On Tuesday, a federal court in Washington found that Texas’s redistricting maps violated Section 5 of the Voting Rights Act and were “enacted with discriminatory purpose.” On Thursday a separate three-judge federal court panel in Washington unanimously found thatTexas’s voter ID law also violated Section 5 by discriminating against minority voters.

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North Carolina State Senator Eric Mansfield was born in 1964, a year before the passage of the Voting Rights Act, which guaranteed the right to vote for African-Americans. He grew up in Columbus, Georgia, and moved to North Carolina when he was stationed at Fort Bragg. He became an Army doctor, opening a practice in Fayetteville after leaving the service. Mansfield says he was always “very cynical about politics” but decided to run for office in 2010 after being inspired by Barack Obama's presidential run.

He ran a grassroots campaign in the Obama mold, easily winning the election with 67 percent of the vote. He represented a compact section of northwest Fayetteville that included Fort Bragg and the most populous areas of the city. It was a socioeconomically diverse district, comprising white and black and rich and poor sections of the city. Though his district had a black voting age population (BVAP) of 45 percent, Mansfield, who is African-American, lives in an old, affluent part of town that he estimates is 90 percent white. Many of his neighbors are also his patients.

But after the 2010 census and North Carolina's once-per-decade redistricting process — which Republicans control by virtue of winning the state's General Assembly for the first time since the McKinley administration — Mansfield's district looks radically different. It resembles a fat squid, its large head in an adjoining rural county with little in common with Mansfield's previously urban district, and its long tentacles reaching exclusively into the black neighborhoods of Fayetteville. The BVAP has increased from 45 to 51 percent, as white voters were surgically removed from the district and placed in a neighboring Senate district represented by a white Republican whom GOP leaders want to protect in 2012. Mansfield's own street was divided in half, and he no longer represents most of the people in his neighborhood. His new district spans 350 square miles, roughly the distance from Fayetteville to Atlanta. Thirty-three voting precincts in his district have been divided to accommodate the influx of new black voters. “My district has never elected a nonminority state senator, even though minorities were never more than 45 percent of the vote,” Mansfield says. “I didn't need the help. I was doing OK.”

Mansfield's district is emblematic of how the redistricting process has changed the political complexion of North Carolina, as Republicans attempt to turn this racially integrated swing state into a GOP bastion, with white Republicans in the majority and black Democrats in the minority for the next decade. “We're having the same conversations we had forty years ago in the South, that black people can only represent black people and white people can only represent white people,” says Mansfield. “I'd hope that in 2012 we'd have grown better than that.” Before this year, for example, there were no Senate districts with a BVAP of 50 percent or higher. Now there are nine. A lawsuit filed by the NAACP and other advocacy groups calls the redistricting maps “an intentional and cynical use of race that exceeds what is required to ensure fairness to previously disenfranchised racial minority voters.”

And it's not just happening in North Carolina. In virtually every state in the South, at the Congressional and state level, Republicans — to protect and expand their gains in 2010 — have increased the number of minority voters in majority-minority districts represented overwhelmingly by black Democrats while diluting the minority vote in swing or crossover districts held by white Democrats. “What's uniform across the South is that Republicans are using race as a central basis in drawing districts for partisan advantage,” says Anita Earls, a prominent civil rights lawyer and executive director of the Durham-based Southern Coalition for Social Justice. “The bigger picture is to ultimately make the Democratic Party in the South be represented only by people of color.” The GOP's long-term goal is to enshrine a system of racially polarized voting that will make it harder for Democrats to win races on local, state, federal and presidential levels. Four years after the election of Barack Obama, which offered the promise of a new day of postracial politics in states like North Carolina, Republicans are once again employing a Southern Strategy that would make Richard Nixon and Lee Atwater proud.

The consequences of redistricting in North Carolina — one of the most important swing states in the country — could determine who controls Congress and the presidency in 2012. Democrats hold seven of the state's thirteen Congressional seats, but after redistricting they could control only three — the largest shift for Republicans at the Congressional level in any state this year. Though Obama won eight of the thirteen districts, under the new maps his vote would be contained in only three heavily Democratic districts — all of which would have voted 68 percent or higher for the president in 2008 — while the rest of the districts would have favored John McCain by 55 percent or more. “GOP candidates could win just over half of the statewide vote for Congress and end up with 62 percent to 77 percent of the seats,” found John Hood, president of the conservative John Locke Foundation.

The same holds true at the state level, where only 10 percent of state legislative races can be considered a tossup. “If these maps hold, Republicans have a solid majority plus a cushion in the North Carolina House and Senate,” says J. Michael Bitzer, a professor of political science at Catawba College. “They don't even need to win the swing districts.” North Carolina is now a political paradox: a presidential swing state with few swing districts. Republicans have turned what Bitzer calls an “aberration” — the Tea Party wave of 2010 — “into the norm.”

Republicans accomplished this remarkable feat by drawing half the state's black population of 2.2 million people, who vote overwhelmingly for Democrats, into a fifth of all legislative and Congressional districts. As a result, black voters are twice as likely as white voters to see their communities divided. “The new North Carolina legislative lines take the cake for the most grotesquely drawn districts I've ever seen,” says Jeff Wice, a Democratic redistricting lawyer in Washington.

According to data compiled by Bob Hall, executive director of Democracy North Carolina, precincts that are 90 percent white have a 3 percent chance of being split, and precincts that are 80 percent black have a 12 percent chance of being split, but precincts with a BVAP between 15 and 45 percent have a 40 percent chance of being split. Republicans “systematically moved [street] blocks in or out of their precincts on the basis of their race,” found Ted Arrington, a redistricting expert at the University of North Carolina, Charlotte. “No other explanation is possible given the statistical data.” Such trends reflect not just a standard partisan gerrymander but an attack on the very idea of integration. In one example, Senate redistricting chair Bob Rucho admitted that Democratic State Senator Linda Garrou was drawn out of her plurality African-American district in Winston-Salem and into an overwhelmingly white Republican district simply because she is white. “The districts here take us back to a day of segregation that most of us thought we'd moved away from,” says State Senator Dan Blue Jr., who in the 1990s was the first African-American Speaker of the North Carolina House.

Nationwide, Republicans have a major advantage in redistricting heading into the November elections. The party controls the process in twenty states, including key swing states like Florida, Ohio, Michigan, Virginia and Wisconsin, compared with seven for Democrats (the rest are home to either a split government or independent redistricting commissions). Republicans control more than four times as many seats at the Congressional level, including two-thirds of the seventy most competitive races of 2010.

This gives the GOP a major opportunity to build on its gains from 2010. Today GOP Representative Paul Ryan, nobody's idea of a moderate, represents the median House district in America based on party preference, according to Dave Wasserman, House editor of the Cook Political Report. That district will become two points more Republican after the current redistricting cycle. “The fact of a Republican wave election on the eve of redistricting means that Republican legislators are in far better shape to shore up that wave,” says Justin Levitt, a redistricting expert at Loyola Law School. Though public dissatisfaction with GOP members of Congress is at an all-time high, Republican dominance of the redistricting process could prove an insurmountable impediment to Democratic hopes of retaking the House, where the GOP now has a fifty-one-seat edge. Speaker of the House John Boehner predicts that the GOP's redistricting advantage will allow the party to retain control of the House, perhaps for the next decade.

Aside from protecting vulnerable freshmen, which would count as a major victory even if the GOP didn't pick up any new seats, the party's biggest gains will come in the South. Though the region has trended Republican at the presidential level for decades, Democrats managed to hang on to the Statehouses (which draw the redistricting maps in most states) for a remarkable stretch of time. Before 2010, Democrats controlled five Statehouses (in Alabama, Arkansas, Louisiana, Mississippi, North Carolina) and one chamber in two (Kentucky and Virginia). Two years later, Republicans control every Southern Statehouse except the Arkansas legislature and Kentucky House.

Race has always been at the center of the Southern Strategy, though not always in ways you'd expect. In addition to pushing hot-button issues like busing and welfare to appeal to white voters, Southern Republicans formed an “unholy alliance” with black Southern Democrats when it came to redistricting. In the 1980s and '90s, when white Democrats ruled the Statehouses, Republicans supported new majority-minority districts for black Democrats in select urban and rural areas in exchange for an increased GOP presence elsewhere, especially in fast-growing metropolitan suburbs. With Democrats grouped in fewer areas, Republicans found it easier to target white Democrats for extinction. Ben Ginsberg, a prominent GOP election lawyer, memorably termed the strategy “Project Ratfuck.”

Republicans prepared for the 2010 election with an eye toward replicating and expanding this strategy. The Republican State Leadership Committee (RSLC) unveiled the Redistricting Majority Project (REDMAP) in 2010 to target Statehouse races and put Republicans in charge of redistricting efforts following the election. Ed Gillespie, former chair of the Republican National Committee, became the group's chair, while Chris Jankowski, a corporate lobbyist in Virginia, handled day-to-day operations. The group, which as a tax-exempt 527 could accept unlimited corporate donations, became the self-described “lead Republican Redistricting organization,” taking over many of the functions of the RNC. The RSLC attracted six- and seven-figure donations from the likes of the US Chamber of Commerce, tobacco companies Altria and Reynolds American, Blue Cross and Blue Shield, the Karl Rove–founded American Crossroads and the American Justice Partnership, a conservative legal group that has been a partner of the American Legislative Exchange Council, a state-based conservative advocacy group. Funding from these corporate interests allowed the RSLC to spend $30 million on state races in 2010, including $1.2 million in North Carolina.

One of the group's largest funders in North Carolina was Art Pope, a furniture magnate who has bankrolled much of the state's conservative movement. Pope's Variety Wholesalers gave $36,500 to the RSLC in July 2010. The RSLC then gave $1.25 million to a group called Real Jobs NC to run attack ads against Democrats. In total, Pope and Pope-supported entities spent $2.2 million on twenty-two state legislative races, winning eighteen. After the election, the GOP redistricting committees hired the RSLC's redistricting expert, Tom Hofeller, to redraw North Carolina's districts. He was paid with state dollars through the General Assembly budget. (Hofeller says he has also been “intensely involved” in this cycle's redistricting process in Alabama, Massachusetts, Texas and Virginia.)

Pope has long been “the moving force behind Republican redistricting efforts in North Carolina,” says Dan Blue Jr. (Pope says he supports an independent state redistricting commission.) In 1992 Pope urged Blue, then Statehouse Speaker, to create twenty-six majority-minority districts. Blue refused, creating nineteen instead. Pope then sued him. “He seemed to believe that African-Americans were required to be represented by African-Americans,” Blue says. Twenty years later, Hofeller enacted Pope's strategy. “The best recent example of success is in North Carolina,” the RSLC wrote in a July 2011 blog post.

The strategy was repeated in other Southern states including Georgia, Louisiana and South Carolina, as Republicans created new majority-minority districts at the state level as a means to pack Democrats into as few as possible. They also increased the BVAP in existing majority-minority Congressional districts held by Democrats like Jim Clyburn in South Carolina and Bobby Scott in Virginia, who have occupied their seats for almost two decades.

Yet this year, unlike in past cycles, the unholy alliance between white Republicans and black Democrats has dissolved. Stacey Abrams, the first African-American leader of the Georgia House, denounced the GOP plan to create seven new majority-minority districts in the Statehouse but eliminate the seats of nearly half the white Democrats. “Republicans intentionally targeted white Democrats, thinking that as an African-American leader I wouldn't fight against these maps because I got an extra number of black seats,” she says. “I'm not the chair of the 'black caucus.' I'm the leader of the Democratic caucus. And the Democratic caucus has to be racially integrated in order to be reflective of the state.” Under the new GOP maps, Abrams says, “we will have the greatest number of minority seats in Georgia history and the least amount of power in modern history.”

Democrats accounted for 47 percent of the statewide vote in Georgia in 2008 and 2010 but, thanks to redistricting, can elect just 31 percent of Statehouse members. Abrams is especially upset that Republicans pitted incumbent white Democrats against incumbent black Democrats in four House districts in Atlanta, which she sees as an attempt to divide the party through ugly racial politics. “They placed whites who represented majority-minority districts against blacks who represented majority-minority districts and enhanced the number of minority voters in those districts in order to wipe the white Democrats out,” she explains. The new districts slither across the metropolis to pick up as many black voters as possible. Abrams says the new maps “look like a bunch of snakes that got run over.

”The same thing happened in the Georgia Senate, where Republicans targeted State Senator George Hooks, who has been in the body since 1991 and is known as the “dean of the Senate.” Hooks represented the peanut farming country of rural Southwest Georgia, including Plains, the hometown of Jimmy Carter. Republicans dismantled his district, which had a BVAP of 43 percent, and created a new GOP district in North Georgia with a BVAP of 8 percent. They moved the black voters in his district into two adjoining majority-minority districts and two white Republican districts, and pitted Hooks against an incumbent black Democrat in a district that is 59 percent black. His political career is likely finished.

The GOP similarly took aim at Representative John Barrow, the last white Democrat from the Deep South in the US House. Republicans increased the BVAP in three of the four majority-minority Congressional districts represented by Georgia Democrats but decreased the BVAP from 42 to 33 percent in Barrow's east Georgia seat, moving 41,000 African-Americans in Savannah out of his district. Just to be sure, they also drew Barrow's home out of the district as well. Based on population shifts — Georgia gained one new seat from the 2010 census — the district could have become a new majority-minority district, but instead it's much whiter and thus solidly Republican.

As a consequence of redistricting, Republicans could control ten of Georgia's fourteen Congressional districts, up from eight in 2010, and could hold a two-thirds majority in the State Legislature, which would allow the party to pass constitutional amendments without a single Democratic vote. When the dust settles, Georgia and North Carolina could send twenty Republicans, five black Democrats and two white Democrats to the US House. That's a generous number of Democrats compared with Alabama, Louisiana, Mississippi and South Carolina, which each have only one Democratic Representative in Congress — all of them black, from majority-minority districts.

In 1949 white Democrats controlled 103 of 105 House seats in the former Confederacy. Today the number is sixteen of 131, and it could reach single digits after 2012. “I should be stuffed and put in a museum when I pass away,” says Representative Steve Cohen, a white Democrat who represents a majority-minority district in Memphis, “and people can say, 'Yes, a white Southern Democrat once lived here.'”

Unlike the Republican Party, which is 95 percent white in states like Georgia, North Carolina and South Carolina, the Democratic Party can thrive only as a multiracial coalition. The elimination of white Democrats has also crippled the political aspirations of black Democrats. According to a recent report from the Joint Center for Political and Economic Studies, only 4.8 percent of black state legislators in the South serve in the majority. “Black voters and elected officials have less influence now than at any time since the civil rights era,” the report found. Sadly, the report came out before all the redistricting changes had gone into effect. By the end of this cycle, Republicans in Georgia, South Carolina and Tennessee could have filibuster-proof majorities in their legislatures, and most white Democrats in Alabama and Mississippi (which haven't completed redistricting yet) could be wiped out.

