The stories you want. The opinions that matter.
No, thanks
Tag: influence
A Top Fundraiser For Obama Turns From Wall Street To Drones

A Top Fundraiser For Obama Turns From Wall Street To Drones

By Max Abelson, Bloomberg News (TNS)

WASHINGTON — Wearing cuff links with the U.S. presidential seal, Robert Wolf was explaining why he loves drones and wants to help big companies fly them.

His new Times Square office features a Barack Obama mouse pad, campaign mug, and cue ball, plus photos of the two men playing golf and basketball together in shorts, having a chat and smiling with family. The only thing that interrupted Wolf’s praise last month for Measure, the drones arm of his advisory company, was some White House news flashing across his TV screen.

A former head of UBS Group AG’s Americas unit and one of Obama’s most visible Wall Street friends, Wolf murmured the headline to himself. When he saw it was minor, he returned to explaining how corporations could use unmanned aircraft to spray pesticides, or inspect pipelines — and let Measure handle everything from getting government permission to arranging flights and analyzing data.

“I’ve been in business for 30 years — this is the most exciting thing I’ve ever done,” said Wolf, who left UBS during Obama’s 2012 re-election campaign to start 32 Advisors, which also offers economic advice, brokers infrastructure deals, and helps foreign governments get investments. “Just to be clear, this is going to change the landscape.”

Change won’t be easy. With Measure approaching its first anniversary next month, interviews with its executives and partners show how hard it is to build a business in a new field, even with connections to presidents. These are still early days for an industry that’s gotten less traction than the toys that hobbyists can buy for $100 or the weapons used by the Central Intelligence Agency to hunt terrorists.

Commercial drone flights in the U.S. are mostly banned. Few companies have won permission from the Federal Aviation Administration for takeoff, despite Amazon.com Inc.’s research into unmanned deliveries and stunts by pizzerias. Bad news hasn’t helped. This year a drone crashed onto the White House grounds, one was discovered carrying about seven pounds of crystal methamphetamine in Tijuana, Mexico, and another, possibly radioactive, was found on the roof of Japanese Prime Minister Shinzo Abe’s Tokyo office.

Wolf has never seen a commercial drone fly and wouldn’t name any paying U.S. clients. Still, the 53-year-old chairman of Measure envisions a future stretching from Gabon to Australia.

Instead of building or owning drones, Measure wants to advise clients and be the middleman arranging flights. The plan is to pick the best one for the job, maybe a three-pound kit that can respond to weather conditions or a ten-foot-wide craft that can stay aloft for 24 hours.

Wolf, who has golfed at least five times with Obama on Martha’s Vineyard, bundled more than one million dollars for his campaigns and was named to White House advisory groups on jobs and economic recovery, isn’t the only one with Washington ties. Measure Chief Executive Officer Brandon Torres Declet was a congressional counsel and lobbyist. President Justin Oberman helped establish the Transportation Security Administration. Senior adviser Jane Holl Lute was the Department of Homeland Security’s deputy secretary until 2013. Former Obama Cabinet member Austan Goolsbee heads 32 Advisors’ economic team.

“Connections open up possibilities and opportunities, except when they don’t,” Lute said. “And they don’t when they don’t fit. And sometimes you have to try a lot of connections before you get a good fit.”

Wolf said he doesn’t email world leaders he knows to ask for help because it wouldn’t show respect. One reaches out instead, he explained, to chiefs of staff and ministers.

Chatting with Obama about the business could be awkward. Weaponized drones have killed civilians including an American and an Italian held hostage by al-Qaida in Pakistan this year, and the mines and pipelines Measure wants to work with can be politically touchy.

Declet, a former counsel to Senator Dianne Feinstein (D-CA), said he won’t let politics get in the way.

“I disassociate being a Democrat from actually being a businessperson,” Declet said. “Being an entrepreneur is about breaking barriers and making money.”

