Archive for the ‘Campaign Finance’ Category

It’s clear that Americans want transparency when it comes to how companies spend in politics.

Courtesy Flickr/Almond Butterscotch.

Courtesy Flickr/Almond Butterscotch.

The next administration and the U.S. Securities and Exchange Commission (SEC) must address secret corporate political spending because it poses a great threat to democracy and investor confidence, says a new report by Public Citizen. The report, highlighting the historic campaign for an SEC rule requiring publicly held corporations to disclose their political spending, comes in advance of a Sept. 20 event on the state of corporate disclosure and as Public Citizen and its partners in the Corporate Reform Coalition (CRC) review and plan ahead for a new administration and new SEC priorities.

The Sept. 20 event is organized by Public Citizen, the AFL-CIO, Americans for Financial Reform, Ceres the Financial Accountability & Corporate Transparency (FACT) Coalition, the International Corporate Accountability Roundtable (ICAR), Patriotic Millionaires and SIF: The Forum for Sustainable and Responsible Investment, and hosted by the Center for American Progress. It will explore the SEC’s recent “Disclosure Effectiveness” review, which is evaluating corporate disclosure requirements, and the role of environmental, social and governance disclosures in promoting a sustainable economy.

The report details how a five-year campaign has driven 1.2 million comments to the SEC in support of a disclosure rule – the most in the agency’s history. The campaign also has garnered more than 500 stories in local and national press, and brought together powerful champions on Capitol Hill who are working to ensure that an SEC rulemaking on disclosure is not obstructed by congressional Republicans’ insertion of a harmful policy rider into the appropriations process that would stop the SEC from finalizing the rule. In addition, another 20,000 comments supporting political spending disclosure have come into the agency as comments to its “Disclosure Effectiveness” review process and to the agency’s Regulation S-K concept release, which solicited comments on proposed changes to corporate financial statement requirements.

The campaign began in response to the disastrous 2010 U.S. Supreme Court decision in Citizens United v. FEC, which opened the floodgates for corporations to spend unlimited and undisclosed amounts to influence American politics. In 2011, a bipartisan committee of leading corporate and securities law professors filed the first petition requesting a rulemaking at the SEC requiring all public companies to disclose their political expenditures. In response, the agency began a rulemaking, then halted it.

In this election cycle, secret outside spending is the highest it has ever been, clocking in at a whopping $660 million. Americans know that corporate influences lurk behind most campaign ads. Polls show they remain frustrated by the lack of transparency around corporate political spending.

Disclosure is material to investors as they consider the risk of their investment and important to the American voters who want to know who is bankrolling their elections. The SEC needs to take a stand and move forward with this rulemaking.

Transparency controversies have dominated this year’s presidential campaign, but observers might be missing one of the most important transparency-related topics of all: What insight will the public have into the candidates’ transition planning?

This and other related questions were covered during a National Press Club event sponsored by Public Citizen on Wednesday that featured the deputy general counsel for President-elect Obama’s 2008 transition team, an expert helping the two major party nominees conduct their transition planning right now, a leading academic expert and advocates with varying perspectives.

Norman L. Eisen, the deputy general counsel to Obama’s transition team, said the 2008 work was the last “pre-historic” transition effort because laws passed by Congress since then have formalized processes for the transfer of power from outgoing to incoming administrations.

Eisen, who subsequently became the “ethics czar” of the Obama administration, also promoted Obama’s decision to adopt an ethics policy for transition team members and to implement various sunshine-oriented policies, such as making the White House visitors’ log public.

But Taylor Lincoln, research director of Public Citizen’s Congress Watch division, noted that various measures Congress has passed to make the transitions more efficient have done little to ensure that transitions are conducted in accordance with small-d democratic principles. Despite the fact that transition work is largely publicly funded, the open records and ethics rules that apply to normal government activities do not apply to it.

These shortcomings are significant because the work of transition teams might be among the most important in a presidential administration, Lincoln said, noting that these teams choose the personnel to fill key positions and formulate policy positions.

Sean Moulton, open government project manager at the Project on Government Oversight, advocated applying the Freedom of Information Act to certain transition period records.

