Donald Trump is on a rampage against mail-in voting and is already questioning the legitimacy of the 2020 election. This week on Intercepted: The modern Republican Party has mastered the art of voter suppression and gerrymandering, but the president is now seeking to exploit the pandemic to aid these efforts. In between tweets accusing Joe Scarborough of being involved with the death of an intern decades ago and spending time on the golf course as the U.S. neared 100,000 coronavirus deaths, Trump has offered an overwhelmingly fictional narrative about Democratic voter fraud punctuated by warnings of the election being illegitimate before a single vote has been cast. Mother Jones senior reporter Ari Berman, author of “Give Us The Ballot: The Modern Struggle for Voting Rights in America,” analyzes the strategy of Trump and the GOP and lays out what he considers the nightmare scenario for the November election. As Trump continues to downplay the human toll of Covid-19, he is doubling down on his push for states to quickly reopen. Many of the states that have reopened surround Indian country and the Chairman of the Hopi Tribe reservation says, “we have a wildfire burning around us.” Journalist Rebecca Nagle, host of the podcast This Land, discusses how the coronavirus is disproportionately impacting native communities, explains some major cases before the U.S. Supreme Court on indigenous land rights, and talks about Trump’s battles against native tribes.
March 23, 2020 was a critical day in U.S. history, though at the time it felt like another 24 hours on the road to pandemic apocalypse. Over 47,000 Americans had contracted the coronavirus by official count, and hundreds of thousands more were walking around with it undiagnosed. Deaths were just starting to spike. Historic job losses had commenced, as lockdowns cascaded across America with no end in sight. The stock market closed more than 35 percent off its peak, continuing an epic slide that had started a month earlier.
But two actions on March 23 would swing investors from despair to relief, and reveal who really matters in America.
That morning, the Federal Reserve announced the deployment of additional “tools to support households, businesses, and the U.S. economy overall in this challenging time.” The measures included many actions taken during the 2008 financial crisis, with one new wrinkle: Direct purchases of corporate debt — the first nongovernment bond-buying in the Fed’s history — would now be allowed. Companies have swelled their borrowing in recent years, and experts have identified this as a source of serious economic risk. A sudden shock like the pandemic that wiped out revenues would not only cause bankruptcies, but also accelerate bond defaults, broadening stress throughout the financial system.
Backstopping corporate bond markets would support investors and capital owners. By the evening of March 23, investor confidence was lifted even further; reports announced progress on a record $2.2 trillion congressional rescue package, a large chunk of which would go to support the Fed’s interventions in corporate bond and other markets.
What would become known as the CARES Act became law on March 27, and the investor class has never looked back. While Americans struggle to file unemployment claims and extract stimulus checks from their banks, while small businesses face extinction amid a meager and under-baked federal grant program, the Fed has, at least temporarily, propped up every equity and credit market in America. And in a testament to its strength, it did so without spending a single cent.
The mere announcement of future spending heartened investors, who have relied on Fed support since the last financial crisis. This explains the shocking dissonance between collapsing economic conditions and the relative comfort on Wall Street. Between March 23 and April 30, the Dow Jones Industrial Average rocketed nearly 6,000 points, a jump of nearly 31 percent, creating over $7 trillion in capital wealth. The April gains were the biggest in one month since 1987.
The same month, 20.5 million Americans lost their jobs.
Similarly, the Fed’s promises to purchase corporate and municipal bonds and asset-backed securities and really anything else uplifted credit markets and made corporate borrowing cheaper, a tangible subsidy for large companies. March ended up setting a record for issuance of investment-grade corporate debt — the safest kind of corporate debt. Two hundred and sixty eight billion dollars traded hands that month, according to a Moody’s Analytics study, and April surpassed it, at $296 billion. Overall, $1 trillion in investment-grade bonds have been issued this year, nearly as much as all of 2019, along with tens of billions more in junk bonds from risky companies, which the Fed has also signaled that it would purchase.
Dozens of companies, from troubled aircraft maker Boeing to airline Delta, from Exxon Mobil to T-Mobile, have been tapping credit markets they might never have been able to access, at lower rates than previously offered. The American Prospect and The Intercept have identified at least 49 large companies that have issued corporate bonds since the Federal Reserve announced that it would purchase them. For some, the benefit of cheaper borrowing was worth hundreds of millions of dollars.
“It is meaningfully changing the way investors are evaluating the risks for a swath of companies,” said Kathryn Judge, a law professor at Columbia University and expert in financial markets and regulations. The Fed’s support disproportionately flows to large corporations with access to credit markets, Joyce pointed out. “Small and midsized businesses with much more need are more likely to struggle.”
Unlike in 2008, the large corporate entities in line for a bailout didn’t create the crisis in the first place. The Fed’s actions to save corporations from instant bankruptcy, simply by nodding in their direction, beats the alternative. The problem is that this same level of thunderous rescue hasn’t been extended beyond the biggest firms, which could lead to an economic landscape where they dominate society in the very near future. We have a system for central bankers to throw a life preserver to any large corporation, while everyone else must swim several miles to shore themselves.
Congress made the choice to empower the Fed, rather than figure out how to adequately support the rest of the economy and its citizens. And it gave the central bank wide discretion over the process, absolving members of Congress from blame but introducing the Fed’s bias toward large corporations and banks into who gets saved and who doesn’t.
In short, while activists nitpicked about which companies got small business grants worth $10 million, the real bailout, with trillions on the line rather than millions, was happening, quietly, at the Fed.
