Elections

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

IRS STORY DEVELOPMENTS. TaxProf Blog. Paul Caron chronicles new reports. IRS ISSUES AND CAMPAIGN FINANCE. Roll Call. “The controversy embroiling the IRS kicked up another storm of rhetoric Monday over enforcement of campaign finance laws.” SEBELIUS SCRUTINY. Story here. “Health and Human Services Secretary Kathleen Sebelius’ recent push to encourage health care executives and nonprofit organizations to make donations to organizations working to implement ObamaCare is drawing criticism from a key Senate Republican who questions whether she has a conflict of interest.” K ST. SPIKE. The Post. “April marked a spike in activity on K Street, with corporations, trade groups and other entities tapping outside lobbyists at a rate not seen since mid-2011.” POLITICAL INTELLIGENCE LAW AND INEVITABILITY. NPR. “One other reason Congress might like a rule on disclosure, it would affect the firms that gather political intelligence, but not the lawmakers and Hill staffers who s

IRS TARGETS CONSERVATIVES. I had a special post on Saturday compiling a number of stories related to Friday’s startling revelation that the IRS targeted conservative groups. With an IG report apparently coming shortly and congressional hearings assured, we’ll be hearing a lot more about this story. And to think it was just last Thursday that three members of the Federal Election Commission warned of the dangers of “partisan or ideological witch hunts” in the administration of campaign finance law… I wouldn’t be surprised if some groups sought the same reporting exemption granted to the Socialist Workers Party a few weeks ago. IG REPORT WILL INTENSIFY CRITICISM. The Post. “At various points over the past two years, Internal Revenue Service officials targeted nonprofit groups that criticized the government and sought to educate Americans about the U.S. Constitution, according to documents in an audit conducted by the agency’s inspector general.” TARGETING AND SIN.

THE BIG STORY:  IRS APOLOGIZES.  AP.  “White House spokesman Jay Carney declared it was indeed inappropriate for the IRS to target tea party groups. But he brushed aside questions about whether the White House itself would investigate.” MISTAKES WERE MADE.  NR.  The IRS statement explains, “Mistakes were made initially, but they were in no way due to any political or partisan rationale.” IRS UNDER SIEGE.  Politico.  “The IRS doesn’t have many friends on a good day. By Friday evening, the agency seemed to have none at all.” MCCONNELL:  SORRY NOT ENOUGH.  Story here.  “Senate Minority Leader Mitch McConnell (R-Ky.) is calling for a ‘government-wide review’ in the wake of the admission from the IRS that tea party political groups were inappropriately selected for special scrutiny in the 2012 campaign.” PAUL OFFENDED.  Story here.  “‘I’m offended when any kind of government entity targets people for their political or religious beliefs. It’s

Republicans on the House financial services committee have long been a cheap date for Wall Street. So it was no surprise that they voted unanimously on May 7 in favor of nine bills to eviscerate important safeguards in the 2010 Wall Street Reform Act pertaining to derivatives supervision. But American taxpayers would be discouraged to learn that most of the junior Democrats on this committee also jumped into the back seat with their Wall Street suitors. Derivatives regard the gambling aspect of financial firms’ operations, the part in which they make high-stakes bets under the guise of “hedging.” For instance, the unregulated “credit default swaps” that nearly caused a full meltdown of the financial sector in 2008 were derivatives. The bills in question include one (HR 1256) that cedes regulatory authority over foreign affiliates of American companies to foreign countries. Another (HR 992), allows taxpayer-backed banks to engage in risky derivatives bets that the Dodd-Frank reform law banned. The bills involv