The light rail also benefited the Pohlad family in other ways, specifically their real estate company, United Properties. The Northstar commuter rail line, which stops near gate six at the stadium, helped boost real estate development in the area. United Properties owns the Ford Center, which is located across the railroad tracks from the stadium.58
The ties were so deep that Chris Pohlad, the grandson of Carl, served as a special assistant to Senator Klobuchar in Washington between 2009 and 2010 while she was issuing the earmarks.59
Klobuchar’s legislative work for the benefit of large donors extends far beyond simple earmarks. From her perch on the powerful Senate Committee on Commerce, Science, and Transportation, she sits at the crossroads of corporate interests in Washington that wanted something from the federal government. We will see how she became adept at crafting specific legislation that would benefit powerful companies who write her checks either just before she introduces the legislation, or shortly after.
In May 2011, Klobuchar stepped forward and introduced a bold bill called the Commercial Felony Streaming Act (S. 978).60 The bill was designed to stop piracy on the internet, specifically the streaming of songs and music online. According to critics, Klobuchar’s was a draconian solution. Namely, individuals who illegally streamed TV shows or movies would be committing a felony. Entertainment industry executives loved the bill for obvious reasons. But it brought her criticism from online freedom advocates. Even those in the music business like Justin Bieber thought it went too far. He suggested that she should be “locked up” for proposing the bill.61
In the ninety days before she introduced the bill, something unusual started happening. Over a one-week period in February, seven executives from 20th Century Fox sent her donations. Three more wrote her checks in March. Other big entertainment companies opened up their wallets, too. Warner Bros., via its PAC, gave her a $20,000 contribution, and no fewer than fifteen other executives with the company sent her thousands in donations. The Motion Picture Association of America, the film industry association, gave $2,500 in late February.62 Comcast, the cable giant based out of Philadelphia, which also strongly backed the bill, began giving and would become one of her largest campaign contributors for reelection in 2012, donating more than $26,000.63 In all, the entertainment industry sent her more than $80,000, a flow of cash she had not experienced before; all of it was collected in the brief period before she introduced the bill.
In short, the entertainment industry “lined up to salute” her bill—and that salute meant cash.64
She was only getting started.
The entertainment industry was not the only one who would give her large concentrated donations in a short period, only to have her later introduce a bill that they liked.
At the end of September 2011, over a six-day period, no fewer than twenty-one executives from Xcel Energy wrote campaign checks to Klobuchar.65 Weeks earlier, Klobuchar introduced legislation to amend the IRS code of 1986 to give a “renewable electricity integration” [tax] credit to utility companies.66 The legislation would give utilities like Xcel Energy federal tax credits for producing renewable energy. Klobuchar was a sponsor of the bill. Xcel Energy lobbied for the bill.67 She continued to go back to Xcel for more, and to introduce legislation that they favored.68
Beginning at the end of May 2017 over a ten-day period, twenty-eight executives from Xcel Energy sent her contributions totaling $12,500.69 Just two and half weeks earlier, she had cosponsored legislation called the Clean Energy for America Act, which would dramatically expand the tax credits available for companies like Xcel Energy.70
Despite a voting record remarkably similar to Bernie Sanders, she enjoyed the sort of corporate cash flow about which the senator from Vermont could only dream.71
Klobuchar likewise aggressively fought for the interests of medical device manufacturers. She pushed a bill that would loosen the conflict of interest rules for advisers to the Food and Drug Administration for approving new medical devices.72 Klobuchar draws an artificial distinction between medical device manufacturers and pharmaceutical companies when it comes to regulations. She bristles at the power of big pharma. “The big pharma companies think they own Washington,” she has said. “Well they don’t own me.”73 But medical device manufacturers enjoy her unending support.
On March 17, 2016, Klobuchar introduced the Improving Medical Device Innovation Act, which would relax regulations for the medical device industry. Less than two weeks later, thirteen executives with medical device manufacturer Medtronic wrote her checks over a three-day period.74 Back in 2011, Senator Klobuchar invited the CEO of Medtronic as her honored guest to President Obama’s State of the Union address. She paid his company and industry homage in announcing the invitation.75 Klobuchar supports the industry in part because it creates jobs in Minnesota. More to the point, they are large donors to her political campaigns and often cut checks close to when she writes legislation.76
Klobuchar is unique among progressives in her ability to raise enormous sums from giant corporations. For her reelection in 2018, she raised thirty-eight times the amount of her GOP challenger. She took in donations from the CEOs of eleven of Minnesota’s twenty-five largest corporations. She has done particularly well with law firms and lobbyists—they have donated more than $3 million to her three Senate races.
