Campaign Finance

Campaign Finance: Is Money Destroying our Democracy (2013)

Notes by Sally Hollemon

The League of Women Voters of Marion & Polk County presented a forum to challenge the decision by the U.S. Supreme Court that unlimited political contributions constitute free speech. Sixty-two people attended the April 24th forum organized by Adrienne Pauly, Susan Gray, and Tina Calos. CCTV taped the event.

A panel of three speakers discussed campaign finance reform and how it relates to the U.S. Supreme Court ruling in Citizens United vs. FEC. The panelists:

• Norman Williams, Willamette University Law Professor and Director of the Center for Constitutional Government, who explained the legal complexity surrounding this decision.
• Jeanne Atkins, State Director for U.S. Senator Jeff Merkley, who described congressional efforts to modify the Citizen’s United decision.
• Norman Turrill, a Board member of the U.S. LWV and past Board member of the Oregon LWV, who discussed the League’s position and perspective on campaign finance reform.

The Law–Professor Williams noted that Citizens United vs. Federal Elections Commission was the culmination of a series of court cases that have gutted campaign finance laws and that Citizens United is not the biggest loophole. No one likes the current legal regime, but there is disagreement over what the fix should be.

Professor Williams said there are two options for controlling campaign finance–caps on contributions and caps on expenditures–and Congress limited both in early 1970’s legislation. In 1976 the U.S. Supreme Court ruled in Buckley v. Valeo that capping contributions to a political candidate is constitutional but putting limits on expenditures is not; a person can spend money to state his views so long as his expenditures are not coordinated with a candidate’s campaign.

In First National Bank of Boston v. Bellotti (1978) the U.S. Supreme Court ruled that corporations have a right under the First Amendment to spend corporate money in an attempt to influence politics. In Austin vs. Michigan Chamber of Commerce (1990) the Court said that Michigan could require that corporate donations must be made from a segregated fund, not the corporation’s treasury.

In Citizens United v. Federal Election Commission (2010) the Supreme Court ruled 5 to 4 that corporations and unions have the same First Amendment rights as individuals and can use their general treasury funds for political purposes. The Court upheld disclaimer and disclosure requirements by 8-1.

Super PACs must spend their money independently, so they are good for transparency since their donors and the money given must be identified. Conversely, 501c4, 503c6, and 503c7 groups must disclose expenditures but not their donors, so wealthy individuals can now secretly spend huge amounts of money through 501c groups. (This is due to the Buckley decision.)

Congress–Jeanne Atkins said that Senator Jeff Merkley has stated that Citizens United is a threat to our democracy. Unlimited spending by unknown contributors is as detrimental as corporate spending. Candidates have to raise lots of money, but campaign contributions are not the only way to influence an elected official: gifts are another way–buying meals and other gifts. Congress has tightened the rules on gifts. Citizens United is an opportunity to look at how campaigns are financed.

LWV–Norman Turrill (in picture at far right) said that in 1906 Oregon voters passed an initiative to limit campaign contributions. In the 1970s the legislature overturned contribution limits and replaced it with limits on expenditures; that was overturned by Valeo. In the 1980s Oregon voters again passed contribution limits; that was overturned by the Oregon Supreme Court. So Oregon has no limits on either contributions or expenditures.

In 2003 or 2005 the Oregon Secretary of State’s panel on campaign disclosure recommendations were ignored by the legislature until a legislator was caught using campaign funds for personal use. Then the legislature passed legislation to establish ORESTAR, which requires campaign contributions and expenditures to be filed on line every 30 days until near an election, when they must be filed every 7 days, allowing the public to see who has made contributions and for how much.

The LWVUS Campaign Finance Task Force works to try to figure how to limit campaign money. The group has looked at fourteen proposed constitutional amendments; all have problems with unintended consequences.

Suggested Solutions

Professor Williams said that very little can be done to solve the campaign finance problem because the Supreme Court has decided that all campaign money limits are unconstitutional. The options are:

• Replace the Supreme Court–This isn’t likely to happen soon, and, even if a liberal should replace a conservative justice, the Court tends to not overturn precedent, so the Court might not overturn the campaign finance rulings.
• Amend the U.S. Constitution–This requires a 2/3 vote of both chambers of Congress (not likely with the current split between the two political parties) and then ratification by 3/4 of the state legislatures. The women’s suffrage amendment took forty years, and the Equal Rights Amendment didn’t get enough state ratifications. So a constitutional amendment would likely take many people working very hard for many years.
• Congress could tighten the rules for 503c4, 6, and 7 organizations, and the IRS could strongly enforce the rules.

Ms. Atkins said members of Congress have tried to find tweaks:

• Disclose Act–This has passed the Senate twice with 59 votes each time, but the way the Senate currently operates, a strong majority vote isn’t enough; it takes 60 votes to pass anything. The Disclose Act will be submitted again.
• Senators Wyden and Murkowski have introduced a bill to require contributions of $1000 or more to be disclosed (modeled on ORESTAR).
• Congress is also looking at requiring shareholder approval of corporate political expenditures, which tend to be directed toward specific policies they like, not to candidates.

Prof. Williams said that most corporations don’t get involved in partisan political activity because they don’t want to alienate any group of customers. The problem is that wealthy individuals can give huge amounts of money to support candidates, often using negative advertising. Removing the cap on individual contributions to candidates might result in reduced negative campaign ads since candidates tend to put out positive ads.

Mr. Turrill said that LWV advocates a multidimensional effort–statutory measures such as the Disclose Act; tightening rules on the coordination between candidates and supposedly independent committees (frequently run by former staff members of the candidate’s campaign committee); tightening IRS rules on 501c4, 6, and 8 groups and enforce the rules.

The Federal Election Commission is dysfunctional; it is composed of four Democrats and four Republicans who can’t agree on anything. Further, their terms have expired. President Obama should appoint new commissioners.

Mr. Turrill thinks a constitutional amendment would benefit the League even if the proposed amendment didn’t make it through Congress because League efforts would attract new members. However, he reiterated that the LWV national board has not yet found an amendment it can support.