« 2005: Labor Adds $70 million in Annual Income | Main | The Battle Of Sago: Mine Company Tries To Run Off The Union »

January 26, 2006

“FOLLOW THE MONEY”: FROM JACK ABRAMOFF AND LOBBYGATE TO THE WORLD OF ‘FOR PROFIT’ EDUCATION

First posted on Edwize.

“Follow the money.” This admonition, Woodward and Bernstein wrote in All The President’s Men, was the advice ‘Deep Throat’ gave as they pursued the Watergate scandal. Last year’s revelation that ‘Deep Throat’ was Mark Felt, second in command at the FBI, came as Washington found itself swept up in the vortex of yet another far-reaching scandal, this time around such key Republican lobbyists and Congressional leaders as Jack Abramoff, Michael Scanlon and Tom DeLay.

In today’s Lobbygate Scandal, Felt’s counsel to “follow the money” seems almost prescient. The Washington power nexus of money and politics is involved in every public allegation of wrongdoing to date, from the millions of dollars in kickbacks and the defrauding of American Indian tribes to the misuse of charities and the ‘laundering’ of illegal campaign contributions. The DeLay-Abramoff campaign to remake the high finance, special interest world of ‘K’ Street lobbying into a wholly owned subsidiary of the Republican Party is an ever-present backdrop to all of these deeds. If we needed reminding, Lobbygate affirms once again an old truth: unregulated and uncontrolled money in politics corrupts republican government “of, by and for the people.”

Now that Abramoff has entered into a guilty plea to charges of conspiracy to bribe elected officials, mail fraud and tax evasion as part of a bargain with prosecutors which requires his cooperation, investigators into Lobbygate have access to his voluminous e-mails and related documents. As many as twenty members of Congress and Congressional aides are believed to be targets of the ongoing investigation, and a small tidal wave of members of Congress has rushed to announce that they were returning campaign donations from Abramoff in the wake of his pleas.

When one ‘follows the money’ in the current scandal, one of the trails leads directly to Primedia, a major for profit media corporation and the parent company of the commercial in-school television network Channel One. According to Senate and House records, Primedia paid two firms in which Abramoff was a prominent partner hundreds of thousands of dollars over a number of years for lobbying work on behalf of Channel One. Primedia first hired Abramoff and the Preston Gates firm while he was a leading partner there; when Abramoff moved to the Greenberg Traurig firm in 2001, the Primedia contract followed him. In early 2004, with the first signs of Lobbygate appearing on the political horizon, Primedia pulled its contract with Greenberg Traurig, then the fourth largest and arguably most powerful national lobbying concern.

Channel One was founded by educational entrepreneur Chris Whittle, who went on to form the largest for profit educational corporation in the US, Edison. According to Primedia, 8 million school children in some 12,000 schools view Channel One on a daily basis — although it refuses to publish a list of the schools. But the numbers of students watching Channel One might even be its least controversial aspect. It has drawn intense criticism from all sides of the political spectrum, as many on both the right and the left feel that schools have no business force feeding commercial advertising to a captive audience of impressionable youth. Critics charge that Channel One advertising promotes tobacco use, junk food, corporate branded apparel and violent entertainment.

Primedia has been less than completely forthcoming on how Abramoff earned these payments. To date, they have limited their commentary to what he did not do — Abramoff’s work “did not include any effort to secure government agency advertising,” according to a Primedia spokesperson. As for the rest, the most the company would say was that “Abramoff and Greenberg Traurig worked for Primedia several years ago. The work was performed well and was on budget.”

Primedia’s targeted denial is significant because the economic balance sheet of Channel One fell into a major tailspin after it cut loose Abramoff and Greenberg Traurig. Channel One is one of those ‘free market’ operations in education that depends heavily upon political connections and government funds to turn a profit. A considerable portion of its revenues came from federal government advertising — especially armed forces recruitment and anti-drug spots from the Centers for Disease Control and the White House Office of National Drug Control Policy — and these ads have declined 31% over 2005, with a drop of 76% in the last quarter. Primedia explains this decline in government advertising revenue, which coincided with the departure of Abramoff, as a function of budget tightening due to the war in Iraq. It is a little difficult to understand, however, how the war in Iraq and the difficulties it has created for military recruitment would not have resulted in an increased demand for armed forces recruitment advertising.

