Sunlight Foundation

Yesterday, two Democratic New York State Senators jumped ship to caucus with the Republicans, potentially shifting the majority from the Democrats to the Republicans. This has huge implications in the world of open government and online transparency as whomever is elected Senate Majority Leader in New York controls the entire budget. Were control of the budget to switch, it is likely that the entire new media team that created this pioneering new web site for the New York Senate would be removed. The future of Empire State transparency may very well be at stake here.

Now, just for clarification, prior to the Democrats’ winning the state Senate in 2008, the body was governed in — and I don’t mean this gently — a totally corrupt manner. Under Senate Majority Leader Joe Bruno, now facing multiple indictments, the Senate operated as a favor factory with official operations as hard to find as acting in the Star Wars prequels. Bruno ran a secret television studio, a secret printing office, and a secret traveling office in a GMC van. Now, the same guys who supported Bruno are poised to potentially come back into power and possibly undo a lot good work done to make the notoriously opaque state Senate more transparent.

Of course, the newly formed Republican caucus is claiming to be in favor of real reform. That is, at least, what Sen. Pedro Espada, one of the switching Democrats, has said. Espada, who has declared himself the temporary President of the Senate, is no shining light of reform and thus I’m taking his pronunciations with a Dead Sea sized helping salt. Espada is notorious for his refusal to file his campaign finance disclosures and has now been outed as earmarking $2 million to nonprofits that are run by close associates and possibly himself. One of those nonprofits was organized one week prior to his appropriation of the earmark. Sounds fishy? Read the whole New York Times story on it.

The other Democrat who flipped doesn’t necessarily have any corruption strikes against him, however he is facing charges for, literally, slicing his girlfriend’s face up with a broken glass.

The Democrats are currently claiming that the party switch is illegal are challenging the change in leadership. We’ll have to wait and see what comes out of Albany and whether the transparency efforts will wind up being lost in this fracas. Considering the character of these two party switchers it doesn’t look good.

It comes as no surprise that Indiana Democrat Pete Visclosky’s favorite word to say in Congress is “Indiana.” While staying out of the spotlight in Washington, he has been a champion for his Northwestern Indiana congressional district, bringing home millions of federal dollars to create jobs and win fans. Since the decline in manufacturing, new jobs have become essential for this Rult Belt region and Visclosky, from his position on the House Appropriations Committee, has sought to get as big a piece of the federal pie as he can for his constituents.

This hard work bringing home federal dollars has made Visclosky a national news name as his connection to a lobbying firm, the PMA Group, which represented many of the recipients of federal money earmarked by the congressman, has brought him under investigation by the FBI. In the past two weeks, Visclosky’s offices and campaign committess have been subpoenaed and he has reliquished control of the Energy & Water Appropriations Subcommittee to Rep. Ed Pastor.

All of this is due to the connection between campaign contributions flowing from the PMA Group and their clients to Visclosky’s campaigns and the millions of dollars in earmarks to PMA Group clients that Visclosky secured in his post on the powerful House Appropriations Committee.
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Every week I climb into the depths of the local political blogosphere to find the Sunlight. I use this series to highlight local blogs that do a great job of covering local, state, and congressional political news.  This week I have highlights from Illinois, Minnesota, Montana, and Nevada.

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According to The Hill, only one political action committee (PAC) reported bundling campaign contributions for a political candidate during the first filing period for disclosed bundlers. The PAC of Gilead Sciences, a health care company, disclosed raising $17,500 for Rep. Henry Waxman’s PAC, LA PAC. It should come as no surprise that disclosure is virtually nil since the Federal Election Commission (FEC) eviscerated the bundling disclosure law when it implemented its regulations for disclosure.

In 2007, Congress passed a large ethics and lobbying reform package, the Honest Leadership and Open Government Act, containing disclosure requirements for lobbyists bundling campaign contributions for candidates. The law for bundling disclosure was not implemented immediately as the FEC, then dormant due to controversy surrounding appointments, was required to set out regulations for the filing of disclosure reports. When the FEC finally issued their regulations, they took knocked the wind out of the law.

The two major rules that they issued were:

1. Candidates would have to show that, either, the lobbyist bundling contributions received a “benefit” — i.e. a honorary award, an autograph from the candidate — or the candidate must maintain a tracking system that gives credit to lobbyists bundling contributions for their campaign or PAC.
2. Lobbyists who are co-hosting a fundraiser for a candidate can divide the amount raised between them, thus circumventing the $16,000 disclosure threshold. This division of raised contributions goes so far to allow co-hosting non-lobbyists to be alotted a portion of the total raised amount.

Both of these rules allow bundlers to easily evade disclosure requirments. The second of those rules was denounced by then-Sen. Barack Obama, an early supporter of bundling disclosure, before the FEC enacted it, when he said on the floor of the Senate, “In a situation where a fundraising event is co-hosted by a number of different lobbyists, I am concerned that some might want to avoid reporting bundled contributions by dividing up the total receipts of a fundraising event among many sponsors or co-hosts of the event. Certainly, that was not our intention.”

