More campaign-finance fiction

Today, Jacobin reports on Bernie Sanders’ proposal to give each American a $50-$200 voucher to spend on politicians’ political campaigns. I’m the lead counsel challenging a similar voucher program in Seattle, so I have some feelings on this subject.

The article opens with this classic ipse dixit: “Everyone knows that rich people skew our political priorities through big-money donations to candidates.” Really? I didn’t know that. But of course this is the big assumption behind so much campaign-finance hype, one that is vague and unprovable, like all good political rhetoric.

My first question here would be an attempt to resolve an ambiguity: what does “skew” mean? Where’s the magical baseline of “unskewed” political priorities? That baseline does not and never has existed. This opening line also fails to account for causation. That is, do donations influence eventual votes, or are both donations and votes attracted to candidate strength? I’ve yet to see a convincing argument that donations have ever “bought” a major federal election.

The article also seems to assume, as many do, that liberal politicians are the ones losing out in the big-donor world. This just isn’t so. Candidates from across the political spectrum receive plenty of cash. Heck, Hillary outspent Trump 3 to 1 in 2016. If she was hoping her donors would “buy” her the election, she was sorely disappointed.

The article also parrots the frequent refrain about our “broken” campaign-finance system. Again, compared to what? Where’s the unbroken system and what does it look like? At the end of the day, politicians need to figure out how to appeal to voters with all that money. How are our politics “skewed” if both parties are receiving plenty of funding with which to present a message that draws votes?

As for the actual voucher proposal, I think most Americans would rather keep their $50-$200 dollars and spend it on something other than a politician, but that’s just a hunch.

A happy ten-year anniversary to the case people love to hate

This month marks the ten-year anniversary of one of the most despised and misunderstood Supreme Court cases: Citizens United v. Federal Election Commission.

I love Citizens United. It stands as perhaps the most important First Amendment decision of the last decade. Yet it’s come to symbolize the illicit marriage between money and power, while what actually happened in the case is largely an afterthought. I remember encountering an enraged signature-gatherer outside a Trader Joe’s a few years ago who was engaged in one of the many campaigns to amend the Constitution to put an end to Citizens United. I thought he might have a coronary when I told him that it was one of my favorite Supreme Court decisions. I deeply regret not asking him if he could rehearse for me the facts of the case. Maybe he would’ve surprised me.

So what did Citizens United actually say? The law at issue banned corporations from using general treasury funds for electioneering, with civil and criminal penalties for corporations that spent money to speak on pressing political issues of the day. The Supreme Court said that a small-time political organization (that happened to be incorporated), Citizens United, could not be banned from publishing a film critical of a presidential candidate. It’s hard to find speech of a higher order of significance than that.

Citizens United held that government cannot ban political expenditures just because people choose to speak through the corporate form. This is a classic example of an old rule–government cannot censor speech based on the identity of the speaker.

Much of the fury over Citizens United is premised on a guttural abhorrence for the corporation. But corporations are just groups of people who have chosen to organize through a particular structure. And most don’t realize that the law at issue in Citizens United also banned unions from using general treasury funds for electioneering communications.

Much of the popular criticism of the case that I’ve seen seems to believe that Citizens United was the first case to establish that corporations had First Amendment rights. It wasn’t. In fact, not even the dissenters in the case would’ve held that corporations lack such rights. That was an uncontroversial and settled matter. And it should be obvious as to why. If corporations don’t have First Amendment rights, then the New York Times doesn’t have First Amendment rights, along with many other media organizations. (I’ve heard the excuse that freedom of the press would still protect media organizations independently, which is a misunderstanding of the freedom of the press, which doesn’t offer greater speech protections to media than non-media).

Citizens United gets a bad break, and I wish it a happy anniversary.

A blatant campaign-finance boondoggle

The City of Seattle is poised to pass a plainly unconstitutional campaign-finance law later this month. The bill would limit contributions to political action committees that are not controlled by or connected to a candidate to $5000 per election cycle. The Ninth Circuit Court of Appeals, which would govern the outcome of any litigation, has already said several times that limiting contributions to independent PACs (meaning independent of a candidate’s campaign) violates the First Amendment.

The rationale is pretty straightforward. Any limit on political spending is a limit on speech, so it must satisfy the First Amendment. In Buckley v. Valeo, the United States Supreme Court said that contribution limits directly to candidates are usually okay because they (arguably) reduce the likelihood of corrupt quid pro quo exchanges between candidates and donors. But Buckley struck down limits on independent expenditures (meaning expenditures that aren’t donated to a candidate but speak independently for or against a candidate). Independent expenditures, unlike direct contributions, are not coordinated or controlled by the candidate, so there is less of a risk that an independent expenditure is actually an illicit quid pro quo. Since limits on independent expenditures restrict speech without actually doing anything to prevent corruption, they violate the First Amendment.

