Money and Democracy

Published — December 24, 2018

The Center for Public Integrity’s top stories in national politics

Evan Vucci/AP

Introduction

This year, our federal politics team spent some time outside of D.C. 

Yes, our reporters still vigilantly monitored the paralyzed Federal Election Commission, followed “dark money” — especially ahead of the midterm elections — and tracked the varying influences on Congress and the White House, including a sanctioned Russian bank.

But with the “Abandoned in America” series, the team visited six communities suffering in various ways, with little political clout and even less attention from officials in the nation’s capital. Check out the series: 

Abandoned in America

President Donald Trump has declared the United States’ economy to be “the best economy we’ve ever had in the history of our country.” His administration likewise declared the nation’s decades-long war on poverty “largely over and a success.” So Center for Public Integrity reporters this summer visited communities where residents say the crushing effects of poverty and government neglect aren’t improving — they’ve gone from bad to worse. Problems range from broken education systems to unlivable housing to infrastructure fit for the third world. One factor bound them together: a profound lack of political clout on the eve of a critical midterm election. 

Where money mattered in the midterms — and where it didn’t

The 2018 midterm elections were easily the most expensive ever — but at best, all that money bought both Republicans and Democrats a mixed result.

A “blue wave” in part propelled by unprecedented small-dollar contributions helped Democrats win the U.S. House and capture more governorships.

But Republicans’ financial focus on holding — and ultimately, expanding — their U.S. Senate majority paid off handsomely.

The Center for Public Integrity analyzed big money in key federal- and state-level races to explain where it mattered most — and where, surprisingly, it didn’t.

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Is the U.S. government wasting millions on trips abroad?

In June 2017, former Environmental Protection Agency Administrator Scott Pruitt traveled to Italy, stopping first in Rome for three nights and then Bologna for two to meet with G7 environment ministers. His reimbursement for meals and lodging on the trip totaled $1,942.

Canadian Environment Minister Catherine McKenna had a similar itinerary, over four nights. But following her government’s reimbursement rules, she expensed just $812 — less than half of Pruitt’s tab.

This discrepancy is illustrative of a U.S. government system for foreign travel expenses that the Center for Public Integrity found is significantly more generous than the comparable standards set by other countries and institutions.

The disparity could be costing American taxpayers millions of dollars annually.

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How ActBlue is trying to turn small donations into a blue wave

ActBlue, a nonprofit whose online fundraising tools have been used to varying degrees by nearly every Democrat running for Congress, says it has raised more than $2.9 billion for Democrats and progressive organizations since its founding in 2004. September was the biggest month in its history.

An analysis of campaign finance data by the Center for Public Integrity and FiveThirtyEight shows that ActBlue is handling more political contributions than ever before. Between January 2017 and Sept. 30, 2018 — the most recent date for which Federal Election Commission data is available — nearly $564 million, or about 55 percent of all contributions from individual donors to Democratic congressional candidates, passed through the platform, compared to about 19 percent at this point in the 2014 election.

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Botched Senate campaign finance records and a new law

A receipts and disbursements form, used by U.S. Senate candidates to file campaign finance reports. Federal Election Commission

Following an investigation into botched Senate campaign finance records, a bill was signed into law requiring U.S. Senate candidates to file campaign finance reports electronically, giving the public more immediate access to information about the candidates’ campaign donors and spending.

Unlike those running for the presidency and U.S. House, U.S. Senate candidates previously filed on paper, which then had to be converted to electronic documents in a process that involved two government agencies, three private companies and countless low-paid workers, many of them overseas.

A bureaucratic Rube Goldberg machine, this document conversion process often spat out bogus, yet official public records that misled the public and obscure who’s funding U.S. Senate campaigns.

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How a sanctioned Russian bank wooed Washington


Foreign campaigns to influence American officials are supposed to be transparent under the Foreign Agents Registration Act, a law requiring detailed disclosure of foreign influence efforts. But few believe FARA — passed in 1938 to combat Nazi propaganda — has been working well. It is riddled with exemptions. Enforcement is weak. Criminal penalties apply only to willful violations. And lobbyists’ filings are frequently late with few consequences, making available information less valuable to the public. For years, not many cared. But now, with accusations of foreign meddling gripping the nation’s capital, FARA is drawing intense scrutiny.

VTB, a sanctioned Russian bank, provides an illuminating example of what Americans learn — or don’t — under FARA. The bank’s hired lobbyists failed to disclose a series of June 2016 meetings with government officials on behalf of the sanctioned bank until months after U.S. law required them to. One firm, Sidley Austin, which boasts more than 2,000 lawyers worldwide, made the disclosure last year only after being contacted by the Center for Public Integrity about the meetings. And FARA administrators, citing a technical glitch, failed for three years to publicly release a document disclosing VTB had hired the U.S. Treasury Department’s former general counsel to advocate on its behalf.

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An Ohio legislator defied FirstEnergy lobbyists. Then, a ‘dark money’ group helped sink her bid for Congress

Christina Hagan, left, at a campaign event in March. On the right, FirstEnergy Corp.’s transformer in Beaver Valley Power Station in Shippingport, Pa. Facebook / FirstEnergy Corp.

A “dark money” organization tied to a major electric company pumped significant cash into an Ohio congressional race in what a losing candidate describes as an act of retribution over a failed financial deal.

