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“Shadow” Parties and the Origins of Super PACs

Public views of the Citizens United v. Federal Election Commission decision

Public views of the Citizens United v. Federal Election Commission decision, by CMBJ (Washington Post), February 2010

“Super PACs” are the enfants terrible of the campaign finance world today. These groups, sporting only slogans for names and raising unlimited contributions to support federal candidates, have been decried as a new and dangerous precedent in election campaigns:

The rise of these groups erodes the twin pillars of a functional campaign finance system: limits on the size of contributions and timely information about who is writing the checks.

Raising concerns about corporate and labor union money, and questions of disclosure, SuperPACs have also been criticized for blurring the lines of candidate and party responsibility – particularly when it comes to attack ads. Such “shadow” organizations cannot be properly held to account, it is said. Indeed, the apparent disconnect between their professed independence from the candidates, and the realities of their impact on the contest, has become as much fodder for comedians as campaign finance scholars. But though SuperPACs may have placed these concerns in graphic relief, they are less creations of the 2010 Citizens United and SpeechNow decisions, than they are new incarnations of old problems.

In fact, fifteen years ago this week, the Senate authorized an investigation into fundraising activities in the 1996 elections, which brought similar problems to the fore. While revelations of sleepovers in the Lincoln bedroom for campaign donors, subpoenaed witnesses fleeing the country, and the laundering of foreign donations captured the headlines during the investigation, the committee also paid extensive attention to the rise of “issue” advertising by parties and “outside groups” – communications which seemed to promote or oppose candidates without actively “advocating” for or against them, and for which responsibility was often unclear.

The Federal Election Campaign Act of 1971 (FECA) and amendments in 1974 had placed limits on both party expenditures and so-called “independent” expenditures from groups not directly associated with the candidate or the party. But the independent expenditure provisions were struck down in the Supreme Court’s Buckley v. Valeo (1976) decision as violations of free speech. In doing so, the Court also drew a distinction between express advocacy in relation to a candidate, which might be subject to some regulations but not a cap, and “issue advocacy,” which could not be regulated.  “Independent expenditures” were defined henceforth as spending on express advocacy made independently of a candidate – with terms such as “vote for” or “oppose” being the key feature. With communications short of this standard escaping regulation, an “issue” advertising loophole was created and exploited from the late 1980s on.

The parties found ways to fund these ads largely through “soft” money – unregulated donations permitted in 1979, ostensibly for “party-building” activities, which could come from and be funded by corporate or union treasuries. But corporations and unions could fund these ads more directly too, or via an array of “issue” organizations that proliferated on the national scene. Issue advertising also avoided thorny questions of whether activity was truly independent of a candidate’s campaign.  And there were concerns about substance as well as financing. “Outside” groups appeared to encourage more negative attack ads than candidates might permit if they were directly associated with them. Thus the specter of unlimited corporate and labor union funding, prominent “outside” groups and questions over coordination, and the distancing of candidates from messaging was apparent, presenting a configuration of problems similar to that we see today. Indeed, Common Cause executive director Ann McBride’s testimony in the ’97 hearings on issue advertising would seem just as applicable to the SuperPACs now:

What is happening with issue ads is fundamentally altering the electoral system in this country. This is beyond the corruption issues. And what you will have is a situation if this continues where candidates are bit players in their own campaigns and where the American people in looking at the debate will not know what these candidates stand for because their voices will be muted by all of these interest groups for and against. . .[W]e are really, if we allow this, altering our basic electoral system in a way that is quite dangerous . . . for our democracy.

 

The 2002 Bipartisan Campaign Reform Act was meant to address many of the issues this investigating committee brought to the fore – it eliminated soft money at the national level, created a new category of “electioneering communications” to try and capture the ads that were designed to promote or oppose candidacies without overt “advocacy,” and imposed a blackout on such ads close to primary and general elections.  It also required that candidates appear in ads funded by their committees and claim responsibility for their content. But in many ways, its efforts only drove more activity into outside groups, with litigation even prior to Citizens United narrowing the application of BCRA’s provisions to such actors. Witness the rise of 527 organizations in the 2004 electoral campaign, or the emphasis on 501(c) groups in 2008.

Yet this nexus of campaign finance problems, and the fragmentation of party and campaign activities that underpins it, has origins much earlier than typically supposed. Corporations had been banned from making direct contributions in election campaigns since 1907.  Early efforts to regulate “outside” money spent on a candidate’s behalf were also evident in legislation passed in 1911, which placed expenditure limits on the campaigns of congressional candidates, and included language that the individual not “cause to be spent” in excess of that sum on his behalf.  In practice, as Louise Overacker – a Wellesley professor and early expert on campaign finance – observed in 1932, “the astute candidate” must simply “be discreetly ignorant of what his friends are doing.”

The activities of the candidate’s “friends” took on new importance in 1936, when the involvement of “non-party” groups became a major feature of the presidential campaign. Groups like the “Committee of One,” for instance, or the “Good Neighbor League” were organized and partly funded by the Democratic National Committee as a way of promoting support for Franklin Roosevelt among independent voters. Some Roosevelt-oriented groups were more fully independent, like “Labor’s Non-Partisan League” – funded by several new industrial unions and marking labor’s first foray into elections as a major financial supporter.

