Adjusting the Flow of Money: Campaign Finance Reform

by Kavonte Batiste

The United States is a Democratic-Republic, but is a government really democratic if it does not follow the will of the majority? For decades, political scientists have argued whether we have a majoritarian electoral democracy or an economic-elite domination. Contrary to past studies, analysis of recent empirical data shows clearly that the interests of the ordinary American have almost no influence over the legislation being passed (Gilens and Page 13). Instead, a more reliable indicator of what legislation will be passed is the preferences of the wealthy. As citizens of the United States, we are afforded the right to elections and the freedom of speech, but the current form of campaign financing allows the general public very little influence.

Political scientists have been debating the constitutionality and fairness of our campaign finance since the 1970’s; since then, litigation has drastically affected campaign finance. Recent empirical data gives clear insight into how lobbying influences our elections. Lobbying, while viewed by many to be an important and fair part of our election process, has allowed elites a disproportionate amount of influence. In 2010, The Supreme Court’s decision in Citizens United v. FEC (Supreme Court) allowed the creation of SuperPACs; committees that can accept contributions without disclosing donors and spend unlimited money on independent expenditures (communications promoting a political candidate or party). For the United States to follow the will of its people, Congress needs to remove the limits on contributions that individuals and parties may contribute to candidates to reduce the influence of SuperPACs.

Since the 1970’s many political scientists have been calling for the reform of our campaign finance. Sterling explores the debates political scientists have had over the years regarding campaign finance laws and reforms. For instance, Marlene Arnold Nicholson (a political scientist and proponent of campaign finance reform) asserted that citizens and corporations should not have a disproportionate influence over our electoral process due to their wealth (Sterling 197). Nicholson, and those that agreed with her, cited the fourteenth amendment by claiming that private campaign finance was unequal “protection of the law” (Sterling 197). Others believed private campaign finance to be protected by the first amendment; therefore, denying the use of private resources would limit our basic right to freedom of speech (Sterling 198). Paul A. Freund, another political scientist, stated that–in the same way the limits on a citizen’s volume of speech are not considered a violation of the first amendment—the limits on the volume of dollars spent should also not be considered a violation of the first amendment (Sterling 199). Sterling himself claimed that reformers want “to turn the doctrine of equality against those whom they believe have ‘too much’ influence because of their financial resources,” and that limiting private resources gives the government the authority to effectively censor political messages which they deem to have a disproportionate influence (198). Sterling also implies that the special interest of wealthy elites is either absent or aligned with those of the average citizen by asserting that our elections require a group of elites to influence voters who cannot devote enough time to finding the right candidate (198). Proponents of this argument believe that the disproportionate influence of the elites is necessary for our electoral process because grassroots actors will be unable to garner political influence without similar financial resources, Sterling’s substantiation of this claim (which includes data indicating a lower rate of participation from individuals with less education) is exclusive to a political landscape where certain actors can drastically outspend others (198 ).

Although I agree that many voters need external influence to determine the proper candidate for them, limiting private spending does not mean removing all external influence. While an electoral process with minimal external influences may be desirable, a widely accepted belief among political scientists is that money will inevitably flow into politics (no matter its source).  Current evidence also rejects his implication that the elites are representing the will of the majority (Gilens and Page 13). Gilens and Page, political scientists from Cambridge University, analyzed 1,779 cases where respondents of a national survey of the general public provided their level of income and whether they opposed or favored a proposed policy change. Through their analysis, it was found that a minority of average Americans supporting a policy change had the same influence over the outcome as support from the majority of average Americans (Gilens and Page). Conversely, a policy change was much less likely to be adopted if affluent Americans opposed it and much more likely to adopt a change if they were in support (Gilens and Page). If a minority of average Americans support stricter gun laws, and a majority opposes such a change, they will each have the same influence on outcome despite the difference in population. The change in legislation is much more likely to be indicated by the preference of elites. The data presented by Gilens and Page clearly shows that the special interests of the wealthy have a significant impact on our legislation.  

