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Supreme Court Scandal Widens

Koch Entertained Justice Thomas At His Private Club

by PAM MARTENS

A CounterPunch Special Report

For the past three years the U.S. has been served up a heaping dose of free market creative destruction that is the sine qua non of legions of corporate funded front groups.  First Wall Street, then housing, now the nation’s highest court have been brought low by its force.  As it turns out, creative destruction is 90 percent corruption and 10 percent creative.

The Citizens United case, decided by the U.S. Supreme Court on January 21, 2010, opened the spigots to unlimited corporate money in elections and put free speech for inanimate, unfeeling corporations on equal footing with free speech for humans with a brain and a heart.  But it didn’t pass the smell test from day one; four of the nine Justices on the court said so in a scathing dissent that raised the issue of unprincipled behavior on the part of the 5-judge majority which ruled on issues that were not legally before the court.

The unpleasant aroma of that decision enveloped Justice Clarence Thomas over his all-expenses-paid, four-day luxury trip to the January  2008 Koch brothers confab in the Palm Springs area of California. (According to his 2008 disclosure form and the Supreme Court’s public information office, his expenses for that trip were paid by the Federalist Society, a conservative nonprofit that the Koch foundations have given $1.9 million to, from 1991 through 2009.)

The Koch brothers, Charles and David, are controlling shareholders of one of the largest private corporations in the world, Koch Industries.  Each brother is worth an estimated $21.5 billion, according to Forbes.  The company has a presence in over 60 countries, including interests in oil, refining, pipelines, paper products, chemicals, fertilizer and commodities trading.  The Kochs’   semi-annual political fundraising event, which attracts upwards of 250 to 300 people, is so secretive that attendees are told in their instruction packet to keep everything they see and hear confidential, according to a memo leaked to Think Progress.org.

Both Koch Industries, and the multitude of nonprofit think tanks and free market advocacy groups the Koch foundations fund,  stand to gain dramatically from the Citizens United  decision as they are all corporations.  Justice Thomas’ trip to the Koch event occurred in the same year as the Citizens United case was accepted by the Supreme Court.  The Court accepts less than two percent of all cases appealed to it.

In back and forth email correspondence last week with Scott Markley, Public Information Specialist at the Supreme Court, it emerges that Justice Thomas was “hosted by Charles and Elizabeth Koch in Indian Wells, California, at the Vintage Club.”  According to a spokesperson at the Vintage Club, it restricts dining to members and their guests.  Membership requires owning a home in the private, high security community.  Homes run from $1.8 million to $18 million.  Golf club membership requires $250,000 in equity with annual dues of $32,000 a year.  The spokesperson for the Vintage Club confirmed that Charles Koch is a member of the Club and has brought guests for dinner.

According to public records, Charles G. Koch owns a home on Desert Rose Lane in Indian Wells, close to the Vintage Club.  The Riverside County Assessor’s office shows it as a 5 bedroom,  8 bathroom, 7,553 square foot home.  The creative destruction of an institutionalized wealth transfer system that is stripping purchasing power from 300 million Americans and concentrating wealth in the hands of the top 1 percent is beginning to devour its own.  Koch’s Desert Rose Lane home has gone from a value of $12 million in 2009 to $5 million today according to the county tax assessor’s records.

The bottom line of all of the delicate parsing by the public information office of the Supreme Court is that a sitting justice of the Supreme Court was entertained in the private club of one of the richest corporate executives in America.  The company, Koch Industries, has paid tens of millions of dollars to settle violations of Federal and State laws.  In 1999, according to 60 Minutes, a jury found that Koch Industries had stolen oil from Federal lands “and lied about its purchases – 24 thousand times.”  Bill Koch, a dissident brother and whistleblower in the case, said profits on that oil were a minimum of $230 million.

Despite a request to the Supreme Court for clarification on how many people attended this dinner with the Kochs and Justice Thomas at the posh Vintage Club and precisely where Justice Thomas was lodged during his 4-day 2008 trip, the details remain a mystery.  The Vintage Club has no hotel rooms, nor is there lodging on the grounds, other than in private homes.  The Court said it had no further details to provide beyond what was reported on Justice Thomas’ 2008 disclosure form.  That form tells one nothing about either detail.  In fact, it portrayed the event as a Federalist Society outing and mentioned nothing about Charles and Elizabeth Koch being the hosts at their private club.

