One Week in Money in Politics: Two New Solutions, One Big Problem

Jan 6, 2012Mark Schmitt

Iowa put the full power of SuperPACs on display. So now the question remains: what meaningful reforms should we fight for to stem the tide of unaccountable money?

What a week it's been for campaign finance wonks:

  • On Monday, the Montana Supreme Court went toe-to-toe with their counterparts in Washington, D.C., upholding the state's longstanding ban on corporate expenditures in ballot initiatives.
  • On Tuesday, the Iowa Republican caucus became the "first SuperPAC election," won not so much by Mitt Romney as by an independent committee that filled the airwaves with $4 million in ads demolishing Romney's strongest rival, knocking Newt Gingrich from a solid lead to fourth place in less than a month. For a few days before his aides set up a SuperPAC of their own, Gingrich, the only Speaker of the House to be fined for ethics violations related to campaign finance, sounded like a convert to reform, claiming that he'd been a victim of "Romney-boating," echoing the "Swift Boat" attacks by an independent committee on 2004 Democratic nominee John Kerry.
  • On Wednesday, New York Governor Andrew Cuomo endorsed a public-financing system for New York state elections, modeled on New York City's matching system, exactly the reform I've been pushing for six years. New York City's admirable system stands in stark contrast to the state's. A the state level candidates get a lower percentage of their contributions from small donors than in any other and the corruption of Albany has been taken for granted for so long that few imagined we'd see the day when a sitting governor, at the peak of his power, would take up the cause of reform.

So where do things stand at the end of this week? Let's start with the SuperPAC problem. What did we learn? Not that SuperPACs -- independent organizations formed to support a candidate, which can take unlimited and corporate contributions -- are a big deal and can spend a lot of money. We knew that. The big news was that "independence" is meaningless, even when SuperPACs obey the letter of the law prohibiting "coordination" with candidates.

Gingrich accused Romney in effect of lying about coordinating with the committee that supported him. As the election law professor and blogger Rick Hasen argued, Gingrich is accusing Romney of doing something that would get him in "very serious legal trouble," and that Romney probably didn't do. But that's the point -- there really was no need for coordination. Romney's allies knew what needed to be done, as did the people in charge of Rick Perry's SuperPAC, Rick Santorum's, Jon Huntsman's, and the several that have been formed to support Barack Obama, Senate and House Democrats, and other Republicans.

Once, long ago, there was some hope that the requirement that such committees remain independent of the candidates they supported would provide a small protection from the worst imaginable results post-Citizens United. Candidates, it was assumed, would rather control their own campaigns, would rather speak for themselves than let someone else do it. But perhaps as a result of an arms race -- everyone needs a SuperPAC because everyone else has one -- candidates have happily shifted a large portion of their communication with voters over to independent groups that they can't control. As long as those groups have no interest other than the candidate (unlike, say, an environmental group that might support a candidate but also want to get its own issues on the agenda), the candidates have nothing to fear from independence. Regulations on coordination, then, are irrelevant.

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Once this truth is out there's not much to stop it, and money in politics is going to look very different in 2012 than it did even a few years ago. Not all of this is a result of the letter of the Citizens United decision. Some of it is just the general tone that the Supreme Court set, some of it is a failure of enforcement by the Federal Elections Commission, and some is the abandonment of any enforcement by the Internal Revenue Service of the political use of 501(c)4 non-profits, which cannot have elections as their "primary purpose." As a result, we have a perfect storm of everything you don't want in money in politics: No limits. No limits on sources of money, including corporations. No disclosure. And no accountability -- candidates aren't responsible for negative ads run on their behalf. (The "I stand behind this message" disclaimer that we've all gotten used to, and that was a throwaway provision in the 2002 McCain-Feingold campaign reform law, has demonstrably toned down negative ads.)

So how do this week's solutions stand up to that perfect storm? Montana's court at least reopens the issue of corporate contributions and tells a clear story about the role of corporate money in a state in which a few corporate interests, such as the "Copper Kings" of the early 20th century, have been battling the public interest for decades. Perhaps the decision will embolden other states or force the Supreme Court to reconsider its decision with a set of facts that reflect real corporate power, not the abstract problem it faced when the corporation in question was just a weasely little nonprofit known as Citizens United. It will surely inspire those who advocate an amendment to the U.S. Constitution to either ban corporate contributions overall, redefine the corporation, or do some other, not quite defined, thing to reverse Citizens United.

But the constitutional amendment is really a distraction. It will take years, decades -- actually, to be realistic, forever -- and in the meantime, money will flow. Reformers' energies will be dissipated, and lots of liberals will be hesitant, with good reason, to amend the First Amendment.

The better solution stems from Cuomo's initiative. We have to change the incentives for candidates to look to small contributors. New York City's system provides a 6:1 match on contributions under $175 and encourages politicians to control their own campaigns, rather than let independent fundraisers call the shots. Cuomo's approach is fully constitutional, even under Citizens United principles. Where such matching systems and similar full public financing systems have been tried (Minnesota, Connecticut, Arizona), they work, and outside money or fake-independent sources have had minimal effect.

Is Cuomo's solution sufficient to take on the magnitude of the "SuperPAC election" as we saw it in Iowa? That's the big question. Once we've swung this far to the control of elections by quasi-independent big-money groups, can a few big changes in the incentives swing it back? It's not clear. But we have to get started. Hopefully in a second term President Obama will join Cuomo and once again be a forceful advocate for public financing, and the FEC and IRS will do their part to enforce the law. It will take a lot of work to unravel the mess that we've just created -- and in the meantime, a lot of people will get elected thanks to SuperPACs who won't want to unravel it. But if we are to have any hope of fixing the economy, enacting reasonable banking regulations, or reversing climate change, this is essential.

Mark Schmitt is a Senior Fellow and Director of the Fellows Program at the Roosevelt Institute.

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