2014: The Year of Koch —By Andy Kroll | Thu Nov. 6, 2014 6:15 AM EST

And six other key takeaways on big money in the 2014 elections.

David Koch Phelan M. Ebenhack/AP

The 2014 election season acquired its fair share of nicknames: the Nothing Election, the Seinfeld Election, and the Meh Midterms. Here’s another: the Year of Koch.

Big money from outside spenders like the Koch brothers’ political network and the pro-Democratic Senate Majority PAC dominated this year’s elections. In the battleground states, a voter couldn’t watch five minutes of television, listen to the radio, or cue up a YouTube clip without being bombarded by political ads, most of them of the minor-chord, attack-ad variety. Broadcasters in Alaska, North Carolina, Colorado, and other critical states collected money by the fistful. Major candidates galore had a deep-pocketed super-PAC or a political nonprofit in his or her corner.

Here are seven big-money takeaways from the second election since the Supreme Court’s landscape-changing Citizens United decision.

The price tag for 2014 will probably be the highest in American history.
Candidates, parties, PACs, super-PACs, and political nonprofits—those anonymously funded outfits including the Koch-backed Americans for Prosperity and the pro-Democratic Patriot Majority—were on pace to spend $3.67 billion on the 2014 races, according to projections by the Center for Responsive Politics. That would be a new record, surpassing the $3.63 billion spent in 2010.

When all the numbers are tallied, Republicans will likely outspend the Democrats—but not by much. CRP predicts that Republican candidates and their allies will unload $1.75 billion this election, while Democrats and their supporters will spend $1.64 billion. (The remaining dollars, according to CRP, went toward nonpartisan and third-party spending as well as overhead costs.)
Super-PACs and dark money are a bigger deal than ever.
All those attack ads clogging up the commercial breaks during your favorite show? Chances are they were funded not by a candidate but an outside group—a super-PAC, a labor union, or a political nonprofit.

The 2014 elections will be remembered as the cycle when outside groups handled much of the mudslinging, which traditionally was the responsibility of candidates and their campaigns. In Kentucky, for instance, a secretly funded group called Kentucky Opportunity Coalition ran 12,000 TV ads—many of which attacked Democratic Senate candidate Alison Lundergan Grimes, depicting her as an Obama clone. The group’s commercials accounted for one out of every seven ads run during that race, according to the Center for Public Integrity. On paper, Kentucky Opportunity Coalition was independent of the candidate it supported, Senate Minority Leader Mitch McConnell. But the group was run by a former McConnell aide and functioned effectively as an offshoot of McConnell’s campaign.

This pattern unfolded across the country, as outside spending ramped up. In all, outside groups pumped $554 million—$301 million from Republican-aligned shops, $225 million from Democratic allies—into 2014 races. And you guessed it: That, too, is a new record for a midterm election.
Koch and Rove: From zeroes to heroes
Two years ago, the biggest donors and operatives in the Republican money universe—Karl Rove, casino magnate Sheldon Adelson, and the Koch brothers and their donor network—spent hundreds of millions of dollars to defeat President Obama and retake the Senate. They got nothing; it was an embarrassment.

This year, they won big.

Rove’s groups—American Crossroads, a super-PAC; and Crossroads GPS, its dark-money-funded sibling—spent heavily in 10 Senate races. The Republican won in at least six of those elections. If Republican Dan Sullivan defeats Sen. Mark Begich in Alaska (Sullivan was leading the vote count the day after the election) and GOP Rep. Bill Cassidy ousts Sen. Mary Landrieu in Louisiana’s runoff next month, Rove will end up 8 for 10. The Sunlight Foundation calculates Crossroads GPS’s return on investment—that is, the success rate of GPS’s spending to elect or defeat candidates—at an impressive 96 percent.

The Koch brothers’ flagship organization, Americans for Prosperity, had an equally stellar Election Day. At least five of the nine AFP-backed Senate candidates won. The Kochs’ Freedom Partners Action Fund recorded an 85 percent ROI, according to the Sunlight Foundation.

