Introduction Abstract Throughout the years campaign finance reform has arguably become the worst component of politics. Due to recent changes campaign finance reform has enabled corporations to donate unlimited amounts of their own funds to political campaigns, thus creating an uneven playing field and creating inequality between not only political campaigns but the citizens themselves by granting corporations the same rights as citizens; mainly the right to freedom of speech, in regards to the amount of money that can be donated towards a campaign. Numerous solutions have been proposed to fix the corruption in politics but none have taken hold.
Keywords Super-PACs, PACs, Congress, Citizens United
Definitions Campaign finance reform is, put simply, a continuous attempt to change the involvement of money in politics. These attempts have occurred since the machination of the United States and continue to this day. The attempts will be discussed in greater detail in the following section of this paper. Media coverage of campaign finance reform focuses mainly on the negative aspects of it; due to the most recent ruling regarding campaign finance reform, the media tends to focus on the corruption in politics that the rulings have prompted; this includes corporations now being considered people and the unlimited funding that they can donate. These views will be expanded on more in the Super PAC segment of this paper. In the past, campaign finance reform was seen positively as it aimed to negate the amount of influence that money has in politics; in most recent years, campaign finance reform has done a complete turnaround to what it previously stood for.
History Prior to 1971 The history of campaign finance reform is a long and arduous one; the history itself puts an emphasis on the reform portion of the term, as campaign finance has had many reforms. According to “Appendix 4: Brief History,� provided by the Federal Election Committee, the history of campaign finance stems all the way back to 1867. From this point until 1971, campaign finance reforms focused on doing the opposite of what these laws do now. These reforms, according to the Federal Election Committee, did:
“Limit contributions to ensure that wealthy individuals and special interest groups did not have a disproportionate influence on Federal elections; ● Prohibit certain sources of funds for Federal campaign purposes; ● Control campaign spending; and ● Require public disclosure of campaign finances to deter abuse and to educate the electorate.” ●
1971 1971, however, marked the beginning of a new set of campaign finance reforms. The Federal Election Campaign Act of 1971 (FECA) made complete disclosure of contributions and spendings in campaigns mandatory and created a limit on how much spending of campaign funds could go towards media advertising, though this portion of FECA was later dismissed. 1971 also marked the first time that citizens could mark on their tax forms that they would allow the government to use their tax dollars to fund presidential elections. This act is noteworthy mainly for its creation of political action committees, or PACs. PACs created a loophole of sorts for corporations and unions; though federal election laws from earlier prohibited direct contributions from corporations and unions, the creation of PACs allowed these entities to “establish, operate, and solicit voluntary contributions” for use in Federal races (“Appendix 4”). In other words, PACs allowed corporations and unions to congregate donated funds for the usage of their chosen benefactor. Since the money was not coming from the funds of the corporation or union directly, but rather the people that comprised of the entities, this method of campaign donation is seen as legal; in recent years, however, the legality has been question. This will be expanded on in the Super-PACs segment. 1974 In 1974, Congress created an independent body that, for the first time, would maintain federal election laws. Prior to this point no entity existed to ensure that federal election laws were being obeyed. Rather, the responsibility fell on a handful of individuals in Congress such as the Secretary of the Senate and Clerk of the House, with the Justice Department prosecuting anyone that violated these laws. The 1974 amendments also created the current system used for financing presidential elections. An amendment was also made that limited campaign contributions to a thousand dollar maximum for individuals and a five thousand maximum limit for PACs. This amendment was challenged in a case known as Buckley v. Valeo. Two senators, one democrat from Minnesota and one republican from New York, challenged the then Secretary of the Senate over the constitutionality of the amendments. The court decided to uphold contribution limits but overturned expenditure limits. Their reasoning behind this was that limiting the quantity of the donations was limiting the quantity of free speech by individuals and groups. This ruling would
have a ripple effect with later amendments and the court case of Citizens United v. FEC. 1980s and 1990s Throughout the 1980s and 1990s, general election spending was increased. From 1980 to 1988, spending was increased from $192.1 million to $408.3 million. Aside from this increase in spending, not much occurred due to Congress either filibustering or rejecting any bills that came up regarding campaign finance reforms. 2002 The Bipartisan Campaign Reform Act in 2002 prohibited unregulated contributions to campaigns and reinforced the rule that corporations and unions could not use their own funding to contribute to campaign funds. The Bipartisan Campaign Reform Act also required that PACs that contributed $10,000 or more be fully disclosed and that individuals that donated $1000 or more have their identity released. No large anonymous donations were allowed at this time (Cantor, 2004) In the years that followed, rulings were generally made that reinforced and backed this act. Notably, the 2006 ruling by the Supreme Court created an exemption for any “electioneering communication� (media ads) that spoke of legislative issues rather than specific candidates.
