Four Years After Citizens United: the Good, the Bad, and the Ugly

Where is the law four years after the Supreme Court decided Citizens United v. FEC? Here's a look at the high lights and the low lights.

January 17, 2014
Citizens United

It's been four years since the Supreme Court decided Citizens United v. FEC. The nation has lived through special elections, governors races, two congressional cycles and a presidential race under the new regime. Where is the law four years later? At a symposium at Stetson Law School on February 28, a group of top scholars will gather to discuss this very issue.

Just days after the decision, President Obama brought national attention to the case by addressing the Supreme Court Justices attending the State of the Union in the Congressional gallery:

"With all due deference to separation of powers, last week the Supreme Court reversed a century of law that, I believe, will open the floodgates for special interests, including foreign corporations, to spend without limit in our elections."

Justice Alito inadvertently made news by shaking his head in reaction. And a national debate began about what the case meant and what the proper policy response should be. Here’s a short catalogue of the high lights and the low lights.

The Good
The good news is states — which Justice Brandeis called ‘the laboratories of democracy’ — are stepping in to adapt their laws to the new type of corporate spending unleashed by Citizens United. States have changed their disclosure laws to capture more of the political spending for the edification of voters. Iowa and Maryland get gold stars for realizing that corporations are different than people. In Iowa, corporate boards must approve political spending and in Maryland political spending must be disclosed directly to shareholders. 

The reaction at the federal level has been more anemic. At the Federal Communications Commission (FCC), the political files of broadcasters in the top 50 markets have gone from gathering dust in file cabinets to being available on-line. And though not a reaction to Citizens United, in 2010 the Securities and Exchange Commission (SEC) issued an anti-pay-to-play rule, which limits the amount of money investment advisers to public pension funds can give to politicians who are in charge of investments. Late in 2013, the IRS started a rule making process to clarify what “political intervention” means for non profits. 

The Bad
The bad news is Congress and the Federal Election Commission (FEC) have been woefully derelict in addressing the new world of corporate spending—including spending by multinational corporations not owned or headquartered in the United States. For example, the Supreme Court clarified in a little noticed case called Bluman v. FEC that foreign nationals still can't spend in American elections. But, we still don't have a clear law as to what counts as a foreign corporation for election law purposes. The DISCLOSE Act would have cleared this up, but the legislation withered in the Senate without 60 votes and died.  

The FEC has also been lingering near some asymptote approaching zero in terms of its actions. FEC rules that do not insist on the disclosure of underlying donors to groups that buy independent expenditure and electioneering communications (i.e. political ads) led to hundreds of millions of dollars in dark money in the 2010 and 2012 federal elections. It’s this FEC approach that allows Alice in Wonderland filings that say that a group spent $100,000 on an ad buy, but that money did not come from anyone in particular.

The Ugly
As a result, voters got a mega dose of negative ads (often of questionable veracity) paid for with untraceable dark money.  In 2010, over $135 million was dark.  In 2012 the total jumped to over $300 million in dark money.  The dark money trend is likely to repeat itself in the 2014 midterm. This means voters cannot tell who is trying to sway their vote. From the corporate point of view, investors can't tell whether their corporation is funding politics.

Solutions

The debate around solutions to Citizens United continues to unfold. Some would go for modest requirements like a new rule at the SEC to require transparency from politically active public companies. This proposal has gained the support of nearly 700,000 public comments at the SEC, but the Commission has yet to act.

Some would try more ambitious reforms like adopting the U.K.’s approach to corporate political spending by requiring shareholder votes before a company can spend in an election. This approach is embodied in the Shareholder Protection Act, which has been introduced in Congress for the third time.

Others focus more on bolstering the tools that candidates need to stay competitive in the new cash soaked environment, including expanded public financing. On the heels of corruption scandals in Albany, New York’s state legislature came tantalizingly close to passing a public financing bill in 2013. In the wake of this defeat, Gov. Andrew Cuomo appointed the Moreland Commission to Investigate Public Corruption. The Commission suggests public financing as a solution.

And finally, some are so distressed by Citizens United that they think only a Constitutional Amendment will get to the heart of the matter. They have been working state by state and community by community, racking up a series of impressive wins. In support of this effort, Professor Lawrence Lessig has been marching across New Hampshire in the January chill. 

Grappling with what the Court did in this case will take citizen engagement and leadership. The good news is the march is on. No one I know in the reform community is giving up.

The views expressed are the author's own and not necessarily those of the Brennan Center for Justice.