Litigation

Analyzing ?Citizens United? and Campaign Cash

By Peter Hardin

Not only are tides of cash flowing into election campaigns this year, but torrents of analysis are following.

Two major newspapers, for example, have offered updated views about the impact of the landmark Supreme Court decision in Citizens United v. FEC, issued in January, on the flood of cash streaming into this year’s elections.

The New York Times published an article entitled “Money Talks Louder than Ever in Midterms,” and it says “torrents of money, much of it anonymous, is gushing” into midterm races. To start, the article notes, TV spending by outside interest groups has more than doubled since a corresponding time in the 2006 midterm election cycle. In examining causes, the article looks at both Citizens United and other legal developments and concludes:

“In the end…it is the decision in Citizens United…that remains the touchstone. Interestingly, the legal changes directly wrought by the case have turned out to be quite subtle, according to campaign finance lawyers and political operatives. Instead, they said, the case has been more important for the psychological impact it had on the biggest donors.”

The article goes on to describe a “psychological green light for donors” given by the high court. As Steven Law, head of the Republican-leaning American Crossroads group put it, “The principal impact of the Citizens United decision was to give prospective donors a general sense that it was within their constitutional rights to support independent political activity.”

A Washington Post editorial, “Secret campaign money,” zeroes in on a “gusher of secret money pouring into the coming elections” and judges it “alarming.” The fundamental problem is not Citizens United, but it “lies in a tax code that permits too much political activity to take place in secrecy,” according to the editorial.

The editorial explains how nonprofit advocacy groups, called 501(c)(4)s, are allowed to engage in a measure of political advocacy and are not required to disclose their donors’ identities. And the Chamber of Commerce and other trade associations that fall under section 501(c)(6) of the tax code, can engage in greater political activity and aren’t required to reveal their donors.

With a passing reference to disclosure legislation that has stalled in Congress (see Gavel Grab), the editorial states, “The 2010 flood of secret money can’t be turned off. It’s essential to act in time for 2012.”

In related reports:

• A Wall Street Journal article examines the case of Montana, one of a number of states with campaign finance laws threatened by Citizens United, and how it alone is aggressively defending its law.
• “Undisclosed donors pump millions into state campaigns,” reported an article in the Seattle Times.

Full post as published by The Gavel on October 12, 2010 (boomark / email).