Along those lines, via John Fund -- funny how Obama isn't getting the same press scrutiny on his campaign finance problems that both Clinton and McCain receive.

On Tuesday, Barack Obama may well wrap up the Democratic nomination. Yet how he rose so quickly in Chicago's famously suspect politics -- and who his associates were there -- has received little scrutiny.

That may change today as the trial of Antoin "Tony" Rezko, Mr. Obama's friend of two decades and his campaign fund-raiser, gets under way in federal court in Chicago. Mr. Rezko, a master fixer in Illinois politics, is charged with money laundering, attempted extortion, fraud and aiding bribery in an alleged multimillion dollar scheme shaking down companies seeking state contracts.

John McCain's dealings with lobbyists have properly come under a microscope; why not Mr. Obama's? Partly, says Chicago Tribune columnist John Kass, because the national media establishment has decided that Chicago's grubby politics interferes with the story line of hope they've set out for Mr. Obama. Former Washington Post reporter Tom Edsall, who now teaches journalism at Columbia University, told Canada's Globe & Mail that "reporters have sometimes allowed themselves to get too much caught up in [Obama] excitement." Then there are Chicago Republicans, loath to encourage the national party to pounce because some of their own leaders are caught in the Rezko mess.

For its part, the Democratic Party may once again nominate a first-time candidate they haven't fully vetted politically. Democrats flocked to Michael Dukakis in 1988, ignoring Al Gore's warnings about Willie Horton; later they were blindsided by revelations about Bill Clinton after he was elected president.

This year, Hillary Clinton made a clumsy attack on Mr. Rezko as a "slum landlord" during one debate. But her campaign has otherwise steered clear -- at least until last Friday, when Howard Wolfson, a top Clinton aide, suggested to reporters on a conference call that "the number of questions that we don't know the answers to about the relationship between Mr. Rezko and Mr. Obama is staggering." Mr. Obama's campaign told me they have answered all questions about Mr. Rezko and have no plans to release any further records.


Mr. Obama has admitted that the 2005 land deal that he and Mr. Rezko were involved in was a "boneheaded" mistake, in part because his friend was already rumored to be under federal investigation. The newly elected Mr. Obama bought his $1.65 million home on the same day, June 15, that Mr. Rezko's wife bought the plot of land next to it from the same seller for $625,000. Seven months later she sold a slice of the land to the trust that Mr. Obama had put the house into, so the senator could expand his garden.

Mr. Obama has strenuously denied suggestions that the same-day sale enabled him to pay $300,000 under the house's asking price because Mrs. Rezko paid full price for the adjoining lot, or that he asked the Rezkos for help in the matter. Both actions would be clear violations of Senate ethics rules barring the granting or asking of favors.

Still, there are anomalies. Mr. Obama admits that he and Mr. Rezko took a tour of the house before it and the adjoining plot were sold. Financial records given to federal prosecutors a year later show Mrs. Rezko had a salary of only $37,000 and assets of $35,000. In court proceedings at that time, to explain how much his bail should be, Mr. Rezko declared that he had "no income, negative cash flow, no liquid assets."

So where did the money for Mrs. Rezko's $125,000 down payment -- and the collateral for her $500,000 loan from a local bank controlled by Amrish Mahajan, like Mr. Rezko a Chicago political fixer -- come from?

The London Times reports that, three weeks before the land transactions, Nadhmi Auchi, an Iraqi billionaire living in London, loaned $3.5 million to Mr. Rezko, who was his Chicago business partner. Mr. Auchi's office says he had "no involvement in or knowledge of" the property purchase. Mr. Auchi is a press-shy property developer (estimated worth: $4 billion) who was convicted of corruption in France in 2003 for his involvement in the Elf affair, the biggest political and corporate fraud inquiry in Europe since World War II. He was fined $3 million and given a 15-month prison term that was suspended provided he committed no further crimes.

Mr. Auchi was also a top official in the Iraqi oil ministry in the 1970s. He has for years vigorously denied charges he had dealings with Saddam Hussein after the first Gulf War. However, an official report to the Pentagon inspector general in 2004 obtained by the Washington Times cited "significant and credible evidence" of involvement by Mr. Auchi's companies in the Oil for Food scandal and illicit smuggling of weapons to the Hussein regime.

In 2003, Mr. Auchi began investing in Chicago real estate with Mr. Rezko. In April 2007, after his indictment, Mr. Auchi loaned another $3.5 million to Mr. Rezko, a loan that Mr. Rezko hid from U.S. Attorney Patrick Fitzgerald's office. When Mr. Fitzgerald learned that the money was being parceled out to Mr. Rezko's lawyers, family and friends, he got Mr. Rezko's bond revoked in January and had him put in jail as a potential flight risk.

In court papers, the prosecutor noted that Mr. Rezko had traveled 26 times to the Middle East between 2002 and 2006, mostly to his native Syria and other countries that lack extradition treaties with the U.S. Curiously, Mr. Auchi has also lent an unknown sum of money to Chris Kelly, who, like Mr. Rezko, was a significant fund-raiser for Illinois Gov. Rod Blagojevich (himself under investigation by a federal grand jury as an alleged beneficiary of the Rezko shakedowns). Mr. Kelly is himself under indictment for obstructing an IRS probe into his activities.

Mr. Obama says he has "no recollection" of meeting Mr. Auchi during a 2004 trip the billionaire made to Chicago, and no one believes he knew of his background. While his name will come up in the trial as a beneficiary of Rezko donations (since donated to charity), Mr. Obama will not be called to testify.

There may be nothing more in Mr. Obama's dealings with Mr. Rezko beyond an "appearance of impropriety." Still, Mr. Obama does have an obligation to explain how he fits into Chicago politics. David Axelrod, Mr. Obama's Karl Rove, is a longtime spoke in the Daley machine that's dominated Chicago for a half century. Gov. Blagojevich, also part of the machine, shared key fund raisers with Mr. Obama.

"We have a sick political culture, and that's the environment Barack Obama came from," Jay Stewart, the executive director of the Chicago Better Government Association, told ABC News. He notes that, while Mr. Obama supported ethics reforms as a state senator, he has "been noticeably silent on the issue of corruption here in his home state, including at this point, mostly Democratic politicians."

