A Corruptive Factor in American Politics

In the last presidential election cycle, $1,977,700,000 was independently spent in support of Barrack Obama or Mitt Romney, $828 million of which was raised by political action committees (PACs). This money, enough to send 54,100 students to an in-state public university for free for four years, has since evaporated, leaving nothing behind except irrelevant advertisements and discarded junk mail. Now, in anticipation the upcoming election, the Koch brothers have announced a pledge of $899,000,000 in support of ultra-right candidates, easily toppling the amount raised by the entire Democratic party ensemble in 2012. These funds, cobbled together by clandestine donations spanning every county in America, and all legally donated through super PACs, is only a fraction of what is shaping up to be the most expensive election in United States history. They are also legally grounded in Supreme Court precedent, specifically in the landmark case Citizens United v. FEC. This money, courtesy of some of the most affluent individuals and corporations in modern history, has changed the way Washington operates and is a corruptive factor in American politics.

The Corporate Corruption of Politics and American Democracy

American government has always managed to shield itself from the corrosive influence of outside political spending. At the turn of the twentieth century, following the scandal-ridden administration of Ulysses S. Grant and the rise of capitalism, a series of campaign finance acts were passed by Congress. Chief among these pieces of legislation was the Federal Corrupt Practices Act (1910) which, for five decades, stymied any hints of external meddling in American politics. It capped donations for Congressional and presidential elections, required disclosure of all political donations, and was the first step towards a moral code for those running for public office. The major component this bill lacked, however, was an enforcing body making sure that those in high office did not violate the laws this act set. This was addressed by the passage of the Federal Election Campaign Act (1972), which, in addition to tightening control over donation limits and disclosure, created the Federal Election Commission (FEC). This body became the “election police”, rigorously enforcing stringent standards on the nation’s politicians.

Despite this seemingly thorough safety net guarding against corruption, some loopholes were left exposed. The Federal Election Campaign Act distinguished between two types of money used in election spending – hard money, and soft money. Hard money was the funding that was donated by official organizations that kept thorough records on who contributed how much and when, while soft money was unlimited, under the radar funding used for “party building activities”. This loose terminology allowed for candidates to use this source of money for ads against Republicans and against Democrats, rather than certain politicians (therefore meeting the party-building activity requirement), and also provided a source of uncapped financial backing. In order to address this, Congress passed the Bipartisan Campaign Reform Act (BCRA) in 2002, which banned all soft money donations and also prohibited corporations from broadcasting advertisements in favor of certain candidates sixty days before general elections.

This intricate, well-crafted system effectively filtered corporate influence out of politics. Cumulatively, approximately $620 million was spent on presidential elections from 1990 (the earliest year available with such statistics) until 2008 (the last election year before the rise of super PACs), with all of the money being donated responsibly, accountably, and accurately through the FEC. However, in 2008, a conservative lobbying group named Citizens United announced plans to release a film critical of Hillary Clinton less than thirty days before the Democratic primary election, a move that directly violated the BCRA. The group was prohibited from doing so and, based on the rationale that this prohibition violated the group’s free speech rights, took its case to court. Citizens United v. Federal Election Commission made its way to the Supreme Court, where the justices ruled that a ban on independent expenditures involving politicians (such as the Hillary movie) were a breach of the First Amendment rights of non-profits. Moreover, this ruling established the precedent that corporations – regardless of their status as non-profit or for-profit – held the same rights as everyday Americans, and they could not be stopped from spending money on politics indirectly.

The Citizens United case paved the road for the establishment of supersized political action committees. With the high court’s blessing, corporations, wealthy individuals, and those who did not wish to be identified began pouring money into a bottomless cauldron designed to conceal donors. Organizations such as political actions committees, that had been active since the 1980’s, restructured themselves into groups of shell companies, for-profit and non-profit activist groups, and explored other loophole-finding measures that exploited standing finance law in order to mask those who contributed to the funding. Abiding by the Citizens United decision, these super PACs expended their funds independently of the candidates, but especially in the months leading up to Election Day, such divisions all but disappeared. Late in the election season, candidates have sufficiently presented their platforms so that no such coordination is necessary. In essence, the super PACs and candidates are openly communicating through public announcements, websites, and speeches, all while technically abiding by the no “direct communications” caveat. Moreover, the rules concerning coordination between candidates and PACs apply only to candidates who have announced their intention to run for office. In preparation for the 2016 election, candidates who have yet to formally announce have sent their campaign-managers-to-be to run super PACs already harvesting tens of millions of dollars, therefore coordinating directly (Healy, Confessore).

Such expansive networks have been proven to exist and have a substantial impact on the political process. In 2012, “independent expenditures” were responsible for over $1 billion in support of candidates, and $828 million of it was raised by super PACs (the difference represents organizations and donors that spent money independently of candidates, but not through super PACs) (Center for Responsive Politics). Hauntingly, about half of this money came from an organization helmed by two of the richest men alive, Charles and David Koch (Gold). This operation is notable not only because of its singularity in terms of its breadth and scope, but also because of the extensive legal barriers put in place in order to conceal the donors behind the coalition. Limited Liability Companies, otherwise known as LLC’s, swapped money back and forth dozens of times, disappeared and reappeared under different monikers, and muddled the paper trail, making the money nearly impossible to trace. These entities, which are not considered separate businesses and therefore do not have to report taxes but rather simply add profits or losses onto the balance sheet of a parent organization, served as de facto banks and cash turnstiles for the Koch brother’s network (Gold).

