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The Counter-Reformation: The Fall of Campaign Finance Reform

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This article is part of a collaboration with MSNBC's "The Dylan Ratigan Show" for the series "Mad As Hell: Get Money Out," that aired Monday and continues Tuesday at 4 p.m. EST.

WASHINGTON -- In the first two weeks of January 2006, the Senate Judiciary Committee held confirmation hearings for President George W. Bush's second nominee to the Supreme Court, Samuel Alito. By replacing Justice Sandra Day O'Connor with Alito, Bush was replacing the Court's swing vote with a reliable conservative. This move would affect countless issues, but one that never came up during those confirmation hearings, campaign finance reform, would wind up the defining issue of Alito's early years on the Court.

In decision after decision with Alito on board, the Supreme Court has gutted a large part of the campaign finance regulation system set up in the 1970s. The 2007 Wisconsin Right to Life v. Federal Election Commission (FEC) created a loophole in the 2002 campaign finance reform law known as McCain-Feingold allowing corporations and unions to run certain types of election ads, but that decision stopped short of allowing unlimited spending to go toward what is known as express advocacy, calls for the election or defeat of an opponent.

This loophole was blown open by the 2010 ruling in the Citizens United v. FEC case, essentially creating a separate, deregulated sphere for non-party and non-candidate groups to spend and raise money from corporations, unions and individuals as they saw fit.

In 2011, the Court invalidated a public financing law in Arizona that provided matching funds to candidates whose opponents were spending their own money.

Other lower court cases are percolating up and could provide other opportunities for further gutting of the campaign finance regulation system.

The Court isn't the only body responsible for the current state of campaign finance reform. The FEC has deadlocked on two important votes on implementing rules to govern the groups now spending money freely post-Citizens United and mundane subject matter including enforcement fines against campaigns. Congress, too, is intractably gridlocked. Democrats and Republicans are now further apart on the issue of what to do about money in politics than ever before.

For those who want to remove money from the political equation, this may be their bleakest moment.

"We're in a very rough patch right now," campaign finance reform advocate Fred Wertheimer, President of Democracy 21, a nonpartisan nonprofit, told HuffPost. "We have a very hostile Supreme Court. We have a highly partisan, gridlocked legislative process which makes it exceptionally difficult to put together bipartisan reform legislation."

The more than a dozen campaign finance reformers, election lawyers and supporters of campaign finance deregulation who spoke with HuffPost agreed one man has put campaign finance reform on the ropes: Justice Samuel Alito.

"We got here because Justice O'Connor retired," said Campaign Legal Center President and CEO Trevor Potter, a former chairman of the FEC and counsel to Sen. John McCain's (R-Ariz.) 2008 presidential bid.

Election law professor Rick Hasen, author of the Election Law Blog, echoed that sentiment. "The reason this took off and changed in the last few years can be explained very simply by the retirement of Justice O'Connor and her replacement with Justice Alito. That changed the court to a 5-4 majority that is hostile to all regulation of money in politics aside from disclosure laws. Citizens United was one of series of attempts to get the courts to strike down major campaign finance laws. It wasn't the first successful one, it was just a nail in the coffin."

Citizens United was just one of many legal challenges to campaign finance regulation that have rapidly increased in recent years. These challenges have been intentional efforts to bring ideal cases before the Court to gain expansive rulings that would roll back the current system of campaign finance regulation. They have been aided by a growing apparatus in Washington and elsewhere of counter-reformers who support the deregulation of campaign finance.

"Six years ago, there was no known entity to get an opinion that is different from the [pro-campaign finance reform] Common Cause and League of Women Voters line," explained Brad Smith, the Chairman and Co-Founder of the Center for Competitive Politics (CCP) and a former FEC chairman.

CCP was founded in 2005 to bring an alternative viewpoint to campaign finance in Washington: Tere is nothing wrong with money in politics. The group has helped to disseminate research, provided professional testimony in Congress and state legislatures, and submitted amicus curiae briefs for court cases contesting campaign finance regulation.

"In legislatures, for example, we get calls all the time," Smith said. "Just six years ago they didn't know where to get witnesses to express a critical view on reform, particularly at the state level. That has slowly been changing public opinion."

CCP and other groups have been laying the foundation for a counter-campaign finance reform establishment. Yet much of the success seen by the counter-reformers has come from one man's quest to end campaign finance regulation through litigation.

Jim Bopp operates the James Madison Center for Free Speech and has devised a strategy to attack campaign finance regulation through the courts. Bopp's position is based on a simple argument: The First Amendment, he says, "is written in strong terms as a protection for speech generally and political speech specifically." Cases brought to the Supreme Court by Bopp include Citizens United v. FEC, FEC v. Wisconsin Right to Life, and Doe v. Reed. Bopp is also leading challenges in lower courts to disclosure requirements for corporations and independent groups and direct corporate contributions to candidates.

"Jim Bopp has always been very active, but it has seemed that since Citizens United, or even before, in 2009, there's been a big push to eliminate as broad a swath of campaign finance laws as possible," Campaign Legal Center lawyer Tara Malloy told HuffPost. "It doesn't seem like this litigation offensive is going to cool down anytime soon."

Campaign finance regulation "is way too complicated, confusing, difficult and is not serving the public interest of accountability and transparency," Bopp told HuffPost. "The biggest problem, which is the fountainhead for all of this, is contribution limits."

Bopp explained that limits on that amount an individual can contribute to a candidate, which were enacted under the original Federal Elections Campaign Act of 1971 and upheld by the Supreme Court's ruling in Buckley v. Valeo, are the real root of the current rush of money into independent political committees filed as nonprofits or trade groups.

