Brown’s gold

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“You can bank on it.” Once that meant reliable, trustworthy. After the financial crisis and near collapse of 2008, who knows? There are efforts afoot in Congress to restore oversight to a criminally risky financial sector, though whether they have the Obama Administration’s blessing remains questionable. One of the foremost proponents of re-regulation is Senator Sherrod Brown. As Bloomberg‘s Craig Torres and Cheyenne Hopkins recently reported:

“‘[T]oo big to fail’ banks are also too big to manage and too big to regulate,” Brown, an Ohio Democrat, said in a Jan. 22 e-mail. “The question is no longer about whether these megabanks should be restructured, but how we should do it.”

Brown and fellow Banking Committee member David Vitter, a Louisiana Republican, are considering legislation that would impose capital levels on the largest banks higher than those agreed to by the Basel Committee on Banking Supervision and the Financial Stability Board, which set global standards. Brown also plans to reintroduce a bill he failed to get included in Dodd-Frank or passed in the last Congress that would cap bank size and limit non-deposit liabilities.

Given his seats on the Banking and the Finance Committees, it’s worthwhile to look at who Brown’s most prominent contributors are. Interestingly, none of the investment banks who feature prominently on many other Senators’ lists make his top twenty (though he has received $2.7 million from the combined areas of finance, insurance and real estate.)

Several of Brown’s biggest donors come from his home state of Ohio. Cleveland-based real estate developers Forest City Enterprises topped Brown’s list, contributing nearly an eighth of a million dollars since 1992; and both Ohio State University (fifth) in Columbus and Akron electric utility FirstEnergy (20th) made significant contributions to Brown’s campaigns.

Brown also rakes in a lot of donations from Ohio lawyers; the legal industry gives more to the Senator — over three million bucks so far — than any other group. Along with trial lawyers’ lobbying organization the American Association for Justice (fourth), Brown received significant donations from Sandusky, Ohio, personal injury lawyers Murray & Murray (seventh); Cleveland business law firms Kohrman Jackson & Krantz (ninth) and Squire Sanders (12th); and Columbus lobbyists Vorys, Sater, Seymour and Pease (17th).

Nationally, labor unions work hard to fill Brown’s campaign war chest. The Senator has rung up nearly an eighth of a million from his second largest donor, the Communication Workers of America, which represents telephone company employees. He’s also received copious contributions from the International Brotherhood of Electrical Workers (sixth); the International Association of Machinists and Aerospace Workers (eighth); public employees’ union AFSCME (tenth); and the United Auto Workers (13th).

Health professionals provided more money to Brown than any industry save lawyers. He’s received a helping hand from manufacturers of wheelchairs and walkers Invacare (third); the American Academy of Ophthalmology (14th); world-famous hospital the Cleveland Clinic (15th); professional organization the American Hospital Association (16th); and the American Society of Cataract and Refractive Surgery (18th).

Completing Brown’s top twenty list are accounting heavyweights Deloitte (11th) and arms control advocates the Council for a Livable World (19th).

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Caricature of Sherrod Brown by DonkeyHotey.

Hatch’s plans

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How can the government squeeze more money out of the elderly? Raise the Medicare eligibility age, privatize the program, and block grant Medicaid, suggests Senator Orrin Hatch (R-Utah). Sound familiar? It’s essentially the Clinton-Gingrich pact from 1997 that only fell apart because of the President’s blow job. Now, with another conservative Democrat in the White House and Republican in the Speaker’s chair, the plan’s being floated again.

As Shamus Cooke of Global Research wrote today:

The main reason that health care reform became a national priority for Obama is because it was a priority for big business: corporations have long complained that their employee health care costs were too high. And they’ve always hated paying payroll taxes for Social Security and Medicare. Obama has responded gallantly to these grievances, as he did to the banks when they demanded to be bailed out with taxpayer money.

Obama has remained mostly quiet about his Medicare plans, but has stated repeatedly ” all options are on the table” (his favorite Bushism). The secretiveness is based on the unpopularity of the options, all of which have already been openly discussed in the media in the last two years of bi-partisan “Grand Bargain” haggling.

