Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right
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Reached later, after the implementation of Obama’s Affordable Care Act, Donald Jacobsen, professor of molecular medicine at the Cleveland Clinic Lerner College of Medicine, who cared for Kendrick, recalled her as a generous donor but dismissed as nonsense her argument that Obama’s health-care plan ever threatened treatment of the kind that she received. “I can assure you that ‘Obamacare’ did not diminish our research efforts in any way,” he said. “However, the sequestration efforts of the right-wing conservatives and their Tea Party colleagues have hampered progress in medical research. The ...more
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Noble surveyed the field and found virtually no organization set up in early 2009 to take aim at Obama on the issue. Or at least none that was a 501(c)(4), the IRS code for a tax-exempt “social welfare” group that can participate in politics so long as it’s not the group’s primary focus. Unlike conventional political organizations, such nonprofits can hide the identities of their donors from the public, reporting them only to the IRS. Noble knew these so-called dark-money groups were especially appealing to wealthy individuals who wanted to influence politics without public attention, like the ...more
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Luntz had studied the building of the conservative movement and become something like a translator, interpreting elite opinion for the masses. “The think tanks became the creators of the ideas, and I became the explainer of the thoughts,” he said. “Mostly what I do is listen and I process.” He admitted that as communicators “these guys were impossible.” In playing this role, Luntz was one of a long succession of “policy entrepreneurs” who served to popularize the agenda of wealthy backers by “framing” their issues in more broadly appealing language.
Leah Paliakas
No.
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“I did create the phrase ‘government takeover’ of health care. And I believe it,” Luntz maintained, noting too that “it gave the Republicans the weapon they needed to defeat Obama in 2010.” But most experts found the pitch patently misleading because the Obama administration was proposing that Americans buy private health insurance from for-profit companies, not the government. In fact, progressives were incensed that rather than backing a “public option” for those who preferred a government insurance program, the Obama plan included a government mandate that individuals purchase health-care ...more
Leah Paliakas
Scary
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R. J. Reynolds’s director of national field operations—put it, the company needed to “create a movement” that would “build broad coalitions around the issue-cluster of freedom, choice, and privacy.” The company, Hyde wrote, “should proceed along two tracks.” One was the “intellectual track within the DC–New York corridor,” which could influence elite opinion with op-ed pieces, lawsuits, and expert think tank studies. The other was “a grassroots organizational and largely local track,” which would use front groups to simulate the appearance of popular political support.
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Unlike lobbying firms, which have to disclose some information, public relations firms exerting political pressure can hide the money trail.
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Mann contended that “the fossil fuel industry is an oligarchy.” Some might dispute that American oil, gas, and coal magnates met the dictionary definition of a small, privileged group that effectively rules over the majority. But it was indisputable that they funded and helped orchestrate a series of vitriolic personal attacks that would threaten Mann’s livelihood, derail climate legislation, and alter the course of the Obama presidency.
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The problem for this group was that by 2008 the arithmetic of climate change presented an almost unimaginable challenge. If the world were to stay within the range of carbon emissions that scientists deemed reasonable in order for atmospheric temperatures to remain tolerable through the mid-century, 80 percent of the fossil fuel industry’s reserves would have to stay unused in the ground. In other words, scientists estimated that the fossil fuel industry owned roughly five times more oil, gas, and coal than the planet could safely burn. If the government interfered with the “free market” in ...more
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As early as 1913, the oil industry used its clout to win a special tax loophole, the “oil depletion allowance.” On the theory that oil exploration was risky and costly, it enabled the industry to deduct so much income when it hit gushers that many oil companies evaded income taxes altogether. After the loophole was scandalously enlarged in 1926, liberals, stymied by the oil patch’s defenders in Congress, tried unsuccessfully for five decades before they were finally able to close it.
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from 2005 to 2008, a single source, the Kochs, poured almost $25 million into dozens of different organizations fighting climate reform. The sum was staggering. His research showed that Charles and David had outspent what was then the world’s largest public oil company, ExxonMobil, by a factor of three. In a 2010 report, Greenpeace crowned Koch Industries, a company few had ever heard of at the time, the “kingpin of climate science denial.”
