has generated over $2.3 billon from these products during a recent 10 year period.

Who else is selling products and giving all of their profits away? Well, Robert Kennedy Jr. founded a company in 1998 called Keeper Springs whose bottled water has raised over $500 thousand for clean water organizations. Actor Paul Newman’s company, Newman’s Own, has been selling food products since 1982, and has donated all of its over $200 million in profits to progressive causes. Even the Girl Scouts of America raise money by selling products; each year their brief cookie selling campaign earns them over $300 million.

Here are some other 100% profit-donating companies you can check out; Humanitas Wines, $30 thousand since 2001; Under One Roof, $3.8 million since 1990; Merit Telecom, over $185 thousand since 2000; Peacekeeper Cosmetics, over $85 thousand since 2001; Charles, Prince of Wales’ Duchy Originals, £6 million since 1992.

I wanted to see for myself how many shoppers would prefer to buy their products from a company that donates its profits to a worthy cause rather than from a conventional company. So, two ladies and I stood in front of a supermarket, and we asked 100 shoppers the following question; "If your supermarket offered new food products that were equal in price and quality to the products that you now buy, and you knew that 100 percent of the profit from these new products would be used to end world hunger, would you buy these new products?" 92 of the shoppers said yes.

O.K., so maybe you’re convinced that selling products would be a good way to raise millions of dollars to elect Democrats to the White House, Congress, and elsewhere. But, maybe you think this is out of our reach because selling a product is expensive, and it demands a lot of know-how. For an in-depth explanation of how not-expensive and not-involved this kind of enterprise really is, you might want to check out Paul Newman’s book Shameless Exploitation in Pursuit of the Common Good: The Madcap Business Adventure by the Truly Oddest Couple wherein he explains exactly how he did it, or read this article as an intro. For now, know that Newman started his company with only $20,000 (he had earmarked $40,000 for the project, but only spent half that amount), and that he and his partner, Alex Hotchner, had absolutely no food marketing experience before they began. How’d they do it? Well, basically they formed an "S" corporation, and outsourced manufacturing and distribution. Also, their entire staff consisted of Alex and Paul, a part-time secretary and a part-time bookkeeper.

Now let’s cut to the chase. A few paragraphs back I said that if we start now, our companies that exist to generate campaign funding for Democrat candidates could raise $100-$200 million in time for the 2010 election. Is this grandiose, wishful thinking or a realistic goal? Let’s go through the numbers. We’ll do a rough ballpark projection using Newman’s Own as our model, knowing full well that as influential a celebrity as Paul Newman was in 1982 when he started the business, the Blogosphere today has far more clout and contacts to push products than Newman had 25 years ago.

In September of 1982, Newman launched his first product with $20 thousand. In 2007 dollars, that comes to about $42.5 thousand. So, let’s say we invest about $2.12 million to launch 50 products. After its first year, Newman’s product had earned $1 million in profits. So, by launching 50 products next summer, we can expect to earn at least a few million dollars by November 2008, and $50 million by the summer of 2009. Newman launched a second product in February of 1983, and a third product in July of 1984. By the end of 1984, the three products had earned a total of $4 million in profit. (Newman’s figures are on pages 205 and 206 of his book, Shameless Exploitation in Pursuit of the Common Good.... To access the online "Chronology" where Newman cites these earnings, first visit this "Search Inside" page, type "204" in the search box, click "GO," and then click the "from Back Matter" link. The $4 million figure appears on page 205.)

So from three products, Newman’s Own earned an average of $148 thousand per month over 27 months. Extrapolating from these earnings, by the summer of 2010, our products would earn about $177 million ($148,000 times 24 months, times 50 initial products rather than one).

Not too shabby a fundraising drive by our company employees who would, of course, earn a decent salary for their labor. Remember, Newman outsourced manufacturing and distribution, and so would we. We would not have to own or rent a single factory or warehouse. We raise $177 million for Democratic candidates in two years by selling products to launch a major offensive against the Republican Party in 2009 and 2010.

And that’s the plan. Shoppers get the opportunity to buy from a company that donates its profits to organizations working on progressive causes rather than from companies that will probably use their profits to finance Republican candidates who’ll oppose that work. The organizations our companies donate their profits to use that money to attack Republican candidates. We fight fire with fire, and win...Big.

