How the power of money was unleashed

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In a way, the enormous amounts of money that are spent in U.S. elections reflects the democratic nature of American institutions.

If the political process were controlled by a few party leaders, as during the Gilded Age of the late 19th century and other times in the past, it wouldn’t cost so much to control the process.

Many reforms were enacted in the 20th century to limit corporate power and make the government more democratic.  The Tillman Act of 1907 forbid corporations to contribute to political candidates or elections.  The Constitution was amended in 1913 so that Senators would be elected by the public instead of chosen by state legislators.

Over time limits were placed on campaign spending, and the Democratic and Republican parties began to nominate their candidates through primary elections rather than party conventions.

These reforms made possible the legislation of the Progressive era and the New Deal, which subjected corporations to unprecedentedly strict regulation and rich people to taxation at top rates reaching 90 percent, while providing Social Security, unemployment insurance and extensive public works.

Business leaders made a concerted and successful effort to turn things around.  They altered the climate of opinion, both among educated people and the public.   They supported candidates committed not only to the interests of particular businesses, but support of unrestricted capitalism in general.

And they worked through the courts, just as liberals had, to change the limits of what was legally permissible.

What follows is a (very incomplete) list of milestones in their progress, with an emphasis on the legal milestones.

POWELL MEMO (1971)   Lewis Powell, a corporate lawyer, wrote a memo to the U.S. Chamber of Commerce about how American corporate leaders could take back the country from liberals and progressives.

He said this required a concerted effort not just to defend the interests of particular businesses, but to defend restore the pre-New Deal free enterprise system.

This required not only support of pro-business candidates, but challenging anti-business laws and regulations in the courts, but to make sure that the business point of review is reflecting in college teaching and textbooks, in publishing and in the mass media of communication.

Two months after he wrote this memo, President Nixon submitted his nomination for Supreme Court justice, which was approved.

BUCKLEY vs. VALEO (1976).  The U.S. Supreme Court ruled that while federal law could limit contributions to political parties and candidates, Individuals had a free speech right under the First Amendment to spend their own money to support the parties and candidates of their choice.

FEDERALIST SOCIETY (1982).  The Federalist Society is an organization of lawyers, law students and law professors, founded in 1982, to promote a more conservative and libertarian interpretation of the Constitution.  Justice Antonin Scalia was among the founding members.  Justices Samuel Alito and Clarence Thomas also are members.

WISCONSIN RIGHT TO LIFE vs FEC (1986).  The U.S. Supreme Court ruled that corporations or unions could run ads concerning political issues just prior to elections so long as they didn’t explicitly endorse a candidate or political party.

PAY TO PLAY (1994).  After Republicans gained control of the House of Representatives in 1994, Speaker Newt Gingrich imposed a requirement that representatives would not be considered for the committee assignments they wanted unless they had raised a minimum amount for the Republican congressional campaign committee.

This policy has been continued by both Democrats and Republicans.  Speaker Nancy Pelosi had a “posted price” on committee chairmanships.

SPEECHNOW.org vs. FEC (2010).  The U.S. Supreme Court authorized the creation of independent expenditure-only organizations, known as Super-PACs, which may spend unlimited money in support of candidates.  Unlike ordinary PACs, they may not donate directly to candidates nor coordinate their activities with the candidates.

CITIZENS UNITED vs. FEC (2011).  The U.S. Supreme Court ruled that corporations themselves may spend money in support of specific candidates so long as they act independently and do not coordinate with the candidates.

MOST EXPENSIVE ELECTION (2012).  The Center for Responsive Politics reported that a total of $6 billion was spent in the 2012 national election, making it the most expensive in history.  Some $300 million was so-called Dark Money (see below)

McCUTCHEON vs. SEC (2014).  The Supreme Court removed the $123,200 limit on the total political contributions that a person can make during a two-year period.  Unlike with Super PACs, they don’t have to report their contributions on a regular basis—just with tax returns.

Specific limits still stand of $2,000 per candidate, $32,400 per national political party, $10,000 per state political party and $15,000 per PAC or other political organization.

DARK MONEY.  Certain types of organizations—social welfare and trade associations, incorporated under 501(c)(4) and 501(c)(6)—do not have to report the sources of their donations.
Under the Citizens United and other decisions, they may spend money in support of particular candidates and parties.  However, under penalty of losing their tax exemptions, they must limit political spending to less than half their overall budgets, and, of course, they must not coordinate with candidates of other political parties. less than half their budgets go for political activities and, of course, that they do not coordinate with candidates or political parties.

The Center for Responsive Politics estimated that $300 million in dark money was spent in the 2012 elections.  An estimated one-quarter of the amount was raised by billionaires Charles and David Koch.

LINKS

Yes, Citizens United and Other Court Rulings Led to a Rise in Dark Money by Paul Blumenthal for Huffington Post.

What is political ‘dark money’—and is it bad? by the Center for Public Integrity.

It Could Soon Be Easier For the Media to Expose Dark Money Donations by Government Contractors by Daniel Angster for Media Matters.

The Koch Brothers’ New Brand by Bill McKibben for the New York Review of Books.

The Problem With Citizens United Is Not Corporate Personhood by James Marc Leas and Rob Hager for Truthout.

Tags: Campaign Contributions, Citizens United, Corporate Personhood, Dark Money, Power of Money