Texas, a state not known for subtlety, chose to ignore its rapidly growing minority population altogether. One of four majority-minority states, Texas grew by 
4.3 million people between 2000 and 2010, two-thirds of them Hispanics and 11 percent black. As a result, the state gained four Congressional seats this cycle. Yet the number of seats to which minority voters could elect a candidate declined, from eleven to ten. As a result, Republicans will pick up three of the four new seats. “The Texas plan is by far the most extreme example of racial gerrymandering among all the redistricting proposals passed by lawmakers so far this year,” says Elisabeth MacNamara, president of the League of Women Voters.

As in the rest of the South, the new lines were drawn by white Republicans with no minority input. As the maps were drafted, Eric Opiela, counsel to the state's Congressional Republicans, referred to key sections of the Voting Rights Act as “hocus-pocus.” Last year the Justice Department found that the state's Congressional and Statehouse plans violated Section 5 of the VRA by “diminishing the ability of citizens of the United States, on account of race, color, or membership in a language minority group, to elect their preferred candidates of choice.” (Texas has lost more Section 5 enforcement suits than any other state.)

Only by reading the voluminous lawsuits filed against the state can one appreciate just how creative Texas Republicans had to be to so successfully dilute and suppress the state's minority vote. According to a lawsuit filed by a host of civil rights groups, “even though Whites' share of the population declined from 52 percent to 45 percent, they remain the majority in 70 percent of Congressional Districts.” To cite just one of many examples: in the Dallas-Fort Worth area, the Hispanic population increased by 440,898, the African-American population grew by 152,825 and the white population fell by 156,742. Yet white Republicans, a minority in the metropolis, control four of five Congressional seats. Despite declining in population, white Republicans managed to pick up two Congressional seats in the Dallas and Houston areas. In fact, whites are the minority in the state's five largest counties but control twelve of nineteen Congressional districts.

Based on these disturbing facts, a DC District Court invalidated the state's maps and ordered a three-judge panel in San Antonio to draw new ones that better accounted for Texas's minority population, which improved Democratic prospects. The Supreme Court, however, recently ruled that the San Antonio court must use the state's maps as the basis for the new districts, at least until a separate three-judge panel in Washington decides whether the maps violate the VRA. Final arguments will take place January 31, in a case that could have far-reaching ramifications for the rights of minority voters not just in Texas but across the South.

In a recent speech about voting rights at the LBJ presidential library in Austin, Attorney General Eric Holder noted that “no fewer than five lawsuits” are challenging Section 5 of the Voting Rights Act, which he called the “keystone of our voting rights laws.” Section 5 requires that states covered by the act receive pre-clearance from the Justice Department or a three-judge District Court in Washington for any election law changes that affect minority voters.

Conservatives want to scrub this requirement. In a 2009 decision, the Supreme Court stopped short of declaring Section 5 unconstitutional but asserted that “the Act's preclearance requirements and its coverage formula raise serious constitutional questions.” Justice Clarence Thomas, in a dissent, sought to abolish Section 5, arguing that intentional discrimination in voting “no longer exists.” But in September a US District Court judge dismissed a challenge to Section 5, writing that it “remains a 'congruent and proportional remedy' to the 21st century problem of voting discrimination in covered jurisdictions.” Voting rights experts expect the Supreme Court to address this issue in the coming year.

Meanwhile, just as they're seeking to declare Section 5 unconstitutional, Republicans are also invoking the VRA as a justification for isolating minority voters. “There's no question that's an unintended consequence,” says Jankowski of the RSLC (which takes no position on Section 5). “Republicans benefit from the requirement of these majority-minority districts. It has hurt the Democratic Party's ability to compete in the South.” But Kareem Crayton, a redistricting expert at the UNC School of Law, argues that Republicans “clearly decided to ignore what federal law requires,” noting that “a party that doesn't like federal mandates all of a sudden getting religion and talking about the importance of federal voting rights is more than a little ironic.”

The VRA states that lawmakers must not diminish the ability of minority voters to participate in the political process or elect a candidate of their choice. “There's nothing out there that says a state can't draw a 42 percent black district instead of a 50 percent black district as long as black voters still have the opportunity to elect a candidate of choice,” argues Paul Smith, a prominent redistricting lawyer at Jenner & Block in Washington. The VRA, in other words, did not compel Republicans to pack minority voters into heavily Democratic districts. “Using the Voting Rights Act to justify racial discrimination is anathema to the purpose of the Voting Rights Act,” says Stacey Abrams.

But it's also difficult for voting rights advocates to prove in federal court that packing minority voters into majority-minority districts diminishes their ability to elect candidates of choice. That's why the Justice Department has pre-cleared redistricting plans in every Southern state so far except Texas, much to the chagrin of civil rights activists. (Plaintiffs may have better luck in state court in places like North Carolina, where the court has acknowledged that civil rights groups have raised “serious issues and arguments about, among other things, the extent to which racial classifications were used.”) “I have not been at all satisfied with the civil rights division of the Justice Department under the Obama administration,” says Joe Reed, a longtime civil rights activist and redistricting expert in Alabama.

Wasserman says the Justice Department is saving its legal firepower to challenge restrictive voting laws passed by Republicans in half a dozen Southern states since 2010. The laws require proof of citizenship to register to vote, cut back on early voting, curtailed voter registration drives and required voters to produce a government-issued ID before casting a ballot. The department has already objected to South Carolina's voter ID law, since blacks are more likely than whites to lack the necessary ID. “Every method that human ingenuity can conceive of is being used to undermine, dilute and circumvent the rights of minority voters to enjoy the franchise,” says Reed.

The use of race in redistricting is just one part of a broader racial strategy used by Southern Republicans to not only make it more difficult for minorities to vote and to limit their electoral influence but to pass draconian anti-immigration laws, end integrated busing, drug-test welfare recipients and curb the ability of death-row inmates to challenge convictions based on racial bias. GOP presidential candidates have gotten in on the act, with Newt Gingrich calling President Obama “the best food-stamp president in American history.” The new Southern Strategy, it turns out, isn't very different from the old one.

This article was reported in partnership with The Investigative Fund at The Nation Institute, now known as Type Investigations, with support from The Puffin Foundation.

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In a Nation article last month, “Disarming the Consumer Cop,” I reported how the bank lobby and its Republican allies in Congress were trying to gut the Consumer Financial Protection Bureau (CFPB) before it goes live on July 21 and prevent Elizabeth Warren from becoming the bureau's full-time director.

The lobby won a partial victory yesterday, when the Obama administration shunned Warren and nominated Richard Cordray — a former Ohio attorney general who was head of enforcement at CFPB — to run the bureau. Cordray has a strong track record of investigating foreclosure fraud and other corporate malfeasance, but he does not have the clout or expertise of Warren. She was the natural pick to run the agency she conceived of and by far the most qualified person for the job. Choosing somebody other than her was a colossal capitulation by the Obama White House.

I'm sure the Obama administration had its reasons for not picking Warren: her appointment might have further inflamed Republicans at a time when Obama needs their support to raise the debt ceiling; she'd complicate his outreach to Wall Street and fundraising strategy for 2012; she wasn't going to win any popularity contests inside the Treasury Department.

But Warren's attributes far outweighed her negatives. The administration pushed her out the door at the very moment it needed her the most. She's the best spokesperson Obama has on economic policy, especially compared to a Wall Street–friendly stiff like Tim Geithner, and has spent her whole life fighting for the middle class, which is the stated priority of the Obama administration. The consumer bureau is the most popular and tangible aspect of the Dodd-Frank financial reform bill, which was the most popular piece of legislation enacted by the administration in its first two years in office.

In the last election, voters who blamed Wall Street for causing the economic crisis supported Republicans over Democrats by fourteen points! The public viewed Obama as a big spending friend of the banks. No one would ever say that about Warren.

Even though she's out of the picture, the GOP still wants to disarm the CFPB and reiterated their vow yesterday not to confirm Cordray unless the White House agrees to major changes to the bureau. The Wall Street Journal reported that “the White House may be willing to make some minor concessions to win confirmation of Mr. Cordray.” But unless the administration is willing to completely restructure the CFPB and forgo its independence, Republicans will not confirm Cordray. That leaves Obama with no choice but to give him a recess appointment, which is what he should have done with Warren.

Thus far, the president has been extremely reluctant to use his recess authority, making only twenty-eight appointments, even though nearly 20 percent of his judicial and executive branch nominations have been blocked by Senate Republicans.

The CFPB goes live on Thursday. Without a full-time director in place, the CFPB will be able to supervise the nation's largest banks and enforce consumer protection rules from other agencies but will not be able to assume any of its new powers, such as policing the shadow banking industry or cracking down on “unfair, deceptive or abusive,” financial services products.

If he wants the CFPB to do its job, Obama needs to act swiftly. He wasn't willing to fight for Warren. Will he now fight for the CFPB? If he doesn't, its very survival is at stake.

This post originally appeared on The Nation online.

The post Will Obama Fight for Post-Warren Consumer Bureau? appeared first on Type Investigations.

According to Bloomberg News and other news outlets, the Obama Administration is considering appointing Raj Date, a top deputy to Elizabeth Warren at the new Consumer Financial Protection Bureau, as the bureau’s permanent director before it goes live on July 21. The articles are all attributed to “a person familiar with the discussions,” which makes it clear that the White House is floating Date’s appointment as a trial balloon, to gauge reaction from financial reform advocates, the business community and members of Congress. This is not an entirely new story — Reuters reported that Date was under consideration back in April — but the campaign on his behalf appears to be intensifying, at least judging from the media coverage yesterday and today.

Date is well-regarded in the business world and among reform advocates, which is why he’s an attractive option for the administration. He worked for Capitol One and Deutsche Bank; served on the board of a peer-to-peer lending company, Prosper Marketplace; started his own economic policy research firm, Cambridge Winter Center; and was a board member at Demos, a liberal think tank. Heather McGhee, director of Demos’ Washington office, called Date “one of the most effective advocates for consumer financial protection during the debate that culminated in the Dodd-Frank Act.”

Which isn’t to stay he’s a better pick than Warren, who remains the preferred candidate among financial reform advocates. He’s still a banking industry veteran at a time when the public remains skeptical of the banks, and it’s unclear if he has the moxy and stature to go up against the $3 trillion financial services industry. The CFPB was Warren’s idea, and she’s the most qualified person to run the bureau.

Senate Republicans have made clear they’ll try to block whomever the Administration picks to formally run the CFPB, which virtually guarantees a recess appointment. The banking lobby hates the bureau as much as Warren, which means that any “consensus candidate” is bound to face fierce resistance once the CFPB is up and running. Support continues to grow for a Warren appointment, including an endorsement today from the AFL-CIO, which is by far the biggest group to come out in favor of a recess appointment thus far.

Yet the Obama Administration seems determined to push Warren out the door at the very moment it needs her the most. She’s the best spokesperson Obama has on economic policy, especially compared to a Wall Street-friendly stiff like Tim Geithner, and has spent her whole life fighting for the middle class, which is the stated priority of the Obama administration. The consumer bureau is the most popular and tangible aspect of Dodd-Frank, which was the mostpopular piece of legislation enacted by the administration in its first two years in office. Yet the bureau and Dodd-Frank are under attack from the banking lobby and Congressional Republicans [see Berman's Investigative Fund article, "The Bank Lobby v. Elizabeth Warren“], who’d like to return to the pre-financial crisis status quo. Any retreat by the Obama administration will hand opponents of reform a major victory — and embolden them to go further.

Four of the nation’s biggest banks — JP Morgan, Bank of America, Citigroup and Goldman Sachs — are among the ten most unpopular companies in America, according to a new Harris Interactive poll. The public hates the banks. And they love Warren and consumer protection. Whom to side with should be a no-brainer for the Obama administration.

This post originally appeared at thenation.com.

The post Has Obama Found a Replacement for Elizabeth Warren at the CFPB? appeared first on Type Investigations.

On May 24 Elizabeth Warren was back on Capitol Hill testifying before Congress, defending her brainchild, the new Consumer Financial Protection Bureau, a key element of the 2010 Dodd-Frank financial reform legislation. Warren is a major celebrity in Washington, an Oklahoma-born Harvard law professor who’s done more than anyone since Ralph Nader to put consumer protection on the national agenda. The room was packed with reporters, consumer advocates and lobbyists. GOP Representative Patrick McHenry, who chaired the House Committee on Oversight and Government Reform hearing, could barely hide his disgust for the CFPB and Warren, accusing her of lying to Congress and frequently interrupting her answers. “In a few short weeks,” McHenry warned ominously, “the bureau will become a powerful instrument in the hands of progressive regulators.”

In part because it’s one of the strongest aspects of Dodd-Frank, the CFPB has become a favorite target of Republican attacks, right up there with George Soros, ACORN and Planned Parenthood. It’s been called “one of the greatest assaults on economic liberty in my lifetime” (Representative Jeb Hensarling) and “the most powerful agency ever created” (Representative Spencer Bachus). The Wall Street Journal opinion page denounced Warren and the bureau three times in one week in March. And the bureau hasn’t even officially launched!

Research support was provided by The Investigative Fund at The Nation Institute, now known as Type Investigations.

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In 1955 the Tennessee Valley Authority built what was at the time the world's largest coal plant, near Kingston, Tennessee. More than fifty years later, the Kingston Fossil Plant produces enough electricity to power 670,000 homes and emits nearly 11 million tons of carbon dioxide--the greenhouse gas most responsible for global warming--each year. On December 22 a dike broke at the plant, sending more than a billion gallons of toxic black sludge downhill into the ground, water and homes of eastern Tennessee. The infected area was some forty times larger than the infamous Exxon Valdez oil spill in Alaska and became known as the “nightmare before Christmas.”

The spill underscored the negative images the word “coal” often conjures up--battered communities in Appalachia, underground explosions, exploited miners, brutal strikes and black lung. Yet the American coal industry, which pumps 2 billion tons of CO2 into the atmosphere each year and contributes more than one-third of the nation's overall greenhouse gas emissions, is nothing if not resilient. Despite rising public concern about global warming and a growing awareness that coal is an irrevocably dirty business, the industry is spending millions of dollars on a slick messaging campaign stressing its “commitment to clean.”

Critics argue that “clean coal” means anything the industry wants it to, pointing out that of the country's 616 coal plants, none are carbon-free or close to it. The viability of an environmentally sustainable future for coal is questionable, and so is the industry's commitment to cleaning itself up. The Center for American Progress recently released a report showing that the country's biggest coal companies have spent only a fraction of their multibillion-dollar profits developing technologies to curb carbon emissions from coal-fired power plants. “The ads and other public clean coal activities are merely designed to delay global warming solutions without suffering a public relations black eye,” the CAP report stated.

