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Aaron Tang .

Posted Tue, November 8th, 2011 8:21 am

The Court’s campaign finance jurisprudence and its impact on the electoral process

Our topic today concerns the Court’s campaign finance jurisprudence and the effect that it has had on the electoral process.  As the 2012 election cycle continues to ramp up, more and more attention is being given to the impact of the Court’s historic decision in Citizens United.  We’d like to hear your thoughts on the questions below.

  • Aaron Tang – 0 Promoted Comments

    In this thread, discuss what impact, if any, you believe the Court’s decision in Citizens United has had on the electoral process thus far?

    • Justin Levitt – 2 Promoted Comments

      We don’t yet know the electoral impact of Citizens United. The decision gave us a new wave of SuperPAC entities flaunting their new SuperPurchasingPower. But before Citizens United (excepting the 2002-2007 stretch from McCain-Feingold to Wisconsin Right to Life II), nonprofits could freely advertise that “Candidate Smith Hates Puppies,” and could raise plentiful corporate money to do so. Citizens United removed only the additional ban on an explicit exhortation, of disputed incremental value, to vote the puppy-hater out. The difference is not insignificant: corporations can now strut, rather than slink, to the political marketplace. That makes fundraising easier and funding pools larger. Ultimately, though, these SuperPACs may represent merely a new vehicle for some very old influence.

      Even if the new legal warmth for corporate political cash amounts to a difference in kind and not just degree, tangible electoral results need not necessarily follow. The money arrives just as the media market is splintering, making it more difficult for any sustained campaign to dominate any given informational channel. And as numerous failed candidates from the .01% have demonstrated, money may buy a seat at the table but does not alone guarantee victory. A deep American populist strain tends to resist massive expense by the few to persuade the many. There’s a catch: the current disclosure regime (http://electionlawblog.org/archives/017415.html) does not meaningfully distinguish one from the other. For that, though, the blame thus far lies not with the Court (which has encouraged robust disclosure), but with Congress (which has not).

    • Nathaniel Persily – 1 Promoted Comment

      So much has been written about Citizens United and yet so much more remains to be said. What follows are just a few brief provocations concerning the possible implications of the decision both within and beyond the law:

      1. Political Implications
      Evaluating the political effects of Citizens United (CU) by itself is a fool’s errand. It was the latest (and not the last) in a series of libertarian campaign finance cases from the Roberts Court. Much of the alleged consequences of that case’s holding concern activities (such as unlimited spending by corporations on candidate related ads that shied away from specific messages of endorsement) that were also legal the day before the Court decided that case. Nevertheless, the story of CU’s consequences is one where the Court turned a license into a blessing. That is, even though certain activities by corporations may have been allowed even before CU, the breadth of the decision has made such activities more likely. What previously may have been phrased by general counsels as exploiting loopholes is now sanctioned as core First Amendment activity.

      2. Jurisprudential Implications.
      The jurisprudential implications of CU have yet to be fully realized. The decision steers the definition of corruption away from differential access and toward bribery and seems to remove the appearance of corruption as a compelling target of campaign finance reform. As such, the next shoes to drop may be the bans on corporate contributions to political parties or their alter egos. But the Court’s post-CU decision in Arizona Free Enterprise v. Bennett (echoing the pre-CU decision in FEC v. Davis) striking down a public campaign funding scheme also shows the broader implications of this jurisprudence. Those cases have will have consequences beyond campaign finance because they raise important questions as to how and when laws burden on speech.

      3. Implications for Public Opinion.
      The firestorm of public criticism that followed CU was unique. Campaign finance decisions usually do not rise to a level of salience or comprehensibility that leads the public to pay attention to such cases (let alone to have a case mentioned in a State of the Union address). Evenso, as a survey I conducted last year with Steven Ansolabehere (available at persily.com) suggested, the unpopularity of the CU holding is characteristic of the recent speech decisions (e.g., bans on depictions of animal cruelty, violent video games, or perhaps protests near military funerals, not included in the survey). For all the talk in the academy about how the Court never strays too far from public opinion, the First Amendment cases, including Citizens United, have proven to be outliers.

