Category: Elections

Help for Super PACs on its Way: At Least Four Cabinet Members May Go to Bat for Democratic Super PACs

An article regarding Super PAC’s was recently published in The National Law Review by Michael Beckel of the Center for Public Integrity:

Fundraising activities are limited, but star power brings in the bucks

At least four Cabinet members appear ready and willing to answer President Barack Obama’s call to help fill the coffers of Democratic outside spending groups, which have to date been badly outgunned by better-funded Republican organizations.

After previously denouncing the so-called “super PACs” as a “threat to democracy,” Obama signed off last week on a move to allow top campaign aides and high-level White House officials to raise money.

Some of those going to bat for the president have long histories of raising money for their own political careers, and even bundling money for Obama’s campaign four years ago.

Interior Secretary Ken Salazar, Energy Secretary Steven Chu, Education Secretary Arne Duncan and U.S. Trade Representative Ron Kirk have all indicated they would be open to participation in activities designed to help the nascent Democratic super PACs, like “Priorities USA Action,” raise money.

“Arne has spoken at campaign-related events in the past on his personal time,” Education spokesman Justin Hamilton told iWatch News. “While he doesn’t yet have any invitations to future events, any that he might attend will be done in strict compliance with the law.”

A similar willingness was also expressed by Interior spokesman Adam Fetcher, whose boss raised more than $13.5 million for his own U.S. Senate campaigns before Obama asked him to become Secretary of the Interior in 2009, according to the Center for Responsive Politics.

“Any invitation for the Secretary to speak at campaign events will be considered in the same way we evaluate all scheduling requests, which includes making sure that all appearances fully comply with rules governing political activity,” Fetcher told iWatch News.

A spokesperson in the office of the U.S. Trade Representative likewise noted that whatever campaign-related activities Kirk may engage in would be cleared by the general counsel’s office in advance.

This wouldn’t be the first time that Kirk has helped Obama’s team raise money: He personally bundled between $50,000 and $100,000 for Obama’s campaign four years ago, according to the Center for Responsive Politics.

This nexus of power and the chase for campaign cash doesn’t sit well with many good-government advocates, especially when there’s no limit on how much money donors can give to super PACs.

“This brings into focus the whole issue of access and influence,” said Meredith McGehee, policy director for the Campaign Legal Center, a nonpartisan group that frequently supports campaign finance reforms. “When you give money, you get access and influence – a way to be heard differently from everyone else.”

Obama’s change of heart was clearly due to the fundraising disadvantageDemocratic super PACs and nonprofits have experienced compared to their Republican counterparts.

Generally speaking, federal law prohibits top White House officials like Cabinet secretaries from using their positions to raise money for candidates. The Hatch Act allows government officials to personally donate money to political committees or engage in a variety of partisan activities, so long as they do so during their personal time and do not use government resources.

They may not solicit campaign contributions — but that doesn’t prohibit them from appearing at political fundraisers.

Last year, several administration officials, including Duncan and Chu, appeared at fundraising events for the Obama campaign, as part of a “speakers series,” in which donors contributed money and mingled with high-level White House officials.

Those events, even while upholding the letter of the law, earned criticism from many Republicans, including Karl Rove, the former senior advisor and deputy chief of staff to President George W. Bush.

“What they’re doing is establishing a process by which you can buy influence,” Rove said at the time.

Rove himself had appeared at fundraisers for Bush during his time as a White House aide. He also helped operate a “political boiler room” within the White House that was criticized in an official Office of Special Counsel report last year.

Meanwhile, some other seasoned rainmakers in Obama’s Cabinet won’t be on the fundraising stump.

United Nations Ambassador Susan Rice, who bundled between $50,000 and $100,000 for Obama’s campaign four years ago, will not be participating in any fundraising events for either the new super PACs or the president.

The same is true of Secretary of State Hillary Clinton, who raised more than $200 million during her unsuccessful presidential run in 2008 – and more than $80 million during her two U.S. Senate bids after leaving the White House.

