Deep Pockets and Deep Problems: An Examination of how Campaign Finance Reform Could Transform American Politics and Create a Better Government

By Robert Anderson • Social Sciences, Cycle 6, 2015
 

 

 

Introduction and Context

The dismal congressional approval ratings and the promise of “change” or a significant “cleaning up” of Washington at the heart of nearly every new political election have left many American frustrated with politics. One of the most prominent and irritating aspects of political campaigns is the scathing attack advertising that saturates the media and bombards consumers during election season. These irksome advertisements are just one small aspect of the larger problem that plagues contemporary politics: the broken campaign finance system. In the 2012 presidential election, the Obama and Romney administrations spent more than seven billion dollars combined, according to the FEC (Parti). The price of winning a seat in the House is $1.7 million, and a seat in the Senate currently costs $10.5 million (Knowles). Campaign finance is a multifaceted issue that has a significant impact on the American political sphere. Not only do campaign finance issues extend past the elections themselves and pour over into how incumbents manage their resources, but they also debase democratic ideals and leave too much power in the hands of the wealthy. Campaign finance reform could improve the political landscape by fixing one of the main grievances many Americans have against the government: the two-party system. The reduction of financial influence in politics is an issue that surpasses party lines and remains fairly consistent across the political spectrum; 75% of Democrats, 64% of Independents, and 54% of Republicans favor some level of campaign finance reform (Nicks).

Sources of Funding

To identify the specific areas of concern regarding campaign funding, it is first critical to determine from where the funds for political campaigns come. The three major sources of campaign funding are bundling, lobbying, and outside organizations. This paper will focus on the third source, as this is where most of the controversy swirls around campaign finance. The main types of outside organizations that will be scrutinized in this project are super PACs and what are known as 501(c)(4) organizations.

Super PACs

A political action committee, or PAC, is an organization that gathers funds for a certain political candidate. There are several different kinds of PACs, including connected, non-connected, and leadership PACs. The last type of PAC, the super PAC, or independent expenditure committee, is the most influential and controversial because it can distribute an unlimited amount of funds from any source. In order to understand the role of super PACs in campaign finance, it is important to examine what caused them to become a problem in the first place. Two court decisions led to the issues currently surrounding super PACs. The first was the Supreme Court decision in the Citizens United v. Federal Election Commission (FEC). The lawsuit arose after the nonprofit organization, Citizens United, released a documentary about politician Hillary Clinton. The documentary portrayed Clinton as an unfit candidate for a presidential election. Citizens United wanted to use its own funds to distribute the film and thus the question of whether or not organizations could spend such great deals of money on politics was asked. In this controversial decision, the Supreme Court ruled that the first amendment protects the ability of corporations, individuals, and organizations to donate to political entities.

Within months of the decision in Citizens United v. Federal Election Commission, another court case shook the world of campaign finance. SpeechNOW, a nonprofit organization, sought to accept contributions greater than the legal limit at the time without having to register as a PAC and fought the Federal Election Committee on these grounds. In the ruling, the FEC ruled that SpeechNOW had to register as a PAC and could accept unlimited donations from individuals. Combined with the previous ruling from Citizens United v. Federal Election Committee, this second case opened the door for Super PACs to donate any amount from any source, including corporations and organizations. Thus, the era of the super PAC was born. Independent Expenditure groups’ contributions greatly increased from 17 million dollars in 2002 to more than $290 million in 2010 (“2014 Outside Spending”).

501(c)4 Organizations

While super PACs allow unlimited spending for corporations, organizations, and individuals, at least the sources of the donations are known. However, that is not the case with 501(c)(4) organizations. The term 501(c)(4) comes from the Internal Revenue Service (IRS) policy the organizations fall under. These organizations are considered tax-exempt social welfare organizations. The significant issue with 501(c)(4) organizations is that they are not required to release information about their donors. As a result, their funds have been classified as “dark money,” implying that they are of unknown origin and are difficult to trace. Spending from sources that did not release donor information increased from 1% in 2006 to 44% in 2010. An estimated $5.2 million came from 501(c)(4) organizations in 2006 and increased to more than $300 million in 2012 (“Outside Spending”). Notable 501(c)(4) organizations include the National Rifle Association, Planned Parenthood, the NAACP, and Americans for Prosperity. Americans for Prosperity is an organization founded by the Koch brothers, two wealthy businessmen, who have already committed to spending nearly $900 million in the 2016 presidential campaign (Confessore).

