Money in US politics: the “super PACs”

Campaign financing has long been a hotbed of controversy in the United States. It is a harshly contested ground between advocates for more regulation and supporters of more liberalization. But never has the issue of money in politics been more contentious and its dynamics murkier than in this election year.

A couple of historic decisions by the US Supreme Court, combined with the partisan deadlock in Washington – which has hindered any compromise at the legislative level – and the ever-rising costs of presidential campaigns, have unleashed an unprecedented flurry of outside spending by independent groups, or so-called “super PACs.” These new political entities are not bound by the same set of rules that applies to parties and candidates; they play a completely different game, which risks undermining the credibility of the American electoral system. Yet, even within the loosely regulated framework established by the landmark Citizens United v. Federal Election Commission (FEC) case of 2010, experts believe there are tools at Washington’s disposal to make the system more transparent and accountable, if only Congress and the White House would really put their minds to it. 

In the Citizens United decision, the conservative-majority US Supreme Court established that the First Amendment protects political speech and therefore prohibits government from regulating independent political spending by corporations and labor unions (on the principle that money is speech.) A subsequent decision, in the Speechnow vs. FEC case, expanded this paradigm to include individual donors as well.

The result is that, while parties and candidates can receive only limited contributions by individuals and groups, “super PACs” are free to raise and spend as much as they can, as long as they don’t officially “coordinate” with the candidates they support.

“We are now in an environment where outside money plays a dominant role,” says Adam Skaggs, senior counsel for the Brennan Center’s Democracy program at New York University School of Law. “The candidates themselves look almost like bystanders watching on the sidelines while the ‘super PACs’ fight it out on their behalf.”

A survey conducted by Wesleyan University shows that outside spending for campaign ads went from 3% of all ads aired in the 2008 race for the GOP nomination to 44% this year: a whopping 1600% increase. In the recent Florida primary, Restore our Future – the largest super PAC, which supports Mitt Romney – spent 8.5 million dollars on ads: 1.5 million more than his own campaign. The ratio was even more skewed in the case of Newt Gingrich and his super PAC, Winning our Future.

Both groups have been raising money from a limited number of extremely wealthy donors. The pro-Gingrich Winning our Future has been relying almost exclusively on the generosity of the family of Sheldon Adelson, a casino magnate in Las Vegas. The Adelson family has donated over $10 million. In 2011, the pro-Romney Restore our Future had 11 donors who gave more than a $1 million a piece. They included hedge fund managers Paul Singer and John Paulson and Texas billionaire Bill Koch, a tycoon of the petrochemical industry. 

“Citizens United put the election process in the hands of a very small number of people, who are very wealthy, have very compelling interests and don’t represent the vast number of Americans,” says David Donnelly of the Public Campaign Action Fund, a pro-campaign reform advocacy group. “It undermines the principle of one person one vote.”

At stake here is the issue of corruption and whether or not candidates that receive so much money from so few people can, if elected, be independent of them. “The idea that, if Gingrich were to become president, a family that gave him $10 million would not have his ear just defies reality,” says Adam Skaggs of NYU.

The Supreme Court, however, disagrees. Writing the majority opinion in Citizens United, Justice Anthony Kennedy stated, “We now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.”

The decision has its share of supporters. “Does the money change the candidate or does the money seek out candidates who have positions and try to get them resources to fight for those positions?” says John Samples, director of the Center for Representative Government at the libertarian Cato Institute. In Gingrich’s case, argues Samples, “Adelson is not trying to get Gingrich to do something he wouldn’t do otherwise; he is giving Newt money to do something they both want.”

Advocates of a less regulated system of campaign finance believe that spending by super PACs translates directly into political ads, and therefore more speech, which, in turn, translates into better-informed voters. In their view, the issue of fairness is not a central one. “Freedom of speech and equality of speech are incompatible,” says Samples. “We have a constitutional amendment for freedom of speech, if you try to bring about equality you’re going to restrict freedom, but there is no mandate for equality of speech in the Constitution.”

The good news for those who fear the corrupting influence of money in politics is that there are decent chances the Citizens United decision will be reversed in the future, once the bench’s majority switches from conservative to liberal.

In the meantime, supporters of campaign finance reform have launched a nation-wide effort in favor of a constitutional amendment barring all political spending by corporations. However, the road to amending the Constitution is long and winding, requiring the approval of two-thirds of Congress and three-quarters of the states. Others work to expand an already existing system of public campaign funds. For candidates who choose to participate in it, the federal government matches the money they have raised, but sets a spending limit on their campaigns. Unfortunately, the viability of this system was somewhat jeopardized in 2008, when then-senator Barack Obama decided to opt-out in order to be able to spend an unlimited amount of money in the general elections.

In theory, there are other, simpler ways to improve the campaign finance environment, even within the current Citizens United framework.

For example, the definition of what constitutes “coordination” between the super PACs and the candidates could be spelled out more clearly. The current interpretation is so loose as to make the system hardly credible: so-called independent groups are often run by close friends and former associates of the candidates they support.

The lack of transparency surrounding super PACs could also be addressed by legislative and regulatory means, without needing to touch Citizens United. These groups are only partially required to disclose the names of their donors and can do so months after the collected funds have been spent – potentially months after an election has taken place – leaving voters in the dark as to which special interests have been financing which candidates. “There is much that could be done by either Congress or the FEC to improve the disclosure law,” says Rick Hasen of UC-Irvine. “But right now, there is political paralysis in Washington.”

So far, all attempts at passing campaign finance reform in Congress have failed miserably, caught in the stalemate between Republicans and Democrats.

The Federal Election Commission, an independent agency of the US government tasked with enforcing existing campaign finance regulations, also has the authority to intervene and could redefine the meaning of “coordination” and “disclosure”. However, the FEC is itself caught in bipartisan bickering and seems incapable of reaching a compromise.

In the meantime, the cost of a presidential campaign is skyrocketing. Some estimates predict that the overall price tag for this cycle will surpass $6 billion. Without serious campaign finance reform, it is hard to imagine that individual candidates for the White House will ever be willing or able to forego the help of super PACs.