The latest ads from the American Crossroads “super PAC” attack Democrats running for Senate seats in Colorado, Illinois, Ohio, Nevada, Missouri and New Hampshire.
The ads contain a number of misleading and false claims.
- An Ohio ad falsely claims that the stimulus "failed to create jobs." It blames candidate Lee Fisher for the state’s job losses, which were declining long before he became lieutenant governor and were worsened by the recession.
- In Colorado, an ad says Sen. Michael Bennet was "the deciding vote" on health care, though he was one of 60 senators who supported it. The ad also contains false and misleading characterizations of the new law.
- In Illinois, an ad misuses a newspaper headline to imply that Alexi Giannoulias is at fault for the loss of millions in a college investment fund.
- A Nevada ad exploits a gaffe by Majority Leader Harry Reid, who said last March that “only 36,000 people lost their jobs today, which is really good." As he later explained, Reid meant to say that the previous month’s job loss was much less than expected.
- New Hampshire’s Paul Hodes is accused of voting for projects that weren’t even mentioned in the stimulus bill he supported.
- In Missouri, an ad attacking Robin Carnahan repeats a litany of misleading claims about the stimulus and health care laws.
American Crossroads is funding the ads, in part, with donations from corporations. A controversial Supreme Court decision earlier this year lifted restraints on the use of corporate funds for political activity.
American Crossroads registered in July with the Federal Election Commission as what has become known as a "super PAC" — a new type of political committee that can accept contributions in unlimited amounts from individuals, unions and corporations. The FEC began allowing these new groups after the U.S. Supreme Court’s January decision in Citizens United v. Federal Election Commission loosened restrictions on corporate and union spending in elections. Among the contributions to the group so far: $1 million from oilman Trevor Rees-Jones; $1 million from Robert Rowling, whose holding company includes stakes in oil companies, Omni Hotels and Gold’s Gym; and $400,000 from American Financial Group, a corporation run by longtime Republican donor Carl Lindner Jr.
Firing on Fisher
The group’s ad attacking Democrat Lee Fisher, Ohio’s lieutenant governor, tries to drape the albatross of declining employment in the state around his neck. It’s not a good fit.
American Crossroads Ad: "Behind"
Narrator: Where will Lee Fisher take our economy? Just look behind you. Fisher served as Governor Strickland’s top official on job creation, yet Ohio has lost almost 400,000 jobs. And Fisher wanted a $1.1 billion tax increase, which could have driven countless jobs out of state. Fisher even supported Obama’s stimulus that failed to create jobs. Ohio can’t afford to keep looking back. American Crossroads is responsible for the content of this advertisement.
The ad misplaces blame for Ohio’s job losses. It’s true enough — as the ad states — that Fisher was the state’s "top official on job creation" and that Ohio "lost almost 400,000 jobs." Fisher has been lieutenant governor and the state’s director of development since 2007, and thus in charge of bringing jobs to the state. And as of August, Ohio had a little more than 5 million nonfarm jobs, according to the Bureau of Labor Statistics; that’s about 400,000 fewer jobs than existed in Ohio in January 2007.
However, Ohio was shedding jobs before Fisher was elected: The state lost 156,000 jobs between January 2000 and January 2007. More important, for nearly Fisher’s entire tenure, the nation has been in a steep economic downturn. Between January 2007 and August 2010, employment grew in only six states and the District of Columbia, and none of the states are in the Rust Belt. The ad doesn’t point to any action by Fisher, or lack thereof, that made the jobs picture worse than it would have been otherwise. Fisher’s website, on the other hand, lists a number of steps he has taken to bring jobs to Ohio or keep them there, with citations to news reports backing up his claims.
The "$1.1 billion tax increase" that the ad says Fisher favored? Context required: The reference is to a 12-year-old proposal to increase the state sales tax by a penny. The 1998 fight for it was led by a Republican, then-Gov. George Voinovich. Half the revenue would have been used to fix up schools, and the other half to give Ohio residents a property tax rebate. Voters rejected the measure.
And the stimulus that supposedly "failed to create jobs"? That’s simply false. The oft-repeated claim is a favorite on the Republican playlist, and we’ve debunked it several times before. As the nonpartisan Congressional Budget Office said in August, the American Recovery and Reinvestment Act "[l]owered the unemployment rate by between 0.7 percentage points and 1.8 percentage points" and "[i]ncreased the number of people employed by between 1.4 million and 3.3 million." ARRA funds are being used in a number of projects in Ohio. The stimulus may have failed to reduce unemployment to desired levels, but it’s wrong to claim that it failed to create any jobs.
