Fracking, Poverty and the New Liberal Gentry

Fred Siegel: Fracking, Poverty and the New Liberal Gentry

The energy bonanza has bypassed New York, where socialites and celebrities have come out in force to stop it.

By

FRED SIEGEL

Nov. 7, 2013

The transformation of American liberalism over the past half-century is nowhere more apparent than in the disputes now roiling a relatively obscure section of upstate New York. In 1965, as part of his "war on poverty," President Lyndon Johnson created the Appalachian Regional Commission. Among the areas to be served by the commission were the Southern Tier counties of New York state, including Broome, Tioga and Chemung. The commission's central aim was to "Increase job opportunities and per capita income in Appalachia to reach parity with the nation."

Like so many Great Society antipoverty programs, the effort largely failed. The Southern Tier counties remain much as they appeared in the 1960s, pocked by deserted farms and abandoned businesses, largely untouched by the prosperity that blessed much of America over the past five decades.

Beginning about a dozen years ago, remarkable improvements in natural-gas drilling by means of hydraulic fracturing, or fracking, seemed to promise a way out of poverty. The massive Marcellus Shale Formation under New York and Pennsylvania has proved to be "the most lucrative natural gas play in the U.S.," Business Week recently noted, because the shale produces high-quality gas and is easily shipped to New York and Philadelphia.

In Pennsylvania, a state long familiar with carbon production through oil drilling and coal mining, Democratic Gov. Ed Rendell backed fracking during his tenure from 2003-11, and the state has experienced a boom in jobs and income. Between 2007 and 2011, in Pennsylvania counties with more than 200 fracking wells, per capita income rose 19%, compared with an 8% increase in counties with no wells, as petroleum analyst Gregg Laskoski wrote for U.S. News & World Report in August.

In New York, the potential natural-gas bonanza has been stillborn. Political support for fracking came largely from Southern Tier landowners scratching out a living on land much of which has been left fallow. These supporters sometimes referred to the environmental benefits of natural gas as opposed to coal. But their core argument was that fracking offered the only chance to rescue a dying region. Many landowners were being crushed by the heavy burden of New York's high taxes—among the highest property taxes in the nation—and by regulation that made it hard to eke out a living from small dairy herds.

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Actress Debra Winger at an anti-fracking protest in Albany, N.Y., Oct. 30. Associated Press

The landowners have been no match for an antifracking coalition that drew on the liberal well-to-do and celebrities, including Yoko Ono and Richard Plunz, a professor at the Columbia Graduate School of Architecture, whose primary residences are in New York City but who also own second homes upstate. These better-known opponents have been joined by other progressives, often from Manhattan, in alliance with the liberal gentry of upstate university towns such as Ithaca, Binghamton and Oneonta. Fracking is occurring in 31 states and has been approved for California and Illinois. But in New York, the antifrackers turned opposition to fracking into a litmus test for liberals.

The antifracking movement has taken on something of the anti-industrial Tory ethos of mid-19th-century England. The romantic sentiments underlying the antifracking movement have been expressed by Adelaide Gomer, the Duncan Hines heiress, who directs the Park Foundation of Ithaca. The foundation finances much of the antifracking movement. "Hydrofracking," Ms. Gomer wrote in a 2010 petition, "will turn our area into an industrial site. It will ruin the ambience, the beauty of the region. But, moreover, it will poison our aquifers. We can live without gas, but we cannot live without water."

Fracking supporters know that the process occurs far below aquifers and is not a danger to water supplies—which in any event proponents would have no interest in poisoning. These advocates are, in the standard sense, conservationists concerned with preserving the land even as they use it. The antifrackers, by contrast, seem most interested in maintaining the upstate region as a pristine setting for gracious living and tourism. Unlike the 19th-century British Tories, who felt a paternal obligation to look after the well-being of the peasants they governed, today's liberal gentry operates on a narrowly self-interested basis.

In 2008, the administration of New York's Gov. David Paterson seemed generally positive about fracking, even while emphasizing the need for updated regulations to protect the environment. But while Mr. Paterson was considering the problem, HBO presented "Gaslands," an agitprop film that depicted Pennsylvania as "getting fracked to hell." The film sensationally portrayed water coming out of kitchen water taps being ignited with a flame—the result of fracking, we were told, though the phenomenon was the result of naturally occurring methane.

"Gaslands" had an enormous impact, and it was buttressed by a series of articles in theNew York Times so biased against fracking that the newspaper's public editor twice apologized for them. The media's antifracking message meshed well with the Park Foundation's subsidies of protests around the region and in Albany. Faced with a surge of antifracking sentiment, the state in 2008 imposed a moratorium.