What would all of this mean for the Blogosphere? Well, we’ve had major victories, and we’re now a force that politicians ignore only at their peril. Championing, promoting, and setting up these fundraising companies would probably bring about the most forceful leveling of the economic playing field in the history of democratic elections. We would be restructuring our capitalist democracy so that it stops catering to the rich and powerful, and finally begins sufficiently representing the millions of us who are America. Let’s get this done.

Cleaning House?

Chip — Mon, 04 Dec 2006 04:59:42 -0500

ABC News reports that Speaker Nancy Pelosi selected El Pasoan Silvestre Reyes (D-TX) as the next chairman of the House Intelligence Committee, the committee on which he has served for the past six years. Prior to his election to the House in 1996, Representative Reyes was a border patrol agent for more than 26 years.

But it isn't Representative Reyes' border patrol experience, or his service in the military during Vietnam, his vote against the Iraq war, or his experience on House Select Intelligence and Veterans Affairs Committees that makes his selection so intriguing. After all, Reyes was instrumental in leading opposition to the WI Republican Jim Sensenbrenner's House immigration proposal and is credited with keeping Fort Bliss and White Sands military bases open, as well as previously chairing the Congressional Hispanic Caucus.

Representative Reyes has been a strong critic of the administration's border security failings. "The Republican House leadership spent the entire month of August holding media events and hearings on the border, and the message from those who work on the border every day is that we don’t need 700 miles of new fence. We need a comprehensive plan that addresses the three main priorities of the Border Patrol: manpower, technology, and infrastructure. After six years of controlling the White House, the Senate, and the House, their ‘signature achievement’ on border security is a 700 mile fence along a 2,000 mile border. This fence doesn’t come close to solving our problem."

Nor did he shrink from criticizing the White House. "This is yet another example of the lack of checks and balances in our current political climate. Libby's indictment and the continuing investigation into White House Deputy Chief of Staff Karl Rove demonstrate that Congress needs to take increased action exercising its oversight responsibilities. Congress has rightfully been criticized of its lack of oversight, and current events certainly warrant that we take a more active role.

Any action exposing an undercover agent is not only against the law, but against the best interests of our nation. This is a political bombshell for the Bush Administration, but has the potential to be very positive for the men and women of the U.S. intelligence community. This sends a strong signal that we as a nation respect their sacrifices and will stand up for them. President Bush must keep his word, hold the wrongdoers accountable and make it clear that no one in his White House is above the law."

So, why then will Speaker Pelosi's selection of Reyes to Chair the House Intelligence Committee be controversial? It won't be for the 94 votes he missed in the House, the ninth most of any member. Instead, ironically, it will be for the part he denies playing in the award to International Microwave Corporation (IMC) of a $239 million dollar, no bid contract for 12,000 border security sensors and cameras installed between 1998 and 2004 to cover a few hundred miles of the 6,500 mile Canadian and Mexican borders.

Immigration and Naturalization Service (INS) official Walter Drabik launched the Integrated Surveillance Intelligence System (ISIS) in 1996, a few months after Rep. Reyes, a strong proponent of placing cameras on the border arrived in Washington. Drabik chose the Alaska-based Chugach Development Corp. to install the system. Later, in 1999, Drabik helped select IMC for a $2 million contract to succeed Chugach.

"Over the objections of Border Patrol officials, INS official Walter Drabik chose cameras distributed by a firm called ISAP. U.S. officials and contractors said IMC had bought the ISAP firm without disclosing it to U.S. officials. This allowed IMC to buy cameras from its own subsidiary, substantially increasing profits. Undisclosed self-dealing could be illegal."

Drabik said in an interview that he recommended that first Chugach, then IMC, hire Rebecca Reyes, the congressman's daughter, as liaison to the INS. Both did so.

Reyes' daughter, Rebecca, became IMC's vice president of contracts, and ran the Integrated Surveillance Intelligence System (ISIS) for IMC. Her career path continued to trace the movements of the ISIS program as IMC was sold to L-3, a mid-level upstart company that aimed to be the "Home Depot" of advanced electronics, making their products available to all. In 2005 alone, L-3 won $4.7 billion in Pentagon contracts.