By contrast, Senate Majority PAC, the super-PAC aligned with Majority Leader Harry Reid (D-Nev.) that funded more ads than any other outside group, took a beating. It spent $47 million—the most of any super-PAC—but saw only two of the nine Republican candidates it targeted go down to defeat. Senate Majority PAC’s ROI: 9 percent.
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Last Week Tonight with John Oliver: State Legislatures and ALEC (HBO) – Published on Nov 2, 2014

While midterm coverage is largely focused on the parts of Congress that do very little, vital (and bizarre) midterm elections are going unexamined. State legislators pass a lot of bills, and some of that efficiency is thanks to a group called ALEC that writes legislation for them. It’s as shady as it sounds!

Dark money: Despite $4 billion spent, midterms hinge on hidden funding – by Ben Piven October 31, 2014 5:00AM ET

Screen Shot 2014-10-31 at Oct 31, 2014 1.55

Ten years ago, it was 527 groups and Pioneer bundlers for George W. Bush. In 2008, Barack Obama took the nation’s top office by storm as soft money ruled. Last election cycle, super PACs were all the rage. In 2014, campaign finance reform has given way to dark money, with unknown sources of indirect campaign spending dropping hundreds of millions of dollars to influence federal races.

“Who are these people, and what do they want with the state’s Senate race? Who are these interests, and what is motivating them?” asked Sheila Krumholz, director of the Center of Responsive Politics, in reference to the burgeoning political fundraising tactic.

Dark money, about $200 million of which has been spent nationally this election cycle, is secretive money generated by nonprofit organizations whose primary purposes are not legally considered “political”.

“We can see where the money comes from going to the candidates’ campaigns and going to some of the outside groups,” Krumholz said. “But for politically active nonprofits, we have absolutely no idea who’s bankrolling their efforts.” She blamed anonymous donors for giving voters “inaccurate, misleading and deceptive information to make up their minds.”

The North Carolina Senate race between incumbent Democrat Kay Hagan and Republican challenger Thom Tillis has set records for out-of-state funding: $75 million as of Oct. 30. The candidates combined have raised only half as much as outsiders have dished out, and the total race spending exceeds $107 million.

Over $20 million of the outside money has been spent attacking Tillis – more than on opposing any other candidate nationally. Hagan has benefited from the Senate Majority PAC and Democratic Senatorial Campaign Committee, the two largest contributors. But much of the money spent against Hagan, who carries a slight lead, is not reported to the Federal Election Commission (FEC), and so it cannot be tracked precisely. However, there is somewhat of a paper trail for broadcast negative ads.

Not far behind the North Carolina face-off are close Senate contests in Iowa, where Republican Joni Ernst is polling just ahead of Bruce Braley for an open seat, and Colorado, where Democratic Sen. Mark Udall is fending off a challenge from Republican Rep. Cory Gardner. Outside spending makes up more than two-thirds of overall funds used to influence both outcomes.

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3 ways this election could transform money in politics – By Mark Schmitt – October 25, 2014, 1:00 p.m. ET

By Mark Schmitt 

Mark Schmitt is director of the program on political reform at the New America Foundation.

At least since the first “billion-dollar election,” in 1996, money in politics has seemed like one of those perpetual problems that we wring our hands about but never fix. The numbers are always shocking, and the solutions always inadequate to the challenge.

But skyrocketing numbers are only part of the story. We often focus on how money affects elections — and it does. But it’s also true that elections affect the role of money and the influence it creates. The rise of intense partisanship, for example, with few independents and swing voters, changes the way money is used — encouraging mobilization of the base rather than persuasion — and thus the types of organizations that can influence elections. This, in turn, should change the way we define the problem of economic inequality reinforcing political inequality, and how we think about solutions.

This otherwise lackluster election might change the role of money in three important ways:

1)  Regulated, disclosed “hard money” contributions might soon become irrelevant

Over the course of the last decade, the system of public financing for presidential elections was effectively repealed, after candidates first began opting out of public financing in the primaries (which involved complex and obsolete limits on spending). In 2012, and then in 2012, both major party candidates chose to forsake public money in the general election, spending more than $1 billion each. But until recently, most political spending still came through the regulated system of campaign and party committees, political action committees and SuperPACs, that disclose their donors to the Federal Election Commission and adhere to contribution limits. While the Supreme Court’s decision in McCutcheon v. FEC earlier this year received outsized attention because it effectively raised those “hard money” limits to the point where a single donor could give more than $3.5 million in one election cycle, more and more big donors have been recruited to support political committees that don’t disclose their donors at all, and aren’t bound by any limits as long as they don’t coordinate with candidates.

