Ears of Cornyn

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When big donors talk, Senators listen. And when the new Senate Minority Whip, Texan John Cornyn, talks, he has the full attention of Capitol Hill. In recent days Cornyn was one of three Senators to vote against John Kerry’s nomination for Secretary of State, has announced his opposition to Chuck Hagel for Secretary of Defense, sounded doubtful about immigration reform, and toed the National Rifle Association line on gun control at a Judiciary Committee hearing. None of these positions is particularly surprising for someone the National Journal once declared tied for the most conservative member of Congress.

Since his election to Congress in 2002, Cornyn, ranking minority member of the Senate Subcommittee on Energy, Natural Resources, and Infrastructure, has received nearly two million bucks from oil and gas companies. About $100,000 came from his top donor, Bass Brothers Enterprises — the Fort Worth oil family, not Eminem’s record producers. Irving-based oil and gas corporation ExxonMobil, the world’s largest company by revenue, ranked second with $84,600. Houston’s oil transporters, Kirby Corp., donated just over $50,000, as did Fort Worth-based coal- and grain-carrying railroad BNSF.

The only industry donating more to Cornyn than the energy sector was the legal sector. Among them, Dallas-based law firms Haynes and Boone and Locke, Liddel & Sapp (now Locke Lord) were Cornyn’s third and fourth largest donors; Houston’s Baker Botts was tenth; and Texas-based law firm Jackson Walker LLP was 20th.

Many of Cornyn’s donors call Texas home, or at least headquarters. San Antonio’s Zachry Construction was his seventh biggest donor, and financial corporation USAA was eighth. Also funding his campaigns were Contran Corporation (ninth), owned by conservative billionaire and superPAC superfunder Harold Simmons; Texas beer distributors L&F Distributors (11th); San Antonio radio conglomerate Clear Channel Communications (15th); Dallas home builders Centex (16th); El Paso real estate company Hunt Companies (17th); Corpus Christi’s Sam Kane Beef Processors (18th).

Rounding out Cornyn’s top twenty list are financial megafirm JPMorgan Chase (fifth); AT&T (sixth), the third-largest company in Texas; Pentagon sweetheart Lockheed Martin (14th); and accounting giant Ernst & Young (19th).

Cornyn will undoubtedly feature prominently in February’s budget negotiations. He took a starring role during the January debt ceiling showdown, and already this month he’s looked into the “Galveston Plan” for privatizing Social Security.

Mitch’s scratch

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Who really runs the Senate? When Majority Leader Harry Reid abandoned filibuster reform last week, he negotiated the Democrats’ surrender with the Minority Leader, Republican Mitch McConnell. Ezra Klein of the Washington Post reported:

A pro-reform aide I spoke to was agog. “Right now, you have to negotiate with McConnell to get on a bill,” he said. “Tomorrow, if this passes, you still need to negotiate with McConnell to get on a bill. It changes nothing on how we move forward.”

Frequently cited in recent years by Citizens for Responsibility and Ethics in Washington (CREW) as one of the most corrupt people in Congress, McConnell will therefore remain a crucial actor in the upcoming battles over the budget and other legislation. Beyond that, because of the lack of filibuster reform, he will essentially have a veto over judicial and regulatory nominees. As Salon‘s Alex Pareene wrote Monday:

Senate Majority Leader Harry Reid spent a few weeks pretending he was on the side of the reformers and then cut a deal with Mitch McConnell that keeps the filibuster in place effectively unchanged. Then, as always, everyone congratulated themselves for some effective and successful worthless deal-making. (And Senate Republicans patted themselves on the back for winning.)

It is almost too perfect that this useless “compromise” happened right before the NLRB decision that granted the Senate minority the ability to stop regulatory agencies they don’t like from functioning entirely….

