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Campaign Cash: How Citizens United Will Change Elections Forever

Campaign Cash: How Citizens United Will Change Elections Forever

Undue corporate influence over U.S. elections has been a serious problem in American politics for decades, but this year’s Supreme Court ruling in Citizens United v. Federal Election Commission made things worse. Worst of all, we may never know the extent of the damage.

Citizens United freed corporations to spend unlimited amounts of money backing specific political candidates, and without congressional action, those expenditures can be completely anonymous. Major corporations are already capitalizing on the new legal landscape by the millions, and the public doesn’t really know who is buying what influence or why.

That’s why The Media Consortium will be carefully watching the effects of this ruling in the run up to this year’s midterm elections. Every day through Nov. 4, we’ll bring you some of the best independent reporting on the effects of corporate spending in an attempt to measure just how widespread the effect of Citizens United will be on this — and the next — election.  Keep your eye on “Campaign Cash” as we follow this issue in the coming weeks. If you want to tweet about it, use the hashtag #campaigncash.

The impact of Citizens United

As Harvard University Law School Professor Lawrence Lessig explains in an interview with The Nation’s Christopher Hayes, the Citizens United v. FEC decision represents one of many ways that corporations buy political favors.

Prior to the ruling, companies couldn’t spend money to directly advocate the election of a particular political candidate during election season. They could form Political Action Committees (PACs) to support or attack specific candidates, but those PACs had to be funded by individuals who worked for the company and couldn’t be funded from the corporation’s treasury directly. The executives of Goldman Sachs, for instance, could band together to form GoldmanPAC and spend their money on whatever candidates they wished — and many corporate employees exercised that right and spent freely on elections through their corporate PACs.

Now corporations can spend as much as they want and actual corporate funds — not just organized individuals — can also be deployed, making massive amounts of corporate cash eligible for political purchasing.

But the scariest part of Citizens United, as Lessig emphasizes, is the money that isn’t spent. That is, if a firm makes it known that they are willing to spend millions of dollars to fight any politician who opposes them on a particular policy issue, representatives and senators might begin changing their voting behavior in Congress before the company actually has to put up the cash.

And ultimately, Citizens United didn’t just legalize unlimited corporate expenses on elections. It also allows those expenses to be anonymous. If companies launder their political cash through a front group, that third-party spender doesn’t have to disclose who its donors are.

This isn’t your local Chamber of Commerce

As Harry Hanbury details for GRITtv, this laundering scheme is essentially the business model for the U.S. Chamber of Commerce — a  lobbying powerhouse in the nation’s capital. Don’t be fooled by its name — the U.S. Chamber has almost nothing to do with the local small business coalitions who help strengthen local economies.

As Hanbury notes, 40 percent of the U.S. Chamber’s 2008 funding came from just 26 corporations. The group represents many of the nation’s largest and most irresponsible corporations, from those responsible for the financial meltdown on Wall Street to BP, the company that spilled millions of barrels worth of oil in the Gulf this summer. The Chamber’s branding allows them to disguise their political as a coalition of local businesses while it does dirty work for corporate titans.

When BP was publicly promising to do everything in its power to fix the massive oil disaster it created in the Gulf of Mexico, it was also funneling money to the U.S. Chamber of Commerce. And what was the Chamber up to? It was lobbying furiously to protect BP from new rules that would force the company to pay for oil disaster clean-up. The Wall Street banks did the same thing as financial reform legislation moved through Congress, and companies never have to disclose these expenditures to the public.

So it’s no surprise that the Chamber responded to Citizens United by immediately announcing a 40 percent boost in its political spending operations. So much corporate money then flowed into the Chamber that the group chose to boost this budget again by 50 percent, allocating $75 million for its 2010 war chest. So far, the Chamber’s ads have favored Republican’s 93 percent of the time. No entity spends more on politics than the Chamber — not even the political parties themselves.

Corporations top the list of big election spenders

But while the future of corporate spending in campaigns looks bleak after Citizens United, corporations are still barred from contributing directly to political campaigns. A company might take out a television ad attacking Rep. Alan Grayson (D-FL), but it can’t make unlimited contributions directly to Grayson’s challenger, Republican Dan Webster.

Nevertheless, corporate employees and company PACs have already been spending lavishly on elections for decades. In a feature for Mother Jones, Dave Gilson compiles the 75 biggest political spenders, both companies and trade groups, from 1989 through 2010, and breaks them down by industry. Goldman Sachs, Citigroup, JPMorgan Chase, and Morgan Stanley are all among the top 20 most extravagant political spenders — but the American Bankers Association, a trade group that all four belong to, is also in the top 10. If you’re wondering how Wall Street was able to secure its massive taxpayer bailout in the face of widespread voter outrage, this is your answer.

To soften the Citizens United blow, Congress has been debating the Democracy is Strengthened by Casting Light on Spending in Elections (DISCLOSE) Act, which would require companies to disclose all of their political expenditures as well as requiring front-groups like the Chamber to list the identities and amounts of its donors. The bill, sponsored by Rep. Christopher Van Hollen (D-MD) and Sen. Russ Feingold (D-WI), cleared the House this summer but was stymied by a Republican filibuster in the Senate.

