Campaign Contributions and Selective Indignation

Steve Nash, author of “Virginia Climate Fever,” is on a crusade against Dominion Energy, electric utilities, the coal industry and other corporate special interests that donate vast sums of money to Virginia politicians. He has been submitting op-eds to newspapers around the state taking Dominion and Appalachian Power to task for their outsized campaign contributions.

Writing most recently in the (Lynchburg) News & Advance, Steve asks:

So whether you’re conservative, green, libertarian or liberal, here’s the question: Can your legislator explain why it’s OK to accept “donations” from the two power companies and still cast votes on legislation that affects not only their profits, but also our electric bills and, crucially, our environment? For that matter, why is it legitimate to take money from any corporate interests who also have legislative needs that should not pre-empt the public interest?

Now, Steve is a very close friend of mine, and we debate issues like this with regularity. One of the things that I love about Steve is that, although he is tenacious in his beliefs, he does make an effort to understand the other side of the argument. He engages in reasoned, gentlemanly discussion rather than resorting to change-the-subject evasions and ad hominem attacks. I will endeavor to engage Steve’s arguments in the same generous spirit.

It is an article of faith on the left that the coal and electric-power industries, and Dominion most of all, are fending off worthy environmentalist legislation by buying legislators’ loyalties. Dominion, as Steve points out, has given more than $7.4 million to legislators of both parties since 2016 — $826,000 in 2016-17 alone. The company is Virginia’s top donor. And it doesn’t hand out the money in a spirit of charity and good will. Like everyone else, Dominion gives money because it hopes to get something in return — access, if not legislators’ votes.

As Steve writes:

Public servants who take Dominion’s and Appalachian’s money have voted on countless power-utility-related bills, listened to the pitches of the sturdy corps of power company lobbyists, and then handed those companies a lengthening series of legislative home runs worth hundreds of millions of dollars — perhaps a billion or two by some estimates. And they routinely vote on legislation affecting the bankers, realtors, beer wholesalers, the health industry and their other benefactors.

Please note that Steve seems to have no problem with environmental interests donating large sums of money. As the Staunton News Leader observed recently, the top three environmental campaign donors, the League of Conservation Voters, NextGen Climate Action, and the Sierra Club have shelled out $5.0 million to individual statewide candidates over the past decade, compared to Dominion’s $3.3 million. (The comparison is not entirely fair because it doesn’t include other utility and fossil fuel interests. But the article makes the point that environmentalists aren’t slouches when it comes to throwing around big money.)

Steve and other environmentalists frequently note that Dominion donated $75,000 to Governor Terry McAuliffe’s 2014 gubernatorial campaign, not including thousands more from individual Dominion executives. Although I don’t recall Steve making the connection, others have suggested that such campaign booty explains the governor’s support for the controversial Atlantic Coast Pipeline, of which Dominion is the managing partner.

But the critics of utility donations never acknowledge that NextGen Climate Action, founded by California hedge-fund billionaire Tom Steyer, donated more than $1.6 million to McAuliffe! Another $1.7 million came from the League of Conservation Voters, and nearly $470,000 from the Sierra Club. Nor do the critics ever observe that, as a reward to his environmental supporters, McAuliffe appointed Angela Navarro, an attorney with the Southern Environmental Law Center, as deputy secretary of Natural Resources.

When was the last time a Dominion Energy executive was appointed to a senior administrative post?

Steve holds up as exemplars more than five dozen House of Delegates candidates who have signed a pledge to refuse to accept campaign cash from either Dominion or Apco. These are mostly Democrats, but Steve argues that conservatives should join the movement, too. After all, big money in politics encourages big government.

As a libertarian, I agree that big money and big government are intertwined.  And as a libertarian, I have no problem with candidates voluntarily turning down corporate money — as opposed to restricting the right of corporations to offer the money. But as best I can tell, Tom Steyer, the Virginia League of Conservation Voters, and the Sierra Club are not calling for less government. They just want to utilize the power of state government to different ends.

The difference between the electric utilities and the environmentalists, Steve implies in the quote above, is that the utilities are lobbying for their own private interests while environmentalists are pushing for the “public interest.”

It’s fair to say that environmentalists believe they are working for the public interest. But they’re working for their definition of the public interest. Their’s is not necessarily the same definition that, say, coal miners in Southwest Virginia would adopt. Or that economic developers in natural gas-constrained Hampton Roads would use. Or that electric rate payers would use. Or that businesses and homeowners counting on the reliability of the electric grid would use.

Environmentalists are a special interest lobby just like Dominion, Apco and the coal companies. That doesn’t make them evil; it doesn’t even make them wrong. Indeed, I’m happy to entertain the idea that in many instances, they are right. But it is romantic nonsense to insist that environmentalists dwell in some higher ethical plane and that their goals are any more pure than anyone else’s.

