ILLEGAL COORDINATION BETWEEN CANDIDATES AND “INDEPENDENT” CAMPAIGN SPENDING

As I described in my last post, one of the Supreme Court’s justifications for its decisions allowing unlimited spending by outside groups in our elections was that their spending would be independent of any candidate’s campaign. Therefore, as Justice Anthony M. Kennedy wrote in the Citizens United decision, such expenditures “do not give rise to corruption or the appearance of corruption.” [1]

However, in reality, many outside groups spending large sums of money on our elections are not independent but coordinate their activities with candidates and their campaigns. One of the most blatant and well-documented examples of coordination between a candidate and outside groups is that of Wisconsin Governor Scott Walker and two non-profit, “social welfare,” 501(c)(4) groups: the Wisconsin Club for Growth and the Wisconsin Manufacturers and Commerce group. [2]

In 2012, when Governor Walker was facing a recall election, he worked closely with these two organizations to raise millions of dollars that were spent supporting his re-election and attacking his opponent. He and his staff advised donors that contributions to these groups would not be disclosed and that corporate contributions were welcome. This bypassed Wisconsin’s laws requiring disclosure of campaign donors and prohibiting corporate donations.

Walker knew where financial support for his re-election was coming from but the public did not. So he rewarded his secret supporters. For example, his top legislative priority after he won the election was passing a mining bill drafted by an out-of-state mining corporation, Gogebic Taconite. It had secretly contributed $700,000 to the Wisconsin Club for Growth. Also after the election, Menard Hardware got a $1.8 million tax credit from an economic development agency that Governor Walker chaired. Its CEO had secretly given $1.5 million to the Wisconsin Club for Growth at Walker’s behest.

These donations came to light two years later in an investigation into allegations of coordination between Walker’s campaign and these two, supposedly independent, outside groups. The investigation was led by both Republican and Democratic prosecutors, as well as Wisconsin’s non-partisan elections board.

Eventually, Walker and his campaign challenged the investigation in Wisconsin’s Supreme Court. It ruled 4 – 2 in their favor, stopping the investigation. Overturning years of precedent, it ruled that the coordination between Walker’s campaign and the two outside groups was constitutionally protected as long as the outside groups didn’t explicitly call for the election or defeat of a candidate.

However, that’s not the end of the story, but rather the beginning of a related one. The four justices who voted to declare the coordination legal, had themselves received a combined $10 million of support in their elections from none other than the Wisconsin Club for Growth and the Wisconsin Manufacturers and Commerce group. In most cases, these two groups had spent more on the judges’ elections than the candidates themselves. For example, in 2011, the two groups spent nearly $3.7 million supporting Justice David Prosser’s election. This was five times as much as the candidate’s campaign spent and he ended up winning by just 7,000 votes (out of 1.5 million cast or less than 0.5%: 50.17% to 49.70%). In 2008, the two groups spent $2.75 million in support of Justice Michael Gableman, over six times what the candidate’s campaign spent. He won by just 20,000 votes (out of 740,000 votes cast or less than 3%: 51.2% to 48.5%). The spending by these two outside groups very likely had a decisive effect on these elections.

When the special prosecutor defending the investigation into the two groups’ coordination with the Walker campaign asked Justices Gableman and Prosser to recuse themselves because of their conflict of interest, they refused to do so. As a result, these justices not only legalized what Governor Walker had done, but also legalized the actions of these deep-pocketed supporters of their elections and coordination with these groups in their own campaigns. [3]

Their decision is now being appealed to the U.S. Supreme Court. It will be interesting to see if the U.S. Supreme Court will take this opportunity to reconsider their Citizens United decision in light of what has happened in its aftermath. The evidence clearly contradicts their rationale for allowing unlimited contributions and spending by outside groups: that it would be independent of candidates’ campaigns and would not give rise to even the appearance of corruption. There has been coordination among outside groups and candidates’ campaigns, followed by blatant corruption of public decision-making. Will the U.S. Supreme Court, therefore, clarify what is required for outside groups to operate truly independently of any candidate’s campaign? Will it recognize the clear potential for corruption and allow limits on contributions and spending? Hopefully, it will acknowledge the realities of our election campaigns and take corrective action.

