Tag Archives: corporate political activity

A Postscript on the Political Project of MCRC v. EPA

A ProPublica investigation of dark money organizations lends context and additional color to some of what I had to say a a short while ago about the Marquette County Road Commission’s lawsuit against the EPA.

Sponsored by State Senator Tom Casperson, the Republican representing Michigan’s 38th district, the MCRC lawsuit is being funded by a non-profit organization called Stand UP. Stand UP is exactly the kind of dark money organization profiled by ProPublica: it’s a special kind of non-profit, a 501c4 “social welfare” organization that is not required by law to disclose the names of donors. It does not have to confine its fundraising and expenditures to the MCRC lawsuit or any other specific purpose. It is a trough of dark money that can serve any number of political efforts.

So, as I tried to suggest in a series of posts on the MCRC complaint (here, here, here and here), while the lawsuit is nominally over a haul road that will serve both mining and timber companies, it also appears to be part of a larger, coordinated effort to sideline federal regulators, stifle local environmental watchdogs, and arrogate the authority and power to direct economic development in the Upper Peninsula to a set of undisclosed actors and moneyed interests.

Now, as Robert Faturechi reports, with efforts in 38 states to make non-profit organizations like Stand UP more accountable and transparent gaining ground, powerful conservative groups are “coaching” allies on how to fight back against any new legislation requiring the disclosure of dark money sources. The tactics they recommend should sound familiar:

Get the debate to focus on an “average Joe,” not a wealthy person. Find examples of “inconsequential donation amounts.” Point out that naming donors would be a threat to “innocents,” including their children, families and co-workers.
And never call it dark money. “Private giving” sounds better.

They urge dark money groups to claim the victim’s mantle and to see conservatives as “a persecuted class,” according to one January 2016 memo Faturechi uncovered. It’s “all part of a plan to choke off our air supply of funding,” they warn.

The documents presented by Faturechi were distributed at a conference held in Grand Rapids by The State Policy Network. The Network “calls pro-regulation activists ‘enemies of debate,’” and generally takes the line that regulation quashes freedom and criminalizes belief — a refrain often heard from climate change denialists — and that transparency will only threaten privacy.

The State Policy Network brings together conservative and tea-party organizations from around the country dedicated to “advancing freedom and making a difference,” so it’s well positioned to coordinate local efforts like the MCRC lawsuit against the EPA with other state, regional and national causes. In Michigan, the Network’s member organization is the Mackinac Center for Public Policy. Just last week, they ran a widely shared update (303 “likes” and counting) on the MCRC lawsuit in which Casperson crows about the progress they’ve made in the discovery phase of the suit and wails about prejudicial treatment at the EPA.

The Political Project of MCRC v. EPA, 2

Second In A Series
Activists Afoot!

In this Greg Peterson photo from the Cedar Tree Institute site, Northern Great Lakes Synod Lutheran Bishop Thomas A. Skrenes blesses one of the trees faith congregations planted on Earth Day, 2009.

In this Greg Peterson photo from the Cedar Tree Institute site, Northern Great Lakes Synod Lutheran Bishop Thomas A. Skrenes blesses one of the trees faith congregations planted on Earth Day, 2009.

As I suggested in my first post in this series on MCRC v. EPA, the complaint filed by the Marquette County Road Commission would have us believe that “anti-mining” forces worked secretly with and even infiltrated the EPA, and the agency’s objections to CR 595 followed a “predetermined plan.” The EPA, it claims, had decided to oppose the haul road even before the MCRC application was reviewed.

This sounds like legitimate cause for concern: permit applications should be reviewed on their merits, not pre-judged and not according to some other anti- or pro- agenda. We certainly wouldn’t want someone in the Environmental Protection Agency to be “pro-mining”; there are enough well-paid mining lobbyists already haunting the hallways in Lansing and Washington, DC. But in this case, the anti-mining label is being used as a term of opprobrium, and to distort and deliberately misrepresent what the Environmental Protection Agency is chartered and required by law to do: in short, to enforce the Clean Water Act and protect the environment.

When it comes to proving the insinuations it makes, the MCRC complaint offers slim evidence.

For example, the complaint makes a big fuss over a November 28, 2012 letter from Laura Farwell, who lives in the Marquette area and is described here as “a prominent environmental activist.”  The letter is addressed to Lynn Abramson, then a Senior Legislative Assistant for Senator Barbara Boxer, and Thomas Fox, Senior Counsel of the Senate Environmental and Public Works Committee, asking them to “weigh-in” with the EPA on CR 595. (Exhibit 1).

