Published on The Atlantic.
The Tea Party and Occupy Wall Street are as far apart on the political spectrum as possible, but both cry foul at the capture of government by special interests. Left and right alike agree that elected officials shouldn’t finance their campaigns with contributions from the industries they regulate.
But even stanching the flow of favor-seeking dollars to our representatives won’t address the potential corruption that flows from soft money spent by supposedly “independent” groups. To safeguard our democracy, we need strong rules that will bring transparency and accountability to this outside spending — and an oversight agency that can, and will, enforce them.
The Federal Election Commission isn’t up to the task. It has refused time and again to enforce the campaign finance laws its commissioners are sworn to uphold. It should be replaced.
The dangers of outside money are growing. Non-candidate political spending rose significantly in the last election cycle, and it’s poised to shatter historic records this time around. In 2010, during the first election after the Supreme Court’s Citizens United case paved the way for unlimited spending by corporations and unions, outside spending increased more than 400 percent compared to the prior midterm election. Almost half came from groups that didn’t disclose their donors. If spending increases at the same rate in 2012, we’ll see more than a billion dollars worth of political spending by groups that aren’t accountable to the public.
Voters can’t make informed choices in the political marketplace if they don’t know which people, companies, or interest groups are trying to influence their votes. Accordingly, federal law requires these spenders to report donors who contributed more than $200 for the purpose of furthering the group’s electioneering.
But the FEC has opened up a loophole in the disclosure law big enough to drive a truck through.
Under the FEC’s rules, groups don’t have to disclose their donors unless the donor specifically earmarks the donation for a particular advertisement. It doesn’t take a particularly sophisticated contributor to game the system — just write your check and hand it over with a wink and a nod instead of an express agreement, and your name stays secret. Under the FEC’s rules, money talks — it just doesn’t leave its name.
Inadequate disclosure is only one problem with the agency. The latest FEC episode looks like pure farce, but it could have tragic consequences for our democracy.
Among other results of Citizens United, and another federal court case concerning the group SpeechNow.org, was the birth of a new entity that can take unlimited contributions: the SuperPAC. Contribution limits exist — and have been repeatedly upheld — because they curb corruption. Citizens United declared that independent political spending — undertaken without coordinating or consulting with candidates — cannot corrupt candidates.
Therefore, the FEC concluded in a 2010 advisory opinion, if a PAC declares that it is fully independent and does not contribute to candidates, it need not abide by contribution limits.
Thus was born the SuperPAC. Under the FEC’s opinion, wholly independent SuperPACs can legally receive unlimited contributions — from corporations, unions, and trade associations, among others.
But, on the way to the 2012 election, a funny thing happened with that “wholly independent” requirement.
First, political operatives came up with the “candidate Super PAC” — an entity that is independent in name only, and exists for the sole purpose of electing a particular candidate. All the leading candidates have one, and they’ve effectively obliterated contribution limits.
You’re limited to contributing $2,500 to your preferred candidate? No problem: Just write one check for $2,500 and another to the SuperPAC working to elect your candidate. And make that second check as big as you want!
Now the SuperPACs want to take it even further. Under the campaign finance laws, expenditures that outside groups coordinate with candidates count as “in-kind” contributions. This makes sense: If a candidate wants to put up a billboard and asks a supporter to pay for it, the supporter’s “independent” check paying for the billboard is just as valuable to the candidate as a cash contribution. This coordinated spending must be reported as a contribution (and must comply with any applicable contribution limits).
Contribution limits don’t apply to SuperPACs, however, because they have agreed never to contribute to candidates. And to avoid those limits, they also can’t coordinate their spending with candidates.
But Karl Rove, who engineered one of the first SuperPACs, thinks he has figured out a way around that pesky prohibition. He asked the FEC to rule that the agency’s definition of a “coordinated communication” doesn’t capture advertisements his SuperPAC wants to produce, even though the ads will be “fully coordinated” with candidates, in that the candidates consult on the script and appear on camera.
Or at the FEC. In considering Rove’s request, the FEC has proposed four potential resolutions — and only one of the four concludes that the “fully coordinated” advertisements are indeed “coordinated.” The fact that there’s a possibility the FEC would give the proposal a thumbs-up reveals just how ineffective and out of touch the agency is. If the FEC allows SuperPACs that take unlimited contributions to coordinate directly with candidates, contribution limits would be utterly meaningless.
A decade ago, a blue-ribbon, bipartisan task force convened by the reform group Democracy 21 proposed replacing the FEC with a new agency that would enforce the law instead of subverting it. The agency would be headed by a single administrator instead of the current model, with six commissioners who routinely deadlock on partisan lines and prevent meaningful action. Violations would be adjudicated by neutral administrative law judges, not political appointees. The proposal made sense then, and it makes sense now.
Replacing the FEC may be a heavy lift, and it may seem that incumbent office-holders benefit from loosely enforced campaign-finance laws and have little incentive to change the game. But the center of gravity in politics is shifting from candidates to outside interest groups, and, once in office, officials are only going to experience more pressure from the shadowy groups that helped put them in office.
At a time when congressional approval ratings are in the single digits and our elections are awash in dark money, establishing a credible agency to enforce the campaign laws will increase faith in our system of government by ensuring our elections aren’t sold to the highest bidder. Our democracy is at stake.