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The Corporate States of America

money in politicsAmericans have long had a sneaking suspicion that there was a “hidden hand” directing our government in Washington and the states, and they were right. The “hidden hand” was actually the corporations, unions, and other special interests that contribute literally $billions to our politicians in order to influence legislation that will favor them. This has happened even with the limits that have been placed on these groups that prevented them from directly contributing to campaigns.

Thursday January 21 2010, will go down in history as a dark day. This is the day that a divided Supreme Court, in a case of unbelievable overreach removed all limits on corporate political campaign spending. If you thought our politicians were corrupt and beholden to corporations before, things are about to get a LOT WORSE now that all limits have been removed. Justices Roberts, Alito, Scalia, Thomas and Kennedy swept aside decades of legislative restrictions on the money from corporations in political campaigns and ruled that companies can use corporate funds to support or oppose candidates. These 5 justices have just opened the floodgates and the strangle hold the banks have over the nation’s wealth will now be amplified by this Supreme Court ruling that has totally removed all limits on campaign financing by corporations. This black day will go ultimately go down in history where the Supreme Court officially validated the takeover of the government by the corporations. The amounts of money spent on the 2010 midterm elections was a record, and the amounts that will be spent on the 2012 presidential elections are projected to total $BILLIONS!

money = freedom

In its impartial majesty the Supreme Court rules that the poor as well as the rich can spend unlimited money to influence elections


The flawed logic they used was that this was a freedom of speech issue. These 5 justices have just declared corporations now have 1st amendment rights, the same as individuals. It is ironic that it is the conservative wing of the court, the same wing that consistently calls for “judicial restraint” and rails against anything not specifically mentioned in the constitution, was the one that overturned decades of precedent. Where in the constitution did our founding fathers give corporations the right to freedom of speech? Where were corporations even mentioned in the constitution?

We all know too well what happened when our nation deregulated the financial industry and told us that “the market” will regulate itself. These 5 men have now totally deregulated money in politics and have left it to the “market” to regulate itself. We have already seen what deregulation of the financial industry did to our economy. These deregulators said the market could regulate itself.It does not take much forward thinking to envision the consequences of this disastrous decision. The special interest groups were handed a late Christmas present and are already gearing up to flood the political campaigns with money from their profits. The corporations will move quickly to complete their stranglehold on the media and then leverage this to their advantage. Fred Werthheimer, president of Democracy 21, a nonprofit, nonpartisan organization dedicated to making democracy work for all Americans stated: "With a stroke of the pen, five justices wiped out a century of American history devoted to preventing corporate corruption of our democracy"

If the nation does somehow survive this handing of the government to the corporations, this decision will go down in history as even worse than the Dred Scott v. Sandford and Plessy v. Ferguson monumental errors of the past. The 5 justices that recklessly voted for removing all limits to corporate campaign spending: Roberts, Alito, Thomas, Scalia, Kennedy will rightly be held in the same regard as those who voted for these other two decisions.

In the 2008 election cycle, nearly $6 billion was spent on all federal campaigns, including more than $1 billion from corporate political action committees, trade associations, executives and lobbyists. This $6 billion figure does not include state and local races. Now consider how much money we will be talking about here, now that the labor unions and corporations can spend unlimited amounts in both Federal and State elections. We will now have wholesale buying of elections by corporations with their vast financial resources. The door has also been opened for foreign corporations to have a say in our elections now. You can now also expect these corporations to move quickly to attempt to finalize their control of the media and use the media along with their money to “inform” the citizenry of the issues. While the electorate was distracted by the staged left vs right, Democrat vs Republican, conservative vs liberal fights, we have actually just had a coup take place where the corporations have taken over the country. This ruling does not really favor any party because in the end it will not matter what party the candidate is from, they will have been bought. Have you noticed that the corporate media did not give this huge event much coverage?

