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How Bobby Jindal’s Con-Profit and David Vitter’s Super PAC Undermine Democracy

Four years ago, an otherwise dull case concerning a pay-per-view documentary about the former and future Presidential candidate Hillary Clinton provided a divided United States Supreme Court with the opportunity to issue its most consequential and most controversial ruling since it halted a ballot recount in Florida ten years prior. Citizens United v. Federal Election Commission, in simple terms, allows corporations to spend unlimited money in order to influence elections. To Chief Justice Roberts and the court’s other reliably conservative members, the previous limitations on corporate spending represented an improper restraint on speech and, therefore, a violation of the First Amendment. But for the Court’s more liberal members, limitations on corporate spending were critical in ensuring a fair, effective, accountable, and- most importantly- participatory system of democracy.

In my opinion, the free speech rights of corporations should not be entitled to the same protections as the free speech rights of citizens. Despite what the Court had held in dicta more than a century ago and despite what Mitt Romney may believe, corporations aren’t people; corporations are legal constructions that exist only on paper. Corporations don’t vote in elections; people vote. And as such, it’s completely reasonable to limit the influence that corporations may exert in political campaigns.

Although Citizens United seems fundamentally misguided to those who fear the outsized influence of corporate spending (and the ways in which that spending can effectively drown out the voices of ordinary citizens), money doesn’t always win elections. Last night, stunningly, House Majority Leader Eric Cantor lost by twelve points to a political unknown; Cantor spent more campaign money in steakhouses than his opponent spent in the entire election. But Cantor’s collapse is obviously an exception to an otherwise ironclad rule in politics: The more money you raise, the better your chances are.

Even if you agree with the Court’s logic in Citizens United, you must acknowledge the ruling has created more confusion than clarity, largely because of the subsequent creation of Super PACs. Elected officials have sometimes exploited that confusion, engaging in legally and ethically questionable accounting tricks that, only a few years ago, would have never been attempted.

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Louisiana Senator David Vitter, for example, recently donated $1 million of his federal campaign cash to a Super PAC supporting his state campaign for Governor. The National Journal reported the story under the headline, “How David Vitter Shattered Another Campaign Finance Rule.” Quoting (bold mine):

David Vitter had a $1 million problem. Back in January, by the time the Louisiana senator announced his long-rumored run for governor, Vitter had already lined up supporters and developed a campaign battle plan. Still, one major hurdle remained: State law barred him from using the seven-figure sum he had amassed in Senate campaign funds.

But through a super PAC and some creative lawyering, Vitter and his allies appear to have found a way to redirect all of that money to support his gubernatorial campaign. And in doing so, they’ve pioneered a new method for politicians nationwide to get around old prohibitions on spending federal money on state races, and vice versa.

Along the way, Vitter has become perhaps the first politician in the country to be the largest funder of his own super PAC.

….

Indeed, his donation to the super PAC only makes sense when seen as a means to skirt the Louisiana law forbidding Vitter from transferring his federal campaign cash to his gubernatorial campaign.

“Absent that law, there’s zero reason that a candidate would do it,” said Paul S. Ryan, senior counsel to the Campaign Legal Center, a nonpartisan watchdog group that advocates for campaign finance reform.

Larry Norton, a former general counsel for the Federal Election Commission, said Vitter funding his own super PAC “strikes me as raising the questionableness of the separation of the super PACs and the campaign to a new level.

The whole notion of a super PAC’s independence from the campaign “rests on the idea that they’re not communicating about strategy or plans, or projects,” Norton said, noting that he’d never heard of a candidate doing this before. “But guess what—the candidate is going to fund the super PAC? You sort of wonder at what point the argument collapses under its own weight.

I’m not sure Senator Vitter “shattered” a federal campaign finance rule as much as he openly mocked a Louisiana campaign finance law.

Regardless, though, Senator Vitter’s $1 million wire transfer pales in comparison to the trick Governor Bobby Jindal is attempting to pull off.

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Citizens United may have lifted the restrictions on corporate donations with certain non-profit organizations and political action committees attempting to influence elections, but it did not change the restrictions and caps imposed on individual and corporate donations provided directly to a candidate’s campaign. As long as political action committees disclosed their donors and did not coordinate with the campaigns they were supporting, the conservatives on the Supreme Court argued, everything would still be transparent; citizens would still know who was attempting to exert influence, and campaigns would continue to function independently, the same way they always had.

But as David Vitter’s $1 million donation to a Super PAC established on his own behalf should clearly prove, the Supreme Court had been extraordinarily naive. Super PACs aren’t really “separate” from campaigns. In many cases, the only difference between a candidate’s official campaign organization and its supportive Super PAC is the number at the bottom of their checkbooks.

Individuals and businesses are still subject to caps on donations directly to political campaigns, because, despite the Court’s bloviating about “money as speech,” it still recognizes that if all a candidate needs to become competitive is the support of one or two wealthy donors, then the credibility of our process, the integrity of our candidates, and the promise of representative democracy are all severely imperiled.

Unfortunately, however, thus far, the Supreme Court’s five conservative justices have refused to realize that the creation of Super PACs allows candidates to completely and openly circumvent laws with which they would otherwise be required to comply.

Stories about the tax code and campaign finance laws don’t make for the most compelling reading. For one, it’s very easy to get bogged down by the details, and also, it’s usually pretty boring stuff. But sometimes, it’s about the front lines of American democracy; sometimes, it’s hugely important.

Knowing who donates to a candidate or an elected official can often be more informative than any campaign speech or press release could ever be. Our laws recognize that an open, transparent, and ethical government demands disclosure. Even Super PACs are required to disclose their donors, which is the only reason we now know about Senator Vitter’s controversial $1 million donation.

In my opinion, elected officials who refuse to disclose donations provided to campaign-related organizations should be presumed to be engaging in criminal activity, regardless of how these organizations are incorporated under the tax code. And that brings me to the subject of Governor Bobby Jindal and his new “charity,” America Next.

