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Profile: Craig Holman

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Research from the media analysis firm Borrell Associates and other sources shows that spending for the 2010 midterm elections will outstrip the record-breaking spending of the 2008 elections, which centered around a presidential contest. The controversial Citizens United Supreme Court decision (see January 21, 2010) has “opened the floodgates” for corporate money to be used in electioneering and advertising, much of that money going anonymously to political parties and operations. It is unprecedented for midterm elections to involve more spending than presidential-year elections. Kip Cassino, vice president of research at Borrell Associates, says the Citizens United decision is directly responsible for the massive upswing in spending. “Unlike a lot of industries in the United States right now, which are seeing some downturns, political spending is absolutely a growth industry,” Cassino says. Corporate money is behind the surge, accounting for what he says is at least a 10 percent jump in advertising. Evan Tracey, president of the Campaign Media Analysis Group, says: “The unwritten charter of these [anonymously funded political] groups is to really be disruptive and try to go in there and turn a race on its head—or put a candidate on the defense. And by that nature, most of those ads that they’re gonna run this fall are gonna be negative ads.” Labor unions account for some of the surge in spending, but most of it comes from corporate donors, from conservative organizations such as the US Chamber of Commerce (see September 20, 2010, September 30, 2010, and October 2010), Americans for Prosperity (AFP—see Late 2004, May 29, 2009, November 2009, and July 3-4, 2010), and American Crossroads, a nonprofit political group headed by former Bush political advisor Karl Rove (see September 20, 2010, February 21, 2012, Late March 2012, and Late May 2012). Senator Robert Menendez (D-NJ) says, “While each of our campaigns has the resources they need to be competitive, we now face shadow groups putting their thumbs on the scale with undisclosed, unlimited, and unregulated donations.” However, national groups are not all of the important players in the spending surge. Tracey says: “We have a lot of little individual state-type groups that are starting to show up in some of the bigger races. And I think they’re going to play a much larger role in the fall.” One group cited in the research is a Nevada-based group called Americans for New Leadership, which has targeted Senate Majority Leader Harry Reid (D-NV) for defeat in a barrage of advertisements aired recently throughout the state. The group says it has spent $300,000 in ads attacking Reid and is prepared to spend more, but has not disclosed from whom that money comes. Senate and House races are seeing more involvement by heavily-funded groups placing ads in local markets for Republican candidates, or attacking Democrats, particularly from AFP, which has already spent some $1.5 million on House races. Craig Holman of the watchdog group Public Citizen says: “In 2004 and 2006, literally 100 percent of the groups were fully complying with the disclosure laws. Today, most groups do not disclose where they’re getting their money from.” The New York Times reports, “The situation raises the possibility that a relatively small cadre of deep-pocketed donors, unknown to the general public, is shaping the battle for Congress in the early going.” Sheila Krumholz of the Center for Responsive Politics observes: “Corporate interests are buying the elections? Oh no, it’s much worse than that. We don’t know who’s buying the election.” [New York Times, 9/13/2010; National Public Radio, 9/16/2010; Think Progress, 9/17/2010]

Entity Tags: Evan Tracey, Americans for New Leadership, American Crossroads, Americans for Prosperity, Craig Holman, Robert Menendez, Borrell Associates, US Chamber of Commerce, Kip Cassino, Karl C. Rove, Sheila Krumholz, Harry Reid

