Big money may have a bigger effect on state and local elections than federal ones. Most of my past posts on campaign finance have focused on spending on races for federal offices (here, here, here, and here). However, state and local races are less expensive and get less media attention, so some big money can have a really big impact. I have written about this before (here). Here are a couple more examples of big money’s role at the state and local level.

Missouri is one of the few states with no limits on campaign contributions directly to candidates. There are four candidates in the Republican primary for Governor. Each of the four has received over $1 million from a single source. One campaign has received almost $5 million from the candidate’s own fortune. In two cases, an individual or family (other than the candidate) has given a million or more to the gubernatorial candidate while also giving millions more to other candidates or political action committees (PACs). [1]

This big money is drowning out the voices of the average voter. It creates conflicts of interest for the candidate who is elected as these large donors have interests that are affected by policy decisions. One of the Missouri million-dollar donors is a strong advocate for repealing all Missouri taxes. He would clearly disproportionately benefit from steps in that direction while the average Missouri resident would suffer the loss of the government’s ability to support infrastructure and programming. Another of the million-dollar donors is a strong opponent of unions. Policies that weaken unions would benefit him as a business owner while hurting workers.

In the Washington, D.C., mayor’s race, the amounts aren’t as dramatic, but campaign donors of $1,000 or more are providing the bulk of campaign money. These large donors are not representative of the electorate; they are disproportionately white and male, and, of course, rich. Overall, for the three candidates in the 2014 race, two-thirds of all the money raised came from donors giving $1,000 or more. Less than 2% came from donors giving $50 or less – an amount that might be affordable for the average voter. [2]

While only 37% of D.C.’s population is white, 62% of donors to the mayoral race were white. In terms of gender, 69% of those giving more than $1,000 were male, although 54% of D.C.’s adults are women.

After the election, the winner created a PAC that took advantage of a loophole in election laws that allowed unlimited donations in non-election years. This Mayor’s PAC took in many $10,000 contributions, many from those with interests in policy and contracting decisions made by the city. An investigation into the PAC found that 11 of its largest donors received $70 million in city contracts.

Big campaign contributions by wealthy donors result in decisions and policies that disproportionately favor the white, male, wealthy, donor class. For example, Washington, D.C., has enacted a series of tax cuts, including a cut in the estate tax, that will largely benefit the wealthy, despite the city’s high poverty rate (18%) and high income inequality. The city also recently announced it will spend $55 million to build a new practice facility for the Washington Wizards basketball team. The wealthy team owner will contribute only $5 million to construction costs and an additional $10 million for community benefits. The city also gave $60 million in tax breaks to a consulting company to keep it from moving to Virginia. The company promised to hire 1,000 D.C. residents, but these jobs likely would have gone to D.C. residents in any case.

Big money is invading state and local elections as well as federal elections. It can have greater effects on the elections at the state and local levels due to smaller campaign spending and less media coverage. And its effects on government decisions and policies can be more immediate and easier to identify.

Subsequent posts will look at the invasion of secret money (where the true donor is obscured) into state and local campaigns. They will also present ways to address the problems of big and secret money in our elections within the constraints of current Supreme Court decisions (e.g., Citizens United and McCutcheon).

[1]       Miller, J., 7/20/16, “This is what happens when a state has no contribution limits,” The American Prospect (http://prospect.org/blog/checks/what-happens-when-state-has-no-contribution-limits)

[2]       McElwee, S., 6/23/16, “D.C.’s white donor class: Outsized influence in a diverse city,” Demos (http://www.demos.org/publication/dc%E2%80%99s-white-donor-class-outsized-influence-diverse-city)

ABSTRACT: Dark money organizations – non-profit, tax exempt groups that do not have to disclose their donors – are spending tens of millions of dollars every year in our election campaigns. This means that when voters go to vote they don’t know who paid for the dark money funded ads, mailings, and other political activity that has tried to influence their voting.

Seventy-five percent of the public, including equal shares of Republicans and Democrats, believe that contributors should be disclosed. There are multiple ways to address the problem of large amounts of anonymous, dark money being spent in our election campaigns:

• Pass a federal Constitutional amendment to overturn the Citizens United and related Supreme Court decisions that allow unlimited spending in our election campaigns
• Require clear and timely disclosure of donors to dark money organizations
• Implement a Securities and Exchange Commission (SEC) rule requiring corporations to disclose their political spending
• Strengthen IRS regulation of non-profit, tax-exempt organizations that engage in political activity
• Strengthen Federal Election Commission requirements for disclosure of political spending

In a democracy, voters have a right and a need to know who is trying to influence their votes and who is supporting or opposing candidates for office. Therefore, clear and timely disclosure of the sources of funds for political activity is essential.

FULL POST: In my last post, I discussed the increasing significance dark money organizations – non-profit, tax exempt groups that do not have to disclose their donors – are playing in our election campaigns and politics at the federal, state, and even local levels. They are spending tens of millions of dollars every year, which will probably grow to over $100 million in the 2016 presidential campaign.

This means that when voters go to vote they don’t know who paid for the dark money funded ads, mailings, and other political activity that has tried to influence their voting. Therefore, they aren’t able to make an informed judgment about the interests or purposes behind these political messages.

Seventy-five percent of the public, including equal shares of Republicans and Democrats, believe that contributors should be disclosed. Even Supreme Court Justice Kennedy, in the majority opinion in the Citizens United case [1] that allows unlimited corporate spending in our elections, wrote that “disclosure permits citizens and shareholders to react to the speech [i.e., spending] of corporate entities in a proper way.”

There are multiple ways to address the problem of large amounts of anonymous, dark money being spent in our election campaigns. [2] Ultimately, I believe we need a federal Constitutional amendment to overturn Citizens United and related Supreme Court decisions. Such amendment would state that 1) The rights protected by the Bill of Rights and the U.S. Constitution are the rights of human beings only and not of corporations or other organizations, and 2) Congress and the states may place limits on political contributions and spending to ensure that our elections are fair and that all citizens can participate and have their voices heard in a reasonably equitable manner.

Given that a Constitutional amendment will not happen quickly, there are a number of steps that could and should be taken in the short-term:

• Require clear and timely disclosure of donors to dark money organizations through federal and state laws and executive action by the President.
• Implement a Securities and Exchange Commission (SEC) rule requiring corporations to disclose their political spending.
• Strengthen Internal Revenue Service (IRS) regulation of non-profit, tax-exempt organizations that engage in political activity.
• Strengthen Federal Election Commission requirements for disclosure of political spending.