Mr. Obama will eventually have to talk about Illinois, if only to clear the air. After John McCain last month was attacked for cozy ties to lobbyists, he held a news conference and answered every question. Hillary Clinton held a White House news conference on Whitewater and her cattle futures. Mr. Obama must do the same for questions about Mr. Rezko and "the Chicago way" of politics. If he doesn't, they may increasingly haunt his candidacy.

Labels: 2008, campaign finance, media bias, Obama, rezko

I consider myself pretty edu-macated on government and civics, and not prone to be caught up in populism, but Charles Krauthammer reminds us in his column today that when we hop on the "banish lobbying" bandwagon we're actually calling for the shredding of the First Amendment. How so? Read on.

Everyone knows the First Amendment protects freedom of religion, speech, press and assembly. How many remember that, in addition, the First Amendment protects a fifth freedom -- to lobby?

Of course it doesn't use the word lobby. It calls it the right "to petition the Government for a redress of grievances." Lobbyists are people hired to do that for you, so that you can actually stay home with the kids and remain gainfully employed rather than spend your life in the corridors of Washington.

To hear the candidates in this presidential campaign, you'd think lobbying is just one notch below waterboarding, a black art practiced by the great malefactors of wealth to keep the middle class in a vise and loose upon the nation every manner of scourge: oil dependency, greenhouse gases, unpayable mortgages and those tiny entrees you get at French restaurants.

Lobbying is constitutionally protected, but that doesn't mean we have to like it all. Let's agree to frown upon bad lobbying, such as getting a tax break for a particular industry. Let's agree to welcome good lobbying -- the actual redress of a legitimate grievance -- such as protecting your home from being turned to dust to make way for some urban development project.

There is a defense of even bad lobbying. It goes like this: You wouldn't need to be seeking advantage if the federal government had not appropriated for itself in the 20th century all kinds of powers, regulations, intrusions and manipulations (often through the tax code) that had never been presumed in the 19th century and certainly were never imagined by the Founders. What appears to be rent-seeking is thus redress of a larger grievance -- insufferable government meddling in what had traditionally been considered an area of free enterprise.

Good lobbying, on the other hand, requires no such larger contextual explanation. It is a cherished First Amendment right -- necessary, like the others, to protect a free people against overbearing and potentially tyrannical government.

What would be an example of petitioning the government for a redress of a legitimate grievance?
That's the teaser. Click the link. There's more.

Labels: campaign finance

The NY Times has published an article alleging that Sen. John McCain had an affair with a lobbyist, Vicki Iseman, in the late 1990s.

The NY Times alleges corruption without using the word. The story is short on new facts and old news to those who have been following politics. The Keating Five scandal is far dead and buried and everyone who has paid even a little attention to the subject understands that McCain's self-imposed penance for his involvement in that warped into a severe over-reactive legislative attempt to "reform" money in politics via the McCain-Feingold Campaign Finance law. McCain-Feingold, in turn, became nothing more than an obscene infringement of the First Amendment.

Indeed, were McCain corrupt he's a cheap date. According to the Washington Post, "Iseman clients have given nearly $85,000 to McCain campaigns since 2000, according to records at the Federal Election Commission." Best put (via David Freddoso): "Eighty-five grand? Over eight years? That's it? He was the chairman of the [Senate Commerce] committee! If McCain is an extortionist, he's a pathetic excuse for one."

McCain's legal council, Bob Bennett (brother of Bill Bennet, by the way), pointed out to the NBC today show that the Times (nor the Wa. Post for that matter) didn't bother adding facts that support McCain's defense:

A Washington attorney representing Mr. McCain, Robert Bennett, told NBC's "Today" show that Mr. McCain's staff provided the Times with "approximately 12 instances where Senator McCain took positions adverse to this lobbyist's clients and her public relations firm's clients," but none of the examples were included in the paper's story.
We'll see where this all goes, but so far, it could actually work to McCain's advantage. After all, this digging up of old bones is the best gift that the NY Times could have given to McCain -- for nothing can rally conservatives to McCain harder or faster than a traditional slimy and slanted NY Times hit piece!

Meanwhile, Gabriel Sherman of The New Republic (warning: the same magazine who tried to sell Beauchamp) has an interesting report on the internal politics at the NY Times and their decision to run the story:

The publication of the article capped three months of intense internal deliberations at the Times over whether to publish the negative piece and its most explosive charge about the affair. It pitted the reporters investigating the story, who believed they had nailed it, against executive editor Bill Keller, who believed they hadn't. It likely cost the paper one investigative reporter, who decided to leave in frustration. And the Times ended up publishing a piece in which the institutional tensions about just what the story should be are palpable.
Read the rest.

Beyond all this is some notable commentary regarding McCain's apparent "disappointment" that the NY Times - which had often published positive views on McCain - would turn on him.

Andrew McCarthy summarized thusly:

Senator McCain appears to have been smeared by the Times. I'm sorry that happened, but if indignation is the order of the day, count me out. You see, I also feel sorry — really sorry — for the intelligence officers who've been maligned as torturers, for those who want the immigration laws enforced and are libeled as racists, for those who doubt the wisdom of campaign finance reform and are glibly scandalized as promoters of public corruption, and so on. Each of these Gray Lady smears has a common thread: John McCain has been only too happy to help, and to bask in the resulting glow: the Times' very own favorite Republican.

The Senator's reaction says it all: he's "disappointed in the New York Times." Of course, we can only be disappointed by those from whom we expect better. McCain expects better from the Times because he's accustomed to getting it, and he's accustomed to getting it because he's been very good about holding up his end of the bargain — especially when it comes to demagoguing the Right. The Times is a politicized rag and no one should take satisfaction in seeing McCain subjected to its journalistic version of waterboarding. I only wish I were convinced the Senator would learn the right lesson from this experience. I'm not.
Well, okay, so it appears that McCain will still have to do some wooing before conservatives rally to McCain, NY Times hitpiece or not.

Labels: 2008, campaign finance, mccain, media bias, NYT

The John McCain-Russ Feingold Campaign Finance law of 2002 is responsible for this entire mess of convoluted campaign financing laws and bands of 527-special interest groups, whom are entirely unaccountable to voters. It's yet another lesson that government intentions, in the form of regulation, often produce an unintended result that is far, far worse than the "problem" it sought to solve.