There are only two reasons that come to mind as to why Justice Thomas would refuse to say where he stayed in 2008.  (Since the event has already occurred, personal safety is not one of them.)  According to local real estate agents, the private community around the Vintage Club has state of the art security technology and three dozen security officers patrolling the grounds; some are former government security officers according to one area resident.  Did Justice Thomas stay in a private home for his four-day visit?  Did he stay four days at a luxury resort in Palm Springs and fail to report it as income on his tax return?

While the Citizens United case was pending before the Supreme Court, Virginia Thomas, the wife of the Justice, created a tax exempt, Tea Party advocacy group, Liberty Central, Inc., with a former lawyer for the Charles G. Koch Foundation acting as her General Counsel in 2010 (Sarah Field) and a former Koch lobbyist serving on her board at inception (Matt Schlapp).

The political watchdog group, Common Cause, filed a formal complaint with the Department of Justice in January of this year seeking an investigation.  It also asked the Department to meet with Common Cause President Bob Edgar. The organization received an emailed response saying the Department was reviewing the correspondence and it hoped  “to respond soon to the request for a meeting.”  No further communication has been received by Common Cause.

Another watchdog group, Protect Our Elections.org, filed a request for an investigation with both the Department of Justice and FBI.  They received a letter in May of this year.   It stated, in part, “Please be assured that the Department of Justice takes very seriously alleged wrongdoing by public officials.  All such matters are reviewed carefully by career prosecutors and law enforcement agents and appropriate action, if warranted, is taken.”  There has been no word since.

Last week, 20 house Democrats sent a letter to James C. Duff, Secretary to the Judicial Conference of the United States, seeking an investigation of Justice Thomas.  The letter cited  Justice Thomas’ failure for his entire tenure on the Court to report his wife’s source of employment income and “use of a private yacht and airplane owned by Harlan Crow and again failed to disclose this travel as a gift or travel reimbursement on his federal disclosure forms as required by the Ethics in Government Act of 1978.”

Virginia Thomas ran Liberty Central, Inc. out of a post office box in a UPS building in Burke, Virginia.  It has subsequently moved to 12587 Fair Lakes Circle, Suite 331, Fairfax, Virginia. Suite 331 turns out to be just another post office box in another UPS building.

According to IRS tax filings, Liberty Central, Inc.  received $550,000 from anonymous donors  in 2009 and was anticipating the receipt of $2,014,000 in 2010.  That’s a very precise figure to anticipate for 2010.  Had it been pledged?  If so, by whom?  Virginia Thomas has stepped down from an official post at Liberty Central, stating in December that she would serve as a consultant to the group.

According to IRS filings, she was to receive annual pay of $150,000.  Repeated emails to Katy Blackwell, a lawyer listed at the Liberty Central web site, did not unearth the actual funds received by the organization in 2010 or the compensation actually paid to Virginia Thomas.  Blackwell says the group has been granted a request for an extension to make its 2010 Federal tax filing on November 15 of this year.

Virginia Thomas’ Liberty Central, Inc. has another serious conflict involving the ruling in Citizens United.  The Citizens United case before her husband at the Supreme Court was decided on January 21, 2010.   Eight days later, Cleta Mitchell, a partner with the law firm Foley & Lardner, filed the application on behalf of Virginia Thomas’ nonprofit group, Liberty Central, Inc. with the IRS. (Protect Our Elections.org obtained the document under a Freedom of Information Act (FOIA) request with the IRS and has posted it on its web site along with Justice Thomas’ disclosure filings and  its requests for  investigations.)  But Mitchell was not an impartial attorney; her Amicus brief filed in the Citizens United case may have swayed Justice Thomas.

Mitchell’s brief was filed on behalf of the American Justice Partnership and Let Freedom Ring in support of Citizens United’s position.  Cleta Mitchell’s law firm, Foley & Larnder, are registered lobbyists for more than two dozen corporations.  Over the past decade, they have spent over $26 million lobbying the Federal government on behalf of corporations.  The firm’s clients and the firm’s bottom line stand to benefit from the Citizens United decision since they now can spend unlimited amounts of money influencing elections.

