Obama’s flip-flops on money in politics: A brief history

Critics say the president's plan for a new nonprofit group to push his second-term agenda opens the door to influence by corporations and other big donors

When President Obama told supporters that he would morph his campaign into a new non-profit that would accept unlimited corporate donations, the announcement set off a familiar round of griping from campaign finance reformers.


The creation this month of Organizing for Action, which will promote the president’s second-term agenda, appears to be the fourth reversal by Obama on major money-in-politics issues since 2008.

“No big bank or corporation will donate million-dollar checks to OFA without the expectation that it will impact which issues they engage on, and that’s very troubling,” said Adam Green of the Progressive Change Campaign Committee.


The Washington Post noted that in reorganizing his campaign as a tax-exempt social welfare group, the president is embracing a structure that has been criticized for allowing anonymous money into politics.

Conservatives who’ve been attacked by the Obama camp for their reliance on such “dark money” groups called out the president’s “brazen hypocrisy.” Neither the White House nor Organizing for America responded to requests for comment.


Here’s a brief history of Obama’s other shifts on money-in-politics issues going back to 2008:

  • Public financing

In November 2007, then-Sen. Barack Obama pledged to take part in the presidential public financing system for the general election, calling himself “a long-time advocate for public financing of campaigns.” Under the system, created in the wake of Watergate, a candidate receives taxpayer money ($84 million in 2008) and cannot accept most private donations or spend beyond the amount of the government grant.


Less than a year later, in June 2008, Obama reversed himself and announced he was opting out of the system. He maintained he still supported the system in principle but said it should be reformed.


Obama became the first candidate to decline general election public financing since the creation of the system and went on to raise a then-record $745 million for the cycle. He outspent John McCain, who did accept public money, by four-to-one. Obama’s 2008 decision generally takes at least some of the blame from campaign finance observers for killing the system.


Neither Obama nor Mitt Romney accepted public financing in the 2012 race. The Obama campaign raised $782 million for the cycle.


  • Super PACs

When the U.S. Supreme Court issued its 2010 Citizens United decision, opening the way for the creation of super PACs financed with unlimited corporate or individual money, Obama became the ruling’s biggest critic.

“Last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests — including foreign corporations — to spend without limit in our elections,” Obama said in his State of the Union address a few days after the decision. “I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities.”


That criticism turned into a pledge not to use the new funding vehicles. In July 2011, Obama campaign spokesman Ben LaBolt told the Washington Post: “Neither the president nor his campaign staff or aides will fundraise for super PACs. Our campaign will continue to lead the way when it comes to transparency and reform.”


Seven months later, the campaign reversed itself and embraced a super PAC founded by former White House aides called Priorities USA Action. “[O]ur campaign has to face the reality of the law as it currently stands,” wrote campaign manager Jim Messina in a blog post.


With the blessing of the campaign, top Obama aides, such as then-Chief of Staff Jack Lew and confidantes like Rahm Emanuel, were dispatched to solicit super PAC donations from Democratic millionaires and billionaires. Priorities USA ultimately spent more than $60 million to help re-elect the president.


  • Inaugural festivities funding

After Obama’s victory in 2008, his inaugural committee abided by what it called “an unprecedented set of limitations on fundraising as part of President-elect Obama’s pledge to put the country on a new path.” That meant taking no corporate money and no individual contributions in excess of $50,000 to pay for the myriad parties and balls that end up costing tens of millions of dollars.


The second time around, Obama reversed the policy. The inaugural committee organizing this month’s inaugural festivities accepted corporate money and imposed no limits on giving. A spokesperson cited the need to “meet the fund-raising requirements for this civic event after the most expensive presidential campaign in history.”


  • Unlimited special interest spending

Just a few months ago, the Obama campaign sent me a memo on the president’s campaign finance record, highlighting his repeated denunciations of special interest money in politics.