Christina Hagan, a state representative who was running in the Republican primary for Ohio’s 16th congressional district seat, said a group called the Conservative Leadership Alliance targeted her with a barrage of attack ads after she declined to support legislation Akron, Ohio-based electric company FirstEnergy had lobbied her to help pass.

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How Democrats use ‘dark money’ — and win elections


Democrats love decrying “dark money” — political contributions for which the source of funds is a mystery. But that isn’t stopping them from accepting “dark money” themselves or making it difficult to determine the original underwriter of a political donation, as a recent Southern contest vividly illustrates.

Alabama’s special U.S. Senate election last December is a case study in the lengths national Democrats, who this year are racing to win back Congress from Republicans, are willing to go to hide their cash in the name of political expediency.

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There are many rich minorities. So why are there no black Koch brothers?

Media mogul Oprah Winfrey is worth nearly $3 billion.

Basketball legend-turned-businessman Michael Jordan’s net worth is a reported $1.65 billion.

Businessman and philanthropist Robert Smith is worth more than both of them with an estimated net value of $4 billion-plus.

All three black billionaires are known as generous philanthropists, but not big political givers — they are rarely mentioned in the same breath as political megadonors Charles and David Koch, George Soros and Tom Steyer.

Winfrey, Jordan and Smith aren’t anomalies, either. The nation’s wealthiest African-Americans are decidedly reluctant campaign contributors, almost completely ceding the rarefied rank of “political megadonor” to older, white men, according to a Center for Public Integrity analysis of Federal Election Commission and Center for Responsive Politics data.

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Stormy Daniels’ payoff an illegal contribution? FEC ruling could take years

Stormy Daniels, left, holds up an issue of Penthouse Magazine at the 2014 Exxxotica Expo in Broward County, Florida. Donald Trump, right, holds up an issue of Time Magazine in January 2016 in Winterset, Iowa.

Based on what President Donald Trump hears on television about the Federal Election Commission, the nation’s cable news consumer-in-chief must be panicked.

Day after day, TV talkers squawk about how the independent government agency is poised to pounce. Their contention: A $130,000 hush-money payment in October 2016 from Trump lawyer Michael Cohen to porn actress and alleged Trump paramour Stormy Daniels could constitute an illegal in-kind campaign contribution to Trump’s presidential campaign — one that exceeds federal limits ($2,700 per election) and wasn’t properly disclosed.

CNN legal analyst Joey Jackson expects a robust FEC inquiry. “You know, they’re certainly in charge — the regulatory body,” he said.

Fox News political analyst Juan Williams predicted an FEC investigation will loom over Trump like a cloud. “It matters in terms of whether there was a Federal Election commission violation — that matters because that will drag out the story and keep it alive,” he warned.

“They’re worried about a Federal Election Commission violation,” CNN legal analyst Paul Callan said of Trump’s legal team. “I think they’re setting themselves up to defend against an FEC claim.”

Trump, however, has little cause to fear the FEC anytime soon, even if the agency, created by Congress in response to Watergate, is empowered to enforce federal campaign finance laws.

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Actions, not words, tell Trump’s political money story

David Goldman/AP

The one-year anniversary of President Trump’s inauguration coincided with the 8th anniversary of the Citizens United v. FEC decision, which allowed corporations, unions and certain nonprofits to raise and spend unlimited amounts of money to advocate for and against political candidates.

So did Trump’s stage-setting declarations about political money still carry currency in his second year in office? Do his statements hold as he begins marshaling resources aimed at winning a second term?

The White House did not respond to requests for comment. But the answers seem clear nevertheless. For the most part, Trump’s actions have betrayed the promises he uttered at the outset of his presidential journey that now seems so very long ago.

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Inside John Bolton Super PAC’s deal with Cambridge Analytica


John Bolton needed billionaire Robert Mercer’s attention and support — so badly, Bolton spent more than $1 million of his John Bolton Super PAC’s money on “comically bad” data from Mercer’s now-defunct voter profiling firm, Cambridge Analytica.

So says longtime Bolton adviser Mark Groombridge in an exclusive interview with the Center for Public Integrity about the John Bolton Super PAC’s internal operations.

Groombridge had a front-row seat to Bolton’s efforts to elect pro-national security conservatives at a time when Bolton himself was bent on boosting his personal profile and pondering a presidential run.

“He said, ‘Look, this is Mercer’s group, we’re going to do something with them,’” Groombridge said of Bolton, who since April has served as Donald Trump’s national security adviser and has severed ties with his still-self-named super PAC. “Bolton had $5 million reasons to keep going with Cambridge Analytica.”

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Congress snuck dozens of tax breaks into the budget deal. Here’s where they went.

“Tax extenders” are overlooked, underpublicized and painfully arcane, known by a name that doesn’t even make sense — they should be called “tax cut extenders,” because extending the duration of temporary tax cuts is what they do.

In practice, tax extenders are legislative favors, often slipped into folds of federal bills notable for funding bigger-ticket items — such as military programs, disaster relief, infrastructure overhauls.

And despite President Donald Trump’s promise to drain the Washington “swamp,” elected officials and lobbyists conceived a new round of extenders, where they became law inside the bloat of last month’s 652-page budget bill with little public input.

Center for Public Integrity investigation of more than 30 of these provisions reveals they benefit narrow special interests that know how to work the system — from race horse owners to StarKist tuna canners to connoisseurs of two-wheeled electric vehicles.

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