Fred Wertheimer2013-05-24T16:21:50-04:00Fred Wertheimerhttp://www.huffingtonpost.com/author/index.php?author=fred-wertheimerCopyright 2008, HuffingtonPost.com, Inc.HuffingtonPost Blogger Feed for Fred WertheimerGood old fashioned elbow grease.Supreme Court Could Create System of Legalized Bribery in Washington Depending on Its Decision in McCutcheon Casetag:www.huffingtonpost.com,2013:/theblog//3.27340072013-02-21T17:02:33-05:002013-04-23T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
If the Supreme Court strikes down the existing limits on the aggregate amount an individual can give to all federal candidates and all party committees in a two-year election cycle, the Justices will create a system of legalized bribery in Washington.
Such a decision by the Court would be a gold mine for big donors interested in buying government decisions and would wreak havoc on the interests of ordinary Americans.
McCutcheon v. Federal Election Commission, the case to be considered by the Supreme Court, involves a challenge by Shaun McCutcheon and the Republican National Committee to the constitutionality of the federal aggregate contribution limits, upheld by the Supreme Court in 1976 in Buckley v. Valeo.
A decision by the Court to reverse that decision would not only strike down the aggregate contribution limits enacted in 1974, but would also eviscerate an essential anti-corruption provision enacted in 2002 and upheld by the Supreme Court in 2003 in McConnell v. FEC. That provision prohibits a federal officeholder or candidate from soliciting contributions that do not comply with the federal contribution limits, including the aggregate limits.
If the aggregate limits are struck down, officeholders would be able to directly solicit the huge contributions from individual donors that the solicitation ban is intended to prohibit.
The Supreme Court in the landmark Buckley case found that a system that allowed huge campaign contributions was an inherently corrupt system. The Court recognized that contribution limits were necessary to deal with:
[T]he reality or appearance of corruption inherent in a system permitting unlimited financial contributions,even when the identities of the contributors and the amounts of their contributions are fully disclosed. (Emphasis added.]
The Supreme Court in the McConnell case recognized the inherent dangers of corruption if federal officeholders are allowed to solicit huge contributions from donors. In upholding the constitutionality of the federal ban on soliciting soft money, the Court stated:
Large soft-money donations at a candidate's or officeholder's behest give rise to all of the same corruption concerns posed by contributions made directly to the candidate or officeholder. Though the candidate may not ultimately control how the funds are spent, the value of the donation to the candidate or officeholder is evident from the fact of the solicitation itself.
McConnell v. FEC, 540 U.S. 93, 182 (2003).
Even Justice Kennedy, who voted to strike down the other restrictions on soft money, agreed that the ban on the solicitation of large soft money contributions by federal officeholders was constitutional. Kennedy wrote:
The making of a solicited gift is a quid both to the recipient of the money and to the one who solicits the payment (by granting his request). Rules governing candidates' or officeholders' solicitation of contributions are, therefore, regulations governing their receipt of quids. This regulation fits under Buckley's anti-corruption rationale.
540 U.S. at 308
The practical consequences of removing the aggregate limits are illustrated by the fundraising that took place in the 2012 presidential elections.
During the last election, because of the aggregate contribution limits, an individual could give a maximum total of $70,800 to party committees and a maximum total of $46,200 to federal candidates in the two-year election cycle.
In order to solicit the largest allowable check from a donor to support his campaign, President Obama established a joint fundraising account, the Obama Victory Fund.
The President solicited individual contributions for the Fund of up to $75,800 per donor to support his campaign, the maximum a donor could give to his campaign and party, which was then divided up among the president's campaign, the DNC and several state parties. (Republican nominee Mitt Romney established a similar joint fundraising account.)
Take away the aggregate limit on individual giving to parties and a presidential candidate in the 2016 election could solicit individual checks from donors of up to $1,194,000 per donor to be spent by his party on his campaign.[1]
Similarly, take away the aggregate total limit on individual contributions to candidates and a House Speaker or Senate Majority Leader could solicit individual checks from donors of up to $2,433,600 per donor to be distributed among their congressional candidates up to $5,200 per candidate.[2]
Or, any powerful federal officeholder could solicit individual checks from donors of up to $3,627,600 per donor for the officeholder's party committees and congressional candidates.
It is axiomatic in American politics that when it comes to raising campaign money, anything that can legally be done will be done.
Thus, President Obama solicited checks for $75,800 for his presidential campaign and party in 2012, the maximum a donor could give.
Checks in excess of $1 million, $2 million and $3 million per donor, the maximums that a donor could give, will be solicited by federal officeholders in future elections if the aggregate limits on individual contributions are struck down by the Supreme Court.
It is simply not possible to have a president or any other federal officeholder soliciting individual contributions in excess of $1 million, $2 million or $3 million per donor without creating opportunities for the corruption of federal officeholders and government decisions.
The Buckley and McConnell Supreme Court decisions and Justice Kennedy in his concurring opinion in McConnell all recognized this reality.
Despite the profound problems created by the Supreme Court's misguided decision in the Citizens United case, furthermore, this provides no justification for the creation of a system of legalized bribery that opens the door wide to the corruption of federal officeholders and government decisions.
It is time for this Supreme Court to stop acting like a super legislature.
It is time for this Supreme Court to stop issuing radical decisions that overturn decades of national policy designed to prevent government corruption. A little respect by this Supreme Court for the constitutional right of citizens and Congress to protect the government from corruption is in order.
Citizens deserve no less.
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[1] Through the use of a joint fundraising committee involving national and state party committees, a single contribution of $1,194,000 would include $32,400 per year to each of the three national party committees, or $97,200 per year combined, and $10,000 per year to each of the 50 state parties, or $500,000 per year combined, for an overall total of $597,200 per year and an overall total of $1,194,000 for a two-year election cycle. Since parties committees can make unlimited internal transfers to other party committees, the joint fundraising committee could first distribute all of the money to each of the separate party committees involved and then could have it all come back to the national party committee in one electronic transaction.
[2] Through the use of a joint fundraising committee involving the committees of every candidate for Congress from a single party, a single individual contribution of $2,433,600 would include $5,200 for the primary and general election of 435 House candidates and 33 Senate candidates.]]>Supreme Court to Decide Next Week Whether to Hear Two Cases Challenging the Constitutionality of Key Contribution Limitstag:www.huffingtonpost.com,2013:/theblog//3.26175342013-02-06T12:54:31-05:002013-04-08T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
At its conference on Friday, February 15, 2013, the Court is expected to act on a petition for certiorari in a case that involves a challenge to the constitutionality of the ban on corporate contributions to federal candidates.
The Court is also expected to act on an appeal in a case that involves a challenge to the constitutionality of the limit on total contributions that an individual can make to all federal candidates, party committees and PACs in a two-year election cycle.
The Supreme Court has upheld both of these key contribution limits in past decisions. Opponents are now asking the Supreme Court to declare unconstitutional, for the first time, limits on contributions to federal candidates.
If the Court decides to hear one or both of these cases, the stakes involved would be enormous.
If the corporate contribution ban is declared unconstitutional a corporation would be free to give, and a federal officeholder free to solicit, a single check to a national party of $1,194,000 million for a two-year election cycle. [1] The national party could then spend all of this money to benefit the officeholder who solicited the million dollar-plus contribution.
The same would be true if the limit on the total amount an individual can give to all candidates, parties and PACs is declared unconstitutional. A federal officeholder would be free to solicit, and an individual free to give, a single check to a national party of $1,194,000 for a two-year election cycle. Again, the national party could spend all of that money to support the officeholder who solicited the donation.
Either or both of these results would open the door to widespread buying and selling of influence in Washington. Striking down either of these contribution limits would be a grave setback in the efforts to prevent corruption of government decisions and federal officeholders and to prevent the appearance of such corruption.
While the Supreme Court created enormous problems for our democracy with its disastrous Citizens United decision in January 2010, the Court also has twice upheld the constitutionality of important campaign finance laws since that decision.
In June 2010, the Supreme Court in Republican National Committee v. FEC reaffirmed the constitutionality of the ban on soft money contributions to political parties. In June 2011, the Supreme Court in Green Party v. Lenge left standing a Court of Appeals decision upholding the constitutionality of the Connecticut public financing law.
The Democracy 21 pro bono legal team, led by former U.S. Solicitor General Seth Waxman and the WilmerHale law firm, filed briefs on behalf of parties in both of these cases in support of the campaign finance laws that were upheld.
The Supreme Court's decision on whether to accept for consideration one or both of the cases pending before the Court is expected to be announced shortly after the February 15 conference. If the Court decides to hear one or both of the cases, the Democracy 21 legal team will file amicus briefs to support the constitutionality of the campaign finance laws being challenged.