“Clean coal is like a healthy cigarette,” Al Gore likes to say. “It does not exist.” Gore is spearheading the Reality Campaign, a countereffort with environmental groups like the Sierra Club featuring an ad by the Coen brothers that's known as “No Country for Coal Men.” Ted Venners, founder of Evergreen Energy--a company in Colorado that reduces CO2 emissions from coal by 8 percent compared with traditional coal--shares Gore's skepticism. “It is an oxymoron,” Venners says. “Even after the process of cleaning coal, it's not clean.”

In the coming months, as Congress and the Obama administration dole out billions in stimulus dollars to kick-start a green economy and draft sweeping legislation to curb climate change, the future of coal will be at the heart of the debate over energy policy. The ultimate impact of the clean coal lobby will be measured by its influence on Capitol Hill and the corresponding outcome of pending legislation. For that reason, this controversial campaign raises a number of questions that will help shape our energy future for years to come. How serious is the industry about developing clean coal, and can it happen? Does the latest message indicate a more environmentally friendly policy, or just a crafty makeover? Can the same people who told us that global warming didn't exist--or that it was a good thing--suddenly be trusted to help solve the climate crisis?

The driving force behind coal's rebranding effort is the American Coalition for Clean Coal Electricity, a 
$40 million campaign funded by all the major components of the modern coal industry--mining companies, power plants, railroads, rural electric co-ops. ACCCE's ad blitz features sleek piano music and high-tech images of the globe; a panoply of workers voicing their belief in new technology; and, of course, President Obama, speaking at a campaign stop in coal-rich southwestern Virginia. “This is America,” Obama tells the crowd. “We figured out how to put a man on the moon in ten years. You can't tell me we can't figure out how to burn coal that we mine right here in the United States of America and make it work.” The ad closes with Obama supporters chanting a familiar refrain: “Yes we can!” To promote its message, ACCCE hired a top ad firm out of Vegas and a well-connected Washington PR outfit, spending three times as much last year as the health insurance industry did on the “Harry and Louise” ads in 1993-94.

ACCCE's office in downtown Washington is empty, but not for long. The group just hired Paul Bailey, a former operative for the oil and electric power industries, as its top lobbyist and will soon fill three more upper-level positions, bolstering a fleet of fixers who spent more money than anyone else--nearly $10 million last year--lobbying on climate change-related legislation, according to the Center for Public Integrity. For now, most of ACCCE's staff work elsewhere, in regional offices and from a nondescript office park in Alexandria, Virginia, at 333 John Carlyle Street. That location is infamous, having housed two radical right-wing groups--the Western Fuels Association and the Greening Earth Society--that formed the backbone of the effort to disprove the science of global warming. Out of the widely discredited denialist movement, ACCCE grew.

Naomi Oreskes, a professor of history and science studies at the University of California, San Diego, compares the strategy of these early groups to that of the tobacco industry, which for decades argued that cigarettes didn't cause cancer. “Doubt is our product,” Brown & Williamson stated in an internal memo in 1969, “since it is the best means of competing with the 'body of fact' that exists in the mind of the general public.” In 1992 a scientific consensus was emerging around the seriousness of global warming, and President George H.W. Bush attended an international climate change conference in Brazil that laid the groundwork for the Kyoto Protocol. Around that time the Western Fuels Association--a consortium of coal producers--introduced an ad campaign to “reposition global warming as theory (not fact),” Oreskes details in a forthcoming paper. Its print and radio ads posed questions like “If the Earth is getting warmer, why is Kentucky getting colder?” and “How much are you willing to pay to solve a problem that may not exist?” On Earth Day 1998, Western Fuels launched a front group called the Greening Earth Society to promote “positive environmental thinking,” namely, the idea that increased CO2 emissions would benefit humanity. The group called CO2 “an amazingly effective aerial fertilizer” and posited that global warming would boost agricultural productivity and create a healthier planet. Greening Earth's founder, Fred Palmer, presented a ready-made villain for the environmental movement. “Every time you turn your car on and you burn fossil fuels and you put CO2 into the air, you're doing the work of the Lord,” Palmer said.

Greening Earth and Western Fuels worked in partnership with the Center for Energy and Economic Development (CEED), an industry group co-founded by railroad exec (and future Bush II treasury secretary) John Snow and Steve Miller, a top aide to former Kentucky Governor Brereton Jones. In the mid-'90s CEED lobbied against the Kyoto Protocol, which it called “wrong in its science, wrong in its approach, wrong to surrender, wrong for America.” The group employed the research of Frederick Seitz--a fixture in the tobacco industry--to argue that CO2 was “NOT A Pollutant” but rather “Earth's Basic Building Block.” “We caution policymakers to fully examine the evidence available regarding climate change and global climate modeling,” Miller said at the time. “Indeed, many scientists maintain that [greenhouse gas] emissions from electric power plants are not contributing significantly to overall warming trends.”

CEED and its ilk found a receptive message on Capitol Hill, where the Senate unanimously opposed the Kyoto Protocol in 1997, making the United States the world's only industrialized nation to ignore the threat of climate change. Yet a message of denial and confusion got the industry only so far, so the main backers of CEED, including Western Fuels and major coal producers like Peabody and Southern Company, formed Americans for Balanced Energy Choices (ABEC) to promote clean coal.

Going forward, CEED and ABEC spent less time disputing the science of global warming and instead featured coal as the lifeblood of the American economy, maintaining that any regulation to reduce emissions would be disastrous. The industry had a willing booster in George W. Bush, who quickly broke his campaign promise to regulate carbon dioxide as a pollutant and appointed coal lobbyists to top positions in his administration, granting the industry a long and now familiar wish list of favors, including gutting the Clean Air Act and easing standards for mountaintop mining.

But increasing public awareness of global warming and the Democrats' takeover of Congress in 2006 foreshadowed challenges for the industry. A September 2007 poll commissioned by ABEC showed that 51 percent of “opinion elites”--a sample of upper-income, well-educated, business-oriented Americans--believed that coal was not a fuel for America's future. In 2007 fifty-nine new coal plants were rejected or put on hold; only a dozen have been built since 1990. “We're walking around with a bull's-eye on our forehead,” Jim Rogers of Duke Energy told journalist Jeff Goodell.

CEED and ABEC correctly recognized that the industry had to be for something, rather than against everything. In 2007 ABEC quadrupled its ad budget to combat what it called “outdated perceptions about coal,” and in early 2008 CEED and ABEC morphed into ACCCE, delivering the fine-tuned message that global warming is real and that clean coal can help solve it. The group used the research from its 2007 poll as the basis for its huge marketing campaign, designed a logo of an orange power cord plugged into a rock of coal and jumped into the presidential campaign.

ACCCE understood that the road to the White House frequently travels through coal country, in states like Ohio, Pennsylvania, Virginia, Indiana, Missouri and Colorado. Even Iowa, a place synonymous with corn, gets four-fifths of its energy from coal. So the group showed up early and often, recruiting a “grassroots army” of staffers in bright blue T-shirts to trail the candidates, passing out promotional materials at every stop, co-sponsoring presidential debates and running ads in key swing states. The group spent $2 million at the Democratic convention alone. At a moment of soaring gas prices and deep economic insecurity, ACCCE conveyed a series of easily digestible talking points: 50 percent of the nation's electricity comes from coal; coal is 77 percent cleaner (when you don't include CO2 emissions) now compared with 1970; America is the Saudi Arabia of coal; coal is cheap, plentiful and clean.

One moment during the campaign, in particular, illustrated the enduring power of the coal industry and the emerging imprint of clean coal. At a mid-September stop in Maumee, Ohio, Joe Biden told a questioner on a rope line, “We're not supporting 'clean coal'.... No coal plants here in America. Build them, if they're going to build them, over there [in China] and make 'em clean, because they're killing you.” John McCain seized on the comment, launching the Coalition to Protect Coal Jobs, and supporters at a Sarah Palin rally in Ohio chanted, “Mine, baby, mine!” CEED co-founder Steve Miller, who had become president of ACCCE, urged Biden to “clarify” his remarks. The Obama campaign quickly responded with a Clean Coal Jobs Task Force of coal-state Democrats. “I support clean coal technology,” Obama said in the final presidential debate. “Doesn't make me popular with environmentalists.”

On election day ACCCE released a poll showing that 69 percent of “opinion leaders” supported coal as a fuel for America's future, a huge turnaround from the previous September, and Obama prevailed in coal-rich states such as Virginia, Ohio and Pennsylvania. ACCCE even got Biden to sign a “clean coal” hat.

“There absolutely has been a change in message,” ACCCE chief spokesman Joe Lucas admits. “It's a pro-technology message.” Lucas, an amiable Southerner who likes to mix it up with his opponents in the environmental movement, grew up in coal-rich Kentucky. He served as the spokesman for the Labor Department's Mine Safety and Health Administration under Ronald Reagan and George H.W. Bush and joined the Energy Department during the Clinton Administration, where he says he was affectionately known as Energy Secretary Hazel O'Leary's “coal hack.” He went to work for the coal industry in 1998 and has been with it ever since. Lucas is a Democrat, but his deputy, Nick Meads, ran the Republicans' 2008 campaign in Virginia.

I met Lucas in DC on March 3, the day after 2,500 environmental advocates descended on Capitol Hill for what was billed as the country's “largest protest against global warming.” The coal industry--and a coal-fired power plant that operates just blocks from the Capitol--were the targets. I asked Lucas about the discrepancy in message between his current group and its past associates, like the Greening Earth Society. “We never said that there was going to be a beneficial global warming phenomenon,” he told me. “Some groups did. We're not scientists. And we never played scientists. We've only repeated what the scientific community has said writ large.”

When asked by CNN recently to give a yes or no answer to the question of whether burning coal contributes to global warming, Lucas responded, “I don't know. I am not a scientist.” He gave a more Rumsfeldian answer when I posed a similar question. “Here's what is the absolute truth about the science of climate change,” Lucas said. “There are certain things which we are certain about. There are other things that we are less certain about. And there are many things about which we are uncertain.” But, he added, “given where we're going with technology, we don't see that any remaining uncertainties should be an impediment for action.”

Although the message on coal has changed, many of the actors--and their actions--remain the same. For instance, Ned Leonard, a longtime Western Fuels operative, became a vice president at CEED and is now the go-to guy on clean coal technology at ACCCE. One of the group's funders, the massive Georgia-based utility Southern Company, spent the better part of $14 million successfully lobbying against Congressional legislation that would have required the United States to generate 15 percent of its electricity from renewable sources by 2020. And a few weeks after the group was formed, ACCCE lobbied against a bill introduced by Senators Joe Lieberman and John Warner that would have mandated a 60 percent reduction in greenhouse gas emissions by 2050. The Lieberman-Warner bill proposed hundreds of billions in subsidies to the coal industry, but nevertheless ACCCE ran print and radio ads against it, calling it a “job killer” and arguing that any regulation of CO2 should be left to the states--even though the group also opposed state-based regulation. Such shell games have become a hallmark of the industry.

The EPA is preparing to regulate CO2 as a pollutant under the Clean Air Act, and Congress will likely draft cap-and-trade legislation this year. As the debate heats up, major business outfits like the Chamber of Commerce and the National Association of Manufacturers are sure to fight back aggressively, as are more traditional coal companies like Peabody and Southern. Lucas says ACCCE plans to spend “at least as much” on lobbying as it did last year, but he promises a less confrontational approach. “We shouldn't focus on whether carbon dioxide will be regulated (it will), or if ACCCE could possibly support regulation (we do),” he wrote on his blog. “The conversation now should be about how we're going to reduce CO2 emissions.” Though it opposed Lieberman-Warner, Lucas says, ACCCE supports “a timely adoption of a mandatory federal program to reduce greenhouse gas emissions.” He points to a bill drafted last year by Representatives John Dingell of Detroit and Rick Boucher of southwestern Virginia as something ACCCE could support.

The Dingell-Boucher bill was widely criticized by environmentalists for containing too many loopholes for industry, rendering the pollution targets essentially meaningless. In the new Congress, enviros scored a major victory when California's Henry Waxman replaced Dingell as chair of the House Energy and Commerce Committee and Ed Markey of Massachusetts supplanted Boucher as chair of the subcommittee on energy and environment. Waxman and Markey are drafting global warming legislation they hope will clear the committee by Memorial Day. Still, the politics of the issue are dicey. “There won't be enough votes to pass the bill if it forces economic disruption,” Boucher told me. “That means not forcing electric utilities to abandon the use of coal.”

The prospects for passing a cap-and-trade bill are significantly tougher in the Senate. Ten coal-state Democrats announced last year that they would oppose Lieberman-Warner unless it was substantially modified, a faction that now comprises as many as twenty-two Democrats, Lucas says. The New York Times dubbed it a “brown state-green state clash.” Ohio Senator Sherrod Brown, a leader of that coalition, says, “I'm almost certain there'll be climate change legislation [this year], and I'm almost certain I'll vote for it. But the pain needs to be shared equally.” As of now, Brown says, he's concerned that “the cost of cap-and-trade is borne overwhelmingly by coal states.”

The coal industry hopes to exploit such economic anxiety by pushing for a watered-down version of an already watered-down bill. (The latest ACCCE ad highlights the affordability of coal and its ability to sustain jobs that will help “get our economy back on its feet.”) “The analogy I like to use is that it's like being on a boat in the middle of the ocean,” Lucas says. “If you're going 100 knots due north and you're on a big boat and you try and immediately go 100 knots due south, you're going to wreck that boat.” He adds, “It's very easy but not too practical to sit there and say, 'Coal will go away,' when we all know that coal is not going to go away. It's going to grow here in America, and even if it were to go away here in America, it's going to grow exponentially in other parts of the world.”

To capitalize on the prevalence of coal in the United States while heeding the dangers of global warming, the industry is pushing what is known as carbon capture and storage (CCS) technology, a complicated process by which CO2 emissions are stored deep underground rather than pumped into the air. Theoretically, CCS would reduce emissions by 90 percent but also decrease efficiency and increase cost compared with traditional coal production. [For much more on CCS, see Jeff Goodell's "The Dirty Rock," May 7, 2007.] The feasibility of instituting CCS on a large scale, at a price worth doing, is the subject of intense debate inside the coal industry and the environmental movement. Greenpeace calls the technology a “false hope,” while the Natural Resources Defense Council cautions that CCS must be quickly developed in order to export it to developing countries like China, which has been rapidly building new coal plants with few, if any, pollution controls.

