Koch network pressures Sens. Manchin, Sinema to oppose $739 billion tax-and-spending bill | Big Indy News
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Koch network pressures Sens. Manchin, Sinema to oppose $739 billion tax-and-spending bill

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The political network backed by billionaire Charles Koch launched an ad blitz targeting Sens. Joe Manchin and Kyrsten Sinema to get the moderate Democrats to block a massive spending-and-tax package that’s advancing in the Senate.

The bill, known as the Inflation Reduction Act of 2022, promises to raise $739 billion in new revenue — mostly by setting a minimum corporate tax rate and making changes to Medicare drug pricing — to help pay for $433 billion in climate and health initiatives.

The legislation is a pared-down version of President Joe Biden’s Build Back Better plan, which failed earlier this year after Manchin and Sinema opposed key elements of the bill. The legislation has a renewed chance of passing after Manchin reached a deal last week on a smaller tax-and-spending package with Senate Majority Leader Chuck Schumer, D-N.Y. It represents one of the most important pieces of legislation for Democrats as they fight to hold on to the Senate with the November midterms just under 100 days away. Manchin and Sinema, who are both up for reelection in 2024, represent key votes in the Senate, with the chamber split 50-50.

Americans for Prosperity, which is part of the larger Koch network, launched two ads on Saturday on its Facebook, Twitter and YouTube pages. The ads specifically call out the two senators, encouraging them to oppose the legislation. “Senator Manchin can stop it. Come on, Joe … Say NO for West Virginia,” the Manchin-focused ad says. The Sinema ad has an almost identical look, stating “Senator Sinema can stop it. Come on, Kyrsten … Say NO for Arizona.”

Each ad calls the bill a “$739 billion tax hike that will raise prices & make American energy more expensive.” The Koch-backed group’s posts on their media platforms link to an online messaging portal from which supporters can call on lawmakers to oppose the legislation.

Facebook’s ad archive shows the spots were playing in Manchin and Sinema’s respective states of West Virginia and Arizona, as well as in Washington, D.C.

Bill Riggs, a spokesman for Americans for Prosperity, told CNBC in an email on Monday that the ad campaign targeting the reconciliation bill is a six-figure buy on digital platforms and connected TV. He said the group is planning to expand this week to calling out Democrat Sens. Raphael Warnock, D-Ga., Catherine Cortez Masto, D-Nev., and Maggie Hassan, D-N.H. All three are up for reelection in November in states that are expected to be competitive.

The Stand Together Chamber of Commerce, which was founded by Charles Koch, contributed $40 million to Americans for Prosperity in 2020, according to the group’s latest financial disclosure. Koch is also the CEO of the massive conglomerate known as Koch Industries, which owns multiple energy subsidiaries.

Manchin has said this bill isn’t a spending package and doesn’t raise taxes but instead is more focused on investing money. Sinema has yet to publicly comment on the bill.

Representatives for Manchin and Sinema did not return requests for comment.

The West Virginia lawmaker reached a deal with Schumer last week on the massive reconciliation package that aims to reform the tax code, fight climate change and cut health care costs for consumers. The bill, if passed, would impose a 15% corporate minimum tax and close the carried interest loophole that allows hedge fund managers and private equity partners to pay lower taxes.

Still, for both lawmakers, this is the latest attempt by an outside group with ties to corporate executives to try to sway their vote. The Koch network has targeted both Sinema and Manchin throughout the 2022 election cycle. Americans for Prosperity leaders previously called on their grassroots supporters to push Manchin to oppose some of his party’s legislative priorities.

Corporations and their executives have also poured money into Manchin and Sinema’s reelection campaigns. Manchin’s campaign raised over $1 million over the past three months, which included contributions from several energy companies, including Coterra Energy, NextEra Energy and Xcel Energy.

Federal Election Commission records show Sinema’ s campaign also received donations from chemical company Dow Inc., pharmaceutical giant Eli Lilly and telecom behemoth Verizon, among other corporations, over the same time frame.

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SEC chair Gary Gensler rushing to unveil big changes amid FTX scandal

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You would think that with the FTX scandal still brewing and investors missing billions of dollars from their supposedly secured crypto accounts, Securities and Exchange Commission chair Gary Gensler would have so much on his plate, he wouldn’t have time to muck around in our capital markets, which are working just fine.

But sources tell me Gensler is doing just that — preparing to unveil plans for the biggest changes in about two decades to the way stocks are routed from buyers to sellers. If Gensler’s timing holds, he will announce (possibly this week) an open meeting for mid-December that will detail his plan to remake the nation’s $46 trillion stock market, as I first reported on Fox Business.

The idea is to jam out his proposed changes — and they’re pretty significant — before year’s end.

