Bailout Money to Be Used To Buy Elections

 

Welcome to the brave new world where your federal bailout dollars will be used to elect politicians. Hundreds of millions of bailout dollars will be used to re-elect members of Congress. Some of the money will find its way into state elections in Gubernatorial, Supreme Court, and legislative races.

 

Most likely, some of the money is already earmarked to defeat Wisconsin Supreme Court Justice Shirley Abrahamson who is on the April ballot in the Badger State.  Saturday’s New York Times reported that Congress is considering legislation that would control the lobbying and political campaigning by receipts of federal bailouts.  Firms That Got Bailout Money Keep Lobbying:

……the growing dilemma facing private companies (bail out recipients), which increasingly deal with the federal government not only as rule-maker but also as shareholder, lender and trading partner.

Pressing federal policy makers risks the appearance of recycling public money to advance a private agenda, while staying on the sidelines could put a company at a comparative disadvantage.

The problem is complicated. The federal bailout money will be used to lobby Congress and to support the election of member of Congress in two years.

 

The Times reports that, “’Nobody mentioned that you are giving up your Constitutional right to petition the government when accepting federal money, said Edward L. Yingling, president of the American Bankers Association.”

 

Wrong. There is no Constitutional right to take federal money and use it to buy Congress. Readers of Waxing America knew this was a pressing issue for two years and certainly since bailout discussions began in September. Mr. Yingling, tell your members if they do not like the rules, to turn down the money.

 

No one made any bank or automobile manufacturer take a cent of federal bailout money. There is a Constitutional right to free speech. There is no Constitutional right to use federal money to influence government or to buy future elections.

 

There are two very critical issues.

 

First there is the question of bans and disclosures. Obviously a ban has more teeth than disclosure.  Secondly, there is the use of the money – the financial service companies can use it for lobbying or electioneering, or both. Some of the money is already going to pay lobbyists to influence legislation such as the pending bill S. 133, the "Troubled Asset Relief Program Transparency Reporting Act.”

Lawmakers, troubled by the prospect of taxpayer-subsidized influence-peddling, are threatening to crack down. Senator Dianne Feinstein, a California Democrat, and Senator Olympia J. Snowe, a Maine Republican, are pushing legislation that would explicitly bar companies from using bailout funds for lobbying or campaign contributions. (Emphasis added)

I have been told that similar legislation failed in the House, where there was:

…some opposition from Committee (House) staff as well as Legislative Counsel. Committee staff was concerned that any restrictions on communication to government would restrict the free flow of information and transparency required to track their progress. Legislative Counsel was concerned about the first amendment rights issue...

Here is what will happen. Just as AIG put $25 million into the United States Chamber of Commerce from 2001-05, , similar amounts will go to that business-oriented organization and other trade associations like Mr. Yingling’s American Bankers Association under the guise of “lobbying.”

 

Some portion of those hundreds of millions from AIG, Citigroup and General Motors will actually be used to pay the salary of lobbyists.

 

The bulk of the money will be used to purchase campaign “issue ads.” These  trade associations will either directly make the purchase, as the U.S. Chamber of Commerce did last fall to try to re-elect Norm Coleman (R-MN), or funneled to organizations like The Institute for Tort Reform, Americans for Prosperity, and even All Children Matter, who will then purchase issue ads to reward their friends.

Follow the money. Your tax dollars went from the federal government to the Citigroup to trade associations to issue groups to buy television ads to influence elections.

Comments

[nonheroicvet]

In my working life, I was involved with many grant applications to the Feds. Almost all of the applications included a certification by senior management of the applicant that none of the funds recieved under the grant would be used for lobbying. What's the deal with Wall Street types that they can lobby with federal $? They must be special.

[R u Kidding?]

Paul Soglin is worried about government money going to campaigns? So then WEAC, the union that skims hunderds of million of dollars per year from teachers' paychecks shouldn't use any of that money in campaigns? No? Oh, I get it. You are ok with government money going to your candidates, but not any you don't support.

But public financing is good because it will force people to give candidates money they do not support? Holy logical confusion. Must be nice to live in that world.

[Madisononian]

There comes a time when retired politicians should shut up and go away peacefully accepting there is nothing meaningful to contribute that advances the greater good. This here silliness from Soglin fits that profile in classic fashion. Can you hear the whining?

[R. Legro]

nonheroicvet writes:

> So then WEAC, the union that skims hunderds of million of dollars per year from teachers' paychecks shouldn't use any of that money in campaigns?

Ah, but you see, that money the teachers earned, once the public school system pays it to them, is THEIR (i.e., PRIVATE, not PUBLIC) money. The government no longer has a say in how they spend it. But on the private side of the equation, those teachers do belong to a union that collects dues in exchange for providing benefits to its members (an act, by the way, that nonheroicvet -- who perhaps gets veterans benefits -- unjustifiably dubs "skimming," as if the union were secretly stealing it.)

In school, if you're paying attention, they often teach you this kind of stuff.

[Taxpayer]

I am taking my own steps - I have written to no avail to representatives in Washington. So my choice is to remove any money I have with financial institutions who took my tax dollars as bailout. I will also not do any business with any firms taking my money from the government in the form of a bailout. Let them get their own house in order - everyone in Washington should take a 20% reduction in pay, give up benefits, those at the very top give up salary altogether. That is what every one of the small family run businesses I work with have done during these tough times. Employees, owners all have taken cuts only to watch Washington spend like madmen.