[1] Carney, E.N., 12/10/15, “Super PAC debate spotlights illegal coordination,” The American Prospect (http://prospect.org/article/super-pac-debate-spotlights-illegal-coordination)

[2] Fischer, B., 5/19/16, “Will SCOTUS confront the results of Citizens United,” Moyers & Company (http://billmoyers.com/story/confronting-citizens-united/)

[3] Fischer, B., 5/19/16, see above

UNLIMITED DONATIONS AND SPENDING ARE CORRUPTING OUR ELECTIONS

The unlimited donations to and spending by Super PACs and non-profit “social welfare” groups [aka 501(c)(4)s] allowed by the Supreme Court’s 2010 Citizens United and other decisions have changed the whole pattern of funding for our presidential campaigns.

These supposedly independent, “outside” entities are the dominant players in this election. Every one of the major presidential candidates except Bernie Sanders has one or more of these unconstrained groups advocating for his or her election. One study found that more than 80% of the advertising in the Republican presidential primary race was paid for by outside entities – not by the candidates’ own campaign committees. [1] Campaign funding from Super PACs and 501(c)(4)s is rapidly trickling down to US Senate and House races, to state-level elections, and even to Mayoral elections.

As of February, $607 million has been given to Super PACs. Of that huge sum, $248 million (41%) has come from just 50 mega-donors, their families, and their privately held companies. This is more money than the $161 million donated by the 1 million contributors to Hillary Clinton’s campaign committee. While donations to Super PACs and 501(c)(4) non-profit groups are unlimited in amount and source, donations to candidates’ campaign committees are limited to $2,700 per election and corporate money is prohibited. [2]

The Supreme Court justified its Citizens United decision by asserting that the unlimited spending of these outside groups would be independent of candidates’ campaigns and that donors and spending would be disclosed so that voters would know who was trying to affect their votes. As Justice Anthony M. Kennedy wrote for the majority in Citizens United: “By definition, an independent expenditure is political speech presented to the electorate that is not in coordination with a candidate.” Because the expenditures are independent, Kennedy concluded, they “do not give rise to corruption or the appearance of corruption.” [3]

These justifications for allowing unlimited spending have now been shown by reality to be wrong. Meaningful disclosure is not occurring. Super PACs’ disclosures of donors are infrequent and often not timely in terms of when an election is occurring. Furthermore, large donors have engaged in money laundering to hide the true source of their donations. They donate via a corporation or other entity that does not disclose its sources of funding and sometimes is set up for the express purpose of funneling political contributions and then disbanded once the election is over. The non-profit 501(c)(4) organizations do not have to disclose donors and hence are referred to as “dark money” groups. Money is often shuffled among these groups to hide its true source.

It is becoming increasingly well documented – although it has been suspected from the beginning – that many Super PACs and 501(c)(4) groups do NOT operate independently of the candidates and their campaign committees. Over 100 of the Super PACs, including many of the biggest ones, are single candidate Super PACs. This means they are raising and spending money on behalf of one and only one candidate. Roughly 80% of the money raised by Super PACs in this election cycle has gone to single candidate Super PACs. These Super PACs are effectively shadow campaigns. They run ads, stage events, sell candidate-branded merchandise, and even handle press inquiries. They are often run by close aides (or former aides) of the candidate.

In many cases, the candidate attends the fundraisers for the Super PAC and in some cases, the candidate launches the Super PAC and directly helps it raise money before officially becoming a candidate. Jeb Bush, former Governor of FL and Republican presidential candidate in 2016, did this with his Right to Rise Super PAC. It raised more than $100 million that was used to support his presidential campaign once he became an official candidate. [4]

One of the most blatant and well-documented cases of coordination between a candidate and outside groups is that of Wisconsin Governor Scott Walker and two non-profit, 501(c)(4) groups: the Wisconsin Club for Growth and the Wisconsin Manufacturers and Commerce group. [5] I’ll describe this example of coordination in my next post.