Investors are supposed to be risk-takers, who earn outsized returns because they put their money on the line. The Fed’s extraordinary support completely flips that, giving a safety net to those who don’t need it and making a mockery of the alleged virtues of free-market capitalism. If nothing the wealthy ventures can be lost, the only people who bear risks in our society are those who don’t have any money to begin with. That’s a recipe for soaring sales in pitchforks.
But what the Fed is doing may not even be sufficient to protect capital. The week of May 11 saw the biggest percentage drop in the stock market in nearly two months. As the Fed actually starts to actually outlay money, even it recognizes that not every crisis can necessarily be solved by lending gobs of money to General Electric. Not only is it socially unsustainable to protect just the rich from a crisis of this magnitude, it may not even work.
Treasury Secretary Steven Mnuchin, center, leaves the offices of Minority Leader Charles Schumer, D-N.Y., as negotiations continue into the night on a $2 trillion economic stimulus in response to the coronavirus pandemic at the U.S. Capitol on March 24, 2020 in Washington, D.C.
Photo: Chip Somodevilla/Getty Images
Among other measures, the CARES Act appropriated $454 billion to the Treasury Department’s Exchange Stabilization Fund to be used as an equity stake in a series of Fed “credit facilities.” You can think of this as similar to a big bank. The ESF stake represents the deposit base, which can absorb any losses from Fed lending. (In reality, the Fed is perfectly able to take losses through various accounting gimmicks, but it has chosen to limit itself in this fashion.) The Fed can then lever those deposits up 10 to 1, the same way a bank loans well above its deposits. That created a $4.5 trillion — trillion with a T — money cannon to back up the promises.
As soon as it became clear that a $4.5 trillion slush fund would be created, equity markets ballooned. The total value of the stock market cratered to 103 percent of GDP, about $21.8 trillion, on March 23. By April 30 it was back to 136.3 percent of GDP, or $28.9 trillion. By that metric, $7.1 trillion in stock market wealth has been created in that period.
Not only is it socially unsustainable to protect just the rich from a crisis of this magnitude, it may not even work.
It’s not like there were any other positive stories in the economy in late March and April, so we can attribute most of this uplift to the establishment of Fed facilities. “The Fed is the action, it’s the only real action,” Marcus Stanley, policy director with the coalition Americans for Financial Reform, told me. Almost all of that benefit goes to the wealthy: A 2017 report showed that about 10 percent of Americans own 84 percent of all stocks.
More critical was the rescue of the credit markets. By March 23, investors had spent a few weeks engaged in fire sales of corporate debt. Cash was fleeing to the safety of Treasury bonds. Reluctance to take on corporate debt triggered higher borrowing costs everywhere, and while bond-buying was still going on, many companies found themselves stuck. “There was like 10 or 15 days, there was no bond issue,” said V. Prem Watsa, CEO of Fairfax Financial Holdings, in a May 1 earnings call. “No one could do a bond issue. The AAA company couldn’t do a bond issue.”
The Fed’s announcement changed the picture. “It’s signaling, ‘We will not let the bond market go low,’” Stanley said. “’We’ll put a floor under the bond market in an aggressive and historically unprecedented way.’”
You can best see this through an array of exchange-traded funds, or ETFs: investment funds traded on stock exchanges made up of securities in a particular economic sector or asset class. There are dozens of ETFs linked to corporate debt, and their charts around this period all resemble a panoramic view of the Grand Canyon, hitting a low point on March 23, before shooting back up.
Corporate bond ETFs deteriorated in March and then sharply reversed themselves at the end of the month.
The Fed announcements included intentions to buy municipal bonds, as well as securities backed by student loans, auto loans, credit card debt, and commercial real estate loans; to make direct loans to large and midsized businesses; and to guarantee the entire trillion-dollar money market fund industry. It sent the message that essentially every credit market in existence would get some form of assistance. “They consider themselves a lender of last resort,” Peter Boockvar of Bleakley Advisory Group told CNBC. “They’re now the lender of all resorts.”
But the corporate bond rescue was particularly useful to companies sinking under the weight of the economic crash.
A cruise ship Diamond Princess leaves Daikoku Futo Wharf in Yokohama, Japan, after being disinfected on March 25, 2020, amid the outbreak of a coronavirus.
Photo: The Yomiuri Shimbun via AP
Carnival Cruise Lines is nobody’s idea of a sustainable business at the moment. Reeling from a Covid-19 outbreak on its Diamond Princess ship and shut down thereafter, in mid-March, Carnival was flirting with a consortium of hedge funds on a high-interest loan above 15 percent. These vulture funds, including Apollo Global Management and Elliott Management, specialize in distressed debt, squeezing governments and businesses with no alternatives. If Carnival couldn’t repay the loan, the hedge funds would be primed to take ownership.
But the March 23 announcement, signaling a Fed backstop to all comers, suddenly gave Carnival new options. Within days, it had secured $5.75 billion in loans, including a $4 billion bond issuance at 11.5 percent interest, and a $1.75 billion bond at an even smaller 5.75 percent rate that could be converted into Carnival stock. Because we know the alternative was a loan with 15 percent interest, we can calculate the value to Carnival. The difference in interest on the $4 billion loan is at least $140 million, and on the overall package, closer to $310 million.
Carnival also sold equity stakes of $500 million after March 23 (including 8 percent of the company to Saudi Arabia’s sovereign wealth fund), less than the $1.25 billion the vulture funds were seeking. That’s an implicit subsidy of $750 million. Keeping more of the company in shareholders’ hands gives them a subsidy as well. In addition, Carnival’s market capitalization grew by $3.5 billion from March 23 to the end of April. So one company with essentially no social or economic function currently benefited from billions in Fed-induced support.