So who gives Mitch his moolah? The Senator, an ardent foe of campaign finance reform, has received a fair amount of money from in-state businesses. His top donors are Louisville-based health care companies Kindred Healthcare and Humana, chewing tobacco manufacturer UST along with its parent company Altria (formerly Philip Morris Companies), and Louisville’s Brown-Forman, maker of Jack Daniel’s whiskey, Southern Comfort and other alcoholic brands. Other Kentucky contributors include Ashland, Inc., makers of Valvoline (12th); Memphis-based FedEx (14th); and United Parcel Service (19th), which runs its own Louisville airline and which benefitted from earmarks McConnell rewrote after being lobbied by his former chief of staff, Hunter Bates.

Securities and investment firms are McConnell’s major industry donor. These include Swiss bankers UBS, financial megafirms Citigroup and JPMorgan Chase, and hedge funds vultures Elliott Management; Capital One Financial, FMR LLC (Fidelity Investments), and private equity firm Welsh, Carson, Anderson & Stowe also ranked among McConnell’s top twenty donors.

Rounding out the Senator’s top twenty: coal behemoth Peabody Energy (sixth); telcom multinational AT&T (tenth); the third largest company in the world, General Electric (11th); insurance giant Blue Cross Blue Shield (15th); rail transport firm CSX (17th); and the world’s biggest advertiser WPP (18th).

Durbin myths

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He’s a legendary lefty in the Senate — or what passes for one these days. Yet two years ago, Senate Majority Whip Dick Durbin voted in favor of the Bowles-Simpson proposal. Last November, calling the Illinois Democrat a “liberal hero”, Kevin Drum of Mother Jones trumpeted Durbin’s proposal for a new commission to cut Social Security. And just last weekend the Senator became chair of the Defense Appropriations Subcommittee, putting him in a highly influential position as Congress and the Administration negotiate (and try to avoid) scheduled defense cuts. In all three cases, Durbin echoes President Obama’s yearning for “balanced” deficit reduction — or “shared sacrifice”, as the nation’s budgetary high priests refer to it.

Considering the outsized influence the senator will have on the budget process in the coming months, I decided to check out who his major campaign donors have been. Durbin, who serves on the Judiciary Committee, received over four million dollars in campaign donations from lawyers and law firms since 1989, according to OpenSecrets.org. Durbin’s top donors, Illinois law firms Kirkland & Ellis and Simmons Cooper LLC each donated an eighth of a million. Chicago trial lawyers Corboy & Demetrio, Jenner & Block, Mayer Brown, Clifford Law Offices, and corporate law firm Sidley Austin each donated $66,000 — $77,000, while Boston law fim Thornton Naumes gave him $59,500.

Durbin sits as well on the Transportation Subcommittee, which has oversight over the Federal Aviation Administration and the National Transportation Safety Board. Perhaps coincidentally, his third and fourth largest donors were American Airlines parent company the AMR Corporation and United Continental Holdings, which owns United Airlines.

Durbin’s also a member of the Labor, Health and Human Services, and Education Subcommittee, and unions make up another large contingent of his donors. Workers for the State of Illinois gave him nearly $80,000, while about $60,000 each came from the National Education Association (his 13th largest donor), the Air Line Pilots Association (14th), the Laborers’ Union (19th), and the United Transportation Union (20th).

Other large donors include the Chicago Board of Trade commodities market (ninth), gargantuan agribusiness corporation Archer Daniels Midland of Decatur (12th), telecom multinational AT&T (15th), financial octopus Citigroup (17th), and the WPP Group, the world’s largest advertisers (18th). Investment groups, second only to law firms in his industry donor list, gave the Appropriations Committee member over a million bucks altogether.

As chair of the Defense Appropriations Subcommittee, Durbin will exercise control over half the nation’s discretionary budget. He’ll be choosing what and whom to sacrifice — and whether to run for re-election in 2014, in which case he’ll need to keep in his donors’ good graces. According to Chicago’s Greg Hinz, Durbin said in November:

“I’m planning to run for re-election, but I haven’t made a final decision,” the Illinois Democrat told me in a phone interview late yesterday. Asked whether that means he’s leaning in favor or merely keeping his options open, he declined to elaborate, though he suggested his decision would come within “a few months.”

