Democracy Decoded: Episode 1 Transcript

Cracks in the System

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Simone Leeper: 

Why does American democracy look the way it does today? And how can we make it more responsive to the people it was formed to serve? I'm Simone Leeper, and this is Democracy Decoded, a podcast where we examine our government and discuss innovative ideas that could lead to a stronger, more transparent, accountable and inclusive democracy. 

If you're like me, you're probably a bit frustrated with the state of our political system today. There's no getting around it. There's a lot to be frustrated about — from healthcare, to jobs, to taxes — we often feel like our government isn't listening to or effectively addressing the main concerns facing our country. Among the key frustrations that Americans have, and one which connects to almost every issue we care about, is the way money works in our political system. 

Campaign spending has ballooned in recent years, to the point where wealthy special interests are drowning out the voices of everyday Americans. How can we protect our First Amendment right to have our voices heard? Can we truly trust the motivations of those in power? These are issues that Campaign Legal Center, my organization, grapples with on a daily basis. And we have a lot of expertise and experience to share on money and politics and campaign finance. 

In this six-part series, we'll take a deep dive into the forces fueling our elections, not just in our nation's capital, but at all levels of government. We'll look at the effects of secret money, also known as dark money, at both the federal and state levels, explore ways that foreign governments are using secret spending to attempt to influence American elections and investigate the fight against the outsized influence wealthy special interests have on local elections. 

So come with me on a journey where we'll delve into the nuts and bolts of our campaign finance system to discover what parts of it work only for a small, elite group, and what we can do to better protect the rights of every American to have a voice in our democracy. 

Before we get into the specifics, we're going to start with some of the basics. How does our campaign finance system even work? To learn more about that I spoke with Trevor Potter, president and founder of Campaign Legal Center, who has been working on these issues for decades. 

 

Trevor Potter: 

I started in the field as a senior lawyer for the first President Bush's campaign. I was appointed a commissioner of the Federal Election Commission and following that was an outside advisor to Senator John McCain on the McCain-Feingold law as it went through Congress. I also was Senator McCain's General Counsel for his two presidential campaigns. 

 

Simone Leeper: 

Trevor had an interesting story of his own to tell. 

 

Stephen Colbert: 

Former Chairman of the Federal Election Commission and General Counsel for the McCain campaign, '08, Trevor Potter. Thank you so much for joining us, Mr. Potter! 

 

Simone Leeper: 

Most famously involving a collaboration with comedian Stephen Colbert, a super PAC and appearances on national TV. 

Before we get into all that, I wanted to know what he thinks of the changes that our campaign finance system has undergone since his time at the Federal Election Commission. 

 

Trevor Potter: 

When I started with the first President Bush's campaign, presidential campaigns were fully publicly funded in the general election and publicly funded with matching funds in the primary. In those elections, there was almost no outside spending, and what spending there was, was fully disclosed. 

 

Simone Leeper: 

For context, the 2012 election cycle cost $6.3 billion at the federal level, a record at the time. Less than 10 years later, the 2020 election cost over $14.4 billion with the presidential contest alone costing $5.7 billion. Those stats are coming from Opensecrets.org. 

 

Trevor Potter: 

Today, we have a huge amount of what's called outside money, which is often simply undisclosed money, spent illegally in my view, in coordination with candidates. So we have a system with corporate money freely spent, labor money freely spent, illegal coordination occurring, secret undisclosed sources of that funding and the possibility of foreign money in our elections, and we routinely see some of that, but a lot of it is happening behind the scenes. 

 

Simone Leeper: 

So how is all this possible? Well, it has to do with the way our campaign finance system is set up and the laws governing things like PACs, super PACs and 501(c)(4)s. PAC is an acronym standing for Political Action Committee. But what does that mean? Well, in 2010, Stephen Colbert of the late night show “The Colbert Report” had the same question. 

 

Stephen Colbert: 

Why would you form a PAC? Why wouldn't I just give money to a candidate? 

 

Trevor Potter: 

Stephen had a mock political commercial. And at the end of it, his staff had said, "Well, these things all say paid for by? Who's it paid for by? What do we put there?" And he said, "Well, just say paid for by Colbert PAC." So they did. And the show went well. The next day, he got a call from the general counsel of Comedy Central that said, "Great show last night, really enjoyed watching it. By the way, that business about Colbert PAC? That was funny, but you just need to understand you can't have a PAC." So Colbert hung up and turned to his staff and said, "What was that about? What does he mean I can't have a PAC? What is a PAC? Find me someone who can explain this." 

 

Simone Leeper: 

So Trevor gets a call out of the blue from Stephen Colbert's staff. One thing leads to another, and he finds himself sitting down with Stephen on “The Colbert Report,” explaining what PACs, super PACs and 501(c)(4)s are to millions of Americans. 

 

Stephen Colbert: 

Now, at this point, some of you may be wondering what Colbert PAC? Well get in line, because I have no idea. Let's start with some basics here. What is a PAC? 