In 1976, during the case Buckley v. Valeo, the FEC’s limitations on independent expenditures from individuals were found to be unconstitutional (Buckley v. Valeo par. 1). According to The Supreme Court, limits on independent expenditures would not level the playing field as the FEC intended but would instead handicap candidates who did not have enough exposure before the start of their campaign, so it was deemed an unconstitutional restriction of speech (Buckley v. Valeo par. 12). In contrast, The Court decided to uphold the FEC’s limitations on contributions to a candidate, stating that even though they did restrict a form of speech, they serve as an important tool to protect the integrity of our elections (Buckley v. Valeo par. 8). This ruling allowed a person to spend unlimited money on communications advocating for or against a candidate, but the amount of money they can directly contribute to a candidate would still be limited. The Court’s decision was made in the interest of preventing corruption, and the people’s ability to effectively advocate for the defeat or election of a candidate, but future litigation would create a more uneven playing field in part due to this case.

Similar to Buckley v. Valeo, in 2010 the Supreme Court made the decisions in Citizens United v. FEC that overruled a pervious decision in Austin v. Michigan State Chamber of Commerce, which had allowed restrictions on independent expenditures from corporations (Citizens United v. FEC). In the same fashion as Buckley v. Valeo, the ruling was made on grounds that the Federal Election Commission had infringed on the donors’ freedom of speech. The ruling stated “political speech must prevail against laws that would suppress it, whether by design or inadvertence” (Citizens United v. FEC par. 5). The court stated in Citizens United v. FEC that their decision in Austin v. Michigan State Chamber of Commerce was made to prevent “the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form…” (par. 5). The same rationale was not found compelling in the Citizens United v. FEC case and was found to interfere “with the ‘open marketplace of ideas’ protected by the First Amendment” (Citizens United v. FEC par. 5). The Court also found the risk of corruption through independent expenditures to be negligible but upheld the restrictions on contributions because of the risk that it would be used as a quid pro quo (United States Citizens United v. FEC par. 6).

Since 1971, corporations and unions have been allowed to raise money through the Federal Election Campaign Act and to use said money as contributions towards candidates so long as they created “separate segregated funds,” but they were not allowed to use those funds for independent expenditures (Dwyre 512). For instance, the UAW or Ford could raise money for a candidate if it were funded separately from corporate or union treasuries. However, The Citizens United v. FEC ruling undid the previous 1907 Tillman Act and 1947 Taft-Harley Act which banned the use of corporate or union treasury funds for electioneering communications (Dwyre 512 ). Due to this decision, corporations and unions would not need to create a separate pool of funds which broadened their depth of financial resources. Shortly after, the D.C. Circuit Court made the decision in SpeechNow.org v. Federal Election Commission to allow organizations making only independent expenditures to raise unlimited money (Dwyre 512 ). Both courts argued their decisions wouldn’t cause corruption because the committees cannot coordinate with candidates or parties (Dwyre 512). The earlier ruling in Buckley v. Valeo allowed individuals to spend unlimited money on independent expenditures, and Citizens v. United opened the doors for corporations and unions to do the same.  The allowance of unlimited spending for organizations solely funding independent expenditures also allowed wealthy individuals to bypass the limits on contributions.

As long as coordination is restricted between organizations making independent expenditures and the candidate or party, they are allowed to raise as much money as they want, but those restrictions are much less strict than what most people think (Wang par. 5). Many political scientists agree that the limits on coordination basically do nothing, and violations are extremely hard to investigate and enforce. The FEC has a very outdated definition of coordination, and the enforcement process incentivizes organizations to push the limits of coordination since investigations usually end in deadlocks (Morrison 476). Committees and candidates can discuss election spending as long as they aren’t talking about specific details like when or where the electioneering communications will take place, and candidates can even ask their supporters to donate to a specific committee (Wang par. 4). For example, Senator Ben Nelson, from Nebraska, appeared in an ad commissioned by an organization other than his party without facing repercussions from coordination (Wang par. 25). Between 1999 and 2012, the FEC only held three investigations into alleged coordination, two of which resulted in fines that added up to $26,000, which is a drop in the bucket compared to the billions spent on electioneering communications (Marcus and Dunbar par. 3). Along with rare enforcement, there is not a standard fine for violating the coordination restrictions, which further incentivizes committees to ignore restrictions (Marcus and Dunbar par. 6). Former FEC commissioner, Karl Sandstrom, described the nature of investigations to be “exceedingly difficult” because the evidence required to prove those activities would often go undocumented, and the rarity of witnesses to coordination made it unlikely for the FEC to open an investigation (qtd. in Marcus and Dunbar par. 8).  