Schumer: Chuck’s bucks

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The squeeze is on — for the elderly, not for Wall Street. Calling for a joint House-Senate budget resolution to implement tax hikes and spending cuts, Senator Chuck Schumer floated a trial balloon in The Hill last Wednesday detailing Democratic strategy in ongoing budget negotiations designed to avoid the massive funding cuts (sequestration) scheduled for March first. Although he later clarified that he didn’t support enacting cuts to Social Security or Medicare in this particular resolution, he left open their inclusion and didn’t rule out voting for them as part of a compromise.

Schumer, the New Yorker who sits on the powerful Finance, Banking, and Judiciary Committees, obtains the lion’s share of his campaign war chest from investment firms and lawyers, raking in over 15 million dollars from them since 1989. His four top donors are the financial leviathans Goldman Sachs, Citigroup, Morgan Stanley, and JPMorgan Chase. Swiss banks Credit Suisse and UBS AG ranked sixth and seventh, while failed investment banks Bear Sterns and Lehman Brothers came in eighth and ninth. Merrill Lynch, consumed during the 2008 financial crisis by Bank of America, took the number ten spot. Accounting firms Ernst & Young and Deloitte were Schumer’s tenth and eleventh largest donors; insurance giants MetLife and New York Life were 18th and 19th. Investment firm Cantor Fitzgerald was 20th.

As a member of the Senate Banking Committee, Schumer gets more campaign funds from financial firms than any other industry. As a member of the Judiciary Committee, his second largest source of money is from law firms. Corporate lawyers Paul, Weiss, Rifkind, Wharton & Garrison (his 5th largest donor), investment lawyers Schulte, Roth & Zabel (13th), mergers and acquisitions stars Sullivan & Cromwell (15th), and litigators Kasowitz, Benson, Torres & Friedman (16th) combined gave Schumer over $800,000. Other major donors include media conglomerate Time Warner (14th) and real estate firm Newmark Knight Frank (17th).

Schumer fervently supported repeal of the Glass-Steagall Act the Depression-Era law which regulated financial firms and whose evisceration led to the 2008 financial meltdown. When the crisis hit, the Senator fought hard to protect his Wall Street donors. According to a New York Times article published in December of 2008:

Other lawmakers took the lead on efforts like deregulating the complicated financial instruments called derivatives, which are widely seen as catalysts to the crisis.

But Mr. Schumer, a member of the Banking and Finance Committees, repeatedly took other steps to protect industry players from government oversight and tougher rules, a review of his record shows. Over the years, he has also helped save financial institutions billions of dollars in higher taxes or fees.

He succeeded in limiting efforts to regulate credit-rating agencies, for example, sponsored legislation that cut fees paid by Wall Street firms to finance government oversight, pushed to allow banks to have lower capital reserves and called for the revision of regulations to make corporations’ balance sheets more transparent.

“Since the financial meltdown, people have been asking, ‘Where was Congress? Why didn’t they see this coming? Why didn’t they provide better oversight?’ ” said Barbara Roper, director of investor protection for the Consumer Federation of America. “And the answer for some, including Senator Schumer, is that they were actually too busy pursuing a deregulatory agenda. Their focus was on how we have to lighten up regulation on Wall Street.”

Now Schumer will be in the vanguard of budget negotiations, which the White House seeks to have include “entitlement reform”, a euphemism for cuts to Social Security, Medicare and Medicaid. Given his history and his donor network, we can look for more gutting of New Deal legislation under Schumer’s leadership.

Reid ’em and weep

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Democrats fold with winning hands; they must consider it fine strategy. On Thursday, Senate Majority Leader Harry Reid, facing an ever-more-obstructionist Republican minority, tossed away any chance for substantial filibuster reform in this session. This maintains the anti-majoritarian balance of power in the chamber just as the Senators begin formally negotiating agreements on the crippling budget sequester scheduled for March first, the debt ceiling extension due by May, and the 2014 federal budget. In preparation for these battles, I decided to examine Reid’s official campaign finance records.

