On Monday, over 2,000 people packed into the historic Riverside Church here in Manhattan to celebrate the 20th anniversary of Democracy Now! Democracy Now! first went on the air on the eve of the 1996 New Hampshire primary. The date was February 19, 1996. The show began as a radio show on a handful of stations. Today, over 5,000 episodes later, Democracy Now! airs on over 1,400 TV and radio stations across the globe. Among those who spoke at Monday night's celebration was Noam Chomsky, world-renowned political dissident, linguist and author, who spoke about Donald Trump's election.
AMY GOODMAN: On Monday night, over 2,300 people packed into the historic Riverside Church here in Manhattan to celebrate the 20th anniversary of Democracy Now! Democracy Now! first went on the air on the eve of the 1996 New Hampshire primary. The date was February 19, 1996. The show began as a radio show on a handful of stations. Today, over 5,000 episodes later, Democracy Now! airs on over 1,400 public television and radio stations across the globe.
Well, today we spend the hour airing highlights from last night's celebration. We begin with Noam Chomsky, world-renowned political dissident, linguist, author, institute professor emeritus at the Massachusetts Institute of Technology, where he's taught for more than 50 years.
NOAM CHOMSKY: Well, I'd just like to begin by saying a word about what a privilege and honor it is to be able to participate in the celebration of the remarkable success of Democracy Now! for these many years and, in particular, the quite astonishing achievements of Amy Goodman, Juan González, their colleagues, in showing us how we might aspire to achieve democracy now. It will be a long struggle. And again, it's an enormous pleasure to be able to share this occasion with people like Harry Belafonte, who has been such an inspiration and being in the forefront of this endless struggle for many hard years.
And for the young people among you, a special word: You'll be facing problems that have never arisen in the 200,000 years of human history -- hard, demanding problems. It's a burden that you can't ignore. And we'll all -- you, in particular, and all the rest of us -- will have to be in there struggling hard to save the human species from a pretty grim fate.
Well, my wife and I happened to be in Europe on November 8th, that fateful day, in fact, in Barcelona, where we watched the results come in. Now, that had special personal resonance for me. The first article I wrote, or at least that I can remember, was in February 1939 at the -- it was about the fall of Barcelona to Franco's fascist forces. And the article, which I'm sure it was not very memorable, was about the apparently inexorable spread of fascism over Europe and maybe the whole world. I'm old enough to have been able to listen to Hitler's speeches, the Nuremberg rallies, not understanding the words, but the tone and the reaction of the crowd was enough to leave indelible memories. And watching those results come in did arouse some pretty unpleasant memories, along with what is happening in Europe now, which, in many ways, is pretty frightening, as well.
Well, the reaction to November 8th in Europe was disbelief, shock, horror. It was captured pretty eloquently in the -- on the front cover of the major German weekly, Der Spiegel. It depicted a caricature of Donald Trump presented as a meteor hurtling towards Earth, mouth open, ready to swallow it up. And the top headline read "Das Ende Der Welt!" "The End of the World." Small letters below, "as we have known it." There might be some truth to that concern, even if not exactly in the manner in which the artist, the authors, the others who echoed that conception, had in mind.
It had to do with other events that were taking place right at the same time, November 8th, events that I think were a lot more important than the ones that have captured the attention of the world in such an astonishing fashion, events that were taking place in Morocco, Marrakech, Morocco. There was a conference there of 200 countries, the so-called COP 22. Their goal at this conference was to implement the rather vague promises and commitments of the preceding international conference on global warming, COP 21 in Paris in December 2015, which had in fact been left vague for reasons not unrelated to what happened on November 8th here.
On Monday night, Democracy Now! celebrated its 20th anniversary at the historic Riverside Church in New York City. Among those who addressed more than 2,000 attendants was world-renowned linguistic Noam Chomsky, who spoke about the two most dangerous threats the human species faces today: the possibility of nuclear war and the accelerating destruction of human-fueled climate change.
AMY GOODMAN: We return now to MIT professor Noam Chomsky speaking at the event.
NOAM CHOMSKY: The U.S. isolation at Marrakech is symptomatic of broader developments that we should think about pretty carefully. They're of considerable significance. U.S. isolation in the world is increasing in remarkable ways. Maybe the most striking is right in this hemisphere, what used to be called "our little region over here" -- Henry Stimson, secretary of war under Roosevelt, "our little region over here," where nobody bothers us. If anybody gets out of line, we punish them harshly; otherwise, they do what we say. That's very far from true. During this century, Latin America, for the first time in 500 years, has freed itself from Western imperialism. Last century, that's the United States. The International Monetary Fund, which is basically an agency of the U.S. Treasury, has been kicked out of the -- of South America entirely. There are no U.S. military bases left. The international organizations, the -- the hemispheric organizations are beginning to exclude the United States and Canada. In 2015, there was a summit coming up, and the United States might have been excluded completely from the hemisphere over the issue of Cuba. That was the crucial issue that the hemisphere -- on which the hemisphere opposed U.S. policy, as does the world. That's surely the reason why Obama made the gestures towards normalization, that were at least some step forward -- and could be reversed under Trump. We don't know.
On a much more far-reaching scale, something similar is happening in Asia. As you know, one of Obama's major policies was the so-called pivot to Asia, which was actually a measure to confront China, transparently. One component of the pivot to Asia was the TPP, the Trans-Pacific Partnership, which excluded China, tried to bring in other Asia-Pacific countries. Well, that seems to be on its way to collapse, for pretty good reasons, I think. But at the same time, there's another international trade agreement that is expanding and growing, namely, China's -- what they call the Regional Comprehensive Economic Partnership, which is now drawing in U.S. allies, from Peru to Australia to Japan. The U.S. will probably choose to stay out of it, just as the United States, virtually alone, has stayed away from China's Asian Infrastructure Development Bank, a kind of counterpart to the World Bank, that the U.S. has opposed for many years, but has now been joined by practically all U.S. allies, Britain and others. That's -- at the same time, China is expanding to the West with the Shanghai Cooperation Organization, the China-based Silk Roads. The whole system is an integrated system of energy resource sharing and so on. It includes Siberia, with its rich resources. It includes India and Pakistan. Iran will soon join, it appears, and probably Turkey. This will extend all the way from China to Europe. The United States has asked for observer status, and it's been rejected, not permitted. And one of the major commitments of the Shanghai Cooperation Organization, the whole of the Central Asian states, is that there can be no U.S. military bases in this entire region.
Another step toward isolation may soon take place if the president-elect carries through his promise to terminate the nuclear weapons -- the nuclear deal with Iran. Other countries who are parties to the deal might well continue. They might even -- Europe, mainly. That means ignoring U.S. sanctions. That will extend U.S. isolation, even from Europe. And in fact Europe might move, under these circumstances, towards backing off from the confrontation with Russia. Actually, Brexit may assist with this, because Britain was the voice of the United States in NATO, the harshest voice. Now it's out, gives Europe some opportunities. There were choices in 1990, '91, time of the collapse of the Soviet Union. Mikhail Gorbachev had a -- what he called a vision of a common European home, an integrated, cooperative system of security, commerce, interchange, no military alliances from the Atlantic to the Pacific. The U.S. insisted on a different vision -- namely, Soviet Union collapses, and NATO remains and, indeed, expands, right up to the borders of Russia now, where very serious threats are evident daily.
Well, all of this, these are significant developments. They're related to the widely discussed matter of decline of American power. There are some conventional measures which, however, are misleading in quite interesting ways. I'll just say a word about it, because there's no time, but it's something to seriously think about. By conventional measures, in 1945, the United States had reached the peak of global dominance -- nothing like it in history. It had perhaps 50 percent of total world's wealth. Other industrial countries were devastated or destroyed by the war, severely damaged. The U.S. economy had gained enormously from the war, and it was in -- and the U.S., in general, had a position of dominance with no historical parallel. Well, that, of course, couldn't last. Other industrial countries reconstructed. By around 1970, the world was described as tripolar: three major economic centers -- a German-based Europe, a U.S.-based North America and the Northeast Asian area, at that time Japan-based, now China had moved in as a partner, conflict then partner. By now -- by that time, U.S. share in global wealth was about 25 percent. And today it's not far below that.
Well, all of this is highly misleading, because it fails to take into account a crucial factor, which is almost never discussed, though there's some interesting work on it. That's the question of ownership of the world economy. If you take a look at the corporate -- the multinational corporations around the world, what do they own? Well, that turns out to be a pretty interesting matter. In virtually every -- this increasingly during the period of neoliberal globalization of the last generation, corporate wealth is becoming a more realistic measure of global power than national wealth. Corporate wealth, of course, is nationally based, supported by taxpayers like us, but the ownership has nothing to do with us. Corporate ownership, if you look at that, it turns out that in virtually every economic sector -- manufacturing, finance, services, retail and others -- U.S. corporations are well in the lead in ownership of the global economy. And overall, their ownership is close to 50 percent of the total. That's roughly the proportion of U.S. national wealth in 1945, which tells you something about the nature of the world in which we live. Of course, that's not for the benefit of American citizens, but of those who own and manage these private -- publicly supported and private, quasi-totalitarian systems. If you look at the military dimension, of course, the U.S. is supreme. Nobody is even close. No point talking about it. But it is possible that Europe might take a more independent role. It might move towards something like Gorbachev's vision. That might lead to a relaxation of the rising and very dangerous tensions at the Russian border, which would be a very welcome development.