Heath Brown, assistant professor of Public Policy at the City University of New York, pointed out that much of the record from past transitions has been lost to history because records were not retained.

Kevin R. Kosar, senior fellow and governance project director at R Street Institute, indicated general agreement with the principle of transparency but noted a tension between transparency and privacy concerns. He noted that transition teams vary for ordinary government work because of hazy lines that separate official participants with informal advisors on the periphery.

Also on the panel was David Eagles, director of the Center for Presidential Transition at the Partnership for Public Service, which is advising the current nominees on their ongoing work. An alum of Mitt Romney’s transition planning team, Eagles noted a significant increase in the comprehensiveness of transition processes in recent years.

Public Citizen will be revisiting this issue next week with the release of a report on the policy advisors closest to Hillary Clinton and Donald Trump.

Here are some photos from the event:
Presidential Transition Event

village-1357192_640At a time when public approval of Congress remains near all-time lows, revisiting campaign finance laws is critical. Party officials have recommended members spend roughly twice as much time fundraising as they do on the floor or in committee. U.S. House members raise on average $2,400 every single day of their term. U.S. Senators will raise roughly twice that.

These campaign spending increases are reflected at the state and local level as well. For example, a single local school board race in California resulted in over $3.5 million in inside and outside spending. The tides may be shifting, however.

California is now poised to enact a law which would lift the state’s ban on publicly financed campaigns. SB 1107 passed with bipartisan backing last week. It gives local and state government to option stick with the current system or switch to public financing. The bill requires public financing laws have a dedicated funding source and that funds be “available to all qualified, voluntarily participating candidates for the same office without regard to incumbency or political party preference.”

Public Citizen’s members in California sent over 1,200 letters to their assembly members in the days leading up to the vote. All that’s left is for Gov. Jerry Brown to sign the bill.  You can contact his office at (916) 445-2841 and ask him to sign SB 1107.

Voters in California will have further opportunity to express their frustration with the current system when Proposition 59 appears on their ballots this November. It is a resolution that calls on California legislators to do everything they can to overturn Citizens United v. Federal Election Commission. Yesterday, the Sacramento Bee endorsed the measure, which is backed by groups such as California Common Cause, calPIRG, Courage Campaign and others.

By Anisha Sehgal

Both consumers and healthcare payers are struggling with the rising price of drugs. Unless meaningful reforms are enacted, this problem will only get larger and patients will continue to face crippling out-of-pocket costs in order to care for themselves and their loved ones. The Medicare Part B demonstration is an example of such a reform and would begin to repair the dysfunctional way that we pay for prescription drugs. Unfortunately for patients, the pharmaceutical industry has mounted considerable opposition to this reform and it is not alone. Politicians and organizations such as patients’ groups have also voiced their objection. However, the majority of these individuals and groups have received industry funding.

A recent Public Citizen report revealed that of the 147 patients’ groups who have signed letters objecting to the Medicare Part B demonstration at least 110 (75%) received funding from pharmaceutical or medical device corporations. Since patients’ groups are not required to disclose their funding sources there may be even more than the 110 groups identified by the report that received money from pharma.

The letter organized by the Community Oncology Alliance was sent to congressional leadership while the letter organized by the Partnership to Improve Patient Care was sent to the Center for Medicare and Medicaid Services (CMS). Along with the 147 patients’ groups, 241 doctors’ groups and pharmaceutical industry groups — both of which benefit from the maintaining the status quo of the current reimbursement method — signed either of the two letters opposing the reform. The letters’ combination of patients’ groups as well as industry groups, such as local Biotechnology Innovation Organization (BIO) affiliates, demonstrates the close ties patients’ groups have with the pharmaceutical industry.

In 2015, Part B spending reached $22 billion, double the amount it was in 2007. A reform such as this is necessary in order to remedy Medicare Part B’s unsustainable spending trend. The Medicare Part B demonstration, which is supported by numerous consumer interest groups including Public Citizen, aims to remove incentives for doctors to unnecessarily prescribe higher priced medicines when effective and affordable alternatives are available. Currently a physician who administers a drug under Medicare Part B will be reimbursed for the average sales price plus six percent. The demonstration proposes changing the reimbursement to the average sales price plus 2.5 percent and a flat dollar amount.

