If you think that an "information era" has ushered in a golden age of transparency, read on. This is the first in an occasional Shadow Elite series examining how private actors seize and hoard vital information to serve their own interests, not the public interest.
Is there anything more toxic to a healthy democracy than special interests buying elections? Sadly, yes. It's when citizens have no idea who those special interests even are, and no way to find out. That's where the U.S. stands in the wake of decisions over the past several years vastly enabling campaign finance secrecy, the focus of the current congressional fight over a so-called DISCLOSE Act.
The blindfolding of the American electorate is a sign of the new era of power and influence -- the shadow elite age, as identified in Janine's book, Shadow Elite. It's an era in which basic questions like "who funds it?" and "who is responsible?" often lack straight answers. It's an era of deniability. Far from transparent, the source of more and more campaign financing is ambiguous or even secret, enabling the funders (and their comrades in the know) to deny responsibility.
There was enormous consternation among public watchdogs after January's Supreme Court ruling in the Citizens United case fully legalizing corporate campaign donations. And so we were intrigued by what the New York Times reported last week: "Corporations have so far mostly chosen not to take advantage of the Citizens United ruling to directly sponsor campaign ads themselves."
The operative word there is "directly." Rather than exert influence openly, even when it is completely legal to do so, (mostly Republican-leaning) donors with deep pockets are apparently choosing to channel influence anonymously through so-called 501(c)(4) groups. These groups declare that their primary purpose is the "promotion of social welfare," not partisan politics, and therefore don't need to disclose their funding sources. The groups themselves, in true shadow elite fashion, add another layer of obfuscation with vague names that give no hint of politics or provenance, like "Americans for Prosperity" and the Karl Rove-backed "Crossroads GPS."
How much influence, in the form of campaign cash, is funneling through these groups from wealthy donors? We'd like to know. Salon reports that "in August, [the non-profit 527] American Crossroads raised $2,639,052. Fully $2.4 million of that -- or 91 percent -- came in the form of gifts from just three billionaires [or companies they control.]"
At least those billionaires are named: American Crossroads' sister group, Crossroads GPS, which is organized as a 501(c)(4), doesn't have to disclose where its many more millions have come from.
Further complicating matters: These organizations "fall into something of a regulatory netherworld," as the Times puts it, with neither the IRS nor the Federal Election Commission seemingly inclined or empowered to push for more disclosure, even when 501(c)(4) activities look far more political than philanthropic. The Times, in an editorial called "The Secret Election," shows the extent and the deliberate nature of this muddle:
In 2004 and 2006, virtually all independent groups receiving electioneering donations revealed their donors. In 2008, less than half of the groups reported their donors, according to a study issued last week by the watchdog group Public Citizen. So far this year, only 32 percent of the groups have done so.
The secrecy and ambiguity is just as the shadow elite wants it. They don't want just influence but rather influence with impunity. A controversial policy decision might be made, and the public would have no idea what questions to ask or even whether to ask the questions in the first place. Both the donor and the politician enjoy the benefits of deniability that come with anonymity. The information that not long ago was public information is now firmly in a few, private hands.
There's an inescapable irony to this: We are told that the digital era has unleashed a wealth of information, and the flood of data has had an inevitably democratizing effect. Amplifying the irony is the cultural atmosphere of self-disclosure and false intimacy fostered by social networking. (Even the wife of the man named to head Britain's Secret Intelligence Service (MI6), in charge of Britain's spying operations abroad, famously (or infamously) put the family's photos on Facebook.)
But confounding this narrative of openness is what has actually happened to vital, should-be public information over the past several decades. In Shadow Elite, Janine identifies a new system of power and influence that debuted with the diffusion of global authority, the growth of privatization, new information technologies, and "truthiness" in the late twentieth and early twenty-first centuries. In this rearrangement of power, responsibility has become more difficult to pin down. The contracting-out of government functions (delivering vast amounts of should-be official information into private hands), the intertwining of business in the regulatory process, and the gutting of government oversight capacity and investigative reporting (enfeebling institutions of check and balance) are some of the key components of this new system.
The result is that the public is more reliant on the accounts and ethics of the players themselves. With major sources of power and influence more difficult to track, the private interests who've stepped into the breach are often the only ones with the needed information to connect the dots. This could be seen in the 2008 bailout process, with private bankers suddenly deputized as crisis contractors for the Treasury Department, without the disclosure requirements of a civil servant. It can be seen in the recent story of Blackwater creating dozens of shell companies, allowing the government to still hire the notorious security contractor, but with a built-in deniability feature of having a different, unrecognizable name on the dotted line.
Meanwhile, the narrative of "transparency" not only masks who is calling the shots, but also makes it more difficult to see the consequences of this chimera for democracy.
Deniability is clearly a huge part of the appeal of these 501(c)(4)'s. A politician can plausibly deny any connection to a wealthy donor. The donor doesn't have to answer to reporters or regulators if his name isn't reported.
Right now, the 501(c)(4)'s are dominated by Republican interests, and indeed the fight over passage of the DISCLOSE Act has split along party lines. But at this point, the act, which would force more disclosure, wouldn't necessarily affect the upcoming elections. And as for the argument that disclosure would "chill political speech," we would say that peddling influence anonymously is an insidious backroom whisper, not the full-throated speech that should be protected. When President Obama last week warned Senate Republicans that "it's our democracy itself" at risk, he was, of course, advocating for his party's interests. But he also happened to be right.
Follow Janine R. Wedel on Twitter: www.twitter.com/profjanine
Just a guess.
