Oligarchy Enshrined
Why the Supreme Court’s McCutcheon ruling is good news for the super-rich and bad news for progressive Democrats.
Cole Stangler
At the 2012 Conservative Political Action Conference, a conservative election lawyer and a baby-faced electrical engineer from Alabama with a made-for-TV Southern drawl began plotting how to unravel federal campaign finance regulations.
Shaun McCutcheon had one of those “rich people problems”: He wanted to give money to more Republican candidates than the Federal Election Commission allowed. During CPAC’s Ronald Reagan Banquet, he started chatting up activist lawyer Dan Backer, according to The Huffington Post. This was low-hanging fruit, Backer assured him. A well-crafted legal challenge could take out the FEC’s so-called aggregate limits on campaign contributions — rules that blocked individuals from giving more than $48,600 to federal candidates and $74,600 to political parties and PACs in each election cycle.
Sure enough, less than a year after lawyers representing McCutcheon and the Republican National Committee filed a complaint against the FEC, the Supreme Court agreed to hear the case. On April 2, a 5-to-4 majority sided with the GOP’s budding benefactor, striking down the FEC’s aggregate contribution limits.
The full impact of the ruling won’t be felt until perhaps 2016, when presidential fundraising kicks into high gear. But campaign finance experts agree: McCutcheon v. FEC will encourage more money to flow into electoral campaigns, reduce the number of stakeholders in the American political system and strengthen the hand of party committees on both sides of the aisle. And, according to Supreme Court observers, the nature of the majority’s ruling invites further challenges that could topple what’s left of campaign finance law.
One impact, however, has been overlooked: The court’s ruling could well hurt the electoral prospects of progressive Democrats.
The worst, it seems, is yet to come.
A tilted playing field
The frenzy over the 2010 Citizens United v. FEC decision often ignored a basic fact: The nation’s campaign finance laws have long favored the rich. Since at least 1976, when the Supreme Court’s Buckley v. Valeo decision struck down campaign spending limits, the wealthy have exercised their First Amendment “speech” rights through a combination of tactics: “soft-money” contributions, self-financed campaigns, and plain old maximum-allowable donations to candidates and parties.
“People who have lots of capital, lots of resources, who want to be involved in the political process have always worked hard to find ways,” says Bob Biersack, a 30-year-veteran of the FEC who’s now a senior fellow at the Center for Responsive Politics, which tracks campaign spending. “There have always been ways available to them.”
The Supreme Court has simply afforded our privileged elite more options. Citizens United infamously allows unlimited outside spending on elections. In the 2011-2012 election cycle, Super PACs spent close to $1 billion—including millions from undisclosed donors. Still, that was a fraction of the whopping $7 billion tab for the total election.
McCutcheon opens up more attractive investment opportunities for the politically inclined super-rich, particularly for those who prefer the personal touch of a direct contribution over the anonymity of a super PAC. Whereas a pre-McCutcheon donor was capped at $123,200 total in a given election cycle, she’s now free to spend as she pleases — so long as each donation respects the $5,800-per-candidate-per-race contribution limit still in effect. As Justice Elena Kagan observed, if one considers each party’s 435 House candidates, 33 Senate candidates, 50 state committees and three main fundraising committees, a single donor can give as much as $3.5 million in direct contributions each cycle.
According to the Center for Responsive Politics, about 600 donors gave close to the legal limit of $123,200 in the last election.
The portrait of this donor class is predictable: A Huffington Post analysis that focused on a smaller group of McCutcheon-limit donors found that almost half came from the financial services sector. Others hailed from the energy industry, law practices and miscellaneous business ventures. A solid majority gave to Republicans.
McCutcheon doesn’t just make it easier for the rich to give. It also makes it easier for parties and committees to aggressively court them — something that can’t be said for Citizens United.
The three main fundraising committees of each party no longer have to compete amongst themselves to win the maximum allowable $32,400 contribution from a single donor. Before McCutcheon, contributions to party committees were capped at $32,400 total per election cycle. However, since the ruling, the Democratic National Committee (DNC), Democratic Senatorial Campaign Committee (DSCC) and Democratic Congressional Campaign Committee (DCCC) can now ask the same Greenwich, Connecticut, hedge-fund manager to write each of them a $32,400 check. (These Democratic organizations declined to comment on how McCutcheon impacts their fundraising strategy.)