As of Oct. 8, with a month left before the election, groups that don’t disclose their donors had spent more than $100 million on congressional campaigns, much more than they had spent on congressional fights in all of the 2012 campaign cycle. In some of the tightest races, candidates have received more support from the combination of non-disclosing non-profits and candidate-specific SuperPACs (which can accept unlimited donations but are required to disclose their donors) than through their own hard-money campaign committees.

The spending we know about from these non-disclosing non-profits includes only broadcast advertising, reported by the stations, and only ads with specific calls to vote for or against a candidate. But much of the groups’ money is spent on ads focusing mainly on issues. In this highly polarized environment, issue ads don’t need to mention a candidate to get their point across. Groups such as those funded by the Koch Brothers ran ads that highlighted citizens who said they had been harmed by “Obamacare.” Some of them mentioned a candidate briefly, many didn’t. It doesn’t much matter: “Obamacare” is an intense partisan signifier. So is “minimum wage” for Democrats.

These non-disclosing organizations are proliferating so rapidly, and the innovations so clever, that this may be the last campaign where the traditional, regulated system really matters. Future reforms will have to deal with these changes, some of which cannot easily be reined in without infringing on core First Amendment rights.

While this change is frightening, the second and third possible changes to the role of money in politics hold some promise.

2) Broadcast television advertising might no longer drive campaign costs

Read the rest of the article here:


Office Politics – By Spencer Woodman OCT. 15 2014 11:49 PM

Inside the PAC teaching corporate America how to make its employees vote for the right candidates and causes.

A worker uses a pressure hose to clean part of the Trans-Alaska Pipeline Marine Terminal in Valdez, Alaska, where oil flows from oil fields in Prudhoe Bay. The Alaskan gas and oil industry lobbied many of its workers to vote no on a state ballot measure in August by suggesting some of their jobs could be at stake.
Photo by Lucas Jackson/Reuters

On the morning of Jan. 29, construction workers were building a seawater pipe at Oliktok Point, part of a sprawling network of oil fields owned by ConocoPhillips on Alaska’s arctic North Slope, when they received an ominous notice. Workers at the icy camp would be required to attend a “safety stand-down” meeting, which is typically announced only after a job-site accident involving serious injury. One such meeting was called earlier this year, according to a contracted worker at the site, when a mechanic’s fingers were mangled by an industrial fan. Working in one of the world’s coldest and most isolated regions in the dead of winter—the nearest town of Deadhorse is roughly 40 miles away—comes with a host of potential hazards, and it was unclear to the crews what had happened and who might have been hurt.

When nearly 200 construction workers assembled inside a large heated tent just outside the camp, they learned the meeting’s true purpose. An unfamiliar manager, identified as John Schuelke from ConocoPhillips’ Anchorage office, took to the stage and told them that there hadn’t been an accident. Instead, the company had gathered the group, mostly construction contractors, to tell them how they should vote in Alaska’s upcoming August primaries. The oil and gas industry, Schuelke said, was fighting Democrat-supported Ballot Measure 1, which sought to repeal a massive tax cut for oil companies that Alaska’s Republican-controlled state Legislature had recently passed. Schuelke told the crowd to vote against the repeal, according to the contracted worker, who was present. Schuelke claimed that many of the area’s jobs relied on the tax break. The implication was clear: Vote against repeal or your industry and your livelihood will suffer.

“I’d never seen so many confused faces and so many frowns,” the contractor said. “It was definitely an abuse of our safety culture.” (A ConocoPhillips spokeswoman said the primary purpose of the meeting was to reinforce safety measures.)

This particular construction worker favored repeal, which Democrats argued would allow Alaska to equitably tax oil companies to fund its struggling public school system and other vital services. Yet the contractor said that corporate management’s forceful political agenda at the site, where ConocoPhillips oversees a patchwork of oil field contractors, made it unwise to express a dissenting point of view. “The feeling was that if we didn’t stay quiet we could get blackballed from the Slope,” the contractor said. A welder and a pipefitter did jump up during the meeting to yell, “What does this have to do with safety!” and another worker walked up to Schuelke afterward to say she wouldn’t vote as he’d instructed. But everyone else was “in fear of their jobs and said, ‘I didn’t agree with what that guy was saying but you guys better be quiet or you’re gonna get fired.’ They were scared.” Afraid of becoming unemployable on Alaska’s North Slope, the contractor spoke with me on the condition of anonymity.

