Category Archives: Money in politics

Transparency? No, Alignment Drives PAC Decisions

Money In Politics

Abigail Spanberger won’t take money from corporate political action committees but will from ideological political action committees because the issue PACs have their position statements on their web pages.

Spanberger said that Friday to a business organization that donates no political money, Virginia FREE, but there were plenty of big donors or their representatives in the room.  Jeff Schapiro of the Richmond Times-Dispatch was there but didn’t really cover her remarks, other than to note she didn’t mention President Donald Trump (so he kindly did that for her.)

Continuing an argument I have made before, Spanberger’s careful tiptoe through this minefield is additional evidence of the powerful corrupting nature of our campaign finance system.  She tried to put a nice spin on her position that business money is too tainted to accept, blaming that in large part on voter perception.  When “face to face with voters” she hears that in Virginia corporate money has too much influence.

Here is what she says on her campaign web page:  “As we’ve increasingly dealt with the effects of special interests in campaign finance, it’s important that all elected officials take a stand against letting a small group of funders influence our elections. And because my commitment to campaign finance reform starts now, with my campaign, I will not accept any corporate PAC donations.”

Abigail Spanberger

Federal election rules have caps on donations that reformers at the Virginia state level can only dream about.  Corporations cannot write checks directly but must set up political action committees collecting funds from employees using the same strict limits.  She is probably correct however that the average voter has no clue about that.

In response to a line of questions from Virginia FREE director Chris Saxman she said hers was really a “a pro-business stance” because it allows her to meet with business leaders and lobbyists with no talk of money.  It’s “taken off the table.”

But then Saxman asked her about all the groups she does take money from.  Business PACs are only a subset of the giving world.  Special interests abound on all sides.  That’s when she said a big difference is those groups have their agendas on full and open display, but with a company “I can’t go to their website and see what those priorities are.”

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CrowdLobby: A Cool Idea Still Needs Work

Samantha Biggio and Heidi Drauschak, both recent University of Richmond law school grads, had an idea for a new business, and they raised $35,000 through the crowd-funding Kickstarter website to fund it. Their business idea? To launch a website, Crowdlobby… where people can raise money through crowd funding to launch lobbying initiatives.

The idea has obvious appeal. The legislative process in Washington, D.C., and state legislatures across the country is dominated by big-money special interests — corporations, unions, advocacy groups — that can afford to hire lobbyists. Individual citizens may share common goals but they aren’t organized enough to raise the kind of money they need to engage a pro.

The Crowdlobby website allows visitors to browse active fund-raising campaigns, submit their own campaigns, commit funds, and select lobbyists. As with other crowd-funding sites, donors are not charged unless the fund-raising objective is reached. Crowdlobby keeps 25% of the proceeds for its role in vetting campaigns, vetting lobbyists, maintaining the website and covering other overhead costs.

The website is just getting off the ground, so at this point it has only nine active fund-raising efforts going on — five in Richmond, three in Washington, D.C., and one in New York. Based on current activity, it may be a long time before anyone sees any tangible results. After six days the most successful fund-raiser so far — to raise Virginia’s minimum wage — has garnered $650 in commitments. Out of $50,000. But the campaign still has 84 days to go.

One Virginia campaign seeks to rejigger the state education funding formula to steer more money to districts with low-income students. Another would decriminalize marijuana. Yet another would lobby for the creation of an independent redistricting commission. And a fifth would lift the 1% cap on the amount of energy that could be generated through the net-metering program. So far, five people have committed a grand total of $31 to support that last one.

Americans have a constitutional right to petition government. In the abstract, the idea of democratizing access to lobbying talent has great appeal. But I’m thinking that Crowdlobby needs to go back to the fund-raising well for a second round of financing to upgrade its website.

The campaign-submission template asks would-be campaigners to provide background information about the issue, a description of the proposed legislation, a history of the issue, polling data, and endorsements. I see no mechanism to include white papers, backgrounders, videos, graphs, charts, spreadsheets, databases or other documentation in support of their position — or even to direct potential donors to a website or other social media with more information. Individual citizens aren’t going to get anywhere on this website because Crowdlobby is unlikely to ever generate the volume of traffic needed to attract hundreds of small donors. This tool could  be used by citizen groups who are already utilizing email, social media and other tools to get the word out. If citizens groups — #MeToo, Tea Party groups, whatever — are already doing the heavy lifting, though, will they be willing to part with 25% of what they raise?

Perhaps the most obvious flaw in the model is that the fund-raising profiles don’t say who is behind the appeal. Once money is raised, someone has to call the shots. Who is that person? If you’re receptive to the idea of donating $100 or $200, who are you entrusting your money to? Who is in charge of framing detailed instructions to the lobbyist? Who makes the decisions when tactical decisions, compromises, and amendments are called for? There is no way to know. Donors are buying a pig in a poke.

I wish Biggio and Drauschak the best of luck because I would love for Virginia citizens to be empowered to participate in the legislative process. I could see Bacon’s Rebellion potentially using crowdsourcing to lobby for more transparency and openness in government. But I would not use Crowdlobby in its current incarnation. The website doesn’t look like it’s ready yet for prime time.

Update: Heidi Drauschak responds to this post, adding details on changes Crowdlobby is making to the website — in particular, describing the mechanism by which a majority of donors will direct lobbyist activities.

Will Virginia Legalize Recreational Marijuana Use?

High times today.  The marijuana legalization wave is beginning to wash over North America. Nine states (WA, OR, CA, NV, CO, MA, VT, ME and AK) along with the District of Columbia have legalized the recreational use of marijuana.  Well over 20% of Americans now live in states which have legalized recreational marijuana use. On Oct 17 of this year recreational marijuana use will be legalized across Canada. While the various provinces will regulate the sale and use of marijuana in their own unique ways, it will be legal across Canada.