Undoing the damage dealt by Citizens United through something like the DISCLOSE Act will help, but it won’t make our democracy totally safe from corporate abuse. As Lessig notes, the day before the decision was handed down, U.S. election financing was already encouraging rampant corruption and in need of serious reform.

Lessig suggests banning political expenditures by corporations altogether, and placing a hard cap on the amount that individuals can contribute. By limiting individual donations to $100, the ability of corporate PACs to funnel cash into the political process would be thwarted.

This post features links to the best independent, progressive reporting about the mid-term elections and campaign financing by members of The Media Consortium. It is free to reprint. 


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photo credit: thanks to Nesster via flickr for the great image of the Goldman Sachs building
by Zach Carter, Media Consortium blogger

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58 comments

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1:04AM PDT on Nov 2, 2010

You know, one thing I'd like ALL candidates to do, is to be real leaders and stop mud slinging and run negative campaign ads. The smears are just ridiculous. I don't want to know why I shouldn't vote for the other guy. I want every one to tell me why I should vote for them. Maybe when they grow up, so will the rest of the supporters. My 10 year old has more manners toward bullies than these politicians...

Vote for those who have the cleanest ads.

11:54AM PDT on Oct 30, 2010

Paul B.-If you prefer freedom over security so much, then why do you back conservatives. The conservatives are the ones behind the Patriot Act. They're the ones behind warrant-less wire tapping and surveillance. And they were the ones behind Citizens United. Also, by your statements, you're confusing socialism with communism. Communism, whose security policies (immigration, travel, citizenship) are all being adopted by the conservative right. Not to mention the conservatives suppression of individuals rights, y'know, the taking away of freedoms (gays, immigrants [legal or otherwise], women, non-christian religions and secular beliefs). All this is fact. Even Fox news corroborates it (hell, they celebrate it). Easy to look up from a multitude of sources. Conservatives seem to rant about freedom, but seem eager to take it away from those unlike themselves. Seem to demand small government, but want gov. to regulate those issues they don't agree with (gay marriage, abortions, immigration, DADT, etc). Seem to fear the growing influence of Big Business, yet continue to back parties (Republican, Tea Party) and politicians who are (PUBLICLY) the biggest supporters of Big Business around. I've read your comments before, and they tend to lack substance. If I am wrong, then please explain to me how the above points are fact (even on conservative media and websites), yet you continue to say and support the things you do.

10:51AM PDT on Oct 27, 2010

If it weren't for the "party of no" we would be a socialist country by now!!! Government run everything, entitlements for all, no opportunity for a personal advancement, no entrepreneurs, no free speech, AMERICAN EXCEPTIONALISM DEAD. If that is what you want, then keep the status quo and reelect the same morons who are driving the car out of the ditch, straight off a cliff. I prefer neither. Get rid of the self-serving elitists in office that think that know best for us. They don't. Hard work should be rewarded, personal achievement rewarded, not a nanny state when everyone is like in a union... security sure, but freedom... gone. I'll take freedom any day over security because that security is entrusted to people who can change their mind, then where are you? Without freedom, you have no choice, no chance to make a change.

10:37PM PDT on Oct 26, 2010

Citizens United?

The fucking proverbial fucking oxy fucking moron.

10:01PM PDT on Oct 26, 2010

Everyone who wanted progress MUST go out and vote against the G NO P! The Republicans are accepting $75 million from unknown sources who refuse to reveal themselves. Call it legalized(by the 5 conservative members of the Supreme Court) bribery. But it is clear that the Republican agenda is simply to gain power at the expense of the middle class. It was Bush and deregulation of the Banks, mortgage companies, and Wall Street that caused this economic mess. Not even Iron Man could repair it with a snap of the fingers. The Party of NO has sabotaged efforts to improve it just to keep things bad so they could manipulate anger into power. You MUST defeat this cynical, money accepting party from giving back to their corporate sponsors their soul for $$$$ (75 million worth). DO NOT SIT THIS ONE OUT. If you do, EVIL and GREED and EXTREMISTS will prevail! VOTE! Damn it, YOU MUST VOTE!
(COPY AND SPREAD THIS IF YOU AGREE…WHEREVER YOU FEEL IT WILL BE READ AND RECEIVED.)

8:30PM PDT on Oct 26, 2010

It's all (or mostly) about the money. After all, money talks.

6:52PM PDT on Oct 26, 2010

big business as usual

5:35PM PDT on Oct 26, 2010

Corporate people are big fat cats and they are evil!

5:01PM PDT on Oct 26, 2010

@Diana S., you have the temerity to call others "nut-jobs" when you say this "As for Citizens United, someone should track them all down and shoot them in their respective heads before they have a chance to breed more nut-jobs like themselves!" I read your page and I really think that at some point you will grow those fully retractable wings and fly off to where ever.

4:14PM PDT on Oct 26, 2010

Interesting how decades of similar efforts by unions have been and still are ok. Given limits imposed by the government, it puts the two on a more equal footing then before the decision.

Of course unions overwhelmingly put their cash/efforts towards progressives regardless of what their membership wants so maybe that's why this article is so one sided in its panic.

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