That was not their intention, but that is what the FEC enacted. And now we have one disclosure, despite bundling being a common form of fundraising in Washington.

It’s a tough day for the credit card industry. In spite of all the lobbying spending ($9,170,573 in 2009) and all those campaign contributions ($7,367,066 in 2008), they couldn’t prevent a landslide loss in Washington. Today, the Senate approved a bill to place regulations on the credit card industry for the first time in decades by a vote of 90-5. The House approved the bill last week by a lopsided 357-70 margin.

There are very few measures in influence when looking at such a lopsided victory, particularly on what would once have been an uphill battle against the credit lobby. All three lawmakers representing Delaware, that little slice of bank heaven, voted for final passage of the bill. The only ones staying true to their contributors and constituents were the three South Dakotans in Congress.

South Dakota is a special case. What peaches are to Georgia, credit cards are to South Dakota. (Watch this PBS Frontline report for the full history.) Rep. Stephanie Herseth Sandlin and Sen. Tim Johnson, both of South Dakota, were the only two Democrats to oppose the bill. Johnson received $349,800 from finance and credit companies over the course of his career, with nearly half of that ($154,350) coming from 2007-2008. Herseth Sandlin has not received a significant amount of money from the credit card companies. I’m sure she received enough phone calls from credit card employees in her state to convince her though.

Despite the epic loss for the industry, the credit cards did have a few important victories. According to CBS News, “the American Financial Services Association urged all U.S. senators to oppose all rate caps and so far they have been successful.” So, there’s that.

All in all, a tough day for a big time lobbying player. As a holder credit card debt myself, I can assure that Americans don’t share their grief. When credit card lobbyist Bill Himpler says, “To our critics? You know, I’m not going to say anything,” it’s because he knows better than to say anything at all.

BusinessWeek, in a good piece on the falling fortunes of car dealerships asks the following question, “Why has Congress not shown much interest so far in the plight of dealers, despite the fact that many dealers are big political donors?” The dealers may be big political donors, but they’re failure to secure a bailout may stem from their contributions going to the wrong party.

Car Dealership Contributions to Congressional Candidates, by Party (2007-2008)
Dems:	$1,933,501
Repubs:	$4,866,533
Others:	$2,248

In the 2008 election cycle, car dealerships made 71.5% of their congressional campaign contributions to Republican candidates. The average contribution to a Republican candidate was nearly twice as high ($11,973 vs. $6,658) as the average contribution for a Democratic candidate. Excluding lawmakers running for the presidency (Barack Obama, Hillary Clinton, John McCain, and Joe Biden), the top eleven recipients were Republicans. Only two Democrats, Reps. Ron Klein and Charles Rangel, received enough contributions to knock them into the top 20.

In a Congress dominated by the Democratic Party, getting your voice heard when you’ve consistently contributed to the minority party may prove difficult. This may prove particularly troubling when your industry is in the dire straights that the American car dealership industry is in at this moment. Chrysler just sent out letters to 789 of its dealerships ending their franchise. General Motors is expected to follow suit on Friday by revoking the franchises of 1,000 to 1,200 dealerships.

Car dealerships, led by the National Automobile Dealers Association (NADA), are sending over a hundred representative to Washington in a large lobbying campaign to push for federal relief for their businesses. So far this year, the industry has spent $1.14 million on lobbying expenses. That puts them on pace to match their record-setting lobbying year of 2008 ($4.48 million).

Still, all this lobbying may find the dealers coming up short. After all, they have to deal with the decades-long cultivation of a bad image. As BusinessWeek says, “As bad as GM’s image is with many carbuyers, the image of car dealers with just about everyone falls below lawyers and even journalists when it comes to public esteem.” What part of public entertainment has not parlayed the grifting car salesman into a source of derision or comedy? And what congressman wants to be known for supporting an industry with such a poor reputation?

Still even more problematic is the overreach of American dealerships. The market for American cars has shrunk dramatically, but the number of dealerships has not. BusinessWeek states that the market share for American cars has shrunk from 90% to 45%-50%. No amount of lobbying or campaign contributions will save your business when you are over-extended to the point American car dealerships currently are.

On the same day that President Obama met with a number of health care organizations, a group of 45 conservative Democrats sent an angry letter to three House committees protesting the secrecy around the production of health care legislation in the House. The New York Times reports that this large group of Blue Dog Democrats is “‘increasingly troubled’ by their exclusion from the bill-writing process.” The Blue Dogs largely represent more conservative-leaning districts and take positions that are often favorable to industry. They are also big fundraisers, with their coalition PAC raking in large amounts from corporate PACs.