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Nonetheless, in 1998, the American Petroleum Institute, along with several top oil industry executives and conservative think tank officials, colluded on a secret plan to spend $2 million to confuse the press and the public about this growing scientific consensus. The plan called for recruiting skeptical scientists and training them in public relations so that they could act as spokesmen, thereby adding legitimacy and cover to the industry’s agenda.
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In all, the Bush energy act contained some $6 billion in oil and gas subsidies and $9 billion in coal subsidies. The Kochs routinely cast themselves as libertarians who deplored government taxes, regulations, and subsidies, but records show they took full advantage of the special tax credits and subsidies available to the oil, ethanol, and pipeline business, among other areas of commerce in which they were engaged. In many cases, their lobbyists fought hard to protect these perks. In addition, their companies benefited from nearly $100 million in government contracts in the decade after 2000, ...more
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But John Boehner, the Republican minority leader in the House, dismissed the real numbers, suggesting anyone who believed them could “go ask the unicorns.”
Leah Paliakas
Lol
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It was particularly disturbing to Mann that there appeared to be overlap between hard-core climate change deniers and Second Amendment enthusiasts, whipped up, he came to believe, by “cynical special interests.” Mann says, “The disaffected, the people who have trouble putting dinner on the table, were being misled into believing that action on climate change meant that ‘They’ want to take away your freedom and probably your guns, too. There was a very skillful campaign to indoctrinate them,” he said. “We’ve seen Second Amendment enthusiasts take action against abortion doctors. There’s an ...more
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Al Gore told The New Yorker’s Ryan Lizza, “The influence of special interests is now at an extremely unhealthy level. It’s at a point,” he said, “where it’s virtually impossible for participants in the current political system to enact any significant change without first seeking and gaining permission from the largest commercial interests who are most affected by the proposed change.”
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One associate said Koch had confided that he gave away approximately 40 percent of his income each year, which he estimated at about $1 billion. This of course left him with an annual income of some $600 million and considerably helped ease his tax burden, but he enjoyed the role, a family member said, in part because it bought him respectability. There was another side to his spending, however, that was then still largely secret. While David was happy to put his name on some of the country’s most esteemed and beloved cultural and scientific institutions and to take a public bow at the ballet, ...more
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On January 21, 2010, the Court announced its 5–4 decision in the Citizens United case, overturning a century of restrictions banning corporations and unions from spending all they wanted to elect candidates. The Court held that so long as businesses and unions didn’t just hand their money to the candidates, which could be corrupt, but instead gave it to outside groups that were supporting or opposing the candidates and were technically independent of the campaigns, they could spend unlimited amounts to promote whatever candidates they chose. To reach the verdict, the Court accepted the ...more
Leah Paliakas
Idiots
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The ruling paved the way for a related decision by an appeals court in a case called SpeechNow, which soon after overturned limits on how much money individuals could give to outside groups too. Previously, contributions to political action committees, or PACs, had been capped at $5,000 per person per year. But now the court found that there could be no donation limits so long as there was no coordination with the candidates’ campaigns. Soon, the groups set up to take the unlimited contributions were dubbed super PACs for their augmented new powers.
Leah Paliakas
Supeer idiots
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In striking down the existing campaign-finance laws, the courts eviscerated a century of reform. After a series of campaign scandals involving secret donations from the newly rich industrial barons in the late nineteenth and early twentieth centuries, Progressives had passed laws limiting spending in order to protect the democratic process from corruption. The laws were meant to safeguard political equality at a time of growing economic inequality. Reformers had seen the concentration of wealth in the hands of oil, steel, finance, and railroad magnates as threatening the democratic ...more
Leah Paliakas
duh!!!!
