Politico op-ed by Democracy 21 President Fred Wertheimer- “Citizens United: Watergate redux”
Politico
Citizens United: Watergate redux
By Fred Wertheimer
June 15, 2012
When the Supreme Court issued its disastrous Citizens United decision, five justices took the nation back to the era of secret money, unlimited campaign contributions and corporate funds at the core of the Watergate scandal.
On June 17, 1972, a burglary at the Watergate Hotel began the unraveling of the worst political and campaign-finance scandals of the 20th century — and the downfall of President Richard Nixon.
Yet today, massive amounts of secret money, unlimited contributions and corporate funds are again flowing into federal elections. The same elements that corrupted government decisions and officeholders in the early 1970s have returned.
As baseball great Yogi Berra said, it is “déjà vu all over again.”
During the Watergate scandals, we had the benefit of the special prosecutor, congressional hearings led by Sen. Sam Ervin and aggressive investigative journalism to crack through the secrecy and reveal the depths of government corruption.
Such official government efforts are absent today, however, even as huge, and/or secret contributions are flowing into the 2012 presidential and congressional races. This money has the power to influence future government actions — just as huge, secret contributions were used in the Watergate era to buy government decisions.
After Watergate, 20 corporations were criminally convicted for illegal campaign-finance activities. The hotel break-in itself was financed with secret campaign contributions.
Consider, ITT pledged $400,000 to help finance the 1972 Republican convention, and the Justice Department quickly settled an antitrust case in ITT’s favor. Nixon himself intervened in the case. The dairy industry gave $2 million to the Nixon campaign and soon got the increase in dairy price supports they were seeking. Nixon overrode his Agriculture Department’s objection to put these supports in place.
Ambassadorships were sold at six-figure prices. Herbert Kalmbach, Nixon’s attorney and a major campaign fundraiser, ultimately went to jail for selling an ambassadorship.
Congress passed sweeping campaign-finance reforms in response to Watergate. The legislation built on existing new disclosure laws and included limits on contributions to candidates and parties as well as a public-financing system for presidential elections. This system worked well for more than two decades and virtually all candidates used it. It became outdated in recent years though and needs to be repaired.
With its Citizens United decision, the Supreme Court in one day tore apart the disclosure rules, the contribution limits and even the restrictions on corporate money in federal campaigns, first enacted in 1907.
Today, hundreds of millions of dollars in secret contributions are flowing through the 2012 presidential and congressional elections.
Crossroads GPS, for example, a group whose overriding purpose is to influence elections, has received 23 contributions of $1 million or more each, totaling $67 million, from donors whose identities are secret from the American people.
One undisclosed donor gave $10 million. How can we know what this hidden contributor — or any other of the hidden seven-figure donors — may be seeking in government favors with their contributions?
Meanwhile, huge contributions with the power to influence government decisions are pouring in to the 2012 elections through super PACs. These PACs were established as a direct result of the Citizens United decision and a later circuit court decision based on it. Large amounts of secret corporate funds also are being injected by nonprofit tax-exempt groups, like the Chamber of Commerce, which do not disclose the donors financing their campaign expenditures.
In 1972, the top contributor to Nixon’s committee to reelect the president, known as CREEP, was Clement Stone, who gave $2 million. Nixon’s top 10 contributors gave more than $4 million, and the top 100 contributors gave a combined $14 million.
These were astronomical numbers at the time. They look quaint today.
Las Vegas billionaire Sheldon Adelson and his wife already have given $21 million to super PACs, and reportedly agreed to give $10 million to Restore Our Future, the super PAC supporting Mitt Romney’s campaign. Adelson reportedly is prepared to contribute as much as $100 million to influence the 2012 elections.
Reuters reported that “criminal investigations against casino mogul Sheldon Adelson’s Las Vegas Sands for violating the Foreign Corrupt Practices Act” are now taking place. “Probes by the Department of Justice and the Securities and Exchange Commission focus on the casino company’s operations in Macau, the world’s biggest gambling hub, court documents show.”
Meanwhile, super PACs have turned out to be a political sandbox for the nation’s millionaires and billionaires.
The top 50 super PAC donors have given nearly $100 million, or 63 percent of the total to all super PACs so far in this election cycle, according to the Center for Responsive Politics. This money comes from just 1 percent of the donors to super PACs.
Billionaires seem to have a special place in their hearts for Romney. So far, 31 billionaires have given large contributions to Restore Our Future, the super PAC supporting Romney, according to Forbes magazine and CRP. That doesn’t count the $10 million coming from what will be billionaire No. 32 — Adelson.
And, as they say, the night is still young.
While President Barack Obama is not doing so well with billionaires, he is doing just fine with bundlers — people who collect and put together large total amounts of money.
The Obama campaign has 117 bundlers, who have each raised $500,000 or more, and an additional 141 bundlers, who have each raised $200,000 to $500,000. These bundlers include five billionaires. So not as many as Romney.
Now, a person who raises $500,000 for a candidate has the same potential ability to obtain government influence as an individual who gives $500,000 of his or her own money. But at least we know who Obama’s bundlers are.
Romney has refused to disclose his bundlers to the American people. So if he wins, Romney likely will be able to repay his secret bundlers with government favors, benefits, tax breaks and ambassadorships — without citizens having any way of knowing.
The Supreme Court in Buckley v. Valeo (1976), its decision upholding the constitutionality of the contribution limits passed by Congress, pointedly noted that a system of unlimited contributions to candidates was inherently corrupt.
Yet the inherently corrupt system that fueled Watergate is now back with a vengeance in U.S. politics with the new campaign finance system spawned by Citizens United.
It leaves the American people sitting on the sidelines, watching their democracy float by as billionaires, millionaires, bundlers, super PACs and phony tax-exempt groups play the influence-money game.
So like the post-Watergate era, we must again pass new campaign-finance laws to protect our democracy against corruption.
We can and must enact legislation that would end secret money in our campaigns, eliminate the candidate-specific super PACs now operating and strengthen the rules that prevent outside funders from coordinating with candidates.
We also can and must re-engage average citizens in the political process by matching their small contributions with multiple public funds — to provide federal candidates with an alternative way to finance their campaigns.
With Citizens United, the Supreme Court has done enormous damage to the country. Yet a pending case about a Montana ban on corporate expenditures in state races, has given the court a rare opportunity to correct the monumental and historic mistake it made in putting our government on the auction block.
If the Supreme Court fails to seize this opportunity, citizens must act to repair the damage.
Fred Wertheimer is the president of Democracy 21 and a longtime advocate for effective campaign-finance laws.
