By ANGUS LOTEN
House lawmakers want to know who's paying for a small-business group's costly lawsuit that seeks to strike down the federal health-care reform law.
The National Federal of Independent Business, a non-profit small-business lobby based in Washington, D.C. with roughly 340,000 members, is a lead plaintiff in the legal challenge to the Affordable Care Act, initially launched by 13 states back in May 2010.
The lawsuit has since worked its way to the Supreme Court, which heard the case in March and is expected to rule later this month.
The group, whose members typically have 10 to 15 employees, says it brought the lawsuit on behalf of small-business owners – many of whom are struggling with weak sales and can't afford health-care coverage, as required under the law. It says that mandate is unconstitutional.
But in a letter this week to NFIB president Dan Danner, the Congressional Progressive Caucus, a group of more than 70 House Democrats, questioned the NFIB's ties to "corporate-funded activist groups," rather than small firms.
The letter cites support from such groups as Crossroads GPS, a Republican campaign fund co-founded by Karl Rove, a former aide to President George Bush.
Internal Revenue Service data, cited in the letter, shows the NFIB received $3.7 million from Crossroads GPS in 2010, the year it joined the lawsuit.
Such ties "call into question the NFIB's role in speaking for small business interests," the lawmakers' say. They want the group to reveal its donors.
In a statement Wednesday, Mr. Danner said none the cash from Crossroads GPS was used to fund the health-care lawsuit, and that the group took up the legal challenge solely on behalf of small businesses.
"As soon as the health-care law was passed, the response from NFIB members was immediate and overwhelmingly supportive of challenging the constitutionality of the law in court," he said.
That didn't come cheap. The group's legal center, which brought the lawsuit, is a separate non-profit entity operating within the organization that is supported by roughly 10,000 regular donors, Mr. Danner told the Wall Street Journal in March. In recent years, at least some were motivated to donate by the health-care law challenge, he said.
According to an IRS filing, the legal center spent some $2.9 million in 2010 on the health-care lawsuit alone, with $1.2 million paid for by donations and grants from the organization. The remaining $1.7 million was charged as "contributed services" by the law firm hired for the case.
Mr. Danner says that Voice of Free Enterprise—a new NFIB entity that allows donors from outside the small-business sector to support its lobbying efforts—wasn't created to help fund the lawsuit, and that any monies derived from it have not and will not go toward the lawsuit.
Still, not all small-business groups believe the NFIB's legal battle is in the best interest of small firms.
The National Small Business Association, a non-profit membership group with about 15,000 members, has said they oppose the health-care law, but don't think it's unconstitutional.
Others, like Main Street Alliance, a national network of state-based small-business coalitions representing about 12,000 businesses, fully support the act. It says the new law will help countless small employers save on health-care costs.
Please add your comments, or shoot us a note at smalltalk@wsj.com.
Canadian Financial System Robust But Highly Susceptible to Euro Crisis - DailyFx
THE TAKEAWAY: [Bank of Canada’s Financial System Review released] > [High risks to Canadian economy if euro crisis worsens] > [USDCAD little changed]
In its semi-annual Financial System Review released today, the Bank of Canada (BoC) cited continued robustness of Canada’s financial system and relative stability in domestic credit markets despite the fragile global environment. However, the Bank warned of high dangers to the Canadian economy if the European sovereign debt crisis worsens, emphasizing that worsening conditions in the euro zone could cause “major shock” to Canada.
The sources of major risks to the stability of Canada’s financial system remain broadly the same as those reported in the December 2011 Review, as outlined below:
- Further escalation of the euro-area sovereign debt crisis;
- An economic slowdown in other advanced economies;
- Financial stress in the Canadian household sector;
- A disorderly resolution of global current account imbalances; and
- Excessive risk-taking associated with a prolonged period of low interest rates.
