Glenn Greenwald highlights this episode of Bill Moyer’s Journal, where Rep. Marcy Kaptur and economist Simon Johnson tell us that the big banks on Wall Street “own” Congress. An excerpt:

BILL MOYERS: Let me show you an excerpt from the speech President Obama made on Wall Street last month, September. Here is the challenge he laid down to the bankers.

PRESIDENT OBAMA: We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall.

BILL MOYERS: A reality check. Not one CEO of a Wall Street bank was there to hear the President. What do you make of that?

SIMON JOHNSON: Arrogance. Because they have no fear for the government anymore. They have no respect for the President, which I find absolutely extraordinary and shocking. All right? And I think they have no not an ounce of gratitude to the American people, who saved them, their jobs, and the way they run the world.

Why don’t they fear Obama? Because Obama’s top advisors are their own people, and they own Congress:

While the industry has scaled back its political spending in the wake of last year’s economic collapse, data from the Center for Responsive Politics show that it’s still investing heavily in the Senate, where it’s likely to have its best shot at stopping — or at least shaping — the crackdown on Wall Street that President Barack Obama has proposed.

And it’s clearly looking to Democrats to do it.

Of the $10.6 million the industry has given to sitting senators this year, more than $7.7 million has gone to Democrats.

The clue as to why our government struggles to deal with any substantial problem facing our country today is right there. So long as politicians must run massively expensive campaigns to get themselves elected, they will be in thrall to those who give them the most money. Between that and a media that’s incapable of either understanding or addressing the problems that face our nation, it’s hardly any wonder that some (myself included) find ourselves thinking that our nation is doomed.

Via Glenn Greenwald, Marc Ambinder has a pretty good explainer of the background to the Citizens United v. FEC campaign finance case that’s currently before the Supreme Court. Ambinder is right that campaign finance “reform” has largely resulted only in a confusing patchwork of regulations that fail to moderate the influence money has in politics. The problem of course is the underlying reasoning at work in Buckley v. Valeo, where the Supreme Court held that money is the equivalent of speech and thus entitled to First Amendment protections. It’s frankly impossible to overstate the corrosive influence this reasoning has had on politics in our country, but Ambinder is right that this precedent isn’t about to be overturned anytime soon. Things will have to get much, much worse before they get any better.

In March we touched on the Supreme Court’s oral arguments in the case of Caperton v. Massey, a case that explored the point at which judicial campaign funding can give rise to an appearance of bias when contributors appear before the judge whose campaign they’ve contributed too. Yesterday the Supreme Court ruled for the plaintiff in the case, finding that excessive contributions by plaintiffs and defendants to a judge who is deciding their case can give rise to actual bias that violates plaintiffs’ and defendants’ due process rights under the Constitution. In March I wondered what sort of standard the Supreme Court would craft. Their answer:

There is a serious risk of actual bias when a person with a personal stake in a particular case had a significantand disproportionate influence in placing the judge on the case byraising funds or directing the judge’s election campaign when thecase was pending or imminent. The proper inquiry centers on the contribution’s relative size in comparison to the total amount con-tributed to the campaign, the total amount spent in the election, and the apparent effect of the contribution on the outcome.

They then find that the contributions in this case had a “significant and disproportionate” effect on the outcome of the case, and that the judge in the case should have recused himself. Of course this is a pretty squishy standard, a fact that Chief Justice Roberts makes clear in the dissent where he lists forty different questions (via Vince) about how the standard should be implemented. It’s clear though that the real divide is between those justices who are opposed in general to campaign finance limitations, and those who are not, with Justice Kennedy (in this case but not in others) siding with the majority. I think this case is an excellent example of the dangers of our present system of campaign finance (generally private) but as you can see, the circumstances must be fairly extreme (one-sided contributions in a judicial campaign where the contributor is before the judge) before the Supreme Court is going to reach out to the Constitution to permit limitations on financing. I applaud the fact that five out of nine of the justices think that there’s a point at which it’s just too much, but this is a pretty backhanded way of getting at campaign finance reform. Impartiality in judges is hardly a guarantee whatever manner in which they are placed on the bench, but this case should be a lesson to states that appointments, or at least state funded elections, are by far the most reliable way to avoid the appearance of (or actual) bias on the bench.

