As it’s become apparent that the 2016 US presidential election campaigns are in full swing, I would like to devote a post to the issue of campaign finance. As 2016 draws upon us, we should expect to see more political ads in the media featuring candidates asking us to cast their votes. Now discussing campaign campaign finance may not be as interesting as other issues the media and the populace like to talk about. But in our day in age, it’s apparent that money has a profound influence in political policy in the United States. Wait a minute, money has a profound influence in pretty much everything. It’s just money has a higher influence in politics than most walks of life. While political candidates may act like prima donnas now and then, we need to note that it’s through elections that we choose our government leaders. Whoever’s in government usually shapes social policy. And social policies affect our lives in more ways that we’d like to admit. So yes, money does play a crucial role in politics, especially when it pertains to who’s giving it.
But aren’t elections decided by votes? Absolutely. And doesn’t everyone have only one vote? Sure. However, if you want to run for elected office, you need to promote yourself as a candidate in your constituency. To do that, you need to tell voters who you are and why they should choose you some time before the election actually takes place. In our mass media culture, it’s best you start early. Now candidates promote themselves in a variety of different ways like personal appearances, endorsements, and advertising through signs, mailings, social media, newspapers, radio, television, the works. All that costs money. So how will get it? From anyone willing to give it to you which is the reason why candidates hold fundraisers as well as have mass mailings to solicit donations.
However, although every US voter is equal in electoral value, they are not all equal financially nor as willing to give money to a political candidate. In fact, more than 90% voters don’t since well, they either can’t afford to or don’t have much interest to. Giving money to a political candidate isn’t like giving to a church, charity, PBS station, non-profit, college, or cultural establishment. You aren’t giving money because you have an affinity for it or want to do something good. No, people give money to political candidates because they want them to win so they can put forth social policy that they want. Still, even among those who contribute to political campaigns, most will contribute no more than $200, while some will donate hundreds or thousands. If you’re a political candidate, chances are you’re going to actively seek political donations from the entities who contribute the most campaign cash. In 2010, small donors only contributed to 13% to congressional candidate funds (which doesn’t include PACs that make up 23%). Large donors contributed to 48% of campaign donations. But here’s the thing, most big money donors won’t just hand you a large chunk of cash right off the bat. No, for before they give you the money, they want to know where you stand on the issues and what you’d be willing to do for their interests. And you’ll have to curry to their good graces by promising them that you will do everything you can to please them once elected. If you think it’s a form of bribery, you’re probably right. Yet, as far as I know it’s perfectly legal. Nevertheless, the more big money donations you have, the more you can spend on campaign advertising. And the more you can spend on advertising, the more likely people will vote for you. So everything’s fine, right?
Well, not really. While government officials are elected to represent the people and fulfill campaign promises, we all know all too well that it’s not exactly the case. Yes, candidates make promises on the trail to get them to vote for you. But that doesn’t mean all will be fulfilled, given the realities of the political landscape. But since these rich donors give money to these candidates, then they believe in the issues they stand for, right? Actually it depends on the contributor. Sure there are donors who do contribute money to those who share their views or party affiliation. But there are plenty of other donors who just want to gain political influence and will contribute to any candidates regardless of party or issue stance (even in the same race). All they care about is having friendly access the candidate so they could support measures they want, even if their wishes contradict the campaign promises and party platform. They may even contribute money because you oppose their interests and just want you to keep quiet. Hell, they don’t care if their wishes works against the candidate’s conscience or their constituents. And sometimes not even the laws. Of course, while this may put some politicians in a dilemma, many tend to follow the wishes of these big contributors to keep their cash flowing. After all, they need the money for reelection and don’t want the other guy to have more influence and capital than them. But do these political money deals benefit the American people?