Orrin Hatch, as the ranking minority member of the Senate Finance Committee, will play a central role in the budget kabuki this month and afterward. In preparation, I’ve taken a look at Hatch’s top twenty career donors from OpenSecrets.org.

Many of the Senator’s contributions come from the pharmaceutical and health care industries. His top donor, giving him over $110,000 since 1989, was health insurance behemoth Blue Cross Blue Shield. Supplemental health insurance company Aflac (fourth) contributed $82,000. The world’s largest pharmaceutical company, Pfizer, came in third. Competitors GlaxoSmithKline and Eli Lilly were fifth and sixth. Pharma multinational Amgen (ninth); kidney dialysis supply company Fresenius Medical Care (12th); rehabilitative hospital operators HealthSouth (15th); and Schering-Plough (17th), now merged with Merck & Co.

Two of Hatch’s top twenty donors have specific Utah ties: O. C. Tanner (seventh), a Salt Lake City human resources company; Provo-based direct-sales supplement marketers Nu Skin Enterprises (20th).

The rest of the Senator’s list contains an amalgam of wealthy corporations. Cerberus Capital Management, an investment firm, ranked second with $106,500. Also contributing significant amounts were hotel franchisor Marriott International (eighth); London advertising giant WPP (tenth); telecom multinational AT&T (11th); computer company Oracle (13th); supermajor oil and gas corporation Chevron (14th); the sixth-largest firm in the US, conglomerate General Electric (16th); accounting powerhouse Ernst & Young (18th); and international law firm Akin Gump Strauss Hauer & Feld (19th).

Jessica Zigmond of Modern Healthcare reports the roles Obama and Hatch have chosen — and that both wish to champion “entitlement reform”, and are only haggling over what form those cuts will take.

The president reiterated his view that the ideal way to reduce the deficit is through a deal that includes both spending cuts and tax reform. And if Congress can’t agree on a larger deal by March 1, Obama added, lawmakers should pass a smaller package of spending cuts and tax reforms that would also further delay the sequester for a few more months.

“I’ve offered sensible reforms to Medicare and other entitlements, and my healthcare proposals achieve the same amount of savings by the beginning of the next decade as the reforms that have been proposed by the bipartisan Bowles-Simpson fiscal commission,” the president said.

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Sen. Orrin Hatch (R-Utah), ranking member on the influential Senate Finance Committee…. chastised the president’s plan to delay the looming sequester.

“When it comes to our debt, we need to focus on structural entitlement reforms,” Hatch said in a statement.

The gospel of Marco

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Call them Time-savers. On the cover of this week’s edition, the national magazine names Senator Marco Rubio “The Republican Savior” — though at this time last February Time‘s editorial board was looking to Mario Monti, who resigned as Prime Minister in December, to save Europe. (His spot in the magazine’s pantheon was taken in January by fellow Italian Mario Draghi, the current president of the European Central Bank.)

The Florida Senator has been chosen to give the rebuttal to President Obama’s State of the Union speech next Tuesday, and will do so in both English and Spanish. Rubio, who is young and Hispanic, seems to have his eye on running for president in 2016 as the head of a rebranded Republican Party. He’s likely to push immigration reform, a position favored by the party’s corporate establishment but reviled by its base. Beyond that, Minority Leader Mitch McConnell says, expect boilerplate Republican positions:

“Marco’s own experience as the child of immigrants has always informed his belief in limited government and free enterprise, which is why he has helped lead the fight against out-of-control spending and job-destroying tax hikes that continue to hold our economy back and stifle opportunity for millions. He was a natural choice to deliver the Republicans’ alternative to the administration’s reliance on government and debt.”

His campaign funds, however, have come from the usual sources. Private organizations with a Republican/conservative bent poured money into his 2010 Senate campaign; after retirees, they were his second largest source of funds. Of these groups, the top individual contributor, giving nearly $360,000, was the tax-cut focused Club for Growth, a 501(c)4 group (a tax-exempt organization that can lobby and campaign but isn’t required to reveal its donors.) Ex-Senator Jim DeMint’s Senate Conservatives Fund, another Tea Party-associated political action committee, came in third on Rubio’s list. Two wealthy conservative families also made the rankings: Crow Holdings (eighth), which manages the estate of late Dallas billionaire Trammell Crow, and Koch Industries (ninth), run by the billionaire Koch brothers.

