How Trump the populist became Trump the corporate shill – NY Daily News

Corporate America has captured the Trump administration. Public Citizen’s research has found that more than 70% of Trump’s picks for top sub-Cabinet jobs have clear corporate ties.In Trump’s Washington, the populism of the campaign has been overtaken by conventional corporate cronyism on a grand scale. After his famous pledge to “drain the swamp,” Trump issued a weak executive order allowing former lobbyists to immediately join the administration and then granted waivers to top White House staffers that render the ethics rules largely meaningless.

Source: How Trump the populist became Trump the corporate shill – NY Daily News

High-powered CEOs at U.S.-India Business Council vote to split from U.S. Chamber – The Washington Post

The Washington Post reports that the Chamber of Commerce, Washington’s most powerful pro-corporate lobby, is having its own governance problems as some of its members are uncomfortable with the positions the Chamber is taking and one group is trying to break off.

The board of the U.S.-India Business Council — whose membership includes the chief executives of Pepsi and MasterCard — has voted unanimously to break off from the U.S. Chamber of Commerce, saying that “recent actions taken by the Chamber have left us with no alternative but to take this vote to formally separate.”The vote by 29 USIBC board members was the culmination of a running battle with U.S. Chamber of Commerce President Thomas J. Donohue that dates back to 2010 and which came to a boil during the recent visit to Washington by Indian Prime Minister Narendra Modi…

The fight between the USIBC, which has about 350 members, and the Chamber was largely about turf and independence. A member of the USIBC board said that Donohue was unhappy that the USIBC invited Vice President Pence to a meeting because Donohue wanted to invite Pence to a different event.

A person close to the USIBC board said that Donohue also wanted to oust certain members of the USIBC board and install others, moves that would be unprecedented in the history of the council.

Donahue is arguing that the USIBC cannot be split off from the Chamber.

Steven Mufson asks if this is a sign that the Chamber’s influence is slipping. The very size and power of the Chamber has led to schisms over policies on issues like health care and climate change.

Companies like GE, which long relied on the Chamber to be their guide and advocate in Washington, are now as politically sophisticated and connected as the Chamber — if not more so. And in an era that allows virtually unlimited independent political spending, they can form their own more focused, and perhaps more effective, associations. Many lobbyists who represent companies individually think the Chamber has taken on the lumbering character of its aging building, a 92-year-old limestone edifice lined with Corinthian columns overlooking the White House.

Source: High-powered CEOs at U.S.-India Business Council vote to split from U.S. Chamber – The Washington Post

Time to have corporate America be honest about political spending | TheHill

In a political environment teeming with corporate giveaways, politicians’ reliance on huge donors to get and remain in power and a president steeped in potential conflicts of interest, it is more important than ever that the U.S. Securities and Exchange Commission (SEC) issue a rule requiring all public companies to disclose their political spending.

Unfortunately, Republicans in Congress are using the federal budget process to stop this from happening. Funding for the government runs out at the end of September, and — even by the tumultuous standard of recent years — the budget process in Congress is in disarray. The process for fiscal year 2018 is already off to a late start, and, making matters worse, Republicans in on the House side are now trying to sneak policy riders that would not otherwise pass into the must-pass budget bills.

This week, the House Appropriations subcommittee on financial services and general government released its budget draft, which includes a harmful policy rider that stops the SEC from working on or finalizing a rule that would require corporations to tell us how they spend money in politics.

Source: Time to have corporate America be honest about political spending | TheHill

“Free Market” Shareholder Proposal on Lobbying Disclosure at Caterpillar

A shareholder proposal on disclosing of lobbying priorities from the right-wing National Center for Public Policy Research’s Free Enterprise Project:

At this week’s Caterpillar annual shareholder meeting, the National Center for Public Policy Research’s Free Enterprise Project (FEP) is asking company investors to support FEP’s shareholder resolution asking the heavy equipment manufacturer to report on how and why it chooses its lobbying priorities.