Actually no. The fact that politicians are more likely to listen to large donors than their constituents suggests that there’s something very wrong in our political system. Yes, people elect their government officials but since they depend on campaign contributions to promote themselves, they usually tend to side with their backers who tend to have their very own lobbyists. After all, most incumbents usually get reelected so those voters aren’t going anywhere. Besides, the biggest incumbent supporters are usually long term donors they’ve had a relationship with every election year. To them, giving is a way of life and a cost of doing business all for the sake of having access to a politician, which leads to more power and influence on policy. But some of these donors can be fickle and might shift their money to the politicians in the majority party whenever the balance of power changes. And it doesn’t help that the fundraising never stops since an successful US Congressional campaign costs $1.4 million on average. But US Congressmen are elected every 2 years so it’s a rather short time window. And US Senate campaigns cost more than 6 times as much. But as money becomes more important in politics, the politicians seem more like a lackey to their rich overlords than the constituents who they’re supposed to represent. This leads to most of the American people having a considerable less political influence in politics, less access to lawmakers, and less of a chance of having their interests heard. More often than not, they become nothing but mere pawns who tend to cast their vote against candidates who may not represent their best interests for various reasons. But it’s mostly because they either know the guy, party line, or that they have no other choice. Thus, as big donors tend to have more access to politicians, American citizens lose out.
But don’t they have rules and regulations on campaign finance? We have a Federal Election Commission (FEC) that’s supposed to enforce and oversee campaign finance laws, it’s notoriously ineffective. However, as an organization that’s supposed to monitor lawmaker behavior, it’s no surprise that it was designed this way even if it was created in response to Watergate. And being the elected politicians they were, lawmakers made sure that the campaign watchdog would have a very tight leash and interfere as little in their campaigns as possible. I mean they set the FEC up as a 6 member body so no ruling can go into effect without a 4 vote majority. This is often impossible since the FEC is evenly split with 3 Republican as well as 3 Democratic commissioners, each nominated by their respective parties. Tie votes are often commonplace on some of the most important campaign finance issues which make the system riddled with loopholes. Because of this, the agency often takes years to resolve complaints and political operatives have learned that they can live on the edge of the law with little fear or interference from the FEC. And judging by the political culture these days, I’m sure the people behind the FEC knew what they were doing.
Still, despite it’s reputation, the FEC is quite effective with improving disclosure for campaign contributions for the most part. But even this has its limitations. And then there’s the matter with the Citizens United Supreme Court case in 2010, which did away with many campaign finance laws already on the books as well as opened up unlimited spending by corporations, unions, and other independent groups. This led to the 2010 elections seeing an unprecedented flood of outside money flowing into congressional races all over the country. Tens of millions of dollars came from secret donors whose identities will never be known. Much of this campaign spending goes to funding political advertisements to elect (or defeat) candidates running for office. However, the money in question can only be used for independent expenditures (not direct contributions to the candidates’ campaigns). And whatever ads are produced can’t be coordinated with the candidates. Of course, it’s no small stretch to say that such measures aren’t always enforced. Thus, rich donors didn’t particularly give a shit since they want to contribute as much money as they want with little or no consequence. However, they didn’t win when it came to disclosing political contributions on account that their right to privacy isn’t as important as the public’s right to know who’s funding who if amount is over $200. The Supreme Court has also said that disclosing campaign contributions is the best way to guard against political corruption. Of course, this brings me to the outside political organizations created to raise campaign funds for elections:
PAC (political action committee)- an organization designed to specifically pool campaign contributions from members to donate for political purposes whether it’s to campaigns for or against a candidates, ballot initiatives, or legislation. According to the Federal Election Campaign Act (FECA), at the US federal level, an organization becomes a PAC when it receives or spends more than $2,600 for the purpose of influencing a federal election. As for state level, the money pertaining to state elections in PAC designation varies. There are many types depending on political purposes and how each one spends their money. Still, you’d see at least one in almost every type of political advocacy organization you could think of. However, PACs have to follow certain criteria which includes:
- Though corporations and labor unions may sponsor a PAC as well as provide financial support through administration and fundraising, they can’t contribute through their own treasuries.
- Union-affiliated PACs may only solicit contributions from members.