Bacon’s bottom line: If Dominion, Apco, the coal industry, Tom Steyer, the Sierra Club, and every other corporate or special interest group under the sun didn’t believe that money didn’t buy them access, they wouldn’t give the money. Clearly, money does influence the public policy process. But so does the media. So do grass roots organizing efforts. So do lawsuits. And, believe it or not, so do the actual merits of the case.

Thanks to the Virginia Public Access Project, it’s easy to follow campaign money. However, a large fraction of the cash dedicated to influencing public policy is invisible. We can’t track how much different groups are spending on public relations and influencing the press. We can’t track how much money is spent on research, organizing demonstrations, letter-writing campaigns, and other grass-roots activities. We can’t track how much money is spent on filing lawsuits and pressuring regulators.

Wouldn’t it be great if the electric utilities and environmental groups alike revealed how much they spent on such efforts? I’m not holding my breath. Most groups hew to the ethic of “Transparency for thee, but not for me.” Until such time as we know the bigger picture, I’m not inclined to make a big deal about disparities in one channel — campaign contributions — for influencing the political process.

Update: I just came across a 2014 Mother Jones article that said Steyer’s NextGen Climate Action spent $8 million “to keep Republican Ken Cuccinelli out of the state’s top office.” So, Steyer spent more money in one year than Dominion donated in ten.

There are currently no comments highlighted.

15 responses to “Campaign Contributions and Selective Indignation

  1. Hmm, let’s see. “Steve is a great guy . . .” Love a set up line like that!

    Nash is absolutely right about the low state of corporate integrity when it comes to state politics. Virginia is famous for its anything-goes policies when it comes to campaign donations. Yes, VPAP does track them but it is unwittingly party an an elaborate game. The money’s tracked, but is there a real, bipartisan ethics commission with subpoena power to look into questionable dealings? No, the GA considers itself too gentlemanly to force the issues. Mimimal reforms were made after the McDonnell fiasco .Yep, he skated on a legal technicality but the affair was a huge black eye for Virginia and one reason the feds went after him was that state law was too weak.

    Next, Jim complains that Big Green is giving away money to candidates, too, and that Nash didn’t point that out. Nash could have added one sentence but it really isn’t the point. Dominion Energy spreads money around like a peanut butter binge because it is a for-profit corporation public company that must please shareholders and stock analysts. It spends money expressly to enhance its own corporate advantage. The Sierra Club and myriad other groups have been muscling up on their advocacy and donations, but most are non-profits. They don’t really have a personal stake in this in which they will get an advantage that benefits them. If they do, it should be exposed by the media on the grounds that they are violating their non-profit tax status.

    Like many conservatives, Jim complains that Green Groups are becoming powerful and deep-pocketed. So what? He seems trapped in a time warp where it is normal for big utilities to throw money around but environmental groups are supposed to be tiny, cash strapped and ineffective. After years of struggle, they are becoming monied, professional and very effective. All during this ramp up stage, utilities like Dominion and others were spending on advocacy to promote their interests. Now they are victims, according to Brother Bacon.

    His claim that someone from Dominion never gets appointed to a government policy making entity is not true. Republican and Democratic governors alike appoint being from large corporations for special commissions such as one to investigate uranium mining in Southside. This is during the McDonnell era. Not one of the members was from the green community. And there are plenty of people who have gone from some regulatory function at DEQ or the Attorney Generals office directly into Dominion.

    And Steve, don’t take this blog post too hard. Jim likes you. He really does.

    • Peter, it is interesting to see how you read into my blog post things that I did not say, or even infer. You wrote: “Jim complains that Big Green is giving away money to candidates, too, and that Nash didn’t point that out. ”

      No, I’m not complaining that Big Green is giving away money to candidates. I’m mere pointing out that Big Green is giving way money to candidates, and that at least in one gubernatorial election (McAuliffe’s), Big Green gave away a lot more money than Dominion did.

      You see, while I may not agree with Tom Steyer’s politics, I do not oppose his right to give away as much of his money as he likes.

      Steve’s stated position on Virginia campaign contributions does not contradict mine. He simply urges candidates to reject Dominion’s contributions. He is appealing to candidates’ consciences to voluntarily spurn donations from power companies. I do object to those who would deprive others of the right to contribute freely — in effect, depriving them of their right to exercise freedom of speech and freedom to petition government.

      As I noted in the post, there are multifarious ways to influence politics, and campaign contributions are only one of them. If the anti-Citizens United crowd succeeds in capping or limiting such contributions, corporate interests still will want to influence politics. Caps would just drive their money underground. They will put more money into P.R., more money into organizing front groups, more money on opposition research, and, who knows, more money into purchasing, Jeff Bezos-style, media properties. Would you want to limit all of those activities, too?