Billionaires for Greg Orman – By KENNETH P. VOGEL and TARINI PARTI | 10/9/14 11:16 PM EDT Updated: 10/9/14 11:42 PM EDT

Independent candidate Greg Orman is pictured. | AP Photo

It’s a dramatic twist for a candidate who staunchly opposes big money in politics. | AP Photo

A small group of free-spending wildcard donors, including investment tycoons Peter Ackerman and John Burbank, are rallying to support Greg Orman’s independent Senate campaign in Kansas. Michael Bloomberg and a Jonathan Soros-backed group are also considering entering the campaign on Orman’s behalf, POLITICO has learned.

It’s a dramatic twist for a candidate who staunchly opposes big money in politics but has been badly outspent on the airwaves after surging to a surprise lead over Republican Sen. Pat Roberts. The Roberts campaign and allied conservative groups including the Ending Spending Action Fund, the Koch-brothers-backed Freedom Partners Action Fund, the National Rifle Association and the National Republican Senatorial Committee combined to reserve $3.3 million in airtime between Labor Day and Election Day.

Orman’s campaign, by contrast, reserved $1.3 million for television and radio ads during that time period, according to ad tracking sources.

(Also on POLITICO: Clinton finds a message in Philly)

It appeared as if Orman might lack a natural big money constituency. The Democratic Party and its allied super PACs have mostly sat on the sidelinesof the Kansas race, apparently unsure whether it’s worth investing in an independent candidate who has criticized both parties, and is not guaranteed to caucus with Democrats. That created the prospect that Orman, a wealthy private equity investor who has decried the role of big money in politics, might be dramatically outspent down the stretch.

Into the breach this week stepped a mysterious super PAC called the Committee to Elect an Independent Senate, which appears to have been created specifically to support Orman. It quickly reserved $220,000 in airtime, and began airing an ad praising Orman as a “bold, independent problem-solver,” who is “a businessman, not a career politician,” while blasting Roberts as “part of the Washington partisan mess.”

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Read more: http://www.politico.com/story/2014/10/greg-orman-kansas-2014-billionaires-111764.html#ixzz3Fj5j4075

Hey! Do You Want to Save America? Give Me $5. – By John Dickerson Oct 2014

Why political fundraising emails represent everything that’s wrong with our politics.

Sen. Jeanne Shaheen speaks during a press conference on Capitol Hill on April 1, 2014, in Washington.
Photo by Allison Shelley/Getty Images

If you receive political fundraising emails, you know the end is near.

As Politico reported recently, pessimism brings in the donations, and as the Wall Street Journal confirmed, studies back that up: “Donors and would-be donors are more likely to click on a fundraising email and contribute if the candidate highlights a recent poll that shows him or her trailing by a narrow margin.”

For me, this creates a parallel world to the one where clouds of happy talk billow from campaigns’ headquarters. I have been on the phone with a campaign staffer hearing how every sign points to his candidate’s success while simultaneously receiving an email from the same campaign claiming that the hordes are cresting over the parapet.

Perhaps it’s effective, but there’s a larger point to be made about political fundraising emails: They are a bouillon cube of all that is awful about American politics—the grasping for money, the neediness, the phony plays on your emotion, the baiting, and reduction of anything complex into its most incendiary form. What makes these emails bad is not the breadth of their insult—you can opt out of receiving them, which makes them easier to avoid than a television commercial—but what it says about the people who send them. Here’s the short version: They think you’re stupid.

“Unless everyone from Michelle to you—and your neighbor—does his or her part, DEMOCRATS COULD LOSE,” reads one from Tuesday from the Democratic Governors Association, referring to the first lady. Yesterday I got seven appeals from the DGA. Today, it’s been three already. The subject line of one: “ARRG!”

