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Category: Citizens United
Posted: 08/12/15 12:51

by Dave Mindeman

Let's talk about corruption. Legal corruption, but corruption none the less.

One of the favorable aspects of Donald Trump... that he, and his supporters, mention often... is that because he finances himself, he is not influenced by anybody or beholden to anybody.

It is unfortunate that it requires super wealth to achieve that, but the ability to be able to say that you are above the influence peddlers has a certain appeal.

Because donating money to elected officials is legal, we can't call it corruption in the legal sense; but it IS corruption. Politicians will go to great pains to tell us that larger donors do not influence their vote....but really, how can it be otherwise?

Look at Minnesota.

Erik Paulsen has been bought and paid for by the medical device industry. John Kline is owned by the For Profit Colleges. Rick Nolan has to be mindful of the mining industry. And Collin Peterson listens to the big agriculture conglomerates.

They call it representing a constituency. I call it legal bribery.

And it happens in the Minnesota legislature as well. As Minnesota's campaign finance laws get weaker and weaker, you see more money flowing into the local races. Outside groups target races and spend hundreds of thousands of dollars. Just to buy one more vote.

Some individuals are willing to dump some money influence into the legislature to protect a particular practice that should be regulated, from being regulated.

A good example of that is Pawn America owner, Brad Rixmann. He has virtually cornered the market on Payday Loans. What is a Payday loan?

A payday loan - which might also be called a "cash advance" or "check loan" - is a short-term loan, generally for $500 or less, that is typically due on your next payday. The cost of the loan (finance charge) may range from $10 to $30 for every $100 borrowed. A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400%. By comparison, APRs on credit cards can range from about 12 percent to 30 percent.

Why would someone take out such a loan? Typically it is poor, cash strapped individuals who don't have a conventional means of getting extra money. Brad Rixmann would say that he is performing a service to these people....most everyone else would say he is exploiting the poor.

However anyone feels about it, Brad Rixmann makes a lot of money via Payday Loans and he wants to keep it viable. Many states have outlawed the practice entirely....

Payday lending occurs in much of the country, although 15 states and the District of Columbia have effectively banned it outright. Minnesota is among 36 states that allow payday lending. Nine of those have set more stringent requirements, including lower limits on fees.

Minnesota has taken up regulating these loans at various times, but it always seems to die in the legislature without final action.

Brad Rixmann has doled out nearly $550,000 in state campaign donations over the last decade.

The majority of it goes to Republicans....but key Democratic legislators will suddenly become recipients when the legislation is on the table.

Of course, all the legislators involved say the contributions had nothing to do with their vote. But then you have to wonder why an individual would pay out over half a million dollars to legislators. Just because he is a nice guy? And you also have to wonder why the votes just happen to always produce the result that Brad Rixmann seeks. Coincidence? Not a chance.

The people that Brad Rixmann exploits obviously aren't good at influence peddling. They don't have the cash. They don't have the clout.

Rixmann even exploits them in other ways. When he gives them their "loans", he asks that they sign a postcard addressed to their legislator, which tells the legislature that they want payday loans to stay legal. I doubt that they get a full explanation of what that post card means....all they are concerned about is making it to the next pay check. But all the legislator sees is a post card with a constituent name on it and another excuse to let Brad Rixmann get his way on the next vote.

We are sinking into an abyss of campaign donor influence. Money in politics is pure and simple corruption...and its all legal.

Campaign donations have become shopping for elected officials.

Buy and sell. Its the new market exchange.
comments (3) permalink
01/24/16 19:26
Regarding payday loans. Yes, they look like a ripoff of poor people, and they are. But, let's look why people patronize them. There used to be pawnshops which financed small loans with items of personal property as collateral. They got a bad rap. Then there were small loan companies in every town of any size. They mostly went out when everybody started using credit cards for short term loans (with outrageous interest charges). The patrons of payday loan companies are people who don't have credit cards and can't get loans any other way. If they go out of business where will that next loan come from? Also, there are check cashing services that made a bundle; they serve people who can't get a bank account.
08/12/15 23:17

One other Member that deserves to be mentioned ... remember when Aaron Schock, who was accused of spending and ethics violations, and resigned ?
Well, that opened a slot on the Financial Services Committee.
That opening was filled by Tom Emmer who had to give up his seat on the Ag Committee.

When you look at what committees receive the most donations, the Financial Services Committee is in the top tier.
For fun, let's watch how much Keith Ellison reports on the third quarter fundraising report versus Tom Emmer ... Emmer was just added to the committee in late May ... both are on the same committee yet I bet that Emmer will outraise him by at least 3:1
08/12/15 17:57
We agree! Mark your calendars!

I don't want to defend Rixmann or payday loans but in fairness to all involved, including those who purchase the service, the collection costs related to problems with the transaction are likely many multiples of the transaction amount. In fairness, what would Dave charge to 'guarantee' a $200 check with cash paid to a stranger with no viable banking relationship? $10? $20? $50? Dave knows better than to place himself at risk for $200.

Influence and special interest political spending is very real. It is about the caucus and influence they can impose on the caucus to do things they would not normally allow. Look at the Union support of the democrats in MN as a perfect case in point. The vast majority of money support goes to Democrats. They do it for a reason. Because the caucus can and does hold itself out "for sale" to buy things like union built stadiums, new union collectives like day care workers, etc.

The political justification for Democrat willingness to do things they otherwise would never advocate is because they are compelled to "even the playing field" when it comes to political contributions. Dave cites republican donations from their sources. The very same issue is rampant in MN politics with favor peddling to unions.

The most onerous part about this is that all that extra money is spent on ridiculous media coverage of absolutely stupid stuff having little to do with substance and much to do about generating dislike for politicians. Those ads get funded because they work. Until we figure out how to ratchet down the rhetoric, political campaigns will get worse with every election cycle.

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