Elections: The Role of Money

Based on Is This Any Way to run An Election?

By Stephen J. Wayne

What does money have to do with democracy? A lot, if it: Gives wealthy people and groups an unfair

advantage Affects who votes and how they vote Conditions who runs for office and who does

not Affects information the electorate receives

about candidates and issues Affects public perceptions

Does Money Matter?

Cycle Total Cost of Election2008* $5,285,680,8832006 $2,852,658,1402004* $4,147,304,0032002 $2,181,682,0662000* $3,082,340,9371998 $1,618,936,265*Presidential election cycle Methodology Source: opensecrets.org

The Price of Running

McCain Raised $368,000,000

Spent $333,000,000

Obama Raised $745,000,000Spent $730,000,000

2008 Presidential Campaign

A more competitive nomination process Modern campaigning techniques

Contributing Factors

Passed 1971, scheduled to go into effect in

1972 Objectives:

Reduce the cost of elections Decrease dependence on large donor Open contributions and expenditures to public

scrutiny To reduce the Republican Party’s financial

advantage in elections!

Federal Election Campaign Act

FECA immediately challenged as

unconstitutional Limits on contributions and spending violated

right to political free speech Funding provisions unfairly discriminated

against third-party and independent candidates Appointment of four of the commissioners by

Congress violated the principle of separation of powers

Court Challenges

The High Court ruled

Congress has the right to regulate campaign contributions for candidates in federal elections

Independent spending by individuals and groups is protected by the First Amendment and cannot be regulated

Congress’s selection of four of its six election commissioners is an intrusion into executive authority and is void

1976 USSC Decision

1976

Retained contribution and spending limits and public funding of presidential campaigns

Funding voluntary If candidates accepted federal money, they were

limited in how much they could contribute or lend to their own campaigns and how much the campaign could spend

THE FEC was reconstituted with three Republicans and three Democrats, nominated by the President and confirmed by the Senate

Back to the Drawing Board

Bulk of resources spent on TV advertising Voter turnout continued to decline Congress concerned that funding limitations,

emphasis on TV and media-oriented campaigning, and the drop in turnout were all related

Consequences

Enabled parties to raise and spend unlimited

amounts of “soft” money for their voluntary efforts to promote voting: Educational campaigns Get-out-the-vote drives Other party-building efforts

Could not be spent advocating a specific candidates’ election

1979 Amendment

“Soft” money not regulated The new rules permitted, perhaps encouraged,

the solicitation of large contributions and the expenditure of those funds to help influence the outcome of an election

1980, 1984: Advantage Republicans 1994 midterms go to Republicans; Clinton devises

a $$$ strategy, launched in summer of 1995 Republicans play tit-for-tat; the “soft money”

wars were on

Loophole

AKA McCain-Feingold Purpose: to ban political parties from raising

soft-money funds Purpose: to prevent parties and non-party

groups from using advocacy advertising as a vehicle for promoting particular candidates

Purpose: to increase the amount that individuals were allowed to give to candidates and their parties

2002 Bipartisan Campaign Reform

Act

Prohibited national parties from soliciting unregulated

contributions Doubled individual contribution limits to $2,000, indexed

to inflation Party & non-party groups prohibited from mentioning

candidates by name in advocacy ads thirty days or less before a primary and sixty days or less before a general election

Allowed federal candidates facing self-financed opponents to raise additional funds to level the playing field – the so-called “millionaires amendment.”

IMMEDIATELY CHALLENGED

BCRA

December, 2003, USSC upholds major provisions Reaction: Terry McAuliff, DNC hair, recommends

use of nonparty, nonprofit 527 and 501c groups as vehicles to raise and spend “soft” money

Such spending could not be coordinated with eitehr the party or candidates

Beginning in 2003 (before the USSC decision!), these groups began to raise money; aided with seed money donated by billionaire financier George Soros and insurance magnate Peter Lewis

McConnell v. FEC

Outraged Republicans see the move as a ruse and

appeal to the FEC, but the commission votes 4 to 2 not to intervene in 2004

In response Republicans establish their own 527 and 501c organizations

More than $417,000,000 raised by these groups and $420,000,000 spent

Parties took advantage of law to raise more money, facilitated by raised individual limits, computerization of und-raising databases, and deep partisan divisions