“No matter what happens next (and we KNOW there’ll be a next), you can do ONE thing right now to stop New Hampshire from falling into Brown’s hands,” reads one from Sen. Jeanne Shaheen. “Give $5 or more now—before midnight—to stop Brown’s bandwagon from stealing New Hampshire.”

Here’s one that addresses me as “Dear Patriot,” and informs me that “left-wing groups are going all-out to defeat Joni Ernst in Iowa. And I’m sad to say that their efforts are paying off.” Former Labor Secretary Robert Reich, writing for MoveOn.org, is worried, too: “We’re all in deep trouble.” The ones from social conservative activist Gary Bauer are fun: “Click here now to stop Barack Obama’s destruction of America!

There are hundreds more like this beseeching and screaming in my inbox. Many of them look like ransom letters, with highlighted passages, bold lettering, and SCATTERSHOT CAPITALIZATION. At the current trajectory of mushrooming calamity, I expect to receive a subject line soon that reads: “This email is coming from inside the house.” Or maybe, “Donate to this campaign or the dog gets it.”

Gabby Giffords gets mean – By ALEX ISENSTADT | 9/21/14 5:45 PM EDT

Gabby Giffords and Mark Kelly are shown. | AP Photo

Giffords is launching her campaign in places affected by incidents of gun violence. | AP Photo

Gabby Giffords, irreproachable figure of sympathy, has fashioned an improbable new role for herself this election year: ruthless attack dog.

The former Democratic congresswoman, whose recovery from a gunshot wound to the head captivated the country, has unleashed some of the nastiest ads of the campaign season, going after GOP candidates in Arizona and New Hampshire with attacks even some left-leaning commentators say go too far. And Republicans on the receiving end are largely helpless to hit back, knowing a fight with the much-admired survivor is not one they’re likely to win.

Some of the toughest spots from Giffords’ newly formed pro-gun-control super PAC, Americans for Responsible Solutions, hammer Republican Martha McSally, a retired Air Force pilot who is running for the Arizona seat Giffords once held. One features a wrenching testimonial from a woman named Vicki who weeps and stumbles over her words as she recounts how her 19-year-old daughter was hunted down and murdered by an enraged ex-boyfriend.

“He had threatened her before. I knew. I just knew,” Vicki says. A narrator then declares that McSally “opposes making it harder for stalkers to get a gun.”

It’s no accident that Giffords is singling out McSally, people close to the former congresswoman say.

During her unsuccessful 2012 campaign, McSally ran TV commercials comparing herself to Giffords. The Giffords team fumed, and her husband, retired astronaut Mark Kelly, released a terse statement declaring, “Martha McSally is no Gabby Giffords.”

Another anti-McSally ad features a woman named Carol who says her daughter was killed by a criminal who bought a firearm at a gun show and didn’t receive a background check — a check, she states, that McSally would oppose.

“To McSally, it’s just politics,” Carol says as she clutches a picture of her deceased daughter. “To me, it’s personal.”

Giffords also is going after Marilinda Garcia, a New Hampshire congressional candidate who, viewers are told, has “strange ideas” on gun laws. Another GOP hopeful in the Granite State, Frank Guinta, is ripped for “support[ing] the loophole that lets stalkers buy guns without a background check, no questions asked.”

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Read more: http://www.politico.com/story/2014/09/gabby-giffords-2014-elections-111180.html#ixzz3E1cs7bmU

Eric Cantor’s out, Wall Street’s still in – By ANNA PALMER and JAKE SHERMAN | 9/17/14 5:04 PM EDT

Eric Cantor rings the opening bell at the New York Stock Exchange. | Getty

Distance between Wall Street and Republican leadership? Fat chance. | Getty


Distance between Wall Street and Republican leadership? Fat chance.

Listen to the chattering class and Eric Cantor’s move to New York was a major blow to the Wall Street-GOP alliance.

But already banks are identifying and courting new allies at the top of the party. And they will keep giving some of the biggest money to Republican candidates and party committees.

(Also on POLITICO: Benghazi hearing opens with little drama)

Add in that banks have long cultivated key friendships with Democrats, too, and the same old picture comes together: Wall Street’s position in Washington hasn’t changed one iota, even if one of its strongest ties might have just broken and publicly candidates from both parties love to dump on it on the trail.