Well, there's a lot more to say about the fears and hopes and prospects. The threats and dangers are very real. There are plenty of opportunities. And as we face them, again, particularly the younger people among you, we should never overlook the fact that the threats that we now face are the most severe that have ever arisen in human history. They are literal threats to survival: nuclear war, environmental catastrophe. These are very urgent concerns. They cannot be delayed. They became more urgent on November 8th, for the reasons you know and that I mentioned. They have to be faced directly, and soon, if the human experiment is not to prove to be a disastrous failure.
AMY GOODMAN: MIT professor Noam Chomsky, world-renowned linguist and political dissident, speaking Monday night at Riverside Church as part of a celebration marking 20 years of Democracy Now! To see the whole evening's events, including clips of Democracy Now! over the last 20 years, go to democracynow.org. After a short break, we'll hear from Harry Belafonte, Danny Glover and Juan González.
AMY GOODMAN: Patti Smith, performing "People Have the Power," along with Michael Stipe of R.E.M., at Monday night's celebration of Democracy Now!'s 20th anniversary at the historic Riverside Church here in New York. I'm Amy Goodman. This is Democracy Now!, democracynow.org, The War and Peace Report.
The future Donald Trump administration's energy agenda is revealed in a memo prepared by Trump's energy transition head Thomas Pyle, titled "What to Expect from the Trump Administration." The document, obtained by the Center for Media and Democracy (CMD), was sent by Pyle on November 15th, just days before the Trump campaign announced Pyle's appointment as head of his Department of Energy transition team.
Pyle is the President of both the American Energy Alliance and the Institute for Energy Research. Both organizations have received cash from numerous fossil fuel funders including ExxonMobil, Peabody Energy and Koch Industries. From 2001 to 2005, Pyle was Director of Federal Affairs for Koch Industries.
The memo outlines fourteen policies to be expected from President-elect Trump, which collectively amounts to a fossil fuel industry wish list and which would be devastating for attempts to slow climate change.
The agenda includes withdrawing from the 2015 Paris Climate agreement, eliminating the Clean Power Plan, increasing the leasing of federal lands for exploitation of coal, oil and gas, expediting the approval of pipeline projects including the Keystone XL and Dakota Access Pipeline and rolling back federal fuel economy standards.
I've been worried about corporate political spending since long before Citizens United. As I discuss in my book Corporate Citizen?, corporations have been eager to spend in elections for a long time. And since 2010, corporations, including publicly traded ones, have been flexing their rights under Citizens United to spend in federal and state elections.
Since 2010, the overall biggest spender among publicly traded corporations in the last four federal elections has been Chevron. This has gone largely unnoticed because the company hasn't actually spent directly for or against presidential candidates. Rather, Chevron tends to kick in a million to two to super PACs supporting congressional Republicans. They did this again in 2016, giving $2 million to the Senate Leadership Fund and $1 million to the Congressional Leadership Fund.
In 2016 publicly traded companies generally gave money in two ways: (1) like Chevron, they spent to support congressional Republican super PACs or (2) they spent on losing G.O.P. presidential candidates like Jeb Bush and Sen. Marco Rubio. For example, Nextera Energy gave a pro-Jeb Bush super PAC $1 million and $100,000 to a pro-Marco Rubio super PAC. Devon Energy gave $750,000 to the Senate Leadership Fund and $500,000 to the Congressional Leadership Fund.
Two public companies bucked these general trends. Masimo Corporation, a medical technology company, gave to the pro-Democratic Senate Majority super PAC instead of giving to Republicans.
But the only publicly traded company to openly throw its support behind one of the general election presidential nominees is the opaque-sounding GEO Group. (I hesitate to claim they are the only publicly traded company to spend in the presidential race because there was more than $175 million in dark money in 2016 which could be masking other corporate spending).
GEO Group's political spending comes in to focus once one understands a bit about the company. GEO is the nation's second-largest private prison operator. In 2015, 45 percent of its revenue came from operating 26 prison centers for the federal government. So when the Justice Department announced August 18th that it wanted to end the use of private prisons, GEO's stock price fell 40 percent. Meanwhile, Democratic nominee Hillary Clinton was also calling for a halt to private prisons.
The day after the Justice Department announcement, GEO gave $100,000 to a pro-Trump Super PAC, Rebuilding America Now. That was a follow-up to a $50,000 contribution earlier in the month. Not only does GEO do work for the Bureau of Prisons, it also operates facilities for Immigrations and Customs Enforcement, garnering $161 million in 2015. Trump's call to deport millions of undocumented immigrants could be a boon to GEO. (That seems to be what a lot of investors are betting on. GEO's stock is up 38 percent since the election, while the S&P 500 is up 3.4 percent.)
Contributing to Trump's super PAC wasn't GEO's only federal election spending this year. They gave $200,000 to the Senate Leadership Fund, $100,000 to Bush's super PAC and $100,000 to Rubio's super PAC. (It's probably not coincidental that Boca Raton-based GEO gave to Bush, a former Florida governor, and Rubio, a current Florida senator.)
Given its business, it's no surprise that GEO also spends in state elections. According to Followthemoney.org which tracks money in state politics, the GEO has given more than $6 million to over 796 entities over the past 16 years. Among the recipients of GEO Group's largesse include both Republican and Democratic governors, attorneys general, and state legislators.
As I explained in an article in the Rutgers University Law Review, companies can hurt their brands by getting too entangled in political fights. They risk being rejected by customers and shareholders. But at least in GEO's case, that does not seem to be the case.
So what to make of publicly traded companies' political spending this cycle? First, the governmental relations shops at publicly companies (who are typically in charge of where companies spend in politics) were no better at picking winners in the presidential primary than pollsters and pundits. They mostly wasted their money betting on losers.
But they did have wild success in Congressional races. When pundits predicted at least one house would flip, publicly traded companies bet on incumbents, helped them win reelection, and thereby contributed to Republicans holding both chambers in 2016. But GEO does stand alone, perhaps because its business had the most to gain from a Trump win. Watch this space. Political quid pro quos are often troubling; but when the beneficiary is a private prison company, it could be downright ugly.
Trump's victory surprised those who expected the better-funded Clinton to win. But the indirect process of steering a republic via investor coalitions is a tricky one. After the 2010 elections, corporate funders realized that anti-government sentiment can sometimes turn against the very public bodies corporations rely upon.
Donald Trump arrives for a campaign event at Gilley's Club in Dallas, Texas, June 16, 2016. Trump's victory surprised those who expected the better-funded Clinton to win. But the indirect process of steering a republic via investor coalitions is a tricky one. (Photo: Eric Thayer / The New York Times)
The dominance of money in American politics is now well-recognized, to the extent that even pro-market Republicans must run as if they're against corporate control of politics. Trump claimed to be running against the hedge-fund billionaires, and even his multidimensionally hideous Republican primary rival Ted Cruz fudges the ruling classes into the "Washington cartel."
But the influence of money was just as compelling in this election as in 2012, with media covering the enormous fund-raising totals as if reporting on a dull city council meeting. The conservative Wall Street Journal reported that corporations are betting on GOP Senate control, as "corporate PACs plowed $3 million into the campaigns of Republican candidates ... 15 times as much as they contributed to Democrats in those same races.... Corporations generally split their PAC money fairly evenly between Republicans and Democrats, with a slight majority of donations going to the side that is winning." So while "Corporations are extremely cautious in how they dole out campaign funds," in the most competitive Senate races corporate America made bolder moves, as "business PACs directed 99 percent of their donations to the Republican candidate."
The correlation between the fundraising totals and the outcome of Congressional races can be seen easily on the prominent campaign data website of the Center for Responsive Politics (CRP), opensecrets.org. Pulling up results for the House and Senate races for each state, from Florida to Colorado, the results are pretty striking visually, as the candidate with the larger green bar representing their campaign funds is almost always correlated with the yellow trophy symbol indicating the winning candidate. Exceptions are uncommon enough to jump out at the reader. Of course, the winners are typically incumbents also, as congressional reelection rates tend to exceed 90 percent.
Despite this heavy flow of corporate Super PAC donations, the business press reported findings that "they trail far behind wealthy individuals in political spending," as individual gifts came to fully 80 percent of Super PAC contributions over the 2016 cycle, with the share from "unions a mere 1.9 percent." In the White House race, this trend favored the Clinton campaign, as 19 billionaires lined up to give $70 million, while the allegedly self-financing Trump attracted four billionaires giving $18 million total.
In addition to PAC giving by particular corporations and rich individuals, the leading corporate umbrella organization, the US Chamber of Commerce, was as active this year as in the past. The Chamber has an important role in organizing PAC funding, especially in lobbying sitting government officials. In 2016 it spent $79.2 million to the AFL-CIO's $3.9 million, continuing to favor Republicans out of fear of new regulations or higher taxes on its corporate members.