Higher times to come. Several more states are slated to decide the question of legalized recreational marijuana use this November (or sooner)…

Michigan – Voter initiated measure to permit those over 21 to grow and possess personal use quantities of cannabis and related concentrates.  Statewide polling data from this spring shows 61% of voters intend to vote “yes” on the measure. While you may not be able to drink the water in Flint it looks like you’ll be legally able to use it in a bong come this November.

New Jersey – The New Jersey legislature is debating bills that would legalize recreational marijuana in the Garden State. Interestingly, some of these bills would also expunge the criminal records of anybody convicted in the past of marijuana-related crimes. Was I ever arrested for weed?  Fuhghetaboutit!

North Dakota – A voter – initiated referendum will appear on North Dakota ballots this November. Uniquely, the North Dakota initiative would set no limits on the amount of marijuana people can possess or cultivate. Perhaps a large stockpile is required to get through those long, dark winters.

New York – A recent state commissioned study on recreational marijuana legalization came out strongly in favor of making ganja legal. Gov Andrew Cuomo quickly sprang to action setting up a working group to write a marijuana legalization bill. Put New York in the “when, not if” column.  This should give new meaning to Billy Joel’s song “New York State of Mind” (which has the opening line, “Take a holiday from the neighborhood”).

Oklahoma – This June Oklahoma voters approved a broad medical marijuana usage law. Activists have collected a lot of signatures to get the question of legalized recreational marijuana on the Nov 6 ballot. Whether there are enough signatures or enough time to get the ballot question approved this year remains to be seen. Sadly, Merle Haggard died in 2016 before being able to revise the first line of his famous song Okie from Muskogee … “We don’t smoke marijuana in Muskogee”.  It seems that sooner, rather than later, people will be openly smoking marijuana in Muskogee.

Delaware – In June, a majority of House lawmakers voted in favor of legislation to legalize marijuana use and retail sales. However, because the legislation imposed new taxes and fees, state rules required it to receive super-majority support. Lawmakers are anticipated to take up similar legislation again next year. I’ll predict that by 2020 people will be legally getting small in the Small Wonder.

A spot of hemp, Mr. Jefferson? Five of the first six presidents of the U.S. were Virginians and there is evidence that all five of them smoked a little hootch from time to time. You can read the evidence from an unimpeachable source … High Times …  here.

Will River City go up in smoke? But what of modern Virginians and Virginia politicians? In a 2017 Quinnipiac poll Virginia voters supported allowing adults to legally posses and use small amounts of marijuana by 59 – 35 percent. So, the voters would like to see marijuana legalized in Virginia. But since when did the voters matter to Virginia’s political elite? They don’t listen to voters, they listen to dollars. The Virginia Public Access Project tallies up the following donation totals for “all years”:

Beverages – Alcohol Distributors / Brokers – $20,885,384
Retail Sales – General $10,113,070
Restaurants – $6,533,357
Beverages – Alcohol Manufacturers – $3,993,418

As point of reference, Dominion Energy donated $11,354,842 during the same period.  Meanwhile, PepsiCo, owner of Frito-Lay – the maker of Cheetos – only donated $82,385.

— Don Rippert

Higher Ed’s Hidden Influence: Alumni Legislators

Fund-raising tip for public colleges and universities: Get more of your alumni elected to the General Assembly. Across the country, a higher number of graduates of public colleges and universities is associated with higher funding for a state’s public higher-ed system, finds a new study, “School Spirit: Legislator School Ties and State Funding for Higher Education.

“One additional legislator who attended the state’s public college or university is associated with a 0.5% increase in the total state funding for that state’s total higher education system, holding all else constant,” write Aaron K. Chatterji, Joowan Kim, and Ryan C. McDevitt in a paper published by the National Bureau of Economic Research.

For an average state, an elected representative is associated with an additional $4.9 million in annual state funding. For a specific institution, election of an alumnus is associated with $49 million increase in funding.

By the tenets of conventional political analysis, higher ed would be a weak player in the political system. In Virginia, public universities don’t organize political action committees, and they don’t raise money for political candidates. In marked contrast to real estate/construction, financial services, health care, law, energy, and other money powerhouses, higher ed does not even warrant a breakout listing in the Virginia Public Access Project data base of major campaign donors. Over the past 20 years, “professors/staff” of public colleges (a category that includes university foundations) have donated only $4.3 million to Virginia political campaigns (overwhelmingly to Democrats).

But public universities do tap alumni to advocate on their behalf. And, as it turns out, among the most effective of those alumni are state legislators, according to the Chatterji et al study.

One might suggest that the authors of the study developed a data set of 96,000 legislators for the years 2002 through 2014 and ran a complex statistical analysis to document the obvious. But what might seem “obvious” isn’t always true. And the magnitude of the effect is not always evident. It is clear from Chatterji et al’s data that on average the effect is significant.

What may be true on average across the 50 states, however, is not necessarily the case here in Virginia. Average numbers can conceal considerable variability. So, consider the study as an indicator of what might be the case in the Old Dominion, pointing the way for follow-up research.

I knocked out some quick numbers this morning, inspecting the biographies of Virginia’s 100 House of Delegates representatives to see which institutions of higher education they attended, if any. Not all of our delegates attended college. Eleven, by my count, attended community college but did not pursue advanced degrees. Many attended private colleges, often out of state, who are not included in the numbers. But 46 have undergraduate degrees from Virginia public colleges and 16 (often overlapping with those with undergrad degrees) have graduate degrees from public Virginia institutions.

Without question, Virginia’s public institutions of higher education have an extensive alumni network to tap when pushing for legislation. To what degree do old-school loyalties affect delegates’ decisions? Do graduates of in-state institutions vote any differently from grads of out-of-state colleges and universities? That question will take extensive additional investigation to answer.

Who Are These Guys, and Where Do They Get All Their Money?

Shenandoah Valley Juvenile Center

The report issued by the Northam administration investigating charges of abuse at the Shenandoah Valley Juvenile Center has come under withering criticism by nonprofit groups that filed a lawsuit last year bringing attention to the treatment of unaccompanied immigrant children held there. The Virginia Mercury has the story here.