Adam Liptak at the NY Times writes that the Supreme Court appears to be gunning for parts of the McCain-Feingold campaign finance law that was passed in 2002. This should come as no surprise. Conservatives in general are opposed to serious efforts to constrain campaign finance spending, and Scalia and Thomas are on the record as opposing the holding of even Buckley v. Valeo, the 1976 Supreme Court decision that got us in this mess in the first place by equating money to political speech and striking down any efforts to limit campaign spending. To some extent I sympathize with the Court; reading the quotes from oral argument, it’s plain to see that they struggle to define a working standard as to what is and is not an illegal campaign contribution. But that’s because the entire framework of campaign finance, as defined by Buckley, is incoherant and unworkable. Unfortunately Democrats also certainly have no impetus to limit campaign contributions, given the massive war chest that Barack Obama accumulated through the Presidential campaign. So long as Buckley stands, serious campaign finance reform in this country is impossible, and money will continue to serve as a proxy for political influence. 

Some local governments across the country are experiencing buyer’s remorse:

A decade after communities around the country adopted term limits to force entrenched politicians from office, at least two dozen local governments are suffering from a case of buyer’s remorse, with legislative bodies from New York City to Tacoma, Wash., trying to overturn or tweak the laws.

The campaigns against term limits, should they succeed, would drastically change the process by which millions of Americans elect a variety of their leaders — and how much power those leaders can amass once in office.

The elected leaders, some of whom supported term limits when they were imposed, argue that the limits severely hamper government and leave the officials little time to figure out the mechanics of their office. That forces them to gravitate toward small-bore projects that can be done quickly, rather than anything visionary that would take years to achieve.

In what could be called the second-term itch, they are pushing to revise the laws so they can serve another term (New York City and Rowlett, Tex.) or to repeal them so they can seek re-election indefinitely (State College, Pa., and Daytona Beach Shores, Fla.).

“It has been an unmitigated disaster for the city,” said Phil Hardberger, the departing mayor of San Antonio, who supports a November referendum to lengthen term limits to four two-year terms from two.

“The learning curve of how city government works and how to get things done is steep, but when you keep putting people in, and throwing them out, there is very little accountability,” he added. “We do a lot of churning here, but we don’t produce a lot of butter.”

Terms limits are popular politically in some areas because they seem to be a way to deal with the problems of entrenched, disconnected and corrupt politicians. And politicians like to run on term limits, or with promises not to be re-elected, because that gives them the appearance of being a man or woman of the people who’s not interested in their personal enrichment or success. What many people fail to realize is that being a public official (and not just a politician) is a job like any other, and those who are in that job longest are generally going to be more effective at what they do. This includes job duties like responding to the needs of constituents, or effectively running a large organization. And term limits are inherently un-democratic, as it removes a choice from voters that they might be willing to make, to re-elect someone they think has done a good job for them. Term limits are an inadequate solution regardless. Many politicians revoke their pledges once they’re in office, and their supporters let them get away with it. And now, as this article demonstrates, some supporters are beginning to wish they could keep the person they elected that they’ve found to be doing a good job. If producing public officials who are sympathetic and connected to their voters is the primary concern, then it makes a lot more sense to encourage ways by which citizens can run for and obtain public office, such as increasing salaries for political offices that are so ridiculously low as to preclude anyone who doesn’t already have their own money from running from for office. Or, increasing public financing for political campaigns, which will enable everyday people to run and enable everybody to run without selling out to various special interests to get their campaigns funded. Term limits are a simple and attractive solution, but they simply don’t work.

Harry Sargant III, a “bundler” for the McCain campaign, has managed to scare up money for his candidate from the most unlikeliest of places:

Harry Sargeant III, a former naval officer and the owner of an oil-trading company that recently inked defense contracts potentially worth more than $1 billion, is the archetype of a modern presidential money man. The law forbids high-level supporters from writing huge checks, but with help from friends in the Middle East and the former chief of the CIA’s bin Laden unit — who now serves as a consultant to his company — Sargeant has raised more than $100,000 for three presidential candidates from a collection of ordinary people, several of whom professed little interest in the outcome of the election.