Casinos and other gambling enterprises led the pack in donating to Reid, who once chaired the Nevada Gaming Commission. MGM Resorts International (formerly MGM Mirage), the world’s second-largest gaming company, has given the Nevadan nearly a half-million dollars since 1989. Caesars Entertainment (formerly Harrah’s) and its owners Apollo Global Management pitched him nearly a quarter million, making them his third-biggest donor. Other betting establishments Reid raked in funds from were Station Casinos (his sixth largest donor) and Boyd Gaming (tenth). One might be tempted to call financial firms like JPMorgan Chase (15th) and Pete Peterson‘s Blackstone Group (18th) gambling enterprises as well — were their losses not likely to be covered by government bailouts.

Harry Reid’s major source of campaign funds, however, is the legal industry, from which he’s collected nearly six million dollars over his career so far. Mesothelioma (asbestos-related cancer) lawyers, including Simmons Cooper LLC (his second largest donor; now simply Simmons Law Firm), Weitz and Luxenburg (fifth), Baron & Budd (eighth), Waters & Kraus (17th), and the Law Offies of Peter G. Angelos (20th) together contributed about half a million bucks; trial lawyers Girardi Keese (seventh) and Lionel, Sawyer & Collins for which the Senator’s son Rory works (ninth), each gave Reid $100,000 or so; and the major DC corporate law firm Akin, Gump, Strauss, Hauer & Feld (14th) pitched in $86,000.

He also accepted substantial donations from Nevada corporations such as the electronics firm Sierra Nevada Corporation (11th) and gold diggers Newmont Mining (12th), and from the telecommunications giant AT&T (13th).

Cash and Kerry

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Senator John Kerry looks to be windsurfing to his new post as Secretary of State. The 194 million dollar man faced a very friendly panel of his fellow plutocrats yesterday as he spoke before the Senate Foreign Relations Committee, which he himself chairs. And he had money on his mind. He cited reducing the US budget deficit as the primary goal of his tenure, as reported by CBS News,

“Because while it’s often said that we can’t be strong at home if we’re not strong in the world, in these days of fiscal crisis, and as a recovering member of the supercommittee, I am especially cognizant of the fact that we can’t be strong in the world unless we’re strong at home. And the first priority of business, which will affect my credibility as a diplomat working to help other countries create order, the first priority is whether America at last puts its own fiscal house in order.”

His deficit mania, though far from uncommon in DC, may well be fueled by his close ties to banking and investment firms, as evidenced by the donations he’s taken over his Senate career. Goldman Sachs (his fourth largest donor), Citigroup (fifth), Switzerland’s UBS (11th), JPMorgan Chase (15th), and Morgan Stanley (17th) altogether have poured more than a million dollars into his campaign coffers. Media corporations that push the austerity storyline also contribute heavily to Kerry: Time Warner (his third largest donor), Viacom (13th), and General Electric (20th) together gave him over three-quarters of a million dollars, while advertising juggernaut Interpublic Group, which paid no taxes from 2008-2010 (and in fact got $15 million in tax rebates) tossed him over $200,000.

Law firms gave heavily to this powerful legislator. During his tenure, Kerry received a third of a million from Wall Street’s most powerful law firm, Skadden, Arps, Slate, Meagher & Flom; another third from WilmerHale; and yet another third from Boston’s Mintz Levin. DLA Piper, the world’s largest law firm, donated nearly $300,000 to him; Minnesota’s litigation-centered Robins, Kaplan, Milller & Ciresi put up almost a quarter million.

Kerry’s foremost donors are educational institutions: his top donor is the University of California (two-thirds of a million dollars); second-highest is Harvard ($463,000). Stanford University gave him just over $200,000 since 1989. Computing colossi Microsoft (his eighth largest donor) and IBM (19th) also chipped in hundreds of thousands.