While I used the Department of Juvenile Justice report as the basis for a blog post yesterday arguing that people were making much ado about a non-scandal, I have to concede that the criticisms of the report are substantive. By substantive, I don’t presume them to be valid. But they are are not frivolous. If I were reporting the story, I would deem them worth probing to see if they were valid.

An interesting sidebar to the controversy is the revelation of the existence of two nonprofit groups that revealed (or, depending upon your viewpoint, concocted) the abuses the first place. One is the Washington, D.C.-based Washington Lawyers Committee for Civil Rights and Urban Affairs. The other is the Henrico County-based disAbility Law Center of Virginia. Both pursue social-justice work. One hews to high standards of transparency; the other does not. 

The Washington Lawyer’s Committee (WLC) is forthright about its commitment to social justice — or at least a leftist perspective on social justice. States the organization’s Guidestar profile: “While we fight discrimination against all people, we recognize the central role that current and historic race discrimination plays in sustaining inequity and recognize the critical importance of identifying, exposing, combating and dismantling the systems that sustain racial oppression.”

The organization reported more than $5 million in revenue in its 2016 990 form, makes the forms accessible on its website, and lists 27 employees on its website. Unlike many nonprofits, the WLC is open about where its money comes from. in 2016 about $3 million came from “contributions and grants,” $830,000 from fund-raising events, and $1.8 million from “legal fees and court awards.”

Most impressively (from a transparency perspective), WLC lists many of its major donors, which include Wiley, Rein & Fielding, a K Street law firm ($414,000); Dentons US LLP, also a K Street Law firm ($173,000), and the Morrison & Foerster Foundation, a San Francisco-based foundation ($215,000); the D.C. Bar Association ($80,000); and Kirkland and Ellis, a Chicago law firm ($153,000), among others. WLC reported another $1.7 million in contributions from unnamed individuals who contributed less than 2% of total revenue.

What emerges is a picture of a well-funded activist group funded mainly by wealthy lawyers, which supplements its income by collecting legal fees and awards from the lawsuits its files. This is not a grassroots organization. It reflects the views of the nation’s liberal legal elite.

In describing what it does, WLC notes a special concern for “people of color, women, children and persons with disabilities [who] are disproportionately forced to live in poverty” (my italics). That may explain the connection with the disAbility Law Center of Virginia. which provides advocacy services across Virginia for people with disabilities.

The disAbilities Law Center is not nearly as transparent. Its 2015 990 form reported $2.9 million in revenue, and its website lists 34 employees. But the nonprofit did not reveal who its major contributors are. More than $2.6 million was classified as “Government grants (contributions),” another $109,000 was described as “National Disability Rights,” $61,000 came from “other attorneys fees,” and $4,000 from settlement fees. The nonprofit reported no revenue from membership dues or fundraising events. As with the WLC, it is safe to say that the disAbilities Law Center is not a grassroots organization, but rather relies upon generous benefactors. I would conjecture that the group’s priorities reflect the preoccupations of liberal elites, but further research is required to document the suspicion.

How does a nonprofit focused on disabilities get mixed up with a center holding illegal unaccompanied-minor immigrants? In its own description, the disAbilities Law Center is part of a “nationwide network of organizations known as ‘Protection and Advocacy systems,’ designed to offer an array of education and legal representation services to people with disabilities and to combat abuse and neglect in both governmentally operated and privately operated facilities.”

The federal government officially recognized the disAbilities Law Center in July 2018 as a group with “authority to monitor conditions and treatment in immigration facilities if those facilities have residents with disabilities.”

So, what does all this mean? The Virginia Mercury was the only media outlet to report today on the follow-up criticism to the report. Reporter Ned Oliver describes the groups as “advocates for the immigrant teens,” never mentioning their social-justice mission or the fact that they are part of a larger constellation of organizations seeking to influence public policy.

Now, this network may be totally benign and above-board. Or it may be part of a larger coalition of nonprofit and advocacy groups intent upon undermining the Trump administration immigration policy by filing lawsuits and generating publicity. I don’t know the truth of the matter. My point here is not to criticize either group, for I have no tangible basis for doing so, but to raise the kind of questions that the media should be asking when they report on the Shenandoah Valley Juvenile Center controversy. If a right-wing legal advocacy group were filing a lawsuit, the ideological orientation of the group surely would be noted in any story. The same rule should apply to liberal-progressive groups and their causes.

Transparency for Thee But Not for Me

Is Ralph Nader the driving force behind UnKoch My Campus?

In response to attacks from left-wing critics, the Charles Koch Foundation said last week that it will post all future multiyear agreements with universities online. The Foundation is one of the nation’s most generous contributors to higher education in the United States, ladling out $90 million in gifts in 2017. Among the biggest beneficiaries has been the Mercatus Center, a free market/fiscal conservative think tank, and to a lesser degree the Antonin Scalia Law School, at George Mason University

Reported the Wall Street Journal last week:

Private colleges and universities aren’t subject to public-record disclosures; some public-university relationships are forged through the schools’ foundations, which can also be exempt from disclosure requirements. Some schools receiving Koch grants have shared the agreement details publicly, but historically not all have been required to do so.

The UnKoch My Campus group has led the criticism of Koch Foundation influence at GMU and elsewhere nationally. Ironically, it is not clear who funds UnKoch My Campus or what strings might be attached to its funding agreements.

In an age in which politics is polarized — and in which everything is deemed political — “dark money” is a massive issue. Millionaires and billionaires influence public policy not just directly through campaign contributions and paid lobbyists but indirectly by funneling foundation money through programs to influence public opinion — as well as those, such as university scholars and new media outlets, who shape public opinion.

Although the Koch Foundation has committed to increased transparency, its critics are not satisfied.