But the organization's famous lobbying operation became an embarrassment in some cases, like when the Chamber went aggressively after Evan Bayh, the former Democratic senator running to return to the body. In line with its usual pattern, it poured millions into PACs supporting Republican Todd Young, but there was a snag: Bayh had been a lobbyist for the Chamber as late as June 2016. Considered a "business-friendly centrist" in the words of The New York Times, Bayh "was a spokesman for the chamber on the perceived dangers of government over-regulation." But although Bayh was an asset while lobbying today's typical pro-business Democrats, his voting record rating with the Chamber was far lower than his Republican opponent's, so the Chamber was reduced to aggressively (and successfully) campaigning against one of its own former employees.
But while the Chamber has leaned heavily Republican in recent races, there was a major exception this year according to the CRP report. It gave $13,865 to Clinton's campaign, while a pitiful $520 is recorded as being donated to Trump.
This, of course, reflects the nature of an unusual race: A highly unconventional Republican candidate with a constantly shifting mix of policy proposals, some a delight and some a horror to the GOP establishment; and Clinton's own conservative, pro-business record, despite New Deal affectations during the primary to fend off Senator Sanders. But with Clinton's loss we must confront the question of how the Chamber was thwarted in this staggering race, a question being debated now with an enormous level of passion and rather little evidence-based argument. But a review of the vote for Trump recalls a rather similar recent story in which the Chamber was forced into a corner.
The indirect process by which a republic can be steered via investor coalitions is far more clumsy than a mechanical dictatorship. It is possible that constituencies whipped up by talk radio and organized through veiled corporate money may grow impossible to control, and their useful anti-government zeal may be turned against the numerous public bodies that corporate investors rely upon.
Indeed, that's happened recently. In 2010 "Business groups spent millions of dollars on the midterm elections to help secure a GOP majority in Congress," the business media recounted, contributing to a Republican wave year that came to be associated with conservative "Tea Party" groups across the country. Business groups like the Chamber hoped to use these groups' anti-government passion to further lower their taxes and dissolve New Deal-era social supports, but it turned out that the movement couldn't be controlled. By autumn 2013, the US Chamber and other large companies and their umbrella groups started spending against Tea Party-associated candidates, out of their desire for basic corporate stability -- like maintaining corporate supports, such as the Export-Import Bank, or avoiding a government shutdown every other year. As I wrote about this episode for Truthout, "It's not easy being a political puppeteer."
Recent events have proven that episode to be a harbinger of rage at globalization and the deepening inequality seen in the current "neoliberal" period of global economic policy. This trend was clear in the surprising Brexit vote, in which the areas of the UK voting most strongly for withdrawing from the European Union were those most hurt by aggressive austerity cuts to social supports under David Cameron's Conservative government. Indeed, the correlation of Vote Leave turnout and fiscal cuts to satisfy neoliberal austerity budget-tightening appears to be consistent even down to the ward level within UK cities. "Leave" voters' anger at their economic decline, plus a very real racist resentment of East European EU citizens' increasing immigration, led them to lash out by choosing the "anti-establishment" option, even though that is likely to make their predicament significantly worse.
This voting pattern, which appears set to continue in imminent EU elections in which conservative and nativist parties look set to make big gains, helps explain how the better-funded, sure-thing Clinton candidacy could lose. A major cash advantage is clearly a pivotal advantage for any campaign, and again based on the down-ballot races, even 2016 keeps to the pattern of victories driven by money and incumbency. But it's quite possible for an electorate to rebel against political ad saturation and choose what appeared to be an anti-establishment option, even if it turns out to still mean Wall Street influence like Trump's Treasury pick, Steven Mnuchin of Goldman Sachs, or Commerce Secretary Wilbur Ross, the private equity kingpin.
And perhaps fittingly, the longtime rebellious writers on the political left have most clearly resolved this, like Ajay Singh Chaudhary who compared American voters to those in Germany, where voters "have an actual Left to flee to." The great socialist writer Mike Davis captured the mood among marooned blue-collar towns (and the evangelicals who stuck with a serial divorcee and sexually assaulting candidate) when he wrote that they "wanted change in Washington at any price, even if it meant putting a suicide bomber in the White House." Labor scholar and former TransAfrica Forum president Bill Fletcher usefully observes that Trump ran on opposition to globalization and immigration, rather than the broader neoliberal program of deregulation and tax cuts, which Trump indeed celebrated.
With the outcome so close, including a margin of over two million votes nationwide that favored the losing candidate, as well as razor-thin margins for Trump in Pennsylvania and Michigan, any factor that made even a small difference can be legitimately claimed to have been decisive. Sexist opposition to the prospect of a woman president and positive responses to Trump's consistent racist messaging were clearly significant and with the narrow outcome, even a small contribution can be considered to have allowed this horrible outcome.
But by now national commentary has resolved that sexism and racism, great and terrible social forces though they remain, were not the main factors swinging just enough Rust Belt voters to break the alleged Blue Wall of the upper Midwest. Trump voters in these areas are often the blue-collar workers once covered by a union contract at their industrial job, watching jobs leave and opioid abuse entering. But more than anxious factory hands, the smaller business owners and petty professionals made up the better part of Trump's base, and indeed have historically been the base of fascist movements more than the blue-collar workforce. The Wall Street Journal notes that among Trump voters "the economy was cited as the top issue far more often -- 46 percent of the time -- than immigration, named by just 17 percent." A majority also held that free trade agreements are a net loss for employment.
Likewise The New York Times reports that blue-collar workers at air-conditioner manufacturer Carrier celebrated Trump's promise to put a hearty 35 percent tariff on the firm's goods if it followed through on plans to outsource production to Mexico from Indiana. But supporters specifically indicate that if the tariff, and other anti-free-trade steps, are not put in place, they will not repeat their GOP votes in 2020. Of course, industry's systemic pressures to cut costs, automate and outsource production into complicated transnational production networks all make corporate return unlikely.
Even with these views increasingly widespread as globalization has more fully stripped these regions of economic functionality, the Democrats have steadily stepped away from their midcentury New Deal policies, from Bill Clinton's major reduction in social welfare programs to Obama's hearty deportation of immigrants and promotion of more free trade deals. Clinton herself is maybe the definitive figure of this change in the party, from aggressive interventions under her State Department to the cartoonishly bad-looking big-ticket Wall Street speeches. The post labor side of the New Democrats is even reflected in Clinton's celebrated data-driven campaign, which turns out to have been so out of touch with the base that it ended up "getting out the vote" for a good number of Trump supporters.
The press was reporting Clinton's cash edge throughout 2016, even toward the end when Clinton's Super PAC had three times as much cash on hand as Trump's, which indeed held only about a third of what previous GOP nominee Mitt Romney had on hand at the same time in 2012. But a detailed review suggests how Trump was able to cope with significantly less campaign cash than Clinton's team. Using the CRP data, we can confirm Clinton's fundraising superiority, with a total of over $687 million raised, relative to Trump's $307 million.
Digging into CRP expenditure data for White House campaigns, a major discrepancy emerges. Clinton spent just under half her campaign and PAC budgets on media -- 48.9 percent of the campaign total, or $125 million. But Trump's campaign spent only $30.4 million, or 37.8 percent of its budget, on media. And yet, who would argue that Trump was under-featured on US media during the campaign? The difference is made up of "earned" media, the bizarre political term for coverage of a candidate generated by independent media sources, like an article or TV segment covering the candidacy, but without the campaign purchasing it.
This earned media is no small thing -- Trump's continuous coverage was worth over $2 billion by media firm estimates. The value of earned TV and radio time is usually larger than what a candidate spends on air time, but Trump's gigantic media exposure left him with two and a half times the earned media value Clinton had. That goes a long way toward making up for Trump's lower cash-on-hand, and aids the money-driven politics thesis somewhat: While Trump had less money, he clearly had other material resources, in this case, his preexisting TV celebrity and ability to outrageous-statement his way onto cable TV on an hourly basis.
The Trump-Ryan Economy
Looking forward, the material impact of the Trump administration will be economic as well as cultural. Today's still-shocked commentary universally cautions that with the candidate's frequently contradictory statements and overall oafish ignorance, we can't be confident predicting policy moves by the new administration. Fair enough, but early signs are that Trump will be typical of intellectually shallow or disinterested power-holders and will have his policy choices set by his staff and the congressional leadership. In addition to the early hard-line militarist appointments, the selection of Reince Priebus as Trump's Chief of Staff is a major indicator of planned cooperation with GOP congressional leadership, a terrible sign.
