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Never Mind Super PACs: How Big Business Is Buying the Election

Lee Fang Twitter

August 29, 2012

This article was reported in collaboration with the Investigative Fund at the Nation Institute, where Lee Fang is a reporting fellow.

On January 27, 2010, one year into his term, President Barack Obama used the occasion of his State of the Union address to issue a warning. The Supreme Court had just opened the “floodgates for special interests—including foreign corporations—to spend without limit in our elections.” He was speaking about the ruling in Citizens United v. Federal Election Commission. in which the Court struck down nearly a century of law, granting corporations vast new leeway to influence the outcome of elections.

In the months after Obama’s speech, the American Petroleum Institute, an oil industry trade association that represents hundreds of multinational oil and gas companies, would demonstrate just how prescient the president’s warning was.

Before Citizens United. API had gone to battle with the president over his efforts to address global warming. It took out issue ads, hired lobbyists from K Street, and financed dubious studies to claim that even the most piecemeal legislative fixes, such as the Waxman-Markey bill designed to cap carbon emissions, would lead to economic ruin. The group spent $7.3 million on federal lobbying during the year the bill was being debated.

But as the 2010 midterm elections loomed, Citizens United handed API an additional arrow for its quiver. The group could now funnel undisclosed corporate donations directly to campaign entities. Among the oil executives leading API at the time —and still to this day—was Tofiq Al-Gabsani, a registered lobbyist for the Saudi government. Al-Gabsani is the chief executive of Saudi Refining Inc. a wholly owned subsidiary of the Saudi

Arabian Oil Company, the government-owned Saudi oil giant better known as Aramco.

Aramco, by means of its US subsidiary, is understood by insiders to be one of the top donors to API, where, according to the Washington Post. membership dues for the largest firms can be as much as $20 million a year. API has roughly 400 member firms, but only a small group of oil and gas industry CEOs sit on its board of directors, which oversees the trade association’s major political campaigns, according to API state business filings and two former API executives. Alongside the top officials of such major American firms as ExxonMobil and ConocoPhillips, one of those directors for the past three years has been Al-Gabsani.

US law still bans foreign corporations from participating directly in elections. But after Citizens United. trade associations like API—whose influential members include foreign corporations—are free to spend as they wish, unburdened by disclosure requirements. And these groups have taken full advantage of their new freedoms. While other campaign committees, from labor unions to Super PACs, face strict transparency rules, trade associations enjoy unparalleled power to covertly manipulate elections using corporate money.

API-funded groups were a force behind the tidal wave of negative advertisements to hit Democrats in the midterms. Pennsylvania Representative Joe Sestak “voted for Pelosi’s job-killing cap-and-trade plan,” intoned one election-season TV ad from Americans for Tax Reform, one of several groups financed by API in 2010. Sestak’s vote for a bill to put a price on carbon pollution, the ad continued, constituted “a great big tax that would make utility bills skyrocket, gas prices soar.” Sestak lost his bid for the US Senate, and his Congressional seat was one of sixty-three taken by the Republicans.

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