“Unless they are going to release all past agreements, and documentation for all their programs, Koch is not providing clarity, but simply executing a p.r. move to deflect scrutiny from the programs on hundreds of campuses where they continue to leverage undue influence for private gain,” Ralph Wilson, research director for UnKoch My Campus, told the Journal.

At least the Koch Foundation files a 990 form with the Internal Revenue Service, which you can view here. The foundation may not live up to UnKoch My Campus’s lofty ideals for transparency, but then… neither does UnKoch My Campus.

UnKoch My Campus does not publish any agreements it has with funders. It doesn’t even identify its funders. Indeed, it doesn’t even file a 990 form. Here’s what you see when you search the Foundation Center’s 990 finder:


While UnKoch’s web page says nothing about where it gets its money, if you want to donate, you can stroke a check to “Essential Information,” a Washington, D.C.,-based outfit, founded in 1992 by Ralph Nader, whose affiliation is not explained.  You can see a a 990 form for Essential Information here.

Reporting total assets of $86,000, Essential Information does not appear to have an endowment or to be otherwise self-funded. The group reported receiving $382,000 in gifts, grants and contributions in 2016 but it did not identify the source of those funds.

The foundation listed $97,000 in salary and other administrative expenses, and it listed the Free Africa Foundation as the recipient of a $25,000 grant. (The previous year, it gave $50,000 to the Environmental Action Center.) The foundation provided no indication of how the other $260,000 was spent.

The president of Essential Information is listed as John Richard, who devoted on average five hours of week to foundation duties. And who is John Richard? According to the Public Citizen website, upon whose board he sits, he “supervises staff at The Center for Study of Responsive Law, the hub of Ralph Nader’s public interest activities in Washington.”

The Center for Study of Responsive Law takes donations on its website, but does not say where its money comes from. The Center’s 990 form is only partially illuminating. The group collected $808,000 in 2016, and it supported a staff of 11 with wages, payroll taxes and benefits of $574,000. Where did that money come from? The group didn’t say. And what did the Center spend its money on? Three things mainly: two Breaking Through Power conferences, the DC Library Renaissance Project and “a wide variety of research and educational projects to encourage government and corporate institutions to be more aware of the needs of the citizen consumer.”

Did Ralph Nader’s Center for Study of Responsive Law donate money to Essential Information and/or UnKoch My Campus? Publicly available data provides no answer. Where did Nader’s $808,000 in 2016 contributions come from? Did he rely upon small-dollar donations? Did he self-fund? Did he rely upon one or two big donors? If there is a funding agreement in the mix, I’d love to see it. Good luck with that.

Irony: Clean Money Group Donates More than Power Company


The Virginia Public Access Project has updated its list of largest campaign donors in Virginia, and the results making good reading.

My money is cleaner than yours. Perhaps the most fascinating tidbit is that Charlottesville-based Michael Bills, founder of Clean Virginia and scourge of Dominion Energy Virginia’s influence on state politics, has injected more money into the political system than Dominion has so far in 2018-2019. Bills donated $245,000 while Dominion contributed $190,940. (The Dominion number does not include personal contributions by Dominion executives. CEO Thomas Farrell, for example, has given $7,500 so far. Dominion executives Paul Koonce and William Murray chipped in $5,000 and $4,500 respectively. Still, Bills managed to give more than Dominion’s PAC and executives combined.)

Clean Virginia’s mantra: “In Virginia, corruption is legal, and it is time for that to end.” Clean Virginia’s solution: The organization out-bids its sworn enemy for the loyalty of Virginia legislators.

To my mind, the most fascinating untold story in Virginia politics today is the rise of Charlottesville’s landed aristocracy as a bankroller of liberal and Democratic Party causes. Virginia’s horse country gentry helped lefty Tom Periello nearly unseat moderate Ralph Northam in the 2017 Democratic Party nomination for governor. I view Bills’ Clean Virginia initiative as a continuation of that momentum.

Speaking of big money… Democratic PACs and allied groups totally dominate the list of largest donors. These include the Stronger Together PAC, which raised money for Northam’s campaign; the Laborer’s District Council, which gave heavily to the Northam campaign; and the Commonwealth Victory Fund and the Legislative Majority PAC, two Democratic Party-aligned groups.

The biggest GOP-leaning donor was William B. Holzman, a Shenandoah Valley oil and gas distributor. Collectively speaking, Virginia’s big businesses — Dominion, Comcast, Verizon, Altria, and the Realtors and Bankers associations — lean to the GOP but they spread their money between both parties. If political power in the General Assembly shifts to the Democrats, the corporate money likely will follow.

How will the media cover this story? As far as I can tell, only David Ress with the Daily Press has reported on the latest VPAP numbers. His focus, unsurprisingly, was Dominion — although he took a man-bites-dog angle on the story, noting that the utility is not the biggest campaign contributor this year. I’m waiting for the media to start showing the same level of interest in the other big-money players as it does in Dominion. And don’t get me started about all the “dark money” sloshing around the system. I’ll save that for another day.

Postscript: By the way, U.S. Senator Tim Kaine is out-raising Republican Corey Stewart by a ratio of about 17 to one. Clearly, Virginia’s moneyed class is avoiding the Trumpier-than-Trump candidate like the Ebola virus. Worse for Stewart, he’s even losing the small-donation race (less than $200) by a margin of about three-to-one. This race will be a wash-out. The Virginia GOP looks like it’s in huuuge trouble.

Updates: Money, Power and Politics (Oh, My)

The following are updates on earlier Bacon’s Rebellion stories of mine.

Clean Virginia Files First Report

Clean Virginia Fund, the political action committee that is trying to buy legislators’ loyalty away from regulated utilities, has filed its first report with the State Board of Elections.  Charlottesville financier and hedge fund magnate Michael D. Bills is the only donor, putting in $50,000.  Two senators and nine delegates, all Democrats, accepted a total of $32,500.  Dominion Energy and Appalachian Power donated a combined $175,000 during the same period so if this is really a bidding war, Clean Virginia has some catching up to do.

