Monday, January 25, 2010

Citizens United: Qui Bono and Que Sera

Nate Persily

As critics of the Citizens United decision have moved in their stages of grief from denial to anger to depression and now acceptance, attention has turned to the questions: Who wins and who loses under this new system the Court has crafted? And what does the future hold for both law and politics?


Qui Bono?

There are many ways to ask and answer the question as to who won in Citizens United. Republicans v. Democrats, Corporations v. Unions, Incumbents v. Challengers, Political Parties v. Outside Groups.

Given the apoplexy of Democrats and the euphoria of Republicans in the wake of the decision, it seems so easy to identify the political coalitions favored by the new constitutional rule. Just because it is easy does not necessarily make it wrong, and due deference should be given to the admitted myopia of those whose jobs are on the line. Perhaps corporate money will now flow in great amounts toward ads supporting Republican candidates. Union money will flow as well, but not as much, so Democrats and their causes will be at a disadvantage, the argument goes. As a consequence, policy in Washington and the many states that have similar (and now unconstitutional) bans on such spending will skew toward protecting corporate interests.

Predicting winners and losers from either a new decision or new legislation governing campaign finance has proven to be a tricky business, however. A vocal minority thought the McCain-Feingold law (BCRA) might actually hurt Democrats, for example, because historically they had been better able to raise money in larger chunks from fewer donors (especially unions) than Republicans, who had a comparative advantage in a broad base of small contributors. Of course, the Obama election, with its unprecedented success among small donors over the internet, seemed to redefine our collective assumptions as to who could raise how much money from whom.

Similarly, many (including some Justices on the Supreme Court) viewed the BCRA as pro-incumbent, because it muted the voices of institutions (parties, unions and corporations) best positioned to spend money to buy the name recognition and exposure for challengers that incumbents get for free. However, it is just as plausible that, under the new regime, corporations and unions will feel the need to ingratiate themselves to current incumbents who have promised to exercise greater power to craft regulations and to allocate money in ways that could literally define their existence. If that is so, perhaps the party currently in control (i.e., the Democrats) will prove to be short-term benefactors of the ruling.

Although we might not know for sure whether Democrats or Republicans were the winners yesterday, it seems to me that the political parties as institutions were probably the losers. Their power is now diminished relative to that of outside groups funded (now in unlimited amounts) by corporations and unions. Perhaps this is a good thing: the extreme cohesiveness and polarization of the political parties might be countered by independent, non-party bases of support that influence candidates. At the same time (and more likely from my view), the decision might polarize the parties even further, because independent spenders tend to come from and support extreme positions.

Still, many predicted that, in the wake of BCRA, corporations would simply funnel their money into shadowy interest groups, such as 527s. Although such groups blossomed, they did so mainly with contributions from individuals, not corporations. This caused many, as my previous post suggested, to conclude that corporations may not have been willing spenders in the campaign finance system at all. Rather than consistently trying to buy influence through expednitures, corporations may have more often been on the receiving end of politicians shaking them down for campaign cash. Perhaps the stimulus, TARP, and a new age of increased government regulation of industry may have restruck the balance in motivations of corporations. Or perhaps, as was historically the case, corporations will continue to spend much more on lobbying, which has often proven a more efficient means of influencing policy.

What does the future hold?

Predicting the future of campaign finance reform represents a task even more difficult than predicting the winners and losers from this decision. To some extent, it depends on the boldness of both the Court and Congress and assumptions as to whether the current majority in each branch continues to retain control.

For the Roberts Court, this will not be the last word on campaign finance…not by a long shot. By treating corporations as a mere species of individual associations, the Court has cast doubt on campaign finance regulations that distinguish between the two. Most notably, the ban on soft money, which prevents corporate and union contributions to political parties and candidates, may be the next shoe to drop. If corporations are like individuals, how can Congress completely ban contributions from one while letting the other give within limits?

Although contribution limits (ubiquitous in both state and federal codes) themselves remain untouched in Thursday’s decision, it has now become more difficult to justify them. As Heather Gerken has argued at greater length, the Court significantly narrowed the interests states can argue underlie such laws. In particular, the Court changed the very definition of corruption in its opinion. In the case it overruled, Austin v. Michigan Chamber of Commerce, corruption included “the corrosive and distorting effects of immense aggregations of wealth [amassed] through the corporate form.” No longer do corporations pose a unique corruption threat. Moreover, even the garden variety definition of corruption as signaling “undue influence on officeholders’ judgment” or special access is now under attack. As the Court said in Citizens United, “The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt. . . . Ingratiation and access, in any event, are not corruption.”

Because corruption of the quid-pro-quo variety is notoriously difficult to prove (after all, how many politicians admit they voted a particular way because of a campaign donation?), defendants historically relied on assurances from the Court that states could target the appearance of corruption. Although still standing, even that concept is under attack, as the Court reinforced that “[t]he appearance of influence or access, furthermore, will not cause the electorate to lose faith in our democracy.”

As the notion of corruption has now become more anemic, the state’s capacity to regulate at all in this area has shrunk considerably. It will be a long time (if ever) before the Court reverses Buckley v. Valeo and grants contributions the absolute First Amendment protection it just gave corporate expenditures. However, the pattern in this area of the law has been death by a thousand strategic cuts, with each new decision casting doubt on classic precedent justifying the state’s ability to regulate.

In the short term, the President and several members of Congress are promising reform, each version of which raises its own constitutional questions. To target corporations, some urge that shareholders be required to vote to have treasury funds used for campaign expenditures. Or, given the presumed ability (still kept alive explicitly by Citizens United) of the federal government to prohibit foreigners from spending money in campaigns, perhaps the government could ban expenditures by corporations substantially owned by foreigners. Or, perhaps it could change the tax code so as to reduce the incentives of corporations to spend money on political campaigns. Or, given the tremendous dependency of the financial industry and others on federal funds as of late, the government could make eschewing electioneering expenditures a condition of its largesse. Or, in the same vein, states could condition the granting of a corporate charter on a promise to disengage from campaigns.

Several of these proposals raise questions of unconstitutional conditions while others may be seen as too-clever-by-half regulations. Public funding of various sorts may be the constitutionally safest option, but in an age where the public has become suspicious of both bailouts and politicians they are likely to be hesitant to use one for the other.

More than any area of election law, however, campaign finance had been characterized by the tug of war between the Court and the political branches in the slippery mud of politics. Each law leads to its own loophole, either discovered by political entrepreneurs or poked by a court or agency. The political branches respond with their own innovations and the Court reins them in.]

Older Posts
Newer Posts