Lobbyists Rush to Hold the Floodgates Open

We noted with interest reports that subsidiaries of foreign corporations from across the globe have launched a lobbying campaign in Washington to protect their newfound power to influence American elections under the Citizens United case.  About 160 of these U.S. subsidiaries of foreign-owned or controlled corporations are involved in a lobbying group trying to stop President Obama and Congress from enacting limits on their spending in political campaigns.  Worse still, the lobbyist leading the effort refused to disclose all the companies involved in the lobbying campaign.  But it appears that the group of companies has the potential to spend hundreds of millions of dollars to influence American elections. 

All of this demonstrates why the President was right to criticize the Supreme Court’s recent decision in Citizens United – and why he is also right to call for reform of the lobbying laws, including tough new rules on lobbyist disclosure, that build on the dramatic steps he has already taken in his first year in office to change Washington.

In Citizens United, a narrow 5-4 majority of the Supreme Court overturned a century of law that had barred corporations from using their financial clout to directly interfere with elections.  As a result of this decision, American corporations owned in whole or in part by foreign companies—and even by foreign governments—are no longer restricted from making expenditures to elect or defeat federal candidates.

Some have argued that Citizens United will not increase foreign influence, but they are mistaken.  The four Justice dissent, authored by Justice Stevens, specifically pinpoints the fact that the majority opinion opens the door to foreign influence -- see page 33 and page 75.   The majority openly acknowledged that foreign influence could pose a potential issue here, as did the lawyer for Citizens United.  And, a stream of independent, non-partisan experts have echoed the President’s concerns:

• Fred Wertheimer of Democracy 21 stated that “there is no statutory prohibition against foreign-controlled domestic corporations from making expenditures to influence federal elections, following the Citizens United decision.”
• Common Cause and Public Campaign issued a joint statement that the Court’s opinion “will allow corporations, including those owned by a majority of foreign entities, to spend without limit to influence US elections.”
• Norm Ornstein of the American Enterprise Institute stated that: “Citizens United opens up opportunities for American subsidiaries of foreign companies, including those owned by foreign governments, to spend huge amounts to influence American elections.”
• Gerald Hebert of the Campaign Legal Center stated that “With the corporate campaign expenditure ban now being declared unconstitutional, domestic corporations controlled by foreign governments or other foreign entities are free to spend money to elect or defeat federal candidates.”

Others assert that subsidiaries of foreign companies already spend millions on independent expenditures and so the Citizens United decision will make no difference.  That misses the point.  The electioneering communications law that was struck down restricted corporate ads naming elected officials in the crucial 60 days before general elections and 30 days before primary elections.  Now those corporations can spend freely on those ads during the most critical periods in elections and the express message can be to vote for or against a named candidate.  That constitutes an enormous expansion of corporate power to influence elections.

Others claim existing law is sufficient to protect against foreign influence in our elections. That too is wrong.  Although the Federal Election Commission (FEC) restricts foreign nationals from spending or directing spending in American elections, it does not prohibit corporations in which foreign nationals are shareholders or hold significant sway or de facto control from making such expenditures.  For example, foreign-controlled corporations making independent expenditures cannot be relied upon to make decisions contrary to the political interests or preferences of their owners.  Before Citizens United, these problems did not exist at the federal level since the corporations themselves were limited in what they could do regardless of whose money or influence was behind them.  But now that restriction is no more.  Accordingly, because of these realities of how foreign control can operate, a stronger rule is needed to protect our domestic politics from foreign influence.

In the State of the Union, the President called for a series of steps to fix the problems caused by this case and also by the problem of special interests and their lobbyists having too much influence in Washington.  In addition to closing the loopholes opened by Citizens United, including the one that could allow foreign interests to influence our elections, the President also called on Congress to:

• Establish carefully-tailored, low-dollar limits on the contributions lobbyists may bundle or make to candidates for federal office;
• Toughen lobbyist disclosure rules so that – like the voluntary step the President has taken to disclose visitors to the White House – lobbyists must disclose the details of every lobbying contact, including what the meeting was about;
• Close the loophole that allows foreign agent lobbyists to avoid full disclosure of their activities;
• Fully disclose all earmark requests on a comprehensive, bipartisan, state-of-the-art disclosure database that allows Americans to examine the details of every proposed request.

