What Matt Bai’s Missing in His Analysis of Whether Citizens United is Responsible for the Big Money Explosion

The other day I linked to Matt Bai’s piece upcoming in Sunday’s NY Times Magazine, “How Much Has Citizens United Changed the Political Game?” The article discusses (though inexplicably does not link to) my recent Slate article, “The Numbers Don’t Lie.”   I promised a response to the article (I gave Matt an extensive interview in his writing of the piece), and here it is.

The relevant question is whether Citizens United and its aftermath (namely, the decision in SpeechNow from the DC Circuit, and two FEC rulings) is responsible for the explosion of outside money since Citizens United.  Here’s Matt’s reaction to my Slate piece claiming that it is responsible:

Richard L. Hasen, an expert on campaign finance at the University of California at Irvine, recently wrote an article for Slate titled, “The Numbers Don’t Lie,” in which he showed that total outside spending, as measured through March 8 of every election season, seemed to explode after the Citizens United decision, reaching about $15.9 million in 2010 (compared with $1.8 million in the previous midterm cycle) and $88 million this year (compared with $37.5 million at the same point in 2008). “If this was not caused by Citizens United,” he wrote, “we have a mighty big coincidence on our hands.”

But there are alternate ways to interpret this data. The level of outside money increased 164 percent from 2004 to 2008. Then it rose 135 percent from 2008 to 2012. In other words, while the sheer amount of dollars seems considerably more ominous after Citizens United, the percentage of change from one presidential election to the next has remained pretty consistent since the passage of McCain-Feingold. And this suggests that the rising amount of outside money was probably bound to reach ever more staggering levels with or without Citizens United. The unintended consequence of McCain-Feingold was to begin a gradual migration of political might from inside the party structure to outside it.

And in his examination of raw numbers, Hasen managed to ignore what is probably the most relevant bit of data during this period: 2010 and 2012 were the first election cycles since the enactment of McCain-Feingold in which a Democrat occupied the White House. Rich conservatives weren’t inspired to invest their fortunes in 2004, when Bush ran for the second time while waging an unpopular war, or in 2008, when they were forced to endure the nomination of McCain. But now there’s a president and a legislative agenda they bitterly despise (much as Soros and his friends saw the Bush presidency as an existential threat to the country), so it’s not surprising that outside spending by Republicans in 2010 and 2012 would dwarf everything that came before. What we are seeing — what we almost certainly would have seen even without the court’s ruling in Citizens United — is the full force of conservative wealth in America, mobilized by a common enemy for the first time since the fall of party monopolies.

A few reactions, beginning with the most important.

1. As I told Matt, and what’s missing from this piece, is the realization that there was considerable legal risk in giving to a 527 before Citizens United and its aftermath. As one reader to commented to me, “Matt’s article suggests that not much has changed post-Citizens United because even prior to the CU decision, “you would have been free to write a check for any amount to a 527 . . . .”  This is untrue and all three groups Matt cites were determined by the FEC to have violated federal law during the 2004 cycle.  ACT paid a $775,000 fine (http://www.fec.gov/press/press2007/20070829act.shtml).  SwiftVets paid a $299,500 fine (http://www.fec.gov/press/press2006/20061213murs.html).  Club for Growth paid a $350,000 fine (http://www.fec.gov/press/press2007/20070905cfg.shtml).”

If Sheldon Adelson really was planning on giving $100 million to 527s before the Citizens United revolution to support a presidential candidate, you can bet that there would be a criminal investigation and very serious charges considered. i have serious doubts Adelson or anyone else would have risked this (much less corporations giving considerable sums to 501c4s for election-related activity).  Now we can debate (and I have debated with others) whether the law barring contributions greater than $5,000 to independent expenditure committees would have fallen even if CU had come out the other way.  But that’s a different point than the one Matt was making.

There’s no reason to think we’d see this explosion of outside money if CU did not start this cascade of events.

2. Matt seems to suggest that the amounts were rising pretty evenly since McCain-Feingold passed. But that’s what the data show.  As Paul Blumenthal explains: “The problem with Bai’s argument is he glosses over the 2006 election, which saw both no soft money to parties and little independent group spending. The rise in outside spending in 2008 back to 2004 levels came after the Supreme Court’s ruling in Wisconsin Right to Life v. Federal Election Commission (FEC) loosened McCain-Feingold restrictions on independent spending and a subsequent FEC rule created a loophole for groups to avoid disclosure. The real culprit would be the change in the Court’s tentatively pro-reform majority with Sandra Day O’Connor’s departure.”  That’s right.  Justice Alito changed everything, and the move toward loosening things up started with WRTL, as Nate Persily explained, and accelerated dramatically with CU.  But we can blame the Court and not McCain-Feingold for the explosion of outside money.

3. Finally, as far as Matt’s point that I “managed to ignore” the presence of a Democrat in the White House—that’s not quite right.  We have a highly polarized electorate and we can expect every presidential election for the foreseeable future to be closely fought and very well funded.  I see no reason to believe that wealthy Republicans would provide less money in the 2016 election (assuming Obama wins 2012) to fill the presidency with a non-incumbent or (assuming Romney wins) to keep Romney in office against a Democratic challenger.  Where’s Matt’s evidence to support that claim?

In the end, Matt tells a (less) plausible alternative story of the rise of outside money, which we will be able to test by the next presidential election (where I take it his theory would have less outside money in that election).  I eagerly await the results of 2016 election. In the meantime, I see nothing in this analysis to convince me that we’d be facing this explosion in 2012 if we had the same rules in place in 2008.  Matt’s biggest error is ignoring the effects of the law on political behavior.


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