Hunton Andrews Kurth, the Richmond law and lobbying firm, is off to a slow start, giving only $23,000 on this report.  The firm drew notice for saying it would not support legislators who refused donations from its utility client.  Its largest check was to the Democratic Commonwealth Victory Fund, which supports both House and Senate candidates in that party.  (Dominion Energy gave to that, too.)

Somehow I don’t think any of the legislators who are refusing corporate or utility dollars will refuse help from that party committee. The check was probably to attend the Democrat’s annual event at the Homestead, where I’m sure all had a nice chin wag over the bar or on the golf course.

Dominion Energy Doubles Down on T1 Rider Taxes

Responding to an adverse recommendation from a State Corporation Commission hearing examiner, Dominion Energy has filed comments asking the full commission to ignore her opinion and make the customers pay too much.

Its first and most important argument is that the commission doesn’t have the authority to exercise discretion over the future transmission charges under rate adjustment clause T1.  It points to language in the 2007 statute that created this RAC and the whole system of RACs.  In the case of transmission costs under T1 the language says that any bill from regional transmission entity PJM is presumed to be reasonable and prudent.

This isn’t about the taxes, it’s about that language.  That “reasonable and prudent” presumption is even more frequent in the statute now, thanks to the 2018 legislation.  This is once again proof that Dominion inserts that phrase (and it writes these bills, no legislator does) to override the judgement of the SCC.  Those of us who worked on that 2007 statute never contemplated that Dominion would take advantage of that presumption to self-calculate its charge based on false information – in this case an erroneous tax rate.

If the SCC stands with its hearing examiner, expect the utility to take the battle back to the Virginia Supreme Court or back to its friendly legislators.  Once again, as it has been for more than a decade, the only real issue is will the legislature listen to the SCC or let the utility make it own laws and rules.

The AG Giveth, the AG Taketh Away

Attorney General Mark Herring has notably been a bit less predictable than many previous AG’s on the question of who his client is, if the state law or regulatory position he would normally defend was highly unpopular with various interest groups.

He earned praise in many circles recently for deciding to have his staff defend certain abortion-related regulations, but now has decided to not let his staff join in the appeal of a recent decision on legislative districts and the Voting Rights Act.  The Republican legislators seeking a delay on drawing a new map pending that appeal will need to fund their own legal efforts.

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AP’s Latest Hit Piece: Journalism or Polemic?

Here we go again. The Associated Press’ Alan Suderman has popped out another context-free article making an issue of Dominion Energy’s tenfold increase in lobbying expenses over the past year to more than $1 million. That spending, writes Suderman, “came during a period when the company successfully pushed through legislation that could lead to substantial increases to electric bills.”

It is a legitimate exercise in journalism to report the lobbying expenditures of the state’s largest investor-owned utility, especially when it is as politically influential as Dominion and when the utility backed controversial and far-reaching legislation. But it’s not legitimate to strip the story of highly relevant context such as… oh, I don’t know… maybe, how much other stakeholders spent on lobbying, advertising, education and outreach.

If Dominion were alone in increasing its investment in influencing legislators, that would be one story. If, given the magnitude of the stakes involved, the utility’s spending was matched by the spending of other interest groups, that would be a very different story. Suderman did not raise the latter possibility in his article, thus creating a highly negative impression of Dominion — an impression he reinforced by quoting Clean Virginia, a group formed to counter Dominion’s political influence:

“It’s unfortunate that at a time when refusing monopoly money has become a hallmark of good governance, Dominion is doubling down on its political spending in an attempt to rig the rules in Richmond and mislead Virginians about the cost of their corruption,” said Brennan Gilmore, executive director of Clean Virginia.

Suderman notes in passing that Clean Virginia is a “newly formed group.” Ironically, Clean Virginia does not yet appear in the Virginia Public Access Project (VPAP) database as a campaign donor, even though the organization has pledged to back General Assembly candidates who refuse Dominion money, nor as a registered lobbyist, even though the group is actively involved in influencing public opinion. Come to think of it, the Clean Virginia website does not say where its money comes from either. One guess is that some, if not all, of its funding comes from its founder and chairman, Michael Bills, a wealthy investment manager (founder of Bluestem Asset Management) from the Charlottesville area. But there is no way for members of the public to find out — Clean Virginia’s 990 filings have yet to show up in the ProPublica database of nonprofit companies.

While Clean Virginia is a cipher, Dominion details precisely how much money it contributes to political campaigns, whom it has hired as a lobbyist, how much it has contributed in gifts and entertainment, and (through other reports) how much, and to whom, its nonprofit foundation donates money.

There’s a real asymmetry at work: Dominion scrupulously documents its lobbying activities but other players in the burgeoning renewable-energy and energy-efficiency fields, not to mention some of the company’s most relentless critics, do not. Suderman calls out Dominion for its spike in lobbying-related activity but cares not a whit what others are spending or their refusal, for whatever reason, to be fully transparent about their activity.

Actually, there’s an even bigger asymmetry at work. While Dominion exercises its influence largely through campaign donations and lobbying, the company’s critics make their power felt by devoting resources P.R., education and outreach to influence public opinion — expenditures that aren’t captured in any database.

If it were possible to compile all the information needed to make a valid comparison, perhaps we would find that Dominion’s bolstered its spending by many times more than others did — although that would raise a different set of issues. (Dominion spokesman David Botkins argues that the spending surge was necessary to “break through the fake news and propaganda perpetuated by anti-energy groups like Clean Virginia and their ilk.”) Alternatively, perhaps we would find that Dominion’s spending increase was matched by others. We don’t know what we’d find until someone does the digging. But it is patently unreasonable to skewer Dominion for its spending surge without (a) comparing the increase to that of other stakeholders, and (b) acknowledging that Dominion is being more transparent than many of its critics.

Biased journalism such as Suderman’s is what causes many Virginians to mentally discount whatever they read. “What is this reporter not telling me?” readers wonder. “Is this just a hit piece?”

