4 Years of Citizens United: The Damage and Its Solution

January 2014 marked the 4th anniversary of the highly controversial Citizens United v. Federal Electoral Committee verdict, in which the Supreme Court granted corporations and unions complete first amendment rights. The Court ruled that these entities are allowed to spend unlimited amounts of money on political advocacy as long as that money is not given directly to a specific campaign. As a result, the 2010 midterm election cycle produced record-breaking levels of spending by Super PACs-  independent organizations formed in the wake of Citizen’s United that pool and spend unrestricted amounts of money on political advocacy – and demonstrated the great influence wielded by this newly branded political tool.(1) The 2012 presidential election followed the same trend, as the Federal Election Committee (FEC) estimated a total of over $6 billion spent on all national elections, an increase of $1 billion from 2008.(2) Today, public opinion polls show that campaign finance reform is unquestionably supported by the general public on both sides of the political aisle, and that over 75% of U.S. citizens think that campaign spending should be limited.(3) Despite this clear, bipartisan support, Congress has still not made any substantial effort to ensure policy changes. As policy has failed to catch up with the Supreme Court’s rendering of the law, a very apparent and uncertain shift in the relationship between business and politics has developed. The Citizen’s United decision has allowed for the creation of a tremendously influential revenue schema, which leaves politicians incentivized to respond to corporate interests first and the people’s second. In order to subvert this potentially disastrous change, a Constitutional amendment reaffirming limitations on political spending by corporations and unions must be passed.

The Citizens United decision has a clear impact on the influx of money in elections. In the 2012 election, total non-party outside spending topped $1 billion for the first time in history – Super PACs represented around 60% of said spending.(4) Some publicly traded corporations and unions hesitate to fund Super PACs due to the negative stigma attached to these organizations and the possibility for public backlash. (4) As a result, some corporations have begun to make large donations to organizations referred to as 527s in the tax code. (5) 527s are tax-exempt not-for-profits that can engage in the same sort of political actions that corporations can now perform, but they do not have to disclose their donors. For example, in the 2014 election cycle companies including Coca Cola and State Farm contributed over $250,000 to 527s while the Service Employees International Union has already given over $3 million.(5) Corporations and unions now have a chance to donate to these organizations and anonymously support or oppose a political candidate, resulting in a large increase in undisclosed donor spending from under $80 million in 2008 to around $300 million in 2012.(6) Undisclosed donor spending now represents almost a quarter of all non-party outside campaign spending.(7)

Citizens United has not only encouraged an increase in corporate political spending but has also made it a fundamental and dutiful act. The Supreme Court has given corporations and unions the same First Amendment rights that individuals have. Inherent within this right is not only the freedom of speech, but the responsibility to use this freedom for the betterment of society. In other words, these entities now have a civic responsibility to participate in elections.  Trevor Potter, former Federal Election Committee chairman, said “Citizens United put a Supreme Court Good-Housekeeping-seal-of-approval on corporations being allowed in elections. After Citizens United, it was almost like their patriotic duty.”(8)  Although encouraging civic and voter responsibility for individual citizens is certainly beneficial for a healthy democracy, doing so for corporations and unions may result in a general complacency and acceptance over just how much influence these entities have, particularly when corporations are able to spend much more money than the average voter.