Corruption of our electoral process
Monica Youn, who directs the campaign finance reform/money in politics project at New York University’s Brennan Center for Law and Justice, said that with this decision the Supreme Court has essentially armed the corporations with a potent weapon, these corporations may not even have to spend that much money. What could easily happen is that the corporations will now have the THREAT of a massive media campaign against politicans that may not do their bidding. This mere potential of a massive campaign of negative ads will probably be enough to make the majority of politicans reconsider their positions. This is like having a negotiation between 2 parties in a room where one of the parties has a weapon and the other does not. The party with the weapon does not need to actually need to wield it to get the desired results, just knowing that it is there is enough. So much for politicians doing the right thing. The corporations will now have even more clout in the legislatures than before and this is without even spending any additional money.

With the broad language that the Supreme Court opinion was written, it may well be almost impossible to draft new legislation to overcome this ruling. Of course, do you really believe that our politicians will even be willing to do pass effective reform legislation now that this new ruling is in place and it favors incumbents even more strongly than before? Our politicians are like drug addicts that are totally dependent on these large sums of special interest money to maintain themselves in power. They will do almost anything to maintain their power.

As if this Supreme Court decision was not bad enough, the nation suffers from a lack of transparency when it comes to trying to follow the money. Deliberate attempts are made to hide and obfuscate the information so that the electorate remains uninformed.

  • Did you know that the Senate deliberately exempted itself from filing campaign finance reports electronically? This slows down the process of determining who is actually making contributions and expenditures by making research a very arduous process of having to read thousands of pages by hand, or having to retype them into a form that can be indexed and readily searched.
  • Did you know that the government’s new “open government” site http://www.data.gov, doesn’t even contain data on campaign contributions, lobbyist filings, statistics on warrantless searches or even committee assignments?
  • Did you know that here is no indexing of the thousands of hours of House and Senate recordings? You would have to listen for days before you could find what you are searching for.
  • Years after the problems with electronic ballots not having a voter verifiable paper audit trail were made public, we still allow these machines to count votes without verifiable paper trails despite the fact that it has been proven that they are easily manipulated. Regardless of your political beliefs, it is crucial for our democracy that the integrity of election results be considered fair and impartial.

It may well be that we have now lost our democracy, but there may still be some hope. Since we can no longer place limits on corporate campaign funding, we need to do the following:

  1. We need to demand TOTAL TRANSPARENCY. We need legislation passed immediately before the next election cycle goes into full swing, where all campaign funding is placed on the Internet and this data must be completely indexed. It is vital that these databases be directly searchable by each and every sort of variable contained in the original documentation. This will make it easy to cross reference the information and find out exactly who is receiving what and from whom. By creating this standard the American people will be able to make informed decisions about the candidates running for office and whose interests these politicans are really representing.
  2. We need passage of the “Fair Election Now Act” immediately. This legislation has been cosponsored by 120 members in the House, however its companion bill in the Senate has a pitiful 5 cosponsors. It has also been supported by many business leaders who sent a letter to the House Speaker and to the Senate Majority Leader. They understand the need for this reform and are getting tired of politicians constantly calling them for money. This bill would create a voluntary system of public funding of campaigns by supplementing small donations of $100 or less. During an election cycle the voters would be able to determine if a candidate was going to serve the people by using the public system or serve the special interests by not participating in it. Check here to see if your congressional representative is a cosponsor. Check here to see if your Senator is a cosponsor. If they are not, call them and ask them why not.
  3. It is time to pass legislating that any corporate money used for political spending be approved by a majority of the shareholders. This will give the shareholders the ability to control corporate political expenditures. (While we are at it, let’s include language in the legislation about shareholder approval of all compensation and bonus payments as well.)

While passage of the above legislation would not stop all of the corruption of money in politics, it would go a long way to limiting its influence and making it apparent to the voters who is trying to influence their candidates. To make the passage of these legislative bills more likely, it is now incumbent on us to actively support organizations that have been fighting for campaign finance reform and government transparency. The time to mobilize is now, while the issue is hot. If we wait too long, the entrenched interests will put additional barriers in place making harder and harder to enact meaningful reforms. There are many organizations working for political finance reform and government transparency, some of these organizations would include:
Common Cause
Public Citizen
Democracy 21
Follow the Money
Open Secrets
Fair Elections Now

These organizations now need your efforts and financial support more than ever. Plato, an ancient Greek philosopher once said, “the price of apathy towards public affairs is to be ruled by evil men." If we do not lift ourselves up from our collective apathy, Plato’s words will most certainly become a reality.

