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The Michigan Messenger going forward

By Staff Report | 11.16.11

I am writing today to announce the closure of the Michigan Messenger. After four years of operation in Michigan, the board of the American Independent News Network, has decided to shift publication of its news into a single site, The American Independent at Americanindependent.com. This is part of a shift in strategy, towards new forms [...]

Colorado-based abstinence program provided false and misleading information to Michigan students

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By Todd A. Heywood | 11.16.11

An abstinence-only presentation provided to numerous school districts in Calhoun and Eaton Counties in October of this year provided false and misleading information to students about HIV, experts allege.

Class action lawsuit filed against MERS over unpaid taxes

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By Todd A. Heywood | 11.15.11

Two county registers of deeds filed a class action lawsuit Monday on behalf of Michigan’s 83 counties alleging that the Mortgage Electronic Registration Services owes millions of dollars in property title transfer taxes.

Schuette fights important mercury regulations

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By Eartha Jane Melzer | 11.14.11

Despite evidence of the impact of mercury on children and public health, Michigan Attorney General Bill Schuette last month joined with 24 other state attorneys general in filing a lawsuit to scuttle new EPA regulations that would reduce mercury emissions from power plants.

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Groups look to rein in corporate power after Citizens United

Focus is on maximum disclosure of political spending
By Eartha Jane Melzer | 09.19.11 | 11:55 am

Last year’s U.S. Supreme Court decision in Citizens United v. Federal Election Commission granted corporations (and unions) the right to directly and expressly back political candidates, and triggered an enormous new wave of political spending. Now watchdog groups are trying to find ways to make sure voters can see who is funding which candidates.

In a web seminar sponsored by the Business Ethics Network last week, groups concerned about the role of money in politics gathered to review strategies for increased disclosure.

Norm Ornstein, a scholar with the American Enterprise Institute, who once helped craft the McCain-Feingold campaign finance act, said that he was struck and “even a little bit heartened” by the fact that Sarah Palin railed against crony capitalism during her Labor Day speech in Iowa saying, in effect, “what do we suppose those fat cats want for their money?”

“It suggests to me,” Ornstein said, “that there is at least a glimmer of a possibility that we might be able to build a very unusual type of coalition against what has become an utterly appalling landscape of influence peddling by enormous monied interests and more and more overt, almost shakedown schemes by political figures to get the money they want from corporations and individuals.”

The Citizens United decision did not strike down any rules that require disclosure of political spending, but loopholes in the tax system and lax campaign finance rules allow corporations to give money in ways that are very hard to track, disclosure advocates say.

According to an analysis by the Center for Responsive Politics in the 2010 election 67 percent of all outside (non political party) spending came from groups that had been freed to contribute by the Citizens United decision with non-profit 501(c) groups dominating spending on election ads.

IRS rules state that 501(c)(4) groups don’t have to name their contributors as long as electioneering is not their primary purpose, but this can be difficult to enforce in a meaningful way. Groups can form and carry out campaign work and then later switch to other activities so that political projects don’t appear to dominate their activities.

With Congress deadlocked over most issues, campaign finance reform advocates say it’s more prudent to focus on promoting regulatory measures that could increase disclosure.

One possibility would be to get the IRS to enforce its requirements for 501(c)(4)s. Another would be to get the Securities and Exchange Commission to require publicly traded companies to report their political spending to shareholders.

Aside from the way it could corrupt the political process, experts point out, unregulated corporate spending on politics poses risks for company shareholders.

Ten corporate law academics recently petitioned the SEC to adopt rules to require that corporations communicate with shareholders about political use of corporate funds.

The idea has support from major institutional investors including the International Corporate Governance Network, which represents $18 trillion in assets.

Any rule change at SEC will be a time consuming process. In the meantime some groups are trying to get corporations to voluntarily release information about their political spending.

Since 2003 the Center for Political Accountability has been working to get companies to establish rules for disclosure of political spending and shareholder oversight.

Valentina Judge of CPA said that such resolutions are good business practices that can protect companies from embarassing contributions that can cause reputational damage.

The Target corporation learned the pitfalls of political donations last year, she pointed out.

The company endured bad press and boycott threats after it made a $150,000 donation to a group that supported a candidate opposed to gay rights.

CPA is preparing to release an index of corporations that have adopted policies on corporate spending.

It’s urgent that groups focus on disclosure strategies that could work fast, said Craig Holman of Public Citizen.

“We just was a 427 percent increase in outside spending in the 2010 election,” he said, “This is a phenomenal increase … and this was just a test run, a trial. Corporations and CEOs were just starting to get involved and were pretty cautious.”

In the 2012 elections, he said, “I believe we are going to see numbers that are off the charts.”

The only thing that could force more disclosure right away would be an executive order from President Obama, he said.

“We need President Obama to step up to the plate and sign an order requiring enhanced political disclosure for contractors to show that contracts are being based on merit and not contributions.”

Another short term effort could involve getting the president to appoint Federal Elections Commissioner who would work to require funding disclosure on television ads, said Meredith McGehee of the Campaign Legal Center.

The most pressing need, however, she said, is is a public education campaign to translate the current situation around corporate funded politics into terms that meet average Americans.

