How Big Business Is Buying the Election
    • American Petroleum Institute

      An API print ad says that "higher taxes won't lower gas prices. Call your Senators at 202-224-3121 and tell them to vote against higher taxes."

On January 27, 2010, one year into his term, President Barack Obama used the occasion of his State of the Union address to issue a warning. The Supreme Court had just opened the "floodgates for special interests — including foreign corporations — to spend without limit in our elections." He was speaking about the ruling in Citizens United v. Federal Election Commission, in which the Court struck down nearly a century of law, granting corporations vast new leeway to influence the outcome of elections.

In the months after Obama's speech, the American Petroleum Institute, an oil industry trade association that represents hundreds of multinational oil and gas companies, would demonstrate just how prescient the president's warning was.

Before Citizens United, API had gone to battle with the president over his efforts to address global warming. It took out issue ads, hired lobbyists from K Street, and financed dubious studies to claim that even the most piecemeal legislative fixes, such as the Waxman-Markey bill designed to cap carbon emissions, would lead to economic ruin. The group spent $7.3 million on federal lobbying during the year the bill was being debated.

But as the 2010 midterm elections loomed, Citizens United handed API an additional arrow for its quiver. The group could now funnel undisclosed corporate donations directly to campaign entities. Among the oil executives leading API at the time — and still to this day — was Tofiq Al-Gabsani, a registered lobbyist for the Saudi government. Al-Gabsani is the chief executive of Saudi Refining Inc., a wholly owned subsidiary of the Saudi Arabian Oil Company, the government-owned Saudi oil giant better known as Aramco.

Aramco, by means of its US subsidiary, is understood by insiders to be one of the top donors to API, where, according to theWashington Post, membership dues for the largest firms can be as much as $20 million a year. API has roughly 400 member firms, but only a small group of oil and gas industry CEOs sit on its board of directors, which oversees the trade association's major political campaigns, according to API state business filings and two former API executives. Alongside the top officials of such major American firms as ExxonMobil and ConocoPhillips, one of those directors for the past three years has been Al-Gabsani.

US law still bans foreign corporations from participating directly in elections. But after Citizens United, trade associations like API — whose influential members include foreign corporations — are free to spend as they wish, unburdened by disclosure requirements. And these groups have taken full advantage of their new freedoms. While other campaign committees, from labor unions to Super PACs, face strict transparency rules, trade associations enjoy unparalleled power to covertly manipulate elections using corporate money.

Since Citizens United, corporations and foreign entities can spend unlimited undisclosed funds on elections. Here's what it looks like:


API-funded groups were a force behind the tidal wave of negative advertisements to hit Democrats in the midterms. Pennsylvania Representative Joe Sestak "voted for Pelosi's job-killing cap-and-trade plan," intoned one election-season TV ad from Americans for Tax Reform, one of several groups financed by API in 2010. Sestak's vote for a bill to put a price on carbon pollution, the ad continued, constituted "a great big tax that would make utility bills skyrocket, gas prices soar." Sestak lost his bid for the US Senate, and his Congressional seat was one of sixty-three taken by the Republicans.

The ads bankrolled by entities like API helped deliver one of the greatest midterm election upsets in American history. For the first time, outside spending groups eclipsed party spending. The young president, with his party's ranks decimated and the House flipped into the hands of the far right, was forced to abandon much of his domestic agenda.

Perhaps the most profound aspect of the Democrats' defeat that year: the window for confronting global warming all but closed. With extreme weather events convulsing the globe, 86 percent of incoming freshman Republicans signed an oil industry–sponsored pledge to oppose all climate regulation. As John Boehner lifted the House speaker's gavel, any chance of passing climate legislation collapsed. In this way, the Democrats' defeat was a resounding victory for the oil companies represented by API — and for Saudi Arabia, the world's largest exporter of crude oil.

Saudi Arabia has worked for years to obstruct progress on climate reforms. Just weeks prior to Obama's State of the Union address warning of the dangers of foreign corporate money, Mohammad Al-Sabban, a senior adviser to the Saudi government on energy policy, helped lead the opposition to a global climate accord in Copenhagen. Like many of the interest groups dependent on fossil fuels, Al-Sabban even disputed the idea that industry has contributed to global warming. "Climate is changing for thousands of years, but for natural and not human-induced reasons," he told BBC News.

Before the advent of the Roberts Court, Saudi Aramco would have been prohibited from using corporate money to influence an American election. The company's only option would have been to ask its US-based employees to make small donations to a transparent political action committee.

A 1990 Supreme Court decision, Austin v. Michigan Chamber of Commerce, required trade associations to spin off separate, highly regulated PACs if they sought to influence federal elections. These PACs could only be funded with disclosed contributions from individuals, in amounts limited by the Federal Election Commission. Trade associations were further restricted by the 2002 McCain-Feingold campaign finance reform act, which prevented corporations from airing so-called electioneering communications within sixty days of a general election. This ban encompassed sham issue ads, which attack a candidate without explicitly calling for his or her defeat — those ubiquitous commercials that go something like: "Call Senator John Smith and tell him to stop killing jobs!"

Then, in 2007, just a year after Samuel Alito replaced Sandra Day O'Connor, and only two years into John Roberts's tenure as chief justice, the Court went to work chipping away at these restrictions. That year, in Federal Election Com-
mission v. Wisconsin Right to Life, the Court's conservative majority struck down the limits on corporate-funded sham issue ads. Three years later, Citizens United vastly expanded the scope of that ruling, striking down any prohibition against corporations airing election ads of any type, at any time.

In his dissent, Justice John Paul Stevens warned that the Court's logic, which put campaign spending by corporations on an equal footing with spending by individuals, would open the door to foreign influence on American elections. The decision affords "the same protection to multinational corporations controlled by foreigners as to individual Americans," wrote Stevens.

Tags: american petroleum institute, api, aramco, attack ads, citizens united, claire mccaskill, election spending, elizabeth warren, global warming, joe sestak, mohammad al-sabban, saudi arabian oil company, saudi refining inc, scott brown, sherrod brown, superpac, tofiq al-gabsani, trade associations

  • Lee Fang is a reporting fellow with The Investigative Fund and a contributing writer at The Nation magazine. He previously covered lobbying and conservative movements as a blogger with

    Lee Fang's reporter page »