American Crossroads accuses Colorado Sen. Michael Bennet of being "the" deciding vote on the health care law, a claim that could as easily be made against any other Senate Democrat. The group’s ad also mischaracterizes the new health care law.
American Crossroads Ad: "Deciding Vote"
Narrator: Michael Bennet was the deciding vote on Obamacare.
Bennet: We just really need to do health care reform.
Narrator: Bennet promised that his reform would save costs and reduce the deficit. Instead we got tax increases, billions in Medicare cuts, and record deficits.
On screen: $525 billion tax increases, $500 billion Medicare cuts, record deficits.
Narrator: Today, health insurers are raising rates. Medical spending is skyrocketing. And even Obama said recently he "knew" it was "going to increase our costs." Michael Bennet: His mistakes, costing us money. American Crossroads is responsible for the content of this ad.
The ad claims Bennet "was the deciding vote on Obamacare." But the same could be said for every Democrat in the Senate. All 60 of them had to stick together last December to overcome the Republicans’ filibuster of the health care overhaul bill. That they did. Bennet’s vote was never in doubt. In fact, a month earlier he had even told a reporter "yes," when asked if he’d vote for the bill if it meant losing his seat. Bennet supported the final bill in March as well, although a few Democrats shied away. Supporters didn’t need 60 votes that time, just a simple majority.
Next, we’re given a misleading juxtaposition. Bennet, the narrator tells us, promised the bill would "save costs and reduce the deficit," but "instead, we got tax increases, billions in Medicare cuts and record deficits." But the "record deficits" don’t result from the health care law. Quite the opposite; it is projected to decrease deficits in future years. The "record" deficit was the $1.4 trillion recorded for fiscal 2009, which ended a year ago, and the deficit for fiscal year 2010 (which ended yesterday, Sept. 30) was recently projected to be somewhat less. The nonpartisan Congressional Budget Office predicts the health law will reduce the deficit by $152 billion over the 11 years spanning 2010-2020, assuming Congress doesn’t cancel or loosen the restraints the new law places on future growth of Medicare reimbursements to hospitals and other providers.
What about the "tax increases" and "Medicare cuts" the narrator complains of? There are some new or higher taxes, but the ones that bring in by far the most revenue ($210.2 billion, according to the Joint Tax Committee) would fall only on couples making more than $250,000 ($200,000 for singles). Their investment income would be subject to a 3.8 percent Medicare tax.
But on Medicare cuts — at the risk of sounding like one of those talking dolls that recites just a few phrases ad nauseum – those aren’t cuts in benefits (except for those currently getting extra benefits under Medicare Advantage), or even cuts in the current level of Medicare spending. The $555 billion in Medicare savings comes from reductions in the growth of future spending on the program. Seniors’ basic benefits packages won’t be cut — they will grow with the addition of free preventive care and the elimination of the "doughnut hole" gap in prescription drug coverage.
Drive-by Hit on Giannoulias
American Crossroads’ spot attacking Alexi Giannoulias, the Democratic candidate for Illlinois’ open Senate seat, reprises some familiar themes: his role with the family’s Broadway Bank, and his oversight of the state’s college investment plan. We’ve written about both of these issues. This time his attackers misuse language from a newspaper article and add a misleading charge about an SUV purchase.
American Crossroads Ad: "Driver Error"
Narrator: Alexi Giannoulias is quite a driver. He helped drive his family’s Broadway Bank into a ditch.
On screen: "Giannoulias Bank Seized"
Narrator: Now, as Treasurer and head of the Bright Start College Savings Fund, Alexi fell asleep at the wheel.
On screen: "…bad investment choices…leading to outsized losses."
Narrator: Under Giannoulias, Illinois families lost $150 million they had saved to pay for college…
On screen: "Parents suffered a total loss of around $150 million."
Narrator: …but spent $26,000 in Bright Start funds to buy an SUV.
On screen: "Bright Start funds used for new SUV."
Narrator: It’s clear: Friends don’t let friends vote Alexi. American Crossroads is responsible for the content of this advertising.
The ad charges that Giannoulias, who is state treasurer, "fell asleep at the wheel" while overseeing the Illinois Bright Start 529 college investment plan. On screen there’s a mock highway sign with the quote "bad investment choices…leading to outsized losses" and a citation to the Chicago Sun-Times. It’s a reference to losses in one of the funds the plan owns, the Oppenheimer Core Bond fund, in 2008.