Five years later, the supposedly temporary ban to allow the study of health and regulatory considerations remains in place. Gov. Andrew Cuomo, who took office in 2010, last year floated a compromise. The areas near the reservoirs for New York and Syracuse, the liberal gentry of Ithaca and the wealthy retirees of Cooperstown would be able to maintain the status quo. The 100 towns that had passed local bans on fracking would have their wishes respected. Mr. Cuomo would have confined fracking areas to sections of the Southern Tier Counties of Broome, Chemung, Chenango, Steuben and Tioga. In those areas, the shale is deep within the earth and there are no aquifers—even antifracking activists would have a hard time finding a threat to the water table.

The proposed compromise might have seemed reasonable. But the antifrackers who had demonized the gas industry responded with a resounding, no. At a rally earlier this year, actor Mark Ruffalo, another antifracking celebrity, warned the politically ambitious Mr. Cuomo: "We'll cream you if you open New York state to fracking." On Wednesday last week in Albany, the state capital, actress Debra Winger was a prominent speaker at an antifracking protest.

Dick Downey, a retired teacher and fracking supporter living in Otego, N.Y., wrote in his local paper, the Daily Star, in 2011 that "the class divide in the argument over drilling in New York is the elephant in the living room. Everyone's aware of it but no one is talking about it. It pits generational farmers against the newly arrived, well-to-do pensioners against those just hanging on."

Poverty and social class don't seem significant issues for the residents of Ithaca, the center of the antifracking movement. Perched on the edge of beautiful Lake Cayuga, one of New York's Finger Lakes, Ithaca is home to Cornell University, Ithaca College and the Park Foundation. Ithaca claims to have more restaurants per capita than New York City. In the 2000 presidential election, more residents voted for Ralph Nader than for George W. Bush.

Great Society liberalism had, for all its faults, an ideal of inclusiveness. The environmental anti-industrial liberalism is implicitly organized around exclusion. Environmentalism, with its powerful not-in-my-backyard and not-in-your-backyard currents in upstate New York, has become an ideological cover for the pursuit of self-interest. New York's liberals are fighting to preserve the status quo, poverty and all.

Mr. Siegel is a scholar in residence at Saint Francis College in Brooklyn and a senior fellow at the Manhattan Institute's Center for Civic Innovation. This essay is adapted from an article that will be published next spring in Society magazine.

Copyright 2013 Dow Jones & Company, Inc. All Rights Reserved

Martha Coakley’s campaign funds in disarray

By Frank Phillips

   

  NOVEMBER 03, 2013

Attorney General Martha Coakley, now a candidate for governor, has used her own federal political account for questionable expenditures.

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As attorney general, Martha Coakley has doggedly pursued campaign finance scofflaws, yet Coakley, now a candidate for governor, has also used her own federal political account for questionable expenditures, while allowing the war chest to fall into fiscal disarray.

Since her failed 2010 Senate bid, Coakley has spent$6,000 in leftover cash to promote a statewide bid for office, much of which appears to be a violation of campaign finance law.

State law prohibits the use of federal campaign funds to support a state race. Coakley has consistently signaled that she is not interested in another Senate run and since 2010 had said that she would instead run for reelection as attorney general, before changing her mind and announcing a bid for governor last month.

Yet she dipped into her federal account to pay for an advertisement and fees at the state party convention that highlighted her position as attorney general, a move her aides say was a mistake. Several months later, she again used the federal cash to travel to the national party convention.

On top of that, Coakley also spent $35,000 from her federal fund — a huge amount for a scarcely active account — on software that helps to maintain a candidate’s fund-raising and volunteer database and to file quarterly financial reports to the Federal Election Commission.

‘The committee was not aware of the issues with the reports.’

To further oversee the account and ensure that the reports were filed correctly, the campaign paid $28,254 to Coakley’s sister, Anne Gentile. It paid another $10,000 to Megan Brengarth, a federal campaign finance compliance consultant, between April 2o10 and April 2011.

Despite all those expenditures, Coakley’s federal accounts are replete with inaccurate numbers. The result is an accounting nightmare that makes it unclear whether the committee is now running a substantial deficit or has cash on hand, according to its quarterly FEC reports.

After the committee paid off all its debts in 2010, it started 2011 with $70,012. Its reports since then show the committee took in $9,355 in reimbursements and other money owed, but collected no contributions. During that same period, the campaign spent $182,125, well more than it had in cash. Despite that, the committee claimed on its latest campaign finance report to have an ending balance of $6,053.