It's not at all clear that CCS will catch on anytime soon in America. In 2003 the Bush administration, with much fanfare, announced the building of the country's first zero-emissions power plant, in downstate Illinois. FutureGen was supposed to be the centerpiece of the administration's strategy for clean coal and a model public-private partnership. Unfortunately, costs skyrocketed, the government footed most of the bill and after five years of planning, the Energy Department killed the project in January 2008. “In retrospect, FutureGen appears to have been nothing more than a public relations ploy for Bush Administration officials to make it appear to the public and the world that the United States was doing something to address global warming,” an exhaustive House Science Committee report recently stated. The abandonment of the project, DOE staffers concluded, set back the development of CCS by at least a decade, deferring widespread deployment until 2040.

The failure of FutureGen reinforced the skepticism of even some in the industry toward the technology. “To do this on a big scale, for every coal-fired power plant, is going to be very, very difficult,” says Ted Venners of Evergreen Energy. Venners has been hearing about the promise of a pollution-free future for coal since he joined the National Coal Council in 1984. “I'm 61,” he says, “and I will not see zero-emission coal plants in my lifetime.” A friend of his in the coal business recently likened CCS to “a lot of foreplay and no satisfaction.”

In the meantime, environmental groups are urging Obama to declare a moratorium on all new coal plants until CCS is ready to go, whenever that may be. “We should not delude ourselves about the likelihood that that's going to occur in the near term or even the midterm,” Gore told the Senate Foreign Relations Committee in January. Yet despite doubts about its future, CCS remains a favored technology on Capitol Hill, where many members represent coal-rich states and districts. “There's a consensus that we need to spend the money in order to prove or disprove this,” says a senior staffer on the House Select Committee for Energy Independence and Global Warming. “I realize that notion can sound disturbing to some people.”

The stimulus bill includes $3.4 billion for CCS research, some of which may go to revive FutureGen. (The legislation also includes $60 billion for renewable energy--a sea change in terms of funding--and the final version stripped $50 billion in loan guarantees for the nuclear and coal industries from the bill.) An energy bill introduced last year by Representative Markey--chair of the select committee--included $5 billion a year for CCS research, with the provision that it expire in 2020, giving the industry more than a decade to prove that it can make the technology work.

But is it worth throwing so much money at an experiment that may very well fail? There are other, cleaner options: groups as disparate as Google and Greenpeace have drawn up detailed blueprints to wean America almost totally off fossil fuels in the coming decades. If Congress and the Obama administration are serious about treating global warming as a pressing economic and ecological threat, coal will struggle to remain relevant. If it hopes to do so, the industry must follow its ads with tangible actions. Nothing less than its survival is at stake.

Research support for this article was provided by the Puffin Foundation Investigative Fund at The Nation Institute. Special thanks to DeSmogBlog for additional research support.

The post The Dirt on Clean Coal appeared first on Type Investigations.

Over the course of the presidential campaign, John McCain has repeatedly emphasized his willingness to stand up to Russian Prime Minister Vladimir Putin as proof that only he possesses the fortitude and judgment to become the next leader of the free world. In his acceptance speech at the Republican convention, McCain lashed out at Putin and the Russian oligarchs, who, “rich with oil wealth and corrupt with power...[are] reassembling the old Russian Empire.” McCain rushed to publicly support the Georgian republic during its recent conflict with Russia and amplified his threat to expel Moscow from the G-8 club of major powers. His running mate, Sarah Palin, suggested in her first major interview that the United States might have to go to war with Russia one day in order to protect Georgia—the kind of apocalyptic scenario the United States avoided during the cold war.

Yet despite McCain's tough talk, behind the scenes his top advisers have cultivated deep ties with Russia's oligarchy—indeed, they have promoted the Kremlin's geopolitical and economic interests, as well as some of its most unsavory business figures, through greedy cynicism and geopolitical stupor. The most notable example is the tale of how McCain and his campaign manager, Rick Davis, advanced what became a key victory for the Kremlin: gaining control over the small but strategically important country of Montenegro.

According to two former senior US diplomats who served in the Balkans, Davis and his lobbying firm, Davis Manafort, received several million dollars to help run Montenegro's independence referendum campaign of 2006. The terms of the agreement were never disclosed to the public, but top Montenegrin officials told the US diplomats that Davis's work was underwritten by powerful Russian business interests connected to the Kremlin and operating in Montenegro. Neither Davis nor the McCain campaign responded to repeated requests for comment. (Davis's extensive lobbying work, especially on behalf of collapsed mortgage giants Fannie Mae and Freddie Mac, has already attracted critical media scrutiny.)

At the time, Putin wanted to establish a Russian outpost in the Mediterranean, and Montenegro—a coastal republic across the Adriatic from Italy—was seen as his best hope. McCain also lobbied for Montenegro's independence from Serbia, calling it “the greatest European democracy project since the end of the cold war.” For McCain, the simplistic notion of “independence” from a country America had gone to war with in the late 1990s was all that mattered. What Montenegro looked like after independence seemed not to interest him. This suited Putin just fine. Russia had generally sided with Serbia against the West during the Balkan wars of the 1990s, but for the Kremlin, cutting Montenegro free from Serbia meant dealing with a Montenegro that could be more easily controlled. Indeed, today, after its “independence,” Montenegro is nicknamed “Moscow by the Mediterranean.” Russian oligarchs control huge chunks of the country's industry and prized coastline—and Russians exert a powerful influence over the country's political culture. “Montenegro is almost a new Russian colony, as rubles flow in to buy property and business in the tiny state,” Denis MacShane, Tony Blair's former Europe minister, wrote in Newsweek in June. The takeover of Montenegro has been a Russian geostrategic victory—quietly accomplished, paradoxically enough, with the help of McCain and his top aides.

In mid-September The Nation's website published a photo of McCain celebrating his seventieth birthday in Montenegro in August 2006 at a yacht party hosted by convicted Italian felon Raffaello Follieri and his movie-star girlfriend Anne Hathaway. On the same day one of the largest mega-yachts in the world, the Queen K, was moored in the same bay of Kotor. This was where the real party was. The owner of the Queen K was known as “Putin's oligarch”: Oleg Deripaska, controlling shareholder of the Russian aluminum giant RusAl, currently listed as the ninth-richest man in the world, with a rap sheet as abundant as his wealth. By mid-2005 Deripaska had already virtually taken control of Montenegro's economy by snapping up its aluminum plant, KAP—which accounts for up to 40 percent of the country's GDP and some 80 percent of its export earnings—in a nontransparent privatization tender strongly criticized by NGO watchdogs, Montenegrin politicians and journalists. The Nation has learned that Deripaska told one of his closest associates that he bought the plant “because Putin encouraged him to do it.” The reason: “the Kremlin wanted an area of influence in the Mediterranean.”

In mid-2005 Ambassador Richard Sklar, the former lead US official in the Balkans, ceased advising the Montenegrin government (he'd worked as a pro bono adviser after leaving the US diplomatic service) when it became clear the plant was being handed to Deripaska under heavy Russian pressure. “I quit because it was a bad deal, not for any political reasons. The Russians scared all the other buyers off. They offered far too little money and got themselves a sweetheart deal.”

Russia's virtual takeover of Montenegro was well under way by January 2006, when Rick Davis introduced Deripaska to McCain at a villa in Davos, Switzerland. They met again seven months later, at a reception in Montenegro celebrating McCain's birthday, as reported in the Washington Post.

The story of how Oleg Deripaska, 40, rose from a Cossack village to become a Putin-blessed aluminum tycoon with an estimated $40 billion fortune does not begin with a lemonade stand and old-fashioned elbow grease. Like most post-Soviet success stories, Deripaska's rise began abruptly and violently, during the chaotic reign of Boris Yeltsin. Among all the battles for control of valuable state assets in the 1990s, none were as bloody as the “aluminum wars,” in which organized-crime gangs hired by competing interests assassinated dozens of executives, shareholders and bankers. During a visit to the United States in 1995, Deripaska threatened the lives of two aluminum rivals, Yuri and Mikhail Zhivilo, according to a RICO lawsuit filed against Deripaska in New York district court in 2000. The RICO case is just one of many lawsuits, including one filed in Israel by a former business partner claiming that Deripaska illegally wiretapped an Israeli cabinet minister. In addition, German prosecutors have begun a criminal money-laundering investigation in Stuttgart. (Deripaska did not respond to requests for comment.)

Deripaska understands that success in Russia today comes from a mixture of brute force, political influence and personal connections. In 2001, about a year after Putin signed a decree granting legal immunity to Yeltsin's family, Deripaska married Yeltsin's granddaughter, thereby cementing his own immunity and power. Throughout Putin's reign, Deripaska has adhered to an unwritten understanding between Putin and the oligarchs: as long as they support the Kremlin, they can operate with impunity. Deripaska has thus taken on numerous projects dear to Putin, such as building a new airport in Sochi for the 2014 Olympics and buying out Tajikistan's aluminum plant to help Putin reassert control over that key ex-Soviet republic. Deripaska openly admits that his RusAl holdings are subservient to the Kremlin's wishes, telling the Financial Times last year, “If the state says we need to give it up, we'll give it up.”

Yet Deripaska faced a serious obstacle to his business ambitions, hampering his duties as a Putin surrogate. Because of numerous accusations of involvement in death threats, extortion, racketeering and money laundering, he had been barred from entering America since 1998. Putin has lobbied for Deripaska's US visa. In an interview with Le Monde earlier this year, Putin complained, “I have asked my American colleagues why. If you have reasons for not delivering him a visa, if you have documents on illegal activities, give us them.... They give us nothing, explain to us nothing, and forbid him from entry.”

The visa ban was costing Deripaska billions: for years he and fellow RusAl shareholders had sought to cash in their wealth by launching an IPO in London, which could have netted up to $10 billion for RusAl's owners. However, finding institutional buyers would be difficult if not impossible as long as RusAl's primary owner was barred from entering the United States.

Despite rampant Russophobia among Republicans, Deripaska turned to powerful GOP figures to solve his problem—especially to Republicans connected with McCain. In 2003 Deripaska hired former presidential candidate Bob Dole, who had nearly picked McCain as his running mate, and Dole's lobbying partner Bruce Jackson (also a McCain aide) to lobby the State Department to overturn the visa ban, according to Glenn Simpson and Mary Jacoby of the Wall Street Journal. Over the next few years Dole's firm, Alston & Bird, was paid more than $500,000 to push for Deripaska's visa.

Deripaska also reached out to a Washington-based intelligence firm, Diligence, chaired by GOP foreign policy hand Richard Burt, McCain's top foreign policy adviser in 2000 and an adviser in '08 (Burt left Diligence in 2007 to join Henry Kissinger's consulting firm). Deripaska's business partner in London, Nathaniel Rothschild, an heir to the English Rothschild fortune, bought a stake in Diligence, according to the New York Times and confirmed by a Rothschild spokesman. The firm offered Deripaska many useful services: corporate intelligence gathering, visa lobbying through considerable GOP connections and, crucially, help in obtaining a $150 million World Bank/European Bank for Reconstruction and Development loan for a Deripaska subsidiary, the Komi Aluminum Project. Getting the loan was useful in providing a layer of comfort to Western investors skittish about RusAl. So Diligence, now partly owned by Rothschild, provided a “due diligence” report to the World Bank, which the Bank then used to approve its loan to Deripaska.

Not surprisingly, the lobbying worked: in December 2005 Deripaska was issued a multientry US visa, according to the State Department. During his brief stay he signed his World Bank loan, spoke at a Carnegie Endowment meeting and attended a dinner for Harvard University's Belfer Center, where, thanks to a generous donation, he became a member of its international council.

However, Deripaska's trip did not end well. Under the visa's terms, he was forced to endure lengthy FBI questioning. According to the mining-industry newsletter Mineweb, the list of his enemies had grown from jilted former business partners to the heads of powerful US metals companies and government officials unhappy with RusAl's control of key Third World bauxite mines, which threatened beleaguered US aluminum giants. The interview went badly—according to people who know him, Deripaska had little patience for prying bureaucrats. When he left the country, the visa ban was reinstated. Once again Deripaska turned to powerful Republicans—this time, to McCain and campaign manager Davis, who arranged the January 2006 Davos introduction. The McCain campaign later claimed that “any contact between Mr. Deripaska and the senator was social and incidental,” but afterward Deripaska thanked Davis for arranging “such an intimate setting.” The Washington Post reported that Davis was “seeking to do business with the billionaire.” Indeed, Deripaska's subsequent thank-you letter mentioned his possible investment in a metals company Davis represented through a hedge-fund client.

If you're wondering how Deripaska came to know Davis & Co., the answer lies in Russia's next-door neighbor Ukraine.

In December 2004 Ukrainians poured into the streets of Kiev and other cities in the peaceful “Orange Revolution,” which overthrew a Putin-backed corrupt leader, Viktor Yanukovich, who had tried to steal the country's presidential election that year (during which the pro-Western opposition candidate, Viktor Yushchenko, was poisoned and almost died). It was a serious blow to Russia's geopolitical standing.

Putin's Ukrainian proxies were also in trouble. Shortly after the Orange Revolution, a murder investigation was launched against the country's richest oligarch, Rinat Akhmetov, Yanukovich's main backer. Akhmetov fled the country. In exile in Monaco, he turned to Davis's business partner, Paul Manafort—the second name in the lobbying firm Davis Manafort. An old GOP hand, Manafort, like Davis, had played a key role in Dole's failed 1996 presidential run and had worked for dictators like Ferdinand Marcos of the Philippines and Mobutu Sese Seko of Zaire. Akhmetov initially hired Manafort to improve the image of his beleaguered conglomerate, SCM, but soon Manafort's role shifted to helping Yanukovich.

Manafort assembled a skilled team of political operatives in Ukraine and set about raising the popularity of Yanukovich's pro-Russian Party of Regions, which Akhmetov financed. It was a very lucrative deal for Davis Manafort—and successful (according to Ukrainian investigative journalist Mustafa Nayem, Akhmetov paid Manafort upward of $3 million). Yanukovich's disgraced party won a resounding victory in the March 2006 elections—and Akhmetov returned as the top Ukrainian oligarch. Thanks in part to the work of Davis Manafort, the Orange Revolution was essentially undone, putting Putin back in the chess match over Ukraine's future.

Publicly McCain and his campaign chief's lobbying firm were on opposite sides. In 2005 McCain had nominated Orange Revolution hero Yushchenko for the Nobel Prize, and that spring he'd honored Yushchenko in the headquarters of the International Republican Institute, whose board McCain has chaired since 1993. But behind the scenes the former head of IRI's Moscow office, Philip Griffin, was recruited by Manafort to work on Yanukovich's campaign against Yushchenko. Davis Manafort's work was considered so detrimental to US interests that a National Security Council official called McCain's office to complain, according to the New York Times. The McCain campaign denies receiving the NSC complaint.

But the firm's work was only just beginning. The same month Davis Manafort helped deliver this victory to Putin's proxies, it started work on another key Kremlin success story: an independent and Russia-dominated Montenegro.