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On Monday, I wrote about how the Supriya Jindal Foundation received millions of dollars in donations from businesses seeking contracts, special deals, and incentives from the State of Louisiana. We know this because the foundation openly disclosed these donations.

To be sure, the Supriya Jindal Foundation may have provided the First Lady of Louisiana with the resources to embark on a statewide goodwill tour, furnishing hundreds of thousands of dollars worth of technology to teachers and schools, but Mrs. Jindal is not and has never been an elected official or a candidate for public office. Although donations to her charitable organization may have been made by companies seeking to ingratiate themselves with the Governor and his wife, the organization’s stated purpose was nonetheless noble.

Last October, Governor Jindal launched his own tax-exempt charitable organization, America Next, but unlike his wife’s charity, America Next is not providing impoverished schools with much-needed technology. Instead, as its name clearly implies, America Next appears to be nothing more than a thinly-veiled attempt to promote his own nascent campaign for President, something that was not lost on the national media when Jindal announced the organization’s formation. Quoting from The Weekly Standard (bold mine):

Louisana (sic) governor Bobby Jindal, the two-term Republican and potential presidential candidate, has announced the formation of a new group called America Next. The organization bills itself as a “conservative policy group” that aims to “focus on winning a war of ideas.”

….

Jindal’s initial statement doesn’t list any specific policy ideas or proposals, though he has made education reform a priority during his governorship. But in places, the America Next mission statements sounds a bit like the first draft of a presidential announcement.

And then there’s this crucial detail from an otherwise fawning piece on Politico (bold mine):

His (Jindal’s) first hire, executive director Jill Neunaber, has experience in the early states. She managed Romney’s Iowa campaign last fall and was deputy manager of his New Hampshire operation during the primary season. She managed Gabriel Gomez’s unsuccessful Senate campaign in Massachusetts this spring.

Jindal confidant Curt Anderson, the veteran GOP strategist who runs On Message Inc., will serve as an adviser for the group.

Those involved stressed that this is not a campaign-in-waiting.

I’m not sure who, exactly, Jindal and his newly-hired employees think they’re fooling. They are manifestly-clearly, obviously, undoubtedly- a group of campaign consultants lamely masquerading as some sort of think tank promoting Jindal’s own ideas. Currently, America Next’s website features only one white paper on policy- Jindal’s health care policy. Quoting from The Daily Reveille (bold mine):

Gov. Bobby Jindal signed into law Senate Bill 682, implementing his health care plan “Louisiana First America Next Freedom and Empowerment Plan” May 30.

The “America Next” plan, which was unveiled by Jindal in April, was created to replace the Affordable Care Act in Louisiana to offer a conservative, consumer- focused alternative. The House voted 96-3 in favor of the bill.

Put another way, the only policy being promoted by Jindal’s new non-profit organization is a variation of a law he just enacted. When the Governor creates a charitable organization to promote a policy that he then signs into law, that charity isn’t just a “campaign-in-waiting;” it is a campaign in action. That may not seem like a big deal, but it is. An organization led by an elected official and created in order to promote his policies isn’t a social welfare charity; it’s a campaign. And this is why it matters. Quoting from The Times-Picayune (bold mine):

“America Next is a 501(c)(4) that will make all disclosures as required by law,” she said in an email. “Beyond that we do not see any reason to give the Obama Administration opportunity to unjustly target conservative donors.”

According to the Center for Responsive Politics, the Supreme Court’s Citizens Union ruling allowed 501(c)(4) groups to participate in political activities just like other groups already had been doing.

But, unlike most of the other groups, which are under the oversight of the Federal Election Commission and must disclose their contributors, disclosure requirements are limited for groups that register as a 501 (c) (4).

“They must make filings with the FEC when they spend money explicitly advocating for or against a candidate, as well as when they buy issue ads that run in the weeks close to an election, but they aren’t required to provide detail about where they’re getting their money or how they’re spending much of it,” the center said in its report on campaign finance law.

Groups that favor strong campaign disclosure laws says without disclosure it’s impossible to determine what interest groups are attempting to assert influence.

For Jindal’s American (sic) Next group, for example, without donor disclosure, there’s no way to determine whether the salaries for staffers who helped put together his health care proposal came from insurance companies, hospitals, or some benevolent group only interested in providing affordable health care. 

It’s worth emphasizing: Bobby Jindal refuses to disclose donations to an organization he created to promote and formulate public policies that he later signed into law. 

America Next isn’t just exempt from financial disclosure laws; because it’s a private organization, it’s also exempt from state public records laws.

Again, I believe elected officials who refuse to disclose donations and documentation related to the promotion, creation, and enactment of laws and public policies should be presumed to be engaging in criminal activity, and I do not think this is an unreasonable or overly burdensome presumption. The public has a fundamental right to know who is spending money to influence their elected officials, how much they’re donating, and when those donations were made.

*****

Only a few weeks after Jindal launched America Next, the IRS issued a notice for a rule change, a change that would likely result in Jindal’s organization losing its tax exempt status. Quoting from Independent Sector (bold mine):

In November 2013, the Treasury Department issued proposed regulations to provide guidance and more definitive rules on political activity for 501(c)(4) organizations. The proposal changes the definition of social welfare to exclude “candidate-related political activity,” which would encompass any communications expressly advocating for a political candidate, as well as any communications made within 60 days of a general election (or 30 days of a primary election) that identify a candidate or political party, among other stipulations. Also included in the new definition are voter registration drives and many civic engagement events. The IRS requested public comments on several elements of the proposed regulations, including on the meaning of “primarily” engaging in social welfare activities, how the standard should be measured, and whether these rules should also apply to 501(c)(5) and (c)(6) organizations.

The change is long overdue, and it should be accompanied by a full-scale investigation into the finances and activities of each and every elected official in America who has cynically attempted to exploit laws protecting charities in order to avoid accountability from the public.

