Reading Between the Lies: Report #4
8/12/02 | Get the PDF

"WHO WILL KEEP THE POLITICIANS HONEST IN ELECTION 2002?"

Campaign for America's Future calls on news media to uncover lies, to explain who is paying for political messages, and to highlight gaps between record and campaign pitch.

Group cites Rep. John Thune, Sen. Wayne Allard, Rep. Shelley Moore Capito and Rep. Pat Toomey as examples of campaigns in need of watching.

Washington, DC -- The Campaign for America's Future today calls on the national and local news media to help inform potential voters in the 2002 congressional elections by means of aggressive journalism that goes beyond simply reporting what the candidates say and do in the course of the campaign. If a candidate lies about his or her own record -- or about an opponent -- most voters would expect journalists, if possible, to report it. The Campaign for America's Future challenges reporters to go further -- to explore major discrepancies between any candidate's record and the claims he or she makes to voters on the campaign trail. And CAF also urges journalists to examine the political agenda of the corporate and financial interests contributing to any given candidate -- either directly or indirectly through independent expenditures.

The Campaign is making this appeal to the media because, as the 2002 election heats up, evidence is growing that lying and misrepresentation are becoming widespread campaign strategies, encouraged by political parties, and carried out by candidates, their consultants, and well-heeled special interests. We explore here three examples that call out for aggressive journalism.

1. Social Security: Rep. John Thune lies about his record and his opponent's.

On August 8 the Associated Press reported on a 280-page campaign primer distributed in recent weeks to House GOP candidates by the Republican party's congressional campaign committee. Among other advice reported by the AP: Never let Democrats get away with using words such as privatization or stock market when they criticize GOP plans for Social Security [even though most Republicans support privatization]. Avoid supporting any specific proposal for personal retirement accounts [even though voters might want to know where a candidate stands on President Bush's plan to let workers invest part of their payroll taxes on their own.] There is ample evidence that many once-aggressive privatizers are following this advice.

Rep. John Thune (R-SD) takes the cake for the most daring attempt to mislead voters about privatization.

Rep. Thune has a long history of support for diverting Social Security money into private investment accounts – as well as for specific benefit cuts such as raising the retirement age. Consider the following quote by John Thune from 1996:

Social Security will have to be restructured if it is going to survive for future generations. We need to give future generations the flexibility to invest a portion of their payroll tax in a private retirement account that can be there for their future. We also will need to raise the age of retirement. [Rapid City Journal, 5/28/96]

This quote is unambiguous: John Thune supports partial-privatization and raising the retirement age.

In recent weeks, the Thune campaign has been running a radio ad about his opponent in the South Dakota Senate race, claiming, “Tim Johnson supports privatizing Social Security.” But Tim Johnson does not support privatizing Social Security at all. He has signed the Pledge against privatization that has been presented to him by the South Dakota Coalition Against the Privatization of Social Security, while John Thune has refused. And Johnson has repeatedly said that he opposes diverting Social Security taxes into private investment accounts, while John Thune continues to support that policy. Rep. Thune’s claim is just a plain old lie.

2. Corporate Reform: Sen. Wayne Allard's record belies his claim to be a corporate reformer.

In his race against Tom Strickland to represent Colorado in the US Senate, Wayne Allard is running a TV spot portraying himself as a corporate reformer. The ad says: Wayne Allard said "enough." He just voted for a bill that requires strict disclosure rules for corporate finances. One thing that Allard's spot does not tell the voters is that more than a year before the Enron and Andersen scandals became public, Cong. Allard tried to stop accounting reform. He was one of several Senators who sent a letter to then-Chairman of the Securities and Exchange Commission Arthur Levitt, urging him to postpone imposition of strict new accounting rules that would have prevented firms like Andersen from the conflicts of interest inherent in their roles as auditors and consultants to Enron and other companies. Levitt has noted that postponing his proposed new regulations was tantamount to killing them. The rules never went into effect. [Rocky Mountain News, March 5, 2002]

As public fury over Enron, WorldCom and the stock market crash have grown, Allard is one of the members of the Senate who have suddenly begun to sell themselves to the voters as defenders of the public against corporate wrongdoing. But the reality of his Congressional record -- replete with votes to weaken, rather than strengthen, laws to prevent corporate crime -- undermines his tough talk in his TV spot. As a House Member, Allard supported the Republican effort to abolish the alternative minimum tax designed to ensure that profitable corporations can't get away with evading taxes altogether. [HR 1215] And now, at a time when shareholder lawsuits against corporations are turning out to be one of the most effective ways to discipline corporate behavior, it might interest the voters of Colorado to know that Allard voted for legislation to make it harder for such citizen lawsuits to be carried out. [HR 1058]

Wayne Allard is a prime example of the conservative lawmakers who voted to undermine the structure of regulation designed to force corporations to protect their workers, small investors and retirees. Now that their anti-government crusade has led to serious corporate crime, stock manipulations and decline, these same conservatives are claiming to be corporate reformers. We urge journalists to compare their rhetoric with their records.

3. Pension Security: Rep. Pat Toomey

As a result of the recession and the stock market decline precipitated by corporate financial scandals, retirement savings of the American people have been devastated. The University of Michigan Health and Retirement Study reports that more than $678 billion in retiree wealth has been lost in the stock market over the past 2 ½ years. A typical retiree over this period who holds stocks has seen their portfolio decline by 10%¹.

Many Members of Congress up for re-election, like Rep. Pat Toomey (R-PA) are now pretending to be fighters for pension reform. But Rep. Toomey, like most Republicans and a few Democrats in the House voted for a so-called "pension reform" bill that actually worsens employee rights and erodes pension and 401k protections.