First, a little history. Montenegro was the smallest of the former Yugoslavia's six republics. When Slobodan Milosevic was overthrown in October 2000, Montenegro's longtime strongman, Milo Djukanovic, figured the West would reward him by supporting his push for independence. But the European Union and the United States opposed Montenegro's secession, which they feared would undermine the new, pro-Western leaders in Serbia and bring more war. So under heavy pressure from the EU, an agreement was struck in 2002 putting off an independence referendum for at least three years.

Djukanovic then looked beyond the West for support. That same year his closest ally and mentor, Milan Rocen, was dispatched to Moscow as ambassador of the Serbia-Montenegro confederation. Rocen nurtured ties to Putin's Russia, and by 2005 the biggest Montenegrin industrial asset, the KAP aluminum plant, was snatched up by Deripaska at Putin's request. After that, Russia surprised everyone by dropping its objections to Montenegrin independence, which Russia's historic ally Serbia vigorously opposed. “There seemed to be a belief that Deripaska and the Russians wanted to gain control of the aluminum plant as part of a Russian move for greater influence throughout Montenegro,” says former ambassador Sklar.

Meanwhile, Rick Davis was also eager for a piece of Montenegro's independence, lobbying hard for Davis Manafort to run the referendum campaign. Bob Dole, who has been paid $1.38 million by the Montenegrin government since 2001 to lobby for it in Washington, urged his Montenegrin friends to hire Davis. Whether it was because of Dole or, as some speculate, the Russians, Davis got his deal.

Though Davis has claimed no connection to his partner Manafort's controversial activities in Ukraine, he nevertheless hired at least three specialists recommended by Manafort, from the same team Manafort used for Yanukovich's victory, to work on Montenegro's independence referendum. They included Russian political operative Andrei Ryabchuk, an elections specialist who had previously worked on pro-Putin campaigns in Russia. Ryabchuk told The Nation that he was “recruited by Manafort's people” out of Moscow to the Ukraine operation and then on to Montenegro.

Davis's team was vetted by Montenegro's Russian ambassador Rocen, who was returning from Moscow to oversee the independence campaign. Why was Davis hired? The top McCain aide was as much a political symbol as a campaign consultant. “I think the Montenegrins hired Rick to have political cover—it was important to show they had support from the United States,” said an American democracy expert who's worked in Montenegro. Though disclosure is required by Montenegrin law, Davis Manafort's contract with the ruling Montenegrin party was never publicly released. In addition, Djukanovic's party never listed payments to Davis Manafort on its election filings, lending credence to private claims by top Montenegrin officials that Russian business interests paid for Davis's work through hired third parties, an oft-used though illegal tactic in Eastern Europe to disguise money trails.

At key points in the campaign, Davis reached out to Deripaska's allies for help. With the referendum too close to call, the Serbs tried to sway public opinion by threatening to revoke scholarships and other education privileges of Montenegrin students if the country should secede. This caused a panic—so to counter the Serbs, Davis turned to Deripaska emissary Nathaniel Rothschild (Rothschild has reportedly become the richest of all the Rothschilds, thanks to his privileged role as a Deripaska adviser).

Three weeks before the independence referendum, Davis asked Rothschild to come to Montenegro. After arriving in his private Gulfstream jet, Rothschild was trotted out before the cameras with the Montenegrin prime minister, where he pledged $1 million to support students who might be hurt by Serbia's scholarship threat. Another Deripaska ally brought in to secure the student vote was Canadian billionaire Peter Munk, CEO of Barrick Gold, the world's largest gold-mining corporation (it was Munk who had hosted the Davos meeting between McCain and Deripaska a few months earlier). Munk, who serves on the advisory board of RusAl, delivered pledges of support from Canadian universities.

At the same time Deripaska's allies were employed by Davis, Dole was lobbying McCain to promote Montenegro's independence. Dole's aides held a teleconference with McCain's Senate office when Montenegro's foreign minister visited Washington; shortly thereafter, the referendum passed by a razor-thin 0.5 percent. In April 2006 McCain announced that Montenegro's independence was the “greatest European democracy project since the end of the cold war.” Despite opposition cries of vote rigging, the United States and other major powers accepted the results—and Putin's Russia recognized newly independent Montenegro before the EU did.

A few months after the vote, McCain and a contingent of GOP senators visited Montenegro. The day before they arrived, Djukanovic had flown to Putin's dacha on the Black Sea. “Your government made it possible for large-scale Russian investments,” Putin told the Montenegrin leader. Djukanovic then returned to Montenegro and warmly received McCain, who also met with the Montenegrin president, speaker of Parliament and opposition leader Predrag Bulatovic. Bulatovic told McCain about how Russian capital was taking over the country and of his concern that “this investment can have a negative impact on the democratic process.” McCain listened but kept criticism of Russia to himself. Meanwhile, Davis was still in the country, helping Djukanovic's Russia-allied party win the upcoming parliamentary elections. (At the time, Djukanovic was under investigation by Italian prosecutors for cigarette smuggling and “Mafia-type activities.”)

Soon after the referendum, the powerful figures behind Montenegro's independence were carving up the country. That summer Rothschild started discussions with top Montenegrin officials about gaining control of the valuable shoreline, including the half-billion-dollar Porto Montenegro project, which aims to become the world's top mega-yacht marina, complete with luxury hotels, shopping and the country's first eighteen-hole golf course. The property was handed to the Munk-Rothschild-fronted offshore consortium for a pittance, according to MANS, the local NGO partner of Transparency International, in yet another backroom deal. Eventually, Deripaska's role in Porto Montenegro, which was initially secret, was formally acknowledged, although the full list of owners is still a mystery. Deripaska is also developing an 8 billion-euro resort in southern Montenegro and seeking control of a coal mine and a thermal power plant.

Roughly two years later, in March of this year, Rothschild hosted a high-dollar fundraiser for McCain at London's posh eighteenth-century Spencer House, which Rothschild donated for the occasion. Given the close relationship between Rothschild and Deripaska, some speculated that Deripaska was the hidden hand behind the event. The conservative watchdog group Judicial Watch filed a complaint with the Federal Election Commission, alleging that the fundraiser amounted to an illegal contribution by foreign nationals to McCain's campaign.

Aside from a little campaign dough, what has McCain gotten out of all this? It's hard to tell—either he was utterly clueless while his top advisers and political allies ran around the former Soviet domain promoting the Kremlin's interests for cash, or he was aware of it and didn't care. McCain was reportedly so angry about Davis Manafort's role in stifling Ukraine's Orange Revolution that he almost removed Davis as campaign manager. But in the case of Montenegro, he should have known what Davis & Co. were up to. After all, McCain lent a helping hand. And by the time he visited the country, the Russian takeover was plain to see.

The story of how McCain's closest aides and employees have been undermining his vociferously expressed opposition to Putin and Russia's oligarchs offers a highly disturbing preview of what a McCain administration might look like. When McCain's campaign proclaims “country first,” one has to wonder, Which country? The one with the highest bidder?

Research support was provided by the Puffin Foundation Investigative Fund at The Nation Institute.

The post McCain’s Kremlin Ties appeared first on Type Investigations.

In early April John McCain held a top-dollar fundraiser at Washington's Willard Hotel, where President Ulysses S. Grant invented the term “lobbyist.” It was a fitting locale, as the election-reform group Public Campaign noted, since thirty-five of the forty-three hosts for the evening were registered lobbyists. The following week Rick Davis--on leave from his job as a lobbyist to work as McCain's campaign manager--gave a strategy presentation to lobbyists from the oil, utility and nuclear power industries, soliciting campaign contributions.

McCain's ties to K Street began attracting attention, and a month later two of his key operatives were forced to resign after the press revealed that they'd lobbied for the Burmese dictatorship. A top McCain fundraiser, former Congressman Tom Loeffler, also got his walking papers after lobbying McCain on behalf of Saudi Arabia. In the space of ten days, five McCain lobbyists-turned-staffers left his campaign. Those who remained included senior adviser Charlie Black--formerly one of the most high-profile Republican lobbyists in Washington, who has represented the likes of Iraqi exile Ahmad Chalabi, mercenary contractor Blackwater and Philippine dictator Ferdinand Marcos. One could be forgiven for wondering, Was anyone in McCain's inner circle nota lobbyist?

Coziness between lawmakers and lobbyists is an old story in Washington, but in McCain's case such entanglements threaten to derail his maverick mystique. After his humiliating involvement in the Keating Five corruption scandal in the late 1980s, McCain worked tirelessly to cultivate a reputation as a chastened reformer. In the following years he made campaign-finance reform--specifically banning unlimited “soft money” donations--a near crusade, working closely with Democratic Senator Russ Feingold and angering many Republicans. Embracing campaign-finance reform became a useful way for McCain to differentiate himself from his earlier incarnation and from the DeLays and Gingriches and Bushes who were corrupting the Republican Party. Yet his second run for the presidency, with its emphasis on courting conservative Republicans, highlights the fact that McCain has morphed back into a quintessential creature of Washington--just another politician who uses the issue of reform when it suits his agenda.

For McCain, there is no better example of how the image of reform has obscured the intersection of corporate donations and DC lobbyists than the Reform Institute. A nonprofit with an Orwellian name, the institute was founded by McCain and his allies a year after his failed 2000 campaign. Billed as “a non-partisan election reform organization whose Honorary Chair is Senator John McCain,” the institute wasn't really nonpartisan, and McCain was far more than an honorary chair. “It was predicated on McCain's political connections,” says Robert Crane of the JEHT Foundation, a social justice organization in New York and one of the Reform Institute's past funders. “It wasn't an independent entity.” To be sure, the institute did some good work at the state level in support of clean elections, but it always remained a John McCain protection agency.

The Reform Institute paid for McCain to give speeches and host town hall meetings, touted him in press releases and cultivated his donor list. The group was housed in the same offices as McCain's PAC, his re-election committee and Rick Davis's lobbying firm, Davis Manafort, which represented telecommunications and gambling interests along with foreign governments like Nigeria and Ukraine. The staff included McCain's campaign manager, Davis, as president; his chief fundraiser, Carla Eudy; and his Internet consultant, Rebecca Donatelli. It was incorporated by McCain counsel Trevor Potter, with seed money from former Merrill Lynch CEO Herb Allison, McCain's finance chairman in 2000. McCain was chairman of the board from 2001 until 2005. Meanwhile, Davis earned $395,000 for three years of work, Eudy took in $294,000 as a consultant and treasurer, and McCain policy guru John Raidt made $145,000 in 2006, to give one example of how the Reform Institute padded the coffers of McCain's political brain trust.

At the outset, the organization's primary purpose was defending McCain's campaign-finance legislation, McCain-Feingold, before Congress, the Federal Election Commission and the Supreme Court. But even as McCain was pushing that bill, he was also gaming the campaign-finance system. The fact that a registered lobbyist was running an entity called the Reform Institute was not the only reason the group raised eyebrows in Washington.

As a 501(c)(3) nonprofit, the Reform Institute could accept the kinds of unlimited tax-deductible contributions that McCain's PAC and re-election committee could not. Longtime McCain donors like California businessman William Bloomfield, former Houston Astros owner John McMullen and businessman and former diplomat Robert Stuart gave more than $50,000 each to the institute. According to Citizens for Responsibility and Ethics in Washington, the largest donors to the institute also gave a combined $305,985 to McCain and his PACs. More unlikely funders included liberal foundations eager to find GOP allies on campaign-finance reform, like George Soros's Open Society Institute, the San Francisco-based Tides Foundation and the David Geffen Foundation. A number of donors who gave almost exclusively to Democrats also wrote large checks. So did wealthy executives who saw that giving to a McCain-affiliated nonprofit could be good for business. This category included insurance giant AIG (formerly run by McCain backer Hank Greenberg) and television interests like Univision, Cablevision and Echosphere.

As the two-time chair of the Senate Commerce Committee, McCain enjoyed unprecedented access to the telecommunications industry. And Davis the lobbyist was the perfect conduit: between 2002 and 2005, for example, Verizon paid Davis Manafort $640,000 in lobbying fees. The contract began after McCain took over the committee and ended when he gave up chairmanship. At the same time Davis aggressively sought telecom donations for the Reform Institute. On two occasions he solicited $100,000 from Cablevision after CEO James Dolan testified before McCain's committee and McCain wrote letters to the Federal Communications Commission on Cablevision's behalf. The donations invited scrutiny from the press: McCain Allies Want Reform (And Money), the New York Times said in March 2005. That July McCain formally resigned from the board, citing “negative publicity,” and Davis stepped down as president.

Yet unscrupulous donations from industries McCain was supposed to be monitoring were only part of the reason the Reform Institute became controversial. Even before the dubious fundraising came to light (the institute also twice failed to disclose the names of major donors on its tax returns, a potential violation of IRS law), McCain and Davis's my-way-or-the-highway approach to campaign-finance-reform legislation rubbed many in the reform community the wrong way.

After the ban on soft-money contributions, McCain and the Reform Institute became strong proponents of regulating so-called 527 political advocacy groups, which arose because of a loophole in the McCain-Feingold law. The 527s were initially thought to benefit Democrats after liberal megadonors such as Soros and Peter Lewis funded the likes of America Coming Together and the Media Fund. In 2004 McCain introduced legislation to ban 527s, which Common Cause and the Brennan Center for Justice opposed, fearing McCain's bill would hamper standard activities like voter registration drives. According to Cliff Schecter's book The Real McCain and an interview that former Common Cause president Chellie Pingree gave to the Portland Press Herald in Maine, where she is now a Democratic candidate for Congress, McCain and Davis called funders and members of the Common Cause board and demanded they fire Pingree or rein her in. Such a move was all the more remarkable because for years the organization led the field operation for McCain-Feingold, building grassroots support for the legislation. “My understanding from people close to the situation is that Common Cause, under Chellie, was deciding to work on comprehensive public financing of elections and not on Senator McCain's 527 policy,” says Nick Nyhart of Public Campaign, which has worked closely with the Reform Institute. “McCain and Davis objected and wanted her out. I've never heard of a public official, or an associate, trying to go after an ally in the nonprofit sector like that.” The McCain campaign has declined to respond.

A similarly partisan bent marked the institute's work on election reform in Connecticut. In 2004 Connecticut's Republican governor, John Rowland, resigned amid scandal, later pleading guilty to mail fraud and tax fraud. His GOP heir, former lieutenant governor Jodi Rell, was hedging on whether to support public financing for state races similar to the “clean elections” legislation in Arizona and Maine. A coalition of good-government groups convened to push for public financing; the Reform Institute was tasked with signing up Republicans. In 2005 the coalition drew up a broad outline of how to press forward. “Davis came in and slammed the plan,” Andy Sauer of Connecticut Common Cause recalls. “The tone was aggressive and hostile.” According to Sauer, Davis wanted Democrats in the Legislature to crack down on labor unions in exchange for Republican support for the bill, and he didn't want the coalition to pressure Rell, a potentially vulnerable Republican governor. Rell eventually came on board and McCain publicly supported her, but only five Republicans in the Legislature signed on. “They were supposed to help make this a nonpartisan issue,” Sauer says. “In the end, they didn't do that.”