 

The Single Question That Could Destroy Bobby Jindal’s Political Future

Last Friday, against the vehement and public urging of his own Attorney General and nearly one hundred of the nation’s most respected legal experts, Governor Bobby Jindal signed Senate Bill 469 into law. Quoting his press release (bold mine):

Governor Jindal said, “This bill will help stop frivolous lawsuits and create a more fair and predictable legal environment, and I am proud to sign it into law. It further improves Louisiana’s legal environment by reducing unnecessary claims that burden businesses so that we can bring even more jobs to our state. The bill will also send future recovered dollars from CZMA litigation to coastal projects, allowing us to ensure Louisiana coastal lands are preserved and that our communities are protected.”

If you’re wondering who, exactly, the law benefits, all you need to do is keep reading Jindal’s press release, which contains this amazing confession. Quoting (again, bold and italics mine):

LOGA President Don Briggs said, “The signing of SB 469 is a huge victory for the oil and gas industry as well as the economy for the state of Louisiana. We commend Governor Jindal for his leadership and support of this bill as it made its way through the process….”

As I mentioned in a previous post, SB 469 was, ostensibly, about stopping a controversial, landmark lawsuit filed by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) against 97 oil and gas companies for their role in illegally damaging and depredating the state’s coastal environment and ecosystem. But as we now know, the law is about much more than merely ending a single lawsuit by a single governmental authority.

SB 469 appears to have been written and deliberately designed by lawyers who represent the oil and gas industry in order to shield, reduce, or eliminate their clients’ exposure to civil damages on a wide range of pending and future claims, including, most notably, BP’s liability for billions of dollars in outstanding claims related to the 2010 Deepwater Horizon catastrophe. Indeed, according to people intimately involved in the legislative process, no one lobbied harder for the passage of SB 469 than those associated with BP.

With the stroke of the pen, Governor Bobby Jindal likely saved the oil and gas industry billions of dollars in damages for which they otherwise would have been legally responsible, damages that are legitimately owed to hundreds, if not thousands, of hardworking families, businesses, and coastal communities who were devastated by and continue to suffer from the lingering effects of the worst environmental disaster in American history. Governor Jindal may claim this was about ending “frivolous lawsuits” and creating a “more fair and predictable legal environment,” but unfortunately for him, the geniuses on his communications team allowed Don Briggs, the President of the Louisiana Oil and Gas Association, to tell it like it is, “a huge victory for the oil and gas industry.” To be sure, that may actually be an understatement.

This wasn’t about ending frivolous lawsuits or better ensuring a fair and predictable legal environment; it was about rigging the law in favor of the biggest, wealthiest, and most powerful industry in Louisiana (and arguably, the world).

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Thomas Enright, the Governor’s Executive Counsel, argues that claims for damages against BP would not be affected by SB 469, because the federal Oil Pollution Act preempts the new Louisiana state law. Notwithstanding the irony and the hypocrisy of Governor Jindal, seemingly for the very first time in his entire career, invoking and championing the preemption doctrine, Enright may very well be correct in his analysis.

But the simple fact is: BP’s lawyers can and will argue otherwise; it’s an issue of first impression that will ultimately be determined by the courts, not by Jindal’s attorney. SB 469 provides a new and novel line of defense. Indeed, Louisiana’s Attorney General and nearly 100 legal experts from the nation’s top law schools all agree. The oil and gas industry’s lawyers know it’s true, too; after all, by Governor Jindal’s own admission, they helped write the law.

Even if Enright is, in fact, right and even if the courts eventually rule against BP, because these issues will take months, if not years, to fully resolve, Jindal’s decision to sign and enact SB 469 almost certainly reduced substantially the anticipated settlement values for thousands of Louisiana citizens. And that‘s why BP stands to gain billions of dollars. Remember, BP has enormously deep pockets; if they wanted to, they could afford to litigate these claims for the next century without ever affecting or even touching their bottom line. The average citizen, however, cannot afford and would never be inclined to wage a war of attrition against BP about the preemption doctrine as it relates to state law conflicting with the Oil Pollution Act.

Remember too, the longer the legal process, the less those who were affected and damaged by BP’s negligence can expect. In a complex case involving billions of dollars, a broadly and vaguely worded new law can have an enormous economic value.

Make no mistake: Governor Jindal understood this. As reported by Patrick Flanagan of The Independent MonthlyNikesh Jindal, Bobby Jindal’s younger brother, “is an attorney with Gibson Dunn, one of the law firms representing BP against the damage claims… assigned to the division handling BP’s case,” a critical detail and potentially a massive conflict of interest that has never been fully explained or even properly disclosed. If Governor Jindal’s brother Nikesh didn’t explain the stakes to him, Jimmy Faircloth, Jindal’s former executive counsel and longtime confidant, should have. Quoting from The Times-Picayune (bold mine):

Also, the claim that SB 469 got a full public airing isn’t true. The bill was cobbled together late in the session by the governor’s former executive counsel, Jimmy Faircloth, and switched to a different Senate committee hours before a hearing on it. That limited public input. Mr. Verchick pointed out in a response to Mr. Enright Wednesday that the chairman of the House Natural Resources Committee also curtailed debate on the bill.

It’s worth noting that Representative Gordon Dove, the chairman of the House Natural Resources Committee, didn’t just shut off debate on the bill; he also refused to read into the record, as is customary, the names of citizens who showed up to support or oppose the bill. If he had, he would have revealed that ten times as many people, almost all of whom were either coastal activists or environmental professionals with no personal financial interest whatsoever, showed up to oppose the bill than those who showed up to support the bill, almost all of whom were being paid by organizations, agencies, and companies with a direct financial interest. (I am in receipt of this documentation and can send it upon request; I’m not posting it out of an abundance of caution, because it contains the home addresses, phone numbers, and e-mail addresses of private citizens).

