In the last few weeks, a new player entered the financial reform fray with a $1.6 million ad buy, a respected economist on board, a blitz of opinion columns on left-leaning websites, and a message, cooked right into the group’s name — Stop Too Big To Fail — that liberals could love.
But as TPMmuckraker has looked into the group, every indication is that Stop Too Big To Fail is an astroturf operation funded by corporate interests to give the appearance of grassroots opposition to reform.
The group’s leader has a long history running a rent-a-front operation: offering up his services to large corporations who are willing to pay top dollar for a “consumers group” that will engage in stealth advocacy on behalf of industry. The group refuses to divulge its funding sources. The respected economist whose support the group touts now says he was deceived. And Stop Too Big To Fail has links to DCI Group, one of Washington’s best-known astroturf operators.Besides all that, Stop Too Big To Fail’s real goal is clear: kill the financial reform bill.
“These guys made the KGB look like amateurs, and I used to work in Russia quite a lot,” says Simon Johnson, a former chief economist at the IMF, now at MIT, who is a prominent advocate of breaking up the big banks.
Stop Too Big To Fail reached out to Simon Johnson earlier this month to participate in a media conference call purportedly on the topic of breaking up large banks. The theme was “protecting small investors.” Johnson agreed to be on the call and outlined his views as usual, but he also noticed something seemed off. “I thought they seemed a little different from the other people I talked to on these issues.”
Stop Too Big To Fail is now featuring Simon Johnson’s picture prominently on the landing page of their website — and he is angry.
“I’m usually inviting the industry to come and debate with me, but I’m not usually inviting them to come and deceive me. It’s really very interesting and sophisticated, and scary,” he says, adding that he will demand the group stop using his picture.
Simon Johnson was right to be suspicious.
Stop Too Big To Fail’s $1.6 million ad campaign, which is targeting Majority Leader Harry Reid, Sen. Claire McCaskill (D-MO), and Sen. Mark Warner (D-VA), asks viewers to tell their senators, “vote against this phony ‘financial reform.’ Support real reform, stop ‘too big to fail.'”
Part of the reason it’s easy to be confused about where Stop Too Big To Fail stands is its tactics: the group pays lip service to the idea of breaking up the big banks while at the same time adopting “bailout fund” rhetoric used by Republicans, all the while devoting its resources to trying to kill financial reform altogether.
That kind of sophisticated strategy is very familiar to Stop Too Big To Fail co-founder Bob Johnson (no relation to economist Simon Johnson). An Indianapolis lawyer, Bob Johnson is president of Consumers for Competitive Choice (C4CC), which runs Stop Too Big To Fail.
C4CC describes itself as “a diverse national coalition of Americans who support a strong, vibrant and consumer-focused economy that is united in the belief that our country’s greatest strength is its ability to dream, build, innovate and compete.”
Before C4CC was Consumers for Competitive Choice it was Consumers for Cable Choice. That group was funded by big telecoms like Verizon and fought to deregulate the cable industry. Sure, Consumers for Cable Choice was a coalition that included better-known groups like the California Small Business Association and the League of United Latin American Citizens (LULAC) — groups that are still members of C4CC, Bob Johnson tells us — but they too, had gotten loads of telecom money, the San Francisco Chronicle reported in 2005.
Before Consumers for Cable Choice, there was Consumers Voice. Founded in the late 1990s, that was “a self-described watchdog fighting against broadband legislation” that was funded by AT&T, according to Roll Call.
Through Consumers for Competitive Choice, Bob Johnson also currently runs www.simplecoverage.org, a website funded by mega-insurer Assurant, that says it helps people navigate the individual insurance market. C4CC recently visited Capitol Hill to advocate against credit card fees that are the bane of many businesses.
For all this, Consumers for Competitive Choice paid Bob Johnson $198,000 through his law firm for “consulting and management” services, according to C4CC’s 2008 tax filings.
Partnering with Bob Johnson on Stop Too Big To Fail is Sam Zamarripa, a former Democratic state senator in Georgia who now owns a private equity firm and is co-founder of Atlanta’s United Americas Bank.
In interviews with TPMmuckraker, neither Zamarripa nor Bob Johnson would detail where Stop Too Big To Fail got its money. “We get grant funding from members and organizations,” said Bob Johnson, who described Consumers for Competitive Choice as a “small operation” made up of him and partner Jim Conran of California.
Asked directly whether the group gets money from the banking industry, Bob Johnson said “you would have to talk with their representatives. I have not done so.”
According to Zamarripa, Stop Too Big To Fail started coming together when Bob Johnson mentioned the idea late last year to Zamarripa, who describes himself as a “lifelong Democrat” who knows Johnson through C4CC. He has become the public face of Stop Too Big To Fail, making media appearances on ABC and Fox and, and writing opinion columns for Politico and the Daily Caller.
In our interview, Zamarripa talked up raising capital requirements on banks and even voiced support for Blanche Lincoln’s derivatives regulation proposal. But none of that changes the kill-the-bill message in Stop Too Big To Fail’s ads.
“This looks to me like a piece of subterfuge,” said a pro-reform operative who examined Stop Too Big To Fail’s website.
One coda to all this: the man who reached out to economist Simon Johnson about joining the Stop Too Big To Fail call was Oliver Wolf, a director with the DCI Group. DCI is the Washington public affairs firm that specializes in astroturf efforts and has worked for everyone from the Burmese junta to the tobacco industry.
Wolf did not immediately respond to a call seeking comment.
Late Update: The group has now pulled Simon Johnson’s image and name from its website.