I’m pleased to welcome Bob Bauer to the ELB Book Corner, writing about his new book, The Unraveling. Here is the second of three guest posts:

One chapter of the Unraveling is devoted to my long-standing view that the standard reform arguments for extensive federal campaign finance regulation are misguided. Much of the reform case rests on dated or skewed assumptions about how the political process operates. Too little account is taken of the dismal experience with the efficacy and cost of complex rules. In the end, key recurring issues of money-in-politics require holding political actors accountable for their ethical choices.

It is important, first, to picture as clearly as possible the motives of the most influential financiers of the political system. Many are not interested in putting their campaign spending to use in buying policies for their own benefit. They pursue ideological commitments and party preferences:  they look to be in on the action. This was true in the past, as in the role that big money played in the challenges to Lyndon Johnson’s and George W. Bush’s reelection campaigns. It is true today in both parties. Consider, most recently, the role of those major donors who pushed hard for President Biden to withdraw from the ticket, pledging to withhold any further funding unless he did so. 

Those who have narrower policy objectives, such as major industries or companies experienced in federal legislative affairs, generally have modest appetites for campaign spending. It can be political messy and functionally inefficient:  lobbying is often the far better route to the achievement of their goals.

What about politicians on the other end of these relationships, who have to raise money and risk potentially trading policy commitments for cash? It has become clear that the outright bribe as a problem is less common than the advantage of money in achieving “access.” This is complicated, because those who support a candidate or party may reasonably expect recognition— calls returned, requests for appointments granted. The Roberts Court has given a measure of constitutional protection to this politics of “access.”

The law struggles with defining and enforcing the line between the gaining “access” and sale of office. The answers, which can never be wholly clear or satisfactory, lie in ethical politics.  Years ago, in his book, Ethics in Government, Paul Douglas offered the example of a “decent interval” a politician should observe between casting a vote and proceeding to raise money off of it. In the famous “Keating Five” case, the Senate Ethics Committee censured one United States Senator who, it found, “linked” to an impermissible degree fundraising and the conduct of his office. The best politicians—the most ethical— try to avoid doing this, and many do a decent job of it.

I note in the book the time and effort federal campaigns and their lawyers put into “vetting” their donors. The vetting standards established by politicians are a meaningful measure of ethical self-definition. The law may allow them to take certain money; they may—and in particular cases, should— decide not to do so. The public can then evaluate the choice they make.

My views annoyed some Democrats but also sparked clashes with the late Senator and campaign finance reformer John McCain. He urged my party to fire me. He even suggested that I was motivated by the legal fees I earned. That was a bit much. I support reasonable campaign contribution limits, source restrictions, and disclosure requirements, but history shows that expectations of what the law can and should do are appropriately modest. On the really hard questions, we must hold politicians and parties accountable for choices beyond the reach of law but squarely within the domain of ethics.     

I am pleased to welcome Diana Dwyre and Robin Kolodny to the ELB Book Corner, authors of the new book, The Fundamentals of Campaign Finance: Why We Have the System We Have (University of Michigan Press). The 30% discount code for ELB readers is UMF24. The book is also available in open access: https://doi.org/10.3998/mpub.9813302. This is the final of three posts.

Things Stay the Same

We do not offer a plan for reform in the final chapter of our book. Instead, we evaluate reform efforts made in U.S. states and by local governments to change the type of candidates who run for office, increase competition between candidates, stimulate voter engagement and turnout, reduce the amount of electoral spending and the time candidates spend fundraising, and encourage small donor participation to limit the influence of wealthy donors.

None of the reform efforts fully achieve their goals because they do not happen in a vacuum.  As a federalist system, federal supremacy can limit or stop reforms entirely. Corruption is a structural concern in capitalist democracies, and freedom of speech leads to unequal political access. Meanwhile, elections at different levels of government happen alongside reformed systems, causing endless confusion and slow (at best) enforcement.

These and other fundamental features of the U.S. system explain why reform efforts are set up to fail. Our story of the rise and fall of the 2002 Bipartisan Campaign Reform Act (BCRA) makes this clear, as the courts picked off one limit after the other in the name of free speech. Moreover, campaign finance actors often find ways around disclosure requirements and contribution limits. Prohibitions on what sort of campaigning can happen just before elections bump up against First Amendment claims and are bound to be challenged for going too far. Attempts to mandate that personal wealth cannot be spent on political speech fell easily. Even literally giving people money (vouchers) to pass on to candidates isn’t enough inducement to make Americans engage with elections.