Stealthy Groups Shake Up Races
Independent Outfits
Avoid Disclosing Donors;
Phone Calls for Huckabee
By BRODY MULLINS
February 4, 2008; Page A12

COLORADO SPRINGS, Colo. -- Election results from Florida were still rolling in last Tuesday evening when Patrick Davis began plotting to help his candidate, former Arkansas Gov. Mike Huckabee, in tomorrow's slate of Super Tuesday contests. He checked campaign finances, analyzed polls and edited phone-call scripts to solicit votes and bash opponents.

But Mr. Davis doesn't work for the Huckabee campaign. In fact, Mr. Huckabee has called for Mr. Davis to halt his activities, which are funded by undisclosed donors.
Mr. Davis is the campaign manager for an outfit called Trust Huckabee, one of a new breed of sophisticated campaign organizations that have sprung up amid the many groups pumping money into the presidential primaries. Like independent groups in the past, they are unafraid to attack opponents and aren't subject to limits on campaign contributions. Unlike the older groups, the new ones don't identify their donors and can directly ask people to vote for and against candidates.

The groups are employing a legal loophole: Saying elections aren't their "primary purpose," they've interpreted a 22-year-old Supreme Court ruling to help them wage aggressive campaigns. That ruling originally applied to a small group of issue-advocacy organizations, but increasingly it is being used by groups like Trust Huckabee in elections. Campaign-finance authorities aren't likely to review its legality until after the November election.

Surging Influence

Overall, independent political organizations -- drawing funding from wealthy individuals, labor unions, corporations and other interest groups -- are expected to spend $18 million on election communications by Super Tuesday, compared with $1 million in the entire 2000 primary season. These groups' influence has surged since campaign-finance reforms limited donations to political parties in 2002, and they could help determine the winners of tomorrow's primaries and the November elections.

As a subset of that effort, groups such as Mr. Davis's are beginning to emerge as an especially opaque force on both sides of the aisle. The big fund-raiser Club for Growth plans to use the obscure exemption to advocate for fiscally conservative candidates, while a West Coast backer of Sen. Barack Obama who claims the exemption is doing a $4 million vote-getting effort for Super Tuesday over the Obama campaign's objections.

"Money in politics is like water running down a mountain," Mr. Davis says. "It will find a way around a boulder: Over, under, through or around."

Earlier independent organizations -- such as the Swift Boat Veterans group that questioned Democrat John Kerry's war heroism in 2004 -- were required to disclose their donors, couldn't campaign for votes and spent most of their money on television commercials. Following different rules, groups such as Trust Huckabee run full-scale campaigns parallel to their candidates, except that by law they're not allowed to talk to the candidates.

Trust Huckabee sponsors television advertisements, recruits volunteers to work the polls and pays for automated phone calls. Visitors to Mr. Davis's Web site, www.trusthuckabee.com1, can watch videos of Mr. Huckabee's speeches or buy a Trust Huckabee button for $2.49. As the Florida results came in, Mr. Davis, 40 years old, kept one eye on cable news while he punched figures into a spreadsheet of delegates on his computer to figure out how to spend his remaining resources to help Mr. Huckabee lock up delegates.

Polls show the former Arkansas governor running close behind the Republican front-runner, Arizona Republican Sen. John McCain, in several Southern states tomorrow. While Mr. Davis doesn't expect the former Arkansas governor to win the presidency outright during the primaries, he's also been mentioned as a vice-presidential contender and Mr. Davis wants to help make him a powerful force at the convention.

Controversial Calls

Trust Huckabee was formed by an organization called Common Sense that was originally underwritten in part by Carl Lindner, the chairman of American Financial Group Inc., and some former executives at Procter & Gamble Co. It restarted last year as a national organization and is now run by Mr. Davis. Trust Huckabee was behind one of the most controversial campaign gambits so far this election cycle: automated phone calls that rival campaigns call thinly disguised efforts to slander foes.

Using voice-recognition software, the calls ask voters to indicate their favorite candidates. If they support Mr. Huckabee, they are reminded to vote and asked to volunteer. If they choose other candidates, they hear a negative message. "Does knowing that Sen. John McCain has refused to support a federal marriage amendment defining marriage as between one man and one woman make it less likely for you to support him?" asks one call.

Sen. McCain and former Massachusetts Gov. Mitt Romney called the tactic unscrupulous. Mr. Huckabee, prohibited by campaign laws from talking to the group or any independent campaign organizations directly, issued a public appeal for them to stop their activities on his behalf.

The group declined. It's their First Amendment right to campaign, says Mr. Davis. He defends the group's phone messages as just "like a television ad on a telephone call." The calls "provide information about your opponent and give positive information about your candidate."

Mr. Obama similarly failed to dissuade a San Francisco-based backer, Steve Phillips, who plans to spend about $4 million on Super Tuesday efforts for the Illinois senator. The groups will air commercials, register black voters and pay campaign workers to knock on doors searching for supporters. An Obama campaign spokesman said publicly that the groups, PowerPAC and Vote Hope, should halt because their funding undermines his campaign message "against the well-heeled lobbyists and interest groups in Washington." The groups declined. "We respect the senator's position on trying to limit the outside spending, but also recognize the outside spending on behalf of his opponents," says spokesman Adam Alberti. "We view our work as leveling the playing field."

For Mr. Huckabee, Mr. Davis has concentrated his Super Tuesday efforts on Missouri, where Mr. Huckabee is vying for the lead, and Georgia, where he has strong pockets of support. If he decides he has enough money, he may blanket Tennessee, West Virginia and Oklahoma with phone calls for Mr. Huckabee in the final hours.

Trust Huckabee is hardly alone in its status. Issue-oriented political groups -- including the abortion-rights group NARAL Pro-Choice America and the League of Conservation Voters, an environmental-advocacy organization -- have long employed the exemption under the 1986 Supreme Court decision. The ruling gives interest groups broad flexibility to wage election campaigns if they don't take money from unions or companies and if funding political campaigns isn't their primary objective. The groups have interpreted that to mean they can't spend the majority of their funds explicitly calling for the election of a candidate.

Since the 2002 campaign-finance reforms, people who want to influence elections have looked for new ways. Most of their early organizations, like the Swift Boat group, were formed under section 527 of the tax code. They could spend unlimited dollars on elections, but had to disclose their donors. They also weren't allowed to directly ask people to elect or defeat candidates.