Shortly after the Citizens United ruling in 2010, Congress considered the DISCLOSE Act that would have mandated disclosure and reporting of all spending in federal election campaigns. The bill passed the House but failed by one vote to overcome a Republican filibuster in the Senate. [3] Congress should consider this legislation again in light of the tremendous growth of dark money spending and it should pass the bill this time. States should pass similar legislation to cover state and local elections.

In the meantime, President Obama should sign an Executive Order requiring all federal contractors to disclose their political spending. In addition, the Securities and Exchange Commission (SEC) should act expeditiously to implement a proposed disclosure rule. It would require publicly traded corporations to disclose their political spending. Given the SEC’s mission of protecting shareholders through corporate accountability and transparency, such a rule would be very appropriate. [4]

Along the same lines, in 2013, after years of development, the IRS proposed a rule for non-profit, tax exempt organizations that defined political activity and required timely reporting of donors. The goal was to increase transparency so voters in the 2016 elections would know who was paying for political ads and other campaign activity before entering the voting booth. There was lots of pushback over the proposed rule. Conservative advocacy groups and their supporters in Congress went so far as to manufacture a crisis surrounding the IRS’s oversight of such organizations to pressure the IRS into delaying the transparency rule and to discredit the IRS’s efforts to regulate dark money. [5]

Finally, the other entity that could and should require disclosure of the sources of campaign spending, the Federal Election Commission (FEC), is effectively paralyzed. Its members are required to be split equally between Democrats and Republicans and must be confirmed by the Senate. With a politicized confirmation process in the Senate and the current hyper-partisanship in Congress filtering down to FEC members, the FEC is gridlocked and basically unable to function.

In a democracy, voters have a right and a need to know who is trying to influence their votes and who is supporting or opposing candidates for office. Therefore, clear and timely disclosure of the sources of funds for political activity is essential. I urge you to let your elected officials and candidates for office at all levels know that you support disclosure of the sources of political spending so you can be an informed voter.

[1]       In Citizens United and related decisions the Supreme Court ruled that individuals and organizations can spend unlimited amounts of money in our election campaigns. Therefore, these dark money organizations can accept unlimited donations and spend unlimited sums. Specifically, the Court ruled that corporations and other organizations are people and have the same first amendment rights of free speech as actual human beings under the Bill of Rights and the U.S. Constitution. The rulings also said that spending money in elections (and elsewhere) is speech and is protected by freedom of speech rights.

[2]       People for the American Way and coalition partners, July 2015, “Fighting big money, empowering people: A 21^st century democracy agenda,” (http://www.pfaw.org/sites/default/files/PresidentialPolicy831.pdf)

[3]       Kuns, K., 7/1/15, “The dark politics of dark money,” The Washington Spectator

[4]       U.S. PIRG, 10/12/15, “Members of Senate Banking Committee, former SEC Commissioner urge SEC nominees to support political disclosure rule,” Common Dreams (http://www.commondreams.org/newswire/2015/10/21/members-senate-banking-committee-former-sec-commissioner-urge-sec-nominees)

[5]       Kuns, K., 7/1/15, see above

ABSTRACT: The fastest growing and perhaps the most troublesome of the four main avenues for presidential campaign fundraising and spending are the “dark money” organizations. These are non-profit organizations that can accept unlimited amounts of money and keep their donors secret. They are social-welfare groups that are supposed to work exclusively to further the common good and general welfare. However, the Internal Revenue Service (IRS) has interpreted “exclusively” to mean “more than 50%,” which still means that political activity shouldn’t be their primary purpose. In addition, an IRS rule prohibits social-welfare organizations from benefiting a single individual.

Some of the politically active social-welfare organizations have pushed against these limitations. In the 2014 congressional elections, dark money expenditures grew tremendously. Because of the lack of oversight and enforcement by either the IRS or the Federal Election Commission (FEC), dark money organizations started ignoring operating rules and reporting requirements. In the 2016 presidential race, single-candidate dark money organizations have surfaced that seem to violate the IRS’s single individual rule. Dark money organizations have also been active at the state and local levels.

Allowing secret donors to pay for millions of dollars of campaign spending means that voters cannot make informed decisions and raises the specter of serious corruption. Without timely disclosure of donors, our democracy cannot have the informed electorate that is essential to its effective functioning.

FULL POST: The fastest growing and perhaps the most troublesome of the four main avenues for presidential campaign fundraising and spending are the “dark money” organizations. [1] These are non-profit organizations that can accept unlimited amounts of money from wealthy individuals, corporations, unions, and other organizations. However, unlike Political Action Committees (PACs) and Super PACs, they can keep their donors secret, hence their money is “dark money.” Like PACs and Super PACs, they are supposed to operate independently of candidates’ official campaign committees.

In exchange for their non-profit, tax-exempt status, these social-welfare groups are supposed to work exclusively to further the common good and general welfare of the people of the community. However, the Internal Revenue Service (IRS) has interpreted “exclusively” to mean that “more than 50%” of an organization’s activities have to be for social-welfare purposes. [2] [3] Therefore, political activity shouldn’t be the primary purpose of these organizations, which are registered under sections 501(c)(4), (c)(5), and (c)(6) of the IRS Code. In addition, an IRS rule prohibits social-welfare organizations from benefiting a single individual – the so-called “private benefit” rule. However, the IRS has been lax in defining political activity and in enforcing the focus on a social-welfare purpose and the private benefit rule.

Some of the politically active social-welfare organizations have pushed back against these limitations. Given the lack of enforcement from the IRS, some of them are basically ignoring operating rules and reporting requirements. In addition, some of these organizations have laundered their contributions through other entities to complicate any attempts to identify actual donors.

