The Future of Corporate Political Spending

By Pacific Standard Staff,

If Trump’s Supreme Court nomination is confirmed, we will likely continue to see a loosening of regulations on corporate campaign spending.

By Rick Paulas

(Photo: envios/Flickr)

The money spent on the 2016 elections — including campaigns for presidential and congressional candidates, political parties, and independent interest groups — was the most in American history: nearly $7 billion dollars. You can trace this massive amount to a Supreme Court decision made over 200 years ago.

In 1809, the Supreme Court heard the case Bank of the United States v. Deveaux. The argument was between the bank, a precursor to the U.S. Treasury, and Peter Deveaux, a tax collector who had seized property from the bank after its failure to pay state taxes. The bank tried to gain its land back through a lawsuit, but Deveaux countered by saying he couldn’t be sued in federal counts because corporations weren’t people.

The Supreme Court agreed, but this decision opened the floodgates for the creep of corporate personhood. In the time since, a series of Supreme Court decisions eroded the distinction between corporations and citizens — corporations got “equal protection” under the Fourteenth Amendment, then they couldn’t be subject to “unreasonable searches and seizures,” then they couldn’t face “double jeopardy”—but it wasn’t until 2010 when the big one hit: Citizens United v. Federal Election Commission, which allowed corporations to spend, without limit, money on political advertising.

Though they had to go through indirect committees that came to be called Super-PACs, corporate America’s funding of political campaigns went wild. In the 2010 mid-terms, the total spent was $15.8 million, trouncing the $1.8 million total spent in the 2006 mid-terms. In 2012, the money spent on all campaigns came close to $6.6 billion.

In 2016, Hillary Clinton’s campaign and the Super-PACs that supported it spent $1.2 billion, while Donald Trump spent roughly $650 million. In fact, one of the oddest aspects of the 2016 election was that Trump won despite being far outspent. Does this suggest a future where corporations become hesitant to throw money at candidates, knowing they may just be flushing it down a loser’s drain? Nope.

“If you want to see the effect of money and politics, the presidential race would be the last place you look,” says Richard L. Hasen, a campaign finance expert at the University of California–Irvine and author of Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections. “There’s just so much money pouring [into the presidential race] that it’s hard for any single person to have an overwhelming influence.”

Corporate campaign financing has a more direct cause and effect in lower-profile races like seats in state houses, where the impact of simply hearing a candidate’s name more times than the other can be enough to swing an election; that barrage doesn’t work in the presidential election because everyone’s already oversaturated.

“Spending money [on politics] is like a lottery,” Hasen says. “And we allow those who are wealthy to buy extra tickets.” When the candidates hit it big, they tend to share it with the person who bought them their tickets. “By and large, if you look at how legislators vote and what policies they pursue, they tend to line up with the interest of their donors.”

When those donors are the wealthiest Americans, their interests may not overlap with the masses who voted them into office.

During the election run-up, Clinton had vowed to overturn Citizens United via constitutional amendment. It was a promise that would’ve been nearly impossible to accomplish—President Barack Obama also felt strongly against it, but couldn’t do anything about it in his six years in office after the decision — but is irrelevant now that Trump has been sworn in. If the vacancy left by Antonin Scalia’s death is filled by Neil Gorsuch, campaign finance regulations may disappear entirely.

“[Gorsuch] appears to be a committed free market person going back to his undergraduate days at Columbia University,” writes William M. Landes, a professor of law and economics at the University of Chicago’s law school, in an email. “My hunch is that nothing much will change in the business cases going forward when Gorsuch replaces Scalia.”

With five justices on the Supreme Court who side with deregulatory forces, one of the first regulations to disappear may be the 2002 Bipartisan Reform Act, known as “McCain-Feingold.” If that goes, the ban on campaigns accepting “soft money” — donations that are not traced through the Federal Election Commission, meaning they’re inaccessible through public records — will be struck down. That may only be the beginning.

“We’ll eventually allow for wealthy individuals to give money directly to the candidate’s campaign,” Hasen says. What’s the difference between giving money in a roundabout way through Super-PACs, or giving it directly to the candidates themselves? “If you ask [candidates], they’d say the current system is terrible because Super-PACs are unaccountable,” Hasen says. “But getting millions of dollars directly to the legislators’ campaign is an excellent way to gain influence over the legislators.”

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