The 2014 congressional elections confirmed that the Supreme Court's decision in Citizens United was based on fundamentally flawed premises.
The Court majority in Citizens United explicitly based its misguided decision on two grounds: campaign expenditures by outside groups would be made independently from candidates and full disclosure of the campaign activities would provide accountability to citizens and shareholders.
Neither has happened.
The Court's premises turned out to be divorced from reality and instead provided false cover for the explosive growth in outside spending of unlimited contributions by super PACs and 501(c) nonprofit corporations.
The Supreme Court held in Citizens United that corporations could make expenditures in elections as long as they were not coordinated with candidates. The Court, citing its Buckley decision, stated, "[t]he absence of coordination ... alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from a candidate."
The "independent" spending by outside groups that has actually occurred in the past two elections, however, turned out to be a figment of the Court's imagination.
There has been widespread coordination between outside spending groups and candidates. For example, in the 2012 presidential election, almost every candidate had an individual candidate super PAC functioning as an arm of the candidate's campaign. In the 2014 congressional races, there were 92 such super PACs, more than quadruple the number in the 2010 races and more than double the number in 2012, according to the Center for Responsive Politics.
Individual candidate super PACs generally are run by the candidate's close associates and often receive contributions raised by the candidate. They are anything but "independent" from the candidate.
These super PACs exist basically for one purpose: they serve as vehicles to eviscerate candidate contribution limits by permitting wealthy individuals, corporations and other moneyed interests to give unlimited contributions to directly support the candidate.
The widespread coordination abuses occurring in our elections can be curbed. Legislative provisions to accomplish this goal, within the parameters of the Citizens United decision, are contained in the Empowering Citizens Act, sponsored by Representatives David Price (D-NC) and Chris Van Hollen (D-MD).
The provisions would define single-candidate super PACs as coordinated with the candidates they support, which would in effect shut down the PACs. The provisions would also strengthen the rules prohibiting coordination between other outside spending groups and candidates.
Disclosure by Outside Spending Groups
Eight of nine Supreme Court Justices voted in Citizens United to uphold the constitutionality of disclosure requirements for outside spending groups. The Court made clear that disclosure was an integral part of its decision to strike down the ban on corporate spending in elections.
The Court stated:
With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation's political speech advances the corporation's interest in making profits, and citizens can see whether elected officials are "in the pocket of so-called moneyed interests."
The Court further stated, "A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today."
Turns out it still does not exist, almost five years after the Citizens United decision.
As a result, a combined half billion dollars in secret money contributions was spent in the 2012 and 2014 national elections, primarily by 501(c) nonprofit corporations. This has brought back to our national elections the same kind of secret money that played a key role in the Watergate scandals, although now the amounts are far greater.
As in the case of coordination, this fundamental flaw in the Citizens United decision can be solved.
The DISCLOSE Act, legislation to provide comprehensive real time disclosure by outside spending groups, has been introduced by Representative Van Hollen in the House and by Senator Sheldon Whitehouse (D-RI) in the Senate.
Polls have shown that disclosure is overwhelmingly supported by the American people.
Nevertheless, since the Citizens United decision, congressional Republicans have blocked the enactment of new disclosure requirements to close the gaping loopholes that exist for outside spending groups. The challenge now is to restore the bipartisan support in Congress for disclosure that had existed for four decades until the Citizens United in 2010.
Other less comprehensive remedies are also being pursued to achieve disclosure by outside spending groups. They include a pending IRS rulemaking to revise flawed regulations that fail to properly limit the role that 501(c) groups can play in elections; an SEC petition to require public corporations to disclose their campaign activities to their shareholders and the public; and an FCC petition to improve disclosure by outside spending groups running campaign ads.
The Supreme Court based the Citizens United decision on "independent" expenditures and "effective" disclosure. Instead we ended up with coordinated expenditures, secret money and a small number of the wealthiest people in America, major corporations and others buying the opportunity to corrupt government decisions and exercising extraordinary influence over our elections.