Such independent groups also appeared on the Republican side, with exhibit Number One being the “Liberty League.” Formed by a group of prominent businessmen in 1934 to channel their opposition to the New Deal, it set its sights on defeating Roosevelt in 1936, and thus lent its support to Republican candidate Alf Landon. Like today’s SuperPACs, the League itself only engaged in expenditures “independent” of the candidate’s campaign (though the status of “advocacy” was not at issue) – reportedly spending over $1 million in its effort. But it’s support proved to be a mixed blessing: the League itself became the focus of Democratic attacks, relegating the Republican party to the background. After Landon’s landslide defeat, RNC chairman John Hamilton concluded, “nothing is more stupid” than for an organization of big businessmen to get out and “carry a flag in a political parade.” Indeed, conservative-leaning SuperPACs might view this as a cautionary tale, with efforts to depict them as business juggernauts already coloring this year’s campaign.

More outside groups appeared during the 1940 presidential campaign, in which Franklin Roosevelt sought a third term against Republican nominee Wendell Willkie.  The Republican-leaning groups in particular give today’s Super PACs a run for their money in the naming stakes. Thus the straightforward and accessible “Employees for Roosevelt,” and the slightly more glamorous “Hollywood for Roosevelt Committee,” for example, were arrayed against the “National Committee to Uphold Constitutional Government,” the assertively titled “Pro-America” and, not to be outdone, “We, The People.” But the “Associated Willkie Clubs of America” was the biggest player this time around – spending almost $1.4 million. Formed to promote Willkie’s outside candidacy for the nomination, it stayed active beyond the convention – presaging an important trend toward candidate committees in subsequent presidential campaigns. Thus, if the candidate might now risk being a bit player in his own campaign, the Willkie effort played a major role in making it his campaign in the first place.

But its activities would be rendered more important by the passage of the Hatch Act Amendments in mid-1940, to which the first cap on individual contributions ($5000) and on overall presidential campaign expenditures ($3 million) were added. The parties scrambled to rearrange their affairs so as to comply with the law, and “independent” groups like the Willkie Clubs provided a convenient outlet for both contributions and spending – particularly after the RNC’s legal counsel, Henry P. Fletcher, announced his interpretation that the spending cap applied individual political committees, not to overall efforts designed to promote a presidential candidate. The provisions more generally encouraged a proliferation of committees “independent” of the party in little beyond name.

Roosevelt’s last presidential campaign, in 1944, also saw the emergence of the most significant group for shaping the nature of political activity conducted “outside” the party organizations: the C.I.O. “Political Action Committee” or P.A.C.  Wartime legislation in 1943 had extended the longstanding ban on corporate campaign contributions to labor unions.  The C.I.O. responded with the P.A.C. – if it could no longer use its treasury funds (drawn from membership dues) to contribute to candidates, it would collect “voluntary” funds from members instead. Yet it was highly controversial in doing so – even compared to a “kiss of death” for some candidates given the visceral popular backlash.

The P.A.C. also engaged in activities beyond simply contributing directly to candidates – producing voting guides, endorsing candidates, and broader publicity efforts. And they used treasury money to fund these effort, justifying this on “educational” grounds – much like the arguments used to distinguish “issue” from “advocacy” advertising in the post-FECA world. In fact, it is largely the activities of the P.A.C. outside of direct giving to candidates that led to the original extension of the corporate and labor prohibition to “expenditures” in connection with elections – in the 1947 Taft-Hartley Act.  Yet the precise nature of those expenditures, and their relation to the candidates, was neither addressed in Congress nor fully examined in the Courts – leaving an array of unresolved questions on political activity outside of a candidate’s orbit. 

So while SuperPACs might be the focus of today’s anxieties, they should be viewed in terms of a longer train of developments, and not simply ascribed to a Court decision that ostensibly created them. Tensions over the nature and scope of outside political activity were already apparent as the Congress considered FECA. FECA did make significant changes to the campaign finance framework – setting up the presidential public financing system and the FEC, for example – but it also built in the extant tensions. Formalizing and codifying the PAC concept as the primary mechanism of financial participation, it constructed the contemporary campaign finance system atop what was itself a circumvention of the law, and did little to address the underlying questions of outside spending that PAC activity had generated.

As Justice Kennedy noted in the Citizens United decision, a patchwork of legal rulings and FEC regulations had subsequently emerged with few simple or consistent principles to connect them – legal complexity that served as a prior restraint on speech, in the Court’s view.  In clearing away some of that complexity in the realm of independent expenditures, at least, the Court’s decision might be viewed in more positive terms, as presenting an opportunity to rebuild a more meaningful campaign finance framework, less hampered by the problems of the past.

Emily Jane Charnock is a doctoral student in the Department of Politics at the University of Virginia, and a Miller Center National Fellow.

Comments

Fascinating summation of the history behind the SuperPac controversy. Perhaps what has changed the most is not how much more easily these sums are spent on behalf of candidates, but that American voters don’t seem to be bothered about it, by and large. There seems to be a presumption that millions spent by a rich business figure or company doesn’t equate to corrupt control in the way that most Americans thought it would a generation ago. I would be interested to hear more about why that may be.

I agree – perhaps we have separated out the scale of spending from the source of contributions a little too much? The record number of small donations to Obama in ‘08, for example, was presented in largely positive terms – as suggesting enthusiasm for and broad participation in his campaign.  But Obama’s campaign also broke all previous fundraising and spending ceilings, and abandoned public financing – and in so doing, it set a new bar for campaign spending which political consultants then have incentives to sustain.  With Super PACs now on the scene, it’s even easier to reach these kinds of totals, and it becomes a new normal.

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