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Beyond Sticker Shock: How Is Big Money Changing Politics in 2012?

A Delve into '12 Event

Earlier this year, Trevor Potter, the former Federal Elections Commission chairman and lawyer who represents Stephen Colbert’s Super PAC on the Colbert Report, received a phone call from a German reporter.

“He said, ‘I want to interview you about the role of the oligarchs in the election,’ and I thought, ‘wait a minute, wrong country!’” Potter laughingly recounted in a faux-German accent. Potter was speaking at a New America event on Tuesday that considered the broader impact of this election cycle’s huge campaign donations – mostly resultant of the Supreme Court’s 2010 Citizens United decision – on the political process. “The notion of a democracy is that people - citizens and voters - get to set policy, not special interests or other groups countries would call oligarchs,” said Potter, who is also the president of the Campaign Legal Center. “Underlying this is the tension between the first amendment when it comes to spending unlimited money [in elections] versus the danger of corruption that politicians might be bought. “

In Citizens United, the Supreme Court held that all corporations and unions have the same unfettered First Amendment right enjoyed by the media and politicians to speak out in support or opposition of a candidate in an election, a right that Congress cannot restrict via campaign finance “electioneering” restrictions. 

That decision helped pave the way for the creation of Super PACS, political action committees that, like traditional PACs, can’t donate directly to a candidate or a party, but can spend infinite amounts of cash on an election independently.

So are these unlimited donations transforming politics?

The answer to that question, said Time magazine White House Correspondent and event panelist Michael Scherer, is complicated. Rich people writing big campaign checks isn’t a new phenomenon. But today, Super PACs are making those dollars more visible through torrential television ad broadcasts. And the massive donations funneled through super PACs allowed candidates like Newt Gingrich and Rick Santorum to continue moribund primary campaigns because of a handful of wealthy donors.

“There’s a lot of concern among democrats that going into 2016, [especially] after what happened in the GOP primary, there is a huge barrier to overcome,” Scherer said. “ It’s difficult to see how any candidate can get into the race without having a few very wealthy friends. There is real concern that [this reality] will self-select candidates, or lead the country on a path to the situation where people who can give 10 million dollar checks have increasing control over the political process.”  

That shift in control could have a ripple effect across society. “This creates a situation where enormous economic inequality is reinforced by political inequality,” said panelist Mark Schmitt, a fellow at the Roosevelt Institute and a New America senior research fellow. “It’s not the one percent that’s giving to campaigns.  It’s about one-fifth of one percent.”  

Another problem, according to the panelists: We often don’t know who comprises that one-fifth of one percent.  Some super PAC money comes from non-profits that don’t have to reveal donor identities. And many super PACs are able to conceal the names of supporters - at least temporarily -  by choosing an infrequent disclosure schedule from options mandated by federal election law.

“For accountability’s sake, I want to know who is trying to push an election one way or another,” Scherer said, arguing for greater transparency. “…We have an enormous problem now in the timing of disclosures.”

Potter hopes that the next congress will address the murky disclosure issue. The Supreme Court, he said, has made it clear that disclosure is a good thing. “Citizens should know who’s paying for these ads and shareholders should know what corporations are up to…it’s hard to argue against disclosure.”

But event moderator Katherine Mangu-Ward, the managing editor of Reason magazine, gave that argument a shot. Isn’t there value in anonymous political speech? she challenged. 

“I don’t understand why you think there’s a value to someone being able to spend millions of dollars anonymously to say someone is great or terrible,” Potter responded, pointing out that there’s inherent value to disclosure in preventing corruption.

Speaking anonymously can protect the reputations of individuals with unpopular views, reasoned Fellow Mangu-Ward, also a New America Schwartz Fellow. “I might be a rich guy who doesn’t want to have the pain at cocktail parties of [a controversial political stance], or someone who generally fears for my personal safety,” she said. “I might be someone who doesn’t want my own reputation to sully the message I’m conveying.” It’s an argument that anyone who has ever written under a pseudonym [including the auhors of the Federalist Papers!] understands, she concluded.

“[Those are] reasons, but I’m not sure they’re good reasons,” Potter gibed.

Later, panelists dismantled a common donor narrative long perpetuated in the press: The individuals who write $10 million checks are pursuing power, and only want to leverage the donation for their own political gain. “The reality is that there are very different motivations from very different types of people,” Scherer said. “[There are] ideological philanthropists who give every year and feel this is how they can do good in the world. They don’t really want anything back. But the problem from a policy and legal standpoint is, how do you distinguish from the outset one guy from the other guy?” Namely, the guy who is donating so he can pull the strings on the president’s policies. That line of thought reminded Potter of the election of Theodore Roosevelt around the turn of the 20th century. Wall Street trusts had donated cash to get Roosevelt in office because they wanted him to keep them safe, and refrain from passing anti-trust legislation. Later, Roosevelt became known as the “Trustbuster” for his crusade against those monopolies.

That stark departure led steel mogul Henry Clay Frick to grumble, “ We bought the son of a bitch and then he didn’t stay bought.“ And it prompted Roosevelt to censure the use of private money in presidential elections. “He said we ought to have public money from the Treasury because private corporations shouldn’t be deciding who the president is,” Potter recounted.

Neither should individuals. Schmitt admitted the relationship between Republican campaign donor and casino magnate Sheldon Adelson and Mitt Romney “troubled” him. “You want to create a structure where elected officials are not largely dependent on a given donor.”

Will Congress work to create a structure like that in the next term?

“Right now, this is a totally partisan issue,” Scherer explained. In the near future, he doesn’t expect much will change on the Hill. But campaign finance reform could become a powerful rallying cry for Democrats during the next four years. During a late August interview with users of the popular news content sharing site Reddit, President Obama promised to pursue the dubious idea of a constitutional amendment to  overturn the Supreme Court’s decision in Citizens United.

But even if he can’t pass an amendment, Obama –or Washington Democrats  - could effectively frame the fight against Citizens United as “helping the working guy defeat the fat cats,” and or the common man versus the power of special interests, suggested Scherer. “There’s real potential for a party to take this as a baton and use it as a way of mobilizing people,” he said.

-Elizabeth Weingarten


Trevor Potter
Founding President and General Counsel, Campaign Legal Center

Michael Scherer
White House Correspondent , TIME Magazine

Mark Schmitt
Senior Fellow,  Roosevelt Institute
Senior Research Fellow, New America Foundation  

Katherine Mangu-Ward
Bernard L. Schwartz Fellow, New America Foundation
Managing Editor, Reason Magazine 

Event Time and Location

Tuesday, October 2, 2012 - 12:15pm - 1:45pm
New America Foundation
1899 L Street NW Suite 400
Washington, DC 20036

Event Photos

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A range of photos from this event are available on Flickr. Click on the icon at left to view or download the photos.