In the 2014 U.S. Senate race in North Carolina, a social-welfare organization called Carolina Rising, spent 97% of the $4.9 million it raised helping Thom Tillis win the seat. It received $4.8 million from a single donor whom it did not, and did not have to, disclose. The organization had no employees and spent $4.7 million through a single advertising firm for TV and cable ads. Because some of these ads aired close to the election in a time window that requires reporting to the Federal Election Commission (FEC), Carolina Rising reported $3.3 million in election spending to the FEC. The contracts it signed with the TV and cable companies airing its ads, which are filed with the Federal Communications Commission, identified the ads as pro-Tillis. However, it reported to the IRS that it had conducted no political activity. Carolina Rising would appear to have clearly violated the IRS rules on benefiting a single individual and on political activity having to be less than 50% of a social-welfare organization’s activity. Furthermore, it may well have knowingly lied to the IRS in stating it had not engaged in political activity. [4]

In the 2016 presidential race, single-candidate dark money organizations have surfaced. At least four Republican presidential candidates have dedicated dark money organizations, although they would appear to violate the IRS’s single individual rule. [5]

A dark money organization, the Conservative Solutions Project, is spending heavily on behalf of Republican presidential candidate Marco Rubio. So far, every Rubio TV ad in the early primary states of Iowa, New Hampshire, and South Carolina, as well as mailings to voters in those states, has been paid for by this dark money, non-profit organization. After spending $3 million over the summer promoting Rubio, it was spending almost $1 million a week in late September and early October on pro-Rubio TV ads. [6] Supposedly, it is doing all of this totally independently of the Rubio campaign.

There are plenty of examples of politically active social-welfare nonprofits flouting rules and reporting. And dark money organizations have been active at the state and local levels as well as at the national level. For example, they have opposed California ballot initiatives and blocked the start-up of a new bus line in Nashville, Tennessee, that would have linked poorer, gentrifying neighborhoods with downtown and wealthier, upscale neighborhoods. [7]

Allowing secret donors to pay for millions of dollars of campaign spending means that voters cannot make informed decisions and raises the specter of serious corruption. Without timely disclosure of political donors, our democracy cannot have the informed electorate that is essential to its effective functioning.

My next post will discuss ways of addressing this lack of disclosure of major donors to election spending.

[1]       See my previous post, Big money for the presidential candidates, for information on the other 3 avenues for campaign fundraising and spending.

[2]       Kuns, K., 7/1/15, “The dark politics of dark money,” The Washington Spectator

[3]       Bykowicz, J., 10/8/15, “Rubio’s presidential bid boosted by secret-money commercials,” The Associated Press (http://bigstory.ap.org/article/5926406673b047a7a34f1177e01014da/anonymous-donors-send-millions-pro-rubio-group)

[4]       Maguire, R., 10/20/15, “Political nonprofit spent nearly 100 percent of funds to elect Tillis in ’14,” Center for Responsive Politics (http://www.opensecrets.org/news/2015/10/political-nonprofit-spent-nearly-100-percent-of-funds-to-elect-tillis-in-14/)

[5]       Maguire, R., & Tucker, W., 9/21/15, “Five-fold upsurge: Super PACs, dark money groups spending far more than in ’12 cycle at the same point in campaign,” Center for Responsive Politics (http://www.opensecrets.org/news/2015/09/five-fold-upsurge-super-pacs-dark-money-groups-spending-far-more-than-in-12-cycle-at-same-point-in-campaign/)

[6]       Bykowicz, J., 10/8/15, see above

[7]       Kranish, M., 10/11/15, “A city’s immovable roadblock,” The Boston Globe

ABSTRACT: Tracking the tons of money already flowing into the 2016 presidential campaign is not easy. There are four main avenues for presidential campaign fundraising and spending today, when as recently as 2008 there was really only one major one – the candidate’s official campaign committee. A candidate’s official committee is limited to donations from individuals of up to $2,700.

Super Political Action Committees (PACs) are one of the new fundraising vehicles. They can accept unlimited donations from individuals, corporations, and other entities. As-of June 30, single-candidate, presidential Super PACs had raised $258 million. This is 16 times the amount such Super PACs had raised at this point in the last presidential campaign. And it is double the amount raised by the official campaign committees.

Fewer than 400 families have given almost half of the $388 million raised by the presidential candidates’ campaigns and Super PACs. While 48,000 Americans have donated $130 million to the presidential candidates’ campaigns, just 65 donors have given an equal amount – $132 million – to the candidates’ Super PACs. Having a wealthy backer or a few, makes a candidate viable today when in the past they wouldn’t have made it to the starting gate.

What all this means is that a small number of the wealthiest people in the US are exercising enormous influence over who our presidential candidates are and what policies they espouse. The rest of us are sitting on the sidelines watching and wondering if our votes or voices matter – and whether our country is still a democracy or not.

FULL POST: Tracking the tons of money already flowing into the 2016 presidential campaign is not easy. Court decisions, creative campaign lawyers, and lax enforcement have all contributed to opening up new avenues for campaign fundraising and making it impossible in some cases to identify the source of the money.

There are four main avenues for presidential campaign fundraising and spending today, when as recently as 2008 there was really only one major one – the candidate’s official campaign committee. [1] Today we have:

1. Candidates’ official campaign committees – limited to donations from individuals of up to $2,700. Have to disclose donors of over $250.
2. Candidate-specific Super Political Action Committees (PACs) – unlimited donations from individuals, corporations, and other entities. Have to disclose donors.
3. Other PACs and Super PACs – some can receive unlimited donations from a wide variety of entities; others are limited. Have to disclose donors.
4. “Dark money” organizations, usually not-for-profit entities – unlimited donations from a wide variety of entities. Do not have to disclose donors.

While any viable presidential candidate today must raise staggering amounts of money, different candidates have different patterns in their fundraising. For example, the Clinton and Sanders campaigns recently reported raising similar amounts of money over the last 3 months, $28 million and $26 million respectively. However, Clinton raised $19 million, roughly two-thirds of her money, through 60 fundraising events where the typical contribution was $2,700. Sanders has held only 7 fundraising events throughout the entire campaign and they typically cost $100 to attend. The bulk of his money came from online contributions where the average contribution was $30 and 99% of his contributions were $100 or less. [2] [3]

The use of candidate-specific Super PACs also varies. While they are supposed to operate independently of the candidate’s official campaign, in reality their operations are complementary if not actually coordinated, so analysis of a candidate’s campaign’s financial status typically combines figures for the candidate’s campaign and his or her Super PAC(s). These Super PACs, while technically barred from coordinating tactics and plans with the official campaign, are increasingly paying for core costs of a campaign, including, for example, the candidate’s travel, polling, and, of course, advertising. Furthermore, candidates are often directly involved with their Super PACs’ fundraising. The Super PACs have effectively eviscerated laws on contribution limits that were put in place to prevent bribery and corruption. [4]

