Open, Accountable Government
Weaker Campaign Finance Limits Increase Need for Effective Disclosure
by Gavin Baker, 4/22/2014
On April 2, the U.S. Supreme Court ruled on McCutcheon vs. Federal Election Commission, striking down aggregate limits on the contributions that individuals can give to political candidates. Coupled with the court's earlier rulings that loosened restrictions on corporate spending on election ads, this decision makes comprehensive and timely disclosure of campaign spending even more important. Voters should be able to see who is financing campaigns.
In a 5-4 decision, the Court's majority ruled that the previous overall campaign contribution limit of $123,200 violated an individual's First Amendment right to freedom of expression. The limits for contributions to individual candidates and parties ($2,600 per candidate per election; $32,400 per party committee per year) will remain in place. However, without an aggregate limit, an individual can now give the maximum to candidates in every House and Senate race in the country, which has been estimated to total more than $2.4 million. In addition, more than $1.6 million more could be donated to political parties at the national and state levels. The Center for Responsive Politics estimated that 591 people provided the maximum amount of direct campaign funds to individual candidates in 2012. This ruling will allow this group to contribute even more.
Since the earliest days of the republic, observers have held that large campaign contributions by the wealthy will result in disproportionate influence over politicians and the decisions they make. These concerns are the reason campaign contribution limits were established. The McCutcheon decision will allow the super-wealthy to donate larger amounts of money directly to candidates around the entire country and further distort the idea that each citizen has an equal voice in the democratic process.
The decision is particularly troubling, coming on heels of the Supreme Court's 2010 ruling in Citizens United v. Federal Election Commission, which eliminated a ban on corporations running political candidate ads and opened the floodgates for wealthy individuals and corporations to establish super political action committees (PACs). While some forms of commercial speech have long enjoyed some level of First Amendment protection, Citizens United took a legal fiction indirectly established by the Court in the late 1800s (corporate "personhood") and extended it far beyond its original extent, essentially granting corporations the same free speech rights as those the Framers intended for individual Americans.
These concerns were evident in the reactions of public interest groups working on campaign finance issues. Miles Rappaport, the new president of Common Cause, claimed the decision was "further opening the floodgates for the nation's wealthiest few to drown out the voices of the rest of us." Marge Baker, executive vice president at People for the American Way, opined that the "Supreme Court has given its stamp of approval to a government unduly influenced by the rich and powerful."
With the Supreme Court striking down key campaign contribution restrictions and limits, public disclosure will become even more important to our democracy. Effective disclosure would allow citizens to track influence that can arise from campaign contributions. Even if attempts at influence-peddling cannot be prevented, transparency can hold these efforts up to public scrutiny.
Currently, direct campaign contributions to candidates or political parties must be reported to the Federal Election Commission (FEC) and publicly disclosed. The increased contributions under the McCutcheon decision will still have to be tracked and disclosed. However, the current system is limited in its utility because it takes time to collect and process donation data, particularly the flood of contributions that come in the final months before an election. Unfortunately, some of the largest, last-minute donations do not become public until after an election.
Moreover, contributions to PACs do not have the same disclosure requirements, so PACs offer individuals an alternative means to contribute to elections but remain anonymous. The Supreme Court's Citizens United decision increased the flow of untracked money through PACs by allowing corporations to make unlimited contributions to them. The court noted in Citizens United that disclosure could be a useful check on such contributions, but Congress has been unable to move forward with legislation to require greater disclosure of donor information for PACs.
Some observers have theorized that the McCutcheon decision could result in more transparency about direct campaign contributions by individual donors. By enabling larger direct contributions to campaigns, the thinking goes, mega-donors may give directly to candidates – donations which would be disclosed to the FEC – rather than funneling money through secretive PACs. But nothing prevents rich donors from doing both: making larger direct contributions to candidates while increasing their PAC contributions.
Limiting the Notion of Corruption
McCutcheon also upheld another controversial line of reasoning from the Citizens United case: its definition of corruption. As Nathaniel Persily wrote in The New York Times, the Supreme Court "asserted that corruption is a narrow concept extending only to the rare phenomenon when a politician does an official favor in exchange for the contribution (so-called 'quid pro quo' corruption). The influence and access rich individuals and corporations enjoy because of their expenditures was not enough to justify campaign finance restrictions. Rather, you now needed to show that money was buying votes or other political favors." In other words, a direct exchange of money for a vote or decision has to be established (a smoking gun) for corruption to be found. Few elected officials are careless or foolish enough to engage in this kind of obvious quid pro quo today.
This limited view does not take into account structural corruption. Yet "in an era with inequality not seen since the Gilded Age and growing … [w]hen more and more sectors are highly concentrated with a few big players, often acting in concert, who write or heavily influence any regulation that pertains to them," wrote the Seattle Times' Jon Talton, systemic corruption is the more serious problem. In light of recent research findings that economic elites significantly influence public policy and that their interests diverge significantly from those of everyday citizens, the McCutcheon decision seems likely to tilt the balance even further away from a government responsive to the needs of its citizens.
Furthermore, by narrowing the definition of corruption, the Citizens United and McCutcheon decisions restrict the rationale for regulating money in politics, which will make it harder to institute future campaign finance reforms. Talton concludes, "Now the only answer is a constitutional amendment."
Moving Toward Even More Extreme Views
The McCutcheon ruling – abolishing overall donation limits while leaving the cap on individual contribution amounts in place – has not settled the issue. In fact, it may have emboldened those who would further undermine the remaining restrictions that prevent wealthy interests from buying our elections. After the McCutcheon decision, Republican National Committee chairman Reince Priebus announced his view that all contribution limits should be struck down. Priebus is reportedly "conflicted" about whether the public should even be able to know the identity of campaign contributors, according to The Washington Post.
But even the most conservative justices have upheld the need for transparency. Justice Antonin Scalia wrote in his 2010 concurrence in Doe v. Reed, "Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed." But disclosure alone won't save democracy.
The problem is clear: we have a political system attuned to the needs of wealthy donors and large corporations. This is not what most Americans would call government of, by, and for the people. Unfortunately, the McCutcheon decision chips away at the options available for solving that problem.
One way forward would be a constitutional amendment to overturn the decisions in Citizens United and McCutcheon. Another approach would be to counteract the concentrated power of mega-donors by amplifying the impact of small donations, as New York City has successfully done – perhaps an interim step toward a constitutional solution. Without action, the future prospects for an effective democracy will dim.