Democracy Decoded: Episode 2 Transcript

How Did We Get Here?

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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. 

In our last episode, we went over some of the basics of our campaign finance system. What are PACs, super PACs and 501(c)(4)s, and how do they all converge to form the perfect storm of outsized spending by wealthy, special interests in our elections? After hearing about all of that, it really made me wonder how we got here in the first place. What were some of the major decisions and events that took place to allow these kinds of things to occur? Who made these decisions? I had heard about the Supreme Court’s Citizens United case, but it turns out there were a number of other major decisions, events and choices in our history that helped shape our campaign finance system into what it is today. A system where, unfortunately, the voices of everyday Americans are frequently drowned out by the voices of those who can spend unlimited sums of money to rig the system in their favor. To find out more, I turned to Sheila Krumholz of OpenSecrets and Norman Ornstein, chair of the board of Campaign Legal Center. But I'll let them introduce themselves. 

 

Sheila Krumholz: 

Hi, I'm Sheila Krumholz. I'm the executive director of OpenSecrets. Our mission is to follow the money in American politics and share our data and analysis with the press, the public, advocates and scholars. And our vision, our hope, is that Americans will use this knowledge to create a more vibrant, representative and accountable democracy. 

 

Norman Ornstein: 

I am Norman Ornstein. I am the chairman of the Campaign Legal Center, while also being an Emeritus scholar at the American Enterprise Institute. 

 

Simone Leeper: 

Both Sheila and Norman have years of experience studying the campaign finance system in this country. So I asked them each what they thought about it. They had similar conclusions. 

 

Norman Ornstein: 

The state of campaign finance in America today is troubling. We're not where we need to be for a few reasons. One is the entire regulatory regime surrounding campaign finance. 

 

Sheila Krumholz: 

There has been kind of a continual effort to chip away at the rules, and it is currently leaning in a very decidedly deregulatory direction. So there have been very strong efforts in the last few years and decades, and success in challenging these rules in the courts. 

 

Simone Leeper: 

But how did these rules even originate? When I talked to Sheila, she began with the Tillman Act of 1907, which prohibited corporations from spending directly in campaigns. The Tillman Act was passed in response to public outrage in the early 1900s about corruption and corporations trying to buy politicians with money, a problem that unfortunately continues to this day, despite many attempts to address it. But a lot of the laws and procedures that govern our modern campaign finance system didn't really come into being until much later in the 20th century, when the Nixon administration attempted to cover up its involvement of a break-in to the DNC headquarters in the Watergate building in D.C. This created a huge political scandal, which made it clear that some changes were needed to our laws. 

 

Norman Ornstein: 

The modern regime of campaign finance regulation was set in the 1970s, after the 1972 election with its rank corruption. The Watergate scandal that brought out how campaign money had been laundered through Mexico and used for corrupt purposes, and that really was the impetus for the first sweeping campaign finance regulatory regime in decades. 

 

Sheila Krumholz: 

This was the first huge campaign finance scandal since the Gilded Age, so was, in that regard, a major turning point, and created the new laws, and created the FEC to enforce the new campaign finance laws and to provide disclosure of the campaign finance reports that now had to be filed at the Federal Election Commission. 

 

Simone Leeper: 

So it seems that after Watergate, things were pretty much on track. We seemed to have a framework to promote accountability and tackle corruption. What's happened since then? 

 

Sheila Krumholz: 

The landmark court decisions that have had the greatest impact on campaign finance over the many years really begin with Buckley v. Valeo, a Supreme Court decision from 1976, which is known as the decision that equates money with speech. It's also known as the decision that created the magic words test — so vote for, vote against, defeat, elect — which led frankly to ridiculous gymnastics by campaigns trying not to use those ads but get across the message that you should vote for or elect or defeat a candidate. 

 

Simone Leeper: 

The Supreme Court essentially interpreted a money equals speech equation in Buckley v. Vallejo in 1976, which was an extremely consequential post-Watergate development in how our courts think about campaign finance. Yet the court continued to recognize that there were important constitutionally sound boundaries that could be upheld to preserve American self-government and fulfill voters' right to know who is spending to influence their vote. 

 

Norman Ornstein: 

Fifteen years ago, we had enacted and gotten through the Supreme Court the Bipartisan Campaign Reform Act, known as McCain-Feingold. We were starting to see some ability to get disclosure of monies going into what we now call dark money more. Limits on what could be used in sham issue campaigns that were targeted at districts and states and clearly geared towards influencing elections. We were seeing money that was channeled through parties that was supposed to be for party building, that was really just going right into these sham issue ads, moved out of that process. Then came Citizens United, a deeply troubling decision both because of the way in which it was made and the consequences of it. 

 

Simone Leeper: 

Citizens United was decided by the U.S. Supreme court in 2010. The case involved a group, Citizens United, that received funding from wealthy special interests. They produced and wanted to promote a movie critical of Hillary Clinton, which was going to be available to the public shortly before the 2008 Democratic presidential primaries. However, campaign finance laws prevented Citizens United from promoting and releasing their film so close to the primaries, and so they sued to get the right to do so, taking their case all the way to the Supreme Court. The lawsuit could’ve been an uneventful one, but five justices on the Supreme Court took the opportunity to essentially gut much of the framework that was in place to protect the speech of everyday Americans. This opened the door to a flood of wealthy special interest money. 