Since the last period of unified GOP government under George W. Bush, the Republican congress has gotten dramatically more extreme, dominated now by the "Freedom Caucus," renamed from the Tea Party Caucus that the Chamber of Commerce put into power in 2010 and then tried to destroy in 2013. At the head of the House is Speaker Paul Ryan, noted fan of arch-libertarian douchebag Ayn Rand. Having promoted the privatization of Medicaid and Social Security for many years, despite the decrease in benefits and vulnerability to market swings and bankruptcies that would bring, Ryan is apparently over the moon about his free hand to liberate the Fountainhead. He's planning "to go big, to go bold" with his plans, described favorably in conservative media as disassembling the Affordable Care Act along with goals "to dismantle the Dodd-Frank financial overhaul, rewrite the tax code and boost military spending." As in 2000, the Republicans lost the popular vote for both the White House, and also lost the total nationwide vote for the House of Representatives, as in 2014. But they can be expected to come in governing as if they won in a landslide.
One notable area of potential agreement among the parties involves infrastructure, the physical structures required to support market activity -- roads, bridges, rails, flood-control systems, and so on. Democrats have been dying to get an infrastructure bill passed for years, with little success in the face of chronic GOP obstruction of anything that might prove politically valuable for the Obama administration. Now Democrats are hoping to work with Trump on this, as he has in the past proposed a trillion dollars in infrastructure spending over several years. However as the conservative Wall Street Journal has reported, "Trump's proposal for $1 trillion of new infrastructure construction relies entirely on private financing, which industry experts say is likely to fall far short of adequately funding improvements to roads, bridges and airports."
This is likely difficult for Rand readers and libertarian purists to comprehend, but even the sympathetic Journal finds the plan hard to buy. Since the proposed plan "largely boils down to a tax break in the hopes of luring capital to projects," problems arise as "Experts say there are limits to how much can be done with private financing. Because privately funded projects need to turn a profit, they are better suited for major projects, such as toll roads, airports or water systems and less appropriate for routine maintenance, they say." Indeed, even the head of the business association representing private toll-road operators finds the plan more conceptual than serious. The paper also adds that "tolls have proved unpopular, with toll-road operators in Indiana and Texas filing for bankruptcy protection." On the other hand, Trump advisor Steve Bannon has claimed the infrastructure program will be based on outright fiscal spending. Most likely a major stimulus program along these lines will materialize over Speaker Ryan's budget-cutting objections, creating a stronger national recovery that can provide cover for Ryan's program for privatizing the remains of the New Deal social supports.
Despite this painful electoral outcome, it appears that many US centrists and liberals have learned the wrong lesson. In a sympathetic profile of economically abandoned blue-collar Trump voters in Indiana, The New York Times notes what it believes is a flaw in their thinking. While globalization and outsourcing of manufacturing have indeed hurt working-class communities, they mean more profitability and a greater income share going to owners of capital, like corporate shareholders. The Times drolly comments, "In this age of 401(k) investment plans and individual retirement accounts, these shareholders are, in a real sense, all of us."
Yet, even a passing familiarity with recent global economic trends proves that this is a delusion. Indeed, the conservative Journal itself ran a graphic, in an article on Trump's business sense, showing the "Percentage of business income earned by households," ranked by income levels. The graph is dramatic, and so is the attached simple summary: "More than half of business income in the U.S. goes to the top 1 percent of households." Adding in the rest of the richest 20 percent by household income brings the total to almost 80 percent of corporate dividends. In fact, the damn graph itself is labeled "Highly Concentrated." If Clintonite liberals cannot begin to see the gravity of these facts now, it's hard to see when they will.
What a revolting development this is.
The rather sketchy plans put forth to date by Republicans such as House Speaker Paul Ryan would not provide enough financial assistance to make coverage affordable, especially for low- and moderate-income people, many of whom would consequently end up uninsured. (Photo: Daniel Huizinga / Flickr)
Republican congressional leaders plan to move quickly in January to repeal the bulk of the Affordable Care Act (ACA) without enacting a replacement plan to prevent the millions of people who have gained coverage through the ACA from becoming uninsured. Instead, the repeal bill will likely delay by two years or more the elimination of the ACA's Medicaid expansion and subsidies that help low- and moderate-income people buy marketplace coverage. But GOP leaders' claim that they will enact a replacement plan in the meantime that will be available when the ACA's coverage provisions expire isn't credible.
Republican leaders have had six years to put forth a replacement plan that matches the ACA's coverage and protection from financial risk, and they haven't done so. The proposals to date from President-elect Trump and congressional Republicans are vague in key respects and would do little to help the millions whose coverage is at risk under ACA repeal to obtain affordable, comprehensive health care. Moreover, many people likely would lose coverage before any Republican health plan was fully implemented.
Repeal Would Leave Market in Disarray
If the repeal bill that congressional GOP leaders passed last year (and President Obama then vetoed) is a guide -- as GOP leaders have said it will be -- the repeal bill that they bring up for a vote early in 2017 will immediately eliminate the ACA's individual and employer mandates. This means some people who are now enrolled -- particularly healthy people who would no longer have to pay a penalty for lacking coverage -- would drop coverage. (Some employers as well could stop offering coverage to their workers.) As a result, it's likely that some insurers would drop out of the insurance marketplaces in 2018, with those that remain raising their premiums significantly since the people they cover will now be less healthy than in previous years. The premiums could rise to levels that most people who don't qualify for subsidies cannot afford.
Looking ahead, Republican leaders acknowledge that it will take time to transition to a replacement plan, even after its enactment -- which itself may take considerable time. It took four years to implement the ACA after its enactment, and state and federal officials, health care providers, and others are still working to make it operate more smoothly. This timetable would leave consumers, insurers, and the health care community in an extended state of substantial uncertainty, exacerbating disarray in insurance markets.
Moreover, a strategy of repeal without replacement means that policymakers and the public will have no way to judge whether a future GOP plan would provide coverage that's at least as available, affordable, and adequate as the coverage the ACA provides. The Republican plans that have been offered to date suggest that a future GOP plan is likely to fail on all of these measures.
The rather sketchy Republican plans put forth to date would not provide enough financial assistance to make coverage affordable, especially for low- and moderate-income people, many of whom would consequently end up uninsured. The plans from House Speaker Paul Ryan and House Budget Committee Chair Tom Price, who has been nominated to be the next Secretary of Health and Human Services, would provide tax credits that vary by age but, unlike the ACA, not by income, and wouldn't take the actual cost of decent-quality coverage into account. The maximum tax credit for people 51 and older in the Price plan would be $3,000 a year, far less than is needed to enable many people with modest incomes to afford coverage in today's market. This would be particularly problematic for the poor and near-poor who now qualify for coverage under the ACA's Medicaid expansion and either don't pay premiums or pay premiums that are very low in relation to their income. Many of them would likely end up uninsured.
While coverage would likely be cheaper under Republican plans, especially for healthier people, that's because their plans would generally cover significantly fewer benefits and have higher out-of-pocket costs. And sicker people would face big increases in premiums and out-of-pocket costs for deductibles and co-payments, as well as having to bear the full cost of all health care services that their new, less comprehensive plans didn't cover. In addition, unlike under the ACA, people with low incomes would receive no help with their cost-sharing charges.
Republican Proposals Would Do Little to Help People Losing ACA Coverage
Adding to these concerns, three of the proposals that are listed on President-elect Trump's transition website, and commonly included in congressional GOP health plans, would do little or nothing to help the millions who stand to lose coverage under ACA repeal:
Expanding Health Savings Accounts (HSAs). These accounts, which people with high-deductible health plans can use to set aside money for out-of-pocket health expenses, offer unprecedented tax benefits especially for people with high incomes. Contributions to HSAs are tax deductible, and can be invested in stocks, bonds, or other investments that, once in the HSAs, grow tax-free. In addition, withdrawals from the HSA are entirely tax-exempt as long as they are used for out-of-pocket medical or long-term care costs. HSAs consequently provide one of the more lucrative tax shelters in the U.S. tax code. Unlike contributions to retirement accounts and other tax preferences, both the contributions into the accounts and the subsequent withdrawals from the accounts are tax free.
This unique tax-sheltering opportunity heavily favors higher-income people, both because this tax break rises in value with an individual's tax bracket and because higher-income people are the people most able to take advantage of this tax shelter and make substantial contributions to these accounts. Most households making contributions to HSAs have incomes of at least $100,000, data from the Joint Committee on Taxation show.
GOP plans to enlarge HSAs and make them an even more lucrative tax shelter would typically allow much larger annual contributions to HSAs. That, too, would primarily benefit high-income people, as they are the individuals most able to make the current maximum annual contribution (the HSA contribution limit is now $3,350 a year for individuals and $6,750 for families), let alone a higher contribution amount. In contrast, people with low incomes usually lack the funds to make significant HSA contributions; they also generally lack the ability to afford the high deductibles that HSA-eligible plans carry.
GOP proposals to expand HSAs typically would also allow people to use their HSAs to pay premiums (currently HSA funds can be used to pay out-of-pocket costs but not premiums). This would make large HSA contributions even more attractive to people with high incomes. Most uninsured people, however, have low- and moderate-incomes and would receive few, if any, tax benefits from an HSA. They would get a tax subsidy of no more than 15 cents on the dollar to purchase health coverage, and those who don't earn enough to owe federal income tax would get no benefit at all.
