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Leo Hindery, Jr.

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Campaign Finance Reform -- Now More Than Ever

Posted: 11/22/11 09:30 AM ET

Campaign finance in this country is in a very bleak place after decades of direct attacks and equally sad unintended consequences. The Supreme Court's 2010 landmark decision in Citizens United v. FEC was the final straw in the corporate hijacking of our political system which began fully thirty years ago.

In Citizens United, the Court, after determining that corporations are in effect "people", concluded that the First Amendment prohibits the government from censoring political broadcasts in candidate elections when those broadcasts are funded by corporations or unions. Specifically, Citizens United struck down provisions of the McCain-Feingold "Bipartisan Campaign Reform Act of 2002" which prohibited all corporations -- both for-profit and not-for-profit -- and unions from broadcasting "electioneering communications": i.e., advertisements or other communications that mention a candidate within 60 days of a general election or 30 days of a primary.

While Citizens United did not strike down the ban on direct contributions from corporations or unions to candidate campaigns or political parties in races for federal office -- such contributions remain illegal -- by giving back to corporations and unions the unlimited ability to fund political ads specifically mentioning candidates in newspapers, magazines and all forms of television, it handed to a relatively small group of CEOs near-unlimited powers of persuasion in what the Founding Fathers intended as the quintessential democratic process of the Republic.

Perhaps worse, in an electioneering system in which, as former California State Assembly Speaker and Treasurer Jesse Unruh famously said, "Money is the mother's milk of politics," it makes almost inevitable the accommodation, if not the sponsorship, of corporate interests by a relatively small number of sitting elected officials, never mind by aspiring candidates.

Individual citizens, who are mostly limited to roughly $5,000 per candidate per cycle, must now come together in staggering numbers for their contributions to have the same effect in a campaign that the spending of just one determined, large corporation could have. For example, President Obama raised $748 million for his 2008 campaign (through year-end 2008). Of that, more than $659 million was raised from individuals, a staggering, never-before achieved level of democratized campaign capitalization. Is it so hard to imagine, however, Big Oil, Big Pharma and the Big Banks funding their own $1 billion in an all-out bid to elect a Presidential candidate, never mind certain Senators and Members of Congress. And the self-interested involvement of such companies on a smaller -- but still relatively massive -- scale is all but assured in coming elections.

Another ruling in 2010, by the District of Columbia Court of Appeals, expressly applied the Citizens United ruling to say that SpeechNOW.org, a not-for-profit organization, was entitled to accept unlimited contributions from individuals for independent expenditures. Thus, "Super PACs" were born.

Super PACs -- technically, "independent-expenditure only committees" -- can raise unlimited amounts for specific candidates or causes from corporations, unions and individuals. And while these PACs can't directly "coordinate" with campaigns, the candidates can themselves help raise money, which of course makes for a paper-thin Chinese Wall. Super PACs must disclose corporate contributions, but issue groups connected to them do not have to, so corporations now simply anonymously funnel many of their political dollars through issue groups -- which really don't have issues at hand as much as they do candidates and Party politics which they seek to advance.

Despite the sense/hope which many of us had, after passage of McCain-Feingold, for a later Congress to enact truly comprehensive campaign finance reform, this now seems as unlikely as Congress soon getting smart (and non-partisan) and adopting a meaningful "jobs policy".

However, there are some bright spots for those of us who believe the fight for campaign finance reform must continue. And somewhat amazingly many of these "spots" are found in my home state of New York, which is not usually thought of as a leader in political reform.

Not long ago, the esteemed (non-partisan) Brennan Center for Justice, with plenty of justification, listed New York State last in terms of governance. Our State's record on campaign finance has not been much better. Here, an individual can give $50,000 to a candidate; there are few restraints on corporate contributions and plenty of loopholes; campaign finance scandals are a regular occurrence; and in my home city the current New York City mayor essentially purchased his third term for $105 million, after first using his unlimited personal monies to overturn term limits which the vast majority of voters put in place years earlier.

But there are three initiatives worth noting and emulating across the country.

