Campaign Finance: Remedies Beyond the Court

It is difficult to overstate the impact of the Supreme Court’s Citizens United decision. Justice Anthony Kennedy, writing for the 5-4 majority, overturned or ignored the Court’s own precedents and federal, state, and local statutes that had been in place for more than 60 years. The immediate impact of Citizens United and subsequent cases was a dramatic increase in the amount that outside groups (both super PACs and certain nonprofit organizations) could raise and spend in federal elections. Given Citizen United’s exceedingly narrow definition of “corruption,” and its broad statements dismissing the concerns of those who believe that unlimited spending by well-financed interests is potentially corrupting, reformers are correct to worry about what other federal and state campaign finance laws may be invalidated in the future.

While the consequences of Citizens United are dire, it is also easy to overstate the difficulties reform faces today. Despite the myriad calls for a constitutional amendment to overturn the decision, there are several reforms—and venues for these reforms—short of an amendment that can meaningfully mitigate the risks posed by Citizens United. In fact, Justice Kennedy’s majority opinion itself provides the beginnings of a framework for such efforts. Broadly speaking, these potential reforms include: enhancing disclosure requirements so that voters know precisely who is funding public communications to elect or defeat candidates; requiring outside groups to operate totally independently of candidates and political parties; and creating a system of citizen funding of elections so that candidates and officeholders have the option of being beholden to average citizens rather than to large donors. Each of these reforms can be simultaneously advanced before several government institutions, including the White House, Congress, the Federal Election Commission (FEC), and other agencies, as well as various state governmental bodies. In short, the Constitution and the Court do not need to be changed in order for us to advance the cause of reform.

The new framework for reform begins with correcting two mistaken premises within the Court’s majority opinion in Citizens United. Justice Kennedy, writing for the Court, stated that unlimited corporate and union independent expenditures do not give rise to corruption or the appearance of corruption for two principal reasons: one, the funders of independent expenditures are fully and effectively disclosed, and two, such expenditures are made totally independently of candidates and political parties. The problem is that both of these premises were proven incorrect as a matter of current law and practice in the 2012 election cycle.

Effective Disclosure

The Court assumed that existing federal campaign-finance laws would result in the disclosure of the sources of independent expenditures. As Justice Kennedy wrote:

A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today…. With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. [emphasis added]

His description of the “effective” disclosure regime that he claimed exists “today”—one in which voters and shareholders are provided with “rapid and informative” data on corporate independent expenditures—is a far cry from the reality of our current disclosure system.

A corporation or individual can easily avoid being disclosed by, for example, giving its funds secretly to a trade association or to a social-welfare organization, which can run the same candidate advertising as a political committee that discloses its donors. In those cases, the only name that appears on the advertisement is the name of the organization airing the ad—the Chamber of Commerce, the Sierra Club Foundation, the NRA, or even a new group with no public profile at all, such as the Citizen Awareness Project, a nonprofit that spent hundreds of thousands of dollars to defeat President Obama in Virginia, or Citizens for Strength and Security Fund, a nonprofit that aired ads against Republican Congressman Denny Rehberg’s candidacy for the U.S. Senate seat in Montana. Such groups themselves need not disclose their donors. Comedy Central’s “The Colbert Report” showed viewers how easy it is to create a new social-welfare organization—technically, a 501(c)(4) group—to provide donors complete secrecy; it took “The Colbert Report” under four minutes to set one up. According to the Center for Responsive Politics, political spending by organizations that do not fully reveal their donors reached more than $663.8 million as of November 29, 2012, comprising 49.3 percent of all spending by noncandidate and nonpolitical party organizations. In contrast, only $96.3 million was spent by such nondisclosing groups on federal elections during the entire 2008 election cycle, and only $7 million during the entire 2004 election cycle. In short, the 2012 election will perhaps be remembered as the “dark money” election.

In light of these events, the creation of an effective disclosure system for campaign finance should be the immediate focus of those interested in reform. The current Senate version of the DISCLOSE Act, discussed in detail below, would mandate full disclosure of such funding.

“Totally” Independent Expenditures

The Court has variously stated that independent expenditures are defined as those made “totally independently,” “wholly independent[ly],” and “truly” independently from campaigns and political parties. In practice, however, such expenditures in the 2012 election cycle were often made in close collaboration with candidates and political parties. This happened because the FEC regulations that govern whether a group is considered to “coordinate” its expenditures with a candidate or political party are so permissive that they have proven more apt as a source of comedic inspiration than anything else.

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