Episode 5 Š Year in Review Influence Watch Podcast Transcript YouTube CC File edited by Jared Cummings [SCOTT WALTER] Thanks for tuning in I'm Scott Walter, [MIKE WATSON] and I'm Michael Watson , [SCOTT WALTER] In this episode, we look back on the year in influence. This is the Influence Watch Podcast Year in Review. [SCOTT WALTER] This week on the Influence Watch podcast weÕre stepping back from the latest news, and instead reviewing the year in influence that just passed. We've seen Hollywood media and politics rocked by allegations of widespread misconduct messes made by the Obama administration cleaned up in the regulatory and litigation arenas and even some normal politics. Mike let's start with pervnado. [MIKE WATSON] So in our first episode a couple weeks ago we just looked at the fallout of allegations of widespread sexual misconduct in the wake of the revelations that Harvey Weinstein, the Hollywood producer, had engaged in widespread sexual misconduct and we suggested that that might have been the tip of the iceberg as more and more women came forward to allege that there had been widespread sexual misconduct in media politics and entertainment and that has continued in the last few weeks. Left-wing documentarian Morgan Spurlock, from Supersize Me, admitted without even an accusation that he had settled a sexual harassment complaint. PBS anchor, Travis Smiley, was suspended for having inappropriate relationships with multiple subordinates. These are allegations he has denied. A former employee of the NFL Network accused numerous former NFL players who now who had been analysts for the NFL network of sexual harassment. The New Yorker fired its star reporter Ryan Lizza for unspecified sexual misconduct allegations which Liz' denies. Mario Batali, the celebrity chef, had to take leave of absence from his businesses after women came forward and accused him of sexual misconduct and lefty actor TJ Miller who was the voice of one of the characters in the one of the worst movies ever made the Emoji Movie, who actually gave an interview where he said that you know the Emoji Movie is going to be a great sign of resistance to Donald Trump. Well it turns out in college he was accused of sexual misconduct again allegations he denies, but it was reported in The Daily Beast that he had done some very nefarious things. And then in politics, more congressmen have been accused of sexual misconduct there are rumors flying around Washington that many many more are going to be accused. The Republicans have already lost a seat in the United States Senate after their candidate was accused credibly of sexual misconduct with a minor. This isn't going away, and it looks like it's if anything accelerating, but if you want to know kind of what's going on behind that we would encourage you to go back and look at our first episode, Episode one to see what we the effect the fallout that we think this is going to have and we've seen no reason to change our expectation that it's going to be a lot of fallout. [SCOTT WALTER] No the momentum is not slowed now this show we also want to deal with some of these what you could call clean ups after the Obama administration there have been regulations reversed for instance the first most obvious one would be net neutrality [MIKE WATSON] Yeah, in our most recent podcast our episode three we discussed the whole battle over net neutrality and I'd encourage you to go back to watch that podcast or listen to it. In 2015 these regulations on internet service providers are passed their own a party-line vote well in late December, they were reversed on a party-line vote. [SCOTT WALTER] There's also the Paris climate agreement that was another major regulatory change tell us a bit about that [MIKE WATSON] Sure, the Obama administration had agreed to this treaty that wasn't really a treaty because if it had been a treaty it would have been not ratified by the Senate which would have meant that it wouldn't have been law which is very weird but it doesn't matter anymore because President Trump announced that the United States was no longer going to be part of it as of June the US. This saves the US taxpayer from having to contribute to the International Green Climate Fund which is simply a transfer from industrialized nations to not as industrialized nations. The US will not have to enact onerous job threatening environmental regulations to comply, and that will probably be reflected in lower than in energy prices that are lower than they otherwise would have been. Obviously, this is highly controversial, the environmentalists are adamant that the US should be a part of this, but as of this moment the United States team when it goes into effect the United States will have withdrawn. [SCOTT WALTER] And as I recall if you study some of the other countries that weren't as proudly defiant of the Paris climate agreement but nonetheless they are discovering that well actually maybe we won't do the things that we promised we would do but let's say let's switch to another regulatory arena one where you're a particular expert the National Labor Relations Board which probably not something most Americans have heard of but nonetheless something that can have a huge effect on the economy and the workplace for ordinary people tell us about some of the developments there, this past year. [MIKE WATSON] Sure, so the National Labor Relations Board is the enforcement arm for the National Labor Relations Act, which is the law that as it has been amended that governs the relations between Labor