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At the time, there was a national outcry against the way both the Democratic and the Republican Parties had evaded contribution limits in the 1996 presidential campaign by paying for what they claimed were “issue” ads rather than campaign ads, with unlimited funds that came to be known as soft money. There was a bipartisan Senate push for reform. But in a guest column in the Capitol Hill newspaper Roll Call, DeVos defended the unlimited contributions. “Soft money,” she wrote, was just “hard-earned American dollars that Big Brother has yet to find a way to control. That is all it is, nothing ...more
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In 2004, Democratic-aligned outside groups spent $185 million—more than twice what the Republican outside groups spent—in a failed effort to defeat George W. Bush’s reelection. Of this, $85 million came from just fourteen Democratic donors. Leading the pack was the New York hedge fund magnate George Soros, an opponent of the U.S. invasion of Iraq who regarded President Bush as such a scourge that he vowed he would spend his entire $7 billion fortune to defeat him, if the result could be guaranteed. With the help of Democratic operatives, Soros funneled more than $27 million into the outside ...more
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At the time, he was arguing that a hyperbolic film attacking Hillary Clinton, who was running for president, deserved the same First Amendment protection as newscasts aired by CBS’s 60 Minutes. The film, a screed called Hillary: The Movie, had been produced by Citizens United, an old right-wing group with a history of making vicious campaign ads. The question, as the Supreme Court interpreted it, was whether Hillary: The Movie was a protected form of speech or a corporate political donation by its backers, which could be regulated as a campaign donation.
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He knew that 2011 was a year in which many state legislatures would redraw the boundaries of their congressional districts based on a new census, a process that only took place once a decade. So he put together an ambitious strategy aimed at a Republican takeover of governorships and legislatures all across the country. Capturing them would enable Republicans to redraw their states’ congressional districts in order to favor their candidates. While the mechanics of state legislative races were abstruse and deadly dull to most people, to Gillespie they were the key to a Republican comeback.
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As passage looked increasingly likely, Tea Party protests grew ever more ugly. Behind them, invisible to the public, was the Kochs’ money. Tim Phillips, the head of Americans for Prosperity, popped up as the organizer of a March 16 “Kill the Bill” protest on Capitol Hill, at which he accused the Democrats of “trying to cram this 2,000-page bill down the throat of the American people!” At a second Capitol Hill rally a few days later, protesters spat on a passing Democratic congressman; mocked Barney Frank, a gay representative from Massachusetts, in lisping catcalls as a “faggot”; and shouted ...more
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Previously, they had given relatively small amounts to 501(c)(4) “social welfare” groups. Before Citizens United, these nonprofit corporations, like for-profit corporations, had been restricted from spending money for or against candidates in elections. Some skirted the law by running what they claimed were issue ads. But legal danger hovered. After Citizens United, though, the Kochtopus essentially sprouted a second set of tentacles. The first cluster was the think tanks, academic programs, legal centers, and issue advocacy organizations that Fink had described as the ideological production ...more
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The Kochs were part of a national explosion of dark money. In 2006, only 2 percent of “outside” political spending came from “social welfare” groups that hid their donors. In 2010, this number rose to 40 percent, masking hundreds of millions of dollars.
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McCarthy had a reputation for being a particularly shrewd consumer of O, or opposition research on the rival candidates he was targeting. He often honed his ads using polls, focus groups, micro-targeting data, and “perception analyzers”—meters that evaluated viewers’ split-second reactions to demo tapes.
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The loophole was in essence an accounting trick that enabled hedge fund and private equity managers to categorize huge portions of their income as “interest,” which was taxed at the 15 percent rate then applied to long-term capital gains. This was less than half the income tax rate paid by other top-bracket wage earners. Critics called the loophole a gigantic subsidy to millionaires and billionaires at the expense of ordinary taxpayers. The Economic Policy Institute, a progressive think tank, estimated that the hedge fund loophole cost the government over $6 billion a year—the cost of ...more
Leah Paliakas
BERNIE
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Later, in a round of image-repairing interviews, the Kochs would portray themselves as disinterested do-gooders and misunderstood social liberals who championed bipartisan issues such as criminal justice reform. But when put on the spot and stripped of public relations help, David Koch made his priorities clear. He regarded his self-interest and the public interest as synonymous.
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The 112th Congress soon unfolded as a case study of what David Frum, an adviser to the former president George W. Bush, described as the growing and in his view destructive influence of the Republican Party’s “radical rich.” The “radicalization of the party’s donor base,” he observed, “propelled the party to advocate policies that were more extreme than anything seen since Barry Goldwater’s 1964 presidential campaign.” It also “led Republicans in Congress to try tactics they would never have dared use before.”
