Faulty Assumptions

In the nearly two years since the Citizens United decision, the progressive movement has used every avenue it can find to adapt anti-corruption regulation into a force for intimidating corporations out of engaging in independent expenditures.

One of the outcomes of this tactic has been a rise in activist investing.  Taking advantage of SEC regulation, activist shareholders buy the requisite value of stock needed to introduce shareholder proposals and propose burdensome disclosure rules targeting political expenditures.

Reform groups can hem and haw all day about the merits of various disclosure regimes, but at the end of the day, it would be disingenuous not to acknowledge that these proposals are in the service of cultivating political power and control.

The so-called “Super Committee” established by the recent debt-ceiling deal is drawing scrutiny by self-styled campaign finance “reformers,” particularly when it comes to their fundraising efforts while serving on the committee.

Needless to say, the commentary and reporting on this issue suggests that what needs scrutiny is the ‘reformers’ understanding of how a democratic Republic works. Courtesy of National Public Radio:

Supercommittee at risk with campaign donors

The 12 lawmakers on the new deficit-cutting supercommittee have their hands full. They’re under orders to bring Congress a plan for cutting the deficit by more than a trillion dollars, and to do it before Thanksgiving.

At the same time, they’re also raising funds for their next campaigns, and that could be a problem if the supercommittee members are under pressure to bite the hands that feed them money…

Who’s Giving

According to Sheila Krumholz, the [Center for Responsive Politics] director, the No. 1 source of contributions [to committee members] was The Club for Growth, a group that promotes smaller government and a deregulated market. Not surprisingly, every penny of its $1 million in contributions went to Republicans.

“Microsoft was second, with $944,000,” she says. That’s money from employees and its PAC.

Democrats on the committee got almost all of it, especially their co-chair, Sen. Patty Murray (D-WA), whose state is where Microsoft’s home base is located.

There are many other ways to parse the donor numbers: by industry, by party and so forth. But the point is, when the supercommittee meets, its members will be pressured to make changes that would affect some of those very groups that helped them get elected.

Murray, for instance, ran an ad last year during her re-election campaign that reminded voters how she helped Boeing land a controversial Air Force contract. In Washington state, 79,000 residents work for Boeing.

But now the supercommittee has to consider whacking billions out of the Pentagon budget, and Murray will help to decide whether big contracts, likely including some for Boeing, end up on the cutting board.

Shocking, no? Senator Patty Murray, representing a state with 79,000 employees of Boeing (and who knows how many family members, subcontractors, and other persons who also depend on Boeing for their livelihoods), might actually feel some obligation to look after the interests of the voters and citizens who put her in office!

That this observation is made at all is indicative of just how badly ‘reformers’ misunderstand and even mistrust the basic concepts of our system of government. Of course Senator Murray is going to be under some pressure to consider the how her decisions will “affect some of those very groups that helped them get elected.” That’s her job, for cryin’ out loud! Our democratic Republic rests on the idea that those elected to office are supposed to represent the interests of the citizens who elect them.

The idea of insulating government from the suspect interests and preferences of the populace is not a new one of course, but it seems worth noting that 235 years ago, give or take, the idea that government officials should be responsive to the citizenry got rolling in the country, and few seem eager to abandon it. Except, apparently, for some ‘reformers.’

The Campaign Finance Institute (CFI) is an unusual organization in the so-called campaign finance ‘reform’ community. Founded and led by Michael Malbin, it’s one of the few groups in the ‘reform’ constellation that isn’t utterly hysterical on the subject of money in politics, and its research tends to rely on sound data that at the very least makes interesting points. And unlike its fellow travelers, CFI has been willing to think beyond the simple sloganeering and dogma of the ‘reform’ movement.

That said, CFI’s research (or at least their analysis and recommendations) suffer from the fact that it makes assumptions that have no real basis in fact or reason to believe they are correct, and in fact there is often ample evidence suggesting that their core assumptions are faulty.

Yesterday’s release of a new study by CFI drives this point home. Titled Public Financing of Elections After Citizens United and Arizona Free Republic, the study assumes up front that campaigns funded primarily by donors making small contributions are inherently superior to campaign funded primarily by donors making large contributions. The beneficiary of these supposedly superior campaigns are the general public.

But there is little reason to believe this assumption is true.

Amid the hysterics concerning Judge Cacheris’s ruling that banning limited corporate contributions is unconstitutional – a ray of sense. Northern Virginia Lawyer has an excellent post: “The educated politico’s guide to U.S. v. Danielczyk: Or rather how to pay attention to a Constitutional campaign finance lawsuit.”

