M E M O R A N D U M
DT: November 8, 2006
TO: Statehouse press corps
FR: Catherine Turcer, Legislative Director
Ohio Citizen Action
(614) 487-7880
RE: Who does Governor-elect Ted Strickland owe, and what do they want?
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1. Does Governor-elect Ted Strickland have a mandate?
When a candidate makes clear to voters what it is he or she wants to accomplish, and the voters use the ballot to give them the authority to do it, this is called a mandate.
A big victory margin does not by itself make for a mandate. In addition, the candidate has to have made prominent their program of action on a specific issue, and the voters’ choice has to have been clearly related to that program.
In Ohio this year, after hundreds of speeches and millions of TV dollars, if voters were asked to name one action Strickland plans to take on any issue, they would be hard-pressed to answer.
Voters chose Strickland because they were weary of an incumbent party that had slid into corruption after controlling state government for sixteen years. The only thing voters can be sure of is that Strickland will not switch parties.
Strickland doesn’t have a mandate.
2. If not the voters, who does hold his IOUs?
A governor-elect without a mandate still has outstanding IOUs.
Predictably, the most money has comes to Strickland from the Ohio Democratic Party, which gave him $1,341,918 in 2006. Also prominent are liberal unions, such as the United Food and Commercial Workers and the Service Employees International Union, both of which gave enough to be included in Strickland’s top dozen 2005-06 non-party organizational contributors.
What the Democratic Party and Democratic unions want from Strickland is straightforward: state jobs, state contracts, and an Ohio victory for the 2008 Democratic presidential candidate.[1]
3. Strickland’s core support: coal companies and
coal-fired electric utilities
Looking more closely at the top dozen non-party contributors, however, we find that Strickland’s fundraising strategy was built around a core in one industry.
On the list of the top dozen 2005-06 non-party
organizational contributors, Strickland’s core support comes from utility
companies and associated unions and law firms: FirstEnergy, American Electric
Power, International Brotherhood of Electrical Workers, Laborers International
Union, Sheet Metal Workers Union, and Roetzel
& Andress.[2]
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Combined, these six account for 61% of the money from the
top dozen organizational contributors.
Further, in valuing their IOUs, politicians give extra weight to “early money.” The following are the top pre-primary organizational contributors to the Strickland campaign. Organizations listed in italics are either coal interests or associated with coal and electric utility interests.
|
Early Money: Top pre-primary
organizational contributors to Strickland |
|
|
Laborers International Union
of North America |
$164,135 |
|
Independence Excavating |
$33,000 |
|
Ohio Civil Service Employees Assn/AFSCME |
$31,110 |
|
Visconsi Companies |
$30,000 |
|
Intl Brotherhood of Electrical Workers |
$29,825 |
|
Multi-Care Management |
$28,500 |
|
Woda Group LLC |
$27,500 |
|
GPD Associates |
$26,350 |
|
Carington Health Systems |
$25,000 |
|
Boich Companies |
$25,000 |
|
Roetzel and Andress |
$23,925 |
|
Porter Wright Morris & Arthur[3] |
$23,450 |
Further down the early-money list comes the Sheet Metal Workers union ($19,050), American Electric Power ($17,500), Cinergy ($16,000), and FirstEnergy ($15,000).
This contributor profile follows the pattern of Strickland’s Congressional fundraising. In each of the last five Congressional races – 1996, 1998, 2000, 2002, and 2004 – Strickland’s top contributors list was built around the same core of coal interests. In each race, approximately a quarter of the total contributions from the top twenty contributors came from these sources.[4]
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When coal and electric utility interests make political contributions, they are selective. For example, in 1998, not a single coal company, electric utility, or associated union contributed enough to gubernatorial candidate Bob Taft to make it into his top 100 organizational contributors list.
These interests must be backing Strickland for a reason.