In response to an email query as to how she became involved in representing Liberty Central, Mitchell said Virginia Thomas  “asked me to assist in the process.  I’ve known Ginny since she worked at Heritage Foundation.” [Virginia Thomas’ nickname is customarily spelled “Ginni” in the press.]

From 1999 through 2007, Virginia Thomas received at least $1,051,214 in compensation from the Heritage Foundation.  That figure has previously been reported as approximately $700,000 from 2003 to 2007.  Through the courtesy of GuideStar.org, earlier Heritage Foundation tax filings with the IRS were obtained showing additional income paid to Virginia Thomas in years prior to 2003.)

From 1987 through 2009, Koch-controlled foundations gave the Heritage Foundation $4.1 million, according to Greenpeace.  Koch foundation money derives from Koch Industries and such corporate brands as Angel Soft, Brawny, Quilted Northern, Sparkle, Vanity Fair, Dixie paper products and Georgia-Pacific.

The rest of Heritage’s money has come predominantly from wealthy foundations built on other corporate brands:  the Mellon banking and industrial empire — synonymous with the Sarah Scaife Foundation, Carthage Foundation, Allegheny Foundation and Scaife Family Foundation.   Richard and Helen DeVos Foundation (both attended a June 2010 Koch outing according to a guest list leaked to Think Progress.org)  synonymous with the Amway brand; John Templeton Foundation (Templeton Mutual Funds).  ExxonMobil has also contributed large sums.  Virginia Thomas’ $1 million in compensation was corporate money funneled through various tax exempt foundations and then to another tax exempt foundation (Heritage) promoting free market (deregulation) benefits for those very corporations.

Yet another conflict arises through attorney Jason Torchinsky.  On May 13, 2010, a letter from Virginia Thomas was sent to the West Virginia Secretary of State on behalf of Liberty Central, enclosing the prior year’s IRS tax filing.  The letter advises the Secretary of State’s office to call Liberty Central’s attorney, Jason Torchinsky, if any additional information is needed.   Torchinsky is an attorney for the Koch-financed Americans for Prosperity.  The Federalist Society at the University of Iowa hosted Torchinsky to speak on the Citizens United decision on October 23, 2009, while the case was pending before the Supreme Court.

The Lincoln Journal Star web site reported on March 20 of this year that Torchinsky, representing Americans for Prosperity (AFP), filed a letter with the Nebraska Accountability and Disclosure Commission effectively stating that it was exempt from the state’s campaign finance laws:  “AFP’s communications are not distributed ‘in assistance of, or in opposition to, the nomination or election of a candidate.’ Rather, AFP’s communications are distributed to inform citizens of certain aspects of legislative records, cite specific pieces of legislation and discuss policy implications. A communication that merely informs citizens of a legislator’s record does not constitute ‘express advocacy,’ and does not ’assist’ or ‘oppose’ the election of a candidate.”

Jack Gould, spokesman for the Nebraska chapter of Common Cause responded: “AFP has found a way to avoid all of Nebraska’s disclosure laws…Every individual and organization has a right to speak, but big money gets to speak louder and more often. The public has a right to know who is speaking and how much money they are spending.”

Torchinsky is a law partner at Holtzman Vogel PLLC.  His fellow law partner at the firm is Tom Josefiak, a former Federal Elections Commission Chairman who was one of a group filing an Amicus in the Citizens United case.

The stench from Liberty Central wafted all the way to the State of Maine and an anti-gay marriage group in what appears to be an evolving plot to gut the remaining shreds of restrictions on corporate money in elections, including keeping all donor names secret from public view at the state level, by maneuvering this Maine case to the Supreme Court.

When Virginia Thomas filed her registration statement for her tea party group, Liberty Central, Inc., with the state of West Virginia on December 31, 2009, she listed her accountant as Neil Corkery with an address of 8665 Sudley Road, Suite 182 in Manassas , Virginia.  According to a UPS store employee located there, there is no other business located at this site; just post office boxes.  When Ms. Thomas filed her first IRS 990 form for tax year 2009, she listed her tax preparer as Conlon and Associates LLC.

What is the statistical likelihood of it being sheer coincidence that these same two names, Neil Corkery and Conlon and Associates LLC, would end up on the 2009 tax filings of the National Organization for Marriage, Inc. – a group funding repeal of same-sex marriage in Maine?

