10/27/2010 11:41 pm ET | Updated May 25, 2011

Stemming the Tide of Secret Corporate Money

Until now the dominant narrative this mid-term election year was that slow growth and high unemployment were sinking the party in power. But other numbers are now showing a new fault-line for 2010, 2012 and beyond. Outside special interest spending will equal or exceed spending by candidates themselves or party organizations in many competitive districts. While contributions to all candidates and party affiliates will slightly favor Democrats -- and be fully disclosed in FEC reports -- this new flood of independently spent money is weighted 8-1 for the GOP and largely hidden behind blandly named web sites. In 2006, a fifth of all non-candidate spending came from such groups (party affiliates the rest). This year, it's three-fifths.

What's happened is a toxic mix: The Supreme Court's 5-4 Citizens United decision plus FEC rulings have for the first time allowed spending out of corporate treasuries and on ads that can expressly urge the defeat of a candidate. Then political operatives like Karl Rove tapped into business hatred of Obama. The result is a $200 million+ tidal wave.

The U.S Chamber of Commerce, Crossroads GPS, Americans for Prosperity, Americans for Job Security, the 60 Plus Association and others need only report their donors after the election to the IRS under their not-for-profit status. Since the tax code requires that such groups have a non-political primary purpose, this year's political advertising is likely illegal, though fines years after the damage is done won't much matter to the billionaires and companies who understand a good return on their investments.

Democratic incumbent Peter DeFazio in Oregon, for example, went to the address of a group opposing him to find out who they were -- it was a mail drop. Senator Russ Feingold, a target too, worried that "our system of government and our democracy [is turning into] another example of what is essentially corporate naming rights."

In the short term, the President and Democrats are making the GOP pay a price for their strategy, accusing them of receiving money from foreign groups in order to block policies that would reduce incentives to outsource jobs. Liberal commentators who worried that Democrats are talking about Rove rather than jobs should appreciate that old arguments on the economy in the final month of the election will have little effect but a new argument about secret corporate money can motivate more outraged Democrats to vote.

With 84% of voters in a Bloomberg poll opposed to such outside corporate spending (even though such negative ads can succeed), this is a smart strategy that's worked before. Recall that in 1996 a late "scandal" about foreign donations to the Clinton-Gore campaign shaved a few points off their margin and saved some congressional seats for the GOP.

Republicans are now screaming about these attacks. What about Soros and "527" money given in prior cycles to Democrats? Those funds were fully disclosed, unlike most this year; so while AFSCME is the biggest spender this cycle, everyone knows who AFSCME is and what it stands for. What about so much of Obama's $750 million in 2008 not being disclosed? The only money that wasn't publicly listed were gifts below $200 under federal law, as if Joe Blow's $50 online to Obama is the same as the Koch brothers giving $10 million to protect their oil and gas interests.

The fight over outside corporate money is forcing smart conservatives to say dumb things. New York Times columnist David Brooks asserts that it's only a tenth of all money spent - but if only averages mattered, then Bill Gates and I would have an average net worth of $27 billion! Money matters when it is concentrated in several score swing House and Senate races, as business donors understand. And George Will's repeated argument that we spend more on yogurt than elections is impossibly glib and proves only to show that he's never spent half his time in a room raising money to buy ads to win office.

As for the complaint that Democrats haven't "proven" that the Chamber of Commerce is using foreign money, on its face the Chamber admits that foreign firms pay membership fees to a fund that ends up financing independent ads; if the Chamber has contrary evidence, let them disclose it. As is said of witnesses given immunity who won't testify, the keys to the jail are in their pocket.

After the likely wreckage of next Tuesday, there will be three possible levees that could be built to stem this flood of legislatively interested money into campaigns.

First, there's congressional legislation on campaign finance reform, especially the DISCLOSE bill, which stalled at 59 Senate votes this year, and Sen. Dick Durbin's Fair Elections Now Act, to provide for public financing of federal elections, with public funds matching a threshold of small donations. The odds against either are now long, given GOP gains next week and existing filibuster rules. But why not keep reminding the public who's for disclosure and fair elections, at least until the next Watergate when incumbents fear voters more than donors?

Second, we need to elect Democratic presidents in 2012 and beyond so that whenever a conservative activist leaves the Court in the next decade, he's replaced by someone who understands that corporate money is not the speech that the Founders were thinking about. (Where's "original intent" when you need it?) Then Citizens United could be reversed just as it reversed years of precedent.

Last, if this Court says it's permissible for big business to purchase democracy, then the Constitution provides the remedy of a constitutional amendment. Most reformers question the plausibility of an amendment because of the difficulty of getting two-thirds of the Congress and three-fourths of state legislatures to go along. But since some 70% of the public in polls oppose Citizens United -- and since a "Stop Corporate Corruption Amendment" would also serve a useful organizing purpose to spur the base to turn out in 2012 -- such a national effort would be both conceivable and strategic. Sen. John Kerry has proposed just such an amendment. Given the stakes here, no one's smart enough to be a pessimist.

Popular uprisings have led to 17 amendments since the original ten in the Bill of Rights, If a Tea Party could arise on the sole, zany premise that reducing government and taxes is The Answer to every question, then perhaps a pro-democracy movement could sprout based on the logic that a captive Congress can't enact essential economic reforms.

As for the argument that ultimately people don't care about money in politics, the right answer is: They should and will. We're approaching or at a tipping point in our democracy when the amount candidates spend on the 2010 midterm is double 2006, when a record $3.9 million was spent by outside interests in one Senate race (Colorado) - and on one day (October 19), when six GOP nominees are in general elections due to their self-financing (Meg Whitman (Ca.), Carly Fiorina (Ca.), Linda McMahon (Conn.), Rick Scott (Fla.), Ron Johnson (Wisc.). and John Raese (W.V.) and when the combination of Buckley v. Valeo and Citizens United are about to make it nearly impossible for non-billionaires and non-businessmen to run and serve.

"I care and you should as well," wrote Mike Tomasky, now the American editor of the Guardian, "unless you think it's a good idea that a few mega-buck corporate titans can give a few million bucks to a group that has to disclose almost nothing and run ads attacking candidate x that say nothing about their real agenda for the country."

Will Public Citizen, Common Cause or the Brennan Center be the Rick Santelli of a post-Citizens constitutional amendment and help launch a Tea Party for democracy?

A version of this piece first appeared in The New York Observer.