    • Karl Sandstrom – 1 Promoted Comment

      Fundraising in a post Citizen United world is characterized by a system of public secrecy and private disclosure. Nothing in current law prevents an organization that expends vast sums of money supporting a candidate from privately revealing the source of its funding to the beneficiary of the spending while keeping the public in the dark. The robust disclosure that Justice Kennedy envisions simply does not exist. Is the lack of disclosure an invitation for corruption?

    • David Primo – 1 Promoted Comment

      One of the most noteworthy effects of the Citizens United decision is the almost seamless transition of “good government” groups from advocating for more direct limits on speech to advocating for more indirect limits on speech, in the form of tightened disclosure requirements for corporations that wish to participate in the political process. While groups like the Center for Political Accountability couch their goals in terms of increased “accountability” of corporations to shareholders, the underlying intent is to limit certain forms of speech—specifically, corporate speech.

      It’s unclear what problem, precisely, increased corporate disclosure is designed to solve, and given the past track record of campaign finance reform, there is good reason to be skeptical that disclosure will improve the political process much, if at all. Empirical research shows that campaign finance reform typically fails at achieving its intended ends. To give just one example, “clean elections” laws, under which candidates receive government subsidies in exchange for forgoing private contributions, did not meaningfully change politics in states like Maine and Arizona, and earlier this year the Supreme Court ruled the most popular version of these laws to be unconstitutional. Is there any reason to expect corporate disclosure regulations will fare differently?

    • Ray La Raja – 1 Promoted Comment

      Commentators have reported substantial activity among outside groups, including “Super PACs”, trying to influence the next federal election. My sense is that these well-funded groups would have emerged eventually even without Citizens United, but that’s not what I want to talk about here. I’m more interested in addressing whether these organizations will tilt the playing field for one party or the other. Past history suggests that experienced politicos affiliated with both major parties exploit all available opportunities to raise money for partisan goals. Under Citizens United, the arms race between the two parties will continue and it is a good bet they will neutralize each other’s efforts. In short, strategy and implementation should matter more than money, per se.

      Stronger evidence about minimal impact comes from observing consequences in the 28 states with unrestricted corporate spending, pre-Citizens. What happens when we compare states with and without a spending ban? The short answer is “not much”. My expectation was that corporate spending would boost the number of Republican held seats in state legislatures (I looked at elections as far back as 1936). But this was not so. In fact, the only effect I observed was for states that prohibited corporate contributions. In such states, Republicans could expect to lose 2.5 percent of the seats in the lower house. I should point out that this effect was apparent only for states with smaller governments (measured by government spending per capita). In other words, corporate bans – on either spending or contributions – had no statistically significant effect on partisan outcomes in big states, the very states that make the best comparison to the federal level. This finding suggests that corporate interest groups find a way to influence elections with or without bans.

      To be sure, federal elections are the major leagues and much innovation with outside spending has occurred in the past 10-15 years. So Citizens United could plausibly have more significant consequences on electoral outcomes than what I’ve found (draft of paper forthcoming). But such caveats aside, we should treat with skepticism any claims that Citizens United will catapult pro-business Republicans into office.

    • Jessica Levinson – 1 Promoted Comment

      Citizens United has already had a deleterious affect on the electoral process. Public outrage surrounding the decision has only grown as corporations and moneyed interests have set up a shadow campaign finance system. Corporations can now give and spend nearly unlimited sums to help elect preferred candidates or defeat candidates they see as less favorable to their interests. Individuals increasingly feel that they cannot affect the outcome of electoral processes. Individual voices are being drowned out by the giving and spending of unlimited sums of money in the political marketplace. As a result voters feel disengaged in our representative democracy. The erosion of public confidence in a representative system of government is deadly serious.

    • Joe Birkenstock – 2 Promoted Comments

      One predicted electoral consequence of overturning Austin v. Michigan Chamber of Commerce was an explosion of corporate spending on independent expenditures, including expenditures from large, publicly traded corporations – either in their own name or, more commonly, through intermediaries such as the Chamber of Commerce. Thus far, however, there has been relatively less of this sort of corporate political activity than some feared – the trillions of dollars in cash reserves held by publicly traded corporations simply hasn’t been brought to bear in meaningful degree.