We do not oppose reform. We recognize, however, that reforms often fall short of their intent. For instance, gridlock is baked into the FEC’s structure with six commissioners who can cast a 3-3 vote and thus take no action, and a good deal of campaign finance activity is not disclosed, such as the identity of donors to and much of the spending by 501(c) nonprofit organizations.

If the Supreme Court continues to pursue its deregulatory approach that interprets limits on campaign spending as limits on political free speech, it will be difficult to curb unlimited spending. Even if the Court began to allow some restrictions (assuming today’s highly polarized Congress could enact such rules), or if the Constitution is amended to overturn Citizens United (highly unlikely), elections in the U.S. would continue to play out within a system that privileges those with resources. Business interests already spend significantly larger amounts on lobbying than campaign activity, and the most effective lobbying efforts now focus on regulatory agencies in the post-legislative phase of policymaking. Additionally, we show in chapter 6 how 18 unopposed House candidates in 2020 still raised significant amounts of money, most of it from traditional PACs. Not every monied interest puts their energy into changing the players.

Fundamental features of the U.S. political and economic systems limit the options available for erecting guardrails designed to promote political equality. However, the nature of communication has shifted dramatically so that the voices of the masses may more easily be heard. The internet and social media allow virtually anyone to engage in politics for little or no cost, and ideas can gain enough traction to influence political engagement. Thus, we remain optimistic that money is indeed not everything in American politics.

I am pleased to welcome Diana Dwyre and Robin Kolodny to the ELB Book Corner, authors of the new book, The Fundamentals of Campaign Finance: Why We Have the System We Have (University of Michigan Press). The 30% discount code for ELB readers is UMF24. The book is also available in open access: https://doi.org/10.3998/mpub.9813302. This is the second of three posts.

The Triumph of Free Speech

How do we both promote freedom of speech in American democracy and allow everyone to be heard? The answer is, we don’t. Today’s court doctrine on campaign finance clearly privileges freedom of speech over any other democratic value. We highlight key cases since the 1970s to show how the tension between limiting speech or limiting access happened incrementally as cases focused increasingly on the free speech rights of contributors and spenders. Whose speech is free? The 1970s reformers thought the distinction between an individual person and a corporation was clear. But critics pressed the court to allow exceptions first for non-profit corporations, then for corporations with a public purpose, and eventually for any corporation.

There have been many changes since 1976 when the Supreme Court declared in Buckley v. Valeo that contributions made directly to candidates and parties may be limited because they can cause corruption but independent expenditures do not pose a corruption concern and limiting them violates the First Amendment’s guarantee of free speech. At first, the Court upheld laws they agreed could combat corruption, such as their decision in McConnell v. Federal Election Commission (2003) upholding the 2002 Bipartisan Campaign Reform Act (BCRA) ban on party soft money. By 2007, the Court shifted its campaign finance jurisprudence in a decidedly deregulatory direction to protect corporations’ free speech rights.

President George W. Bush’s 2005 appointments of John Roberts as Chief Justice after William Rehnquist’s death and of Samuel Alito to replace retired Justice Sandra Day O’Connor gave the Court a conservative majority that applied the freedom of speech standard to rules designed to reduce the influence of money in American elections to curb corruption. Moreover, as Ann Southworth documents in Money Unleashed: The Campaign to Deregulate Election Spending (Chicago 2023), as the new conservative majority emerged, a network of conservative lawyers, advocacy groups, government officials and big contributors successfully challenged many campaign finance restrictions in the courts on First Amendment grounds. These deregulatory decisions have had a dramatic effect on who funds U.S. elections.

