FEC hearing on campaign finance rules: The agency appears powerless to do its job.

The FEC Held a Hearing. It Revealed Almost Everything That’s Wrong With American Democracy.

The FEC Held a Hearing. It Revealed Almost Everything That’s Wrong With American Democracy.

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Feb. 11 2015 8:12 PM

Open Mic Disaster

The FEC held a hearing. It revealed almost everything that’s wrong with American democracy.

Shaun McCutcheon
Shaun McCutcheon in front of the United States Supreme Court in Washington, D.C., on Sept. 13, 2013.

Photo by Gary Cameron/Reuters

Woe, to be the Federal Election Commission in the age of the Koch brothers. The agency charged with safeguarding the integrity of American democracy has, in recent years, been hit again and again by other branches of the federal government further flooding the political system with money from a small coterie of ultrawealthy donors. There was the Supreme Court’s Citizens United v. Federal Election Commission ruling in 2010, which made it possible for corporations, unions, and nonprofit groups to spend directly on elections. There was the McCutcheon v. FEC ruling last year, which, while keeping in place caps on how much an individual could give directly to a candidate or political committee, eliminated the aggregate limits on how much he could give combined. And just two months ago, Congress slipped into the big must-pass spending bill a further expansion of the sums a wealthy donor could give to party committees.

The FEC hasn’t exactly helped matters, either. In the final years of George W. Bush’s administration, in 2007, it issued a rule that greatly weakened the requirements for nonprofit groups airing political “issue ads” to disclose their donors. More recently, the agency, despite the best efforts of Chairwoman Ann Ravel, a Democrat, has been conspicuously weak in enforcing its remaining rules on donor disclosure, laundered campaign contributions, and improper coordination between outside groups and candidates—the result of a worse-than-ever partisan deadlock between its three Democratic appointees and its three Republican ones, who have repeatedly resisted serious enforcement actions.

All in all, the agency is looking about as effective at holding the line as a middle-school hall monitor at a Roman bacchanal.

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Yet it is a government agency, which means there’s something it still knows how to do: hold hearings. And on Wednesday, it threw open its doors in downtown Washington for a real doozy, a daylong open-mic session asking the public how it could improve its campaign finance regulations in light of the recent court and congressional actions. There was an almost post-apocalyptic feel to the proceeding: Effectively, the agency was admitting that the village had been all but burned to the ground, and it was looking for any last-ditch tips on how to rebuild.

For context, this is what the scorched landscape of campaign finance regulation now looks like, as compiled by the Brennan Center for Justice at New York University: Since Citizens United, there has been almost $2 billion in spending on federal elections by so-called super PACs—501(c)(4) nonprofits and other outside groups that can raise unlimited funds. More than a third of that can be traced to a mere 209 individual donors. (In 2014, the top 100 publicly disclosed donors gave almost as much as all 4.7 million people who gave $200 or less.) Roughly another third of the $2 billion total has come from completely dark sources—501(c)(4)s and other groups who do not need to disclose their donors. And the outside spending was funneled heavily toward the most competitive races—last year, for example, nearly 90 percent of outside spending on Senate races flowed toward the 11 hardest-fought races, where it often exceeded both regular candidate and party spending.

In Kentucky, for example, a secretive organization called the “Kentucky Opportunity Coalition” sprang up to spend more than $7 million—with none of its sources disclosed—in support of Sen. Mitch McConnell, making it the race’s biggest spender aside from the two candidates. In North Carolina, total spending topped $110 million, two-thirds of it from outside groups. “The messaging and ads were so relentless and so similar, that it was impossible to separate one PAC or super PAC from another,” said Glenn Conway, a North Carolina resident who came to testify at the hearing. “It would seem that they were all coordinated together, or produced using a common theme. If there was any real independence between any of them, it was impossible to distinguish. The whole thing was sickening.”

