Monday, March 19, 2018

It's Not Like Corruption Is Just A Republican Thing-- But It Is SUCH A Republican Thing!


Last week, Vicky Ward wrote the definitive piece on GOP slime machine Nick Ayers, Swamp Thing. It's like a book about an insider that few people know about. Ayers is Mike Pence's brain in the same way Rove was Bush's. He's also very handsome and the first-- of many-- pictures in the piece in the one everyone uses to imply that Pence is an obsessed repressed homosexual. This one:

Ayers in from a poor family and he's worth something like $50 million today-- having never had an honest job in his life. For years people have implied he sold his ass to rich old Republican closet cases. Washington is a city like that but... not $50 million worth. My favorite part of Ward's post is how people like Ward so get rich. I recognized it from my studies of the DCCC staffers.
Astonishingly, when Ayers entered the White House, he didn’t immediately sell his lucrative business, C5 Creative Consulting, as previous administrations would have required. He also obtained a broad waiver permitting him to talk to former clients. His ownership of C5 turned his White House job into a minefield of possible conflicts of interest. As chief of staff to the vice president, Ayers’ duties can include advising Pence on which candidates to support—decisions that can have a huge influence on fundraising and, hence, political advertising. In addition, in his private work for the Pence PAC, he is in a position to steer donor dollars into races where the company could potentially benefit. “That’s staggering,” one seasoned Republican operative told me.

In an environment where ethical scandals are spilling into public view on a near-daily basis, each seemingly more flagrant than the last, no one paid much attention to Nick Ayers’ consulting firm. Ayers himself declined to speak on the record and did not respond to a detailed list of questions for this article. After multiple attempts to clarify the status of Ayers’ business, Pence’s office sent a statement just as this story was going to press to say that his next financial disclosure in May “will reflect” the sale of his company. The White House provided no proof that the sale had occurred.

Waiting for so long into his White House tenure to address the issues posed by his ownership of C5 (and seemingly only under pressure) was a characteristic move from Ayers-- and one strikingly at odds with the plain-spoken virtue that the vice president seeks to project. But, as is clear to those who have followed Ayers’ rapid ascent to the top of his profession, he has made an art form of skillfully navigating the gray areas in electoral politics. And in the process, he has demonstrated that the real danger in our porous, post-Citizens United campaign-finance regime isn’t always what’s illegal, but what’s been made possible.

...No one has ever made a fortune in electoral politics merely by giving sound advice to candidates. The real money is in political advertising. “Everybody sees the media budget as the golden ticket,” said a senior executive at one of the five largest Republican media buying firms.

Even the standard way of doing business is, frankly, dubious. There can be variations on the model, but usually a consultant hired by a campaign or political action committee chooses a creative firm to make its TV ads. The consultant also hires a media buying firm to negotiate with TV stations over distribution. A commission of up to 15 percent of the advertising expense is split in various combinations between the consultant, the creative firm and the media buyer. And this is where the dubiousness comes in: Neither the candidate nor the donors typically have any idea how the split is divided. Often, at the end of the election, the TV station will not have run the exact number of ads the media buyer purchased. So the stations rebate the media buyer, who—in theory—is supposed to return that money to the campaign. But “only the media buyer knows the true amount of the rebate,” said one veteran creative director.

The sheer volume and speed of the transactions can obfuscate a lot of double-dealing. Campaigns are largely forced to trust that the media buyers pay the TV stations the contracted amount for the right ad spots. Two buyers emphasized to me that they pride themselves on returning leftover funds, suggesting that such scrupulousness may be the exception rather than the rule.

It is also not unusual, I was informed by a handful of industry insiders, for the consultant to privately negotiate a fee for bringing the media buyer the business. These sums can amount to hundreds of thousands of dollars, far outstripping a consultant’s typical monthly retainer of around $15,000 on a gubernatorial or senate race. All of which provides a powerful incentive for the consultant to use the media buyer who will give him the best deal, not the one who will deliver the most effective ads. “That’s what happens a lot,” said one top buyer. Most political campaigns don’t conduct even perfunctory oversight of their spending. “There is no CFO on any campaign,” said the buyer. “There is a treasurer. The treasurer’s job is to make sure that the reports get filed properly at the FEC. That’s it.”