The National Organization for Marriage, Inc. was named an anti-gay group in 2010 by the Southern Poverty Law Center.  It played a pivotal role in the 2008 Proposition 8 in California, which won voter approval to invalidate same-sex marriage.  A Federal District Court struck down Proposition 8 in 2010 as an unconstitutional violation of due process and equal protection.  The matter is now under various court challenges.

The IRS 2009 tax filing for the National Organization for Marriage, Inc. shows it took in $7.1 million and made five grants totaling $2,105,000.  Stand for Marriage Maine received 93 percent of those funds, or $1,960,000.  Stand for Marriage Maine waged the successful 2009 repeal of same-sex marriage in Maine, using the same tactics and, indeed, the same ad and marketing firm that was used in the California Proposition 8 battle.

Secret donors washing money through a 501(c)(4) tax exempt organization and then funneling it to a Political Action Committee in Maine brought a request for an investigation to the Maine Commission on Governmental Ethics and Election Practices by Fred Karger, founder of Californians Against Hate.  The Commission initiated an investigation.  Stepping forward to represent both the National Organization for Marriage and Stand for Marriage Maine PAC was the law firm Bopp, Coleson & Bostrom.  In a phone call with Jonathan Wayne, Executive Director of the Maine Commission, he reports that the investigation is currently on hold as court challenges proceed.

James Bopp of Bopp, Coleson & Bostrom is the lawyer who represented Citizens United in the lower courts and, hoping to gut campaign financing reform, maneuvered the case to the U.S. Supreme Court, where former Solicitor General, Theodore Olson, was counsel of record.  Bopp also filed an Amici Curiae in the case on behalf of former members of the Federal Election Commission.

The law firm Bopp, Coleson & Bostrom is located in Terre Haute, Indiana.  What is the statistical probability of it being sheer coincidence that an Indiana law firm is involved in a nonprofit advocacy group case in Maine involving secret donors; also involved in the Citizens United case before the U.S. Supreme Court in Washington D.C. involving secret donors; and the wife of  Justice Clarence Thomas is using the same Neil Corkery and Conlon and Associates for her Tea Party nonprofit as Bopp’s anti same-sex marriage clients in the Maine case?  An email to Bopp received no response.

Even when Justice Thomas attempted to shore up his stature in his memoir, “My Grandfather’s Son,” there were unseemly conflicts.   A web site, www.MyGrandfathersSon.com, was set up by friends of the Supreme Court Justice, apparently with his permission since it includes links to purchase the book , a copy of the copyrighted cover, and a video of Justice Thomas reading the introduction to the book.  The web site instructs members of the media to direct their inquiries to Wendy Long at Judicial Network.com.  Ms. Long and her husband, Arthur Long, met while serving as law clerks for Supreme Court Justice Thomas.

At the time Long was effectively serving as a publicist for Justice Thomas, she was also serving as Chief Counsel to the Judicial Confirmation Network, now called the Judicial Crisis Network.  In that capacity, she launched a media assault against the nomination of Sonia Sotomayor for the Supreme Court.  Justice Sotomayor did go on to be confirmed and sit as a fellow Justice alongside Clarence Thomas on our Nation’s highest court, despite his book publicist’s attacks.

On May 26, 2009, Wendy Long posted the following at the National Review Online: “Judge Sotomayor is a liberal judicial activist of the first order who thinks her own personal political agenda is more important than the law as written. She thinks that judges should dictate policy, and that one’s sex, race, and ethnicity ought to affect the decisions one renders from the bench.”

The criticism seemed harsh and unseemly, especially for someone simultaneously promoting Justice Thomas.  Justice Thomas had less than two years experience as a judge when he was nominated to serve on the nation’s highest court.  Justice Sotomayor had almost 17 years, as both a U.S. District Court Judge and 2nd Circuit Appeals Court Judge.  Her academic record was impeccable – she graduated Princeton summa cum laude maintaining almost straight A’s in her junior and senior year.  In her senior year she was awarded the University’s highest academic honor, the M. Taylor Pyne Prize, according to the Daily Princetonian.

After Wendy Long left the Judicial Crisis Network, another former law clerk for Justice Thomas, Carrie Severino, took over as Chief Counsel.  Severino made the same type of media assault against the nomination of Elena Kagan to the Supreme Court.  On  August 5, 2010, Severino posted the following comment on the Judicial Crisis Network: “It came as no surprise today that the 59 seat Democratic Majority in the Senate confirmed Elena Kagan to join the Supreme Court with the hope that she will rubber stamp President Obama’s liberal agenda that they continue to impose upon the American people including government-run health care, homosexual marriage, cap and trade, and amnesty for illegal immigrants.”