Defense Secretary Leon Panetta, Attorney General Eric Holder, Transportation Secretary Ray LaHood and Homeland Security Secretary Janet Napolitano are among other top Obama administration officials who are not expected to appear at any fundraisers.

“Longstanding Department of Defense policy requires that the Secretary and all Senate-confirmed and non-career senior executive service officials refrain from participating in partisan political activities,” said Carl Woog, a DOD spokesman.

LaHood — who raised about $7 million over his career as a congressman, according to the Center for Responsive Politics — “hasn’t and won’t be participating in any political fundraising,” said DOT spokesman Justin Nisly.

Super PACs were created last year in the wake of two federal court rulings, including the U.S. Supreme Court’s Citizens United v. Federal Election Commission decision. They can collect unlimited amounts of money from individuals, unions and corporations to spend on advertising to elect or defeat candidates, but cannot illegally coordinate with the candidates themselves or make direct contributions.

Not everyone is concerned about Cabinet members being involved in the super PAC money chase.

“You don’t lose your rights to free speech just because you hold public office,” conservative attorney Dan Backer of DB Capitol Strategies said. “You may have a public trust, but you shouldn’t lose your free speech rights.”

Reprinted by Permission © 2012, The Center for Public Integrity®.

Copyright Lessons from the Campaign Trail: Romney, Gingrich and Fair Use

Recently found in The National Law Reviewwas an article by Geri L. Haight of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding Copyrights and Fair Use:

This Republican primary season has provided lots of fodder for political blogs, but it has also provided a few gems relating to — what else — trademark issues.    Now, U.S. copyright law is in the spotlight of the Republican primary campaign.  First, Republican presidential hopeful Mitt Romney is considering whether to pull a television ad that is comprised wholly of a 30 second clip from a January 21, 1997 episode of NBC’s “Nightly News” program hosted by Tom Brokaw.  The Romney ad is entitled “History Lesson” and can be viewed here.  In the ad,  Brokaw announces the House Ethics Committee’s decision to penalize then-Speaker Newt Gingrich.  The ad contains no other voiceover or images.  It ends simply with a Romney disclaimer (“Paid For By ….) and the statement that Romney approves the ad.  NBC has sent the Romney campaign a cease and desist letter, alleging that the ad constitutes copyright infringement.  Tom Brokaw has expressed that he is “extremely uncomfortable” with the use of his personal image.   Romney’s campaign asserts that its use of the news clip  “falls within fair use” and, therefore, does not violate copyright laws.

Second, Romney’s primary opponent in the race for the Republican nomination, Newt Gingrich, has copyright troubles of his own.  On Monday, Gingrich was sued in Illinois by a former member of the band Survivor (under the name “Rude Music”) for his use of the song “Eye of the Tiger” at campaign events.  The complaint asserts that Gingrich is “sophisticated and knowledgeable” of federal copyright law, citing Gingrich’s tenure in the U.S. House of Representatives during which the Copyright Act underwent several revisions.  As evidence of Gingrich’s further familiarity with copyright laws, Rude Music cites Gingrich’s recent criticism of the Stop Online Piracy Act at the Republican primary debate in South Carolina.  During that debate, Gingrich is quoted in the complaint as saying: “We have a patent office, we have copyright law. If a company finds that it has genuinely been infringed upon, it has the right to sue.”  In the complaint, Rude Music seeks an injunction and unspecified monetary damages based on Gingrich’s unauthorized public performances of the song.

Romney’s and Gingrich’s recent copyright troubles involve the defense of fair use.  So, what is that?  This defense to a charge of copyright infringement is provided in Section 107 of the Copyright Act.  Section 107  contains a list of the various purposes for which the reproduction of a work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research.   This provision sets out four factors to be considered in determining whether or not a particular use is fair:

  1. The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
  2. The nature of the copyrighted work
  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole
  4. The effect of the use upon the potential market for, or value of, the copyrighted work

In Romney’s situation, NBC’s position seems to be focused largely on the first factor — its assessment that use of the news clip is commercial in nature.  The clip is used in a political ad that seeks, among other things, donations to fund Romney’s campaign against Gingrich.  But Romney’s campaign has stressed that it used only 30 seconds of a much longer broadcast and that it is using the clip for the content of the facts conveyed (regarding Gingrich’s past ethics violations), not for the particular style of the delivery of those facts.  And Romney seems to be using the clip to comment on Gingrich’s representations during the campaign regarding these past ethics violations.  The risk for the Romney campaign, however, may be the problem with reliance on the fair use in general, identified by the U.S. Copyright Office itself:  “The distinction between fair use and infringement may be unclear and not easily defined.”  But maybe that’s the point.  The Romney ad is certainly getting lots of attention due to NBC’s assertion of a copyright infringement claim.

