POLITICO Magazine

Legalized Bribery

Four years on, Citizens United is ruining democracy. Here’s how to get it back.

By FRED WERTHEIMER

Exactly four years ago, the U.S. Supreme Court changed the landscape of American politics—and in ways we have yet to understand fully. In its 5-to-4 decision in Citizens United v. FEC, the court struck down the longstanding ban on corporate expenditures in federal elections, a move that reversed its position on how corporate money enters the political system and created new avenues for corrupting our government.

Today individual Americans are allowed to contribute only $2,600 per election to a federal candidate. Corporations, for their part, are prohibited from giving money directly to office-seekers. The Supreme Court didn’t change those facts, but its ruling made them far less relevant. The decision opened the door for anybody—individuals, corporations, interests groups—to give unlimited contributions to groups that then do the spending to influence federal elections. In effect, the donors and candidates are now allowed to circumvent the contribution limits.

The results have already been striking: During the 2012 election cycle, super PACs, tax-exempt nonprofit organizations and businesses spent more than $1 billion, including more than $300 million contributed by donors whose identities were never disclosed. This represented three times as much spending by outside groups as in either the 2008 or the 2010 election. In 2012, just 100 of the wealthiest people in America gave $339,490,176 to super PACs, or an average contribution of $3.4 million per donor, according to the Center for Responsive Politics.

The unlimited contributions, the secret money and the corporate cash washing into our politics returns us to a system that existed before the reforms enacted by Congress after the Watergate scandal—an era when government decisions could be routinely purchased with campaign contributions. (Overriding the objections of his Department of Agriculture, President Richard Nixon, for example, ordered the increase of dairy prices shortly after the industry gave $2 million to his 1972 reelection committee.)

And the bad situation could be made worse. In October, the Supreme Court heard arguments in another case—McCutcheon v. Federal Election Commission—that involves a challenge to the limits on the total contributions a donor can make to federal candidates and party committees in a two-year election cycle. If the Supreme Court strikes down these contribution limits, upheld by the court in 1976, we could well institute a system of legalized bribery—one where officeholders could solicit for their party $1 million contributions from influence-seeking donors, and then have the party spend the cash on their campaigns.

Amid the flood of cash threatening to corrupt the system, an opportunity now exists to make major changes to our campaign finance process. After all, it’s historically been the moments when money is most threatening our politics that Americans have seized the chance to make a change.

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The corrupting evils of money in politics threatened even the Roman Republic, as far back as the first century, when the ancient historian Plutarch noted that “buying and selling votes crept in and money began to play an important part in determining the elections.” In the United States, by the gilded-age period of the late 19th century, corporate money had became so intrusive that senators were jokingly referred to by the companies that supported them, rather than the states they represented—as in “the senator from Standard Oil” or his colleague, “the senator from Union Pacific.”

Elihu Root, who later became the U.S secretary of state, addressed the Constitutional Convention of New York State on the scourge of corporate money in 1894, saying it was doing “more to shake the confidence of the plain people of small means in our political institutions than any other practice which has ever obtained since the foundation of our government.”

Root called for an end to “the giving of $50,000 or $100,000 by a great corporation toward political purposes, upon the understanding that a debt is created” to the corporation in return for the money. The crisis and the call for reform led eventually to a measure pushed by President Theodore Roosevelt in 1907 to ban corporate contributions to federal candidates and political parties—a ban that still exists today, though, of course, it has been weakened by the Citizens United decision.

Money in politics is a cyclical issue. The cycle consists of scandals, followed by new laws, followed by those laws breaking down after a period of effectiveness, followed by new scandals—which in turn beget new laws. Thus, the response to the historic campaign finance abuses of the Watergate era was the landmark campaign finance reform legislation enacted in 1974. In addition to disclosure requirements, the law established limits on contributions from individuals to candidates and parties and created a public financing system for presidential elections that made funds available to candidates who agreed to limit spending. (The presidential financing system worked well for the nation and candidates of both parties for more than two decades.)

From the outset, efforts arose to curtail the contribution limits, but in 1976 the Supreme Courtfound that they were necessary “to deal with the reality or appearance of corruption inherent in a system permitting unlimited financial contributions.” Unlimited or very large contributions, the court reasoned, created an inherently corrupt system.

Of course, reforms can never solve all problems or anticipate all consequences. The failure to have an effective enforcement agency for the laws opened the door to abuses. For example, the explosive growth in the 1990s of “soft money”—donations unfettered by limits that are made not to a candidate, but to a candidate’s party, which then spends on the candidate’s behalf. Ironically, the loophole that allowed for this was created by flawed regulations issued by the Federal Election Commission, the agency that is supposed to enforce the laws. Congress put an end to this practice with a reform measure in 2002, but not before the spirit of the era was captured colorfully by Johnny Chung, an influence-seeking businessman who, in the late 1990s, gave $366,000 to the Democratic Party. “The White House is like a subway,” Chung said. “You have to put in coins to open the gates.”

