Elections

In December, 2012, federal prosecutors failed to bring true justice to HSBC for massive, criminal money laundering because the giant UK bank was too big. An indictment, they thought, would ravage the financial sector. In January, 2013, with a full month to reflect about the non-prosecution of HSBC, Attorney General Eric Holder acknowledged the policy: “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large.” Since then, numerous bank regulators and Obama administration officials have attempted to refute their role in or even the accuracy of Holder’s assertion.  In testimony and speeches, officials from the Federal Reserve, FDIC, Comptroller of the Currency, and Treasury contradicted Holder’s claim that government deemed  some banks were just too big to jail.  Those denials may be explored when Justice Department official James M. Cole testifies before a House financial services subcommittee May 22. On May 15, Attorney General Holder himself seemed bent on correcting the record as to whether some banks are too big to jail. “Let me make something real clear right away. I made a statement I guess in a Senate hearing that I think has been misconstrued. I said it was difficult at times to bring cases against large financial institutions because [of] the potential consequences that they would have on the financial system. But let me make it very clear that there is no bank, there’s no institution, there’s no individual who cannot be investigated and prosecuted by the United States Department of Justice.” Notice that Holder did not disavow his earlier statement that it was difficult. He simply asserted that the department’s policy is to pursue warranted cases. “Let me be very, very, very clear,” Holder continued. “Banks are not too big to jail. If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought.” (“Very, very, very” clear?) But, the fact is, the Department of Justice did find such a bank. It was HSBC. In December, Holder’s own DoJ released a 30-page document in which it declared that HSBC violated anti-money laundering laws. In fact, the DoJ found at HSBC a “failure to adequately monitor over $200 trillion (yes, with a T) in wire transfers between 2006 and 2009 . . . including over $670 billion in wire transfers from HSBC Mexico.” Did the DoJ’s lawyers think they could prove this? Well, yes. “If this matter were to proceed to trial, the Department would prove beyond a reasonable doubt, by admissible evidence, the facts alleged below and set forth in the criminal Information attached to this Agreement,” the DoJ’s document said. http://www.justice.gov/opa/documents/hsbc/dpa-attachment-a.pdfevidence, the facts.” The government found not only that HSBC had done “something” wrong, to borrow Holder’s configuration, it found 200 trillion dollar’s worth of wrong.  But HSBC ended up paying a fine equal to a just month’s profit for numerous infractions. Meantime, in January, the DoJ caught a check-cashing manager of a small Los Angeles storefront failing to fill out the proper forms for $8 million in transactions. Her penalty? Five years in prison. Violating money laundering laws can’t be dismissed as a clerical oversight. Unaccountable mega-bank money launderers enable drug trafficking and associated gun violence. They facilitate terrorism. They abet tyrants. It isn’t a small infraction, and the punishment should fit the crime. Our insight into crucial decisions involving justice should not depend on a chance moment of candor by an attorney general. Any decision

AL.com reports: Acting state Democratic Party Chairwoman Nancy Worley lowered her head and slowly shook it side to side when summing up the financial condition of her once powerful party. "We're broke, broke, broke," Worley told the party's Executive Board...

AL.com reports: Alabama's law governing campaign finance would change in numerous ways under a bill approved by the Legislature tonight. The Senate and House of Representatives voted tonight to pass a compromise version of SB445 by Sen. Bryan Taylor, R-Prattville....

BACHMANN UPDATE. The Post. “The FBI is scheduling interviews related to allegations of financial impropriety in Rep. Michele Bachmann’s 2012 campaign.” WEINER WIFE WAIVER. NY Times. “The State Department, under Secretary Hillary Rodham Clinton, created an arrangement for her longtime aide and confidante Huma Abedin to work for private clients as a consultant while serving as a top adviser in the department.” COMMENT ON PROPOSED SEC MOVE ON POLITICAL CONTRIBUTIONS. HLS Forum on Corporate Governance and Financial Regulation. “The submitted Article puts forth a comprehensive, empirically-grounded case for the rules advocated in the Petition. The Article also provides a detailed response to each of the ten objections that have been raised by the Petition’s opponents, either in the comment file or elsewhere. The Article shows that none of these objections, either individually or collectively, provides a basis for opposing rules requiring public companies to disclose political spending.” MN: DISCLOSURE DROPPED. Story here. “Three provisions have been dropped from a campaign finance bill that would have required some political groups to say more about where their money is coming from and how it is being spent.” NV: MILLER AND CFR. Here. “An out-of-state conservative group wants you to call Democratic Nevada Secretary of State Ross Miller and tell him that you’re ‘sick of his costly hypocrisy.’” NV: TESTIMONY IN TRIAL. News here. “Two more of Harvey Whittemore’s former employees testified Monday they each voluntarily contributed $4,600 to Sen. Harry Reid’s campaign in 2007 at the suggestion of the wealthy ex-developer and lobbyist but didn’t fear for their jobs if they didn’t do so.” HAVE A GOOD DAY.

