Elections: The Role of Money

1. Elections: The Role of Money Based on Is This Any Way to run An Election? By Stephen J. Wayne

2. Does Money Matter? What does money have to do with democracy? A lot, if it: • Gives wealthy people and groups an unfair advantage • Affects who votes and how they vote • Conditions who runs for office and who does not • Affects information the electorate receives about candidates and issues • Affects public perceptions

3. The Price of Running

4. 2008 Presidential Campaign • McCain Raised $368,000,000 Spent $333,000,000 • Obama Raised $745,000,000 Spent $730,000,000

5. Contributing Factors • A more competitive nomination process • Modern campaigning techniques

6. Federal Election Campaign Act • Passed 1971, scheduled to go into effect in 1972 • Objectives: • Reduce the cost of elections • Decrease dependence on large donor • Open contributions and expenditures to public scrutiny • To reduce the Republican Party’s financial advantage in elections!

7. Court Challenges • FECA immediately challenged as unconstitutional • Limits on contributions and spending violated right to political free speech • Funding provisions unfairly discriminated against third-party and independent candidates • Appointment of four of the commissioners by Congress violated the principle of separation of powers

8. 1976 USSC Decision • The High Court ruled • Congress has the right to regulate campaign contributions for candidates in federal elections • Independent spending by individuals and groups is protected by the First Amendment and cannot be regulated • Congress’s selection of four of its six election commissioners is an intrusion into executive authority and is void

9. Back to the Drawing Board • 1976 • Retained contribution and spending limits and public funding of presidential campaigns • Funding voluntary • If candidates accepted federal money, they were limited in how much they could contribute or lend to their own campaigns and how much the campaign could spend • THE FEC was reconstituted with three Republicans and three Democrats, nominated by the President and confirmed by the Senate

10. Consequences • Bulk of resources spent on TV advertising • Voter turnout continued to decline • Congress concerned that funding limitations, emphasis on TV and media-oriented campaigning, and the drop in turnout were all related

11. 1979 Amendment • Enabled parties to raise and spend unlimited amounts of “soft” money for their voluntary efforts to promote voting: • Educational campaigns • Get-out-the-vote drives • Other party-building efforts • Could not be spent advocating a specific candidates’ election

12. Loophole • “Soft” money not regulated • The new rules permitted, perhaps encouraged, the solicitation of large contributions and the expenditure of those funds to help influence the outcome of an election • 1980, 1984: Advantage Republicans • 1994 midterms go to Republicans; Clinton devises a $$$ strategy, launched in summer of 1995 • Republicans play tit-for-tat; the “soft money” wars were on

13. 2002 Bipartisan Campaign Reform Act • AKA McCain-Feingold • Purpose: to ban political parties from raising soft-money funds • Purpose: to prevent parties and non-party groups from using advocacy advertising as a vehicle for promoting particular candidates • Purpose: to increase the amount that individuals were allowed to give to candidates and their parties

14. BCRA • Prohibited national parties from soliciting unregulated contributions • Doubled individual contribution limits to $2,000, indexed to inflation • Party & non-party groups prohibited from mentioning candidates by name in advocacy ads thirty days or less before a primary and sixty days or less before a general election • Allowed federal candidates facing self-financed opponents to raise additional funds to level the playing field – the so-called “millionaires amendment.” • IMMEDIATELY CHALLENGED

15. McConnell v. FEC • December, 2003, USSC upholds major provisions • Reaction: Terry McAuliff, DNC hair, recommends use of nonparty, nonprofit 527 and 501c groups as vehicles to raise and spend “soft” money • Such spending could not be coordinated with eitehr the party or candidates • Beginning in 2003 (before the USSC decision!), these groups began to raise money; aided with seed money donated by billionaire financier George Soros and insurance magnate Peter Lewis

16. Republican Reaction • Outraged Republicans see the move as a ruse and appeal to the FEC, but the commission votes 4 to 2 not to intervene in 2004 • In response Republicans establish their own 527 and 501c organizations • More than $417,000,000 raised by these groups and $420,000,000 spent • Parties took advantage of law to raise more money, facilitated by raised individual limits, computerization of und-raising databases, and deep partisan divisions