Rubio also received big bucks from the finance sector, often from corporate raiders. “Vulture” hedge fund holding company Elliott Management, Rubio’s second largest individual donor, pitched him $121,000. Rubio received $85,800 from multinational investment bankers Goldman Sachs (fourth), while insurance and financial services firm State Farm (seventh) tossed in $36,000. Leveraged buyout specialists Kohlberg Kravis Roberts & Co. (KKR & Co.) (sixth) and Boca Raton’s Sun Capital Partners (13th) appeared on his list, as did LBO master Harold Simmons’s Contran Corporation (17th) and Affiliated Managers Group (19th), another hedge fund company.

Many of the Florida Senator’s contributors were located in the Sunshine State, or at least had headquarters there. These included Palm Beach sugar company Florida Crystals (fifth); Miami construction firm MCM Corporation (11th); Boca Raton’s GEO Group (12th), providing jails and other detention facilities worldwide; Juno Beach electric utility company NextEra Energy (14th); Jacksonville real estate developers Demetree Brothers (15th) and railroad company CSX Corporation (16th); Clewiston sugar company Hilliard Brothers of Florida (18th); and Sumter County retirement community The Villages (20th).

Also in Rubio’s top twenty was the world’s largest advertising company, the WPP Group (tenth).

Beaucoup bucks for Baucus

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Money doesn’t simply talk in Washington, DC — it whispers in the ears of the powerful and it silences all opposition. The recent career of Max Baucus (D-Montana), top-ranking Democrat on the Senate Finance Committee since 2001, provides a case in point. As Dustin Hurst of the conservative watchdog.org reported just last month:

[T]he Washington Examiner’s Tim Carney detailed how more than $60 billion in corporate handouts found their way into the fiscal cliff bill. The handouts were copy-and-pasted by the White House into the bill, using the Baucus-created Family and Business Tax Cut Certainty Act of 2012 as the blueprint.

Things only grew worse for Baucus when Carney dug even deeper, finding that the multinational corporations benefiting from the handouts, known in Washington-speak as “tax extenders,” employ a number of the senator’s former staffers who’ve left public service for greener pastures.

Baucus, the Finance Committee’s current chairman, has collected over five and a half million dollars during the course of his career from the finance, insurance and real estate sector. Baucus’s top donor therein, tossing him nearly $100,000 since 1989, was financial titan Goldman Sachs. American International Group (AIG), which the Federal Reserve bailed out during the financial crisis of 2008, pitched the Senator $91,000, putting it in third place; on the other hand, New York Life Insurance Company, which ranks second on his donor list, declined TARP funds. JPMorgan Chase (sixth), whose two trillion dollars in assets make it the largest bank in the country, donated just over $75,000 to the Senator; its daughter corporation, Morgan Stanley (tenth), gave slightly under that amount. Citigroup (11th) and Wells Fargo (12th), two of the other Big Four US banks, each contributed a little over $70,000 to the Montanan. American Express (16th) and Prudential Financial (17th) tossed in about $60,000 as well.

His second largest source of funds, the health sector, has produced nearly four million bucks for his campaigns. This includes health insurance megafirms Blue Cross Blue Shield (fourth) and Aetna (fifth), which put in over $80,000 apiece, as well as Kindred Healthcare at 19th. Pharmaceutical company Schering-Plough, which merged with Merck in 2009, ranked eighth, while pharmacy claims processor Express Scripts was 13th. Kidney dialysis company DaVita made it to 15th; biotech firm Amgen, which will sell its dialysis drug Sensipar to Medicare for up to half a billion dollars more (due to a paragraph Baucus helped insert into January’s “fiscal cliff” agreement) ranked 20th with $55,750.