- Independent PACs may solicit contributions from the general public and must pay their own costs from those funds.
- Federal multi-candidate PACs may contribute to candidates as follows:
- $5,000 to a candidate committee for each election (primary and general elections count as separate elections)
- $15,000 to a political party per year
- $5,000 to another PAC per year
- PACs may makes unlimited expenditures independently of a candidate or political party
The types of PACs consist of the following:
Connected PACs- designated as “separate segregated fund” (SSF), these are sponsored by labor unions and corporations. These PACs may only raise money from a “restricted class” generally consisting of managers and shareholders for corporations and members for unions and other interest groups. Sponsor may not contribute to the PAC directly but can absorb costs of administrative operations and soliciting contributions. As of 2009, there were 1,598 registered corporate PACs, 272 related to labor unions, and 995 to trade organizations.
Non-Connected PACs- basically financially independent PACs that must pay for its own administrative expenses with contributions it raises. May be financially supported by an organization but such expenditures are considered PAC money which are subject to the dollar limits and other requirements of FECA. May accept funds from any individual, connected PAC, or organization. Used by members of Congress, political leaders, ideology, and single-issue groups. As of 2009, there were 1,594 registered, the fastest growing category.
Leadership PACs- non-connected PACs sponsored by elected officials and political parties with independent expenditures, which isn’t limited (as long as it isn’t coordinated with the other candidate). Nor can they be used to support the official’s own campaign. Set up since elected officials and political parties can’t give more than the federal limit directly to candidates. Can fund travel, administrative expenses, consultants, polling, and other non-campaign expenses. Used by dominant parties to capture seats from other parties. Between 2008 to 2009, these have raised more than $47 million.
Super PACs- Citizens United gave rise to this new kind of PAC designated as “independent-expenditure only committees,” because they may not make contributions to campaigns or parties directly but can generate any political spending independently of the campaigns. Unlike other PACs, there is no legal limit on funds they can raise from individuals, corporations, unions and other groups, provided they are operated correctly. As of August 2012, 797 of these have raised $349 million, with 60% of that money coming from just 100 donors, according to the Center of Responsive Politics. Also, Stephen Colbert started his own Super PAC for his show to inform his viewers how it’s done (but he donated all the money he raised to charity).
Aside from the PACs, there are some other organizations and entities also known to raise money for political campaigns as I list below:
501(c)(4) Organizations- defined by the IRS as “social welfare” non-profit and tax-exempt organizations but may also participate in political campaigns and elections. That is, as long as its “primary purpose” it promoting social welfare and not political advocacy (50.1% of their spending efforts much go to “social welfare” activities or “promoting in some way the common good and general welfare of the people of the community.”) Like Super PACs they can accept unlimited amounts of money from corporations, unions, or other interest groups. However, they are not required to disclose spending on their political activity or information on their donors unless they give for the express purpose of political advocacy. Traditionally these have been civic leagues promoting social welfare or local associations of employees with limited memberships to a designated company or a municipality or neighborhood. And often these net earnings went exclusively to charitable, educational, or recreational purposes. Groups like Planned Parenthood, the National Rifle Association, the NAACP, the National Organization for Marriage, the Sierra Club, and the League of Conservation Voters have been active in lobbying and have long held 501(c)(4) status before 2010. Citizens United has seen a dramatic rise of these organizations that contributed to a sharp increase in outside campaign spending from undisclosed sources from a bit more than 1% ($700,000) in 2006 to 44% ($1.27 million) in 2010. In 2012, that number was more than $308 million. And as far as we know much of this anonymous donor money went to Republican organizations and candidates since it helped topple the Democrats in Congress that year. And as of August 2012, two of the biggest 501(c)(4) organizations (Crossroads GPS and Americans for Prosperity) put more money into the presidential campaign than all the Super PACs combined, according to Pro Publica. However, these two groups were much less successful in that year’s presidential election (because Obama still won). Along with Super PACs, it’s also said that these organizations tend to coordinate among themselves and each other. Nevertheless, almost every advocacy organization has one. Also, Stephen Colbert talked about these on his show as well.