The Court’s ruling means that the field of influential political players will continue to shrink, according to Biersack. This trend, already fueled by an unprecedented acceleration of economic inequality, was sent into hyperdrive by Citizens United.
“What [McCutcheon] does is magnify something that was already happening,” Biersack says. “It puts the focus of political professionals of all kinds, including candidates and office-holders, on a very small group of people and institutions that have big capital resources that the political professionals need and want.”
Citizens United introduced Americans to the comically nefarious Super PAC. McCutcheon will familiarize voters with newly empowered “joint fundraising committees.” These committees have been popular among the major fundraisers of both parties because they are able to sweep up large sums of money at a time. For example, in 2012 donors were able to write a single megacheck to joint fundraising committees, such as the Romney Victory Fund, which then divvied up the donations among all players: the presidential campaign, the national party committee and participating state party committees. Often used at events featuring candidate appearances, joint-fund-raising committees allow less prominent candidates or state committees to piggyback on the big name draws that command the fat checks. The old aggregate limits restricted how many entities could link up under a single joint fundraising committee. However, under McCutcheon, these super committees have become cash-guzzling monstrosities capable of swallowing up a seven-figure check from a single donor in one big gulp, then regurgitating it out to all participating committee members. Party officials can now “essentially go to one donor who’s willing and able to give $3.5 million, and ask for that kind of money dispersed to various candidates,” says John Bonifaz, president of Free Speech for People, a group that advocates for public financing of elections.
The $3.5-million-check scenario is unlikely, as a committee would need to include all the party’s federal candidates. But the larger the pool of participants in these committees grows, the larger the checks can be. On April 9, one week after the ruling, the three main Republican fundraising committees — the Republican National Committee (RNC), the National Republican Senatorial Committee (NRSC) and the National Republican Congressional Committee (NRCC) — joined forces to form the Republican Victory Fund, a joint fundraising committee. The Victory Fund is allowed to accept a single contribution of $97,200 and distribute it evenly among the participating committees. On April 15, a group of GOP senators formed their own joint-fundraising committee that’s capable of reeling in a $98,800 check from a single donor.
This pushes up the price that donors are expected to pay for access to elected officials, says Lisa Rosenberg, a former staffer for then-Sen. John Kerry (D- Mass.) and a lobbyist for the Sunlight Foundation, which advocates for more transparency in government.
“You’re going to get these members of Congress, elected officials, or would-be elected officials, soliciting these million-dollar checks,” says Rosenberg. “ ‘Oh come to my joint-fundraising committee on behalf of all these candidates.’ That’s going to be the invitation from John Boehner or Nancy Pelosi.”
Bonifaz agrees: “If you’re a donor who wants to maintain influence and access with those in leadership, you’re likely to give at that level. It means that we have increased even further the kind of disproportionate influence the very wealthy have over our politics.”
Full speed ahead
McCutcheon leaves existing campaign finance law on very shaky ground. The Chief Justice John Roberts-led majority dismissed the notion that limits on campaign contributions are necessary to ensure equality of representation.
“It would seem as if this court believes there should effectively be special speech rights for the wealthiest people in America,” says Nick Nyhart, president of Public Campaign, which supports electoral reforms to reduce the amount of money in politics. “They have so turned the speech argument around that they’re saying your right to speech is dependent on the size of your wallet.”
Rick Hasen, University of California-Irvine law professor who specializes in campaign finance regulation, predicts that McCutcheon “will be an essential building block to challenging other campaign contribution limits.”
McCutcheon drastically narrows the legal grounds on which the FEC can enforce any contribution limits. Since Buckley v. Valeo in 1976, the Court has justified its regulation of campaign finance on the basis of preventing “corruption or the appearance of corruption.” In McCutcheon, Roberts adopted a more stringent definition of corruption as a quid pro quo — a direct exchange of money for a specific vote.
This quid pro quo standard may provide the justification to challenge any contribution limits. “That lays the groundwork for the argument that we have laws like that — they’re called bribery laws,” says Nyhart. “So why do we need anything more?”