especially labor unions and management. So during the Obama administration, the National Labor Relations Board was stocked with former Union attorneys and took a very Pro-labor union approach to interpreting the national labor relations act new government new national labor relations board. Now it's management site attorneys mostly. The Republican majority in late December overturned two highly controversial Obama era decisions called Browning-Ferris and specialty health care after the companies that were that the unions were going after in those cases. And the first case, Browning-Ferris had instituted a respective standard to determine whether a company is a joint employer. When you go to a McDonald's with rare exceptions, you are going toÉ The actual operator the restaurant isn't McDonald's Corporation. It's a small business owned by some guy who licenses the recipes, the branding, the building, the name, all from McDonald's Corporation. And what the SEIU, the Service Employees International Union, one of the largest labor unions in the United States extremely left-wing. [SCOTT WALTER] And one of the largest funders in American politics [MIKE WATSON] One of if not the largest funder in American politics. What they had wanted because they're looking for more membership. What they had thought that they would get and what a restrictive joint employers say or a loose joint employer standard like the Obama administration NLRB had instituted would have given them given them the opportunity to hold big McDonald's corporation liable for employment law violations committed by little McDonald's franchise in Topeka Kansas and the SEIU hoped that they would be able to use that as leverage to get big McDonald's Corporation to force little McDonald's in Topeka Kansas to unionize. That is no longer the case. That is no longer operative the National Labor Relations Board has gone back to its old standard which means that unless big McDonald's Corporation is actively involved in the operation of little McDonald's in Topeka Kansas then big McDonald's corporation is not a jointed player and cannot be held liable for any shenanigans committed by the by the general manager, owner-operator of little McDonald's in Topeka Kansas. [SCOTT WALTER] Now, and this is not just a ruling that matters in fast food I mean obviously when people think of franchise businesses that's one of the first things they think of as fast food but multiple other industries would be affected. [MIKE WATSON] Dry-cleaning car dealerships all sorts of businesses have a franchise arrangement. Also subcontractors were potentially implicated in in joint employment under the Obama administration standard they are no longer implicated this is a major revert it's a major reversion to the long-standing practice that the National Labor Relations Board had used and then in specialty health care the other major case also a reversion to long-standing practice the Obama administration in the specialty healthcare case had determined that a labor union could organize a small part of the workplace. They've taken a very narrow definition of what is called a community of interest in determining who gets to be unionized. Who the union is going to represent the NLRB has to apply a rule called community and interest. So think of a think of a sales floor, and this is actually a real-world example from the NLRB during before they reverse specialty health care sales Florida department store you have cosmetic salespeople you have suit salespeople, you have shoe sales people, you have dress sales people let's say. The old rule was that the community of interest the similar circumstances applied to all the salespeople under specialty health care. Under the Obama administration, the union could organize just the cosmetic salespeople, and that gives the Union and advantage in organizing because they can find the most aggrieved, the most motivated to unionize part of the workplace, and organize it and then from there they can work out into the shoe salespeople and the dress salespeople in the suit salespeople. That is no longer operative the National Labor Relations Board reversed that standard went back to its old rule which says that the entire sales floor in this example the entire sales floor is the community of interest and the electorate for determining whether it's to be unionized. [SCOTT WALTER] Now, I think it's worth taking a slightly further back glance for a moment, and we've been talking about the SEIU in this which as we said is one of the most powerful richest unions out there. It is understandable that the Obama administration would have made regulatory decisions like these two. You've just discussed because the SEIU was such a critical component of the funding for both of Obama's election runs but also the most the SEIU was the most prominent actor in the fight over the single biggest policy issue for the Obama administration which would be Obamacare. They were the driving force behind the aggregation of activist groups known as Health Care for America Now or HCAN. HCAN wouldn't have existed if it weren't for the SEIU and should throw in one particular donor the Atlantic Philanthropies, an offshore foundation with left-wing inclinations that put tens of millions of dollars into the HCAN lobbying effort that finally did succeed in passing Obamacare. Well coming up to more recent items that are very much on a dead center and the kind of thing that Influence Watch covers. There have been changes in government money flows to special interest