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the challenge was to minimize political damage from cuts to entitlement spending. “It wasn’t about developing policy,” Goeas said, “it was about selling it.” The solution, it appears, was to avoid the frank use of the word “cut” when talking about Medicare or Social Security. “There was discussion that you could deal with it as ‘getting your money’s worth out of the government,’ ” said Goeas. “You could talk about it as ‘more effective’—but not as cutting it. It had to be more about ‘efficiencies.’ That
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As the attention lavished on Ryan suggested, tax issues loomed large on the victorious donors’ agenda. Dull though the mechanics can be, as Neera Tanden, the president of the liberal Center for American Progress, puts it, “When oligarchs control the levers of government, they get the spoils. It’s litigated through tax policy.”
Leah Paliakas
Ways and means committee wya
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But the 1970s kicked off a three-decade-long “tax-cutting spree” during which the wealthiest 1 percent succeeded in getting their average effective federal tax rate slashed by a third, and the very, very richest, the 0.01 percent of the population, did even better, getting its effective federal tax rate cut in half. Unsurprisingly, the distribution of wealth in America grew increasingly skewed.
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the conservative nonprofit ecosystem had grown quite adept at waging battles of ideas. The think tanks, advocacy groups, and talking heads on the right sprang into action, shaping a political narrative that staved off the kind of course correction that might otherwise have been expected.
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Joseph Stiglitz, the liberal economist, described the 2008 financial meltdown as the equivalent for free-market advocates to the fall of the Berlin Wall for Communists. Even the former Federal Reserve chairman Alan Greenspan, Washington’s free-market wise man nonpareil, admitted that he’d been wrong in thinking Adam Smith’s invisible hand would save business from its own self-destruction. Potentially, the disaster was a “teachable moment” from which the country’s economic conservatives could learn. This is not what happened, however. They instead started with their preferred conclusion and ...more
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The most shocking aspect was its radical rewrite of America’s social contract. To reduce the deficit, Ryan prescribed massive cuts in government spending, 62 percent of which would come from programs for the poor, even though these programs accounted for only about a fifth of the federal budget. According to a New York Times analysis of a similar, later version of Ryan’s budget, 1.8 million people would be cut off food stamps, 280,000 children would lose their school lunch subsidies, and 300,000 children would lose medical coverage.
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President Obama now proposed $4 trillion in spending cuts over the next twelve years, not all that far from the $4.4 trillion that Ryan had proposed. The proposal so distressed Hillary Clinton, then secretary of state, a colleague said, she had to go outside to get some air.
Leah Paliakas
Omg
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The Kochs had recently come up with a new and even cleverer way of masking the money. Rather than simply directing the funds through the maze of secretive nonprofit charities and social welfare groups that they had used during the 2010 campaign, they now established a more efficient method. They pooled much of the cash first in a form of nonprofit corporation that the tax code defined as a 501(c)(6), or a “business league.” The advantage of this umbrella organization, which they named the Association for American Innovation (AAI), was that donations to it could be classified as “membership ...more
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The Koch network loomed as a colossus over this new political landscape. On the right, there were other formidable donor networks, including the one assembled by Karl Rove, but no single outside group spent as much. On its own, in 2012 the Kochs’ network of a few hundred individuals spent at least $407 million, almost all of it anonymously. This was more than John McCain spent on his entire 2008 presidential bid. And it was more than the combined contributions to the two presidential campaigns made by 5,667,658 Americans, whose donations were legally capped at $5,000. Politico’s Kenneth Vogel ...more
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Soon afterward, Romney proposed to cut all income tax rates by one-fifth. According to the nonpartisan Tax Policy Center, Romney’s proposal would save those in the top 0.1 percent an average of $264,000 a year, and the poorest 20 percent of taxpayers an average of $78. The middle class would get on average $791. Romney also proposed other items high on his donors’ wish lists, including eliminating estate taxes, lowering the corporate tax rate, and ending taxes owed by companies that had shipped operations overseas. Taken as a whole, the Tax Policy Center said the proposal would add $5 trillion ...more
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Obama had reserved some of the harshest words of his presidency for the Citizens United ruling, saying that he couldn’t “think of anything more devastating to the public interest.” So he had steadfastly refused to encourage supporters to form an “outside” super PAC that could accept unlimited contributions on his behalf. “I think we need to switch our position,” Messina said. “Until people understand it’s important to you, they’re not going to give.” Soon after, Obama bowed to the new economic reality and reversed himself. His campaign began encouraging supporters to give to the pro-Obama ...more
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Yet, according to the Princeton University professor of politics Martin Gilens, because of the outsized influence that the affluent exert over the political process, “under most circumstances the preferences of the vast majority of Americans appear to have essentially no impact.”