Why the rush? The word inside the SEC is that Gensler wants to get much of the work on it done before the new GOP Congress takes over Jan. 3. While a probe of Hunter Biden’s swampy business dealings is high on the list of the incoming committee chairs, Gensler knows he also has a target on his back for his ambitious — some would say zealous — progressive agenda at an agency that has a core mission of protecting investors from being ripped off by scammers.

The Gensler SEC has moved so far beyond this mission that he’s looking to score lefty points and join the Environmental Social Governance bandwagon by forcing companies to disclose non-financial metrics such as how they are reducing their carbon footprint.

The House Financial Services Committee, meanwhile, is intent on grilling Gensler on what he knew about the shenanigans of Sam Bankman-Fried, the Democratic megadonor under criminal investigation over the implosion of the crypto exchange FTX. The company is now in bankruptcy, while SBF, as he’s known, remains in the Bahamas.

Securities and Exchange Commission, Chairman Gary Gensler testifies before a Senate Banking, Housing, and Urban Affairs Committee hearing on "Oversight of the U.S. Securities and Exchange Commission" on Tuesday, Sept. 14, 2021, in Washington.
If Gensler’s timing holds, he will announce (possibly this week) an open meeting for mid-December that will detail his plan to remake the nation’s $46 trillion stock market
Bill Clark/Pool via AP

Billions missing

As this column goes to press, countless billions in customer money remain missing, likely gambled away in Bankman-Fried’s side hustle of a prop-trading fund.

Here’s where things get interesting: Gensler met with SBF months before the blowup. The SEC had additional meetings with the fallen crypto bro’s people and business partners who were looking to start a commission-approved exchange. GOPers want to hear how all this occurred ­under the nose of Wall Street’s ­so-called top cop.

Market structure, meanwhile, hasn’t really caught the full attention of the incoming 118th Congress and its new GOP majority yet, but it should. The way we buy and sell stocks, the so-called plumbing of the market, is often taken for granted for the simple reason that it works pretty seamlessly even if the process is pretty complex.

It’s more complicated than just a bunch of guys on the New York Stock Exchange screaming out bids to match buyers and sellers.

For starters, most of those guys are gone, replaced by computers that can match orders in nanoseconds. The main public stock markets, the NYSE and the Nasdaq, aren’t the only game in town and are in competition to match buyers and sellers with private exchanges and market makers, companies like Citadel Securities and Virtu Financial. They’re armed with highly efficient trading machines that can match orders cheaply and still skim a bit and make a profit. It’s why we have low-cost and, in the case of Robinhood, no-fee trading platforms.

The system isn’t perfect, of course (see what happened during the early stages of the so-called meme-stock craze of 2020-21). There are outages and price discrepancies due to computer errors. But it works pretty well, and by most measures small investors benefit greatly from better execution and lower trading costs — just the way the SEC intended the last time it instituted changes.

FTX founder Sam Bankman-Fried
Sam Bankman-Fried is under criminal investigation over the implosion of the crypto exchange FTX.
FTX/Handout via REUTERS/File Photo

Anything can be improved — but should it?

The main thrust of Gensler’s proposal, according to people briefed on it, could cost retail investors billions of dollars. I don’t have all the details, but broadly he wants trades made by small investors to be routed separately into various public auctions, presumably run by the NYSE or Nasdaq — a change that would significantly reduce competition that the SEC intended. His hypothesis is that there’s nefarious stuff going on in those private venues where ­rip-offs might be going down.

What are those rip-offs? Gensler hasn’t really said. Do we have evidence that cheap or no-fee discount brokers are covering up hidden costs on execution performed by market makers? No.

Looking for headlines

So why is Gensler looking to fix what isn’t broken? Some people in the markets say he’s merely looking for headlines and to curry ­favor with the Wall Street-hating progressive Sen. Elizabeth Warren, who has a big say in President Biden appointments for economic roles in the administration. Gensler is eyeing treasury secretary when Janet Yellen steps down next year as expected.

Others say he really does think Wall Street is a sewer of corruption. Maybe we will find out more at the SEC’s next open meeting, or maybe Gensler will drop his fixation with fixing something that’s not broken and realize his time is better spent finding those countless billions still missing from those FTX customer accounts.

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World Cup fans choose party city Dubai over buttoned-down Qatar

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Football fan Chris Leek was born in 1958, the last time Wales qualified for the Fifa World Cup. “All I ever wanted was to see Wales in the World Cup — now I can be happy for the rest of my life,” he said of the principality’s participation in this year’s tournament in Qatar.

Leek plays alto saxophone with The Barry Horns, a brass band made up of 11 Welsh football fans. Seven of them have travelled to the Gulf to play at Wales’ matches in Qatar, not only to try to galvanise the crowd with their music but also to promote Welsh identity and independence from the UK.

But like thousands of other supporters, they have based themselves in nearby Dubai, the regional trade hub in the United Arab Emirates, making the tiring day-long trip to the Qatari capital Doha via hour-long shuttle flights connecting the cities during the tournament.