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If it weren’t already obvious that SB 469 had little to do with ending the SLFPA-E’s lawsuit and almost everything to do with broadly immunizing the oil and gas industry from a wide range of otherwise legitimate claims, Governor Bobby Jindal made it abundantly clear only a few hours after he signed the bill into law. Later on Friday, Jindal announced he was replacing Tim Doody, the Chairman and founding member of the SLFPA-E, with a former oil and gas industry insider who openly admitted his biases and ignorance. Quoting from The Advocate (bold mine):

In a second blow to the flood protection authority Friday, Jindal announced that Tim Doody, a St. Bernard Parish resident who has served on the authority since it was created, will be replaced by Tyrone Ben, a fellow St. Bernard resident who works for the Guidance Center, an outpatient behavioral health and counseling center. Doody is the fourth member of the authority who supported the suit to be replaced since the case was filed.

With Doody’s replacement, only five of the nine members of the board are on record in favor of continuing the suit. Two more members, one who supports the suit and one who opposes it, are expected to be up for renomination later this year.

Ben, who was urged to apply for a seat on the board by former St. Bernard Parish President Craig Taffaro, currently an official in Jindal’s administration, said he did not have a “political agenda” in applying for the seat.

Based on his experience working for oil and gas companies, Ben said, he is inclined to believe that because energy companies needed to receive permits for their work, they were already being regulated and the lawsuit was not necessary. However, he said he was willing to listen to those who disagree.

“I don’t know anything on the other side of the argument,” Ben said. “I would be open-minded. I would be willing to listen. Evidently they had something that compelled them to file it in the first place.”

Jindal officials have said opposition to the suit would be a “litmus test” for all new appointees to the authority, and Ben said he was asked about the case by Jindal administration officials prior to his appointment.

“I said if my selection was predicated on that, I might not be the best person for the job,” he said.

Because he was appointed after the session ended, Ben will not have to face Senate confirmation until next year’s session. Jindal’s other three appointees were all confirmed by the Senate this year.

Despite Mr. Ben’s equivocations, he was, very obviously, selected to oppose the authority’s lawsuit, and because Mr. Jindal has the opportunity to replace two more members within the year, including one who supports the lawsuit, the Governor will almost certainly have the five votes he needs for the SLFPA-E to withdraw the case within the year. In other words, SB 469 was not necessary at all for Mr. Jindal to ensure that the SLFPA-E’s lawsuit was dropped. That may have been how the legislation was sold to the public, but again, that’s not what the law actually does. Indeed, several legal experts argue that SB 469, due to its purposely sloppy and overly broad statutory language, won’t affect the SLFPA-E’s lawsuit at all.

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Before I ask what I believe to be the single question that could destroy Bobby Jindal’s political future, I think it’s important to focus first on what may be the most astonishing accomplishment of his career. To be sure, the accomplishment doesn’t actually belong, exclusively, to him; it also belongs to his wife Supriya.

Only a few short months after he was elected to his first term, Bobby Jindal’s wife Supriya established The Supriya Jindal Foundation, a tax-exempt and tax-deductive charity that provides schools with high-tech whiteboards, a worthy pet cause that immediately was embraced by some of Louisiana’s most powerful companies. In almost no time at all, the Supriya Jindal Foundation went from an up-start that existed only on paper to a full-fledged organization with millions of dollars in the bank. Its astronomical success at immediately cultivating major donors and raising vast sums of money had never been done before in Louisiana, and it provided the new First Lady of Louisiana with the platform and the resources necessary to embark on annual statewide goodwill tours, doling out hundreds of thousands of dollars worth of much-needed technology to teachers and schools.

Unfortunately for Bobby and Supriya Jindal, eventually, people began asking questions about where all of that money actually came from, and once they started asking questions, it didn’t take long to figure out that the Supriya Jindal Foundation was funded, almost exclusively and entirely, by companies seeking special incentives and preferred treatment from the State of Louisiana. Quoting from a 2011 report in The New York Times (bold mine):

AT&T, which needed Mr. Jindal, a Republican, to sign off on legislation allowing the company to sell cable television services without having to negotiate with individual parishes, has pledged at least $250,000 to the Supriya Jindal Foundation for Louisiana’s Children.

Marathon Oil, which last year won approval from the Jindal administration to increase the amount of oil it can refine at its Louisiana plant, also committed to a $250,000 donation. And the military contractor Northrop Grumman, which got state officials to help set up an airplane maintenance facility at a former Air Force base, promised $10,000 to the charity.

The foundation has collected nearly $1 million in previously unreported pledges from major oil companies, insurers and other corporations in Louisiana with high-stakes regulatory issues, according to a review by The New York Times.

….

Dow Chemical, which has pledged $100,000 to the foundation, is the largest petrochemical company in Louisiana and has had numerous interactions with state officials during the Jindal administration, including an investigation into a July 2009 spill at its St. Charles Parish plant that forced the evacuation of area homes. The state in December 2009 proposed fining the company and its Union Carbide subsidiary for allowing the release of a toxic pollutant and failing to quickly notify state authorities of the leak, but so far no fine has been assessed.

….

Alon USA, an Israeli oil company that has pledged $250,000 to the Jindal Foundation, last year sought permit changes that would allow it to discharge more pollutants at its Krotz Springs refinery. In 2009, state environmental officials also eased requirements for the company to check for spills of oil, ammonia or other contaminants in waterways to twice a month, instead of twice a week, records show.

Several of the charity’s major donors are large state contractors, like Acadian Ambulance, or D&J Construction, which alone has received $67.6 million in contracts since 2009, mostly for highways, said a separate report on the foundation being issued this week by Citizens for Responsibility and Ethics in Washington. Both companies have pledged at least $10,000 to the foundation.

Since The New York Times report, the Supriya Jindal Foundation appears to have dramatically scaled back its activities. Aside from a few minor edits, its website hasn’t changed in years. According to its most recently available 990 report, the organization has no employees and only three officers, all unpaid: Supriya Jindal, Jeff Anger, a former lobbyist who runs a political action committee, and Lynn Moore, the wife of Jeff Moore, a member of the LSU Board of Supervisors and a hotelier who inherited his fortune from his family’s oil and gas company.