Official data are available on the campaigns’ fundraising through June 30. At that point, the single-candidate, presidential Super PACs had raised $258 million. This is 16 times the amount such Super PACs had raised at this point in the last presidential campaign. And it is double the amount raised by the campaigns themselves. [5] Four of the top 7 candidates in terms of fundraising had raised more money through their Super PACs than through their campaigns, while one had raised no Super PAC money and another had essentially only raised Super PAC money: [6]

• Jeb Bush:                Total raised: $115 million             Super PAC: $103 m          Campaign: $11 m
• Hillary Clinton:     Total raised:  $68 million             Super PAC: $20 m            Campaign: $48 m
• Ted Cruz:                Total raised: $53 million              Super PAC:   $39 m           Campaign: $14 m
• Marco Rubio:         Total raised: $27 million              Super PAC:   $17 m           Campaign: $10 m
• Ben Carson:            Total raised: $17 million              Super PAC:   $7 m             Campaign: $11 m
• Bernie Sanders:     Total raised:   $16 million            Super PAC:   $0 m            Campaign: $16 m
• Chris Christie:        Total raised: $14 million             Super PAC:   $14 m           Campaign:  $0 m

Fewer than 400 families have given almost half of the $388 million raised by the presidential candidates’ campaigns and Super PACs. Much of the Super PAC money is coming from a small handful of individuals and families. While 48,000 Americans have donated $130 million to the presidential candidates’ campaigns, just 65 donors have given an equal amount – $132 million – to the candidates’ Super PACs. These wealthy contributors not only have great access to the candidates they support, they are often confidantes and sometimes have business dealings with the candidates or entities that the candidates run. Having a wealthy backer or a few, makes a candidate viable today when in the past they wouldn’t have made it to the starting gate. [7] For example:

Cruz: 6 people, 4 individuals from one family and 2 other individuals, have contributed the $36 million his Super PACs have received. Under our previous campaign laws, it would have required over 13,000 individuals giving the maximum $2,700 to raise this much money.

Rubio: 4 donors have contributed $12.5 million.

Mike Huckabee: 1 individual gave $3 million.

Bush: 26 individuals or corporations have given over $1 million each.

Clinton: 9 individuals have contributed over $1 million each.

Rand Paul: 2 individuals have given a combined $3 million.

What all this means is that a small number of the wealthiest people in the US are exercising enormous influence over who our presidential candidates are and what policies they espouse. The rest of us – 300 million Americans – are sitting on the sidelines watching and wondering if our votes or voices matter – and whether our country is still a democracy or not. [8]

To put the current presidential campaign’s fundraising in some perspective, the $388 million raised by the presidential candidates’ campaigns and Super PACs already – over a year before the final election – is more than the $331 million that Bill Clinton, George H.W. Bush, and their rivals spent in the whole 1992 election. And it is almost 5 times the amount that had been raised at this point in the 2012 presidential campaign. In the 2016 presidential election, spending will be over 20 times what it was just 24 years ago in the 1992 election.

[1]       Pindell, J., 10/1/15, “Evaluating campaign money reports gets more complicated,” The Boston Globe

[2]       Campaign Notebook, 10/2/15, “Sander’s war chest fills fast,” The Boston Globe from the Associated Press

[3]       Bykowicz, J., 9/30/15, “Clinton, Bush steady fundraising amid GOP summer Trump slump,” Associated Press

[4]       Confessore, N., Cohen, S., & Yourish, K., 8/1/15, “Small pool of rich donors dominates election giving,” The New York Times

[5]       Kranish, M., 9/13/15, “In national politics, big money drowning out everyone else,” The Boston Globe

[6]       OpenSecrets.org, 10/4/15, “Behind the candidates: campaign committees and outside groups,” Center for Responsive Politics (http://www.opensecrets.org/pres16/raised_summ.php)

[7]       Confessore, et al., 8/1/15, see above

[8]       Kranish, M., 9/13/15, see above

ABSTRACT: The political money and influence of the wealthy grows and grows. Wealthy donors making large contributions of up to $2,600 directly to Congressional candidates’ campaigns represent the great majority of candidates’ funding. There had been an overall limit of $123,200 on the grand total any individual could contribute in a two-year federal election cycle. However, the Supreme Court just ruled that this limit is an unconstitutional violation of freedom of speech. A wealthy individual can now contribute roughly $3.6 million directly to candidates and parties in every 2-year election cycle.  (This is in addition to the unlimited money they can spend on campaign advocacy outside of candidates’ campaign accounts based on the Supreme Court’s Citizens United decision in 2010.)

Furthermore, a donor can gather checks from colleagues and friends and present them to the candidate along with his or her own check. This is a practice known as “bundling.” Often these bundlers pledge to raise $100,000 or more for a candidate.

Candidates spend 30% to 70% of their time raising money. If they can raise money in bigger chunks, they will. Therefore, candidates focus on the few big “funders” of campaigns. These big contributors or bundlers have more than an adequate incentive to contribute because it ensures that candidates hear their particular views and that candidates have an incentive to support big contributors’ views when policy is made.

The result is that our “democracy” is not representing us – the average voter. What we have here in the US is increasingly a plutocracy: government dominated by the small minority that are the wealthiest citizens. Coming up in my next post: strategies for reforming our system of financing campaigns to reclaim our democracy.

FULL POST: The political money and influence of the wealthy grows and grows. Wealthy donors making large contributions of up to $2,600 directly to Congressional candidates’ campaigns represent the great majority of candidates’ funding. Candidates for Congress raise only about 11% of their campaign contributions from donors giving less than $200.

Beyond donations to candidates’ campaigns, wealthy individuals can also give up to $32,400 per year to a national political party. There had been an overall limit of $123,200 on the grand total any individual could contribute in a two-year federal election cycle. However, the Supreme Court just ruled that this limit is an unconstitutional violation of freedom of speech in its McCutcheon decision.

Although the limit on a contribution to any candidate’s campaign or to a party remains (for now, see below), a wealthy individual can now contribute roughly $3.6 million directly to candidates and parties in every 2-year election cycle. [1] Through joint fundraisers and committees, wealthy contributors will now be solicited to write a single check for hundreds of thousands of dollars, if not a million dollars or more. (This is in addition to the unlimited money they can spend on campaign advocacy outside of candidates’ campaign accounts based on the Supreme Court’s Citizens United decision in 2010.)