3. What do coal interests want?
Ohio coal companies and coal-fired electric utilities are looking for two things from the Strickland Administration:
“According to state Budget Office data, the General Assembly has so far authorized Ohio to issue $165 million in coal-development bonds, which are supposed to finance the creation, somehow, of nonpolluting coal. The bonds are general obligations of the state, and “GO” bonds are a first lien on the taxes that Ohio collects. Then there’s a fabled tax credit for Ohio electric companies that burn Ohio coal. The credit, devised in the 1990s, has been pruned somewhat and is set to expire late in 2007.” [5]
The biggest subsidy of all is the “rate stabilization charge” of $15-20 a month on a typical FirstEnergy residential customer's bill. This multi-billion dollar subsidy, imposed by the Public Utilities Commission of Ohio, is pure profit for FirstEnergy, unrelated to any current costs the utility is incurring.
Ohio coal companies and coal-fired electric utilities also want the Strickland Administration to continue the State’s weak pollution regulation, despite the well-documented damage:
"Power
plant smokestacks are public health enemy number one for their contribution to
deadly particulate pollution across the eastern United States," said Dr.
John Balbus, a physician and head of the Environmental Defense health program.
"Particulate pollution is inhaled deep into the lungs and contributes to
tens of thousands of premature deaths annually, heart attacks, strokes and
asthma attacks." . . .. Power plants are the nation's leading contributor
to harmful particulate pollution, discharging more than 60% of all soot-forming
sulfur dioxide released from all pollution sources nationwide.[6]
Margaret
Newkirk and Bob Downing of the Akron Beacon Journal sum it up this way:
The role of Ohio’s power plants in
its pollution problems is almost impossible to overestimate.
Name the high-profile air-pollution issues of the past 30 years and coal smoke lies behind all of them. Acid
rain. Smog. Summertime ozone air alerts. Mercury warnings for fish.
Dirty power plants are even hiding
in the shadows of the E-Check controversy. The ozone
problems that saddled Northeast Ohio with the hated car-emissions testing could
have been better addressed by forcing
power plant cleanups, scientists say. Nitrogen oxide,
produced by coal smoke, is one of the two components of ozone. It’s one of four
key pollutants found in coal plant
emissions. The others are sulfur dioxide, mercury, and carbon dioxide.
The four pollutants are linked to acid rain, smog, mercury contamination, and global warming.[7]
Unfortunately, by the evidence of Strickland’s record and platform, he is ready to give the coal interests everything they want.
4. Strickland’s Congressional record
His record in Congress on power plant pollution earned him the “Clean Air Villain of the Month” award for February 2002 by the non-profit Clean Air Trust.
Strickland earned this dubious distinction by becoming the "go-to-guy in the House of Representatives for the dirty-air lobby," according to Frank O'Donnell, executive director of the Trust.
O'Donnell explained that Strickland, who hails from Southeastern Ohio, has become a reliable conduit for the anti-clean air lobbying by the National Association of Manufacturers (NAM). NAM has ghostwritten a letter, under Strickland's signature, urging President Bush to press the Environmental Protection Agency to "reform" the New Source Review program, which is designed to make sure that refineries, electric power plants, and factories don't increase emissions -- and cause added public health damage -- when they undergo major modifications. NAM wants to weaken the program so its member companies can avoid pollution cleanup.
In a February 1 [2002] memo obtained by the Clean Air Trust, NAM urged its member companies to "identify those House members" who might co-sign the letter. "Please have your contacts in those House offices contact" Strickland's legislative director, notes the NAM memo. "A quick turnaround is needed, so please try to identify signatories by COB [close of business] Thursday, February 7." NAM notes there were several previous "Strickland letters" on this topic, including an August 2001 letter posted on NAM's Web site.