First, as a quasi-model for all manner of campaign finance reform efforts, we in New York City already have a pretty good municipal campaign finance effort underway. It's not perfect, as shown by the amount of money Michael Bloomberg has been able to spend in his three campaigns and the ongoing scandal of Comptroller John Liu's bundling practices. Yet, despite many legal challenges over the last twenty years, all campaigns are required to disclose both contributions (i.e., who donated, the amount and their occupation and employer) and expenditures (i.e., how money was spent), which are also capped; candidates can't accept contributions from corporations, LLCs or partnerships; and, very important, campaigns are limited in how much they can accept from entities which have business dealings with the City's government. Much of these requirements could, as I said, be the underpinning of meaningful federal campaign finance reform.

Second, a very serious bipartisan group has established "New York Leadership for Accountable Government" -- or NYLEAD -- to encourage Governor Andrew Cuomo to advance public financing legislation dedicated to advancing small-donor driven public financing. Working alongside the Brennan Center, Americans for Campaign Reform, and Citizen Action of New York, NYLEAD is modeled on the successful program in New York City. Its leadership of prominent civic, labor and business leaders have as their goal a system of public financing which would provide for 'multiple-match' public financing, reasonable qualifying criteria and highly transparent voluntary spending limits. Governor Cuomo appears supportive of this effort, which appears to be gaining real momentum.

Lastly, we in New York have the "Coalition for Accountability in Political Spending" (or CAPS). CAPS was largely formed by City Public Advocate Bill de Blasio after the Citizens United decision, and the stated goal of its public official supporters is to curb the role of corporations in elections.

This particular goal of limiting the role of corporations should be, I believe, the primary goal of any campaign finance reform effort. It is, after all, at the end of the day the anonymous unleashing of corporations and their millions -- if not hundreds of millions -- of dollars which is the most pernicious aspect of the Citizens United decision. Even the singular efforts of super wealthy individuals (like the Koch Brothers) to commandeer elections do not begin to equal the damage done to our democratic process by corporations which Citizens United has wrought.

Working with institutional investors, policy makers and voters to encourage policies that limit corporate political spending, CAPS has already begun to ignite the public pension fund activism around this issue, which I have advocated for years. Yet even though some very prominent national companies and banks have, to their credit, already indicated that they support the principals espoused by CAPS, there are still two very important steps to take.

First, the SEC, working in conjunction with the FEC, must demand full disclosure, by recipient, of all public company political contributions and lobbying, whether or not it is "material" to the profitability of the companies.

• And second, where the recipient is a "bundler" or an intermediary, such as the U.S. Chamber of Commerce or the Business Roundtable, then the bundler itself, as a precondition to receiving corporate contributions, must agree to specifically disclose all of its 'downstream recipients' who are either in or are running for Congress.

The best voice by far to advance these outcomes would seem to be the nation's public pension funds, which Congress would (or at least should) be hard-pressed to ignore.

Now is one of those genuine turning points in electoral politics, and this time we as a nation will decide just how much influence we're going to let corporations have over our political system. I hope the amount is de minimus, for if we don't largely eliminate corporate money and increase overall transparency, then for the middle class the analogy of bringing a pocket knife to a gunfight will stand true. We will never see our economy fairly recover, we will never eliminate the unprecedented income inequality which now plagues our society, and we will never again be at real full employment.

Leo Hindery Jr. is chair of the US Economy/Smart Globalization Initiative at the New America Foundation, co-chair (with Leo Gerard) of The Task Force on Jobs Creation, founder of Jobs First 2012, and a member of the Council on Foreign Relations. He is the former CEO of AT&T Broadband and its predecessors, Tele-Communications, Inc. and Liberty Media, and is currently an investor in media companies.


 

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03:01 AM on 11/26/2011
This is a Catch-22 situation. You can't get campaign finance reform with a Congress bought by the 1%, but you can't get a Congress that represents the 99% until you have campaign finance reform!

