“Corporations are people, my friend,” Governor Mitt Romney told a heckler at the Iowa State Fair during the 2012 Presidential Election. While he later backtracked after widespread backlash (and a major drop in the polls), Romney’s claim was correct – as far as the Supreme Court is concerned.
In January 2010, the U.S. Supreme Court ruled in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), that political spending is “a form of protected speech under the First Amendment, and the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections.”
In other words, the Court proclaimed that companies should enjoy the same basic human rights as you and I, giving firms the First Amendment right of freedom of speech – with spending money being a form of speech.
Later that year, in SpeechNow.org v. Federal Election Commission, the U.S. Court of Appeals for the District of Columbia applied the Citizens United ruling in an unprecedented manner, proclaiming that the federal government may not require an unincorporated association that makes only independent expenditures to register and report as a political committee.
The result? The rise of Super PACS (Political Action Committees) as a means of influencing elections, while keeping donors’ personal identities in the dark. While Super PACS are prohibited from donating money directly to political candidates, they can raise unlimited sums of money from corporations, unions, associations and individuals, then spend unlimited amounts to overtly advocate for or against political candidates.
Recognizing that the election finance reforms of 2010 essentially made it easier for corporations and billionaires like the Koch brothers to spend unlimited amounts of money to influence public policy, in 2011, ten professors of law sent a petition to the SEC, urging it to require corporations to disclose all significant political spending so shareholders can hold their companies accountable. As of last month, the petition had garnered more than 640,000 comments – 99.7 percent of which were in support of greater transparency. Many of the petition’s supporters include academics, clergy, dozens of members of Congress and business owners.
Those in opposition of the petition, unsurprisingly, were tax-exempt political groups that do not disclose their contributors – those that benefit most from shady campaign finance laws. These included the U.S. Chamber of Commerce, the 60 Plus Association and the National Association of Manufacturers, among others. They claimed the proposed rule was “wholly unsupportable as a matter of policy”, “far outside the Commission’s legal authority,” and “plainly” in violation of the First Amendment, according to ThinkProgress.
Felicia Kung, who heads up the SEC’s Office of Rulemaking, said that the petition has “garnered more comments than even our most controversial rules…”
While many companies already disclose political spending voluntarily, since Citizens United large corporations are receiving double the number of proxy proposals each year urging them to adopt a policy, according to ProxyMonitor.org, a website sponsored by the Manhattan Institute for Policy Research.
Interestingly, all the fuss about elections being bought and paid for might be for naught, according to Jeff Milyo, an economics professor at University of Missouri at Columbia.
“It is true that winning candidates typically spend more on their campaigns than do their opponents, but it is also true that successful candidates possess attributes that are useful for both raising money and winning votes (e.g., charisma, popular policy positions, etc.),” Milyo wrote. “This ‘reverse causality’ means that campaign spending is potentially as much a symptom of electoral success as its cause.
“People just aren’t that malleable; and for that reason, campaign spending is far less important in determining election outcomes than many people believe (or fear),” he added.
Even if Milyo is right, and campaign spending is not as decisive a factor in winning elections as many of us would believe, there is little doubt that those who do win are compelled to remember their donors. It seems no coincidence that those groups that can pay – Wall Street, the Chamber of Commerce, and the healthcare and defense lobbies – tend to get their way in the halls of Congress.
Based in San Francisco, Mike Hower is a writer, thinker and strategic communicator that revels in driving the conversation at the intersection of sustainability, social entrepreneurship, tech, politics and law. He has cultivated diverse experience working for the United States Congress in Washington, D.C., helping Silicon Valley startups with strategic communications and teaching in South America. Connect with him on LinkedIn or follow him on Twitter (@mikehower).