Erosion of Democracy

Money in Politics – The Erosion of Democracy

By George Beck

(Based on a talk to the Edina League of Women Voters, 11/14/2019)

I was talking to an old friend of mine a few weeks ago. As we were catching up, I told him about my work with Clean Elections and the effort to reform our use of money in politics. He said, “Why don’t we just have the rich support candidates so that the rest of us are left off the hook.” The Citizens United court, which released billions of dollars into our political campaigns, didn’t phrase it that way. But the result has been the same. However, it is also special interests that are footing the bill, with an expectation of some benefit.

So, what has been the result of Citizens United? A few donors are providing much of the contributions. Just 11 donors have injected $1 billion into U.S. political races in the past 8 years through Super PACs. In 2016 alone 100 superrich Americans gave $1 billion to Super PACS, or $10 million per donor. That includes Democrats and Republicans and Michael Bloomberg. In 2018 the Adelson’s gave $112 million to conservative Super PACs. 

The problem is bipartisan. Current presidential candidate Tom Steyer gave $50 million in 2018. Bloomberg contributed about $100 million to Democrats. There is no doubt these contributions had a disproportionate influence on our elections. The overwhelming amount of political contributions today leads to corruption as elected officials pay more attention to contributors than constituents.  This causes them to neglect their more important duties. The spending by Super PACs has surpassed that of candidates and the disparity increases with each election.

Is big money effective? In the 2012 congressional races the better financed candidate won in 91 percent of the races. The spending is made by a small fraction of Americans. Big money increases incumbency as incumbents raise 5 to 10 times more than challengers according to Open Secrets. High levels of incumbency lead to gridlock as incumbents work on behalf of donors and devote a large amount of time to fundraising in order to stay in office. Big money also leads to monopolies that limit competition. For, example, ten companies control the food industry in this country. 

In 2016 and 2018 Minnesota was affected by an inflow of out-of-state money and dark money. Corporations and the wealthy have discovered that it is easy and relatively inexpensive to sway a state election compared to a federal election, and to then block legislation that corporations don’t like. In 2016 the Minnesota Jobs Coalition, a conservative leaning independent expenditure group, raised $755,000 in 10 days from business interests, including Wal-Mart and Koch Industries, to retain a business-friendly majority in our legislature. 

The Koch brothers have a strong interest in weakening environmental rules to benefit their fossil fuel businesses. Large sums of outside money (sometimes undisclosed) flowed to even out-state house districts. We had two, million-dollar legislative contests in 2016 and 2018 and almost three. Large sums of money in campaigns have a major downside apart from influencing a legislator’s vote. It means that legislative compromise is less likely because legislators are concerned about an opponent being provided with big contributions if the legislator deviates from the party line. It also often means that the Super PAC (sometimes with no disclosure) attacks the opponent while the candidate takes the higher road 

Corrupt money in politics has a long history in the U.S. Mark Twain once said that “We have the best Congress that money can buy.” So, how blatant has “pay to play” become today? 

An Oct. 17, 2017 article in the Star Tribune reported that Congress had stripped the DEA of its most potent weapon against large drug companies suspected of spilling opioid prescriptions onto the nation’s streets. PACs representing the industry contributed over $1.5 million to the 23 legislators sponsoring the bill. Since early 2017 drug makers contributed to 217 Republicans and 187 Democrats. Former House Energy and Commerce Chair Greg Walden received over $200,000 while Chair. Last year Big Pharma spent over $220 million to lobby Congress.

What is the consequence of this congressional action? It leads to the fact that 200 people die every day in this country from opioids. In Hennepin Country opioid deaths have increased 50% in the last two years to 162 deaths last year. 

Eighty-three percent of Americans support the federal government’s negotiating drug prices for Medicare. Yet zero bills have progressed to make this happen. Drug companies have spent 1.6 billion dollars lobbying Congress since 2003.

The same corruption exists for other regulated businesses with consequences for climate change, gun safety, and health care, among others. Although 90% (90%!) of us support full background checks for the purchase of a gun, the legislature cannot get this done. Is this related to contributions? It’s certainly not related to losing votes. It’s clear that to solve important problems like these we also need to solve the problem of money in politics.

Research has shown that policies supported by economic elites and business lobbies became law between 60 to 70% of the time while policy changes favored by a majority of all voters were enacted just 30% of the time. Something has gone tragically wrong in our democracy when legislators represent their contributors rather than their constituents. 

Politicians no longer even bother to hide “pay to play.” Senator Lindsay Graham stated that they had to pass the tax bill or political contributions would dry up. A few days after the bill passed, then Speaker Paul Ryan’s joint fundraising committee received $500,000 in contributions from Charles Koch and his wife. That is peanuts compared to what the Koch brothers will save. I am sure Mr. Koch believes he made a wise investment.

The chair of the Minnesota Senate Elections Committee recently said that “Taking money out of politics is like taking people out of politics.” Recently a political party chair stated that “Fundraising is the most important part of politics.” To me these statements— repeating an obvious falsehood for public consumption—remind me of George Orwell and 1984. In fact, our current system of political fundraising has taken most people out of politics.