Contributions to PACs that engage in independent expenditures are basically the same as independent expenditures–there isn’t a direct connection to a candidate, so there simply is no genuine risk of corruption. The City of Seattle probably knows this, and they either don’t care or they hope to change the state of the law. I look forward to the forthcoming judicial rebuke.

Really, I find the entire premise behind limits on either contributions or expenditures to be highly dubious. While there are no doubt a few instances where a contribution to a candidate is given in direct exchange for some future favor once the candidate wins office, the vast majority of contributions are not that. They’re donations to support a candidate because his platform reflects the donor’s policy preferences. Most corrupt exchanges of money, when they do occur, almost certainly occur under the table and outside the context of highly regulated campaign contributions. Thus, contribution limits penalize a wide range of legitimate political speech to get at a vanishingly small (and unknowable) number of malefactors.

Defenders of campaign-finance laws tend to emphasize the huge amount of political spending as per se evidence of the need for reform. (When you compare the amount of political spending to other spending in the economy, it becomes quite clear that the amount of money in electoral politics simply isn’t that much). This claim that money in elections is fundamentally bad has always struck me as bizarre. That money is spent by both sides on political speech that informs the public. Why should we assume that this is a bad thing? Of course all political speech has a partisan aim–to convince voters to vote for so-and-so. But the information hardly compels voters to do so. At the end of the day, it seems much better to have a public informed by politically motivated communications than to have less information.

Campaign-finance advocates also like to point out that candidates who receive the most money tend to win. Again, it isn’t obvious why this is a bad thing. It seems rather obvious that popular candidates will attract both dollars and votes, not because they get lots of money, but because they’re popular. This is a classic failure to acknowledge the difference between correlation and causation. To date, no significant evidence has surfaced demonstrating that dollars cause votes.

And what about the concern over undue influence? Of course, politicians may be responsive to high-dollar donors. But again, this is a correlation issue. The NRA gives money to candidates who support the NRA’s  policy preferences. When the candidate reaches office and fights gun control, is it because of the NRA’s support, or was the NRA’s support prompted by the candidate’s pre-existing policy platform? Over and over, the deeply felt convictions of campaign-finance advocates seem to rest on a house of cards.

In any case, even if risk of quid pro quo corruption is a valid reason to restrict speech, Seattle’s bill goes well beyond that rationale. PACs engage in core political speech, as do the individuals who donate to them. That speech merits protection.

Bad guys and bad thinking

AOC made waves with her recent “lightning round” during a hearing on a new campaign finance behemoth lumbering through the House, HR 1. Her basic point was that under our current campaign finance regime, it’s “super legal” to be a “pretty bad guy.”

I wrote recently that much campaign finance rhetoric resembles a religious canon. If so, then AOC is vying for the position of high priestess. I can’t review all the many flaws in her five-minute fable, but I’ll briefly canvas her commitment to orthodoxy.

First, she asks the hearing panel whether there is anything stopping a “bad guy” from being entirely funded by corporate PACs. The panel answered that no law prevents that. But surely common sense does. Running on a campaign solely funded by corporate PACs would be a titanically stupid campaign strategy. First off, thanks to disclosure laws and the realities of a media-rich society, all constituents would know that the candidate was running solely off corporate PACs. Why any candidate would intentionally sell themselves as a corporate lackey is beyond me.

Not only would this look bad, but it would also come at a huge financial cost. Congressional campaigns are mostly funded by individual contributions, not corporate PAC money, so basically a candidate would be refusing a huge amount of loot in order to broadcast themselves as the Peter Pettigrew of electoral candidates. I’m not convinced this is a looming threat to our democracy. Why should we regulate a non-existent problem?

Of course, she also trotted out important theological terms such as “dark money.” She seems to think campaigns are directly funded by dark money. Not so–any contribution over $200 faces extensive disclosure requirements. Dark money usually refers to independent political expenditures, which still face a variety of disclosure requirements and make up a surprisingly small amount of total political expenditures. Again, she is swiping at phantasms.