Many employees of companies like Enron and WorldCom, which have recently imploded because of their criminal manipulations, have lost everything. The corporate scandals have exposed gaping holes in the laws surrounding corporate management of 401(k) plans. The only way to prevent such catastrophes from recurring is to change the law and require greater diversification of assets.

Yet Cong. Toomey, President Bush and his party tout a "reform" bill, passed by House Republicans which allows 100% of 401(k) assets to be invested in the employer’s stock.

Conflicts of interest such as Arthur Andersen’s dual role as accountant and consultant were at the heart of Enron’s downfall, yet the House bill makes it legal for companies to hire firms and individuals with financial conflicts of interest to provide investment advice to employees regarding their 401(k) investments.

The President called on Congress to treat “the top floor like the shop floor," to give average employees the same rights as high-paid executives. Real reform would require employers to make at least a minimum pension contribution for all employees. Instead, the House bill makes it easier to exclude average employees from the pension plan altogether. The House bill widens the loophole – putting pension coverage for millions of employees at risk.

Enron’s employees were tricked into keeping company stock by top executives who quietly sold their own shares as Enron went into a death spiral. Current law makes it hard, if not impossible, for employees to sue those executives and Arthur Andersen, which helped conceal the truth about Enron’s finances. The House bill does nothing to help employees sue to recover their losses. The House even rejected an amendment that would require the executives and the pension plan to notify employees when insider trading occurs.

The law should mandate the appointment of employee trustees to 401(k) boards, where they could help choose investment options and monitor plan operations. The House rejected an amendment to require employee trustees.

Pension “reform” that fails to deal with these issues is an outright sham. And candidates who claim to be pension reformers by pointing to their support for the House pension bill should be questioned about whether they are really supporting reform or a corporate wish list for further deregulation.

4. Prescription Drug Benefits: Shelley Moore Capito

In early July, television viewers in West Virginia were repeatedly exposed to an ad that praised incumbent Congresswoman Shelley Moore Capito on the issue of prescription drugs. Here's what it said:

ANNCR: America’s Seniors deserve the best of health. And Medicare is our promise to them. Congresswoman Shelley Moore Capito understands. That’s why she voted to add meaningful prescription drug coverage to Medicare for all Seniors. Under Congresswoman Capito’s plan, Seniors who now pay retail prices would see their out-of-pocket drug costs fall by as much as seventy percent and Seniors would have complete protection against catastrophic drug costs.

ANNCR(VO): Call Congresswoman Capito and thank her for voting to add prescription drug coverage to Medicare.

SUPER: Paid for by the United Seniors Association

Similar ads ran in over 25 Congressional Districts praising Members of Congress who voted for the House Republican bill. The ad script and information on the districts it ran in are available from the United Seniors Association website. But nowhere on their site can an average citizen or reporter find out that the advertising campaign (independently estimated to have cost over $3 million) was actually paid for by the Pharmaceutical Manufacturers of America (PhRMA). The trade association and lobbying arm of America's drug companies first opposed prescription drug legislation for seniors, and then, when popular support became too great, helped to craft a bill that impinges minimally on their profits. The PhRMA bill would provide what many senior leaders and experts say is wholly inadequate funding and coverage and an unrealistic mechanism based on private HMO's and insurance companies.

Note: United Seniors opposed the one prescription drug bill that actually passed in the Senate in this session: the Greater Access to Affordable Pharmaceuticals (GAAP) Act. Why did they oppose it? Could it be because it impinges on the drug industry' ability to extend patents on drugs, thus causing drug prices -- and drug company profits -- to fall? Find out more.

At a time when the demand for comprehensive prescription coverage is growing as a political issue, the massive advertising buy is clearly designed change the public image of a large number of Members of Congress, many Republicans and some Democrats. The very companies who stand to experience reduced profits if more comprehensive coverage were to be passed are spending millions to make the voters think that the industry's closest Congressional supporters should be thought of as crusaders for progressive reform and lower prices.

Obviously, Congresswoman Shelley Moore Capito is not the only member of Congress benefiting politically from the drug industry's political strategy. In every Congressional race where the drug companies are spending money to promote their favorite candidate, voters deserve to be informed about where the money comes from. They also deserve to hear about the views of opponents. In most cases, the candidates praised in these ads by the drug industry front group are opposed by candidates who advocate much tougher controls on drug prices and more comprehensive senior drug entitlements. If the so-called United Seniors organization (heavily subsidized by the drug industry) spends millions to support one candidate, the media have an obligation to let the voters know if their opponents have the support of more traditional senior citizen organizations, such as the Alliance for Retired Americans and the National Committee to Preserve Social Security and Medicare. These organizations are likely to have a larger number of members in the district, and therefore deserve to be covered by local media, even if they cannot match the advertising buy paid for by the Pharmaceutical Manufacturers Association.

When the first wave of advertising began, critics issued a message that deserves wide coverage:

"These ads are thoroughly misleading," said Edward F. Coyle, Executive Director of the Alliance for Retired Americans, a national retiree and senior advocacy organization made up of more than 2.5 million members nationwide. "Who makes up the 'United Seniors Association'? What are the pharmaceutical companies afraid of, that they need to use these front groups rather than running the ads themselves? Tomorrow we will be calling on media outlets that run the ads to acknowledge that the United Seniors Association is not the real funding source of the ads, and to identify the pharmaceutical industry as the true source," Coyle stated. "The fact of the matter is that the United Seniors Association would not be running these if it weren't for the $3 million that they got from the pharmaceutical companies." (Alliance for Retired Americans, Press Release, 5/9/02)  

¹ Wall Street Journal, July 9, 2002. “Stock Market Stumble Forces New Thinking on Retirement.”