“After eight years of President Obama’s regulatory overreach, high corporate taxation and executive actions that hampered growth and led to America’s worst economic recovery since the 1930s, we finally have a president willing to work with business leaders on a pro-growth agenda. President Trump is showing an eagerness to increase American manufacturing and bring jobs back to America,” said National Center General Counsel and FEP Director Justin Danhof, Esq. “Our shareholder proposal urges Caterpillar to capitalize on the current political climate to advance the company’s goals and improving shareholder value.”

The labor group CtW also submitted a shareholder proposal at the Caterpillar annual meeting. Theirs was to implement a stronger clawback policy. It received 121,854,679 votes in favor and 292,939,985 votes against. There were votes more than 25 million cast against three of the directors as well.

IRRC Webinar on Corporate Political Spending at the State Level

On March 22, 2017 IRRC is hosting a webinar on its new report with shocking new information on the undisclosed corporate political expenditures at the state level:

Join us to review the latest research from the IRRC Institute, “How Leading U.S. Corporations Govern and Spend on State Lobbying”, conducted by the Sustainable Investments Institute.

Download the research.

This research reveals virtually no disclosure of corporate expenditures related to political lobbying activities at the state level. Even at the federal level, only 25 percent of companies have board-level policies on lobbying and only 12 percent disclose actual spending.

A summary of the findings:

Corporate Policies

 Just one-quarter of the S&P 500 have board-level policies regarding lobbying. However, this is an increase from only 16 percent in 2013. (Chart, p. 9, shows corporate governance trends.)

 By contrast, company oversight and disclosure of election spending is commonplace among the largest American companies, with 90 percent of the S&P 500 having a policy that addresses election contributions and half of the index companies specifically requiring board oversight. Further, 75 percent of the S&P 500 explains which corporate officials oversee election spending.

 The contrast between the level of disclosure about election spending and lobbying is stark. Only 12 percent of S&P 500 companies report how much they spend on lobbying; most only report on spending at the federal level. Voluntary disclosure about state lobbying on company websites is nearly non-existent: Just two companies report appear to report on all their state
expenditures, while 5 percent identify the states where lobbying occurs but not the amounts spent, and 2 percent report on aggregate state spending.

 Companies are revealing more about how much they spend in elections and lobbying but remain reticent about disclosing how much they give to intermediary groups that use corporate money to pursue political objectives—trade associations, non-profit “social welfare” organizations or charities that have clear partisan goals. These intermediaries pursue their goals
at all levels of government through election spending and lobbying. Half of the S&P 500 have some sort of policy on these groups, up from only 14 percent in 2010; and 31 percent of companies make public at least some of their payments to these groups, a three-fold increase from just 9 percent in 2010. Yet most policies are about money in elections, not lobbying.

Source: Register here

The Problem With Roger Lowenstein

Fund manager Roger Lowenstein demonstrates a breathtaking ignorance of government checks and balances in an op-ed for the New York Times, suggesting that Senator Elizabeth Warren does not have the right to ask President Obama to remove Mary Jo White as Chair of the SEC.

He sneers:

Last time I checked, the S.E.C. was a regulatory agency of the executive branch, in which Ms. Warren is not, in fact, employed.

Senator Warren is, on the other hand, a member of the United States Senate, which approves (or not, as Judge Merrick Garland can attest) Presidential appointees like Chair White. The terms “advise” and “consent” make clear the duty of the Senate to oversee Presidential appointees. The Senate is also responsible for the enabling legislation and budget for the Commission, and therefore it is entirely within its jurisdiction and indeed its obligation to review and comment on its activities. And a note: she did not call for Chair White to be “fired,” as Lowenstein claims. Commissioners cannot be fired. But the Chair designation is within the authority of the President to reassign and it is entirely within the authority of a Senator (or anyone else, for that matter) to suggest that he do so. (Does anyone remember Lowenstein objecting to the House considering impeachment of the Commissioner of the IRS? For some reason, that did not offend his sense of propriety.)

In fact, it is a provision imposed by Congress in the Commission’s budget that prevents it from issuing rules that would require companies to disclose their direct and indirect campaign contributions and lobbying expenditures.