Another good example is Boeing, the basket-case aircraft maker with a sketchy record of keeping planes in the sky. The firm “rejected” a federal bailout after issuing $25 billion in bonds. But that bond issuance was entirely made possible by the Fed’s implicit guarantee of corporate bond markets. Boeing’s Chief Financial Officer Greg Smith admitted on March 24, a day after the Fed announcement, that credit markets were “essentially closed.” A month later, it made the sixth-largest bond issuance in U.S. history that left investors clamoring for more; over 600 investors were willing to take up to $70 billion in Boeing debt at the auction.
So Boeing didn’t avoid a bailout; it got one through the side door from the Fed. And the company knows it: Smith thanked the Trump administration after securing the loan, “for the actions they have taken to support our economy and the credit markets.”
Boeing’s bond rescue had a secondary benefit. The CARES Act set aside $17 billion in a Treasury-led bailout for firms “critical to national security,” which everyone recognized as code for Boeing. That money would have come with significant strings attached, like equity stakes for the government. By the Fed reopening credit markets to Boeing, the company sidestepped that condition and kept its investors whole. “Without the Fed action, Boeing would be significantly owned by the U.S. taxpayer,” said Dennis Kelleher of the Wall Street watchdog Better Markets. That’s an implicit subsidy to Boeing and its shareholders.
The lack of conditions had a human cost. Aviation-related grants that the Treasury supplied came with a requirement to keep workers on the payroll for six months. Freed from any restrictions, Boeing almost immediately announced that it would cut 16,000 jobs. Similarly, General Electric, another company that spurned a direct bailout and floated $6 billion in bonds, cut 13,000 jobs in its aviation unit shortly thereafter.
Within weeks of the March 23 announcement, many large companies had wandered over to the corporate bond trough and taken a sip. Issuance of corporate bonds in April alone jumped to three times as much as the year before. The three largest weeks in the history of corporate debt offerings were two weeks in April and the first week of May.
Corporate bond issuances between March 23 and May 15, 2020.
Bond recipients included companies battered by the coronavirus crisis. “April’s worst month for U.S. business activity in perhaps more than 85 years did not prevent high-yield bond issuance from topping its year earlier pace by 19 percent,” Moody’s noted. That included an $8 billion high-yield bond for Ford, the largest speculative bond sale in history.
“They consider themselves a lender of last resort. They’re now the lender of all resorts.”
Investors deemed just one major company too risky for bonds: United Airlines, which begged off a $2.25 billion bond deal on May 12 because investors wanted more protections attached to the loan and a higher interest rate than United sought. But despite the fact that banks and investors are in position to demand better terms, interest rates are correspondingly lower than what these companies would have been forced to agree to before the Fed’s intervention.
It was also significantly cheaper for companies to borrow money at the beginning of May than it was in late March. The corporate bond spread (the difference in interest-rate yield between the corporate bond and Treasury bonds) for BBB-rated firms, just above investment grade, soared throughout February and March and peaked on, you guessed it, March 23, at 4.88 percent. By May 1, it was down to 2.83 percent. The high-yield corporate bond spread looks the same, peaking at 10.87 percent on March 23 and settling at 7.7 percent on May 1. Those spreads have continued to drop. A lower spread equates to tangibly lower borrowing costs for large firms.
In all, The American Prospect and The Intercept found published reports of bond sales for 49 companies, a total of at least $190.3 billion. Some bond amounts were undisclosed, like for General Mills, CVS, and Kroger, so the number is likely higher. The interest savings on those bond issuances due to Fed intervention is hard to calculate, but using Credit Flow Research’s post-announcement bond issuance estimate of $575 billion, and the changes in spreads after March 23, it’s clearly tens of billions of dollars.
And, given that one part of the credit hierarchy gives the rest a boost, the market uplift to investors in the $10 trillion corporate debt market would be calculated in the hundreds of billions. Combined with ETF and stock market uplift, the trillions in relief absolutely dwarfs what regular Americans got to tide them over during the crisis.
In this screen-grab taken from the Federal Reserve website, Fed Chair Jerome Powell issues the Federal Open Market Committee statement on April 29, 2020 in Washington, D.C.
Photo: Federal Reserve via Getty Images
This unprecedented rescue of corporate America, done without the outlay of a single U.S. dollar, was described by Fed Chair Jerome Powell in an April 29 news conference as not only necessary, but positive. “Many companies that would’ve had to come to the Fed have now been able to finance themselves privately … and that’s a good thing,” Powell explained. It is somewhat positive that distressed companies could turn to regular credit markets instead of bottom feeders like private equity vultures or Warren Buffett. And because of the existing connections to flood the financial system with money, bailouts are almost literally as simple as turning on a light switch.
Congress didn’t have to cede authority to the Fed and carp about it after the fact.
But to properly assess the virtues of the rescue, you have to set it in context. The unemployment rate is 14.7 percent and rising. Car lines for food banks stretch for miles. As Americans continue to struggle and lose ground, the nation’s investment elite have been thus far saved from any downside of the coronavirus crisis. Beneficiaries are largely confined to stockholders, bondholders, and corporate executives (who are often major stockholders). Workers are not only not protected, they’re paying for the rescue, with taxpayer money propping up the Fed actions.
