How the FEC Can Stop the Tidal Wave of Secret Political Cash
Don’t blame Citizens United for the worst excesses of this year’s election.
Instead, look to the failures of the Federal Election Commission.
The Supreme Court’s Citizens United decision — which created a constitutional right for corporations to spend unlimited amounts independently of federal candidates or party committees — has been rightly criticized for its legal incoherence, judicial activism and equation of corporations with individuals. However, it’s not responsible for two of the most outrageous aspects of the 2012 campaign: the super PACs that claimed to be independent despite their close association with candidates, and the hundreds of millions of dollars from secret donors that paid for an avalanche of negative campaign ads.
Concerning the super PACs, the court — in several rulings, including Citizens United— said the only unlimited campaign expenditures it was enabling had to be “wholly,” “totally” and “truly” independent of candidates and political parties. As for secret donors, the Citizens United opinion stated that, under existing law, the sources of funding for election ads would be fully and speedily disclosed on the Internet — promising that shareholders could hold corporations “accountable” for their political donations, and voters could “see whether elected officials are ‘in the pocket of so-called moneyed interests.’ ”
Both of those promises went unfulfilled this year — not because of the court’s ruling, but because of the FEC, the government agency whose job it is to enforce U.S. laws on money in politics.
It is the FEC and the permissive regulations it has created over the past decade that have allowed close connections between candidates, parties and political action committees. And it is the agency’s dysfunctional state — engineered by a Republican congressional leadership adamantly opposed to campaign finance reform — that has turned the Supreme Court’s promise of transparency into a joke.
When I was appointed to the FEC by President George H.W. Bush in 1991, I joined a panel made up of two fellow Republicans and three Democrats, commissioners who basically saw their jobs as ensuring that their own party was treated fairly in the rough-and-tumble of elections.
In practice, this worked pretty well. When Congress created the FEC after the Watergate scandal of the early 1970s, it decreed that there be six commissioners, with no more than three from one party. At least four votes are required to take any action, such as opening an investigation or appealing a court decision.
This had an obvious potential for deadlock, but in my years on the commission, 3-to-3 ties were quite rare. The most partisan disputes involved a commissioner saying something like, “Well, if you’re going to vote that my party broke the law in this case, then you’d better vote the same way in this other case, where one of your guys does the same thing.”
My fellow commissioners largely believed in the FEC’s mission and worked hard to enforce campaign finance laws.
Things began to go badly wrong with campaign finance law during the 1996 presidential campaign, when Democrats’ cultivation of big “soft money” contributors — donors, some of them foreign, who gave money to “party-building” organizations — resulted in a lengthy Justice Department investigation. It was also becoming clear to many in Congress that soft-money donations to the Republican and Democratic national committees were corrupting the legislative process.
Two senators, Republican John McCain and Democrat Russ Feingold, reached across party lines to write a campaign finance reform law that prohibited parties from seeking or taking huge contributions, and reinforced the ban on corporate and labor money paying for campaign ads in federal elections. It was called a bipartisan effort, but in reality the Republican leadership fought it bitterly for years. After the McCain-Feingold bill finally passed in 2002, Republican opponents led the lawsuit to have the measure declared unconstitutional, and after losing that suit it tried to limit enforcement of the law.
Meanwhile, the FEC, which included commissioners of both parties who were skeptical of reform, wrote regulations that deliberately weakened and distorted the law.
When President George W. Bush nominated a new slate of FEC commissioners in 2008, its three Republicans reflected even more strongly the party’s opposition to the law. The Democrats, mirroring their own party’s leadership, supported it, but without Republican cooperation they were unable to strengthen regulations. Since then, most important votes at the FEC have resulted in partisan 3-to-3 ties, leaving the commission essentially unable to act.
In this situation, the congressional sponsors of McCain-Feingold repeatedly sued the FEC to try to force it to do its job. Twice, federal courts threw out FEC rules that allowed too much coordination between candidates and supposedly independent political committees, and twice, the commission turned right around and wrote new regulations that were as permissive or worse.