Campaign finance lawyers next employed section 501(c)4 for "social welfare" groups, which don't have to disclose their donors. But most still can't advise people to "vote for" or "vote against" a candidate -- though they can challenge candidates' stands.

Then the lawyers began suggesting outside groups can have the best of both worlds if they start a 501(c)4 group and claim an exemption under the 1986 Supreme Court case. They can hide their donors -- though they can't take union or corporate money -- and can directly call for the election or defeat of candidates. They just have to attest that they spend a majority of their funds on issues instead of candidates. "I've been recommending this to people for years," says Cleta Mitchell, a campaign-finance lawyer who advises Mr. Davis.

The Federal Election Commission hasn't tracked the number of groups claiming the exemption, or their spending. Just a handful showed up in a sample of electronic FEC filings reviewed at The Wall Street Journal's request; their spending increased by 43% between the 2002 and 2006 congressional elections, to about $509,000, while in the 2004 presidential election they spent just under $1 million. No reliable figures for the 2008 election are yet available.

Groups such as Trust Huckabee "break new ground," says Ken Gross, a campaign-finance attorney with Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates. Steve Weissman, associate director of policy at the Campaign Finance Institute, a nonprofit organization that tracks spending by nonprofits in elections, says it looks like the groups are violating their legal authority, but laments that authorities haven't taken visible interest. "None of these groups seem to have had any difficulty with the FEC or [Internal Revenue Service] even though they appear to be all election-oriented," he says.

Trust Huckabee's Mr. Davis says the lines between election and educational expenses are bright. But they can appear blurry. Take the Trust Huckabee phone-call campaign. Most of the 60-second call tells voters where Mr. Huckabee and his rivals stand on issues like abortion and gay marriage. In the final seconds, people are asked to vote for Mr. Huckabee. Mr. Davis says only about one in 10 people stay on the call long enough to hear the plea to vote for Mr. Huckabee.

So Mr. Davis considers 90% of the call to be educational and 10% to be election-oriented. As a result, Mr. Davis reports to the FEC just 10% of the costs. According to those forms, Mr. Davis has spent just $20,000 on those calls. Overall, Trust Huckabee has disclosed $167,000 in spending on the election.

FEC officials couldn't be reached for comment.

When Mr. Davis tells antiabortion Republicans that Mr. Romney once supported abortion rights, he doesn't consider that election activity and doesn't report it to the FEC

Before hiring Mr. Davis, Common Sense spent $4 million in the final weeks of the 2006 election to help several Republican Senate candidates. It hired Mr. Davis in early 2007 to help remake the group as a national political organization for 2008.

Mr. Davis spent a career running traditional campaigns and independent efforts by interest groups. After college, he accepted a $20,000-a-year job with the 1992 reelection bid of President George H.W. Bush. After Mr. Bush lost, Mr. Davis couldn't find a political job in Washington. He worked for two years in sales at Crate & Barrel. Eventually, he began working for an arm of the Republican Party that oversees campaigns for the U.S. Senate, then for an anti-abortion group in South Dakota.

Conservative Principles

Soon after Mr. Davis took over, Common Sense decided to endorse Mr. Huckabee and start Trust Huckabee, even though Mr. Lindner was a Romney backer. Mr. Lindner no longer contributes to the organization, according to his office. Mr. Davis says that most of the group's backers believed that Mr. Huckabee was the candidate most willing to fight for conservative principles such as the right to bear arms and opposition to abortion and gay marriage.

Keet Lewis, a self-employed Dallas businessman, says he has raised about $1 million for Trust Huckabee from people who have already donated the maximum amount allowed by law to Mr. Huckabee's official campaign. "This is not to detract from the Huckabee campaign, but for those who want to do more, I want them to know that they can go to Trust Huckabee," Mr. Lewis says.

Mr. Davis works from a small, carpeted office in his home at the foot of the Rocky Mountains. The office is decorated with framed pictures of Mr. Davis with President George Bush and Vice President Cheney, and a pair of paintings by his two young children. He spends long hours working the phones and a pair of computers while his two Labrador dogs lie at his feet. People who donate are asked to send checks to a post-office box in Cincinnati that is checked each day by a Trust Huckabee volunteer.
In December, Mr. Davis set his sights on winning Iowa for Mr. Huckabee. Just a week before the Jan. 3 caucus, Mr. Huckabee trailed Mr. Romney. Then Trust Huckabee spent $50,000 on television advertisements trashing Mr. Romney for switching his position on abortion. It launched calls to every Iowa household.

Huckabee in Iowa

In Iowa, Mr. Huckabee said the attack-call method "really defeats the kind of politics that I want the campaign to be a part of." Mr. Davis kept it up. "Our bigger goal is to raise the awareness of these important issues," he says. Mr. Huckabee won Iowa by 9 percentage points.

Mr. Huckabee hasn't done as well since, finishing behind the winners in New Hampshire, Michigan, Nevada and Florida. Mr. Davis says that he and his financial backers plan to spend between $5 million and $8 in the November election even if Mr. Huckabee isn't the nominee, but the string of losses has hurt fund raising.

Mr. Davis hopes to help Mr. Huckabee win Super Tuesday states where he has high poll numbers and a natural constituency of social conservatives. The automated phone calls remain the foundation of the campaign. People who agree to volunteer become "Trust Huckabee captains" who dial through lists of other numbers to encourage supporters to vote.

As Mr. Davis's polling data for Super Tuesday trickled in during the Florida primary, he decided that Mr. Huckabee could prevail in the winner-take-all states of Missouri, Arkansas, Tennessee, Oklahoma and Mississippi. He figured Mr. Huckabee could win in pockets of three states that allocate delegates on a proportional basis: Georgia, Illinois and Texas.

Just then, Mr. Huckabee appeared on television to give his concession speech. "There's our boy," Mr. Davis says. Mr. Huckabee delivered just the message Mr. Davis wants to hear: "We're playing all nine innings," Mr. Huckabee said. That delights Mr. Davis.

Later, Mr. Huckabee publicly named the half-dozen states where he planned to campaign before Super Tuesday. That's critical intelligence to help Mr. Davis synchronize his activities. "He's really good about speaking plainly, you can read quotes in the newspaper and see good clues about his strategy," Mr. Davis says.

Corrections & Amplifications: The Club for Growth is a fiscally conservative organization. The initial version of this article said it supports socially conservative causes.