TICK TOCK DRIP. The Post. “The firestorm buffeting the Internal Revenue Service intensified Friday as lawmakers began what they promised would be an extensive effort to learn whether there was any political motivation or White House involvement in the agency’s recently acknowledged misdeeds.” CINCINNATI CONFUSED. The Times. “While there are still many gaps in the story of how the I.R.S. scandal happened, interviews with current and former employees and with lawyers who dealt with them, along with a review of I.R.S. documents, paint a more muddled picture of an understaffed Cincinnati outpost that was alienated from the broader I.R.S. culture and given little direction.” SHAKE UP IRS. Post. “Among the many investigations getting started, the Justice Department is beginning a criminal probe. More important than criminal convictions, however, is that investigators in the Obama administration and in Congress get answers, that the IRS sees genuine reform, and that those who betrayed the public trust — willingly or not — are removed from positions in which they could repeat their errors.” CAMPAIGN FINANCE: IT’S COMPLICATED. The Post. “How certain groups qualify for tax-exempt status as a 501(c)(4) organization — a distinction that allows them to keep both their donors and donations secret — is the focus of the week (thanks to the buffoonery, at best, of some IRS officials) but it opens up (or should open up) a conversation about the vagaries of campaign finance law.” SEC AND DISCLOSURE. The Post. “House Republicans repeatedly warned the chairman of the Securities and Exchange Commission on Thursday against dragging the agency into a political fray, evoking the scandal at the IRS over the targeting of conservative groups.” IL: RAHM REFUND. News here. “Mayor Rahm Emanuel has returned a $10,000 campaign donation from a lobbyist for a tech firm disqualified from a city program this week after the Tribune raised questions about potential violations of the mayor’s self-imposed limits on political fundraising, an Emanuel spokeswoman confirmed Thursday.” NJ: BOOKER FEES. NJ.com. “Mayor Cory Booker made $1.3 million on the speaking circuit between 2008 and 2013 and gave roughly $620,000 of it to charity, according to documents and disclosures he released yesterday.” VA: GIFT ISSUES IN VA. The Times. “While not on a par with Washington scandals unfolding around the I.R.S. and other agencies, which are commanding national and presidential attention, Virginia’s homegrown drama, now in its seventh week, has more outsize characters and soap opera turns.” VA: LOOSE RULES. Story here. ”The commonwealth is one of 10 states that places no cap on the size of personal gifts that officeholders can accept. Many, including Maryland and the District, prohibit elected officials from accepting any gift from a company with business before the government.” HAVE A GOOD DAY.

How can you tell that momentum is building for change? Well, one good sign is that the opposition starts getting nervous about your progress. That’s why we took it as a positive sign that the U.S. Chamber of Commerce recently stepped up attacks on shareholders who attempt to make companies disclose political spending. Earlier this month, I attended an almost comical presentation at the U.S. Chamber headquarters where speakers spent most of a four hour event attacking political spending disclosure resolutions as being bad for business. I say ‘almost’ comical because, while much of the information is laughably wrong, the subject matter is far too important to joke about. There are a number of things wrong with what I heard at this event, but I’d like to focus on two disturbing claims in particular. First, I heard several participants—including former SEC commissioner Paul Atkins—make the claim that requiring companies to disclose political spending is incompatible with free speech. That’s just flatly wrong. Even if you agree that corporations have free speech rights similar to those of real people—which Chamber Watch absolutely does not—the courts have acknowledged that transparent disclosure of corporate political spending strengthens the democratic process and protects shareholders. When the Supreme Court ruled in the Citizens United case, Justice Anthony Kennedy said in writing the majority opinion: With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests. Companies should be required to disclose their political spending as part of their responsibility to provide relevant information to investors. And that brings us to the second erroneous claim made at the U.S. Chamber event. Participants repeatedly said that a company is violating its fiduciary duty to shareholders by disclosing its political spending. How a company spends its political dollars can have an impact on the company’s value—so it is imperative that stockholders be well-informed about what corporate treasury money is being spent on. This information is relevant to the bottom line and clearly material to investors. The need for this information is why shareholders have continued to demand that their companies implement strong political spending disclosure rules via shareholder proposals and why shareholders and others have made a loud call to the SEC for a uniform rule for all public companies. More than 500,000 citizens and retail investors have signed a formal petition to the Securities and Exchange Commission asking the agency to consider requiring political spending disclosure from all publicly traded companies. The SEC has said it will consider proposing such a rule soon. However, until a rule is proposed and implemented, we applaud the huge number of institutional shareholders that continue to introduce resolutions asking for political spending disclosure. If adopted, these shareholder resolutions would help protect our economy and our democracy. Attacks like those at the U.S. Chamber event just show that the push is working. ake Parent is the coordinator of Public Citizen’s U.S. Chamber Watch. To learn more about Chamber Watch, follow @uschamberwatch on Twitter and sign up for email updates. Share/Bookmark