“This is a massive wealth transfer to owners of financial assets,” said Lev Menand, a former Treasury official who now teaches at Columbia University. “The rules of the game are supposed to be that equities take the loss, high-yield debt holders take the loss. We’re watching this new hierarchy being created by the government. It’s a bizarre form of socialism for capitalists.”
It would perhaps be more tolerable if anyone other than the rich shared in the gains of this corporate rescue. But the Fed’s bond-buying program, unlike the Paycheck Protection Program, has no requirements on companies to retain workers. The Fed changed the term sheets between March 23 and April 9, eliminating any such requirements. Apple’s recent debt issuance, which could later be purchased directly or indirectly by the Fed, explicitly states that it will be used for, among other things, “share buybacks and dividends” — forms of leaking money to investors rather than keeping workers on payroll.
In addition, the Fed has essentially outsourced its bond-buying and loan-making authority to big money managers and banks, heightening the need for connections with these giants to get relief. Smaller companies, who don’t have the revenue or technical know-how to issue bonds into public markets, will find it more difficult to get in line for relief. Meanwhile, lending to small businesses and individuals has slowed as banks pull back during the crisis; by one count, interest rates charged to small businesses are now double the rates for large firms. Running bailouts through the Fed necessarily enhances the survival of large financial players and big corporations; everyone else must fight for crumbs.
Treasury Secretary Steven Mnuchin responded to this charge of special benefits for large corporations at a Senate Banking Committee hearing on May 19, essentially calling the stealth bailout a good thing. “The announcement of the corporate bond facility without putting up $1 of taxpayer money unlocked the entire primary and secondary market for corporate bonds,” Mnuchin said. “Companies that I had expected would need to borrow from us were able to borrow $25 billion in the primary markets” — a reference to Boeing.
Congress didn’t have to cede authority to the Fed and carp about it after the fact. It could have decided the parameters of any economic rescue. But that would involve making actual governing decisions, which Congress would rather defer to others. You can argue that, in the absence of state functionality, the Fed had to step in. But we’re living with the unequal consequences of a central bank that can only solve problems for one set of powerful interests. And perversely, rescuing investors — rich people like members of Congress and the donors they listen to — makes it easier for Congress to keep ignoring the needs of everyone else.
Even the Fed understands this at some level. On May 13, Powell pleaded with Congress to pass stronger fiscal aid to prevent a multiyear economic malaise. “Deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy,” he said.
On May 12, the Fed finally kicked off its corporate bond-buying program, 50 days after the fateful March 23 announcement. It was confined to purchasing corporate bond ETFs of once investment-grade “fallen angel” companies that had gone to junk. Within two days, $305 billion had been purchased. But while the purchases sent corporate bonds up in value, by and large the promise of bond-buying had already produced the desired effect. The Fed completed the bailout before ever administering it.
“This is more like August 2007 than September 2009.”
Some market watchers see the runaway rally in capital markets as irrational. “People that manage large portfolios and assets spent 10 years in a bull market fed by Federal Reserve intervention,” said Menand. “Their frame of reference is that something goes wrong and the Fed comes in, that’s a market opportunity.” Menand believes that the Fed won’t be able to sustain such valuations amid mass bankruptcies and high unemployment.
With the hope of a V-shaped economic recovery now completely dead, at some point the markets will have to take notice, and the sugar high from the Fed aiming its money cannon will wear off. Stocks fell modestly in May, and Goldman Sachs analysts have predicted a 20 percent drop in the next three months. Noted hedge fund manager David Tepper called the stock market in the first half of May the second-most overvalued market in his career, rivaled only by the dot-com boom. And in raw numbers, the valuation increase has gone well beyond the amounts the Fed has promised.
That’s what you get when you send the Fed in to handle a problem in the real economy. The Fed is ill-suited as a crisis manager; it sees its job as mainly to boost liquidity and keep assets strong.
“You can get loans, but loans don’t replace income,” said Nathan Tankus, research director at the Modern Money Network. Menand likened the moment to August 2007, when the Fed provided enough liquidity to avert crisis for a while. Eventually, there was a reckoning when asset prices declined and losses hit the system. “This is more like August 2007 than September 2009,” he said. “The idea that we won’t have massive insolvency at big companies is crazy. And the Fed will not be there.”
The Fed-induced rush into corporate bonds, in other words, pools risk in an unstable asset, creating the type of financial crisis it seeks to stamp out. Companies with functionally no revenue path in the near future taking on mounds of additional debt could set the stage for a series of defaults, which rose in April. Zombie companies being kept alive by debt markets eventually run up against the fundamentals of operating amid an economic depression. And indebted companies stave off liquidation by firing workers, as Hertz did last month to avoid bankruptcy. It didn’t help; Hertz filed for Chapter 11 on May 22.
The very knowledge that the Fed will save investors from trouble is likely to accelerate risk throughout the market. “If you told a family you can get a credit card at 18 percent [interest], but in a downturn we will give you an opportunity to get a 3 percent card, that would incentivize them to spend a lot of money,” Bharat Ramamurti, one of the members of the Congressional Oversight Commission, told me.
The Fed itself has called out this possibility. Powell’s comments on May 13 were accompanied by a May 15 financial stability report, warning that the financial system had “amplified the shock” of the coronavirus crisis. It raised concerns about debt defaults as its actions persuaded investors to buy up more debt. It warned that asset prices had “room to fall,” when the announcement effect created more of that room. It worried of defaults among high-risk “leveraged loans,” when these are precisely the kind of loans it’s vowed to buy through purchases of high-yield ETFs.