A court challenge to the contribution limit on donations to party committees has been filed by the Republican National Committee [2] and a challenge to the limit on contributions to individual candidates’ campaigns is likely. If successful, these challenges would allow wealthy individuals, and perhaps corporations, to give unlimited amounts of money directly to political candidates and parties.

Furthermore, a donor can gather checks from colleagues and friends and present them to the candidate along with his or her own check. This is a practice known as “bundling,” and the donor’s sway with the candidate is, of course, enhanced by delivering these large sums to the candidate’s campaign. Often these bundlers pledge to raise $100,000 or more for a candidate – far beyond the individual limit of $2,600.

Imagine you’re a candidate running for political office. You can either try to raise $100,000 from a thousand people in $100 contributions (a big contribution for most people), or you can try to raise $100,000 from 40 wealthy individuals or via one bundler. Candidates spend 30% to 70% of their time raising money. If they can raise money in bigger chunks, they will. Therefore, candidates focus on the few big “funders” of campaigns, because with each big catch they can cover much more of their campaign costs. [3] These big contributors, now more than ever, will be national figures, not ones with any connection to a candidate’s district or state.

Edwin Bender of the National Institute on Money in State Politics notes that “contribution limits play a crucial role in … increasing the participation rate by small-dollar donors.” [4] So as the Supreme Court eliminates contribution limits as unconstitutional limits on freedom of speech, the candidates focus on fewer and fewer donors who contribute larger and larger amounts. These big contributors or bundlers have more than an adequate incentive to contribute because it ensures that candidates hear their particular views  – about regulation, government spending, limits on lawsuits, trade, workers’ protections, intellectual property right s, or whatever – and that candidates have an incentive to support big contributors’ views when policy is made.

In a recent study from Princeton (the largest empirical analysis of government policy decision making to-date), Martin Gilens and Benjamin Page conclude that “economic elites and organized groups representing business interests have substantial … impacts on U.S. governmental policy, while average citizens and mass-based interest groups have little or no … influence.” [5]

With candidates dependent on big contributors for the money necessary to run a competitive campaign, it’s not surprising that policies reflect the interests of these contributors and not the average citizen. The result is that our “democracy” is not representing us – the average voter – and therefore is not working as our founders intended. What we have here in the US is increasingly a plutocracy: government dominated by the small minority that are the wealthiest citizens.

Coming up in my next post: strategies for reforming our system of financing campaigns to reclaim our democracy by making our elected officials beholden to us. As a result, they would have incentives to represent us instead of wealthy individuals and corporations.

[1]       Lee, C., 5/5/14, “The fatter the wallet, the louder the voice,” Brennan Center for Justice (http://www.brennancenter.org/analysis/fatter-wallet-louder-voice)

[2]       Money in Politics Newsletter, 5/29/14, “The aftermath of McCutcheon v. FEC,” Brennan Center for Justice (http://www.brennancenter.org/newsletter/money-politics-newsletter-mccutcheons-aftermath-primary-fundraising)

[3]       Lessig, L., 6//4/14, “What’s so bad about a Super PAC?” https://medium.com/law-of-the-land/whats-so-bad-about-a-superpac-c7cbcf617b58

[4]       Bender, E., 5/13/13, “Evidencing a republican form of government: The influence of campaign money on state-level elections,” Montana Law Review (http://www.followthemoney.org/press/Reports/Evidencing_a_Republican_Form_of_Government.pdf)

[5]       Gilens, M., & Page, B., 4/9/14, “Testing theories of American politics: Elites, interest groups, and average citizens,” (http://www.princeton.edu/~mgilens/Gilens%20homepage%20materials/Gilens%20and%20Page/Gilens%20and%20Page%202014-Testing%20Theories%203-7-14.pdf)

ABSTRACT: Huge contributions and expenditures from wealthy special interests were front and center in the 2012 campaigns because of the unlimited spending allowed by the Supreme Court’s Citizens United decision. The 32 biggest donors to Super PACs spent as much money as the total of all the donations by the 3.7 million Americans who made small donations to the Obama or Romney campaigns.

The Open Secrets project of the Center for Responsive Politics (http://www.opensecrets.org/) investigates and reports on money in campaigns. It has now documented a web of over a dozen organizations that transferred money among themselves to hide the true sources of campaign spending, so-called “dark money.” Dark money has been used in state, local, and national campaigns. Adding an international element to the dark money issue, federal prosecutors say a Mexican businessman illegally funneled more than $500,000 into U.S. political races through Super PACs and various shell corporations.

The amounts of money that candidates for Congress have to raise for their campaigns is staggering. A member of the US House needs to raise, on average, $15,000 each and every week; a Senator needs to raise $33,000 every week. Time spent fundraising is time that doesn’t get spent working on legislation or listening to and representing average constituents.

The dominance of money in campaigns, and of wealthy special interests in providing this money, skews the priorities and policy positions of elected officials. It corrupts the making of public policy. Reforms of our campaign finance system are needed and can be done now (within the context of the Supreme Court’s rulings) that:

• Amplify the voices of average citizens and their small contributions to campaigns,
• Require timely reporting of all campaign spending and contributions, and
• Severely limit political activity by tax exempt organizations.

FULL POST: Huge contributions and expenditures from wealthy special interests were front and center in the 2012 campaigns because of the unlimited spending allowed by the Supreme Court’s Citizens United decision. Private watchdog groups are continuing to trace and expose the sources and convoluted paths of money going from wealthy donors to campaign spending. This both exposes the donors (who often wish to remain secret) and illustrates the need for reform. Here are a few examples of their extensive findings.