  2. I’m offended by the arrogance of Mr. Nash. Once any money is bundled by a third person or given by an entity it’s all the same. And usurping the “term public interest” is frankly disgusting.

    Under the American system of law, the public interest is determined after some type of open process that lets multiple parties present their vision of public interest with a determination by a government official, body or agency following established procedures.

    • TMT, In Steve’s defense, he is not advocating restrictions on campaign contributions (at least not in the piece I cited). He is urging candidates to voluntarily forego donations from electric utilities. I don’t see how anyone can object to that.

      But I do share your objection to the presumption that environmental organizations represent the “public interest.”

      • Point noted. However, I object to the idea that, under existing rules, donations from any American citizen, which includes corporate entities, both for profit and nonprofit, is somehow different than those from any other American citizen. Nash is trying to wrap his argument in the assumption that he gets to define the public interest. That is extremely arrogant and, to me, offensive. I’d be inclined to vote for a candidate who took contributions from Dominion just to shoot Nash the bird.

        Instead of saying here’s my argument as to why my position is sounder, Nash is effectively arguing “I know better.” Give me a break.

  3. re: lobbying for the public interest does not make them “evil”!

    😉 that’s GOOD!

    now THAT’a mouthful!

    so the folks that are “lobbying” to reduce mercury and air pollution that harms the elderly, sick and young are …. not necessarily “evil” but they ARE “arrogant” and presume to know what is right?

    oh that’s right they sorta believe in science…. when it talks about pollutants and harm to the climate and people..

    Now some folks have said that this public interest lobbying actually is being done so scientists can get more money for studies -… that they collude and scheme together to paint a bogus picture of the environment.

    I’ll say this – that’s sure a lot more creative and yes, downright “evil” than what Dominion is up to… just greed and mere profits…

    😉

  4. re: ” But I do share your objection to the presumption that environmental organizations represent the “public interest.”

    good grief!

    Do you guys “think” that people who give to the environmental organizations do so gullibly not knowing they’re going to use that money to lobby in the “public interest” when their donation appeals promise to do just that ?
    What else would the environmental groups do with that money… hire more staffers or increase their own pay? You really don’t have to guess; the law requires them to file a 990 AND any donations used for political purposes is NOT deducible… and you can find the 990 right here quite easily :

    http://foundationcenter.org/find-funding/990-finder

    On the other hand – when you pay your electric bill do you have any choice in whether Dominion uses part of it to essentially influence the elected to work in Dominion’s best interest whether it serves the public interest or not?

    How did ya’ll get to such a warped view of this?

    and you got an apples to oranges problem here…

    do the money for – energy resources and you get this:

    $60,597,409 Energy, Natural Resources

    Then there seems to be another problem with the data:

    Top Donors – all years:
    $10,697,274 Dominion Energy (Richmond)

    http://www.vpap.org/money/top-donors/?year=all

    maybe Bacon needs to “fact check” the RTD before he gobbles it up as truth!

    • Larry – no Virginia utility is allowed to recover its lobbying expenses from its rates charged to customers. Similarly, any campaign contributions are not allowed for ratemaking purposes. These expenses reduce the utility’s profits.

      Virginia law does allow utilities to recover the costs for charitable contributions in its rates. Some other states don’t allow for this recovery, and a number of politicians from both sides of the aisle have argued the law should be changed to prohibit recovery of charitable contributions in utility rates.

      • @TMT … where do you think Dominion gets the money to pay for lobbying if not from the money they receive from customers? Do they solicit separately for donations for lobbying?

        • Larry – utilities are allowed to set electric rates at levels that recover their costs, including depreciation and amortization, along with the cost of debt, taxes and a fair return on capital investment. When rates are set, the utility makes projections of these costs and, after giving staff and intervenors a chance to challenge the projections, rates are set and charged by the utility.

          Under Virginia law, a utility is not permitted to include the costs for lobbying in its projected expenses. Let’s say the utility’s projected costs of service, including return on capital, is $100,000,ooo that includes $5 million for lobbying. The VSCC would remove the lobbying expenses and set the rates for electricity at a level that would recover only $95 M in costs. When the utility spends $5 million on lobbying, those expenses produce a lower profit level. When utility expense are not allowed for ratemaking, the shareowners receive a lower profit and effectively pay the costs for lobbying. Dominion’s profits are lower because they lobby.

          • @TMT – Dominions profits are LOWER .. because they lobby?

            would you like to re-think that?

            😉 are you saying that if they did not spend those millions of dollars that they’d make more profits?