The words in the ad indeed appeared in a Chicago Sun-Times story last year. But they were used in reference to the Core Bond fund’s managers, not to Giannoulias. Those managers, as the Morningstar investment research firm put it, "gained exposure to the battered commercial mortgage-backed securities market through derivatives that had a leveraging effect on the fund, amplifying losses." Remember credit default swaps?
And a Giannoulias spokesman said that Illinois was the first state to notice problems with the fund and investigate. Of the approximately $150 million of investors’ money that was lost in the Core fund (one of 21 funds owned by Bright Start, which is a $2 billion program), Giannoulias reached a settlement with Oppenheimer to recover $77 million.
The ad also accuses Giannoulias of using "$26,000 in Bright Start funds to buy an SUV." That’s true, but misleading. Giannoulias drove the car but didn’t own it — he used it as his Illinois state vehicle — and no taxpayer funds were used.
Giannoulias’ office bought the new Ford Escape Hybrid in October 2007. The Chicago Tribune reported the purchase last year under the headline: "Illinois’ Bright Start college fund loses $85 million, buys hybrid for treasurer." Giannoulias said the new SUV replaced a 10-year-old vehicle and was used not only by him, but also by Bright Start employees as "a more efficient, quicker, less expensive way" to sign up families for the savings plan. "What I think is important here to understand is that this is a vehicle used by Bright Start marketers to travel the state and talk about the program," he told the Tribune. Giannoulias denied ever using the vehicle for personal purposes, and no evidence has surfaced to show that he did. But his office kept no vehicle logs to document who actually used the vehicle, something Giannoulias said was "probably an oversight." His spokesman said money to buy the vehicle didn’t come from taxpayers, but rather from a fee paid to the treasurer’s office by the investment firm that manages Bright Start.
Did Giannoulias "help drive" his family’s Broadway Bank to its demise? Broadway was seized by regulators in April. Giannoulias was a senior loan officer and a vice president at the bank from 2002 until spring 2006, according to a campaign spokesman. During that time, according to one publication’s analysis of Broadway’s problems, the bank made a great number of construction and development loans, tying up a far larger-than-average share of its portfolio in such loans for a bank of its size.
Giannoulias was fresh out of law school when he joined the family business, and says his role in the bank’s failure was limited. Both he and the bank have said that only 9 percent of the nonperforming loans held by Broadway at the beginning of 2010 were made during his time at the bank. Furthermore, not all of those were approved by him. He has said that he takes his "share of the responsibility for mistakes that were made … in investing too heavily in commercial real estate and not diversifying into other sectors." He denied that the loans were "reckless or risky," though.
It’s also true, as Giannoulias points out on his website, that more than 200 community banks have failed since the beginning of 2009, and the shutterings continue, because of the economy’s downturn and particularly the collapse of the real estate market. Unfortunately, Broadway has lots of company.
Rebuking Reid’s Record
The group’s ad attacking Senate Majority Leader Harry Reid quotes his own awkwardly stated words while portraying him as Nevada’s unemployment bogeyman.
American Crossroads Ad: "Not My Job"
Narrator: For 27 years we’ve paid Harry Reid to do his job.
Reid in TV clip: I think it is my job to create jobs, and I’ve done my best.
Narrator: But you’ve failed. Nevada has the highest unemployment in the nation.
Reid in TV clip: You know that I have nothing to do with these unemployment figures.
Narrator: Really? What have you been doing as Senate Majority Leader?
Reid on Senate floor: Only 36,000 people lost their jobs today, which is really good.
Narrator: No it’s not. Harry Reid. Extremely out of touch with Nevada. American Crossroads is responsible for the content of this advertising.
In this ad, the group tags Reid with responsibility for Nevada’s unemployment, and indeed the nation’s. And it features a Reid quote that is an opposition researcher’s dream: "Only 36,000 people lost their jobs today, which is really good." That’s what Reid said on the Senate floor on March 5, the day February’s unemployment numbers were released by the Labor Department.
Reid, who has a reputation for verbal stumbles, didn’t really mean "today." He was referring to a report covering the entire previous month. And the point he was struggling to make was that the 36,000 job loss was less than expected, and a big improvement over previous months. The number was indeed heralded with optimism in the press. The lead of the New York Times‘ story on the subject read, "The American economy lost fewer jobs than expected last month, bolstering hopes that the worst may finally be over in the wrenching event known as the Great Recession." One economist quoted in the piece sounded much like Reid: He called the 36,000 figure "strikingly good."
Naturally, the ad doesn’t mention that on the same day, Reid took the floor again to clarify his remarks, which he said were being "irresponsibly mischaracterized."