The 32 biggest donors to Super PACs spent as much money as the total of all the donations by the 3.7 million Americans who made small donations to the Obama or Romney campaigns. [1] The two Koch brothers, billionaires due to their oil and industrial corporations, spent at least $400 million on campaigns in 2012, which is more than John McCain’s entire presidential campaign spent in 2008. [2] And fewer than 300,000 individuals (one-tenth of one percent of the 300 million Americans) provided the majority, roughly 60%, of the money raised by Congressional candidates from individuals. [3]

The Open Secrets project of the Center for Responsive Politics (http://www.opensecrets.org/) investigates and reports on money in campaigns. It has been digging into the money spent in the 2012 campaigns by Super PACs and social welfare groups (tax exempt 501(c)(4) organizations). It has now documented a web of over a dozen organizations that transferred money among themselves to hide the true sources of campaign spending, delay any reporting of it, and circumvent IRS limits on political activity by non-profit, tax exempt organizations. It has also documented that at least one quarter of the so-called “dark money” – money where the source was hidden – was linked to the two Koch brothers. [4]

Dark money was used in state as well as national campaigns. In California, an $11 million campaign contribution of dark money by a non-profit, tax exempt organization opposing a tax increase sparked an inquiry by the state’s Fair Political Practices Commission and a grand jury investigation into violations of campaign finance laws and money laundering. A judge forced the Americans for Responsible Leadership, the apparent source of the contribution, to reveal the original source of the money. The money had come from the Center to Protect Patient Rights, another Arizona non-profit, which received the money from Americans for Job Security, a Virginia non-profit. Both of these organizations are connected to the Koch brothers’ political money network. The organizations have agreed to disgorge the $11 million contribution and pay a record $1 million fine. The investigation also uncovered a separate $4.1 million illegal contribution that now will also be disgorged. California is working to improve disclosure of campaign contributions and strengthen laws and regulations to stop dark money activity. [5]

Dark money has arrived at the local level as well. In the recent Boston mayoral election, organizations independent of the candidates’ campaigns spent over $3.8 million, much of it dark money. This spending had a significant impact as it was more than two-thirds as much as the campaigns of the two finalists spent on their own ($5.4 million). As a result, Massachusetts elected officials are working on laws that would tighten regulation of campaign spending, and, in particular, require disclosure of all donors promptly, before the election, so voters would know who was responsible for the spending. [6][7]

Adding an international element to the dark money issue, federal prosecutors say a Mexican businessman illegally funneled more than $500,000 into U.S. political races through Super PACs and various shell corporations. This is the first known instance of a foreign national exploiting the Supreme Court’s Citizens United decision to spend money on U.S. elections. The allegations surrounding Jose Susumo Azano Matsura, the owner of multiple construction companies in Mexico, include bankrolling a handful of southern California candidates. The scandal involves a U.S. congressman, a Washington, D.C.-based campaign firm, and the consequences of the Citizens United decision. That decision, which gives corporations the right to funnel donations to US candidates, allowed Matsura to obscure the true source of the donations and, therefore, the citizenship of the donor. [8]

The amounts of money that candidates for Congress have to raise for their campaigns is staggering. In 2012, the average cost of a wining campaign for the House was over $1.6 million and over $10.4 million for the Senate. That means that a member of the House, who runs for re-election every two years, needs to raise, on average, $15,000 each and every week. And a Senator needs to raise, on average, $33,000 every week. Newly elected members of Congress are typically told to spend four hours each day raising money. Time spent fundraising is time that doesn’t get spent working on legislation or listening to and representing average constituents. [9]

The dominance of money in campaigns, and of wealthy special interests in providing this money, skews the priorities and policy positions of members of Congress, and other elected officials, to favor the wealthy and special interests over the common good. In other words, it corrupts the making of public policy. Democracy – government of, by, and for the people – is perverted by the current role of money in our political system, where big money drowns out the voices and overwhelms the interests of average citizens.

Reforms of our campaign finance system are needed and can be done now (within the context of the Supreme Court’s rulings) that:

• Amplify the voices of average citizens and their small contributions to campaigns;
• Require timely reporting of all campaign spending and contributions (including bundling), so that voters know before they vote where the money is coming from;
• Limit contributions that elected officials can receive from interests they oversee, from political committees, and from lobbyists;
• Prohibit fundraising by elected officials during normal working hours;
• Severely limit political activity by tax exempt organizations and require them to report donors; and
• Improve enforcement of existing campaign finance laws.

ABSTRACT: So why were all the outside money and all the advertising it bought less effective than was anticipated in the recent election? First, the great bulk of the outside money was spent on advertising, largely negative advertising. Voters were overwhelmed and simply tuned them out. The advertising lost effectiveness and experienced diminishing returns. Second, the huge amounts of money and advertising drew lots of attention. So fact checkers were very active and the mainstream media became active in covering the money, the advertising, and the fact checking. This gave voters information that may have led them to question or resist the messages of the ads.

Third, the big money and advertising appears to have been less effective than good old fashioned grassroots organizing. Finally, Democratic candidates and messages appear to have resonated better with voters than Republican candidates and messages. Despite the outside money’s lack of success in electing desired candidates, I doubt that it will go away. My next post will examine likely future effects and what can be done to better monitor and control potential negative impacts.

 FULL POST: So why were all the outside money and all the advertising it bought less effective than was anticipated – and than hoped for by those paying for it – in electing specific candidates in the recent election? I think there are four major reasons.

First, the great bulk of the outside money was spent on advertising, largely negative advertising. And it bought lots of ads. But voters know that ads are marketing and hype, and that their goal is often to deceive and obfuscate (especially negative ads) rather than to inform. [1] Also, voters were overwhelmed by the din and repetition of all the ads and simply tuned them out. [2] Advertising markets where the Presidential race or other races were competitive were literally saturated; all the available air time was purchased for political ads. In short, because there was so much advertising, it lost its effectiveness and experienced diminishing returns. [3]

Second, the huge amounts of money and advertising drew lots of attention. So fact checkers were very active in analyzing the accuracy of the ads. And the mainstream media became active in covering the money, the advertising, and the fact checking. This included reporting on who had funded the ads or that the actual funders were veiled in secrecy. This coverage of the ads, their accuracy and their funding, gave voters information that may have led them to question or resist the messages of the ads. Although negative advertising has historically depressed voter turnout, that did not happen in this election. Perhaps there was an actual voter backlash against the negative advertising.

Third, the big money and advertising appears to have been less effective than good old fashioned grassroots organizing – voter outreach, identification, and get out the vote efforts. The ground game appears to have been more effective at producing votes than the airwaves. [4] In addition, efforts to make it harder to vote or to suppress voting appear to have generated a backlash in some places that resulted in high voter turnout that blunted the impact of negative advertising.

Finally, Democratic candidates and messages appear to have resonated better with voters than Republican candidates and messages. The extreme positions and statements of some Republicans, particularly Tea Party types, generally did not sit well with voters, both within their states or districts and beyond. And the advertising blitz could not overcome these differences between the parties.