ANOTHER OFFICIAL TO LEAVE. The Hill. “Joseph Grant, the acting commissioner for the agency’s Tax Exempt and Government Entities division, plans to retire, according to the IRS.” WERFEL APPOINTED. News here. “President Obama on Thursday appointed Office of Management and Budget (OMB) Controller Danny Werfel as acting commissioner of the Internal Revenue Service.” REQUEST TO REMOVE VIDEO. Roll Call. “A video posted on the Politico website featuring Senate Minority Leader Mitch McConnell’s chief of staff has been taken down after the Kentucky Republican’s office objected to its placement on a page designed to solicit advertisers.” REQUEST FOR SEBELIUS INVESTIGATION. Here. “A group of Republican lawmakers called on the Government Accountability Office to investigate Health and Human Services Secretary Kathleen Sebelius over her fundraising for a nonprofit supporting Obamacare.” IN: CAMPAIGN FINANCE GRADE. Here. “The Center for Public Integrity, which assisted in the study, reported that in 30 states, including Indiana, it’s impossible to total how much money outside groups are spending in state and local races because of the lack of disclosure laws.” IL: CHICAGO RULES. Story here. “Leaders of a tech firm seeking a city contract donated $15,000 to Mayor Rahm Emanuel’s campaign fund, despite Emanuel’s own executive order banning contributions from vendors trying to get city business.” NY: CUOMO AND CFR. Story here. “New York Governor Andrew Cuomo wants to break the connection between cash and politics that’s led to corruption in Albany for decades, and he says public financing of election campaigns is the solution.” HAVE A GREAT WEEKEND.

Robert Weissman, president of Public Citizen, and former U.S. Supreme Court Justice John Paul Stevens, at Public Citizen’s 2013 Gala honoring the lifetime achievements of Stevens. Photo by Brendan Hoffman. “What can you say in three minutes about someone who has dispensed justice for 35 years on the Supreme Court?” So asked Alan Morrison, founder of the Public Citizen Litigation Group, as he introduced retired U.S. Supreme Court Justice John Paul Stevens tonight at Public Citizen’s annual gala in downtown Washington, D.C. Stevens was there to receive a Lifetime Achievement Award in recognition of his “gentleness, decency, searing intellect and passion for what is right” – from which all Americans have benefited, in the words of Public Citizen President Robert Weissman, who presented the award to Stevens. While on the bench, Stevens, the third longest-serving justice in American history, displayed a deep concern with ensuring the fair treatment of all. He wrote a blistering dissent to the now infamous Citizens United v. Federal Election Commission decision, which gave corporations the green light to spend unlimited sums of money to influence elections. Tonight, Stevens sat on the stage with Linda Greenhouse, former Supreme Court reporter for The New York Times, for a chat before a crowd of just under 400 Public Citizen supporters. The former justice received a standing ovation before he even began speaking. “Obviously, Justice Stevens is a rock star in this crowd,” Greenhouse remarked. Their conversation touched on everything from sovereign immunity and Stevens’ confirmation hearing to the Bush v. Gore decision (Stevens said he often reflects about how treating hanging chads differently from dimpled chads was hard to accept). Stevens answered questions with alacrity and humor. He still reads every opinion the Supreme Court issues (“I find it interesting reading”). His record of guessing the outcomes of cases is, well, not very good, although he said he accurately predicted that the ruling on the Affordable Health Care Act would be 5-4 and that it would be upheld. Oral arguments, he said, were valuable: “They are a very important part of the process … it often changes your analysis of the case … it has affected my thinking.” On his record 720 dissenting opinions, he wryly noted, “That should entitle me to the lifetime failure award.” When Stevens accepted his award – to yet another standing ovation – he smiled. “This is a more moving occasion than I thought it would be,” he said. Share/Bookmark

RESIGNATION AT IRS. Politico. “President Barack Obama announced Wednesday that Treasury Secretary Jack Lew requested and accepted the resignation of Steven Miller, the acting commissioner of the IRS.” LERNER TESTIMONY. Lois Lerner has appeared before Congress before. In 1998, she was called to testify about a matter involving a Democratic fundraiser.  The background is somewhat complicated; the Commission had declined to pursue a case against Howard Glicken, a fundraiser alleged to have solicited a foreign national.  Rep. Livingston asked:  “Why didn’t they investigate? Here is what the FEC’s General Counsel’s Report says. And I hope all my colleagues will listen to this. ‘Because of Mr. Glicken’s high profile as a prominent Democratic fundraiser, including his potential fundraising involvement in support of Vice President Gore’s expected Presidential campaign, it is unclear that this individual would agree to settle this matter short of litigation.’

RESPONSE TO IRS ISSUES.  Roll Call.  “There may be 100 senators willing to vote to excoriate the agency for subjecting conservative groups seeking tax-exempt status to an intensified level of investigation. But there’s no sign that a necessary 60 of them will get behind meaningful legislation to make sure that positioning anywhere along the ideological spectrum is never the interest of the tax auditors again.” TIGTA REPORT.  Here. TIMES ON REPORT.  Here.  “‘What we don’t know at this point is whether it jumped the fence from the I.R.S. to the White House,’ said Senator Mitch McConnell of Kentucky, the Republican leader. ‘But we do know this: we can’t count on the administration to be forthcoming about the details of this scandal, because so far they’ve been anything but.’” WATCHDOG REPORT.  The Hill.  “A leaked version of the highly-anticipated report from the Treasury Inspector General for Tax Administration (TIGTA) shines a light on the scandal that has