McConnell Raised Big Bucks From Foreign Defense Contractor Probed For Bribery

Zachary Roth | February 3, 2010
In the wake of the Supreme Court's Citizens United ruling, Sen. Mitch McConnell (R-KY) has been quick to denounce a bid by Democrats to stop foreign corporations from pouring money into U.S. elections, claiming current law already bars such spending. As we've reported before, it's not nearly as simple as that -- but McConnell should know: The GOP Senate leader has raked in campaign cash from a subsidiary of a major foreign defense contractor that's currently being investigated by the Justice Department for bribery.

As we reported yesterday, McConnell, a longtime foe of efforts to get money out of politics, last week took to the Senate floor to pooh-pooh the notion that the court's decision could allow a flood of foreign money to sway our elections, citing an existing law that prevents foreign nationals, including corporations, from spending on U.S. elections. But that ban doesn't cover the U.S. subsidiaries of foreign companies, or to foreign-owned corporations that incorporate in the U.S.

That's not just some technical loophole. Democrats and campaign-finance reform advocates argue it's a very real weakness in the law, that, even before Citizens United, gave foreign corporations influence in our elections. And McConnell's own ties to one foreign defense contractor offer a pretty good illustration.

Since 2005, McConnell has received $21,000 -- spread between his campaign and his leadership PAC -- from a PAC run by BAE Systems Inc., according to federal campaign disclosure records examined by TPMmuckraker. BAE Systems Inc. is the American subsidiary of BAE Systems, the world's second largest defense contractor, headquartered in Britain.

In addition, United Defense Industries, another defense contractor bought by BAE in 2005, reportedly pledged half a million dollars to the McConnell Center at the University of Louisville, a political science foundation that the senator created.

McConnell has been good to BAE, which owns a facility in Louisville, Kentucky. For fiscal year 2010, the senator requested earmarks for the company worth a combined $17 million.

BAE is hardly a squeaky clean corporate citizen, either. The Justice Department is conducting an ongoing investigation (pdf) into allegations that the company bribed members of the Saudi Royal family, including the Saudi Ambassador to the United States, in support of a mulit-billion dollar, decades-long deal to barter arms for oil.

To be sure, as election lawyer Kenneth Gross points out, the existing law does make it illegal for foreign corporations to "funnel foreign corporate funds through domestic entities or to have foreign officers, directors, or employees direct foreign or domestic funds with regards to federal, state, or local elections."

But in practice, reform advocates argue, this prohibition doesn't get to the root of the issue. Even if a U.S. subsidiary uses its own funds to contribute, and the decision to contribute is made only by Americans, the money nonetheless comes from a subsidiary of a foreign corporation, whose officers can hardly be expected not to act with that interest in mind.

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Can Democracy Withstand The Power of Big Money?

This week on the JOURNAL, Bill Moyers spoke with libertarian journalist Nick Gillespie and progressive legal scholar Lawrence Lessig about the impact of last month’s controversial Supreme Court ruling allowing corporations and unions to spend unlimited funds from their general treasuries on political communications in periods shortly before elections and primaries.

While many have argued that the Court’s decision in Citizens United v. Federal Election Commission affirms free speech and the First Amendment, others have expressed grave concern that the ruling may open the floodgates of corporate money into America’s elections and undermine the voices and trust of ordinary citizens.

Criticizing the Court’s ruling as a blow to citizens’ faith in government, Lessig said:

“I think it's an ominous sign about the future of this Court and any kind of reform. Because though I support free speech, and even free speech for corporations, what this means is increasingly people are going to believe their government is controlled by the funders and not by the people... Congress has lost the respect of the people, and it’s only going to get much, much worse... Increasingly, members are thinking not about what makes sense... They think about what's going to make it easier for the lobbyists to help channel money into their campaigns. They've produced the fundraising Congress, where their obsession is, ‘how do I make the people who will fund my campaigns happier?’... The problem that I see is that when speech gets read by the ordinary American people as just another way in which Congress is focusing on the funders rather than focusing on the people, it erodes the trust in this government.”

Gillespie defended the Court’s decision and suggested that shrinking the scope of government is the best way to drain money from politics:

“I think it was a victory for free speech, in the end. If anything, it didn’t go far enough. Campaign finance regulation is always a suppression of speech... What I would argue is that we have too many campaign finance reforms. They do stifle free speech – that’s what they’re designed to do – particularly political speech... Who are the corrupt politicians? Name names, because that’s what this is about. Who are the people who are dancing to the tune of their corporate masters?... We have seen an explosion of corporate lobbying after Obama went into office. This past year has been the biggest bumper year for lobbyists ever. What I would argue is it has nothing to do with patrolling speech or even elections – what it has to do with is the fact that the budget that’s on the table now is $3.8 trillion. As long as the government is shoveling that kind of cash around, people are going to be sniffing out ways to get their share.”

Statements made are the opinion of the writer who is exercising his first amendment right to freedom of speech. Freedom of speech in the United States is protected by the First Amendment to the United States Constitution and are generally permitted.
"As someone who has known Obama vaguely for almost twenty years--he was my colleague at the University of Chicago, and I supported and contributed to every one of his campaigns--I would have bet my career that he understood this. That's what he told us again and again in his campaign, not as colorfully as Edwards, but ultimately more convincingly. That's what distinguished him from Hillary Clinton. That's what Clinton, defender of the lobbyists, didn't get. It was "fundamentally chang[ing] the way Washington works" that was the essential change that would make change believable.
So if you had told me in 2008 that Obama expected to come to power and radically remake the American economy--as his plans to enact healthcare and a response to global warming alone obviously would--without first radically changing this corrupted machinery of government, I would not have believed it. Who could believe such a change possible, given the economy of influence that defines Washington now?
Yet a year into this administration, it is impossible to believe this kind of change is anywhere on the administration's radar, at least anymore. The need to reform Congress has left Obama's rhetoric. The race to dicker with Congress in the same way Congress always deals is now the plan. Symbolic limits on lobbyists within the administration and calls for new disclosure limits for Congress are the sole tickets of "reform." (Even its revolving-door policy left a Mack truck-wide gap at its core: members of the administration can't leave the government and lobby for the industries they regulated during the term of the administration. But the day after Obama leaves office? All bets are off.) Save a vague promise in his State of the Union about overturning the Court's decision in Citizens United v. Federal Election Commission (as if that were reform enough), there is nothing in the current framework of the White House's plans that is anything more than the strategy of a kinder and gentler, albeit certainly more articulate, George W. Bush: buying reform at whatever price the Fundraising Congress demands. No doubt Obama will try to buy more reform than Bush did. But the terms will continue to be set by a Congress driven by a dependency that betrays democracy, and at a price that is not clear we can even afford."

Statements made are the opinion of the writer who is exercising his first amendment right to freedom of speech. Freedom of speech in the United States is protected by the First Amendment to the United States Constitution and are generally permitted.

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