In Gingrich’s case,  there are arguments for and against application of the fair use factors for both sides.  Again, because the songs are played at campaign events, there is an arguable commercial component to the use.  But there are also arguments about the use being political speech and commentary (given the theme of Gingrich’s underdog status).  The case involves claims that arise frequently in the content of political campaigns (e.g., Jackson Browne sued John McCain in 2008 based on the candidate’s use of the song “Running on Empty” in an ad mocking then candidate Barack Obama’s energy policies).  Though common, most cases settle early so that we do not have a wealth of case law resolving this issue.

NBC and Rude Music have both expressed false endorsement and right of publicity concerns.  By using the NBC news clip, does the public believe that NBC and/or Brokaw endorse Romney?  Or does the band Survivor endorse Gingrich because Gingrich uses “Eye of the Tige” at his campaign events?  Clearly, this perception is a concern to Brokaw, who has stated that he does not “want [his] role as a journalist compromised for political gain by any campaign[.]“  In a world where journalists are perceived as favoring one political party or the other (e.g., Fox News or MSNBC) and musicians take sides in political fights (e.g., Springsteen endorsing Obama or Wayne Newton endorsing Bachmann), such a claim may have legs.

©1994-2012 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

‘Outsider’ Candidate Santorum Collected Millions in Corporate PAC Money

An article published in the National Law Review recently by Josh Israel and Aaron Mehta of the Center for Public Integrity regarding Candidate Santorum’s PAC Campaign Donations:

 

 

Santorum’s corporate backers: Santorum took on ‘special interests’ while collecting millions in corporate PAC money

Who bankrolled Rick Santorum?

Rick Santorum the presidential candidate casts himself as a Washington outsider, “one of the most successful government reformers in our history,” according to his campaign bio, “taking on Washington’s powerful special interests from the moment he arrived in our nation’s capital.”

But Rick Santorum the House and Senate member received more than $11 million in contributions from corporate and other special interest political action committees (PACs) over his career, according to a Center for Public Integrity investigation.

Among the largest donors are giants from the telecommunications, tobacco, and banking industries, the analysis found. The Center examined contributions to the Pennsylvanian’s congressional, senatorial and 2012 presidential campaigns — as well as his “America’s Foundation” and “Fight PAC” leadership PACs, entities set up by Santorum to aid others in their political campaigns.

Corporate PACs connected to telecommunications firms that became today’s AT&T Inc. poured more than $98,000 into Santorum’s campaign coffers, making the behemoth his top career patron.

Those donations may have been rewarded with support for the industry; in 1996 Santorum was one of 91 Senators to approve the heavily lobbied rewrite of telecommunications law that deregulated the industry.

Government watchdog group Common Cause decried the industry for “buying” the legislation.

Verizon Communications Inc. (and companies now part of the Verizon empire, including GTE, Bell Atlantic Corp., NYNEX and Verizon Wireless, a joint venture with British wireless giant Vodafone Group PLC), also made the top-ten (No. 6), with more than $75,000 in corporate PAC contributions.

Santorum’s second-highest total came from the Altria Group, including predecessor companies like the Philip Morris Companies and U.S. Tobacco. The makers of Marlboro cigarettes and Skoal tobacco have spent more than $96,000 in PAC funds to advance Santorum’s political career.

Santorum, a member of the Senate Committee on Agriculture, Nutrition and Forestry, opposed increased restrictions on the tobacco industry — joining with 39 other Republicans and two tobacco-state-Democrats to kill the 1998 Universal Tobacco Settlement Act.