The relative participation of various campaign finance actors has shifted dramatically from strongly regulated candidates, parties, and PACs to hardly limited 527 groups, 501(c) nonprofits, and especially super PACs. In 1996, PAC contributions and independent expenditures constituted 84% of all non-candidate spending in federal elections, and party contributions, coordinated and independent expenditures were the remaining 16%. In 2002, the last election before BCRA, party soft money was 60% and traditional PAC contributions and independent expenditures constituted 35% of total non-candidate spending. The 2010 Citizens United and SpeechNow.org decisions extended political free speech rights to all corporations to raise and spend unlimited amounts, paving the way for the emergence of super PACs. By 2012, super PACs did over 32% of the non-candidate spending, traditional PACs 22%, and parties only 14%. By 2020, super PAC spending constituted almost 60% of all non-candidate spending, while traditional PACs made up only 9% and parties only 8% of the total. This is a striking shift in the relative participation of campaign actors from PACs (once the big spenders) and parties (thought to be the most accountable and least polarizing campaign actors), which must raise money in limited amounts to combat corruption and fully disclose all their contributors, to super PACs, which can raise and spend unlimited amounts and may receive unlimited anonymous funds from 501(c) nonprofits that do not have to disclose their contributors. So, whose speech is free?

I am pleased to welcome Diana Dwyre and Robin Kolodny to the ELB Book Corner, authors of the new book, The Fundamentals of Campaign Finance: Why We Have the System We Have (University of Michigan Press). The 30% discount code for ELB readers is UMF24. The book is also available in open access: https://doi.org/10.3998/mpub.9813302. This is the first of three posts.

Capitalism, Campaign Finance, and Policymaking

We are grateful to Rick Hasen for the opportunity to post about our new book, The Fundamentals of Campaign Finance: Why We Have the System We Have. Our posts highlight the book’s arguments, using edited excerpts from the book.

Today’s post highlights one of the book’s central themes: the U.S. campaign finance system exists in and is fundamentally shaped by the American capitalist economic system. This is not news to ELB readers, but it helps explain why our book does not offer a remedy for a broken campaign finance system. From the first elections in the new republic to today’s complex system of rules for financing elections at all levels, free market principles and practices influence how money is raised and spent in elections, who gets elected, and what policy solutions are possible. The founders were keenly aware that the unequal distribution of resources naturally occurring in a free-market system would be the basis of much of the nation’s political conflict. The new government was designed to manage these conflicts so that those with fewer resources (a majority) did not deny those who control more resources (a minority) their right to economic liberty in the free market economy. Thus, it is not surprising that there was never a doubt that America’s campaigns would be paid for with private rather than public sources of money.

At first, wealthy men used their own money to stand for office. Then, as parties emerged and ran career politicians for office, campaign funds came from government workers who owed their jobs to the party in power, a system ended by the Pendleton Act in 1883. As America industrialized, corporations poured money into campaigns to ensure a minimal regulatory state, and party bosses nominated candidates friendly to corporate interests. Eventually, Congress banned corporate contributions (with the 1907 Tillman Act), required disclosure, and imposed spending limits (with the 1910 Federal Corrupt Practices Act and its 1911 and 1925 amendments). Yet, without effective enforcement, these reforms were largely ignored. Even as Democrats began to receive campaign support from newly powerful labor unions in the 1930s, both parties were (and still are) largely reliant on corporate funders for campaign resources. Today, we often hear that corporate influence in our political system has reached unprecedented levels. Increasing corporate campaign spending (not adjusted for inflation or population growth) is cited as evidence. If the reported money today surpasses the figures from 1976, it is assumed that influence is on the rise. Yet, corporations influence policymaking in other, perhaps more effective ways as well.

We tie arguments about business’s structural power to the fundamentals of campaign finance. Do you ever wonder why the political reaction to a major economic catastrophe such as the 2008 global financial crisis is to make only minor policy adjustments? We remind our readers that 84% of Americans work for the private sector. Business leaders do not have to make campaign contributions to influence lawmakers, as they can threaten to lay off workers or move operations elsewhere if elected officials do not support their preferred policies (Lindblom 1982). Powerful interests also use what Bachrach and Baratz (1962) call the “second face of power” to keep issues off the political agenda that are contrary to their interests, such as universal health care and strict environmental regulations. We should expect businesses to do what they can to portray policy issues as benefitting the ‘average’ American, and to ensure that lawmakers do not try to counter their interests, corporations closely monitor officials by spending far more on lobbying than on financing campaigns.