“That’s one of the reasons I ran for President: because I believe so strongly that the voices of ordinary Americans were being drowned out by the clamor of a privileged few in Washington,” he said in May 2010, decrying the way Citizens United “gives corporations and other special interests the power to spend unlimited amounts of money — literally millions of dollars — to affect elections throughout our country.”


In 2012, the Obama campaign specifically called out social welfare, or 501(c)(4),  groups that spent hundreds of millions of dollars of anonymous money on political ads.


That’s why campaign finance reformers are so angry: Organizing for Action is a 501(c)(4) that will advocate for the president’s second-term agenda.

The group has said that despite its status, it will voluntarily disclose donors. But it’s not clear whether that will involve full, prompt disclosure of who is giving and how much, or simply providing a list of names at some point.

A spokeswoman for the new group told NBC this week the disclosure issue is “still being worked out.”

Unnamed Democratic officials have told media outlets that the group will take corporate money (though not donations from registered lobbyists). Indeed, at a meeting this month at the Newseum in Washington, Obama campaign aides pitched top Democratic donors, reported Politico, which obtained a ticket to the event.


The meeting was sponsored by a trade association founded by Fortune 100 companies, including UnitedHealthcare, Microsoft, Wal-Mart, and Duke Energy.


Social welfare groups are formed to promote the common good and may be involved in politics. Under IRS rules, they are not supposed to be primarily engaged in campaigns.


It’s unclear whether Organizing for Action will get involved in electoral politics as other such nonprofits have in recent years. The group’s spokeswoman told NBC it will run “issue” ads to support Obama’s agenda — but that’s a category of political advocacy that has been open to wide interpretation.




Information that cannot be denied to Parliament cannot be denied to you and me… but does it happen?

Does this provision in Section 8 wherein, despite exemptions you have the right to information if it is of larger public interest being correctly interpreted by Courts? A study thinks otherwise

Notwithstanding Section 8 of the Right to Information (RTI) Act under which you are denied the right to certain information, there is a provision which states that, every citizen has the right to get that information which our elected representatives, have access to. It reads thus, “Provided that the information which cannot be denied to the Parliament or a State Legislature shall not be denied to any person.”


However, it has been observed in an expert study, conducted by the Commonwealth Human Rights Initiative (CHRI) that the judiciary has been inconsistent in application of this provision and therefore “does not provide clarity of interpretation of this crucial provision of the RTI Act.’’


Sometimes, the judiciary applies it to the entire Section 8 (1) which should be the case according to the CHRI’s analysis but many a time in its judgment, the judiciary restricts this provision only to Section 8 (1)(j) which relates to protection of personal information. Such varied interpretation which is diluting the power of this provision says the study, would have adverse repercussions for citizens, if this trend continues in the court of law.


Interestingly, even the Department of Personnel and Training (DoPT), Government of India in its guidelines to public authorities, Public Information Officers (PIOs) and First Appellate Authorities (FAAs) at the Central and State level for implementing the RTI Act, directed them to follow this provision by stating that:  “The Act gives the citizens a right to information at par with the Members of Parliament (MPs) and the Members of the State Legislatures (MLAs). According to the Act, information which cannot be denied to Parliament or a State Legislature shall not be denied to any person.’’


However, many PIOs and FAAs continue to decline information and the matter goes to information commissioners who often order disclosure of information. However, petitioners seek legal intervention and it is here that the provision is not used in its true spirit, as per the study.


Venkatesh Nayak, Programme Coordinator, Access to Information programme, Commonwealth Human Rights Imitative (CHRI) conducted the study to highlight how the provision is being narrowly used. States Nayak, “In 18 judgments interpreting the provision, this is far from convincing. We have chosen one such issue for analysis where despite the existence of more than 15 judgments, the jurisprudence does not provide clarity of interpretation of this crucial provision of the RTI Act.  Settlement of access disputes in the High Courts has not always conformed to the doctrine of precedent.”