The Strings On The Money Revealed

Money In Politics

And now, from our You Can’t Make This Stuff Up Department, come two Richmond lobbyists providing strong evidence that the money really does have strings and you only get it if you play along.  We had no idea, right?

First, see the story on Blue Virginia, with newly-elected Del. Dawn Adams, D-Henrico, sharing a recent email response from a representative of Verizon. In response to a solicitation to attend her lobbyist shakedown soiree the Verizon employee said nope, she didn’t vote for a bill we wanted so no money. Most of us around the Capitol have a very good idea who would write that. But it is only a guess.

Second, read in this morning’s Times-Dispatch about a recent message from legal mega-firm Hunton Andrews Kurth (formerly Hunton & Williams) to any legislator who declines a campaign contribution from its client Appalachian Power. If you refuse to accept APCO money, the firm will refuse to send you money from its own accounts.

The head of the government affairs team, former legislator Whitt Clement, was quite open about it but added: “This matter has not been thoroughly vetted in view of our other clients. So I think it is safe to say that we will continue to evaluate our position.” Given that this story hit the T-D website yesterday afternoon, it may be that policy has already been dumped. That isn’t going to help their other clients and potentially does them harm.

Years ago one of Clement’s colleagues in that firm advised me on what not to say in written or even spoken communications with legislators on behalf of my then-employer. I guess that advice was only for external consumption. Or perhaps the new Texas partners have brought a new tone to Richmond’s Main Street.

The business entities most subject to state regulation are logically among the largest state donors. High on that list would be the public service corporations, the public utilities and transportation companies. Clearly it is a threat to their influence if a subset of legislators refuses to take their money and makes it an issue, pressuring their peers to follow suit.

There can be a good case made for refusing public service corporation money. If the legislators are going to take that stand it needs to be consistent. If you decline APCO money you should decline Hunton Andrews Kurth money. There is no difference between Verizon and Dominion except that Verizon no longer enjoys a monopoly. It is still providing a necessity and is thus regulated, and it does come to the General Assembly seeking to set rules for the regulators or to give it advantages. The purity of the stance is also eroded by the acceptance of money from a party or caucus committee being funded heavily by regulated entities. (Just as the high-and-mighty stance by the law firm is also just a posture if it continues to support the parties.)

The bottom line is all the money, including money from people on any side of various issues, is intended to influence the process and usually does. Rather than everybody pontificating about what money is evil and what money is clean, it is time to start the conversation in Virginia about placing some reasonable limits on the amount of money any candidate or party committee can take from any person or corporation. Limit the money, limit the influence.

Remembering Tim Kaine’s Caribbean Vacation

by D.R. Rippert

Rolexes in Paradise. Ask most people about former Virginia Governor Bob McDonnell and the first thing you’re likely to hear is, “You mean Governor Rolex?” or some other reference to his trial and conviction on bribery charges. The fact that the U.S. Supreme Court unanimously overturned the conviction doesn’t matter. McDonnell’s once promising political career was left in ruins by the Obama Administration’s DoJ and a conflicted trial judge who erroneously instructed the jury on the definition of “official acts.” In McDonnell v. the United States the U.S. Supreme Court rules that “official acts” within the context of federal bribery statutes do not include such things as merely setting up meetings, calling another public official or hosting an event. The U.S. Supreme Court never ruled as to whether an “official act” would be the appointment of a gift donor to a prestigious state position because McDonnell never did that. Governor Tim Kaine, however, did.

The Virginia Way. First things first, the Old Dominion has mastered the art of legalized corruption. Politicians can pocket extravagant gifts from favor seekers, campaign contributions are unlimited and can be spent on virtually anything, the list goes on. So it was certainly legal for former Governor Kaine to accept  $160,000 worth of gifts during his single four year term. He took $5,500 in free clothes from a now bankrupt menswear company. A global pharmaceuticals company paid $12,000 for him to attend a meeting in Aspen. He even got over $45,000 in travel and lodging from Obama for America to help campaign for Obama while still pretending to be Virginia’s Governor. However, there was one gift in particular that should have landed him in the same hot water as McDonnell … a Caribbean vacation on a private island.

Warm your bones in the Sun, Tim my boy. After a long campaign Tim Kaine won the governorship in 2005 and was looking for a bit of a rest before assuming office. He didn’t have to look far. One of Kaine’s benefactors, Charlottesville tech investor James B Murray Jr, had just the solution – his home on the private island of Mustique. Mustique is owned by a company that, in turn, is owned by the home owners of Mustique. Frequented by Princess Margaret, Tommy Hilfiger, Mick Jagger and David Bowie Mustique was the perfect getaway for the Kaine family. And best of all, it wasn’t going to cost them anything to stay there. Off they went.

Tim has an appointment to keep, err … make. So far this story about former Governor Kaine is pretty tame by Virginia standards. Kaine won the election, the world is his oyster, gift givers are lining up to bless the “king” with tokens of their endearment and affection. Business as usual in America’s most corrupt state. But on April 10, 2006 in one of his first acts as governor Tim Kaine decides to re-appoint James B Murray Jr (of Mustique fame) to the Board of the Virginia Commission on Higher Education. This commission reviews potential appointees to the governing bodies of Virginia’s public higher education institutions. One can only imagine how socially popular these commissioners must be among the hoi palloi of Virginia’s horsey set as they vie for a seat on this or that board of visitors. Today, James B Murray Jr is the Vice Rector of the University of Virginia and helpfully told the Cavalier Daily, “It might be desirable if the process were entirely apolitical, but it is highly politicized and always has been.” My translation? Send the Kaine family on a nice vacay and you get appointed to play kingmaker.