The post makes some excellent points, and serves as a sober reminder that litigation is a considered, careful process. My favorite quote: “Vocal opposition from the media, although widespread, has been focused heavily on the political consequences of the ruling rather than the legal underpinnings or consequences of the ruling.”

Also note that Judge Cacheris has gone out of his way to ensure his decision is subject to appellate scrutiny, even postponing trial to eliminate any question as to the government appeal’s ripeness.

The post is excellent and speaks for itself. But as part of the wider debate over campaign finance laws and the First Amendment, it shows how federal courts are faithful to their traditions of care, procedural fairness, and humility in reviewing these sorts of constitutional challenges. The contrast with the overblown and highly-political rhetoric characterizing opposition to the Danielczyk ruling could not be clearer.

Yesterday the web site iWatchnews, a project of the Center for Public Integrity, released a scathing report on the number of bundlers for the 2008 Obama campaign that have subsequently been appointed to administration positions.

Titled Obama rewards big bundlers with jobs, commissions, stimulus money, government contracts, and more, the report begins:

Telecom executive Donald H. Gips raised a big bundle of cash to help finance his friend Barack Obama’s run for the presidency.

Gips, a vice president of Colorado-based Level 3 Communications LLC, delivered more than $500,000 in contributions for the Obama war chest, while two fellow senior company executives collected at least $150,000 more.

After the election, Gips was put in charge of hiring in the Obama White House, helping to place loyalists and fundraisers in many key positions. Then in mid-2009, the new president named him ambassador to South Africa. Level 3 Communications, in which Gips retained stock, meanwhile received millions of dollars of government stimulus contracts for broadband projects in six states-though Gips said he was “completely unaware” of the stimulus money.

More than two years after President Obama took office vowing to banish “special interests” from his administration, nearly 200 of his biggest donors have landed plum government jobs and advisory posts, won federal contracts worth millions of dollars for their business interests or attended numerous elite White House meetings and social events, an investigation by iWatch News has found.

Pretty scandalous, isn’t it?

Except upon reading the full report, and applying a little common sense it becomes pretty clear that the Obama administration is being unfairly smeared by the accusation that they’re simply handing out government jobs and contracts as a reward for their top fundraisers.

Many of us who favor unfettered politcial speech and the right of citizens to spend or contribute money as they see fit in order to promote their own political views have had the sneaking suspicion that many of our counterparts in the so-called campaign finance ‘reform’ community aren’t just wrong, they are deeply ignorant and misinformed when it comes to what the law actually is.

At least in the case of Common Cause, this suspicion seems to be confirmed via today’s Twitter feed. Remarking on President Obama’s release today of his “long form” birth certificate (depriving the American public of a perfectly silly conspiracy theory to laugh at, incidentally), Common Cause Tweeted the following:

RT @CommonCauseMA: @commoncause now that the #birthcertificate is released, can we talk about releasing the names of PAC donors #uncloakkoch

It’s hard to imagine anyone who even vaguely understands campaign finance law would assert, as Common Cause does, that donors to PACs aren’t disclosed. But the “#uncloakkoch” hashtag goes a long way towards explaining this Tweet. In their pursuit of the Great Koch Brothers Conspiracy (only slightly less bizarre than the Obama birth certificate craziness), Common Cause has once again chosen to abandon caution, facts, the law, and any sense of reasonableness for one more false attack against their target.

It’s increasingly clear that the ‘reform’ community is dividing into those that are simply wrong, and those that have become so unhinged by Citizens United and the free exercise of the First Amendment by Charles and David Koch that they’re basically uninterested in the truth, only scoring partisan points.

*** UPDATE

@CommonCause Tweets to thank me for noting their error:

RT @seanparnellCCP: @CommonCause PAC donors are released: www.fec.gov #campaignfinance …True, i meant 527′s thx for correction #eitherway

Of course, 527 donors are disclosed as well at the website of the IRS.

Eventually they’ll get it right…

*** CORRECTION

Slight error, it was the Massachussets chapter of Common Cause that sent the last Tweet explaining that they wanted 527 donors released. Not that big of a difference, but worth noting.

Public Citizen is out with its one year report on Citizens United v. Federal Election Commission.  Its predictable claim: bad, bad, BAD!

But what odd criteria they use to come to such a conclusion.