When picturing an image of organized crime, the overwhelming majority think of the “mafia-related” examples depicted in movies like the Godfather, Goodfellas, and the Sopranos. But organized crime comes in many forms with each crime leader having their own political agenda, money supply, and lobbying techniques. The question we must ask ourselves is: Can Super PACs (Political Action Committees) be used by “mafia gangsters” to infiltrate our American political system?
A Super PAC is an organization that can accept unlimited sums of money to be used for the advocacy of a candidate. Super PACs arose after the Supreme Court decisions in Citizens United v. Federal Election Committee, which said that corporations could donate to political candidates based on the right of free speech; and Speechnow.org v. Federal Election Committee, which states that individuals cannot be limited in how much they donate to corporations. Many political pundits were not pleased with paving the way for billionaires and “bad rich guys” to, publicly and anonymously, funnel as much money as they want into campaigns. The 782 registered Super PACs spent about $629 million in 2012, according to Federal Election Commission reports. It has been reported that this has led to problems, which some may characterize as white collar crime or worse…the mob!
A recent example of the organized crime connection with Super PACs was reported in the case of casino billionaire, Sheldon Adelson. Adelson is the most notable of the Super PAC donors with FCPA (Foreign Corrupt Practices Act) concerns; he has contributed $21.5 million to a Super PAC that supported Newt Gingrich's presidential bid, $10 million to the pro-Romney Super PAC and $5 million to a Super PAC with ties to House leadership. The billionaire's business, Las Vegas Sands Inc., faces 3 FCPA investigations into casino operations in China. Those investigations center on allegations made by, former Sands China CEO, Steve Jacobs, stating that payments were made in Macau to government officials and deals were cut with members of the Chinese mafia known as the Triads.
Possible Triad participation is not the only concern involving Super PACs. For example, it has been reported that more than five months after Newt Gingrich dropped out of the Republican presidential primary, the founder of a Super PAC backing him was still collecting a check. In fact, almost half of the $480,000 Rebecca Burkett paid herself as founder of Winning Our Future came after Gingrich quit the race. Burkett approved the payments to herself, she said, with input from a board of directors; she declined to name any of the board members. Winning Our Future’s website doesn’t list a board, and the FEC doesn’t require Super PACs to maintain one.
The Super PACs sometimes moved as much money into the pockets of employees as they did into races. Some have allegedly engaged in significant practices of self-dealing. For example, Revolution Super PAC raised $1.2 million by pitching itself as a booster for Texas Representative Ron Paul’s run for president. Under the direction of Gary Franchi, the group spent $1 million, 83 percent of its cash, on administrative expenses, including about $153,000 for himself and his companies. A $1,766 monthly fee for office rent went to a Franchi company whose address is a mailbox at a Northbrook, Illinois, UPS Store. Franchi said in an interview there is a physical location for the company, declining to give its address for privacy reasons. This past year, consultants and fundraisers spent at least $21 million, based on disbursements clearly labeled as consulting, commission, and fundraising fees or donor development. The FEC has few requirements defining how a Super PAC identifies expenses.
Another crime-related issue for Super PACS comes in the form of donor company influences on the candidates they support. A federal law to prevent U.S. companies from paying bribes to foreign businesses came to the forefront when the New York Times reported Walmart officials had covered up alleged bribes made by company representatives in Mexico. The retail giant now faces federal investigation for violating the Foreign Corrupt Practices Act (FCPA). Jim and Alice Walton, children of the founder of Walmart, contributed $200,000 each to Restore Our Future, the Super PAC supporting Mitt Romney's campaign. The Waltons are among the many Super PAC donors with businesses facing FCPA investigation.
Romney supporters are not the only big-money donors facing investigation. The SEC has opened an inquiry into whether Hollywood studios could be involved in making payments to gain access to the lucrative Chinese movie market, according to CNN Money. One of those studios is DreamWorks, whose CEO has contributed $2 million to Priorities USA Action, the Super PAC that backed President Barack Obama's reelection, and raised at least $500,000.
Campaign finance officials warn that limitless contributions to Super PACs today could influence future priorities at the Department of Justice and the Securities and Exchange Commission, where FCPA investigations originate. They fear that a future administration, brought to power by these donors, could drop investigations, appoint opponents of FCPA enforcement at the Justice Department and the SEC, or otherwise shift the focus away from the FCPA. It’s really a donor-beware situation. A Super PAC can do what they want with the money, if they can raise it. Donors need to distinguish the good ones from the bad ones. There are countless ways the existing system of campaign finance should be reformed, but cleaning up Super PACs is an obvious first step.
Political experts seem to agree that the 2012 election was not decided by Super PAC money. However, whether Super PACs can influence a candidate to change their position on key campaign issues is yet another cause for concern. For example, Mayor Michael Bloomberg was accused of trying to “buy” the Illinois congressional race after Congressman Jesse Jackson Jr. vacated the seat. Bloomberg’s PAC, Independence USA, spent 2 million dollars, largely, on ads against the candidates opposing Republican candidate Robin Kelly. The ads focused on gun control, the key issue of Kelly’s campaign platform. Kelly eventually won the election, but stated she would have won regardless of Bloomberg’s Super PAC support.
Utilizing political influence in conjunction with organized crime is not a scenario that would surprise any American; but shouldn’t there be greater control of areas that are magnets for corruption and abuse? After the Supreme Court lifted a ban on Super PACs, the media severely scrutinized and highlighted the potential dangers correlated to the relaxed restraints and lack of reporting requirements. Politicians promised they would vehemently tackle these dangers. WE THE PEOPLE are still waiting!