Nayak observes that, “Eight High Courts have interpreted the scope and application of the proviso under Section 8(1) varyingly. Starting with the Bombay High Court, in 2007, five High Courts (Bombay, Delhi, Madhya Pradesh, Madras and Patna) have interpreted this proviso in six cases as being applicable only to clause (j) of Section 8(1), namely, the exemption protecting personal information of an individual from disclosure. Three High Courts (Calcutta, Kerala and Punjab and Haryana) have in ten cases interpreted this proviso as applying to all exemption clauses listed in Section 8(1). In at least two High Courts (Bombay and Delhi) single‐judge and Division Benches have held contrary views indicating the lack of crystallisation of judicial precedent, regarding the interpretation of the scope and application of this proviso.’’


Section 8 (of the RTI Act) deals with exemptions to the right to information.  Nayak points out that:

  Sub‐Section (1) lists out the specific exemptions to disclosure –namely, information that an applicant may not claim as a matter of right

  Sub‐Section (2) provides for the disclosure of even exempt information when public interest in disclosure outweighs the harm to the protected interests.

Sub‐Section (3) limits the operation of seven out of the ten exemptions up to 20 years for a given set of records. The exemptions relating to national security, foreign relations with foreign Governments, Parliamentary and Legislative privilege and Cabinet documents apply for an indefinite period of time.

  A proviso is inscribed at the bottom of Section 8(1) which states that… Provided that the information which cannot be denied to the Parliament or a State Legislature shall not be denied to any person.”


The study highlights several judgments which have interpreted Section 8 (1) in different modes. In most of these cases, the High Courts have upheld the orders of information commissioners but the judgment is not based on a comprehensive look at this provision.  This study aims to provide insight into this discrepancy. Concludes Nayak, “We hope that in an appropriate case the true meaning of the proviso underlying Section 8(1) is interpreted by the courts with due regard to legislative intent and the drafting history of the RTI Act.’’


Following are a few examples:


Case 1: A member of the Legislative Assembly (MLA) was sentenced to a month’s imprisonment for committing contempt of Supreme Court’s orders during his tenure as Minister in the Government of Maharashtra. He spent 21 days of his jail term in a hospital in Mumbai under the pretext of being treated for various illnesses.


A citizen sought medical reports of his treatment, under RTI, in order to ascertain why the MLA had spent most of the duration of his sentence in an air‐conditioned hospital. The Petitioner objected to the disclosure of his medical records claiming that such action would cause invasion of his right to privacy. The matter escalated to the State Information Commission which ordered disclosure in the larger public interest.


The Petitioner (the MLA) challenged the order of disclosure on various grounds including the right to privacy and the requirement of confidentiality of patient‐related information under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2002.


A two‐judge Bench of the Bombay High Court upheld the order of disclosure of the Petitioner’s medical records in the larger public interest. (Mr Surupsingh Hrya Naik v/s State of Maharashtra Through Additional Secretary, General Administration Deptt. And Others, Bombay High Court [Writ Petition No. 1750 of 2007] decision date: 23/03/2007)


CHRI’s analysis: “The Court relied upon the judgement of a single‐judge Bench in an earlier dispute relating to access to information under the Goa Right to Information Act, 1997 (Goa RTI Act) to hold that the proviso underlying Section 8(1) applied only to clause (j)… The main cause in the Surupsingh Naik case was about an individual’s right to privacy in relation to his medical records. In our opinion inquiring into Parliament’s intent behind placing the proviso under Section 8(1) in the light of the Court’s earlier pronouncement was necessary before determining its scope and application. Instead the ratio of the Court in the Panaji Municipal Council case was applied mechanically without regard to the reasoning that informed it. In view of this glaring contradiction the Court’s reading of the import and application of the proviso underlying Section 8(1)(j) of the RTI Act, deserves to be reviewed.’’