EPA must determine whether to uphold its original objections to proposed County Road 595 under Section 404 of the Clean Water Act (“CWA”), pursuant to its supervisory authority over Michigan’s delegated wetlands permitting program. Tom may remember that during the August 30, 2011 meeting at EPA Denise Keehner of EPA’s office of Wetlands, Oceans and Watersheds definitively reiterated EPA’s position and stated that the haul road would not happen.
Thus, this letter is to request, respectfully, that you weigh-in as soon as possible with the EPA on its decision.

The MCRC complains about Farwell’s use of the word “definitively” here and casts the 2011 meeting in a sinister light:

on August 30, 2011, a very different type of meeting regarding CR 595 took place at USEPA Headquarters in Washington, DC. MCRC was neither invited to nor informed of the meeting. In attendance (as far as is known at the present time) were top USEPA officials, Congressional staff, KBIC representatives, and a prominent environmental activist opposed to the construction of CR 595. It further appears that USEPA made no formal record of the meeting.

Without a formal record, it’s impossible to know what transpired at this meeting, and if the complaint is going to rely on Farwell’s memory of the conversation, then it should also take into account her intentions in paraphrasing and recounting it, one year after it took place. The language here — “a very different type of meeting,” “neither invited nor informed,” “as far as is known at the present time,” “no formal record” — doesn’t help in that regard, and it’s meant to suggest that conjurations were already afoot.

It’s clear the MCRC was not included in some discussions at EPA. There’s nothing extraordinary or illicit about that. All concerned parties had been meeting with and petitioning the EPA for several years at this point. The complaint is still a long way from proving that the EPA “surreptitiously met with a number of environmental activists vocally opposed to the road,” and an even longer way from proving that there was anything like an anti-mining coalition assembled in secret at the offices of the EPA.

In an ironic twist, these allegations of secrecy and whispering behind closed doors may come back to haunt the MCRC: at a Marquette County Board of Commissioners meeting this month, the Marquette County Road Commission itself faced accusations that it had violated the Open Meetings Act in planning to bring its suit against the EPA. Public officials who intentionally violate that act are ordinarily fined and incur other liabilities; in this case, there would be some eating of words as well.

By November 28, 2012, the EPA had, in fact, “decided against the proposed haul road,” as Farwell puts it in the email she sent along with the letter to Abramson and Fox. The EPA had entered objections to the Woodland Road Application (in March, 2010) and announced their objections to CR 595 (in March, 2012).  Even so, a Fall 2012 public meeting held by the EPA “in Marquette…for more input” had Farwell worried. She was not at all confident the EPA would uphold its original objections to the haul road.  The matter was still far from being “definitively” settled.

Whatever reassurances Farwell was given at that 2011 meeting — or thought she had been given, or recalled having been given, one year later — were clearly at risk of getting lost in the bureaucratic shuffle. The purpose of her letter is to prevent that.

There is nothing surprising in all this. Those watching new mining developments in the Upper Peninsula are constantly having to chase after the EPA and demand that the regulator step in and do its job.

Jeffery Loman, a member of the Keweenaw Bay Indian Community and a former federal regulator, has repeatedly put the EPA on notice and complained of the agency’s failure to enforce the Clean Water Act.

In May of this year, the grassroots environmental group Save the Wild UP filed a petition with the EPA’s Environmental Appeals Board, arguing that Eagle Mine was issued the wrong regulatory permit. The appeal requested that the EPA require Eagle Mine to obtain a Clean Water Act permit in order to protect the Salmon Trout River and other surface waters from the discharge of mining effluent. The Appeals Board did not contest the facts put forward in the petition, but dismissed it for lack of jurisdiction. They hardly proved themselves to be staunch allies.

So watchdogs and environmental groups, too, have reason to gripe about the EPA and often feel powerless in the face of bureaucratic inertia and ineptitude. Laura Farwell herself seems to have felt that way, and that’s why we find her asking Abramson and Fox for help. The MCRC complaint exaggerates her influence at the EPA when it describes her as “a prominent environmental activist.” The epithet is used here to create the misleading impression that within the offices of EPA Region 5 and the confines of Marquette County there are political opponents with resources to match the power of multi-billion dollar, multinational mining companies.

Laura Farwell and her husband Frank moved to the area in 2006 from Madison, Wisconsin. They are members of the St. Paul Episcopal Church and participate, along with their son Cody, in the church’s Earth Day tree plantings. The couple donated some money to the UP Land Conservancy. Farwell has also organized events for the Cedar Tree Institute, which works to bridge “faith communities and environmental groups.” (She is described on the Institute’s site  as “a concerned mother and local citizen.”) She is thanked for “working quietly behind the scenes” in a 2011 Earth Keeper TV video on the environmental risks posed by the Eagle Mine; and she’s copied along with many other local citizens in a Google Group post dated April 9, 2012, urging people to comment on CR 595 before the public comment period is closed.