With the large influx of money and the acceptance of greater corporate interference in politics resulting from Citizens United, Washington has been mired in recent political dysfunction. In October of 2013, the federal government experienced its first shutdown in almost two decades. President Obama specifically pointed to Citizens United as the cause for the stalemate that led to the potentially disastrous shutdown: “I continue to believe that Citizens United contributed to some of the problems we’re having in Washington right now. You have some ideological extremists who have a big bankroll, and they can entirely skew our politics”. Obama added “There are a whole bunch of members of Congress right now who privately will tell you, ‘I know our positions are unreasonable but we’re scared that if we don’t go along with the tea party agenda or some particularly extremist agenda that we’ll be challenged from the right’”.(9) Obama’s point is highlighted by the recent fracturing of the Republican Party on ideological lines and especially by the ability of more conservative groups such as the Tea Party to play a larger role in government. For example, Republican Senator Thad Cochran defeated primary challenger and Tea Party-backed State Senator Chris McDaniel by a margin of 1.4% in June 24th, 2014, a surprisingly close race given Cochran’s status as a 6-term incumbent. Cochran was able to raise $1.15 million himself over the last 3 weeks before the runoff, and received over $2 million from outside groups. McDaniel, on the other hand, raised only $174,000 during this time period, but had over $2 million injected from outside groups including the Club for Growth, Tea Party Patriots, and FreedomWorks.(10) More extreme groups have benefitted greatly from Citizens United and have been able to challenge strong contenders such as Cochran because they can now raise and spend unlimited amounts of money, giving more extreme candidates a legitimate chance at victory. Although there is nothing inherently undemocratic about this, the recent polarization of U.S. politics, which has led to massive Congressional dysfunction, can be attributed to the rise of extreme factions.(11) It is important to note that conservatives are not the only candidates benefitting from Citizens United, as even President Obama has benefitted by becoming the first candidate to raise $1 billion in an election.(12) In response, the President points to his campaign fund success as a political necessity in a post-Citizen’s United electoral reality, which further demonstrates the bipartisan nature of this type of political dynamic.  Although politicians readily acknowledge the Citizens United decision as a problem – particularly when launching partisan attacks – no action is ever taken due to the reach that corporate money has in both parties.  Today, because of Citizens United, it is increasingly difficult to operate as a powerful politician without the help of these politically motivated entities.

Despite its clear influence, the Citizens United decision and the creation of Super PACs still represents only one part of the corporate political spending apparatus . Lobbying, an institution stapled into American democracy since the days of Carnegie and Rockefeller, has long been used as a way for corporations and unions to voice their opinions to Congress, and is an important structure in the hierarchy of American politics. However, the influence of lobbyists has grown immensely over the last half century. Corporations and unions, through the lobbyists they fund, now provide almost half of all Congressional members with a large source of wealth during and after their time in office.(13) These entities already have a powerful and influential political device in the form of lobbying.  Citizens United has now enabled them with a second, potentially more capable tool: indirect, unlimited political spending. With both lobbyists and Super PACs at their disposal, corporations and unions exert a very obvious influence in a political system that is intended to be “by the people.”

However, the growing strength of corporate and union influence in post-Citizens United America has not gone unnoticed; citizens and voters are starting to realize the magnitude of the impact of Citizen’s United on Washington. Harvard Law School Professor Lawrence Lessig gave a TED talk in 2013 expressing his concerns over the influence of corporate donations within post-Citizen’s United elections.(14) In his talk, Lessig compares the current system in the United States to his made up “Lesterland”. Lesterland is a democracy in which elections have two phases: the Lester Election and the General Election. In the Lester Election, only those citizens with the first name Lester are allowed to vote, and only candidates who perform well in the Lester Election are allowed to run in the general election. Lessig compares Lesterland elections to elections in the U.S. According to Lessig’s talk, the U.S. essentially has a corporate election: an election where only significant funders, namely corporations and extremely rich persons, decide who gets to run in the general election by giving out their money. Lessig denotes these significant funders as about 0.05% of the general population, or the amount of people named “Lester” in the United States.

Lessig’s analogy defines the U.S. political system today. According to the Center for Responsive Politics, in the 2012 election cycle the average cost of winning a seat in the House of Representatives totaled $1,567,293.(15) In the Senate, the cost is $11,474,077. It’s also important to note that the average losing Congressional campaign spends around 50% less than its victorious counterpart. Corporate donors who can pour in hundreds of thousands of dollars to campaigns are not only beneficial, but also necessary. U.S. House and Senate campaigns tend to be most vulnerable to the influence of corporate and union Super PACs, as a bombardment of attack ads in a small, localized area can easily swing elections.(16) Without getting the approval of large donors it would be incredibly difficult for any U.S. Congressional candidate to meet the basic financial needs of running a campaign.

Critics in favor of the Citizens United decision argue that the political system has always required large donations from powerful elites. In the end, they reason, people still have the ultimate decision on who wins and who loses. This is why Lessig’s argument is vital. It is true that people do have the final decision in elections, but to even have a chance at victory in an election, politicians must receive an incredibly large amount of funding. An inordinate amount of these funds happens to come from corporate donations, whether through Super PACs or 527s. In essence, corporations choose the candidates they prefer, fund them, and in doing so give them the greatest chance of winning the election.

