Here’s How Money Came to Rule Politics

Source: Drew Angerer/Getty Images

Source: Drew Angerer/Getty Images

The Beginning: Citizens United

The 2010 Supreme Court case known simply as Citizens United decided that corporations, non-profits, and unions could spend an unlimited amount of money on campaigns, meaning the role outside funds play financing both presidential and congressional races is now huge.

A subsequent decision by the federal Court of Appeals for the D.C. Circuit  — 2012’s v. FEC — further changed the system. It held that restrictions on the source and size of contributions could not be applied to organizations (both for profit and not-for-profit) that made only independent expenditures in support of or opposition to a candidate. The effect of these two cases was the birth of the Super PAC. Sure, political action committees, groups whose mission is to influence elections, are no new phenomenon; they exists as early as the late 1940s. But at that time donations had limits. Now, thanks to the removal of caps on donations to Super PACs and holes in U.S. disclosure law, understanding where all this election money comes from is not possible. And that is problematic. That reality has cast a shadow over U.S. politics because politicians depend on the support of these groups for campaign financing and donors have the power to curry favors in Washington.

In the wake of the Watergate scandal restrictions were placed on so-called “soft money,” or political contributions made indirectly to parties and committees. But four years ago, the court ruled those restrictions were a violation of the First Amendment’s right to free speech. “We now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption,” wrote Justice Anthony Kennedy in the majority opinion for Citizens United. While the 2012 case, McCutcheon v. FEC limited the size of donations made to particular candidates and parties by a single individual, this decision in no way impacted the use of soft money, or specially dark money.

What is Dark Money?

Dark money — or funds whose donors are not disclosed — is funneled through nonprofit organizations, which then spend on elections, financing advertisements on issues without the input of the candidate. In fact, Super PACs are forbidden from coordinating with a campaign or a candidate. But still ties are close. Former aids of both President Barack Obama and 2012 Republican presidential candidate Mitt Romney ran organizations dedicated to supporting their respective campaigns.

Much has been made of the so-called mandate voters gave Republicans in the past midterm elections. Arguments have been made that the party’s sweeping win earlier this month means the American public wants to see Republican lawmakers check President Barack Obama and advance a conservative-minded agenda. But in reality, with voter turnout at a record low and anti-incumbent sentiment overwhelming, the message of the elections should be that the public wants Washington’s political dysfunction to end. Of course, that message was not a loud one, and whether congressional lawmakers’ new commitment to a functioning government will last remains to be seen. But still, the disillusioned national mood warrants an investigation into the one of the reasons the American political system is so broken: campaign financing.

How Did the 2014 Elections Become the Most Expensive Midterms Ever?

The 2014 midterm elections were the most expensive non-presidential contest in United States history. The 2012 presidential race was the most expensive election ever. “Every election since 1998 has been more expensive than the one before it, and predictably the 2014 election will follow that path,” The Center for Responsive Politics calculated in its first analysis of the November election. “The total projected cost of $3.67 billion is only a slight uptick over the price tag of the 2010 midterm,” but “counting all forms of spending — by candidates, parties and outside groups — Team Red is projected to have spent $1.75 billion, while Team Blue’s spending is projected to ring in at $1.64 billion.”

Sure, the GOP had a slight edge over Democratic candidates in terms of overall campaign spending. However, “the real story of the election’s campaign finance chapter was not which side had more resources, but that such a large chunk of the cost was paid for by a small group of ultra-wealthy donors using outside groups to bury voters with an avalanche of spending,” explained the CRP report. And the results prove that money wins elections. The center’s analysis shows that the House candidates who spent the most won 94.2 percent of the time. Senate races saw a lower correlation, but still candidates who spent more than their opponent were triumphant 81.8 percent of the time. Even though Senate Democrats lost control of a number of key seats — who had the funding advantage as incumbents — 2014 congressional election spending figures are higher than 2012’s numbers. In the last election cycle, 93.8 percent of higher-spending candidates won seats in the House of Representatives, and just 75.8 percent won in the Senate.

What Role Do Super PACs Play?

There is one key difference between the two parties; Democrats channeled funds through groups that primarily reveal the donors, while Republicans relied much more heavily on secret sources of money funneled through political nonprofits.