According to a Washington Post article reporting the number of contractor in Iraq at close to 100,000: "MPRI, a unit of L-3 Communications, has about 500 employees working on 12 contracts, including providing mentors to the Iraqi Defense Ministry for strategic planning, budgeting and establishing its public affairs office. Titan, another L-3 division, has 6,500 linguists in the country."

The Department of Homeland Security Inspector General's office issued a scathing report criticizing the implementation of the program, "A Review of Remote Surveillance Technology Along US Land Borders" in December of 2005, noting that official inattention to the system "placed taxpayers' dollars and . . . national security at risk."

Among the problems cited:

"A GSA inspection of eight Border Patrol zones found that $20 million had been paid to IMC for work there but that none of its camera systems was fully operating.
Near Buffalo, IMC billed the government for 59 cameras but only four were installed, and in Naco, Ariz., unassembled high-tech gear was found lying in the desert, the report said. "No IMC personnel had been on-site since the equipment was delivered" in 2003, the report added.
The most troubled part of ISIS was in Washington state, where the more than 64 cameras fogged up in cold and rain and sometimes broke down completely, according to Border Patrol officials and the GSA report. IMC-hired workers had done such shoddy wiring of fiber-optic cable at junction boxes that Border Patrol operators couldn't control the cameras, according to the officials and documents. Electrical wires were found corroding under water in supposedly sealed concrete vaults, they said.
The GSA report found that IMC was paid about $1 million up front to install 36 poles to hold multiple cameras in Washington state, but in fact had installed only 32. Contract documents executed by both GSA and the company "misrepresented the work that was actually furnished," it said.
It was common, the GSA report said, for the government to pay IMC "for shoddy work . . . [or] for work that was incomplete or never delivered."
IMC's Acri said the Washington project was "a nightmare" but blamed it on miscommunications with Border Patrol officials. L-3 has fixed many of the problems there recently, but Border Patrol agents still complain of malfunctions and blind spots.
The GSA inspector general's report also sharply criticized operations at a Border Patrol repair center in New Mexico staffed by two Border Patrol officials and 19 IMC employees. Many Border Patrol agents complained that repairs on the ISIS equipment they sent there took months to complete.
The GSA report said "little or no work" was done at the center in the previous year, even though IMC billed the government for $500,000 during that time. The report said millions of dollars in IMC overcharges might have occurred there.
The Border Patrol official who ran the center, David Watters, acknowledged he had a brother and a niece who worked for IMC. But he said his relatives' jobs did not affect his dealings with the company.
Watters said that the GSA report was unfair and that the center's slowdown in repairs was caused by the halt in ISIS work. IMC's Acri disputed some of the GSA's findings, saying it failed to accept his assertions that IMC did not profit improperly.
The GSA report and numerous government and industry executives said Border Patrol, INS and GSA officials -- most of whom lacked experience on complex contracts -- often deferred to IMC in deciding what equipment to buy and how much IMC should be paid. The GSA report said IMC's contracts with the government lacked detail, "thereby leaving interpretation of the government's needs up to the contractor."
"Government officials failed miserably to do their job," said Tim Golden, an IMC subcontractor on the program who later had a falling out with IMC. "It's incomprehensible how inept they were."
Many ISIS documents were drawn up in such a way that IMC was paid up front, and escaped financial liability if its performance was disputed, said the GSA report and U.S. officials.
Inspectors visited three sites in 2004 - Nogales, Naco and Tucson - and found none of the remote surveillance systems was fully operational, despite payments of more than $5.2 million since 2001."

According to the Washington Post, "Many -- but not all -- of the system's problems have been resolved in the past year by repair work done by L-3 Communications Holdings Inc., a New York firm that bought IMC in 2003, officials said." However coincidentally, Rebecca Reyes is employed by L-3 Communications in their Washington Government Services Office.

For his part, Representative Reyes campaign contributors include key defense industry companies.