Private Corporate Court System

There is a country where Big Business can completely bypass the court system and have cases brought by employees, customers, and individuals heard by a private court system that is overwhelmingly funded by the corporations themselves. In this country they can even totally prevent the bringing of any class action suits for any damage, fraud, or other illegal practice they may engaged in. These suits can only be brought individually and must be heard by this private court system. So what country is this in? Iran, North Korea, Afghanistan, Zimbabwe, Myanmar? No, this country is the United States!

Our “independent” Supreme Court has AGAIN sided with the huge corporations and just delivered the working people of the United States another body blow. In this new ruling, AT&T v. Concepcion, the Supreme Court has overturned lower federal Court decisions and given Big Business the ability to deprive you of your most potent weapon to fight back if you have been cheated or harmed by a corporation. In this ruling you will now no longer be able to use class action suits for redress against a corporation. This new ruling comes on top of the Citizens United v. FEC case where the Supreme Court declared that corporations have the same rights as individuals and were entitled to free speech where they were free to spend unlimited amounts of money to influence elections. In fairness to the impartiality of the Supreme Court, the poor as well as the rich both have the right to spend unlimited amounts of money for political purposes.

Consider this: If your phone company illegally charges you $10 on your bill and also does this to another million customers, the Supreme Court’s ruling allows companies to force consumers or employees into arbitration agreements that prevent them (you) from joining with the others to hold the company accountable. Big Business with its myopic focus on profits often cross the line into fraud, discrimination, and other illegal practices.

How many people have the money and time to take on the task if suing a corporation for $10 or even $1000? The only way this was possible was through the use of class action suits where the customers would join together and take on the wrongs of the corporations. This ruling will now make it nearly impossible to fight against Big Business’ malevolent behavior, and leaves consumers powerless to stop them if they do. This Supreme Court decision, basically allows the major corporations to ignore the law and because of the Citizens United case, to create corporate-made law for the rest of us as they use their economic might to hire the politicians to write laws that favor them.

The use of arbitration agreements on the surface sounds like a reasonable solution because no one wants to go through the turmoil of a lawsuit, and it does streamline any grievance process. However, in reality this amounts to a private corporate controlled court system. The largest arbitration firms are heavily biased in favor of Big Business and against consumers. Since an arbitration company must keep future possible cases in mind, it is in its interests to rule for Big Business and against consumers, and this fact is a blatant violation of any stated impartiality that they may profess.

The Citizens United v. FEC and the AT&T v. Concepcion cases, our Supreme Court has tilted the playing field heavily in favor of the corporations and against working people. The impliciations of such a radical tilt will certainly be felt as time goes by. Think of this, if AT&T decided to “make a mistake” of $10 on 1 million customers bills, it would make $10 million because of this mistake with probably only a small handful of people challenging it, and they would have to challenge it in the private corporate arbitration courts. What do you think are the odds that practices such as this will become common in the future as the nation marches closer and closer to a corporatocracy?

Are we solving the ROOT CAUSE of our economic problems?

Are we solving the ROOT CAUSE of our economic problems?

Picture yourself in the following scenario: you are visiting your doctor complaining of abdominal pains, the doctor gives you a prescription for a strong pain killer. Certainly the pain medicine will help you feel better, but does it really solve the problem that caused the pains in the first place? Could this be the result of appendicitis or some other serious condition? You would rightly question the doctor’s judgment. The doctor is treating the SYMPTOMS of the problem, not the ROOT CAUSE.

