Tea Party is all on board for the Special Exemptions Act

by Brian Leubitz (Note: I work for the Stop Special Exemptions Campaign. Cross-posted to DailyKos)

At first blush, some would think that the Special Exemptions Act would be a step in the right direction.  That it would somehow reform our broken campaign finance system.

Nothing could be further from the truth.

In fact, the Special Exemptions Act ends up making the system worse, and more biased against working Californians. It leaves open huge loopholes for Billionaires to spend in SuperPACs and Independent Expenditures(IEs), while stifling the voice of labor and working Californians. It’s an unbalanced and unfair measure that would just increase the power of the undisclosed and poorly regulated SuperPACs and IEs and their tea party allies in California.

How do we know the tea party loves the Special Exemptions Act? Well, how about the San Diego GOP’s very special invitation to a rally for the Act in San Diego a day after they plan how they can smash and burn Obamacare?

STOP SPECIAL INTEREST MONEY BRIEFING… Come learn about this CRITICAL statwide ballot measure in November to ban corporate and union contributions to state legislators to level the playing field and empower taxpayers. (SD GOP)

Except that the measure does nothing of the sort. Corporate money would simply move to IEs and SuperPACs. And that doesn’t even start the discussion of all the exemptions put into the measure to protect their friends. Are you formed as an LLC? You get an exemption! LLP? You get an exemption! Hedge Fund? You get an exemption! It’s almost like the authors of the Act consulted Oprah Winfrey on gift giving.

With the growing power of SuperPACs and IEs, it becomes increasingly easy for corporations to contribute in non-traditional ways that simply aren’t possible for regular Californians. A group of your friends aren’t likely to get together to donate $10 million to a candidate supporting SuperPAC as Sheldon Adelson did a few weeks ago. More locally, a contribution of $100,000 can turn a legislative race on its head. And in several races this year in California, Independent Expenditures spent far more than that.

The Special Exemptions Act does nothing about this so-called outside spending, just facilitates it through new and ever more anonymous routes.  And these SuperPACs and IEs are finding new ways to hide the true source of their money. Just last week, the New York Times reported how “non-profit” corporations are being used to hide corporate money.

Two years after the Supreme Court’s Citizens United decision opened the door for corporate spending on elections, relatively little money has flowed from company treasuries into “super PACs,” which can accept unlimited contributions but must also disclose donors. Instead, there is growing evidence that large corporations are trying to influence campaigns by donating money to tax-exempt organizations that can spend millions of dollars without being subject to the disclosure requirements that apply to candidates, parties and PACs.

It probably won’t surprise you too much to learn that the Tea Party has some affinity for these “non-profit” organizations. In fact, Freedomworks, one of the biggest Tea Party funders, is just such a group. It is not required to disclose their donors, and yet they use this money to finance SuperPAC campaigns across the country. Nothing in the Special Exemptions Act does anything about even these disclosure issues, yet these groups stand to become more powerful under the Act.

The campaign behind the Special Exemptions Act likes to talk about how they are going to change California’s political finance scheme. Yet real reformers are opposing the measure. Don’t let your friends get fooled by their slick positioning, the Special Exemptions Act will take California and our campaign finance system in exactly the wrong direction. In the direction favored by the Tea Party and their supporters.

In other words, the Special Exemptions Act is wrong for California.

If you haven’t joined the campaign online yet, please take a moment to get connected now. We also need your help on social media to show the strong opposition to this cynical ploy. Please like the campaign on facebook or follow on twitter.  

