Rackets Science: the Influence Peddlers Protection Act of 2015 (H.R. 2029)

Rackets Science: The Influence Peddlers Protection Act of 2015 (H.R. 2029)


1 Government by the wealthy.
2 A country or society governed in this way.

Christmastime for Plutocrats

Political scientists need a new sub-specialty to describe the end of year extravaganzas that influence peddlers and special interests have made a Capital Christmas tradition: the racket of wholesale plundering of government. Paraphrasing Willie Sutton, that’s where (the tax-farmed and public-debt) money is.

On Friday, December 18, 2015, Obama and Congress processed the plutocracy’s 2015 Christmas gift order at lightening speed. These rented politicians jump right to attention when the owners are being served.   Who said government doesn’t work? Under Obama it purrs right along smoothly, for plutocrats.

If there are Americans in need of more evidence that they live in a plutocracy, where governing is just another racket run by what Bernie Sanders calls “the billionaire class,” then the Influence Peddlers Protection Act of 2015 should provide. Technically known as the Consolidated Appropriations Act of 2016, this law almost seems like piling on after last year’s similar year-end Bonanza for Plutocrats Act of 2014 (known as CRomnibus”).   All on the same day, the House and Senate approved H.R. 2029, Obama signed it into law, and still had time left over for propaganda to make it sound like something that could plausibly be supported by one holding the middle class values that he likes to speak about.

My extensive piece last year on this subject described how Obama and a majority of Senate Democrats similarly connived to bypass ordinary legislative procedures to expedite the 2014 appropriations bill. The 2014 “CRomnibus Act” could rank as one of the most corrupt laws in United Sstates history. It increased the amount of money that plutocrats can legally give to political parties by a factor of ten. (It thereby enables plutocrats to finance, while their propaganda machine supports, the DNC “finger on the scale” effort to stop Bernie Sanders).

These large kickbacks to political parties were exchanged for the favor of making taxpayers insure casino capitalists who are poised to loose trillions in the next, inevitable, too-big-to-fail banking crisis. I wrote then: “The CRomnibus repeal of this ‘swaps push-out rule‘ to withdraw federal insurance from this particular gambling table is the most blatant of second Gilded Age economic recklessness, exceeding even such Clinton era corruption as the repeal of Glass-Steagall.”   As described in that article, Obama lobbied for and signed the 2014 Act when he could have obtained a clean appropriations bill by using his veto power, as House Democrats wanted him to do. An Appropriations Committee member summed up the quid pro quo purpose of Obama’s 2014 handiwork: “’This bill is a one-two punch at middle-class voters. It weakens financial regulation on big banks and rewards Congress for doing so by increasing campaign donation limits of big donors.”

Matt Taibbi, The Divide: American Injustice in the Age of the Wealth Gap (2014) 70, describes Congress as “enabling the transformation of the world’s biggest banks into bona fide organized crime operations” where no target large enough to be worth their trouble, such as last year’s middle class bank deposits, or this year’s government treasury, is exempt from the political corruption racket. Congress’ repeal of the swaps push-out rule, so as to give casino capitalist gamblers federal deposit insurance and other federal benefits for banks guaranteed the eventual bankruptcy of the essential New Deal reform for protecting ordinary bank depositors.

Last year’s Christmas gift for plutocrats required some slight financial understanding to foresee the threat of bail-in theft of middle class bank deposits as a result of allowing the FDIC to be used as a guarantor for Wall Street’s table stakes in the swaps markets.

But the racketeers got away clean last year without much comment. So they came back for a repeat performance in broad daylight this year. They only needed Obama’s continued support to succeed. The “mascot of the Wall Street oligarchs” did what he is paid to do, and artfully obliged. He upped his game this year by promoting his handiwork for plutocrats as a good thing, rather than just disguising his role.

Without going over the same ground again in the same detail as last year to describe what the plutocrats are up to, and how their caper works when Congress unbreaks itself momentarily for their bipartisan felony fiesta, the rules of the game for this per se illegitimate form of legislation can can be briefly stated.

Obama cuts the deal directly with the few party leaders who control the flow of money and other benefits within the party. The process is rigged to skip all the ordinary legislative steps. It is totalitarian in its nature in that it issues a virtual decree without advance notice, committee hearings, or much time for deliberation by legislators responsible to the people, let alone knowledge by the people themselves.

