The Truth will prevail, But only if we Demand it from Congress!
9-11 Inside Job and Neocons Hacked 2004
AlterNet
By Matt Taibbi, RollingStone.com
Posted on August 9, 2008, Printed on August 12, 2008
http://www.alternet.org/story/94334/
Remember the total, hideous, inexcusable absence of oversight that
has been the great hallmark of George Bush's America for almost
eight years now? Well, now we're getting to see that same regulatory
malfeasance applied to yet another cornerstone of our political
system. The Federal Election Commission -- the body that supposedly
enforces campaign-finance laws in this country -- has been out of
business for more than six months. That's because Congress was
dragging its feet over confirmation hearings for new FEC
commissioners, leaving the agency without a quorum. The commission
just started work again for the first time on July 10th under its
new chairman, Donald McGahn, a classic Republican Party yahoo whose
chief qualifications include representing Tom DeLay, the corrupt
ex-speaker of the House, in matters of campaign finance.
Apart from the obvious absurdity of not having a functioning
election-policing mechanism in an election year in the world's
richest democracy, the late start by the FEC makes it almost
impossible for the agency to do its job. The commission has a
long-standing reluctance to take action in the last months before a
vote, a policy designed to help prevent federal regulators from
influencing election outcomes. Normally, the FEC tries to root out
infractions and loopholes -- fining campaigns for incomplete
reporting, or for taking shortcuts around spending limits -- in the
early months of a campaign season. But that ship sailed way too long
ago to take the stink off the 2008 race.
"The time for setting the ground rules was earlier," says Craig
Holman, a lobbyist with the watchdog group Public Citizen. "There
isn't time to do much now."
That's especially true given the magnitude of what we're dealing
with here: the biggest pile of political contributions in the
history of free elections, nearly a billion dollars given to
presidential candidates in this season alone. Because the FEC has
been dead in the water for so long, it's likely that we'll still be
in the dark about a large chunk of this record manure pile of
campaign contributions when we go to vote in November.
But that doesn't mean that a little sifting through campaign records
doesn't tell us quite a lot about who's backing whom in these races.
The truth is that the campaigns of both Barack Obama and John McCain
are being inundated with cash from more or less exactly the same
gorgons of the corporate scene. From Wall Street to the Big Oil
powerhouses to the military-industrial complex, America's fat-cat
business leaders know that the Animal House-style party of the last
eight years that made almost all of them rich with bonuses,
government contracts and bubble profits is about to come to an end,
and someone is going to have to pay to clean up the mess. They want
that someone to be you, not them, and they've spared no expense to
make sure both presidential candidates will be there to bail them
out next year.
They're succeeding. Both would-be presidents have already sold us
out. They've taken the money and run -- completing the cyclical
transformation of the American political narrative from one of
monopolistic Republican iniquity to an even more depressing tale
about the overweening power of corporate money and the essentially
fictitious nature of our two-party system.
In layman's terms, we've gone from being screwed to being fucked.
Who knows -- maybe Barack Obama will surprise us if he wins the
election. But if you look at the money, it doesn't look good.
Thanks in part to the dormant FEC, corporate America has had even
easier access to the candidates than usual in its effort to buy off
the next government before the crash. In fact, this election has
seen some excellent new innovations in the area of
campaign-fundraising atrocities. Chief among them is the rise of
so-called "joint committees."
It used to be that campaigns could raise a maximum of $2,300 from
each individual. Now, both candidates -- but especially McCain, who
far outstrips Obama in this area -- routinely hold fundraisers in
which individuals can give far more to a joint committee.
Technically, the candidate still pockets only $2,300 in
contributions. The bulk of the money raised -- in McCain's case, a
whopping $70,100, or 30 times the previous limit -- goes to the
state and national arms of the candidate's party, which can then
spend the unprecedented haul on behalf of the candidate. "This
allows CEOs to walk in the door and drop $70,100," says Holman. "It
basically allows campaigns to exceed the spending limits."
McCain has raised more than $63 million via these joint committees,
thanks to more than 1,000 "megadonors" who have each given at least
$25,000 to his campaign effort. Obama, by contrast, has some 471
megadonors -- and a close examination of their backgrounds
underscores some of the differences in corporate America's attitudes
toward the two candidates.
One of McCain's chief sources of corporate money is the
private-equity firm Kohlberg Kravis Roberts, memorialized for its
takeover of RJR Nabisco in the movie Barbarians at the Gate. Through
the pretext of joint committees, 10 KKR executives have given McCain
$285,000, and it's not hard to figure out why. Two of McCain's key
campaign proposals -- lowering the corporate tax rate to 25 percent
and making purchases of industrial equipment fully deductible --
would save a single KKR subsidiary, Energy Future Holdings, $49
million.
