The Distillery: A Glimpse Into 'The Coordination Fallacy’

The Distillery: A Money in Politics Digest will provide a periodic look at the latest legal research in the ongoing national debate about the role of money in politics.

A central feature of campaign finance law is that contributions made to (or in coordination with) a candidate can be limited, but contributions made independent of a candidate cannot.  So the Koch brothers can spend $889 million on the 2016 elections, but only $2,700 can go directly to the federal candidate of their choice.

If that seems odd to you, you’re not alone. Since the 1970s, we’ve treated campaign cash a lot like speech. The First Amendment says we can’t limit speech, so we also can’t limit campaign contributions. At least not without good reason.

And not just any good reason. The Supreme Court recently decided that the only reason we can limit campaign contributions is to prevent “quid pro quo” exchanges – essentially bribes – between candidates and contributors. Everything else is just politics. Money given to (or in coordination with) candidates could be a bribe.  Money spent “independent” of candidates can’t be.

So mail your millions to “Ready For Hillary” or “Right to Rise.” These super PACs are openly supporting Hillary Clinton and Jeb Bush respectively, and will spend many millions on their behalf. But if you want to support these candidates directly, you’ll have to settle for a more modest donation.

This distinction has been loudly criticized. Common sense tells us that nominally “independent” spending is not actually independent. Ready For Hillary and Right to Rise will likely have access to information about the Clinton and Bush campaigns that isn’t widely available. Their staffers will probably have key personal and professional connections with the campaigns’ staffs. And they may well employ some of the same political consultants as the candidates’ campaigns.

The logic of this distinction has also been criticized. In their forthcoming paper, “The Coordination Fallacy,” Professor Michael Gilbert and Brian Barnes of University of Virginia Law School argue that we’ve approached the question from the wrong direction. Instead of asking whether coordinated spending is more likely than independent spending to result in bribes, we should ask whether existing limits on coordinated spending are effective at preventing bribes in the first place.

Gilbert and Barnes’ provocative conclusion is that they are not, for one simple reason: the limits are easily circumvented. To be sure, coordinated spending is usually more valuable to a candidate (and therefore more likely to result in a bribe), because the candidate can suggest how the money is spent. But Gilbert and Barnes argue this advantage can be overcome by increasing the amount of independent spending. A $5 million independent ad blitz may be just as valuable (and bribe-worthy) as a $1 million coordinated ad buy.

What’s more, coordinated spending can be made “independent” by routing the money through a candidate-aligned super PAC. You can be confident that your multimillion dollar contribution to Ready For Hillary will benefit candidate Clinton, almost as much as a direct contribution would have.

If there’s no meaningful difference between coordinated and independent spending, why does the law treat them differently? Perhaps it shouldn’t. Gilbert and Barnes suggest this means that coordinated spending limits (just like independent spending limits) violate the First Amendment. But there is another possibility, which Gilbert and Barnes dangle in their final paragraph. If both types of spending create value that risks a bribe, then perhaps both can be limited without violating the First Amendment.

Indeed, our very own Brent Ferguson makes a similar argument in his forthcoming paper, “Beyond Coordination.” Rather than accept the existing line between coordinated and independent spending, however, Ferguson argues the line should be moved, and that it can be moved without violating the First Amendment.

Much “independent” spending is still highly valuable to candidates, and therefore risks bribery. By acknowledging this reality, and identifying the telltale signs that collaboration has occurred, we can expand the definition of coordination to also limit “independent” activity that isn’t really independent. By leaving only truly independent spending unlimited, we can reduce the risk of corruption without creating an obvious loophole that threatens the integrity of our elections and weakens our campaign finance law.

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