Although the candidates backed by the Koch brothers did not win the 2012 election, there is still evidence of the effect corporate meddling has had in American politics. In the 2014 midterm elections, $585 million was spent on “independent expenditures”, more than half of which went to the Republican party and its candidates. The outcome was a resounding victory for conservative politicians who received nearly $171 million in support from the financial sector alone, which includes wealthy individuals, banks, and organizations like super PACs (Center for Responsive Politics). Following this domination on Capitol Hill, right wing lawmakers swiftly introduced legislation proposing to repeal crucial parts of post-recession Dodd-Frank legislation. These laws, passed in 2010 as a response the risky behavior of banks that in part caused the Great Recession, dictated, among other things, that banks could not place big bets with money involved in loans and other securities (otherwise known as the Volker rule). After unsuccessfully attempting to pin this legislation onto crucial government spending bills, Republicans fell six votes shy of letting Wall Street run unchecked and according to pre-recession standards (Ackerman). Whether or not these efforts had a correlation to the troves of money the financial sector contributed in 2014, or the anticipated funding in 2016, is not backed by concrete evidence, but the timing could not be more impeccable.

The presidential election in 2016 is shaping up to be the most expensive in history. The $889 million donated by the Koch political network matches the entire amount of money spent by the Democrats in 2012, and then some. This is only a fraction of what is expected to be spent next year, but already, frontrunners are speaking against this flood of money. Hillary Clinton has made eliminating the flow of “big money” one of the “four pillars” of her campaign, going as far as calling for a constitutional amendment (Overby). Although this may be her intention, there is little doubt that any candidate without a sizable war chest will stand a chance against the Republican coffers in the election, so it seems that Clinton is a proponent of “Do as I say and not as I do”.

Much of the original purpose of soft money financing was to mobilize voters and support Election Day turnouts. However, if this was ever the intended consequence, the results have been abysmal. Despite spending over half a billion dollars in order to “mobilize voters”, 2014 turnout was the lowest midterm turnout since 1942. Just over thirty-six percent of the population followed its civic duty to cast a ballot, and Indiana saw a mere twenty-eight percent of voters come to the polls (DelReal). Perhaps this is due to the increased independence young voters feel, which translates into political apathy. Moreover, it could be a general political apathy Americans feel after the record partisanship Congress showed in its previous term, notching a 14% general approval rating (Riffkin). Although it is only possible to speculate, what is doubtless is that the effect of the record amounts of money being spent on elections and politics is not producing a more socially responsible, participating society.

The funding flood overtaking our nation has far-reaching implications. Firstly, it brings America as close to public extortion as it has ever been. The Supreme Court’s affirmation of commercial speech counting as free speech protected under the First Amendment has transformed the political landscape into one which sells privilege to the highest bidder. As aforementioned, Wall Street donations to the Republican party have been conspicuously followed by attempts to repeal crucial financial regulation law. Moreover, dysfunction and strife within the Federal Election Commission has essentially left campaign finance regulation reliant on integrity of candidates, with one of the body’s commissioners stating that “the likelihood of laws being enforced is slim” in May 2015 (Lichtblau). Secondly, money coming in from both sides of the aisle has drowned out the voice of voters. Congress only managed to pass 56 bills in 2013, choosing to play politics and give an ear to those willing to pay rather than enact meaningful legislation despite record-low approval ratings. Thirdly, the economic results of Citizens United is the superhuman status of corporations in America. Although they have the same rights that physical human beings have, these multi-billion dollar entities are not subject to the same criminal, ethical, or moral standards as physical human beings. Therefore, they receive all the benefits associated with being an American, with the ability to pay their way out of the responsibilities.

All of these pitfalls have culminated in a dangerous precipice for disaster. Young and old voters alike have begun to see democracy with skepticism and disengage with it, rather than attempt to salvage it. Inevitably, this will lead to business replacing the voter and the golden age of America leading the pack of the “free world” will come to an end. The questions at the center of the issue of campaign finance are much bigger than politics. They are not about free speech, as some proponents have suggested, because America is the only place where Nazis and the Klu Klux Klan can march down the streets of a city. They are not about equal treatment, because corporations do not share the same burdens, responsibilities, and are not entitled to the same privileges as citizens. What they are about, though, is whether we will be able to sustain the future of this country the way our forefathers have envisioned us to. At stake is the blood, sweat, and millions who gave their lives for America, tens of millions of immigrants seeking a better life for their children who immigrated here in decades past, and even millions more Americans who tirelessly built the foundation of this country for nearly three centuries. The question at the beating heart of this issue is if we will allow the ever-growing 1% to exploit the American Dream in the name of profit yet again, and this is a question that cannot go unanswered. We must retaliate through the power of the vote, and rid ourselves of those representatives who forsake the principles of this nation. We must resist through the power of the purse, and show those corporations that seek to drown voters out that we will not be silenced. Moreover, we must use the most precious freedoms that we are guaranteed – the freedom to assemble and the freedom to speak – to tell those who are on top that they are not able to dictate the direction of this country.

Money has always been kept at a safe distance from Washington D.C. The Federal Corrupt Practices Act, the Federal Elections Campaign Act, and the Bipartisan Campaign Reform Act were the products of painstaking efforts to keep corporations and corrosive influences out of politics. The precedent set in Citizens United managed to overturn nearly a century of meticulous regulation by exposing loopholes in the law and outright overturning parts of the aforementioned acts. The election cycle in 2016 is set to hit a record high in terms of money spent, yet predictions for voter turnout remain dismally low. With the immense power wielded by Wall Street through its affluence, and some politicians promising to counter that influence and restrict to pre-Citizen United levels if elected, a showdown is set to occur next year. This showdown will decide the fate of American democracy, and if it will survive the overwhelming deluge of money coming through its gates.