nonprofits. Why don't you start with some of the developments at the Environmental Protection Agency or EPA? [MIKE WATSON] So during the Obama administration the EPA, the Environmental Protection Agency, had a practice which became known as sue and settled the environmentalist group say the Natural Resources Defense Council which is one of the biggest environmental groups would sue the government saying that it had failed to regulate some environmentalist thing and then EPA ostensibly the defendant having been sued would say oh yeah you're right we didn't regulate that thing so let's have a settlement agreement where we agree to not only regulate that thing, but we're going to pay natural resources defense counsel's attorneys fees. [SCOTT WALTER] Running into the millions of dollars [MIKE WATSON] Running into the six and seven figures easily. And in October the new EPA Administrator former Oklahoma Attorney General Scott Pruitt who sued the EPA and did not settle on numerous occasions ended the practice. No longer will the EPA use this sue and subtle method to run taxpayer money into the legal arms of left-wing environmentalist groups. No longer will it use settlements as a way to go around the normal notice and comment all interested parties at least get their say even if they're going to lose the rulemaking, in the act of regulations. [SCOTT WALTER] Now there's a similar sort of thing going on at the new department of justice tell us about that. [MIKE WATSON] So the department says had a similar but even potentially more shady practice which as of June it no longer has. The Department of Justice had a policy where if it was making a settlement with the corporation Morgan the sort of the mortgage cases that came out after the financial crisis were some of the bigger ones if I'm remembering this correctly that if let's say Bank of America had been sued that if they made a settlement or if they had been charged by the by the Department of Justice and they were going to agree to pay damages that rather than paying the damages to the Treasury or at least a substantial chunk of the damages that would have normally gone to the Treasury, they were instead ordered to pay it to third party groups not involved in the case but involved in the issue area. And lo and behold it turned out that there was a long-standing order in the Obama administration Justice Department that these would go only to favored liberal groups. In fact, by name emails that were unearthed, I think by representative Goodlatte. [SCOTT WALTER] Or by I think it may have been our friends at Judicial Watch but we should double check that. [MIKE WATSON] those that they had specifically by name excluded the conservative public interest law center of the Pacific Legal Foundation. [SCOTT WALTER] And explicitly kept it out using the very word the conservative Pacific Legal Foundation just in case there was. [MIKE WATSON] Just in case there was any confusion about why they were doing it. That practice has been ordered to cease by the Department of Justice. [SCOTT WALTER] And I think there's in one other related area, popping back to the Environmental Protection Agency the EPA. Administrator Pruitt has announced his intention to end the practice of allowing experts or as we would perhaps prefer to say influencers who are on official EPA boards determining grants and other determinations from actually receiving taxpayer grants. Well, let's switch a bit over to that's complicated regulatory issues. Let's switch into the broader more public political fights of the past year the first most obvious one is the recently passed tax reform bill tell us a bit about that. [MIKE WATSON] So, in late December the Republicans in Congress got their tax reform bill through. It either will be or has been now signed by the President. It will by in the estimations or that it will by and large cut taxes for most people with a few exceptions for high-income earners without children and high-tech states seems to be the potential losers if you're but there's a substantial credit for parents there's a reduction in the rates for most other people, and if you don't live in a high-tech state the changes to the state and local tax deduction don't affect you or don't affect you very much. [SCOTT WALTER] And if we can be allowed a brief influence watch joke high-income individuals in high tax states are probably not a prominent demographic for the current President [MIKE WATSON] There has been some suggestion that the that they may have been gone after um in part because of their of their political situation [SCOTT WALTER] Now the charitable deduction, of course, is a very important component of tax law that matters for folks who track the nonprofit sector the way that we do what's happening with that [MIKE WATSON] Well, the charitable deduction is staying as it is, but there's an asterisk there. The asterisk is that fewer people are likely to itemize their deductions itemize their deductions do the Schedule A and to write off all the little things because the standard deduction has been doubled. So the changes to other provisions and also the fact that the state and local tax deduction has been capped may lead more people to file the simple standard deduction no schedule A, No sitting there collecting all your receipts rather than going through all that going through all that trouble to get the actual write down. However there's another asterisk to the asterisk to the asterisk which is that there are also changes to the alternative minimum tax which is a tax provision