Farwell’s commitments to land conservation are pretty clear, and while the complaint asks us to recoil in horror at the phrase “prominent environmental activist,” cooler heads are just as likely to be impressed by Farwell’s dedication to the people around her and the place where she lives. Maybe that dedication is all it takes to be a prominent environmental activist in the view of the Marquette County Road Commission.

Some locals, on the other hand, are legitimately concerned that nationally and internationally prominent environmentalists — like Bill McKibben, George Monbiot, Naomi Klein and their ilk — ignore the current situation around Lake Superior, or fail to give it the serious attention it deserves. National media have barely taken notice. Farwell herself admits that to the great and powerful in Washington DC “the proposed haul road may seem like some little back trail in the middle of nowhere,” but she urges that it will cut through “critical wetlands resources” and “enable the industrializing of this rural Great Lakes watershed by international mining interests.”

Farwell’s letter tries to create some urgency around the CR 595 issue by putting the road in context and specifying whose interests would be served by the industrializing of the region. A serious assessment of CR 595 would significantly widen the lens, taking into account the cumulative effects of all the new mining activities around Lake Superior: all leasing, exploration, development and active mining throughout northern Michigan, Wisconsin, Minnesota and Ontario. Otherwise, we miss the big picture, and without that perspective, it’s just too easy to parcel out the land, the water, and the future of the region to the highest bidders.

The MCRC complaint, too, places CR 595 in the context of “mining and economic development in the Great Lakes region” in a few places, but only to make the specious argument that those who oppose or question the road are opposed to mining and therefore opposed to the region’s prosperity. These are the ideological leaps the complaint makes. Those who don’t make these leaps are called activists or anti-mining obstructionists. That is a political, not a legal argument.

It’s never too late to have a serious discussion of what sustainable economic development and true prosperity for the Great Lakes region might look like. How might we best organize our lives together in this place? is a fundamental political question. But at this juncture, it appears, the MCRC can’t afford to let that conversation happen. This lawsuit is an attempt to shut it down and stifle dissent. Where business leads, society must obediently follow. To question this order of things, as Laura Farwell seems to have repeatedly done, quietly, behind the scenes, is to commit some kind of nefarious act.

This is where the attitude on display in this complaint gets worrisome. With this lawsuit, the MCRC pretends to have the political authority to direct economic development in the region (not just to build and repair roads). But that is only pretense, and things in Marquette County are not as they appear. The public still does not know who is funding the Road Commission lawsuit, what they stand for and what they expect in return for their support. The real powers lurk behind the scenes.

Three Reasons Why the Election is Running on Empty

It’s fitting that a freakish storm (or fears of a freakish storm) should interrupt a presidential campaign that has shied away from discussing climate change. As the New York Times noted after last week’s third and final debate, neither candidate broached the subject in the course of the debates; nor did the vice-presidential candidates or moderators or the model citizens in the made-for-TV town hall.

Those who fear some conspiracy of silence on this issue, or think our candidates are cowards only when it comes to climate change, should be reminded that on nearly every issue before the country, the 2012 campaign has been almost entirely devoid of substance. Both sides have offered nothing more than zingers, soundbyte-sized bromides and unprincipled pandering.

You know things have gotten really bad when the TV pundits – who trade in platitudes and talking points – start complaining about the lack of substance in the campaign. That’s starting to happen, at least in the pseudo-serious world of public television. Last Friday on Newshour, Judy Woodruff asked Mark Shields and David Brooks why they thought the campaigns had been so lacking in real substance and so unwilling to engage on the issues. Neither correspondent gave the most obvious response – which is that this hollowing out is inevitable when you conduct politics on TV.

Instead, David Brooks fixed the blame squarely on the “consultants,” who have “taken over,” he said. This wasn’t much of answer, but – since this was TV – it sufficed; the segment was soon over and the discussion closed. Brooks could have easily implicated people like himself, the press and the punditry. He also could have added that what most of these consultants do, in one way or another, is package the candidates for TV audiences and attention spans.

At the very least, Brooks failed to go far enough. Consultants aren’t the only ones to blame. Off the top of my head I can name at least three other reasons why this election is running on empty.