"Just in his tax policies alone, McCain is saving corporate America
$175 billion a year," says James Kvaal, who analyzed McCain's tax
policy for the nonprofit Center for American Progress.
McCain has also raked in big contributions from two other giants of
the buyout world: the Carlyle Group (famous for its close ties to
the Bush administration) and the Blackstone Group (whose co-founder,
Pete Peterson, wrote a $28,500 check to McCain after he took home
almost $1.8 billion from a public offering last year). McCain has
also received monstrous sums from hedge-fund managers, attracted by
his pledge to keep the tax rate on their earnings at only 15
percent. Executives and family members in a single hedge fund, Knott
Partners, have contributed some $225,700 to McCain's campaign.
Then there's the predictable influx of cash from would-be military
contractors. John Lehman, a former secretary of the Navy whose firm
builds the Superferry transport vessel, not only donated $28,500 of
his own money, but bundled at least $250,000 for McCain from other
donors. Donald Bollinger, who is a contractor on the controversial
Littoral Combat Ship, gave $27,300 and bundled a whopping $500,000.
Anyone want to bet on a decrease in Naval appropriations in a McCain
presidency?
McCain has also received big money from telecommunications magnates.
The senator has always been a friend to the industry: Back in 2003,
just four days after AT&T sent him a check for $10,500, he sponsored
a bill to ban state and local taxes on Internet service. Since 2007,
McCain has taken in some $1.3 million from the communications
industry. Just four members of the McCaw family, which owns the
telecommunications firm Eagle River, have kicked in $123,200.
McCain's campaign manager, Rick Davis, was a former lobbyist for
BellSouth, Verizon and SBC Communications. His deputy campaign
manager, Christian Ferry, was a partner to Davis at Verizon. One of
his chief advisers, Charlie Black, is the head of the lobbying firm
BKSH and Associates, which represents AT&T. His Senate chief of
staff, Mark Buse, worked for AT&T Wireless. All told, of 66 current
and former lobbyists working for McCain, some 23 come from the
telecommunications industry.
Given McCain's telecom backing, it's not surprising that the senator
has had one of his characteristic changes of heart. As recently as
last November, McCain was staunchly opposed to retroactive immunity
for telecommunication companies that took part in Bush's illegal
spying on American consumers, saying their actions "undermine our
respect for the law." Now, jammed to the gills with telecom cash,
McCain calls himself an "unqualified" supporter of immunity,
praising the telecom industry's warrantless wiretapping as
"constitutional and appropriate."
All the same, plenty of other evidence suggests that much of Wall
Street is betting on an Obama win. In fact, some observers believe
that KKR announced a multibillion-dollar public offering this summer
because it expects McCain to lose. "They're doing the public
offering now so that the compensation can be taxed at the lower rate
while Bush is still in office," says a strategist for a major labor
union. "They're betting Obama is going to win, and they're getting
their money while they can."
Other companies are getting in on the ground floor with the new
chief by stuffing money in his ears. Overall, Obama is flat-out
kicking McCain's ass when it comes to Wall Street contributions,
raking in nearly $9 million from securities and investment
executives, compared to $6.2 million for McCain. Obama has received
more contributions from Goldman Sachs than from any other employer
-- more than $627,000 at this writing -- not to mention $398,021
from JP Morgan Chase, $353,922 from Lehman Brothers and $291,388
from Morgan Stanley. Even among hedge-fund executives, who have an
unequivocal interest in electing McCain, Obama is whipping the
Republican, collecting $500,000 more than McCain. All of which begs
the question: Why would corporate giants like these throw so much
weight behind a man who promises to strip them of billions in tax
breaks?
Sadly, the answer to that question increasingly appears to be that
Obama is, well, full of shit. He has made no bones about his plans
to raise income by soaking the rich, promising to roll back the Bush
tax cuts for people making over $250,000, increase the top tax rate
on capital gains to 25 percent and raise the top rate on qualified
dividends. He has also pledged to deliver a real stomach punch to
hedge-fund managers, raising the tax rate on most of their income
from 15 percent to 35 percent.
These populist pledges sound good, but many business moguls appear
to be betting that the tax policies, like Obama himself, are only
that: something that sounds good. "I think we don't want to make too
much of his promises on taxes," says Robert Pollin, professor of
economics at the University of Massachusetts. "Not all of these
things will happen." Noting the overwhelming amount of Wall Street
money pouring into Obama's campaign, even elitist fuckwad David
Brooks was recently moved to write, "Once the Republicans are
vanquished, I wouldn't hold your breath waiting for that
capital-gains tax hike."