Fortunately, Lessig’s message did not fall on deaf ears. His TED talk has already received over 1 million views and early in 2014 he led the New Hampshire Rebellion Walk, a walk through the entire state in protest of current campaign finance practices.(17) Along with Lessig and the New Hampshire Rebellion, other grassroots movements such as Occupy have bolstered the movement against money in politics. Lessig’s ultimate goal? To pass a Constitutional amendment limiting the influence of corporate money on elections.

The movement for a Constitutional amendment limiting spending on elections has brewed since Citizens United, and not only because of Lessig. Spurred by the Occupy movements of 2011, House Democrat Ted Deutsch first introduced an amendment to Congress in November of the same year.(18) However, many advocates are pushing for something that has been done just once in American history: passing an amendment through state convention. The Founding Fathers inserted the provision for state conventions calling for Constitutional amendments in order to subvert the federal government in case it became too powerful. The measure was used to pass the 21st amendment repealing prohibition, but was unnecessary otherwise.(19) As corporate influence creeps further and further into political decision-making, no one can expect Congress to regulate itself on campaign finance. The change must come directly from the people, through convention.

The passage of a Constitutional amendment is rare, because doing so often represents a great paradigm shift in American politics. The severity of issues such as freedom of speech, slavery, and women’s rights are examples that required such a drastic measure. Although some argue that campaign finance, an issue seemingly always on the fray of political discussion, would never warrant the use of such a powerful tool, campaign finance policy ultimately sits at the heart of democratic function and is an issue that affects all others. If federal law allows politicians to be influenced by unlimited money coming from corporations, then such money will continue to influence their decisions. A powerful force that does not have the best interests of society in mind will deter the entire policy making process. People like Lawrence Lessig have realized the severity of this fact and have forced the issue into the minds of the people. The paradigm shift has already begun.

Several prominent media members have also supported the amendment movement. Cenk Uygur, host of “The Young Turks”, the largest internet news show in the country, created his own Super PAC, called Wolf PAC, to support the fight for the amendment.(20) Stephen Colbert, host of Comedy Central’s “Colbert Report”, satirized the abundance of Super PACs by creating his own Colbert Super PAC, stating the money would be used for “normal administrative expenses, including but not limited to, luxury hotel stays, private jet travel, and PAC mementos from Saks Fifth Avenue and Neiman Marcus.”(21) The Colbert Super PAC ended up raising a total $1.02 million as of January 2012.(22)

Still, the movement for an amendment is not without its fair share of critics. Brad Smith of the Center for Competitive Politics argues this so-called movement hardly even exists by stating: “10 years ago…we could put an issue on the ballot in any state in the country asking to restrict campaign contributions and spending, and we would have gotten 70 percent majorities.”(23) Though there has always been support for campaign finance reform, Smith is wrong in saying that support has not grown in recent years. If Citizens United did anything positive, it motivated disgruntled citizens to speak out and take action against the current political system. This grassroots push has turned into real political action. After Deutsch proposed his amendment in the House in 2011, Tom Udall of New Mexico introduced a similar amendment in the Senate. (24)  Other Congressional members who have voiced their own desires for amendment include Senators Elizabeth Warren and Bernie Sanders, and Representative James McGovern.(25)(26)(27) The idea of Constitutional change to solve the campaign finance crisis is a very real debate among citizens and Congressional members alike.(28)

Smith and other critics also argue that large organizations have always influenced campaign spending. The Sierra Club, the NRA, and Planned Parenthood are all organizations that spend millions of dollars on campaigns every year, but these organizations are never criticized for their political action. Corporations, critics say, should receive the same right. But the difference between corporations and these political organizations is that corporations have a fiduciary responsibility to maximize profits for their shareholders.(29) This presents a clear conflict of interest in their political motivation since, legally and rightfully, they must earn profit for their shareholders above all else. However, corporate political spending cannot be expected to benefit society when corporate motivation is not necessarily aligned with societal well-being.

The current campaign finance system has created a dysfunctional political system. It has allowed corporations to distort political will and cause political stalemate throughout the federal government. Congressional approval rates have fallen to rock-bottom levels since Citizens United. To think this is a mere coincidence is a grave miscalculation.  Campaign finance requires more focus than an ordinary political issue because it affects the outcome of all political decisions. If money truly has infiltrated politics past the point of no return, a Constitutional amendment is clearly the only fix.

Prasanna Rajasekaran,

Economics ’18

References

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