When the Supreme Court handed down its historic decision in Citizens United v. Federal Election Commission on January 21, 2010, some legal analysts and political commentators warned that it would, in effect, open the floodgates for unlimited campaign contributions from corporations. Others championed the decision as a victory for free speech.
Today the court struck down decades-old limits on corporate and union spending in elections (including judicial elections) and opened up our political system to a money free-for-all.
…the Court overturned long-standing precedent, ruling that banning corporations from using money from their general treasuries for express advocacy was an unconstitutional violation of First Amendment political free speech rights. The majority opinion also struck down the electioneering communications rule as it applies to corporations. As a result, corporations and unions may now spend as much as they want on independent expenditures, in a way that could help the candidate of their choice, right up until Election Day.
Restore our Future
Formed in October 2010 by three former campaign staffers of Republican candidate Mitt Romney, Restore our Future is known as a super PAC and is a political by-product of the Supreme Court decision.
Restore Our Future, a group run by Romney officials from his 2008 bid, was funded exclusively by 90 wealthy donors, most of which have also given to the former Massachusetts governor’s presidential campaign account.But with no limits on the contributions to such entities as Restore Our Future, the contributors were able to give huge chunks of money – not a single check was under four figures and most were in the five and six-figure range. There are also no restrictions on how donors can give to the SuperPACs and three of the four $1 million contributions came from organizations instead of individuals.
One clue emerged, however. According to the article, the address in Midtown Manhattan was shared by Bain Capital. Romney, in fact, founded and served at as CEO of Bain Capital.
“From 1984 until 1999, Romney led Bain Capital, a Boston-based private equity group that earned jaw-dropping profits through leveraged buyouts, debt hedge funds, offshore tax havens and other financial strategies. In some cases, Romney’s team closed U.S. factories, causing hundreds of layoffs, or pocketed huge fees shortly before companies collapsed.”
“They’re whitewashing his career now,” said Marc B. Wolpow, a former managing director at Bain Capital who opposes Romney’s White House bid. “We had a scheme where the rich got richer. I did it, and I feel good about it. But I’m not planning to run for office.”
After NBC made this discovery, two groups, Democracy 21 and Campaign Legal Center, requested the Justice Department to investigate the matter of the mystery company and its secret owner/contributor.
“Political spending has been driven into secret corners, and more power and influence has been handed to hidden special interests.”
The scenario raised at least two possible legal problems for Conard and W Spann. First, federal law prohibits making a political contribution “in the name of another”—i.e., federal law prohibits a human from making a contribution to a Super PAC in the name of a shell company. In other words, federal law prohibits using straw donors.Second, federal law requires a group that has the major purpose of influencing elections, that receives contributions or makes expenditures exceeding $1,000 in a calendar year, to register with the FEC as a “political committee” and to file periodic disclosure reports regarding where the group gets its money and how it spends that money.The reason for these laws is simple. The Supreme Court has long recognized the right of voters to know the true identity of those funding our electoral process. Accurate disclosure advances two compelling government interests: fostering a well-informed electorate and preventing corruption.
The Latter-Day Saints
The other company, F8 LLC, was founded by another lawyer with ties to Nu skin, Jeremy Blickenstaff. Despite the fact that current estimate of Blickenstaff’s law firm’s annual revenue is $500,000, through the front corporation, he was able to deliver $1 million to the Romney campaign. Blickenstaff also happens to be the son-in-law to Steven Lund which might explain things.
According to the online biography, Steven Lund currently serves as Vice Chairman of the Board of Directors for Nu Skin Enterprises. Previously, Mr. Lund served as President and Chief Executive Officer from 1998 to 2003 and before that as President and Chief Executive Officer of Nu Skin Asia Pacific (NSAP) from November 1996 to May 1998. Mr. Lund also served as Executive Vice President of Nu Skin International (NSI) since its inception in 1984. The Campaign Legal Center has this to say about Lund and NuSkin:
The booming skin care business has made Lund a very rich man. He was Nu Skin’s CEO for five years, owned $31.9 million in company stock and was paid $1.2 million in compensation last year, according to the company’s proxy statement.
The company he founded with three friends out of one of their homes in 1984 has grown to $1.5 billion in annual sales, occasionally inviting controversy.Nu Skin, faced a series of investigations in the early 1990s into its business model and the financial and health claims made by its distributors. It paid a $1.2 million settlement to the Federal Trade Commission in 1994 over health claims made for its products and still operates under a consent decree with the commission. The possibility of tightened federal regulation could pose a threat to profits.But friends dismissed any suggestion that Lund’s donations to Romney would be aimed at averting harmful federal regulations or investigations.Utah Republican Rep. Jason Chaffetz, who worked for Nu Skin for over a decade, said that Lund has supported his campaigns but never asked for anything in return.
But where did all that cash come from?
(R)esearch has shown that the MLM business model, as it is practiced by most companies, is a marketplace hoax. In those cases, the business is primarily a scheme to continuously enroll distributors and little product is ever retailed to consumers who are not also enrolled as distributors…
MLM is not defined and regulated like, for instance, franchises are. MLMs can be established without federal or state approval. There is no federal law specifically against pyramid schemes. Many state anti-pyramid statutes are vague or weak. State or federal regulation usually involves first proving that the company is a pyramid scheme. This process can take years and by then, the damage to consumers is done. Indeed, even when MLM pyramids are shut down, often the promoters immediately set up new companies under new names and resume scamming the public.