Maybe it's not surprising that Strickland would allow himself to be used as a lobbying tool by those opposed to clean air. According to Federal Electric Commission records, his recent campaign contributors include American Electric Power, Cinergy, First Energy, Duke Energy, and Dominion Resources -- all sued by the Justice Department for alleged violations of New Source Review.[8]
In 2005, Boich Coal Companies executive vice president Matt Evans told the Toledo Blade why individuals attached to the Boich Company were contributing to Strickland’s gubernatorial campaign:
“I think overall as a member of Congress, he’s supportive of the business we’re in, which is tough to find in the Democratic Party these days. In terms of clear skies, we get zero support in terms of reasonable solutions. I think Congressman Strickland over the years has been a good listener on this stuff. Trying to keep energy prices low and stable is important for jobs. If you have a governor who wants to go the environmentalist route, that’s fine and dandy, but you’re not going to have a whole lot left here.”[9]
5. The 2006 Strickland platform
The 2006 Strickland platform continues the theme, proposing to add more coal-industry subsidies to those already in place. It contains, for example, the jarring announcement that he intends to double Ohio coal production.
“By creating incentives for coal and clean coal production, we should double [Ohio] coal production from 23 million short tons to 46 million short tons a year.”[10]
There is no mention of the cost of this initiative, either in public subsidy or in environmental damage.
There are reasons why Ohio mines are running at 50% capacity. It is due to the coal market, which is subject to factors including “(1) energy prices, (2) competition from out-of-state coal suppliers, (3) relative costs (and risks) of power generation from the many fuel and technological options that are available, (4) coal transportation constraints, (5) coal mining limitations, (6) the availability of skilled personnel to mine, transport and utilize coal, and most importantly, (7) federal and state regulatory requirements, especially those related to deregulation of the electric power industry and environmental protection.” [11]
How big would Strickland’s “incentives” have to be to distort the market enough to double Ohio coal production? Who would pay for them? Does Strickland understand the environmental damage that would result?[12]
More subsidies:
“A Strickland administration will work to ensure that Ohio’s regulatory climate provides incentives for investment in a wide range of clean coal technologies. It will also encourage the development and implementation of advanced coal gasification technologies for a variety of purposes including electricity, liquid fuels and fertilizers.”[13]
There is no reason to believe that all these subsidies will work when past ones have backfired.
Newkirk and Downing illustrate the dynamic in discussing the rationale for the 1991 coal tax break:
Enticed by the tax breaks, utilities would clean up and modernize the aging fleet of power plants that had made Ohio’s air emissions among the worst in the nation and earned the state the lasting ire of its downwind neighbors and the federal government.
The power companies did nothing of the kind.
Instead, they launched expensive programs to keep their old plants up and running, while claiming to have implicit permission to break federal clean-air laws. They also lavished money on lobbyists and politicians. Those politicians just as lavishly helped them. Citing the need to save coal jobs, Ohio politicians lobbied Washington to lay off the state’s power plants. They sank millions of tax dollars into developing technology that would allow utilities to burn Ohio’s high-sulfur coal cleanly – technologies the utilities never brought into commercial use.[14]
What about state pollution regulations? Strickland’s platform is a terse as it can be:
“Ted will enforce environmental rules fully to protect our air, water, and land for all Ohioans.” [15]
This sounds good, until you realize that on January 8, 2007, Ted Strickland is going to be required to take an oath of office before being inaugurated governor. That oath will include a promise to enforce the Ohio Constitution and the laws of the state. All he had done in his platform is to promise that he will do the bare minimum.
His orientation to pollution regulation is also reflected in his support for the Clean Ohio Fund:
"Ted will support reauthorization and additional funding of the Clean Ohio Fund to clean up brownfields, preserve farmland, protect green spaces, and improve outdoor trails.”[16]
This fund is a Bob Taft initiative. It cleans up old factory sites (brownfields) and sends taxpayers the bill, rather than requiring polluters to pay for their mess. “Polluter pays” is the foundation of responsible regulation, and by reversing it, Taft created another taxpayer subsidy for polluters – one that Strickland wants to expand.
6. Jim Rhodes redux?
Of course, every candidate for Ohio governor has at least paid lip-service to coal. Ted Strickland, however, has a commitment to coal interests that is unparalleled since Jim Rhodes, who began running for governor in 1950.[17]
Rhodes was born in Coalton, in Jackson County, in 1909, when there were 50,000 working coal miners in Ohio. His father was a coal miner who died in a mining accident when Jim was seven years old. As governor (1963-1971, 1975-1983), Rhodes ferociously defended Ohio coal companies and coal-fired electric utilities, and made himself the primary obstacle to solving the acid rain problem in North America.