The problems these controversial sources of funding create are numerous. Dr. Timothy Luke, a scholar of political science at Virginia Tech, has claimed that “PAC money creates an enviable source of power disproportionately allocated to those with fat wallets” in regards to super PAC spending (“The Power of Money”). The wealth of the few should not influence politicians more than the will of the many. The argument against outside intervention with political spending is mostly an argument of principle. Entities with large sums of money dictating how elections are run creates an unfair playing field.

Opposition to Campaign Finance Reform

Opponents to this viewpoint argue that the more money circulating through political elections, the better. James Bopp, an attorney and the former Republican National Committeeman for Indiana, argues that high levels of funding in campaigns allows citizens to become more informed before casting a vote (Bennet). I argue that many Americans simply dismiss political advertisements as propaganda and that these advertisements are not the grounds upon which Americans choose candidates. Therefore, excessive spending on such ads likely does not improve voter turnout. Instead, Americans choose through political debates and their own research about policies.

Violated Principles

Democracy has always been a cornerstone of American society, but the vast amount of money in politics is making the fight for equality difficult. The American ideal incentivizes the average citizen to participate in government. However, participating in government is significantly more difficult for those who do not have access to large pools of funds; qualified candidates without funds are barred from entry. With a congressional approval rating of 15%, it is clear that members of Congress are not fulfilling the wishes of their constituents (Riffkin). Many credit this poor job by Congress to pressure from outside organizations that bribe officials with funds in exchange for political favors.

The current system of campaign finance undermines the core American value of “one man, one vote.” Organizations, corporations, and individuals with deep pockets are able to influence the political sphere significantly more than the average citizen. This goes against America’s two-and-a-half-century struggle for equality. Despite all the issues that the United States currently faces, polls show that Americans believe government to be the largest area of concern, topping issues such as the economy, ISIS, and jobs (McCarthy).

Another significant issue with the way campaigns are run is that, because so much of the campaign is focused on money, officials are often so distracted by preparing for the next election that they disregard their main duties. Instead of donating time and resources to begin funding the next election, officials should be fully dedicated to performing the duty they were selected to serve. The emphasis on money adds another level of unnecessary stress for officials and not only distracts them from their work, but wastes time and resources that could be used for something more productive. Opponents have argued that it is more difficult to collect funds from smaller sources than larger ones, but I contend that it would ultimately provide more freedom for the candidate because they would not be primarily accountable to a small group of donors who have a great amount of influence over their political career.

Impact of Money in Politics

In the recent North Carolina senatorial election, the Koch brothers, two conservative businessmen, used their wealth to benefit Republican candidate Thom Tillis. The Koch brothers poured more than $1 million into advertisements that promoted Libertarian candidate, Sean Haugh. These ads focused on the legalization of marijuana and the reduction of United States military influence in other countries, two issues that many liberals support (Gold). As a result, liberal votes were divided between Haugh and Democratic candidate Kay Hagan, thus allowing Thom Tillis to more easily achieve victory.

Some scholars argue that money is not the deciding factor in elections, but is still perhaps the most vital asset needed to run a successful campaign. Another issue is that, in television commercials, the “approved by” messages are becoming increasingly detached from the candidates themselves. The Bipartisan Campaign Reform Act of 2002 made these “approved by” statements required in advertisements, but over the years this law has become less effective. As a result, some advertisements are not even related to a candidate, which destroys any credibility of the advertisement (Schmitt). This negatively impacts both candidates and voters because they are unsure of what the candidates’ actual stances are on important issues.

Examination of Other Countries

With all of the focus on campaign finance in America, it is important to look at what other countries around the world are doing in regards to this issue. In the United Kingdom, the amount of money spent on political elections has dropped by 26% since 2005. This decrease sharply contrasts the increase that the United States experiences year after year. Despite the decrease in campaign funds, the United Kingdom faces many of the same issues that the United States does. For example, private donors expect things in return for large donations and the public continues to grow wary of the government. In Norway, campaign funding is more of a public rather than private activity. In fact, more than 74% of money raised by the two main parties came from the government. Norway also bans any political advertisements from television and the radio (Thompson). America could benefit from the Norwegian system because candidates would not be as influenced by large private donations. The American public would also benefit, as the media would not be full of advertisements that are neither credible nor effective.