Labels: 2008, campaign finance, mccain

There are some worrying trends I see among Americans and especially conservatives. On many key issues having to do with free market, trade, and economics people seem to be mimicking old liberal arguments (many debunked long ago) and (often inadvertently) end up calling for more government intrusion into their daily life and livelihood.

Much of this, of course, is due to noneducation of the subjects at hand. While I don't profess to be an expert on these matters I am well-read enough to understand that government intervention has both seen and unseen, often unintended, consequences on my family's bottom line. But because the "reforms" are packaged as populism -- things that create a division or dichotomy between "the people" and "the elite" -- in this case "the elite" usually being auto-makers, oil companies, drug companies or politicians and lobbyists.

After all...

Who would be against strengthening campaign finance laws?
Who would be against forcing auto-makers to make more fuel efficient vehicles?
Who would be against protecting the environment?
Who would be against cheaper pharmaceuticals or Canadian drug imports?

But each of these things has often unintended but very bad consequences for the individual consumers and citizens whom have been fooled into believing they need government protection. Each of the "reforms" often more harm individual liberty than they do "reform" anything.

Each new set of campaign finance reform laws, for example, attempt to correct the overreach and consequences of past campaign finance reform laws. The McCain-Feingold campaign finance reform bill was created to correct problems created by the Watergate-era campaign finance reform bills. In it's wake, McCain-Feingold ended up curbing free speech guaranteed to us by the First Amendment (in the form of prohibiting broadcast advertisements that name a federal candidate within 30 days of a primary or caucus or 60 days of a general election). This created a vacuum, explained by Reason's Jonathan Rauch, "filled by private groups that are unaccountable to the voters," also known as "527s." To date, there is more money in politics than before, but like damming water running downhill, the law simply shifted the path to groups with anonymous and often very powerful backers whom do not have to answer to voters.

Next, forcing auto-makers to make more fuel efficient vehicles by raising CAFE (Corporate Average Fuel Economy) standards really only does two things: increased the number of highway deaths due to auto-makers making lighter, smaller cars, and increase the price of cars whose engines really do become more fuel efficient. You'll save at the pump but never enough to make up for the extra money you paid to purchase the more expensive fuel-efficient car.

Protecting the environment? On an almost daily basis I cite article after article showing that the cause of global warming and defining of carbon dioxide as a pollutant has little to do with the environment and much to do with continuing grant funding, justifying new taxation schemes, and empowering those few corporate-NGO blocks who have devised way to make money off the red-herring issue (and faulty science at that).

Finally, I'm going to post Megan McArdle's recent commentary as someone who understands the consequences of the continued demonization of pharmaceutical companies and "progressive" populist demand for cheaper drugs. Socialist medicine, single-buyer healthcare, national healthcare, etc., are really just repacked descriptors by our politicians for a monopsony -- the opposite of a monopoly, a monopsony is one buyer to many sellers.

[McCardle:] Yesterday I wrote:

So the most probable outcome of introducing monopsony power here [in the U.S.] is that the market for drugs shrinks to the point where it will support few-to-no new drugs.
Not to put too fine a point on it, Tom responded:

This seems crazy.
He is not the only one for whom this seems a little nuts. But it is not. Let me explain.

People who think that there will be continuing R&D in the pharmaceutical industry are basically thinking of it as a budgeting problem. They think of the pharmaceutical industry's gross income as a budget to be allocated between various functions, such as marketing and R&D. They may concede that by changing the size of the budget, you may shrink the amount of money to fund R&D, because there will be less money in the kitty. (Though many or most hope that shrinking the size of the pie will force pharmaceutical companies to transfer money from the advertising budget to R&D1). But, their reasoning goes, there will still be money in the kitty; if you allow pharmaceutical companies 1/3 as much gross income, you will get 1/3 as much R&D. Or perhaps they will cut their advertising budgets to zero, and then you will get 2/3 as much R&D. But still, you will get something.

I don't think of R&D as a budgeting problem; I think of it as an investment problem. After all, even if the pharmaceutical industry has no profits right now, they can borrow the money in the financial markets at fairly attractive rates.

The main obstacle to R&D, then, is not the current state of pharmaceutical industry profits; it is the potential return on the investment in R&D. After all, Merck doesn't have to make drugs; it could generate a nice, safe return of 5% a year in government bonds. Or it could get into some other business, such as making soap. If you drive down the profits on new drugs too far, it stops making sense to invest in new drugs, even if there is a small profit to be made on current production.

Developing new drugs is very, very risky. Depending on what you think constitutes a drug candidate, somewhere between one in one thousand, and one in ten thousand drug candidates makes it from a lab bench to clinical trials. Each of the failed drugs was very expensive, particularly if it got partway through clinicals, which run about $500 million per course.

The problem is, once you've developed a drug, it's easy to copy. It's also usually trivially cheap to produce. And your patent is rapidly running out. This gives a monopsony buyer a lot of leverage to force down your price--you're almost always better off taking something. This is particularly true if the monopsony buyer has the power to break your patent and license its generic manufacturers to turn out cheap but near-perfect imitations of your product2. This is, in fact, what Europe has done; they make pharmaceutical firms sell to them at cost plus. The lion's share of the profits on any drug come from the United States; what they get in Europe and Canada and the rest of the world is (thin) gravy, a price that is just a little bit better than not selling any drugs there.

Now imagine that America drives drug prices down to that sort of "cost+10" or "cost+20" level. The pharmaceutical firms will keep making the drugs they already have, because there will still be a little profit there. But they would have to be psychotic to invest billions of dollars over a 20 year time horizon in exchange for a one in a thousand chance of making that small a profit. Would you put 20% of your income now into an investment that might yield a profit of 10% of your income--in thirty years?

But they have to invest in R&D, say my interlocutors; otherwise they won't have any drugs to sell! This makes the odd assumption that they can't do anything else. But history is full of companies that used to do something else entirely--and also, of companies that went out of business when their market collapsed.

1 This belief is wrong, for reasons I will explain in another post.

2 The patent threat seems to be the most plausible reason that pharmaceutical firms do not raise Canadian prices to US levels.

Labels: CAFE, campaign finance, civil liberties, Economics, free markets, healthcare, mccain, Oil, pharmacy, supply-side, taxes, the moderate trap

Remember, "diversity" means a range of all views except those of conservatives. And "tolerance" means a participatory inclusion of all views except those of conservatives. These are the same people who bring up the McCarthy blacklist era every 30 seconds. The irony is dripping down.