that if you make a certain amount of money and have a certain have certain circumstances rather than doing the regular 1040 and doing your deductions that you have to pay a special, it's not really an alternative minimum tax it's the mandatory maximum tax but they've raised the thresholds for that so if you were fewer taxpayers are probably going to be affected by it which means that they will then then be in a position theoretically to itemize which means they may have a charitable deduction to write down so it's kind of unclear what the effects will be but the main charitable deduction has stayed and will remain you will still be able to if you itemize your deductions which may change under the new law you will be able to write down to the extent permissible by law your contributions to 501C3 organizations. [SCOTT WALTER] Yes, while I'm speaking of 501C3 organizations there was another part of the tax reform bill that will affect nonprofits to others that particularly make a difference one is involving a surtax and the other involving the so-called Johnson amendment. Why donÕt we start with the surtax? [MIKE WATSON] Sure, so in the final bill, there was a provision that if the highest paid employee at a nonprofit organization is paid over a million dollars here, you're thinking like university presidents, hospital chain presidents, college football coaches that they would have to pay a surtax. The justification being that you know the nonprofit status is supposed to be because you are not enduring benefit to your office you know to your officers in the form of profit, but if you're just earning it in the form of salary is that really a good use of the tax exemption? So, that has been at least at that high level has been has been curtailed some. [SCOTT WALTER] Yes, then the other provision that it affects nonprofits significantly yeah it's the so-called Johnson amendment tell us a bit about where that comes from and what's been done on it. [MIKE WATSON] Sure back in the 1950s I believe Lyndon Johnson then-senator from Texas instituted a provision in tax law that a church cannot endorse a candidate or if it does endorse a candidate then it loses its tax status. The president and some Republicans Congress had wanted to get rid of that it had been in the original drafts of the bill. However, it was ruled ineligible for the Senate's reconciliation rules which allow the tax bill to pass without breaking a Senate filibuster. Since it was passing on a party-line vote Republicans don't have 60 votes they can't just simply Ram it through with whatever they want. [SCOTT WALTER] 60 votes being what's needed if legislation is to be able to jump the filibuster hurdle. [MIKE WATSON] Right, so but they didn't have those votes so they couldn't win those votes so they had to follow all the final reconciliation rules that allow them to go around the filibuster and those rules held that they could not touch the Johnson amendment, so that ultimately came out of the bill [SCOTT WALTER] Yep, and of course tell our viewers and listeners Johnson was not exactly disinterested in this particular tax provision in one of his election campaigns for the Senate a local church had strongly opposed him and he was very much aiming to have no more of that troubling him. I have been on record about the Johnson amendment myself or for some time. I think that the ideal policy area if you want my opinion is that 501c3 public charities which includes churches that they should be free to say what they wish which could include endorsing a political candidate but I think it would be very desirable to curtail not their speech but their actions and currently 501 C 3 public charities can register people to vote and can even bus them to the polls to get out the vote as it's called in the trade. [MIKE WATSON] I'm a decadent libertarian, so I just repeal the corporate income tax [SCOTT WALTER] Ha ha ha. There you go. Another way to thread the needle, but I don't think most Americans even realize that charities, so-called charities, can and do register people to vote and bus them to the polls. It seems to me that it would be reasonable for that to be pushed over into the 501C4 category of organizations that exist to do such. [MIKE WATSON] Sure, especially given how clever political data operations have gotten the notion of nonpartisan voter registration and nonpartisan civic participation activity. Unless you're actually like you can demonstrably yes I helped this liberal demographic 10,000 voters and I helped this conservative demographic 10,000 voters unless there's something like that. With the sophistication of political data now the non-partisanship is even more in name only than it often is in the organization [SCOTT WALTER] Yeah, the idea was it was something like the League of Women Voters putting up a card table in front of the grocery store or in the public park, and you know who knows who's going to come up but that is not at all the way voter registration and get-out-the-vote efforts are conducted. These days with the with the kind of massive micro-targeting and powerful data work. In fact the I should say that one of the things when the Soros leaks came out in the last year or two Capital Research Center, which sponsors InfluenceWatch.org and the Influence Watch Podcast was mentioned in there and it was mentioned in a memo from Andy Stern, then head of the SEIU that we've been talking about, and Deepak Bhargava of Centers for Community Change and it was written to George Soros and the other members of the Soros