Effects of Citizens United case still unclear

If you were following the coverage of the 2010 congressional election, you probably got the idea that Republicans greatly outspent Democrats, that campaign money had a lot to do with the Republican landslide and that a January decision of the U.S. Supreme Court – Citizens United – opened the floodgate to the huge, secret corporate contributions.

That was the refrain of innumerable press reports in the mainstream media, such as NPR. But parts of that picture are misleading, exaggerated or, at least, unprovable based on current campaign finance data.  For example, experts point out that:

– Republicans did not greatly outspend Democrats.  Republicans and Democrats spent almost the same amount if one includes all spending by candidates, party committees and outside groups, according to the Center for Responsive Politics.  Republicans had a big advantage among outside groups, but Democrats had an advantage among party and candidate committees.

– Outside Republican groups lost many of the close Senate races where they spent the most money – Colorado, Washington, Nevada, California and West Virginia.  Their money might have made the difference in two other close Senate races – Illinois and Pennsylvania. Meanwhile, Meg Whitman’s $142 million loss in the California governor’s race showed that money can’t buy you the governor’s mansion.

– It is impossible to say with precision how much additional money the Citizens United Supreme Court decision generated. The largest estimate is that it generated a 40 percent increase in spending by outside groups, but the estimate rests of dubious assumptions and math.

– The Citizens United decision did not allow big donors to keep secret their identities.  In fact, the decision concluded that disclosure could be required.  Congress, however, did not pass the Disclose Act to require that disclosure.

The Supreme Court ruled last January that corporations —  and by implication labor unions —  had the First Amendment right to make unlimited contributions for campaign spending that expressly advocated the election or defeat of a candidate.  The contributions had to be in the form of independent ads.  Corporate money could not be contributed to candidates themselves.

Before Citizens United, corporations and unions could make unlimited contributions for “issue ads” that, for example, said Russ Feingold is wrong on abortion, call Russ Feingold and tell him he is wrong.  What Citizens United changed was that it allowed the unlimited corporate funds to be used for express advocacy, using the terms vote for or vote against.

In the wake of Citizens United, there were popular fears that big corporations would spend huge sums on political campaigns for particular candidates.  But there have been very few ads where corporations themselves advocated the election or defeat of a candidate.

Target was one of the few corporations that paid for political ads directly and the move backfired. The candidate Target supported had anti-gay positions, leading to gay rights groups protesting at and in Target stores.  A YouTube video – “Target Ain’t  People” – features an in-store musical performance aimed at Target and at the notion that corporations have free speech rights as do people.

But corporations have been able to avoid publicity by making large donations to outside political groups, some of which have been disclosed and others of which have not. This lack of disclosure is one reason it is hard to determine how much additional money Citizens United injected into the 2010 races.

Much of the additional spending in 2010 was channeled through “social welfare” organizations organized under 501(c)4 of the Internal Revenue law.  Those groups do not have to disclose contributors at all – not because of Citizens United, but because of the rules of the IRS.
This year also saw the formation of what became known as “Super Pacs” – political committees organized under 527 of the IRS law. These groups groups have been active in previous election cycles.  But two Federal Election Commission decisions over the summer, generally following the lead of Citizens United, turned 527s into Super Pacs able to accept unlimited contributions from corporations or individuals and to explicitly call for the election or defeat of candidates. These Super Pacs do have to disclose donors, however.

Karl Rove, the former Bush administration political operative, was associated with one 501(c) and one Super Pac.  The 501(c) that does not have to disclose donors was American Crossroads GPS and the Super Pac was American Crossroads.  The Super Pac received $400,000 from American Financial Group.  That sum is clearly the result of Citizens United.

Cynthia Canary, director of the Illinois Campaign for Political Reform, put the development of these political committees this way: “Citizens United did not create the 527 and c4 mechanisms that have been favored for independent expenditures. It merely said the First Amendment protects the rights of corporations to use corporate treasury money to fund uncoordinated election expenditures…. Corporations who want to tap into treasury funds to electioneer have found it advantageous to utilize mechanisms which obscure disclosure.  This is not mandated by Citizens United, rather it is a side effect.”

The Sunlight Foundation, a group that supports transparency in government, estimated that 40 percent of the money spent on the 2010 election by outside groups was the result of Citizens United.  It added the $120 million spent by groups that can receive unlimited donations and don’t have to disclose them and the $60 million from those who receive the unlimited donations but do disclose them (the Super Pacs).  This was 40 percent of the $450 million spent by outside groups on the election.

But critics say that estimate is greatly exaggerated. There is no way to determine how much spending by these groups was for express advocacy – vote for, vote against – ads and how much was for issue ads.  Citizens United only opened the way for the express advocacy advertising.  Unlimited contributions for the issue ads had been permitted before the decision.  Also, the 40 percent figure appears to include all of the spending by these groups, which clearly would have made big expenditures even with the limitations in place before Citizens United.

Bruce La Pierre, a Washington University law professor who is an expert on election law, says that Citizens United “has become the whipping boy for criticism of money in politics.” He says it is impossible to figure out how much unlimited corporate money came into 2010 elections.  “We don’t know whether these ‘independent’ (no official coordination with candidates) groups are getting corporate money or rich people’s money or, if both, the percentage from corporations or rich people – so no one can be certain how much corporate money, freed by CU, poured into campaigns this year.”

John Jackson, a professor at the Paul Simon Public Policy Institute at Southern Illinois University Carbondale, argues that the big money spent by outside Republican groups in the wake of Citizens United had an effect on the election.  “First, it cannot be totally wasted money and uncorrelated with the fact that Republicans and Conservatives won big time and in lots of competitive places and even in some races where they should not have been competitive,( e.g Wisconsin Senate race with Feingold). Second, there is a financial ‘effectiveness threshold’  below which any campaign cannot fall and still be competitive. The extra money coming  in to Conservative causes and candidates allowed
them to be competitive everywhere and to reach that threshold everywhere.
Money is fungible….Finally, the unions will never be able to keep pace.  They have maxed out
already and their numbers are shrinking.”

Jackson adds this zinger: “I find it ironic that those same people who want corporations to be individuals under the campaign finance and other laws, also don’t want them to pay any corporate income tax!”