Lowenstein writes:

Actually, dredging up the details of political spending has nothing to do with protecting investors, though it might fall into the category of “things corporations do that some people do not like.”

Actually, it falls into the category of “things the Supreme Court explicitly predicated the Citizens United decision on.”

In the majority decision, Justice Kennedy Anthony M. Kennedy said that corporate political spending depends on the ability of shareholders to ensure that the speech reflects their views rather than diverting corporate assets for the benefit of executives. He suggested that any abuse could be corrected by shareholders “through the procedures of corporate democracy.” He said this would happen because all political spending will be thoroughly disclosed online: “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.”

Justice Kennedy correctly notes that the expenditure of corporate assets for political purposes can only be legitimated by transparency and a robust market response.

Senator Warren’s comments on Chair White were accurate, appropriate, and civil. Lowenstein’s criticism of Senator Warren was not.

Source: The Problem With Elizabeth Warren – The New York Times

John Bogle Wants Companies to Stop Hiding Their Political Contributions | Huffington Post

VEA Vice Chair Nell Minow writes in the Huffington Post:

Citizens United invalidated limits on corporate political spending. It is one of the most controversial Supreme Court decisions of this generation and its impact on our political system has been enormous, if incalculable. And yet, one of the key findings in Justice Kennedy’s majority decision, one of the key bases for the ruling, is factually wrong.

Justice Kennedy wrote that if shareholders oppose political expenditures made by management, they will be able to correct the situation “through the procedures of corporate democracy.” He said this would happen because all political spending will be thoroughly disclosed online: “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.”

The problem is that the Supreme Court did not make corporate political contributions contingent on disclosure. That leaves us with the worst of both worlds. Executives can use unlimited corporate money to elect and influence politicians and shareholders have no ability to discover how and how much. Even if they did, the conflicts of interest and lack of disclosure within the financial services industry impose so many layers between investors and their money and so many restrictions on investor oversight that shareholder oversight is all but vestigial.

No one has thought more deeply and meaningfully about this problem than the man who created the modern mutual fund system, Vanguard founder John Bogle. He supports “proxy access,” giving investors the right to propose alternate candidates for the board of directors. He supports transparency, disclosure of the process, amount, and recipients of corporate political contributions.

And Bogle supports a proposal for an SEC rule that would require companies to disclose their spending in politics. That proposal has received a staggering and unprecedented number of comments in support from more than 1.2 million Americans. But it is stalled now because Congress cut off funding to move it forward — apparently due to exactly the kind of undisclosed corporate political contributions the rule would make public.

Bogle wrote in the New York Times:

For all its faults, the Citizens United ruling upheld the disclosure requirements of the campaign financing law, and I had hoped full disclosure might limit corporate contributions. But in fact, corporations are able to exploit provisions in the law governing nonprofit groups to make lavish political contributions without disclosure, making it easier than ever for cash to subvert our political system. Action to limit contributions at the corporate level is therefore urgent.

Indeed, the Supreme Court itself put the onus on shareholders to control corporate political giving. In his opinion for the majority in Citizens United, Justice Anthony M. Kennedy predicated the First Amendment right of free speech on the ability of shareholders to ensure that the speech reflects their views rather than diverting corporate assets for the benefit of executives. He suggested that any abuse could be corrected by shareholders “through the procedures of corporate democracy.”

Bogle calls on institutional shareholders to insist on better disclosure. “America’s institutional investors must stand up to the Supreme Court’s misguided decision and bring democracy to corporate governance, recognize conflicts that arise from the interlocking interests of our corporate and financial systems, and take that first step along the road to reducing the dominant role that big money plays in our political system.”Bogle spoke with members of the Corporate Reform Coalition this month, reiterating his belief that shareholders, as owners, are entitled to the information about how corporate money is used to influence elections and politicians.