Drones need all the regulatory help they can get. The FAA has granted 244 exemptions, most of them this month, including to Dow Chemical Co. for plant inspection and Union Pacific Corp. for assessing damage after train accidents.

In February, the FAA proposed rules that would keep flights from going too high, long, or fast, over crowds, or out of the sight of operators. A letter from Measure this month asked the FAA to soften the visibility rule.

Government ties are especially valuable to businesses that need exemptions from regulators, according to David Leblang, chairman of the University of Virginia’s politics department.

“Is it fair?” he said. “No. That’s the simple answer.”

A project in Africa shows how far Wolf’s network stretches. He went to a conference last May in Gabon, where he knows President Ali Bongo Ondimba, and met Devry Ross, a former Morgan Stanley vice president. Ross, who knows the head of utility Societe d’Energie et d’Eau du Gabon, became Measure’s senior adviser for Africa. The company, controlled by Veolia Environnement SA, became a client.

“It was pure luck,” said Declet. “Here we had Robert and Devry in the same place at the same time.”

Declet met her in Gabon in February to do an analysis that he said cost the client about $50,000.

According to Measure’s report, muddy roads and rough terrain have impeded power-line inspection. It recommends twice-a-year drone flights with video, explaining that Measure can meet with officials including Bongo’s chief of staff to seek permission. Jean-Paul Camus, head of the utility, didn’t respond to messages.

Gabon’s president was voted into office in 2009 after his late father’s four-decade rule. The U.S. State Department has urged the government to end corruption while saying ties between the countries are strong.

“I’m comfortable with President Bongo, I’ve met him multiple times,” Wolf said. “You cannot be completely idealistic when you’re dealing with these countries. Because I think that part of these countries getting to where you want them to be is making sure they have the right infrastructure.”

Wolf spent 18 years at UBS, becoming president of its investment bank. His former colleague Phil Gramm, the Texas Republican who joined the Swiss bank after leading the Senate Banking Committee, doesn’t see anything wrong with a client wanting to work with Wolf because of his connections.

“If I’ve got to deal with government and I need to get a license like anybody else, what would be wrong with me finding someone like Robert Wolf to help me make the strongest case I can?” said Gramm, a vice chairman of UBS’s investment bank until 2012. “If I want to fly a drone and I’m looking at people that can help me make my case for a license, who am I going to pick, somebody who came in off a turnip truck?”

Measure is interested in working with companies that mine bauxite in Guinea, copper in Zambia and gold in Tanzania, according to Ross and Declet. Mark Stevens, who heads the company’s Australian wing, said that while six clients there had signed up for advice, dipping commodity prices have slowed plans to work with mines.

There are prospects at home, too. Measure is leading a study with the American Farm Bureau Federation to see how drones can boost crop yields and cut costs. It has discussed them with PepsiCo Inc., the world’s largest snack-food producer.

“At the end of the day he wants to make money,” Pepsi CEO Indra Nooyi, who has known Wolf since his UBS days, said this month. “But there’s an incredible way he deals with that.”

Last week, Measure published a study on disaster response for the American Red Cross whose sponsors included drone-makers Boeing Co. and Lockheed Martin Corp. The 52-page report explains how drones can fight fires, assist in search and rescue and deliver food.

“I don’t think we’re ready to do that,” Richard Reed, who develops disaster programs for the nonprofit, said in Washington after the report was made public, referring to regulation.

There are other obstacles.

“Drones crash,” said Greg McNeal, who advises Measure and studies technology at the Pepperdine University School of Law. “Drones malfunction. Camera equipment crashes. People just make errors. They drop things on landing or takeoff. They hit unexpected obstacles in the air.”

In December, two months after an Air Force report blamed a drone crash in Nevada on wind and pilot error, that state’s governor joined a senator and congressman to watch a test flight. The drone flew a few feet and crashed.

“People will just say, ‘It’s too early! It’s too early!'” said Oberman, Measure’s president. “We don’t accept that.”