The proposals are detailed in this White House fact sheet.

For at least a century, it was considered perfectly legal to treat corporations differently than people in the context of political activity.  The Supreme Court’s decision changes that century-old legal principle.  As Justice Stevens wrote in dissent, “Congress has placed special limitations on campaign spending by corporations ever since the passage of the Tillman Act in 1907... The Court today rejects a century of history when it treats the distinction between corporate and individual campaign spending as an invidious novelty born of [more recent Court decisions].”

The American people have a compelling interest in preventing foreign interests from influencing our domestic political process.  A strong legislative response is required given the stakes: Americans’ control over their own electoral process.  That is why the President is working with Congressional leadership to move rapidly to pass legislation that protects our politics from undue special interest influence.

Norm Eisen is Special Counsel to the President for Ethics and Government Reform

Putting Washington at the Service of the Middle Class

Ed. note: Also watch shorter video clips from the speech, broken down by topic.

In his State of the Union Address tonight, the President laid out an agenda attempting to attack one problem from every conceivable angle: the terrible squeeze felt by America’s middle class.  Fundamentally, that means prying government away from special interests and dedicating it to measures that put Americans to work and lay the foundation for a stronger economy for our country – lowering health care and tuition costs, spurring creation of the next generation of clean energy jobs.  It also means putting a cop on the beat on Wall Street, so major banks can no longer take advantage of families and taxpayers.

To do all that, though, we need to change the way Washington works.  Already the President has taken unprecedented steps in this direction, from releasing the names of all visitors to the White House for the first time ever to clamping down on the revolving door between government and lobbying.  But as much progress was made on this front in this first year, it was still only the first year, and the President will keep pushing forward, whether that’s shining sunlight on any contact between lobbyists and the White House, or pushing Congress to disclose all earmark requests in one place for Americans to see.

This was the vision that shaped the President's address, but this is not just a matter of rhetoric.  The President made clear that there is tremendously busy agenda ahead for his second year – the policies and proposals below are just examples of the plans the President laid out in his address to put government to work for the middle class.

Here are a few initiatives you might have missed in the course of the speech:

• The President called on the Senate to pass a financial reform package. “A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes.  But that can only happen if we guard against the same recklessness that nearly brought down our entire economy.” Essential reforms include measures to protect consumers and investors from financial abuse; close loopholes, raise standards, and create accountability for supervision of major financial firms; restrict the size and scope of financial institutions to reign in excesses and protect taxpayers and address the ‘too big to fail’ problem; and establish comprehensive supervision of financial markets.
• A vision for a clean energy economy. “…to create more of these clean energy jobs, we need more production, more efficiency, and more incentives.” We will build on the historic $80 billion investment made through the Recovery Act.  The President’s vision includes investments in important technologies to diversity our energy sources and reduce our dependence on foreign oil, including:  the renewal of our nation’s nuclear energy industry after a 30-year hiatus, cutting edge biofuel and clean coal technologies, and additional offshore oil and gas drilling.  To fully transition to a clean energy economy and create millions of new American jobs, we must pass comprehensive energy and climate legislation to promote energy independence and address climate change.
• The President will continue his push to invest in the skills and education of our people. “This year, we have broken through the stalemate between left and right by launching a national competition to improve our schools. And the idea here is simple: instead of rewarding failure, we only reward success... In this country, the success of our children cannot depend more on where they live than on their potential.” The Obama Administration supports a new vision for increasing student achievement, delivering opportunity, and supporting excellence in America’s public schools. The President’s 2011 budget supports a new framework for the Elementary and Secondary Education Act that will foster innovation, reward excellence, and promote reform in our schools, as well as invests an additional $1.35 billion to continue the historic Race to the Top program to open it up to districts in order to spur innovation and additional progress. At the same time, the Administration is moving to consolidate ineffective policies and practices. The President’s Budget eliminates six programs and consolidates 38 others into 11 new programs that emphasize using competition to allocate funds, giving communities more choices around activities, and using rigorous evidence to fund what works.
• The President is committed to making college affordable for all Americans. “(I)n this economy, a high school diploma no longer guarantees a good job.” To increase college access and completion, the Administration will make student loans more affordable by limiting a borrower’s payments to 10 percent of his/her income and forgives remaining debt after 20 years – 10 years for public service works. We will also make permanent the American Opportunity Tax Credit. The President urges the Senate to pass the American Graduation Initiative, which invests more than $10 billion over the next decade in reforming our nation’s community colleges, promoting college completion, and moving toward the President’s goal of having the highest proportion of college graduates in the world by 2020. The President is also asking colleges and universities to do their share to make college affordable for all Americans cutting their own costs.
• The President is making investments to ensure that the middle class benefits from this economic recovery.   “(T)he price of college tuition is just one of the burdens facing the middle class.  That's why last year I asked Vice President Biden to chair a task force on middle-class families.” The President has outlined immediate steps to reduce the strain on family budgets and help middle class families manage their child and elder care responsibilities, save for retirement and pay for college. He will double the child tax credit this year, make it easier to save for retirement with automatic IRAs for workers without access to existing retirement plans, provide  larger tax credits to match retirement savings for millions of additional workers, and provide new safeguards to protect retirement savings.
• Changing the way we do business. “To close that credibility gap we have to take action on both ends of Pennsylvania Avenue to end the outsized influence of lobbyists; to do our work openly; to give our people the government they deserve.” The President has called for additional new lobbyist reforms, including enhanced disclosure of lobbyist contacts, strict campaign contribution limits by lobbyists, and a single earmark database, so American taxpayers find out what earmarks are being requested, and where their money is going.
• Countering Citizens United. “I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities.” Last week’s Supreme Court Citizen’s United decision opens the floodgates to special interests and foreign countries and companies bankrolling national campaigns.  The President called for bipartisan support for legislation that will remedy the Supreme Court’s unprecedented and troubling decision. 
• The President stands by military families. “Tonight, all of our men and women in uniform...have to know that they have our respect, our gratitude, our full support.” The President’s 2011 budget announces significant new investments, totaling more than $8 billion, and protections for our nation’s military families, including increased military pay and housing allowances, increased funding for family support programs, expanded availability of affordable, high-quality child care, the renovation or replacement of schools, and expanded and improved care for wounded, ill and injured service members. 
• The President is establishing a National Equal Pay Enforcement Task Force.  “We're going to crack down on violations of equal pay laws -– so that women get equal pay for an equal day's work.” To make sure we uphold our nation’s core commitment to equality of opportunity, the Obama Administration is implementing an Equal Pay initiative to improve compliance, public education, and enforcement of equal pay laws. The Task Force will ensure that the agencies with responsibility for equal pay enforcement are coordinating efforts and limiting potential gaps in enforcement. The Administration also continues to support the Paycheck Fairness Act, and is increasing funding for the agencies enforcing equal pay laws and other key civil rights statutes. 
• Immigration reform. “And we should continue the work of fixing our broken immigration system - to secure our borders and enforce our laws, and ensure that everyone who plays by the rules can contribute to our economy and enrich our nation.” The President is pleased Congress is taking steps forward on immigration reform that includes effective border security measures with a path for legalization for those who are willing to pay taxes and abide by the law. He is committed to confronting this problem in practical, effective ways, using the current tools at our disposal while we work with Congress to enact comprehensive reform.

