Money in politics, then and now

While rummaging around in the archives at the Montana Historical Society yesterday I came across a Nov. 1978 headline in the Great Falls Tribune that caught my attention:

The 1978 headline juxtaposed with what I watched last night on Montana PBS was a stark reminder of money’s dramatic influence our politics today .

If you didn’t watch the Frontline/Marketplace special “Big Sky, Big Money,” do yourself a favor and do it now. You can see first hand how third party groups, SuperPACs, and shadowy tax-exempt 501(c)(4) “dark money” groups are trying to influence the outcomes our elections here in Montana while hiding from public view the identity of those trying to influence us. It’s a sobering exposé of  post-Citizens United Montana and the group whose lawsuit reaffirmed the controversial Supreme Court decision and tossed out our 100-year-old Corrupt Practices Act in the process.  Watch it here or go to Frontline’s excellent website for more interactive features about money in politics:

Watch Big Sky, Big Money on PBS. See more from FRONTLINE.

Montana State University political science professor David Parker is featured in the program. Parker says outside groups spent $6.8 million on the Montana Senate race through June alone.

According to Great Falls Tribune Washington bureau reporter Malia Rulon, during the first three weeks of October, Montanans were subjected to 25,211 political ads about the race between Democratic Sen. Jon Tester and his Republican challenger, Rep. Denny Rehberg. During that three-week period, groups spent $3.27 million.

So in 1978 Democrat Max Baucus’ and Republican Larry Williams’ campaigns combined spent less than $1 million on the Senate race and in 2012 the campaigns and third-party groups, many of whom are funded by secret donors and corporations, spent more than three times as much in a three-week period alone.

“2012 will go down as a record-pulverizing year for political advertising,” said Erika Franklin Fowler, co-director of the Wesleyan Media Project.

The future of American politics post-Citizens United is here folks. Like what you see?

What everyone’s talking about: Big Sky, Big Money

In case you haven’t seen it yet, this ProPublica/Frontline report investigating the shadowy “dark money” group American Tradition Partnership is causing quite a stir in Big Sky Country this morning (emphases mine):

The boxes landed in the office of Montana investigators in March 2011.

Found in a meth house in Colorado, they were somewhat of a mystery, holding files on 23 conservative candidates in state races in Montana. They were filled with candidate surveys and mailers that said they were paid for by campaigns, and fliers and bank records from outside spending groups. One folder was labeled "Montana $ Bomb."

The documents pointed to one outside group pulling the candidates' strings: a social welfare nonprofit called Western Tradition Partnership, or WTP.

Altogether, the records added up to possible illegal "coordination" between the nonprofit and candidates for office in 2008 and 2010, said a Montana investigator and a former Federal Election Commission chairman who reviewed the material. Outside groups are allowed to spend money on political campaigns, but not to coordinate with candidates.

"My opinion, for what it's worth, is that WTP was running a lot of these campaigns," said investigator Julie Steab of the Montana Commissioner of Political Practices, who initially received the boxes from Colorado.

It’s a long read, but well worth it.

This Oct. 29 ProPublica/Frontline report is just the tip of the iceberg. A series of investigative reports by ProPublica, Frontline and The Center for Public Integrity dig deep into the question: “who is funding attacks on Montana’s election laws?”

The reportage will continue on PBS tomorrow, Oct. 30, when Frontline airs what former Montana Public Radio capital bureau reporter Emilie Ritter referred to on her facebook page as “a big ol’  journalism bomb"”:

Watch Big Sky, Big Money, an investigation with Marketplace on PBS. See more from FRONTLINE.

The program airs at 8:30 p.m. on Montana PBS, but cick here to check your local listings. It will also be available online beginning Oct. 30.

In this Oct. 22 report, journalists Kim Barker, of ProPublica, and Emma Schwartz, of Frontline, uncover evidence that Western Tradition Partnership “misled the IRS when it applied for the tax-exempt status that shields its donors from being publicly disclosed.”

Documents obtained by ProPublica and Frontline show that Western Tradition Partnership, now known as American Tradition Partnership, said it would not attempt to sway elections when it asked the IRS to recognize it as a tax-exempt social welfare organization in late 2008.

Shortly before submitting the application, however, Western Tradition Partnership, which bills itself as a "grassroots lobbying" organization dedicated to fighting radical environmentalists, and a related political committee sent out fliers weighing in on candidates for Montana state office. The mailers blitzed districts in Montana days before the Republican primary.

Also last Monday The Center For Public Integrity published this report showing that a millionaire furniture store mogul from Colorado dumped $300,000 to get ATP “on its feet”:

In its 2008 application for tax-exempt status as a 501(c)(4) “social welfare” organization, ATP listed its “primary donor” as Jacob Jabs, Colorado’s largest furniture retailer and a donor to Republican candidates and causes. Jabs pledged a $300,000 contribution to get ATP on its feet, according to IRS records obtained by the Center for Public Integrity.

Jabs, through a spokesman, on Monday said he did not make a donation and has "never heard of" ATP or the group's previous incarnation.