Special interest lobbyists with their Christmas wish lists all show up to the party at the end of the year, a week before Christmas, the very end of the work week. Their wish list gifts all get attached to an appropriations bill necessary to fund the government just prior to the date it would otherwise shut down. The whole package becomes law before the public has any opportunity to sort out the provisions on a variety of different subjects.

Congress and Obama’s now annual Influence Peddlers Protection Acts deliver their bipartisan Christmas goodies to plutocrats as if from a down-the-chimney black-box form Santa’s special gift bag for special interests, bypassing the normal legislative process where laws are supposed to use the front door.

Here’s the tick-tock: The same process used in 2014 was used again for the 2015 caper, stripping an unrelated bill of its content to use as a vehicle to be sent back over to the House for substituting, this time, two interdependent amendments: Amendment #1 titled the Consolidated Appropriations Act, 2016 and Amendment #2 titled the Protecting Americans from Tax Hikes Act of 2015, which contained tax break “extenders.”   The two amendments represented the two halves of the basic extortion deal.   One contained the tax expenditures and the other appropriations for the government to stay open. They were separate, since each amendment had different supporters. But they were joined into one bill when sent back to the Senate and on to Obama. This way Obama would have to accept both or neither, giving him the excuse again that the Republicans made him swallow the large amount of bad to get the little good in the bill. A veto would have killed both amendments.

Amending an empty bill with respect to another much lesser matter (H.R. 2029) that had already gone through whole the legislative process short of final enactment, avoided the messy journey of taking the new amendments for financing the whole government and for tax breaks through the same subcommittee and committee vetting, mark-ups and hearing process that the gutted bill took the better part of a year undergoing. Debate could be limited to 2 hours in the House, the total debate allowed for this main legislative output of Congress for the whole year. This process shuts down all discussion, debate, opposition, and public input. Lobbyists, rather an open legislative process, produce such a bill.

House Democrats voted unanimously against the resolution to adopt this summary procedure. This was a deal between Obama, the Speaker, and the Senate leaders, and eventually the House leaders, that could not be stopped by dissenters in either party. On December 18, 2015, the House sent its two amendments of the Senate’s stuffed bill back to the Senate for rubber stamping. There Bernie Sanders and a mixed group of only 6 Democrats and 26 Republicans voted against HR 2029. Among the 37 Democratic votes that provided a filibuster-proof majority for this bill to protect dark money by a margin of seven, were at least seven Democrats who complain about “unaccountable” money in politics, like Hillary Clinton does.

Thus plutocrats have turned the once-boring budget process for funding the federal government into a swift act of larceny from the taxpayers, while changing out the locks to make future larceny even easier. Lobbyists get to stuff all the presents for special interests they can pay for under their omnibus Yule tree called the Consolidated Appropriations Act, while politicians get to receive secret payments for these gifts and many more to come.

After signing the Act, President Obama conducted one of his rare press conferences to soft sell it to the public. He sought to make it all sound normal, “Just keep moving, nothing to see here.” Legislative circumvention which last year the Washington Post protested as a “caricature of the deliberative process by which Congress is supposed to approve appropriations” this year becomes, in Obama’s alternate version of reality, “typical of American democracy.”

Not content with just signing the law under his usual pretense that the Republicans made him do it – a dodge which seems to be wearing thin — this year, according to CNN, “Obama called Ryan after the vote to thank him ‘for helping government work,'” although even the Speaker was complaining about the process: “Ryan repeatedly stressed he doesn’t like rolling up all the spending bills, along with a myriad of policy provisions, into one measure.”   NYT confirms he told reporters, “You know I don’t like this process, right?” Short-cutting democratic process is Obama’s preference, designed by him to instruct the leaders what Republican policies he will not veto in order to serve Wall Street as discreetly as possible. This approach makes it easier to defraud his supporters. Obama can almost make Paul Ryan look good.