Meanwhile, Coakley’s federal committee failed to respond to repeated requests from federal campaign finance regulators to straighten out a series of error-riddled reports that it submitted over the last several years. Political aides attributed the miscommunication to an e-mail mix-up.

The campaign insisted that the US Senate database was used for federal purposes only. “The campaign committee made the decision to keep the federal account open to support other federal candidates, like Senator [Edward] Markey, and keep other options open,” spokesman Kyle Sullivan said.

As the state’s chief legal enforcer of campaign finance laws, Coakley is under particular scrutiny to adhere to the rules governing political fund-raising, particularly after taking legal action against several elected officials whose publicly filed records were incomplete and inaccurate.

While the questions surrounding Coakley’s campaign account were far less serious, she brought a criminal indictment against former South Boston legislator Brian P. Wallace on charges of failing to properly document how he spent his campaign cash. A judge reduced the charges to civil penalties.

In August, Coakley filed suit against William Lantigua, the controversial Lawrence mayor, charging that he had committed a range of campaign finance violations and accusing him of an “inability or unwillingness” to comply with the law. She has also brought campaign finance-related criminal charges against Michael E. McLaughlin, the former chief of the Chelsea Housing Authority, and she negotiated a huge campaign finance fine for former lieutenant governor Timothy P. Murray.

Those prosecutions rub up against her own issues with the Federal Election Commission. The agency has written her committee a half-dozen times since early 2011 demanding that it clean up its quarterly balance sheets. The federal committee never responded. Only when the Globe inquired this week did Coakley’s committee begin to prepare amended filings.

Aides say there’s a reason for that: The e-mail communications from the FEC went to a defunct e-mail address.

“Because the e-mails from the FEC were sent to an old e-mail address, the committee was not aware of the issues with the reports,” said Sullivan, the spokesman. “Once we were made aware of the issues, the campaign moved immediately to contact the FEC and address the issues.”

The statement does not explain that Gentile, who serves as treasurer of both Coakley’s state and federal accounts and provided the FEC with the contract address, never informed the agency of any change. Sullivan did not say why Gentile failed to inform the FEC that the e-mail address was no longer correct.

The FEC would not comment directly on the Coakley case, but said it typically makes efforts to get in touch with committees that do not respond to e-mails.

Sullivan did not explain why the filings were so inaccurate after the committee spent so much money on NGP database software, on top of the cash it paid to Coakley’s sister and the compliance consultant to oversee the work. Those filed documents were rarely more than 20 or 30 pages and often as slim as a dozen or fewer.

White the committee’s books fell into chaos, it continued to contribute to Coakley’s favorite candidates, charities, and political groups, as well as to Democratic Party organizations.

Those donations appear to fall within the law. But her use of the Martha Coakley for Senate Committee’s money for her direct political benefit when she was gearing up to run for reelection as attorney general (and now governor) falls into a gray legal area. Beacon Hill political figures created a 1997 law banning the use of federal funds in state politics in order to block members of the congressional delegation from using their campaign money to run for governor.

The $35,000 that Coakley spent on the software seems out of proportion with the committee’s activities during that time. As a state candidate in the same time frame, she paid the firm $18,625 for similar purposes. Yet while the federal committee raised nothing, the state organization took in $1.37 million in contributions.

Coakley declined to be interviewed about the accounting problems.But an aide acknowledged an “error” in some of its expenditures for state political activities, namely the ad and the convention fee.

In June 2012, Coakley’s federal committee paid a $1,000 fee for a state party convention and bought a $1,200 ad for the convention’s booklet, featuring a photo of her and a caption that read “Attorney General.” It made no mention of a potential candidacy for Senate or any other federal office, and claimed to be paid for by Coakley’s state committee, despite the fact that the state committee had no involvement in the purchase.

“We regret the error and will reimburse the funds,” Sullivan said.

He said they are working with the FEC to amend the reports and they aim to shut down the federal committee by the end of the year.

Her federal committee also paid the $3,763.10 in credit card charges that she ran up attending the September 2012 Democratic National Convention in Charlotte, N.C. Once again, the reason for her trip was clear. Coakley was not attending the event as a would-be federal candidate — she was there to carry out her political duties as an elected constitutional officer of Massachusetts, saying at the time that she was running for reelection. Sullivan insists that her use of the funds for the convention did not violate state law.

Frank Phillips can be reached at frank.phillips@globe.com.