Despite the outside money’s lack of success in electing desired candidates, it did have significant impacts. (See 11/14/12 post.) I doubt that it will go away, and there are good reasons to be concerned about big money in political campaigns. My next post will examine likely future effects and what can be done to better monitor and control potential negative impacts.

ABSTRACT: Roughly $6 billion was spent on the 2012 elections for federal offices. Although complete data isn’t yet available, an unprecedented $1.3 billion plus of this amount was “outside” money. Roughly a quarter of this outside money was “dark” money – money where the actual source of the money cannot be identified. About 80% of the outside money was spent opposing a candidate, typically through negative advertising. And over 70% of the outside money was spent trying to elect Republicans. The big outside money donors are large corporations and very wealthy individuals who have very specific, special interests in government actions that provide them substantial benefits.

Although the deluge of outside money achieved only limited election results, it had other significant, if somewhat more subtle, impacts. First, the great majority of the outside spending was on negative advertising, which changed the tone of the campaigns and demeaned the whole electoral process – candidates, voting, and the role of government. Second, the unlimited contribution amounts increase the influence these contributors have with elected officials; it creates a sense of obligation. Third, candidates had to spend even more of their time than before raising money. Finally, certain issues were not even discussed during the campaign for fear of alienating large donors.

FULL POST: Roughly $6 billion was spent on the 2012 elections for federal offices according to the best estimates; a truly staggering sum. Although complete data isn’t yet available, an unprecedented $1.3 billion plus of this amount was “outside” money, namely spending by entities other than the candidates’ campaigns themselves. And roughly a quarter of this outside money was “dark” money – money where the actual source of the money cannot be identified. [1]

About 80% of the outside money was spent opposing a candidate, typically through negative advertising. And over 70% of the outside money was spent trying to elect Republicans. This Republican advantage in outside money was offset in part by Obama’s and other Democratic candidates’ ability to out raise Republicans in direct contributions to their campaigns (i.e., in “inside” money). [2]

Beyond the general concern about the influence of large amounts of campaign money on candidates and elected officials, these unprecedented levels of outside money raise particular concerns. The outside money comes almost exclusively from large donors (i.e., $100,000, $1,000,000, and multi-million dollar contributions). The outside money donors are large corporations and very wealthy individuals who have very specific, special interests in government actions that provide them substantial benefits.

The good news is that all this outside money didn’t buy successful election results to the extent I and many others thought it would. Clearly, outside money significantly affected the Republican Presidential primary.[3] It also had a notable impact on some Congressional primary races. And presumably the large sums that flowed into competitive Congressional races, particularly in the last few days before the election, did affect the outcome of some of those races. [4] [5]

Although the deluge of outside money achieved only limited election results, it had other significant, if somewhat more subtle, impacts.

First, the great majority of the outside spending was on negative advertising, which changed the tone of the campaigns, particularly in competitive races. This negativity demeaned the whole electoral process – the candidates, voting, and the role of government. The ads were often misleading and sometimes clearly false. This occurred because candidates cannot be held accountable for the ads, given that the outside money is independent and outside of the candidates’ control (at least in theory). [6] The negative advertising forces candidates to spend time and money defending themselves rather than discussing issues. Note that in the Massachusetts Senate race there was very little of the negative advertising that was common elsewhere because the candidates had an enforceable agreement to ban outside spending on advertising.

Second, the unlimited contribution amounts, newly unleashed by the Supreme Court’s Citizens United decision, increase the influence these contributors have with elected officials when they are in office. The big contributions by large corporations (which have far deeper pockets than any of the other players) and very wealthy individuals, create a sense of obligation. [7] For example, Sheldon Adelson and his wife have given over $36 million to Super PACs and unknown tens of millions to non-profit groups that don’t have to report donors. He has a clear policy agenda and makes it known that he views giving to these groups, who then support specific candidates, the same as giving to the candidates directly. [8]

Third, candidates had to spend even more of their time than before raising money. This diverts their time and attention from interacting with voters and discussing issues. [9] The huge amounts of money in general, turn campaigns into an arms race. The unlimited outside spending exacerbates this, requiring candidates to build up huge war chests to be able to counter last minute outside expenditures. [10]

Finally, certain issues and issue options were not even discussed during the campaign for fear of alienating large donors. For example, the issues of global warming and meaningful regulation of the financial industry effectively disappeared from the presidential and many other campaigns. It’s hard to believe that the deep pockets and big campaign spending of companies and executives in the oil, gas, and coal corporations and of those from Wall Street didn’t contribute to the lack of discussion of these issues.

So why were all the spending and all the advertising less effective than was anticipated – and than hoped for by those paying for it – in electing specific candidates? That will be the topic of my next post.

ABSTRACT: Because of the way we fund campaigns, we have two elections every cycle, the money election and the voting election. For Congressional races, fewer than 1 in 400 people contribute $200 or more to a campaign. This one-quarter of 1% of the population determines who will show up on the ballot for the voting election. Consequently, these campaign contributors, this 1 out of 400 people, have the power to block candidates from getting on the ballot and, therefore, the power to block – to veto – issues and policies from even getting on the agenda. There are many ways to change the funding of campaigns and broaden who can afford to run.

The current elections will have huge amounts of money spent on negative advertising. Voters will be turned off and disillusioned by the whole process and therefore will not bother to vote. We the voters must stay engaged and elect the best candidates we can find. And then we must hold our elected officials accountable for their actions after they are elected.

FULL POST: Because of the way we fund campaigns, we have two elections every cycle, the money election and the voting election. If you don’t win the first, or at least show that you’re competitive, you don’t even get to the second one. For Congressional races, fewer than 1 in 400 people contribute $200 or more to a campaign. This one-quarter of 1% of the population determines who will show up on the ballot for the voting election, the one everyone thinks is the real election. To succeed as a Congressional candidate, you must gain the support of these large contributors.

Consequently, these campaign contributors, this 1 out of 400 people, have the power to block candidates from getting on the ballot and, therefore, the power to block – to veto – issues and policies from even getting on the agenda. This tilts our democracy toward plutocracy, where the wealthy rule and the rest of us try to hold on for the ride. “[A] nation in which so few have the power to block change is not a nation that can thrive.” [1]

And the proof is in the pudding; it’s not what candidates say on the campaign trail, it’s what they do in office. There’s plenty of winking and nodding that goes on during the campaign, where the one quarter of 1% know that it’s just rhetoric and that they don’t have to worry that action will follow.