Militarizing the DoJ. Nobody accused Gov Bob McDonnell of appointing donor Jonnie Williams to anything. What he was accused of doing was unanimously rejected as an “official act” in the context of federal bribery statutes by the U.S. Supreme Court. Gov Kaine took a lovely gift and then quickly re-appointed the gift-giver to a prestigious state board. Isn’t that more of an “official act” than anything McDonnell did? So, why the disparate treatment? The answer has become increasingly clear in recent months as the Obama Administration’s use of various federal agencies for partisan political purposes has come to light. The IRS, The DoJ, The FBI, even the FISA Court – all tools of political persecution in hands of an unscrupulous president. Did anybody do anything illegal? Maybe, maybe not. But does it seem right that one governor has his political career destroyed for seemingly less of an offense than the prior governor / U.S. Senator /  Vice Presidential candidate committed? Let’s hope somebody asks Tim Kaine that question as the U.S. Senate race unfolds.

Their Money is Bad and Our Money is Righteous

Money In Politics

During the 2018 session I received a curious meeting invitation, hush-hush, from somebody who indicated a possible alliance in the struggle against the pending utility legislation. We had to meet away from the Pocahontas Building to avoid observers.  My curiosity led me to take the meeting, and it turned out to be about the Clean Virginia effort which sparked a Washington Post story Friday.

As the person described back in the winter how they were planning to fight Dominion’s political clout by asking legislators to take a pledge against Dominion money, and in exchange replace those dollars with their own funds, my reaction was immediate: What is the difference? Aren’t you also assuming that all legislators care about is who gives them money? Aren’t you also trying to buy votes?

That was the counter attack to expect, and I wanted nothing to do with it. It would be detrimental to our efforts. I predicted it would blow up. It was a short meeting and forgotten until reading Blue Virginia Sunday reacting to the Post. (I cannot remember if the Feb. 8 Times-Dispatch story about this was before or after I had that meeting, but at that point the group had not begun its pitch.)

Emailing a cash donation offer to 140 publicly-funded legislative inboxes – as Clean Virginia apparently did recently — was an intentional invitation to media attention. They had to expect a story. The assertion by Blue Virginia that the new Post story was a Dominion-inspired hit piece (“fed to the stenographers”?) is just more evidence that for far too many clueless activists these days (all sides), the end justifies any means and anyone who questions the means is an enemy.

The pitch came across as a quid pro quo because that is what it is. “Don’t take Dominion’s money and we will replace it” is pure “that for this.” It was the story I had predicted 90 days ago. A less sympathetic newspaper would have written a much tougher story. More coverage may yet follow. They have done Dominion a major favor.

I try not to argue with smart lawyers (Clean Virginia claims to have them) but every one of them who has ever advised me said do not, ever, not even indirectly, not in writing or just with a wink or nod, promise financial support in exchange for any action by a legislator. Likewise do not link financial support to any specific action after the fact.

As previously noted by me three weeks ago, the 2018 energy omnibus was all about political clout and huge campaign contributions, but it was the eventual alliance between Dominion Energy and the big environmental groups that pushed the final anti-consumer product onto the desk of a governor who had received unprecedented financial support from environmental groups plus the usual attentions from Dominion.

Nobody gives millions of dollars to politicians without expecting a return, not Dominion, not the League of Conservation Voters and not Clean Virginia if it gets into that big league. Everybody believes the return they are expecting is the right thing for Virginia. The conversation in Virginia about contribution limits should start now.

Behavior Has Changed But Within Limits

Gifts per legislator. Source: Virginia Public Access Project

There are plenty of complaints these days that the legislative process is unduly influenced by money, but when the spotlight shines or a major scandal erupts, behavior can change. For example, Virginia legislators simply do not want to report that they have received gifts or attended lobbyist dinners, on public records which are available to their voters, the media and potential opponents.

How few actually do show up on 2018 reports is well-illustrated in the graphic above recently posted on the Virginia Public Access Project (click here for interactive features). Readers of Bacon’s Rebellion are probably already following VPAP as well, but if not this is worth a look.

Except for one very popular event, the annual Agribusiness Council Dinner, 91 of Virginia’s 140 legislators would have reported no gifts or meals at all. In many rural districts the political cost of skipping the Ag Dinner and not being seen by constituents attending would also be high. Yet 64 legislators missed that one, too, and avoided having to explain that $69.48 repast.

Several legislative offices have signs out front expressing a policy against accepting any gifts, even innocuous gifts such as a ball point pen or a box of candy or a calendar. That is growing but is not universal. It is the aversion to reporting gifts or entertainment that is becoming more widespread.

That report makes one think the place has really changed since the Bob McDonnell case, right? Not so fast. First note the data covers the period of the regular General Assembly session, from January 1 to Sine Die in March, not the whole year. As you can see with the full 2017 data here the totals tend to grow through the year, especially with paid trips to summer conferences. But there is no dispute that the number and value of reported gifts and meals is shrinking. For example look at the same report for 2012.

Second, remember that gifts or entertainment expenses of $50 or less do not trigger a reporting requirement. Lobbyists or organizations are keeping a closer eye on the cost of items, but $50 can still pay for some very nice gifts or meals.

Does it at least mean the days of the big restaurant dinners are over? Oh my no – and here is how they do it. It can be tracked on VPAP as well but it takes research. The $50 reporting trigger is interpreted to mean $50 per person per lobbying principal (client) paying the bill. If two clients for the same firm split the tab the trigger is $100 per person, and if three – well, you get the drift.

To confirm this is still the practice I easily found an example, but will not provide the details because I did not reach out to the major lobbying firm involved. I noted that one client reported a dinner on January 25, 2017 with 12 persons and a bill of $149 – well below the cost that would require naming the legislators. But by clicking down its full client list I found four more clients reporting a dinner for 12 at $149 on the same date.

Assuming the firm didn’t host five different dinners that night, the real bill was $745 for 12 people, or $62 per person.  That’s hardly lavish, but the intent to disclose the names of attendees has apparently been thwarted. They could stay on the list of those with no reportable gifts for 2017.