He and Declet were looking to raise money for a drone startup last year when a friend of Declet’s helped introduce them to Wolf, whose advisory business has done work for private-equity company Fortress Investment Group LLC and hedge fund York Capital Management.

“About 20 minutes into the meeting he said, ‘You guys should join 32 Advisors,'” Oberman said.

Wolf, whose University of Pennsylvania football jersey number inspired the company’s name, also told them he didn’t like their proposal to own drones and lease them out. He sent them into a conference room to come up with a different plan.

“I’m incredibly transparent,” said Wolf, who speaks with the stretchy vowels of his Massachusetts hometown outside Boston and keeps a photo of Red Sox hitter David Ortiz in his office. “Most people say Robert Wolf would be a fastball pitcher if he were in the major leagues. He has no curve in his game.”

Despite outbursts that he and his colleagues call “minute madness,” Wolf can put even the most powerful people at ease. “He’s so warm, and he’s so approachable,” said Commerce Secretary Penny Pritzker, who knows Wolf from Obama campaigns. When she met Wolf and some clients and colleagues in New York this year, she said, it was helpful for everyone.

“I want to speak with business leaders across all spectrums of our economy,” she said. “And he was delivering the secretary of commerce.”

Photo: 32Advisors via Twtitter

Report: Interest Groups Have Greatest Effect On Policy

Report: Interest Groups Have Greatest Effect On Policy

A study published Monday by the Sunlight Foundation suggests that interest groups, not individual voters, are the primary catalysts of policy change in American government. Michigan State University political science professor Matt Grossmann studied “790 significant domestic policy changes” occurring since 1945, and found that interest groups were more likely to motivate change than “public opinion, research, events, ideas, the media or courts.”

These findings come as little surprise in light of recent research indicating that in the hierarchy of influence on policy decisions, average voters come dead last. However, Grossmann’s study differs slightly in his findings of which group exercises the most power.

Last month, Princeton University released a study entitled “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens” that quickly went viral and was rebranded in the headlines as “America Is An Oligarchy.” While this study also determined that average citizens had the least amount of impact on the government, it also claimed that businesses and other economic elites carried the most sway, and that mass-based interest groups were largely ineffective in influencing policy.

But in Grossmann’s new study, he manages to restore a little faith in the effectiveness of advocacy groups that are meant to represent public interest, not just the economic affairs of big business. According to Grossmann’s work, “The interest groups credited with policy changes most often since 1945 were the AFL-CIO, the NAACP, the U.S. Conference of Mayors and the ACLU.” 

For Grossmann, influence is indicated by successful policy change. Businesses, according to the Princeton study, tend to advocate for the status quo, and oppose policy change. As such, though their opposition is effective, it is not responsible for affecting actual change, but rather for simply maintaining existing conditions.Therefore, big business and its interest groups tend to stymie policy change, rather than encourage it. 

The Princeton study also failed to include a variety of interest groups and advocacy groups, only taking into consideration five generally conservative interest groups and “only two of the top 28 advocacy groups,” as indicated by policy historians.

Regardless of their differences, both studies found that organized action and large groups were far more influential in policy decisions than individual voters, which as the Princeton study suggests, de-legitimizes a Majoritarian Electoral Democracy or Majoritarian Pluralism as the structure of the American government.

These results also further corroborate another recent study conducted by professors at Yale and the University of California, Berkeley which determined that campaign donors received better access to their politicians. The study provided statistical support for the previously unproven (though largely held) belief that “financial resources translate into political power.”

This finding is raising increasing concerns into the influence of wealth in today’s political scene, particularly in light of the Supreme Court’s recent decisions to further loosen limitations on campaign contributions. As individuals are able to contribute more and more to candidates and campaigns, it seems that the rule of the economic elite may be almost inevitable.