Expanding high-risk pools. High-risk pools are not a new idea, but rather an approach to providing coverage that's been proven unsuccessful. Because high-risk pools combine sick people with even sicker people -- rather than pooling sick and healthy people together as regular insurance does -- they tend to charge extremely high premiums that people can ill afford.
Moreover, states' experience with state high-risk pools before the ACA shows that even the very high premiums that high-risk pools charge covered only about half of the cost of operating the pools; the rest came from government support. Over time, states with high-risk pools either had to kick in more and more money -- or cut their high-risk pools deeply by imposing waiting lists, curtailing benefits, and charging unaffordable premiums. That's why in 2011, prior to implementation of the ACA's major coverage provisions, there were a total of only 226,000 people insured nationwide through state high-risk pools, alongside 49 million people who were uninsured.
Allowing insurers to sell plans across state lines. Allowing insurers to sell health coverage in other states even if the plans fail to comply with the other states' consumer-protection requirements would encourage insurers to seek licensure in states where insurance companies are the most powerful politically and consumer protections are the weakest -- and then market those plans in other states.
The few states that tried to open their markets to out-of-state insurers prior to health reform generally had little to show for it, as insurers had problems establishing networks of providers outside their own states. But if insurers did succeed in entering other states' markets, the out-of-state plans would likely attract healthier-than-average people with low health care costs, because such people have much less need for consumer protections such as requirements to cover certain benefits or limits on insurers' ability to charge higher premiums based on age or gender. As a result, the group of people who remain in plans offered by the in-state insurers would become less healthy as a group, and the premiums that the in-state plans charge then would rise accordingly, making it more difficult for people with medical problems to remain insured.
The ACA has helped tens of millions of Americans gain coverage, even as it has also helped slow the growth in health care costs. The Congressional Budget Office estimated last year, based on the repeal bill that Congress passed and President Obama vetoed in January, that repeal would raise the number of uninsured Americans by at least 22 million.
To be sure, the ACA is far from perfect. Some enrollees face deductibles that are too large relative to their incomes, and millions of uninsured people haven't enrolled, many of whom are relatively young and healthy and would like more affordable coverage. The top priority for policymakers should be to make health care more affordable, not making it less so or making it entirely unavailable for millions of Americans who now have it.
After giving something up in a previous contract, is it possible to win it back? It took a massive effort, but hospital workers in Buffalo proved it can be done.
Catholic Health is one of the two local hospital chains that dominate western New York. Communications Workers (CWA) Locals 1133 and 1168 represent 6,900 of its employees in six bargaining units.
Four years ago, Catholic Health cried poverty at the bargaining table. Threatened with layoffs, our unions reluctantly agreed to eliminate daily overtime (after eight or 12 hours, depending on the job -- of particular importance to part-timers), cost-of-living increases, bonus pay for nurses who came in on short notice, and seniority-based wage scales.
After all these losses, many workers jumped ship for the union hospitals of competitor Kaleida, which offered better conditions and paid $6 to $8 more per hour. Instead of hiring to replace them, Catholic Health filled the gaps with temporary, non-union nurses -- who are unfamiliar with local policies and require a lot of help.
"The staffing levels are atrocious," said St. Joe's nurse Heather Lawrence, a Local 1168 steward. "We'd call for more staff and tell the administration we needed them, and they pretty much ignored us." Catholic Health also cut back on nursing assistants, who work closely with nurses to care for patients. On Lawrence's floor, four nursing assistants were reduced to two.
The Last Straw
By 2015, union leaders were determined to build a contract campaign that could reverse the givebacks. Four of the six contracts would be expiring within a year, covering 2,500 workers -- including 2,200 at the flagship Mercy Hospital of Buffalo.
It helped that Local 1133 had elected a new executive board in 2014. Under the previous administration, "we weren't even given a chance to be involved," said Kevonna Neely, a steward and certified nursing assistant at the nursing home attached to Mercy. "I never even knew you were able to go to bargaining, or you were able to talk about real issues with your executive board."
By now Catholic Health was doing much better, with record revenue and $340 million cash on hand -- even more than the New York Presbyterian system, which is four times its size. But that didn't stop management from demanding still more concessions, such as excluding spouses from family health plans.
Meanwhile union researchers discovered a bonus system that was rewarding upper administrators not for improving patient outcomes, but for cutting wages and benefits. Compensation for Human Resources head Michael Moley had doubled in five years, hitting $668,122 -- while employees were being told, "Tighten your belts." That was the last straw.
Members Warm Up
For the first time, the unions set up a mobilizing team. Organizers set out to identify leaders in each department and shift. One on one, they asked questions like:
- Who do people go to when there's a problem?
- Who's the contract expert?
- Who isn't afraid to share their opinions and ideas with co-workers?
- Who isn't afraid to approach management with concerns?
Next the organizers met with these people, identified which were real leaders, recruited them as department mobilizers, and trained them in one-on-one conversations.
Each mobilizer took charge of communicating with 10 to 15 co-workers, distributing flyers and buttons, and setting up department meetings. Every two weeks the mobilizers met to debrief, hear the latest updates from bargaining, ask questions, and let each other know what rumors were going around.
After getting burned in 2012, many members wanted nothing to do with the union. "At first they weren't receptive, because we had already lost so much," Neely said. "They felt like it was going to be the same thing. But once we involved them, people saw -- 'Oh no, this is nothing like last time around!'"
The mobilizers circulated a bargaining survey, asking members to identify their top concerns and evaluate the staffing and equipment in their areas. "We went to every department," said Neely. "We started communicating with our top people who we wanted to get involved, and they helped get the surveys back."
In another first, the union held open bargaining, welcoming any member to sit in. "They could see both sides," Lawrence said. "They didn't have to rely on, 'This is what the hospital's telling us, and this is what the union's telling us.'"
"It opened a lot of people's eyes to see the demeanor of our employer," said Lisa Boettcher, another St. Joe's nurse and the area vice president for Local 1168. "I was shocked, the ways the lawyers from Catholic Health spoke to us. They were rude, and they were not nurses. They were making decisions about running a hospital without knowing what we do."
Members also got the chance to speak at the table, such as to describe how short-staffed their units were.
"We Were Everywhere"
To win, union leaders knew they would need public pressure. They had gotten a taste of the hospital system's vulnerability during service workers' 2014 fight for a new contract at St. Joe's, when neighborhood door-knocking helped stave off concessions.
Though Catholic Health hospitals have grown into massive operations that take in hundreds of millions of dollars annually, local people still think of them as small community hospitals. Their children are born there; they go there for any major procedure. Many employees also live nearby.
The issue of short staffing resonated with the community, Neely said. "They knew it could have been them, or one of their family members or loved ones, in the hospital being taken care of without enough staff. For some patients, just talking to them helps -- but when you're short-staffed, you can't do that. You get in, you do what you've got to do, and you go."
To educate local residents, small teams of union members and staff distributed flyers all over the area -- at church events, art festivals, and concerts by the Buffalo Philharmonic and Bruce Springsteen. Often at performances we handed out fake playbills stuffed with information about our negotiations.
Particular targets were events sponsored by Catholic Health, such as a series of talks on women in leadership, held at an art gallery. The gallery directors came out to ask leafleters, "Why are you guys out here?" We hoped that institutions like this gallery would contact Catholic Health to say, "They're out here again! What are you guys doing to settle this?"
Members met with elected officials too. In one bargaining session, the three top lawmakers in South Buffalo (a state assembly member, a state senator, and a county legislator) spoke on our side. And our local Jobs with Justice affiliate convened a Workers' Rights Board of experts from finance, labor relations, and the religious community. Workers testified about how Catholic Health had changed for the worse, and the board issued two scathing reports on the harms done to employees and patients.
Members also helped distribute 1,800 lawn signs with the slogan "We ♥ Mercy Hospital Workers." We made sure Catholic Health felt like we were everywhere.
Our Secret Weapon
In July, members at Mercy voted by 96 percent to authorize a strike. In the weeks after the vote, we organized rallies outside the hospitals. The largest drew more than 1,000 people, lining both sides of the busiest street in South Buffalo during rush hour. One of our signs read, "Just Practicing!"
And we unveiled a new secret weapon that helped push us over the top -- an inflatable "Fat Cat," 15 feet tall, wearing a large ring, pleated suit, and suspenders. It held a cigar in one hand and strangled a nurse with the other.
We debuted the Fat Cat during rush hour on the front lawn of Catholic Health headquarters, where thousands of commuters saw it. It made the rounds to each hospital and to summer festivals where community members got to see it up close and chat with workers.
As our Labor Day strike deadline drew near -- with members mobilized like never before, and community pressure growing -- Catholic Health finally presented an agreement on all four contracts that we could accept.
The new contracts revive wage scales that reward years of service. Over four years, pay increases of 11.75 to 17.75 percent will bring Catholic Health workers closer to their Kaleida counterparts. We kept spouses on our health plans. All these gains will help recruit and retain staff.
On staffing, we won more input on the joint labor-management staffing committee, and a commitment to add 65 new fulltime positions -- on top of hiring another 70 nursing assistants and 100 nurses to fill the current staffing shortage. Most importantly, we lined up all our Catholic Health contracts so that they will expire on a common date -- June 20, 2020 -- giving us more power in the next round of negotiations.