Case 2: An Applicant sought information about the appointment, posting, transfer and promotion of clerical staff employed by the Canara Bank (the Bank) in Ernakulam district of Kerala during the period 2002‐2006. The Bank denied access on various grounds. When the matter escalated to the Central Information Commission (CIC), it ordered that the information be disclosed. The Bank challenged this order before the Kerala High Court claiming the protection of Section 8(1)(e)‐ when information is available to a person in his fiduciary relationship‐ and Section 8(1)(j)‐ when disclosure of personal information has no relationship to any public activity or interest or if disclosure would cause unwarranted invasion of the privacy of the individual. A single‐judge Bench of the Court rejected both contentions and upheld the order of the Central Information Commission. (Canara Bank vs the Central Information Commissioner and Another, Kerala High Court [Writ Petition (Civil) 9988 of 2007, decision date: 11/07/2007]7 2.1)


CHRI’s analysis: The Court independently held that the proviso applied to the whole of Section 8(1) and not merely to clause (j) of that Section. More importantly, the proviso to the section qualifies the section by stating that information which cannot be denied to the Parliament or a State Legislature shall not be denied to any person.


Case 3: A student sought access to his answer sheets in a Bachelor’s Degree examination conducted by the University of Calcutta. The PIO rejected the request without invoking any of the exemptions provided in Section 8 of the RTI Act. He merely stated, in an undated letter, that the University had taken a decision not to permit inspection of evaluated answer scripts under the RTI Act.


The matter escalated to the High Court where the University cited a decision of the CIC which had ruled in an earlier case that where Boards and Universities conducting public examinations had evolved a robust system of evaluation and, if, by their own rules, prohibited disclosure of evaluated answer‐sheets or where such disclosure would result in rendering the system unworkable in practice, a citizen could not seek disclosure of the answer‐sheets. The University also contended that answer scripts did not fall within the definition of information under Section 2(f) of the RTI Act and that disclosure of the evaluated answer scripts would endanger the lives of the examiners. The University contended further that the Supreme Court had in earlier decisions refused to order disclosure of such documents, so Section 8(1)(b) of the RTI Act would apply. A single‐judge Bench of the Court rejected these contentions in a well reasoned judgement and ordered the evaluated answer sheets to be disclosed. (Pritam Rooj vs University of Calcutta, Calcutta High Court [Writ Petition No. 22176 of 2007], decision date: 28/03/2008.)


CHRI’s Analysis: …The Court also took notice of the need for protecting the privacy of individuals. However the Court held that the proviso underlying Section 8(1) applied to the whole of that Section…The proviso at the foot of Clause (j) appears to cover the entirety of Section 8(1), notwithstanding the view taken by the Division Bench of the Bombay High Court. The manner in which the exceptions to the rule have been carved out in Section 8 and the proviso which appears to govern all the cases covered by Section 8(1) of the said Act, makes the exemption section exhaustive. [emphasis supplied]…That the Court rejected the finding of a larger Bench of another High Court without supplying a reasoned justification is problematic, particularly when both parties had used the ratio to support their contention..


In case you would like to have the full report, please contact:

Venkatesh Nayak

Programme Coordinator,

Access to Information Programme

Commonwealth Human Rights Initiative

B-117, First Floor, Sarvodaya Enclave

New Delhi- 110 017, INDIA

Tel: +91-11-43180215/ 43180201

Fax: +91-11-26864688

Skype: [email protected]

Alternate Email: [email protected]




Vinay Joshi

4 years ago

Hello Ms.Vinita,

Why RTI needs to be supreme? Why it should not be? We have to fight for that.

Mr. Shailesh Gandhi has commented on the apex court judgment, - legitimized the denial of info by public authorities who claim that there are rules to disclosure. He refers to the Karnataka HC
Appeal heard in SC.

Setting an unfortunate a precedent the apex court has downsized information commissioner’s authority.

But I’m surprised how Karnataka HC declined info u/s 8&9? SC has upheld it.

But Chennai HC had asked to reveal info u/s 8 RTI. [in different a case]

The subjudice aspects in courts – be it writ, PIL – are not even accessible by the parliament u/s 8 or sec 9 under RTI or otherwise also.

Can Mr. Venkatesh Nayak state or comment on the said apex court judgment?
I appreciate his efforts.