Sean Parnell
President
Center for Competitive Politics
http://www.campaignfreedom.org
http://www.twitter.com/seanparnellccp
http://thomas.loc.gov/cgi-bin/query/F?c111:1:./temp/~c111XrnZhp:e27919:
You think a person that makes a net contribution of $600 is the one "calling the shots"? This individual with a net contribution of $600 is your "Shadowy Elite"?
Why the need to post two electronic reports within 24 hours of an independent expenditure and also within 24 hours have it online in machine readable format? And if not the website is open to FEC litigation? Give me a break, this bill is so impractical.
We need to start reading the language of the bills themselves (especially those who write articles about them), it is usually the case that its all about the fine print and not the emotoinal rhetoric.
And why use the general term "communication" instead of the well defined "public communication"? And why would it need to be enacted within 30 days even if the FEC has not "promulgated regulations to carry out such amendments." if it is was not intended to affect the coming elections? I say again.. give me break... at least please read the bill and imagine the practicalities of it.
Advocates of this speech-chilling bill keep mouthing platitudes and evasive rhetoric regarding what the bill actually does. "It's just disclosure," etc. No, it's a huge, regulatory nightmare for people who want to associate freely with one another in order to magnify their voice in politics.
Not only does the bill somehow think that citizens contributing $600 to a group need to be exposed to the public, but the bill seems to take the position that the U.S. Chamber of Commerce, or Planned Parenthood, both decades-old organizations with very little confusion about what they represent, are no different than "shadowy" organizations that spring up a few months before the election and disappear right after. Nonsense.
Read the actual bill, like you say, and people will see all the hurdles and bans on speech imposed, as well as all the special exemptions for unions and a handful of large groups like the NRA.
Sean Parnell
President
Center for Competitive Politics
http://www.campaignfreedom.org
http://www.twitter.com/seanparnellccp
I'm confused here. How could an ordinary citizen have a passion about politics strong enough to give $600+ out of their own pocket but simultaneously be ashamed of what they supposedly stand for and want it kept secret? Where does the First Amendment mention anonymity as a component of free speech?
If you blog or have meetings at your home, nobody is trying to stop you. The same goes for actively seeking others to support your cause. What you're talking about is pooling large amounts of money to peddle influence. If you insist on shouting louder than others, people should know who you are. What is unreasonable about that?
Read.
We the people can make a difference this November.
I love my country. Because I love my country, I have read and thought about the history of the Revolutionary War. War. I have an understanding of the frail existence, the desperate emotions in the daily lives of the HUMAN BEINGS who were the Creators of the Nation I have the priviledge to live in today.
I am humbled by their Sacrifice. I owe those HUMAN BEINGS a debt I can never repay. But I will make a deposit: I'M NOT GOING TO VOTE
It's my Protest -- puny really, compared to other declarations of independence in the history of my country -- but I'll feel part of Democracy none-the-less.
On that day, I will take the time to privately think about the HUMAN BEINGS who lived the creation of my country, as well as those who WORKED to ensure it did not die. And then, I going to go help someone close to where I live who has a tougher row to hoe than I do in these times.
Want to join me?
Instead, they inserted provisions that let unions give unlimited money while corporations cannot; requirements for all shareholders to approve every single political message (as though the corporate boards weren't elected to do this for them, and with no comparable member votes for unions), and complex reporting requirements designed to discourage (or prosecute) businesses.
None of the above provisions would be likely to withstand a legal challange, but they couldn't be repealed before the election (which is precicely why the Democrats wanted to get them through this year).
Start over, include Republicans, and bargain in good faith. The bill would be a slam-dunk if they would just think of the good of Americans instead of their own party.
You know what is more toxic ?
A bunch of uninformed yahoos that rely on the bible more than actual facts , education and logical thought process !
Why not argue from the "actual facts" of the way this econopathic system operates? How it excludes working people, treating us as easily replaced parts. How it denies that we have a stake in the wealth we help create.
Show some respect and concern for us, the majority. Progressives need all possible allies.
That is a two way street my friend .
Look at yourself using the term progressives . They have you so scared to say you are a LIBERAL that you turned to a different name even !
These ignoramous have made LIBERAL into a four letter word and you sit here lecturing me about showing respect !
Well you keep showing respect to them just like Obama has and see where it gets you they will Cr@p all over you just like they have been Obama and LIBERALS for decades !
Don't you dare try to lecture me ! I have been around to long and watched these animals demonize Americas very own citizens and destroy the middle class the real thing that made this country great and you want to be tolerant , turn the other cheek .
Sorry not me I am ready to fight for this country I call home I think she is worth it !
The proposed legislation is so heavy a burden on "free" speech that more than 15 seconds of a thirty second ad would have to be given over to some guy who talks faster than Robin Williams on cocaine.
Sean Parnell
President
Center for Competitive Politics
http://www.campaignfreedom.org
http://www.twitter.com/seanparnellccp
After reading key components of the bill Obama gets a big negative from me for openly supporting this bill... another big negative was saying that he thought the argument was already settled whether governments should massively spend to stimulate the economy in a downturn... well maybe in the halls of Harvard they teach that... but certainly not the case if he would do a basic survey of the history of economic thought, and yet he thinks economic theory in relation to government spending is closed to debate... not good.
Is that good?
We like to think of our country as the great demoracy. But we are only a couple hundred years old, really just an experiment in human history. And it may prove to fail.
Citigroup Plutonomy Report Part 2
Mar 5 2006
RISKS -- WHAT COULD GO WRONG?
Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as was -- one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation on the rich (or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous [home-grown] laborers, in a push-back on globalization -- either anti-mmigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.