Congress is in the throes of budget negotiations, the nights are a little cooler, football is back – fall must be around the corner. As you grapple with the question of whether or not to wear those shorts for the last time this year, we’re here, as ever, to provide you with the top corruption stories you might have missed.
Equifax spent $500,000 lobbying to limit legal liability in the months before the massive data hack
Before the security breach went public, Equifax executives also dumped $1.8 million in stock.
Hold on to your seats, folks, because this one’s a doozy. In the months leading up to a security breach that may have compromised the personal data of 143 million customers, credit-reporting company Equifax spent half a million dollars lobbying for regulations that would limit its own legal liability in the event of such a cyberattack, the Wall Street Journal reported. In fact, the company is no stranger to federal lobbying, having spent more than $1 million influencing Washington in both 2015 and 2016, according to data compiled by the Center for Responsive Politics. As the Journal notes, however, Equifax’s PAC also made political contributions to members of Congress, including $2,000 to Rep. Barry Loudermilk, who introduced a bill earlier this year that would limit the damages aggrieved consumers could win in lawsuits against credit reporters. And to make matters worse, in the period between discovering and publicly revealing the breach, three Equifax executives sold off $1.8 million in stock. The company denies the managers knew of the hack when they made the transactions.
The bottom line: Companies, like Equifax, which control large amounts of sensitive consumer data should take steps to protect that information, instead of spending $500,000 to try to limit its own liability in case of a data breach. This entire fiasco illustrate just how much power special interests have to influence policy in Washington – and its effects can be deeply damaging.
Friends with benefits: Menendez trial kicks off
A former legislative aide testified that Menendez personally intervened to secure visas for girlfriends of a doctor who paid for expensive trips for the senator.
The corruption trial against Sen. Robert Menendez got off to a contentious start this week, revealing the details of years of interactions between the senator and Dr. Salomon Melgen, the Florida ophthalmologist who showered him in travel and political contributions. It’s a big story and as we wrote last week, the outcome could provide a crucial litmus test for standards of official corruption. The information coming out of the case so far doesn’t look great – former aide Mark E. Lopes testified Monday that Menendez worked personally to secure visas for Melgen’s girlfriends after their initial attempts had fallen short. He also testified that the senator was directly involved in visa proceedings and intervened in a dispute with the Department of Health and Human Services. This testimony complicates the defense’s argument that Menendez did not take “official actions” to improperly assist Melgen. And if that’s the “quo,” it’s easy to argue the “quid”: Meglen provided the senator with luxury trips to the Dominican Republic and France and splashed hundreds of thousands of dollars on political contributions to benefit Menendez and other Democrats.
The bottom line: Generally speaking, officials cross the line into “corruption” by using their authority to personally assist friends and associates. It’s not unreasonable to argue that the power that comes with a public office shouldn’t be used for personal gain.
Treasury secretary asked for a government plane for his honeymoon to Europe
The U.S. Air Force jet would have cost up to $25,000 an hour.
United States Treasury Secretary Steven Mnuchin got married this year, and when he and his wife were set to head to Scotland, Italy, and France for their honeymoon, the secretary’s office made an unusual request to use an Air Force jet to get around. As ABC News reported, operating the government plane could run up to $25,000 per hour, though a Treasury Department spokesperson argued the jet would have been used to provide the secretary with a secure line to Washington. Ultimately, the request fell through. This isn’t the couple’s first government plane fiasco: the department’s Office of Inspector General recently announced that it would investigate the couple’s trip to Kentucky on a government plane in August after allegations arose that Mnuchin had traveled to Fort Knox in order to watch the solar eclipse.
The bottom line: Sometimes this stuff just strains belief. Maybe it goes without saying, but a honeymoon to Europe seems like hardly the best use for an Air Force jet.
Denver and New Mexico put in place dark money disclosure requirements
The rules will require people and groups making independent political expenditures to reveal sources of funding.
And finally, some good news. The Denver City Council and New Mexico Secretary of State have approved new requirements that will force “dark money” groups – entities spending money to try to influence elections without coordinating with candidates – to provide some information about where their money is coming from. In Denver, people, organizations, and companies that spend at least $1,000 to support or oppose a candidate will be required to report donors who gave more than $25. The thresholds are higher in New Mexico, where groups making $7,500 in independent expenditures or $2,500 on a single advertisement for a statewide race will have to disclose contributors. The two reforms are part of a broader movement to crack down on groups shuttling money through nonprofits that don’t reveal their funding. In Massachusetts, for example, one such organization agreed this month to pay a $426,500 settlement after the Office of Campaign and Political Finance determined the group had solicited contributions to support a statewide ballot question without registering as a political committee.
The bottom line: Rules like these represent a real step toward truly transparent elections.
Thanks for reading, folks. If you see something you’d like to see highlighted in the next corruption rundown, feel free to email me at email@example.com.