Archive for the ‘Money & Democracy Update’ Category

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Since Congress repealed public financing of conventions in 2014, with the exception of $50 million provided by Congress for each convention’s security expenses, the rest of the money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

Because civic participation is vital and should be protected, we’ve asked the Treasury Department to issue new guidance on the political activity of nonprofit groups organized under section 501(c)(3) of the tax code and put an end to the confusion stemming from the current confusing rules.

In a letter submitted Monday as a comment to the Treasury’s self-imposed to-do list, called the Priority Guidance Plan, we point out that 501(c)(3) organizations are uniquely vulnerable to unclear rules, since doing any political activity, defined by the murky “facts and circumstances” standard, puts their tax-exempt status at risk.

501(c)(3) groups, like churches and charities, end up being prevented from doing political activity because the current vague definition of political activity acts like a speed limit sign that says “don’t go too fast.” Some bad actors will push the boundary, but most careful organizations won’t do things they otherwise could because they’re too afraid of “going too fast.”

“Offering 501(c)(3)s guidance on the rules that apply to them will create a more workable regulatory regime, deter bad actors, and empower well-meaning organizations to engage in the political system in the permissible ways that Congress intended,” says the letter.

The letter points out that while a provision in the 2016 Consolidated Appropriations Act prevents Treasury and the Internal Revenue Service (IRS) from improving the definition as it relates to 501(c)(4) groups, the path for a new definition for (c)(3)s is clear.

The current rules are so unworkable that risk-averse (c)(3)s don’t engage in the kinds of nonpartisan activities they are allowed to do, says the letter. Particularly in an election year, having unclear rules chills the speech of law-abiding organizations while encouraging abuses from those willing to flout the rules.

Charities should be encouraging civic participation; it’s one of their most vital roles. Nonpartisan engagement with our democracy should be easy for nonprofits, but the rules as they stand make it hard. Treasury can take a small step toward clearer rules by putting a fix for (c)(3)s on their to-do list NOW!

This article was originally posted on Public Citizen’s Bright Lines Project blog.

Last week at the Netroots Nation 2016 conference, Presidential candidate Hillary Clinton addressed the attendees through a pre-taped video, announcing that, if she were elected, she would propose a constitutional amendment to overturn the Citizens United v. FEC decision within the first 30 days of her administration.

“Today, I’m announcing that in my first 30 days as President, I will propose a constitutional amendment to overturn Citizens United and give the American people – all of us – the chance to reclaim our democracy,” Clinton said in the taping. “I’ll also appoint Supreme Court justices who understand that this decision was a disaster for our democracy, and I will fight for other progressive reforms including small dollar matching and disclosure requirements.  And I hope some of the brilliant minds in this room will seek out cases to challenge Citizens United in the courts.”

hillaryClinton also committed to signing an Executive Order requiring federal government contractors to fully disclose all political spending and urging the U.S. Securities and Exchange Commission (SEC) to move on the long-awaited rulemaking to require publicly traded companies to disclose all political spending to their shareholders.

These commonsense requirements for political spending disclosure have long been supported by Public Citizen.

Following the ruling in the Citizens United case, Public Citizen led the the fight to amend the Constitution to overturn the decision, working across the nation. At this point, 17 states from New York to Oregon have passed resolutions in support of an amendment to the constitution to overturn Citizens United.

More than 1.2 million investors and members of the public have already submitted comments to the SEC calling for a rule requiring the disclosure of corporate political spending, including major institutional investors, Secretaries of State, State Treasurers, former SEC Commissioners and Chairs, Senators and more. In addition, another million plus Americans have weighed in on the executive action on disclosure of secret contractor spending, and in December, Public Citizen worked with other progressive organizations to bring those million-plus signatures to President Obama to urge him to take action and curb dark money.

You too can show your support for getting money out of politics by signing a petition to overturn Citizens United here and sending a comment to the SEC regarding disclosure here.

Beginning shortly before noon on Wednesday and continuing until Thursday afternoon, Democrats in the House of Representatives occupied the House chamber floor for 26 hours in a sit-in to push for a vote on bills that would put tighter restrictions on the purchase of firearms. As one side interrupted normal procedure with an historic action, and the other brazenly moved to an early recess, the House was the very picture of the partisanship and inefficiency that has repeatedly plagued our nation’s capital. And underlying this entire spectacle was another grim reminder of the massive influence of money in subverting the wishes of the people in our politics.

85% of respondents to a new CNN/ORC poll supported “preventing people who are on the U.S. government’s Terrorist Watchlist or no-fly list from owning guns.” Previous polls have shown that the vast majority of gun owners support increased background checks. Despite this overwhelming support, House Republicans have declined to even schedule a vote. Now why might we see such a failure of elected representatives to follow the will of the people? There’s a simple answer: money.

The National Rifle Association (NRA) is just one of many lobbying groups with deep pockets and a network of wealthy donors that are overpowering the voice of the American public with millions of dollars’ worth of ads and campaign funding. According to Open Secrets, in 2014 the NRA spent $974,152 on political contributions, $3,360,000 on lobbying and $27,024,618 on outside contributions, such as running ads directly from the NRA.

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sunset-powerlines-prettyYesterday the Sustainable Investments Institute (Si2) and the Investor Responsibility Research Center Institute (IRRCi) released a report detailing which of America’s top 25 investor owned utility companies are choosing to adapt to the changing business landscape as a result of climate change and which are not.

The report, titled The Top 25 U.S. Electric Utilities: Climate Change, Corporate Governance and Politics shows that while some utility companies are taking steps to change their business practices to adapt to the challenges posed by climate change, others are digging in their heels and going so far as to spend heavily in politics and engage in litigation to protect the status quo.

“Rather than changing the energy mix or seeking innovation that can reduce capital costs, some utilities are deploying their resources toward court battles and political influence,” says IRRCi’s Executive Director, Jon Lukomnik.

This report aims to be a resource for investors looking to know more about a certain company’s policies regarding climate change and for companies to see how they stack up against their peers. The 117- page report uses 12 metrics to measure each company’s climate change orientation including but not limited to potential legal liability, political activity spending and public policy position disclosure, corporate political activity governance, and litigation.

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