The Judicial Crisis Network (JCN) has a link that invites one to view “more JCN sites.”  One of those sites is Frank-Dodd Exposed, a web site devoted to attacking Wall Street reforms.  The registrant of the web site is Bork Communications Group and the front page of the web site is simply writings by Robert Bork Jr.  Bork Communications Group describes Bork’s history as follows: “In his many years of experience managing the public environment surrounding high-risk, high-profile litigation, he has worked on behalf of CEOs and general counsel of major U.S. and international corporate clients and their lawyers.”

The web site notes that it is a “Project of the Competitive Enterprise Institute.”  Koch foundations have provided over $700,000 to this group since 1986.  ExxonMobil is also a large funder.

A call to the contact number listed on the Judicial Crisis Network took me to CRC Public Relations.  That is the same public relations firm that was employed by Virginia Thomas at Liberty Central.  I requested that Wendy Long contact me.  No response was received.

While Justice Thomas’ former law clerk was simultaneously pumping his book and bashing his future colleague, Justice Sotomayor, a division of Rupert Murdoch’s News Corp, HarperCollins, was paying Justice Thomas the decidedly round figure of $1,500,000 for book advances and royalties over a period of four years while he was a sitting judge on the Supreme Court. (Murdoch’s empire is currently on the hot seat in the U.K. for illegal hacking and bribes.)  These funds were disclosed on Justice Thomas’ federal disclosure forms but, throughout those four years, Justice Thomas stated that he had no agreements to report.  Was there no book contract?  Does a major publishing house disperse $1.5 million with no agreement?

As Common Cause pointed out to the Department of Justice in its letter of January 19, 2011, “Federal law requires any United States judge – including a Supreme Court justice – to ‘disqualify himself in any proceeding in which his impartiality might reasonably be questioned.’” 28 USC; 455(a).  Justice Thomas’ litany of conflicts raise not just impartiality concerns with the Citizens United case or future cases coming before Justice Thomas. They raise alarm bells as to cases already decided by the Supreme Court.

One such example readily comes to mind. The case was Exxon Shipping Co. et al v. Baker et al. On June 25, 2008, the U.S. Supreme Court ruled, with Justice Thomas concurring in the majority opinion, that an original $5 billion punitive damage award by a jury against Exxon for the oil tanker spill in Prince William Sound in Alaska, be reduced to $500 million.  An appellate ruling had previously reduced the award to $2.5 billion.  The ruling suggested that other corporate miscreants might need only pay the same amount in punitive damages as were paid in compensatory damages – a logic that seems to miss the point of the word “punitive.”

In Justice John Paul Stevens’ dissent, he said the original jury award should have been upheld.  “In light of Exxon’s decision to permit a lapsed alcoholic to command a supertanker carrying tens of millions of gallons of crude oil though the treacherous waters of Prince William Sound, thereby endangering all of the individuals who depended upon the sound for their livelihoods, the jury could reasonably have given expression to its ‘moral condemnation’ of Exxon’s conduct in the form of this award.”

Creating a precedent for capping punitive damage awards benefits both ExxonMobil and Koch Industries, both of which were funding the Heritage Foundation while it was issuing paychecks to Justice Thomas’ wife.  Neither fellow justices nor the public had the means of readily knowing of this conflict because the Supreme Court does not put the Justices’ financial disclosures on its web site and  Justice Thomas withheld, evading Federal law, the fact that his wife was drawing a salary from the Heritage Foundation for nine years; amending his disclosure forms in January of this year, only when the facts were exposed by watchdog groups.

Pam Martens worked on Wall Street for 21 years. She spent the last decade of her career advocating against Wall Street’s private justice system, which keeps its crimes shielded from public courtrooms.  She has been writing on public interest issues for CounterPunch since retiring in 2006.   She has no security position, long or short, in any company mentioned in this article.  She can be reached at pamk741@aol.com

Related articles by Pam Martens:

The Koch Whisperers

The Far Right’s Secret Slush Fund to Keep Fear Alive

The Koch Empire and Americans for Prosperity