Timeline Tags: Civil Liberties, 2010 Elections

American Future Fund logo.American Future Fund logo. [Source: American Future Fund / Talking Points Memo]Three citizen watchdog and pro-campaign finance groups, the Center for Media and Democracy, Protect Our Elections, and Public Citizen, allege that the tax-exempt nonprofit group American Future Fund (AFF) is violating tax law by operating primarily as a political advocacy group. AFF was founded and is operated by Nick Ryan, a former campaign advisor for former Senator Rick Santorum (R-PA) and former Representative Jim Nussle (R-IA), and the head of a political consulting firm, the Concordia Group. Ryan also founded a pro-Santorum “super PAC” called the Red, White and Blue Fund. State Senator Sandra Greiner (R-IA) and prominent Iowa Republican Allison Dorr Kleis serve as the organization’s directors. The group states that it advocates for “conservative and free market ideals.” The New York Times will later confirm that Bruce Rastetter, co-founder and CEO of Hawkeye Energy Holdings, a large ethanol company, provided the seed money for AFF in 2008. Investigations by the Center for Public Integrity will also show that the Pharmaceutical Research and Manufacturers of America (PhRMA) contributed $300,000 to the organization in 2010. The group also received $2.44 million from another 501(c)4 group, the American Justice Partnership, which advocates for “tort reform,” and over $11 million from the Center to Protect Patients’ Rights, another 501(c)(4) organization. The Times will find that AFF-supported candidates win 76 percent of the time, making the group “one of the most effective outside spending groups of the 2010 election cycle.” The law allows 501(c)4 groups (see 2000 - 2005) such as AFF to operate without taxation or legal scrutiny as long as they spend the bulk of their resources on “further[ing] the common good and general welfare of the people of the community” and not political advocacy. Moreover, federal election law provides that if a group’s major purpose is electioneering and it spends at least $1,000 to influence elections, it must register as a political action committee (PAC). A New York Times analysis recently showed that AFF spent 56 percent of its television budget on political advertising, and so far has spent $8.8 million on television ad buys. Its ads attack Democratic candidates in Indiana, Iowa, New Mexico, and West Virginia, and expressly tell voters to cast their ballots against these candidates. And the organization’s Web site says it exists to “target… liberal politicians.” The group says it plans to spend as much as $25 million on the 2010 elections. In a press release, Public Citizen says that AFF, “a conservative nonprofit group pouring money into the 2010 midterm elections, appears to be violating campaign finance law.” The three groups file a complaint with the Federal Election Commission (FEC) asking it to decide whether AFF has violated the tax code. If so, AFF would be forced to re-register as a PAC and be subjected to more disclosure requirements, particular who donates to the organization and how much they donate. Craig Holman of Public Citizen says: “American Future Fund is pulling out the stops to ensure that Republicans are elected this November. That imposes on the group the legal duty to register with the FEC and disclose exactly who is funding all those expenditures.” Protect Our Elections spokesperson Kevin Zeese says: “In this first post-Citizens United (see January 21, 2010) election, corporations and their executives are testing the limits of the law and crossing over into illegality. They cross the line when they use nonprofit groups to urge people to vote ‘for’ or ‘against’ a specific candidate. Political committees violate the law when they accept anonymous contributions for their work. These violations of federal election and tax laws need to be challenged now; otherwise we will see even more anonymous corporate donations trying to illegally manipulate voters into voting against their own interests in future elections.” And Lisa Graves of the Center for Media and Democracy says: “Groups spending millions to attack Americans running for office should not be able to use their tax-free status to hide the truth about which fat cats are behind their ads. Voters have a right to know which corporations or millionaires are laundering their profits through nonprofits like the American Future Fund, whose main business seems to be electioneering. We have joined this complaint to demand that the law be enforced and the truth be told.” [Center for Media and Democracy, Protect Our Elections, and Public Citizen, 10/12/2010 pdf file; Public Citizen, 10/20/2010; Mother Jones, 1/28/2011; iWatch News, 6/21/2012] AFF will continue to operate as a 501(c)4 group in spite of the FEC complaint, and will continue to spend heavily on anti-Democratic ads, many of which will be proven to be false by organizations such as FactCheck (.org). More complaints will be filed against the organization, including a February 2011 IRS complaint by Citizens for Responsibility and Ethics in Washington (CREW). [iWatch News, 6/21/2012]

Entity Tags: Center to Protect Patients’ Rights, Red, White and Blue Fund, Center for Public Integrity, Bruce Rastetter, American Justice Partnership, American Future Fund, Allison Dorr Kleis, Public Citizen, Protect Our Elections, Sandra Greiner, Nick Ryan, Federal Election Commission, Kevin Zeese, Craig Holman, Citizens for Responsibility and Ethics in Washington, Concordia Group, Center for Media and Democracy, Pharmaceutical Research and Manufacturers of America, New York Times, Lisa Graves