Source: John Bogle Wants Companies to Stop Hiding Their Political Contributions | Huffington Post

Ciara Torres-Spelliscy on Citizens United and Corporate Political Contributions

corporate-citizenThe Supreme Court’s Citizen United decision, giving corporations the right to unlimited political contributions usually kept secret from voters and shareholders, was just the most recent in a series of rulings giving corporations “personhood” rights. In her new book, Corporate Citizen?: An Argument for the Separation of Corporation and State, Stetson law professor Ciara Torres-Spelliscy documents corporate efforts to dramatically enlarge their political and commercial speech and religious “rights” through lawsuits, campaign contributions, and lobbying. They also use these “rights” to limit their liability for the damage they do to investors, employees, customers, and the community. In an interview with VEA vice-chair Nell Minow, Torres-Spelliscy discussed the impact corporate money has on preventing progress on issues like climate change and what options there are for reducing the distortion effect of corporate money from government.

How did you first get interested in this issue?

I first ran into the issue of money in politics as a senior at Harvard in a class called “Democracy” which was taught at the Harvard Law School. I had to read Who Will Tell The People by William Greider and that introduced me to the issue of corporate lobbying and campaign finance.

Can you give some examples of corporate money distorting the legislative process in (1) Obamacare, (2) climate change, and/or (2) post-Enron era/post-financial meltdown reforms?

As I discuss in Corporate Citizen?, corporate money can distort the legislative process by curtailing what is on the agenda of Members of Congress and by narrowing what lawmakers think is even possible. So for example, when the U.S. was revising its health care system, instead of going with a public option where the government provides health care for all, which is basically the approach of most western democracies, instead what American got with Obamacare was essentially a mandate for people of a certain income level to purchase private health insurance from private companies. This served the interests of private companies, but not necessarily the public. But because of years of lobbying–including derailing the efforts of President Bill Clinton to reform health care in the 1990s–the public option wasn’t really even seriously considered as a starting point for the Obama Administration.

One of the most troubling conclusions I came to when writing Corporate Citizen? was that the American Congress seems utterly incapable of dealing with climate change. This is a potentially deadly mistake that even the U.S. military recognizes as an existential threat. When I asked environmentalists why Congressional inaction on climate was the case, I got very similar answers from scientist Gretchen Goldman, environmental lawyer Deborah Goldberg and the former head of Greenpeace, Phil Radford. They all described how industries–especially the oil and gas industries–were particularly effective at lobbying to get Congress and regulators to do as little as possible to protect the environment. A common theme each mentioned was the attempt by businesses to manufacture doubt about the underlying climate science by paying scientists to spout the industry position that climate change is not caused by man, even though the scientific consensus is that climate change is caused by human activity. This is very similar to recent revelations that the sugar industry paid scientists to cast doubt on the link between sugar and heart disease. The impact is similar, the public is confused about what the truth is, and meanwhile elected officials are provided cover for failing to act. I find this lack of urgency on the issue of climate change personally troubling as I live in Florida, close to the coast. If nothing is done about climate change federally, my community and my home could be literally under water.

Even after corporate interests like the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers lose a legislative fight like with the passage of Dodd-Frank, they don’t give up waging the war. After Dodd-Frank became law, these trade associations were active challenging many regulations that were promulgated under Dodd-Frank through litigation. For example, these trade associations were successful in stopping Dodd-Frank’s proxy access rule, the conflict mineral rule and a rule on reporting payments to foreign governments by extractive industries. Frequently, the arguments raised in these cases tried to expand corporate First Amendment rights by making elaborate claims about how a given regulation was unconstitutional.

After the Citizens United decision, what are the options at the state or federal level to limit the amount or increase transparency in corporate political contributions and lobbying expenses?

As I explicate in Corporate Citizen?, because Citizens United was decided on Constitutional First Amendment grounds, it severely curtails the options for state and federal regulators to limit corporate money in politics–especially if the money is spent independently of candidates. But there is some room for Congress and the states to maneuver. For one, because of a case called Beaumont from 2003, states can still ban corporate contributions that are given directly to candidates’ political campaigns. And the federal government and states can vastly improve their disclosure of the sources of money in politics–ending the dark money problem. The Supreme Court in Citizens United ruled in favor of disclosure by a margin of 8 to 1. This frees federal agencies like the Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), the Federal Communications Commission (FCC) and the Federal Election Commission (FEC) to all improve transparency of political spending.