And here are still more initiatives the President spoke to just tonight:

• The President will fight to recover the money American taxpayers spent to bailout the banks. “To recover the rest, I've proposed a fee on the biggest banks. Now, I know Wall Street isn't keen on this idea. But if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need.”   The President has proposed the Financial Crisis Responsibility Fee, which will require the largest and most highly leveraged Wall Street firms to pay back taxpayers and provide a deterrent against excessive leverage for the largest firms. The conservative estimate for the cost of TARP in the budget is $117 billion, but the Treasury Department expects it to be much less and the fee will be in place for a minimum of ten years or however long it takes to recoup every last penny to the American taxpayer.
• The President recognizes that Small Businesses will be key to our nation’s economic recovery. “I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I'm also proposing a new small business tax credit – one that will go to over one million small businesses who hire new workers or raise wages.” To get small businesses growing again, and growing our economy, the President has proposed a range of provisions that include tax incentives to spur investment; expanded access to capital and growth opportunities to create jobs; and increased support for entrepreneurship to foster innovation. He is proposing an employment tax credit for small businesses to encourage hiring, eliminating capital gains taxes on small business investments, extending enhanced small business expensing, and transferring $30 billion in resources from TARP to a new program to help community and smaller banks give small businesses the credit they need. The President and members of his Administration will announce additional details in the coming weeks. 
• The President reiterates his support for continued investment in our nation’s infrastructure.  “Tomorrow, I'll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act. There are projects like that all across this country that will create jobs and help move our nation's goods, services, and information.” Through the Recovery Act, we made the largest investment in our nation’s infrastructure since President Eisenhower called for the creation of our national highway system over half a century ago.  In his speech, the President announced funding to make a  down-payment on a new nationwide high-speed rail system being built in-part with ARRA dollars. 
• Tax breaks to keep jobs at home. “(I)t’s time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America.”  The President has called for an end for tax breaks for companies that ship our jobs overseas to help fund tax cuts – like making the R & E credit permanent – that reward companies for investing and creating jobs in the United States.
• The President also called on the Senate to pass a jobs bill that he can sign. “The House has passed a jobs bill…. As the first order of business this year, I urge the Senate to do the same, and I know they will. People are out of work. They are hurting. They need our help. And I want a jobs bill on my desk without delay.” The bold and difficult steps the President took to stabilize the financial system have reduced the cost of TARP by more than $200 billion, providing additional resources for job creation and for deficit reduction. In December, the President outlined a package of targeted measures to help further stimulate private sector hiring, including measures to facilitate small business growth, green jobs and infrastructure. The House has passed strong legislation - it is time for the Senate to do the same.
• We must invest in American ingenuity and innovation. “We need to encourage American innovation.” The Obama Innovation Agenda will get us closer to the President’s long-term goal of increasing combined private and public R&D investment to three percent of GDP. The Obama 2011 budget will move us closer to restoring America to first in the world in college completion; and invest in the next generation of scientists so we will not lag behind countries like China in science and engineering graduates. More details will be announced in the coming weeks.
• We need to export more of our goods around the world. “We will double our exports over the next five years, an increase that will support two million jobs in America.” To meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports and expand their markets. Details will be announced in the coming weeks, but the NEI includes the creation of the President’s Export Promotion Cabinet and an enhancement of funding for key export promotion programs. We will work to shape a Doha trade agreement that opens markets and will continue to work with key allies like South Korea, Panama, and Colombia on trade agreements that provide real benefits to our workers.  The President and members of his Administration will announce additional details in the coming week. 
• The President remains committed to helping Americans stay in their homes and help their homes retain their value. “… we’re working to lift the value of a family’s single largest investment – their home.” Last year, we took steps allowing millions of Americans to take out new loans and save an average of $1,500 per family on mortgage payments.  This year, we will step up programs that encourage re-financing so that homeowners can move into more affordable and sustainable mortgages.   In addition to the changes proposed last week to ensure sound risk management, the FHA is continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through other FHA initiatives going forward.   In order to ensure American families receive the same consideration American corporations do, the Obama Administration remains supportive of efforts to allow bankruptcy proceedings to renegotiate all debts, including home mortgages.
• As Americans are getting their budgets in order, the President is getting the nation’s financial house in order. “Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don’t.” The President has announced the three year, non-security discretionary spending freeze, and also called for a bipartisan Fiscal Commissionto identify policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. The President and members of his Administration will announce additional details in the coming weeks.   
• The President’s focus on national security includes rooting out terrorists where they hide. “Since the day I took office, we have renewed our focus on the terrorists who threaten our nation.” In the last year, hundreds of Al Qaeda’s fighters and affiliates have been captured or killed – far more than in 2008. 
• The President’s commitment to Non-Proliferation results. “Even as we prosecute two wars, we're also confronting perhaps the greatest danger to the American people - the threat of nuclear weapons.” The United States and Russia are completing negotiations on the farthest-reaching arms control treaty in nearly twenty years.   He will also host a Nuclear Security Summit in April, which will bring forty-four nations together behind a clear goal: to secure all loose nuclear materials around the world in four years, so that they never fall into the hands of terrorists.
• The President is launching a bioterror and pandemic threat initiative. “We are launching a new initiative that will give us the capacity to respond faster and more effectively to bioterrorism or an infectious disease - a plan that will counter threats at home and strengthen public health abroad.” The President called to action key U.S. Government leaders to re-design our medical countermeasure enterprise to protect Americans from bioterror or infectious health threats. We will pursue a business model that leverages market forces and reduces risk to attract pharmaceutical and biotechnology industry collaboration with the U.S. Government.
• The President announced that he will work this year to repeal “Don’t Ask, Don’t Tell.” “I will work with Congress and the military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are.” 