An article in the Star Tribune quoted White House chief of staff Mike Mulvaney as saying that when he was a Congressman, his policy was “If you’re a lobbyist who never gave us money, I didn’t talk to you.” In other words, he sold access to his office for contributions and thought that was proper.

In Minnesota the founder of a prominent cancer treatment center has contributed over $1.8 million to legislators in order to preserve a moratorium on new radiation treatment facilities. The good news is that it was disclosed. That’s why disclosure is important.

Dean Phillips ran for Congress on a platform of campaign finance reform and is working hard on that in Congress. When he arrived in Washington, he was told that no one cares about campaign finance reform, just drop that as an issue. But he is convinced that progress on any other issue like climate change, health care or gun safety, is dependent on changing our present system of officeholders relying on massive contributions. He couldn’t be more right about that.

According to 60 minutes, the average day for a member of Congress now includes 4 hours of call time to raise money. Rep. Phillips has confirmed that members of Congress spend at least 20 to 40 hours each week dialing for dollars, often talking with funders from outside their district. This causes them to neglect their more important duties. It also means talking to wealthy interests who want benefits from Congress. What chance do average voters have to be heard in this scenario? Elected officials are aware that a vote against moneyed interests may mean they will face a well-funded opponent in the next primary or general election. 

Half of Americans think that the United States is in “real danger of becoming a nondemocratic, authoritarian country.” A majority, 55% see our democracy as “weak” and 68% believe it is getting weaker. The Economist magazine performs an annual review of the health of democracy in the world’s countries. They recently downgraded the United States from a “full democracy” to a “flawed democracy.” 

Is this discouraging? No! Some 80% of Americans already support reversing Citizens United and ending dark money. Across the political spectrum it’s recognized that this is wrong and undemocratic. And yet the will of the people has not been implemented due to the power of large contributors and political parties who like things the way they are – pay to play. IRS and SEC attempts to write regulations in this area have been successfully blunted and are prohibited in budget bills advanced in Congress. The IRS could more clearly define when a 501c4 non-profit can contribute to candidates and the SEC could require corporations to disclose to shareholders political contributions made by management.  But the present opinion of Americans on money in politics does mean that that part of the effort is complete.

In Minnesota we have a roadmap to reform courtesy of the Minnesota House of Representatives in the form of HF 1603 which was passed as a part of the House State Government Finance bill this year. This legislation allowed released felons to vote; it provided for automatic voting registration with a new or renewed driver’s license; it authorized early voting for 30 days prior to an election; it allowed cities, counties and townships to adopt ranked-choice voting; it provided for Minnesota’s presidential electors to follow the national popular vote;  it required contributors to issue ads to disclose their identity; and it created a redistricting commission to assist the legislature in drawing voting districts, to reduce the possibility of gerrymandering. This bill was a major step forward for democracy in Minnesota. It was denied a hearing in the Minnesota Senate. We need to push for this change. 

We also need to have our legislature petition Congress for a constitutional amendment to reverse Citizens United as 20 other states have already done.

The problem of unlimited contributions is made much worse by the failure to disclose the contributors. Dark Money is political contributions whose contributors are not disclosed to the public. This is a serious problem for a democracy because voters do not know who is supporting candidates. That is a significant factor in deciding who to vote for. We also don’t know if other countries are contributing to our campaigns. Furthermore, we can’t tell whether an elected official is voting for a large contributor rather than for us. And it encourages attack ads just before an election that are often untruthful because there is no responsibility for the ad. 

Dark money has become increasingly prominent in campaigns. According to Issue One, since the Citizens United case in 2010, the top 15 dark money groups have spent more than $600 million dollars in secret money on elections. The majority was spent on negative attack ads, criticizing candidates from the shadows while purposely hiding their donors and masquerading as “trade associations” or “social welfare” non-profits. In 2014, 86% of independent expenditures in 13 toss-up congressional races came from dark money groups.

Why is it so popular? Major donors expect benefits from contributions, but they don’t want anyone to know about it, nor does the legislator sometimes want anyone to know about it. Dark money may be used when, for example, management doesn’t want shareholders and customers to know what they are doing. (Target) 

The Citizens United Court believed that in this electronic age, full disclosure of contributions would cure any problems. But political action committees became qualified as “social welfare” non-profits—501c4 organizations—that allow them to hide the identity of contributors. The IRS statute says a 501c4 “must be operated exclusively to promote social welfare.” The IRS regulation, however, says that a 501c4 need only be “primarily engaged in promoting in some way the common good and general welfare of the community.” The IRS then adopted a liberal interpretation of its permissive rule: The rule for c4s became that up to 49% of your budget could be used for election activity. But because there is simply no IRS or FEC enforcement of even that policy, political non-profits simply spend as much as they want for campaigns without disclosure. 