Hasen agrees, saying that Roberts’ opinion reads like an invitation to challenge the existing bans on soft-money contributions to political parties. Until 2002, outside groups like corporations and unions were able to give unlimited donations directly to parties, which the parties would then disburse. In response to critiques that such donations circumvented campaign finance law by allowing wealthy donors to make indirect donations to candidates, Congress outlawed these types of “soft-money” contributions. That’s part of the reason Super PACs cannot directly coordinate with candidates or parties.
So what’s going to fall first? Contribution limits to candidates or soft-money donations to parties?
“Part of it depends upon what gets challenged,” says Hasen. “The lawyers [will decide] which cases to file when. But I do think that the Roberts Court has been moving slowly, but steadily, toward knocking these things down. So if we have the same nine justices the next time these issues face the court, I expect them to fall.”
Underdogs beware
After Citizens United, progressives warned that Republicans were on the verge of buying the presidency, the House and the Senate. In 2010 and 2012, at least, this turned out not to be the case. Much like its landmark predecessor, McCutcheon is unlikely to threaten the ability of the Democratic Party to win federal elections.
The current Republican dominance in Congress is, above all, a structural phenomenon, argues Rob Richie, executive director of FairVote, which advocates for voting rights and electoral reform. Thanks to how House districting works, rural, conservative-leaning parts of the country are overrepresented, stifling the ambitions of the nation’s liberal-leaning, mostly urban-dwelling majority. Barring sudden demographic changes or electoral reforms (such as proportional representation or a national popular vote) or, say, a massive popular movement that threatens the two-party stranglehold — conservative America is likely to remain overrepresented in Congress.
Rather than swing Democratic seats to the GOP, McCutcheon is far more likely to impact what kind of Democrat is able to compete in the donation-grubbing, free-spending, advertising-saturated, deeply perverse world of 21st-century American elections. Two groups in each party, it seems, stand to gain most: Candidates who can count on the support of party leadership and those who rely heavily on large individual contributions. Each of those scenarios is bad news for progressives.
“There’s more big money. Big money is never on the side of progressive candidates. Never,” says Rep. Alan Grayson (D-Fla.).“Big money is always going to support big money shills, and progressives are not big money shills.”
Left-leaning House Democrats are often at odds with their party’s leadership. Sometimes that tension spills over to fundraising and campaigning. In 2010, for example, Congress watchers reported that the DCCC, under the leadership of Rep. Chris Van Hollen (D-Md.) abandoned one of the most progressive members of the House— Congressional Progressive Caucus (CPC) vice-chair Grayson. Grayson lost badly to a Tea Party challenger, but won his seat back in 2012. Ongoing intra-party tension could leave some CPC members on the outside of key joint fundraising committees, which in the post-McCutcheon world will only grow more powerful.
As it is, incumbent progressives trail the rest of the Democratic Party’s representatives, both in total amount raised from all sources (PACs, committees and individuals) and in the percentage of total donations that come from wealthier donors. In These Times compared the types of donations received by the 68-member CPC with those of the 55-member New Democrat Coalition (NDC), a proudly neoliberal House caucus that bills itself as the “pro-growth, fiscally responsible wing of the Democratic Party.” During the 2012 cycle, the CPC representatives reeled in an average of $584,000 in individual contributions of more than $200. Those contributions made up an average of 42 percent of total contributions per candidate. NDC members, on the other hand, took in an average of more than $1 million in such contributions — 48 percent of total contributions per candidate.
That data belies the common myth that for every Charles and David Koch, there’s a Hollywood billionaire bankrolling an army of liberals fighting his or her pet causes. Tom Steyer, the hedge-fund manager-cum-environmental activist, is the exception, not the rule.
“We have made tremendous strides over the past several years in establishing smaller contributions as one of the foundations of successful fundraising for progressives or a progressive party and McCutcheon sets that back,” says Grayson. “McCutcheon changes the incentives to once again have many members of Congress and the parties as a whole focus their attention on large contributions rather than small contributions.”
Following the money
By fueling symbiotic relations between party committees and their big donors, McCutcheon will likely make it more difficult for progressive Democratic challengers to unseat incumbents — whether they’re Democrats or Republicans.