While Democrats enjoy very public support from Hollywood's top actors and musicians, who often hold lavish events for their favorite candidates, Republican supporters in Hollywood try hard to keep their political views quiet.

"They learn very quickly, if they know what's good for them, to donate to the Democratic Party," said Andrew Breitbart, co-author of "Hollywood, Interrupted." "If they were to donate to the Republican Party, they would be exposed to career-ending ridicule, period."

...Still, Republicans have streamed into Hollywood for cash — former Massachusetts Gov. Mitt Romney courted contributors in the state yesterday and held a town meeting just outside Hollywood.

In the first nine months of this year, Sen. John McCain of Arizona pulled in $390,000 from Hollywood, with Mr. Giuliani close behind at $360,000, according to the Center for Responsive Politics, a nonpartisan, nonprofit research group based in Washington.

Those numbers pale in comparison to Democrats. Sen. Hillary Clinton of New York drew $2.2 million from the movie, music and TV industries over the same period. Sen. Barack Obama of Illinois pulled in $2.1 million from some A-list actors, including Tom Hanks, Tobey Maguire, Eddie Murphy, Edward Norton Jr., Morgan Freeman and Ben Stiller.
The first point is the most obvious -- Hollywood bigwigs aren't just slanted in their views but actually hire and fire based on them, something which would earn you or I a painful lawsuit if we did the same in our line of work. This makes the Hollywood elite bigots. It's not "reverse discrimination." It IS discrimination.

Having said that it's clear that there's a market for conservative politicans in Hollywood. It will never be as rewarding as it is for liberal politicans but Republicans would be foolish to at least not attempt the courtship of center-right and fully conservative entertainers.

UPDATE: Funny how themes just fall in line as a news day progresses.

Here's one brave Hollywood soul: Ron Silver.

Great commentary:

Often when I walked onto the set of the West Wing some of my colleagues would greet me with a chanting of “Ron, Ron, the neo-con.” It was all done in fun but it had an edge.

Since speaking in support of George Bush at the 2004 Republican convention I’ve become increasingly disadmired by members of my profession as well as many others. As of this writing my family tells me they still love me. I believe them, but stay tuned, as another presidential cycle is upon us.

I find myself increasingly amused as folks extrapolate my support for the Bush Doctrine and our battles in Iraq and Afghanistan to how I feel about everything. When backed into a corner I often describe my politics, quite snarkily I admit, as a little bit to the right of the left of center.

As far as I can tell, my politics, with regard to American foreign policy and projection of American power haven’t changed very much from what they’ve always been—what I would call revolutionary liberalism. I have always resisted reactionaries from the left or right, Democrat or Republican. At the moment, the reactionary forces on the left, the Democratic netroots and their supporters—Mickey Colitis from the Daily Cuss, MoveOn.org and the Moores and Sheehans—are more fearful to me than the traditional reactionary forces of the extreme right. And the Democratic Party seems to be listening to them.

Senator Joe Lieberman, the Democratic Vice-Presidential candidate only eight years ago, gave an extraordinary speech on national security last week that the mainstream media did not cover. It’s a shame. And it’s a shame the Democratic Party shunned Lieberman and tried to defeat him in a primary. They made it clear that there is no place for him in the party he’s dedicated his life to. I’m a Joe Lieberman Democrat.

JFK reportedly remarked, “sometimes the party asks too much.” He was referring to the deal his Democratic Party made with southern segregationists to maintain control of Congress. His words are as true now as they were then. Sometimes the party asks too much.

I count myself firmly in the tradition of Wilson, FDR, Truman and Kennedy…and yes, Reagan and George W. Bush. “Go anywhere, bear any burden,” “try to do our best to make a world safe for democracy.” Our national mission, a worthy and ennobling one, is to expand freedom where we can. These are revolutionary goals very much in keeping with our Founders’ vision. They are hardly conservative, let alone neo-conservative goals.

My reactionary former colleagues and friends were quite content with the status quo with Saddam in power in a post 9/11 world. I was not. Revolutionary, not reactionary. My friends sound a bit racist when they insist on Arab-Muslim incapacities to expand freedoms and maintain their faith. I believe the Arab world will work its way to achieve this. I know that it will most likely come about through internal Arab-Muslim struggles and not via external pressures, but I believe we are uniquely capable of helping it along. Uniquely, because our Founding scriptures declare, “all men are created equal, endowed by their Creator, with certain unalienable rights.” Revolutionary, not reactionary.

Many people felt that the threat posed by Saddam was more tolerable than the risk of removing him. I disagreed and still do. Many of these people now feel that the threat of a nuclear Iran is more tolerable than the risk involved in making sure Iran doesn’t have such capabilities. I think they have it backwards. Many people feel reluctant to acknowledge that the “war on terror” is a real war. There is an unwillingness to identify the enemy, which is clearly a world-wide, malignant, metastatic Islamic jihadism, that will only be defeated ultimately with the Islamic world rising to reject the cancer. We cannot fight a war by pretending we’re not in one. This requires transformative, upset the apple cart thinking. It requires people who are revolutionary, not reactionary. As much as we might like, we cannot return to a pre-9/11 world.

The President is challenging the world with a new order. There is always passionate opposition to change. Have grievous mistakes been made? Yes. But just as Wilson, FDR, Truman, Kennedy, and Reagan laid the foundations for fighting and prevailing in the Cold War, Bush has responded to 9/11 with a foreign policy revolution of similar magnitude: a reorganization of government institutions and appropriate legislation to meet the emerging threats.

Containment and deterrence are ineffective in this brave new world. There is no containment if you can’t see the enemy; there is no deterrence if the enemy desires death.

I believe the President’s critics are profoundly mistaken. I believe they misunderstand how he’s trying to protect us. I believe they misunderstand the nature of the threat. I believe they misunderstand history. If they succeed in dismantling what President Bush has set in motion, the results may well be catastrophic and history will never forgive them.

George W. Bush: a revolutionary liberal internationalist? History may so decree. Let’s wait and see.

My philosophy, at the end of the day, bottom line, as they say: “Sticks and stones may break my bones, but labels never hurt me.”