There are many ways to change the funding of campaigns and broaden who can afford to run. One that is in place in Arizona, Maine, and a few other places is to match small campaign contributions from individuals with public funds. Presidential elections used to have a mix of private and public funds until the public funding got overwhelmed by huge sums of private money. A newer idea is to give every taxpayer a voucher that can only be used to contribute to campaigns. Another approach would be to reduce the cost of campaigns and the importance of money by requiring broadcasters – who get to use the public airwaves – to provide free air time to candidates so they don’t have to spend small fortunes on advertising.

The current elections will have huge amounts of money spent by supposedly independent groups outside of the candidates’ own campaigns. The bulk of this money will be spent on negative advertising. The small number of wealthy individuals and corporations that are funding these outside groups hope, in part, that voters will be turned off and disillusioned by the whole process and therefore will not bother to vote.

We, the voters, cannot fall into this seductive trap of cynicism and apathy. We must stay engaged and active in the election, and elect the best candidates we can find, even though they are rarely if ever perfect. And then we must hold our elected officials accountable for their actions after they are elected.

Here’s issue #12 of my Policy and Politics Newsletter, written 12/18/11. This newsletter continues looking at the issue of voting, exploring who is affected by the changes in voting laws and why they are happening.

The new hurdles to voting and registering to vote that have recently been put in place in various states (see Newsletter #11) will have the greatest impact on the young and old (particularly those who don’t have a driver’s license), on minorities, and on low income individuals. For example, the requirement for a government-issued picture ID will have the greatest impact on the 10% of US citizens who lack such IDs, including, disproportionately, 25% of African-Americans, 18% of 18 – 24 year olds, and 15% of those with incomes under $35,000. Some states’ laws disqualify or make it difficult to use student IDs. Note that before 2006, no state required voters to show a government-issued photo ID in order to vote. In some states, one has to pay to get a government-issued voter ID or the documents required to qualify for one; this has the effect of instituting a backdoor poll tax. Some states’ laws requiring an ID were blocked by courts on the ground that they interfered with the right of eligible citizens to vote. [1]

So where is the thrust for these new, restrictive voting laws coming from? The charge is being led by conservative Republicans and an advocacy group they and corporations created and fund called the American Legislative Exchange Council (ALEC). ALEC was founded by arch conservative Paul Weyrich, who in 1980 stated, “I don’t want everybody to vote. … our leverage in elections … goes up as the voting populace goes down.” ALEC is funded in part by the billionaire Koch brothers, who bankrolled the Tea Party. It develops model legislation that it provides to state legislators. [2]  [3]

The 6 states that passed new voter ID laws this year have Republican Governors and Legislatures. In 5 of those states, the law was sponsored by a legislator who is a member of ALEC. The 5 Governors who vetoed voter ID laws were all Democrats.

In Maine, a new Tea Party Republican Governor and Republicans in the Legislature repealed the state’s 38 year old same day registration law. (It was reinstated by a referendum.) In Floridaand Iowa, new, conservative Republican Governors removed ex-felons’ right to vote, disenfranchising 100,000 voters in each state. And the pattern goes on. [4] 

In conclusion, these new barriers to voting are the result of a concerted effort to reduce voting among citizens who tend to be progressive or Democratic. Conservative Republicans are engaged in an unprecedented effort to reduce voting to gain partisan advantage. These are the first efforts to systematically diminish rather than expand voting and voting rights since the final days of southern resistance to black voting. These efforts represent an attack on the basic principle of democracy on which this country was founded.

Here’s issue #11 of my Policy and Politics Newsletter, written 12/16/11. This newsletter addresses the issue of voting – an issue that has been simmering in the background but is coming to the forefront.

The ability and right to vote is a foundational principle of our democracy. From the end of the Civil War, through the 19^th Amendment in 1920 that gave women the right to vote, to the Voting Rights Act of 1965, the US has worked to achieve this principle of government by, for, and of the people through universal voting. Until recently, efforts have been focused on making it easier to:

• Register to vote (e.g., motor voter laws that allowed voting registration when getting a driver’s license and same day registration when voting) and
• Cast a ballot (e.g., expanded early or absentee voting, on-line or mail voting, and voting on weekends).

Despite these efforts voting participation in the US is well below participation levels in other western democracies. [1]  Turnout in the last six Presidential elections averaged only 53% and only 37% in the last six Congressional elections. Turnout in recent national legislative elections was 93% inAustralia, 66% in theUnited Kingdom, and 61% inCanada.

Starting in the 1990s, a range of efforts with the stated goal of preventing voter fraud were initiated that are making it more difficult to register to vote and to vote. Despite assertions of voter fraud, every non-political investigation of the issue has failed to find any significant voter fraud. “A major probe by the Justice Department between 2002 and 2007 failed to prosecute a single person for going to the polls and impersonating an eligible voter.” [2]  “In fact, Americans are more likely to be struck by lightning than to commit voter fraud.” [3]  “There is no evidence – none – that fraud is a major problem in any state.” [4] 

Nonetheless, in 2011, state governments have enacted an unprecedented array of new laws to make it harder to register and to vote. These new laws are likely to make it significantly harder for more than 5 million eligible voters to vote in 2012. [5]  The new restrictions on voting and registering include: [6] [7]

• Requiring a government-issued picture ID to vote (in 14 states including Alabama, Indiana, Kansas, Rhode Island, South Carolina, Tennessee, Texas, Wisconsin. Vetoed by Governors in 5 states. Proposed in 22 more states.)
• Requiring proof of citizenship to register. (Kansas andAlabama)
• Repealing same day voter registration. (Repealed inMaine after being in effect for 38 years without any problems but reinstated by voters in a statewide referendum.) In 2008, over 1 million voters registered on Election Day.
• Reducing early voting (i.e., prior to Election Day). (Florida,Georgia,Ohio,Tennessee,West Virginia) In 2008, 40 million voters took advantage of early voting.
• Prohibiting ex-criminals who have served their time from voting. (Florida,Iowa,Kentucky,Virginia)
• Restricting voter registration drives. (Florida,Texas)

In the next issue, I’ll take a look at who is affected by these changes and why they are happening.