The bill aimed to “prevent the use of tobacco products by minors” and to “redress the adverse health effects of tobacco use.” It also would have incorporated a settlement requiring the industry to pay billions of dollars to state governments. After Congress failed to pass it, a narrower settlement was reached between the tobacco companies and state attorneys general.

In addition, documents made public as a result of the tobacco settlement with the states indicate that representatives from Philip Morris communicated with then-Rep. Santorum in 1994 during the debate on the Clinton health care reform proposals.

A March 20, 1994, interoffice memo notes that several company employees attending public meetings with Santorum reported “very positive” conversations aimed at ensuring his opposition to an increase in the federal excise tax on cigarettes.

Santorum’s Nos. 3, 4, 5, 7 and 8 backers were all financial services companies. Bank of America Corp. and companies it has acquired gave more than $92,000; PNC Financial Services Group Inc., a Pittsburgh-based bank, gave more than $87,000; JPMorgan Chase & Co. gave at least $76,000; Wells Fargo & Co. gave more than $73,000; and Bank of New York Mellon Corp. gave more than $69,000.

Santorum served on the Senate’s Committee on Banking, Housing and Urban Affairs and was one of 54 senators to back the Financial Services Modernization Act of 1999 (commonly known as Gramm-Leach-Bliley), a bank deregulation law signed by President Clinton.

That law eliminated several restrictions on the size and scope of banks, precipitating the mergers that allowed these and other financial services giants to merge and grow. The law has been blamed for setting the stage for the financial collapse of 2008 and resulting recession. Despite the banks’ largesse, Santorum has been a vocal opponent of the Troubled Asset Relief Program bank bailout, often using it as a club against other Republican candidates.

Rounding out the top 10 were GlaxoSmithKline PLC (more than $68,000), a pharmaceutical company, and energy powerhouse Exelon Corp. (more than $67,000).

Corporate PACs are funded by employees who may give up to $5,000 per calendar year. The PAC itself may give $5,000 per election to candidates. These PACs are usually controlled by the corporation’s chief lobbyist.

It should be no surprise that Santorum’s donors are among the biggest corporate interests in the country.

The anti-tax lobbying group Club for Growth rates Santorum’s record on economic issues in the U.S. Senate as “above average,” while the U.S. Chamber of Commerce gave him a 100 percent rating for 2005.

And if elected, it is likely Santorum will continue his support for business.

On his website he promises to cut the corporate tax rate in half “to make our businesses competitive around the world,” eliminate the corporate income tax for manufacturers and sharply reduce taxes on repatriated foreign income. The Center recently reported on how the issue of repatriation is currently a cause célèbre for many large corporations.

As Bloomberg reported recently, since his 2006 Senate re-election defeat, Santorum has received hundreds of thousands of dollars in directors’ fees and stock options from Universal Health Services Inc. Though it did not rank among his top patrons, Santorum received at least $11,500 from that company’s PAC.

Santorum later received a consulting contract with Consol Energy Inc., reportedly worth more than $140,000. The Pennsylvania-based company donated almost $20,000 to Santorum while he was in office. The Center previously reported on Consol’s long-wall mining operations in southwestern Pennsylvania.

Santorum’s campaign did respond to a request for comment on this story.

Here is a list of Santorum’s top 10 political action committee donors:

  1. AT&T – at least $98,603
  2. Altria – at least $96,500
  3. Bank of America – at least $92,250
  4. PNC – at least $87,805
  5. JPMorgan Chase – at least $76,000
  6. Verizon – at least $75,165
  7. Wells Fargo – at least $73,050
  8. Bank of New York Mellon – at least $69,374
  9. GlaxoSmithKline – at least $68,305
  10. Exelon – at least $67,589

Source: Center for Public Integrity analysis of contributions from political action committees to Rick Santorum’s congressional, senatorial, and presidential campaign committees and leadership PACs: “America’s Foundation” and “Fight PAC.” Data was obtained from subscription-only CQ-MoneyLine, and covered Santorum’s first campaign, in 1989-1990. The data was retrieved Jan. 4, 2012.