Timeline Tags: Civil Liberties

House Republicans rush a bill to the floor for a vote to eliminate all public funding of the presidential election. The bill, if passed by the Senate and signed into law by President Obama, would eliminate one of the few remaining public funding methodologies for federal elections, and, critics say, give wealthy corporate and individual donors even more influence over elections. Public financing of presidential elections was made law by the 1971 Federal Election Campaign Act (FECA—see February 7, 1972 and 1974) and upheld by the Supreme Court (see January 30, 1976). The bill comes to a vote almost exactly a year after the Supreme Court allowed corporations and labor unions to make unlimited donations to political organizations (see January 21, 2010). The bill, HR 359, was sponsored by Representative Tom Cole (R-OK) in June 2009 and cosponsored by 17 other House members, all Republicans. It would eliminate the Presidential Election Campaign Fund and the Presidential Primary Matching Payment Account. The Republican House leadership did not hold hearings on the bill, nor allow it to be debated in committee. Representative Chris Van Hollen (D-MD) calls the bill “a sneak attack on the system,” and notes that the Republicans had pledged to observe “transparency and openness,” but instead are pushing through such a transformative bill without allowing debate. The bill passes the House on a 239-160 vote, with the Republican majority overriding the Democratic minority. Ten Democrats vote for the bill and one Republican votes against it. Senate Minority Leader Mitch McConnell (R-KY) has already introduced his version of the bill in the Senate, though Senate Democrats say the bill has no chance of passing; Senate Majority Leader Harry Reid says through a spokesperson that the bill will never be brought up for a vote. [Mother Jones, 1/24/2011; Raw Story, 1/25/2011; CNN, 1/26/2011; National Public Radio, 1/27/2011; Bloomberg, 1/27/2011]
Repair or Eliminate? - Presidential candidates who accept public funding must agree not to accept private donations in the fall campaign. Every presidential candidate from 1976 to 2008 has accepted public funding. In 2000, George W. Bush (R-TX) did not take public financing for his primary campaign, and in subsequent years no presidential nominee has taken such funding. In 2008, Barack Obama (D-IL) declined to take public financing for his general election, the first presidential nominee to do so. Republicans claim the elimination of the public funding program would save the government between $520 and $617 million over the next 10 years. Meredith McGehee, policy director at the Campaign Legal Center, says the public financing system needs to be updated. It was created in 1976, she notes, and does not reflect the needs of 21st-century candidates. Lawmakers from both parties have attempted, without success to introduce legislation to update the system. McConnell says that Americans do not believe in the PECF, citing declining public participation. The program is funded by a $3 check-off on individual tax returns; in 1980, almost 29 percent of tax returns carried the check-off, while in 2007 only 8.3 percent of tax returns checked off the donation. “In a time of exploding deficits and record debt, the last thing the American people want right now is to provide what amounts to welfare for politicians,” McConnell says. House Democrats have introduced legislation that would modify and update the PECF instead of end it. One of that legislation’s sponsors, David Price (D-NC), says, “Dare we forget what Watergate was all about?” (Price is referring to the post-Watergate origins of the PECF.) “President Nixon’s Committee to Re-Elect the President, fueled by huge quantities of corporate cash, paid for criminal acts and otherwise subverted the American electoral system. Let’s not return to the darkest days of our democracy.” [Mother Jones, 1/24/2011; CNN, 1/26/2011; National Public Radio, 1/27/2011; Bloomberg, 1/27/2011]