However, Grossmann’s study made one more interesting discovery that may quell these fears. According to Grossmann, although the number of lobbyists and organizations (and therefore money in play) has skyrocketed, with the amount spent on presidential elections consistently on the rise since 2000, interest group influence has not increased in parallel.

Moreover, when comparing the effects of business interest to that of advocacy groups and public interest groups on policy change, the latter two were more influential in 9 out of 14 policy areas, whereas business was more effective in predictable industries, including finance and commerce, science and technology, and macroeconomics.

So while the United States certainly isn’t the sort of democracy that we might imagine it to be, Grossmann still manages to make the argument that the best interests of the people continue to be represented in Washington –even if not by way of individual votes.

Photo via Flickr

Lifting Donation Caps Will Boost Political Establishment, Experts Say

Lifting Donation Caps Will Boost Political Establishment, Experts Say

By Lisa Mascaro, Tribune Washington Bureau

WASHINGTON — The Supreme Court’s decision to lift the cap on the amount donors can contribute in a congressional election cycle promises to shift power to the political party’s established leaders, who had lost ground to outside groups.

With the demise of the $123,200 limit for the two-year election cycle, party stalwarts such as House Speaker John A. Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) will be able to raise multimillion-dollar checks from wealthy contributors for new campaign committees. With control of such ventures, they will have substantial influence over the direction and ideology of their parties.

For Boehner, who has been contending with a tea party insurgency for years, the chance to wield a larger campaign war chest could help him sharpen his edge against his GOP rivals. And although Democrats condemned the ruling, their leadership also stands to gain more control over congressional campaigns.

“Look at whoever is most powerful in Congress right now — and you magnify their power,” said Lisa Rosenberg, a lobbyist for the Sunlight Foundation, a government watchdog organization that denounced the ruling. “Think back to the Robber Baron age — there were no restrictions; it was just kind of a free-for-all. That’s where we’re heading.”

Experts predict that the parties and their leaders will quickly set up committees to solicit multimillion-dollar contributions from single donors and spread the money around to their candidates.

Already on Thursday, a day after the decision, party officials were planning mega-fundraising opportunities for 2014 midterm election candidates. Republicans envisioned a gala headlined by party superstars, say Sen. Marco Rubio of Florida or Wisconsin Rep. Paul D. Ryan, that could burst earlier fundraising caps. Say goodbye to the $1,000 a-plate-dinner and hello to $10,000 tickets.

“We want to take advantage of this opportunity now, as quickly as we can,” said Andrea Bozek, communications director of the National Republican Congressional Committee, which is working to maintain Boehner’s majority.

Party leaders have long used their stature to raise money from rich supporters and hand the bounty to rank-and-file lawmakers — or candidates seeking to join them in Congress.

These so-called Leadership PACs often have catchy names, such as the Every Republican Is Crucial PAC, which was started by House Majority Leader Eric Cantor (R-VA) Cantor’s PAC has spent $1.4 million so far this campaign cycle, more than any other in Congress, according to the Center for Responsive Politics.

But a decision by the Supreme Court four years ago dramatically diminished the power of party leaders and lawmakers. In the Citizens United decision, the court freed corporations, unions and the very wealthy to spend unlimited sums on independent election campaigns.

Outside groups such as Karl Rove’s American Crossroads and the Democratic-aligned Emily’s List became the most well-financed players in the elections.

The swift ascent of these often single-issue organizations shifted the playing field, especially with the rise of the conservative tea-party-style organizations that have pushed the Republican Party — and Congress — rightward.

The once-dominant party committees — the Democratic National Committee and the Republican National Committee, and their House and Senate counterparts — fell to a lesser role.

But the court’s decision in McCutcheon vs. Federal Election Commission turned the tables once again in a way that could bolster the party establishment — and its leaders.

“Right now, these candidates in the House, they’re worried about super PACs coming down on them, but if more money comes in the system through the political parties, they might feel safer,” said Ray La Raja, an associate professor of political science who studies campaigns and parties at the University of Massachusetts.