United States v. Danielczyk
The Danielczyk case involves a criminal prosecution brought against two individuals who were charged with using corporate funds to make contributions to a federal candidate, in violation of the longstanding federal ban on contributions by corporations in federal elections. The defendants are arguing that the corporate contribution ban is no longer constitutionally valid in light of the 2010 decision in the Citizens United case.
In Citizens United, the Supreme Court struck down the ban on independent corporate expenditures but did not address the ban on direct corporate contributions to federal candidates.
In the Danielczyk case, the defendants argue that the Court's reasoning in striking down the expenditure ban applies to the contribution ban as well. They also argue that Citizens United effectively overruled a 2003 decision by the Supreme Court in FEC v. Beaumont in which the Court directly upheld the ban on corporate contributions as applied to a non-profit corporation.
Based on its reading of Citizens United, a federal district court in Virginia struck down the corporate contribution ban. The district court ruling, however, was reversed by the Fourth Circuit Court of Appeals in a decision issued in June, 2012.
The Fourth Circuit opinion said it was bound by the Supreme Court's earlier ruling in Beaumont upholding the ban on corporate contributions. The Circuit Court rejected the defendants' argument that Beaumont applied only to non-profit corporations and therefore cannot be read as precedent for upholding the contribution ban as applied to for-profit corporations.
The Fourth Circuit found instead that Beaumont was based on "extensive discussion of Congress' legitimate interests in regulating direct contributions made by all corporations."
The Court of Appeals also distinguished the Supreme Court's ruling in Citizens United. It noted that a different standard of review applies to restrictions on contributions than to restrictions on expenditures. The Court also concluded that Citizens United preserved the anti-corruption and anti-circumvention interests in the campaign finance laws. The Court reasoned that while those interests were not served by the ban on corporate expenditures at issue in Citizens United, they are served by the ban on corporate contributions.
In their petition for certiorari to the Supreme Court, the defendants urge the Court to reconsider Beaumont, arguing that Citizens United "swept away Beaumont's logical underpinnings and scrapped most of the government interests that case described." In particular, they argue that a total ban on corporate contributions is overbroad, and that any legitimate governmental interest in deterring corruption can be served by a limit on contributions to federal candidates by corporations, just as the same interest is served by a limit on contributions by individuals.
The defendants argue that "it cannot be that allowing the wealthiest American to donate $2,500 creates no intolerable risk of corruption, but allowing the most impecunious corporation to donate a penny would. Nor can Congress single out corporations for unfavorable treatment just because they are corporations: The First Amendment protects corporations' political activity no less than that of individuals."
In opposing the petition for certiorari, the Solicitor General argues that "Citizens United does not cast doubt on Beaumont."
The Solicitor General says:
Congress has good justification for treating corporate and individual contributions differently. One special risk posed by corporate-treasury contributions--that is not posed by individual contributions--is the ease with which corporations can proliferate. New corporations can be formed merely by filing some papers . . . A single corporation can spawn multiple new corporations, each of which could then make its own campaign contributions. Contrary to petitioner's suggestion, the government could not easily devise and enforce rules for attributing one corporation's contributions to another.
The Solicitor General elaborated on the potential for circumvention of contribution limits on individuals if corporations are permitted to make contributions, even if the corporate contributions themselves are subject to limits:
Without [the ban on corporate contributions], an individual who wanted to exceed the individual contribution limits could quickly create a new corporation to serve as his conduit, or a hundred new corporations, each of them able to contribute to the same candidate in the same election cycle. The corporations may all have different names, and the complexities of corporate structure may mask their relationship to each other and to the conduit contributor.
The Solictor General accordingly urged the Court not to review the decision by the Fourth Circuit Court of Appeals to uphold the ban on corporate contributions.
McCutcheon v. Federal Election Commission
The McCutcheon case involves a challenge to the limit on the total contributions by an individual to all federal candidates, political parties and PACs. Under current law, an individual is limited to an overall total of $123,200 in contributions to all candidates, parties and PACs during a two-year election cycle. Within that limit and time frame, no more than $74,600 can be given to all party committees and PACs and no more than $48,600 can be given to all federal candidates.
These aggregate limits were challenged by plaintiff Shaun McCutcheon and by the Republican National Committee, who contended that the limits serve no valid anti-corruption purposes and therefore violate their First Amendment rights. (The case does not involve a challenge to the limit of $2,600 per election on the amount an individual can now give to a candidate).
In September, 2012, a three-judge district court in Washington, DC rejected the constitutional challenge to the aggregate limits. The court noted that the aggregate limits are necessary to prevent individuals from contributing very large sums of money each cycle, and therefore necessary to prevent massive circumvention of the underlying individual contribution limit.
Eliminating the aggregate limits would mean that an individual could give, and a President or a member of Congress could solicit, a single contribution of more than $1 million to a joint fundraising committee comprised of the officeholder's campaign committee, the three national party committees of the officeholder's party, and the party's 50 state party committees.
The joint fundraising committee would be required to divvy the contributions among all the committees taking part in the joint fundraising effort to ensure that no committee receives more than it is allowed to receive under the contribution limits that apply to the various committees.
But because party committees may make unlimited internal transfers among themselves, the million dollar-plus contribution that was distributed to the separate committees could then come back to a single national party committee's coffers. This would be easy to do through electronic transfers. That committee, in turn, could spend all of the money to make coordinated and independent expenditures in support of the candidate who raised the million dollar-plus contribution.
As the lower court stated, the candidate "will know precisely where to lay the wreath of gratitude" for the $1 million donation spent on his behalf.
McCutcheon and the RNC have appealed the lower court's ruling directly to the Supreme Court. In urging the Supreme Court to dismiss the appeal and affirm the three-judge district court panel's ruling, the Solicitor General argues that the aggregate contribution limit was reviewed and upheld by the Supreme Court in its 1976 decision in Buckley v. Valeo.
In Buckley, the Court said that the aggregate limit "is no more than a corollary of the basic individual contribution limitation" that the Court had "found to be constitutionally valid." The Solicitor General stresses the anti-circumvention role played by the aggregate limits, noting that "multiple contributions create that risk than an individual contributor can circumvent the base limits by channeling his money in such a way that a particular target is likely to receive much more than the base limits would allow (e.g., by contributing to political committees likely to contribute to a particular candidate)."
Indeed, quoting the district court decision, the Solicitor General points out that "if the aggregate limits did not exist, 'an individual might contribute $3.5 million to one party and its affiliated committees in a single election cycle,' yet remain in compliance with all of FECA's base contribution limits." For example, this would result, if an individual gave $5,000 (recently increased to $5,200) per election cycle to each of a party's House and Senate candidates, plus $30,800 (recently increased to $32,400 per year) to each of a party's three federal party committees each year, and $10,000 to each of a party's fifty state committees a year--contributions that would all be lawful if there was no aggregate limit in place.
As the Solicitor General notes:
Congress could reasonably conclude than an individual who made contributions of that magnitude to a party's overall electoral efforts might acquire actual or perceived 'improper influence' over the party's elected officials, even if no single contribution was likely to have that effect.
Conclusion
The ban on corporate contributions was enacted in 1907 and has been in effect for more than a century. The ban was upheld by the Supreme Court in 2003 by a 7 to 2 vote in the Beaumont case. The aggregate individual contribution limit was enacted in 1974 and was upheld by the Supreme Court in 1976 in a per curium decision in the Buckley case.
When the Supreme Court struck down the federal ban on corporate expenditures in the Citizens United decision in 2010, it based its decision on the grounds that the expenditure was made "independent" from the candidate. The Court did not address the ban on corporate contributions made directly to candidates.
The Supreme Court has consistently upheld limits on contributions to federal candidates.
It would be a disaster for our democracy and political system if the Court was to now reverse its past decisions and strike down the contribution limitations involved. Such a radical step would invariably result in ongoing and widespread government corruption and would fundamentally undermine public trust in federal officeholders and government decisions.
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[1]Through the use of a joint fundraising committee involving national and state party committees, the single contribution would include $32,400 per year to each of the three national party committees, or $97,200 per year combined, and $10,000 per year to each of the 50 state parties, or $500,000 per year combined, for an overall total of $597,200 per year and an overall total of $1,194,000 for a two-year election cycle. Since parties committees can make unlimited internal transfers to other party committees, the joint fundraising committee could first distribute all of the money to each of the separate party committees involved and then have it all come back to the national party committee in one electronic transaction.]]>A Challenge to President Obama's New 501(c)(4) Grouptag:www.huffingtonpost.com,2013:/theblog//3.25691052013-01-29T17:23:08-05:002013-03-31T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
His second term is beginning in the polar opposite way.
Through his political agents, the resident has created a section 501(c)(4) tax-exempt organization, Organizing for Action, that will raise and spend money from corporations and other special interests to support his policy agenda.