A larger issue is that even if her claims are true, HR 1 and most other campaign finance laws are hugely overbroad. The overwhelming majority of political spending occurs with no eye toward extracting favors from a candidate. Yet HR 1 would impose huge burdens on all groups speaking in the political arena. The better route to catch “bad guys” is to enforce criminal laws that prohibit bribery. Will you catch every instance of quid pro quo corruption? Almost certainly not. But since when was this a controversial price to pay for a free society? We’ve long ago decided that it’s best to have less than perfect enforcement in order to preserve individual liberty.

The collateral damage that HR 1 would impose on legitimate, non-corrupt speech is tremendous. I’m not confident AOC is fretting over the real “bad guy.”

Time to emerge from the campaign finance mythology

Campaign finance laws long ago ascended to the Mount Olympus of political mythos. The mantra that we must exorcize money from politics has become an article of faith. But the basic premises undergirding this creed rest on a sandy foundation made up of unsound logic and unsupported claims. Not to mention a total disregard for First Amendment rights. The Supreme Court, however, will soon have a chance to reconsider campaign finance laws’ often dubious rationales and uncomfortable relationship with the First Amendment.

Campaign finance laws kicked off in the late nineteenth and early twentieth centuries with some early laws that banned corporation contributions, but they mostly gathered dust. Then, ironically, Republicans in 1947 used campaign finance laws to try and stifle union contributions, which led unions to create the much-hated PAC to dodge the restrictions. Then first serious attempt at comprehensive campaign finance regulation swept through in 1971 with the Federal Election Campaign Act. FECA laid down strict contribution and expenditures limits. Six years later, FECA led to the Supreme Court’s major canonical work in campaign finance lore, Buckley v. Valeo.

Buckley was a mixed bag. On the one hand, it struck down limits on independent expenditures by people who spend their own money on political communication during a campaign. On the other, it upheld limits on direct campaign contributions. Hence, both sides of the campaign-finance divide gripe about Buckley—First Amendment advocates want campaign contributions to be just as uninhibited as independent expenditures, and campaign-finance believers think government should be able to curtail independent expenditures to the same degree as campaign contributions.

As a speech advocate, I fall into the camp that feels Buckley did not do enough to protect First Amendment interests. Buckley relied on flawed notions about the nature of campaign contributions and the alleged need for limiting them. For example, the Buckley Court claimed that contributions don’t deserve as much First Amendment protection as expenditures because the speech facilitated by the contribution is someone beside the contributor. The trouble is that the same is true of expenditures—typically a political spender’s message is conveyed through a go-between, like an ad agency or a TV station. Courts have never held that reliance on someone else to convey your message robs you of the right to promote that message. Except for Buckley.

Another rationale for distinguishing contributions and expenditures is the “general” nature of a contribution. An expenditure allows the speaker to tailor his precise message. I.e.: I support Daenaerys Targaryen because she fries Lannisters with dragon fire. But if you just give a contribution to the Targaryen campaign, then no one knows why you support her. Anti-slavery? Dragons? Small Hands? You could be contributing for any reason, and the lack of specificity translates to a weaker First Amendment right. This is another lame excuse. After all, does the guy holding a “Warren 2020” deserve less First Amendment protection than someone holding a “Harris for better healthcare” sign? No case has ever said so or will ever say so. Except for Buckley.

The third rationale for contribution limits is that the quantity of the contribution does not strengthen or weaken the speech being regulated. That is, Buckley says if you give $5 or $500 to the Palpatine campaign, your message is the same. But surely the number is a clear metric for degree or intensity of support. If you gave $1 to Albus Dumbledore and $100 to Lord Voldemort, that says something about your viewpoint. If a cap is placed on contributions, the government is essentially saying that you can only support your candidate up to X amount—that’s more than a minor burden on someone’s right to political expression and participation. Plus, the contribution is not just about the symbolic act of giving—it’s also about the speech facilitated by that contribution, which is obviously affected by the quantity of the donation.

Buckley allowed contribution limits for the sake of combating corruption or the appearance of corruption. Here, too, Buckley falters. Study after study has failed to demonstrate that campaign contributions purchase special favors on anything approaching a widespread basis. Yet contribution limits take a widespread approach. Certainly, anecdotal evidence of quid pro quo exchange of contributions for favors exists. But that can hardly support a widespread cap where the overwhelming majority of contributions are motivated by ideological commitment, not a desire to obtain special political favors post-election.

Bereft of actual evidence, campaign finance zealots resort to bumper sticker slogans like “money buys elections.” Certainly, candidates who receive a lot of money tend to also receive a lot of votes. But this is just correlation. People will tend to donate to strong candidates, and people will also tend to vote for strong candidates. The likely variable here is a candidate’s popularity, not campaign contributions.

