New York Times Gets It Wrong: Bernie Sanders Not "Top Beneficiary of Outside Money"

By Lee Fang, The Intercept

31 January 16

he New York Times caused a stir by publishing a classic man-bites-dog style campaign finance story in its Friday editions titled “Bernie Sanders Is Top Beneficiary of Outside Money.” The article charges that despite his fiery campaign rhetoric against Super PACs and big money in politics, Sanders has gained much more from Super PAC spending than his Democratic opponents.

“In fact,” the Times reports, “more super PAC money has been spent so far in express support of Mr. Sanders than for either of his Democratic rivals, including Hillary Clinton, according to Federal Election Commission records.”

While more money has indeed been spent on a certain type of campaign spending in support of Sanders, the article leaves the wrong impression by suggesting that pro-Sanders Super PACs have outpaced outside groups supporting Hillary Clinton. If that sounds confusing, that’s because the Times article hinges on a technicality in campaign finance law.

When total Super PAC spending is measured, Clinton groups are leading the way.

The newspaper calculated totals using only “independent expenditures” spent by Super PACs. If the Times had taken into account all pro-Clinton Super PAC campaign spending from this cycle, outside money spent in support of Clinton is more than twice the amount spent in support of Sanders.

The National Nurses United, a labor group for nurses and the only significant group to pour money into a Super PAC supporting Sanders, has indeed backed the Vermont senator by spending a little more than $1 million on “independent expenditures,” a term used by the Federal Election Commission to describe communications spent “expressly advocating the election or defeat of a clearly identified candidate.” When you dig into these filings, some are advertisements, while much of the $1 million includes a special Bernie Sanders-branded bus, printing costs, and workshops hosted by the group.

Clinton’s campaign has benefited from Super PAC spending that has been disclosed as both independent expenditures and non-independent expenditures. In the piece that ran on page A17 on Friday, the Times narrowly considers pro-Clinton independent expenditures — which total about $847,000 — while leaving out other spending.

Previous stories by the Times, however, describe in detail how Super PACs such as Correct the Record operate as a shadow Clinton campaign capable of receiving unlimited donations. Correct the Record uses its resources to pay campaign staffers to provide opposition research, communications, and strategy to elect Clinton, though not all of that spending is disclosed to the FEC as an independent expenditure.

To debunk the claim that the nurses are outspending all pro-Clinton outside groups, one merely has to look at six months of spending and limited independent expenditure disclosures by the primary pro-Clinton Super PACs Correct the Record and Priorities USA Action. Doing so finds that pro-Clinton outside organizations have spent well over $2.2 million during this campaign cycle on staff, consultants, research, advertising, communications, advocacy, and other campaign-related expenses. If you add in pro-Clinton independent expenditures from Planned Parenthood, the Service Employees International Union, the League of Conservation Voters, and the Human Rights Campaign, the pro-Clinton total rises to more than $2.6 million.

That pro-Clinton outside money number is likely to rise dramatically after new disclosure reports are released this weekend. The Super PAC disclosures will reveal the last six months of spending in 2015. And given reports that Clinton Super PACs are sitting on a war chest that is estimated to be in the tens of millions of dollars raised from wealthy individuals, corporations, and unions, the comparison to the nurses union, which raises its cash from working nurses, may look quite strange in only a few days.

Nicholas Confessore, the reporter who wrote the piece, defended it on Twitter, writing, “[Independent expenditures] are a perfectly reasonable way to measure political spending in this context.”

Why Prosecutors Don't Target Thieving CEOs

By Ian Salisbury, TIME

31 January 16

Letting executives off the hook undermines our moral authority, but winning cases is notoriously tricky

assachusetts Senator Elizabeth Warren issued a stinging broadside against federal prosecutors on Friday, charging U.S. courts with throwing the book at mixed-up teenagers, while letting wealthy corporate executives who commit much larger and sometimes deadly crimes off with essentially no chance of punishment.

In a new report, Sen. Warren’s office makes the case that CEOs and other top executives simply don’t face the same legal consequences as ordinary Americans, releasing a list of what it claims are 20 examples of corporate criminal and civil cases that prosecutors failed to pursue to the full extent of the law last year.

Among the cases: scandals ranging from General Motors’ years’ long cover up of ignition switch problems to currency manipulation by large banks (including Citigroup and J.P. Morgan), to a mine explosion that killed 29 people — the only instance of misconduct which led to a conviction of a corporate executive, according to Warren.

The problem, the senator argues, isn’t the way U.S. laws are written. Rather it’s that, despite repeated promises, the Obama Administration hasn’t made prosecuting corporate bigwigs a priority. She goes so far as to make the case that such selective application of the law undermines the government’s moral authority: “If justice means a prison sentence for a teenager who steals a car, but it means nothing more than a sideways glance at a CEO who quietly engineers the theft of billions of dollars, then the promise of equal justice under the law has turned into a lie,” Warren charges in the report.

As a moralist, Warren may well have point. But, as politicians tend to do, she is also over-simplifying. Many prosecutors would love nothing more than to cuff a dishonest Wall Street trader or arrogant CEO, for the same reasons as Warren or even simply to burnish their resumes. For proof, just look at the career of former New York governor Elliot Spitzer, who rose to prominence due to his tough-on-finance record, or for that matter, the plot of Showtime’s new drama ‘Billions.’

But white collar prosecutions are notoriously expensive and risky. After all, fat-cat CEOs often come flanked with expensive lawyers and their cases often hinge on mind-numbingly arcane legal principles.

Even the most vigorous prosecutors can fall victims to such difficulties. Starting in 2009, Manhattan U.S. attorney Preet Bharara racked up a string of insider trading convictions against Wall Street executives, at one point winning 85 straight cases. But even Bharara’s run of victories eventually stopped short of what many considered to be their ultimate target, hedge fund magnate Steven A. Cohen. What is more, a number of Bharara’s most significant convictions were eventually overturned when a Federal appeals court unexpectedly re-interpreted the contours of insider trading law, setting defendants free.

It’s not just a problem in the U.S. In fact, earlier this week, U.K. prosecutors, after winning an initial conviction in their quest to prosecute bankers accused of fixing LIBOR — a key benchmark central to financial markets — failed to secure any further wins. While prosecutors had seemed confident in their case, the jury took just two days acquit all six additional defendants. The acquittal led to questions about whether the U.K.’s Serious Fraud Office — which had handled the prosecutions — will survive the humiliation.

All this isn’t to say corporate malfeasance isn’t indeed going unpunished, or that Warren is wrong to use her bully pulpit to call attention to it. But the situation won’t be easy to fix.