The creation of Organizing for Action has established an unprecedented vehicle for potential influence-buying, influence-selling and government scandals for his administration during his second term.
The Washington Post raised concerns about Obama's new organization in an editorial entitled "Obama's Cashier's Window?" According to the Post editorial (Jan. 28, 2013):
"What's most troubling is that President Obama seems to have developed a tin ear about shadow money in politics. In the aftermath of the Supreme Court's decision in the Citizens United campaign-finance case, Mr. Obama warned of 'a new stampede of special-interest money in our politics.'
Why, then, is he opening a cashier's window with his name on it for the same special interests? The president and his team may be wizards at social media and grass-roots organizing, but from an influence-peddling standpoint this organization looks to be fraught with hazard."
Functioning as a virtual arm of the Obama presidency, Organizing for Action will solicit and accept money from corporations and other special interests seeking to influence Obama Administration decisions.
What happened to the president who warned us about the dangers of corporate money in the American political system?
What happened to the president who warned us about the damage being done to our country by business as usual in Washington?
What happened to the president who said in his 2010 State of the Union address, "We face a deficit of trust -- deep and corrosive doubts about how Washington works that have been growing for years?"
What does the president expect the American people to think when he attacked the Citizens United decision as "a major victory for big oil," and then accepts $250,000 from ExxonMobil, the biggest of "big oil," to help pay for his second inauguration?
President Obama may think he can accept huge contributions from corporations and other special interests without undermining the trust of the American people and the credibility of his administration.
The president is wrong.
President Obama should shut down Organizing for America and remain true to the repeated warnings he has given the nation about the dangers of corporate influence-money and business as usual in Washington.]]>President Obama Opts for "The Ends Justify the Means," Where "Means" Creates Potential for Government Corruptiontag:www.huffingtonpost.com,2013:/theblog//3.25288732013-01-23T16:18:03-05:002013-03-25T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
The president and his political allies are creating a section 501(c)(4) tax-exempt organization, Organizing for Action. It will be governed and run by some of the president's closest political operatives.
The new organization has the stated purpose of advocating the president's agenda and will accept unlimited contributions from corporations and individuals to pursue this goal. As far as I know, this is the first time a president has outsourced an important responsibility of his presidency to a private sector organization that is financed by unlimited private funds and that is, in effect, operating as an arm of the presidency.
In taking this step, the president has opted for "the ends justify the means" approach that is fraught with danger. It opens the door to opportunities for government corruption, by allowing corporations and individuals to provide unlimited amounts of money to directly benefit the president's interests and potentially to receive government benefits and favors in return.
This action by the president also represents the last stage in an apparent remarkable transformation in President Obama's views regarding the role of corporate money in the American political process.
Following the Supreme Court's disastrous decision in the Citizen United case that overturned the longstanding federal prohibition on corporate spending to influence federal campaigns, President Obama aptly stated:
"With its ruling today, the Supreme Court has given a green light to a new stampede of special interest money in our politics. It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans."
In making this statement, President Obama clearly recognized the dangers of allowing corporations to use their funds to buy influence over government decisions and federal officeholders.
But now with his decision to allow corporations to fund the new organization that will operate as an arm of his presidency, President Obama "has given a green light to a new stampede of special interest money" to directly benefit his presidency. And the president has provided a "major" opportunity for "big oil, Wall Street banks, health insurance companies and other powerful interests" to provide direct financial resources to support the president's interests.
Indeed, according to an article in Politico, the president "may personally fundraise on behalf of the group." Thus, the president may personally solicit huge contributions from corporations and wealthy donors for Organizing for Action, a step that would threaten to inject the president personally and directly into the potential exchange of large donations for governmental favors or the appearance of such potential exchanges.
This would take President Obama about as far away as he could possibly get from the goal he set in 2008 to "change the way business is done in Washington."
In late 2008 and 2009, the president had previously recognized the danger of taking corporate money when his Inauguration Committee refused to accept funds from corporations to pay for his first Inaugural.
And the president also initially recognized the same dangers when a policy was established by the DNC to prohibit corporations from paying for the costs of the 2012 Democratic nominating convention. That policy was later abandoned, however, and the Democratic Party ended up accepting $20 million from corporations to pay for the 2012 nominating convention including gifts from Bank of America and Wells Fargo and Company, according to Bloomberg.
Then, following his 2012 election, President Obama reversed the position he had taken for his first Inaugural and allowed corporations to contribute to finance his second Inaugural events. What the president thought was wrong in 2008, all of the sudden became acceptable in 2012, at a point where he would never have to face voters again.
As a result, among other corporations, ExxonMobil, which certainly qualifies as "big oil," contributed $250,000 to the Obama Inauguration Committee, according to The Hill, a contribution that directly benefited the president's interests.
Corporations have a responsibility to their shareholders to invest their resources to advance their corporate economic interests. They are not in the business of making eleemosynary contributions, but rather seek economic returns on their investments.
History is quite clear that unlimited funds provided to benefit an officeholder or candidate create the opportunity for corruption or the appearance of corruption. And that is the opportunity being created with the establishment of Organizing for Action by the president and his political allies.
President Obama would no doubt say that his policies are not going to be influenced by any contribution made by a corporation to Organizing for Action. But that is the unacceptable defense that almost every officeholder gives and it is not sufficient to protect citizens against large amounts of corporate money buying influence over government decisions.
And while Organizing for Action says it will voluntarily disclose its donors, we are left to trust the organization that it will do so fully, accurately and on a timely basis. In any event, disclosure, while very important, does not prevent influence buying. There is no reason to believe that the $100 million that Sheldon Adelson reportedly gave to influence the 2012 national elections, much of which was disclosed, has not created the potential for buying influence over government policies with the political party and winners he supported, or at least created the potential appearance of such influence buying.
Organizing for Action also says it won't take money from PACs and lobbyists. This is an irrelevant obfuscation. It doesn't matter if you are not taking money from PACs or lobbyists when you are taking money from the corporations they represent.
President Obama should shut down Organizing for Action now before it creates the appearance of influence buying and/or scandals for the second term of his administration.
As long as Organizing for Action exists, however, Democracy 21 will closely monitor its activities to determine whether the "issue ads" it says it plans to run, as well as its other activities, comply with its proposed tax-exempt status as a section 501(c)(4) "social welfare" organization.]]>The Small Donor Revolution: Empowering Citizens to Combat Influence-Money in Politicstag:www.huffingtonpost.com,2012:/theblog//3.18286902012-09-06T08:00:00-04:002012-11-06T05:12:01-05:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/Citizens United decision.
With that decision, the Supreme Court unleashed huge contributions, secret money, corporate spenders and Super PACs on our political system. The decision gave these funders the power to exercise disproportionate and corrupting influence over our elections and government decisions.
The problem we face today: millionaires, billionaires, corporations and bundlers are playing a dominant role in financing the 2012 national elections. The answer: we need to empower ordinary citizens to become the key players in financing our future elections.
We need a small donor revolution.
On August 22, 2012, the Brennan Center and Democracy 21 issued a report and new proposal for financing congressional elections. The proposal would engage and empower citizens in the political process by matching in-state contributions to candidates of up to $250 per donor with public funds at a 5 to 1 ratio.
The proposal, modeled on the successful system used in New York City elections, has been described by a New York Times editorial (August 22, 2012) as "a plan that could restore a voice to ordinary citizens."
In Buckley v. Valeo, the Supreme Court recognized the democratic values of public financing. The Court stated, "[Public financing] is a congressional effort not to abridge, restrict, or censor speech, but rather to use public money to facilitate and enlarge public discussion and participation in the electoral process, goals vital to a self-governing people."
The symbol of our future national elections must be the ordinary citizen, not the multi-billionaire Sheldon Adelson.
Mr. Adelson already has contributed tens of millions of dollars to Super PACs and told Forbes that he is willing to spend $100 million or more to ensure President Obama is not re-elected in 2012. Adelson also is the owner of a huge gambling empire that reportedly is the subject of multiple federal investigations by the Obama Administration's Justice Department, the Securities and Exchange Commission and the U.S. Attorney in Los Angeles.
As a New York Times editorial (August 17, 2012) stated, "[S]ince Mr. Adelson's financial future is riding on the outcome of these federal investigations, it is legitimate to ask whether he has motivation for supporting the Republican ticket so lavishly, beyond his sharp disagreement with the Obama administration's position on the Israeli-Palestinian peace process."
The Adelson example captures in a nutshell the dangers to democracy created by Citizens United and its new world of unlimited contributions, Super PACs and corporate spending.
In Buckley v. Valeo (1976), the Supreme Court held that the contribution limits enacted following the Watergate scandals were necessary to deal with the "reality or appearance of corruption inherent in a system permitting unlimited financial contributions."