Reid: Take a step back and put the number in context. Economists, as reported by the Wall Street Journal, Bloomberg News Wire and other publications, believed that 75-80,000 Americans were going to lose their jobs last month. That’s more than double what the actual number turned out to be.
Reid even tweeted a clarification, saying the 36,000 "is a step in the right direction but I don’t pretend for a minute that it’s enough. Much work still to do."
Hit – and Miss – on Hodes
American Crossroads attacks Democratic Rep. Paul Hodes of New Hampshire for claiming to be a fiscal conservative while voting for the stimulus bill. But it’s off target when it names specific projects that weren’t in the bill. Hodes is running against Republican Kelly Ayotte for the seat of retiring GOP Sen. Judd Gregg .
American Crossroads Ad: "Fiscal"
Narrator: In New Hampshire, Congressman Hodes claims…
Hodes: "You deserve a Senator who’s a real fiscal conservative. And who gets rid of the pork."
Narrator: But Hodes voted for the pork-filled stimulus bill. $1.9 million to study ants in Africa. $39 million for office upgrades for politicians. Billions wasted and unemployment still higher. No wonder the Union Leader says, "the guy just can’t tell the truth." American Crossroads is responsible for the content of this advertising.
The ad features video of Hodes saying the state "deserves a senator who’s a real fiscal conservative and who gets rid of the pork," but the narrator interjects that Hodes voted for the "pork-filled stimulus bill. $1.9 million to study ants in Africa, $39 million for office upgrades for politicians." The money was "wasted," we’re told, and unemployment is up.
Here’s the most important thing to know in evaluating the ad’s claims, though: Hodes didn’t vote for the projects mentioned. Nobody did. They weren’t in the bill.
Money to fund the "office upgrades for politicians" is actually going to help finance a renovation of the 140-year-old Kansas Statehouse, which has been underway for more than 10 years. That money wasn’t earmarked in the stimulus bill; it’s being borrowed by Kansas officials at a reduced interest rate through a program set up by the bill, the Build America Bond program. The bonds program created by ARRA allows state and local governments to lower the borrowing costs of certain projects. The IRS announced the new program in April 2009, saying, "This new program is intended to assist state and local governments in financing capital projects at lower borrowing costs and to stimulate the economy and create jobs."
The Kansas State Legislature plans to use $39 million in Build America Bonds to help finance the estimated $285 million renovation. The Associated Press reported that state legislators approved the controversial project back in 2000 "because the Statehouse’s wiring, plumbing, heating and air conditioning were decades out of date," and also because state lawmakers wanted better meeting rooms and more office space. Kansas is looking to save $840,000 in interest costs by using the bonds. The years-long remodeling could provide an additional financial boost to the state. The Topeka Capital-Journal reported that the state’s capital city could "see a $3 million to $4.5 million infusion" if at least 30,000 more people visited the Statehouse each year as a result of the upgrades.
As for the African ants, the stimulus legislation gave a chunk of money to the National Science Foundation — ARRA didn’t call for any ant studies itself. The National Science Foundation, in turn, awarded more than $1.9 million to the California Academy of Sciences in San Francisco to research different species of ants in the islands of the Southwest Indian Ocean and east Africa. The project, at least in theory, could advance our understanding of biodiversity. A bit more detail on the project is available at the Recovery.gov website.
In Missouri, an American Crossroads ad repeats a litany of misleading claims we’ve been hearing from Republicans this election season. The ad targets Democratic Senate candidate Robin Carnahan.
American Crossroads Ad: "Follows"
Announcer: They have failed Missouri.
On screen: Nancy Pelosi, Harry Reid, Barack Obama.
Announcer: And Robin Carnahan is one of them. Carnahan stands with Obama’s health care law that cuts medicare and could raise insurance premiums. And Carnahan supports the failed stimulus that put us in debt while we lost jobs. Now they need Carnahan.
Obama: " I need another vote!"
Announcer: To give us more of the same. Say no to Obama, Pelosi, Reid. Say no to Robin Carnahan. American Crossroads is responsible for the content of this advertising.
We’ve addressed these allegations elsewhere in this article, or others we have posted recently. Yes, Carnahan, Missouri’s secretary of state, has said she supports the health care law that "cuts Medicare" – but the cuts are in the growth of future spending. The law "could raise insurance premiums" – for a relatively small share of people. Premiums for the vast majority, as we’ve explained before, will be no more than if the law hadn’t passed, and in many cases will be less, according to CBO. The "failed" stimulus? CBO says that it increased the number of people employed by between 1.4 million and 3.3 million, and that the unemployment rate would be worse if it hadn’t been enacted.
– by Viveca Novak, with D’Angelo Gore
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