[EL] 3 Thoughts on Super PACs: What We Now Know (and What We Don’t)
Lloyd Mayer
lmayer at nd.edu
Thu Feb 2 03:31:58 PST 2012
[Sorry, computer glitch; here is the complete message.]
One point that seems to have been missed in the otherwise extensive coverage of corporate and individual money flowing through both SuperPACs and 501(c)(4)s: the likely role of unions (501(c)(5)s) and trade associations/chambers of commerce (501(c)(6)) as we move toward the general election. Like C4s, C5s and C6s can engage in a limited amount of electioneering without having to disclose their donors. Unlike C4s (and SuperPACs), it appears that these more established groups - think SEIU and the U.S. Chamber of Commerce, for two of the largest past spenders - appear to avoid involvement in the primary elections and to instead focus on the general election. So to date the reported spending by such groups has been minimal (SEIU has only spent less than $300,000 and the Chamber only $100,000 in 2012 according to Open Secrets (http://www.opensecrets.org/outsidespending/summ.php?cycle=2012&type=p&disp=O). Those numbers are likely to sharply increase as the general election approaches, however; in 2010 the Chamber spent almost $33 million and SEIU almost $16 million (see http://www.opensecrets.org/outsidespending/summ.php?cycle=2010&type=p&disp=O). These groups may therefore actually prove to be a larger funnel through which individual and, particularly for business groups, corporations route their political spending anonymously. Something to watch as the year goes on.
Lloyd Hitoshi Mayer
Professor of Law & Associate Dean
Notre Dame Law School
P.O. Box 780
Notre Dame, IN 46556-0780
campus address: 1106 Eck Hall of Law
(574) 631-8057/cell: (574) 598-0740/fax: (574) 631-4197
Web Bio<http://law.nd.edu/faculty/lloyd-hitoshi-mayer>: http://law.nd.edu/faculty/lloyd-hitoshi-mayer
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From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Rick Hasen
Sent: Wednesday, February 01, 2012 11:35 AM
To: law-election at UCI.edu
Subject: [EL] ELB News and Commentary 2/1/12
3 Thoughts on Super PACs: What We Now Know (and What We Don’t)<http://electionlawblog.org/?p=28973>
Posted on February 1, 2012 8:29 am<http://electionlawblog.org/?p=28973> by Rick Hasen<http://electionlawblog.org/?author=3>
These days, I probably spend more time speaking to reporters (from as far away as Brazil and Italy) about Super PACs than about any other election law subject. There is a lot of misinformation floating out there about what Super PACs are, where they came from, the relationship to Citizens United, and the ability of super PACs to coordinate with candidates without running afoul of the FEC disclosure rules. For those looking for basic information from what I’ve written, I point reporters to my recent CNN oped<http://www.cnn.com/2012/01/09/opinion/hasen-super-pacs/index.html?eref=rss_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20rss%2Fcnn_topstories%20%28RSS%3A%20Top%20Stories%29>, this blog post<http://electionlawblog.org/?p=28207> on whether Citizens United created Super PACs, and this blog post<http://electionlawblog.org/?p=28617> which highlights the kinds of coordination which are currently permissible under FEC rules.
In light of the glut<http://politicalactivitylaw.com/2012/02/01/political-law-links-for-tues-feb-1/> of<http://www.washingtonpost.com/politics/super-pacs-helping-republican-candidates-close-in-on-obama/2012/01/31/gIQA0lcKgQ_story.html> news<http://www.washingtonpost.com/politics/super-pacs-helping-republican-candidates-close-in-on-obama/2012/01/31/gIQA0lcKgQ_story.html> about yesterday’s FEC filings by Super PACs (many of whom did not exist or had not filed reports since June), I expect a new round of stories and questions about how Super PACs and related developments may be changing elections. I offer these three observations about what we now know.