"He did not commit to the funds indicated by Athena Dalton in the filing so clearly he did not give them funds," wrote Charlie Shaulis, director of communications for American Furniture Warehouse, Jabs' company, in an email to I-News Network in Colorado.

Dalton wrote a letter to the IRS asking the agency to speed up the process for awarding it nonprofit  status. The letter states that the approval was needed quickly, otherwise Jabs would not make a contribution. The agency gave it the thumbs up four days later.

All of this reporting is coming out in the two weeks before the Nov. 6 election, and tomorrow’s Frontline exposé is exactly one week from election day.

How will “dark money” impact our elections?

We might not know for months, or even years what the full effect has been or will be. But I for one am glad the rest of the country is taking an interest in Montana’s elections and examining how Big Sky Country has become a petri dish for experiments in “dark money” manipulation of politics.

Dems slam Fox’s role in SME bankruptcy

The Montana Democratic Party is criticizing Republican Attorney General Candidate Tim Fox's role in the ongoing Southern Montana Electrical Cooperative bankruptcy proceeding. 

Earlier this month the Democrats accused Fox of "playing a central role in a legal scheme that could put millions (of dollars) in the pockets of out-of-state predatory lenders."

At issue is Fox's role in representing lenders who gave money to embattled SME to build the Highwood Generating Station.

First some background: Critics of the beleaguered power venture say the giant finance companies knew, or should have known, that loaning SME the capital to build Highwood Generating Station was a risky venture.

Public Service Commission chairman Travis Kavulla, a Republican, said in an interview with the Tribune last month that the loan Prudential Capital Group of Dallas gave to SME was "totally well-above the market rates" given to similar power plants.

Prudential, the largest lender to loan SME money, loaned the company $75 million at 8 percent interest which the company used along with along with a $10 million loan from another lender at 7.25 percent interest, “to pay for a plant that should have cost more like half that," Kavulla said, adding that the the loans were "risky and predatory."

The Democrats jumped on an recent Associated Press story, in which Kavulla said he he is "concerned the individual members of the electricity cooperative may end up paying the price for the bad decisions by Southern managers and lenders."

The cost to run the plant currently exceeds the open-market price of electricity, Kavulla said.

So where does Tim Fox come into play in all this?

Fox is representing Prudential Capital Group, the largest lender, in the ongoing bankruptcy saga. According to federal court records, lawyer and trustee fees related to the bankruptcy proceedings have already eclipsed $1 million.

"If Fox and his clients have their way in court, SME customers — both ratepayers and taxpayers — could be on the hook to pay back millions, including over a million in attorney fees. This will amount to tens of thousands of dollars each for a loan that Fox's clients likely knew was 'risky and predatory," the Democratic Party said in its Oct. 1 release.

Fox's attorney fees account for a just a tiny fraction of the overall fees paid in the case. According to court records Fox, who is charging an hourly rate of $250, filed reimbursement requests totaling $12,500 since getting involved in November, 2011.

That's chump change compared to many other lawyers involved in the case, some of whom charge up to $845 per hour for their time.

For his part Fox declined to comment on his role in representing Prudential in the SME bankruptcy.

"I don't talk about my clients' business in pending cases," Fox said in an interview. "I can't do that, ethically. It's public record that I have appeared on behalf of a creditor in a bankruptcy case, but that's all I can say about that."

Fox's opponent in the attorney general race, Helena Democrat Pam Bucy, said in a statement that she believes everyone deserves legal representation, but she is troubled that Fox took Prudential on as a client in a case that opposes Montana ratepayers and taxpayers.

"The attorney general is Montana's chief consumer protection advocate," Bucy, a former assistant attorney general under Democrat Mike McGrath. "We established the Office of Consumer Protection at the Department of Justice so that Montanans would have legal recourse in cases like this, where out-of-state lenders have made risky and predatory loans to Montana consumers. Since we are both running to be Montana's chief legal representative, it is alarming to see my opponent put the profits of risky, predatory out-of-state lenders before the well-being of Montanans."

Since electric coops are not regulated by the PSC, the SME case would fall to the next attorney general and the Office of Consumer Protection if consumers file a complaint of unfair debt collection practices, the Democrats claim.

According to the latest Public Policy Polling survey, Fox has 45-35 lead over Bucy with a whopping 20 percent still undecided.

Judge may release investigation report in Flathead Lake boat crash before Nov. 6 election

Flathead County District Judge John McKeon, of Malta, will consider whether to release the pre-sentence investigation report that was part of the criminal case against former Montana State Sen. Greg Barkus, R-Kalispell.

McKeon ordered all sides in the case to respond by Oct. 23 to a non-profit watchdog group’s  request that the court release the pre-sentence investigation report related to the 2009 boat crash which left Barkus, Congressman Denny Rehberg and three others seriously injured. The group, Citizens for Responsibility and Ethics in Washington, wants the documents released before the Nov. 6 election in which Rehberg, a Republican, is challenging incumbent Democratic Sen. Jon Tester for the U.S. Senate.

According to CREW’s Oct. 10 press release:

“CREW requested the PSI to shed light on the true facts surrounding the crash, including the extent to which those facts differ from the version offered by Rep. Dennis Rehberg (R-MT), a passenger on the boat who denied Sen. Barkus was impaired in any way.”