Should the euro debt crisis continue to intensify, further weakening in global economic would fuel sovereign fiscal strains and heighten risk aversion. This would exacerbate pressures on bank balance sheets and ensuing tightening of lending conditions would further dampen global economic growth. Diminished growth prospects would foster expectations of continued low interest rates, possibly eroding the financial positions of life insurance companies and pension plans while boosting household borrowing in Canada.
The Bank stated that mitigation of risks to the global financial system requires a number of policy actions, with containment measures in the euro area at the forefront of priorities. Mitigation measures abroad include adequately capitalizing euro-area banks, reinforcing financial firewalls, enforcement of structural and product market reforms, and a clearer path for risk mutualization within the European monetary union. Globally, current account imbalances must be addressed to help foster sustainable and balanced global economic growth.
Domestically, “the high indebtedness of the household sector and elevated valuations in the housing market require continued vigilance”. In regards to broader financial reform, Canadian banks plan to implement Basel III capital rules as a key priority, which will help build a resilient market infrastructure in future.
USDCAD 1-minute Chart: June 14, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
The loonie remained largely unchanged against the greenback, as few developments have come out since the Bank’s December 2011 Review. At the time of this report, the USDCAD pair was trading at C$1.0246 to the dollar.
--- Written by Tzu-Wen Chen, DailyFX Research
Canada needs financial reforms to absorb shocks-BoC - Reuters
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MPs attack Money Advice Service over lack of direction - Citywire.co.uk
MPs have attacked the Money Advice Service (MAS), arguing it has a lack of direction and is replicating services that were already available.
During a Treasury Select Committee evidence session as part of an inquiry into the MAS, Labour MP Andy Love (pictured) said that the service was brought in to help consumers manage debt advice and it seemed instead to be replicating other services already provided.
‘I would understand as a coordinator in that sense at least a minimum bringing together some of these services and having them understand to interact with each other,' he said.
'Do they recognise that this is a complex landscape? And that MAS has been asked to coordinate?’
Labour MP George Mudie attacked the service’s lack of direction and said: ‘Does anyone at the table know what their role is?
‘They have not just arrived, they came from the body that was under the Financial Services Authority—I didn’t hear screams then— this body has been set up with this money and it seems to be they’re scrambling around to find a role at a very sensitive time.’
On the panel was chair of the Financial Services Practitioner Panel, Joe Garner, who said it was ‘absolutely appropriate’ for the financial services sector to be funding the MAS but that it should be pulling its weight.
‘I don’t think there’s an issue over the price tag, I think it’s over the value for money. If it were a business it would be more closely co-ordinated.
‘There’s a big savings gap and pensions gap in this country and between us we can’t do enough in this area and the industry thinks [the MAS] should be at least contributing its fair share.’
Adam Phillips, chair of the Financial Services Consumer Panel agreed, arguing the MAS needed to do more than simply sign-posting or replicating other websites.
FBL Financial's CEO plans to step down June 30 - AP - msnbc.com
WEST DES MOINES, Iowa — FBL Financial Group Inc.'s CEO James Hohmann is stepping down on June 30, the insurance company announced Thursday.
James Brannen, the company's chief financial officer, has been named interim CEO until a permanent replacement is found. The company expects to name a new CEO by the end of next year.
Hohmann will also be stepping down from the FBL Financial Group board.
FBL, based in West Des Moines, Iowa, is a holding company whose primary operating subsidiary is Farm Bureau Life Insurance Company. It also manages all aspects of two Farm Bureau affiliated property-casualty insurance companies.
"When I was hired as CEO of FBL Financial Group the company was struggling to address the serious challenges brought upon by the financial crisis," Hohmann said in a statement.
He said the company has "dramatically strengthened our capital position, increased profitability and grew our business" in the past three years. He said the recent sale of EquiTrust Life had "significantly changed the risk profile and focus of the company."
"With the transition of its operations nearly complete and FBL in a financially strong position, the time is right for me to move on and to find a new challenge," Hohmann said in the statement.
Its shares fell 16 cents to $25.96 by late morning. Its shares have tripled from $7.29 per share in early July 2009. But they have fallen 30 percent their high of $36.93 in mid-December.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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