Just how deeply does the Fed have its fingers in the dough of the economy? Recent job growth numbers reflect what you’d guess — that the most rapid job creation is happening at general merchandise stores like Walmart and Costco. Right behind them are “monetary authorities-central banks.”
“The Covid virus has been a gift from God,” began Ken Eldred. “The kingdom of God advances through a series of glorious victories, cleverly disguised as disasters.”
In response to the coronavirus pandemic, Eldred noted, millions of Americans are turning to Christ, Walmart is selling out of Bibles, and online church broadcasts have hit record numbers.
But while religiosity was growing, there have been setbacks from the disease outbreak. “Satan has been busy too,” Eldred, a major donor to evangelical and Republican causes, explained. “The virus has messed up many of our plans involving our in-person meetings with voters.”
And the rise of mail-in ballots, Eldred added, would undercut voter identification laws, which have been a pillar of GOP election strategy. “The children of the darkness put early voting into this CARES package,” he grumbled, a reference to the $400 million for election assistance programs to states included in the $2.2 trillion coronavirus relief bill.
Following a brief prayer led by Eldred, in which he declared that “we have now turned the corner on the virus” and asked God for an end to coronavirus deaths, the business of the call got started: How Christian voters can be a force to reelect Donald Trump.
The call, held in mid-April, one in a series of meetings sponsored by United in Purpose, a low-key group that has quietly become a preeminent venue for leaders on the religious right to convene. UIP was crucial in connecting Trump to evangelical leaders in 2016, and it promises to be one of the most vital weapons in Trump’s reelection arsenal this year.
At first, the effort may seem like a throwback. Participants in the group include televangelist preachers and anti-gay activists. David Barton, a historian that serves on the board of UIP, sells box sets of DVDs arguing that America was founded as a fundamentalist Christian nation with no separation of church and state.
But the group, whose supporters include major donors to conservative causes, pastors, and political operatives with decades of winning elections, is serious about serving as the tip of the spear to maintain control of the White House. UIP’s 2020 election plan — which it calls “Ziklag,” a town referenced in the Bible — is a multipronged effort to connect Trump with evangelical leaders and increase support among minority voters through appeals to faith-based messages and church outreach.
UIP did not respond to a request for comment.
And, perhaps most importantly, it plans to use data mining to identify millions of new voters and target them with cheap ads on Facebook. The pandemic, speakers noted on the call, means that they must work overtime to compensate for the effects of mail-in voting.
The unprecedented campaign would mobilize what they call “dormant evangelical and conservative Catholic voters,” with a focus on appealing to religious affiliation as a way to compensate for Trump’s relative lack of support among nonwhite voters. They expect to focus on reducing Democratic support among African Americans and older, religiously active Latino voters in particular, as they tend to hold far more culturally conservative, devout religious views than white liberals.
UIP, though not a well known group, has emerged in recent years as the essential conduit connecting the religious right to the Trump administration.
“While few Americans know about United in Purpose,” noted Katherine Stewart, the author of “The Power Worshippers,” a new book on the Christian nationalist movement and its takeover of the Republican Party, “the organization has claimed to know at least something about all or most American voters.”
The group works closely with the Family Research Council, the arch-conservative family values think tank led by Tony Perkins. The board includes former Rep. Bob McEwen, R-Ohio, an active member of the religious right through his role in convening the Council for National Policy, another Christian conservative group.
Tax disclosures show that UIP received $75,000 from the Wellspring Committee, the same mysterious nonprofit that financed the television advertising campaign to confirm Judge Brett Kavanaugh to the Supreme Court. Another major donor to UIP is Maj. Gen. Vernon B. Lewis Jr., who retired from the military to found MPRI, a defense contractor sold to L-3 Communications, and another defense consulting firm called Cypress International.
In June 2016, after Trump effectively secured the nomination, UIP hosted a high-profile meeting between then-candidate Trump and about a thousand evangelical leaders. Trump reportedly used the event to promise an array of social conservative agenda items, including lifting political restrictions on churches and a promise to appoint judges in line with religious right priorities.
Since Trump’s election, UIP has hosted regular meetings across the country to convene prominent religious leaders and donors. In 2017, UIP hosted an awards gala at the Trump International Hotel hosted by Ginni Thomas, the spouse of Justice Clarence Thomas. The following year, Vice President Mike Pence attended a UIP dinner.
Last September, members flocked to the Luxe Sunset Boulevard, a trendy Los Angeles hotel, to discuss strategy and hear from singer Pat Boone, who discussed how faith issues are influencing Hollywood. George Seay, a major GOP donor and chief executive of Annandale Capital, a global investment firm, has hosted Ziklag events for members of UIP.
UIP plans to replicate the 2016 campaign event, which was high-profile enough to generate headlines around evangelical support for Trump. But this year, the focus will be on minority outreach. During the call, UIP’s Brian Burch said that the group hopes to host an event for Trump to meet and pledge support to African American and Latino church leaders.
Burch added that UIP has already “made a series of grants to partners focused in key states” to begin efforts to reach minority faith-based voters.
Ralph Reed, a major figure in evangelical outreach for President George W. Bush, addressed the April call to provide what he called a “macro political picture” of the election ahead. In rapid succession Reed explained previous election results, comparing Trump to Mitt Romney to argue that lower turnout among African Americans in battleground Rust Belt states had been key to GOP success.
“There were 47,000 fewer black votes cast in 2016 compared to 2012 in just Milwaukee County alone,” said Reed. “In Michigan, similar outcome, Trump wins by 10,704 votes out of about 2 million cast in Michigan. And there were 36,000 fewer votes cast by African Americans in Detroit, Wayne County.”
