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Campaign Cash: Naming Names
The 2012 elections for President and Congress are awash in cash. By early October, President Obama had raised nearly $600 million and was poised to break the record $750 million he set in 2008 for spending by a presidential candidate. GOP challenger former Massachusetts Governor Mitt Romney had raised nearly $400 million. Both candidates also have received significant support from the national political parties and other outside groups. By Election Day, nearly $2 billion will be spent on the presidential race and another $4 billion will be spent on the congressional races.
The record-breaking presidential numbers are a result of the collapse of the post-Watergate campaign finance regulations that attempted to limit expenditures and bring transparency and accountability to the process. The beginning of the end was in 2008, when candidate Obama opted out of voluntary spending limits and rejected public financing for his general election campaign. He subsequently spent more than twice as much as any previous presidential candidate. Senator John McCain’s decision to adhere to the spending limits also contributed to the collapse by showing future presidential candidates that it would be foolish to rely only on public funds. In the end, McCain got outspent in the general election by $336 million to $84.1 million.
To no surprise of election analysts, President Obama’s campaign again has managed a significant fundraising advantage over his Republican opponent even though Governor Romney also opted out of voluntary limits. The President is able to draw upon a fundraising network that his campaign had assembled in 2008 and has used use the powers of incumbency to expand that network over the past four years.
The Romney campaign, however, is hardly short of funds. The GOP has been able to bridge the money with the help of independent expenditures from outside groups commonly referred to as super PACs. To date, super PACs backing Mr. Romney have spent $210 million on his behalf, while pro-Obama super PACs have spent “just” $90 million.
Given their own campaign money and these independent “dark funds,” it’s safe to say that neither presidential campaign is lacking cash:
The deregulation of the American system of financing political campaigns was brought on by a set of federal court decisions, most notably Citizens United vs. Federal Communication Commission, which the Supreme Court announced in on January 21, 2010. Citizens United struck down laws restricting independent political expenditures by corporations and unions.
At his 2010 State of the Union address (with seven of the justices present), President Obama condemned the decision and claimed that it “would open the floodgates for special interests — including foreign corporations — to spend without limit in our elections” and urged Congress “to pass a bill to correct some of these problems.” Congressional Democrats put forward the DISCLOSE Act, which among other things would require so-called 501(c)s (including public interest groups, labor unions and industry associations) and other groups spending more than $10,000 in campaign-related expenditures to disclose their contributors.
Republicans generally opposed the Act, citing free-speech grounds, privacy rights, and concerns about the government and others using disclosure information to punish and intimidate political enemies. The Act passed the House with only two Republicans votes but then died in the Senate without any Republicans support.
Republicans were correct that DISCLOSE and other attempts at campaign finance reform were partisan. DISCLOSE specifically targeted industries that had been favorable to Republicans, while creating exemptions for labor unions. That’s no surprise: given the ordinary course of politics, it is highly unlikely that Democrats would have proposed any reform if they thought it would hurt their friends.
But the Republicans were similarly disingenuous in claiming that their opposition was based on a constitutional protection of free speech, or that regulation would infringe upon sacred “privacy rights.” Simply put, money used in an election campaign is not analogous to other private behavior. Political contributions affect who gets elected and how elected officials behave while in office. Public disclosure allows voters to decide whether they are uncomfortable or worried about the source or size of any contributions.
Large contributions from Sheldon Adelson, Jeffrey Katzenberg, the Koch brothers and other very wealthy people garner extensive media coverage not only during the campaign, but once candidates assume office. It is likely that any policy decision that benefits a donor will be highly scrutinized and perceived with suspicion. Rather than concern ourselves with novel and elaborate ways to close a loophole created in the previous round of reforms, the public should pressure Congress to require all tax-exempt, non-profit organizations that participate in elections to reveal their donors.
The absence of limits on contributions and expenditures makes it imperative that Congress and the FCC move quickly to create strict disclosure requirements and bring anonymous donors from out of the shadows and into the public eye.
Girish “Jeff” Gulati is associate professor of Global Studies at Bentley University. For more details on about the financing of campaigns in the post-Citizens United era, see Gulati's article in SOCIETY magazine.
College Factual, an online portal designed to assist students in selecting a college, has released its top colleges for a degree in finance ranking and Bentley University stands at #4 overall in the U.S.