The pharmaceutical industry is strongly opposed to this reform because a decrease in the prescription of higher-priced drugs means a decrease in the industry’s profits. In fact, the industry has already spent more than $9 million in campaign funding for members of Congress, which is strongly correlated with lawmakers’ stances on the issue, as revealed by another recent Public Citizen report.

The pharmaceutical industry’s troubling pattern of influence raises questions about the independence of this reform’s opponents. Patients’ groups should reconsider their stance on this issue and realize that in this debate pharma is only looking out for itself, not for the deserving patients of this country.

While the speeches of the Democratic and Republican conventions have been dominating traditional news and social media, behind all the pageantry a slew of special interests are pulling the strings.

Photo courtesy of IIP Photo Archive/Flickr under Attribution-NonCommercial 2.0 Generic license.

Photo courtesy of IIP Photo Archive/Flickr under Attribution-NonCommercial 2.0 Generic license.

The conventions are yet another moment to highlight what is becoming an increasingly more talked- about campaign issue: special interests’ influence in politics. This year’s conventions are expected to continue to shatter spending records. The Democratic National Convention is projected to cost $65 million and the Republican National Convention is expected to cost even more, with a price tag coming in around $71 million.

Since Congress repealed public financing of conventions in 2014, with the exception of $50 million provided by Congress for each convention’s security expenses, the rest of the money will come from special interests including corporations, unions, and lobbyists looking to gain favor with the politicians attending the conventions.

This special interest money enters the equation through “host committees,” which aren’t considered political entities and therefore do not need to disclose where their unlimited contributions come from. These undisclosed special interest dollars fund events and parties surrounding the conventions.

The presence of undisclosed special interest dollars at the conventions is problematic because it makes it impossible for the public to know whether the voices they hear at the conventions really represent the candidates or whether they represent the interests of those funding the events.

The public is becoming increasingly frustrated with a system that is rigged in favor of the super wealthy and special interests, and the conventions are another moment to draw attention to the corporate money flooding into the American political process. Polls show that two-thirds of Americans are dissatisfied with the outsized influence of corporations in America and 88% of Democratic and Republican primary voters think that the U.S. Securities and Exchange Commission should require public corporations to disclose their political spending.

Facing increased frustration, some may wonder how they can participate in changing the system. One unexpected way is through their retirement investments. Americans who invest their retirement savings with major mutual fund companies are ultimately empowering major corporations who meddle in politics.

Let’s break down how this happens.

When you contribute money to your retirement account with Vanguard, for example, Vanguard then takes your money and invests it in major corporations on the stock market. Those major corporations then turn around and spend money influencing elections and policy implementation. This spending is not required to be disclosed to the general public or the corporations’ shareholders.

Shareholders at major corporations have been asking the corporations to disclose their political spending for years. Unfortunately, those shareholder proposals rarely receive majority support because the biggest mutual fund companies, like Vanguard, can own 5 percent or more of these corporations and they tend to vote against increased transparency.

Five percent may not sound like a lot, but in actuality it translates to significant voting power in corporate elections where the fates of shareholder proposals on transparency are decided. Here’s where the average American saving for retirement comes in. Americans who invest their retirement savings with major mutual fund companies like Vanguard or BlackRock should tell the companies to support political spending disclosure at the corporations where their retirement dollars are invested.

The conventions are another instance where undisclosed political contributions are running rampant and Americans don’t know whose voices they are really hearing. Until the U.S. Securities and Exchange Commission issues a rule requiring all public companies to disclose political spending, mutual fund companies can and should represent the 401Ks and other investment accounts entrusted to them, and play a pivotal role in supporting disclosure. In turn, Americans who trust major mutual fund companies with their retirement savings should tell the companies to support disclosure whenever it comes up. Transparency is good for investors and good for our democracy.

Rachel Curley is the Democracy Associate at Public Citizen’s Congress Watch. Follow more of her work at Corporate Reform Coalition

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