Reporters always want to know how changes in campaign finance laws will affect elections, and we are always cautioning that the precise results may not be known for some time. Nevertheless, we support deregulation of the political process not merely on purist speech grounds, but also because we believe that deregulated political markets work better.
It’s been barely a year since the Supreme Court decision in Citizens United v. Federal Election Commission and the Court of Appeals for the District of Columbia Circuit ruling in SpeechNow.org v. Federal Election Commission resulted in a dramatic liberalization of the law regarding independent expenditures in political campaigns, but that hasn’t stopped the unending chorus of dire warnings from “reform” jannisaries who see themselves as the ancient protectors of the old regulatory regime. In fact, though, the early anecdotal evidence and numbers are almost all good. Citizens United and SpeechNow have coincided so far with an explosion in the number of competitive races, more political speech, and campaigns with a greater focus on big issues of national direction rather than trivia, gaffe, and personality.
The latest bit of data supporting the wisdom of the courts’ deregulatory, pro-First Amendment jurisprudence is a short report by Michael Beckel for the Center for Responsive Politics (no relation). While we don’t think Beckel intended for this to be a positive report on Citizens United and SpeechNow.org, that’s the logical conclusion from the information.
SpeechNow PACs (Super PACs) played modest role in furthering competition, helping family business and Indian tribes be heard
The Center for Responsive Politics (CRP) focuses first on what they call “Super PACs,” or what we prefer to call “SpeechNow PACs” after the case that made them legally possible. SpeechNow PACs can accept unlimited contributions from individuals, corporations, and unions, and make unlimited expenditures to specifically advocate the election or defeat of candidates, so long as they do so without coordinating their activity with candidates or parties. SpeechNow PACs include groups such as Emily’s List and the Club for Growth.
Here are the key findings in the CRP report:
- At the federl level, SpeechNow PACs spent approximately $65 million in 2010, or less than four percent of the amount spent directly by federal political candidates. Add in party independent expenditures and independent spending by traditional PACs and individuals, and the percent of express advocacy financed by SpeechNow PACs is even smaller.
- In turn, about 17 percent of SpeechNow PACs’ money came from corporations, or less than one percent of the amount spent by federal candidates themselves.
- Energy companies, singled out by President Obama as a particular threat to take over our electoral systems, contributed approximately $5.6 million to SpeechNow.org PACs, or less than one-third of one percent of the amount spent by candidates.
- Only one Fortune 500 company, American Financial Group, contributed to a SpeechNow PAC at the federal level.
- Among the major beneficiaries of their newly reaffirmed constitutional rights were Native American groups in Alaska (which are incorporated – so much for the idea that “corporations aren’t people”), and family owned businesses such as Jelly-Belly Candy Company and Shamrock Farms.
This all fits with our predictions. The modest increase in campaign speech should be regarded as a good thing, even by those who would rather have the government do it than the citizenry. At the same time, these added voices clearly did not “drown out” anybody else. They simply added to the debate. And the primary beneficiaries were, as we predicted, smaller businesses and family owned enterprises, not the Fortune 500 companies that have large lobbying operations and large traditional PACs.
Direct corporate independent expenditures almost non-existent, and limited to small business
CRP then turns its attention to direct corporate independent expenditures authorized by Citizens United, and finds that they were extremely rare in federal races in 2010. In fact, they found just three (3) companies that made such expenditures.
Penneco Oil, an independent, family-owned drilling company in Pennsylvania, spent a bit under $5000 on billboards supporting Pat Toomey’s successful campaign for the U.S. Senate and Tim Burns’ unsuccessful campaign for the U.S. House. Given that Burns was outspent by his opponent, incumbent Mark Critz, by nearly $300,000, Penneco’s modest expenditure made a small difference in equalizing that race.
Central Arizona Block Company, another family owned business, paid for about $2000 for radio ads supporting Jim Deakin, a Republican who challenged John McCain in the Arizona Republican Senate primary. Deakin spent approximately $70,000 on the race, while Senator McCain’s reelection spending topped $21 million.
The big dog corporate spender wasn’t Exxon, but DGS Construction, a family owned, Maryland construction company (“DGS” stands for the founder, Daniel G. Schuster) that spent some $40,000 for radio ads supporting Andy Harris for Congress in Maryland, who defeated incumbent Frank Kratovil despite being outspent by roughly $240,000.
Dan Schuster, Founder and President of DGS Construction: Does this man threaten American democracy?
It appears that Russ Feingold’s dire warning that Citizens United would unleash between $600 billion and $23.5 trillion in corporate political spending overshot the mark by something in the range of $600 billion to $23.5 trillion. But we again see that such added spending as occured favored outspent challengers and small business.
Non-Profits extend citizen voices
Finally, the CRP report turns to spending by 501(c)(3) groups, whose operations were also liberalized by the combination of SpeechNow.org and Citizens United. According to CRP, these non-profits (such as the NRA and the Sierra Club) spent some $140 million in 2010, or less than 10 percent of what candidates themselves spent. That was an increase of about $80 million from 2008. Making the unlikely assumption that all of this increase can be attributed to SpeechNow.org and Citizens United, and likewise that all SpeechNow PAC spending can be attributed to those decisions, the entire amount of the increase attributable to the recent Court decisions is far less than 10 percent of all federal political spending in 2010. What percentage comes from corporations is, of course, unknown, but obviously some lesser percentage.
That money, once again, primarily served to equalize spending in last fall’s races, and to expand the playing field of competitive races.
When all is said and done, the hysterical predictions about the consequences of Citizens United, SpeechNow.org, and other recent court decisions protecting the First Amendment have proven badly off the mark, and appear to be fueled largely by the perception that the wrong side will win, at least in the short term.
But these decisions – Citizens United, SpeechNow.org, and also other deregulatory court rulings such as Emily’s List v. FEC, Randall v. Sorrell, Wisconsin Right to Life v. FEC, and Davis v. FEC have, from all we can see so far, been tremendously successful by almost any objective measure.