Interestingly, two leading conservative movement leaders who loom large in Lobbygate and in numerous Abramoff projects — former Christian Coalition head and brain trust Ralph Reed and Grover Norquist of Americans for Tax Reform — both joined Abramoff in work on behalf of Primedia. In 1999, at approximately the same time it took on Abramoff, Primedia hired Ralph Reed to work with Abramoff in a successful effort to delay and then diminish hearings into Channel One by the Senate’s Health, Education and Labor Committee. In September 2002, Reed helped Primedia avoid a proposed Texas Board of Education resolution urging school districts to throw Channel One out of the schools. Grover Norquist, who played the role of the ‘ideas man’ and ‘publicist’ in a number of joint ventures with Abramoff, appeared on the op-ed page of the Washington Times, declaring that “an independent news media outlet not controlled by liberals has seeped into the public schools,” and that “the liberals are hysterical in trying to stop it.” Especially ironic, given Channel One’s dependence upon politically connected government advertising, was Norquist’s line that it “has come up with a brilliant free-market innovation that can translate into lower taxes.”

Another alpha conservative who is a leader in the movement for school vouchers, Clint Bolick, figures prominently in a particularly squalid Abramoff venture. Bolick, President and General Counsel of the Alliance for School Choice, was a prominent publicist for an Abramoff and Norquist campaign on behalf of sweatshop owners on the Commonwealth of the Northern Mariana Islands [CNMI], a Pacific archipelago captured by the US in World War II. Under the 1976 covenant establishing it as a commonwealth of the United States, CNMI is exempt from US minimum wage, labor and immigration laws, but its manufacturing products are considered ‘Made in the USA’ and not subject to trade restrictions. Taking advantage of this unique status, numerous sweatshop businesses have set up shop on the islands. [Registration Required.] Most notoriously, a number of Chinese businesses established factories in CNMI, bringing with them 32,000 Chinese, mostly indentured workers, with contracts that would appear to be open violations of the Thirteenth Amendment’s prohibition of “involuntary servitude” enforced on American soil by agents of the Chinese state. According to two reports produced by the Democratic Party staff of the House Committee on Resources [Economic Miracle or Economic Mirage? (1997) and Beneath the American Flag: Labor and Human Rights Abuses in the CNMI (1998)], “systematic patterns of violations of labor right and human rights” occur in CNMI. Labor camps were marked by “hazardous working conditions,” and were “unsanitary and dangerous.” The government of the Philippines found so many “wage violations, poor working conditions and physical abuse” of Filipino workers, the largest foreign workforce in CNMI, that it declared a moratorium on their further deployment in 1995. Numerous instances of women laborers from China and the Philippines being forced into prostitution and the sex trade have been documented.

Abramoff organized a major campaign on behalf of the CNMI sweatshops to stop Congressional efforts to extend the full protections of American labor law to the islands. Over 100 Congressional aides, journalists and conservative policy advocates were taken on Abramoff arranged junkets to CNMI. Along with Bolick, there were Washington Times editorial writers, the managing editor of the Public Interest, staff of the Traditional Values Coalition and representatives of a host of conservative think tanks, from the Cato Institute to the American Enterprise Institute to the Heritage Foundation. Upon their return, they proclaimed the ‘free market’ miracle of CNMI, and denounced the proposed extension of labor law as, in the words of Daniel Mitchell of the Heritage Foundation in the Washington Times, “the modern siege of Saipan.” Bolick himself penned commentary supporting the agenda of the CNMI sweatshops in the Wall Street Journal and Human Events.

Earlier this month the Washington Post reported that in return for a donation of a half million dollars from CNMI textile companies to the U.S. Family Network closely tied to Tom DeLay, the owners of those companies received DeLay’s public commitment that he would block any legislation which would increase their labor costs. (Although it was organized as a not for profit organization, the U.S. Family Network spent little on public advocacy or education; the bulk of expenditures were used for DeLay’s political and lobbying efforts in apparent violation of the Internal Revenue Service law.) In the wake of the Abramoff’s guilty pleas, Congressman George Miller [D-CA] has called upon the Republican leadership of the House to undertake a full investigation of “a long-standing but unresolved scandal involving Abramoff, members of Congress, their staff, and others to prevent Congress from passing legislation to end serious labor, human rights, and immigration abuses in the U.S. Commonwealth of the Northern Mariana Islands and to investigate interference with local elections in that U.S. territory.”

Oh, and by the way, Channel One faithfully “reported” on the Abramoff scandal — without a single mention of itself or Primedia.

Posted by Leo Casey at January 26, 2006 06:19 PM