Barack Obama and the Democrats have a story about this election. It goes like this. The Supreme Court ruled that corporations have free speech rights in the Supreme Court decision Citizens United. Since then, all this corporate money has flowed into campaigns, blah blah blah. And the press has completely accepted this line of thinking.
It is complete nonsense. They probably want to concoct a falsehood so that this election somehow is not about the White House. But the reality is that their core narrative is simply false on its face.
The basic claim of the left and the media is this: Citizens United allowed (a) a new flood of corporate money that is (b) completely undisclosed. Both (a) and (b) are false. Find out why after the jump.The first point, that this decision will, to quote the President from his State of the Union speech, "open the floodgates for special interests — including foreign corporations — to spend without limit in our elections," is simply false. In fact, the history of these ads go back all the way to 2000.
Even that profoundly right-wing news outlet, the New York Times, points out that the White House's narrative is simply not true.
So far, however, the nightmare situation envisioned by some campaign finance watchdogs — droves of commercial corporations vying for voters' attention through a Super Bowl-style frenzy of advertising bearing their company logos — has not materialized. Instead, corporate money is being funneled through third-party groups, many of them organized under Section 501(c) of the tax code, which can accept donations of unlimited size and generally do not have to disclose their donors under Internal Revenue Service rules. Rulemaking by the election commission after the Wisconsin Right to Life case further enabled this.
There is absolutely nothing new about 501(c) organizations, and in particular, the 501(c)(4) organizations that have been active this cycle. George Washington University's Campaign Finance Institute noted in 2008 that "With the advent of legislation requiring 527s to publicly disclosure their finances in 2000, the 501(c)s now had the advantage of little or no public disclosure." In that same memo, they noted a number of organizations: "National Rifle Association, National Right to Life Committee, U.S. Chamber of Commerce (the only 501(c)(6) group), Defenders of Wildlife Action Fund, Friends of the Earth Action Fund, League of Conservation Voters Inc., NARAL Pro-Choice America, and Planned Parenthood Action Fund." That is, the Chamber was doing what they are doing in 2008 and earlier. And many lefty groups, including Planned Parenthood, the League of Conservation Voters, etc. were also active. (Note that in 2006, the FEC fined the League for Conservation voters for violating campaign finance law, along with MoveOn and the Swift Boat guys)
But it gets better. In 2007, CFI had a round-up on the legal structures behind the 2006 election. They said:
In addition, [George Soros] donated $3,890,000 to Section 527 political organizations, was the largest investor in "Catalist," a company formed to supply voter files to politically active pro-Democratic interest groups, and was one of about 100 "partners" in the Democracy Alliance which channeled funds to "center-left" 501(c)(4) social welfare organizations and 527s that were active in federal elections.
They went on to say:
Another important development has been the rise of certain 501(c)s that undertake issue campaigns with strong electoral overtones. Among these groups were: Americans United for Change, Communities United to Strengthen America and Progress for America, all of which were closely associated with organizations directly involved in campaigns. These groups' efforts paralleled explicit campaign themes and were targeted to key "battleground" voters.
They had a similar round-up after the 2008 election in which they noted.
As Table 1shows, we were able to document $196 million in estimated 501(c) group soft money campaign spending in the 2008 federal elections. We have little doubt that the real figure is in excess of $200 million. We lack credible estimates for spending by at least three groups reported tohave conducted multimillion dollar campaigns: Committee to Defend America, Americans United for Change and National Right to Life Committee. Furthermore, even 501 (c) spending that is subject to FEC reporting requirements does not include expenses for administration, fundraising,and polling.
Note that two lefty groups, Americans United for Change and the Committee to Defend America did not disclose their spending (not donations, spending. See below). In fact, Americans United for Change was headed by a certain Brad Woodhouse who is now the Communications Director for the Democratic National Committee. The Politico's Ben Smith noted that AUC ran campaign ads of exactly the sort that Mr. Woodhouse is now condemning from the DNC. Indeed, Al Franken — whose vote passed Obamacare — may have been elected due to these ads.
So we have established that there is nothing new about the legal structure. The foreign money canard, rejected by FactCheck.org, the New York Times, etc. Follows from this. The claim is that it comes in through the Chamber which has the same tax structure as before or 501(c)(4)s which also existed before.
The upshot is that Citizens United has had no meaningful impact on the amount of money coming into politics. In fact the only claim that the New York Times could substantiate is that there was a "psychological" effect.
The second part of the claim is that Citizens United is resulting in new undisclosed money in politics. This is also silly. The only new legal structure post-CU is the so-called "Super-PACs". These are PACs that disclose their donors and expenditures to the FEC. Here was the Washington Post's description:
Super PAC: Can raise and spend unlimited amounts on politics, but must operate independently of candidates and cannot contribute to individual candidates. Donors must be disclosed to the Federal Election Commission
The reason that these are new post-CU is that these PACs can take unlimited contributions, as opposed to $5,000 prior to the decision.
I think I have made it clear that the White House's fundamental story about campaign finance is a lie. It is based on a falsehood about a Supreme Court decision that, in fact, has had little demonstrable impact. The White House's primary demons, the Chamber and others, are organized by structures that have been in existence since 2000. I doubt the press will notice or understand this.
But it is telling that this White House would invest so much energy on pushing an argument that is so fundamentally false on its face. It tells you something about their respect for the American people, their belief in the gullibility of the media, and their character.