The Blue Dog PAC pulled in $2.26 million in PAC contributions during the 2008 election cycle. Approximately eighteen percent of that amount — $410,300 — came from PACs connected to the health sector. During the 2008 cycle, individuals members of the Blue Dog Coalition raised a combined $6.24 million from the health sector. The average contribution to a Blue Dog Democrat in the 2008 election cycle was slightly higher — $122,370 — than the average contribution to a Democratic lawmaker — $116,748.

Rep. Mike Ross, who is noted in the Times article as leading the Blue Dog Health Care Task Force, received nearly twice the average for a Blue Dog Dem — $259,625 — from the health sector, the most from any sector. Some other top Blue Dogs, many of whom are on the Health Care Task Force, are also leading recipients of contributions from the health sector. Reps. Bart Gordon ($395,178), Earl Pomeroy ($392,699), Jim Matheson ($350,994), Jason Altmire ($336,729), John Tanner ($264,299), Ross ($259,625), Mike Thompson ($254,625), and Patrick Murphy ($239,371) all rank in top 50 recipients of health sector campaign contributions.

When examing health sector campaign contributions over the careers of the 51 members of the Blue Dogs, the numbers jump up dramatically. For their collective careers (some spanning decades, others only one or two election cycles), the Blue Dogs have raised a total of $17.6 million from the health sector. Two members — Gordon and Pomeroy — have received over $1 million in contributions. Three more — Jim Cooper, Matheson and Tanner — are close to reaching that mark.

A spokesman for House Energy & Commerce chair Henry Waxman, one of the recipients of the letter, stated that he has already met with members of the Blue Dogs and did not understand what the commotion was about. They obviously want a seat at the table. But are they bringing their campaign funding friends with them?
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Apparently, PACs and the FEC are playing a serious game of Calvinball over disclosure rules. Bill Allison at Real Time Investigations looks at the ways PACs get around disclosure requirements by, well, making up the rules as they go along. This is how I imagine the disclosure Calvinball dialogue as it is played:

“I’m in the no-disclosure zone,” PAC.

“The no-disclosure zone only works in odd years and when you sing the ‘I hate transparency’ song,” FEC.

“Pppfffttt!!!,” PAC.

As a commenter noted in a post yesterday, Sen. Amy Klobuchar is the 37th senator to cosponsor S. 482, the Senate e-filing bill. We’re glad that Minnesota’s one senator has signed on to support transparency for Senate campaign finance filings. If your senator hasn’t cosponsored yet, go to the Pass 482 site and urge them to do so.

David Waldman (aka Kagro X) posted a very good piece on Congress Matters regarding congressional transparency and the bureaucratic arguments by institutionalists that often prevent positive action. Waldman’s piece focuses on the priority of technology-enabled transparency in voting records and how the members of Congress may simply say, “Gather the info and do it yourself. We don’t want to spend the money to do it.” He also touches on one area that we focus on a lot here, the lack of electronic filing for Senate campaign finance forms. Waldman draws an analogy between the institutional arguments for not releasing voting records with Senate obstinacy on electronic filing of campaign forms:

A similar issue arises, it turns out, with the drive to get the Senate to file its campaign finance forms electronically, too. I haven’t had any particular need to comb through that information (though it wouldn’t be hard to imagine needing it), but in my discussions with people in the transparency biz, that’s clearly been a big sticking point. Again, though, I could see the institutionalists saying, “You want campaign finance forms? Go ask the [FEC]. We’re the Senate. We’re what happens after all that stuff.” That’s a gross oversimplification, of course, since everyone knows that the general public at least considers it important to know where incumbent Senators have raised and are raising their money from.

If the Senate wants to make an institutional argument about whether it is on them to properly file their campaign finance forms or whether this is an FEC issue, that is perfectly fine. That’s because the problem lies solely with the institution of the Senate and cannot be deferred as an issue with the FEC.

You see, senators do not file with the FEC directly. Instead, they file, on paper, with the Secretary of the Senate’s office, which then passes the documents onto the FEC (where they are copied and housed in a series of file cabinets). Thus, the Senate insists on making its bureaucratic inefficiency a problem for both the information provider and the information seeker. They can’t possibly say, “You want campaign finance forms? Go ask the [FEC]. We’re the Senate. We’re what happens after all that stuff,” because they have made themselves file with the Senate, not the FEC.

When Congress mandated electronic filing of campaign finance forms in 1999, the Senate exempted themselves by carving out a loophole that requires only those filing directly with the FEC to file electronically. Since senators file with the Secretary of the Senate, they became exempt, thus they can’t push this issue off to the FEC or any other information providing body.

If you think this is absurd and want transparency from the Senate, you can help us pass S. 482, a bill that would require senators to file directly with the FEC, thus ending the Senate exemption. Go to the Pass 482 site and tell your senator(s) to cosponsor the bill.