Reversing Citizens United, Bernie Raises Top Dollars, Wall Street’s Secret 0.1%

By Peter Ward     March 25, 2016

Reversing Citizens United

In 2010 the U.S. Supreme Court struck down limits on corporations’ campaign expenditures, arguing that such limits were restrictions of free speech. Since then, campaigners and Presidential candidates have called for the limits to return. An article by David Cole published in The Atlantic this week explains how campaign finance reform proponents could achieve their goals by following the examples of the NRA and marriage equality advocates.

Those two groups forced the biggest constitutional changes in recent times, argues Cole. In 2008 the Supreme Court recognized an individual right to bear arms and in 2015 the court ruled gay and lesbian couples have the right to marry.

Both of the campaigns behind these law changes started in states that were most sympathetic to their causes – Florida for gun advocates and Vermont and Massachusetts for marriage equality activists. Both groups then expanded state by state. By the time the Supreme Court made its ruling on gay marriage, 37 states and the District of Columbia had already recognized equal rights to marry.

The campaign finance movement has already made progress at the state level, with campaign finance initiatives appearing in New York, Maine, Connecticut, Arizona and Seattle. The chances of repealing the Citizens United decision that removed limits on corporate spending on election campaigns may be strengthened by the recent death of conservative judge Justice Antonin Scalia, which will require the appointment of a new Supreme Court judge.

The movement is also boosted by support from Democratic presidential candidate Bernie Sanders, and condemnation of the existing campaign finance system by Hillary Clinton and Donald Trump.

Who’s Raising the Most Money?

While the debate over the influence of money on politics rages, cash continues to pour into the election campaigns of those hoping to be elected U.S. President in November.

At the start of this week the presidential candidates and super-PACS reported how much they raised and spent in February, data that was presented in an interactive graphic by Bloomberg on Monday.

The Bernie Sanders campaign raised the most money, $43.5 million, during February, although as has been the case throughout his campaign, super-PACS did not raise a single dollar on his behalf.

Marco Rubio, who dropped out of the race for the Republican nomination on March 15, received the most cash from super-PACS in February: $25 million. Republican front runner Donald Trump raised $9.2 million in February and, like Sanders, took no super-PAC money.

Rolling a cursor over these numbers allows readers to see which super-PACs are affiliated with each candidate. Marco Rubio received all of his support from just one – the Conservative Solutions PAC. Hillary Clinton, who benefited from $4.9 million in super-PAC money in February, is affiliated with three.

Wall Street’s Secret 0.01%

On Wall Street, inequality can be found even among the top 1%. A Bloomberg investigation published on Thursday shows banks are increasingly prioritizing elite clients that generate the most money for them, and turning away lower income customers.

Citigroup’s equity research desk has a secret list, according to the article, which dictates which clients get the best service. At the top of the list are hedge fund giants named the “Focus Five”: Millennium, Citadel, Surveyor Capital, Point72 and Carlson Capital.

This tiered approach to client service is also practiced at Morgan Stanley, HSBC Holdings, among other financial institutions, according to Bloomberg. Citigroup and Morgan Stanley refused to comment for the article, while HSBC said in a statement that it is “reducing the number of dormant and low-revenue clients” to help build a more sustainable business.

Analysts at Citigroup are discouraged from spending significant time on non-priority clients and are given quotas to ensure they keep in regular touch with this newly identified group of financial elite. That leaves smaller clients struggling to get time with analysts. “If you want to sit down and talk to an analyst or strategist, clearly the biggest clients are the ones that get first cut,” said Voya Investment Management’s Paul Zemsky.

U.S. Agriculture Lobbyists in Cuba Explained

U.S. President Barack Obama wasn’t the only visitor to Cuba this week. A number of lobbyists for the American agricultural industry and major business groups also descended on Havana, as they sought to make the most of improved ties between the two countries.

Obama’s visit to Havana was the first time a sitting U.S. President has entered the country in 88 years and follows the December 2014 announcement that the U.S. would reestablish diplomatic ties with Cuba.

There is currently a trade embargo between the two countries, and lifting the ban on trade would require congressional action, something unlikely to happen in an election year. But lobbyists used Obama’s recent trip to publicize the case for boosting economic relations with Cuba.

A report by the Washington Post suggests lobbyists had been in contact with U.S. administration officials for weeks prior to the President’s trip, picking Cuban business owners to attend entrepreneurship events and connecting them with U.S. companies.

Among those lobbyists is the U.S. Agriculture Coalition for Cuba were an alliance of grain trading companies, such as Cargill, Archer Daniels Midland and Bunge, as well as industry groups such as the American Soybean Association.

The agricultural industry’s appetite for trade with Cuba should come as no surprise. According to Mother Jones, pre-1959 Cuba imported about $600 million worth of food from the U.S., adjusted for inflation. Cuba sent around $2.2 billion worth of agricultural products the other way.

The trade embargo was imposed after the revolution in Cuba began an era of frosty relations between the U.S. and the country, which is located just 90 miles southeast of Florida. The embargo on food exports to Cuba was eased in 2000, although U.S. agricultural companies can still only accept cash for their products when selling to the country, a remnant of the original restrictions. This puts them at a severe disadvantage compared with competitors from nations that allow free trade with Cuba.

The Week’s Top Headlines

Rockefeller family charity to withdraw all investments in fossil fuel companies – Rupert Neate, The Guardian

‘Flash crash’ trader may be extradited to U.S., judge rules – Kaja Whitehouse, USA Today

Amazon says there’s no gender pay gap in its ranks – Angel Gonzales, Seattle Times

Exxon Mobil must allow climate change vote: SEC – Ernest Scheyder, Reuters

Labor Dept. finally closes a loophole favoring union-busters — after 57 years – Michael Hiltzik, LA Times

Credit Suisse Pulls Back Further on Investment Bank – John Letzing, The Wall Street Journal

Yahoo’s activist investor is making a bid to remove the company’s entire board – Lara O’Reilly, Business Insider

D.C. regulators green-light Pepco-Exelon merger, creating largest utility in the nation – Thomas Heath, Aaron C. Davies, Washington Post

Uber sues Indian rival Ola over ‘fake accounts’ – BBC

Investors Dump Timeshare Companies After News Of Federal Inquiry – Matthew Zeitlin, Buzzfeed News

This entry was posted on Friday, March 25th, 2016 at 2:28 pm. It is filed under Week in Review. You can follow any responses to this entry through the RSS 2.0 feed.