Until about a decade ago, Target Enterprises hardly had a presence in national political advertising. But in his West Coast milieu, David Bienstock was known as a consummate hustler. A flashy figure, he “was the kind of man to carry cash,” said a former colleague who remembers him being visited monthly at his offices by a banker who delivered envelopes of bills. Bienstock, who did not comment for this article, has a taste for lavish real estate. He changes cars often and used to drive a gullwing model with doors that opened upward. The former colleague recalls a framed photo in Target’s hallway of Bienstock standing next to his favored private plane. He’s known as both a charmer and a screamer who sometimes holds court at Shutters on the Beach in Santa Monica, dressed in a black T-shirt and blue jeans. When discussing pitches with colleagues, he talks a lot about “the dangle”—that is, what the client really wants. He might say, “So, the dangle is... ”

In 2009, Bienstock acquired a right-hand man who could help him break into national politics. Adam Stoll, a former Goldman Sachs executive then in his mid-30s, had run New York governor George Pataki’s 2002 reelection campaign. Quiet and preppy, Stoll is Bienstock’s outward opposite. Someone who has worked with him remarked to me that “he probably showers in his suit.” Stoll was also a longtime friend of Ayers, who was then midway through his tenure at the RGA.

The RGA had never used Target before 2009. That year, the firm was hired to work on, among other things, the Virginia gubernatorial race—a “test run” of sorts, said someone involved with discussions between Ayers and Target. But Bienstock and Stoll wanted a much closer relationship with the RGA for 2010. So they invited Ayers and Bennecke to a retreat at the Wynn hotel in Las Vegas over the weekend of November 20 to cement a deal. The weekend “has become legend,” said one media consultant. “Nobody could figure out why Nick and Paul would even go anywhere with Bienstock. You’d see why if you met him ... [he] makes my skin crawl.” One of the items on Saturday’s agenda was a talk by Bienstock: “Media Buying: The Inside Story … A View from Behind the Curtain.”

I talked to four people who have heard Target’s pitch. Their experiences were not identical, but two consultants gave very similar accounts of someone at Target proposing the following arrangement: Target would charge the campaign a much lower fee than its competitors. The Target representative would go on to explain that the company would later invoice for an amount that represented a payment for how much the firm had saved the campaign-- with Target determining what the savings had been. This model might be described as “performance-based pay,” said an industry insider. A more accurate term, said one person who listened to the pitch, is “fucking bullshit.” However, most campaigns either lack the expertise to spot the catch in a highly technical pitch or are too focused on winning to closely monitor how their media budgets are spent. “It’s much easier for someone to pull the wool over the eyes of a political client than a consumer client,” said a veteran buyer in both spaces.

Whatever Target’s dangle to Ayers and Bennecke was, it seemed to be persuasive. “David can be very charismatic,” said the former colleague. In 2010, according to IRS filings, Target suddenly became the RGA’s biggest vendor, receiving $31 million for buying ads—about 36 percent of the RGA’s budget. (The next-highest-paid media buyer was Crossroads Media, which got $7 million.) Bennecke and Target did not respond to questions about Target, its business practices and its relationship with the RGA. I asked Haley Barbour why the RGA had chosen to give Target so much of its business. He told me he could “not recall that one firm got an especially large [share] of the media buy.”

Fourteen months into Trump's presidency, the idea that he would fulfill his campaign promise to “drain the swamp” is the stuff of black humor. His failure to sell his real estate business-- while technically legal because the president is exempt from conflict-of-interest statutes-- has cast suspicion over nearly everything he does. It is impossible to tell whether a decision has been motivated by policy or financial self-interest or some combination of the two. This uncertainty undermines public trust in government-- and the dynamic is far from limited to Trump.

Although Ayers had been a valued member of the transition, he was initially reluctant to take an official administration role. People who know him believed he was hesitant because he didn’t want to sell his business. “I was doubtful he was going to give up his financial empire,” mused the Pence ally. Ayers had lobbied unsuccessfully to succeed Reince Priebus as the chairman of the Republican National Committee. (Priebus, according to one source, couldn’t dismiss the chatter about Ayers’ prodigious self-promotion over the years.) After that, Ayers briefly ran Trump’s outside advocacy group, America First Policies. And he remained indispensable to Pence. Last spring, he was flying regularly to D.C. from the exclusive Atlanta neighborhood of Buckhead, where he has a $2.3 million home, to advise the vice president.

Privately, however, he was less than thrilled with his situation. He had rare behind-the-scenes access to the president and vice president and wasn’t fully utilizing it. A big problem, as he saw it, was that he wasn’t getting paid. He called a political veteran asking if there was some kind of “special purpose vehicle,” such as a 501(c)(4) or PAC, that he could set up so he could at least be reimbursed (it was unclear by whom) for his trips to and from D.C.