That campaign spending has skyrocketed over the past five years is no surprise; nor is the increase in outside political spending. After all, the Supreme Court’s 2010 decision in the Citizens United case allowed special interest money to rush into American politics. Yet, the fact that the number individual donors — especially those giving less than $200 — is decreasing is a new trend, one that often gets lost in the shadow of these huge election price tags. Until this year’s midterms, the number of individual donors was on rise, with each election drawing more contributors than the one before. This change means that the number of overall donors are decreasing as more money comes from outside groups. It is true that the bulk of money raised by the campaigns of Senate and House candidates did still come primarily from individual donors, as opposed to Super PACs. But more important is how campaigning has changed; those campaigns run by the candidates pale in comparison to the promotion that outside groups organize.

While the overall cost of the 2014 election was record, candidates spent less. Victorious house candidates spent an average of $1.2 million on campaigns, down from $1.5 million in 2012, while their Senate counterparts spent an average of $8.6 million, down from $11.4 million. Of The cost of several 2014 Senate races did set records, but that is because outside groups did much of the heaving spending. This is a new phenomenon; increasingly organizations like the Koch-backed Americans for Prosperity and the liberal Senate Majority Super PAC are buying advertising slots, rallying voters, conducting opposition research, and participating in other campaign ads — functions that were once the responsibility of the candidate.

Of course, it is important to note that CRP’s analysis is based only on initial data; final tallies for many types of political spending are not yet available, meaning the final number will be much higher than $3.67 billion. Spending could rise as high as $5 billion.

Why Is This Spending Concerning?

It is not too early to say that more expensive elections do not produce a better political system. It does not make more people vote; 2014 saw the lowest turnout since 1942, when the Second World War disrupted the voting process. Nor does high spending foment higher-quality debate over the issues concerning the public; the 2014 elections have been described as the “election about nothing.” And it definitely does not push congressional lawmakers to govern better; just before the elections, the approval rate of Congress stood at only 8% — nearly an all-time low. Even Americans themselves worry about the role of money in politics. An April 2014 poll conducted by Reason-Rupe found that 75 percent of Americans think politicians are “corrupted by campaign donations and lobbyists.” An exclusive poll conducted for MSNBC in late 2013 found that 90% of respondents support stricter campaign finance laws. And there was little difference in the answers of respondents that identified with the GOP or the Democratic party, meaning there is a broad consensus that money should not buy votes. And that is just another way of saying that unlimited political spending should not be the same as free political speech.

Instead of reform, the only changes to campaign finance have been made by the Supreme Court when it removed aggregate limits on campaign contributions earlier this year.

It would be easy to argue that American voters could make political speech a voting issue if they so chose, and they have not. Yet it is also true that even though most Americans want to reduce money’s role in politics and a number of proposals exist, including the Government by the People in Act and the American Anti-Corruption Act, survey data suggests that most Americans do not believe the reform would be in their best interest. In July 2012, the Clarus Research Group asked “when Congress passes laws that affect the way political campaigns are financed, do you think these laws have been designed more to help current members of Congress get re-elected or do you think these laws have been designed more to improve the system?” Eighty percent of respondents said those reform laws would be self-serving. And with the current state of politics in Washington it seems unlikely that opinion will change.

But the pressure for reform is slowly gaining mass. Proposals to limit money in politics were on ballots across the country. In nearly three dozen cities across numerous states — in both conservative and liberal regions and rural and urban areas — approximately 2 million Americans voted for measures that would amend the constitution so that corporations are not entitled to use money as speech. The Internal Revenue Service is contemplating new rules that disclose the use of so-called “dark money” in politics, and President Barack Obama favors legislation that would force non-profits to report donations.

But Should Money Equal Speech?

The argument for the concept “money equals speech” contends that the federal government is not the preserve of the wealthy because “most of federal spending goes to the poor and the middle class,” as Robert Samuelson wrote in an opinion column for The Washington Post. He based that figure off the Office of Management and Budget, which calculated that 70 percent of 2014 spending by the federal government was directed to “payments for individuals,” including food stamps and other benefits. Samuelson did acknowledge that rich contributors can deliver elections, but he suggests that is tempered by the fact that both super liberals and super conservatives funnel money into campaigns and that money does not guarantee victory. His final conclusion is that “campaign finance ‘reform’ aims to fix a problem that doesn’t really exist.”


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