In the wake of Citizens United, the inherently corrupt system envisioned in Buckley is becoming a reality.
While we cannot limit independent spending of unlimited contributions by outside groups, we can dramatically increase the role and importance of small donors in our elections and revolutionize the way campaigns are financed.
Under the Brennan Center-Democracy 21 small donor empowerment program:
Individual in-state contributions up to $250 per donor would be matched with public funds on a 5 to 1 ratio. This would greatly increase the value of small contributions, dilute the importance of large contributions and provide new incentives for donors to give and for candidates to seek small donations from their constituents.
The proposal would provide citizens with complete control over the distribution of public funds. There would be no public grants. The public funds would be provided to candidates based on their ability to show continuing support on an ongoing basis from small donors in their states.
The existing limit of $2,500 per individual donor, per election would be cut in half for candidates who participate in the program. This would reduce the role and influence of large contributions for candidates who participate in the system.
There would be no spending limit for candidates who participate in the system, but there would be a limit on the total amount of public funds available to a candidate. Spending limits are no longer viable as a practical matter in the post-Citizens United world where outside groups can make unlimited campaign expenditures using unlimited contributions.
National parties could make unlimited expenditures in coordination with candidates participating in the system from a pool of contributions limited to $1,250 per donor per year. This would increase the ability of candidates to respond to independent spending by outside groups.
Ongoing breakthroughs in small donor online fundraising and recent FEC rulings that facilitate giving online should greatly enhance the effectiveness of the small donor empowerment program.
A similar small donor, public matching funds system is contained in legislation to repair the presidential public financing system introduced in this Congress by Representatives David Price (D-NC), Chris Van Hollen (D-MD) and Walter Jones (R-NC) and Senator Mark Udall (D-CO). The presidential system worked well for more than two decades, but over time the public funds available for candidates failed to keep pace with the skyrocketing costs of presidential campaigns.
A successful small donor empowerment program, like the Brennan Center-Democracy 21 proposal, will restore citizens to their rightful preeminent place in our democracy.
The program will dilute the role and importance of influence-seeking money, reduce the opportunities for government corruption and provide candidates with an alternative way to finance their campaigns without having to sell their souls to their funders.
Citizens are not going to sit idly by while a relatively small number of very rich individuals along with powerful interest groups dominate our elections with influence-seeking money. The battle for the small donor revolution in American politics will begin as soon as the 2012 Election is over.
Fred Wertheimer is president of Democracy 21, a nonpartisan, nonprofit organization that promotes effective campaign finance laws.
This post is part of the HuffPost Shadow Conventions 2012, a series spotlighting three issues that are not being discussed at the national GOP and Democratic conventions: The Drug War, Poverty in America, and Money in Politics.
HuffPost Live will be taking a comprehensive look at the corrupting influence of money on our politics August 29th and September 5th from 12-4 pm ET and 6-10 pm ET. Click here to check it out -- and join the conversation.]]>Fourteen Current Republican Senators Voted for Loophole-Closing Disclosure Legislation Enacted in 2000tag:www.huffingtonpost.com,2012:/theblog//3.16723792012-07-16T15:08:37-04:002012-09-15T05:12:02-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
But that has not been the history of other Senate Republicans, especially when it comes to campaign finance disclosure laws.
In 2000, loopholes in the disclosure requirements for 527 groups -- similar to the loopholes today for 501(c) nonprofit groups -- led Congress to act quickly to restore effective campaign finance disclosure requirements.
The disclosure legislation was enacted by Congress in 2000 with overwhelming bipartisan support.
The Senate passed the bill by a vote of 92 to 6, with 48 Republican Senators voting for the loophole-closing disclosure legislation and only six Republican Senators opposing the bill. Needless to say, Senator McConnell was one of the six Senators voting no.
Fourteen current Republican senators voted for the loophole-closing disclosure legislation in 2000. They include: Senators Thad Cochran (MS), Susan Collins (ME), Michael Crapo (ID), Mike Enzi (WV), Chuck Grassley (IA), Orrin Hatch (UT), Kay Bailey Hutchison (TX), Jon Kyl (AZ), Richard Lugar (IN), John McCain (AZ), Pat Roberts (KS), Jeff Sessions (AL), Richard Shelby (AL) and Olympia Snowe (ME).
With a Senate cloture vote scheduled today on S.3369, the DISCLOSE Act of 2012, no Republican Senators have said they will support the disclosure legislation.
Senate Republicans still appear to be marching in lockstep with Senator McConnell down a path towards licensing secret money, corruption and scandal, just as Senate Republicans did in 2010 in opposing the DISCLOSE Act of 2010. The vote of just one Republican Senator then would have ended a filibuster and opened the door to enacting the disclosure legislation in 2010.
To date, Republican Senators have chosen party over country and political money over protecting citizens against corruption.
Democracy 21 very much hopes that this changes today and that at least some of the Republican Senators who have recognized the vital importance of effective disclosure with their votes in the past will do so again on today's cloture vote.
The arguments being made against the legislation by Senator McConnell and others are hollow and without merit. Senator McConnell has challenged the DISCLOSE Act of 2012 on constitutional grounds while completely ignoring the overwhelming 8 to 1 vote by the Supreme Court upholding the constitutionality of disclosure requirements for outside spending groups.
Ever since Buckley v. Valeo (1976) the Supreme Court has upheld the constitutionality of campaign finance disclosure laws as necessary to prevent government corruption and provide citizens with basic information they have a right to know.
The Chamber of Commerce claims that the legislation tilt towards labor is a red herring argument to provide cover for the fact that the Chamber does not want citizens to know the identities of the corporations funding the Chamber's campaign expenditures.
The disclosure provisions of the DISCLOSE Act apply across-the-board to any group spending more than $10,000 on campaign-related expenditures, regardless of whether these expenditures are made by corporations, labor organizations, conservative groups, progressive groups, pro-Democratic groups or pro-Republican groups.
The $10,000 threshold for disclosure of donors to groups making campaign-related expenditures is designed to narrowly tailor the disclosure requirements for all groups making campaign-related expenditures that are not political organizations. By requiring disclosure only of substantial donors to such groups, the $10,000 threshold balances the interests that such groups have in privacy for their donors with the public's interest in knowing the significant donors financing campaign expenditures. The contribution disclosure threshold also answers the inaccurate claim that the Act requires groups to disclose their membership lists.
Until the Citizens United decision on January 21, 2010, most congressional Republicans consistently took the position that effective and timely disclosure laws were the best way to address campaign finance issues. Their position changed in the wake of Citizens United for partisan and political reasons having little to do with the policies involved in disclosure laws. This is affirmed by the fact that Republican Senators have not been willing to discuss policy changes in the disclosure legislation that would lead to their supporting the legislation.
Today's cloture vote on the DISCLOSE Act will put every Senator on record and will require each Senator who votes against the Act to take personal responsibility for the corruption and scandal that invariably will follow if new disclosure legislation is not enacted.]]>RNC Lawsuit Challenging Contribution Limit Would Open Door to Corrupting Million Dollar Party Contributionstag:www.huffingtonpost.com,2012:/theblog//3.16601672012-07-10T10:20:32-04:002012-09-09T05:12:04-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/Buckley v. Valeo (1976).
The RNC lawsuit, McCutcheon, et al. v. Federal Election Commission, challenges the aggregate limit on the amount that an individual can give to all federal candidates, PACs and political parties in a two-year election cycle. This limit was explicitly upheld as constitutional by the Supreme Court in the Buckley decision, which is controlling precedent in this case.
The RNC lawsuit would open the door to the RNC (and the DNC) receiving corrupting contributions of as much as $1,184,800 from a single donor for a two-year election cycle.
The lawsuit would also permit a federal officeholder to solicit a donor to give $1,184,800 to the officeholder's party. The party could then spend the entire amount to support the election of the officeholder soliciting the money.
This, in effect, would put officeholders back in the business of soliciting million dollar contributions from donors, a practice that was banned by the Bipartisan Campaign Reform Act of 2002 (BCRA). And it would provide the opportunity for massive circumvention of the $2,500 limit per election on what a donor could give to an officeholder or other candidate.
The RNC with this lawsuit is attempting to eviscerate the existing contribution limits and the existing prohibition on federal officeholders soliciting huge contributions. These provisions were enacted by Congress and upheld as constitutional by the Supreme Court in order to prevent the corruption of federal officeholders and government decisions. (The Campaign Legal Center and Democracy 21 are filing an amicus brief in the case to defend the aggregate contribution limit.)
Million-dollar contributions solicited by federal officeholders and laundered through political parties to support the officeholders who solicited the money re-create the system of legalized bribery that Congress ended with laws upheld by the Supreme Court.
