President Obama and the Democrats are making a rather odd ploy for votes: Attacking the Chamber of Commerce and insinuating that it’s secretly funneling money to Republican campaigns.
The White House intensified its attacks Sunday on the powerful U.S. Chamber of Commerce for its alleged ties to foreign donors, part of an escalating Democratic effort to link Republican allies with corporate and overseas interests ahead of the November midterm elections. The chamber adamantly denies that foreign funds are used in its U.S. election efforts, accusing Democrats of orchestrating a speculative smear campaign during a desperate political year.
President Obama, speaking at a rally in Philadelphia, said “the American people deserve to know who is trying to sway their elections” and raised the possibility that foreigners could be funding his opponents. “You don’t know,” Obama said at the rally for Senate candidate Joe Sestak and other Democrats. “It could be the oil industry. It could even be foreign-owned corporations. You don’t know because they don’t have to disclose.”
The remarks are part of a volley of recent attacks by Obama and other Democrats on alleged foreign influence within the Republican caucus, whether through support for outsourcing jobs by major U.S. corporations or through overseas money making its way into the coffers of GOP-leaning interest groups.
The comments also come as Democrats attempt to cope with an onslaught of independent political advertising aimed at bolstering Republicans, much of it fueled by donations that do not have to be revealed to the public. The spending has added to a political environment in which Democrats are in danger of losing control of both the House and Senate.
David Axelrod, a top Obama adviser, said on CBS’s “Face the Nation” that secret political donations to the chamber and other groups pose “a threat to our democracy.” Axelrod also took the unusual step of calling on the chamber to release internal documents backing up its contention that foreign money is not being used to pay for U.S. political activities. Democrats have seized on a report by a liberal blog alleging that dues from chamber-affiliated business councils could be used in that way. “If the chamber opens up its books and says, ‘Here’s where our political money’s coming from,’ then we’ll know,” Axelrod said. “But until they do that, all we have is their assertion.”
Of course, all we have the other way is the Democrats’ assertion. And will Americans otherwise predisposed to vote Republican in November really change their mind on vague assertions that the Chamber is funneling foreign money into their campaigns?
Apparently, the impetus for all this is last week’s reporting from Think Progress that I’d missed until now. It’s rather convoluted — making its likely impact on next month’s voting even more unlikely — but, essentially, the argument goes like this:
- The Chamber is the chief outside group buying ads for Republican candidates
- These ads are paid for out of the Chamber’s general fund
- The Chamber accepts foreign donations through its overseas Business Councils
- Thus, foreign money is used for the ads
- Additionally, a 527 called American Crossroads, which Karl Rove and Ed Gillespie are affiliated with, is coordinating spending with the Chamber. And who knows where American Crossroads is getting the money? Maybe it’s from foreigners!
For their part, both the Chamber and American Crossroads have denied that foreign money is going toward these ads, asserting that they have firewalls in place. Absent strong evidence to the contrary, I’m inclined to believe them. After all, money is fungible. So, the Chamber doesn’t need to use foreign money to fund political advertising — which is presumably still illegal — when all they have to do is use the foreign money to finance legal activities and shift the domestic money that would have funded said activities over to advertising. (Now, effectively, there is no difference! Legally, though, it’s the difference between night and day.)
I suppose that, given the polling numbers, Obama and company have to try something. Certainly, “We’re doing a great job and you should give us two more years” isn’t going to cut it. But this is not only desperate but it’s the kind of inside baseball that will just irritate voters. I guarantee you that if I’m just now getting wind of this week-old blog story, nobody at that rally in Philly had any idea what the hell Obama was talking about.
This was probably inevitable: the minute that Dodd-Frank cracked down on the fees charged by credit cards aimed at students, some other bright financial innovation would crop up. This time, a debit card aimed at students. Which carries lots of fees. Ylan Mui reports that a company called Higher One has started signing up colleges around the country, taking on the burden of providing cash to students. In return, it gets lots of fees:
Students say several of the fees associated with Higher One’s card are particularly irksome, including the $19 inactivity fee, a 50-cent charge for using a PIN to make a purchase rather than a signature, and a $2.50 fee for using other banks’ ATMs…
Higher One said that only 1 percent of customers have been charged an inactivity fee and that more than half are charged the 50-cent fee only once. All fees are listed on Higher One’s Web site, along with tips on avoiding them.