As McCain's commitment to campaign-finance reform waned, so did that of the Reform Institute. Congressional scandals involving Tom DeLay and lobbyist Jack Abramoff presented the best opportunity since Watergate for disinfecting Washington. Yet after investigating Abramoff's links to Indian tribes, McCain, then chair of the Indian Affairs Committee, was nowhere to be found. “I remember being very frustrated trying to get him on board lobbying reform,” says Craig Holman of Public Citizen. “He remained aloof until too late, then offered a very weak bill.” The Reform Institute, at best, was also a bit player. “We haven't worked with them for over a year,” Holman says. “They're very defensive about any criticism of McCain.” Neither McCain nor the institute has supported legislation to modernize the presidential public-finance system (the Feingold-Collins bill) or to publicly finance Congressional campaigns (Durbin-Specter); Barack Obama co-sponsored both bills. When asked in 2006 whether he still supported public financing, as he did in 2002, McCain responded, “No.”

The Reform Institute has sought to cultivate the image of a post-McCain identity. “It's very independent of McCain,” says executive director Cecilia Martinez, who previously worked to pass clean elections legislation in Arizona. But though McCain and Davis officially departed in 2005, many McCain loyalists remained involved with the institute and its advisory committees, including top fundraisers, former staffers and political allies of the Arizona senator.

The institute still closely resembles a McCain administration in exile and, predictably, takes up the same issues that McCain does. In 2005, as Ken Silverstein of Harper's noted, the institute added “climate stewardship” to its agenda, around the same time the Lieberman-McCain Climate Stewardship Act was reintroduced in the Senate. The institute's climate initiative was led by John Raidt, McCain's top policy adviser, and a grant for the work came from Environmental Defense, an enthusiastic backer of McCain's climate change bill. The Reform Institute began reaching out to the nuclear power industry, including the Nuclear Energy Institute, the industry's main lobbying arm. Not surprisingly, McCain also happens to be an energetic proponent of nuclear power, which he recently called “one of the cleanest, safest and most reliable sources of energy on earth.” Today the institute's energy project is overseen by Ken Nahigian, a former counsel to McCain on the Commerce Committee whose brother, Keith, directed media strategy for McCain in 2000. Together the Nahigian brothers run a consulting firm whose clients include the Energy Department, the National Security Council and, yes, the Reform Institute. Roll Call listed the Nahigian brothers as part of a “stable of K Street lobbyists [who] have help[ed] pad McCain's campaign coffers.” Other members of the Reform Institute's Energy Advisory Committee include David Pottruck, former CEO of Charles Schwab and a top fundraiser for McCain; Matthew Freedman, a former lobbying partner of Rick Davis; and Marc Spitzer, a Bush appointee to the Federal Energy Regulatory Commission who is a friend, fundraiser and former tax adviser to McCain.

The institute's work has also reaped political benefits for McCain in the areas of immigration reform and outreach to Hispanic evangelical communities. In 2006 the institute hired Juan Hernandez, a former deputy to Vicente Fox, president of Mexico from 2000 to 2006. Hernandez, who now works on Hispanic relations for the McCain campaign, courted Hispanic evangelical organizations, a growing swing constituency and a ripe target for McCain. The group hosted a Capitol Hill press conference featuring the Rev. Sam Rodriguez of the National Hispanic Christian Leadership Conference, an umbrella of 15 million Hispanic Christians, who was described as “the Karl Rove of Latino evangelical strategy” by the Chicago Tribune. Another ally was Marcos Witt, Hispanic pastor at Joel Osteen's Lakewood Church in Houston, the country's fastest-growing megachurch. Members of the institute's Immigration Reform Advisory include Lindsey Graham, McCain's closest friend in the Senate; Eric Rojo, a member of the US-Mexico Chamber of Commerce who has donated to McCain; and Kim Binkley-Seyer, a former deputy to Jeb Bush in Florida.

Cecilia Martinez says it's natural that people close to McCain, like Lindsey Graham, would take an interest in the Reform Institute. “We're a home for centrists, moderates and conservatives,” she says. “Where else are they going to go?” In fact, a lot of them have gone to work on McCain's campaign, including former institute staffers Davis, Eudy, Potter, Hernandez; former spokeswoman Crystal Benton, who now does press for McCain; and board member Pam Pryor, who was a chief of staff for conservative Oklahoma Congressman J.C. Watts and is the national coordinator of Women for McCain. “It's a question funders were worried about,” said the JEHT Foundation's Crane. “Is this a political arm for John McCain?” In fact, much of the group's foundation funding has since dried up. Donors who once gave to the Reform Institute are instead raising money directly for McCain's campaign. Perhaps that's one reason the institute decided to focus on homeland security, a potentially lucrative source of post-9/11 funding.

The institute's newest obsession is “resiliency”--the latest buzzword in homeland security circles. Resiliency was an obscure engineering term for how systems bounce back from disruption, until it was popularized by Council on Foreign Relations scholar Stephen Flynn and embraced by politicians and industry. This winter Rudy Giuliani titled his homeland security blueprint “The Resilient Society.” For business, invoking resiliency has been a shrewd way to avoid government security mandates, as the chemical industry did after 9/11, thwarting Congressional attempts to toughen standards at chemical plants by arguing, under the banner of resiliency, that they could monitor themselves better than the government could. Promoting a laissez-faire approach to regulation under the guise of protecting the homeland may be one reason the private sector loves resiliency; the Reform Institute's recent New York symposium on the topic attracted the likes of PR behemoth Burson-Marsteller, Bank of America, NASDAQ, Shell Oil, Alcatel-Lucent, Sprint, AT&T, Motorola and Verizon.

Resiliency also presents new business opportunities and political connections for members of the Reform Institute's Homeland Security Advisory Committee. The institute's homeland security director, Robert Kelly, is also chair of the homeland security division at the National Defense Industrial Association, a lobbying arm for military contractors like Bechtel and Halliburton. Kelly's vice chair, Rich Cooper, a fellow institute adviser, lobbies on resiliency issues for the American Society of Mechanical Engineering. A third member of the homeland security task force, David McIntyre of TriWest Healthcare in Phoenix, is a former McCain aide and longtime financial backer who is one of “several McCain loyalists [who] arise as possible Arizona appointees” should McCain win in November, the Phoenix Business Journal reported.

Homeland security is just one area where the institute reflects ties between McCain and the business/lobbying community. Economic policy adviser Joseph Schmuckler, an executive at the investment bank Mitsubishi UFJ, is McCain's campaign treasurer and a “Trailblazer” who's raised between $100,000 and $250,000 for McCain. Another Reform Institute economic policy adviser, Al Zapanta, president of the US-Mexico Chamber of Commerce, is both a “Virginia Business Leader for McCain” and a member of the senator's Hispanic Advisory Board.

Of the four members of the institute's current board of directors, only Charlie Kolb, president of the Committee for Economic Development, worked on behalf of campaign-finance reform. Two new members from the business world bring scant reform experience and questionable credentials: Paul Bateman is president of the Klein Saks Group in Washington, which lobbies on behalf of the mining industry. Lawrence Hebert was CEO of Riggs Bank from 2001 until 2005, when the company pleaded guilty to failing to report suspicious financial activity after hiding money and setting up shell accounts on behalf of Chilean dictator Augusto Pinochet and Teodoro Obiang, autocrat of oil-rich Equatorial Guinea. Obiang, routinely labeled one of the world's worst dictators, was the biggest client of Riggs, with accounts totaling $700 million. At a Senate hearing in 2004 Senator Carl Levin asked Hebert, “How do you basically live with yourself?” Hebert oversaw the sale of Riggs to PNC Bank in 2005 and became chairman of the board of Dominion Advisory Group, which ironically specializes in stopping money laundering. In April he joined the Reform Institute's board, praising it as a “champion for private-sector innovation.”

Despite McCain's close ties to lobbyists, exploitation of the reform community and abandonment of campaign-finance reform as a major issue, many reform groups in Washington continue to go easy on him. When Barack Obama opted out of the public-financing system for the general election, Public Citizen proclaimed itself “deeply disappointed” without noting that McCain had done the same during the Republican primary--after securing favorable bank loans when his campaign was broke by promising to accept federal matching funds, which he never did. Fred Wertheimer of Democracy 21, a longtime ally of McCain and perhaps the most widely quoted campaign-finance expert, also said he was “very disappointed” in Obama. “There are some who believe McCain will be with us at the end of the day, including those that have worked with him in the past,” says David Donnelly of Public Campaign, one of the few groups that has run ads spotlighting McCain's ties to lobbyists and industry contributors. “Others see the overwhelming evidence of how McCain has retreated from reform and are no longer willing to cut him the slack they once did.”

Donnelly notes that McCain has pledged to appoint Justices to the Supreme Court like John Roberts and Samuel Alito, who are critics of McCain-Feingold. In a nod to the hard right, the chairs of his campaign's judicial advisory committee are conservative Senator Sam Brownback and former Bush Administration Solicitor General Ted Olson. In 2007 Olson filed an amicus brief on behalf of Senate minority leader Mitch McConnell--arguably the number-one foe of campaign-finance reform--to overturn a key aspect of the McCain-Feingold bill in Wisconsin Right to Life v. McCain. The Supreme Court concurred in a controversial 5-to-4 decision in June 2007. So McCain's chief legal adviser has argued against McCain's chief legislative accomplishment. That's as ironic as the name of the Reform Institute.

Research support was provided by the Puffin Foundation Investigative Fund at The Nation Institute.

The post John McCain’s Voodoo Reformism appeared first on Type Investigations.

He's a Muslim. He was sworn into office on the Koran. He doesn't say the Pledge of Allegiance. His pastor is an anti-Semite. He's a tool of Louis Farrakhan. He's anti-Israel. His advisers are anti-Israel. He's friends with terrorists. The terrorists want him to win. He's the Antichrist.

By now you've probably seen at least some of these e-mails and articles about Barack Obama bouncing around the Internet. They distort Obama's religious faith, question his support for Israel, warp the identity and positions of his campaign advisers and defame his friends and allies from Chicago. The purpose of the smear is to paint him as an Arab-loving, Israel-hating, terrorist-coddling, radical black nationalist. That picture couldn't be further from the truth, but you'd be surprised how many people have fallen for it. The American Jewish community, one of the most important pillars of the Democratic Party and US politics, has been specifically targeted [see Eric Alterman's column in the March 24 Nation, “(Some) Jews Against Obama”]. What started as a largely overlooked fringe attack has been thrust into the mainstream — used as GOP talking points, pushed by the Clinton campaign, echoed by the likes of Meet the Press host Tim Russert. Falsehoods are repeated as fact, and bits of evidence become “elaborate constructions of malicious fantasy,” as the Jewish Week, America's largest Jewish newspaper, editorialized.

What floods into one's inbox these days bears little or no relation to Obama's record. “Some of my earliest and most ardent supporters came from the Jewish community in Chicago,” he has said. Obama ran for the Senate promising to help reconstitute the black-Jewish civil rights coalition. His first foreign policy speech of the campaign was before the American Israel Public Affairs Committee (AIPAC), where he pledged “clear and strong commitment to the security of Israel.” He has occasionally angered pro-Israel hawks by urging direct negotiations with Iran and Syria, but Obama's foreign policy record is well within the Democratic Party mainstream. He's committed to a two-state solution between Israel and the Palestinians, supported Israel's incursion into Lebanon in 2006 and has criticized Hamas. During his campaign for the presidency, Obama has been defended by AIPAC, the neoconservative New York Sun and The New Republic's Marty Peretz, a noted Israel hawk. And yet no defense of Israel by Obama — or of Obama by the pro-Israel establishment — seems to be enough. “When one charge is disproved, another is leveled,” says Rabbi Jack Moline, who leads a synagogue in Alexandria, Virginia.

It's nearly impossible to decipher where the smears originated [for a comprehensive account of how such campaigns are generated and spread in the age of the Internet and e-mail, see Christopher Hayes, "The New Right-Wing Smear Machine,“ The Nation, November 12, 2007]. The Jewish Telegraphic Agency traced one e-mail back 200 people before it stopped with a filmmaker in Tel Aviv who didn't receive a return address. ”No one knows if it's the Clintons, a rogue agent or a Rove agent,“ says Congressman Steve Cohen, a Jewish Obama backer who represents a largely black district in Memphis. Likely it's a combination of the three.

We may not know who started the smears, but we do know who's amplifying them. The ”Obama is a Muslim“ rumor began in the fringe conservative blogosphere. ”Barack Hussein Obama: Once a Muslim, Always a Muslim,“ blogger Debbie Schlussel wrote on December 18, 2006. Schlussel had a history of inflammatory rhetoric and baseless accusations. She said journalist Jill Carroll, who was kidnapped by Iraqi insurgents in 2006, ”hates America“ and ”hates Israel“; labeled George Soros a ”fake Holocaust survivor“; and speculated that Pakistani terrorists were somehow to blame for last year's shootings at Virginia Tech. Yet her post on Obama gained traction; one month later, the Washington Times's Insight magazine alleged that Obama had attended ”a so-called Madrassa“ and was a secret Muslim.

The Christian right is also preoccupied with Obama's religious beliefs. ”Is Obama a Muslim?“ the Rev. Rob Schenck, a reform Jew who converted to Christianity and now calls himself a ”missionary to Capitol Hill,“ asked in a recent videoblog. ”He may be an apostate, he may be an infidel, he may be a bad Muslim, a very, very bad Muslim, he may be an unfaithful Muslim.“ Schenck's videoblog was circulated by the Christian Newswire and Cross Action News, a self-described ”Drudge Report for Christians.“ Schenck later concluded that, although not a Muslim, Obama was also ”not a 'Bible Christian'“ and did not practice a ”confident faith.“ A separate report posted on the Christian Newswire recently asked if Obama was ”Wearing a What-Would-Satan-Do Bracelet.“ And a top figure in the group Christians United for Israel, Pastor Rod Parsley, a ”spiritual guide“ to John McCain, repeatedly referred to Obama as ”Barack Hussein Obama“ before campaigning with McCain in Ohio. (Thirteen percent of registered American voters now incorrectly believe that Obama is a Muslim, according to a recent Wall Street Journalpoll, up from 8 percent in December. Forty-four percent of respondents are unsure of his religion or decline to answer; only 37 percent know that he is a Christian.)