Our campaign finance needs reform, but not fake reform that hurts working Californians

by Brian Leubitz (Note: I work for the Stop Special Exemptions Campaign. Cross-posted to DailyKos)

On Thursday, the California Senate approved AJR 22, a joint resolution from the Assembly and Senate calling for the repeal of the Citizens United decision. It doesn’t change the very real threat from moneyed interests, but it does put a flag down for change in our campaign finance system. Here is a portion of that:

WHEREAS, Citizens United v. Federal Election Commission purports to invalidate state laws and state constitutional provisions separating corporate money from elections; and

WHEREAS, The United States Supreme Court’s ruling in Citizens United v. Federal Election Commission represents a serious and direct threat to our democracy; and

WHEREAS, The general public and political leaders in the United States have recognized, since the founding of our country, that the interests of corporations do not always correspond with the public interest and that, and, therefore, the political influence of corporations should be limited; and

*** **** ***

Resolved by the Assembly and the Senate of the State of California, jointly, That the Legislature of the State of California respectfully disagrees with the majority opinion and decision of the United States Supreme Court in Citizens United v. Federal Election Commission; and be it further

Resolved, That the Legislature of the State of California calls upon the United States Congress to propose and send to the states for ratification a constitutional amendment to overturn Citizens United v. Federal Election Commission and to restore constitutional rights and fair elections to the people;…(Resolution)

But what does that mean?

Under Citizens United and subsequent decisions and FEC regulations, SuperPACs (and their California analog, Independent Expenditures) can raise unlimited, and often anonymous, funds to spend on a candidate or campaign. In theory, SuperPACs are supposed to operate entirely independently of the actual campaigns. However, as we’ve seen over the last few months, that is more theoretical and less factual. In fact, Karl Rove, who runs one of the biggest SuperPACs (Crossroads GPS) was at a “strategy” retreat for GOP nominee Mitt Romney in late June. As was Charles Spies, the man who runs the Romey-backing SuperPAC Restore Our Future.

And the amount of money is simply staggering. Karl Rove wants to raise $600 million to spend to get Mitt Romney and other Republicans elected in November. So far, Republican SuperPACs have raised $158mil and Democratic SuperPACs have raised $47mil. While the Republican balance is notable, any way you look at it, the amount of money has grown exponentially for the 2012 election.  Just this week, Restore Our Future reserved over $7 million of Olympics advertising.

With the balance of money being tilted heavily towards Republicans, the next questions is what do they want? If you look at the big federal SuperPACs, the big names that jump out at you are Sheldon Adelson, a gambling magnate.  Also high on the list? The Koch brothers, who made their money in oil business. Harold Simmons is a banking tycoon, and Bob Perry is a developer in Texas. Both were prominent in the so-call Swift Boat Veterans campaign, and are now two of the largest GOP SuperPAC donors.

In California, independent expenditure committees are also spending millions upon millions of dollars upon candidates and campaigns. And while the Special Exemptions Act looks like “campaign reform,” in reality it just gives these same folks more power.  And guess what, they have ideas on how to use it as well.  Just this week, William Oberndorf, a hedge fund manager, gave $150,000 to the Act. Oh, and he’s prominent in the school privatization movement, in case you are wondering at his angle.  He’s not the only one, of course, with several other prominent right-leaning funders already on board.

Take a look at who is financing the Special Exemptions Act. (links here and here.) You’ll find there is a long list of folks who have an interest in changing California in a way that runs counter to working Californians. The Lincoln Club, the Jarvis group, etc. The Special Exemptions Act is just a step in the wrong direction.

California progressives need to work together to defeat this measure. If you haven’t joined the campaign online yet, please take a moment to get connected now. You can also like the campaign on facebook or follow on twitter.

Yesterday, California took a key step in positioning itself as the “anti-Arizona” on immigration enforcement, with the state Senate passing a bill that would restore common sense to states’ approach on immigration. Ironically, California was the first state to embrace an extremist approach to immigration with the passage of Proposition 187 in 1994. Fortunately, the state has now come full circle and is breaking new ground by passing what we see as the “anti”- Prop 187 and “anti”-SB 1070: the TRUST Act.

The TRUST Act passed the California Senate with a 21-13 vote, moving the bill to the State Assembly, where it is also expected to pass. As the Los Angeles Times explains, the TRUST Act would:

prohibit police and sheriff’s officials from detaining arrestees for possible deportation unless the suspects have previous convictions for a serious or violent felony. The measure is aimed at blunting federal immigration enforcement, in particular the Secure Communities program, under which fingerprints of arrestees are shared with immigration officials who issue hold orders.