Do other countries limit corporate political contributions?

According to Transparency International, Belgium, Estonia, France, Hungary, Latvia, Lithuania, Poland and Portugal all ban corporate political contributions, as does the United States at the federal level under the Tillman Act of 1907. The catch is in over half of the 50 states in America, corporations can give money directly to state candidates. And furthermore, as I noted in Corporate Citizen? because of Citizens United, corporations are free to spend an unlimited amount of money on political ads (making the underlying federal contribution ban nearly meaningless).

What is “dark money?” How do litigation and bankruptcy proceedings give us insight into the size and use of “dark money?”

So-called “dark money” is money that is spent in politics–typically to buy political ads–without revealing to the public who paid for the political expenditure. Dark money can be revealed through bankruptcies if the debtor was a source of dark money. Clever investigative reporters have discovered that when they pull the matrix of creditors in certain bankruptcies like that of Corinthian Colleges and coal company Alpha Natural Resources, they find dark money conduits are listed. This means that these corporations were spending dark money before they went bankrupt. Also on occasion, courts will order a dark money spender who is violating a disclosure law to actually tell the public where their money came from. This happened in Montana with a group called Western Tradition Partnership (which later changed its name to American Tradition Partnership). As I explain in Corporate Citizen? this group had bragged to donors that only they would know who had influenced the election. This promise of anonymity was one Western Tradition Partnership couldn’t legally keep.

What citizenship rights have not been granted to corporations?

Corporations cannot run for office, though one corporation tried in Maryland a few years back and was rebuffed. Corporations also cannot vote in a US election. And they still cannot give directly to federal candidates under a case called Beaumont.  But in terms of their First Amendment rights, corporations have gained very robust political speech rights starting with Bellotti in the 1970s and continuing to the present day with Citizens United. Depending on who replaces Justice Scalia on the Supreme Court, corporations could continue on a trajectory of gaining more expansive First Amendment rights.

How does the US tradition of state control of corporate governance make it more difficult to address corporate involvement in politics?

Corporations are creatures of state law, which means that states compete to attract corporate charters and the revenues that go with them.  This places states in a race to the bottom in terms of corporate governance rules.  Generally each state wants to be as permissive as they can be towards corporate managers so that the managers will locate a given corporation in their state. So states may be reluctant to be a first actor to institute stronger shareholder protections to allow investors to have more transparency of corporate political spending or shareholder votes on corporate political spending. Though interestingly there is some movement after Citizens United. In Maryland, corporations that spend in state elections, must inform investors of this fact, and in Iowa, boards of directors must vote to approve corporate political spending.

What does the Hobby Lobby case mean for the idea of corporate citizenship? Would it have been decided differently if it was a public company with outside shareholders?

Hobby Lobby grants religious rights to for profit business corporations for the first time. Before this only churches and other religious nonprofit organizations enjoyed such rights.  By its terms, Hobby Lobby appears to be limited to closely held corporations.  Much will depend on how the Supreme Court changes after the death of Justice Scalia.  Hobby Lobby (like Citizens United) was decided 5-4 with Justice Scalia in the majority.  If a more progressive Justice is appointed to his seat, then over time some of these 5-4 decisions which empowered corporations could be eventually overturned by a newly reconstituted Supreme Court.  On the other hand, if the new Justice believes similar things as Justice Scalia, then a new Supreme Court could continue to expand corporate First Amendment rights.  A new frontier would be expanding Hobby Lobby to apply to publicly traded corporations.  That has not happened yet. But it could especially as firms continue to litigate over issues like their ability to discriminate against transgendered or gay individuals.

Is there a case to be made that corporate personhood rests on an obligation to be accountable to shareholders through disclosure and the ability to remove directors?