"As you regulate and restrict candidates, people went to advocacy groups and parties, then they went off to 527s or LLCs," Bopp said. "When Congress is taxing and regulating you and passing around a lot of money people want to participate. That’s just perfectly natural."

Recently, the counter-reformers have run up a string of losses in court on the issue of disclosure. One thing that the Supreme Court's Citizens United ruling did protect was disclosure provisions for all political spending, a decision that is leading lower courts to reject the multiple attempts to gut state disclosure requirements.

Despite the Court's upholding of disclosure laws, counter-reformers like CCP's Smith oppose the recent focus on campaign finance disclosure. "I think there's a disclosure craze going on," Smith said. "It's a way to limit speech."

"I'm not a big fan of disclosure of contributions," said David Keating, Club for Growth Executive Director and founder of SpeechNow.org. "A lot of people are justifiably worried about retribution by politicians."

"I don’t object to disclosure of contributions or expenditures of political actors, candidates, political parties, or PACs," Bopp said. "Those are appropriate. When you’re talking about advocacy groups or for-profit corporations disclosure can be real detrimental."

The Supreme Court, however, has issued fairly strong statements in support of disclosure from participants in politics. In Doe v. Reed, a case brought by Bopp, the Court ruled that the state of Washington's disclosure of ballot signatures is constitutional. The ruling featured a marker for how the Court may view other disclosure challenges in the future in the form of a scathing rebuke by Justive Antonin Scalia, a noted conservative voice on the Court, to opponents of disclosure.

"Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed," he wrote. "For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously and even exercises the direct democracy of initiative and referendum hidden from public scrutiny and protected from the accountability of criticism. This does not resemble the Home of the Brave."

Rulings in favor of disclosure are currently the only bright spots among efforts to expose, reduce or eliminate money in politics. The makeup of the Court and the partisanship on Capitol Hill has led some reformers to look beyond the legislative path for ways to ferret money and influence out of politics.

"What Public Citizen or other groups are doing is important, laying down markers, but doing anything through the legislative or constitutional route is going to be impossible," said Bruce Freed, President of the Center for Political Accountability. "That's just recognizing reality. this is something where you have to be innovative."

The Center for Political Accountability, Freed explained, works through shareholders to pressure companies to adopt disclosure policies for their political spending.

"Early on, the [Center for Political Accountability] made the case that political spending by corporations does pose a risk to companies," Freed said. "By posing a risk, companies need to address that risk. Working with a group of shareholder partners, we have used the whole shareholder route to get 88 boards to adopt oversight and disclosure policies."

Efforts to gain disclosure and oversight of corporate political spending extend beyond the Center for Political Accountability. The Committee for Economic Development is calling on companies to forgo political spending, and a group of law professors has called on the Securities and Exchange Commission (SEC) to develop rules to require the disclosure of political spending by corporations. All three of these efforts are what Ciara Torres-Spelliscy, assistant professor at Stetson University College of Law, recently dubbed "a growing consensus among shareholders, corporate leaders and corporate law experts."

Others are looking at lobbying reform to try to tackle the campaign finance issue from a different angle.

"Lobbying laws are part of where reform attention is going to go towards," said Emory University law professor Michael Kang, the author of a forthcoming paper titled "The End of Campaign Finance Law." "The speech interests are different and the Court's thinking isn't as entrenched in how they think about lobbying laws. I would suggest that there's reason for the Court to view that type of regulation a little bit differently."

Others efforts focus on a constitutional solution. Groups like Free Speech for People and individuals like MSNBC host Dylan Ratigan support the adoption of a constitutional amendment to get money out of politics.

Democracy 21's Wertheimer explained that efforts to obtain a constitutional amendment are coming as a response to the makeup of the Supreme Court. "I think people are doing that in part because of the Supreme Court we have now, and no one knows how far this Supreme Court is prepared to go," Wertheimer said. "If, down the road, the Supreme Court makes it impossible to deal with the role of money in politics, then I think a lot of people will look at a constitutional amendment."

"If the Court was 7-2 or 6-3 [opposed to getting money out of politics] a constitutional amendment would rise to top of demands," said Nick Nyhart, the executive director of Public Campaign, a public financing advocate.

Despite the grim state of campaign finance reform, organizing around getting money out of politics is ramping up.

"As bad as it is right now, the darkest moment is when you can see some change," said Robert Greenwald, the president of the liberal film, research and activist group Brave New Foundation. Greenwald's operation runs a website called KochBrothersExposed.com that seeks to bring awareness to the role that Charles and David Koch, the owners of Koch Industries, play in financing conservative politics.

In the past year, liberal activists have targeted the Koch brothers as the face of undue corporate influence in politics. The duo has reportedly funded efforts to gut public employee unions and privatize public education, blocked efforts to control climate change and supported Tea Party groups that were vital to energizing limited government activists during the first two years of President Barack Obama's term. The Koch brothers were targeted in the union protests against Republican Wisconsin Governor Scott Walker, with perhaps the most famous episode being a recorded prank phone call by a David Koch impersonator to Walker thanking the governor for his anti-public employee union stance. Protests were also held at the Kochs' annual conference in California.

Public Campaign's Nyhart explained that money-in-politics critiques are now being sought by issue-based groups. "Increasingly we're seeing issue-based organizations bringing in money-in-politics research into their fight on their day-to-day issues," said Nyhart. "It shows the public why they're not getting what they're asking for."

"Clearly we need to drive the money out of politics," Greenwald said. "There's such a general disgust in the corruption in the way the system works."

READ the first article in this series: "Super PACs And Secret Money: The Unregulated Shadow Campaign"

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