1. Citizen United mattered in increasing spending, but by how much we don’t yet know. Right after Citizens United was decided, there was a great debate within the campaign finance world over whether the case would change campaign finance patterns. Some pointed to the fact that in the 2010 election, we saw barely any independent spending directly by corporations. My view had always been that most (for profit) corporations would not want to stick their necks out and risk alienating customers by putting their names on independent ads. For corporate money to really matter, there would have to be a way to filter it through committees and sometimes to hide the money entirely. Thanks to Super PACs and the transformation of 501c4′s, both of these are now possible and we are witnessing the corporate money coming in. See today’s must-read NYT report<http://www.nytimes.com/2012/02/01/us/politics/campaign-finance-reports-show-super-pac-donors.html?_r=1&hp> (“The filings also revealed how recent court decisions have opened new avenues for corporate contributions into campaign politics, and how narrow the gap has become between the candidates and the theoretically independent super PACs that are backing them. Four contributions of $250,000 to Mr. Romney’s super PAC came from affiliates of Melaleuca, an Idaho-based company that manufactures skin and nutritional products. The company’s president and chief executive, Frank VanderSloot, is a national finance co-chairman of the Romney campaign and a fellow graduate of Brigham Young University.”). We don’t know how much corporate money is coming in now (and as to 501c4s, because of lack of disclosure we likely will never have the full picture). But it seems a safe bet that there is lot more corporate money coming into the system than was (barely) allowed in the pre-Citizens United world. Further, by making legal what was of questionable legality <http://electionlawblog.org/?p=28207> (through 527s) before Citizens United, my sense is that there will be much more independent money from individuals through committees than we’ve ever seen in the past. I look forward to the work of political scientists to ferret out the independent (individual, corporate and union) money in this election compared to prior elections. We also need to figure out if there is more of an arms race going on, or if corporate money will now dominate-a topic I know Ray LaRaja and others are working on.
2. The Secret Money is Shifting to 501c4s, and It Demands a Legislative Response. Last night ace election lawyer Rob Kelner tweeted<https://twitter.com/>: “Biggest story today: Crossroads’ c4 raised more than its Super PAC. Confirming that media is missing the boat by focusing on Super PACs.” My big concern before yesterday was that we would see a lot of transfers of money from 501c4s to affiliated Super PACs to shield the identity of donors to Super PACs. I’m still trying to get a handle on how much of this took place (apparently less than I thought). But the reason these transfers are not taking place is that it appears the 501c4s are engaging in much more direct election-related activity than they have in the past. That is, we are seeing some 501c4s becoming pure election vehicles. The relation of 501c4s to super pacs is now like the past relation between 527s and pacs-these are now the vehicles of questionable legality to influence elections. While Adam Skaggs<http://www.mediteerenian.salon.com/2012/01/31/congress_can_fix_the_super_pac_problem/singleton/> is rightly focused on fixing the coordination rules for Super PACs, this seems to be fighting yesterday’s war already. The key is to stop 501c4s from becoming shadow super PACs. Yes, campaign finance reform community, it has become this bad: I want more super PACs, because the 501c4 alternative is worse!
3. We don’t know yet how much Super PACs are affecting electoral outcomes and legislative outcomes. It is really easy for journalists to write stories about how one candidate (combined with his or her super pac) has vastly outspent opponents in a race and come out on top. The (sometimes) unspoken implication is that money is buying the outcomes. I’m skeptical of such claims: money gets you taken seriously in elections but usually doesn’t buy results. Case in point: the more CA gubernatorial candidate Meg Whitman spent on her election (from her considerable wealth), the worse she did. And as the Washington Post pointed out<http://www.washingtonpost.com/politics/big-spending-on-presidential-candidates-can-have-little-effect/2012/01/10/gIQA7QtduP_story.html> after Iowa, while it was true that Gingrich plummeted in Iowa after a pro-Romney super PAC ran ads attacking him there, Gingrich at the same time also fell nationally, where no ads were running. So anyone who thinks they know the relationship between super PAC spending and outcomes better be doing a pretty nuanced and sophisticated analysis. We also will need to watch after the election to see how super PAC spending (and the future threat of it) may be affecting legislative actions. As I concluded my CNN oped: “I am greatly concerned that when Election Day is over and the public will stop hearing about Super PACs, contributions to these groups will skew public policy away from the public interest and toward the interest of the new fat cats of campaign finance, as members of the House and Senate thank their friends and look over their shoulder at potential new enemies.
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Posted in campaign finance<http://electionlawblog.org/?cat=10> | Comments Off
SuperPac Disclosure Data and “Citizens United as the Root of All Evil” Watch: Part II<http://electionlawblog.org/?p=28974>
Posted on February 1, 2012 8:15 am<http://electionlawblog.org/?p=28974> by Richard Pildes<http://electionlawblog.org/?author=7>
Several months ago I wrote <http://electionlawblog.org/?p=25207> to argue against the constantly-repeated storyline that cast Citizens United as responsible for the explosion of SuperPacs in this election cycle. Though I have written critically about the Court’s decision, I was also skeptical of the tendency to blame the Court’s decision for all the forms of newly emerging election financing in this cycle that critics disliked. Citizens United did liberate corporate and union general-treasury funds to engage in independent election spending, but it did not otherwise change the constitutional architecture originally constructed in Buckley v. Valeo, back in 1976.