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it denigrated nearly half the country as what the Journal called “Lucky Duckies” freeloading off the rich. This startling theory held that because many members of the middle class and working poor received targeted tax credits, such as the earned income tax credit and the child tax credit, which reduced their income taxes to zero, they were “a nation of moochers,” as the title of a book written by a fellow at the Wisconsin Policy Research Institute put it.
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Critics immediately pointed out that the theory ignored the many other taxes paid by lower- and middle-income Americans, including sales taxes, payroll taxes, and property and gas taxes, which took a disproportionately large share of their income. The theory also overlooked the unique circumstances of retirees, students, veterans, and the unwillingly unemployed. And it completely ignored the many tax breaks disproportionately enjoyed by the wealthy, from mortgage and charitable deductions to the preferential treatment for unearned income that kept Romney’s income taxes at an effective rate of ...more
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At the time, Schwarzman’s comment got little attention. But when the rest of the nation learned from Romney’s remarks that the superrich considered nearly half of them freeloaders, the reaction was explosive. Obama’s internal polling numbers, which had hovered steadily in the range of 48 to 50 percent, shot up to 53 percent over Romney. The damage was even more pronounced in battleground states, where Romney’s numbers plummeted. Within days, polls showed that fully 80 percent of the country had heard about the remark—more, one pollster said, than knew of the existence of North Korea.
Leah Paliakas
HAHAA
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the alarmism resulted in legislative initiatives aimed at requiring voters to produce official photo IDs in thirty-seven states between 2011 and 2012. It also led to a national outbreak of mysterious citizen watchdog groups calling for crackdowns on election fraud.
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The national outbreak of fear over voter fraud appeared a spontaneous grassroots movement, but beneath the surface there was a money trail that led back to the usual deep-pocketed right-wing donors. To target Sharp, for instance, the Ohio Voter Integrity Project had relied on software supplied by a national nonprofit, True the Vote, which itself was supported in different ways by the Bradley Foundation, the Heritage Foundation, and Americans for Prosperity. True the Vote described itself as a nonprofit organization, created “by citizens for citizens,” that aimed to protect “the rights of ...more
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Contrary to predictions, the Citizens United decision hadn’t triggered a tidal wave of corporate political spending. Instead, it had empowered a few extraordinarily rich individuals with extreme and often self-serving agendas. As the nonpartisan Sunlight Foundation concluded in a postelection analysis, the superrich had become the country’s political gatekeepers. “One ten-thousandth” of America’s population, or “1% of the 1%,” was “shaping the limits of acceptable discourse, one conversation at a time.”
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Gerrymandering was a bipartisan game as old as the Republic. What made it different after Citizens United was that the business of manipulating politics from the ground up was now heavily directed and funded by the unelected rich. To get the job done, they used front groups claiming to be nonpartisan social welfare groups, funded by contributions from some of the world’s largest corporations and wealthy donors like the Kochs. The big outside money flowing into the most granular level of politics was transformative. “The Kochs were instrumental in getting the GOP to take over state ...more
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In theory, redistricting was supposed to reflect the fundamental democratic principle of one person, one vote. The shifting U.S. population was supposed to be equally distributed in accordance with the new census figures, across all 435 of the country’s congressional districts. In a charade of fairness, Republican legislators overseeing the process in North Carolina crisscrossed the state to hold public hearings, gathering comments and suggestions from citizens about how the lines could best be drawn. “What we are here for is to basically hear your thoughts and dreams about redistricting,” the ...more
Leah Paliakas
Im going to kill myself