Republican presidential candidate, former Pennsylvania Sen. Rick Santorum speaks during a town hall meeting in South Carolina.David Goldman/AP

Reprinted by Permission © 2012, The Center for Public Integrity®. All Rights Reserved.

‘Super PACs’ Spend $13 Million on Early Primaries, Romney Top Beneficiary

Posted previously by the National Law Review, an article by The Center for Public Integrity regarding Super PACs Spending on Early Primaries:

New outside spending groups, dubbed super PACs, that can accept unlimited donations from corporations and wealthy individuals, spent $12.9 million in Iowa and other early GOP battleground states through New Year’s Day, according to an analysis of federal data.

The top beneficiary was former Massachusetts Gov. Mitt Romney. A total of $4.6 million was spent to help the nominal front-runner, the vast majority for ads torpedoing former House Speaker Newt Gingrich. Second was Texas Gov. Rick Perry, who benefited from $3.7 million in outside spending.

According to a Center for Public Integrity analysis of Federal Election Commission data,12 outside super PACs spent money, mostly on advertising, with the intention of electing or defeating a GOP presidential candidate. Ten have not yet reported their donors. The two that have did so last summer.

The upshot is that voters in Iowa, New Hampshire, South Carolina and Florida, all of whose contests will be held this month, won’t know who is paying for much of the advertising they see until after their votes are cast.

The next reports on donors aren’t due until January 31, the day of the Florida primary.

Federal court decisions in 2010 made it possible for individuals, corporations and labor unions to give unlimited contributions to political organizations (super PACs) and certain types of nonprofits, which can then spend the money to elect or defeat candidates. The groups are prohibited from coordinating their activities with candidates.

The top super PAC spender was “Restore Our Future” — the ambiguously named group set up to help Romney. The group spent $4.1 million, all of it in opposition to Gingrich, who enjoyed a brief lead in Iowa polls last month before the shellacking.

Restore Our Future has moved on from Iowa and spent $622,000 in Florida, a likely harbinger of more to come in that high stakes contest. Almost $100,000 has been spent by the pro-Romney group in South Carolina, whose primary is January 21.

Restore Our Future reported raising over $12 million in the first six months of 2011; it is apparently the best-funded of the new breed of PACs, and has received a few seven-figure donations. Not so well known is a second organization that hopped on the Romney bandwagon, Citizens for a Working America Inc.

The group spent $475,000 on a Christmas Eve ad buy praising the candidate.

The group initially supported Rep. Michele Bachmann of Minnesota but changed course shortly before the big ad buy.

The Center traced an address in an FEC filing for Citizens Inc. to the office of JSN Associates in Dayton, Ohio. The “JSN” is James S. Nathanson, who said Monday the group is “very definitely pro-Romney.” He would not say who the group’s donors are.

A previous incarnation of the group met with some controversy when it accepted a single $255,000 donation in 2010 from a Virginia consulting group called “New Models.” Questions were raised as to whether the group was being used as a pass-through for unnamed donors.

A super PAC supporting Perry, “Make Us Great Again,” spent all of its $3.7 million on ads backing the Texas governor.

Former Utah Gov. Jon Huntsman enjoyed the support of “Our Destiny PAC” which spent $1.9 million for ads in New Hampshire, where he opted to compete first rather than Iowa.

Two groups supporting Gingrich ponied up just over $900,000 for TV spots. The bulk of the pro-Gingrich spending was done by “Winning Our Future,” a super PAC that was just started last month.

A surging Rick Santorum, a former U.S. senator from Pennsylvania, enjoyed $631,000 in supportive spending by outside groups.

“Priorities USA,” a super PAC supporting President Obama, was also active, spending a little more than $306,000 on advertising opposing Romney.

And “Endorse Liberty Inc.,” a new super PAC embracing Rep. Ron Paul of Texas, spent more than $448,000, most of that on Internet advertising. It also listed one of the more unusual expenditures of the 2012 campaign — $2,000 on “costumes and makeup.”

Peter Stone contributed to this report.

Reprinted by Permission © 2011, The Center for Public Integrity®. All Rights Reserved.