August
2004
Right-Bashing
or Left-Washing?
By Catherine Clyne
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“Working Assets—cool!” I
often get such enthusiasm when I use my bright purple credit card to
make a purchase. People know that a portion of every transaction goes
to help nonprofit organizations working to make a positive difference
in the world, fighting for human rights and the environment, among other
things. In fact, Working Assets’ “members” gave nearly
$5 million to various causes last year. Along with its credit card,
Working Assets offers long distance phone service as well, which I also
use.
An example of some of the cool stuff Working Assets does: a few weeks
ago I received a pamphlet in the mail entitled “The right-wing
rip-off.” It’s a promotion to get your friends to sign up
for their long distance service so that together we can “fight
right-wing extremism” to create a “better world.”
“They call themselves conservatives,” it warns, “but
in truth they are extremists, the right-wing fringe. And from tax cuts
to prescription-drug coverage to the increasingly tragic hundred-billion-dollar
hunt for weapons of mass destruction, they’ve been ripping us
off for years.”
“Help fight back by helping recruit more members to Working Assets,”
they say, “where one percent of your bill goes to progressive
nonprofits working for peace, justice, and the environment.” And
the hard sell: “More Working Assets members means more donations
means more leverage for our side. Plus, as a signing bonus, you and
your friend get to call each other free for a year.”
Cool…right?
Not So Cool
A few months ago I read a little piece in Mother Jones entitled, “What’s
in Your Wallet?” (May/June 2004), listing the top 10 credit card
companies that give to the GOP. MBNA is the number one corporate donor
to the Republican Party; Working Assets credit cards are issued by MBNA.
Dave Gilson and Jennifer Hahn report that MBNA’s founder and former
chairman Charles Cawley raised $370,000 for the Bush/Cheney 2000 election
campaign, including nearly a quarter of a million from MBNA’s
employees. Cawley also personally donated $5,000 to the GOP’s
Florida recount team and $100,000 to Bush’s inauguration. He was
a top fundraiser for the 2000 Bush/Cheney ticket, and is still going
strong.
This is not a new development. MBNA has generously supported the Republican
Party for the past decade. In the last quarter of 2003, MBNA was one
of the top three contributors to the GOP. Now retired, Cawley has pledged
to raise oodles of cash to help Bush get reelected.
So much for using your money to fight right-wing extremism.
Just How Bad?
While there’s a certain level of dirt with just about every credit
card and MBNA isn’t alone in its generous giving to politics,
the difference is one of enormous degree. Let’s compare it with
Citigroup, for example, which is regularly targeted by activists for
supporting oil ventures that abuse human rights and the environment
and is MBNA’s primary rival as the top credit card issuer in the
country.
According to the Mother Jones report, over the past three election cycles
(2000, 2002 and 2004), Citigroup donated roughly $4.5 million to the
GOP and $4.3 million to the Democrats; that’s about four percent
more to the Republicans. MBNA gave $5.2 million to the GOP and $1.2
million to the Dems—a whopping 350 percent more to the right.
The way Delaware-based MBNA is currently growing, the horizon looks
quite rosy: with two million new accounts opened during the first quarter
of 2004, MBNA reported a 20 percent rise in profits; with an addition
of 2.5 million new credit card holders for the second quarter, MBNA
enjoyed a 21 percent profit jump. They are currently positioning themselves
to aggressively enter the credit card market in China. The sky’s
the limit.
Household Economics: More Than a Pound of Flesh
Why are financial service companies dumping millions into political
campaigns, you might ask. It has a little something to do with the amount
of debt we Americans owe.
According to 2003 Federal Reserve statistics, the average American household
carries some $8,000 in credit card debt, collectively owing bank and
retail credit card companies a staggering $700 billion. Given that 43
percent of American families spend more cash than they earn in a year,
it’s no surprise that personal bankruptcies have doubled in the
past decade. And that’s partly what this is about.
With credit card users owing MBNA roughly $82 billion, there’s
a lot at stake. And to stay on top of things, MBNA has its own Political
Action Committee.
