The Impact of Citizens United on Election Spending

David Gittelman October 7, 2015

Five years ago, the United States Supreme Court handed down an important decision in Citizens United v. Federal Election Commission, (No. 08-205, 558 U.S. 310 (2010)).  In Citizens United, the Supreme Court held that the protections afforded by the First Amendment prohibit the government from restricting independent political expenditures by a nonprofit corporation.  (Citizens United has since been expanded to include for-profit companies, labor unions, and associations.)  What is the central holding of Citizens United?  Has this decision had the effect on campaign financing that was feared?

In 2002, the Federal Election Campaign Act of 1971 was amended by way of the Bipartisan Campaign Reform Act of 2002 (commonly referred to as the McCain-Feingold Act).  This Act prohibited corporations and unions from using their general treasury to fund “electioneering communications” (broadcast advertisements mentioning a candidate) within 30 days before a primary or 60 days before a general election.  In 2004, Citizens United, a conservative nonprofit 501(c)(4) organization, filed a complaint before the Federal Election Commission (FEC) charging that advertisements for Michael Moore’s film Fahrenheit 9/11, a documentary critical of the Bush administration’s response to the terrorist attacks on September 11, 2001, constituted political advertising and thus could not be aired within the 30 days before a primary election or 60 days before a general election. The FEC dismissed this complaint and then a second complaint filed by Citizens United. As a direct result of these decisions, Citizens United produced its own “documentary” films, including one entitled “Hillary: The Movie”, which was highly critical of Hillary Clinton.

In January 2008, the United States District Court for the District of Columbia ruled that the television advertisements for “Hillary: The Movie” violated the restrictions of the McCain-Feingold Act of “electioneering communications” within 30 days of a primary.  Although Citizens United asserted that the film was fact-based and nonpartisan, the lower court found that the film had no purpose other than to discredit Clinton’s candidacy for president.  The Supreme Court agreed to hear the case.  After oral argument but before a decision was handed down, the Supreme Court directed the parties to re-argue the case, essentially expanding the potential ruling.  The Supreme Court ultimately overruled two prior finance cases (Austin v. Michigan Chamber of Commerce and McConnell v. Federal Election Commission) and held that, “…the government may not suppress political speech on the basis of the speaker’s corporate identity.  No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.”

After Citizens United, corporations and unions could make independent expenditures.  However, a separate provision of the Federal Election Campaign Act held that individuals could not contribute to a common fund without it becoming a political action committee (“PAC”). PACs, in turn, were not allowed to accept corporate or union contributions of any size or to accept individual contributions in excess of $5000. Subsequent to and as a direct result of the Citizens United holding, the D.C. Circuit held that such restrictions on the sources and size of contributions could not apply to an organization that made only independent expenditures in support of or opposition to a candidate, but not contributions to a candidate’s campaign. (speechnow.org v. Federal Election Commission).  This holding has lead to the creation of “super PACs”, which make no contributions to candidates or parties and so can accept unlimited contributions from individuals, corporations and unions.

Have these decisions and the creation of super-PACs had any real impact on election spending?  The answer is a resounding yes, and the numbers are staggering.

A recent analysis found outside spending more than doubled since 2010 for Senate races, to $486 million. Outside groups spent more than candidates in 2014’s closest Senate races. Of the 10 highest-spending super PACs in the most competitive Senate races in 2014, all but two got less than one percent of their individual contributions from small donors of $200 or less.

Of the $1 billion spent overall in federal elections by super PACs since 2010, nearly 60 percent, or over $600,000,000, of the money came from just 195 individuals and their spouses.  The super PACs are already gearing up for the 2016 election cycle.  To date, super PACs have raised over $300,000,000 for 2016, and have spent just over $25,000,000 so far.  Jeb Bush leads the pack of PACs, with over $100,000,000 raised on his behalf by the conservative PAC “Right to Rise USA”. (The Bush campaign has only $11,000,000 in its war chest.)   The Koch brothers, via their conservative super PACs, seek to spend almost $900,000,000 of their own money in the 2016 election cycle.

The question remains whether all of this spending has an influence on voter decisions, or has it all become “white noise” to voters?  While it is a fact that the Republicans gained seats in Congress in the 2014 midterm elections, it is unclear how much that was due to spending versus other factors.  The same applies to the 2016 election cycle:  the amount of super PAC money spent will be the most ever, but will it change voters’ minds?  You decide.

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