After checking around with others, this person told Ayers that the proper way to cover those costs was to go through the RNC. Furthermore, this person added, Ayers could not advise the vice president-- even voluntarily-- while on a business trip paid for by private clients. Ayers, the political veteran recalled, seemed unsatisfied by the conversation.

Within weeks of this exchange, Pence launched a leadership PAC headed by Ayers and another Pence adviser, Marty Obst. A front-page New York Times article would later describe the PAC as the possible vehicle for a “shadow campaign” for the presidency, which would be unheard of so early in a new administration. (Pence called this claim “offensive.”) One of the PAC’s first large expenditures was $50,000 to C5. According to the most recent available records, C5 has received over $110,000 from the Great America Committee, including a payment as late as October. It occurred to the person whom Ayers had approached for advice that perhaps The New York Times had misread the point of the PAC. Ayers “was calling around about a [special purpose vehicle] and then weeks later suddenly there was the PAC. Oh my God: The PAC was the SPV for Ayers,” this person said. (Obst did not respond to a request for comment.)

These ethical questions only became more acute when Ayers finally entered the White House. Ordinarily, someone with a political consultancy would have been expected to divest himself of it to avoid the potential for conflicts of interest. For instance, when Karl Rove became George W. Bush’s senior adviser, he sold his political consulting business on the advice of Richard Painter, then the chief White House ethics lawyer. Rove also went on to sell his stock portfolio. While the sale was processing, he was prohibited from attending any meetings on energy because he owned Enron stock. Separately, Rove got a waiver allowing him to talk to former clients if, for example, there was a government investigation or regulation that directly involved them. By selling his business, Rove had removed the prospect of those conversations being motivated by personal gain.

In contrast, by retaining his business, Ayers created a situation where even the most mundane matters could create the appearance of an improper conflict. Under 18 U.S.C. 208 it is illegal for a government employee to participate in any matters in his official position that could have a direct or predictable effect on his business. A chief of staff to the vice president can be called upon to help make all kinds of decisions that would have implications for a consulting firm looking for work—whom to endorse, whom to welcome into the White House, where to campaign, which event to show up for. “I think it’s a very dangerous situation,” Painter said. “It’s hard to avoid doing something in your official capacity that’s not going to affect [the consultancy].”
If there wasn't already so much crap queueing up to upend the Trump Regime, the obsessive, all-consuming greed of Nick Ayers would be a sure bet to be a defining scandal. Now a lot of stuff like that-- that would have been 5 alarm fires at any time pre-Trump-- is barely noticed. Like Paul Ryan. Paul Ryan has gotten awful rich as a public servant. With all that money sloshing around for corporate donors, it's not to hard to figure out how-- generally speaking. But how about specifically speaking. I never see much about Ryan's crookedness. In 2012 though, Dominic Rushe tackled one aspect of it for The Guardian: Paul Ryan sold shares on same day as private briefing of banking crisis. It may have disappeared down the national memory hole, but that doesn't erase the fact that Ryan profited from a 2008 meeting with Ben Bernanke, the Fed chairman, and Hank Paulson , then Secretary of the Treasury, in which officials outlined fears for financial crisis. And when he sold stock in US banks right after that meeting-- on the same day in fact-- (when it was disclosed the banking sector was heading for a deep crisis)...well, that's called insider trading. Right after the meeting Ryan sold stock in banks that we're disclosed as troubled, including Wachovia and Citigroup, and bought shares in Goldman Sachs, Paulson’s old employer and a bank that he had been told was stronger than its rivals. About a week after Ryan sold his shares, Wachovia plunged 39% and was soon absorbed by Wells Fargo for a fraction of its former value. Citigroup’s share price fell soon after the meeting and was among the largest beneficiaries of the the taxpayer-funded bailout that Ryan pushed through Congress. (After the bailout, which was opposed by many Republicans, Goldman Sachs and Wells Fargo flooded Ryan's campaign apparatus with huge "contributions."

It's our Congress, but they pass their own behavioral rules... and no one ever thought of bringing up criminal charges against Paul Ryan or any of the dozens of any of the other members who have become very wealthy by trading on insider information. Accountability is up to the voters.

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At 12:48 AM, Anonymous ap215 said...

It's also a systemic thing as well.

At 10:43 AM, Anonymous Anonymous said...

The republicans and democraps are indistinguishable wrt corruption. They all represent and care only for their sources of big money, which are very nearly identical lists.

At this point, the implication of your title is quite untrue. It isn't 'SUCH a republican thing'. It's an American political thing.

Of course, voters, by continuing to support both so-called "parties", are just as complicit.

For 308 of the 310 million of us, voting for either R or D is an act of autoratfucking (as in ratfucking yourself).


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