 

Trevor Potter: 

It's a group of individuals who get together and raise and spend money to elect or defeat a candidate —sometimes by contributing to them directly, sometimes by taking out television advertising independently — to talk about them or issues that the PAC is focused on. 

 

Simone Leeper: 

PACs can spend money on ads promoting a candidate or issue, but there are limits on who can donate to PACs and how much they can donate. For example, PACs can't receive corporate donations, and individuals can't donate more than $5,000 per year to a particular PAC. Or at least that was true for traditional PACs as originally created by Congress. But in 2010, a Supreme Court decision upended all of that and a new entity burst onto the scene, the super PAC. 

 

Stephen Colbert: 

What's a super PAC? Is that like a PAC that got bitten by a radioactive lobbyist? 

 

Trevor Potter: 

Well, you'll remember that last year there was a furor over the Supreme Court's decision in the Citizens United case. 

 

Stephen Colbert: 

Oh that said that corporations are people and people have free speech, therefore, money is speech and corporations can give unlimited money to political issues? 

 

Trevor Potter: 

So the Federal Election Commission created last summer what they call a independent expenditure only committee, which is commonly known as a super PAC. 

 

Trevor Potter: 

So Colbert created a super PAC. 

 

Stephen Colbert: 

Colbert Nation, are you ready for Colbert super PAC? 

 

Trevor Potter: 

And then having done that, it went through a series of episodes where it raised money and spent money, and the point of it was to illustrate the holes in the campaign finance system. I was willing to do this because I thought there were holes and it needed to be fixed, and he was willing to do it because he wanted to explain what in the world these super PACs were and how they got away with raising and spending all of this money. 

 

Simone Leeper: 

So how do they get away with it? I mean, even if super PACs can spend money in unlimited amounts, and raise that money from previously inaccessible sources, they are still required by law to reveal who their donors are. But corporations and other wealthy special interests are somehow spending money to influence political campaigns in secret. How does that happen? 

 

Stephen Colbert: 

Trevor, I've got all these people that have been giving me money — individual Americans — but I haven't gotten any of the big corporate money. That's why I have a super PAC. Why wouldn't a corporation give money? 

 

Trevor Potter: 

Well, they'd be nervous about giving in a way that their name is publicly disclosed. People might object to what they've done, their shareholders, their customers. 

 

Stephen Colbert: 

Okay. So that's where a (c)(4) comes in. A corporation or an individual can give to a (c)(4) and nobody gets to know that they did it. Right? 

 

Trevor Potter: 

That's right. 

 

Simone Leeper: 

A 501(c)(4) is a particular type of nonprofit organization that is not required to disclose who donates to it. 

 

Stephen Colbert: 

Can I take this (c)(4) money and then donate it to my super PAC? 

 

Trevor Potter: 

You can. 

 

Simone Leeper: 

In recent years, many 501(c)(4)s have been created solely in order to receive donations from wealthy special interests and funnel that money into super PACs. 

 

Stephen Colbert: 

So I can take secret donations from my (c)(4)and give it to my supposedly transparent super PAC. 

 

Trevor Potter: 

And it'll say given by your (c)(4). 

 

Simone Leeper: 

Super PACs have to disclose if they receive a donation from a 501(c)(4), but the real human donors that donated to the 501(c)(4) in the first place can remain anonymous. 

 

Stephen Colbert: 

What is the difference between that and money laundering? 

 

Trevor Potter: 

It's hard to say. 

 

Simone Leeper: 

It seems crazy to me that all of this is completely legal, and it really leaves me wondering: what's the impact of all this? 

 

Trevor Potter: 

Turns out that a lot of that spending is not in any way independent in the way the Supreme Court described it. What we're seeing is a lot of spending by these so-called outside groups that is at the request of a candidate, the candidate helps raise the money, the fundraising is done by the candidates chief fundraiser, the head of the independent group is closely associated with the candidate, was a former campaign manager, a relative of the candidate. And you end up with exactly what the Supreme Court said was the problem. Namely, very close linkage between raising and spending large sums of money, and the candidate and the party. Effectively, the whole idea of noncorrupting independent speech has been perverted into very corrupt political raising and spending of funds in close coordination with a candidate. And yet it is happening in front of us, because the Federal Election Commission deadlocks on these issues, and there is not sufficient barriers to prevent candidates and these outside groups from coordinating with each other. 

 

Stephen Colbert: 

Do a lot of people go to jail for breaking the law with their PACs? 

 

Trevor Potter: 

No. 

 

Stephen Colbert: 

Can you name anyone who has gone to jail for breaking the law with their PACs? 

 

Trevor Potter: 

Not a person. 

 

Stephen Colbert: 

That's my kind of law. 

 

Simone Leeper: 

I'm starting to get the sense that there's a culture of impunity in our campaign finance system, that people can seemingly get away with a lot. That brings us to the Federal Election Commission or FEC for short. This is the federal government agency that Trevor served on and chaired back in the 1990s. 