Some of the most prolific givers in Sargeant’s network live in modest homes in Southern California’s Inland Empire. Most had never given a political contribution before being contacted by Sargeant or his associates. Most said they have never voiced much interest in politics. And in several instances, they had never registered to vote. And yet, records show, some families have ponied up as much as $18,400 for various candidates between December and March.

Both Sargeant and the donors were vague when asked to explain how Sargeant persuaded them to give away so much money.

“I have a lot of Arab business partners. I do a lot of business in the Middle East. I’ve got a lot of friends,” Sargeant said in a telephone interview yesterday. “I ask my friends to support candidates that I think are worthy of supporting. They usually come through for me.”

Sargeant said the same people who have helped him build relationships around the world also helped him create a vast network. In recruiting some donors, he confirmed he had help from a business associate who formerly was a top counterterrorism official in the CIA.

A review of state and federal campaign finance records found that this collection of donors has been activated four times. Their names — confirmed by Sargeant — first appeared in finance records on June 19, 2006, when about 50 of them each donated $500 to Crist’s gubernatorial campaign. Sargeant helped lead fundraising for Crist that year.

Thirteen of the donors resurfaced on Dec. 13, 2007, sending a combined $29,200 to Giuliani’s campaign at a time when Sargeant was heading up fundraising efforts in Florida for the former mayor. Seventeen of them sent the maximum allowed, $2,300, to Clinton’s presidential campaign on Dec. 24. And a dozen of them returned in March to write checks to McCain totaling $50,600.

Donors reached by phone or interviewed in person declined to explain who asked them to make the contributions.

Ibrahim Marabeh, who is listed in public records as a Rite Aid manager, at first denied that he wrote any political checks. He then said he was asked by “a local person. But I would like not to talk about it anymore.” Neither he nor his wife is registered to vote, but the two donated $4,600 to Clinton and $4,600 to Giuliani in December.

At the Twilight Hookah Lounge, owned by Nadia and Shawn Abdalla, patrons smoke tobacco flavored with honey and fruit from a menu that includes the strawberry-flavored Sex on the Beach and the strong, orange-flavored Fuzzy Navel.

The Abdallas, who are not registered to vote, said in an interview that they recalled writing a check to an organization in Miami, because a person with that organization was a friend of their mother’s. They said they could not remember his name.

Nader, 39, and Sahar Alhawash, 28, of Colton, Calif, who at one point ran the Avon Village Liquor store, donated a total of $18,400 to Giuliani, Clinton and McCain between December and March. About 80 people in the country made such large contributions to all three, and most were wealthy business executives, such as Donald Trump. The Alhawashes declined to comment about the donations. Abdullah Abdullah, a supervisor at several Taco Bell restaurants in the Riverside area, and his wife have donated $9,200 to McCain.

Reached at work, Abdullah said he knows little about the campaign. “I have no idea. I’ll be honest with you,” he said. “I’m involved in the restaurant business. My brother Faisel recommended John McCain. Whenever he makes a recommendation, we do it.”

Faisal Abdullah, 49, said he helped organize all of the contributions from members of his family. When he was asked who solicited the contributions from him, he said: “Why does it matter who? I’m telling you we made the contribution. We funneled it through the channel in Florida because that’s the contact we had. I was responsible for collecting it.”

“Business connections”, eh? I’m sure we’ll here more about these connections and where their money came from in the very near future. Strangely enough, these aren’t the only McCain contributors who’ve come up with more significant contributions than they appear to be capable of making. Employees of McCain’s friends in the oil industry appear also to favor the McCain campaign with their savings accounts:

Alice Rocchio is an office manager at the New York headquarters of the Hess Corp., drives a 1993 Chevy Cavalier and lives in an apartment in Queens, N.Y., with her husband, Pasquale, an Amtrak foreman.

Despite what appears to be a middle-class lifestyle, the couple has written $61,600 in checks to John McCain’s presidential campaign and the Republican National Committee, most of it within days of McCain’s decision to endorse offshore oil drilling.

At a June fundraiser, the Rocchios joined top executives at Hess Corp. — Chairman and Chief Executive Officer John Hess, his wife, Susan, his mother, Norma Hess, and six other officials in giving a total of $313,500 to a joint McCain-RNC fundraising committee, Federal Election Commission records show.