This year’s theft is more raw and comprehensible. In a nutshell the basic deal was that to support a federal budget of $1.1 trillion, Congress and Obama have awarded tax-breaks mostly for special interests in an amount that will put the government another $622 billion deeper in debt, not including the CBO-projected increase in spending over ten years of over $57 billion.   The cuts primarily benefit plutocrats though there was some window dressing – like the “small-but-symbolic tax deduction” for teachers mentioned by NYT – in order to reward some union, poverty and environmental ”non-profit industrial complex” constituencies, which they and Obama could talk up. “Just keep moving, please.”

Made simple, what Obama failed to mention is that plutocrats took more than half the amount of the whole federal budget as their price, payable in future tax expenditures, for allowing the government that they own to continue functioning. What Bernie Sanders calls the “billionaire class” has taken over a formerly public bridge by force of bribery and is now charging tolls worth half its value to keep the non-military level of it functioning for civilians another year.   An open question is whether the federal government even functions for the public as usefully as does a privatized bridge since it is now used mainly to facilitate plundering expeditions against the citizenry by its corrupt new owners.

Unlike last year, not only the company town Washington Post rushed out reportage on these last minute shenanigans. This year others also have covered this “orgy of predatory, omnivorous bipartisanship” in some detail. One piece exposed “the truth of inadequate government spending and conservative sabotage” reflected in the levels of appropriations so diminished as to undermine government missions. The general flavor of priorities was reflected in the proud report of a Republican supporter who praised the law because it: 1) “Cuts EPA funding by $452 million below the President’s budget request, holding the agency’s budget at 21% below FY10 levels;” 2) contains “funding for the DOE’s Office of Nuclear Energy at $986 million, an increase of $73 million above fiscal year 2015 and $79 million above the President’s request.” and 3) “Denies the administration’s request to retire the A-10 Thunderbolt II” which had been requested by the Air Force on cost grounds.

Steve Horn wrote an excellent piece on a major global warming provision “to end the 40-year export ban” on US petroleum, which serves the twin public policy goals of increasing the price at the pump for future American consumers with the added bonus of increasing the global temperature too.

And then, barely worth remarking in the permanent war state, there is a declaration of war hidden in there somewhere, according to Harvard expert on such things, Jack Goldsmith. “Congress is not calling its funding an authorization for the use of force against ISIL, much less debating the authorization. But make no mistake: The funding to continue the war against ISIL is an authorization of force against ISIL, albeit a quiet one, designed not to attract attention.

Who knows what else is in there seeking to avoid the disinfection effect of sunlight.”

In exchange for such favors for plutocrats in various sectors, Congress has also included some gifts for themselves while they were in the holiday mood. Like last year’s Christmastime for Wall Street exercise, politicians captured a percentage rake by the house on the gifts to plutocrats by prohibiting the forced disclosure of corporate and others’ “dark money” political investments. More dark money will produce more money for the incumbents’ who just voted for the tax giveaways and other breaks.

Michael Hiltzik described in the LA Times how, “Two provisions buried in the 2,009-page bill … emasculate efforts by the Internal Revenue Service and Securities and Exchange Commission to force public disclosure of donations by individuals and corporations.” They were so buried that Hiltzik missed a third provision, equally important, that prevents the president from using disclosure requirements for enforcing federal procurement law.

The procurement law should be used to ban independent political investments in politicians by government contractors in accordance with international best practice. Since government contractors are among the largest racketeers this alone could solve much of the problem. The long-existing FECA provision, titled “Contributions by government contractors,” prohibits contractors “directly or indirectly to make any contribution …to any person for any political purpose or use.” 52 U.S. Code § 30119(a)(1). “Dark money” independent expenditures enabled by Citizens United are mostly indirect contributions made in violation of this law. Obama has not only refused to enforce this law against these largest of corporations used by plutocrats for making political investments. “See no evil” Obama has refused to even take the most modest step of requiring such contractors to simply disclose their Citizens United expenditures as a condition of doing business with the government. This would be a “necessary and proper” enforcement tool for a law designed to foster effective governance.

There has been much agitation for Obama to use this power. Under existing law such a disclosure mandate should not violate even the Supreme Court’s most bizarre interpretations of the First Amendment to legalize influence peddling. The efficient conduct of government functions has been generally exempted from such First Amendment rulings, which would otherwise raise separation of power concerns. E.g. Wagner v. FEC (D.C. Cir. 2014) (unanimous en banc decision) (upholding constitutionality of the contractor contribution prohibition). Citizens United, 558 U.S. at 359, itself acknowledged this exception in order to accommodate the public’s “interest in allowing governmental entities to perform their functions” while it, and McCutcheon (2014), also more generally approved disclosure rules. It is just good government practice that contractors should not be funding the campaigns of politicians who both create the projects and appropriate the funds to pay the contractors.