The federal “Secure Communities” program was created to target serious criminal offenders, but has been widely criticized by elected officials, law enforcement and others for sweeping up tens of thousands of immigrants without criminal records and destroying immigrants’ relationship with the police. That is why the California legislature-and, hopefully, soon the Governor-is taking concrete steps to address this with the TRUST Act.

The California approach stands in stark contrast to the SB 1070 law passed by neighboring Arizona, a law that continues to be mired in controversy and legal challenges. While the TRUST Act’s goal is to bring balance to immigration enforcement, SB 1070’s goal is to make every immigrant a law enforcement “priority.” Basically, it’s the difference between support for community policing and the creation of a police state.

Arizona is already ground zero for profiling and harassment of people “perceived to be immigrants,” and the federal government is certainly doing its part. The Border Patrol’s recent treatment of former Arizona Governor Raul Castro-who was stopped and held in 100 degree heat while traveling to celebrate his 96th birthday-is just the most recent example of how “checkpoint” culture has invaded the southwest and turned even the most patriotic of Americans into suspects. As Alessandra Soler, Executive Director of ACLU of Arizona stated:

This happens all the time in terms of these types of indiscriminate stops of individuals not suspected of any wrongdoing…I think most people would agree that subjecting a 96-year-old man to secondary screening does little to secure our borders and a man who had just informed them that he had undergone this medical procedure.

In fact, this wasn’t even the first time Governor Castro was subjected to harassment by the Border Patrol, and it’s a clear indication that Arizona remains the Wild West, while California is striking out on a decidedly different path.

According to Frank Sharry, Executive Director, America’s Voice Education Fund:

The rapid expansion of federal immigration enforcement capacity and authority has helped foster a climate of impunity and excess, as the detention of former Gov. Castro demonstrates. That’s why California’s TRUST Act is such a welcome and sensible step forward. By taking smart steps to restore immigration enforcement priorities, California’s TRUST Act is the antidote to Arizona immigration policy excesses. We hope and expect Governor Brown to sign the TRUST Act into law, sending a strong signal that California has learned from, and moved beyond, its Proposition 187 past.

Commissioner Dave Jones Sides With Consumers, Echoes Concerns Raised by Consumer Watchdog in Lawsuit Over the So-Called “Death Spiral”

Santa Monica, CA – Consumer Watchdog praised Insurance Commissioner Dave Jones’ announcement today opposing Blue Shield’s plan to close 23 health insurance policies, and echoing concerns raised by Consumer Watchdog in a recently-filed class action lawsuit.

Consumer Watchdog said, however, that as many as 100,000 Californians are still trapped in closed or lower-benefit health plans following policy closures carried out by Blue Shield’s affiliate regulated by the Department of Managed Health Care in 2010.

“Blue Shield is on notice that the company’s plan to close health insurance policies fails to protect consumers as the law requires,” said Jerry Flanagan, staff attorney for Consumer Watchdog. “If Blue Shield decides to go forward with the policy closures, we look forward to working with the company to implement a consumer-friendly plan. We also hope that Blue Shield will ensure that consumers affected by the 2010 policy closures will finally benefit from the protections mandated by law.”

The lawsuit filed by Consumer Watchdog and Whatley Kallas, LLC alleges that Blue Shield is illegally gaming the health insurance system by alternately closing older policies and opening new ones in order to push older, sicker consumers who are more expensive to insure into lower benefit, higher deductible coverage that requires consumers to pay more out of pocket.

The lawsuit seeks to stop Blue Shield from shoving its policyholders into what is known as a “Death Spiral”-the industry term for what happens when a health insurer “closes” certain insurance policies to new customers, and later raises rates to those remaining in the closed policy until those enrollees can no longer afford coverage. Since consumers with preexisting conditions cannot switch to a comparable or better policy, consumers trapped in the closed policies must either accept greatly inferior coverage or face bigger and bigger premium increases.

Download the lawsuit filed in San Francisco Superior Court here

According to legislative records, it was Blue Shield’s own past business practices, resulting in Death Spirals for consumers, that spurred the Legislature to adopt the same 1993 law that Consumer Watchdog and Whatley Kallas, LLC now allege the company has violated.