As the late Senator Russell Long of Louisiana noted, "The distinction between a large campaign contribution and a bribe is almost a hairline's difference."
The current aggregate individual contribution limit is $117,000 for a two-year election cycle and there are two sub-limits within this overall limit: a total of $46,200 can be given by an individual to all federal candidates and a total of $70,800 can be given by an individual to all political party committees and PACs during the two-year period (The amounts of the aggregate limit have been adjusted upwards over the years.)
In the Buckley decision, the Supreme Court found the aggregate individual contribution limit essential to prevent evasion and circumvention of the law's other contribution limits.
But this quite modest restraint upon protected political activity serves to prevent evasion of the $1,000 contribution limitation by a person who might otherwise contribute massive amounts of money to a particular candidate through the use of unearmarked contributions to political committees likely to contribute to that candidate, or huge contributions to the candidate's political party. The limited, additional restriction on associational freedom imposed by the overall ceiling is thus no more than a corollary of the basic individual contribution limitation that we have found to be constitutionally valid.
The RNC lawsuit seeks to permit the "huge contributions to the candidate's political party" that the Supreme Court in Buckley cited as the reason the aggregate limit is constitutional and necessary to prevent evasion of the candidate contribution limits.
BCRA contains additional provisions to prevent evasion of the contribution limits, including a ban on national parties, federal officeholders and federal candidates soliciting contributions larger than the federal contributions limits for candidates and parties, including the aggregate contribution limit.
The Supreme Court upheld the solicitation ban in McConnell v. Federal Election Commission (2003), on the same grounds of preventing "evasion" of the contribution limits that served as the basis for the Buckley decision upholding the aggregate contribution limit.
The solicitation, transfer, and use of soft money thus enabled parties and candidates to circumvent FECA's limitations on the source and amount of contributions in connection with federal elections.
The elimination of the aggregate limit on contributions from an individual to all party committees would lead to massive circumvention of both the limits on contributions to candidates and parties and the solicitation ban -- and would result in the functional equivalent of million dollar individual contributions to candidates.
Here is how the circumvention would work:
Under current law an individual can give up to $30,800 per year to each of the three national committees of a party -- the national party committee, the Senate party campaign committee and the House party campaign committee -- and $10,000 per year to each of the 50 state parties to spend in connection with federal elections.
All of this is currently subject to an overall cap of $70,800 on the total contributions an individual can give to all party committees in a two-year election cycle.
If the aggregate cap is removed, however, in each two-year election cycle an individual could give $61,600 to each of the three national committees of a party or a total of or $184,800, and could also give $20,000 to each of the 50 state parties of that political party, or a total of $1 million dollars. Absent the aggregate limit, the overall total that an individual could give to a party in a two-year election cycle would be $1,184,800.
Through the use of a joint party fundraising committee involving the three national committees and the 50 state committees of a party, and the ability of party committees to freely transfer funds to each other without limit, the joint party fundraising committee could receive a check for $1,184,800 from a donor, make instant electronic transfers back and forth among the party committees and end up with a $1,184,800 donation from an individual to the RNC.
Furthermore, an officeholder could solicit the $1,184,800 check for his party and the party through coordinated and/or independent expenditures could spend all of the money to support the officeholder's election. The $2,500 candidate contribution limit would be circumvented and the officeholder would have solicited and the donor would have given, in essence, a $1,184,800 contribution to the candidate.
The same result could be achieved if the money was solicited for and spent by the Senate Republican campaign committee or the House Republican campaign committee.
Of course, the Democrats and their party committees would be free to do the exact same thing.
The result: evisceration of the contributions limits enacted to prevent corruption of federal officeholders and the buying and selling of government decisions.
There is little doubt that million dollar contributions would be solicited and given if the aggregate contribution limit is removed. History makes clear that when it comes to raising and spending political money, what can be done will be done.
History also makes clear that huge contributions can and will be used to buy government decisions.
In 1972, for example, ITT pledged $400,000 to help finance the 1972 Republican convention. The Justice Department proceeded to quickly settle an antitrust case in ITT's favor, with President Nixon personally intervening to obtain the result. Similarly, the dairy industry gave $2 million to the Nixon re-election campaign. Shortly thereafter the dairy industry received the increase in dairy price supports they were seeking, with President Nixon intervening to override the objections of his Agriculture Department.
The elimination of the aggregate limit on contributions from an individual to all candidates in a two-year election cycle would have similar corrupting consequences. It would allow a single donor to contribute $5,000 to every House and Senate candidate of a party or more than $2 million in an election cycle. It would also allow a federal officeholder, such as the President, House Speaker and Senate Majority Leader, to solicit a check for more than $2 million from a single donor, making use of joint candidate fundraising committees.
This would permit a donor to obtain more than $2 million worth of corrupting influence.
The Supreme Court in Buckley upheld the constitutionality of the aggregate contribution limit to prevent circumvention of the candidate contribution limits. Nothing has changed since then to undermine or call into question this decision.
The legal issues raised in the RNC lawsuit are fully controlled by the Buckley decision and the case should be dismissed as without any legal basis or policy justification.]]>Senator McConnell "Pounds the Table" in Opposing Campaign Finance Disclosure Long Upheld by Supreme Courttag:www.huffingtonpost.com,2012:/theblog//3.16317882012-06-28T11:22:18-04:002012-08-28T05:12:04-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
Senate Republican Leader Mitch McConnell has been spending a good deal of time "pounding the table" recently in his efforts to ensure that Senate Republicans vote as a block against the DISCLOSE Act of 2012 and to provide cover for the corporations and wealthy individuals that are secretly injecting hundreds of millions of dollars into the national election.
The DISCLOSE Act is expected to come to the Senate floor for consideration in July.
Senator McConnell's latest pronouncement on the issue of campaign finance disclosure came in an op-ed article that ran on June 23, 2012 in The Washington Post.
In the op-ed, McConnell sets forth a litany of specious arguments about why campaign finance disclosure is bad for America. He concludes, "The First Amendment allows all of us to have a place in the national debate. There can be no retreat from its defense." The implication is that disclosure is a retreat from the First Amendment.
This is an exercise in sophistry and has no place in reality.
Senator McConnell ignores Supreme Court decisions that for decades have upheld campaign finance disclosure laws as consistent with the First Amendment. He fails to make any mention in his op-ed of the two leading Supreme Court decisions that have upheld the constitutionality of campaign finance disclosure laws. The decisions were issued 34 years apart in 1976 and 2010.
These Supreme Court decisions flat out reject the arguments being made by Senator McConnell -- that campaign finance disclosure stifles speech, threatens the First Amendment and is unconstitutional because of the potential for harassment of donors and groups.
In Buckley v. Valeo (1976), the Supreme Court upheld the constitutionality of federal campaign finance disclosure laws, stating:
[D]isclosure requirements deter actual corruption and avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity. This exposure may discourage those who would use money for improper purposes either before or after the election. A public armed with information about a candidate's most generous supporters is better able to detect any post-election special favors that may be given in return.
Thirty four years later, the Supreme Court in Citizens United v. FEC (2010) again unequivocally upheld the constitutionality of disclosure requirements and spelled out the importance and value of campaign finance disclosure.
Eight of the nine justices, including Chief Justice Roberts and Justices Kennedy, Scalia and Alito, found that disclosure requirements for independent spending groups "do not prevent anyone from speaking" and serve the important governmental interest of "providing the electorate with information about election-related spending sources " so that voters can "make informed choices in the political marketplace."
The Supreme Court noted that it had earlier upheld disclosure laws to address the problem that "independent groups were running election-related advertisements while hiding behind dubious and misleading names." The Court further stated:
With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation's political speech advances the corporation's interest in making profits, and citizens can see whether elected officials are "'in the pocket' of so-called moneyed interests."... The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.
In past years, the Supreme Court has explicitly rejected the inappropriate argument that Senator McConnell is making, in which he attempts to equate Alabama's unconstitutional requirement in the 1950s for the NAACP to disclose its membership lists with campaign finance disclosure requirements.
The Supreme Court in 1958 declared Alabama's disclosure requirements unconstitutional in NAACP v. Alabama.The Court in 1976 in Buckley expressly found that the NAACP decision was not applicable to campaign finance disclosure requirements. The Court said:
The strict test established by NAACP v. Alabama is necessary because compelled disclosure has the potential for substantially infringing the exercise of First Amendment rights. But we have acknowledged that there are governmental interests sufficiently important to outweigh the possibility of infringement, particularly when the "free functioning of our national institutions" is involved.
The governmental interests sought to be vindicated by the disclosure requirements are of this magnitude.
