Thursday, October 6, 2016

Illegal Dark Money In Wisconsin




Illegal Dark Money In Wisconsin

10/06/2016 03:44 pm ET

Jay Mandle Professor of Economics, Colgate University


On September 14th, The Guardian newspaper published 1,500 leaked documents collected by the Wisconsin prosecutors who were investigating suspected campaign violations by Scott Walker, the state’s Governor. The Guardian analysis found that these documents “speak to the cozy relationship between politicians and big business, and to the frustration of millions of Americans who feel disenfranchised by an electoral system that put (sic) the needs of corporate donors before ordinary Americans.”

The documents show how individual billionaires came to the rescue of the right-wing, anti-union Governor of Wisconsin when he was threatened with defeat in a recall election. They reveal that the Walker campaign solicited “dark money” donations from rich supporters, money that was directed to 501(c)(4) organizations, the most important of which was the Wisconsin Club for Growth. The Club for Growth then used the money to fight the recall campaign. As Walker’s top fundraiser put it in a leaked email, it was important that all the ads on his behalf “run thru one group to ensure correct messaging.”

By coordinating this effort, the Walker campaign broke the law. 501(c)(4) organizations like the Club for Growth are designated as social welfare organizations. They are able to take unlimited donations - Sheldon Adelson, for example contributed $200,000 to the Walker effort, while John Menard and Stephen Cohen each gave $1 million. But such organizations are prohibited from coordinating their activities in any way with campaigns. When Scott Walker and his fundraising team explicitly directed his donors to give to these organizations to help him fight the recall, they were engaged in a brazen violation of campaign finance laws. Indeed, a campaign consultant reported that the Wisconsin Club for Growth alone “raised 12 million dollars and ran a soup to nuts campaign...Polling, focus groups and message development was a collaborative effort.”

What makes this case all the more outrageous is that it was thrown out of court by Wisconsin Supreme Court justices who themselves had demonstrable conflicts of interest. For example, one judge was the recipient of $1.5 million for his own judicial race from the same Wisconsin Club for Growth.

An appeal to this verdict is now before the United States Supreme Court. But no matter how that ruling comes down, there are three lessons that the campaign finance reform community should learn from The Guardian’s expose.

The first is that many rich political campaign donors do not believe that rules and laws apply to themselves. Convinced of the legitimacy of the privileges that come with their mega-billions, they feel free to disregard legal restrictions in the name of their self-interested politics. They skirt the law by having their lawyers and accountants find loopholes. But when that is not possible, they will, as in the Walker this case, simply disregard any limitations.

The second is that the power of wealth shapes the course of history. If Walker had been recalled, Wisconsin would have been set on an altogether different path than the anti-labor agenda promulgated by the Governor. Limiting the political power of wealth is not simply a “good government” issue, though it is that. It is a tool to democratize politics. With reform the policies that are adopted by legislatures would serve the interests of more than the handful of individuals who now underwrite the political process.

The third lesson is the most difficult one. Laws and rules restricting donor contributions will not adequately curb the political power of wealth. The only way to do so is with public taxpayer money funding campaigns, and it will take a lot of it to be successful. Candidates and the political process itself must be freed from having to depend on wealthy funders.

It is true that both Hillary Clinton and Bernie Sanders have endorsed the public funding of campaigns. But neither has addressed the level of funding they would support, or how the changes they seek will be paid for. As a result, reformers have not been adequately armed for the struggle that will ensue once transformation of the current system appears on the legislative agenda. Publicly funded candidates will not necessarily have to match the level of donations that their privately funded opponents receive. But they will require more than a bare-bones allocation to be competitive.

We live in an era when it is clear to all who care to look, that the political process has failed the American people. They in turn deeply distrust politicians. Yet the society has to be governed: politics is both necessary and inevitable. It important to establish that there is an alternative funding system that will serve the electorate better than the one we have. But that alternative will not be inexpensive.

The rich are prepared to invest a lot to defend their interests; the people of the country will have to be convinced to do the same.

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Iowa wind farm generates more tax credits than electricity

October 06, 2016, 09:30 am


By Grant Kidwell

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After reaching a settlement with some of its biggest customers this summer, the Warren Buffett-owned utility company MidAmerican Energy may soon build a massive new wind farm in Iowa. The thing is, electricity is far from the only thing it will generate. Known as “Wind XI,” the proposed 2,000 megawatt wind farm—Iowa’s largest ever—has the potential to produce a lot of electricity, but even more tax credits.

In total, Wind XI could generate up to $1.8 billion in tax credits for its backers over the next decade.