The policy closures are taking place among certain insurance plans in the individual market. California law requires that when health insurers close a policy the insurer must either offer consumers new comparable coverage, or minimize rate increases on the closed policies.

Two regulatory agencies – the California Department of Managed Health Care (“DMHC”) and the California Department of Insurance (“CDI”) – oversee different segments of Blue Shield’s insurance business. In the lawsuit, Blue Shield is accused of illegally closing eight policies regulated by the DMHC in 2010, and announcing it would close 23 policies regulated by the CDI on July 2, 2012 without offering consumers comparable policies or limiting rate increases as required by law.

Consumer Watchdog and Whatley Kallas, LLC settled a similar class action lawsuit last year targeting Blue Cross of California’s illegal Death Spiral practices. Read more about that lawsuit and settlement here. Under the terms of that settlement, Blue Cross must both offer consumers in the closed policies access to comparable coverage and limit rate increases in the closed policies if consumers choose to remain enrolled in the older, closed policy.

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Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at: http://www.ConsumerWatchdog.org

WhatleyKallas has earned a national reputation-based on trust, respect, demonstrated commitment and tangible results-in connection with its representation of healthcare providers and members of the organized medicine community. The firm’s lawyers have negotiated settlements with most of the major health insurers in the country on behalf of hundreds of thousands of consumers, physicians and medical associations that resulted in monetary relief and revolutionary practice changes valued in the billions of dollars. These settlements fundamentally changed the way managed care companies do business. The lawyers of WhatleyKallas have been repeatedly recognized in legal publications, such as “The National Law Journal” and “American Lawyer”, by their peers and by leaders of organized medicine for our work in the healthcare field. For more information, go to: http://www.whatleykallas.com/

The Special Exemptions Act would make it even easier for Super PACs to buy our elections.

by Brian Leubitz (Note: I work for the Stop Special Exemptions Campaign. Cross-posted to DailyKos)

In 1980, Ronald Reagan spent $29.2mil to win the presidency. The incumbent, Jimmy Carter, spent $29.4mil to lose it.

In 2012, with the nominating convention still two months away, Sheldon Adelson, a casino magnate with ambiguous goals has committed, so far, over $35mil to ensure that his voice is millions of times larger than any single everyday voter. Just a few days ago, Adelson committed another $10mil at the Koch Brothers luxury convention. No matter how committed the volunteer, no matter how many phone calls they make, no matter how many doors they knock, no single volunteer will ever approach the impact that Sheldon Adelson will have simply by writing a check.

And, with a net worth somewhere in the $25 billion range, it is chump change to Adelson. For comparison’s sake, it’s like you giving a political candidate a hundred dollars. Maybe he’ll notice a small dip in his bank account, but it won’t affect him. And so, the Super PAC Billionaires get to exert massive influence on our elections.

And yet here in California, the Special Exemptions Act would grant these same Super PAC Billionaires a big ol’ pat on the back. The measure crafts out exemptions for some of the biggest businesses and campaign spenders. The measure purports to be an even-handed reform, but instead it protects one side from any change of their big spending ways.

This measure is just far too risky for California. Who knows what kind of disastrous results it could bring? Resurgent anti-environmentalists with corporate polluter money? Anti-public education with for-profit education money? In the end, the Special Exemptions Act would give them a huge leg up in elections, and in the Legislature. You don’t need a crystal ball to see that their real agenda goes far beyond November.

California doesn’t need to protect the Super PAC Billionaires. People like Sheldon Adelson are doing quite alright on their own.  If you haven’t joined the campaign on social media, please take a moment to get connected now: join the campaign today. You can also like the campaign on facebook or follow on twitter.

On June 27 Governor Jerry Brown vetoed language inserted by both houses that would have tied UC funding to admitting a minimum number of students (the same as last 2011).  His veto message says as follows:

 

“Deletes provision 15 of item 6440-001-0001 from AB 1497, because the requirement contained in this provision that the University achieve an enrollment target of 209,977 resident full-time equivalent students creates unnecessary cost pressures on this item and is unnecessarily restrictive.”