The DCCC can be tough on some elected Democratic members of Congress, but we should pity the insurgents. “Where they’re ruthless and they really do a hatchet job, is on candidates,” says Howie Klein, a Los Angeles-based blogger who covers Democratic Party politics from his blog, Down with Tyranny!. Klein documents how, every two years, the DCCC overlooks promising progressive challengers in favor of milquetoast centrists. Ground zero this year may well be California’s 31st district, in the state’s Inland Empire region — arguably the most solidly Democratic district in the country with a Republican representative. The Democratic Super PAC, House Majority PAC, has called GOP Congressman Gary Miller “the most endangered Republican incumbent in the country.”
Instead of backing progressive challenger Eloise Gomez-Reyes, a former labor lawyer who calls for expanding Social Security benefits, the DCCC is throwing its weight behind Pete Aguilar, a banking lobbyist-turned-mayor of Redlands. As one of the 16 “top-tier” candidates who are part of the DCCC’s “Jumpstart” program, Aguilar has received “financial, communications, operational and strategic support” from the party committee since last May. In the last election, the DCCC-endorsed Aguilar somehow managed to place third in the Democratic-leaning district’s crowded “jungle primary” (which lumps together candidates from all parties), eliminating Democrats from the two-candidate November run-off and gifting the seat to the GOP. Post-McCutcheon, the DCCC will likely have more money for races like this and be able to more effectively muscle out primary candidates whose populist credentials it doesn’t like.
Rick Weiland, a left-leaning former adviser to Tom Daschle running for the Senate in South Dakota, knows what it’s like to be on the wrong side of those in the Democratic Party leadership who control the purse strings. Last year, Harry Reid and the DSCC tried to recruit a former U.S. representative, the centrist Stephanie Herseth Sandlin, to replace Democratic Sen. Tim Johnson, who is retiring following a stroke. But in May 2013, when Weiland announced his bid for the soon-to-be-open seat, the former congresswoman backed off. Reid has apparently held a grudge against Weiland ever since.
Today, Weiland is the only Democratic Senate candidate not to be formally endorsed by the DSCC. The NRSC has already held a fundraiser for his leading opponent in the GOP primary, Mike Rounds. The former governor has raised close to $2.9 million; Weiland’s campaign coffers stand at a paltry $740,000. (Weiland also appears to be a casualty of an ego-driven pissing match between former Senate Majority Leader Daschle and current Senate Majority Leader Reid.)
“The problem of big money and its effects on public policy is the reason I got into this race,” says Weiland, who opposes the Keystone XL pipeline, backs single-payer healthcare, and rails against Big Oil and Big Pharma. “It’s really at the cornerstone of my campaign.”
The O-word
With fewer and fewer political players in the game, more and more progressives are talking “oligarchy.” Chief among them is Vermont Senator Bernie Sanders. He tells In These Times that the recent Supreme Court rulings are “paving the way for oligarchy in America.” Nobel Prize-winning economist Robert Solow, in a recent interview at the Economic Policy Institute, made a similar warning based on the nation’s rising economic inequality: “If that kind of concentration of wealth continues, then we get to be more and more an oligarchical country, a country that’s run from the top.”Jeffrey Winters, a political science professor at Northwestern, maintains we’re already there. (Winters was the author of In These Times’ March 2012 cover story, “Oligarchy in the U.S.A.”) He describes the United States as a “civil oligarchy” — as opposed to, say, “warring oligarchies” like 19th century Appalachia, or “ruling oligarchies” like ancient Athens and Rome. Oligarchy at its core, he says, is the “politics of wealth defense.”
Results from a forthcoming study support Winters’ assessment. Political scientists Martin Gilens of Princeton and Benjamin Page of Northwestern have found that wealthy people and corporate interest groups exert far more influence over policy than average American citizens. By measuring the correlation between the political preferences of various income levels and 1,799 policy outcomes between 1981 and 2002, their fall 2014 article in Perspectives on Politics quantifies a fact that has long fallen on deaf ears in the United States: Political power is concentrated at the very top of the economic ladder.