In a case brought in 2002 by Senator McConnell, the Supreme Court again rejected the argument being made by Senator McConnell. In McConnell v. FEC (2003), the Court reaffirmed that campaign finance disclosure is not comparable to the membership disclosure requirements at issue in the NAACP case. The Court said, "In Buckley, unlike NAACP, we found no evidence that any party had been exposed to economic reprisals or physical threats as a result of the compelled disclosure."
Senator McConnell has argued that general concerns about harassment of donors and independent spending groups make the free speech case against campaign finance disclosure laws. However, the Court has repeatedly rejected that view.
In cases ranging from Buckley to Citizens United that upheld campaign finance disclosure laws, the Court has provided for a narrow exception from disclosure -- but only in cases where an organization could make a specific showing that there was "a reasonable probability that the group's members could face threats, harassment, or reprisals if their names were disclosed."
Even in those cases the Court has never said that such "a reasonable probability" is grounds for throwing out the disclosure laws, but only that a specific group which makes a showing that it faces a "reasonable probability" of harassment or reprisals would be exempt from the disclosure requirements. Disclosure laws would still constitutionally apply to everyone else.
Nor has the Court ever indicated that public criticisms of a group's campaign finance practices or of its donors would qualify as the kind of "threats, harassment, or reprisals" that justifies an exemption from campaign finance disclosure requirement.
In a concurring opinion in Doe v. Reed (2010), which upheld disclosure requirements for ballot measure campaigns, Justice Scalia made a powerful case for the importance of disclosure in a democracy, writing:
There are laws against threats and intimidation; and harsh criticism, short of unlawful action, is a price our people have traditionally been willing to pay for self-governance. Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed.
Senator McConnell doesn't have a constitutional leg on which to stand when he argues against the right of citizens to know the identity of secret donors funding campaign expenditures to influence their votes.
Nevertheless, Senator McConnell espouses the position taken by Justice Thomas -- the only dissenter from the Citizens United ruling that upheld disclosure laws -- as if it represents the views of the Supreme Court. In so doing, Senator McConnell completely ignores the position taken by the other eight justices in favor of disclosure that, in fact, constitutes the Court's view.
We can expect Senator McConnell to keep "pounding the table" in his efforts to maintain unified opposition by Senate Republicans to campaign finance disclosure requirements that are overwhelmingly supported by the American people.
Meanwhile, it may take another Congress, but in the end the DISCLOSE Act will be enacted and citizens will be informed about the donors paying for campaign ads to influence their votes.]]>Senator McConnell's Misguided and Meritless Attack on Campaign Finance Disclosuretag:www.huffingtonpost.com,2012:/theblog//3.16010402012-06-18T11:55:30-04:002012-08-18T05:12:12-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/in a speech he gave at AEI that attacked the very idea of campaign finance disclosure, which has been the cornerstone of campaign finance laws for many decades.
Senator McConnell conveniently forgets that secret campaign money was at the heart of the Watergate scandal that began 40 years ago on June 17, 1972 and was the worst political and campaign finance scandal of the 20th century.
In his speech, Senator McConnell describes campaign finance disclosure as an effort by the left and the Obama administration to stifle free speech.
Senator McConnell failed to mention in his speech that the Supreme Court in its Citizens United ruling -- which was passed by an 8-to-1 majority, including votes from four of the five conservative Justices -- upheld campaign finance disclosure as constitutional and a requirement for outside spending groups.
What is really going on here is that Senator McConnell is cloaking his partisan opposition to disclosure in the rhetoric of free speech.
Senator McConnell does not have a constitutional or policy leg to stand on.
Senator McConnell's speech today is about protecting the ability of groups, like the Chamber of Commerce and Crossroads GPS, to keep secret from the American people the identities of the donors who are financing their campaign expenditures.
The Supreme Court said in Citizens United that disclosure requirements are constitutional because they serve important governmental interests in "providing the electorate with information about the sources of election-related spending," in order to help citizens "make informed choices in the political marketplace."
The Court also said in Citizens United that it had earlier upheld disclosure laws to address the problem that "independent groups were running election-related advertisements, while hiding behind dubious and misleading names."
In his speech, Senator McConnell also ignores the powerful support for disclosure provided by Justice Scalia. In Doe v. Reed (2010), Justice Scalia stated, "Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed."
Senator McConnell no doubt sees a big partisan stake in protecting the ability of secret money to be laundered into federal elections. Outside spending groups supporting Republican congressional candidates, such as the Chamber of Commerce and Crossroads GPS, currently have raised the bulk of secret contributions that are being spent in federal elections. These groups do not want to disclose to the American people the identities of the donors whose money they are spending on ads to influence the voters.
For example, Crossroads GPS has disclosed on its tax returns that there are 23 donors who have each given $1 million or more to finance their campaign activities. However, the identities of these donors have not been disclosed because Crossroads GPS claims status as a section 501(c)(4) group, even though its overriding purpose is to influence elections.
Senator McConnell's speech also serves the purpose of offering cover for his Senate Republican colleagues who are expected to have to vote next month on the DISCLOSE Act sponsored by Senator Sheldon Whitehouse.
Until 2010, there was consensus support among Democrats and Republicans alike regarding campaign finance disclosure, although not from Senator McConnell. That changed in 2010 following the Citizens United decision when outside spending groups started spending large amounts of money provided by secret donors to support Republican congressional candidates.
Senator McConnell's claim that secrecy in campaign finance activities is needed in order to protect against harassment is a bogus argument that has been repeatedly rejected by the Supreme Court, except in limited circumstances.
The Court has said that a disclosure provision would be unconstitutional as applied to a specific organization only if the organization could establish "a reasonable probability that the group's members could face threats, harassment, or reprisals if their names were disclosed."
In these circumstances, the Supreme Court has said that even where a specific group could show such a "reasonable probability" of harassment, the remedy would be to exempt that specific organization from disclosure; not to strike down the disclosure requirements for all groups.
The notion that groups may come under public scrutiny and criticism for their campaign activities has never been viewed by the Supreme Court as constituting the kind of "threats, harassment or reprisals" that would justify overturning campaign finance disclosure requirements.
Senator McConnell's protestations notwithstanding, the Supreme Court has rejected the argument that disclosure requirements stifle speech and the Court has repeatedly upheld such requirements as serving important governmental purposes in providing voters with information they have a right to know about those who are trying to influence their votes.]]>Attacks on Media Coverage of Citizens United's Pivotal Role in Rise of Super PACs Are Misguided and Wrongtag:www.huffingtonpost.com,2012:/theblog//3.13136082012-03-01T17:26:40-05:002012-05-01T05:12:02-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
The Supreme Court's decision played a pivotal role in the rise of Super PACs.
Super PACs are federally registered political committees that raise unlimited contributions from wealthy individuals, corporations, labor unions and other entities and use the funds to make independent expenditures to influence federal elections. They are required under federal law to report their contributions and expenditures.
In recent weeks, there have been a series of unwarranted and misguided attacks against the media for linking the Citizens United decision to the rise of Super PACs in our elections.
On Feb. 7, 2012, Floyd Abrams attacked a Washington Post column by E.J. Dionne and said in essence that Citizens United did not have anything to do with the fact that Sheldon Adelson is able to contribute millions of dollars to the candidate-specific Super PAC supporting Newt Gingrich. Abrams is an attorney who represented Senate Republican Leader Mitch McConnell in the Supreme Court in the Citizens United case.
On Feb. 8 in a Mediaite column, Dan Abrams, a legal analyst for ABC News, attacked a number of members of the media claiming that they had repeatedly misstated the holding of Citizens United. Dan Abrams described as a "myth" the idea that the Citizens United decision "opened the door to wealthy individuals like Sheldon Adelson to pour millions of dollars into PACs."
On Feb. 24, Wendy Kaminer in an op-ed on the website of The Atlantic attacked The New York Times editorial page for "its disingenuous assault on Citizens United." Kaminer also attacked the Times more broadly by saying that its new stories and columns have "repeatedly mischaracterized Citizens United, explicitly or implicitly blaming it for allowing unlimited "super PAC" contributions from mega-rich individuals."
On March 1, conservative columnist George Will also mistakenly claimed in a Washington Post column that "Actually Citizens United has nothing to do with Adelson and others who are spending their own money, not corporations."
These attacks on the media are wrong.
The two cases most relevant to the rise of Super PACs are the Supreme Court decision in the Citizens United case in 2010, and the subsequent D.C Circuit Court of Appeals decision in the SpeechNow case. The SpeechNow decision is explicitly based on the Citizens United decision.
In Citizens United, the Supreme Court overturned a longstanding statute and past Court decisions in ruling that corporations can make unlimited expenditures in federal elections as long as the corporations spend the money independently from the candidates they are supporting.
The Supreme Court's decision was interpreted by the FEC to mean that corporations can also give unlimited amounts to groups, like Super PACs, to use in making independent expenditures.