527 Organizations- tax-exempt organizations which aren’t regulated under state and federal campaign finance laws because they do not “expressly advocate” the election or defeat of a particular candidate or party. When operated within the law, there are no limits on contributions to these groups or restrictions on who may contribute. Nor are they subject to spending limits either. However, they must register with the IRS, disclose their donors, and file periodic reports of contributions and expenditures.
Political Parties- while they may do more than just raise campaign cash, national and state party committees may contribute funds directly to candidates and make additional “coordinated expenditures” for their nominees in general elections. But these are subject to FECA limits. However, national party committees may make unlimited “independent expenditures” to support or oppose federal candidates. Nevertheless, since 2002, national party committees have been prohibited from accepting any funds outside FECA limits.
Bundlers- actually these are individuals who can gather contributions from many individuals in an organization or community and present that sum to the campaign. They’re often recognized with honorary titles and sometimes exclusive events featuring the candidate. It has evolved into a more structured form in the 2000s and we know that all high profile candidates use them. However, there’s currently no law requiring disclosure of campaign bundlers as long as they’re not active, federally registered lobbyists. Nevertheless, the amount raised by bundlers has grown significantly with each election year with average contributions to winning presidential candidates reaching $186.5 million in 2012. We should also note that bundlers are more likely to be appointed to administration posts. In the Obama administration, it’s apparent that 80% of those collecting over $500,000 took key administration posts. George W. Bush appointed about 200 bundlers to posts in his administration.
I know writing about this campaign finance stuff might seem boring and meaningless to you in our political process. But it’s not. In fact, knowing about such organizations can explain how campaign donations for elections shapes the political landscape. Besides, noting how campaign finance works tends to explain a lot about what’s going on in this country. The rise in political activity pertaining to 501(c)(4)s was what led to the IRS scandal in 2013 as employees tried to create ways to weed out organizations that applied for 501(c)(4) status for being overly political. Their methods might not have been specifically appropriate but you really couldn’t blame the IRS for suspecting certain applicants of being overly political, particularly if they support conservative or Tea Party policies. This is especially the case if the recent 501(c)(4)s like Karl Rove’s Crossroads GPS and the Koch Brothers’ Americans Prosperity which many people seem to believe as having little to do with promoting the social welfare whatsoever. Following the money in Washington also explains other recent events as well. Powerful healthcare lobbies help explain why it was so difficult for Democrats to pass the Affordable Care Act despite a Democratic presidential administration and significant control of both congressional houses. The significant influence of the Koch Brothers and industry on Washington help explain the pervasive influence of climate change denial among Republican politicians and why so many polluters shift clean up costs to taxpayers during environmental disasters. And the NRA’s influence helps explain why no gun control legislation has ever been passed in either congressional house, despite the prevalence of mass shootings in recent years.
But what the nature of campaign finance really helps explain is the relationship between Washington and Wall Street. The fact that the financial sector tends to be the largest contributor to federal office candidates and parties explains why the federal government has been so reluctant to prosecute Wall Street after the 2008 recession. It helps explain why many Republicans have vociferously opposed raising taxes and instilling regulation but supported bailouts. Yet, the financial sector also contributes money to Democrats which doesn’t make passing financial reform on Capitol Hill any easier. Just so you know, the financial sector contributed $468.8 million to federal campaigns and candidates in 2008 alone (80% more than in 2006) and has spent more on K Street lobbying than any other sector. As of 2014, the financial sector has spent nearly $500 on lobbying as well reports 855 clients and 2,358 lobbyists. Thus, it’s a very powerful influence in Washington as well as a very corrupting one. Wall Street’s dubious practices basically led to an economic collapse and recession in 2008 as well as put so many people in financial ruin, possibly for the rest of their lives. But because of the financial sector’s hold on Washington, the federal government walks a fine line between its obligation to the general public and the desires of powerful backers many of them committed actions that should’ve put them in jail.