Perhaps not surprisingly, at the time of The New York Times report, Governor Jindal’s press secretary Kyle Plotkin (who was recently promoted to Chief of Staff) was not too thrilled. Quoting (bold mine):

“It is a completely nonpolitical, nonpartisan organization created by the first lady, who as an engineer and the mother of three children, has a passion for helping our young people learn science and math,” said Kyle Plotkin, the press secretary. “Anything other than this reality has plainly been dreamed up by partisan hacks living in a fantasy land.”

The inability of Governor Jindal and his staff to recognize the enormous concerns raised by the size, the timing, and the source of corporate donations to his wife’s foundation and the arrogant, bombastic dismissiveness with which they treated those concerns were and continue to be troubling.

But if you care about the corrosive influence of money in our political process, the potentiality of a government defined by closed door quid pro quo agreements between elected leaders and their corporate benefactors, then you should be even more alarmed by the newest Jindal non-profit.

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Three months after the SLFPA-E filed its landmark lawsuit against 97 oil and gas companies, Bobby Jindal launched America Next, a 501(c)(4) social welfare organization that many immediately perceived to be a launching pad for a 2016 Jindal Presidential campaign.

If, in fact, America Next is nothing more than about promoting Jindal’s candidacy, through the ruse of promoting his “ideas,” (and all indications, thus far, are that it is), then it, undoubtedly, violates federal tax laws regulating and defining 501(c)(4) social welfare organizations. Donations to Jindal’s new organization aren’t tax-deductible, but the organization is still tax-exempt. And perhaps most importantly, as a 501(c)(4), America Next isn’t required to disclose any of its donors to the public.

When Jindal was first elected Governor of Louisiana in 2007, he promised a new era of transparency in government. He campaigned on implementing the “gold standard” of ethics reform. He lambasted the cronyism and corruption that had defined state politics for decades, depicting his opponents as clowns who were willing to do anything for a bribe.

Seven years later, approaching lame duck status, Bobby Jindal is preparing his exit from the Governor’s Mansion by establishing a tax-exempt organization intended to promote his candidacy for national office, and when asked if he intended to reveal the donors to his new organization, Jindal not only refused, he acted as if disclosure of his donors – the very definition of transparency- was nothing more than a trap set by his political opponents. Quoting from The Times-Picayune (bold mine):

During a breakfast meeting with political reporters Wednesday, in which he unveiled a market-alternative alternative to the Affordable Care Act prepared by America Next, Jindal was asked whether he would reveal the group’s financing. He referred the question to the group’s executive director, Jill Neunaber, a former aide to the 2012 Mitt Romney for President organization.

It didn’t take long for Neunaber to respond to an email question:

“America Next is a 501(c)(4) that will make all disclosures as required by law,” she said in an email. “Beyond that we do not see any reason to give the Obama Administration opportunity to unjustly target conservative donors.”

The glaring truth is: America Next isn’t a social welfare organization, and it shouldn’t be tax-exempt under Section 501(c)(4). It’s an organization of political consultants, led by a woman who most recently worked for Mitt Romney’s campaign, in order to support Jindal’s candidacy, and they’re all hoping that everyone else is too dumb, too lazy, or too scared to call them out for openly breaking the law. If Bobby Jindal wants to build an infrastructure for a 2016 campaign, he should have formed a Political Action Committee; that would have also provided him with certain tax exemptions. But there’s one major difference: Unlike a PAC, 501(c)(4)s aren’t required to disclose their donors.

So, for the next year or two, Jindal hopes we all ignore his blatant disregard of laws that are designed to ensure transparency and the public’s right to know who is paying their elected officials on the side, how much they’re paying, and when those payments are made. Jindal hopes we’ll consider America Next to be his quaint little think tank, and he’s banking on the belief that Louisiana citizens won’t group the donations to his new non-profit with his actions as Governor. But as his wife’s foundation proves, it would be foolish not to look into who is bankrolling his organization.

That’s the single question that could destroy Bobby Jindal’s political future: Who? 

 

 

If You Care About Louisiana, This Should Make You Livid

“A lot of people mentioned to me how omnipresent BP lobbyists were, more than the other major oil companies were (though all of them showed plenty of interest), so much more that it got a lot of people wondering, `What’s in the bill for them?’ It certainly got us wondering.” – John Barry, June 5, 2014

“As our analysis shows, SB 469 fails to protect the local governments whose concerns your letter concedes are at issue and puts at risk billions of dollars of local government claims against BP. And, here, it should be noted that BP heavily lobbied for the passage of SB 469 – a fact strongly suggesting that the now known consequences of SB 469 were not unintended at all.” – Robert Verchick, June 4, 2014

“They (BP) didn’t lobby me, because they knew my position. But they lobbied several of my colleagues.” – State Representative John Bel Edwards, June 5, 2014

*****

In the late evening of April 20, 2010, Ryan Chaisson, Wes Bourg, Dustin King, and Albert Andry- a group of friends who called themselves the Knight Ryderz- were out fishing in the Gulf of Mexico. They steered their boat ten miles south of the Pass-a-Loutre Wildlife Management Area, fifty miles off the Louisiana coast, alongside the leg of a massive offshore oil rig. There, under a waxing crescent moon, a canopy of stars, and the blinking lights of nearby rigs, the four men witnessed an explosion that would set into motion the worst environmental disaster in American history and the largest oil spill in the history of the world. Shortly after the explosion, they moved to a safe distance and recorded this video.

Eleven people died that night, and for the next 87 days, more than five million barrels of oil gushed into the Gulf of Mexico, ravaging the already fragile coastal ecosystem, poisoning and killing marine life, and nearly crippling Louisiana’s seafood industry.

Four years later, BP still hasn’t paid billions in damages owed to families, businesses, and communities devastated by their negligence. Four years later, oil continues to wash ashore, and four years later, there are reports that suggest people are still getting severely sick due to their exposure to the dispersant BP used to “clean up” the oil. Today, literally today, federal investigators finally released a report on the cause of the spill- the failure of the blowout preventer, a critical piece of safety equipment.