“Eric had a depth of relationships that won’t be easily duplicated,” said Rep. Patrick McHenry (R-N.C.), the recently appointed chief deputy whip. “However, current leadership has existing relationships and are actively cultivating new ones across business and industry.”

For instance, Speaker John Boehner counts lobbyists who represent banks among his kitchen cabinet of outside advisers. The Ohio Republican is also the top House recipient of campaign cash from the financial sector, taking in $2.6 million, according to the Center for Responsive Politics.

Not to be outdone, House Majority Leader Kevin McCarthy, regularly courts the Bay Area private equity set.

(Also on POLITICO: House moves toward Syria vote)

Republican officials, including National Republican Congressional Committee Chairman Greg Walden, regularly make the trek up to the Big Apple to raise funds for the party committee.

Even newly crowned House Majority Whip Steve Scalise began working to strengthen his ties to the industry before he moved into a leadership slot. The Louisiana Republican held a D.C. roundtable with banks big and small this summer as head of the conservative Republican Study Committee. His office said he’ll continue to do outreach to the financial services industry going forward.

“As RSC chair, Rep. Scalise held roundtables with industry representatives from many sectors of the economy, all affected by President Obama’s job-killing policies,” said Scalise spokeswoman Moira Bagley Smith. “As whip, he will continue to engage with these groups to find solutions to counter the administration’s assault on American business and workers.”

Republicans expect Cantor will use his perch on Wall Street to help his colleagues make inroads in New York. Cantor joined Wall Street bank Moelis & Co. earlier this month entering the financial services industry for the first time.

(Also on POLITICO: Twitter’s new guide for campaigners)

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Business groups ask Supreme Court to review swipe fee decision – By Vicki Needham – 08/18/14 08:08 PM EDT

Several retail and merchants groups on Monday asked the U.S. Supreme Court to review a March ruling that upheld the Federal Reserve’s debit card swipe fee rules.

The groups — National Association of Convenience Stores (NACS), Food Marketing Institute (FMI), National Restaurant Association, National Retail Federation (NRF), Boscov’s department stores and Miller Oil Company — filed a petition asking the justices to examine the decision that left the swipe fee cap at 21 cents per transaction rather than lowering it.

The National Retail Federation said the debate is “of staggering importance: that will have a significant economic effect to the nearly 8 million merchants that accept debit cards for payment.

“There’s so much at stake here for U.S. retailers and their customers that we have no choice but to pursue this case as far as possible,” said Mallory Duncan, NRF’s senior vice president and general counsel.

“When a federal agency blatantly disregards the clear intent of legislation passed by Congress and signed into law by the president, that’s a dispute that cannot be ignored.”

Under Dodd-Frank, the Fed calculated the average incremental cost at 4 cents per transaction and initially proposed a cap no higher than 12 cents, but eventually decided 21 cents.

“Unfortunately, the Fed overrode the language of the law and blunted the positive impact of reform. We need the Supreme Court to decide this case so that American merchants and their customers stop paying billions of dollars more than they should per year to the big banks,” said NACS President and CEO Henry Armour.

NRF has argued that the 21-cent figure included costs that went beyond those allowed under the legislation and filed suit against the Fed in U.S. District Court in 2011 along with other retail groups.

All of the groups filing the petition were plaintiffs in the original lawsuit.

In July 2013, Judge Richard Leon ruled in NRF’s favor and ordered the Fed to recalculate the cap at a lower level but the Fed appealed.

In March, the U.S. Court of Appeals for the District of Columbia overturned Leon’s ruling, citing “ambiguity” in the 2010 law and saying the Fed based the cap on a “reasonable interpretation” of the measure.

“Congress originally passed a law that was designed to lower swipe fees paid by customers and merchants, but the final Federal Reserve rule disregarded the legislative language and actually raised rates on many transactions,” said FMI President and CEO Leslie G. Sarasin.

“Our food retailers and wholesalers consistently serve their customers based on a simple merchandising strategy — low markups and high volume – and these excessive swipe fees exceed the industry’s one-percent net profit on shoppers’ orders.”

Read more: http://thehill.com/policy/finance/215454-business-groups-ask-supreme-court-to-review-swipe-fee-decision#ixzz3ApRiHWpA  Follow us: @thehill on Twitter | TheHill on Facebook