“They are convinced that Hillary [Clinton] lost because she failed to replicate [Barack] Obama’s turnout of minority voters,” Reed added. “And they are focused on that like a laser beam as Trump is on evangelicals and pro-life Catholics.”
Marjorie Dannenfelser, president of Susan B. Anthony List, speaks during the anti-abortion organization’s 11th annual Campaign for Life gala at the National Building Museum on May 22, 2018, in Washington, D.C.
Photo: Brendan Smialowski/AFP/Getty Images
Marjorie Dannenfelser, who leads the Susan B. Anthony List, an anti-abortion advocacy group active in GOP elections, recently joined UIP as an ally for outreach. The group, though less well known as its pro-reproductive rights counterpart Planned Parenthood, is a major player in congressional elections. SBA List, which includes a super PAC, announced its intention to spend $52 million on the 2020 cycle in January.
During the April call, Dannenfelser emphasized the need to adapt tactics to meet the unique circumstances of the pandemic. Voters will need powerful messages to urge them to vote by mail. And across independent and Democratic voters, the abortion issue cuts across partisan lines, especially in Rust Belt states, she claimed.
“The battle for the, for the working-class pro-life voter in those battleground states is going to be key,” Dannenfelser said. SBA List, she added, has been conducting survey research on exactly how to message abortion issues. “And what we’re finding, not surprisingly, but it’s good to know, is that the born alive issue that the president has raised the profile of, has had a tremendous affect in moving persuadable voters in all of those areas in Republicans, Democrats, and Independents.”
This plan appears to dovetail with the Trump campaign’s own strategy. In January, Trump launched “Evangelicals for Trump” at King Jesus International Ministry, a largely Latino megachurch in Miami led by Pastor Guillermo Maldonado, a prominent evangelical leader.
“My administration will never stop fighting for Americans of faith,” Trump declared at the event. “We will restore the faith as the true foundation of American life.”
But the bulk of UIP’s 2020 efforts, Reed explained on the call, is grounded in the identification of new religious voters. To reach nontraditional faith-based voters, UIP is using an array of data-mining tools.
Reed claimed his “data partners” had identified 26 million key voters in battleground states, about three-fourths of whom are Facebook users. “We can reach them,” said Reed, “and it’s pennies on the dollar in terms of targeting a message compared to what the other side is going to spend on television.”
While the call didn’t specify exactly what these tools are, several members of UIP have been involved in creating technological tools for voter ID.
UIP was founded by Bill Dallas, a former model, San Francisco real estate investor, and technology entrepreneur, who became a born-again Christian while serving a prison sentence for embezzlement. One of the first businesses Dallas founded after leaving San Quentin State Prison was the Church Communication Network, a satellite and online network to broadcast church programming.
Dallas now runs Pioneer Solutions, a data-mining operation used to find and activate religious voters. In 2015, an information technology researcher stumbled upon a trove of demographic information on voters affiliated with Pioneer Solutions, including information on gun ownership and whether or not an individual had a “Bible lifestyle.” The inadvertent data leak featured information covering 191 million U.S. citizens. “We have about 200 million files, so we have pretty much the whole voting population in our database,” boasted Dallas in an interview with Christian Broadcasting Network the following year.
Brian Burch, the official with UIP who helped lead the April call, serves as president of the group CatholicVote, a group that collects potential voter information by harvesting vast troves of cellphone location data.
The controversial strategy allowed CatholicVote to use what is known as a “geofence” to target voters with frequent Catholic church attendance. The data, paired with other datasets such as voter registration, was designed to identify and motivate Mass-attending Catholics to support Republicans in the 2018 midterm elections.
In the 2020 elections, Burch has written that he intends to expand the geofencing strategy to identify millions of Catholic voters in battleground states. Burch claims that his approach has identified as many as 91,373 church-attending Catholics in Wisconsin alone who have not registered to vote.
Evangelical supporters of Donald Trump are being led in prayers inside El Rey Jesús, also known as King Jesus International Ministry, church in Miami on Jan. 3, 2020.
Photo: Adam DelGiudice/ Echoes Wire/Barcroft Media/Getty Images
The UIP donor who opened the April conference call, Eldred, built his wealth founding a series of technology companies through the early ’90s. Eldred cofounded Inmac, which marketed computers and electronics over catalogs, which he sold in 1996. He now serves on the board of another firm he co-founded, Epicenter, which specializes in outsourcing debt collection and information technology services to India.
Kelly Kullberg, another UIP official and the founder of a group called the American Association of Evangelicals, previously ran a network of 24 Facebook accounts with a combined 1.4 million followers designed to spread partisan misinformation. The groups, using names such as “Blacks for Trump,” “Evangelicals for Biblical Immigration,” “Veterans for Trump,” and “Nurses and Doctors for America,” were routinely filled with misinformation and hate.
A post shared across the Kullberg network of Facebook groups warned that refugee programs represented “cultural destruction and subjugation.” Another claimed Muslims are incapable of assimilation because a “normal Muslim’s loyalty is to Sharia law and supremacy.”
In a separate UIP conference call in May 2019, Kullberg discussed the need to find messages to inspire conservative voters after conferring with Reid Rutherford, a solar energy executive who has donated to the group. The pair reviewed survey research data to prepare a dossier for the 2020 election.
“Those issues include the sanctity of life versus infanticide,” Kullberg said. “What are the images that most move people? The content that drives those talking points,” she added, noting that she could push these election messages to her social media network.