The campaign finance reform advocates at the hearing largely agreed on what was needed now. The commission, they said, ought to require big-spending outside groups to disclose the source of contributions above a certain threshold. It ought to clamp down on donors who get around limits on donations to individual candidates by “earmarking,” funneling money to party committees and outside groups so that it will get to the candidate. Such reforms, the advocates said, would be fully in line with the guidance offered by the Supreme Court majority in Citizens United and McCutcheon, which even as it struck down limits, said that better disclosure and tracking of spending could mitigate the risk of corruption.

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And the commission ought to crack down on the blatantly illegal coordination between candidates and super PACs raising unlimited funds to back him or her—they’re supposed to be completely separate, but these days candidates hold fundraisers for their own super PACs (which are typically run by the candidates’ former aides), share the same consulting firms, and personally court or even swan around with their biggest super PAC donors, as happened in 2012 with megadonors like Sheldon Adelson and Foster Friess. “Unenforced campaign finance rules in our view are, in some respects, worse than no rules at all,” said Daniel Weiner, of the Brennan Center. “They breed contempt for the law and foster a system weighted in favor of insiders and special interests who know how to play the game.”

Opponents of new regulations scoffed at these suggestions. Greater disclosure, said James Bopp Jr., who initially represented the plaintiffs in Citizens United, would only expose donors to public harassment and intimidation, as occurred with donors to the anti–marriage-equality cause in California. (Indeed, marriage-equality supporters did campaign finance disclosure no favors by hounding Brendan Eich out of his job.) Bopp and several others at the hearing went so far as to compare conservative donors threatened by disclosure to supporters of the NAACP in the Jim Crow South.

Sheldon Adelson
Sheldon Adelson in 2010.

Photo by Siu Chiu/Reuters

Opponents also argued that the court had left it to Congress, not the FEC, to come up with reforms to address problems created by its recent rulings. “Congress has not chosen to put in that limit, and you can’t do it,” said Hans von Spakovsky, a former commission member (and leading supporter of Voter ID laws), in a taunting tone.* Indeed, stalemated Congress has not acted—in 2010, the House passed legislation requiring greater disclosure of outside spending, but Sen. Mitch McConnell led a Senate filibuster to block it. Campaign finance reform supporters fired back that it was “absurd” to suggest that the FEC had no authority to address problems amidst congressional inaction.

But it was left to Zephyr Teachout, the Fordham law professor and campaign finance reform champion who challenged New York Gov. Andrew Cuomo in last year’s Democratic primary to state the obvious, which was that even if the FEC did have the institutional prerogative to issue and enforce regulations, it currently lacked the willpower to do so, given its 3-3 deadlock. “We know that the structure of the FEC is such that it is next to impossible for it to operate as it should,” she said, “and we should take the opportunity more publicly to talk about fixing the structure of the FEC itself.” This could be done either by adding a member to the commission so that it was no longer split evenly between parties but controlled by the party in the White House, as is done with, say, the National Labor Relations Board, or by turning it over to a single director, as is done with the FBI.

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Such structural reforms are nowhere in the offing, and meanwhile, the big-money beat goes on. Late last month, the Koch brothers announced that their network of conservative donors was budgeting about $900 million for the 2016 election cycle—almost none of it disclosed. And on Wednesday night, Jeb Bush is headlining a fundraiser in New York at a whopping entrance price of $100,000 per person—not to raise money for his campaign, which he has yet to officially launch, but for the super PAC created to support him. “We are to believe with a straight face that this organization is completely independent of Gov. Bush,” said Stephen Spaulding, of Common Cause. “No Americans would believe that to be the case.”

But Dan Backer of the Conservative Action Fund defended the arrangement. “Gov. Bush is not a candidate for a federal office at the moment,” he said. “Maybe he should be and maybe he should be considered to be, but the law is what the law says that it is. Gov. Bush is not running for anything … To say there is some sort of shameful activity going on when people comply with the law, I think is part of the problem here.”

Or, less charitably, as the founder of this magazine once said, “The scandal isn’t the illegal behavior—the scandal is what’s legal.”

*Correction, Feb. 12, 2015: This article originally misspelled the last name of former FEC commissioner Hans von Spakovsky. (Return.)