What influence did these health care and insurance companies gain for their donations? As observers of negotiations over what’s now called Obamacare may recall, and as Wikipedia summarizes:

As chairman of the Senate Finance Committee, Baucus called the first Senate meeting of interested parties before the committee to discuss health care reform, including representatives from pharmaceutical groups, insurance companies, and HMOs and hospital management companies. The meeting was controversial because it did not include representatives from groups calling for single-payer health care.

The Washington Post‘s Dan Eggen reported at the time (July 21, 2009):

As his committee has taken center stage in the battle over health-care reform, Chairman Baucus (D-Mont.) has emerged as a leading recipient of Senate campaign contributions from the hospitals, insurers and other medical interest groups hoping to shape the legislation to their advantage. Health-related companies and their employees gave Baucus’s political committees nearly $1.5 million in 2007 and 2008, when he began holding hearings and making preparations for this year’s reform debate.

Top health executives and lobbyists have continued to flock to the senator’s often extravagant fundraising events in recent months. During a Senate break in late June, for example, Baucus held his 10th annual fly-fishing and golfing weekend in Big Sky, Mont., for a minimum donation of $2,500. Later this month comes “Camp Baucus,” a “trip for the whole family” that adds horseback riding and hiking to the list of activities.

To avoid any appearance of favoritism, his aides say, Baucus quietly began refusing contributions from health-care political action committees after June 1. But the policy does not apply to lobbyists or corporate executives, who continued to make donations, disclosure records show.

Other major contributors to Baucus over his career so far include: accounting giant Ernst & Young (sixth); international law firm Akin Gump Strauss Hauer & Feld (ninth); multinational conglomerate General Electric (14th); and telecom Verizon (18th).

Raising McCain’s funds

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Cheap labor means big profits for capitalists. In his book Moving Millions: How Coyote Capitalism Fuels Global Immigration, Jeffrey Kaye writes:

The pursuit of business-friendly immigration policies has been a priority for companies that have come to rely on immigrant work forces…. The immigration laws they favor would have the effect of providing a cheap disposable compliant labor force by authorizing additional work visas. They would like the current illegal workforce legalized and, beyond gathering paperwork and consulting computer records, employers do not want to be held responsible for hiring immigration workers with the wrong identification documents….

And few Senators are as beloved by investors as John McCain of Arizona; ten of McCain’s top dozen career donors are financial firms. Leading the pack is Merrill Lynch, the world’s largest brokerage, now an extension of Bank of America, which separately was his eleventh largest donor. Citigroup and JPMorgan Chase, two of the other Big Four US banks, rank second and third in contributions to the Senator. Goldman Sachs (fifth) and Morgan Stanley (sixth) each provided McCain with roughly a third of a million dollars since 1989, while Swiss banks UBS AG (eighth) and Credit Suisse (tenth) pitched him about a quarter million apiece. Wachovia, which has since merged into Wells Fargo, ranked 12th with just over $200,000.

Humongous multinationals AT&T (his fourth largest contributor), FedEx (13th), PricewaterhouseCoopers (14th), and General Electric (18th) all tossed him money, as did one-time telecommunications giant Qwest (19th). Members of the US Government (seventh) have donated over a quarter million dollars, and those of the US Army (15th) gave the ranking member of the Committee on Armed Services just under $200,000. Pinnacle West Capital (ninth), Arizona’s largest electric utility, has given McCain $223,000 over the years.

Global law firms Gibson, Dunn & Crutcher (16th), Blank Rome (17th), and Greenberg Traurig (20th) fill out his top-twenty list. Securities and investment groups and the legal industry are two of McCain’s three largest overall contributors. (By far, retired people make up his biggest donor base, giving him more than $37 million over his political career.)

As a new immigration bill moves through Congress, it should not be surprising that two of its foremost proponents, Republican McCain and Senate Democrat Chuck Schumer, count financial firms as major sources of their campaign funds. Enthusiastic backing by big business means bipartisan support among the establishment in Congress. Writes Daniel Strauss in The Hill:

Sens. Charles Schumer (D-N.Y.) and John McCain (R-Ariz.) both predicted that immigration reform legislation would ultimately win significant support among both Democrats and Republicans — and pass the Senate and then the House.

“I think it could take three, four weeks,” Schumer said Wednesday at an event sponsored by Politico.