Corporations that profit from the credit industry have contributed grandly
to pressure politicians to pass a bill making it tougher for people
to file for bankruptcy. MBNA was also a leading proponent of banking
deregulation and lobbied against the protection of consumer privacy
in a recently passed bill. (For example, if card holders want to protect
their privacy, they have to specifically request institutions not distribute
their personal information; whereas the democrats unsuccessfully tried
to include an “opt in” clause that would have given consumers
the option of allowing their information to be distributed.)
There’s a reason why major religions ban usury, the practice of
lending money with exorbitant interest (although most have worked a
way around it these days). Debt is one of the oldest manifestations
of power in human history, a dynamic that’s very difficult to
upset once established.
Offsetting Evil
In a letter, I voiced my concerns to Working Assets, asking if they
had an explanation for choosing the top Republican Party supporter for
its credit card transactions. “I don’t understand how Working
Assets can seriously ‘work for change’ by lining the pockets
of MBNA with well-meaning, progressive dollars,” I wrote.
After thanking me for giving Working Assets the “opportunity”
to respond to my concerns over their partnership with MBNA, Customer
Relations Representative Dale explained: “All of us at Working
Assets are doing our best to make social change happen while remaining
a viable business. We believe that the tens of millions of dollars channeled
to progressive nonprofits through our credit card and long distance
programs more than offset the inevitable compromises required to operate
our business.”
If institutions that can handle large credit card portfolios were difficult
to come by, I might be sympathetic. But that’s hardly the case
here. For me, it’s a matter of scale: of the top contributors
to the Bush/Cheney 2000 election campaign, MBNA gave more than Phillip
Morris or the NRA, and contributed only $20,000 less than that good
corporate citizen Enron. Oh, and move over Enron—according to
the Center for Public Integrity, this past January MBNA unseated Enron
as the top career supporter of George W. Bush.
To be sure, there’s a distinction to be made: while MBNA profits
from Working Assets’ credit card portfolio, its long distance
service is leased from major carriers. So MBNA isn’t profiting
from Working Assets long distance users.
Since everybody knows that without money Bush couldn’t buy the
White House again, it seems a tad disingenuous for Working Assets to
say the good they do “offsets” the business they bring to
MBNA. Their partnership with the second largest credit card company
in the country, which happens to be one of the biggest GOP supporters,
makes their “right-wing rip-off” pamphlet seem somehow obscene,
like an absurd lefty marketing ploy. Sure, it’s insulting, but,
more damaging, there are a lot of people who think they’re helping
important causes by using Working Assets and other such credit cards.
MBNA’s corporate motto is “Getting the right customers and
keeping them.” With Working Assets and many other activist groups,
they’ve certainly managed to get the right customers. If Bush-bashing
is going to be profitable, MBNA higher-ups obviously feel comfortable
enough to happily support groups that do just that. Making me feel like
a real sucker.
Now for the Bad News
Before you cut up your Working Assets credit card in a huff, be advised
that they are simply one of thousands of groups that issue their credit
cards via MBNA.
A few weeks after reading the Mother Jones piece, a friend offered to
pay a bar tab with her HSUS credit card. I fairly hissed when I saw
the MBNA logo, which made me dig a little deeper.
With an enormous roster of more than 5,100 endorsement programs, including
hundreds of universities and alumni associations, MBNA issues credit
cards for groups ranging from the NAACP to NASDAQ; the American Medical
Student Association to the Marine Corps; the National Hockey League
to the Smithsonian Institution; the National Black Women’s Health
Project to NASCAR. Not to say it stops there. Here’s a taste of
some of the animal, environmental, human rights, and veggie groups MBNA
issues cards for: the Humane Society, the Animal Protection Institute,
In Defense of Animals, Amnesty International, the Sierra Club, the Nature
Conservancy, and the Vegetarian Resource Group.
“Guess I’ll use a different card ‘til after the election,”
my friend chuckled.
Watch these pages next month for suggested credit card alternatives.
To learn more about corporate political contributions, visit the Center
for Responsive Politics at www.opensecrets.org.
An excellent resource for up-to-date goings-on at MBNA is the Delaware
News Journal online at www.delawareonline.com/newsjournal.
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