[1] Carney, E.N., 12/17/15, “Democracy prospect: Omnibus battles spotlight political money fault lines,” The American Prospect (http://prospect.org/article/democracy-prospect-omnibus-battles-spotlight-political-money-fault-lines)

[2] Gold, M., & Narayanswamy, A., 4/17/16, “41% of Super PAC money coming from 50 donors,” The Boston Globe

[3] Carney, E.N., 12/10/15, “Super PAC debate spotlights illegal coordination,” The American Prospect (http://prospect.org/article/super-pac-debate-spotlights-illegal-coordination)

[4] Carney, E.N., 12/10/15, see above

[5] Fischer, B., 5/19/16, “Will SCOTUS confront the results of Citizens United,” Moyers & Company (http://billmoyers.com/story/confronting-citizens-united/)

DEMOCRACY IS AWAKENING, BUT NOT IN THE CORPORATE MEDIA

One of the goals of this blog is to provide information on policy and politics that the mainstream corporate media fails to provide. One of the most blatant examples of news ignored by the corporate media is last month’s Democracy Awakening protests.

The Democracy Awakening protests were undertaken to highlight the issues of money in politics and abridgements of voting rights. Starting on April 2 under the banner of Democracy Spring (http://www.democracyspring.org/), over 100 people marched the 140 miles from the Liberty Bell in Philadelphia, where our democracy was founded, to Washington, D.C. In conjunction with Democracy Awakening (http://democracyawakening.org/), a week of protests, meetings with Congress men and women, and civil disobedience in Washington followed. By the end of the week, over 1,200 people had been arrested for civil disobedience, the largest such protests in decades.

The coverage of any of this in the mainstream corporate media was minimal at best. The most covered element of it was that Ben and Jerry (of Ben and Jerry’s ice cream) were arrested for civil disobedience. This warranted one story each on CBS, in the New York Times, and in the Boston Globe. This was the only coverage that showed up in a search of their websites, other than a letter to the editor in the Times. NBC had one story and ABC had three.

Democracy Awakening is a broad coalition of over 100 groups, including organizations representing campaign finance reform efforts, labor, environmental issues, students, and the racial justice and civil rights movements. They have coalesced with a shared belief that progress on the broad range of policy issues they care about will not occur until we combat attacks on voting rights and the corruption of our elections and democracy by big money.

The reason for civil disobedience at the Capitol was that Congress has refused to act on the issues of voting rights and campaign finance despite the overwhelming support of the American public across party affiliation, even including many in the “Tea Party.” Presidents Obama and Clinton made campaign promises to address these issues but did not follow through.

This lack of action by Congress is not because there aren’t bills that would address these issues. Ninety members of the House have signed a letter demanding action on four bills and a resolution that reflect the Democracy Awakening agenda:

HR 12: Makes it easier for citizens to vote and increases the verifiability of voting results. It would require on-line and same-day voter registration, along with early voting and voting by mail. It would require voter-verified paper ballots and audits of voting results.
HR 2694: Makes voter registration automatic.
HR 2867: Restores some of the protections of the Voting Rights Act that the Supreme Court voided in 2013.
HR 20: Provides incentives for small contributions to candidates for Congress and takes steps to reduce the influence of big money in our elections. It establishes a 50% tax credit for small contributions, bans the joint committee fundraising that has led to contributors giving checks for hundreds of thousands of dollars to candidates, and improves disclosure by requiring candidates’ financial reports to be electronic.
Resolution 22: Proposes a constitutional amendment that would reverse the Supreme Court’s ruling in Citizens United and other cases that have allowed unlimited campaign spending by wealthy individuals and corporations, and have also given corporations and other organizations rights under the Bill of Rights that were meant for human beings.

Democracy Awakening is part of a broad effort to mobilize voters and increase participation in our elections. In the 2014 Congressional elections, barely a third of eligible voters voted. The current paralysis in Washington, hyper-partisanship, and negative campaign ads have left voters so disillusioned and cynical that they see no point in participating in our democracy and, therefore, disengage.