Yet collectively we are doing exactly the same thing on a national and even international level. Consider the following scenarios:

  • During the health care debate, we witnessed the spectacle of Mitch McConnell (Republican Senator from Kentucky), worrying about the effect that the emerging health care bill would have on health insurance companies. This was coming from a Senator who represents a state with the 5th highest level of poverty in the nation. Why is he so worried about the insurance companies? Would the majority of his constituents have called his office asking him to protect the insurance company profits?
  • AT&T warrantless surveillance

  • When it was discovered that telecommunications companies were illegally spying on citizens of the United States, Jay Rockefeller (Democratic Senator from West Virginia) voted to give these same companies “retroactive immunity” to protect them from the lawsuits that were working their way through the legal system. If no crime was committed, why did they need to receive retroactive immunity? If a crime was committed, why did they receive retroactive immunity? Would the majority of his constituents have called his office and asked him to authorize corporate spying on Americans with no judicial overview?

Of course, these are not the only elected representatives who did this and the examples just cited are only 2 of literally thousands of such efforts by members of both political parties on behalf of the well connected insiders. These efforts worked directly against the interests of the vast majority of their constituents. So, why would these seemingly intelligent people work so blatantly against the interests of the people who they are supposed to represent?

The answer is that all of these people received significant amounts of campaign money from the very corporations who would benefit from their efforts. It turns out that Senator Mitch McConnell received $932,207 from the insurance industry and $2,758,468 from medical professionals over his career. Senator Jay Rockefeller received $42,000 from the telecommunications industry in 2006 while the lawsuits and the bills for immunity were working their way through the legislative process. (Mitch McConnell also strongly supported retroactive immunity for the telecoms and received siginificant sums from them).

Does anyone really think that a regular citizen has the same access to their elected representatives as those corporations who contribute thousands and millions to these campaigns? If you showed up at your elected representative’s office at the same time as a lobbyist, who would get to meet with the elected official first? When it comes time to allocate access, priority will always be given to those with the money. In 2008, the telecommunication industry contributed over $9.4 million–from January 2007 to June 2009, and the insurance industry contributed $46,720,000 in 2008 to politicians in both political parties. In the aftermath of our financial meltdown, we certainly need significant financial regulatory reform, but realistically we cannot possibly hope to have effective financial reform when in 2008 the banking industry contributed $37,242,212, hedge funds contributed $16,993,557, and so on and so on. You have a situation where we have elected representatives sitting on the committees that have jurisdiction over specific industries or issues where these same representatives are receiving huge contributions from those very same companies they are supposed to be regulating.

corruptionLike drug addicts, our politicians have become totally dependent and addicted to these large campaign contributions for their political survival. It is an illusion that we have a government of the people and by the people. Instead, we have devolved into a government of the corporations, by the corporations, and for the corporations. We are moving further and further towards centralizing power and wealth into the hands of fewer and fewer people with inside connections. Our elected representatives are not truly our decision makers, but have become mere figureheads on the stage providing a fig leaf of cover to perpetuate the illusion that this government represents the interests of the people. The situation has become so bad that Senator Dick Durbin, Senator from Illinois remarked: "And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place."  How else could we have seen the most massive transfer of wealth in human history from the poor and working classes to the same people, banks, and corporations whose bad decisions brought the world economy to its knees?

Think back to the doctor who only prescribed a solution to the SYMPTOM of the problem. In this economic situation, the ROOT CAUSE of the problem is money in politics and any attempt to “fix” the problem without addressing the ROOT CAUSE, is doomed to failure because any “fix” will only address the SYMPTOMS of the problem. Until we have public financing of all political campaigns, without any private or corporate funding we will always have these problems. There are those who might say, that we do not need any more spending since this would add to the deficit and cost more money to the treasury. However, consider how much the “influenced decisions” have cost the nation so far. How many bills were recently passed that were obviously designed to favor a single special interest? Just ponder this very incomplete list:

  • The nation passed deregulation bills such as:
    • Phil GrammThe Gramm, Leach, Bliley Act which repealed the Glass-Steagall Act which tore down the firewall banning the banks from gambling with depositors funds. Do you really think that a majority of constituents called their representative’s office and asked to have these protections removed?
    • The Commodity Futures Modernization Act which explicitly banned regulation of derivatives, allowing banks like JP Morgan Chase to become the largest derivative holder in the WORLD at $87,362 BILLION! There is not enough money on this planet to bail this out if these gambling debts go bad. Do you really think that a majority of constituents called their representative’s office and asked to allow these “financial weapons of mass destruction” to remain totally unregulated and opaque to regulators?  
  • The gutting of America’s manufacturing sector because of one sided trade agreements and tax policies that allow companies to defer and often never pay taxes on foreign-earned profits. So foreign profits of U.S. companies end up taxed at a lower rate than their U.S. income, creating an incentive to invest in foreign factories. The jobs left the country along with the factories. Do you really think that a majority of constituents called their representative’s office and asked to have these perverse incentives implemented to move the foundation of economic base to foreign countries?
  • The nation committed over $12,200 BILLION dollars to bailout, backstop, and guarantee the banks and financials.  (I like to use $1000’s of billions, rather than $trillions since it is easier to grasp the unbelievable scale of these numbers.) Do you really think that a majority of constituents called their representative’s office and asked them to use their tax dollars to reward the same corporations and people who created the economic mess?
  • How can we have had over a year pass since the economic meltdown, and yet no meaningful regulation of the financial industry has been passed?  Do you really think that a majority of constituents are calling their representative’s office and asking them to refrain from regulating the banks and financials?
  • The “too big to fail” banks have been not only been bailed out, but encouraged to become even bigger. Do you really think that a majority of constituents called their representative’s office and asked them to allow these big banks to buy up the smaller ones at pennies on the dollar and to provide taxpayer guarantees on any loses they might incur?
  • Almost 2/3 of Americans opposed the TARP bailouts, yet the bailouts passed anyways. We KNOW that a majority of constituents did NOT call their representative’s office and ask them to use their tax dollars to reward the same corporations and people who created the economic mess.
  • follow the money

  • A bankruptcy bill passed in 2005 that forced people to pay credit card and private student loan debt before unpaid child support. The politicians had the audacity to call this the Consumer Protection Act of 2005. Do you really think that a majority of constituents called their representative’s office and asked them to protect the big banks’ already obscene profits?
  • In several states there were efforts to ban labeling milk as free from artificial growth hormone rBST also known as rbGH (synthetic or recombinant bovine growth hormone). I find it hard to believe that a majority of constituents called their representative’s office and told them that they did not want to know if there were any artificial growth hormones in the milk their children drank. The good news here is that many of these efforts were defeated as the result of grassroots efforts by organizations such Physicians for Social Responsibility.

  • Efforts to label genetically modified foods have been blocked from passage. Do you really think that a majority of constituents called their representative’s office and said that they preferred to be uninformed as to whether the food their families eat have been genetically modified?
  • Larry SummersThe people on the economic team in the current administration such as Larry Summers, Timothy Geithner, John Dugan, Gary Gensler, to name just a few, not only missed predicting this economic collapse, but were complicit in enabling the deregulation that made it possible. I doubt that the majority of people who called the White House asked that these Wall Street insiders be part of the decision making team.

  • The Federal Reserve has provided over $2,000 BILLION in free money to the “big” banks by allowing them to “borrow” money at 0%. These banks then “deposit” this money with the Federal Reserve as a “savings account” for which they collect interest, while paying no interest on the “loan”. I would think that a majority of people would like to have sweet deal such as this for themselves.
  • There is very limited transparency as to how the alphabet soup of bailout program funds that were distributed. This invites fraud and corruption. We have a situation where the financial corporations do not even fear the government because they know that their paid off politicians will not call them on this. Even Elizabeth Warren, the chair of the Congressional TARP Oversight Panel cannot get the information she needs and is frustrated by the lack of transparency. Do you really think that a majority of constituents called their representative’s office and asked them to give these big financial institutions a break and allow them to ignore even congressional inquiries?