Kullberg suggested driving a wedge between lesbians and the transgender community by bringing attention to the fact that trans students would gain access to women’s bathrooms and women’s scholarships. “We’ll be pointing this out,” Kullberg said. “When we were involved with exposing the anti-Semitism of Linda Sarsour, that divided the Women’s March. There are some very smart moves to weaken or soften the opposition by telling the truth.”
“Sometimes our side doesn’t really do that very well. We’re too worried about being nice,” Kullberg said. “But then we end up with infanticide. So we just realized we need to play to win this time. This is a hill worth charging.”
Kullberg claimed she could reach 80 million people with her Facebook network during the call. But her network was later shut down after it was exposed in a report by the fact-checking website Snopes.
Meanwhile, the novel coronavirus threatens to undermine their efforts and draw attention away from these conservative wedge issues.
George Barna, a pollster, has worked closely with UIP to shape its approach. In a recent memo to the group, he warned that the coronavirus pandemic has sharply reshaped American priorities going into the election, with a new focus on health care, unemployment, economic growth, and stability.
On abortion, Barna warned, “one might have expected the issue to have decreased in importance in the eyes of moderates and liberals,” while in fact, “it was conservatives who were relatively more likely to indicate a decline in importance for that issue.”
Still, UIP could serve as a potent force in the election.
“All major political operations—of all parties—now rely on big data and activist networks to sharpen their effectiveness in election campaigns,” observed Katherine Stewart, who wrote about evangelical political operations in “The Power Worshippers.”
“A key difference, however, is that United in Purpose’s voter turnout machine is at the top of a long pyramid that largely operates in the religious sphere, almost all of which is exempt from taxes and shielded from public scrutiny.”
In the weeks before the 2016 presidential election, the most powerful former leaders of the Central Intelligence Agency did everything they could to elect Hillary Clinton and defeat Donald Trump. President Obama’s former acting CIA chief Michael Morrell published a full-throated endorsement of Clinton in the New York Times and claimed “Putin ha[s] recruited Mr. Trump as an unwitting agent of the Russian Federation,” while George W. Bush’s post-9/11 CIA and NSA Chief, Gen. Michael Hayden, writing in the Washington Post, refrained from endorsing Clinton outright but echoed Morrell by accusing Trump of being a “useful fool, some naif, manipulated by Moscow” and sounding “a little bit the conspiratorial Marxist.” Meanwhile, the intelligence community under James Clapper and John Brennan fed morsels to both the Obama DOJ and the U.S. media to suggest a Trump/Russia conspiracy and fuel what became the Russiagate investigation.
In his extraordinary election-advocating Op-Ed, Gen. Hayden, Bush/Cheney’s CIA Chief, candidly explained the reasons for the CIA’s antipathy for Trump: namely, the GOP candidate’s stated opposition to allowing CIA regime change efforts in Syria to expand as well as his opposition to arming Ukrainians with lethal weapons to fight Russia (supposedly “pro-Putin” positions which, we are now all supposed to forget, Obamalargely shared).
As has been true since President Harry Truman’s creation of the CIA after World War II, interfering in other countries and dictating or changing their governments — through campaigns of mass murder, military coups, arming guerrilla groups, the abolition of democracy, systemic disinformation, and the imposition of savage despots — U.S. interference in and control over the internal affairs of every other country on the planet is regarded as a divine right, inherent to American exceptionalism, and anyone who opposes it or seeks to impede it is suspect at best.
The CIA’s antipathy toward Trump continued after his election victory. The agency became the primary vector for anonymous, illegal leaks designed to depict Trump as a Kremlin agent and/or blackmail victim. It worked to ensure the leak of the Steele dossier that clouded at least the first two years of Trump’s presidency. It drove the scam Russiagate conspiracy theories. And before Trump was even inaugurated, open warfare erupted between the president-elect and the agency to the point where Democratic Senate Majority Leader Chuck Schumer explicitly warned Trump on the Rachel Maddow Show that he was risking full-on subversion of his presidency by the agency:
This turned out to be one of the most prescient and important (and creepy) statements of the Trump presidency: from Chuck Schumer to Rachel Maddow – in early January, 2017, before Trump was even inaugurated: pic.twitter.com/TUaYkksILG
Democrats, early in Trump’s presidency, saw clearly that the CIA had become one of Trump’s most devoted enemies, and thus began viewing them as a valuable ally. Leading out-of-power Democratic foreign policy elites from the Obama administration and Clinton campaign joined forces not only with Bush/Cheney neocons but also former CIA officials to create new foreign policy advocacy groups designed to malign and undermine Trump and promote hawkish confrontation with nuclear-armed Russia. Meanwhile, other ex-CIA and Homeland Security officials, such as John Brennan and James Clapper, became beloved liberal celebrities by being hired by MSNBC and CNN to deliver liberal-pleasing anti-Trump messaging that, on a virtually daily basis, masqueraded as news.
The all-consuming Russiagate narrative that dominated the first three years of Trump’s presidency further served to elevate the CIA as a noble and admirable institution while whitewashing its grotesque history. Liberal conventional wisdom held that Russian Facebook ads, Twitter bots and the hacking and release of authentic, incriminating DNC emails was some sort of unprecedented, off-the-charts, out-of-the-ordinary crime-of-the-century attack, with several leading Democrats (including Hillary Clinton) actually comparing it to 9/11 and Pearl Harbor.
