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Campaign Finance: Free Speech, or Another Platform for Corruption?

31 August 2016

Each year, as billions of dollars are funneled into American elections, more and more questions continue to rise regarding not only the legality of these financial contributions, but also the true intentions behind them.

Currently, anyone from individual citizens to enormous Political Action Committees (PAC’s) can contribute money to a campaign. Though somewhat indirectly, corporations are currently able to support various candidates through these means as well.


This aspect of campaign finance in particular has caused a great deal of controversy in the political arena. There are, however, strong arguments made on both sides of the financial battlefield.


Some claim that the ability to make campaign contributions is a right as well as an expression of free speech, while others argue that this practice only leads to unfair elections, ultimately resulting in the wrong candidates finding their way into positions of power.


Aside from the question of who is right and who is wrong, it is apparent that the bipartisan issue of campaign finance has made enormous waves in the American political climate.


In 2004, though running unopposed, George W. Bush set a new fund-raising record and raised the bar on election finance by acquiring over $200 million in the Republican Presidential Primary. Though that number sounds impressive, Barack Obama later trumped that number in 2008 by raising over $600 million.


With this mind boggling number as the new standard, big money soon trickled down from the Presidential elections to the smaller campaigns. According to MapLight, in 2012 the average amount of money raised for a Congressional campaign was $10,476,451.


Gubernatorial election funds have also skyrocketed over time-- in 2002, Texas candidate Tony Sanchez raised $66,253,516 throughout the general election. Eight years later, former eBay CEO Meg Whitman set the record for the most money raised by a losing gubernatorial candidate, raising roughly $177 million in the 2010 California election.


Aside from  the occasional exception, modern campaign contributions nearly always come from four different sources: interest groups, labor unions, corporations, and individuals. From these groups of donors come several different types of contributions.


“Hard Money” involves any money that is donated directly to a candidate or campaign party. This type of donation is undoubtedly the most strictly regulated by the FEC, both in terms of who is allowed to donate it and how much can be donated. Currently, the legal limit is $2500 per election, with primary and general counting as two separate elections.


On the opposite end of the spectrum, there is “Soft Money”, which has a bit of a dual definition. In a classic sense, this term refers to money that was given to parties for general, party building purposes.


In the initial 1976 Buckley v. Valeo decision, these contributions were seen as unnecessary to regulate via the FEC due to the fact that they did not directly play a role in candidate finance. However, this ruling was later overturned in the The Bipartisan Campaign Reform Act of 2002, otherwise known as the McCain-Feingold Bill.


Currently, this form of soft money is still banned from political parties. In a more modern sense, however, soft money often refers to unlimited donations that can be given to committees and organizations that do not qualify as campaigns or political parties.


These organizations, often referred to as “527’s”, are not legally allowed to spend this money on advertisements for the promotion of specific candidates. Therefore, these groups will instead create generalized attack ads, which can often serve the same purpose.


The third and most unregulated type of campaign contribution comes in the form of independent expenditures. Often used for advertisements, independent expenditures are contributions that are intended to be implemented without the candidate’s consent or knowledge.


Though Political Action Committees (PAC’s) and 527’s were initially the only groups using independent expenditures, the rules have changed. With the famous Citizens United v. FEC ruling of 2010 came a new wave of campaign funding. From this moment on, entities ranging from corporations to labor unions were legally permitted to provide these expenditures, indirectly playing a role in the campaign process.


In the decision, the court cited that there was no distinguishable difference between individual citizens and corporate entities. Corporate donations in this form qualified as free speech and therefore could not be restricted. There are currently still restrictions on these donations, to a degree.


Disclosure currently plays the biggest role in regulation-- campaigns must eventually disclose who their donors were and how much money they received. However, these disclosure laws are not perfect. Politically active nonprofits, sometimes referred to as “Dark Money” donors, are currently not required by law to reveal the sources of their funding.  


In addition to these lawsuits, there have also been recent rulings that further advance the guidelines put in place by Citizens United. In 2014, according to InfoPlease, the Supreme Court banned caps on the amount that individuals could donate to both campaigns and political parties each election cycle in the case of McCutcheon v. Federal Election Commission.


Citing the same principles as Citizens United, the court claimed that these caps were a violation of free speech and therefore unconstitutional. When asked about the decision, Justice Stephen G. Breyer stated "If Citizens United opened a door, today’s decision we fear will open a floodgate".


However, according to Chief Justice John Roberts, the government “may not any more restrict how many candidates or causes a donor may support than it may tell a newspaper how many candidates it may endorse. If the First Amendment protects flag burning, funeral protests and Nazi parades, it surely protects political speech”.


So what conclusion can be drawn here? Many would say Breyer is correct in his statement, but not without opposition.


Some political analysts, such as Paul Jacob, have suggested that it is in America’s best interest to actually decrease campaign funding regulations even further. According to Jacob, though the current system allows the potential for a group of wealthy donors to fund campaigns that would otherwise flop, the voters still ultimately decide on each candidacy.  


On a similar note, Bradley Smith says that the best solution to the campaign finance debate is to simply embrace the higher spending. He says that in this case, “the cure is worse than the disease”. Before Buckley v. Valeo in 1976, the concept of regulating campaign finance was virtually non-existent. Smith argues that legislative responses to the increase in “big money” have done next to nothing to prevent it from continuing, therefore we are better off allowing money to send a mass message.  


On the opposite end of the spectrum, Craig Holman of Public Citizen believes that the solution to the campaign finance ordeal must involve advocating for the public financing of elections, as well as overturning Citizens United.


Lee Drutman, following a similar mindset, has a unique solution to the issue: creating a matching system for small donors. Following the same precedent as New York’s current system, this Government By the People Act would provide a $6 match from public funding for every $1 a candidate raises from a small donor. According to Holman, this method would encourage candidates to “connect broadly with constituents first and directly—not only through massive ad-buys after they’ve raised their millions”.


Another proposed solution by Maplight data director Miriam Marks involves a more direct and thorough approach to donation disclosure. According to Marks,  current disclosure regulations allow Super PAC’s to avoid disclosing their donors for months after contributions were made. These regulations are even more lax with 501(c)(4) groups, who are currently not legally required to disclose donor information at all.


Marks insists that a stricter disclosure policy would not only better educate the public about the true state of campaign finance, but would also force corporations and other wealthy donors to think twice about their actions before their contributions are made a matter of public record.


As with most political issues, there is most likely no “black or white” answer to the question of campaign finance. Though many politicians are reluctant to address the issue, those that do often give a simple “yes” or “no” when asked whether or not campaign finance reform is currently needed.


With their reputations and the votes of their constituents at stake, the idea of discussing finances at length is an uncomfortable one for most who hold office.  As some constituents demand campaign finance reform, we will see more officials of both parties weighing in on this bipartisan issue.


Haley Engle is a student at Middle Tennessee State University, majoring in Political Science. She was an intern with Vote Smart in the Biographies Department. For more information on internship opportunities with Vote Smart, contact us at intern@votesmart.org or by calling 1-888-VOTE-SMART.


 


Related tags: blog, campaign-finance, election-spending, free-speech

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