During my perusal of the coin and currency related news on the Internet, I came across a story, “Survey shows dislike of Schweikert’s Coins Act” on the website for the East Valley Tribune, a newspaper based on Tempe, Arizona. The story is about alleged opposition to Rep. David Schweikert (R-AZ) sponsored the COINS Act to transition the one-dollar federal reserve note in favor of a one dollar coin. Schweikert represents Arizona’s 5th District that includes Tempe.
The article discusses a survey that was “conducted by the independent public opinion research firm Lincoln Park Strategies”that was paid for by an organization named Americans For George. Lincoln Park Strategies (LPS) was founded by Stefan Hankin who has worked on behalf of “numerous Democratic politicians and organizations, including President Barack Obama and the Democratic National Committee.” Although Hankin has tried to position his company to be non-partisan, his LPS’s portfolio boasts of the firm’s association with many Democrats and left-leaning organizations.
Americans for George claims to be a coalition “of like-minded individuals, businesses, and organizations seeking to ensure that the citizens of the United States maintain the ability to choose their preferred currency.” Their coalition members includes bars, restaurants, vending machine companies, companies that supply vending machine parts, armored car services, a few taxi services, Bingo World in Baltimore, and the Alabama Forestry Association an advocacy group for renewable forest resources in Alabama.
Unless you followed the paper, vending machine, and armored service industries, none of the coalition members are a household name outside of their home towns except one: Crane & Company, the Dalton, Massachusetts company who has the exclusive contract to supply currency paper to the Bureau of Engraving and Printing. Also listed as a coalition member is The Crane Family Council, a group of the extended Crane family that still owns and operates the paper company.
In other words, Americans for George is a front for Crane & Company to promote the business agenda of Crane & Company.
From 2005 through 2011, Crane & Company has paid Russell Wapensky, a lobbyist and former State Department employee, to lobby on their behalf. Wapensky was paid $80,000 by Crane & Company for his services in 2011. Wapensky has not filed disclosure paperwork and an office listed in the last discovered address in Washington, D.C. does not list him as a tenant. Disclosure records shows that for the last three years, Crane & Company was his only lobbying client.
In February 2012, Gephardt Government Affairs filed lobby registration forms (PDF) declaring Crane & Company as their client with the lobbying issue of “preservation of the dollar bill currency.” Gephardt Government Affairs was founded and run by former Rep. Dick Gephardt (D-MO) who served in the House of Representatives from 1977 through 2005. No disclosure regarding how much Crane & Company has paid the Gephardt Group is available since the Lobbying Activity Reports for the first quarter of 2012 are due on April 20.
Dick Gephardt was a mainstay in the House for 28 years having climbed the ranks to become House Majority Leader (1989-1995) and Minority Leader (1995-2003). He ran for president in 2004, losing in the primaries to John Kerry and was mentioned as a potential vice presidential candidate in 2004 and 2008. Gephardt remains well respected by many congressional veterans.
House rules allow members to keep their membership pins when their service ends. These pins allow their owners access to the House floor and other areas where the public is not allowed without escort. Gephardt should know his way around the Capital building. Buying this type of access and potential influence to Capital Hill is not cheap and shows that Crane & Company may be afraid that the political will is there to make a change that would cut a significant portion of their business. Currency paper for the one dollar Federal Reserve Note has to be the least expensive of the papers Crane & Company manufactures for the BEP. It is the only note that does not include features like watermarks or embedded security ribbons that has to make the process more expensive.
Without full disclosures from both Crane & Company and the BEP, it is impossible to determine the exact loss of revenue. The BEP is not required to report what they pay individual vendors and Crane is a privately held corporation, they are not required to file financial disclosure reports. However, we can make assumptions based on information provided by the BEP 2010 CFO Annual Report (PDF), the last available, and other public information.
How much revenue could Crane & Company lose if the the law was changed to eliminate the dollar note? Let’s assume the BEP produces 405 million $1 Federal Reserve Notes (rounded average of the last five years production). Let’s also assume that it costs the BEP $33.48 per one thousand notes to produce Federal Reserve Notes (the 2009 cost adjusted for inflation) of which 55-percent ($18.41) is the cost of the paper (calculated from 1990s information). In order to produce 405 million Federal Reserve Notes, Crane & Company would be paid about $7.45 million to supply the paper—estimating that the potential revenue loss from eliminating the one dollar Federal Reserve Note would range from $7 million to 10 million.
Crane & Company has over 7 million reasons to hire a powerful lobbyist like Dick Gephardt.
As a citizen, numismatist, and blogger, I have made it clear that I am in favor of transitioning from the paper note to the dollar coin. As the process continues, I will watch the public reports by Gephardt Government Affairs and any other information available on Crane & Company’s manipulation using the patriotic sounding front group, Americans for George.