In 2018 dark money groups accounted for more than half of all outside group spending on broadcast television ads. Both parties contributed to this. The original intent of the 501c4 provisions was to allow social welfare groups like the Sierra Club or a scientific society or a firefighter organization to avoid taxation and to allow their contributors to be anonymous.  They are not supposed to be political committees. 

One result of secret money is that when citizens believe that the system is not responsive to them (“rigged”), they vacate the public square. A recent poll of professed non-voters found that they were turned off by political parties and our broken system. We will need everyone to vote to attack this problem. Cleaning up legal corruption will encourage voting.

Issue One reports that dark money groups that do not disclose their donors spent more than $800 million from 2010 to 2016, with $600 million coming from only 15 organizations. Judicial Crisis Network, a 501c4 dark money group poured at least $5.3 million into its pro-Kavanaugh advertising campaign, much of it targeting vulnerable Senate Democrats in red and swing states.

Some Super PACs simply don’t file with the IRS assuming that a fine, if assessed, is a cost of doing business. And now the Treasury Department has recently announced that it will no longer require non-profits like the NRA, Planned Parenthood, the Koch-aligned Americans for Prosperity and labor unions to disclose their donors. The system is simply broken. 

80% of Americans, including most Republicans, are opposed to dark money in election campaigns. Across the political spectrum it’s recognized that this is wrong and undemocratic. And yet the will of the people has not been implemented due to the power of large contributors and political parties who like things the way they are – pay to play. IRS and SEC attempts to write regulations in this area have been successfully blunted and are prohibited in budget bills advanced in Congress. The IRS could more clearly define when a 501c4 can contribute to candidates and the SEC could require corporations to disclose to shareholders political contributions made by management. 

Minnesota has an added dark money problem. Under existing law independent committees like Super PACs, can pay for electioneering communications – radio, TV, mailings, billboards, electronic mail – and not have to report donors as long as they avoided the eight magic words (Buckley v. Valeo) like “vote for” “elect” or “defeat” – namely, clear statements for or against a candidate or “expressly advocating.” Minnesota adopted this rule in statute but then a later federal decision recognized the loophole created and expanded the prohibition to include communications “susceptible of no other reasonable interpretation than an appeal advocating the election or defeat of one or more clearly identified candidates.”  

Twenty-five states and the federal government adopted this more restrictive rule language, but not Minnesota. For example, “Ask Rep. Jones why he hates the 2nd Amendment” can be posted on a billboard within 30 days of an election. Jones supports the 2nd Amendment, but also supports background checks. The billboard is completely misleading, but we don’t know who is responsible for it. So, we know anecdotally that electioneering communications were made in the last election with undisclosed donors, but we don’t know how much secret money was really spent 

For now, change will need to come at the state level. For example, New York state law requires 501c4s that spend at least $10,000 per year on issue advocacy that advocates for or against a clearly identified political candidate must identify donors who give $1000 or more. California has a similar law. One Minnesota state senator has said that over $100,000 in unreported spending attacked his positions in 2012. That type of spending has undoubtedly increased since then. 

Reversing Citizens United by a constitutional amendment will take some time. But it will happen. For the present, we need to send more legislators to St. Paul and Congress who believe in campaign finance reform. In 2020 we need to ask candidates for their position on money in politics through town halls, e-mails, phone calls and visits. Clean Elections will survey the 2020 Minnesota Senate candidates on campaign finance and report their answers. 

We need to make sure that candidates and legislators understand the concern of “We the People” and understand that we are in charge.  This is the effort that we all need to make to preserve our democracy. These are easy steps. It is our responsibility as citizens. A woman outside the Constitutional Convention asked Ben Franklin what they had created. He replied, “A republic, madam, if you can keep it.” Let’s keep it for our children and grandchildren.

The League of Women Voters has been a leader in holding forums to explain and support voting and campaign finance reform. Clean Elections recently sponsored talks by Rep. Dean Phillips, Secretary of State Steve Simon, and reporter and author Hedrick Smith. In April we will bring professor and author Nancy MacLean to town to discuss her book, Democracy in Chains. All of our organizations need to work together to raise the profile of the need for reform to elected officials and the public. We all need to talk to our friends about the consequences of big money in politics. In order to make progress everyone needs to understand that there is something very wrong with our democracy at present.

We need to support the League in their effort to increase voting. Forty-three percent of eligible voters did not vote for President in 2016. Minnesota leads the nation in voter turnout (thank you League) but that still means that 25% of eligible voters in our state failed to vote.   Were some discouraged by the belief that money controls politics? We need their votes. We must talk to our friends and relatives about voting and support get out the vote campaigns. Why not turn Columbus Day into Election Day to make voting easier? We also need to oppose voter suppression efforts in our legislature like voter ID and provisional ballots.

We don’t need wait for Congress to make the change. A lot can be done here in our state. That’s our responsibility. As Justice Sandra Day O’Connor said, “The practice of democracy is not transferred through the gene pool. It must be taught and learned anew by each generation of citizens.” We are the teachers. We will do our part. 

Perhaps Dr. Seuss said it best. “Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.”

More Posts