Labels: campaign finance, Hollywood bias

Gotta say, there's just a handful of factors that prevent me from fully backing John McCain -- his unconstitutional and futile McCain-Feingold Campaign Finance law is a big one at that:

[Wall Street Journal] In 2002, new campaign-finance laws sharply reduced what individuals could donate. Suddenly, politicians needed people who were good at raising lots of small donations and bundling them together. According to public records in 2003, Mr. Hsu donated $2,000 to John Kerry's presidential bid, his first federal campaign contribution. Over the next year, he gave so much that politicians began routinely inviting him to fund-raising events. In the final month of the 2004 campaign, he poured more than $30,000 into Senate races and state Democratic parties.

By 2005, he had graduated from writing checks to persuading others to do so. Since then, he has collected well over $1 million in small checks for candidates, making him one of the biggest fund-raisers in the nation. "Norman Hsu would vow to raise a certain amount -- and he would always surpass it," says Hassan Nemazee, who was Mr. Kerry's New York finance chairman and is now a fund-raiser for Mrs. Clinton.

Flying around the country in a leased jet, Mr. Hsu gave to the Los Angeles city attorney, the governors of Iowa and New Mexico, the Massachusetts treasurer, and senators from Arkansas, Louisiana and California. He became a leading donor in the Democratic quest to retake control of the Senate in the 2006 campaign.
Partisan shots at Hillary Clinton's Hsu scandel aside, this story underscores what George Will remarked during the campaign finance frenzy of 2002: Trying to stop money in politics is like trying to stop water from running downhill -- no matter what you do the water will find a new path to carve out.

Here we see the consequences of good intentions. McCain intended to remove the large soft money donations from politics. All he did was empower new persons and groups, in the form of 527s such as MoveOn and others, who quickly learned how to bundle small money into large money, all the while circumventing the intended transparency.

McCain's law has thus made campaign finances more convoluted and more difficult to track than before.

Labels: campaign finance, mccain, republican folly

While the campaign of John Edwards - currently a distant third place - is all but irrelevant to next year's election, I couldn't help but note his selective definition of "lobbyist contributions," in a Washington Post story titled, "Edwards Emphasizes Lack of Corporate Funding Ties."

Former senator John Edwards ( N.C.) continued to swing hard at the Democratic front-runner, Sen. Hillary Rodham Clinton (N.Y.), saying: "I think she operates within a corrupt system and defends it. . . . And it's not okay. And it's costing America."

On ABC's "This Week," Edwards equated the lobbyist contributions that Clinton is receiving with "a bribe." He said of lobbyists: "Their job is to influence what happens in the Congress, to influence members of Congress. And they're giving and raising money for them." ..."When I'm the Democratic nominee," he said, "I will have beaten two celebrity candidates who've spent $200 to $250 million, and I'll be running against a Republican carrying George Bush's baggage. That's a fight I'm ready for, and I will win." He continued: "I will have taken a principled stand. They will be awash in this corporate and lobbyist money, and the distinction will be absolutely clear. We can't be a lighter version of them. We have to give Americans very clear choices in this election, and that's one of the choices."

Lest anyone forget, John Edwards is a personal injury lawyer millionaire, who made his fortune from lawsuits that would later be discovered as backed by junk science.

Meanwhile, the trial lawyer and the legal profession in general is just as big a lobbying sector as any corporate group. "The Association of Trial Lawyers of America—the "home office" of Trial Lawyers Inc.—, routinely ranks among the top five PACs in federal campaign donations, leaning strongly to Democrats," according to the Manhattan Institutes's Trial Lawyers, Inc. study, and, "Through individual and soft money contributions, as well as PAC donations, the lawsuit industry has surpassed all others in political giving in every electoral cycle since 1990 ."

Even the New York Times has Edwards pinned:

In fact, of his [Edwards'] campaign's top 20 donors, 15 are from law firms and 12 from the plaintiffs' bar. No other single industry accounted for more than 2 percent of the $23 million he raised through the first two quarters. Mr. Obama, who raised $59 million, and Mrs. Clinton, who raised $63 million, have tapped a far broader range of sectors.

So, who is the most beholden to a single advocacy group here? That would be John Edwards.

Labels: campaign finance, corruption, democrats, john edwards

[Boston Globe] Disgraced fund-raiser Norman Hsu did a lot more than just pump $850,000 into Hillary Clinton's campaign bank account: He also raised hundreds of thousands of dollars for local, state, and federal candidates who have endorsed Clinton or whose support she courted.

In at least some cases, Clinton or her aides directly channeled contributions from Hsu and his network to other politicians supportive of her presidential campaign, according to interviews and campaign finance records. There is nothing illegal about one politician steering wealthy contributors to another, but the New York senator's close ties to Hsu have become an embarrassment for her and her campaign.
Okay, given, technically Clinton broke no laws. But, neither did so many Republicans whom the mainstream media smeared with the broad Abramoff scandal brush during the 2006 election cycle -- costing Republicans Congress.

I don't recall a single media report every so quickly volunteering that Republicans who accepted contributions from a shady character weren't breaking a law. It's always implied.

But back to Clinton -- I like how this paragraph is buried second to last from the article's end:

But the Los Angeles Times reported earlier this month that a California businessman had warned the campaign about Hsu in June and that a Clinton aide dismissed the concerns. "I can tell you with 100 [percent] certainty that Norman Hsu is NOT involved in a ponzi scheme. He is COMPLETELY legit," Samantha Wolf, Clinton's former West Coast campaign finance director, wrote in an e-mail to a California Democratic Party official, the Times reported.
Again, were Mrs. Clinton a Republican you can bet that the above section would have been paragraph two, while the "broke no laws" paragraph would have been second to last.

One should suspect that there's far more to the Clinton-Hsu connection than meets the eye. The question is: will the media dig into it with as much effort as they did Jack Abramoff?

Labels: campaign finance, Clinton, media bias

Looks like I'm in the wrong line of work... there's a lot of money to be made in the Global Warming business.

First off, The Olympian reports that the Olympia City Council is paying two speakers - one of them a NY Times reporter - $12,500 each plus lodging for a 30-minute presentation on the impacts of global warming. That's $435 per minute. Worse, "what's really galling is the fact that the two speakers, Andrew Revkin, author and environmental writer for The New York Times and Terry Tempest Williams, a naturalist and author, are not even going to take questions from the audience."

No questions? That's the academic honesty the left loves!