Super-PACs History The biggest changes made to campaign finance reform occurred in 2010. Two major court rulings happened in this year that has created radical changes in the political atmosphere. The first one, Citizens United v. FEC, is the one most recognized of the two court rulings. This ruling essentially said that corporations are people and that limiting their campaign contributions was limiting their freedom of speech. Before, corporations were unable to make campaign contributions due to the desire to limit the amount of influence corporations and unions had. Now, Citizens United v. FEC has made campaign contributions to campaign for or against candidates legal. The second ruling was Speechnow.org v. FEC and occurred two months later. This case marked the creation of what is now known as a Super-PAC and removed limits on contributions. While PACs have limits to how much money can be donated and requires disclosure of who donated money (should the donation be larger than $1000), Super-PACs allow anonymous donations of any amount. Additionally, Super-PACs disallow direct contributions but allow unlimited political spending independent of the campaign; an example of this is rather than donate directly to the campaign, the money spent in Super-PACs can go towards ads promoting a candidate or portraying another
candidate in a negative light. One of the more controversial parts of a Super-PAC is the inability of candidates and Super-PAC members to directly coordinate. However, discussing and strategy via the media is entirely legal. Overall Super-PACs are less restrictive than regular PACs and therefore allow for the possibility of greater donations and anonymity. Comedian Stephen Colbert had a segment about the questionable rules regarding Super-PACs on his show The Colbert Report. Spanning over several episodes, Colbert created his own SuperPAC (Americans For a Better Tomorrow, Tomorrow; also known as the Colbert Super PAC) that raised over $1.02 million. The money, he said, would be used for campaign ads and “normal administrative expenses, including but not limited to, luxury hotel stays, private jet travel, and PAC mementos from Saks Fifth Avenue and Neiman Marcus” (Khan, 2011). This segment revealed that SuperPACs are not only easy to make but the rules regarding them are easy to manipulate and use to the individual’s own advantage.
Solutions The problems associated with the 2002 Bipartisan Campaign Reform Act and the recent 2010 court rulings have driven some people to come up with solutions. Though many of these solutions exist, four stand out from the rest and are widely accepted as the only valid and legitimate solutions to the aforementioned problems. These solutions are voting with dollars, matching funds, clean elections, and a constitutional amendment inspired by Occupy Wall Street.
Voting With Dollars Similar in a sense to online gambling, the solution to vote with dollars in what is called a “Patriot Program” would entail the government giving registered voters $50 “patriot dollars” that the voters would then donate to the candidate of their choosing. As Bruce Ackerman and Ian Ayres write in their book Voting With Dollars: A New Paradigm for Campaign Finance, anonymous donations and PACs would still exist. The point of the Patriot Program is to eliminate the influence of PACs and other sources of large donations; should a large donation be made, the number of patriot dollars given to citizens would raise in turn to avoid overwhelming patriot dollars with donations from a separate source. Citizens, they write, would have the potential to donate to PACs rather than candidates directly. These PACs would only have the ability to donate to candidates rather than using the money to create politics ads or any other sort of communication effort; money for media-related expenditures would have to be raised independently for that. For those that wish to donate anonymously using their own money rather than the patriot dollars would use what is called a “secret donation booth.” Author Stephen K. Medvic, a member of the Department of Government at Franklin & Marshall College, summed up the process of secret donation booths in his review of Bruce Ackerman and Ian Ayres’ book: “Contributors of private
dollars can authorize the FEC to acknowledge donations of up to $200; for contributions of more than that, a statement from the FEC would verify only that the individual has given “$200 or more.” In addition, the authors would allow a PAC redistributing Patriot dollars to candidates to publicize the amount of money it has contributed.” (Medvic, 2004) Ackerman and Ayres address foreseeable problems in their book as well. For individuals who wish to donate a large sum of money to aid in campaigning, Ackerman and Ayres propose breaking the donation up and delivering it to the candidate in smaller chunks. “Thus,” Medvic writes, “no one contribution could produce a large jump in a candidate’s account.”
Matching Funds Howard Dean, a former chairman of the Democratic National Committee, and Christine Todd, the director of the Environmental Protection Agency under George W. Bush, write in their opinion piece for CNN “New York can lead the way in campaign finance reform” that matching funds would “put ownership of our public elections in the hands of voters, not special-interest donors, and the politicians who are elected will be accountable to them.” This means that the government would match donations and would promote small contributions rather than large ones. By mandating that the government match donations up to $250, small donations would therefore become more important than large donations. This system is the one currently used for the presidential primaries.
Clean Elections Clean elections emphasize the usage of “clean money.” Grassroot groups work to gather signatures and monetary donations for their candidates of choice. After reaching a certain amount of money, candidates will receive matching donations from the government. While this is similar to the matching funds system, the fact that candidates are not allowed to accept outside donations or use their own money should they choose to accept the matched funds makes clean elections dissimilar. Common Cause, a nonprofit advocacy group, writes on their website that clean elections will: Place an emphasis on making elected officials and potential candidates “accountable only to the public interest, rather than special interests.” ● Level the playing field for all candidates, rather than making elections a matter of who can raise the most money ● Eliminate the need for fundraising so politicians can focus on campaigning ● Provide all citizens with a voice, thus minimizing voter apathy and the necessity to donate money in order to be heard during elections ●
This method is used in Wisconsin and six other states.
Constitutional Amendment The proposed amendment, created by Ted Deutch (democratic member of the House of Representatives), would be called OCCUPIED -- “Outlawing Corporate Cash Undermining the Public Interest In our Elections and Democracy” -- and would do exactly as the name implies. The use of money donated by for-profit entities would become illegal under this amendment, though unions and non-profit organizations would still be allowed to donate. The OCCUPIED amendment would undo the Citizens United v. FEC decision by removing the “corporations are people” aspect of the ruling. Deutch writes in the proposed amendment that “The rights… are the rights of natural persons and do not extend to for-profit corporations, limited liability companies, or other private entities established for business purposes or to promote business interests under the laws of any state, the United States, or any foreign state” (Deutch, n.d.)
Conclusion Recommendations Of the proposed solutions, the clean election one seems the most plausible. Clean elections incorporate the matched funding and improve on it by disallowing donations from outside sources. This, as said before, would eliminate large donations and level the playing field for not only the candidates but for the citizens as well. Citizens would have their voices heard and campaigns would become less focused on obtaining funds and more on the campaign itself.
Bibliography
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