How much has the Citizens United case changed campaign finance in 2010?

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Oct. 6 2010 6:09 PM

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How much has the Citizens United case changed campaign finance in 2010?

Chief Justice Roberts. Click image to expand.
Chief Justice John Roberts

Democrats will find plenty of scapegoats for their electoral losses in 2010, but high on the list will be Supreme Court Chief Justice John Roberts. The Washington Post reported on Monday that interest groups have spent five times as much on this year's midterm elections as they did in 2006, and the money has gone overwhelmingly to Republicans—a spike that the Post says "is made possible in part by a series of Supreme Court rulings unleashing the ability of corporations and interest groups to spend money on politics."

Note the key phrase "in part." We know recent Supreme Court rulings—including this year's Citizens United v. Federal Election Commission, which opened the door for corporations and unions to spend unlimited amounts of their own treasury money (as opposed to forming a PAC) on broadcast endorsements—have changed the campaign finance game. We just don't know to what extent. * Independent expenditures trend up every four years anyway, so we'd expect to see more outside spending in 2010 than in 2006, even without a landmark Supreme Court decision.

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It's therefore premature to pin all the responsibility for the election spending boom on Citizens United. The rules that govern corporate- and union-funded advertising in 2010 were largely in place in 2008—an election that, while expensive, didn't spark the same suspicions of corporate manipulation. That year, the door for corporate spending in elections was already wide open. Citizens United just removed the hinges.

After the Bipartisan Campaign Finance Act, better known as McCain-Feingold, passed in 2002, corporations and unions were banned from spending money on broadcast campaign ads in the one or two months before an election. (The "window" spans the 30 days before a primary and 60 days before a general.) The Supreme Court softened the ban with its 2007 decision in Federal Election Commission v. Wisconsin Right to Life, ruling that corporations can fund ads right up to Election Day as long as the ads don't expressly endorse a candidate. For example, you can say, "Candidate X supports terrible policies that we disagree with," but you can't say, "Vote for Candidate X." (Corporations called these "issue ads." The FEC called them "sham issue ads" that simply provide a loophole for endorsements.) In 2008, therefore, corporations could already finance campaign ads as long as they weren't too specific.

Citizens United eliminated the ban altogether, and with it the distinction between "issue ads" and "express endorsements." Corporations and unions can now spend unlimited amounts of money on any kind of campaign ad they want, whenever they want. But the new landscape isn't all that different than it was in 2008. "They could spend the money before," says Brad Smith, a former FEC commissioner and a professor at Capital University Law School. "It just would have gone to issues ads run 60 days before an election. Now it goes to express advocacy."

So how much has Citizens United really influenced the rise in spending? It's hard to say. FEC reports are released monthly, so we won't be able to take full stock of corporate spending until after the election. But even then, not all groups that produce ads have to disclose their donors. Citizens United didn't change the disclosure rules for corporations and unions. But those that exercise their new spending liberties can avoid taking responsibility for their spending by exploiting pre-existing loopholes. For example, instead of spending money directly on an ad, which requires disclosure to the FEC, they give money to a 501(c)4 organization, which doesn't. (A 501(c)4 can keep its donors secret as long as its primary purpose is not campaigning.) These "shadowy" groups are nothing new. They're just more flush this year.

The frustration for campaign finance reformers is that Citizens United didn't have to happen the way it did. Originally, the court case was about disclosure rules, says Fred Wertheimer of Democracy 21. The court told the litigants to come back and rebrief the case to make it about the ban on corporate spending instead. "This case was actually brought by the five justices," says Wertheimer. "They wanted to rule on it." No doubt Citizens United set back the cause of campaign finance reform. But the jury is still out on its practical effects.

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Correction, Oct. 7, 2010: This article incorrectly suggested Citizens United was decided in 2009. It was 2010. (Return to the corrected sentence.)

Christopher Beam is a writer living in Beijing.

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