How did any of the above help most Americans? Would the majority of any elected politicians’ constituents have supported any of the above decisions? Of course not! It was money that influenced these decisions that benefited a small inside group without regard for the vast majority of the workers in this country who actually produce the wealth of the nation. By not having public financing of campaigns, the nation is paying a huge price with the legislation that is being influenced by the private money. To illustrate this point, the big financial companies contributed over $2,300,000 to both presidential candidates during the 2008 campaign. These companies hedged their “bets” by contributing to both candidates, so they would “win” no matter who won the election. When you consider the $thousands of billions committed to these financials, that $2 million was truly a great return on their “investment”.

government for saleThe cost of running publicly financed or at least significantly reformed fund raising in campaigns is miniscule compared to these numbers. The need to build walls between lawmakers and those private interests looking to buy votes is obvious and unfortunately too many of the currently elected politicians are against this because as long as this system is perpetuated, incumbents are at an advantage. This money in politics is the ROOT CAUSE of all of the bad decisions listed above and many, many, more.

There currently limits on the amounts of “hard money” that can be contributed directly to a campaign, however “soft money” can be contributed without limits to organizations that do not directly support specific candidates. An example of soft money is: an ad that says Tom Smith supported cutting Medicare benefits and accepted contributions from some special interest, call Tom Smith and tell him what you think of this. Political Action Committees (PACS) are where unions and corporations provide contributions, but they are limited to $5,000 for a single candidate.

A WARNING

There are dark storm clouds on the horizon. There was recently a case before the United States Supreme Court, The Citizens United v. Federal Election Commission, where the current federal prohibition against corporate campaign contributions was struck down. We are now witnessing a situation where the level of corruption and influence will go from the current very bad, to even worse. This marks a pivotal turning point in this nation’s history where corporate spending on campaigns will notch up exponentially. It will inevitably result in even more bad legislation influenced by the huge increase in corporate campaign spending, and sideline most citizens even more from the political process. Using first amendment arguments, the Supreme Court could actually give corporations equal protection to that of individuals. Where in the constitution did our founding fathers give corporations the same 1st amendment rights as individuals?

So what can you do?

  1. Call your representatives and DEMAND public financing of all political campaigns with strict limits on private funding. Let them know you are a voting constituent and will be watching their actions closely.
  2. Support organizations such as Common Cause, Public Citizen, followthemoney.org, opensecrets.org, youstreet.org, to name just a few.  These organizations are fighting to bring transparency and responsiveness to our government and need your support.
  3. Protest the bailouts, lobbying, as well as the bonuses, by moving your money from the big banks to a small community bank. Can you imagine the effect this would have on congress and the big banks when literally $billions would be withdrawn from their system. Vote with your pocketbook!
  4. Send AIG a message about their lobbying and bonuses by cancelling any policies you have with them and insuring with another more responsible company. Be aware that they have changed their name to 21st Century auto insurance to mask the tarnished image that the AIG name has. It is the same company! Vote with your pocketbook!
  5. Minimize the use your of credit cards. Every time you charge something, the issuing bank makes money from BOTH you and the merchants. With the widespread use of credit cards, the average 2-3% charge to the merchants by the credit card companies amounts to a BANK TAX on all purchases since the merchants have to pass this cost on to the consumer. This BANK TAX is a huge source of income for the big banks. Remember the merchant that charges you less for cash is actually doing you a favor by passing the BANK TAX savings on to you. Patronize merchants who offer this discount. Ask those who do not offer the discount to provide it. Vote with your pocketbook!

Remember, that any “reforms” that do not address money in politics are only nibbling at the edges by treating the SYMPTOMS of the problem like the doctor giving you pain killers,  rather than getting at the ROOT CAUSE of the problem. If enough people follow through with the steps outlined above, we will have the beginnings of a true populist revolt against our current corrupt system that is fueled and sustained by private money. It is time the citizens took control of this fight similar to the way the passengers on the Detroit Christmas flight did. Our government will not do it for us.

Rudy Avizius
http://www.endtheillusion.org

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