Republican Reaction

Positive: Encouraged parties to improve and

broaden fundraising base Positive: Increased the number of small donors

($200 or less) Positive: Advocacy advertising limits

motivated parties and groups to spend more on grassroots efforts, resulting in higher voter turnout

BCRA Outcomes

Negative: Soft money continued to find its way

into federal election campaigns Negative: 527 and 501c groups weakened the

control the candidates and their parties had on campaigns because of separate and (maybe) uncoordinated campaigns

Negative: Allowed parties to engage in independent spending, resulting in more being spent on uncoordinated campaigns than in coordinated ones

BCRA Outcomes

January 21, 2010 The 2002 Bipartisan Campaign Finance Act, aka McCain-

Feingold, banned corporations and unions from "electioneering communications" within 30 days of a primary or 60 days of a general election.

considered whether the government could ban a 90-minute documentary called "Hillary: the Movie" that was set to run on cable channels during the 2008 Presidential campaign. Because it was funded by an incorporated group and was less than complimentary of then-Senator Hillary Clinton, the film became a target of campaign-finance limits.

Citizens United v. FEC

Justices rejected that limit on corporate spending as

unconstitutional. Corporations are entitled to the same right that individuals have to spend money on political speech for or against a candidate.

Justice Kennedy: "Because speech is an essential mechanism of democracy—it is the means to hold officials accountable to the people—political speech must prevail against laws that would suppress it by design or inadvertence." The ban on corporate expenditures had a "substantial, nationwide chilling effect" on political speech, he added.

Citizens United v. FEC

Soft money still flows into federal elections The cost of campaigns continues to escalate Most of the money comes from a small group

of wealthy people The connection between contributions and

expenditures and the special treatment of large donors continues to challenge the notion of democracy in the electoral process

Money Makes the (Political) World Go ‘Round

Former House Majority Tom DeLay: “Americans

spend twice as much per year on yogurt than they spend on political campaigns.”

1996: Dems spent $M363.1; Reps spent $M558.2

2000: Dems spent $M510.7; Reps spent $M679.8

2004: Dems spent $M655.6; Reps spent $M752.6

Elections more expensive, but public participation is little improved

Are Elections Too Expensive?

1996 $M192.2 2000 $M239.9 2004 $M343.1 2008 $M1,063!!!

Presidential Candidates

“Since 1990, labor unions have contributed over $667 million in election campaigns in the United States, of which $614 million or 92 percent went to support Democratic candidates. In 2008, unions spent $74.5 million in campaign contributions, with $68.3 million going to the Democratic Party. Already, unions have contributed $6.5 million to the 2010 elections, and $6 million has gone to Democrats, according to the Center for Responsive Politics in Washington, D.C. “ American Institute for Economic Research

Access & Influence: Any way to Run an Election?

The proximate goal is… Democracy is damaged if the public believes

that the system is of, by, and for special interests

A matter of equity: businesses outspend consumer groups, tend to gain the most

Thinking about Mayhew

The need for money has come to obsess

candidates; the wealthy exercise the most influence, undermining the equity principle

Political speech = political spending: can campaign spending be equalized without harming constitutionally protected freedoms?

The inability to resolve the problem contributes to public cynicism in the electoral system: Government appears to be for sale to the highest bidder

Dilemmas

“ In Australia, there is a growing trend for MPs

to become directly involved in the corporate fundraising efforts of their parties. Ministers and staff are encouraged to engage with donors and business supporters, with the aim of raising cash for their political parties. It is known for business leaders to pay $1400 to get near a federal minister.”

A Global Problem

Is money really as corrupting an influence on government

and politics as people believe? Do the wealthy exercise disproportionate influence on the

conduct of elections and, through that influence, on the operation of government?

Are American elections really too expensive? What would be a reasonable criterion by which to evaluate whether or not costs were excessive?

Can money in elections be regulated without violating First Amendment protections of freedom of speech? If so, how? If not, why not?

Does money buy electoral success?

Discussion