*****

Foster Campbell, a former State Senator who is currently serving on the Public Service Commission, once famously quipped, “The flag of Texaco flies over the Louisiana State Capitol.” Texaco has since merged with Chevron, but as this year’s legislative session proves, Campbell’s joke still works. All you need to do is replace Texaco with BP.

For nearly a century, Louisiana has been involved in a torrid, abusive, and complicated love affair with the oil and gas industry. The industry generates an enormous amount of wealth, provides tens of thousands of good-paying jobs, and represents the state’s single-largest economic engine. But it’s also at least partially, if not principally, legally responsible for the destruction and degradation of the state’s coast- the marshland and barrier islands that serve as the first and most critical line of defense against hurricanes.

For far too many in Louisiana, the environment is a mushy, amorphous, liberal issue. Even when scientists explain the issue in colloquial terms most people should understand (i.e. “Louisiana is losing a football field of land every hour”), it’s difficult to conceptualize. After all, you can’t sit outside and watch as an entire football field is, literally, swallowed back into the ocean in only an hour. But even if you could, that may still not be sufficient enough to convince the current regime of science deniers occupying the Governor’s Mansion and the tables at the Baton Rouge Ruth’s Chris Steakhouse.

Money, on the other hand, is immediately tangible. It talks, and it walks. Money buys access, influence, and power, and much like the rest of the country, in Louisiana, it also buys politicians.

*****

Last July, the Southeast Louisiana Flood Protection Authority- East (SLFPA-E) filed a landmark lawsuit against 97 different oil and gas companies “alleging that the conduct of those companies in their operations in a ‘buffer zone’ of marshes and wetlands between SLFPA-E’s levee system and the Gulf of Mexico has caused that wetland system to degrade and disappear, making SLFPA-E’s mandated role of storm surge protection a more difficult and expensive task.” Put more simply, the SLFPA-E sued these companies for destroying the environment.

The SLFPA-E had a few important things going for them: The law, the history, and the science. Environmentalists and legal scholars praised the authority’s bold decision to finally hold these companies accountable for the billions of dollars in damages they illegally and negligently inflicted.

But the oil and gas industry had an ace up its sleeve: Louisiana’s politicians were already on their payroll. The Texaco corporate logo may have changed, but the flag of Big Oil still soars high above the House That Huey Built.

Almost immediately, Governor Bobby Jindal, the recipient of more than $1 million in campaign contributions from the oil and gas industry, announced his vehement opposition to the SLFPA-E’s lawsuit, arguing, among other things, that it was an illegal usurpation of his authority (not true), that it was merely an attempt by greedy trial lawyers to earn massive amounts of money from these companies (not true, but even if it were, Jindal unwittingly acknowledged that the oil and gas companies were culpable and likely to lose), that these lawyers entered into an illegal agreement with the authority (not true, as the courts subsequently made very clear), and that it undermined the state’s long-term coastal restoration plan (once again, not true; if anything, it bolstered the plan).

Although it was established as an apolitical authority of coastal restoration experts and professionals, through a referendum supported by nearly 80% of Louisiana voters, Governor Jindal made it abundantly clear: From here on out, if you wanted to serve on the SLFPA-E, your political loyalty to him (and by extension, to the oil and gas companies that finance his campaigns) was more important than anything else on your resume.

The powerful Louisiana Oil and Gas Association (LOGA) launched a full-scale astroturf campaign opposing the lawsuit, complete with phony websites and stacked town hall meetings. LOGA’s campaign was informed, almost entirely, by a thoroughly debunked study about legacy lawsuits (which, notably, have nothing to do, substantively, with the SLFPA-E’s suit) written by LSU Professor David Dismukes.

Clancy DuBos of The Gambit reports, “LOGA took it a step further and filed a lawsuit challenging the legality of SLFPA-E’s contract with its legal counsel. The contract includes a handsome contingency fee. LOGA’s lawsuit specifically claims the SLFPA-E suit would cause ‘irreparable injury’ to LOGA members and have a ‘chilling
 effect on the exploration, production, development and transportation’ of oil and gas in Louisiana.” LOGA ultimately lost its lawsuit; there was nothing illegal or improper about the ways in which the SLFPA-E hired its legal counsel. But because of the case, thankfully, we now have the transcript of LOGA President Don Briggs’ deposition. Quoting again from The Gambit:

For example, Briggs was asked in a Feb. 20 deposition if he had “any facts or information” to back up his opinion that oil and gas exploration did not contribute to coastal land loss. He answered, “No. … Nothing.”

That was just the start. Consider the following exchanges in Briggs’ deposition:

Question:·Is it your opinion that oil and gas companies are leaving Louisiana because of the threat of lawsuits?

Briggs: Yes.

Question: Which oil companies have left Louisiana because of lawsuits?

Briggs: I don’t know.

Question: Do you have any facts or data to support your opinion?

Briggs: No.

Question: Is it your belief that oil and gas companies are not coming to Louisiana because of the threat of lawsuits?

Briggs: Yes.

Question: Which oil companies have decided not to drill in Louisiana because of the threat of lawsuits?

Briggs: I don’t know.

Question: Do you have any facts or data to support your opinion?

Briggs: No.

Briggs’ deposition contains many more admissions, including one that he hadn’t even read the SLFPA-E lawsuit.

*****

Because Bobby Jindal couldn’t stop the lawsuit through an executive order and because Don Briggs and the insiders he represents couldn’t convince the courts to agree with anything he argued, they turned to their trusted friends in the Louisiana legislature.

Not surprisingly, despite a few false starts and failed attempts, the legislature eventually passed SB 469, a bill that was originally written and sponsored by State Senator Robert Adley, an oilman himself who has received nearly $600,000 in campaign contributions from the oil and gas industry. After Adley’s bill failed, in a move that would seem sneaky and skilled if it hadn’t been so sloppy and blatant, it was subsequently taken up by State Senator Bret Allain, whose torturous misunderstanding of the law is actually less offensive than the fact that he sued (and settled with) an oil and gas company for the very thing his bill now seeks to prohibit.