One of the things that is peculiar about Citizens United and Hobby Lobby is that the Supreme Court in both cases seems to ignore the corporate form when it ruled.  A corporation is a distinct legal entity from its board, officers, shareholders, or employees.  But the excuse that the Supreme Court used to give corporations more rights is that corporations are just a group of human beings.  What’s odd about this from a corporate law and election law point of view is the underlying human beings already had religious rights and political speech rights.  Why the Court has to give extra rights to the corporate entity on their behalf is not clearly articulated by the Justices.  Respect for the corporate form would require more robust protections for investors to ensure that managers only make political or religious positions that are consistent with the wishes of the owners of the company.

What is the best hope for solving this problem?

The antidote to expanding corporate political power is placing more power in the hands of American voters. While certain regressive states have made it harder for voters to exercise the franchise though restrictive voter ID laws or cutbacks in early voting, there is some forward motion to empower voters as well. As I wrote inCorporate Citizen?, California and Oregon have adopted automatic voter registration. And since the book was written, Connecticut, Vermont, and West Virginia have passed similar laws empowering American voters. More states should follow suit– placing voters back at the center of the democratic process.


A shorter version of this interview appears on Huffington Post.

Bill to Scrap Dodd-Frank Advances Amid Wells Fargo Backlash – Bloomberg

U.S. House Republicans advanced legislation to undo Congress’s response to the 2008 financial crisis after Democrats forced quick action on the measure that they decried as toxic.Financial Services Committee Chairman Jeb Hensarling’s bill, which he said will spur economic growth and end bank bailouts, will move to the House floor after a 30-26 vote in an acrimonious committee markup on Tuesday. The Financial Choice Act is the Texas Republican’s plan for replacing the six-year-old Dodd-Frank Act.

“This bill is so bad that it simply cannot be fixed,” Representative Maxine Waters, the panel’s ranking Democrat, said in a statement before the vote. “It’s clear that this is a rushed, partisan messaging tool, though why anyone would want to push legislation to deregulate Wall Street at a time like this is beyond me.”Even with committee approval, the legislation isn’t expected to get a vote on the House floor. Many Republicans aren’t anxious to take a position that can be portrayed as giving support to the financial industry, especially in the weeks leading up to an election. 

Scrapping Dodd-Frank may be even less popular after Wells Fargo & Co. set off a renewed backlash against banks in Washington when it agreed last week to pay $185 million in fines for allegedly opening deposit and credit-card accounts without customers’ approval.

Source: Bill to Scrap Dodd-Frank Advances Amid Wells Fargo Backlash – Bloomberg

Vigilant companies can avert Watergate scandal replay | TheHill

Karl Sandstrom and Bruce Freed write in The Hill about liability and reputational risk from corporate dark money political contributions.

  • NextEra, a Florida-based utility giant, has faced sharp questions about its $1 million contribution to Jeb Bush’s presidential Super PAC. The ex-governor had earlier given public support to a rate hike sought by the company, according to media reports.
  • Paul H. Jossey, a campaign finance lawyer involved with creating and operating Super PACs, warned in a recent first-person essay about their misuse. Certain PACs dunned Tea Party “true believers” and “used that money first to enrich themselves and their vendors and then deployed most of the rest to search for more ‘prospects,” Jossey wrote.
  • At least 45 well-known corporations with strong internal anti-discrimination policies gave to the Republican State Leadership Committee, a national group instrumental in flipping control of the North Carolina legislature, it was reported in April; in turn, North Carolina legislators this year enacted legislation barring municipalities from adopting rules to prevent bias against LGBT people.
  • Arizona Public Service, the state’s leading public utility, is under FBI investigation for alleged “dark money” political contributions to independent political groups in order to influence state regulators on a rate increase sought by the company. The investigation is getting saturation media coverage in Arizona.We don’t advocate stifling legitimate political giving by public corporations, yet we believe that when shareholders and the public are left in the dark about this spending, they and companies face a serious risk.

Because company spending through third-party political groups is becoming an increasingly serious problem, it is imperative that companies know how their political money is being spent: Who’s receiving it, the purpose of the contribution and the motivation behind it.

Source: Vigilant companies can avert Watergate scandal replay | TheHill