Campaign Finance and COVID-19

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by Charles Shafer

As we look at our federal government’s bumbling effort to deal the current pandemic, it is important to remember that some of the failure could be traced to campaign finance corruption.

For example Time Magazine recently has shown that two tax provisions, which remove caps on individuals’ and businesses’ ability to write off net operating losses, are expected to deliver a $160 billion windfall to the wealthiest Americans, disproportionately benefiting hedge fund and real estate investors. The National Multifamily Housing Council (NMHC), which represents the apartment industry, spent $1.4 million in the first quarter on lobbying myriad power centers, including Congress and the Executive Office of the President. It listed one of the two tax provisions among its many lobbying targets. On May 13th, just two days before Democrats voted to repeal sections of the CARES Act, NMHC hired an outside lobbying firm, Nixon Peabody, to lobby in part on “corrections to the CARES Act.” Those two provisions, which amount to just twelve pages in a more than 800-page law, now carry outsized weight.

An Associated Press story reviews companies, interest groups and entire industries seeking help from lobbyists to secure a piece of the record $2.2 trillion financial aid package. The number of companies and organizations hiring lobbyists shot up dramatically across the months of February, March, and early April.  Many lobbyist registrations and job reports specifically mention COVID-19 or a global health crisis. And there has also been a stark increase in medical groups, drug makers and others connected to the medical industry who have hired lobbyists, even if the virus was not specifically given as a reason in the disclosures. One example is that a company that sells commercial laundry equipment employed the lobbying firm run by a top fundraiser for Trump, to get laundromats added to a federal advisory list of essential businesses that should stay open.

The HEROES Act passed by the House of Representatives on May 21, now includes $10 billion targeted to non-profits and specifically including 501(c)(6) trade organizations – such as chambers of commerce – that may lobby Congress and state governments.

The New York Times  details how companies see the virus outbreak as a chance to cash in, do some good, or both and that, “Among the early winners: the Washington influence industry.” For example, two prominent and well-connected Republican fund-raisers have linked up with competing businesses, both claiming to be able to acquire coveted equipment like coronavirus test kits and masks. And a South Carolina-based company called NanoPure hired Brian Ballard, a lobbyist who is a top fund-raiser for Mr. Trump. Mr. Ballard helped obtain approval for a misting spray disinfectant system to kill bacteria and viruses on airplanes and airports and other institutional settings. A former deputy assistant secretary of the Army and Republican Party official registered as a lobbyist for a company involved in diagnostic testing and another that provides treatments for viral infections. On lobbying registration forms, he indicated he would arrange “meetings with officials regarding rapid testing for Covid-19,” and reach out to Congress on “issues related to the treatment of immune compromised patients who have documented Covid-19 infections.”

Transparency International released its 2019 Corruption Perceptions Index, and for the second year in a row, the United States slipped in the standings. In 2018, the U.S. dropped out of the top 20 least corrupt nations in the world, falling to No. 22 on the list. Danielle Brian, executive director of the Project on Government Oversight, stated that, “It’s disturbing to see the United States fall yet again in the rankings.  Unfortunately, it’s not surprising given what we’ve seen under the current administration.  President Donald Trump is facing an impeachment trial Yet, Trump’s actions are just the tip of the iceberg. The U.S. faces systemic issues of corruption as well. Agencies like the Defense and Interior departments are heavily influenced by industry lobbyists and contractors, and loopholes in laws governing foreign lobbying allow many influence campaigns to go unreported. To end corruption and restore trust in politics, it is imperative to prevent opportunities for political corruption and to foster the integrity of political systems.” Transparency International listed 7 steps countries need to take to prevent corruption. Number two on that list is “Control political financing.”

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