Indeed, no industry has given her more.77
Lobbyists have been some of her most prolific fund-raisers. Lobbying shops such as McGuire Woods, Locke Lord Strategies, Holland & Knight, Flack Associates, Covington & Burling, have held fund-raisers in Washington for her.78
Klobuchar has tried to downplay the flow of corporate cash into her campaign coffers. Her announcement in February 2019 that her presidential campaign would not accept donations from corporate PACs was ironic, given that only months earlier she collected $1.9 million from corporate PACs for her 2018 Senate reelection campaign.79
This has led Klobuchar to apply her views on regulation and antitrust matters selectively. Klobuchar is the ranking member on the U.S. Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights.80 The subcommittee is ground zero for large corporations seeking merger approval from the federal government. That power, of course, creates enormous opportunities to raise money from corporations who are donating out of either fear or favor. Klobuchar has always taken the position that she has no clear-cut position on mergers. As she announced in early 2008 during an interview about a potential airline merger, she proclaimed that she had no “blanket stance against mergers.”81 This case-by-case approach, which makes sense, also maximizes the opportunity to collect large sums of cash from companies seeking federal approval. Companies that are seeking approval for large mergers and acquisitions are some of her “most generous donors. Many of them have found themselves in the target of both the Justice Department’s antitrust division or [sic] the Federal Trade Commission.”82
Medtronic, for example, sought a “vertical” integration merger to buy a competing firm called MiniMed in 2011. The merger was highly criticized—but not by Klobuchar. Medtronic was her third-largest contributor from 2011 to 2016, which coincides with her first reelection bid in 2012.83
Cargill Inc. is a giant Minnesota-based food producer and distributor. Valued at approximately $60 billion, it has been one of Klobuchar’s top donors. In 2013, it was the subject of a bipartisan probe by President Obama’s Justice Department and some Republican attorneys general over its plans to merge with ConAgra Foods Inc. In the name of protecting consumers, the Obama Justice Department required Cargill to divest from four flour mills in order to approve the deal. Going back four decades, Cargill has faced major anticompetition investigations seven times.84
All said, “Klobuchar does not appear to have questioned many of [her corporate donors’] acquisitions.”85
Klobuchar was also supportive of carve-outs for Cargill when it came to derivatives regulation. These complex investment vehicles on Wall Street have been highly contro
versial. Klobuchar supported legislation to rein in the trading of derivatives, but allowed for exemptions that would permit Cargill to continue to leverage them.86
When she organized an Innovation Summit with her National Innovation Agenda, two of the corporate speakers were the corporate VP of Cargill and the chairman/CEO of Medtronic, whose companies were major donors.87
9
Eric Garcetti
Mayor Eric Garcetti, longtime political fixture in Los Angeles, can run a star-studded campaign like few others.
When he was running for mayor in 2013, he tapped his friend and supporter actress Salma Hayek to do a video about his merits as a leader. She talked about his skills as a dancer, the fact that he was a military officer, his culinary skills, his gardening acumen, and, finally, the job he was doing as president of the city council.1 Then there was a fund-raiser at the Henry Fonda Theater featuring actor Will Ferrell, talk-show host Jimmy Kimmel, and the musician Moby. The campaign produced a list of two hundred “entertainment leaders for Garcetti,” which included Michael Eisner, Jake Gyllenhaal, Kevin Spacey, and Michael Ovitz. His campaign finance chair was Sony executive Eric Paquette.2
Being mayor of the Entertainment Capital of the World means a melding of politics and celebrity like no place else. Mayor Garcetti, in addition to his apparent dancing skills, has also appeared on several television shows. He has appeared on The Closer and Angie Tribeca. And he is friends with rapper Jay-Z. When the city was planning to shut down the 6th Street Bridge for repairs, the mayor cut an R&B single called “101 Slow Jam” as a public service announcement.3
Eric Garcetti is one of the rising stars in national progressive circles. Journalists regularly point to his “solid progressive achievements” as mayor, and as one of the “potential pioneers of progressive policy” among America’s big-city mayors.4 In 2016, he was reportedly on the list of Hillary Clinton’s vice presidential choices.5 He remains a major player in the Democratic Party.