The donations, first traced by Campaign Money Watch last week, were part of $1.2 million in oil industry contributions to McCain’s Victory ‘08 Committee, 73 percent coming after McCain reversed his long-held opposition to offshore oil drilling. The non-partisan watchdog group said oil executives and their spouses from Colorado, Mississippi, Louisiana, California, Indiana, New Jersey and Florida also donated.

Hess, among the nation’s five biggest oil companies, conducts deepwater drilling in the Gulf of Mexico as well as off the coasts of Europe, Africa and Asia.

The Rocchios donated $4,600 to McCain’s campaign in February and another $57,000 at the June fundraiser.

Alice Rocchio, reached at the office, confirmed that she registered her ‘93 Chevy in February, but said that she “absolutely” used her own money to make the donations.

Moments later, she asked a reporter: “Are you done with your questions?”

Apparently there was no need for subtlety here; no one would EVER question how a solidly middle-class couple found the financial wherewithal to make the kind of donation only the wealthy do, especially when they happen to be employees of a company whose executives have also made big-money donations to a campaign whose candidate has made quite favorable statements about their business interests (except for his ridiculous declaration that he would “battle big oil“…hopefully the Rocchio’s missed that or they might ask for their money back.) Of course, Obama has his own critical network of “bundlers”, as the NY Times reports, and they’ve raised big-time money for his campaign. I’m not really sure that anybody is surprised that big-money donors find a way to get their money to their preferred candidates, come hell or high water, given how lax campaign finance laws are and how desperately candidates need money to win their races. Campaign finance reform of the scale necessary to curb this problem simply doesn’t exist in this country.

NPR reports that the first of what will be untold millions in independent expenditures on the Presidential race have been spent in the form of a television commercial linking McCain to Bush that has been unveiled as a test in Erie, Pennsylvania. The group behind it is the generically named (of course) Campaign to Defend America, comprised apparently of veterans of MoveOn.org who are none too eager to have their involvement in the group highlighted and whose money has been filtered through various liberal advocacy groups.

Of course, I have a problem with untraceable/undisclosable money being spent in the millions on electoral contests by shadowy advocacy groups, but as it is largely conservative-backed Supreme Court Justices who have helped to bring this situation about I can only say, turnabout is fair play.

Here’s an interesting article on Obama and the “special interest” groups that are contributing time and money to his campaign, mostly outside of the campaign finance regulatory system:

fter months of denouncing the influence of special-interest money in politics, Senator Barack Obama is nonetheless entering a critical phase of the presidential campaign benefiting from millions of dollars being spent outside campaign finance rules.

Mr. Obama has repudiated a California group, Vote Hope, that is working on his behalf. But it has pressed on and, along with a sister organization called PowerPac.org, is planning to spend up to $4 million promoting him in California and conducting voter registration drives aimed at blacks in 11 Southern states.

The group has already run radio advertisements with local ministers in South Carolina. New advertisements, some for television, have been prepared for California, one with the rap star Common and others focusing on black and Latino voters.

As the campaign treasuries of Mr. Obama and Senator Hillary Rodham Clinton are rapidly draining heading into the nominating contests in more than 20 states on Tuesday, independent political groups — whether so-called 527 groups, political action committees, nonprofit organizations or trade unions — are stepping in to help fill the void. The efforts of these groups, particularly 527s, which are named for a section of the tax code under which they fall, worry campaign finance watchdogs because many can take unlimited contributions from donors and have limited oversight.

Mr. Obama’s campaign says it has taken pains to discourage these efforts on its behalf, and in fact the campaign has no recourse in controlling them. “We do not think people should be donating to 527s,” said Bill Burton, a campaign spokesman. “We would rather have them involved in our campaign. It is our hope that anyone who supports Obama does so directly through his campaign and not through these outside groups.”

