Foreign Money and Super PACs - Collaboration Week

ADDITIONAL CONTRIBUTORS Gabriel Bly

Photo by Phillip Brewer.

An Editorial:

If you want to know what a politician is going to do once in office, don’t listen to their speeches, don’t look into their past for clues about their character, and don’t believe what the pundits say about them. All you have to do is look at who is paying for their campaign and, unfortunately for this upcoming presidential election, there is a lot of money to follow.

Two years ago, the Supreme Court ruling on Citizens United vs. Federal Election Commission allowed for the creation of Super PACs, or political action committees that can accept unlimited donations from individuals, organizations, and even corporations. These Super PACs do not allow for donations to be made directly to candidates, but the committees they go through are really nothing more than thinly disguised supporters of those candidates. Through these new Super PACs, politicians and special interests are taking the idea of unlimited cash to the next level.

Since January 2011, nearly one out of every four dollars currently in the hands of Super PACs was donated by only five wealthy individuals. In other words, if money is speech, there are already five people who are louder than a quarter of the population combined.

When President Barack Obama spoke against the Citizens United decision and the advent of Super PACs in his 2010 State of the Union speech, he cited a very specific concern about the ruling: “I don’t think American elections should be bankrolled by America’s most powerful interests, and worse, by foreign entities.”

Considering that before the ruling, 130 foreign companies sponsoring political action committees through their U.S. subsidiaries contributed $12.6 million to the 2010 election cycle alone, the prospect of that number growing exponentially is daunting (right now, the number is $7 million and counting). The problem lies in how far those domestic subsidiaries end up putting their parent company’s political and economic interests ahead of their country. After all, a company is not accountable to its fellow citizens; it’s only accountable to its shareholders, who can be foreign investors.

Days before Sheldon Adelson signed a $5 million check (the largest political contribution in U.S. history) to the pro-Gingrich Super PAC, “Winning Our Future,” he told The Jewish Press that the Palestinians “don’t want the Jews or any other religion to be alive, so how are they going to get to the point of peace?”

Newt Gingrich’s comments about Palestinians being an “invented people” suddenly become clear. Like any good CEO, Newt probably does believe what he is saying, but there is no doubt that he is being influenced by the Israeli newspaper tycoon to be more outspoken about the issue. He is just trying to please his main shareholder, Sheldon Adelson.

Article I of the U.S. Constitution forbids members of government from receiving contributions from foreign states in order to avoid this type of corruption from outside interests. So, the money is being hidden and funneled through shell companies, American subsidiaries, and non-profit 501(c)(4) organizations who don’t have to disclose their donors under rules set by the Citizens United ruling.

Three separate companies recently donated $1 million each to “Restore Our Future,” a Super PAC that backs Mitt Romney: W Spann LLC, Eli Publishing Inc., F8 LLC are among the top contributors to the super PAC, and all of them have been found out to be shell companies.

W Spann LLC was incorporated on March 15, it made a $1 million contribution to Romney’s Super PAC on April 28, and according to the Federal Election Commission, the company quickly folded two weeks before the Super PAC was required to make its first disclosure of its donors.

What it sold, bought, or made is still unknown. It was a company that never had a single shareholder or a chief executive. Fred Wertheimer, President of Democracy 21, a nonprofit watchdog organization whose mission is to divert the influence of wealth on politics, said the $1 million donation was “apparently made in a manner designed to blatantly circumvent the campaign-finance disclosure laws.”

But the scariest aspect of this financial fiasco is that there is so much money from so many donors that, even if their identities are revealed, tracking down exactly who is holding the purse strings could still prove difficult.

Rick Santorum’s Super PAC, “Red, White, and Blue,” refunded a $50,000 donation from a London-based company. “We had spoken to one of the executives there who’s an American citizen,” he said. “But instead of sending the money himself, he sent it from the company.”

Somehow, I don’t believe that you can accidentally write a $50,000 check from the wrong account, but apparently it’s easy. Even Obama’s re-election campaign “accidentally” accepted $200,000 in bundled donations, which turned out to be linked to a Mexican criminal business, before also returning the money.

These shadowy contributions have spurned the House of Representatives to pass the Disclose Act, a bill that would require Super PACs to disclose their donors’ identities, but the bill did not live through the Senate. Now, just two years after the Citizens United case passed, one out of every five Super PACs has untraceable donations.

Republicans have always wanted political donors to be transparent and Democrats have always wanted regulation over campaign contributions, but now we get neither. There is no transparency or regulation; there is only a big pot of corporate money open to bidding from every corner of the global financial market.

When corporations rule the government, the government becomes like a corporation. The powers of the state merge with the powers of the corporations and, as Mussolini says, “Fascism should more properly be called corporatism because it is the merger of state and corporate power.”

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