As VPAP helpfully explains: “Disclosure forms do not require clients to state clearly the average cost per person. Calculating the average cost per person may not be as simple as dividing the total cost by the number of people attending. Because the forms and instructions are unclear, the amount listed can represent either the total cost of the event, the amount spent on only the officials who attended or the average cost per person.”

It is silly and arbitrary to assume that somebody who accepts a $51 dinner has been compromised while somebody who skips dessert or drinks and spends $40 has not. Frankly neither has been compromised in my book. The real purpose of these dinners is to get the undivided attention of the legislators for a while – admittedly an advantage for that lobbyist and an edge on the competition. That is reason enough they should be fully reported.

If the costs of a dinner can be shared among multiple clients then the costs of other forms of entertainment or gifts could also be divided, seeking to keep the cost below $50 per client per recipient and keeping the recipient(s) off reports. I have not scoured the records to see if that happens, but nobody should have to.  The General Assembly needs to end this particular game.

Money Always Finds a Way

Every right-thinking person in America is concerned, if not downright appalled, by the role of money in politics. Citizens want their legislators to base their lawmaking decision on the merits of the case, not how much money corporations and special interest groups are shoveling into their campaign coffers. Some states deal with the problem by putting caps on campaign donations. Here in Virginia, there are no such limits in campaigns for state office, but the Commonwealth does require full transparency. Go to the Virginia Public Access Project to find out who’s donating money — and presumably has the ear of — your elected representatives.

But the debate over money in politics rages unabated. Not without some queasiness, I hew to the view that Virginia does it right. I could cite reasons of lofty principle, such as the argument that campaign contributions constitute a form of free speech that should not be abridged. And I could cite reasons of base practicality: Restrictions on campaign contributions will just drive influence seeking into the shadows where it cannot be tracked.

Now comes research by four economists (lead author Marianne Bertrand with the University of Chicago), “Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence,” which illuminates a surprisingly common means of subterranean influence — corporate philanthropy.

The authors examined where philanthropic foundations of Fortune 500 and S&P 500 corporations donated their money. Lo and behold, a significant percentage went to charities in the districts of congresspersons sitting on committees that oversee the industries of the donating firms.

Our analysis suggests that firms deploy their charitable foundations as a form of tax-exempt influence seeking. Based on a straightforward model of political influence our estimates imply that 7.1 percent of total U.S. corporate charitable giving is politically motivated, an amount that is economically significant: it is 280 percent larger than annual PAC contributions and about 40 percent of total federal lobbying expenditures. … Charitable giving may be a form of political influence that goes mostly undetected by voters and shareholders, and which is directly subsidized by taxpayers.

It would be naive to think that corporations are the only players in the philanthropy-for-influence game. Corporate motives might be easier to discern, but individual philanthropists often back causes and crusades of an ideological nature — the environment, social justice, free markets — that intersect with political controversies. Are billionaires and centi-millionaires any less likely than corporations to curry favor with elected officials than corporate executives?

Bertrand et al. posit a mechanism by which charitable contributions translate into influence.

To understand how charitable contributions directed to a congressional district may serve as a channel of political influence, one can build on the notion of credit-claiming by self-motivated politicians, an idea in political economy and political science that dates back at least to Mayhew’s observation that “Credit claiming is highly important to congressmen, with the consequence that much of congressional life is a relentless search for opportunities to engage in it.”

Although it is typically discussed in the context of federal grants and earmarks, political credit-claiming of local charities is a natural means of appealing to voters, given the visibility of many charities to politicians’ constituencies.

As a concrete example, the authors point to Washington Senator Patricia Murray, whose official webpage describes her work on housing, stating, “I was proud to establish the Washington State Farmworkers Housing Trust to help families who work hard to keep one of our state’s most important industries strong.” The charity’s donors include the foundations of JPMorgan Chase, Bank of America, and Wells Fargo. (The authors would have made a stronger case if Murray served on a committee regulating the banking or housing industries, but it doesn’t appear that she does.)

There’s an old saying that water seeks its own level. So does money in politics. We live in a political system that intrudes into every corner of the economy. No business activity is beyond the reach of taxation and regulation. As long as politicians have the power to reward and punish, businesses will have an incentive to influence the political process. If they don’t do it one way, they will do it another. As we’ve seen vividly with the machinations of the Clinton Foundation, politicians and corporations are infinitely ingenious in finding ways to trade in influence. Two hundred and fifty thousand dollars for a speech? Outrageous. But what’s the solution? Prohibit former presidents from being paid to give speeches?

The question for citizens is this: Would we rather they conduct their influence peddling out in the open where we can see it, dissect it, and denounce it? Or would we rather have it go underground?

A Shocking Case of Lawful Behavior

by Stephen D. Haner

Sometimes the problem is fake news and sometimes the problem is non-news, and in a shocking non-news story it was revealed that (gasp) politicians are raising money. Just as they have for every year I can remember, General Assembly incumbents are filling mail and email inboxes with invitations to their usual spring and summer lobbyist shake-down events.

But you have to understand, these are Senate Republicans doing this, the very same Republicans who have not acted yet on a delayed state budget! They are now in a special session. Acting in total and clear compliance with state law, and conducting themselves in complete conformity with previous patterns of behavior…..wait, why is this news? Are not Democrats also holding fundraising events? Actually they are, while the story was light on those details.

Perhaps you think it okay for members of the House of Delegates – in both parties — to hold their standard spring events. Do you think they have done their duty by passing out another version of their budget, so they get no special scrutiny as they dun the lobbying corps and the various corporate donors? They also are in special session, if that is what offends.

Granted, very few Senate Democrats are as aggressively raising funds. They have always been less aggressive about raising funds. It is one reason they are, in case you missed it, not in the majority.

I am not going to defend the Senate GOP delay on starting the second budget conference. But the issues that caused the hang up are legitimate and sadly we are all getting used to this unfortunate game of budget chicken. It may lead to laws that prevent fundraising during special sessions as well as regular sessions, but those prohibitions are mainly for show. If money can affect their decisions in January, it works just as well in June.