The Muslim rumor was followed by fictions about Obama's actual faith, Christianity. In February 2007, Erik Rush, a columnist for WorldNetDaily, a hub of right-wing yellow journalism, called Obama's Chicago church a ”black supremacist“ and ”separatist“ institution. Rush found a sympathetic audience at Fox News, where he was interviewed by Sean Hannity. Soon after, another blast of e-mails went out, calling Obama a racist: ”Notice too, what color you will need to be if you should want to join Obama's church...B-L-A-C-K!!!“ Like the Muslim claim, it was a lie. But screeds about Obama's faith soon gave way to wide-ranging attacks against his campaign advisers, his positions on the Middle East and his associations in Chicago.

At the fulcrum of this effort is a little-known blogger from Northbrook, Illinois, named Ed Lasky, whose articles on AmericanThinker.com have done more than anything to give the smear campaign an air of respectability. Lasky co-founded AmericanThinker.com in 2003, modeling it after Powerline, a popular conservative blog. Before that, he had frequently written letters to newspapers defending Israel and criticizing the Palestinians. Though his background remains a mystery, Lasky didn't hide his neoconservative leanings. He wrote a blog post in 2004 titled ”Why American Jews Must Vote for Bush,“ made three separate donations to the Swift Boat Veterans for Truth, contributed $1,000 to Tom DeLay and has given more than $50,000 to GOP candidates and causes since 2000. Lasky sits on the board of the International Fellowship of Christians and Jews, headed by Rabbi Yechiel Eckstein, whose close affiliations with Christian-right operatives like Ralph Reed has made Eckstein a controversial figure in the Jewish community.

A lengthy article from January 16, ”Barack Obama and Israel,“ put Lasky on the map. ”One seemingly consistent theme running throughout Barack Obama's career is his comfort with aligning himself with people who are anti-Israel advocates,“ Lasky wrote. To reach that conclusion, Lasky laughably warped what it meant to be ”pro-Israel,“ criticizing Obama for, among other things, opposing John Bolton as UN ambassador and hiring veteran foreign policy hands from the Clinton and Carter administrations. By Lasky's criteria, every Democrat in the Senate, and more than a few Republicans, would be considered ”anti-Israel.“ ”Lasky's piece is filled with half-truths, omission of 'inconvenient facts,' innuendo, deeply flawed logic, undocumented charges, hearsay, and guilt by distant association,“ wrote Ira Forman of the National Jewish Democratic Council in the Philadelphia Jewish Voice.

Despite — or perhaps because of — its propagandistic nature, Lasky's column and subsequent follow-ups circulated far and wide. Caroline Glick of the Jerusalem Post quoted Lasky at length in a January column, printing his false claims as fact, as did a separate column in the same paper by Marc Zell, a former law partner of Douglas Feith (a onetime top official in the Bush Defense Department) and a top ally of neocon darling and Iraq War proponent Ahmad Chalabi and co-chairman of Republicans Abroad in Israel. More surprising, Lasky became a household name in the mainstream Jewish press, the talk of the town at synagogues — even liberal ones — and a useful ally for members of the Clinton campaign, who circulated his articles. Recently he's been interviewed by mainstream outlets like NPR and the New York Times, which have labeled Lasky a ”critic“ of Obama without explaining his neoconservative sympathies. ”I wonder how a tendentiously argued anti-Obama piece is mass-emailed by so many Jews who should know better,“ blogged Andrew Silow-Carroll, editor of the New Jersey Jewish News.

Another key purveyor of the smear campaign is Aaron Klein, an Orthodox Jew who is Jerusalem correspondent for WorldNetDaily. WND is notoriously disreputable, a sort of National Enquirer for the right (typical headline: ”Sleaze Charge: 'I Took Drugs, Had Homo Sex With Obama'“). Klein made a name for himself by getting terrorists to say nice things about Democrats and allying himself with extremist elements of the Israeli right, whom he frequently quotes as sources in his articles — when he bothers to quote anyone at all. Klein originally called Hillary Clinton the ”jihadist choice for president,“ but when Clinton stumbled, he turned his fire to Obama, attempting to expose his so-called ”terrorist connections.“

Klein penned two stories in late February wildly distorting Obama's links, from his days in Chicago, to pro-Palestinian activists like Rashid Khalidi, a respected professor of Middle East studies at Columbia University who previously taught at the University of Chicago (hardly a bastion of left-wing activism). Klein's story goes something like this: Obama sat on the board of a foundation in Chicago that gave a grant to the Arab American Action Network (AAAN), run by Khalidi's wife, which supposedly rejects Israel's existence; and Khalidi directed the PLO's Beirut press office and is a supporter ”for Palestinian terror.“ (In fact, the AAAN focuses solely on social service work in Chicago and takes no position on the Israeli-Palestinian conflict. Khalidi says he was never employed by the PLO; he has been a harsh critic of Palestinian suicide bombings and a longtime supporter of a two-state solution, and he has never been an adviser to Obama. As for Obama's past statements, at least in Chicago, being pro-Israel and pro-Palestinian is not a contradiction in terms.)

Once again, the facts mattered little, and Klein's stories gained an audience beyond the narrow confines of WND. Christian publicist Maria Sliwa sent Klein's articles to prominent reporters, the Tennessee GOP included his claims in a press release titled ”Anti-Semites for Obama“ and theJewish Press, an Orthodox Brooklyn paper, reprinted his story about Khalidi. His latest article alleges that ”terrorists worldwide would indeed be emboldened by an Obama election.“ As evidence, Klein quotes Ramadan Adassi, a leader of the Al Aqsa Martyrs Brigades in the West Bank's Askar refugee camp, who says an Obama victory would be an ”important success. He won popularity in spite of the Zionists and the conservatives.“ In previous stories, Klein has quoted Adassi praising Cindy Sheehan, Rosie O'Donnell and Sean Penn. For a suspected terrorist, Adassi follows pop culture and US politics remarkably closely.

Despite Klein's questionable sourcing and scandalous accusations, mainstream reporters now call the Obama campaign to ask about Klein's articles. He also reports for John Batchelor, a right-wing talk-radio host for KFI-AM in Los Angeles who has written a series of outlandish columns about Obama for the conservative magazine Human Events and repeatedly pushed the Obama smears on his radio show. According to an e-mail of Batchelor's obtained by The Nation, Batchelor says that information about Obama and Khalidi came via ”oppo research.“

Even if the false claims about Obama originally emanated from the neoconservative right, the Clinton campaign has eagerly pushed them. Clinton operative Sidney Blumenthal has e-mailed damaging stories about Obama to reporters, including a recent article by Batchelor. Clinton fundraiser Annie Totah circulated a column by Ed Lasky before Super Tuesday, with the inscription ”Please vote wisely in the Primaries.“ Clinton adviser Ann Lewis falsely referred to Zbigniew Brzezinski, a critic of AIPAC, as a chief adviser to Obama on a conference call with Jewish reporters. ”I can tell you for a fact people from the Clinton campaign are calling reporters and asking them to pay attention to things involving Obama and Israel,“ says Shmuel Rosner, Washington correspondent for the Israeli daily Ha'aretz. The volume of e-mails about Obama in a given state tends to track the election calendar — hardly a coincidence.

Large American Jewish organizations, like AIPAC and the Orthodox Union, have repeatedly defended Obama. Yet they've had little sway over reactionary elements in both the United States and Israel — including Jewish hate groups — who are eager to keep the smear campaign alive. The website Jews Against Obama, for instance, is run by the Jewish Task Force, which funnels money to the radical settler movement in Israel. (Curiously, John McCain's alliance with Pastor John Hagee of Christians United for Israel, a leading proponent of ”end times“ theology, and his recent endorsement by former Secretary of State James Baker have received far less scrutiny from pro-Israel pundits. It was Baker, after all, who reportedly told George H.W. Bush, ”Fuck the Jews. They didn't vote for us anyway.“)

Respected news outlets have stoked these smears, even as they attempt to debunk them. ”Is Barack Obama a Muslim?“ asked an editorial in the Forward. ”Almost certainly not. Was he ever a Muslim? Almost certainly yes.“ After Obama criticized ”a strain within the pro-Israel community that says unless you adopt an unwavering pro-Likud approach to Israel that you're anti-Israel,“ Rosner of Ha'aretz accused Obama of ”meddling in Israel's internal politics.“ TheWashington Post noted Obama's ”denials“ of his Muslim faith, without ever stating that the rumor was untrue. Post columnist Richard Cohen crassly connected Obama, his pastor, Jeremiah Wright, and Louis Farrakhan, a line of guilt-by-association questioning that Tim Russert aggressively repeated in the last Obama-Clinton debate.

Among conservatives, Fox News has endlessly amplified such rumors. Karl Rove, a new hire by the network, recently speculated that Obama would withdraw funding for Israel. Sean Hannity has asked if Obama has a ”race problem.“ Fox News radio host Tom Sullivan compared Obama to Hitler. ”Fox News are on to him and all the arguments our 'smear' camping [sic] is making and for the most part it is running with them,“ right-wing blogger Ted Belman, of Israpundit, wrote in a recent e-mail.

The attacks on Obama reek of racism and Islamophobia but, as John Kerry learned in 2004, any Democrat should expect such treatment. ”If Moses was the Democratic nominee, he'd still be the victim of this hate mail,“ says Doug Bloomfield, a former legislative director for AIPAC. The right-wing smear machine grinds on, with the mainstream media and rival campaigns lending a helping hand.

Research support was provided by the Puffin Foundation Investigative Fund at The Nation Institute.

The post Smearing Obama appeared first on Type Investigations.

In March 2001, as Dick Cheney assembled his secret energy task force, Haley Barbour, one of the most powerful Republican lobbyists in Washington and a former chair of the Republican National Committee, fired off a memo to the Vice President. “A moment of truth is arriving,” Barbour wrote, “in the form of a decision whether this Administration's policy will be to regulate and/or tax CO2 as a pollutant.” Barbour pointedly asked, “Do environmental initiatives, which would greatly exacerbate the energy problems, trump good energy policy, which the country has lacked for eight years?”

The memo bore the imprimatur of Barbour's lobbying firm, but the real work was being done by Bracewell & Patterson, a midsize Texas law firm with a client list as long as the plume from a smokestack. Bracewell would go on to become one of the key lobbying outfits on energy policy in the Bush II era. Its clients have included massive coal-burning power plants like the Atlanta-based Southern Company; more than 450 oil companies represented by the National Petrochemical and Refiners Association; and Texas heavy hitters like Enron, ChevronTexaco and Valero Energy. All these interests had a major stake in persuading George W. Bush to abandon his campaign pledge to regulate carbon dioxide, the leading source of greenhouse-gas emissions. Two weeks after receiving Barbour's memo, Bush reversed his position and decided against naming CO2 as a pollutant, leading to more than six years of inaction in combating global warming.

It was the first of many victories for Bracewell & Patterson. In the coming years the firm would persuade the Administration to exempt coal-burning power plants from new pollution controls, forestall plans to reduce mercury emissions and shield the makers of MTBE, a toxic gasoline additive that contaminates drinking water, from costly lawsuits.

In March 2005 Bracewell got its biggest boost yet. At a press conference at the Waldorf-Astoria in New York City, the firm unveiled a new partner: former New York Mayor Rudolph Giuliani. It also unveiled a new name: Bracewell & Giuliani. It was a huge coup for the firm. “He's going to help expand Bracewell's reputation nationally and internationally,” Bracewell lobbyist Scott Segal said at the time.

It was also a shrewd move for “America's mayor.” Giuliani had already enjoyed a string of business successes following his term as mayor. He had launched the consulting firm Giuliani Partners shortly after 9/11, and he'd partnered with Ernst & Young to launch an investment bank, Giuliani Capital Advisors, which was sold in March to an Australian company for an undisclosed sum. Giuliani jet-setted around the globe in a Gulfstream, giving speeches at $100,000 a pop. His 2002 book Leadership sold more than a million copies.

A law firm would solidify Rudy's financial empire — but not just any firm would do. Partner Giuliani wanted to become President Giuliani. He needed money and, more important, political connections. Bracewell offered a gateway into the lavish world of Texas Republican fundraising and easy access to the same titans of industry who had helped make the Bush family rich and propelled W. into the White House. The former mayor of one of the bluest cities in the country had just inked a whole lot of red.

Strike Force for Industry

The arrival of the second Bush Administration and the ascent of Bracewell went hand in hand. After persuading the Administration to abandon its CO2 pledge, Bracewell launched a full-court press on behalf of another industry priority: relaxing restrictions on coal-fired power plants. In 1999 the Clinton Administration had sued nine companies for failing to add new pollution controls when updating or expanding more than fifty of their plants. The companies wanted the EPA rule, known as “new source review,” changed and the lawsuits dismissed. Enlisted in the cause were key GOP lobbyists, including Barbour; C. Boyden Gray, White House counsel for Bush Sr.; and Marc Racicot, former governor of Montana, a Bracewell partner who was a top lobbyist for Enron and head of the Republican National Committee.

In May 2001, two weeks before the Administration unveiled its energy plan, Barbour and Racicot met with Cheney and urged him to abandon the Clinton-era rules. Over the intense objections of career EPA attorneys, the Administration decided to torpedo the Clinton lawsuits and granted the power plants the huge loopholes they sought. Senior EPA officials resigned in protest, and fourteen states sued to block the rules changes. Eliot Spitzer, New York Attorney General at the time, accused the Administration of “gutting” the Clean Air Act and “putting the financial interests of the oil, gas and coal companies above the public's right to breathe clean air.”

Days after the changes were announced, Ed Krenik, the EPA's chief liaison to Capitol Hill, took a job in Bracewell's Washington office. It was the beginning of an EPA exodus — especially to Bracewell. The EPA's acting general counsel, Lisa Jaeger, joined Bracewell in March 2004, and the agency's top political appointee for clean air, Jeffrey Holmstead, was hired last October. These hires solidified Bracewell's reputation as a “strike force for industry,” says Frank O'Donnell, president of Clean Air Watch.

By the time Giuliani joined Bracewell in 2005, the firm was regarded as “the most well-known face of aggressive energy-industry lobbying in DC,” says John Walke, head of the clean air division at the Natural Resources Defense Council. The DC contingent has done little to tone down its advocacy since Rudy's arrival. In the wake of record oil industry profits, they lobbied against a tax on windfall revenue. At a recent EPA hearing in Philadelphia, physicians, state officials, environmentalists and even an asthmatic family testified about the need to reduce smog levels. But Holmstead, now Bracewell's star expert, brushed aside such concerns. “If you change the standard, it's not going to have any impact whatsoever,” he said.