Obama disagrees, of course.   By conniving with Congress to pass a law that makes it illegal to use any of the three tools available for him to require such disclosures, he is no longer theoretically impeachable for his failure to see that federal procurement law was faithfully executed after Citizens United. He can blame on Congress his refusal to enforce existing law by requiring disclosure of independent political investments of government contractors.   His defense is that Congress has withdrawn his power to do that, or to require disclosure of political investments by SEC-regulated corporations (i.e., most contractors), or by plutocrats who launder their political investments, corporate or otherwise, through 501(c)(4)’s in order to keep them secret.   Now, without disclosures of the dark money, Obama can see no evil that would be subject to the law he is not enforcing.

All three of these provisions blocking such disclosures are extending the perverse reach of Citizens United by a law that was approved by an overwhelming majority of Democratic Senators, and negotiated, approved, signed, and propagandized by Obama, all of whom have chanted the refrain of wanting a futile “constitutional amendment to overturn Citizens United.” These provisions, constituting a “Dark Money Promotion Act” are reproduced from the bill below.

Obama calls these provisions “American democracy” at work. When Obama goes to the trouble of personally taking his propaganda game to the public, it can be expected that the truth will be the opposite of whatever he says. Telling the truth is not what he is paid for. These provisions are in fact clear sign posts that democracy is dead in the United States where elected officials are able to get away with passing laws mandating that their formerly illegal bribe-taking and influence-peddling – now legalized by a plutocratic majority of judicial supremacists on the Supreme Court that these same officials have failed to restrain within their proper judicial powers – can now be conducted by law in secret. Ari Fleischer’s comment, “Bush’s 4th term continues” applies to more than just Guantanamo, secret renditions, indefinite detention, mass surveillance, permanent war.

Is the United States more corrupt that it was eight years ago?

The Supreme Court has constructed its “money is speech” jurisprudence since Buckley v Valeo (1976) and as recently as McCutcheon (2014) on the premise that disclosure is available as a sure remedy for corruption. This theory both demonstrated the total theoretical ignorance of the Court and was also proven wrong in lived experience as the country succumbed to systemic corruption in a disclosure regime after Buckley. Disclosure works in a system where corruption is illegal and regularly prosecuted, but has no useful function after corruption is legal or tolerated and therefore systemic as it has been after Buckley v Valeo (1976) bizarrely legalized it as “speech.”

Now that Obama and Congress have foreclosed disclosure of unlimited independent expenditures by law, not just refused to mandate it by law or administrative regulation, the whole rotten edifice of the Supreme Court’s money is speech jurisprudence now collapses around it with nothing to support it but shell game logic that somewhere in the four words “the freedom of speech” is to be found the meaning “the freedom to corrupt.”.

Self Help

An ironic note can be found in The Influence Peddlers Protection Act.   This same law in which Congress paid off plutocrats with enormous tax expenditures and other profit opportunities, and which further tightened the firm grip of plutocracy by prohibiting SEC, IRS or government procurement regulations from interfering with plutocrats’ right to keep their corrupt “dark money” political investments in politicians secret from the public (though not from the politicians who are expected to reciprocate), also happens to contain a provision that the segregationist, propagandist, warmongering Woodrow Wilson would like.   Wilson diverted attention from the lack of democracy in the Jim Crow United States by making war, he said, for democracy abroad.

It is ludicrous to think that the systemically corrupt United States, which has struggled to live up to its democratic traditions and Constitutions,could be capable, in its current second Gilded Age, of spreading democracy elsewhere in the world. But under this guise a group of beltway bandits do run businesses as contractors of USAID to do just that. These operators are as capable of recycling kickbacks to politicians who appropriate the money for these programs with the best of the military industrial complex. Actually, some of them are the MIC.

Countries where the United States has had the most influence in fashioning a new government after it caused the old one to collapse, Afghanistan and Iraq, are two of the most corrupt governments in the world according to an accepted global index.

