When Obama Regulates, Companies Retaliate with Donations to Romney Super PAC
The most recent filing by Restore Our Future, the technically independent group supporting the candidacy of Mitt Romney, revealed a number of firms—a for-profit school, several payday lenders, and a chemical company–whose bottom lines have been threatened or harmed by regulations supported by the Obama Administration.
As such, the contributions represent a clear realization of the Supreme Court’s 2010 Citizens United decision, which permitted independent spending by corporations to directly influence the outcome of elections for the first time in decades: If politicians mess with a company’s bottom line, that company now has the power to directly retaliate by supporting the efforts of rival candidates or funding negative attack ads.
The for-profit college company Apollo Group, for instance, donated $75,000 to Restore Our Future on February 1. Thanks to the policies of Obama, the company, and its subsidiaries, including The University of Phoenix, have been on the defensive in Washington for much of the last three years. “We collected the substantial majority of our fiscal year 2011 total consolidated net revenue from receipt of Title IV financial aid program funds, principally from federal student loans and Pell Grants,” the company noted in its most recent annual report.
Some of those grants have been reduced in recent budgets, and new rules put forward by the Department of Education have put strict limits on the sorts of classes that can be funded with federal dollars and the ways in which companies like Apollo can give incentives for recruiting students. For-profit educators have also faced new rules requiring minimum acceptable performance by the programs they offer. “Rulemaking by the U.S. Department of Education could materially and adversely affect our business,” the company warned investors in its most recent filing. A call for comment Wednesday to Apollo was not immediately returned.
On the campaign trail, Romney has tried to contrast his views on for-profit education with Obama’s. Bill Heavener, the chief executive of another for-profit education company, Full Sail University, has also been a donor to Restore Our Future, and serves as the co-chairman of the Romney campaign in Florida. In December, Romney praised Full Sail by name on a campaign stop in New Hampshire as an example of free-market competition in education, which would help “hold down the cost of education.”
Payday lenders, who offer high-interest, short-term credit to low-income people, have also contributed to Restore Our Future from corporate accounts. The new Consumer Financial Protection Agency, which passed as part of Dodd-Frank, is expected to release new regulations curtailing the industries activities in the coming months. At a January fact-finding hearing in Birmingham, Alabama, Richard Cordray, the new director of the CFPB, left little doubt of his intentions. “The Bureau will be giving payday lenders much more attention,” he said. “This is an important new area for us.” He also invoked the memory of Dr. Martin Luther King Jr. in his description of the “outrageous” and “illegal” techniques that some payday lenders use to profit from clients.
Many of the payday lenders that gave to Restore Our Future are privately owned regional operators, like Tennessee’s Express Financial Services. Others like KC Holdings and Advance America are publicly traded companies. In January,
Joe Kilsheimer, a spokesman for the payday lender AMSCOT which gave $10,000 to support Romney, tells TIME that a number of firms were solicited by Restore Our Future to help the Romney effort. “There was a guy with a phone list and he was making phone calls,” Kilsheimer said. AMSCOT executives, he said, have are very active in supporting candidates from both parties on the state and federal level. “The reason they do that is the business is heavily regulated,” he said. “They want to stay engaged with the issues and regulators.”
Mitt Romney has called for a repeal of Dodd-Frank, the law that created the CFPB, which he has called, “the most powerful unaccountable bureaucracy in the history of our nation.” If Romney won the presidency, he would have the power to replace Cordray as the head of the agency. Bloomberg reports that payday lenders have given more than $400,000 to Restore Our Future since Cordray’s appointment as director of the CFPB. In January, some $200,000 in donations came through limited liability corporations linked to short-term lenders.
A Detroit-based chemical firm, PVS Chemicals, is another, giving $100,000 from its corporate account to the PAC on February 20. The company’s vice chairman, James M. Nicholson, was recently quoted in the Detroit News complaining about the regulatory environment. “We are most worried about regulations,” he said. “We’re seeing many more proposed regulations for everything from what comes out of the steam stack to the energy supply. ” A call to PVS Chemicals was not returned Wednesday.
The donations come nearly two years after President Obama took the Supreme Court to the woodshed before a joint session of Congress out of concern that such donations would become commonplace. “With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections,” he said. “I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities. They should be decided by the American people.”
It was a fancy bit of political rhetoric that easily glossed over the fact that Obama himself raises money in large sums regularly from individuals that have significant special interest in his actions—green energy firms, environmental causes, technology companies, federal contractors and unions. But the Supreme Court ruling did grant corporate executives new abilities to fund unlimited campaign speech from corporate bank accounts to directly advocate the election or defeat of a candidate.