            I’m smiling here guy.. do you think that they may consider those dollars to be “invested” towards higher profits? and that the seed money to do that comes from ratepayers…?

            Do you think Dominion could be convinced that they’d make more profits if they stopped paying money to the GA?

            🙂

          • Larry, TMT is absolutely right about this. Here’s an Associated Press article that makes the point that Dominion’s donations to charities — but not its lobbying expenses — can be recouped from rate payers.

            End of discussion. Let’s move on.

  5. “It’s fair to say that environmentalists believe they are working for the public interest. But they’re working for their definition of the public interest.”

    Absolutely. Don’t we all!

    There’s a fine balance to be struck here and we’re not in a good place these days. Environmentalists need public support and the benefits of organization and connections to be sure they are heard by regulators. Utilities need quick and certain decisions from regulators so they can “keep the lights on” at reasonable cost to the public. Regulators need a long view and as much freedom from political interference as feasible to steer the process toward the public good. But in Virginia, the GA micromanages the process, and, in the GA, money talks.

    I don’t blame Nash for his complaint about big money talking. The Virginia process is way too responsive to lobbying of all kinds in the GA, to big money. But it wasn’t Dominion that created the GA’s penchant for micromanagement. Dominion has simply responded, rationally, to the “regulatory” system that runs things in Virginia. Call it the “Virginia Way” if you will; it really is different. Compare the process here with other States where the State utility commission is strong and respected and actually allowed by the legislature to make the unpopular decisions and steer policy, and I’ll bet you will see a very different pattern of utility donations.

  6. re: ” But it wasn’t Dominion that created the GA’s penchant for micromanagement. Dominion has simply responded”

    all things equal – Dominion seems to have “responded” in way bigger ways that other companies… their money is much bigger and much more pervasive …

    money in politics is WHY the incumbents almost always win… against challengers who just don’t have equal financial resources to exercise their “free speech”… that we hear is Corporations “rights” to “free speech”.

    As long as Corporations can actively influence people in office – and fund them for elections – how can Virginia Voters change “the Virginia Way”?

    We have a corrupt system that is set up to perpetuate itself… and folks defend it as if it is about Corporations “free speech” … “rights”.

  7. re: ” Here’s an Associated Press article that makes the point that Dominion’s donations to charities — but not its lobbying expenses — can be recouped from rate payers.”

    Where else does Dominion get money other than from ratepayers? Do they have a separate source of revenues from a distinct and separate source from the get go?

    Unless they actually solicit donations separate and apart from their business revenues – and account for it in that way – the distinction of whether it is from their “profits” or not is purely an accounting device as money is fungible.

    Virginia could pass a law for charitable “donations” also but it would end up the same if those dollars were also from their ratepayers revenues stream.

    So… whether it was Dominion or WalMart – both would say ” of course, it’s from our “profits” and we consider it an expense before we share those profits with our shareholders”.

    Walmart – actually – at the register on some charitable WILL ask customers if they want to donate a buck to something like the “Kis Miracle network”… but other charitable comes direct from their business revenues stream.

    And they would then represent those expenses as such on their accountings.

    It’s a distinction without a real difference – and in Dominion’s case – some folks could make the argument – that in using that money – from their profits of course that they were , just as with charity, “buying goodwill” from the GA who would then pay more attention to regulations and rules that affect Dominions ability to make MORE profits – in effect – the money for lobbying would help Dominion increase their revenues….

    …. and here is A “distinction” .. say, for instance, a rule affects who can compete against Dominion and take some of their electricity sales away – if such a rule preserved Dominion’s ability to sell MORE electricity and not let others poach their sale of electricity.. then such lobbying money would actually end up helping them increase their revenues, ergo their profits , ergo the money used from their profits for lobbying – actually effectively ended up INCREASING their profits.

    At that point – is there REALLY any distinction about whether or not their lobbying expenses could ONLY come from their PROFITS?

    In the end – money is fungible… and the only thing is how it is accounted for in their financial reporting..

    right?

    ANY company, regulated monopoly or not , could make the very same argument about ANY “expense” they had … that went towards increasing their revenues and profits… like advertising… PR, charitable giving.. and lobbying.

    In the case of the public-interest groups – and unions – there is no business “revenue” , just “donations” – voluntary – and “required”.

    So… if Dominion actually put a spot on their bills or had on their website a “paypal” type button.. or perhaps even a mechanism for their employees to “donate” – then logically one must conclude that the money for lobbying does come from their business revenue streams.

    You, of course, as moderator , can just delete this if you really want to “end” the discussion – but in doing so , methinks – you would be cutting off … I think, an expanded understanding or at least an “airing” .. that actually does have relevance – to ANY discussion of whether lobbying “expenses” come from customers – or legitimate other sources.

Leave a Reply