"Wouldn't a video conference have been more environmentally conscious?" The Olympian adds.

Another case of do as we say but not as we do.

Meanwhile, Investor's Business Daily reports that the so-called maverick NASA scientist championing global warming and associated policy changes - Mr. James Hansen - receives funding, and a ton of it, from George Soros!

How many people, for instance, know that James Hansen, a man billed as a lonely "NASA whistleblower" standing up to the mighty U.S. government, was really funded by Soros' Open Society Institute , which gave him "legal and media advice"?

That's right, Hansen was packaged for the media by Soros' flagship "philanthropy," by as much as $720,000, most likely under the OSI's "politicization of science" program.

That may have meant that Hansen had media flacks help him get on the evening news to push his agenda and lawyers pressuring officials to let him spout his supposedly "censored" spiel for weeks in the name of advancing the global warming agenda.

Hansen even succeeded, with public pressure from his nightly news performances, in forcing NASA to change its media policies to his advantage. Had Hansen's OSI-funding been known, the public might have viewed the whole production differently. The outcome could have been different.
According to IBD, George Soros is behind a variety of policy change efforts to the tune of $74 million in 2006 alone.

Including: $17 million to a, what was then thought to be spontaneous, rally of "2 million angry Mexican-flag waving illegal immigrants demanding U.S. citizenship in Los Angeles, egged on only by a local Spanish-language radio announcer."

Soros is also dorking around with your personal security:

Do people know last year's Supreme Court ruling abolishing special military commissions for terrorists at Guantanamo was a Soros project? OSI gave support to Georgetown lawyers in 2006 to win Hamdan v. Rumsfeld — for the terrorists.

OSI also gave cash to other radicals who pressured the Transportation Security Administration to scrap a program called "Secure Flight," which matched flight passenger lists with terrorist names. It gave more cash to other left-wing lawyers who persuaded a Texas judge to block cell phone tracking of terrorists.

They trumpeted this as a victory for civil liberties. Feel safer?

It's all part of the $74 million OSI spent on "U.S. Programs" in 2006 to "shape policy." Who knows what revelations 2007's report will bring around events now in the news?
Indeed.

I thought Democrats were all about transparency and getting the money and special interests out of politics...

Oh, I'm sorry, they're all about getting other people's money and interests out of politics, but not their own.

Labels: campaign finance, climate, global warming

[MRC] CBS and NBC on Thursday night aired brief updates on how the Justice Department filed a criminal complaint against Norman Hsu, the captured fugitive Democratic/Hillary Clinton campaign donor, for bilking $60 million from investors -- but ABC was once again absent on the story. ABC's World News hasn't uttered Hsu's name since its one and only story the Friday night of Labor Day weekend while Thursday's mention was the fifth for NBC and fourth for CBS. (Coverage details below.) On the NBC Nightly News, Brian Williams read this very short item: "Norman Hsu, that Democratic fundraiser indicted today by federal prosecutors -- accusations of a massive Ponzi scheme. Hsu funneled a lot of money to Senator Clinton's campaign."
Again, just as big a story as the Jack Abramoff scandal... and if not, well then the Jack Abramoff scandal shouldn't have been either. The double standard on campaign finance scandal reporting continues.

Labels: campaign finance, Congress, democrats, Hsu

The editors of the San Francisco Examiner wonder how Norman Hsu could have remained so criminally dirty yet simultaneously have so much access to the Democratic Party?

How indeed...

It is surely among the most astonishing developments of the present campaign season that Norman Hsu, a star Democratic fundraiser, has been on the lam for 15 years after pleading no contest to felony grand theft charges. He faced a three-year California prison sentence when he fled America.

Hsu's case raises so many disturbing questions that it is difficult to know where best to begin. But let's start with this: Where was the U.S. Department of Justice for the past 15 years? Hsu's plea was to California charges, but pleading no contest to charges of running a Ponzi scheme designed to defraud investors of $1 million and then disappearing overseas surely merited federal attention. Did California authorities fail to inform the feds? Or did the feds just look the other way? Somebody in California and Washington needs to step forward to answer these questions.
Do the campaigns of Hillary Clinton, Barak Obama or Jim Webb bother with any background checks of their donors?

And if names like DeLay, Craig and Abramoff became part of the media lexicon, why hasn't Hsu or William Jefferson? Must be the big "D" after their names.

Labels: campaign finance, Clinton, Congress, corruption, democrats, Hsu, media bias

Labels: campaign finance, Congress, earmarks, ethics

The WSJ editors retort to a tee the mainstream media's propaganda that McCain's numbers have fallen because he supports the war in Iraq.

But Mr. McCain has picked a policy fight over the years with nearly every part of the Reagan-Bush coalition.

His obsession with campaign money struck social conservatives as an attempt to limit political speech. He angered economic conservatives by opposing tax cuts in his 2000 campaign, and then voting against them in 2001 and 2003. While Mr. McCain now says he wants to extend the Bush tax cuts past 2010, his campaign is offering no new tax proposals to reverse doubts about his economic convictions.

Even on national security, which is his strength, Mr. McCain has let other GOP candidates get to his right on interrogations and enemy combatants. Rudy Giuliani in particular has jumped into this space on economics and the war on terror, sounding more stalwart than Mr. McCain. We support Mr. McCain's consistent and far-sighted stand on immigration reform, but it also didn't help him with many in the GOP base this year.
I've got one more -- McCain kowtows to the global warming scaremongers. While his attempt is probably to mollify attacks from that group, the side effect is to disgust traditional conservatives, the very base that he needed to win.

Labels: 2008, campaign finance, climate, global warming, immigration, interrogation, Iraq, mccain

Labels: campaign finance, fairness

Five years ago, as my colleagues got ready to pass BCRA [Bipartisan Campaign Reform Act 2002], I warned them that three things would result: that rather than reduce the influence of money on politics, they'd drive it further underground; that advocacy groups would be blocked from speaking even on issues unrelated to elections; and that a deadline on issue ads would only lead to campaigns starting earlier, with a greater premium on early fund raising. All three predictions have come true, from the influence of 527s on the last presidential campaign, to the case before the Supreme Court, to primary campaigns 23 months ahead of the next presidential election.
-- Sen. Mitch McConnell (R, Ky), commenting on the folly that is the John McCain/Russ Feingold campaign "reform" law.

Labels: campaign finance, mccain