      To be sure, as many of the comments so far have noted, we don’t have the kind of disclosure system that would inform the public about exactly who provided the dollars spent on independent expenditures and electioneering communications, but existing law does require each sponsor of such ads to disclose how much was spent. And those totals, so far, simply do not support the proposition that CU has unleashed the tidal wave of corporate political spending some feared.

  • Aaron Tang – 0 Promoted Comments

    Do recent developments in the political fundraising arena, such as the growth of so-called “Super PACs,” reveal anything about the correctness of the Court’s reasoning in Citizens United?

    • Rick Pildes – 1 Promoted Comment

      There is a tendency right now to attribute to Citizens United (CU) virtually all newly emerging forms of financing elections, and the increasingly large amounts, that arose in the 2010 election cycle and that look to play an even more central role in the 2012 elections. But this tendency can reflect a complacent sensibility among critics of Citizens United that the case is the source of all evil in campaign financing or the desire of journalists and others to craft dramatic narratives that elevate single moments into uniquely transformative events. The truth is more complicated, for at least two reasons.

      First, the most significant innovation – the rise of so-called Super Pacs, which can solicit unlimited contributions for purposes of independent electioneering – probably would have happened without CU. The organizational entrepreneurs that pioneered the Super Pac form, SpeechNow, came up with this idea in 2007 and pursued this strategy long before CU. It is really Buckley v. Valeo, from 1976, not CU, that establishes that Congress cannot regulate independent electioneering spending (other than through disclosure requirements). On this issue, CU did little more than confirm what Buckley had already established. In virtually every election cycle in our highly competitive, polarized era, innovators have created new organizational forms or exploited existing ones (527 organizations, 501(c)(4) entities). Super Pacs should be understood as the most recent stage in this cycle, not as some radical new structure made possible only by CU. CU does affect whether corporate and union general treasuries can contribute to these Super Pacs; but Super Pacs, funded with unlimited contributions by wealthy individuals and various other entities would exist without CU, once aggressive innovators figured out Super Pacs would best serve their interests.

      This leads to the second point: we simply do not know at this point how much corporate money is or is not flowing to Super Pacs or other campaign-finance entities. Large, publicly traded corporations might be less likely to get involved in election financing than many people tend to assume – particularly if that involvement must be publicly disclosed. A recent, authoritative study concludes that 60% of companies in the S & P 100 Index have already responded to CU by prohibiting spending corporate money on politics or disclosing their direct political spending and adopting Board oversight. Such spending risks alienating potential customers; it can trigger shareholder backlash; and, frankly, corporations probably are able to attain influence more efficiently through spending their money on lobbying on specific issues, rather than generally trying to influence election outcomes. Privately-held corporations, or those dominated by a single shareholder, are probably more likely to engage in election spending. Moreover, we are still in the middle of working out what kind of public, regulatory regime for disclosure will end up being required; the SEC, for example, has been petitioned to adopt such requirements. Until we know what kind of disclosure of direct and indirect corporate spending will be required, we won’t know how active corporations will end up being. And because we don’t have such a regime in place yet, we are left with a lot of speculation, but little actual information, about how much corporate spending is actually taking place.

    • John Samples – 1 Promoted Comment

      Over the next year, there will be a flood of complaints about the damage done by the Supreme Court’s decision in Citizens United. Setting aside the rhetoric, it is worth recalling what was (and is) at stake in that decision.

      Justice Anthony Kennedy’s Citizens United opinion drew a clear line between political activities that could be regulated (contributions and sources) and those that could not (independent campaign spending). Kennedy did not make up that line. The Supreme Court had validated campaign finance regulation to prevent corruption or its appearance. In turn, corruption depended on a relationship between a donor and a candidate. Absent a candidate, campaign spending could not corrupt; it was “just” political speech, an activity protected by the Constitution. Professor Richard Hasen, along with many other critics of CU, wish to erase this bright line that marks the outer edge of state power. If, as Hasen suggests, all spending can corrupt officials, then all spending (and speech) may be regulated, assuming a congressional determination of impropriety is forthcoming (it will be). The authority of Congress over political speech will then be plenary. There would be no bright line marking the limits of state power. That would be a strange result for a government constrained by a Bill of Rights that were enacted precisely to indicate and reinforce those limits.