Dan DiMaggio helped with reporting.
New book from Labor Notes: Secrets of a Successful Organizer is a step-by-step guide to building power on the job. "Full of so many creative examples and powerful rank-and-file stories, it makes you want to dive right in." Buy one today, only $15.
Just before the US Environmental Protection Agency released its high profile study on fracking, the agency planned to announce that the draft "study shows potential vulnerabilities to drinking water from hydraulic fracturing process."
But that wasn't the message the public heard the next day.
Instead, the EPA's press release highlighted a statement that the $29 million "[a]ssessment shows hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources…"
That reassuring phrase was widely repeated in news headlines online, in print and on television, and touted by the drilling industry as evidence that despite spending millions of dollars, EPA had failed to turn up evidence proving that fracking was bad for people's drinking water. For years, the oil and gas industry has insisted that there was not a single documented case where fracking polluted underground drinking water supplies -- despite mounting evidence disproving that claim.
Now, a powerful new investigative report, based on internal EPA emails and documents obtained by Marketplace and American Public Media, show that the language about "widespread, systemic impacts" was added to the study itself shortly after White House-level officials were briefed on the EPA's research. And key changes to the EPA's public messaging about the study -- which had already taken the agency's scientists roughly five years to conduct -- were made on the day before their preliminary findings were made public.
The emails, obtained through the Freedom of Information Act, were carefully vetted by Marketplace, which confirmed their authenticity with "three people with knowledge of the study" and conducted 19 separate interviews with individuals "familiar with the research" who labeled the EPA's denial of "widespread, systemic impacts" a "bizarre conclusion" and "irresponsible."
Environmentalists expressed outrage at the newly uncovered last minute edits.
"We've suspected for months that the White House egregiously manipulated the headlines and summary findings of a draft study in order to obfuscate the details buried within -- details confirming that fracking has caused numerous cases of water contamination," said Food & Water Watch Executive Director Wenonah Hauter. "Today's report confirms this political meddling."
This August, that same inserted wording came under withering criticism from the expert panel charged with making sure that the EPA study's science was sound.
Those experts concluded that the phrasing in the Executive Summary "appears inconsistent with the observations, data, and levels of uncertainty presented and discussed in the body of the draft Assessment Report," -- unusually strong language for a scientific review.
The newly released documents show that as of April 24, 2015, EPA's Executive Summary contained no mention of the phrase "widespread, systemic impacts."
Instead, an internal draft of the Executive Summary reads, "Evidence from multiple sources indicates that hydraulic fracturing activities have contaminated drinking water resources in a variety of documented cases." EPA's draft summary later added that "the number of documented impacts is quite low," (though it is worth noting that the Summary that EPA made public explains that the number of documented cases "may be an underestimate as a result of several factors," citing data gaps).
It was only after officials from the White House, along with top Interior Department and the Department of Energy officials, were briefed on the scientific conclusions that the controversial phrase found its way into the EPA's Executive Summary, Marketplace found.
Eight days after that briefing, a draft version cuts the sentence explaining that "multiple sources" showed fracking "contaminated drinking water resources".
Instead, the Summary's May 12, 2015 draft reads: "We did not find evidence of widespread, systemic impacts. The number of identified cases was small compared to the number of hydraulically fractured wells. This could reflect the rarity of effects on drinking water resources, but may also be due to other limiting factors."
News coverage of the lengthy and technical study very often focused on the Executive Summary or looked to reactions from experts -- which can produce a "he said, she said" narrative, with industry backers and environmentalists given time to air their take on how to interpret EPA's findings.
DeSmog previously took a close look at EPA's full report and itemized a litany of fracking-related problems that EPA reported, including hundreds or thousands of wastewater spills, a fundamental failure to track wastewater (which could prevent illegal dumping or other mishandling), multiple cases where fracking itself was the only available explanation for underground drinking water contamination, and instances where drillers failed to take the most basic of safety precautions.
For example, EPA noted, even though drillers talk about "best practices," hundreds of wells per year in North Dakota were fracked without enough steel or cement casings -- and skipping those casings makes the risk of water contamination skyrocket 1,000 fold.
In other cases, EPA said, drillers deliberately fracked into drinking water supplies, putting some people at risk in the short term, and more people at risk over the long term, if droughts force communities to drill water wells into those fracked supplies.
Those damning findings came even though the drilling industry was allowed to play a very close role in determining how EPA conducted its study and to limit the scope of the agency's research.
"[Y]ou guys are part of the team here," an EPA representative wrote to driller Chesapeake Energy as they together edited study planning documents in October 2013, a March 2015 DeSmog investigation based on over 3,000 pages of internal EPA documents found, "please write things in as you see fit."
Marketplace did not report any changes to the body of EPA's 998 page study -- just the Executive Summary and the press release.
Government studies about the oil and gas industry's environmental impacts have been accused of being subject to political manipulation in the past. "It was like the science didn't matter," Carla Greathouse, author of a 1987 EPA study into the oil industry's toxic wastes -- which was used to justify an exception for drillers from hazardous waste handling laws even though researchers found many problems -- told The New York Times in 2011. "The industry was going to get what it wanted, and we were not supposed to stand in the way."
This time around, environmental groups are calling for the Obama administration to take conclusive action before leaving the White House.
"Enough is enough," Ms. Hauter said. "It's time for the administration to acknowledge its intervention in the crafting of the draft study, and issue a final version that clearly and conclusively highlights that fracking does indeed cause water contamination."
A Texas judge stated that he found sufficient grounds for ExxonMobil to investigate whether two attorneys general (AGs) had acted in bad faith when, in fact, the AGs have been engaged in activities that are commonplace and entirely appropriate for state prosecutors. (Photo: Thomas Hawk / Flickr)
A Texas federal judge's recent order -- that the attorneys general of Massachusetts and New York must submit to questioning by lawyers for ExxonMobil about why they are investigating the company -- is highly unusual and unwarranted, as is the underlying lawsuit brought by ExxonMobil against the prosecutors. If upheld, this approach could turn the legal system upside down, allowing wrongdoers possessing sufficient resources to file lawsuits that paralyze law enforcement efforts aimed at protecting the public.
Although the Texas judge stated that he found sufficient grounds for ExxonMobil to investigate whether the two AGs had acted in bad faith, in fact the AGs have been engaged in activities that are commonplace and entirely appropriate for state prosecutors: 1.) cooperating with AGs from other states, 2.) consulting with experts about possible unlawful activity, 3.) seeking documents to investigate that activity, and 4.) speaking in public about the matters under review.
Dallas-based United States District Judge Ed Kinkeade has granted permission to oil and gas giant ExxonMobil to question under oath Massachusetts' attorney general, Maura Healey, and New York's attorney general, Eric Schneiderman, as to their motivations for investigations of the company. Issuing orders in a lawsuit filed by ExxonMobil, a case aimed at stopping Healey from going forward with her investigation, Judge Kinkeade has directed the two AGs to come to Dallas on December 13 to face depositions from ExxonMobil's high-powered legal team.
Buoyed by the judge's ruling, and possessing seemingly-limitless resources to engage in litigation, ExxonMobil also now has issued subpoenas in the case to non-profit environmental groups and private lawyers that provided advice and information to the two attorneys general.
Healey has said she will "vigorously oppose" Judge Kinkeade's order for her to come to Texas and be deposed. "Our position in this ligation is that the authorities in Texas, and specifically the federal court down there, has no jurisdiction over state attorneys general and the work of their offices," Healey told reporters in Boston on November 21. "It's been disappointing to see Exxon fight the request for basic information. Our job as attorneys general is to be able to ask questions."
Healey has filed a motion asking the judge to reconsider his ruling, and has indicated that, if necessary, she will seek to appeal the judge's order to the United States Court of Appeals for the 5th Circuit.
Schneiderman, as well as the outside groups and lawyers, are also opposing Exxon's efforts to take discovery in the Texas case. (Disclosure: I have advised some of the groups.)
The AGs and outside groups are on firm legal ground objecting to Judge Kinkeade's highly unusual and unwarranted rulings. ExxonMobil's lawsuit is a virtually unprecedented effort by a corporation to sue and investigate state prosecutors who are conducting an investigation of that corporation. If the case goes forward, it would give a green light to wealthy corporations of all kinds to seek out sympathetic federal judges and pursue expensive legal proceedings aimed at derailing state law enforcement investigations. Such a development would create new layers of lawsuits surrounding every dispute, force taxpayers to spend more to sustain state prosecutors' offices, and make it much more difficult for attorneys general to protect the public against investor and consumer fraud, unsafe products, environmental harms, and other abuses.
To the extent that ExxonMobil has substantive and procedural objections to the attorneys general demands for information, it has every right to raise those objections in the Massachusetts and New York state courts, and indeed ExxonMobil is already doing just that.
Douglas Gansler, who was the attorney general of Maryland from 2007 to 2015, told Bloomberg that "he's never heard of an instance where a company under investigation by a state sues and wins permission to question law-enforcement officers." Gansler said: "Not only is it unusual, it's unprecedented… It's completely inconsistent with the law and the functioning of our government."