“You have to build a public base before you can get into specific answers,”
she said. “The pot is not yet boiling.”

“The reality is that the other side that is supporting this outcome is outgunning the reform community and those that see the problem by a million to one,” she said. “It doesn’t mean give up. It means you’ve got to start thinking about 21 century solutions and approaches.”

Comments

  • CarmanK

    I thought the president had already given an executive order, that all government contractors must disclose their political contributions. Is what you are suggesting more inclusive?? The House already started beating up on him about the rule.

  • Anonymous

    Not only should this decision be altered, it should be outright overturned. The trend to fund political candidates with vast sums and to then actively curry favor from these same candidates in order to run up huge profits is at the very core of the decline of the efficiency of American government. Under the current decision, you don’t know if domestic American policies are being influenced by foreign governments. A very dangerous way to run a government, to say the least. I can remember when a candidate was only alloted their share of the $2 contribution checked off on ones tax return to finance thier campaigns. The campaigns didn’t start two years ahead of the election. The candidates were elected on their merits and philosophies and not through dirty smear ads continually shown against the opposition with no more thread of proof than mere innuendo or just outright lies. And always from a positive sounding, yet anonymous and shadowy institution. I believe that the Founding Fathers would turn in their graves if they could see to what level that American politics has sank. If left to it’s own device, this will eventually lead to the downfall of our great nation!

  • http://www.steveharrypublicpolicy.com Steve Harry

    I’d like to see political spending banned for both corporations and unions. The Supreme Court said such a ban would violate their right to free speech. However, the real violation is when stockholders’ money and union members’ dues are used to promote candidates and views they don’t personally support. Why not let them do their political spending directly, as individuals? Or contribute voluntarily to PACs?

    • Anonymous

      Union members service fee dues are not used to support candidates. Only the dues of full members can be used to support candidates (at least in Michigan.) With that full membership, you have the right to vote and run for leadership positions that decide who those candidates are. Corporations, however, are using the labor of their workforce to produce the money to generate those contributions. They promote candidates with a disregard for their employees for the most part. Unions and Corporations are very different entities.

      • http://www.steveharrypublicpolicy.com Steve Harry

        What do you mean by “full members”? Do you mean union members as opposed to employees who choose not to join the union? Don’t they pay the same amount of dues?

        • Anonymous

          Michigan union shops allow for 2 tiers of membership. Service fee members pcay duhes to only have their contract serviced. Full members are allowed to vote and the additional dues they pay are allowed to be used for political action. In a sense, unions already do what you request. Individuals decide if their dues go toward candidatrs.

          • http://www.steveharrypublicpolicy.com Steve Harry

            By “have their contract serviced” do you mean representation? If you are a conservative union member, you’d just about have to decline to be a full member, because about 95% of union spending goes to Democrats, right? At the site http://www.uaw.org/node/651, it says UAW monthly dues are equal to 2 hours pay. There is no mention of service fee members.

          • Anonymous

            A conservative member has every right to decline full membership, and some do and many don’t because they recognize the service that the union provides and they want a voice in that union. Those that opt out still are paying for the service on the contract. The added fee for full membership is nominal compared to the amount it takes to organize and negotiate a contract. The service fee dues in my union are 1.54% of the pay, and to move up to full membership is an additional .36%.
            BTW, I appreciate your inquiry and your desire of knowledge as to how union dues operate. It is admirable to want to know more about the topic even when in disagreement so as to be informed.

          • Anonymous

            Also though, look at the attacks on unions from the right wing (aka right to work, banning the use of work email to contact members, Emergency Manager powers that eliminate contracts) and you see why they support Democrats primarily. If conservative union members wanted to change that, they ought to be signing up and running for leadership positions. If conservatives wanted to preserve the rights to collectively bargain and wanted to make it easier to organize (Employee Free Choice Act) then they would garner the support of unions.

            It isn’t a “Unions like Democrats so they give money to them.” It’s more like “Conservatives don’t like unions so the unions give donations to Democrats.” Unions didn’t just pick a side willy nilly.

          • http://www.steveharrypublicpolicy.com Steve Harry

            Since you have been so helpful, I should be fair and tell you that I am dead against collective bargaining (see my website: steveharrypublicpolicy.com). But even if the majority of full members of the union vote to support Democratic candidates, there is still that conservative minority, even if it hurts their own pocketbook to vote conservatively, and that means that their union dues are being used to support views they disagree with. Most unions already have political action committees (PACs) that members contribute to voluntarily. Wouldn’t it be better for all union political activity to be supported from voluntary contributions? And the same goes for corporations – their political activities should be supported from voluntary contributions from stockholders.

  • Prof Kenneth Kolk

    The best curb on the use of corporate money would be a requirement that they must get the majority of their stock holders, including those who are stock holders through mutual funds before they can spend any of the corporate funds on political activities of any kind, including lobbying, contributing to 501c groups, or 527 groups, or contributing to any legislator’s office holder’s account.

    • http://www.steveharrypublicpolicy.com Steve Harry

      But even with the consent of the majority, the minority who disagree are having their money spent promoting views or candidates they may not support. They buy stock as an investment, not to pay someone to speak politically on their behalf. Why not let them speak for themselves?