    • Joe Birkenstock – 2 Promoted Comments

      And as for what the reasoning behind the decision has brought about, in my eyes one of the most interesting consequences is a broadening of the scope of many state & local campaign finance laws around the country. In California, for example, the Fair Political Practices Commission relied on the holdings and reasoning in CU to broaden its definition of express advocacy beyond the so-called “magic words.”

      While controversial, this approach could be mirrored in other jurisdictions going forward, especially to the extent the state or local laws in question address only disclosure requirements, as opposed to the imposition of contribution limits. These surprising changes (using a decision that sharply narrowed campaign finance prohibitions as a means of broadening political law rules more generally) result from some of the tactical choices the CU majority made in the course of reaching the result that they did.

      Specifically, in order to have a basis to overrule Austin, the Court needed to find that “Hillary: The Movie” constituted a corporate political activity that could be prohibited were Austin still good law. Once having done so, however, by invalidating the corporate expenditure prohibition itself, the Court deeply undermined the case for applying the strictest scrutiny to the definition of what counts as an expenditure and what doesn’t.

      And by treating “Hillary: The Movie” as one such otherwise illegal activity – while also upholding compulsory disclosure of the spending on such activities very broadly, by an 8-1 margin – it set a precedent for similarly defining other political efforts as political expenditures and for imposing mandatory disclosure requirements on them.

      Some of those opposed to this approach point out (correctly) that CU itself technically did not concern an “expenditure” prohibition, but rather only the prohibition on corporate funding of “electioneering communications.” Nevertheless, the Court’s *holding* in CU clearly was not limited to 441b as applied to funding of electioneering communications, but rather the Court overturned 441b facially, in all applications, and overturned Austin – a case that explicitly applies to expenditures.

      In this way, the reasoning of the Court’s opinion in CU may turn out to cause nearly as much consternation for free speech advocates as it has for campaign finance reformers.

  • Aaron Tang – 0 Promoted Comments

    In this thread, discuss whether there are other aspects of the Court’s campaign finance decisions that warrant attention in light of the way that political fundraising has developed over the past two years?

    • Michael Dimino – 1 Promoted Comment

      Skeptics of campaign-finance regulation have been concerned not only with the direct costs of such regulation in limiting the speech that is prohibited by such regulation, but also by the indirect chilling effects caused by potential speakers’ inability to be certain when they might be violating laws that only a handful of lawyers understand. Further, allegations of a candidate’s campaign-finance transgressions can be politically damaging, even if those allegations turn out to be unfounded.

      In 2009, the Supreme Court held in Caperton v. A.T. Massey Coal Co. that due process required the recusal of a judge who was the beneficiary of a large amount of independent campaign expenditures purchased by the CEO of one of the litigants. The dissenters in Caperton predicted an increase in recusal motions, as strategic lawyers would attempt to use the case to disqualify unfavorable judges. This result was especially likely because the Court never provided any administrable rule that could allow observers to determine which campaign activity would require recusal.

      Recusal motions obviously come into play after the candidate has won the election and assumed office. Another effect, however, may appear during campaigns. Recently a reporter asked me to comment on a Pennsylvania judicial race in which the Democratic candidate accepted a contribution of $300,000 from a PAC funded by trial lawyers. The Republican Party chairman has alleged that the acceptance of the contribution raises the possibility of bias, and has suggested that the Democratic candidate should have to recuse himself, should he be elected, from any suit involving any contributor to the PAC. http://www.pagop.org/2011/10/pa-gop-judge-for-sale-democrat-david-wecht-owned-by-philadelphia-trial-lawyers/

      The charge is frivolous. Even if an individual’s $300,000 contribution was large enough to trigger Caperton’s presumption of bias (Caperton itself involved more than $3,000,000), the recent contribution was from a PAC. No reasonable person would think that a judge would be unconstitutionally biased in favor of every person who contributed to the PAC, regardless of the amount of each individual’s contribution.