Supporters of such a system perhaps wouldn’t all use Chung’s analogy, but they do argue that corporations, wealthy individuals and other donors have First Amendment free speech rights to give as much money as they want to candidates and parties. They agree with Justice Anthony Kennedy who, in 2009, authored the majority opinion in Citizens United and wrote that there is nothing wrong with money being used to buy “influence over or access to elected officials.”

Polls, though, show that most Americans disagree. A 2012 Reuters/Ipsos poll found that 75 percent of Americans feel there is “too much money in politics,” and only 25 percent felt that there should not be limits on the amounts spent in elections. The poll also found that 75 percent of Americans “feel that the amount of money in elections has given rich people more influence than other Americans.”

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The campaign finance system we have today, corrupt as it’s become, has brought us to the reform stage of our historical cycle—and opportunity exists for citizens to build a new national movement to demand change. The key to combating a small group of big-money donors who can corrupt our politics lies in engaging tens of millions of citizens to finance our elections instead.This can be accomplished by creating public incentives for donors to give small contributions and by finding new and smart ways to encourage online giving.

As President Obama’s campaigns in 2008 and 2012 showed, the Internet can empower donors to give more—and candidates to raise historic amounts of money—through small contributions. The two Obama campaigns combined to rely on 6.5 million individual donors who gave online. Finding ways to get more Americans donating to finance our elections would dilute the influence of big donors and reduce opportunities for government corruption. Legislation to do this by matching small contributions in federal elections with public funds has been introduced by Reps. David Price (D-N.C.) and Chris Van Hollen (D-Md.). The Empowering Citizens Act, which is modeled on the successful public matching funds system used since 1989 to finance New York City elections, is the most comprehensive campaign finance bill currently pending in Congress and has been called a “vital” reform measure by editorials in the New York Times and the Washington Post.

According to the nonpartisan Campaign Finance Institute (CFI), candidates who participated in the New York City system in 2009 raised 63 percent of their funds from individuals who contributed less than $250. By contrast in 2008, candidates for the U.S. House and Senate raised only 8 and 14 percent, respectively, from small donors of $200 or less (percentages in line with the fundraising performance of candidates who did not participate in the New York City system, according to CFI).

The Empowering Citizens Act would also prohibit candidate-specific super PACs, the most insidious new innovation produced by Citizens United, which allow political associates of a candidate to raise and spend unlimited amounts of money, as long as they aren’t, technically, coordinating with the campaign or the candidate they’re supporting. Candidate-specific super PACs sprout up like weeds to support Republican and Democratic candidates alike; already dozens are taking shape in advance of the 2014 election.

At the root of all of the possible solutions to these issues is the notion of transparency—the foundational right of citizens to know who is spending what to influence government. For more than 35 years there was a bipartisan support in Congress for campaign finance disclosure requirements. But that consensus ended after the Citizens United decision, when Republican leaders in Congress concluded that the undisclosed money unleashed by the Supreme Court would provide them with a partisan advantage. Thus, a 48-to-6 vote in 2000 by Republican senators in support of legislation to close campaign finance disclosure loopholes turned into a 39-to-0 vote in 2010 by Republican senators against requirements to close new disclosure loopholes.

Unlike in Congress, there is little partisan divide among Americans on the usefulness of campaign disclosure requirements. A 2012 poll by the Clarus Research Group found that 88 percent of respondents thought campaign fundraising and spending should be made public. To its credit, the Supreme Court has consistently upheld such requirements. A measure introduced by Van Hollen in the House and by Sen. Sheldon Whitehouse (D-R.I.) in the Senate would require all groups that make expenditures to influence federal elections to disclose their donors. The so-called DISCLOSE Act would bring out of the dark the hundreds of millions of dollars in secret contributions now being spent in federal elections. In 2010, the measure came within one vote of being enacted when it passed the House and received 59 votes in the Senate. Now efforts are focused on finding Republicans willing to negotiate a compromise disclosure bill.

Efforts to remove secret money from our elections are also being pursued at federal agencies with the power to adopt regulations that would provide new disclosure requirements for tax-exempt, nonprofit groups (Internal Revenue Service), for corporations (Securities and Exchange Commission) and for broadcast stations (Federal Communications Commission).

The good news, as we contemplate the dismal landscape that the Citizens United decision has wrought, is that effective campaign finance reforms have been won in the past and can and will be won in the future. As my former colleague and mentor, John Gardner, the founder of Common Cause and a champion of the campaign finance reform movement of the 1970s, was fond of saying, though, “reform is not for the short-winded.”

Fred Wertheimer is founder and president of Democracy 21, a nonpartisan organization promoting campaign finance transparency and reform.