The winners? Warren Buffett; MidAmerican Energy’s other investors; and Facebook, Microsoft, and Google—MidAmerican’s biggest customers, who will receive tax benefits of their own for using wind energy. The losers? Taxpayers and other ratepayers footing the bill.

Unfortunately, this is part of an ongoing trend in wind energy across the country. It’s not the demand for more electricity that’s driving construction, but rather the government’s preferential tax treatment and counterintuitive energy mandates.

The demand for electricity in the U.S. has been nearly flat over past decade, due to slow economic growth and gains in energy efficiency. Despite the lack of new demand, new wind farms are popping up across the country because of the tremendous tax credits they generate for their owners.

Warren Buffett has admitted as much. In 2014 he explained: “I will do anything that is basically covered by the law to reduce Berkshire's tax rate [. . .] We get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit.”

And the tax credits Buffett mentions are substantial. Although MidAmerican Energy likes to note that Wind XI is not receiving any financial incentives from Iowa, that’s only half of the story. The federal government provides $23 in credits for every megawatt hour—the large-scale unit of production for energy-- of electricity produced by wind and other alternative energy sources. Known as the production tax credit (PTC), this government giveaway means that MidAmerican’s new wind farm could generate $180 million in credits each year.

The federal government does even more than that to ensure green energy producers get ample benefits. MidAmerican Energy can use the PTC for up to 10 years, after recent regulatory changes expanding the life of the credit. In addition to the tax credits, government regulators set a fixed rate of return for MidAmerican Energy to charge its customers. MidAmerican will receive a guaranteed 11 percent return on equity for Wind XI, meaning it will rake in $395 million in profit over the roughly 30 year life of the project.

Another set of reasons why new wind farms are in high demand are energy mandates at both the state and federal level. Currently, 29 states have renewable portfolio standards mandating utilities to generate a certain percentage of their electricity from sources such as wind and solar. On the federal level, the Environmental Protection Agency’s recent carbon regulations—if eventually upheld by the Supreme Court—will shutter many traditional power plants, leaving wind farms to take their place.

In other words, government policy is doing everything in its power to set the stage for wind. Those investing in wind stand to reap guaranteed profits, while taxpayers and ratepayers have to pay more in the end. In terms of tax dollars, the production tax credit for wind is estimated to cost taxpayers $13.8 billion between 2014 and 2018. Energy mandates, meanwhile, will drive up electricity prices as traditional energy sources are phased out for costlier power provided by wind and solar. The EPA’s carbon regulations that would potentially go into effect in 2022, for example, could raise electricity bills for the average American family 14 percent higher than they were a decade prior.

Public officials must stop gearing energy policy around the promise of guaranteed profits for well-connected energy investors like Warren Buffett. This hits average Americans once in their taxes and twice in higher electricity bills, which raises the prices on goods and services as well as utilities. If wind farms like the one Iowa will soon get are worthy investments, it should because of the power they generate—not the tax benefits.

Grant Kidwell is a senior policy analyst at Americans for Prosperity.

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Public should have a say on new Great Lakes Basin rail plan


Gazette Editorial board’s Views: Public should have a say on new Great Lakes Basin rail plan



Wednesday, October 5, 2016

A substantial change in the proposed rail line route through Rock County should prompt the federal Surface Transportation Board to reopen the public comment period for this project.

The new route is almost 15 miles west of the original route and now affects a different set of residents and property owners. They deserve an opportunity to submit comments to the governing body conducting the environmental review of the proposal.

We support Rep. Mark Spreitzer, D-Beloit, and Sen. Janis Ringhand, D-Evansville, in their call for both reopening the comment period and holding an additional public informational meeting during the comment period.

During the previous comment period, which ended July 15, the Surface Transportation Board received more than 3,500 comments. The original route would have started east of Milton, traveled south through Rock County and headed east of Clinton on its way into Illinois.

“Clearly, the public has serious concerns about the project,” Spreitzer and Ringhand wrote in a Sept. 29 letter to the Surface Transportation Board. “We believe more will voice their opinions if given the opportunity.”

Regardless of economic justifications for a new rail line, the route itself will encounter opposition wherever it lands. Few people want a railroad going near their backyards, and anyone living along the proposed new route will feel unfairly treated if not given a formal venue to voice their concerns.

The new route starts east of Milton, goes south but then jogs to the west, cutting between Janesville and Beloit before heading south into Illinois. It crosses County D, Highway 213 and Highway 81.

Rock Against the Rail has mounted a legal challenge locally, while groups along the proposed route from Wisconsin to Indiana are fighting similar battles. The developer, Great Lakes Basin Transportation, touts the project as way to bypass Chicago’s congested rail lines and efficiently move goods through the Midwest.