For Boehner, he added, “if this gives him more control over more money, then this gives him more influence.” And, he noted, “you see that on the Democratic side too.”

The court’s decision threw out the $74,600 limit for donations to political parties and the $48,600 limit for House or Senate candidates in a two-year campaign season. Donors still cannot contribute more than $5,200 to a candidate per election.

But without the overall caps, those who can afford to give to many candidates will have enormous influence. Donors could support their party by giving to all 435 House candidates and the 33 candidates for Senate seats up for election, as well as each party’s national committees.

Justice Stephen G. Breyer, dissenting in the 5-4 ruling, said the parties could establish new joint committees that could solicit checks from wealthy donors for $3.6 million — the amount that can be contributed to 468 candidates and all the political parties. Under current election laws, he said, the parties could redistribute the money, possibly even using the entire amount to benefit one candidate.

He warned that this could lead to a consolidation of political power to the wealthy few, as well as the party’s leaders, resulting in improper influence on Capitol Hill.

“Will party officials and candidates solicit these large contributions from wealthy donors? Absolutely. Such contributions will help increase the party’s power, as well as the candidate’s standing among his colleagues,” Breyer wrote. “Will elected officials be particularly grateful to the large donor, feeling obliged to provide him special access and influence, and perhaps even a quid pro quo legislative favor? That is what we have previously believed.”

Photo: Carol H. Feeley via Flickr Creative Commons

Big PACs Throw Money At Supercommittee Members

Want to get a huge influx of cash? Looks like all you have to do is be part of the supercommittee.

From the time the six Republicans and six Democrats were appointed to the special committee to reduce the deficit, suspicions about lobbyists’ influence on these politicians arose. AP reported in August that the 12 members had received more than $3 million in the past five years from special interests. Given those contributions, the supercommittee members will no doubt consider their donors’ requests instead of acting in the best interests of the general public when making their proposal.

Now, as the supercommittee continues its deliberations, new reports reveal that special interests have stepped up their efforts to influence the politicians and ensure that their sectors are not adversely affected. The watchdog Sunlight Foundation writes:

PACs for 19 of the biggest political donors in the country, as determined by Center for Responsive Politics, have reported contributing more than $83,000 to 10 of the 12 members of the super committee or their leadership PACs, Federal Eelection Commission filings show. It’s the first glimpse available of fundraising by super committee members as they wrestle with their mandate to recommend at least $1.2 trillion in cuts to the debt, increased revenues, or a combination of both.

… The totals represent just a fraction of what super committee members and their leadership PACs have raised since being named to the committee.

Rep. Dave Camp, R-Mich., raised $26,500 from PACs of the big donors, with most going to his leadership PAC, Continuing a Majority PAC. Pfizer, Goldman Sachs and Comcast all sent $5,000 checks to the fundraising committees of the chair of the House Ways and Means Committee within days of his appointment to the debt reduction panel.

Rep. Xavier Becerra, R-Calif., who was criticized when a fundraising invitation sent out on his behalf advertised his new position on the super committee, raised $15,000 from the big PACs, including $2,500 checks from the American Health Care Association and the American Hospital Association sent within days of his appointment.

Pfizer’s PAC reported the highest amount of contributions — $10,000 — to super committee members; the pharmaceutical manufacturer also donated $5,000 to Sen Max Baucus, D-Mont.

Defense contractor Lockheed Martin contributed to the most super committee members–Camp ($2,500), Rep. James Clyburn, D-S.C. ($1,000), Sen. Rob Portman, R-Ohio ($2,000) and the leadership PAC of Sen. John Kerry, D-Mass., Campaign for our Country ($2,500).

Sen. Patty Murray, D-Wash. and Sen. Jon Kyl, R-Ariz., were the only members of the committee who did not receive donations.

Considering these special interests, it won’t be surprising if military contractors, banks, and pharmaceutical companies avoid the harshest measures when the supercommittee unveils its proposal.