THE BLOG

The Unfulflled Promise of Citizens United

01/21/2014 10:44 am ET | Updated Mar 23, 2014
  • Bruce Freed President, Center for Political Accountability
ASSOCIATED PRESS

This post was co-authored with Karl J. Sandstrom, former vice chairman of the Federal Election Commission.

In his Citizens United majority opinion, Justice Anthony Kennedy paired the unshackling of companies to engage in broad political spending with the potential of modern technology to make "disclosures rapid and informative." Recent advances in information technology, he said, would enable shareholders to hold a corporation accountable for political spending that they don't support.

On Citizens United's fourth anniversary, it's past time to correct what Justice Kennedy failed to acknowledge. Under current law, corporate political accountability is unachievable in both principle and practice. Our political finance disclosure system has become a maze without a solution. Tracing the money flow can be impossible for even the most skilled investigator -- that's why it's so often called "dark money."

Why is the promise of effective disclosure, so optimistically embraced by the Court, unfulfilled?
First, the Court failed to appreciate that the campaign finance system it was upending was predicated on individual citizen participation and accountability. Contributions and expenditures in federal elections were the result of individual citizens choosing to voluntarily use their own personal resources.

An individual could choose to spend on his own or contribute to a candidate, a political party, a corporate trade association or labor PAC, or an independent political committee. If his or her contribution exceeded $200, the recipient committee would be required to identify the donor. Consequently, the public could always trace money in politics back to its original source -- an individual participating freely.

Since the Court freed corporations and labor unions to engage in political spending, however, it has become impossible to identify where their spending originated. As recent news media accounts have documented, "dark money" can flow through many groups before it pays for a political attack ad. These entities can be birthed, and terminated, with a few key strokes on a computer.

Established groups such as trade associations and 501(c)(4) "social welfare" organizations can serve as conduits or upfront the money. The money source can request, and secure, anonymity. When this happens, the public is easily blinded to the hidden interests served by political spending. Who approves and who finances a political attack is regularly concealed and unaccountable.

Second, such relevant regulatory agencies as the Federal Election Commission, the Securities and Exchange Commission, and the Internal Revenue Service, along with Congress, have failed to repair the massive sinkhole in disclosure created by Citizens United. Justice Kennedy, it turns out, assumed incorrectly that shareholders would have the information they urgently need to assess a corporation's political spending.

Although many corporations have elected to disclose their political spending as a matter of good corporate governance, many have not done so. The Securities and Exchange Commission, even in the face of unprecedented public support for a disclosure rule, has not acted. The Federal Election Commission, which could fill some of the gaping hole, has been gridlocked by partisan division about what current law requires. For similar reasons, Congress has failed to act. The disclosure that the Court envisioned remains just that -- only a vision.

In the end, it's doubtful that a regulatory system that removes the centrality of individual choice from political spending can ever be truly accountable and responsive to the needs of a political system premised on representation of the people and not economic interests.

Nonetheless, the Court's promise of effective disclosure in Citizens United is an important safeguard against corruption and abuse of our democratic institutions. It needs to be realized or the promise will forever ring hollow.

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Bruce F. Freed is president of the Center for Political Accountability, a nonpartisan nonprofit organization promoting corporate political disclosure and accountability.

Karl J. Sandstrom, CPA's counsel, is a former vice chair of the Federal Election Commission.