Still, while this post appears to focus on the nature of campaign finance in Washington, the corrupting influence of the political money culture doesn’t just affect the federal government alone. State governments have their officials supported by the same kind individuals and organizations with the same agendas and in very much the same way. Of course, what’s different at the state level is voters can elect more people to office like high court justices and cabinet positions. However, there’s a special nonprofit organization founded in the 1970s called the American Legislative Exchange Council (ALEC) consisting of state legislators and private sector representatives. Now according to ProPublica, ALEC is said to produce model legislation that is heavily influenced by big business and industry as well as “works to advance the fundamental principles of free-market enterprise, limited government, and federalism at the state level through a nonpartisan public-private partnership of America’s state legislators, members of the private sector and the general public.” Each year almost 1,000 bills based on ALEC’s “model” legislation are introduced in state houses across the country of which about 200 become law. Now these ALEC sponsored bills advocate a wide range of measures like reducing corporate regulation and taxation, combating illegal immigration, loosening environmental regulations, preventing Medicaid expansions and other state-related Obamacare policies, reducing pensions for public employees, retaining the minimum wage, privatizing prisons as well as enacting harsh sentencing laws, deregulating the telecom industry, privatizing public education, tightening voter identification rules, weakening labor unions, and promoting gun rights. It also acts as a networking tool among Republican state legislators, allowing them to research conservative policies implemented in other states. Not to mention, it’s funded almost exclusively by big business.As of 2013, ALEC’s membership consists of 1,810 state legislators representing nearly a quarter of legislative seats in the US as well as 300 corporate, foundation, and private-sector members.
Now it’s very simple to explain why politicians and private entities would want to join this organization if you know a anything about campaign finance. ALEC allows state legislators to be acquainted with potential campaign backers while it helps corporations gain access to and form long term relationships with politicians.They also hold meetings on all expense paid trips in cities across the country that are said to resemble vacations (sometimes funded by taxpayer money by the way). Another way to explain its appeal was how it helps draft model bills through task forces during their meetings. Public and private sector members make up each of their task forces with the later typically being corporate or think tank representatives (who have veto power over drafted model bills). These task forces generate model bills that members can customize an introduce for debate in their own state houses after being approved by their board of directors who comprise of all legislators. In your 2016 Republican lineup, ALEC-related contributions have gone to Marco Rubio, Bobby Jindal, John Kasich, Lindsey Graham, Rick Perry, and Scott Walker as well as held some considerable influence in Chris Christie’s gubernatorial administration in New Jersey. Nevertheless, it’s a hugely influential lobbying organization in the states which it has always denied to keep its tax-exempt status. Yet, what it does can be seen by most Americans as nothing but the very definition of lobbying. But media scrutiny has grown after being publicized by liberal groups and news outlets like The New York Times and Bloomberg Businessweek since 2011 and for a good reason.
However, while I might pick on ALEC for supporting measures I think hurt this country, I think all Americans should be very concerned about this organization regardless of their politics. Because if their politics doesn’t trouble you, its conduct should since this conservative bill mill is well known for its lack of transparency. Since the 2000s many news organizations have found that ALEC hasn’t been friendly to reporters much and usually doesn’t grant interviews. They may open policy seminars to reporters and other nonmembers but they will receive public conference agendas that don’t include names of presenters, the lists of legislative and private-sector board chairs, or the meetings’ corporate sponsors. Task-force meetings and bill-drafting sessions are held behind closed doors mostly taking place at high end hotels in American cities, which resulted in reporters being turned away. ALEC doesn’t disclose membership lists or the origins of its model bills. Instead lawmakers generally propose ALEC-drafted bills without disclosing authorship as an newspaper found out in 2012 after analyzing 100 bills proposed by the Christie administration in New Jersey.