Obama Administration Opposes Bill - The Obama administration strongly opposes the bill, saying that the public financing system should be improved rather than eliminated. In a statement, the White House says: “The presidential election public financing system was enacted in the aftermath of the Watergate scandal to free the nation’s elections from the influence of corporations and other wealthy special interests. Rather than candidates having to rely on raising large sums of private money in order to run, the system provides qualifying presidential candidates with the option of accepting matching funds in the primary and a public grant in the general election.… H.R. 359 would kill the system, not strengthen it. Its effect would be to expand the power of corporations and special interests in the nation’s elections; to force many candidates into an endless cycle of fundraising at the expense of engagement with voters on the issues; and to place a premium on access to large donor or special interest support, narrowing the field of otherwise worthy candidates.” [Raw Story, 1/25/2011]
Divided Response from Lawmakers - Representative Eric Cantor (R-VA) says after the bill passes that voting it into effect “should be a no-brainer.” House Minority Leader Nancy Pelosi (D-CA) says that Congress “should come together to ensure that the American people are heard, that they are heard and that they are not drowned out by special interest dollars.” Republicans such as Aaron Schock (R-IL) call Democrats and the Obama administration “hypocrites” because in 2008, Obama turned down public financing. Schock says, “It was President Obama who killed it and made a mockery of public financing of president campaigns with his arrogant pressing of self advantage.” David Price (D-NC) makes an angry rejoinder, saying: “Talk about having it both ways. [Schock] comes onto this floor to condemn President Obama for opting out of the system, and then he proposes to abolish the system so that everybody has to opt out.” Cole also condemns Obama for not taking public financing in 2008, and says he believes public financing of elections should be illegal, but goes on to say that he supports Republicans who take public financing because it is a legal option. Lynn Woolsey (D-CA) says: “Special interest money is having a corrosive effect on our democracy, eating away at the people’s confidence in their government and their elected representatives. The one beacon of light in this system is the public financing of presidential campaigns. It is, I would remind everyone, a voluntary system.” “This is an attempt to finish the job that the Supreme Court started with the Citizens United decision,” says Senator Charles Schumer (D-NY). Schumer chairs the Senate Rules Committee, which has jurisdiction over campaign finance legislation. “It would bust one of the last dams protecting our election system from an uncontrolled flood of special-interest money.” [CNN, 1/26/2011; National Public Radio, 1/27/2011; Bloomberg, 1/27/2011]
Campaign Finance Reform Advocates Critical of Bill - David Arkush of the citizens advocacy group Public Citizen says in a statement, “A vote for HR 359 is a great way to tell the American people that you want to give corporations more power over our government rather than make democracy work for ordinary Americans.” Craig Holman of Public Citizen says of the bill: “Make no mistake about it: The Republican leadership’s legislation to eliminate public financing is an attack not just on the presidential public financing system, but also an attack on congressional public financing proposals. To ensure that the public’s voice can be heard against the corporate onslaught, we need to expand public financing of elections, not kill it.” Campaign finance reform advocate Fred Wertheimer of Democracy 21 calls the bill “a gross abuse of the legislative process.” [Mother Jones, 1/24/2011; Raw Story, 1/25/2011] The nonpartisan Public Finance Action Fund, which advocates for public financing of state and federal elections, says in a statement: “These efforts are not about saving taxpayer money, they are about giving corporate donors even more access than they enjoy today. We hope these measures don’t advance any further.” [CNN, 1/26/2011]
Bill Dies in Senate - The bill will, as expected, not pass the Senate, which is under Democratic control. A similar bill will be introduced in December 2011 (see December 1, 2011), again pass the House, and die in the Senate. [Real Clear Politics, 12/1/2011]

Entity Tags: David E. Price, US Senate, US House of Representatives, Craig Holman, Aaron Schock, Barack Obama, Chris Van Hollen, David Arkush, Charles Schumer, Thomas Jeffery Cole, Public Finance Action Fund, US Supreme Court, Presidential Election Campaign Fund, Presidential Primary Matching Payment Account, Federal Election Campaign Act of 1972, Eric Cantor, Fred Wertheimer, George W. Bush, Harry Reid, Mitch McConnell, Lynn Woolsey, Obama administration, Meredith McGehee, Nancy Pelosi

Timeline Tags: Civil Liberties

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