Those worried that Obama might be all talk when it comes to needed
reform had a real scare in July, when the senator failed to show up
to vote for the Stop Excessive Speculation Act, a bill designed to
curb rampant oil speculation. Oil speculators provide the perfect
microcosm of what happened to the economy under Bush. Back in 2001,
investment banks like Goldman Sachs and JP Morgan got together and
created an online exchange called the ICE for trading energy
commodities. The ICE ended up buying the British-regulated
International Petroleum Exchange; it then opened trading windows in
the U.S., allowing Wall Street investment banks to make oil-futures
trades on American soil, on their very own commodities exchange,
without any federal regulation whatsoever.
"In financial terms, they were playing blackjack at tables where
they themselves were the dealers, in casinos they themselves owned,"
says Warren Gunnels, a senior policy adviser to Sen. Bernie Sanders.
"It was crazy." Trading on the ICE had a massive impact on U.S.
gasoline prices, and more than one legislator wondered if energy
speculators were manipulating the market, as energy traders like
Enron had been before. The speculation bill was designed to regulate
the ICE and place limits on trades. But on the day before Obama
returned from his eight-day, eight-country, megadazzling
international photo op, Democrats failed by a vote of 50-43 to force
a vote on the bill, as heavy lobbying by investment banks like
Goldman Sachs torpedoed the effort.
Not only did Obama not show up to vote, he appeared at a public
forum three days later flanked by Jon Corzine and Robert Rubin, two
former Goldman executives, to discuss how to revive the economy.
Here you have the basic formula of campaign contributions in a
nutshell: Powerful investment bank gives big money to candidate,
needed reform requires candidate to cross said investment bank,
candidate pussies out and finds way to be gone at the moment of
truth, candidate resurfaces later in arms of aforementioned
investment bankers.
Obama's absence on oil speculation was eerily reminiscent of his
previous decision to change his mind about giving retroactive
immunity to telecom companies for spying on Americans. Obama
withdrew his pledge to filibuster the immunity bill right around the
time the Democrats announced that AT&T would be sponsoring the
Democratic convention. So no filibuster on retroactive immunity from
the top Democrat -- but conventiongoers in Denver will get tote bags
emblazoned with the AT&T logo. So that's something.
Look, we all knew this was coming. Once Obama vanquished Hillary
Clinton, it was inevitable that his campaign would start roping in
the Clinton moneymen for the fall confrontation with McCain. Among
those snagged by Obama were Iranian millionaire and former
Democratic Senatorial Campaign Committee chairman Hassan Nemazee,
venture capitalist Alan Patricof and the touchingly plugged-in Wall
Street power couple Maureen White (First Boston) and Steven Rattner
(Morgan Stanley). Rattner and White, the former chief fundraiser for
the DNC, are longtime friends of the Clintons; she quit the DNC in
2006 to build Hillary's war chest, while he backed Joe Lieberman
against Ned Lamont and flirted with a Mike Bloomberg presidential
run. Such are the people who are now whispering in Obama's ear.
Over the summer, the Obama camp has relentlessly pushed the notion
that its record fundraising is mainly the result of small online
donations. The first presidential candidate to raise so much money
that he could afford to eschew the spending limits that would be
imposed if he accepted federal matching funds, Obama claims that he
opted out of public funding so that he could have a campaign "truly
funded by the American people." And indeed, he has a record number
of small donors, with some 45 percent of his campaign cash coming
from contributions smaller than $200.
Which is a great percentage -- but it's only eight points better
than John Kerry in 2004 and only 14 points better than George Bush
that same year. In truth, Obama is still raising tons of money from
big corporate donors. In June alone, as Obama was raking in more
than $30 million from small donors, he also bagged $6 million in a
single fundraiser at Ethel Kennedy's home in Virginia and another $5
million at an event in Hollywood. But time and time again, you see
Obama aides boasting about how the day of the big-dollar donor is
over. "More people are involved, and I think that necessarily
dilutes the impact of any individual -- which is probably a good
thing," one prominent Obama supporter recently declared. This
staunch champion of the small donor happened to be none other than
James Rubin, son of former Goldman Sachs co-chairman Bob Rubin.
Obama's decision to embrace Clinton's moneymen coincided with his
decision to attend a public forum on economic policy with an A list
of Clinton-era economic advisors, including Rubin and Corzine. "The
message is that he's going to be a friend to Wall Street, just as
Bill Clinton was a friend to Wall Street," says Pollin. "Wall Street
will want to be at the head of the table."
By now it should be clear what type of service Wall Street will
demand. The financial disaster dumped on us by eight years of Bush's
mismanagement has left America with the prospect of short-term
solutions in the form of massive government bailouts, and long-term
solutions in the form of reform and regulation. A big chunk of the
$1 billion in cash that will be spent on the presidential race this
year represents Wall Street's desire to make sure that both
candidates can be counted on to make the short-term bailouts large
and passionate, and the reforms gentle and halfhearted. "They want
to make sure there's socialism when they need it -- bailouts -- and
capitalism when they need that," says Pollin.