Now it’s one thing for businesses to lobby for business friendly legislation drafted in the state house committee. But a lobbying organization drafting model bills behind closed doors for lawmakers to introduce and adopt them without disclosure seems like a violation of the democratic process, if not then the US Constitution. In fact, I’m not sure if the idea of a political organization drafting a model bill in secrecy is even legal or ethical, especially if it promotes legislation benefiting big business at the public expense. It also excludes not just Democratic legislators but also the American people from having a say in drafting legislation, which ALEC puts in highly partisan politicians and private sector hands. And in many ways, I see ALEC’s methods of secrecy as as a way for corporations and politicians to put their legislative ideas forward and avoid public scrutiny by opposing forces like liberals, the media, or the American public. But while public scrutiny can be annoying and disruptive, it’s an essential component in our democracy which should never by taken away even by some private and right-wing lobbying organization. While ALEC claims that their organization is supposed to give corporations a voice and a vote, they also want to make sure to deny a voice to anyone who potentially disagrees with them. It also shows that this organization only cares about enacting its own agenda and would do so through any means necessary. It doesn’t care whether its proposed legislation works at the public interest’s expense to enhance corporate profits. Not only that, but this organization has existed for over 40 years and prior to 2011, almost nobody knew it existed outside its membership until investigative reporters blew the whistle on it. And as of 2015, there are still people who’ve never heard of this organization. Now people have talked about certain shadow government organizations as the stuff of conspiracy theories such as the Illuminati. But ALEC is a real organization that functions exactly like one that reflects the relationship between money and politics at its worst. However, thanks to investigative reporting exposing the organization, ALEC has become a toxic brand as well as experienced an exodus of politicians and corporations.
Now I understand that American campaigns will always be tied to money and special interests to a certain extent even if I may not always like it. However, we need to understand that corporations are not people and money isn’t speech. Nor should political access and influence be a pay to play field. Yes, money buys influence and influence buys votes. But sometimes political money games prevent a substantial number of citizens from having a political voice in their governments all because they don’t contribute thousands of dollars to their representatives. And I mean at the state and federal level. Sure I know that liberals aren’t above these political shenanigans either as I’m well aware of it. But we have to understand that most big money contributors are more likely to support Republican policies, especially since most campaign donations come from big business. And since 2010, those who’ve benefited from Citizens United and its impact have been Republican politicians. Besides, as far as I know, the Democratic Party doesn’t have its own shadow government organization generating model bills for them. Or at least one as powerful or influential as ALEC. Thus, my focus on contributions and lobbies in Republican campaigns is based on more than my liberal political biases here. But the growing influence of money in politics hasn’t been good to our democracy its created a system where incumbents almost always win, the races are not even competitive, politicians are at the mercy of big donors and their lobbyists, and a significant chunk of Americans feeling like they don’t matter in the political system.
Now I know politicians don’t want to implement campaign finance reform since it hurts their self-interests. But since money tends to talk, we need regulations to keep those with the big money at bay. Or else such influence might make us wonder whether our political representatives work for the voters who elected them or the donors who bankroll them that consist of a wealthy few. Yes, I know that some people don’t like regulations they think infringes on their rights. But regulations also protect the rights of those who may otherwise be sidelined by the rich and powerful special interests. And powerful special interests care more about themselves and don’t care if the public has to suffer for policies they want passed. Besides, we want our elections to be fair while big money tends to offset the balance, especially in races involving incumbents who have access to considerable financial resources. Our country was founded on freedom of the people, by the people, and for the people with a government to promote the general welfare and secure the blessings of liberty, for ourselves and posterity. And if we want that, we need to acknowledge and do what we can to keep big money from undermining these ideals. Yes, I know that money is necessary for everything, but it doesn’t have to be the bottom line in politics or how representatives conduct their business. We can start with overturning Citizens United so we can set limits on campaign spending by corporations because we need to.
To learn more:
OpenSecrets.org: The Center for Responsive Politics OpenSecrets.org: Money in Politics — See Who’s Giving & Who’s Getting
ALEC Exposed from the Center for Media and Democracy ALEC Exposed