      But the fact that the charge is frivolous doesn’t mean that it is ineffective. The Republican charge is not likely to force the recusal of the judge, should he win the election — and forcing recusal is not its purpose. Rather, the charge is designed to characterize the Democratic candidate as a lawbreaker — someone willing to sell justice to the “special interests.” And to a voter who is unfamiliar with Caperton, PACs, and campaign finance, the charge may appear to make sense.

      What this example illustrates is the potential for Caperton to be used as a partisan weapon. Judges accepting campaign contributions may always be accused of bias, but Caperton gives those claims of bias an added legitimacy by grounding them in the Constitution. Judicial candidates in the future may have to worry not only about contributions that will require recusal under Caperton, but also those contributions that might be mischaracterized by political opponents as raising a Caperton issue (which is to say, virtually all contributions). The vagueness of Caperton will thus threaten to chill political speech by both candidates and supporters fearful of a charge of unconstitutional bias.

    • Monica Youn – 1 Promoted Comment

      In the world according to Justice Kennedy, the tide of dark money in the 2010 midterms should have been an impossibility. In Citizens United, Justice Kennedy had assumed that disclosure laws would “provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.… This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Of course, this sunny picture had little basis in political reality, then or now. Corporations are not generally required to disclose political spending to the public, to shareholders or to corporate boards, and anyone who watches the Colbert Report now knows enough to avoid existing disclosure regulations on independent spending. In the 2010 midterms, according to the Center for Responsive Politics, outside groups raised and spent $140 million in undisclosed funds, representing nearly half of the $300 million spent by outside nonparty groups. And midterm secret spending was only a trial run for the 2012 cycle, as early adopters took Super PACs for a test drive in the first post-Citizens United election.

      Existing federal and state disclosure laws, though inadequate, would at least seem to be on safe constitutional ground, since the Court upheld disclosure laws against facial challenges by an 8-1 majority first in Citizens United, then in Doe v. Reed, which involved disclosure of petition signatories. But, as Republican FEC Commissioner Don McGahn stated at a recent conference, as-applied challenges to disclosure laws are “where the action is going to be in the future.” This is because both Citizens United and Doe v. Reed, while upholding disclosure in theory, left open a back door to challenges to disclosure laws in practice. Under longstanding precedent, groups such as the NAACP and the Socialist Workers Party have been held exempt from generally applicable disclosure laws if they can demonstrate that disclosure will subject their members to official or private harassment, threats, and reprisals. The various concurring opinions in Doe v. Reed disagreed as to the severity of harassment and quantum of evidence required for such an exemption to apply; what I found worrying, however, was the way Chief Justice Roberts’ majority opinion teed up future as-applied challenges in the majority opinion. Roberts explained that such as-applied challenges might be available for backers of particularly controversial petitions, rather than for members of particularly vulnerable groups, as in the NAACP and Socialist Workers Party cases. Harassment of individuals is a serious concern, but Roberts’ framing of the harassment exemption would seem to allow a corporation spending on a controversial ballot initiative to claim the same harassment exemption as an individual.

  • Brad Smith – 1 Promoted Comment

    For years, a majority of states allowed unlimited corporate spending – and Superpacs, if you will, though no one called them that – with no public outcry. Indeed, states such as Utah and Virginia, that took that route, were consistently among the best governed states in the nation. Looking back, when the Supreme Court decided Austin v. Michigan Chamber of Commerce in 1990 (the precedent overruled in Citizens United), there was little public commentary either before or after the decision. The outcry over the case has a whiff of made-up symbolism about it.

    Citizens United and the various decisions that have supported it – most notably SpeechNow.org v. FEC – have increased competition in the political system by allowing money to find its way more rapidly to potentially competitive races, and allowing more voices to be heard. These are generally good things.

