How Debt Deregulation and Dark Money Nearly Bankrupted America (2009)

• published: 27 Mar 2015
• views: 8

Super PACs, officially known as "independent-expenditure only committees," may not make contributions to candidate campaigns or parties, but may engage in unlimited political spending independently of the campaigns. Unlike traditional PACs, they can raise funds from individuals, corporations, unions, and other groups without any legal limit on donation size. Super PACs were made possible by two judicial decisions: the aforementioned Citizens United v. Federal Election Commission and, two months later, Speechnow.org v. FEC. In Speechnow.org, the federal Court of Appeals for the D.C. Circuit held that PACs that did not make contributions to candidates, parties, or other PACs could accept unlimited contributions from individuals, unions, and corporations (both for profit and not-for-profit) for the purpose of making independent expenditures. The result of the Citizens United and SpeechNow.org decisions was the rise of a new type of political action committee in 2010, popularly dubbed the "super PAC".[19] In an open meeting on July 22, 2010, the FEC approved two Advisory Opinions to modify FEC policy in accordance with the legal decisions. [20] These Advisory Opinions were issued in response to requests from two existing PACs, Club for Growth, and Commonsense Ten, which later became Senate Majority PAC. The opinions gave a sample wording letter which all Super PACs must submit to qualify for the deregulated status, and such letters continue to be used by Super PACs up to the present date. FEC Chairman Steven T. Walther dissented on both opinions and issued a statement giving his thoughts. In the statement, Walther stated "There are provisions of the Act and Commission regulations not addressed by the court in SpeechNow that continue to prohibit Commonsense Ten from soliciting or accepting contributions from political committees in excess of $5,000 annually or any contributions from corporations or labor organizations." (emphasis in original) [21] The term "Super PAC," was coined by reporter Eliza Newlin Carney.[22] According to Politico, Carney, a staff writer covering lobbying and influence for CQ Roll Call, "made the first identifiable, published reference to 'super PAC' as it’s known today while working at National Journal, writing on June 26, 2010, of a group called Workers’ Voices, that it was a kind of '"super PAC" that could become increasingly popular in the post-Citizens United world.'"[23] According to FEC advisories, Super PACs are not allowed to coordinate directly with candidates or political parties. This restriction is intended to prevent them from operating campaigns that complement or parallel those of the candidates they support or engaging in negotiations that could result in quid pro quo bargaining between donors to the PAC and the candidate or officeholder. However, it is legal for candidates and Super PAC managers to discuss campaign strategy and tactics through the media. http://en.wikipedia.org/wiki/Political_action_committee#Super_PACs The Federal Reserve, Treasury, and Securities and Exchange Commission took several steps on September 19 to intervene in the crisis. To stop the potential run on money market mutual funds, the Treasury also announced on September 19 a new $50 billion program to insure the investments, similar to the Federal Deposit Insurance Corporation (FDIC) program.[196][197] Part of the announcements included temporary exceptions to section 23A and 23B (Regulation W), allowing financial groups to more easily share funds within their group. The exceptions would expire on January 30, 2009, unless extended by the Federal Reserve Board.[198] The Securities and Exchange Commission announced termination of short-selling of 799 financial stocks, as well as action against naked short selling, as part of its reaction to the mortgage crisis.[199] In May 2013 as the stock market was hitting record highs and the housing and employment markets were improving slightly[200] the prospect of the Federal Reserve beginning to decrease its economic stimulus activities began to enter the projections of investment analysts and affected global markets. On April 17, 2009, the then head of the IMF Dominique Strauss-Kahn said that there was a chance that certain countries may not implement the proper policies to avoid feedback mechanisms that could eventually turn the recession into a depression. "The free-fall in the global economy may be starting to abate, with a recovery emerging in 2010, but this depends crucially on the right policies being adopted today." The IMF pointed out that unlike the Great Depression, this recession was synchronised by global integration of markets. Such synchronized recessions were explained to last longer than typical economic downturns and have slower recoveries. http://en.wikipedia.org/wiki/Great_Recession#United_States_policy_responses