Many people believe there is nothing wrong with our current system of campaign finance, and that it benefits the average American. Political scientists from Investopedia also cite the constitutionality of lobbying by explaining that it is not a bribe sent to candidates. According to this view, lobbying allows the average person to pool their resources with likeminded individuals, thus giving their voice a higher chance of being heard, and the potential to bring attention and access to issues that would have otherwise been ignored among the onslaught of bills (Weiser par. 5). In the past when studies showed evidence of a majoritarian electoral democracy, this position would be well supported (Gilens and Page 2).

Unfortunately, the influence that the people have over legislation, even with the use of lobbying, is undermined by the monetary power of wealthy individuals and corporations. In Buckley v. Valeo the Supreme Court upheld the limits on contributions that a corporation or individual could make to a candidates’ campaign, but also allowed individuals unlimited spending on independent expenditures if they do not coordinate with candidates (par. 1). In Citizens United v. FEC, The Court rejected the anticorruption rationale presented by the FEC stating that “independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption” (Martin par. 6). Despite the Supreme Court’s denial of the potential for quid pro quo bribery from independent expenditures, Gilens and Pages’s evidence of special interests influence over legislation shows there is some form of corruption present. Richard Hasen explains, “…when the SuperPAC is reliable, the money is just as valuable as in the campaign coffers” (qtd. in Morrison 475). The Supreme Court upheld the limitations on contributions directly to a candidates’ campaign in the recent litigation relevant to campaign finance because of the potential for quid pro quo bribery which is, according to The Court, absent from independent expenditures. Even though people are limited on the amount of money that they can directly give to candidates, in practice, it wasn’t a deterrence for quid-pro-quo bribery. Since non-coordination was leniently enforced, a donation to a SuperPAC that can raise unlimited funds is the same as contribution directly to a candidate, but without the limits that were supposed to prevent corruption.

People who believe that campaign finance needs to be reformed have proposed some common solutions. A constitutional amendment is often put forward to reverse the Citizens United v. FEC decision, but such a change would take drastic measures that are unlikely to happen. Reformers also believe that the appointment of a liberal Supreme Court justice, or strengthening of disclosure rules would solve the issue (La Raja and Rauch par. 2). If any of those changes could be made, it would reduce the influence that SuperPACs and other political action committees have on our elections, but to accomplish those changes requires an unlikely agreement among Congress. A consensus among almost all political scientists is that money inevitably flows into politics, and prevention is impossible, but it is feasible to influence the direction. When restrictions on contributions put a dam on the flow of money to state parties, there is no other direction for money to flow but towards loosely regulated political action committees. La Raja and Rauch assert the elimination of restrictions on contributions that state parties can receive to offset the influence of SuperPACs. In states where contributions are limited, 65% of respondents in their study reported that more than half of all political ads are sponsored by independent groups, and in states where there are no limits, only 23% reported the same (par. 8). Their study shows that in states with no limits on state parties, the amount of independent spending is significantly lower. While some states need stricter regulations, such as Virginia where there is little campaign finance oversight and campaign money can be used for personal expenditures, voters in most states would benefit since more money is being contributed to accountable actors (Morrison 518).