First and above all, Citizens United: this is the first election held after the Supreme Court ruled, in 2010, that unions and corporations could spend without restriction in political campaigns, because they were entitled to the same free speech considerations as human persons. The consultants are simply following the money. So far, the glut of ads – someone the other day estimated that it would take 80 days to watch all the ads currently airing on TV in Ohio – has made even the candidates wince. The ads are superficial and offensive to anyone with a modicum of intelligence because they are always a ruse: they make up a cover story so that big money can pursue its aims through the electoral process.

Second, we’ve had no meaningful participation by third party candidates in the political process or the presidential debates. The two-party show airs without interruption and without challenge. This partly has to do with the control exercised over the debates by the Presidential Debate Commission, which produces the debates for TV. Run by lobbyists and sponsored by major corporations, the Commission approves questions, debate topics and moderators, and disapproves of outsiders who want something other than Coke or Pepsi, Red or Blue, Obamney or Romama. As Jill Stein (who is suing the Commission for keeping her out in 2012) remarked when she was arrested outside the debates: “It was painful but symbolic to be handcuffed for all those hours, because that’s what the Commission on Presidential Debates has essentially done to American democracy.”

Third and finally I would point to the deliberate, regular and daily conflation of the election with the popular vote. This helps perpetuate the illusion of a tight race and distorts people’s choices. It also makes the election a choice between candidates rather than an opportunity to talk about issues on a local, state and national level. The emphasis ought to be on the issues people bring to the election – which is where democratic elections begin – and not exclusively on the candidates or even their platforms. Polling focuses on how people feel about the candidates from one day to the next instead of providing data and insight about changing attitudes toward the enduring and emerging questions we, as a people, face. Who’s going to win? is the last question we should be asking ourselves in an election year. Or in any year. And it only gets worse the closer we get to election day.

The list could go on. But when all is said and done, the consultants and the pundits and the pollsters aren’t really to blame: we are. That may not be something you can say on TV, but if there’s a real battleground this election year, or in any year, it’s American democracy itself. It’s something we have to fight for and claim for ourselves and for every citizen, against politicians, powerful forces and against all odds. That’s not just highfalutin talk. Ben Franklin was right: we will have a republic, if we can keep it. I wonder if we can. I know the consultants have taken over only to the extent that we have surrendered.

Bank of America Shareholder Meeting – A Failure

The Bank of America Board of Directors was on the defensive yesterday. There were protestors gathered outside the annual general meeting; security was high; inside, the mood was testy. In his opening remarks, Chairman of the Board Chad Holliday flubbed an announcement about question and answer time, prompting a shareholder to interrupt the preliminaries; and when Q & A on shareholder resolutions began in earnest, CEO Brian Moynihan stuck to terse, one-sentence, boilerplate answers to most questions, until one stockholder stood up and asked for “more nuance and explanation” and “a more thoughtful response” to the owners’ questions. General applause ensued, but the dialogue did not really improve. In that respect, the meeting felt like a lost opportunity: the Board simply refused to engage.

There were six shareholder resolutions but (as the Q & A revealed) really just three big issues on shareholders’ minds: executive compensation, predatory mortgage and lending practices, and political contributions.

One shareholder seemed to sum up the feelings of many in the room when he said that “it’s a comedy” to be a Bank of America shareholder, given the gap between the stock’s performance and the compensation of its executives. Several people directly asked Brian Moynihan to forgo (or, as one shareholder put it, “deny”) his raise for the coming year. This came to a head in an exchange with one shareholder, who said that the issue really came down to where Moynihan’s “heart” is. “Do you love your neighbor as yourself? Are you going to turn down your raise?” Like a boy at his catechism, Moynihan parsed the question and said that he had been raised to love his neighbor as he loves himself (how could he say otherwise?), but when it comes to turning down his raise the answer is simply “no”; and then he repeated a few prepared phrases about how his own compensation is “aligned” with the Bank’s strategic goals. That was his gospel.

Still, shareholders urged the bank to consider the “injustice” in the world, and Bank of America’s part in it. Activist shareholder Dawn Dannenbring (whose appearance at a JP Morgan shareholder meeting I blogged about here) asked the Board to think about why they need to have heightened security at their shareholder meetings: “If you were a better corporate neighbor,” she remarked, “you wouldn’t have to be so scared.” To charges that it had “decimated” the communities where it did business, the Bank responded with a bland assertion: “the success of communities is equal to our success”; at one point Moynihan even muttered the phrase “good for America,” but it sounded as if he had never really warmed to that talking point, and his voice trailed off.