Gilens says he hesitates to use the word “oligarchy” because it implies a group of a certain size and his data doesn’t show exactly how large a group of affluent individuals “have real influence over government policy-making.” He and Page prefer to talk about what they term “economic elite domination.”
Because of limited data, Gilens and Page only considered the policy preferences of the top 10th income percentile. But, says Gilens,“It would be surprising if within that group of people in the top 10 percent, that those in the top 1 percent didn’t have more influence than the remainder, and of course, those in the top one-hundredth of 1 percent even more influence.”
The study also doesn’t examine the mechanisms by which the rich exert their influence over public policy. Nevertheless, Gilens says he’s been able to rule out other potential factors based on prior research — such as, say, disproportionate levels of political engagement, interest or knowledge.
“The bottom line is that money in politics, generally, and campaign contributions, third-party spending and so on, is absolutely central in explaining the greater influence of people with money,” says Gilens.
The fight back
No one-shot remedy will level the electoral playing field. But an increasing consensus holds that a constitutional amendment strengthening campaign finance regulations is a necessary first step.
“I don’t know what the Congress could do to fix this that the Court wouldn’t rule as unconstitutional,” says South Dakota’s Weiland. “So we’ve got to change the Constitution. Then we can take a look at the best path forward to reform how these campaigns are funded and waged.”
Weiland says he’s handed out thousands of calling cards that, on the back, include his preferred language for an amendment: “So that the votes of all, rather than the wealth of the few, shall direct the course of this Republic, Congress shall have the power to limit the raising and spending of money, with respect to federal elections.”
Such an amendment would overturn the Supreme Court’s Buckley v. Valeo ruling in 1976, which allows for unlimited campaign spending. Without spending limits, it’s more difficult to make the constitutional case for contribution limits.
The Senate recently agreed to allow a floor vote on such an amendment — the first time that’s happened since Citizens United triggered calls to update the Constitution.
Others believe any such amendment needs to go even further. They say the problem lies in the concept of corporate personhood — a court precedent that goes back to 1886 and Santa Clary County v. Southern Pacific Railroad.
Move to Amend, a coalition that includes groups like CODEPINK, the Sierra Club, Progressive Democrats of America and Free Speech for People, calls for a constitutional amendment to establish that “money is not speech” and that “human beings, not corporations, are persons entitled to constitutional rights.”
No matter how an eventual amendment reads, the road to ratification will be long. In order to be considered, a constitutional amendment needs to first earn the support of a two-thirds majority of both houses of Congress. Alternatively, two-thirds of the nation’s state legislatures can request that a constitutional convention be held. But for an amendment to actually be ratified, it has to win approval from three-fourths, or 38, of the nation’s state legislatures.
Free Speech for People’s Bonifaz takes the long view: “In our history as a country, we have dealt with these kinds of major threats to our democracy in the past via a constitutional amendment.”
Seven previous constitutional amendments, he says, have addressed “egregious” Supreme Court rulings. The 19th Amendment, for example, overturned prior Supreme Court rulings that prevented women from exercising the right to vote.
“The power that we as a people have under Article 5 is designed to ensure that when the Supreme Court engages in this kind of egregious decision-making, or when we face some other kind of threat to the franchise and must lift up the promise of American democracy, that we have that power to use it. And I think we’re in that historic moment again.”
Nick Nyhart, meanwhile, offers an analysis that hasn’t exactly stood the test of time — the worse things get, the greater the chances of a popular backlash. He points to the demonstrations that followed the McCutcheon decision. In some 150 towns and cities across the country, thousands of people turned out on short notice to protest the ruling.
“The good news,” says Nyhart, “is that as the system gets worse, as people see these headlines about individuals being able to give $3.5million directly to candidates through a bundling process … and see the tens of millions that other people are putting into politics, and the hundreds of millions being bundled by people like the Koch brothers, there is a reaction.”
Popular outrage may well be mounting. But time isn’t on the side of reformers. Each election cycle in the current climate threatens to make elected officials and political parties more beholden to big-pocketed contributors, and thus less likely to reform the system. Meanwhile, the Roberts majority has yet to consider a campaign contribution limit that it hasn’t decided to strike down.
One imagines the corporate donor class salivating: Who will be the next McCutcheon?
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