    Conversely, the horror stories about the potential consequences of Citizens United have not come true.

    These decisions are also forcing legislators to change how they think about campaign finance law. Before, the focus was on trying to squelch political conversation. Now, the parties and candidates operate under more oppressive rules than other spenders. This creates incentives for legislators to further liberalize the system, and that is also a good thing.

  • David LeRoy – 4 Promoted Comments

    In practical terms, nothing. Look at the 2010 midterms- especially the races where there was considerable advocacy by “outside groups” whether expressly for or against a candidate, or impliedly so. I believe the win percentages for the candidates receiving the greater amount of support in terms of money or advocacy is somewhere near 50%.
    I believe that many analysts forget one very important fact: voters pull levers in voting booths, not dollar bills.

  • Ciara Torres-Spelliscy – 1 Promoted Comment

    The public policy response to Citizens United leaves the distinct impression that our politics are not capable of producing results that 85% or more of Americans want: more transparent elections. Clearly $135 million of dark money in the 2010 midterm wasn’t enough to motivate our Congress or our administrative agencies to act to bring clarity to money in politics.

    The Federal Election Commission has been particularly hamstrung in responding to the new Citizens United reality. As FEC Commissioner Weintraub lamented earlier this year:

    here we sit, almost eighteen months after Citizens United was announced, mired in gridlock over whether certain aspects of the case may be addressed in the rulemaking, over whether the Commission is willing to hear from the public on a part of the case that my colleagues would prefer to pretend is not there. Regrettably, we cannot even agree on whether certain questions may be posed, let alone reach the stage to consider the substance of any final rule. Disclosure, which I have always considered one of the core missions of the FEC, has become, like the villain in a children’s novel, the topic that may not be named.

    That was in June. At this time in November, the FEC still has not acted to clarify what types of disclosures are required of corporate political spenders.

    There appears to be a glimmer of light over at the FCC which announced it may require better disclosure for broadcast political ads. Industry efforts to quash this have already commenced.

    This is why so many, including myself, have pinned their hopes on the independent SEC which has the capacity to bring transparency at least to our publicly-traded companies. (see http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1955950) Congressmen, economists, corporate law professors and investors with $690 billion worth of skin in the game have all urged the SEC to promulgate a new rule requiring disclosure of political spending by listed companies. (see http://www.sec.gov/comments/4-637/4-637.shtml) The second anniversary of Citizens United may come and go without new disclosure rules from any federal entity. If this comes to pass, it will show a grave political failure.

  • – 0 Promoted Comments

    The driving premise of the court’s corporatist philosophy is that the First Amendment does not discriminate on the basis of speaker identity.

    Yet SCOTUS upheld in Richardson v. Ramirez (1974) the constitutionality of disenfranchisement statutes, which strip convicted felons of their right to vote. Though the court decided Richardson within the framework of the 14th Amendment’s second section, which limits the Congressional representation of states that restrict voting rights, I would argue that the right to vote is nonetheless the quintessential form of symbolic speech as per the First Amendment.

    It appears, then, that the Court affirmed the constitutionality of state law that debars felons from exercising their voting rights on the basis of their identity as felons, and thus established that the First Amendment does discriminate on the basis of speaker identity.

    Once the idea of an indiscriminate First Amendment is rebutted, as evidenced in Richardson, the bedrock of corporate personhood collapses. The deduction that corporations are people who talk through money is rendered invalid, as it is not necessarily true, and unsound, as, in addition to being invalid, it does not proceed from a true premise.

    Thoughts on this line of reasoning?

  • Charles Bowsher – 0 Promoted Comments

    The Citizens United Debacle is the most important decision the Supreme Court has made in my lifetime (55 years). Question is, how do we, as lowly citizens get them to re-visit it and overturn it? There can be no question or argument made that will convince me it was properly decided. I challenge the readers here to answer how the SCOTUS refusal to recognize the simple fact that corporations are already, and always have been represented in our political process and system. “They” are represented by their owners, their shareholders and their customers. That ought to be enough representation for anyone!

    Besides, how will “they” ever be able to fit into a non-electronic voting booth?

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