 

Simone Leeper: 

First, what is the Federal Election Commission? 

 

Trevor Potter: 

The Federal Election Commission is the only government agency whose sole responsibility is overseeing the integrity of our political campaigns. 

 

Simone Leeper: 

The FEC is responsible for enforcing the laws that govern our campaign finance system for federal campaigns. That's specifically for Congress and the Presidency. I'm willing to bet that a lot of people have never heard the FEC before, and importantly, I bet most Americans have no idea who is running it and making these impactful decisions. I've always been pretty plugged in with politics, but I didn't have much of an understanding of it until I spent a summer volunteering for a congressional campaign. 

 

Trevor Potter: 

I can assure you nobody knows who commissioners are, and that is because the entities that are directly regulated by the FEC, which is to say members of Congress and federal candidates and party committees, are the ones who are so immediately affected by it, and they tend to be the ones who are involved in the process of selecting commissioners. And all of that happens behind the scenes, it's an unknown agency and only when it really has broken down, as it has now, do people pay attention to it. 

 

Simone Leeper: 

So the FEC is supposed to enforce campaign finance laws at the federal level and ensure bad actors are held accountable. But over the past decade, the agency has repeatedly failed to do its job, and this has had consequences. 

 

Trevor Potter: 

The failure of the FEC to enforce campaign finance laws has resulted in an explosion in secret spending, and our politics are increasingly rigged in favor of special interests. We need a strong Federal Election Commission to protect our First Amendment rights, including the right to have our voices heard in elections. 

 

Simone Leeper: 

It's clear that voters have a reason to care about the FEC's failures, which we'll get into in more detail in a later episode. And it often seems like the cards in Washington are stacked against making changes to our campaign finance laws, but Trevor was there in the room when a significant campaign finance bill passed Congress in 2002. That was the bipartisan campaign reform act known as BCRA, or McCain-Feingold, after the two senators, Republican John McCain and Democrat Russ Feingold, who were major proponents of the legislation. Trevor shares his recollection, which starts after the 2000 presidential election, when he was working for McCain. 

 

Trevor Potter: 

After that election, he went back to the Senate and really worked hard to pass what we call McCain-Feingold. He did so with significant Republican support in the Senate and the House. He needed to get 60 votes to beat back the filibuster, and he did get 60 votes. One of the aspects of that bill, that was to me fascinating, and I think largely unprecedented, is that he went across the Capitol, which Senators do not do, and he actually lobbied members of the House late into the night, from rooms off the House floor, while the Republican leadership was lobbying members the other way. Republican members of the Federal Election Commission, again in an unprecedented move, actually went to the Hill to lobby against the bill. So we had all of us in back rooms in the House. I was at McCain's side, talking to members and explaining the provisions. There were Republican commissioners in the leadership office explaining them the other way or disagreeing. But it's very unusual to have a Senator cross the Hill and be welcomed by members of the House and engage in effectively the House debate. 

 

Simone Leeper: 

Before we close, I had to ask Trevor, why does he care? What has motivated Trevor to continue working on these issues over the course of his career? 

 

Trevor Potter: 

I think as somebody who grew up really interested in American history and the story of how we've over time become the country we are and how we have grown to be more inclusive in terms of who citizens are, who voters are, I really believe in our democracy. And then as a lawyer understanding the Constitution and studying it and our system of government, what I've come to appreciate is it only works if citizens actually are invested in it, meaning they vote, they are involved in elections and they believe in the integrity of the process. And I think the greatest danger is disillusionment. If they don't have faith in the government, then they won't vote and participate, or they won't trust the results. And that I think all goes back to the amounts of money in politics, the way it is raised and spent, disclosure of funding so that people can monitor donations to candidates. 

 

Simone Leeper: 

Trevor answered a lot of the questions I had about how money affects our political system, but his answers also left me with a lot more questions that I still wanted to explore. How did our system end up this way? What happened along the path from the founding father's vision for our country to turn our campaign finance system into what it is today? 

In the next episode, we'll rewind to take a look at some of the most important historical events that helped shape our current campaign finance laws to better understand how it's possible that we've ended up in our current predicament. 

Special thanks to Trevor Potter for appearing in this episode, as well as to Stephen Colbert and Comedy Central for providing clips from “The Colbert Report.” You can find links to these clips in the show notes, along with additional background information on the topics discussed, and a full transcript of the show. 

This podcast was produced and written by Casey Atkins and Brendan Quinn, with additional script writing by Bryan Dewan. It was edited by Parker Podcasting and narrated by me, Simone Leeper. Democracy Decoded is a production of Campaign Legal Center, a nonpartisan, non-profit organization, which advances democracy through law at the federal, state and local levels, fighting for every American's right to responsive government and a fair opportunity to participate in and affect the democratic process. You can visit us on the web at campaignlegalcenter.org.