This is said with a wink and a nod of course. Of course they want people donating to 527s, because campaign finance law limits how much you can contribute directly to the campaign of a candidate. So what are well-off contributors supposed to do with all that money? Well, they funnel it to 527s and enjoy anonymity in the process because, ostensibly, 527s are not advocating directly for the election of one candidate or the other but on political issues in general, and so are not subject to the contribution limits and disclosure requirements of political action committees. Of course as we witnessed in 2004, prominent 527s like MoveOn and the Swift Boat Veterans for Truth most certainly did prominently advocate for the election or defeat of candidates. And they were fined as a result for violating campaign finance law…in 2006, two years after the elections and long after they achieved their desired results of circumventing the campaign finance system. Of course, this was an after-the-fact determination by the FEC, meaning there was no real change in the campaign finance system. Instead, groups like MoveOn and the Swift Boaters were warned to behave next time or face the same fines, which for groups like PowerPac.org is practically an invitation to misbehave.

Anyway, this article nails Obama, but the truth is all candidates disclaim “special interest” groups like these on one hand, and take their money with the other. They’d be fools not to, and that’s the way it’ll stay until substantial and comprehensive campaign finance reform is enacted in this country.

President Bush at last nominated a VA secretary and is considering a recess appointment for his controversial surgeon general nominee. Retired Army Lt. Gen. Dr. James B. Peake is likely to face tough questions during his confirmation hearings (likely weeks away) about how he would lead a troubled Department of Veterans Affairs. If confirmed, Peake would become the first general and first medical doctor to head the VA. President Bush on Wednesday also nominated Edward Schafer, a former two-term Republican governor from North Dakota, to head the Agriculture Department in an attempt to influence the upcoming farm bill. AG nominee Michael Mukasey’s confirmation is less in doubt now that Democratic Sens. Chuck Schumer and Diane Feinstein have announced they will vote him out of committee on Tuesday, November 6th.

The House of Representatives unanimously voted to extend the Internet tax moratorium another 7 years (matching the Senate version) and passed, 244-166, a bill that would put new environmental controls on hard-rock mining, set up a cleanup fund for abandoned mines and permanently ban cheap sales of public lands for mining. Additionally, the House passed by a voice vote legislation that orders a government study into the technology needed to overcome the circumstances of miners being trapped far underground without the ability to communicate with would-be rescuers. And, defying a White House veto threat, the House on Wednesday passed a multibillion-dollar expansion of a program to help retrain workers who have lost their jobs because of foreign competition, 264-157.

The Ways and Means Committee voted 22-13 in favor of a bill that would provide temporary relief from the alternative minimum tax and pay for it in part by raising taxes on private equity fund manager. Majority Leader Reid has said the Senate will not wave “pay-go” rules for the AMT fix, but it is not clear that Rangel’s proposal will fly there. The House Ways and Means Committee also voted 39-0 for a free trade pact with Peru.

The Senate’s Environment and Public Works Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection approved a climate change bill by a 4-3 vote. The measure would limit greenhouse gas emissions thought to contribute to global warming. It may see a floor vote by year’s end.

Meanwhile, the Senate Foreign Relations Committee voted 17-4 to send to a floor vote the Reagan-era “Law of the Sea” treaty supported by President Bush. With Senate ratification, the United States would join 155 nations that are party to a convention that sets rules and settles disputes over navigation, fishing and economic development of the open seas and establishes environmental standards. Treaty supporters, after making little headway for years, have gained momentum recently with concerns that the melting of the global ice cap will trigger a rush of claims by Arctic countries, including Russia, to previously iced-in resources.

House and Senate panels voted Tuesday to eliminate a five-year expiration date for registered phone numbers on the National Do Not Call Registry.

Oh, and it looks increasingly unlikely the “No Child Left Beind Law” will be brought up for re-authorization by the end of the year.

In corruption news, an oil services contractor testified Monday that he was blackmailed by an employee over renovations at Sen. Ted Stevens’ home. Sen. David Vitter has agreed to pay a $25,000 fine for violating federal election laws during his campaign for the Senate in 2004. And Rep. Henry Waxman, who chairs the House Oversight and Government Reform Committee, on Wednesday demanded that the White House turn over hundreds of pages of material about Jack Abramoff.

Lawmakers on Capitol Hill are weighing the possibility of adding a “millionaire’s amendment” to presidential campaign finance reform measures. As it applies to Senate races, the amendment states that if a candidate exceeds the statutory threshold by 10 times, then the cap on the amount of money other candidates can accept from a single donor can be raised. Unfortunately, the Senate appears deadlocked over legislation that would require members to file their campaign finance forms electronically. Oh well.