17. BCRA Outcomes • Positive: Encouraged parties to improve and broaden fundraising base • Positive: Increased the number of small donors ($200 or less) • Positive: Advocacy advertising limits motivated parties and groups to spend more on grassroots efforts, resulting in higher voter turnout

18. BCRA Outcomes • Negative: Soft money continued to find its way into federal election campaigns • Negative: 527 and 501c groups weakened the control the candidates and their parties had on campaigns because of separate and (maybe) uncoordinated campaigns • Negative: Allowed parties to engage in independent spending, resulting in more being spent on uncoordinated campaigns than in coordinated ones

19. Citizens United v. FEC • January 21, 2010 • The 2002 Bipartisan Campaign Finance Act, aka McCain-Feingold, banned corporations and unions from "electioneering communications" within 30 days of a primary or 60 days of a general election. • considered whether the government could ban a 90-minute documentary called "Hillary: the Movie" that was set to run on cable channels during the 2008 Presidential campaign. Because it was funded by an incorporated group and was less than complimentary of then-Senator Hillary Clinton, the film became a target of campaign-finance limits.

20. Citizens United v. FEC • Justices rejected that limit on corporate spending as unconstitutional. Corporations are entitled to the same right that individuals have to spend money on political speech for or against a candidate. • Justice Kennedy: "Because speech is an essential mechanism of democracy—it is the means to hold officials accountable to the people—political speech must prevail against laws that would suppress it by design or inadvertence." The ban on corporate expenditures had a "substantial, nationwide chilling effect" on political speech, he added.

21. Money Makes the (Political) World Go ‘Round • Soft money still flows into federal elections • The cost of campaigns continues to escalate • Most of the money comes from a small group of wealthy people • The connection between contributions and expenditures and the special treatment of large donors continues to challenge the notion of democracy in the electoral process

22. Are Elections Too Expensive? • Former House Majority Tom DeLay: “Americans spend twice as much per year on yogurt than they spend on political campaigns.” • 1996: Dems spent $M363.1; Reps spent $M558.2 • 2000: Dems spent $M510.7; Reps spent $M679.8 • 2004: Dems spent $M655.6; Reps spent $M752.6 • Elections more expensive, but public participation is little improved

23. Presidential Candidates • 1996 $M192.2 • 2000 $M239.9 • 2004 $M343.1 • 2008 $M1,063!!!

24. Access & Influence: Any way to Run an Election? “Since 1990, labor unions have contributed over $667 million in election campaigns in the United States, of which $614 million or 92 percent went to support Democratic candidates. In 2008, unions spent $74.5 million in campaign contributions, with $68.3 million going to the Democratic Party. Already, unions have contributed $6.5 million to the 2010 elections, and $6 million has gone to Democrats, according to the Center for Responsive Politics in Washington, D.C. “ American Institute for Economic Research

25. Thinking about Mayhew • The proximate goal is… • Democracy is damaged if the public believes that the system is of, by, and for special interests • A matter of equity: businesses outspend consumer groups, tend to gain the most

26. Dilemmas • The need for money has come to obsess candidates; the wealthy exercise the most influence, undermining the equity principle • Political speech = political spending: can campaign spending be equalized without harming constitutionally protected freedoms? • The inability to resolve the problem contributes to public cynicism in the electoral system: Government appears to be for sale to the highest bidder

27. A Global Problem • “ In Australia, there is a growing trend for MPs to become directly involved in the corporate fundraising efforts of their parties. Ministers and staff are encouraged to engage with donors and business supporters, with the aim of raising cash for their political parties. It is known for business leaders to pay $1400 to get near a federal minister.”

28. Discussion • Is money really as corrupting an influence on government and politics as people believe? • Do the wealthy exercise disproportionate influence on the conduct of elections and, through that influence, on the operation of government? • Are American elections really too expensive? What would be a reasonable criterion by which to evaluate whether or not costs were excessive? • Can money in elections be regulated without violating First Amendment protections of freedom of speech? If so, how? If not, why not? • Does money buy electoral success?