Campaign Contributions, 2005-2006:

Echostar Communications Corporation PAC Inc $2000

L-3 Communications Corporation Political Action Committee $3000

General Dynamics Voluntary Political Contribution Plan (GDVPCP) $6000

Lockheed Martin Employees' Political Action Committee $6000

Boeing Political Action Committee $6000

Raytheon Company Political Action Committee $9000

Campaign Contributions, 2003-2004:

L-3 Communications Corporation Political Action Committee $5000

Echostar Communications Corporation PAC Inc $5500

Boeing Political Action Committee $7000

Employees of Northrup Grumman Corporation PAC $7500

General Dynamics Voluntary Political Contribution Plan (GDVPCP) $9000

Lockheed Martin Employees' Political Action Committee $10000

Raytheon Company Political Action Committee $10000

Speaker Pelosi, are you really the woman to clean up the House? Come on, show us!

A Proposal for Election REFORM by Coordinated State Ballot Initiatives

thepen — Fri, 01 Dec 2006 11:12:34 -0500

Dear Friends and Activists,

We all worked enormously hard this election for the most progressive candidates we could find, and we had a couple winners. In addition, Ciro Rodriguez is in an upcoming runoff in TX-23 with very excellent prospects. In truth we probably had even more winners but for the election shenanigans we knew would be a handicap and which certainly took place. But the good news is that in spite of them, and thanks to your valiant participation, the people have regained both the House and the Senate. This at least allows us the power and opportunity to fight another day, and it is critically important that we continue to speak out in ever increasing numbers now that we have majorities who are more likely to influenced.

In the meantime, we have put a lot of thought into the next major strategic move. There will be bills in Congress to attempt real election reform, but there is no assurance that anything of substantive impact can survive a veto, assuming we can even pressure its passage. Therefore, we propose opening up a collateral front by putting together as many state ballot initiative campaigns as possible where laws can be passed directly on to the books. What we have in mind are two separate propositions in each such state, with the idea that there is synergy in collecting signatures for two related initiatives at the same time.

1) A paper ballot initiative of some kind

2) A clean money campaign financing measure

PAPER BALLOT REFERENDUM: http://www.usalone.com/paper_ballots.php

Critical to the success of these initiatives will be to establish a consensus of what we should shoot for, and to get everyone on the same page up front, so to speak. We recognize that with the question of paper ballots there are two camps who so far have been working perhaps at cross purposes. Some support H.R. 550 as an attempt to add on some kind of afterthought accountability to the existing electronic voting machines. Some others strongly oppose any variation of that bill because it doesn't go far enough, and are pushing for total elimination of the infernal Accu-Hack machines with their secret proprietary software.

What we are asking you, our participants, to do is to weigh in on what direction you think we should go in. We have set up a special referendum page where we ask if there should be mandatory paper ballots in all elections. Especially if you are one of the movers and shakers in the election protection movement, please email us so we can engage you in the drafting of the actual proposed initiatives.

PAPER BALLOT REFERENDUM: http://www.usalone.com/paper_ballots.php

While it is true that such initiatives cannot be pursued in all states, among the many where they can are most of the key presidential swing states. And by passing parallel state propositions where we can we would hope to build a de facto national standard, adding to the momentum for federal legislation, as in the recent spate of minimum wage increase intiatives, all of which succeeded.

With regards to clean money legislation, initiatives have been successful in AZ and ME to date, although limited to state office candidates only. We think we would like to also see some kind of help for federal candidates from state voters while we are working also to pass federal legislation. The recent measure in CA failed in large part because its supporters did not have the support of most of the unions for whatever reason, with the nurses association alone responsible for most of the votes it did get.

We are very interested in taking another shot at CA in particular with an initiative to public finance political campaigns for candidates, attempting to craft a measure that more people on our side can get behind, and as above to spark plug parallel initiatives in as many other states as possible where that can be done. So again, if you are an interested think tanker in the clean money movement, please email us so we can welcome you on to the team.

We would like to thank each and every one of you again and again for your magnificent and generous contributions, without which some of the candidates we were helping would have had no campaigns at all. And these same former and future candidates will be playing a key role in signature gathering for these upcoming state initiatives as they develop. We have moved the ball down the field and we are not going back.

Please take action NOW, so we can win all victories that are supposed to be ours.

To be added to the list go to http://www.usalone.com/in.htm

Or if you want to cease receiving our messages, just use the function at http://www.usalone.com/out.htm