Foundation board and it was at the start of the 2012 Presidential election cycle that was begging them to invest yet again many millions of dollars in c3 groups to do voter registration and get out the vote because it thought that without that there was no way they would be able to it was very explicit without that we will not be able to reelect President Obama and many members Democratic members of Congress who are needed for all of our policy goals that we're hoping to influence. So this is not a small thing I will say in this case most of what we talked about both sides are relatively similar in what they do. In this case, it actually is pretty rare for conservative foundations to fund and conservative Charities to execute voter registration and get out the vote that is mostly done on conservative side by C4s where it is less a less legally problematic [MIKE WATSON] Yeah, where 501C4 organizations the trade-off is your donors can't write the contributions off their taxes, but 501C4s are allowed to intervene in elections in a manner showing open favor to one candidate or the other which is prohibited to 501C3 [SCOTT WALTER] Yes, now let's turn now to another branch of government that's not elected to the judiciary. In Episode two we spent a good bit of time talking about the influencers on both sides of judicial nominations and the Senate battles for confirmation over those can you remind our readers a bit of what they missed if they didn't see episode two. [MIKE WATSON] Sure we discussed the battle over the appellate judicial confirmations in the past year. The president and the Senate have gotten 12 appellate judges confirmed which is since apparently since the beginning of the appellate courts the most that a president has gotten in his first year in office and we looked at the both the conservative Federalist Society which has assisted the presidents in choosing nominees and in vetting nominees for a strict constructionist originalist view of the law and then also the liberal groups like the Alliance for Justice that have been leading the opposition and digging up opposition research trying to derail their confirmations. [SCOTT WALTER] Yes, and at the district level, they've had some success haven't they? [MIKE WATSON] Well they've had some success but not nearly as much as they have had at the appellate level and in fact a couple of district nominees had to withdraw after it turned out that they had not done as well and their confirmation hearings are done as well in their in their materials provided to the Senators on the Judiciary Committee that then had been hoped. [SCOTT WALTER] Yeah, well let's turn now to what we can be expecting in the year ahead in influence obviously the alphabet soup of agencies of FCC FEC NLRB EEOC and the rest some of those battles are being fought even as we sit here what are some of the things that our listeners can expect? [MIKE WATSON] So with the independent commissions the President's party gets a majority with the exception of the FEC the Federal Election Commission which is evenly divided for the obvious reason that they don't want the election administrator to be partisan to the extent that thatÕs possible but the labor relations board we talked about earlier the Federal Communications Commission, the Equal Employment Opportunities Commission the President's party gets a gets a majority but the minority party the opposition party gets to have members on the board as well. So there are vacancies on the EEOC there are two Republican nominees pending one Democratic nominee is pending now you have you remarked about the I guess you would say from a democratic perspective the stellar qualifications of the Democratic nominee [SCOTT WALTER] Yes, that a highly influential, leading thinker and vigorous advocate on that side and in fact there are conservative activist groups who are not pleased at the trade of this one Democrat for two Republicans which is the extensible deal being made in Congress and there's probably some truth that because the Democrats are willing to do that without any objection then they must view it as a worthwhile trade on their part [MIKE WATSON] And then these Commission's also the commissioners terms don't perfectly align with the chain with the Presidential changeover cycle so, for instance, the chairman of the NLRB, Philip Miscimarra, his term is expiring at the end of the year he is stepping down he is he is stepping aside so that will be a Republican vacancy on the labor board that will need to be also filled the Federal Elections Commission apparently is on the verge of losing quorum there have to be four commissioners there are only two who have their terms that continue all the way through the next year so the President and the Senate if they want the FEC to continue operating, will need to nominate new FEC commissioners and get them through the Senate [SCOTT WALTER] And that's not looking good at the moment well let's turn to legislative battles where influencers will be quite prominent probably one of the most volatile and controversial with lots of groups on both sides will be immigration thanks to the DACA fights and the rest tell us a what we can expect on that? [MIKE WATSON] Sure, so President Obama issued an order known as DACA an acronym for deferred action for childhood arrivals which gave a sort of pseudo-legal status to illegally present persons who met certain criteria about having been brought here as children and having certain establishing characteristics in the United States. There had been a lot