Removing limitations on contributions towards state parties would help their political viability in state elections, but that still leaves federal elections to be financially dominated by SuperPACs and similar political action committees. La Raja and Shaffner argued that “laws limiting money to candidates but leaving party contributions unlimited would channel more money and donations to parties…” (qtd. in Morrison 514). Channeling money towards parties, especially from wealthy extremist donors, is preferable for the average citizen because they have a broader range of aggregated interests; but, in reality, wealthy contributors still have the option to donate to candidate specific SuperPACs (Morrison 514). In practice, a wealthy donor may still prefer to donate directly to a candidate, and the limits on contributions would force them to use less accountable candidate specific SuperPACs. Since outside groups are the only way to raise unlimited donations for a specific candidate, there are almost no political repercussions from accepting “dark money [money contributed from unknown actors]” (Morrison 515). Removing limitations that individuals can donate to candidates would provide a transparent alternative to raising unlimited money and make it less politically acceptable to receive dark money, thus incentivizing a shift away from SuperPACs (Morrison 515).

The influence of money in our politics cannot be eliminated, and political scientists agree that restrictions on outside spending are unlikely (Morrison 515). The Supreme Court’s decisions in Buckley v. Valeo and Citizens United v. FEC allowed for the creation of Super PACs and the rise of dark money’s influence in our elections. While The Court asserts that their ruling would not allow for corruption, recent data shows that legislation essentially ignores the interest of the general population. (Gilens and Page 13). The FEC’s loose rules and lax enforcement of coordination restrictions, the limits on contributions that state parties can receive, and the limits that federal candidates can receive contribute to the disproportionate influence that wealthy elites have on our elections. When a candidate’s only option to raise unlimited money is from SuperPACs, there is no political price for accepting their dark money (Morrison 515). Removing the limits on contributions that state parties and federal candidates can receive will allow a more even flow of money through our elections. In order for our democracy to be preserved effectively, an effort by Congress for these changes is essential.
 

Works Cited

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Gilens, Martin, and Benjamin I. Page. “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens.” Perspectives on Politics, vol. 12, no. 3, Cambridge U. P., 18 Sep. 2014. Cambridge Core, doi:10.1017/S1537592714001595 .  

La Raja, Raymond J., and Jonathan Rauch. “Want to Reduce the Influence of Super PACs? Strengthen State Parties.” Brookings: Commentary, The Brookings Institution, 24 Mar. 2016. https://www.brookings.edu/articles/want-to-reduce-the-influence-of-supe…. Accessed 1 Aug. 2023.

Marcus, Rachel, and John Dunbar. “Rules against Coordination between Super PACs, Candidates, Tough to Enforce.”, The Center for Public Integrity, 13 Jan. 2012. https://publicintegrity.org/politics/rules-against-coordination-between…. Accessed 1 Aug. 2023.

Martin, Myles.. “Citizens United v. FEC. (Supreme Court)." United States, Federal Election Commission, Litigation Records, Federal Election Commission. n.d. https://www.fec.gov/updates/citizens-united-v-fecsupreme-court/. Accessed 16 Jul. 2023.

Morrison, Zachary. “Facing the Coordination Reality: Removing Individual and Party Limits on Contributions to Presidential Campaigns.” Columbia Journal of Law and Social Problems, vol. 52, no. 3, 2019, pp. 473-519. https://jlsp.law.columbia.edu/wp-content/blogs.dir/213/files/2019/04/Vo….

Sterling, Carleton W. “Public Financing of Campaigns: Equality Against Freedom.” American Bar Association Journal, vol. 62, no. 2, Feb. 1976, p. 197-200. EBSCO Academic Search Premier, search.ebscohost.com/login.aspx?direct=true&db=aph&AN=4797981&site=ehost-live&scope=site.

United States, Federal Election Commission, Legal Resources. “BUCKLEY V. VALEO.” Federal Election Commission. n.d. https://www.fec.gov/legal-resources/court-cases/buckley-v-valeo/. Accessed 16 Jul. 2023.

Wang, Marian. “Buying Your Vote: Uncoordinated Coordination: Six Reasons Limits on Super PACs Are Barely Limits at All.” ProPublica, Pro Publica Inc, 21 Nov. 2011. https://www.propublica.org/article/coordination-six-reasons-limits-on-s…. Accessed 1 Aug. 2023.

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