The influence of the US is typically negative because those ultimately in charge of such programs, like Hillary Clinton was as Secretary of State, are as totally clueless about what it would take to build a democratic foreign government that is not corrupt as she is about what it would take to reform the systemic corruption of the US government. A corrupt plutocracy is what such politicians in ‘the Clinton school of economics” — who arose after Buckley v Valeo (1976) legalized corruption,” actually mean when they use the word “democracy.”

As a first-hand witness of Hillary Clinton’s specific personal responsibility for corruption in Afghanistan wrote: “If the obstacle preventing more meaningful action against abusive corruption wasn’t active U.S. complicity, it sure looked like it.” Sarah Chayes, Thieves of State: Why Corruption Threatens Global Security (2015) 147. Special Inspector General for Afghanistan Reconstruction (SIGAR), John Sopko, has exposed waste and corruption in Afghanistan notwithstanding the U.S. government’s lack of commitment to preventing it. Sopko emphasizes that corruption and the closely related problem of narcotics are “mission critical” factors jeopardizing all U.S. goals in Afghanistan. Hillary Clinton’s clueless approach to anti-corruption work, which in her own “memo entirely ignored the structured, vertically integrated nature of the corruption networks that had taken over the Afghan government,” according to Chayes, was responsible for the failed mission in Afghanistan, as it was in Iraq and wherever“terrorist” insurgency is a predictable response to systemic corruption, as Chayes observes and tried to inform the Clinton State Department.

An authority on that part of the beltway bandit democracy business that specializes in anti-corruption work captures this ignorance at the top about this kind of systemic corruption when she writes that “approaches of the anti-corruption industry diverge a full 180 degrees from the realities of [systemic] corruption with its built-in unaccountability.” Janine Weddell, Unaccountable: How Elite Power Brokers Corrupt Our Finances, Freedom, and Security (2014) 87. Albeit for programs designed to fail,   the money for the democracy programs continues to flow. The money almost certainly does more harm than good abroad, since it is directed in the opposite direction from success, as Weddell describes.

The Consolidated Appropriations Act of 2016 (H.R. 2029), Division K, Title VII ” SEC. 7032. (a) FUNDING” provides “$2,308,517,000 shall be made available for democracy programs.” It is unlikely that Congress could point to a single country which has become an authentic democracy, free of the undermining effect of corruption, as a result of these annual appropriations of billions of dollars. But were this same money spent strategically at home on reform of US corruption, the US could possibly be the first country to actually benefit from this otherwise wasted taxpayer’s largesse.

One of the insincere pieties of Obama’s first Inaugural Address was, “America has carried on … because we, the people, have remained faithful to the ideals of our forebears and true to our founding documents. So it has been; so it must be with this generation of Americans…. Our security, emanates from the justness of our cause; the force of our example.” The capacity for the United States to demonstrate a functioning democracy that were not, as it is now, systemically corrupt would unquestionably have a beneficial impact on promoting democracy around the world, far moreso than these wasted appropriations that are more likely part of the problem than part of the solution.

Congress defines the purpose of its democracy programs abroad as “development of democratic states, and institutions that are responsive and accountable to citizens.” Id. Wouldn’t Americans like to have such a state? Instead of the corrupt plutocracy that is unaccountable to voters in all important matters. It could probably be provided here for less than the price Congress spends to achieve counterproductive results abroad.

Let us then rededicate these wasted billions to the need of the United States to 1) create and robustly enforce an automated conflicts of interest reporting system for political investors, and their lobbyists and rented politicians, that would support enhanced conflicts of interest recusal requirements foreclosing all politicians from doing favors for those who pay for them; 2) convert the Patriot Act and Homeland Security budget to focus on defending against plutocracy – which has actually overthrown by means of corruption the formerly democratic government described in the Constitution – at least as robustly as it now focuses on those who would attempt to overthrow it by the highly unlikely means of violence; 3) develop a voting machine or apparatus, using publicly-owned intellectual property rights, that cannot be programmed or rigged to steal elections by deliberately miscounting the vote ; 4) host debates and other campaigning on non-plutocratic, publicly controlled airwaves (pdf), thereby reducing the major cause for the inordinate cost of political campaigns that now functions as a subsidy to a mass media propaganda system; and 5) write and enact laws that would strip jurisdiction from the Supreme Court to continue basing unconstitutional rulings the surreal proposition that “money is speech,” while restoring all the state and federal laws the Court has overturned under that flight of illogic, laws that would also create and fund the enforcement of new comprehensive prohibitions against and the robust prosecution of political corruption in all its forms.