Fans from the participating countries have opted for Dubai’s lively nightlife scene over Doha’s buttoned-down atmosphere. Qatar’s last-minute decision to ban alcohol sales around the stadiums only served to underline the country’s more conservative culture.

The party atmosphere starts at Dubai’s two airports, where outlets have been so busy this week that some ran out of McDonald’s and Heineken beer.

Football fans watch a match between Argentina and Saudi Arabia on a large screen, at a fan zone in Dubai, United Arab Emirates © Hussein Malla/AP

Across the city, fan zones have been bustling with supporters from every nation, reflecting the diverse nature of Dubai’s expatriate population, which makes up 90 per cent of the 3.5mn population.

In the downtown financial centre, bankers have been swapping suits for football shirts to watch matches at its fan park, where companies have been renting out lounges at $5,500 for 20 people, which includes food and booze.

With 60 daily shuttle flights between Dubai and Doha, up to 350,000 people could be transported from the region’s tourism hub throughout the tournament, which expects to host about 1.5mn visitors.

The deluge of fans comes in the middle of Dubai’s tourism season, when visitors flock there in search of winter sun. The government-owned airport operator says passenger throughput has eclipsed pre-pandemic numbers, with traffic surpassing 6mn a month during the third quarter. Dubai’s Emirates airline has recorded a 228 per cent rise in passengers in its first-half results.

“Dubai has extremely strong demand at this time of year and I’m sure there will be people travelling through Dubai to the World Cup,” said Issam Kazim, chief executive of Dubai Tourism. “This tournament will be a boost for the entire region.”

But officials say the number of fans who are visiting the emirate with the sole purpose of catching games in Qatar is likely in the low tens of thousands, or the equivalent of an uptick in hotel occupancy of up to three percentage points. Many match tickets have been sold to expatriates in the Gulf, including some of the 100,000-plus Britons living in the UAE.

Many hotels are now operating at near full capacity anyway as travel demand has soared. In September, the last available statistics, average occupancy at the roughly 140,000 available rooms across the emirate was 71 per cent with the average daily rate around a quarter higher than 2019.

Dubai-based Expat Sport has brought in about 2,000 fans through its hotel and flight packages for supporters who have tickets to attend games in Qatar. Fans from South America, India and the UK are staying in the popular Palm Island district of Dubai, shuttling to and from Qatar on flights booked by the company, which also sells World Cup hospitality packages for UAE-based expatriates.

“There’s general excitement, it’s suddenly here,” said Sue Holt, executive director of the sports tourism group. “People who weren’t thinking about it are saying ‘why don’t we just go’.”

For visitors such as The Barry Horns’ founder Fez Watkins, Dubai also offered a chance to visit “amazing” clubs where the blend of south Asian and Arabic-influenced rhythms was “absolutely, mind-blowingly good”.

Local well-wishers have been lending the band sound equipment and drums for the matches in Doha as well as their gigs for expatriate enthusiasts at hotels and events at the British embassies in Qatar and Dubai.

The group, formed in 2011 when the national team’s fortunes were at a low point, plays tunes such as the military march “Men of Harlech” and Depeche Mode’s “Just Can’t Get Enough”, to raise the morale of the “Red Wall” of Welsh fans decked out in national colours and bucket hats.

“There have been a few hassles, but it’s been great overall — arriving at the airport with the fans from likes of Mexico and Argentina has been a joyful World Cup experience,” said Watkins.

“The World Cup has always been like a party we were never invited to. And now we’re finally part of it.”

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Whole Foods upsets Maine politicians with decision to stop selling lobster

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Whole Foods’ decision to stop selling Maine lobster has been cheered by environmental groups, but made politicians steaming mad.

The high-end grocery giant took lobster from the Gulf of Maine off the menu at hundreds of its stores nationwide, citing a pair of sustainability organizations yanking their support for the US lobster fishing industry.

The organizations, the Marine Stewardship Council and Seafood Watch, said they were concerned about the risks fishing gear posed to the endangered North Atlantic right whales. The whale population is estimated to be around 340.

The decision, revealed last week, has drawn ire from Maine, which boasts the nation’s largest lobster fishing industry.

In a joint statement, Gov. Janet Mills and the state’s four congressional legislators voiced their concern about the impact on local fishermen’s livelihoods and defended the state’s fishermen, saying they’ve been committed to sustainability and protecting right whales.

Whole Foods cited a pair of sustainability organizations yanking their support for the nation’s lobster fishing industry in their decision to stop selling the crustacean.
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“The Marine Stewardship Council, with retailers following suit, wrongly and blindly decided to follow the recommendations of misguided environmental groups rather than science,” the politicians said.

Whole Foods said that it is “committed to working with suppliers, fisheries, and environmental advocacy groups as [the situation] develops.”

With Post wires.

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