The Future of Campaign Finance Reform

Campaign finance reform has been an issue stemming back several decades that many presidential candidates have attempted to resolve. However, little has been accomplished because of ineffective legislation. The last law to be passed dealing with campaign finance was the Bipartisan Campaign Reform Act of 2002. This law sought to close loopholes in the campaign finance system but instead led to many more problems. Potential presidential candidates from both the Democratic and Republican parties have spoken out against issues with the current campaign finance system. Hillary Clinton has mentioned that there is an “unaccountable amount of money in politics” (Miller) and has talked about a potential constitutional amendment to alleviate this problem. Similarly, Bernie Sanders has prioritized the issue of campaign finance reform in his Presidential run. His official campaign website outlines several steps that Sanders promises to take to strive for a better campaign process. These include overturning Citizens United v. Federal Election Committee, promoting complete transparency in regards to donor information, and strictly enforcing rules on the FEC. Republican candidate Ted Cruz has also noted the pressure of campaign fundraising and the concerns about anonymous donations (Tau); however, campaign finance reform is not part of his core platform and does not even make an appearance under the “issues” section of his campaign website. Lastly, GOP candidate Donald Trump takes great pride in the fact that his campaign is self-funded, but he is an extreme case because most candidates are not billionaires who can afford to fund their own campaigns with no outside help. On his website, he claims to be self-funding so he does not “owe anything to special interest groups” (Issues-Donald J Trump).

Solutions

The main solution to this problem consists of stricter campaign finance laws that do not allow unlimited private funding or force donors to be transparent. The FEC should be given more power so that it can fulfill its mission and create an environment of transparency. Currently, any organizations that do not have to disclose information about donors violate the purpose of the Federal Election Commission. The FEC’s role should be increased to manage campaign finance and to make the public aware of what is going on behind closed doors.

A solution to the issue of massive donations could also consist of a heavy tax on donations above a predetermined limit. This would discourage entities from donating large sums of money because most of it would be collected as taxes. Instead, the incentive would exist for there to be many smaller donations as opposed to a few larger ones. Large donations would still be possible, but they would be met with the requirement of taxation. In order to ensure that candidates and voters can rely on credible advertisements, the candidates themselves need a larger voice in regards to problems with the Bipartisan Campaign Reform Act of 2002.

Third Party Viability

Through campaign finance reform, viable third parties can be created. A major problem with third parties is that they do not receive nearly as much funding as the two major parties. Closing the gap of funding between these two groups would help assure Americans that third parties are a viable alternative to the two traditional parties. An increasing percentage of Americans are dissatisfied with the current two-party system, but many simply do not see a third party as an option because they are greatly overshadowed by the Democratic and Republican parties. In fact, surveys found that only 26% of Americans believe the two parties are doing adequate jobs, while 60% believe a third party is needed (Jones). Third parties could bring issues to the political agenda that were previously unaddressed because both of the major parties agree on the issue, such as in the case of drone warfare. Third parties would help with the polarization of the country because voters could choose based on different issues rather than the doctrines of the Democratic and Republican parties.

Voter Turnout Issues

A major issue with the current two-party system is that the ideologies of the two parties have become polarizing for many Americans. Voter turnout for the 2014 midterm election was the lowest in 72 years, with no state exceeding a 60% turnout. The overall turnout for the midterm election cycle was 36.3% (“The Worst Voter Turnout”). A decreased reliance on the two-party system would mean less polarization, which would increase the likelihood of moderates going to the polls and participating in government. Changes in the structure of campaign finance could promote different parties that would better represent the beliefs of Americans. Increases in voter turnout would improve American politics because a greater percentage of the population’s beliefs would be represented as a result of voting.

Conclusion

Ultimately, the current system of campaign funding in the United States needs to be reformed to create a better government, society, and country. Not only does it go against the principles of America, it allows a few wealthy entities to influence our whole country’s politics, politics which have served as a beacon and model for governments around the world. Super PACs and 501c(4) organizations negatively impact American politics by creating massive sources of funding for political elections. These funds in turn lead to stiff barriers of entry for potential candidates, distractions for current officials, and a system in which money matters more than policy. These problems could be solved by incorporating a tax on large donations or adopting a public form of campaign funding as seen in Norway. This issue crosses the aisle and is something that even the most polarized politicians agree should be changed. Reform in campaign finance will help fight the polarization that plagues America and hopefully increase voter turnout by getting moderates to the polls. It is simply irresponsible to allow the current process of campaign funding to continue. Officials who support campaign finance reform should be elected because the longevity and credibility of the political system depend on it. America should be a place in which copious amounts of money are not required to run for political office. The heart of politics should be the principles at hand, not groups that are able to control the government through the size of their wallets.

*Illustration by Frits Ahlefeldt-Laurvig: https://www.flickr.com/photos/hikingartist/3000884104