On May 31st, Loyola Law Professor Robert Verchick sent Governor Bobby Jindal a detailed legal memorandum, urging him to veto SB 469. But, as Verchick made clear, his concerns had nothing to do with the merits or the politics of SLFPA-E’s lawsuit. Instead, Verchick called attention to the ways in which the bill’s vague, ambiguous, and overly broad language could jeopardize and potentially invalidate an enormous range of otherwise legitimate pending and future claims for damages against oil and gas companies. Most importantly, Verchick notes that SB 469, if signed into law, would likely be used by BP to reduce their financial and legal exposure to damages resulting from the 2010 Deepwater Horizon disaster.

As of this writing, 79 legal scholars from all over the country have signed onto Professor Verchick’s memorandum.

Quoting from an earlier report by Mike Hasten of Gannett (bold mine):

A Loyola law school professor and several professors from other law schools issued a statement that the bill could jeopardize claims of parishes and individuals seeking compensation for damages from the massive BP oil spill in the Gulf of Mexico.

Jindal said he agreed to delay signing because “we’re certainly not going to do anything to impede our people’s ability to file claims in regard to the explosion.”

However, the governor said he does not believe the bill would affect those lawsuits because they are filed in federal court, and the bill deals with state laws.

Jindal acknowledged that oil industry attorneys were involved in drafting the bill.

The fox, in other words, is guarding the hen house. Oil and gas industry attorneys weren’t merely “involved;” they wrote the bill. According to those who were there, lobbyists and lawyers for BP seemed to play an outsized role.

Earlier tonight, John Barry, the former chairman of the SLFPA-E and the internationally acclaimed author of Rising Tide: The Great Mississippi Flood of 1927 and How It Changed America, told me, “A lot of people mentioned to me how omnipresent BP lobbyists were, more than the other major oil companies were (though all of them showed plenty of interest), so much more that it got a lot of people wondering, ‘What’s in the bill for them?’ It certainly got us wondering.”

I also spoke with State Representative John Bel Edwards, who echoed Mr. Barry’s concerns. Oil and gas lobbyists already knew Representative Edwards was opposed to the legislation, he said. They didn’t even waste their time trying to convince him otherwise. But lobbyists, particularly lobbyists associated with BP, spent a lot of time with some of his colleagues.

Despite the fact that 79 leading legal scholars from all over the country and Louisiana’s own Attorney General are publicly urging the Governor to veto the bill, Jindal’s executive counsel, Thomas Enright, suggested on Wednesday that the bill would be signed into law. Quoting again from Mike Hasten of Gannett (bold mine):

Thomas Enright, Jindal’s executive counsel, dismissed (Attorney General) Caldwell’s recommendation in a Wednesday afternoon letter that says the Legislature fully debated the bill, and that local governments had the opportunity to amend it if they were concerned about its impact on their ability to sue.

….

Enright maintains in his letter, “Simply put, this piece of legislation was fully debated, was the subject of intense media coverage throughout the session and now represents the Louisiana Legislature’s intent to make absolutely clear that irresponsible lawsuits, such as the one filed by SLFPA-E, are unwelcome in this state.

Even if one agrees that SLFPA-E’s lawsuit was irresponsible, that hardly justifies enacting an even more irresponsible law.

Professor Verchick responded to Enright’s letter and skillfully and methodically dismantled his argument. Quoting in full (bold mine):

Dear Mr. Enright:

I have obtained a copy of your letter of June 4, 2014, addressed to Attorney General James D. Caldwell, which you furnished to the media. While I understand your position, I find your reasoning unpersuasive and, in some cases, based on inaccurate facts.

First, you write that the reasons set forth by the Attorney General for vetoing SB469 lack “specificity” as to the bill’s “unintended consequences.” To that end, I direct your attention to the legal analysis provided by my colleagues and me and encourage you to review our memorandum. That document—seven pages long and signed by more than 20 legal professors and scholars (now 78) from the most prestigious law schools across the country, including our very own Loyola, Tulane and LSU law schools—reports in stark and detailed language the many ways that SB469 threatens billions of dollars worth of claims related to the BP oil spill. I’m frankly baffled at how such consequences could go ignored in the Governor’s rush to sign this bill into law. For that reason, I include a copy of our full analysis for you to review.

In addition to the reasons outlined in that document, we are now also concerned, as you no doubt know, that NOAA has expressed serious questions about SB469, which could result in the loss of federal funding to protect our coast. Federal approval of the bill was never obtained as is required by federal law or even sought as of yesterday, June 3, 2014. In addition, the weakening of parish authority to protect their coastlines could lead NOAA to rescind the state’s coastal management program, depriving the state of needed federal revenue.

Second, you say, “this piece of legislation was fully debated, was the subject of intense media coverage throughout the session and now represents the Louisiana Legislature’s intent.” But SB469 was not fully debated. As you know, in the legislative process, discussion by the public can only take place in committee hearings. The bill was first assigned to Senate Committee Judiciary A, where it was clear the bill would have failed. When the author of the bill learned of its obvious fate, the bill was hastily moved, rewritten, and then heard in Senate Natural Resources Committee less than 18 hours later. There was next to no public notice, and debate on the bill was thus cut short. Furthermore, when the bill moved to the House of Representatives, it was assigned to the House Natural Resources Committee, instead of the Civil Law Committee where legislators skilled and experienced in the issues presented by SB469 could have addressed same. Worse, Representative Gordon Dove, Chair of the House Natural Resources Committee cut off debate.

Regardless, and contrary to the suggestion, neither legislative debate – nor media coverage – can substitute for thorough legal analysis by experts in the field. SB469 has been subject to just such an analysis, and under that analysis SB469 fails. As our analysis shows, SB469 fails to protect the local governments whose concerns your letter concedes are at issue and puts at risk billions of dollars of local government claims against BP. And, here, it should be noted that BP heavily lobbied for the passage of SB469 – a fact strongly suggesting that the now known consequences of SB469 were not unintended at all.

