Home / News / News Features / The $6 Billion Question: Did Corporations Buy Our Democracy?

The $6 Billion Question: Did Corporations Buy Our Democracy?

Nov. 7, 2012
Google plus Linkedin Pinterest
Was it worth it?

The first general election in which unlimited, undisclosed corporate money could be used in campaigns is winding down as the Shepherd goes to press this week.

We don’t know who will take the oath of office on Jan. 20, 2013, nor do we know which candidates will be seated in Congress or the state Legislature.

But we do know that money—about $6 billion nationally, a record-setting sum—helped to select candidates, shape the races and messages, and flood our airwaves with toxic campaign commercials.


Feingold: Money Problem ‘Has Expanded Exponentially’

Thank the U.S. Supreme Court’s Citizens United decision for that.

The landmark 2010 case gutted the McCain-Feingold campaign finance law’s ban on corporate money in elections. Now, thanks to Citizens United, corporations and unions can spend funds from their general accounts on campaign activities. As a result, a wide range of corporate- and millionaire-funded “independent issue” groups has sprung up to attack or support candidates on both sides of the aisle. And thanks to loopholes in the law, these groups have to report very little information about their donors or expenditures.

The best estimate at the moment is that outside, special-issue groups have spent $1.11 billion on campaigns during this cycle, according to research conducted by Wisconsin Public Interest Research Group (WISPIRG) and Demos—a 400% increase over 2008 spending by outside groups. That amount will likely increase as late expenditures are factored in to the total.

Even more worrying, WISPIRG and Demos found that almost a quarter of outside spending—$257.9 million—was “dark money” from groups that do not report their donors.

Former Wisconsin Sen. Russ Feingold, a co-author of the McCain-Feingold bill, said the spending in the post-Citizens United era is even worse than he had expected.

“It has expanded exponentially, rather than just growing at a rapid pace,” Feingold told the Shepherd last week.

He said his and McCain’s campaign finance law cracked down on “soft money”—unregulated funds raised by the political parties—because he’d seen the special-interest funds’ effect on members of Congress.

“The Telecommunications Act, crushing diversity in the media; trade agreements that shipped our jobs overseas; and getting rid of the restrictions on Wall Street that led to this economic collapse—this is all a result of soft money,” Feingold said.

But Feingold said the spigot of money that was opened by the Supreme Court in Citizens United will be even more corrupting.

“If you compare the kind of money, soft money, to what we’re dealing with now, it will be even more devastating perhaps, many times over,” Feingold said. “People need to not just focus on what happens during the campaign, which is very disappointing and depressing for people who want their voice heard, but also on the policy result that occurs afterward, and, frankly, the buying off of both sides.”


‘Dark Money’ Drowns Out Candidates

The campaigns and their independent allies are so flush with cash that they seem to be spending in states that seemingly aren’t competitive. Last week, it was reported that all TV spots had been bought up in Ohio and Virginia, two truly swing states. So what does a candidate with money to burn do? Buy TV time in states that don’t seem to be up for grabs, as Mitt Romney did in Pennsylvania. That forced Barack Obama’s campaign to play defense and put up ads. As of last Friday, the RealClearPolitics polling average had Obama 4.6% over Romney in Pennsylvania, a solid, pretty much insurmountable margin just days before the election. Pennsylvania voters will decide if Romney’s strategy worked or not.

Wisconsin voters have not only been on the receiving end of presidential political commercials, but we’ve had to slog through unending negative ads in the race for U.S. Senate between Democrat Tammy Baldwin and Republican Tommy Thompson.

At more than $65 million, the campaign is the most expensive Senate race Wisconsin has seen, and it could decide political control of that chamber. More than two-thirds of that money—an estimated $45.7 million—is being spent by outside groups. That means the outside groups are dominating the election messages.

“Technically, these are independent groups that cannot coordinate with a candidate,” said Joe Rasmussen of WISPIRG. “But it’s obvious that they are working toward the same goal.”

The biggest outside spender is Karl Rove’s Crossroads GPS, which, along with American Crossroads, has dropped at least $7.4 million on ads attacking Baldwin, including the almost-endless loop of Baldwin saying, “You’re damn right,” and blasting her as “taxing Tammy.”

On the other side of the aisle, the Democratic Senatorial Campaign Committee has spent $7.2 million on the Baldwin-Thompson race.

While it may seem as if the two sides have achieved some sort of parity in spending, they’re playing by vastly different rules.

Rove’s Crossroads GPS is, technically, a “nonprofit social welfare organization” and it does not have to register with the Federal Election Commission (FEC) or disclose its donors. It only has to report its spending in the 60 days leading up to a general election.

This “dark money” group is a companion to American Crossroads, a Super PAC that can receive unlimited funds but is required to register with the FEC and disclose the sources of those funds.

In contrast, the Democratic Senatorial Campaign Committee is playing by the old, established rules, with limits on donations and requirements on funding and spending disclosure.

Although wildly expensive, Wisconsin’s Senate race seems to be typical of what’s happening in other states.

According to Lee Drutman of the Sunlight Foundation, Republican Senate candidates across the country are relying much more on non-party organizations—such as Crossroads GPS and the U.S. Chamber of Commerce—that can receive unlimited sums, don’t have to disclose their donors and only have to report their spending within 60 days of an election. As of late October, these “dark” groups have spent $56.2 million in support of Republicans, while Democratic “dark” groups have spent $24.6 million.

Bill Kraus, a longtime Republican strategist, said the anonymity of the donors and groups has made campaigns toxic in their negativity.

“TV is the medium now,” Kraus said. “And what works on TV is negativism and scaring people. There aren’t too many people who are willing to try anything else. You have scared candidates and big money. It’s a perfect storm.”


What Can Be Done?

Since the Supreme Court found that corporations have a constitutional right to spend money on campaigns, it’s difficult to craft any law that would survive a challenge in the Citizens United era.

That’s why Feingold and his Progressives United PAC are advocating for overturning Citizens United with another campaign finance case. But that will only happen if Obama survives the election and appoints justices who are less beholden to the corporate interests that have exploited the ruling.

He’s also pushing for the passage of the DISCLOSE Act, which would require outside groups to list their big donors. Feingold noted that disclosure was favored by eight of the nine Supreme Court justices in the Citizens United case, showing that while the court didn’t want to ban corporate donations outright, it did see the value in transparency. Feingold said he thinks Obama supports the DISCLOSE Act as well. The former senator also wants to get rid of the FEC so that it can be replaced by what he calls “a real enforcement agency.”

State-level disclosure laws and public financing options could also stem the tide of over-the-top special interest spending.

The push to blunt the effects of Citizens United is also gaining momentum at the grassroots level. This spring, West Allis voted 70% in support of a constitutional amendment that would affirm that money is not speech and that corporations are not people, striking at the heart of the Supreme Court’s ruling.

This summer, a veto-proof super-majority of the Milwaukee County Board of Supervisors voted to place a similar advisory referendum on the Nov. 6 ballot. But Milwaukee County Executive Chris Abele vetoed it at the last moment so the board could not override his veto and allow county residents to make their voices heard. The measure died due to Abele’s apparent support for corporate money in politics.


Despite their cold start in April, do you believe the Milwaukee Brewers will be able to finish the season above .500?

Getting poll results. Please wait...