For Garcetti, it is all about a modern progressivism—with a pragmatic twist. In contrast with Elizabeth Warren and Bernie Sanders, his public persona and rhetoric appear to be far less hostile to corporations. He wants to make the machinery of government more efficient, bringing it into the “smartphone era.”6 Garcetti clearly sees his policies as setting a national agenda, which can be replicated around the country. “We’ve done it in L.A.,” he told the Democratic National Convention in July 2016. “Now let’s do it for our entire country.”7
But behind the tinsel and celebrity Los Angeles has a corrupt political culture, as evidenced by two FBI raids on City Hall—one in November 2018, the other in July 2019.8
At the heart of LA politics is a hardened political operation fueled by an elaborate pay-to-play system where businesses and developers pay money to get their projects approved by the city. It appears to operate like a classic political machine, albeit less explicit than the old Tammany Hall system made famous in the nineteenth century. The way Garcetti’s machine operates often looks like Tammany Hall in Ray-Bans: sleek, stylish, and sophisticated, but at its root a machine that leverages power for money.
Garcetti is an amalgam of Los Angeles. He describes himself as a “kosher burrito,” because of his mixed Jewish and Mexican roots.9 He grew up in a prominent Los Angeles family. His father, Gil Garcetti, who “grew up poor in South L.A.,” was the famed district attorney whose office took on O. J. Simpson and lost. Eric’s mother, Sukey, is the daughter of a financially successful clothier.10 Garcetti’s parents were an atheist and an agnostic. But he has embraced his mother’s Jewish heritage, studying the Talmud and attending LA’s “social-justice-minded” IKAR synagogue.11
Eric received an elite education, attending first the Harvard School, the elite prep school in Studio City, California. He then went off to Columbia University.12
As an undergraduate at Columbia University, Garcetti organized a protest against a nearby market that had forbidden the homeless from redeeming cans and bottles for the five- and ten-cent deposits. “We hope to resolve this without it getting messy,” he declared, “but the managers seem to be assholes who have to be hit hard.”13
From Columbia, he went to Oxford on a Rhodes scholarship. It was on his way to the city of spires that he met his future wife, Amy Wakeland. Raised in Indiana, Wakeland was a Rhodes Scholar, too. They formed a solid team and core from the beginning and today she is widely considered one of his closest advisors.14 After they returned from England and had settled in Los Angeles, Eric ran for city council. Wakeland served as the campaign field director and was described as a “general charging into battle.” In contrast to her husband’s more laid-back style, Wakefield is tough. “She is fierce,” a deputy mayor under Antonio Villaraigosa (Garcetti’s predecessor) who has worked with Wakefield told Los Angeles magazine. She has remained a central component of his power structure, recruiting many of the top aides who serve with him in the mayor’s office. She also reportedly has oversight of his schedule.15
Garcetti has been a longtime political fixture in Los Angeles. He was first elected to the Los Angeles City Council back in 2001, and then for six years served as the city council president, which essentially gave him “complete control” of the legislative agenda for the city.16
During his earliest days as a member of the city council, Garcetti aligned himself with the interests of Los Angeles’s developers. Los Angeles has very strict zoning and environmental laws when it comes to construction projects. But the laws allow the city council and the mayor to make exceptions—and under Garcetti they have done so an overwhelming majority of the time.17 If a builder can get these politicians to give them an exception, it can result in an enormous windfall. As we will see, the way builders get those exceptions is by showering politicians and their families with cash.