Some tried to appeal to the bank’s business sense: if Bank of America is seen “not as part of the solution but as causing the problem,” it runs a “reputational risk.” That’s putting it mildly. Others were not so restrained: “You’ve got to stop foreclosing on families,” exclaimed one shareholder; and a number of people rose during the Q & A and told their own stories about how the bank – their bank – had ruined them. Moynihan was patient and even compassionate with these share-owning customers, and told them they could talk to a B of A “teammate” on the spot, that very day, about their problems. But the crowd was repeatedly reminded that these individual cases – their own cases or the cases of family and friends – did not bear on the proposals they had assembled to vote on. This was a myopic response at best, as if behind each of these proposals there were not thousands, hundreds of thousands, millions of individual stories that need to be told, and that make up the big picture of the bank’s role in America.

While the bank is reluctant to open a dialogue on its role in society, it is aggressive in its bid for political power and social influence. And in the wake of Citizens United, the battle lines around political spending are being drawn. A proposal to prohibit all political spending from the corporate treasury – which I wrote about in a previous post — received just 4 percent of the vote, but the resolution still counts as an important first step. Another political spending proposal, requiring Bank of America to disclose all grassroots lobbying, fared much better, garnering about 30 percent of the vote (right around the 32.73 percent it gained last year).

Calls for disclosure of political spending are getting harder to ignore. And though prohibitions and other checks on spending still face an uphill battle, the resolution to stop political spending at least gave shareholders a chance to say a few words about the risks and uncertain outcomes of profligate political spending. Shareholders cited research (by Hadani and others) to support their position; but it is hard to say whether this made any impression whatsoever on the Board. If so, they weren’t going to let it show. They just seemed to want to get the whole thing over with. They had not come to deliberate, or listen or learn. They had come to defend. And that is why the 2012 Bank of America shareholders’ annual meeting should be reckoned a failure.

Can CEOs Ever Get The Political Fix They Need?

There have recently been plenty of shareholder proposals asking companies to disclose political spending. In fact (as noted in an earlier post), the share of proposals to the Fortune 100 focusing on political spending increased 84 percent in 2011 from the three previous years. Last week, to mark the second anniversary of the Citizens United decision (on January 17th), Trillium Asset Management and Green Century Funds took things up a notch.

Urging “corporate leaders to heed the call of shareholders and citizens,” the two social investment firms filed shareholder resolutions at Bank of America, 3M, and Target Corporation asking those companies to stop political spending altogether. This was the first time institutional shareholders have formally asked corporations to refrain from political spending.

The chances of these resolutions winning approval are slim to none, of course – at least right now. The hope is that over time support will build around these proposals, until they reach a threshold where boards of directors can no longer ignore them. (That’s around 30 percent of shareholder approval.) That day seems a long way off. Still, a slim chance is better than no chance, and — let’s face it — there is simply no chance of legislative remedies to Citizens United, especially from the current Congress, and definitely not in an election year.

“We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward,” David Stockman tells Bill Moyers in an interview that will air this weekend. “As a result,” Stockman says, “we have neither capitalism nor democracy. We have crony capitalism.”

That sounds about right, though I would ask whether Stockman and others who take this view have really put their finger on what’s novel or unique about the present moment. Entitlement and cronyism are not exactly new in America; some would say the game has been rigged all along.

But that’s a historical discussion. The more pressing question is one these new shareholder resolutions would have us address. Is corporate political activity good for business? Is the corporate plan to capture government sound? Are corporations really getting what they pay for? Can those entitled CEOs and Wall St. financiers win the game, or are there rules to the game they don’t understand? In other words, how well does crony capitalism work? Those broad questions frame the question posed in the title of this post.

There’s some compelling evidence to suggest that corporate political activity is not only bad for democracy but also bad for business. The Trillium and Green Century announcements cite the research of Michael Hadani, who sets out to “question the standard narrative that political spending is an unmitigated good for firms.” Hadani, a Professor of Management at Long Island University, concludes that despite spending extravagant amounts of money – AT&T, for instance, “officially” spent over 219 million dollars between 1998 and 2008 “on achieving political success” (and that was before Citizens United!) — corporations are not achieving the political outcomes they want.

What’s worse, corporate political activity generally does not appear to increase shareholder value.

This chart tracks a negative correlation between firm market value and PAC activity:


And that is just one lens. The research Hadani presents tells a pretty consistent story: the profligate pursuit of illusory goods, usually without the requirement to disclose where the money goes, or what companies and their investor-owners get for it (apart from heightened risk and reduced transparency). It should therefore alarm all shareholders – not just socially-conscious ones — that Citizens United makes it possible for executives to plunder the corporate treasury in pursuit of those same uncertain ends, without any limits or any real accountability. A new kind of barbarian may already be inside the gates: the CEO in search of the ever-elusive political fix.