After adopting such reforms the US could stand as a role model capable of again exporting lessons of democracy to the world. But then, the real irony is that the US government would not qualify under its own democracy program The same rules supposed to apply to Afghanistan , for example, would prohibit funding the US to recover democracy. Division K, Title VII, “SEC. 7044 (a) AFGHANISTAN … (2) (A) Provid[es], That such funds may not be obligated for any project or activity that— (i) includes the participation of any … individual or organization … involved in corrupt practices.” That rules out any government and its corrupt hangers-on in the United States which is crawling with a political class mired in “corrupt practices.”

Nor could the systemically corrupt US government be certified under SEC. 7044(a)(2)(B) requiring “Prior to the initial obligation of funds made available by this Act…the Secretary of State shall certify … (iv) the Government of Afghanistan is reducing corruption ,,,.” Ashraf Ghani’s government may well be “reducing corruption” in Afghanistan from its extraordinary level under the Karzai family, especially now that Americans are mostly gone from the country; but Barack Obama’s government would be disqualified since it has increased corruption here many fold.

As Obama said “To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history.” Perhaps a US democratic government in exile, on the right side of history, could qualify for the US democracy program appropriations.
Addendum:   “Dark Money Promotion Act” (selected provisions from Consolidated Appropriations Act, 2016) (H.R. 2029)

Division E, Title I, SEC. 107. None of the funds made available under this Act may be used by the Internal Revenue Service to target citizens of the United States for exercising any right guaranteed under the First Amendment to the Constitution of the United States.

[Translation: “right guaranteed under the First Amendment” is influence paddlers’ and their Supreme Court patrons’ lingo used euphemistically to both connote and provide protection for political corruption]

Division E, Title I, SEC. 127. During fiscal year 2016—

(1) none of the funds made available in this or any other Act may be used … to issue, revise, or finalize any regulation, revenue ruling, or other guidance not limited to a particular taxpayer relating to the standard which is used to determine whether an organization is operated exclusively for the promotion of social welfare for purposes of section 501(c)(4) of the Internal Revenue Code of 1986.

[NOTE: 501 (c)(4) nonprofit groups are allowed to spend on projects for the “promotion of social welfare,” such as say supporting Ted Cruz or Marco Rubio, with much less disclosure of their donors than is required of a campaign or political action committee. They are the prime vehicles for political “dark money.”]

Division E, Title VIII, SEC. 735. (a) None of the funds made available in this or any other Act may be used to recommend or require any entity submitting an offer for a Federal contract to disclose any of the following information as a condition of submitting the offer:

(1) Any payment consisting of a contribution, expenditure, independent expenditure, or disbursement for an electioneering communication that is made by the entity… to a candidate for election for Federal office or to a political committee, or that is otherwise made with respect to any election for Federal office.

(2) Any disbursement of funds (other than a payment described in paragraph (1)) made by the entity … to any person with the intent or the reasonable expectation that the person will use the funds to make a payment described in paragraph (1).

(b) In this section, each of the terms ‘‘contribution’’, ‘‘expenditure’’, ‘‘independent expenditure’’, ‘‘electioneering communication’’, ‘‘candidate’’, ‘‘election’’, and ‘‘Federal office’’ has the meaning given such term in the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.).


None of the funds made available by any division of this Act shall be used by the Securities and Exchange Commission to finalize, issue, or implement any rule, regulation, or order regarding the disclosure of political contributions, contributions to tax exempt organizations [e.g., 501(c)(4)’s], or dues paid to trade associations.

Division K, Title VII SEC. 7032. (a) FUNDING.— … $2,308,517,000 shall be made available for democracy programs [for]… development of democratic states, and institutions that are responsive and accountable to citizens.


Rob Hager is a public interest litigator who filed an amicus brief in the Montana sequel to Citizens United and has worked as an international consultant on anti-corruption policy and legislation.