Gansler expanded on that point in remarks yesterday at an event at the Center for American Progress. At the same event, entitled "The Battle for Climate Change Accountability," Georgia State University law professor Neil Kinkopf said that there was nothing unusual or unwarranted about the Massachusetts and New York probes, that forcing depositions of the AGs would violate the Constitution, and that "I cannot even begin to fathom" the consequences of allowing such depositions to go forward.
Background of the Dispute
The Texas suit by ExxonMobil is part of an aggressive legal strategy to block investigations by the attorneys general, investigations that focus on whether Exxon misled consumers and investors about the dangers of global warming and the potential impact of those dangers on the company's bottom line. Investigative reporting in the past year showed that Exxon scientists have known and told Exxon management for decades that burning fossil fuels was heating up the planet, but rather than educate the public on the dangers and change its business strategy, Exxon instead spent millions supporting efforts to question and deny the science of climate change. The state AGs are also investigating whether ExxonMobil has properly accounted for its oil reserves in the wake of global price drops and evidence of global warming.
ExxonMobil contends there is no legitimate basis for the AG probes, and that the First Amendment shields the company from scrutiny for its public statements, a claim that leading constitutional law experts sharply dispute, because it is a settled legal principle that the First Amendment doesn't protect fraud.
ExxonMobil, headquartered in Irving, Texas, filed its lawsuit in nearby Dallas against Healey alone, but after Kinkeade ruled on October 13 that ExxonMobil could pursue discovery against the Massachusetts AG, ExxonMobil added Schneiderman as a defendant in the case.
Schneiderman issued a subpoena to ExxonMobil in November 2015, and Healey issued a civil investigative demand (CID) to the company in April 2016. Exxon already has produced more than 700,000 pages of documents to Schneiderman in response to his subpoena; on October 26, a New York judge ordered ExxonMobil and its auditor, PwC, to comply with a subpoena issued by Schneiderman seeking additional information regarding PwC's auditing of the oil company.
ExxonMobil now also faces an investigation from the US Securities and Exchange Commission, initiated in August 2016, examining a similar set of issues. In addition, in March 2016, the US Department of Justice, responding to a congressional request to investigate ExxonMobil, referred the matter to the FBI.
Meanwhile, US Representative Lamar Smith (R-TX), chairman of the House Science Committee, has subpoenaed documents from Healey, Schneiderman, and other state attorneys general. lawyers, and outside groups connected to the ExxonMobil matter. Over the summer, Smith held a committee hearing regarding his demands. For the most part, the AGs, groups, and lawyers have declined to comply.
ExxonMobil's Claims and Judge Kinkeade's Order
Judge Kinkeade's order that the state attorneys general must face discovery is possibly unprecedented, and that's because federal law, as established in the US Supreme Court's decision in Younger v. Harris, generally prohibits a federal court from interfering in a criminal, civil, or administrative investigation or proceeding brought by state officials; instead legal complaints about such matters belong in the state courts where the state officials are located.
ExxonMobil argued to Judge Kinkeade that Healey's conduct -- meeting with non-profit groups and other attorneys general, speaking out publicly regarding ExxonMobil's conduct, and issuing a CID to the company -- fell within the Supreme Court's exception to the general rule of Younger: A federal court does not have to abstain from hearing such a case where a prosecutor is acting in bad faith or with the purpose of harassing the target.
As evidence of such bad faith, Exxon cited Healey's participation in a March 29, 2016, press conference in New York with the so-called "Green 20" group of attorneys general, following a meeting that included attorneys general and outside experts from non-profit groups and law firms. Speakers at their press conference, under the banner "AGs United for Clean Power," were attorneys general Healey, Schneiderman, William Sorrell of Vermont, George Jepsen of Connecticut, Brian Frosh of Maryland, Mark Herring of Virginia, and Claude Walker of the US Virgin Islands, along with former Vice President Al Gore.
In its September 8, 2016, filing with the court, ExxonMobil complained that at the New York press conference:
Attorney General Healey declared that "certain companies" needed to be "held accountable" for expressing a viewpoint on climate change that she disfavored. After acknowledging that "public perception" was her principal concern, she condemned her targets for not sharing her beliefs on "the catastrophic nature of" climate change. Attorney General Healey then pledged to take "quick, aggressive action" to "address climate change" by investigating ExxonMobil. Prejudging the investigation's results, she told the public she had already found a "troubling disconnect between what Exxon knew, what industry folks knew, and what the company and industry chose to share with investors and with the American public."
(Healey's full statement is here.)
ExxonMobil in its court papers also attacked the motivation behind Healey's CID to the company, which sought communications between Exxon and non-profit groups engaging in denying or questioning the science of climate change: "The focus of the CID on entities the Attorney General perceives to be antagonistic to her policy preferences underscores the improper motivation for issuing the CID in the first place -- namely, to silence perceived political opponents."
ExxonMobil's papers also note that in April and May 2016, seventeen attorneys general, including Healey and Schneiderman, signed a "Common Interest Agreement" to share information and expressing as a goal "limiting climate change and ensuring the dissemination of accurate information about climate change." Exxon Mobil contended that the existence of such an agreement "shows that the purpose of the Attorney General's investigation is entirely political, pertaining to the promotion of preferred climate change policies."
ExxonMobil told the court that this course of conduct by Healey proves that she "is engaging in unapologetic viewpoint discrimination, conducting an unlawful fishing expedition, directing a biased investigation with preordained results, and she is seeking to regulate speech and conduct occurring well beyond the borders of the Commonwealth of Massachusetts."
Judge Kinkeade has not ruled that Exxon is entitled to the injunction it seeks stopping Healey's investigation. But he did, on October 13, issue an order permitting Exxon to take limited discovery regarding whether he should dismiss the case under the Younger abstention doctrine. He ruled that ExxonMobil can examine "Attorney General Healey's comments and actions before she issued the CID," and whether AG Healey served the CID in bad faith.
In a written opinion, Judge Kinkeade cited, as cause for deposing Healey, all the factors raised by ExxonMobil: the New York AGs United for Clean Power meeting and press conference, the presence of outside experts and lawyers at the meeting, Healey's remarks at the press conference, and Healey's issuance of the CID to the company. Kinkeade declared "the allegations about Attorney General Healey and the anticipatory nature of Attorney General Healey's remarks about the outcome of the Exxon investigation to be concerning to this Court." The allegations, he wrote, "if true, may constitute bad faith in issuing the CID which would preclude Younger abstention."
Armed with this ruling, ExxonMobil, on October 24, served on attorney general Healey more than a hundred discovery requests. On November 4, ExxonMobil sought depositions of Healey, Schneiderman, and two assistant attorneys general in each of their offices.
On November 10, Exxon filed an amended complaint adding Schneiderman as a defendant; the complaint charged that Schneiderman had given "unprecedented briefings to the press on the status of his 'investigation' of ExxonMobil and announced his expectation that a 'massive securities fraud' will be uncovered." The company further charged that the demands for documents by Healey and Schneiderman "were issued in bad faith to deter ExxonMobil from participating in ongoing public deliberations about climate change and to fish through decades of ExxonMobil's documents in the hope of finding some ammunition to enhance the coalition's, and its climate activist confederates', position in the policy debate over climate change."
On November 17, Judge Kinkeade ordered Healey to appear in Dallas for a deposition on December 13 and also directed Schneiderman to be available in Dallas that day.(ExxonMobil itself actually had noticed Healey to appear for a deposition in Boston, where her offices are located.) Judge Kinkeade also ordered Healey to fulfill ExxonMobil's written discovery requests within 10 days of receiving them.
On November 26, Healey filed a motion with Judge Kinkeade to set aside his order for a deposition and to stay the discovery against her.
Why the Judge's Order Is Unwarranted
Such written discovery and depositions are an unwarranted intrusion on the legitimate work of a state attorney general. Healey's and Schneiderman's actions were entirely consistent with the kinds of actions taken regularly by attorneys general and other prosecutors in the course of their work: consulting with outside experts, collaborating with attorneys general from other states, demanding information, and speaking out to educate the public on matters of concern, often prior to filing a formal enforcement action.
Judge Kinkeade's finding of possible bad faith and bias is misguided. Attorneys general are not judges, charged with remaining impartial as a case proceeds. Attorneys general are advocates for the public. As public officials, state AGs have a duty to gather relevant information -- and to educate the public about potential wrongdoing. They are not obligated to wait for a jury verdict, or even the filing of a lawsuit, before publicly addressing possible misconduct.
As Healey argues in an October 31 filing with the Texas court, her statements at the March 29 press conference, which Exxon claims prove that Healey has prejudged the outcome of her investigation, are entirely consistent with her duty to investigate violations of law. The statements, her legal team writes, "merely show that Attorney General Healey holds a belief that Exxon has or is engaged in conduct prohibited by the Massachusetts consumer protection statute… This is not an 'unconstitutional prejudg[ment],' as Exxon suggests…. Rather, it is a state law directive. Specifically, Massachusetts law requires the Attorney General to believe there has been a violation of Massachusetts law prior to issuing a CID." (Healey additionally argues that the Texas federal court lacks personal jurisdiction over her, that the circumstances do not warrant the unusual step of deposing a top executive branch official, and that the matter, under federal law, is not yet ripe for decision.)
