money

Campaign Finance

Democracy on a Wobble?   While making this film we spoke with people all across the country, in both political parties, who are concerned about food safety, energy independence, healthcare, the economy or the environment…and nearly all told us they think that our government is broken.

A Root Cause: The more time we spent filming around Congressional office buildings, the more we came to believe that there is one underlying reason why our representatives in Washington D.C. can’t solve these problems: money. The place is swarming with lobbyists, many of whom are well-heeled conduits for a flood of special interest campaign cash, money that candidates desperately need more than ever. The 2010 mid-term election was the most expensive in our history, over $4 billion. The last mid-term, in 2006, cost $2.6 billion. In 2010, incumbents had to spend more than $9 million on average to hold on to their Senate seats and almost $1.6 million to keep the average House seat.

Where does this money come from?  Only a quarter of 1% of the U.S. population made itemized contributions in 2010 and yet they supply 2/3 of all contributions. Less than one out of 400 Americans, most of them affiliated with major corporate interests, made itemized donations of $200 or more to federal candidates or PACs. Given this reality, most members of Congress have no choice but to take contributions from anyone willing to fund their campaigns––even if those donors have business before their committees. In 2010 House Members raised about four out of every five dollars in campaign funds from outside of where their constituents live. 97% of House members raised more than half of their funds from outside their congressional districts.  Most of the money came from zip codes in the Washington D.C. metropolitan area.   http://www.opensecrets.org is the the non-partisan “easy look-up” database tracking where politicians on the federal level get their campaign cash.  For politicians on the state level, an equivalent non-partisan database is http://www.followthemoney.org

Outside Spending: A January 2010 Supreme Court decision (Citizens United v. Federal Election Commission) now permits corporations and unions to make these contributions directly from their treasuries, as well as through other organizations without complete or immediate disclosure of who they are––preventing voters from understanding who is behind political messages. They are also allowed to contribute as much as they like, no longer having a cap on political contributions.  According to the Center for Responsive Politics, corporate treasury money accounted for about $15.5 million of the cash donated to so-called “super PACs.”

Super PACs (from the Center for Responsive Politics):  The 2010 midterm elections will be remembered for spawning this new breed of political animal — the “super PAC,” officially known as “independent expenditure-only committees,” which are legally allowed to raise unlimited amounts of money from individuals, corporations and unions to expressly advocate for or against federal candidates. According to the Center’s research, a significant portion of all corporate donations to super PACs came from companies with interests in the energy sector. These organizations combined to give more than $5.6 million to super PACs — more than 36 percent of all corporate donations to these new groups. Several agricultural interests also took advantage of the changes in campaign finance law to donate from corporate accounts. The Dixie Rice Agricultural Corp. was the largest of these, donating $1 million to the conservative super PAC American Crossroads.

Other Outside Spending:  In addition to super PACs and regular political action committees (which raise money via contributions capped at $5,000 per year), special interest groups also have other vehicles at their disposal to influence elections and policy. These include 527 organizations registered with the Internal Revenue Service and 501(c) nonprofits, which aren’t primarily supposed to be involved in politics, but are allowed limited political activity. 501(c) groups must also register with the IRS, but do not have to publicly disclose their donors.

The Upshot:  Big money that buys access and influence in Washington each and every day dominates our policies and corrupts our politics. Just about every citizen we met seems to sense this, including the young civics students we interviewed. But how to fix the problem? According to a growing number of lawmakers and legal experts, the only way to get it out of politics is to cut politicians’ dependence on big campaign contributions.  Sort of a no-brainer, but why hasn’t it happened? Is it even possible to do? Is there any alternative to the present electoral system?

The Public Funding Option:  We did indeed find an alternative in the state of Arizona where—as in Maine and Connecticut—candidates and officeholders who refuse special interest money can opt for their state’s public campaign funds [link] that match small contributions from citizens within their own district.  Voters have tended to embrace these “clean candidates” because they say the emphasis shifts from the deep pockets of special interests to their own modest contributions. Over half of Arizona’s legislature has won office with these limited public funds, the primary source for which is a surcharge on fines and penalties, such as traffic tickets. The program takes no money from the general fund that is from the general tax revenues the state receives.

Can it Work With Congress?  Our cameras returned to Washington to cover the introduction of a bill, The Fair Elections Now Act, that provides for a similar, voluntary system that would match small donations from constituents with public funds at a five to one ratio—enough to ensure that any candidate who foregoes large donations from special interests has enough money to run a competitive campaign. The bill initially had broad bipartisan support, but ultimately got bottled up after the 2010 election and will likely remain that way until enough citizens demand that it get considered, be amended as needed, and put to a vote. We spoke with a number of incumbent members who seem in no hurry to meaningfully consider the bill, saying they have their doubts about asking taxpayers to fund elections. We also got the impression that they know full well that this reform would effectively neutralize the extreme advantage they have with connections to lobbyists and a river of special interest campaign cash.

Fair Elections Now Act:  The reform would allow House and Senate candidates to run a competitive race for office by collecting small contributions from people back home in their own district. These candidates could only accept contributions of $100 or less that would then be matched on a 5-to-1 basis. Instead of spending time dialing for dollars or asking for money from the lobbyists hoping to influence their votes, members of Congress could focus on addressing the needs of their constituents and their country. They’d thus be accountable to the voters, not the people writing them big checks. To learn more about the Fair Elections Now Act visit: http://fairelectionsnow.org/about-bill

A Drain On Taxpayers?   Citizens we met who helped pen the Fair Elections Now Act believe the reform could be the biggest bargain American taxpayers will ever get. The total cost for all federal races—President, Senate and House—will be approximately $1.5 billion per year, which works out to just $5 for each of the 300 million citizens of our country. However, the public fund need not be paid directly by individual taxpayers at all. The current Senate bill calls for funding from a 0.5% surcharge on government contracts in excess of $10 million. The House bill calls for funding from 10% of the proceeds of broadcast spectrum auctions. Other options being discussed include land-use and royalty fees on natural resource extraction.  When you consider the costs of the current private funding system—including the billions spent on boondoggle policies, awarded to special interests and corporate tax loopholes––we believe that it would save taxpayers a lot of money.

Public Funding Option Constitutional?  The U.S. Supreme Court strongly endorsed voluntary public financing in the landmark 1976 Buckley v. Valeo case, finding that public financing represents a governmental effort “not to abridge, restrict, or censor speech, but rather to use public money to facilitate and enlarge public discussion and participation in the electoral process, goals vital to a self-governing people.” This position was reiterated by the Court in the wake of the Citizens United v. FEC decision.  The recent Supreme Court decision in McComish v. Bennett regarding the Arizona public funding system dealt solely with the constitutionality of that state’s trigger mechanism that provided additional funds to candidates who were grossly outspent. There is no such trigger in the federal public funding programs currently under consideration. The constitutionality of voluntary public funding has also been endorsed by many legal scholars including the Brennan Center for Justice at NYU, Campaign Legal Center President Trevor Potter, and former Solicitor General under President Reagan, Charles Fried.

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