And what in the world is the “appearance” of corruption? No other First Amendment right that I know of lives or dies by the grace of the subjective feelings of the public. Rights are supposed to exist despite any prevailing hostility from the public. Yet that’s the Buckley standard. Indeed, courts have looked to public opinion polls and other tenuous evidence to uphold severe contribution limits in cities and states across the country.

While contribution limits likely don’t do any good, they do plenty of harm. Even beyond the injury done to the First Amendment interests of contributors, campaign finance laws tend to only help one group of people: incumbents. Campaign finance laws erect such arcane labyrinths that only the savvy, experienced politicians who can afford pinstriped election-law attorneys and have lots of name recognition will come out ahead. Contribution limits also do huge favors for wealthy, self-funded candidates.

Often, what political amateurs with no name recognition need is a concentrated boost of support from a small group of supporters to kickstart a competitive campaign. Contribution limits make this nigh impossible. But instead of loosening campaign finance laws that fortify incumbency, politicians peddle terrible ideas like term limits. If they truly wanted competitive politics (which they don’t), then they’d liberalize campaign finance.

Since we can hardly rely on the incumbents to break down incumbency protections, the time has come for the Supreme Court to return to Buckley. The Court will have the chance to do just that with a petition from a case called Illinois Liberty PAC v. Madigan. We could do for some fresh air in politics—the way to do that is to strip away an orthodoxy that only serves to protect the powerful.

Courting Campaign Money

The Supreme Court has overruled 5 to 4 the previous limit on total campaign contributions in the US. In the McCutcheon v. Federal Election Commission case, The Court eliminated the limits on the total campaign contributions an individual could make to candidates and committees per election. Previously, in the Citizens United case, the Court struck down the limits on campaign funding and electioneering by corporations, labor unions, and nonprofit organizations.

Critics of these rulings say that they transform our democracy into a plutocracy, the rule by the rich, but the United States has always been a plutocracy, and the voters have used democracy to keep the system plutocratic. Wealthy donors could already finance Super PACs – political action committees. The amount of money spent in US elections had been escalating each election for decades.

American political culture has had a mixture of two ideals. The first is democracy, the rule by the people as equals rather than by a king or an aristocracy. The second ideal is liberty, especially freedom of speech. When the rich can influence candidates and elections by spending huge amounts of money, the ideal of liberty clashes with the egalitarian ideal of democracy.

Political speech is the most important of all, and the speech that most needs to be free of restrictions. Just as the government should not limit how many times one may give a speech, or how many editorials one may write on a topic, the government should not limit how much one spends to propagate speech.

Proposals to have the government finance campaigns also clash with free speech, if private financing is again limited. Governmental funding entrenches the established parties, and it forces the taxpayers to finance political ads which they may well detest.

Unfortunately, along with democracy and liberty there has been a third political idea in the USA. Economists call it “rent seeking.” In classical political economy, “rent” meant the yield of land. The classical economists knew that landowners receive rent in exchange for nothing, since the title holders did not create the land. They broadened the term to “economic rent,” which means any gains beyond what is needed to put resources to their most productive use.

Then economists in the branch called “public choice,,” which applies economics to voting and politics, recognized that the subsidies and privileges that special interests receive from government are economic rent, since it is loot taken from the public in exchange for less than nothing. Hence, when special interests seek favors from government, they are rent seekers.

The modern use of “rent” has become so far removed from its landed origin, and the land factor so much subsumed under capital, that economists no longer appreciate that the biggest rent seekers are the landed interests who obtain the implicit subsidy as the land rent generated by public goods paid for by taxes on labor.

Because superficial appearances trump the understanding of implicit reality, the reflexive reaction to the corruption of rent seeking is to limit campaign money. That then clashes with free speech. But the reason there is a clash between free speech and democracy is that we have inherited an antiquated 19th-century model of voting that is no longer appropriate to the 21st century world of mass democracy combined with great state power.

Public-choice economists such as Mancur Olson have recognized that the way to limit the rent seeking disease of democracy is to vote in small groups rather than in large groups. In a large country, the small groups should federate rather than become a large single group.

The demand for campaign money dissolves when people vote in tiny local districts. The district councils send representatives to a higher-level (or broader-level) council. With such a bottom-up small-group voting system, we would have much fewer political ads in the mass media.

The mass-democracy model has been grafted world-wide, and it has not brought social peace, as we have witnessed in place such as Egypt and Ukraine. But one day, mass democracy will be regarded as a relic like we today regard the former power of monarchs and aristocrats.

(Note: this article is also at http://www.progress.org)