Rehberg’s campaign did not immediately respond to an email seeking comment on CREW’s request or McKeon’s order.

UPDATE: Rehberg’s campaign manager, Erik Iverson, said in a telephone interview Wednesday afternoon that his boss has no control over whether the report is released or not because he is not a party to the case in question.

“Denny was a witness and has no rights or privileges different than any other witness,” Iverson said. “That said, it doesn't matter to Denny what the judge decides. He has no problem with the documents being released at all. He has not seen them or read them, but either way Denny is fine with whatever the judge decides to do."

Barkus, who was the House majority whip at the time, was behind the wheel of the boat that on Aug. 27, 2009 slammed into the rocks on the shore of Flathead Lake near Wayfarers State Park. Court records revealed that Barkus’ blood alcohol content was .16, twice the legal limit of .08, nearly two hours after the crash. Rehberg, two of his staff members and Barkus’ wife were passengers on the boat, and all were seriously injured in the crash. Rehberg denied being impaired himself and said he “saw no signs of impairment” in Barkus.

(You can download the complete audio from Rehberg’s hour-long press conference two weeks after the crash here).

Barkus was charged with criminal endangerment and negligent vehicular assault. McKeon rejected prosecutors’ original plea agreement with Barkus, which called for a three-year deferred sentence, a $4,000 restitution payment and unsupervised probation. McKeon instead imposed a $29,000 fine and a four-year deferred prison sentence.

On Oct. 1 CREW asked McKeon to release the pre-sentence investigation report that the court used to determine Barkus’ sentence. According to court records, the report includes:

1. photographs of the crash;
2. witness statements;
3. the investigating officers’ reports;
4. toxicology reports;
5. the report of the accident reconstruction expert;
6. written or transcribed statements of the the boat’s occupants;
7. a history of Barkus’ 2004 conviction on traffic offenses, including the circumstances surrounding the reckless driving conviction in which he was originally charged with driving under the influence of alcohol.

Under state law, McKeon cannot disseminate the pre-sentence investigation report to CREW without first finding “that the demands of individual privacy do not clearly exceed the merits of the public disclosure.”

CREW chief legal counsel Anne L. Weismann argued that the Barkus case involved people in positions of public trust. Barkus was a sitting state senator at the time of the crash and Rehberg, a sitting U.S. Congressman now and at the time of the crash, is running for the U.S. Senate. CREW argued there is “significant public interest in disclosure” to understand the circumstances of the crash and how those circumstances relate to the integrity and judgment of the public officials involved in the crash.

Barkus’ case was ongoing when Rehberg sought reelection to the House in 2010. The case was scheduled to go to trial more than three weeks after the election but the settlement was eventually reached and finalized in January 2011, after Rehberg started his sixth term in Congress.

Schweitzer’s “VETO Chicken”

Absentee ballots hit the mail today marking the home stretch of the 2012 election season, and term-limited Gov. Brian Schweitzer reminded voters what is at stake in the 2013 Legislative session.

Not one to shy away from the limelight, Schweitzer, a Democrat, continues to thump his chest over last session's record 79 vetoes of Republican bills with a tweet today featuring a photo of "veto chicken."

Schweitzer, who has done little to temper speculation that he plans to seek a higher office after his gubernatorial term expires, was was the keynote speaker at NARAL Pro-Choice America’s 18th annual “Chicago Power of Choice Luncheon,” at the downtown Standard Club. According to Schweitzer’s spokeswoman, that’s where the “Veto Chicken” was served.

Schweitzer has built a national following among some members of his party who admire his no-holds-barred approach to taking on Republicans in the Capitol. From calling the GOP-controlled Legislature “bat crap crazy” or using a red-hot branding iron to “veto” Republican bills in 2011,  Schweitzer has never backed down from a battle with his Republican rivals.

With Republicans looking to hold solid majorities in the next Legislative session, many of the same bills Schweitzer vetoed in 2011 will no-doubt land on the next governor’s desk in 2013.

Democratic Attorney General Steve Bullock has already said he would veto any right-to-work bill that crosses his desk. Bullock has also invoked Schweitzer’s “bat crap crazy” remark, saying any bills to allow spear hunting, or calls for secession from the union or or measures aimed at imposing a gold standard in the state will likely meet his veto pen. However, Bullock recently told students at Great Falls High that since he’s a lawyer he would probably use a fountain pen, rather than a branding iron, to do the deed.

Meanwhile, Rick Hill, a Republican, has said he would allow some of the bills that Schweitzer vetoed to become law. Hill said he supports right-to-work legislation and at a debate in Helena the former Montana congressman said he supports the ballot measure that would change Montana law to require women under 18 to get parental consent before having an abortion, a bill Schweitzer vetoed in 2011.

If the measure fails at the ballot box come November, chances are that proposal will still become law if Hill is elected governor.

Schweitzer’s “veto chicken” tweet, as odd as it was, serves as a reminder that the next governor will probably see many of the same bills he vetoed in 2011.  Some voters will no-doubt have that in mind when they fill out their ballots this fall.