 

This enrollment target, identical with what it was 2 years ago (c.210K), was missing from the Governor’s January budget and the May revise. The  legislature put it back after the LAO notedits absence. Governor Brown’s veto means that, although Master Plan eligibility still exists on paper the state will no longer monitor UC’s compliance with Master Plan expectations. (In some previous years it required that fund be “reverted” to the State if UC did not meet its enrollment target.)

 

The Council of UC Faculty Association’s Executive Director, Eric Hays has been keeping track of how far the Governor has moved away from Master Plan requirements in the past three budgets. As you can see (below), Jerry Brown is MUCH worse than Schwarzenegger in holding UC to Master Plan targets. By several measures he is also worse in funding UC, which may be why he no will longer hold UC accountable Californians with non-resident students, each of whom yields a surplus revenue of c. $22K . Who will keep these accounts if the DOF and the Governor don’t?

UC remains free to enroll more the 210K resident students even if the state no longer expects it to do so.  This year’s vetoed language contained no penalty if UC missed it’s target, so the Governor’s veto should probably be read as a purely symbolic repudiation of the Master Plan’s link between UC funding and if you want a sense of where things are headed, just listen to President Yudof crow: “[The] bill included California resident enrollment target language that is not consistent with funding levels provided from the State… In accordance with my request the Governor vetoed the budget provisions on the enrollment target ….” (Yudof to Regents, June 29, 2012)

On Friday, June 30, Eric Hays and Joe Kiskis (CUCFA’s VP for External Relations) attended a meeting at UCOP in which the likely outlines of the Governor’s  compact with Yudof were revealed. Joe reports as follows:

In the event that Brown’s ballot initiative does pass, the governor has promised to dust off the multi-year (4-year? 5-year?) UC funding agreement that was apparently worked out between OP and the Governor during the spring and has since been on hold. The present version of this has a 6%/yr increase in state support for UC. That is the 4% previously rumored plus 2% for UCRP. In that eventuality, OP would likely ask the Regents for a 6%/yr tuition increase. (You read that right.) In the event that the ballot initiative does not pass, OP will probably ask the Regents for a tuition increase sufficient to make up for the $250M trigger, the lost $125M tuition buy out, and some other increasing fixed costs for a total increase of 20.3% to be effective Jan. 1, 2013. Yes, mid-year.

But with without any stated expectations for California UC will be free to replace in-state students with non-residents, thereby reducing the budgetary quality of education at campuses that continue to honor the Master Plan. (See https://calitics.com/diary/… )

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Here is relevant language from the last three state budgets as compiled by Eric Hays:

 

2010-11 (Schwarzenegger’s last): “The Legislature expects the University of California to enroll a total of 209,977 statesupported FTES during the 2010-11 academic year. This enrollment target does not include nonresident students and students enrolled in nonstate-supported summer programs.

The University of California shall report to the Legislature by March 15, 2011, on whether it has met the 2010-11 academic year enrollment goal. For purposes of this provision, enrollment totals shall only include state-supported students. If the University of California does not meet its total state supported enrollment goal by at least 512 FTES, the Director of Finance shall revert to the General Fund by April 1, 2011, the total amount of enrollment funding associated with the total share of the enrollment goal that was not met.” (page 604-605 of

http://www.documents.dgs.ca.go…

 

2011-12 (Brown’s first): “The Director of Finance shall not [emphasis added] revert state funds appropriated to the University of California for the 2011-12 fiscal year pursuant to subdivision (c) of Section 59 of Chapter 7 of the Statutes of 2011 even if the university does not meet its total state-supported enrollment goal.” (page 602 of

http://www.documents.dgs.ca.go…

 

2012-13 (VETOED): “The Legislature expects the University of California to enroll a total of 209,977 state-support-ed full time equivalent students during the 2012-13 academic year. This enrollment target does not include nonresident students and students enrolled in nonstate supported summer programs. The University of California shall report to the Legislature by May 1, 2013, on whether it has met the 2012-13 academic year enrollment goal.”