Campaign Finance Reform

Most of the issues we talk about here are pretty straightforward.  I mean, yeah, they’re more complicated than either the news or politicians let on, but once you get past the fact that complex problems demand complex solutions, it’s smooth sailing.

(Well, I say “smooth sailing”…)

Anyway, this one’s tougher than normal, because the obstacles are legal ones — not mere quibbles, but questions fundamental to our very way of life.  Put simply:  If we let Congress decide when people are or are not allowed to contribute to political campaigns or buy posters or commercials, we’re restricting free speech.  On the other hand, the effect right now is that individual votes are being suppressed and manipulated by corporate entities, which is likewise a fundamental threat to our manner of government.

There are some very intelligent people out there who say — and with justification — that we can never solve the biggest problems facing us (such as healthcare, gun control, and so on) without first addressing campaign finance reform.

Precisely how that’s to be done, however, is problematic — at best.

Ancient History

Way Back When, it was considered traditional to flatter, bribe, or outright buy newspapers to support your campaign.  Since there was no radio or television at the time, this had a profound influence on public opinion.  People would use their personal fortunes if they had them, and could draw on virtually unlimited funds from private or corporate donors.

One of the great early battles between corporate and party money was during the re-election campaign of Andrew Jackson.  Jackson had won his first election only narrowly and through a quirk of the system; his support was garnered largely through a system of party-controlled newspapers across the country.  In 1831, he proposed that the Second Bank of the United States be replaced or at least reformed, as he thought it indecently corrupt; later events proved him quite correct, as the bank then spent tens of thousands of dollars (unheard of in that time) to oppose his re-election.  (They failed.)

The election of 1832 was by no means unique.  Madison had a pet newspaper while president; Lincoln purchased one in Illinois to help him in 1860; even Washington (through Hamilton) had private use of newspapers to support his policies.  In fact, it wasn’t until the Progressive movement of the early twentieth century that public opinion against vote-buying began to have an impact.  The Tillman Act (1907) was designed to prevent chartered corporations and interstate banks from contributing to federal candidates; unfortunately, it failed due to weak enforcement provisions.

The Progressives backed many efforts to reform voting, including the women’s suffrage movement, the reborn Klan, and Prohibition.  (Editor’s Note:  Progressivism was, even at its best, a work in progress.  They worked to strengthen labor unions and break up trusts and monopolies, opposed prostitution and child labor, and embraced eugenics and other pseudo-science.  The cynical would say they haven’t changed much.  I, of course, am entirely unbiased on this and every topic.)

But it wasn’t until the Federal Election and Campaign Act of 1971 that truly effective and enforceable reform was enacted.

From FEC to Citizens United

When the FEC was first established in the wake of Watergate (1974), it was given broad enforcement powers and the right to track individual campaign contributions.  However, the laws they enforced frequently failed Constitutional testing, and were repeatedly restricted or struck down, at least in part, by the Supreme Court.  The reasoning is simple.

If Congress restricts spending for political purposes, it does so to limit the expression of political ideas; there can be no other purpose.  The First Amendment expressly forbids any such restriction; it was designed to do exactly that:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

In the interest of preventing either corruption or the appearance of corruption, the Court has repeatedly affirmed that the government has the right to cap individual contributions to candidates, campaign committees, PACs, and political parties.  On the other hand, it’s clearly unconstitutional to restrict any individual from making their personal opinion on political issues known, so there can be no limitation on the amount someone could spend on, say, newspaper ads as long as those ads don’t explicitly advocate a particular candidate’s election.  As such, national parties can fund unlimited attack ads that aim at the defeat of a particular opponent so long as they don’t go so far as to name someone they’d rather have you vote for.

The most recent major ruling was in Citizens United, in which the Court struck down limitations on political spending by corporations and unions.  The grounds for doing so were that unions and corporations are, by definition, associations of individuals, and that the First Amendment explicitly protects the right of individuals to assemble for political purposes.  It is notable that the Court was bitterly divided in this ruling, with Justice Stevens taking the unusual step of delivering parts of his detailed 90-page dissent from the bench.

As a result of these and other court decisions, individuals remain limited in the amounts they can donate to candidates, but corporate entities are permitted to spend unlimited amounts in attack ads and communications that focus on specific issues.  In short, if you’ve been wondering why politics has gotten so negative recently, now you’ve got an idea.  (A list of the major applicable cases is appended to this article.)

Going Forward

If we view the decisions of the Supreme Court as settled law, there really isn’t much left for us to do.  If Congress can’t make new laws to reform campaign finance, we’re limited to a possible Constitutional amendment — and amending the First is a tricky business.

However, as Chief Justice Roberts stated in the Citizens United decision, courts not only may but must sometimes rule against legal precedent:

Stare decisis is a doctrine of preservation, not transformation. It counsels deference to past mistakes, but provides no justification for making new ones. There is therefore no basis for the Court to give precedential sway to reasoning that it has never accepted, simply because that reasoning happens to support a conclusion reached on different grounds that have since been abandoned or discredited.

Doing so would undermine the rule-of-law values that justify stare decisis in the first place. It would effectively license the Court to invent and adopt new principles of constitutional law solely for the purpose of rationalizing its past errors, without a proper analysis of whether those principles have merit on their own. This approach would allow the Court’s past missteps to spawn future mistakes, undercutting the very rule-of-law values that stare decisis is designed to protect.”

In short, if a new law is passed giving the Court a sound and explicit argument in favor of renewing restrictions, there may well be cause to revisit the case and decide another way.  Congress could force such an event by passing a law that defines for-profit corporations in a way that restricts their ability to weigh in on American politics.  They could mandate that all shareholders be American citizens, for example.  Alternately, corporations could be defined explicitly as non-persons for the purposes of expression.

Another method would involve the tax laws; this one I like particularly.  Corporate expenditures on election-relevant communications might be protected expression, but there’s nothing to ensure that such messages must be tax-deductible.  If they’re taxed, even at a reasonable rate, at least the public will gain some benefit — and corporations really do hate to pay taxes, so it would be a discouragement.

I would be remiss did I not mention some of Senator Warren’s proposals in this area.  One of these is that megacorporations should be compelled to have a federal charter of corporate citizenship, something that binds them to act with a measure of civic responsibility.  Another is that they would be required to seek approval from their boards and shareholders before engaging in political activity.  After all, if corporations are to have some of the rights of people, it’s only proper that they also should bear some of the responsibilities.

Major campaign finance laws still in force:

  • Tillman Act of 1907 — prevention of political contributions from banks and corporations
  • Taft-Hartley Act of 1947 — restriction on union donations from compulsory dues
  • Federal Election Campaign Act of 1971 — comprehensive restrictions on campaign finance
  • FEC amendments of 1974 — creation of the FEC
  • McCain-Feingold, 2002 — modernization of the 1971 provisions

Some of the more meaningful Supreme Court rulings:

  • Buckley v. Valeo, 1976 — struck down campaign spending limits
  • Colorado RFCC v. FEC, 1996 — separated attack ads from campaigns
  • McConnell v. FEC, 2003 — restricted unlimited ‘soft money’ contributions

  • Citizens United v. FEC, 2010 — reversed McConnell, and eliminated limits on corporations

  • McComish v. Bennett, 2011 — prevented states from granting matching funds to underfunded candidates
  • McCutcheon v. FEC, 2014 — eliminated the cap on total individual donations

If you’re interested in media finance reform, donate here.  We urge you to either consider PayPal or

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