We need to re-awaken participation in our democracy. Without informed and engaged citizens, and without high levels of participation, our democracy will not be of, by, and for the people, because special interests will take control and bend public policy to their benefit.

I encourage you to learn more about the Democracy Awakening effort and to sign-up to be informed about this effort at its website: http://democracyawakening.org/. I also encourage you to “Follow” this blog (if you haven’t already) and to sign-up for Bill Moyers’ newsletter, where much of the information for this post came from (http://billmoyers.com/; click on “Newsletter” and enter your email address to subscribe).

$200,000+ CHECKS ARE BEING GIVEN DIRECTLY TO CANDIDATES

In 2014, the Supreme Court, in a decision known as McCutcheon, ruled that it is unconstitutional to limit how much an individual can give in aggregate to all candidates’ campaigns and political parties during an election cycle. This ruling affects contributions that go directly to candidates, whereas the better known Citizens United decision allows unlimited campaign spending that is (supposedly) independent of any candidate’s or party’s campaign. Shortly after the Supreme Court ruling, Congress exacerbated the situation by slipping a provision into a must-pass budget bill that raised substantially the amount a contributor can give to a party committee and allowed them to give that amount to each of multiple party committees.

Contributors are still limited by laws capping the amount one can give to any individual candidate ($5,400 for federal candidates), but the aggregate limit, which was $123,200 per two-year election cycle, was ruled a violation of free speech. Furthermore, candidates and the parties have developed strategies that allow joint fundraising where contributors can write one check that will be split among multiple candidates and/or a variety of national and state party committees.

As a result contributors are now giving checks of well over $200,000 directly to candidates. Republican Representative Paul Ryan, the Speaker of the US House, has received at least 22 checks of $244,200 each. Democratic presidential candidate Hillary Clinton has received at least eight checks of $353,400 each. For the Hillary Victory Fund, the maximum donation is actually $356,100, based on maximum donations of $2,700 to Hillary for America for the primary election, $33,400 to the Democratic National Committee, and $10,000 to the federal accounts of each of 32 state Democratic parties. [1]

These are only the most dramatic examples of the dozens of checks over the previous limit that Ryan, Clinton, and other politicians are receiving. Several husband and wife pairs have given close to half a million dollars per couple. And some wealthy contributors have given super-sized checks to more than one of these joint fundraising efforts. [2]

While the bulk of the money from these huge checks goes to party committees, these party committees often make large donations to the candidate who sponsored the fundraiser. Basically, this is money laundering that circumvents the limit on what a contributor can give to any individual candidate.

The McCutcheon ruling is one of a series of Supreme Court decisions, almost all by 5 to 4 votes, that have undermined campaign finance laws and allowed huge sums of money to flow to candidates’ own campaigns, to party committees, and to supposedly independent expenditures meant to influence voters. These Supreme Court decisions appear to ignore the realities of campaign financing and the potential of large campaign contributions and expenditures to influence elected officials. They also appear to ignore the potential for outright corruption and bribery.

Although most of the media’s attention is focused on the fundraising of the presidential campaigns, big contributors tend to have even greater influence on congressional candidates and their campaigns. Furthermore, their influence on state level campaigns can be even more dramatic.

The bottom line is that these Supreme Court decisions, somewhat exacerbated by increases in contribution limits initiated by Congress, have increased the ability of a very small number of the very richest Americans to provide ever increasing amounts and portions of campaign funding. This shifts our political system away from democracy and toward a plutocracy, where the rich elites effectively rule our country.

[1] Vogel, K.P., & Arnsdorf, I., 5/2/16, “Clinton fundraising leaves little for state parties,” Politico (http://www.politico.com/story/2016/04/clinton-fundraising-leaves-little-for-state-parties-222670)

[2] Vandewalker, I., 4/25/16, “Two years later, McCutcheon fuels huge checks to politicians,” Moyers & Company (http://billmoyers.com/story/two-years-later-mccutcheon-fuels-huge-checks-to-politicians/)