There's only one way to break this. We the People can still vote. And we don't have to go on voting for candidates who have their snouts deep in the corporate trough. Check out
www.breakcorporatepower.org
and see how it can be done!
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dtallwalk
09:43 PM on 11/23/2011
Until we make the so called law makers stop taking the money and let them know if they do they will loose there job will they do anything about reform. The OWS movement may in time be able
To get this done then we may have a government that will have to address our concerns
Before CORP. let's all pray
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LeftCoastEng
Obsessed with failed trade
03:49 PM on 11/23/2011
Sign in support of a constitutional amendment giving Congress and states the authority to limit corporate and special interest money in our elections:

http://petition.reversecitizensunited.com/p/dia/action/public/?action_KEY=5007&tag=rcu_durbin_e2
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11:09 AM on 11/23/2011
I have a far-simpler suggestion:

"All civil officers ... shall be removed from office for ... Bribery ..."
-- Article 2, Section 4.
07:24 AM on 11/24/2011
Right on. When a campaign contribution exceeds a total of mote than $100 a person or corporation, it becomes a form of bribery.

Buddy Roener won't accept more than $100. and he has been blackballed by the media. Another form of control over politcal candidates by billionaire owners of news media.

The travesty is that the government FCC has power to license air waves like radio and TV. All that is required to end excessive campaign contributions to bribe candidates is for the FCC to make mandatory time be given free to all candidates. However, that would mean a tremendous loss of profit to the media from political advertisments, that is why certain candidates like Buddy Roener gets very few invitatinons or time by newscasters.

"Money honey if you want to get along with me.: are the same words of a song about a prostitute. Not much different in the meaning of a lot of politicians becing controlled like puppy dogs by the media owners..
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DoubleYellowLines
Left of the Right, and Right of the Left
10:42 AM on 11/23/2011
I still don't understand why I, as a resident of a small East Coast state, should be allowed to donate significant funds to the campaign of the Representative in another state. Heck, even in another district in my state.
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09:20 AM on 11/23/2011
Unions are the #1" Political Action Commitee". If the members feel strongly let them give on their own, same with corporations. Interesting how its only corporate political giving is always attacked, but union giving never is. No liberal bias there.
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Carl Caroli
I just don't understand people
09:08 AM on 11/23/2011
Absolutely a must if we the people are to get our government back from the oligarchs.
07:52 AM on 11/23/2011
Your numbers are off on how much Obama recieved, unions donated how much? The naacp donated how much? The list is large but you seem to want to make him out different. He is just like all other politicans when it comes to campaign contributions. The trouble is not contributions it is the media. The meet builds up one canidate and acts the other. How do you deal with media bias.
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banana republican
Next in line for crumbs from the King's Table
06:28 AM on 11/23/2011
Agreed. This is the only way we can ever get the elected officials out of the pockets of the greedy. However, lets see how much luck you have getting the labor unions and the trial lawyers behind the idea. You push this with any intensity, I guarantee some union thug is going to show up at your door to discuss the health of your knee caps.
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budanatr
US Expat in EU
05:27 AM on 11/23/2011
There is a very simple answer to this problem: Public Financing of Elections only. Period.

Making that happen is nearly impossible because of all the lobbying and money already flooding DC.

Maybe it is time to Occupy K Street.
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DoubleYellowLines
Left of the Right, and Right of the Left
10:50 AM on 11/23/2011
I'd say local funding only. Reps may only accept funds from their district residents, Senators only from their state residents, and Presidential candidates can accept from any US citizens. Even if you allow corporate contributions, it's got to be based on where that company is incorporated, not that it has operations in that state. And full disclosure, of course, of all contributions.
04:39 AM on 11/23/2011
First, extend financing control over the campaigns media and messaging machines, and then later control content. It's a brilliant idea.
12:49 AM on 11/23/2011
We need to get ALL of the money out of elections, which include the unions, the corporations, the lobbyists. No one can give more than $1000 to a person and that does NOT include corporations (they are NOT people Mitt!). Lobbyists can meet with Congress, but they have do it in person while Congress is in session and on LIVE TV so everyone can see what is going on (no secret meetings with payoffs). Any congressman caught cheating on this rule...will be automatically removed from Congress!

Force ALL politicians to use public money (no more self-funded millionaires, sorry Meg) and make them tell us what their platform is...on live TV and radio. No more 30 second "fake" commercials to hide behind. If you are not intelligent enough to debate the other person (sorry Rick Perry), you are probably not intelligent enough to be in office.