The bill may even fail to achieve its original goal— termination of the SLFPAE’s lawsuit. The bill says it applies only to “local government entities,” a term with a specific legal meaning that does not include regional flood protection authorities or the levee districts that make up SLFPAE. And, in the one place SB469 does mention regional flood protection authorities, the bill fails to include levee districts. The SLFPAE lawsuit is filed on behalf of the East Jefferson Levee District, the Orleans Levee District, and the Lake Borgne Basin Levee District as entities distinct from SLFPAE itself. So those levee districts’ claims in the SLFPAE lawsuit could well remain untouched. In sum, SB469 fails in every regard.

So far, Jindal’s allies have struggled to come up with a convincing response. Quoting again from Mike Hasten (bold mine):

Don Briggs, president of the Louisiana Oil and Gas Association, objected before The Daily Advertiser’s editorial board Wednesday to complaints that the legislation, if signed into law, would complicate or hinder claims against BP for the 2010 oil spill.

“Twenty three lawyers, judges and professors from California to Florida were somehow able to come together on a seven-page dissertation on what SB 469 does in less than 24 hours after it passed,” Briggs said. “Has anyone seen 23 lawyers agree on anything? Much less in 24 hours over email? If it doesn’t smell fishy to you, it certainly should.”

Again, notably, Professor Verchick’s memorandum now has the endorsement of nearly eighty “lawyers, judges and professors from California to Florida.” Maybe it is surprising to people like Mr. Briggs, a man who has repeatedly and, at times, hilariously demonstrated his ignorance of the law, that legal experts can agree on an issue in less than 24 hours. To me, if anything, it’s not evidence of some nefarious conspiracy; it’s just proof that the bill is clearly flawed. Unless Mr. Briggs can produce documentation of a secret, national network of law professors and judges who have a financial interest in defeating SB 469, I think it’s safe to say the only thing that smells “fishy” here is the outsized role he and his fellow industry lobbyists (that is, the people who actually do have a financial interest) played in crafting legislation that could potentially keep oil and gas companies off the hook for billions in damages. Continuing (bold mine):

Stephen Waguespack, president of the Louisiana Association of Business and Industry, said he considers the effort to get to Jindal to veto the bill is the SLFPA-E attorneys “doing everything they can to save the contract. The opponents did not raise a lot of issues in the session. It’s amazing how well thought out it is 48 hours after the session.

Prior to becoming the President of LABI, Stephen Waguespack was Bobby Jindal’s Chief of Staff. If Mr. Waguespack were serious about his new job, he would have done his homework. On April 8th, the attorneys representing the SLFPA-E sent out a press release captioned:

Attorneys Representing  Southeast Louisiana Flood Protection Authority – East Put The Ball in Oil and Gas Companies’ Court – Offer To Tear Up Contract

Under New Terms, Public Would Not Pay a Penny for Lawyers’ Fees

Suffice it to say, the attorneys’ offer went nowhere, and Governor Jindal, Mr. Briggs, and Mr. Waguespack, along with a handful of conservative commentators, continue to mislead the public, relying on lazy and hackneyed cliches about the evils of trial lawyers in order to score cheap political points. It’s not folksy; it’s dishonest and hypocritical. That said, Governor Jindal is imminently qualified on the subject of bad lawyers; since he was elected, he’s hired and enriched more bad lawyers than anyone else in the State of Louisiana.

But if you care about Louisiana, that’s not what should make you livid. You should be livid about the ways in which BP, a company responsible for the largest environmental disaster in American history, bought off an incompetent legislature and an absentee Governor and somehow managed to help write and pass a bill that, ostensibly, was about killing one lawsuit but, effectively, is about much, much more. Quoting from Professor Verchick’s memorandum (bold and underline mine):

As stated above, these open questions present a significant litigation risk to the governmental entities’ BP claims, as well as for claims from future spill events. While it is not a given that this risk will ultimately result in a dismissal of the state and parish claims against BP under OPA, we believe that the risk creates an uncertainty and an almost-sure delay in resolution of the BP litigation that is unacceptable. A court could plausibly interpret SB 469 to dismiss or limit damage claims, now before the court, that the state and its subdivisions have brought against BP. Regardless of how the court ultimately rules, the very existence of these eventualities will devalue the plaintiffs’ settlement posture and perhaps lengthen the time those governmental entities will go without recompense for these categories of economic loss.

Should BP raise defenses based on SB 469 and succeed even partially, the results would needlessly and disastrously deprive Louisiana and its communities of precious revenue and cause considerable embarrassment for state leaders. The legal issues we raise here are real and unnecessary to take on. It would be foolish to bet tens of billions of dollars on their outcome.

*****

Former Louisiana Governor Edwin Edwards spent eight years in federal prison for accepting payments, totaling a few hundred thousand dollars, from would-be casino operators who sought his mostly unsuccessful “help,” after he had returned to his law practice, in receiving licenses from a state board comprised largely of people he had previously appointed. Former New Orleans Mayor Ray Nagin was convicted of using his position to steer business to a struggling granite and stone company he owned with his sons and taking bribes, in the form of paid vacations, meals, and cell phones, from people seeking contracts or incentives from the city.

For many, these crimes are unforgivable, a complete and total dereliction of duty, a breach of trust, and for many, these two men, along with former Congressman William Jefferson, will forever be remembered as criminals.

If Bobby Jindal signs SB 469 into law and if BP does what nearly eighty of the country’s most preeminent legal scholars anticipate they will do- with a law that BP’s own lobbyists likely helped to write, Governor Jindal would have betrayed the people of Louisiana far more than Edwin Edwards or Ray Nagin or William Jefferson ever did. Edwin’s deals, C. Ray’s vacations, and Dollar Bill’s $90,000 in the freezer would all pale in comparison to the $1 million that oil and gas companies have already deposited in Jindal’s campaign bank account, the $600,000 they’ve given, so far, to State Senator Robert Adley, and the millions more they’ve contributed to their other friends in the legislature.

Update: Bobby Jindal signed SB 469 into law.

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