As a result, this year we saw “independent” political action committees founded or principally funded by candidates’ fathers, mothers, siblings, ex-campaign lawyers, fundraising officials and former employees. We saw candidates travel or meet privately with the individuals who provided 90 percent or more of the funding for some of the “independent” super PACs. Candidates could appear at their events, endorse their work and even solicit money for them. Mitt Romney spoke to a meeting of donors to a super PAC that supported him;a super PAC backing President Obama was run by two former White House officialsand was publicly endorsed by the president.
The story of secret money is depressingly similar.
One provision of the McCain-Feingold law requires groups spending money on election advertising to disclose any contributor of $1,000 or more. But in 2007, the FEC interpreted this fairly straightforward rule to mean that groups had to reveal only the names of donors who gave for the express purpose of funding campaign ads — something that is very difficult to prove.
In 2008, for example, a conservative group called Freedom’s Watch began running ads for Republican candidates. Its federal filings did not identify any donors, despite the fact that a subsequent FEC investigation showed that “almost all” of the group’s $30 million budget had come from one person: casino magnate Sheldon Adelson, making his debut on the political advertising scene. When the FEC had to rule on whether Freedom’s Watch had broken the law, it once again deadlocked 3 to 3 — with the Republican commissioners going so far as to say that donors had to be identified only if they designated their contributions for specific TV ads. Donors almost never do this; usually the ads are not even made until the money has been raised.
Enabled by this kind of ruling, about half of all television advertising supporting Romney’s campaign was paid for by groups that do not disclose their donors.
Things are so bad at the FEC that the commissioners have deadlocked three times in the past year over whether to even accept public comments about changing the inadequate disclosure regulations.
It seems unlikely that the Supreme Court will revisit its mistakes in Citizens United so long as the five justices who were in the majority in that case remain in place. But the good news is that it’s not up to the court to fix some of the worst problems we saw in the 2012 election. Nor does Congress have to pass new laws, although clearer congressional mandates would certainly help.
Instead, the FEC just has to do its job. For that to happen, we need new commissioners dedicated to enforcing the laws passed by Congress and upheld by the Supreme Court. As it happens, five of the six commissioners are holdovers whose terms have expired.
To overhaul the panel, Obama will have to upend decades of tradition. Since the establishment of the FEC, presidents have appointed commissioners according to an unwritten agreement: Two have been proposed by the Senate leadership (one from each party), two by the House and two by the White House. The nominees got routine Senate confirmation.
That clearly needs to change. The president could start by bringing in a bipartisan group of outsiders who know something about enforcing the law — former judges, prosecutors and state election officials — and agree to nominate to the FEC both the Republican and Democratic nominees whom the group proposes. If senators wanted to object to these names, they would have to do so in public and justify their reasons.
It might be tempting to say we don’t need an FEC. After all, even with no effective watchdog in place, Adelson and lesser-known billionaires were unable to buy the Republican primary, let alone the presidency. But the big bucks spent by super PACs allied with losing Republicans undoubtedly distorted the primary process. Without them, Romney would have speedily become the nominee; he could have started his campaign months earlier, and with more money in the bank.
And though Obama’s mostly small donors matched the Republican campaign chest, he had an advantage no Democrat will have in 2016: He was the incumbent, able to start his campaign 18 months before the election, with the names of millions of supporters already on file.
If the Democrats — and the Republicans — want to change things for the better, we need a functioning FEC to produce regulations that adhere to the law. Then it has to ensure that candidates and “independent” outside groups alike follow them.
Trevor Potter was a Republican FEC commissioner from 1991 to 1995, serving as chairman in 1994. A Washington-based lawyer, he has represented Stephen Colbert and appeared on “The Colbert Report” to discuss election law and Colbert’s super PAC. This opinion piece originally appeared in the Washington Post's Outlook section on November 18, 2012.