If everyone came out to vote, we can FORCE our country to abide by rules that will allow us to elect people who actually will look out for the 99%!

If we had a national election week, with one day being an Election Day holiday; we would probably get 75-80% of the people to actually vote! This would get the money out of politics once and for all!
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04:30 AM on 11/23/2011
Yep great points, viewing the elections from over the pond I am constantly amazed at how early the presidential re-election bids take place in America but saying that, We don't elect our head of state (and before I hear that that is a bad thing, She has veeeeery limited powers constitutionally).
MrStat1
I believe in the rule of law
08:42 AM on 11/23/2011
You want all of this done and you know none of it has a snowballs chance in hell of happening.
04:20 PM on 11/23/2011
Election reform is the only hope of getting money out of elections and yes, you are correct in that it stands a snowballs' chance in hell of happening...but nice thought though!
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DustyMills
A liberal tree-hugging Oregonian...
08:42 PM on 11/22/2011
There is a direct correlation between how corrupt our politicians have become, and how downtrodden the majority of people in this country find themselves.........I don't know whether this has been some sort of plot by corporations and the banks to high~jack our government, or if things have just worked out this way, but our government is now owned by people who do not have our best interests in mind.

Simply replacing our politicians is not the answer, it is the system we must change, and it will take the will of all the people to do this........
04:24 PM on 11/23/2011
True, but congress makes the laws and I can't see any republican voting for a change in the system...they like it just the way it is!
08:03 PM on 11/22/2011
Your article states:
“Individual citizens, who are mostly limited to roughly $5,000 per candidate per cycle, must now come together in staggering numbers for their contributions to have the same effect in a campaign that the spending of just one determined, large corporation could have.”

So, how do campaign laws that exempt corporate media and regulate candidates, political parties and PACs reduce the influence of corporate money?

Following reports of serious financial abuses in the 1972 Presidential campaign, Congress amended the FECA in 1974 to set limits on contributions by individuals, political parties and PACs. The 1974 amendments also established an independent agency, the Federal Election Commission (FEC) to enforce the law, facilitate disclosure and administer the public funding program.

"Section 431(9)(B)(i) makes a distinction where there is no real difference: the media is extremely powerful by any measure, a "special interest" by any definition, and heavily engaged in the "issue advocacy" and "independent expenditure" realms of political persuasion that most editorial boards find so objectionable when anyone other than a media outlet engages in it. To illustrate the absurdity of this special exemption the media enjoys, I frequently cite as an example the fact that if the RNC bought NBC from GE the FEC would regulate the evening news and, under the McCain-Feingold "reform" bill, Tom Brokaw could not mention a candidate 60 days before an election. This is patently absurd." – From Senator McConnell’s letter to a constituent
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CollectiveNotIndividual
07:48 PM on 11/22/2011
Liberal progressives are closed minded. Me and my 10 friends have incorporated...we are a corporation...it's who we are. Can me and my 10 friends lobby my congressman? Liberals say no. Okay....so I don't want them and their friends (unions) to lobby their congressman either...is that not fair??? Yet when Wisconsin governor tried to stop the state's public sector uniosn from lobbying for benefits (they can still lobby for salary) the liberals when crazy mad. I just don't get it....either all collectives must stop lobbying...or else no collectives stop lobbying. Make your mind up liberals.
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budanatr
US Expat in EU
05:24 AM on 11/23/2011
If you want to be taken seriously on an American website you really should learn how to write in English.
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George From NYC
Warren in 2016
08:37 AM on 11/23/2011
Negotiating contracts is not "lobbying". Unions represent the interests of millions of middle class workers. Corporations represent the interests of corporate monopolies.

You seem to mistake "lobbying" with negotiating a contract on a regular basis.

Lobbying is an example of a corporation buying influence with law makers to get a particular break or rule implemented that benifits a corporation. Government does not get involved with negotiations between a union and their employer. What walker is trying to do, is to get government involved by changing how unions can negotiate with their employers.

Show me where thousands are protesting in the streets in favor of corporate interests and then we'll talk.