Rhodes always justified his indulgence to the coal companies by saying he was saving coal miners jobs. Meanwhile, these companies were investing in an all-out mechanization of their operations that has, by now, slashed total Ohio coal industry employment to 2,510.[18]
At least when Jim Rhodes catered to coal interests, there were jobs he could falsely claim to be saving. Now there are almost none, so Strickland is left with the claim that he is going to resurrect long-gone coal jobs by following Rhodes example.
[1] Ohio Citizen Action, “Follow the Money: Ted Strickland,” data as of October 4, 2006. http://www.ohiocitizen.org/moneypolitics/2006/october.html. Similarly, it is to be expected that the same top-contributor list would include companies like Cleveland-based Independence Excavating. This firm has already had contracts with the Ohio Department of Transportation, Ohio Department of Natural Resources, and the Ohio Turnpike Commission, and wants an open door to future contracts.
[2] Roetzel & Andress, based in Akron, frequently represents FirstEnergy in legal matters.
[3] Porter Wright Morris and Arthur represents American Electric Power in many legal matters. For example, the firm serves as outside counsel to AEP in Ohio Citizen Action, et al, v. American Electric Power Service Corporation, et al (2:99-CV-1250) for Clean Air Act violations. (http://www.catf.us/advocacy/legal/nsr/USvAEP_137_FSupp2d_1060.pdf).
[4] Center for Responsive Politics, www.crp.org
[5] Thomas Suddes, “Candidates tout coal-fired future,” Cleveland Plain Dealer, July 19, 2006.
[7] Margaret Newkirk, Bob Downing, “Power to pollute; clearing the air,” Akron Beacon Journal, January 7, 2001.
[8] Clean Air Trust, “Trust
names Rep. Ted Strickland the clean-air ‘Villain of the Month’,” February 5,
2002,
http://www.cleanairtrust.org/villain.0202.html
[9] Joshua Boak, “Ohio Democrat sets sights on party's nod for governor; Strickland hopes humble beginnings add to ballot appeal,” Toledo Blade, October 16, 2005.
[11] Taratec Corporation and Energy Resources International, Inc, “Third Party Review of the Ohio Coal Development Office,” July 29, 2005, p. iii.
[12] See also Thomas Suddes, “Candidates tout coal-fired future,” Cleveland Plain Dealer, July 19, 2006. “That Ohio needs and consumes coal isn’t in question. What is in question are the kind of gubernatorial campaigns that pretend they’re raising “issues” – in a state that’s at a crossroads – when they’re really just trying to raise donations.”
[13] Ted Strickland for Governor Campaign, “Powering Ohio's Economy: The Strickland Strategy for Creating Good Jobs through Clean Energy in Ohio”http://www.tedstrickland.com/content/258/powering-ohios-economy-the-strickland-strategy-for-creating-good-jobs-through-clean-energy-in-ohio
[14] Newkirk and Downing, op. cit., emphasis added.
[15] Ted Strickland for Governor Campaign, “Ted’s Commitment to the Environment,” August 25, 2006. http://strickland.3cdn.net/24a0dbc4fd1bb6fc3d_x7m6bx8o3.pdf
[16]
Ted Strickland for
Governor Campaign, “Ted’s Commitment to the Environment,” op. cit
[17] U.S. Senator George Voinovich has been consistently loyal to FirstEnergy, to be sure, but he is from Cleveland, not Scioto county, and he is not as focused on coal interests as is Strickland.
[18] National Mining Association, 2004 data. http://www.nma.org/pdf/c_employment_state_region_method.pdf. This figure includes coal miners and all other employees now engaged in production, processing, development, maintenance, repair, shop or yard work at mining operations, including office workers. Compare the employment of the whole Ohio coal industry to the number of Ohio employees of single companies: Wal-Mart (37,000 employees), Kroger (29,000 employees), and the Cleveland Clinic (23,700 employees). Ohio Department of Development, “Major Ohio Employers,” March 2003.