Despite Kerry’s focus on deficit reduction and his Wall Street ties, the majority of his Senate hearings will likely focus on foreign policy. As spokesman for the Obama Administration, Kerry talked up the unsubstantiated threat of a nuclear Iran, predicted regime change in Syria, and urged much closer involvement in Africa to counter Chinese interests. He also touted corporate solutions to the climate crisis:

Where Kerry was most passionate was on the issue of climate change, calling it a “life-threatening issue.”

“The solution to climate change is energy policy,” he said. “You want to do business and do it well in America, we got to get into the energy race.” He cited Massachusetts, where alternative energy is “growing faster than any other sector. . . . This is a job creator.”

“I will be a passionate advocate for this,” he added, “not based on ideology but facts.”

Haggling for Hagel

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Where there’s war there’s money. With his nomination for Secretary of Defense soon to come before the Senate, former Nebraska Senator Chuck Hagel can anticipate plenty of questions about his views on foreign policy. He made enemies on the neoconservative right by criticizing George W. Bush’s handling of the second Iraq War (though Hagel supported the invasion initially), his calls for direct negotiations with Iran and Hamas, and his mild demurrals from full-throated backing of Israeli leaders. Likely because of this reaction, and because President Obama backs him, liberal resistance to his nomination has been light. So far as I know, the Senate is not expected to examine his domestic record with much vigor. However, given his role on the Senate’s Committee on Banking, Housing, and Urban Affairs in the run-up to the 2008 financial crisis, a review of his major donors suggests at least a few questions are warranted.

A visit to OpenSecrets.org quickly provides a list of Hagel’s major campaign donors over his tenure. Most of them are either Nebraska-based, financial, or both. Top donor to Hagel was the Kiewit Corporation, an Omaha-based construction and mining company, one of the world’s largest contractors. Next were Citigroup, a natural for the former president of an investment bank (Omaha’s McCarthy Group), and insurance/financial services titan Mutual of Omaha. Rounding out the top five were Omaha’s Union Pacific Corporation, centering on the railroad industry, while California-based Edison International‘s subsidiary, the Edison Mission Group, has multiple contracts building and running wind farms in Nebraska.

Bank of America brokerage Merrill Lynch, insurance giant AIG, and investment bankers Goldman Sachs and JPMorgan Chase all gave significant amounts to Hagel, as did the largest privately-held bank in the country, First National Bank of Omaha. Other financial groups contributing to Hagel, a member of the Subcommittee on Securities, Insurance and Investment and the Subcommittee on Financial Institutions were the American Bankers Association, the National Association of Insurance & Financial Advisors (a political action committee) and Omaha investors the America First Companies.

ConAgra Foods, Omaha’s food packaging giant, energy companies like coal miners Murray Energy and oil and natural gas behemoth ExxonMobil, and communications corporations Level 3 Communications, a subsidiary of Kiewit during Hagel’s tenure, and Huntel Systems (of Blair, Nebraska) all gave to Hagel, as did pharma fixture GlaxoSmithKline and the American Medical Association.

Overall, Hagel received donations of more than a million dollars from the insurance, securities and investment, and commercial banking industries. Nor has Hagel left his banking and investment background behind after leaving the Senate. According to Wikipedia:

In the private sector, he serves on the board of directors of Chevron Corporation, Deutsche Bank’s Americas Advisory Board, and the advisory board of Corsair Capital, and is a director of the Zurich Holding Company of America and a senior advisor to McCarthy Capital Corporation.

It’s not surprising that an Administration as Wall Street-friendly as Obama’s would choose a man with close ties to finance like Hagel, particularly to head the largest employer in the world, the US Department of Defense. He’ll control half the federal discretionary budget and decide whose contracts get cut and whose remain. Instead of focusing entirely on foreign policy controversies, watchdogs would be wise to follow the money domestically as well.