Mona Sutphen is Deputy Chief of Staff

How "Open Gov" Datasets Affect Parents and Consumers

On December 8, 2009, the Administration issued the Open Government Directive to hardwire the values of transparency, participation and collaboration into the DNA of the Federal government.  Around here, we call the general effort "Open Gov." You can learn more about it here: WhiteHouse.gov/open.

As part of the Directive, federal agencies have answered the President’s call by democratizing hundreds of high-value datasets on every aspect of government operations.  While this is meaningful for the technology community and transparency advocates who have been working on this issue for years, the data released will have direct impact on the daily lives of the American people.  Here are three examples to consider:

• Parents can make better decisions when buying a car seat for their newborn because the National Highway Traffic Safety Administration released data rating child safety seats for ease of use, simplicity of instructions and vehicle installation features
• Consumers can make intelligent decisions when buying a car because the Department of Transportation released details behind automobile safety and crash ratings gathered during crash and rollover tests conducted at their research facilities
• As Norm Eisen mentioned in his earlier post (which has a few other good examples), entrepreneurs, researchers and healthcare professionals can access Medicare Part B data to analyze the cost, volume and types of services delivered to meet the needs of Medicare beneficiaries because the Centers for Medicare & Medicaid Services has released data that used to cost $100 and was delivered on CD-ROM, for free via Data.gov

The Obama Administration is committed to unlocking public data to drive innovation by tapping into the ingenuity of the American people; increase agency accountability; and change the default setting of Washington to be open, transparent and participatory.  For far too long, government data has been locked within the four walls of Washington and confined to a selected group of people. President Obama has said, “information maintained by the Federal Government is a national asset.”  This is why, on his first full day in office, the President charged agencies to harness new technologies to put information about their operations and decisions online.

To institutionalize a culture of open government, on February 6 we will launch a public dashboard to provide an ongoing assessment of the Executive Branch’s progress against the Directive.  You'll be able to find that at WhiteHouse.gov/open.

Vivek Kundra is the Federal Chief Information Officer

Weekly Address: President Obama Addresses This Week's Supreme Court Decision

In this week’s address, President Barack Obama addresses the Supreme Court decision to further empower corporations to use their financial clout to directly influence elections and vows that "as long as I'm your President, I'll never stop fighting to make sure that the most powerful voice in Washington belongs to you."