In the subsequent SpeechNow decision, the full D.C. Circuit Court of Appeals ruled that individuals like Sheldon Adelson can make unlimited contributions to political committees, like the Super PAC supporting Newt Gingrich, as long as the committee makes only independent expenditures, and not contributions, in federal elections.
It is this decision that freed up the Sheldon Adelsons of the world. And the D.C. Circuit based the SpeechNow decision directly on the Citizens United decision. The Circuit Court stated that the Citizens United decision "resolves this appeal" and held:
In accordance with that decision, we hold that the contribution limits of 2 U.S.C. § 441a(a)(1)(C) and 441a(a)(3) are unconstitutional as applied to individuals' contributions to SpeechNow.
The SpeechNow decision held unconstitutional, in the case of a federal political committee that only makes independent expenditures, a longstanding limit of $5,000 per year on contributions from an individual to a federal political committee. This contribution limit had applied to all PACs -- including those that made only independent expenditures.
While the 1976 decision in Buckley v Valeo had declared unconstitutional a limit on how much money an individual could independently spend to influence federal elections, the $5,000 limit on how much an individual could contribute to a political committee that made independent expenditures had been the law of the land since 1974, was not struck down by the Buckley decision and remained in effect for decades.
This is the individual contribution limit that was declared unconstitutional in 2010 in the SpeechNow decision, based on the Citizens United decision.
It is plain wrong to claim the Citizens United decision had nothing to do with the ability of individuals to make unlimited contributions to Super PACs when the SpeechNow decision that struck down the limit on these contributions was explicitly based on the Citizens United decision.
Critics also wrongly have claimed that the kind of unlimited contributions made by Sheldon Adelson to the Super PAC supporting Newt Gingrich have been allowed for years. The critics point to the millions of dollars that George Soros gave to two pro-Democratic 527 groups, ACT and The Media Fund, to support Senator Kerry in the 2004 presidential election, as well as to the unlimited contributions used by a pro-Republican 527 group, Swift Boat Veterans for Truth, to attack Senator Kerry in that campaign.
But these unlimited contributions were illegal precisely because they violated the $5,000 limit on individual contributions to political committees and the FEC fined those 527 groups for raising and spending those funds.
George Will got it wrong again in his column when he claimed that critics of super PACs "were remarkably reticent in 2004" in challenging the Soros contributions.
In fact, in 2004, Democracy 21 joined by two other reform groups, filed FEC complaints against ACT, The Media Fund and Swift Boat. Those complaints resulted in FEC findings that the two pro-Democratic groups, supported by Soros' contributions, had spent $150 million illegally and that Swift Boat had spent $20 million illegally to influence the 2004 presidential election.
The FEC concluded that the groups should have registered as federal political committees and, as such, they were bound by the $5,000 limit on individual contributions they could accept -- the same individual contribution limit that was later struck down in 2010 in the SpeechNow decision, based on the Citizens United decision.
In other words, the unlimited contributions raised by the 527 groups in the 2004 election were illegal.
This certainly doesn't support the claim that what Adelson is doing now was done legally in the 2004 elections. Just the opposite is true. What Adelson is doing now was flatly illegal in 2004.
The bottom line: the Supreme Court's decision in the Citizens United case is the basis for the rise of Super PACs and for the corrupting role they are now playing in our national elections.]]>How Citizens United Unleashed Campaign Spending in Federal Elections by Tax-Exempt Organizationstag:www.huffingtonpost.com,2012:/theblog//3.12972982012-02-24T11:03:52-05:002012-04-25T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/Citizens United v. Federal Election Commission has changed the landscape of American politics.
The decision has brought enormous amounts of unlimited contributions and secret money back into our elections, the kind of political money that has resulted in corruption and scandals in the past and is bound to do so again in the future.
There are two types of entities injecting hundreds of millions of dollars in unlimited contributions into our federal elections as the result of the Citizens United decision: Super PACs and groups claiming tax-exempt status as 501(c) organizations.
The Citizens United decision is directly responsible for the rise of the Super PACs that are flooding our elections with expenditures financed by huge contributions from the super rich, corporations, labor unions, and other entities.
The Citizens United decision is also directly responsible for the unlimited, secret contributions being injected into federal elections by 501(c) groups, including (c)(4) "social welfare" groups, and (c)(6) business associations, like the Chamber of Commerce.
These groups are not required by tax law to publicly disclose their donors and could end up spending as much or more than the Super PACs in the 2012 presidential and congressional elections.
Contributions to 501(c) groups can come from corporations, labor unions, individuals and other entities. They also can come from foreign entities. Absent effective disclosure requirements, it is exceedingly difficult to know if foreign money is being illegally used by these groups to pay for expenditures to influence federal elections.
The reason for the rise of campaign expenditures in federal elections by 501(c)(4) and (c)(6) groups is simple: most of these groups are corporations and prior to Citizens United they were prohibited by the corporate spending ban from making such expenditures.
Following the Citizens United decision, 501(c)(4) and (c)(6) groups spent more than $135 million in unlimited, secret contributions in the 2010 congressional elections. This amount is expected to dramatically grow in the 2012 presidential and congressional races.
Without the Citizens United decision, there would be no campaign expenditures in federal elections by incorporated 501(c) groups, and no secret contributions being spent by these groups in the elections.
Furthermore, similar to candidate-specific Super PACs, a number of 501(c) groups appear to be ignoring the laws.
Presidential candidate-specific Super PACs appear to be routinely violating the law prohibiting them from coordinating their expenditures with the candidates they are supporting.
A number of political organizations appear to be improperly claiming tax-exempt status as 501(c)(4) "social welfare" organizations to keep secret the donors financing their campaign expenditures.
Democracy 21, joined by the Campaign Legal Center, have filed complaints against several 501(c)(4) groups at the IRS challenging the eligibility of these groups to receive tax-exempt status and thereby to keep their donors secret. We also have petitioned for an IRS rulemaking challenging as contrary to law the IRS regulations that define when a group is eligible for tax-exempt status.
While the Citizens United decision is directly responsible for 501(c)(4) and (c)(6) groups pouring unlimited, secret contributions into federal elections, the dysfunctional Federal Election Commission has made its own inimitable contribution to this result.
Current law requires any entity that makes independent expenditures and electioneering communications to disclose its expenditures and the donors funding these expenditures. FEC regulations, however, have gutted the donor disclosure provisions and left citizens with no information regarding who is financing these efforts to influence their votes.
Representative Chris Van Hollen, represented by the Democracy 21 legal team, has challenged as contrary to law the FEC contribution disclosure regulations. The case has been briefed and is awaiting a decision by a federal district court Judge in Washington, D.C.
The Act would provide for timely disclosure of campaign-related spending in federal elections by outside groups and would ensure that significant donors, and the amounts they give to the groups making such expenditures are made public. The legislation covers all entities making these expenditures, including 501(c) groups.
The bottom line is this: the Citizens United decision (with an assist from the FEC) is directly responsible for 501(c) organizations spending hundreds of millions of dollars in unlimited, secret contributions in federal elections.
]]>Citizens United and Contributions to Super PACs: A Little History Is in Ordertag:www.huffingtonpost.com,2012:/theblog//3.12914652012-02-21T16:35:31-05:002012-04-22T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/ Citizens United v. Federal Election Commission that the longstanding ban on corporate expenditures in federal campaigns was unconstitutional.
In reaching this decision, the Court unleashed a flood of unlimited contributions into federal elections through Super PACs and other independent spending entities, and thereby unleashed the corruption of our government.
Recently the argument has been made that the Citizens United decision had little responsibility for the torrent of unlimited individual contributions being spent by Super PACs to influence the 2012 elections.
This argument is wrong. A little history is in order.
Citizens United and Super PACs
Super PACs are federally registered political action committees that file disclosure reports with the FEC and spend unlimited contributions from individuals, corporations, labor unions and other entities on independent expenditures to influence federal elections.
Super PACs are playing a major role in the 2012 presidential primaries and will continue to be a major factor throughout the 2012 presidential and congressional races.
The Citizens United decision explicitly held that corporations could make independent expenditures in federal elections and also implicitly held that corporations could give unlimited amounts to third party groups, such as Super PACs, to make independent expenditures in federal races.
Two months later, on March 26, 2010, the D.C. Circuit Court of Appeals in SpeechNow v FEC held unconstitutional the existing $5,000 per year limit on the amount that an individual could contribute to a third party group, such as a Super PAC, to make independent expenditures in federal elections.
The SpeechNow decision is explicitly based on the earlier Citizens United decision.