It supposedly sells vitamins and skin care products … But virtually none of its revenue comes from selling anything. Instead, its money comes from recruiting a never-ending stream of new distributors who are the primary buyers of the company’s products and who pay to attend seminars in the hopes of making big bucks. Of course, most of the people who take the plunge lose money rather than earning it. As a result, Nu Skin has a long and troubled history with regulators dating back to the early 1990s, when several states were investigating the company for operating a pyramid scheme.In 1992, Nu Skin settled a threatened lawsuit with the Michigan attorney general’s office and four other states, promising to clean up its business practices and to pay $25,000 to cover the cost of the investigation. It later paid $85,000 to settle a suit with Connecticut, where then-attorney general (and current US senator) Richard Blumenthal had filed suit alleging that it was an illegal pyramid scheme. (Incidentally, during this time when Nu Skin was under fire from state consumer protection officials, its official spokesperson was Jason Chaffetz, who now represents Utah’s 3rd District in Congress.)
Nu Skin also got into hot water with the Federal Trade Commission for making false claims about its products, including weight loss supplements and baldness cures, and for misrepresenting the earnings new distributors would make. (The FTC alleged that Nu Skin failed to disclose that new distributors made virtually no money, despite its promises of easy wealth.) In 1994, the company settled a case with the FTC and signed a consent order promising not to engage in false advertising and to stop misleading potential distributors, among other things. In 1997, it paid $1.5 million in civil penalties for violating the order. These actions are one reason that for the past decade, 85 percent of the company’s distributors are in Asia, where the market is not yet over-saturated with distributors and consent orders don’t apply, according to company critic Jon Taylor, the head of the Utah-based Consumer Awareness Institute. Taylor used to be a Nu Skin distributor himself.
“We’ve just been supportive of him,’’ Marriott said. “If he wants us to help out on certain things, then we’re willing to help.’’
Blake Roney is such a church supporter that he commissioned a Mormon sculptor to carve giant pieces of stone into replicas of the original sunstone capitals that were part of the legendary 19th-century Mormon temple in Nauvoo, Illinois. He put them in his front yard in Provo.
The Queens-born hedge fund titan scored big by making complex investments that would reap huge profits if housing prices drop and mortgage foreclosures rise. As the housing market tanked, Paulson made $2.7 billion in the first nine months of 2007 to lead all hedge fund bosses. Things are looking even better for him in ’08 as real estate prices crumble and millions of Americans struggle to stay in their homes.“I’ve never been involved in a trade with such unlimited upside,” Paulson, 52, boasted to The Wall Street Journal.The publicity-shy Paulson,…. eschews the workaholic Wall Street ethos and tries to get home to his $15 million townhouse on the upper East Side in time for dinner…Despite his regular New Yorker roots, Paulson made his biggest splash as a prophet of doom for American homeowners.“Mortgage experts were too caught up” in their own happy talk, Paulson told The Journal. Perhaps feeling twangs of compassion, Paulson donated $15 million to a nonprofit group that helps troubled homeowners keep their homes.
How can a single person earn so much? A brilliant investor is John Paulson, the most successful depository of the world leads. He made a capital in 2007 and in 2008 when the real estate and mortgage market in the USA, then the investment banks and finally the world economic trend broke in first. In 2009 it changed the horses on time, put on gold, mines and oil shares as well as U.S. benches….
In 2007 John Paulson & Co. made a profit of 15 billion dollars more than the economic performance of Bolivia, Honduras and Paraguay together with more than twelve million inhabitants. Paulson personally earned more than four billion dollar and thus more than J. K. Rowling, Oprah Winfrey and tiger of Wood together. So that not enough: “King Midas” made five billion from 2008 by the beginning of 2009 for his enterprise as he is called reverent on Wall Street. Losses stand for banks and other enterprises on the other side in the amount of three billions dollars. The stock markets lost globally more than 30 billions in between. The consequence: The most serious recession since the second World War.
Other financial services industry donors to the group include Moore Capital CEO Louis Bacon, who gave $500,000, former JPMorgan Chase (JPM_) CEO Bill Harrison, who donated $10,000, and IntercontinentalExchange(ICE_) CEO Jeffrey Sprecher, donor of $230,000.Senior executives from private equity firms KKR & Co.(KKR_), Apollo Management and Bain Capital, which Romney co-founded in 1984, were also among the donors, as was Sun Capital co-CEO Marc Leder, who gave $125,000.Putnam Investments CEO Robert Reynolds gave Romney $100,000, while Edmund Kelly, who retired last month as CEO of Liberty Mutual Group, chipped in $1,000. Eric Varvel, Credit Suisse(CS_) COO of Investment Banking and a major donor to Romney’s 2008 campaign, gave $100,000 to the PAC.
Is it all that unreasonable to think that when somebody is generous enough to give you a million dollars in order to make all of your rather large ambitions come true that they would not ask something in return? Or, in the same way, that you would not feel a bit disposed to see things from their point of view.? Or, to be, at least, somewhat more responsive when called upon to repay the favor?
Mandatory disclosure plays a big part in the Court’s majority reasoning that unregulated expenditures will not cause undue harm to the integrity of elections.
(T)hat’s true only if one takes the leap from anonymous speech for natural persons to anonymous speech for corporations. Yet the sort of threats and intimidation that one might legitimately think entitle natural persons to anonymity when speaking or even when spending money on speech, are quite different for a corporation. The fear that a corporation might lose customers if it is known that it supports the Democratic or Republican candidate in some election is hardly comparable to the sorts of fears that could chill speech by natural persons.
True enough, but the disclosure system they describe doesn’t yet exist. The current disclosure system is insufficiently “rapid and informative” and does not make effective use of modern technology.
And we can let others know in order for all of us to vote accordingly.
Update: By special request. I really enjoy the laughing in the background.