The U.S. Supreme Court released a decision on January 21 that will have great implications for the future of American democracy. In a 5-4 decision, the court essentially gutted all restrictions on corporate campaign spending. We run through the implications for federal and state campaign finance laws.
While all eyes in Washington are still focusing on the Senate debacle in Massachusetts, the U.S. Supreme Court released a decision yesterday that will likely have greater implications for the future of American democracy. In a 5-4 decision, the court (and its "minimalist" Chief Justice John Roberts) overturned two precedents and essentially gutted all restrictions on corporate campaign spending.
First, let's dig into the specifics of the decision.The court did not change the law on corporations’ ability to contribute directly to a political campaign. Regulations on individual’s donations were not altered, either. What the conservative majority did -- by affirming that corporations are legal persons with free-speech rights and that money is the equivalent of speech -- was eliminate the distinction between corporate and individual donations in American elections. That means corporations are no longer prevented from spending money in support of a candidate. The Wall Street Journal's Ashby Jones explains:
Yesterday, a company was limited in its ability to create, say, its own television advertisement supporting or ripping a political candidate. Today, there are no limits. So long as a company does not coordinate with a campaign, it can spend as much money as it wants to on a sort of shadow campaign on behalf of a candidate.
In practice, corporations (and labor unions) are no longer required to establish a political action committee, whose donations are capped. Instead, they can spend profits freely in a variety of ways publicizing or attacking any candidate for federal office. If you think the banks "own the place" now, wait until this general election kicks into high gear this fall. Michael Waldman of the Brennan Center for Justice pens this bitter take for the New York Times:
Why will this matter? Isn’t there a lot of money sloshing around in politics already? Consider Exxon-Mobil. In 2008, its political action committee (PAC) raised about $1 million from its employees and offices. Its profits that year -– which it was legally barred from pouring into politics -– were $45 billion. It was illegal for Exxon to spend that money on elections; now with this decision, it will be legal. Exxon or any other firm could spend Bloomberg-level sums in any congressional district in the country against, say, any congressman who supports climate change legislation, or health care, etc.
Illinois officials agree. For instance Sen. Dick Durbin released a statement yesterday describing the ruling as "a triumph for special interest and judicial activism at its worst."
While campaign finance reformers are obviously dispirited, it's worth considering whether this ruling -- and its inevitable effects -- will ultimately reinvigorate alternative efforts to keep special interest money out of the political process. At a Brookings Institution panel one week ago, The American Prospect's Mark Schmitt reports that mainstream campaign finance scholars are coalescing around an public financing approach that matches small donor contributions. (Durbin's Fair Elections Now Act features this type of system.) It wouldn't nullify the influence of Big Money entirely, but Schmitt think it's "the only possible path ... for offsetting the influence of money in politics."
Meanwhile, local blogger Ellen Beth Gill wonders if there will be an eventual public backlash:
It will be interesting to see how this affects everyday television watching, a subject far more important to the American people than free speech rights or government. Perhaps it will the the sacred American right to watch reality shows and football games that will bring sanity back to American elections. A few 30 or 60 minute pitches for some candidate who sold out to corporate America might just be what we need to convince Americans that we need fully publicly funded elections.
Here in Illinois, it would not be surprising to see a locally-based corporation challenge the state's brand new campaign contributions law. State Sen. Mike Jacobs (D-East Moline) told the Illinois Statehouse News that he thought the decision will have a "huge impact" on Illinois’ regulations. We'll be on the lookout for any developments on that front.