Rudy didn't come cheap. Bracewell paid Giuliani Partners $10 million for his services and Giuliani a base salary of $1 million a year, plus 7.5 percent of the firm's New York revenues. (Former New York City Mayor Ed Koch once said, “You can get rich, or you can get elected.” Giuliani is trying to do both.) In return, Rudy performed a variety of tasks. He spearheaded the opening of the New York office, bringing over talent like Michael Hess, New York City's chief lawyer under Giuliani, and Marc Mukasey, the son of US Attorney General-designate Michael Mukasey, to head the firm's white-collar defense practice. In more than two years, the firm has grown to roughly forty lawyers, with annual revenues estimated at $27 million.

Giuliani says he's never lobbied in Washington. But he has helped in other ways. He traveled to London to meet with executives from Shell Oil. He recruits new associates. As of last year he worked on “three or four cases” a year, he told Bloomberg News.

Rudy was once widely considered one of the premier lawyers in the country. He was the youngest associate attorney general ever, under Ronald Reagan, and as district attorney in Manhattan he made a name for himself by prosecuting crooked congressmen, Wall Street schemers and mob leaders. Yet he's always had trouble balancing his law career with his politics. In 1989 Giuliani joined the New York firm of White & Case. The firm had a list of controversial clients, including the government of Panama, home to drug-dealing dictator Manuel Noriega; foreign banks that gave large loans to the apartheid regime in South Africa; and an Italian construction firm that helped build a chemical weapons plant in Libya.

When Giuliani launched a run for mayor that same year, he was blindsided by bad press. “White & Case represented all sorts of dictators and scumbags,” says veteran political consultant Hank Sheinkopf. “Rudy could never understand why that would be a problem.” Politicians of both parties called on Giuliani to release his client list. Billionaire businessman Ronald Lauder, who ran against Giuliani in the Republican primary, aired a television ad featuring side-by-side pictures of Giuliani and Noriega. Nelson Warfield, Lauder's spokesman at the time and a current adviser to presidential candidate Fred Thompson, sees parallels between then and now. “It was an issue for him in '89, and it's an issue for him in '07,” Warfield says of Rudy's clients. (Thompson, it should be noted, has his own questions to answer about his lengthy career as a Washington lobbyist.)

The Giuliani campaign is anticipating such scrutiny. In a leaked campaign dossier obtained by the New York Daily News in January, the word “business” appeared at the top of a list of potential vulnerabilities, ahead of his ex-wife Donna Hanover. The concern was justified. After the 2004 election Giuliani saw the nomination for Homeland Security czar of a protégé, former New York City Police Commissioner Bernard Kerik, crash and burn when the press uncovered Kerik's affairs, unpaid back taxes and ties to the mob. “Rudy will be held to a higher standard,” predicts GOP strategist Tony Fabrizio. “This is stuff he did after becoming America's mayor.”

Bracewell & Giuliani presents a host of potential sore spots, on the left and the right. Operatives from rival GOP campaigns were quick to exploit the fact that the firm represented Citgo, the state oil company of Venezuela, one of the current bêtes noires of the right wing. Bracewell helped Rupert Murdoch's News Corp. block “indecency” laws on television, thwarting a pet issue of Christian conservatives. The firm provided counsel to the defense fund of disgraced former House majority leader Tom DeLay — at the same time that it was lobbying DeLay and Congress to grant immunity to the makers of the toxic gasoline additive MTBE, which faces hundreds of lawsuits for contaminating drinking water. Clients abroad have included repressive regimes such as Saudi Arabia and Kazakhstan (Bracewell has two offices representing American oil companies in Kazakhstan; Rudy's Bracewell supporters recently held a campaign fundraiser there). A few years ago its biggest client was Enron.

Giuliani has accepted more money from the energy industry — $477,208 through the first half of 2007 — than any other presidential candidate. These ties likely won't hurt him with GOP primary voters, who welcomed Bush and Cheney with open arms. But it could arouse the suspicions of moderate and independent voters in a general election, many of whom don't look forward to the idea of Halliburton clones dictating policy in the next White House.

Texas Loves Rudy

After joining Bracewell, Giuliani became a frequent visitor to Texas. He's raised nearly $4 million in the state, more than any other Republican, and as of August recruited thirty-seven of George W. Bush's Pioneers and Rangers (those who raised at least $100,000 and $200,000, respectively, for the Bush campaigns), second only to John McCain. Rudy became acquainted with Texas politics when he launched his aborted senatorial run against Hillary Clinton in 2000. Roy Bailey, a Dallas insurance mogul and former finance chair of the Texas Republican Party, helped him raise money for that race. They struck up a close friendship, and after 9/11 Giuliani told The American Lawyer magazine he “turned over” his postmayoral planning to Bailey, who became managing director of Giuliani Partners. At the 2004 Republican National Convention in New York City, where Rudy's invocation of 9/11 took center stage, Bailey met Pat Oxford, managing partner of Bracewell & Patterson. Over coffee the next day, Bailey floated the idea of Giuliani joining Bracewell. They clicked, and soon the deal was done.

Oxford himself is a player in Texas Republican politics. He met George W. Bush in the 1970s, worked on his campaigns and became a Pioneer in 2000 for Bush/Cheney. Through Texas Senator Kay Bailey Hutchison, a law school classmate, Oxford met Karl Rove; they became “fast friends,” Oxford told The American Lawyer. In 2000 Oxford formed the Mighty Texas Strike Force, dispatching volunteers from Texas to battleground states. During the 2000 recount in Florida, Oxford said he “ran Broward County” and managed the Bush/Cheney legal defense team, talking with Bush frequently in Texas. In 2004 his twenty-five-person “strike force” in Ohio became a source of contention when hotel workers in Columbus, according to a report compiled by the Democratic staff of the House Judiciary Committee, claimed that the strike team used “payphones to make intimidating calls to likely voters, targeting people recently in the prison system” and alleging that the FBI would send them back to jail if they voted.

Giuliani's business partners and Texas allies have come to play a prominent role in his presidential campaign. Oxford is the campaign's national chairman, marshaling operations and squiring Giuliani throughout the state. A fellow Houstonian, Jim Lee, a close ally of Governor Rick Perry and a Pioneer for Bush/Cheney in '04, is the campaign's new finance chief. The day-trading company Lee co-founded, Momentum Securities, was censured and fined $75,000 by the National Association of Security Dealers in 2001 for producing misleading advertising material, downplaying financial risks to investors and overstating its capital. After Lee raised $200,000 for Perry's re-election campaign, the governor appointed him last year to the board overseeing Texas's $96 billion public school employee pension fund.

Giuliani Partners's Roy Bailey introduced the candidate to GOP billionaires and major Bush supporters like T. Boone Pickens and Tom Hicks. Pickens got to know Rudy after dinner one night at Bailey's house. Hicks had committed to McCain's campaign, but after Bailey “went to see him and rib him about it,” he changed his mind and became Giuliani's Texas chairman. The three hosted a fundraiser for Rudy last March in Dallas.

Pickens is a legendary corporate raider from West Texas who terrorized Wall Street by threatening to take over oil companies and grew filthy rich in the process. Since launching a hedge fund specializing in energy investments in 1996, Pickens has become even richer, making more than $1.5 billion in 2005. That same year he gave $165 million to Cowboy Golf, a small charity connected to his alma mater, Oklahoma State, and on whose board Pickens sits. Within an hour, the tax-deductible donation was invested back into the Pickens hedge fund, BP Capital. Critics who objected to the transaction, and Pickens's influence at OSU, began calling the school “Boone State.”

More recently, Pickens has been prospecting in Texas's new oil: water. His company, Mesa Water, owns groundwater rights to 200,000 acres of land north of Amarillo (in Texas, unlike other Western states, groundwater is considered private by virtue of a “right to capture” law), which he's said he plans to sell to cities like El Paso, San Antonio and Dallas, potentially netting him $1 billion over the next thirty years. Pickens claims to be the “number-one steward of the land,” but locals are wary of what Fortune magazine dubbed a Chinatown-esque scheme to divert water from the Panhandle, earning Pickens the status of “regional reprobate,” as Salon put it. For a born-and-bred Texan, Pickens is more like Giuliani than you'd think, especially when it comes to his personal life: four wives, semi-estranged from his children, reviled in his hometown. His political profile is no less turbulent. When the Swift Boat Veterans for Truth needed seed money for an ad campaign smearing John Kerry's service record in Vietnam, Pickens ponied up an initial $500,000. He eventually gave $3 million to the group. Pickens has raised more than $500,000 for Giuliani, including $50,000 from employees of his hedge fund.

Tom Hicks isn't far behind Pickens financially, and his ties to the Bush family go even deeper. In 1994 under then-Governor Bush Hicks joined the University of Texas Board of Regents, one of the plushest appointments in the state, and was put in charge of investing the university's multibillion-dollar endowment. Hicks formed a private entity using UT money, called the University of Texas Investment Management Company, which invested millions with Bush family supporters and Hicks allies like The Carlyle Group, Bass Brothers of Fort Worth — who bailed out Bush's previous company, Harken Energy — and Dallas's Wyly family, all major patrons of the Bushes. News reports detailing the close family connections led to a major public controversy. Hicks stepped down at the end of his term, but the ties to Bush didn't end there. In 1998 Hicks bought the Texas Rangers for $250 million, three times what Bush and his partners paid for the team in 1989, and granted Bush six times his original share, making the failed businessman an overnight multimillionaire.

Hicks, who became vice chairman of the radio behemoth Clear Channel in 2000, helped Bush in whatever way he could. According to Salon, “Hicks announced on a conference call among Clear Channel's senior radio executives that the company was supporting Bush's presidential run, that everyone was encouraged to make donations, and that the legal department would be in contact with donors in order to maintain a proper roster.” After 9/11 Clear Channel banned “potentially offensive” songs from its stations, and in the run-up to the war in Iraq, bankrolled supposedly grassroots pro-war “Rallies for America” across the country. The company gave nearly $470,000 to Republican candidates in 2006, roughly the same as in '04. Ironically, Hicks's investment fund sold its stake in Clear Channel last year to the private equity firm Bain Capital Partners — the longtime employer of Mitt Romney. Today, though, Hicks says, “I'm more closely aligned to Rudy than I am to Bush.” As state chair for Giuliani, Hicks was given the task last January, according to the leaked strategy memo, of raising $30 million for the campaign in Texas, a figure that has thus far proven wildly optimistic.

The benefits of Giuliani's association with Bracewell are evident when it comes to hauling in money and supporters. “If people in Texas want a presidential candidate with Texas connections, I think I have the strongest one,” he told donors at a private golf club in Dallas in March. “I'm here a lot on business. I've got to know Texas really well.” Bracewell gave Giuliani a foothold in Texas that other candidates don't have. “It helped considerably,” says Robert Stein, a professor of political science at Rice University in Houston whose daughter recently accepted a job with the firm.

In between stops on the campaign trail, Giuliani always found time to swing by the Houston office. “This summer, it was quite a thing to watch,” Stein says. “He was there a lot, to be seen and to create press.” At gatherings of prospects whom Bracewell wanted to lure to the firm, Giuliani was a star attraction. “It was as much a fundraising attempt as an attempt to get people to sign with Bracewell,” Stein says. (The Giuliani campaign never responded to repeated requests for interviews with the candidate's business partners and key fundraisers.)

Giuliani was back in Houston in early September, enjoying a Houston Texans football game with Oxford and Texans owner Bob McNair, who in 2004 had given more than $500,000 to the Swift Boat Veterans and another right-wing 527, Progress for America. Rudy had been in Arlington the day before taking batting practice with the Texas Rangers, courtesy of owner Tom Hicks, who was hosting a fundraiser at the park. That night, Hizzoner threw out the first pitch.

On the surface, it's surprising that a thrice-married, pro-gay rights, pro-gun control mayor of New York City could do so well in the Lone Star State. But when you examine Giuliani's record as mayor and his positions on the campaign trail, it begins to make sense. As mayor of New York, Giuliani tried to privatize everything he could, including hospitals, schools and the management of Central Park, while vetoing a living-wage ordinance for city employees.

On the campaign trail in Texas, like everywhere else, he talks largely about 9/11 and “the terrorists' war against us.” (His foreign policy advisers include neocon war cheerleaders like Norman Podhoretz and Daniel Pipes.) He has taken a newfound hard line on illegal immigration and the border and frequently professes his love for Ronald Reagan. He talks about the need to further reduce taxes and shrink the government. In an essay on National Review Online, Pickens explained his support for Giuliani in part by noting that “Rudy will demand that each Cabinet member submit budget cuts of between 5 and 20 percent annually.” When asked at a cocktail party in the Woodlands, a chic suburb of Houston, how he could win the South, Giuliani mentioned his “strong conservative credentials” and his competitiveness in a general election, according to Jim Granato, a professor at the University of Houston who attended the event. “He's the one they think can defeat Hillary,” says Stein.

In a state where Republicans remain doggedly fond of their native son, Giuliani rarely, if ever, criticizes President Bush. “Rudy's been alone, among all the candidates, in treating Bush with kid gloves,” says Giuliani's former deputy mayor, Fran Reiter. “So gathering Bush's supporters to his campaign makes sense to me.”

When it comes to energy policy, Giuliani's record as mayor won't present a roadblock to his industry supporters. He put ten new power plants in New York neighborhoods over the objection of community groups and allowed utility giant Consolidated Edison to expand along the East River. Unlike other New York Republicans, such as former Governor George Pataki, “environmental issues were not a big category for Giuliani,” says Reiter.

At a speech last year at the Manhattan Institute, the conservative think tank that generated many of Rudy's mayoral policies, Giuliani called the idea of energy independence “the wrong paradigm.” He dismissed energy conservation as “helpful but not really very, very effective.” He was most animated, according to press reports, about the need to build new nuclear power plants and expand oil drilling. “We haven't drilled in Alaska,” he said. “We haven't built oil refineries. We haven't ordered a nuclear power plant since 1978.” He also plugged ethanol, a favorite in Midwest corn states like Iowa, and so-called clean coal technologies.

On the campaign trail, Rudy now includes the requisite language about curbing global warming and weaning America from its dependence on foreign oil. One of his campaign's “twelve commitments” is to “lead America towards energy independence.” At a diner in Waterloo, Iowa, this past summer, he was asked how he'd accomplish that goal, given his clients in the oil, gas, coal and nuclear energy industries. “Law firms aren't political,” Giuliani responded, “so this is kind of a silly way in which people attack each other on politics. It has no relationships to your political position. As a lawyer, or a law firm...you don't make determinations of who you represent on your political philosophy.”

That answer was less than convincing in light of Bracewell's political activism and Giuliani's newfound friends. These days, Rudy's “political philosophy” seems to mirror that of his energy clients and Bush Pioneers. There's synergy between the old Bracewell & Patterson and the new Bracewell & Giuliani. On a recent trip to Mississippi, Giuliani even floated the name of Haley Barbour, now governor of the state, as his potential VP.

Research support was provided by the Puffin Foundation Investigative Fund of The Nation Institute, now known as Type Investigations.

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