Both candidates are already falling all over themselves to signal
their business-friendly approach to the economy. McCain entered this
election with a reputation as a strict Goldwater conservative. "I
have always been committed to the principle that it is not the duty
of government to bail out and reward those who act irresponsibly,"
he declared. McCain also sounded off in the past about troubled
quasi-governmental lenders Freddie Mac and Fannie Mae, pledging to
"make them go away" and to strip them of their right to lobby.
But this year, McCain -- perhaps emboldened by the $238,100 he got
from seven JP Morgan Chase executives or the $500,000 bundled for
him by Chase executive James Lee Jr. -- caved in and supported
Chase's outrageous government-backed acquisition of Bear Stearns. He
also backed the recent bailout of Freddie Mac and Fannie Mae -- no
surprise given that former Fannie Mae lobbyists are serving as his
chief of staff and the head of his vice presidential vetting panel.
Obama also supported the Freddie Mac-Fannie Mae rescue, and that,
too, is no surprise, given that he hired one former chairman of
Fannie Mae to chair his vice presidential vetting panel and hired
another former Fannie Mae chairman to serve as his consultant on
housing issues. Most of us will never get within a hundred miles of
a single Fannie Mae chairman, but Obama has already hired two -- and
he isn't even president yet.
This, folks, is the way of the world. Forget all the promises to
make the rich pay their fair share. As the candidates get closer to
office, the actual paying customers move to the front of the line.
Sadly, both candidates have an extensive history of being dependable
pals of campaign contributors. Back in 2000, when Obama was a state
senator in Illinois, an entrepreneur named Robert Blackwell Jr.
hired him to be his lawyer, paying him a monthly retainer of $8,000
-- big money for a part-time legislator with an annual salary of
just $58,000. A few months later, Obama sent a letter urging state
tourism officials to give a grant to one of Blackwell's companies,
the amusingly named Killerspin, to fund a table-tennis tournament.
Killerspin received $320,000 in public funds; Obama pocketed
$112,000 in fees from Blackwell.
So far this year, Blackwell has bundled more than $100,000 for
Obama's campaign. Looks like there's going to be a shitload of
table-tennis tournaments all across America next year.
McCain also likes to write letters for big contributors. In 1998,
four months after BellSouth contributed $16,750 to the senator, he
sent a letter to the FCC asking it to give "serious consideration"
to the company's request to enter the long-distance market. He later
wrote letters on behalf of Paxson Communications, which donated
$20,000 and let him use their company jet, as well as Ameritech and
SBC Communications, which raised $120,000 for McCain at a time when
they were seeking permission to merge.
McCain's still sticking by that gang. Former Ameritech chairman
Richard Notebaert bundled more than $100,000 for him this year, and
two of McCain's key fundraisers, Peter Madigan and Tim McKone, hail
from SBC. The point is that politicians are intensely loyal to the
people who give them money -- and not anywhere near as loyal to the
promises they've made to suckers like us. No matter who's in the
White House, the direction of the government has remained remarkably
stable. Clinton's treasury secretary, Rubin, was a Goldman Sachs
man; Henry Paulson, the current secretary under Bush, is also a
Goldman Sachs man. It'll probably be a Goldman man again next year.
Meet the new boss, same as the old boss. In sickness or in health,
the faces may change, but the money remains. "It's not an accident
that both administrations picked for leading economic advisers
people from Goldman Sachs," says Pollin.
The really distressing thing about all of this is the signal it
sends to Americans. Goldman Sachs posted a record profit of $11
billion last year, much of it from betting against the subprime
mortgage market they themselves helped to fuck up. That little
energy exchange Goldman set up, the ICE, made a profit of $240
million last year, as gas prices skyrocketed. It may suck to be you
right now, but all that pain isn't so bad if you are a big oil
speculator.
When you live in million-dollar Manhattan townhouses and make
billions in profits betting on the pain of the ordinary foreclosed
homeowner, you shouldn't get to run around on TV with the
prospective president on your arm. You should be hung by your balls.
But that's not the way it works, and despite what you might have
heard about "change," it probably never will be.
For all the excitement that Barack Obama has garnered, and all the
talk about a new day in Washington, it would be tragic if the real
legacy of his election victory was to finally expose the essentially
unchanging, oligarchic nature of our political system. It's the same
old story: Money talks, and bullshit walks. And don't be surprised
if we're the ones still walking after November.
Matt Taibbi is a writer for Rolling Stone.
© 2008 RollingStone.com All rights reserved.
View this story online at: http://www.alternet.org/story/94334/