Many communities in Illinois, Wisconsin and Indiana are trying to make sense of the amended route submitted last month by Great Lakes Basin Transportation. The old route was 281 miles. The new one is 260 miles.

Nearly 300 residents of Winnebago County, just south of Rock County’s border, attended a meeting Monday to express their anger with the amended route, according to news reports. The original proposal sent the rail line to Winnebago’s east, through Boone County, but the new route misses Boone County entirely.

With its new plan, Great Lakes Basin Transportation appears to have swapped one set of angry residents for another. Whether its new plan is better or worse than the original, that’s difficult to immediately say.

But we know many people are upset with the new proposal, and ignoring their complaints would only add to the pile of ill will already being directed at this project.

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La Porte County opposes proposed Great Lakes Basin Railroad route Herald Argus | 0 comments

La PORTE — The La Porte County Board of Commissioners came to agreement and passed a resolution on Wednesday opposing the proposed route of the Great Lakes Basin Railroad.

Previously, the commissioners had made it clear to the developer of the proposed 278-mile railroad line that a series of conditions would have to have been met in order for the county to potentially support the project

. These conditions included having the route be as minimally invasive as possible with regard to small towns, residential areas and existing farmland by using existing right-of-way and railway instead of using greenfield sites, which is undeveloped land used for agriculture, landscape design or left to evolve naturally.

"The route hardly incorporates any existing right-of-way or using existing railway, but in fact uses extensive greenfield," said Commission Attorney Shaw Friedman, referring to the most recent proposed GLBR route.

Commission President David Decker said it was the commission's duty to take in and listen to everyone's opinion, which is why the commissioners previously heard a proposition from GLBR.

Decker, however, said until recently he'd been hoping for the greenfield sites to not be included in the the new route and for existing railways to be implemented. This was not the case.

"This particular route is not feasible for us to have," Decker said.

Commissioners Dr. Vidya Kora and Michael Bohacek agreed as the plan also didn't meet past criteria, such as having the support of a Class I railroad.

The resolution stated a Class I railroad was deemed vital as it would allow the GLBR to gain access to existing right-of-ways.

In a letter from the GLBR, however, the developer admitted to dismissing the use of former and existing right-of-ways due to being "inconsistent with the project's purpose and need."

The GLBR went on to say they are not affiliated with any rail carrier, have no right to use any existing railroad's trackage and need to control management, dispatching and maintenance of its own lines in order to provide the proposed service, which they would lose the ability to do operating on another railroad's track.

While job creation and boosting train traffic to Kingsbury Industrial Park had been the reason why the commission listened to proposed plans from the railroad, Bohacek reminded everyone he has spoken out several times on record as being skeptical of any long-term job creation which could come out of the project.

The resolution opposing the current GLBR plan will be communicated to the Surface Transportation Board.

In unrelated matters, Tony Mancuso of the La Porte County Health Department mentioned during his commissioners report that of 193 wells tested within the county, 11 came back positive for E. coli.  ….

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Fiat Chrysler supplier to bring 400 jobs to Belvidere


BELVIDERE — An automobile interior company is the latest to follow the Jeep Cherokee to property near Fiat Chrysler Automotive's assembly plant.

Yanfeng Automotive Interiors will bring 400 jobs to Belvidere. The company is investing $28.1 million in a 336,000-square-foot building that's been under construction since July at 775 Logistics Drive in a new industrial park on land owned by Rockford-based The LandMark Group.

Yanfeng, which says it is the world's largest supplier of automotive interior components, will occupy the building next year.

Yanfeng’s facility to draw employees from throughout the area.

"It's very good for the region," said Jarid Funderburg, executive director of Growth Dimensions, a development agency that helps attract and retain jobs in Belvidere and Boone County.


Yanfeng Automotive Interiors is a joint venture between Milwaukee-based Johnson Controls Inc. and Yanfeng Automotive Trim Systems Co. Ltd. Yanfeng is a subsidiary of China's largest automobile manufacturer, Shanghai Automotive Industry Corp.

"We are pleased to be a part of the Belvidere community and support FCA in the production of the Jeep Cherokee," said Nathan Bowen, vice president and general manager, Americas, Yanfeng Automotive Interiors. "The opening of this facility further demonstrates our commitment to supporting our customers."

Fiat Chrysler Automotive is investing $350 million and adding 300 employees in Belvidere for Jeep Cherokee production, which will replace the Dodge Dart, Jeep Compass and Jeep Patriot on the assembly line.

Production of the Cherokee is moving here from Toledo, Ohio.

Brian Leaf: 815-987-1343;; @b_leaf

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