An amicus brief filed with Judge Kinkeade in August by the attorneys general of twelve states explains that it is standard procedure for state attorneys general, including Texas's own attorney general, in seeking to protect their own citizens, to issue investigative demands to companies headquartered in other states, and for attorneys general in multiple states to coordinate efforts to investigate unlawful activities, for example with respect to tobacco companies, mortgage foreclosure abuses, sham cancer charities, and Volkswagen's deceptions about vehicle emissions.
There are, in fact, numerous examples of attorneys general collaborating on investigations and speaking out against targets in advance of filing a case. Here are a few:
- In 1988, a coalition of attorneys general from Alabama, Arizona, California, New York, Minnesota, Wisconsin, and West Virginia sued major insurance companies for allegedly conspiring to sell stripped-down liability policies to municipalities and schools.
- In 1991, Michigan attorney general Frank Kelley issued a notice of intended action against Nu Skin International, a Utah based personal-care products business. Kelley issued a public statement charging that the company was "operating an illegal pyramid marketing scheme." He added, "Such practices are defined as pyramid schemes and are in clear violation of Michigan law."
- In 1994, Maryland's attorney general office issued three dozen subpoenas as part of an investigation of an alleged pyramid scheme. An assistant attorney general told a reporter, "What we have is a lot of people who have been pressured. That's exactly why this is open to fraud. ("Maryland Officials Are Trying to Find Out Who Is Running Game," Washington Post, Dec. 13, 1994.
- A group of eighteen state attorneys general and the Department of Justice pursued a case against Microsoft, which resulted in a 2001 settlement.
- In 2007, the attorneys general of 28 states sent a letter to the federal Alcohol and Tobacco Tax and Trade Bureau warning of potentially fraudulent marketing of "energy drinks" that combined alcohol and caffeine. In connection with the initiative, Oregon attorney general Hardy Myers said, "Nonalcoholic energy drinks are very popular with today's youth…Beverage companies are unconscionably appealing to young drinkers with claims about the stimulating properties of alcoholic energy drinks." Maine attorney general Steven Rowe added, "I am deeply concerned that alcoholic energy drinks will lead to even more aggressive binge drinking than we are already seeing."
- In 2008, New York attorney general Andrew Cuomo subpoenaed United HealthGroup, the nation's largest health care insurer and other large insurers, along with a notification of intent to sue the companies over assertions that they used "rigged data to manipulate the reimbursement rate to their customers who filed claims." In a statement, Cuomo said, "When insurers like United create convoluted and dishonest systems for determining the rate of reimbursement, real people get stuck with excessive bills and are less likely to seek the care they need."
- In 2010, the attorneys general of all 50 states and the District of Columbia joined together to investigate mortgage foreclosure practices and determine whether some banks had illegally forced borrowers from their homes. Patrick Madigan, an Iowa assistant attorney general, told a reporter, "'We'll contact the loan servicers, hear their stories, and then let the facts lead us where they will… We'd already been working with 13 other states on loan-servicing issues, but this new coalition is a law-enforcement action. This isn't just policy review anymore; this is about lenders breaking the law.' ("Foreclosure Crisis: Officials in 50 states, DC Launch Probe," San Jose Mercury News, Oct. 13, 2010)
- Following the 2010 BP Deepwater Horizon disaster, five state attorneys general formed the Gulf State Coalition in order to coordinate their legal efforts with respect to the oil spill. Attorneys general from Texas, Louisiana, Mississippi, Alabama and Florida met in Mobile, Ala., to plan to jointly to protect their states' natural resources and coastal businesses.
- In recent years, 37 state attorneys general formed a national working group to aimed at, as stated by the office of then-attorney general of Kentucky Jack Conway, "reviewing the troubling practices of some for-profit colleges." Numerous state attorneys general have issued demands for information and filed lawsuits against for-profit colleges allegedly engaged in fraud or deceptive business practices. The attorneys general engaged in these efforts have spoken out publicly on numerous occasions about abuses in the for-profit college industry. In a 2015 press release, Conway praised efforts by Senator Dick Durbin (D-IL) to protect students and added, "It is time that the Department of Education publicly recognizes the serious threat for-profit colleges pose to all students and work toward protecting students against future harm." In 2012, Conway and attorneys General Lisa Madigan (IL) and Beau Biden (DE) appeared at a Washington press conference alongside Durbin and three other senators to announce a settlement between 20 state AGs and an online lead generation company, QuinStreet, that was luring veterans to for-profit colleges through a website, GIBill.com, which looked to many like an official government site. The senators and attorneys general criticized QuinStreet but also addressed critical comments at the for-profit college industry with, for example, Conway saying, "These are public companies taking tax dollars, and they are, in many instances, not doing what we need them to do."
Nor is an attorney general consulting with, or pursuing the same targets as, outside organizations and lawyers, any indication of misconduct; rather it is a common practice. Interest groups regularly petition prosecutors to take action and provide information that assists prosecutors in determining whether such action is in the public interest, and outside lawyers and experts regularly provide advice and support.
A few examples:
- Months of pressure from members of the public, elected representatives, and advocates led to federal intervention in the investigation of a slaying of a rabbinical student in the Crown Heights neighborhood of Brooklyn, New York, in 1991.
- By the time that the attorneys general of 46 states reached a landmark 1998 settlement agreement with four of the largest tobacco companies over smoking and health issues, various state AGs had been advised and assisted by a number of private law firms in the matter.
- In October 2011, a coalition of businesses and groups asked state attorneys general to investigate Google for possible antitrust violations.
- This past summer, after a string of high-profile police killings of unarmed African-Americans, members of the Congressional Black Caucus (CBC) sought meetings with US Attorney General Loretta Lynch and FBI Director James Comey, and stood in front of the Department of Justice and demanded that Lynch initiate civil rights investigations.
Without attorneys general working together, and consulting with outside experts, lawyers, and elected officials, it would be more difficult to detect, deter, and punish violations of law, especially those by politically powerful interests.
If other judges issued rulings like Judge Kinkeade's, corporate targets of investigations could tie down state law enforcement agencies in endless legal proceedings where prosecutors would be required to defend themselves.
Imagine if the tobacco companies could have spent years deposing the attorneys general investigating deceptions in the marketing of cigarettes, simply because AGs had declared tobacco harmful or accused the tobacco companies of deceptive acts, or because the AGs consulted with experts on smoking and health, or because the AGs worked together.
Imagine if each of the dozens of for-profit college companies now under investigation by state AGs sued those officials in federal courts, asking numerous federal judges to oversee discovery into whether the state AGs were biased against them or had prejudged their cases.
Perhaps drug lords and organized crime syndicates could attempt similar efforts to sue and depose state AGs in order to block investigations of their offenses.
Or perhaps Judge Kinkeade's decision could be used by citizens groups to sue, say, Texas attorney general Ken Paxton for joining a lawsuit to stop federal environmental regulations. Should attorneys for such groups be able to depose the Texas AG regarding his motives for bringing the case, to see if he acted in bad faith? After all, it's documented that the Texas AG and other Republican attorneys general opposed to the Obama administration's Clean Power Plan and other climate change regulations have banded together, publicly spoken out against Obama environmental policies, and met behind closed doors with oil and gas industry lobbyists.
There is, in fact, nothing unusual or oppressive about the actions of the Massachusetts and New York attorneys general in the ExxonMobil matter. Judge Kinkeade's ruling threatens to open a Pandora's box of efforts by corporations and others to evade responsibility for misconduct. A world in which targets of law enforcement probes can engage in court-approved investigations of their investigators is unsustainable.
The new dawn of American manufacturing broke Thursday with one big step for the workers of Indiana and one far bigger step for a more muscular trade policy: Carrier will stay in Indianapolis – along with more than 1,000 jobs. The Never Trumpers will be quick to give others credit or attack the terms of the deal. But there is something much more important going on here that is the real story. It is a story about how the loss of America’s manufacturing base has been a politician-made disaster rather than the inevitable march of globalization.
Last week in Indiana, Donald Trump saved a thousand jobs. You heard the story: Carrier, a heating and cooling company, had been planning to move some of its operations to Mexico. Then the president-elect personally phoned the CEO of its parent company. Then Carrier announced that it would accept tax incentives from the state of Indiana in exchange for keeping some of the jobs—between 800 and 1,100 of them, depending on who you ask—in the USA.
Students of political despair (a popular field these days) might consider the case of Robert Parris Moses. He was a twenty-six-year-old high-school math teacher in New York City, when, in 1961, he set off, alone, to register African-American voters in Mississippi. At the time, fewer than seven per cent of eligible African-Americans in the state were registered. Local officials kept the number low by means of literacy tests, poll taxes, and violence—aimed at those trying to register and, particularly, at those seeking to register others. They included Moses and a small band of colleagues...