“We have a big effort with educating students on how to use the account,” Smith said. “We’re very passionate about financial literacy.”
If the fees are listed on Higher One’s website, they’re not exactly prominent. I did find this page, eventually, via this blog entry, but it just says that “when you swipe & sign, you won’t be charged the PIN-based transaction fee”. I haven’t been able to find a page showing a 50-cent transaction fee anywhere*, although I did manage to find this page, showing a $25 fee for domestic wire transfers and a $50 fee for international wire transfers. “Higher One offers less costly alternatives for transferring funds”, it says, without giving any indication what they might be; I suspect that what they’re talking about is transfers to or from people who have already registered somehow with Higher One.
It should go without saying that any firm which is “very passionate about financial literacy” would encourage, rather than penalize, simple, cheap and safe PIN-debit transactions. It would not give students a debit card and then tell them that if they want to avoid fees they should select the “credit” option rather than the “debit” option when they come to pay.
And I can’t think of any good reason to charge a $19 inactivity fee to people who haven’t used their cards in 9 months.
The fact is that students are often very naive when it comes to money, and it’s easy to gouge them once or twice before they learn that banks are not necessarily on their side. If you can get your card accepted by a majority of freshmen every year, and then come up with all manner of weird fees to hit them with, that’s a great way of making money out of ignorance.
Meanwhile, all students should have a bank account: giving them a debit card instead only serves to maximize the number of unbanked students. So while I’m sure cards like this are attractive to colleges, it would be great if either the colleges or else the Consumer Financial Protection Bureau started being a lot more critical of them. Prepaid cards only ever make sense if the alternative is being completely unbanked; that should not ever be the case for students.
*At Southern Oregon University, Higher One agreed to waive the 50-cent PIN-debit charge, but only if there was a simultaneous “swipe-and-sign” campaign. If the campaign is unsuccessful and students do the sensible thing by using PIN debit, then the university can be charged $2 per student for “PIN fee elimination”.
Update: Higher One’s Donald Smith responds:
Higher One was founded 10 years ago by three college students (undergraduates at the time) who were looking for streamlining the way financial aid refunds were distributed to students. Today we work with more than 675 campuses across the country, have a 97% client retention rating, and an A+ rating with the BBB.
The OneAccount is Higher One’s optional, no minimum balance, no monthly fee, FDIC-Insured checking account created by students for students. We do not offer a stored value card. We are very open with our fee schedule. We post it on every program website for all to access, explain each fee, discuss how to avoid each fee, and provide students with a web page that tells them how to use the account for free (which you’ve already found). Because of this, we believe that our customers pay less than half the amount in fees that the average bank checking account customer pays per year.
Two of the fees you referenced in your blog are the PIN fee and the Abandoned Account Fee. The PIN fee is easily avoided by choosing a signature based transaction at the checkout. The majority of students uses it in this manner and is in turn protected by MasterCard’s Zero Liability Policy against fraudulent charges (a safer way of purchasing than a PIN based transaction). We do not have an inactivity fee on our fee schedule – we don’t penalize students who do not use their accounts. We do have an Abandoned Account Fee of up to $19, for those who have abandoned their accounts, but this has been charged to less than 1% of all OneAccount holders in our company’s history because of our proactive outreach plan.
Higher One offers no instruments of credit. As a matter of fact, we’re generally in favor of initiatives restricting students’ access to credit cards and promoting financial literacy. This is why we offer a full range of financial literacy resources along with the services we provide.
I particularly dislike the implication, here, that PIN-based transactions are unsafe. They’re not; they’re just less lucrative, in terms of interchange fees, than signature-based transactions.
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