Yesterday’s disclosure filings with the FEC by the various SuperPacs gives us better traction on this issue. Based on the data<http://www.nytimes.com/interactive/2012/01/31/us/politics/super-pac-donors.html?hp> provided by the New York Times, my quick initial calculation suggests that the proportion of the money contributed to the major, candidate-specific SuperPacs for the Republican primaries that came from corporations versus wealthy individuals was the following: Romney (“Restore Our Future”): 23% corporate money; Gingrich (“Winning Our Future”): 0% corporate money; Santorum: 0% corporate money. I also included Rick Perry in my calculations, even though he has dropped out, because he had the second most successful SuperPac for the last quarter of 2011, and he might be thought more likely than Gingrich or Santorum to have been able to draw corporate money. The Perry SuperPac, “Make Us Great Again,” raised 25% of its money from corporations. Aggregating the figures for all four of these candidates, 22% of the money supporting Republican-candidate SuperPacs seems to have come from corporations. Compared to all the prior ungrounded speculation, that figure now provides us actual information, for the first time, on how much Citizens United and corporate money is or is not fueling the rise of SuperPacs.
To be sure, lots of the individuals who donated large amounts are CEOs of various corporate entities. The Gingrich-supporting SuperPac is almost single-handedly being funded by the Adelson family, and Sheldon Adelson is the CEO of Las Vegas Sands Corp. But ever since Buckley, wealthy individuals could spend unlimited amounts to seek to help elect their preferred candidates. One might ask whether these CEOs are being reimbursed for their donations from the general corporate treasury in some form. I hope not and assume they are being well advised legally. For doing so might well constitute a crime.
Federal law makes it a crime to make a political contribution in the name of another. Indeed, this is the one crime in the area of federal campaign financing that the Department of Justice prosecutes most aggressively. Specifically, 2 U.S.C. Section 441f makes it a crime to manipulate the source of the actual contribution: “No person shall make a contribution in the name of another person or knowingly permit his name to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person.” Reimbursement schemes are a core violation of this provision, as numerous successful criminal prosecutions have established. This provision covers direct “contributions” to candidates. There might be some uncertainty about whether “contributions” to PACs, including what are now called SuperPacs, are similarly covered. I do not know whether the Department of Justice has brought criminal prosecutions for contributions made in the name of person A to a SuperPac that are then reimbursed by some other person or entity, including the corporate general treasury. The DOJ regulations<http://vlex.com/vid/110-contributions-name-another-cash-432-19623177> implementing 2 USC 441f do apply to contributions made to “political committees.”
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Posted in campaign finance<http://electionlawblog.org/?cat=10> | Comments Off
“Increasing number of ethics probes rattles House Republicans”<http://electionlawblog.org/?p=28971>
Posted on February 1, 2012 7:47 am<http://electionlawblog.org/?p=28971> by Rick Hasen<http://electionlawblog.org/?author=3>
The Hill<http://thehill.com/homenews/house/207559-growing-number-of-ethics-probes-rattles-republicans>: “An increasing number of House Republicans are getting wrapped up in allegations of ethics violations ahead of the November elections, handing Democrats easy campaign fodder and putting the GOP in an unexpected bind.”
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Posted in conflict of interest laws<http://electionlawblog.org/?cat=20>, ethics investigations<http://electionlawblog.org/?cat=42>, legislation and legislatures<http://electionlawblog.org/?cat=27> | Comments Off
“Va. Supreme Court lets congressional redistricting suit proceed”<http://electionlawblog.org/?p=28966>
Posted on February 1, 2012 7:39 am<http://electionlawblog.org/?p=28966> by Rick Hasen<http://electionlawblog.org/?author=3>
AP reports<http://www2.timesdispatch.com/news/2012/feb/01/va-supreme-court-lets-congressional-redistricting--ar-1655529/>. You can find the court’s two orders, with a dissent, here<http://electionlawblog.org/wp-content/uploads/120148-Appeal-order.pdf> and here<http://electionlawblog.org/wp-content/uploads/120149-PR-order.pdf>.
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Posted in redistricting<http://electionlawblog.org/?cat=6> | Comments Off
“Electing judges still works for N.C.”<http://electionlawblog.org/?p=28963>
Posted on February 1, 2012 7:35 am<http://electionlawblog.org/?p=28963> by Rick Hasen<http://electionlawblog.org/?author=3>
Scott Gaylord has written this oped <http://www.newsobserver.com/2012/02/01/1820295/electing-judges-still-works-for.html> for the Charlotte News and Observer.
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Posted in judicial elections<http://electionlawblog.org/?cat=19> | Comments Off
--
Rick Hasen
Chancellor's Professor of Law and Political Science
UC Irvine School of Law
401 E. Peltason Dr., Suite 1000
Irvine, CA 92697-8000
949.824.3072 - office
949.824.0495 - fax
rhasen at law.uci.edu<mailto:rhasen at law.uci.edu>
http://law.uci.edu/faculty/page1_r_hasen.html
http://electionlawblog.org
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