In the operative sentence of the SpeechNow decision, Judge David Sentelle writing for the full D.C Circuit Court of Appeals stated:
Thereafter, the Supreme Court decided Citizens United v. FEC, 130 S. Ct. 876 (2010), which resolves this appeal. In accordance with that decision, we hold that the contribution limits of 2 U.S.C. § 441a(a)(1)(C) and 441a(a)(3) are unconstitutional as applied to individuals' contributions to SpeechNow. (Emphasis added).
Floyd Abrams, an attorney who supported the Citizens United challenge in the Supreme Court, has argued that the right of individuals to make unlimited contributions to Super PACs was established by the landmark Supreme Court decision in 1976 in Buckley v. Valeo.
This argument is wrong.
While the Buckley decision held that an individual could make unlimited expenditures of his own money in federal elections, the Court did not rule that an individual could make unlimited contributions to a group that is making independent expenditures in federal elections.
And until 2010, federal campaign law and FEC regulations limited to $5,000 per year the amount that an individual could give to a PAC making independent expenditures in federal elections. It is this individual contribution limit that was declared unconstitutional in the SpeechNow case, which was based on the Citizens United decision.
Mr. Abrams also cites the Swift Boat PAC ads in 2004 which attacked Senator John Kerry and the expenditures by two pro-Democratic PACs that supported Senator Kerry, funded in part by multimillion dollar contributions from George Soros, to argue that unlimited individual contributions to PACs making independent expenditures to influence federal elections have long been allowed.
This argument is wrong.
The unlimited contributions from individuals to these three PACs went to groups that operated illegally in the 2004 presidential election and accepted contributions that did not comply with federal law. The PACs paid substantial fines to the FEC for making combined illegal expenditures of $170 million in the 2004 presidential election.
If these PACs had properly complied in 2004 with existing campaign finance laws, the contributions from individuals to the Swift Boat PAC and to the two pro-Democratic PACs would have been limited to $5,000 per donor per year.
The bottom line is this: the ability of corporations, labor unions and individuals to give unlimited contributions to Super PACs making independent expenditures to influence federal elections flows directly from the Supreme Court's decision in the Citizens United case.
Unlimited contributions in federal elections invariably lead to corruption and scandal, and that is what is unfolding in the 2012 elections.
Fred Wertheimer is the President of Democracy 21, a nonprofit, nonpartisan organization that promotes campaign finance reforms and related government integrity measures.
]]>Super PAC Legality? We Don't Believe in the Tooth Fairy Eithertag:www.huffingtonpost.com,2012:/theblog//3.12600392012-02-07T16:47:52-05:002012-04-08T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
Democracy 21 wrote to the Justice Department twice last month expressing our concerns about the serious legal questions that exist regarding the presidential candidate-specific Super PACs. We also issued a report last month about these serious legal questions.
We will be writing to the Justice Department shortly asking the Department to open a criminal investigation into whether Restore our Future and Priorities USA Action are illegal operations.
In order to believe that the Super PACs supporting President Obama and Mitt Romney are "independent" from the presidential campaigns they are supporting, you must believe in the tooth fairy.
Democracy 21 does not believe in the tooth fairy.
The Supreme Court has spoken in the broadest terms about the degree of independence that is necessary for "independent expenditures" to be considered free of the legal constraints that would otherwise apply to in-kind contributions. Such expenditures must be "totally independent," "wholly independent," "truly independent," and made "without any candidate's approval (or wink or nod)...," according to the Court.
The federal campaign finance statute provides that expenditures made "in cooperation, consultation, or in concert with or at the request or suggestion of a candidate, his authorized political committees, or their agents, shall be considered to be a contribution to such candidate."
The Super PACs supporting Mitt Romney and President Obama do not approach meeting these legal standards.
In our view, any involvement of a presidential candidate or campaign, or agents of the candidate or campaign, in the establishment or operation of a candidate-specific Super PAC supporting that presidential campaign constitutes coordination that renders all of the Super PAC's subsequent expenditures as having been made in coordination with the presidential campaign.
The idea that the presidential candidate-specific Super PACs are "independent" from the presidential candidates and campaigns they are supporting is a complete fantasy.
It is time to return to reality and put an end to these corrupting Super PACs whose purpose is to circumvent and eviscerate the limits on contributions to candidates enacted to prevent corruption.
]]>Super PAC Disclosure Reports Reveal Out-of-Control and Corrupt Systemtag:www.huffingtonpost.com,2012:/theblog//3.12469782012-02-01T16:26:17-05:002012-04-02T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/
A relatively few super rich individuals and a number of corporations are making huge unlimited contributions to the Super PACs and are exercising magnified and undue influence in the 2012 presidential primaries.
These huge donors are also buying corrupting influence over the presidential candidates they are supporting and over government decisions in the event their candidate wins.
All of this is the result of the disastrous, misguided decision by the Supreme Court in the Citizens United case, along with a lower court decision in the SpeechNow case.
Congress needs to act this year to address the problems with Super PACs within the boundaries available under court decisions.
Congress needs to pass legislation that provides new disclosure requirements to ensure that secret donors financing campaign expenditures are disclosed and to solve the problem of untimely disclosure by Super PACs that has arisen in the 2012 presidential elections.
The Super PAC disclosures filed yesterday are already too late to provide voters in four key presidential nominating races with information they have a basic right to know. These reports, furthermore, show donors only through the end of December 2011, and do not show the donors who gave money in January during the presidential caucus and primaries last month. This information will not be reported until later in February.
According to published reports, at least one Super PAC, Priorities USA Action, received a contribution of more than $215,000 from Priorities USA, its affiliated 501(c)(4) tax-exempt group. Priorities USA Action is a candidate-specific Super PAC supporting President Obama's re-election. Priorities USA also is supporting President Obama's re-election.
Since 501(c)(4) groups do not have to report their donors, this amounts to a money-laundering scheme to hide the true sources of the money going to the Super PAC supporting President Obama, which is supposed to disclose its actual donors.
This too-little-too-late Super PAC reporting system must be fixed by new disclosure legislation.
The new legislation also needs to require corporations, including nonprofit tax-exempt groups, labor unions and Super PACs to have an official representative appear in their TV ads to take responsibility for the ads and to require the groups to list their top five donors in these TV ads.
The legislative effort in 2012 needs to focus on disclosure provisions only and not include the non-disclosure provisions that were part of the DISCLOSE Act in 2010.
It is essential for the legislative effort in 2012 to focus solely on the issue of "disclosure versus secrecy" in order to be a real effort and not merely a political exercise, and in order to build the support necessary to ultimately win this battle.
Democracy 21 is also preparing a legislative proposal to shut down the kind of candidate-specific Super PACs that are functioning for the first time in the 2012 presidential election.
The legislation would treat these candidate-specific Super PACs in legal terms as arms of the presidential campaigns, as they are in reality. The legislation would treat a candidate-specific Super PAC run by associates of the candidate as affiliated with the candidate's campaign and subject to the candidate's contribution limits.
It is important to recognize that the Super PAC problem cannot be solved by repealing the limits on contributions to candidates. Taking that destructive step would return us to historic campaign finance scandals of the past and a system of pure legalized corruption where donors could provide huge contributions directly to officeholders and candidates in exchange for their votes.
This would create nothing less than a system of legalized bribery of our elected representatives.
]]>Court's Decision Will Not Stand the Test of Time and Historytag:www.huffingtonpost.com,2012:/theblog//3.12188412012-01-20T13:18:57-05:002012-03-21T05:12:01-04:00Fred Wertheimerhttp://www.huffingtonpost.com/fred-wertheimer/radical decision in the Citizens United case that is now wreaking havoc on the 2012 elections. The Citizens United decision has done enormous damage to our political system and our democracy.
The Citizens United decision fundamentally undermined the nation's anti-corruption campaign finance laws.
The decision is beyond extreme in explicitly stating that the ability of the country to be protected from the corruption of our government is outweighed by the right of a corporation to make unlimited expenditures to influence elections. The decision is beyond the pale in flatly stating that it is perfectly OK to use campaign money to buy influence over our elected representatives in Washington.
The Founding Fathers were well aware of the dangers of corruption when they wrote the Constitution. The Court's extreme position in Citizens United notwithstanding, the Founders did not create an overriding right for corporations that would leave the new nation unable to protect itself from corruption.
The five Justices who voted for the Citizens United decision -- Chief Justice John Roberts and Justices Anthony Kennedy, Antonin Scalia, Clarence Thomas and Samuel Alito -- will go down in history for issuing one of the worst and most misguided decisions in the history of the Supreme Court.
Citizens must and will overcome the damage done to the country by five Supreme Court Justices who valued the right of corporations to influence elections over the right of citizens to be protected from corruption of their government.
In the end, the Citizens United decision will not stand the test of time and history.
The eloquent dissenting opinion in Citizens United written by Justice John Stevens on behalf of four Justices will one day become the Supreme Court's majority position.
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