Why the apex court should take umbrage that the information commissioner should file a petition.

Mr.Shailesh Gandhi points out, u/s 22 RTI, -- if any inconsistency in a law re furnishing info, such a law is superseded by RTI Act. This is an insertion of non-obstinate clause, a conscious choice to safeguard fundamental Right under RTI.

Though apex court judgment is required to be honoured it has reprimanded a statutory authority, I second Mr.Gandhi, but am of the opinion that a review petition can be filed with a caveat.

RTI applicants are subservient, not pinpointing the exact info sought & in further appeal also.


Harish M Belani

4 years ago

Why not get This SC to spell out the Scope and Application of Sec. 8 of the RTI . Willing to contribute towards this ...

Inflation Index Bonds: Issues and challenges

For small investors, Inflation index bonds can be beneficial. Though the real return from these bonds will be close to being a very nominal amount, the wealth erosion won’t happen

This comes in the background of increasing gold import in the country which has added to the increasing current account deficit. To wean investors away from buying gold, Reserve Bank of India (RBI) has decided to introduce inflation-indexed bonds (IIBs) in a new avatar  Whether gold import will be reduced as a result of this measure is debatable, the basic idea of these bonds is to give subscriber of these bonds protection from inflation.  It is pertinent to note that these bonds were introduced earlier in India as well but somehow could not work in terms of attracting attention of investors. In 1997, RBI has introduced capital index bonds which got matured in 2002.

Fixed Income: Risks with NBFCs

Inflation Indexed Bond: How it works internationally

What is inflation indexed bond and how it works? Many countries in the world have issued it and the idea of inflation indexed bond has worked successfully in these countries. For instance, in USA, this type of bond is called as,’ Treasury Inflation Protection Security’ or TIPS. Treasury Inflation-Protected Securities, or TIPS, provide protection against inflation. The principal of TIPS increases with inflation and it decreases with deflation, as measured by the Consumer Price Index. When TIPS matures, an investor is paid the adjusted principal or original principal, whichever is greater. In UK, such bonds are called as,’Index Linked Gilts’. Index-linked gilts differ from conventional gilts in that both the semi-annual coupon payments and the principal payment are adjusted in line with movements in the General Index of Retail Prices in the UK (also known as the RPI). Australia has issued inflation index bonds more on the pattern of USA. As per Australian Office of Financial Management,’ Treasury Indexed Bonds will be issued only as capital-indexed bonds with the capital value of the investment being adjusted by the rate of inflation. Interest will be paid quarterly, at a fixed rate, on the adjusted capital value. At maturity, investors will receive the inflation-adjusted capital value of the security - the value as adjusted for inflation over the life of the bond.

Buying bonds from secondary market: Go through the checklist

Challenges before RBI

Issuance of inflation indexed bonds in India is full of challenges for RBI. The first and the most important challenge come from the fact that we have two indices which are used for calculation of inflation. One is Wholesale Price Index (WPI) and the second is Consumer Price Index (CPI). Which one should RBI use for benchmarking inflation indexed bonds? This is a dilemma which many governments internationally have faced. The next challenge would be identifying whether only principal should be adjusted to inflation or even coupon should be adjusted. There are both models available in the world. Adjusting both principal and coupon is a very attractive proposition for investors but very costly concept for a high inflation country like India. Additionally another aspect that needs to be considered is the taxability of these bonds. Any taxation of these bonds will reduce real returns of investors and hence these bonds should be logically tax free.

Benefits for Investors

For investors it can open a new avenue of investments. There are very few risk free investment options in India which have the potential to match inflation. As a result of this, investors have to venture into the world of uncertainties. For the small investors, this type of bond can be beneficial. Though the real return from these bonds will be close to being a very nominal amount, the wealth erosion won’t happen.




4 years ago

Good opportunity for people. If they put money in such bonds, their capital is protected in real terms (i.e. against too high & killing inflation) besides giving some return.

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