of skepticism especially on the right as to whether that was within the president's power to actually order [SCOTT WALTER] He had himself previously excused himself from having done this thing [MIKE WATSON] He being President Obama [SCOTT WALTER] Yes, he had previously said that he could not take this action which was highly desired by many of his own supporters because he lacked the legal authority to do it [MIKE WATSON] Right, so the legal authority was contested. New president, you know a few months ago it was decided that they would no longer defend they would no longer defend the authority and so what they did was they kicked it to Congress President Trump to what I would say is his credit said you know we don't really want to throw these people out they're mostly good you know please come to some sort of agreement to give them permanent informal status and then we won't have this sort of limbo situation that we've had for the past couple of years the Democrats had at one point vowed to shut down the government if a clean reauthorization of the program was not included in the spending bill if that seems not to be what's going to actually happen they seem to have stepped back from that demand and a bipartisan negotiating group has convened is going to the White House asked the president you know what sort of border security concessions do you want. You know do you need do you need part of the wall built, the border fence that the president proposed constructing during his campaign but this is gonna be this is gonna be nastily fought over there's there are numerous groups some which are interested in it for you know financial and corporate reasons the business community wants this settled in a fairly liberal manner. The labor unions see a bunch of possible future union members once everything is normalized. Then you have the the the ethnic interest groups on both sides the anti-immigration groups the very Pro-immigration groups who are going to be fighting with each other in a fairly nasty manner on this on this issue [SCOTT WALTER] It sounds to me like it is worthy of a whole influence watch episode and we probably will be doing that in the future. [MIKE WATSON] I would project that there will be at least one on the ongoing coming debate over immigration [SCOTT WALTER] And I will tease that with just we will see if anybody can guess the one single foundation that largely created a lot of the Latino rights groups out of whole cloth many decades ago. That's a fascinating story of influence and influencers and funding. Well in addition to immigration what are other legislative issues that are likely to be hard fought with influencers on both sides? [MIKE WATSON] So, the White House has expressed a desire to pass an infrastructure an infrastructure spending bill that will be contested as much on regional grounds as on ideological grounds obviously to be a big spending bill so the free market groups would be inclined perhaps to oppose it but you know New York and New Jersey are going to want more for rail. Texas and Utah are going to want more for roads, and then some in Congress have suggested that they maybe want to go after the third rail of American politics and actually try to reform entitlements. You know again you kind of wish them good luck but, [SCOTT WALTER] Yes the influence groups will certainly be out for that [MIKE WATSON] We will discover the death star of American politics might be the American Association of Retired Persons and if we go into welfare and entitlement reform I strongly suspect that they will show themselves to be a Death Star which of course you know we know what happens to the death star at the end of the movie but you know [SCOTT WALTER] But it hasn't happened to AARP yet. Sure, well of course 2018 is also going to have a midterm election what is the outlook for that with our influence perspective? [MIKE WATSON] So right now right now the polling looks pretty good for the Democrats in the midterm elections this is to an extent normal the president's party usually does badly in midterms. In fact in every midterm election since 1994 when Newt Gingrich and the Republicans took control of Congress for the first time since the 50s. In all but one case which was 2002 in all the midterms since 1994 except 2002, the president's party has either lost or failed to regain control of the US House of Representatives so the Democrats making gains would be expected. The way things have gone, there's been a lot of a lot of angst about how the president has conducted himself in office that has not helped the Republicans some of the side matters the election in Alabama has led to a considerable amount of disgust with the Republicans. This has created an opening for the liberal influencers to rally you know register voters rally the troops you know recruit candidates in on a level that has not you know that has not previously been seen at least in recent years during when Obama was president. When the Republicans had more enthusiasm during the off-year elections [SCOTT WALTER] Indeed, so we shall see if the typical pattern holds or not. Well that's our show for this week and for this year if you're listening to this on iTunes or Stitcher know that we broadcast a live video version of this podcast at 10:00 a.m. on Thursdays on Facebook Live and YouTube and you can find our pages by searching for Capital Research Center. If you're watching the video version, we encourage you to subscribe to the audio on your preferred podcast platform. We'll see you next week, next year.