Garcetti also became a supporter of using eminent domain to push people out of their property so that newer, larger projects could be built. He once offered, “The city would not use its powers of eminent domain to force property owners to sell, unless the developers were unable to reach a deal with the landowners.” Reason’s Matt Welch argues, in short, that the city is going to take your property; you had better take the deal.18
Even as the president of the Los Angeles City Council, Garcetti was a rising star in national politics. President Barack Obama tried to lure him to the White House, according to Garcetti, to serve as his “urban czar.” They met in the Oval Office to discuss having him join the Obama administration. “He said I could oversee HUD [Department of Housing and Urban Development] and HHS [Health and Human Services] and Education and transportation. It would have been an amazing opportunity.” But Garcetti had larger ambitions, including running for mayor. And, perhaps, further down the road, he hoped to be sitting on the other side of the desk in the Oval Office.19
From president of the Los Angeles City Council, Garcetti ran for mayor. He won both elections handily, but he benefited from voter apathy and low turnout. The 2013 election was a “very low-turnout election.”20 Indeed, so few people in Los Angeles voted, Garcetti was elected with just 222,300 votes, equivalent to what was needed in the 1930s when LA was half the size.21
He was reelected in 2017 in an election where just one in five eligible voters turned out.22
The move to the mayor’s office brought him more broad-ranging powers that could affect the fortunes of developers and other businesses. In Los Angeles, the mayor and other elected officials have enormous power to make developers rich with changes to the zoning code, waivers to planning requirements, and other benefits for real estate projects. Tweaking the law can dramatically increase the market value of commercial parcels of land and buildings by expanding their possible use, or allowing larger buildings to be constructed than regulations allow.23 They can also exempt future real estate projects from the California Environmental Quality Act.24 These favors can, over a number of projects, translate into billions of dollars for builders and developers.
In August 201
3, Rick Jacobs joined Garcetti’s office as deputy chief of staff for operations. During the 2013 mayoral run, Jacobs was a major fund-raiser for the campaign.25 He was the founder of a consultancy firm called RDJ Strategic Advisors, which “provides expertise to ultra-high net worth families, investors, non-profits and corporations.” Earlier in his career, Jacobs was assistant to the chairman of Occidental Petroleum, which was headed by the controversial Armand Hammer. Jacobs says that he took sixty trips to the Soviet Union in the 1980s.26 Hammer, it was later revealed, worked as a “virtual spy” for the Soviet Union and was “a conduit for money that financed Communist espionage operations.”27
With his elevation to the mayor’s office, Garcetti set up the infrastructure for a self-funding political influence machine. Each of the roles that Rick Jacobs played appear to be a gateway between those looking for favors from the city government and the mayor’s own political and personal ambitions. The merging of Garcetti’s political machine with the official powers of the LA mayor became more apparent when Jacobs, who was officially the deputy chief of staff, began to introduce himself as “Executive Vice Mayor” of Los Angeles. It was a nonexistent position in Los Angeles city government; the title was apparently inspired by a role common in China.28
In June 2014, Garcetti launched a nonprofit he called the Mayor’s Fund for Los Angeles. The nonprofit was explicitly linked to the city’s government and worked on Garcetti’s projects. Jacobs claims to have created the organization and would go on to serve as the treasurer and director. Jacobs would remain attached to the Mayor’s Fund, but on July 20, 2016, Jacobs left the mayor’s office on a “leave of absence” to focus on “outside political and civic activities,” including Garcetti’s reelection campaign and another Garcetti pet project: Measure M, an initiative for a sales tax increase to fund infrastructure projects.29 The initiative was a merging of interests. Jacob’s company was paid almost $90,000 to advise on the initiative; the largest single donation to the “Yes on M” campaign was a political action committee (PAC) for the infrastructure firm HNTB, which stood to gain a lot from its passage. In November 2016, Measure M passed.30 It was expected to raise $120 billion over a forty-year period for infrastructure projects.31 In late October 2017, Garcetti launched a nonprofit called Accelerator for America (alongside South Bend, Indiana, mayor Pete Buttigieg), with Jacobs as CEO.32 In November 2017, Garcetti launched the Democratic Midterm Victory Fund, a PAC to support Democrats in the 2018 midterms. Jacobs’s firm, RDJ Strategic Advisors, was paid $231,797 by the PAC during the 2018 cycle—nearly 10 percent of what it raised.33 Jacobs was accused of using extortion tactics against opponents of some of the mayor’s initiatives. Opponents of Measure EE, a tax plan backed by Garcetti, were reportedly warned of voicing opposition. The LA Times reported, “Tracy Hernandez, founding chief executive of the Los Angeles County Business Federation, known as BizFed, said Measure EE campaign manager Rick Jacobs told her during a phone call last month that BizFed members who campaign against the measure won’t do any business in the city of L.A. for the next four years.” Jacobs denied the allegations.34
Profiles in Corruption Page 22