The level of historical ignorance and/or jingostic American exceptionalism necessary to believe this is impossible to describe. Compared to what the CIA has done to dozens of other countries since the end of World War II, and what it continues to do, watching Americans cast Russian interference in the 2016 election through online bots and email hacking (even if one believes every claim made about it) as some sort of unique and unprecedented crime against democracy is staggering. Set against what the CIA has done and continues to do to “interfere” in the domestic affairs of other countries — includingRussia — the 2016 election was, at most, par for the course for international affairs and, more accurately, a trivial and ordinary act in the context of CIA interference.
This propaganda was sustainable because the recent history and the current function of the CIA has largely been suppressed. Thankfully, a just-released book by journalist Vincent Bevins — who spent years as a foreign correspondent covering two countries still marred by brutal CIA interference: Brazil for the Los Angeles Times and Indonesia for the Washington Post — provides one of the best, most informative and most illuminating histories yet of this agency and the way it has shaped the actual, rather than the propagandistic, U.S. role in the world.
Entitled “The Jakarta Method: Washington’s Anticommunist Crusade and the Mass Murder Program that Shaped Our World,” the book primarily documents the indescribably horrific campaigns of mass murder and genocide the CIA sponsored in Indonesia as an instrument for destroying a non-aligned movement of nations who would be loyal to neither Washington nor Moscow. Critically, Bevins documents how the chilling success of that morally grotesque campaign led to its being barely discussed in U.S. discourse, but then also serving as the foundation and model for clandestine CIA interference campaigns in multiple other countries from Guatemala, Chile and Brazil to the Philippines, Vietnam and Central America: the Jakarta Method.
Our newest episode of SYSTEM UPDATE, which debuts today at 2:00 p.m. on The Intercept’s YouTube channel, is devoted to a discussion of why this history is so vital: not just for understanding the current international political order but also for distinguishing between fact and fiction in our contemporary political discourse. In addition to my own observations on this topic, I speak to Bevins about his book, about what the CIA really is and how it has shaped the world we still inhabit, and why a genuine understanding of both international and domestic politics is impossible without a clear grasp on this story.
With Michael Bloomberg, the 9th richest man on earth, apparently running for president, Americans are asking themselves some tough questions. Like, why did we ever allow non-billionaires to run for the highest office in the land? And, why aren’t all the other billionaires jumping into the race?
After all, for all intents and purposes the United States is already run by its billionaires. They should care about us enough to make things official. If you like America, you should put a ring on it!
There’s no possible downside here. We already have a guy who calls himself a billionaire as president, and that’s going great. Things could only get better with more of this billionaire magic.
History makes this clear too. Two thousand years ago, in A.D. 19, the politics of the Roman Empire had become a plaything of its ultrarich. We haven’t checked, but presumably we would have heard if anything’s gone wrong for the Romans since then.
Bloomberg (net worth: $55 billion), Tom Steyer ($1.6 billion), and President Donald Trump (“$3.1” “billion”) are a good start. But it’s time for America’s other 604 billionaires to step up to the plate. Here’s a look at just a few of our options for our next president/chieftain/despot.
Michael Bloomberg, Bloomberg L.P.
PROS: At 5’7”, would be the shortest U.S. president since William McKinley.
CONS: Is a tough sell as a Democratic candidate since he’s a Republican.
Jeff Bezos, Amazon
PROS: Harnessed the kind of aggression and lust for dominance that other humans have used for war to create a mechanism for online shopping.
CONS: Will, if the opportunity arises, abandon us to become President of Space.
Bill Gates, Microsoft
PROS: Unlike most billionaires, seems aware that 1) non-billionaires can be afflicted with disease and 2) this is bad.
CONS: Murdered Jeffrey Epstein.
Mark Zuckerberg, Facebook
PROS: Speaks Mandarin, so can supervise the impending merger of American surveillance capitalism and Chinese surveillance communism.
CONS: Believes that Silicon Valley “is an extremely left-leaning place,” suggesting that he’s never been anywhere else on earth.
Sheldon Adelson, Las Vegas Sands Corporation
PROS: His administration would answer the question, “What would it be like if Jabba the Hutt were president?”
CONS: Probably nothing unless you think it would be bad for America to suddenly nuke Iran.
David Koch, Koch Industries
PROS: There’s nothing in the Constitution that says the president has to be alive.
CONS: Redundant, we’re already going to be ruled for the next 1,000 years by the nightmarish consequences of his climate denialism.
The Entire Walton Family, Walmart
PROS: As of this moment, the heirs of Walmart founder Sam Walton have a combined $200 billion, almost twice as much as Jeff Bezos. They could deliver addresses from the Oval Office, taunting him in unison.
CONS: Get ready for the new minimum wage of $0.37.
Eduardo Saverin, Facebook
PROS: Could inspire Americans to make $10 billion by attending Harvard at the same time as Mark Zuckerberg.
CONS: Renounced his U.S. citizenship to avoid taxes, but maybe he could be lured back if we all apologize.
Ken Griffin, Citadel
PROS: Embodies Schrödinger’s Paradox: He can explain that he is not driven by money while simultaneously saying we better not tax him more because he’s driven by money.
CONS: Only spent $238 million on his New York penthouse. Americans want a president who lives large.
Kylie Jenner, Kylie Cosmetics
PROS: Uses makeup both more skillfully and more sparingly than Donald Trump.
CONS: None.
Pierre Omidyar, eBay
PROS: Handsome, kind, wise; like Bloomberg, already has a media outlet up and running.
CONS: Campaigns are expensive, and we can think of far better uses for that money. (Unlike Bloomberg Media Group, The Intercept is a non-profit.)