 

Sheila Krumholz: 

The Supreme Court took a very narrow question about Hillary the movie and took the opportunity to rewrite campaign finance law — going far beyond that narrow question to toss out the rules prohibiting direct corporate labor and trade association spending on independent expenditures. 

 

Norman Ornstein: 

And then they blew up well over a hundred years in campaign finance law through a sweeping ruling that eviscerated the Bipartisan Campaign Reform Act. 

 

Sheila Krumholz: 

This really opened the door for politically active nonprofits, which do not report to the Federal Election Commission but instead report to the Internal Revenue Service, to begin spending on politics. And the notion is that as long as their primary purpose is not political, they may raise and spend unlimited sums from any source, and it need never be reported except to the IRS. 

 

Simone Leeper: 

A lot of us may have heard about the Citizens United decision, at least in passing. It was widely criticized when it was decided in 2010, but Citizens United wasn't the only recent case that revolutionized how political actors raise and spend money. 

 

Norman Ornstein: 

That was bad enough, but it was followed soon after, by a lower court decision called SpeechNow, which relying on the Citizens United decision, basically opened the door even more to what we call loosely super PACs. But the ability to use this dark money — money that's virtually untraceable, big quantities, unlimited quantities to have an impact on campaigns — and of course, including money from corporations, individuals and others. 

 

Sheila Krumholz: 

The biggest concern here is that although these are known as independent expenditure only committees, they are so often not all that independent. So often these super PACs have red flags like they are created by the candidate's parent, or they are led by their former chief of staff who just left the campaign and then pops up to lead the charge on the single candidate super PAC. In addition, super PACs are very often affiliated with a nonprofit. So here again, a political operative can go to a mega donor and offer them a menu of choices. If you don't mind the public scrutiny, give to the super PAC, and your name will be disclosed to the Federal Election Commission. If you don't want that press inquiry or your name in the media, then simply give to the non-disclosing nonprofit. So there are all kinds of tricks and ultimately, lots of highly-paid political operatives and election lawyers that are always looking for the way to have their cake and eat it too. 

 

Norman Ornstein: 

And subsequent to that, we saw a decision that I think is undervalued as an important one, which is McCutcheon. 

 

Simone Leeper: 

McCutcheon v. Federal Election Commission was a Supreme Court decision in 2014 that removed overall campaign contribution limits for individuals that had been put in place by the Bipartisan Campaign Reform Act. You remember that's the formal name for McCain-Feingold, which we spoke about in episode one. By concluding that individual donors can give the maximum permissible amount to every single candidate, party and PAC in a given election cycle, the Court made it more difficult to restrict political contributions. 

 

Norman Ornstein: 

The reason that I believe McCutcheon is important is that in it, Chief Justice Roberts basically tries to redefine what corruption is and define away the idea that the appearance of corruption matters at all here. You're going to have to catch somebody on videotape handing a member of Congress or a candidate money and saying, "Here's money for your campaign. And in return, you've promised me you're going to kill this amendment or enact this bill, or do something of value in return for the money." That if it just happens and nobody sees the interaction directly, that's just the way of the world. That was, I think, a troubling decision. 

 

Simone Leeper: 

We've heard Sheila and Norman talk a lot about legal cases, abstract principles and technical stuff. But in reality, this is a human story. The sum of all of these decisions and changes has led in practice to a system where a very small number of wealthy Americans and special interest groups, disproportionately exercise so-called political speech. They're able to set policy priorities, often in secret, while millions of Americans are left without much of a meaningful say. You and I see this every day from taxation and government spending, to healthcare, to education and public safety. 

The campaign finance system we have today is a system where everyday Americans' voices are often drowned out by the shouting of a loud, well-financed few that want to have power over our lives. It's no wonder that tens of millions of Americans feel like their voices don't matter much in our political system. Those few who can write the checks in the thousands and millions of dollars can supposedly exercise their First Amendment rights, but the rest of us? 

After hearing about how things have gone from bad to worse in recent years, it didn't make me all that hopeful for what lies ahead. But I wanted to ask Sheila and Norman, where they saw things going from here. Is it possible to reverse this trend and get our system back on track? How would we do so? 

 

Norman Ornstein: 

The wild west we live in with campaign finance, the ability to use these huge sums of money to influence outcomes, this is a cancer in the political system. And right now we are fighting all kinds of legal battles to try and keep things from getting worse. But it's going to be some time before we can look at the possibility, with optimism, of things getting significantly better. 

 

Sheila Krumholz: 

Although we have the FEC, technically, and numerous rules governing campaign finance, still it can feel like a system of Swiss cheese that's more holes than cheese. And so we're continually looking for ways to defend, to champion transparency as a crucial pillar of a healthy democracy. One point of optimism is that right of right and left of left, people everywhere want a government of integrity; one that cannot be bought and sold; one that is passing policies based on the merits and not based on who has the fattest wallet. So I do think that what it takes, what it will take to create meaningful reform is for people acting in good faith, to keep the pressure on, keep pushing, to create campaign finance regulations that protect our democracy. 

 

Simone Leeper: 

Updating our campaign finance system can sometimes seem like a really huge undertaking. One that could only be solved by politicians in Washington, if at all. But it's important to remember that there are also efforts going on at the state and local levels to help move things in a more positive direction. 

On our next episode, we'll take a trip to the Midwest to investigate two different campaign finance stories affecting everyday people and hear what they did to bring about change in their own communities. The ability of American citizens to advance democracy at the federal, state and local levels in the face of many challenges is a reason for optimism. 

Special thanks to Sheila Krumholz and Norman Ornstein for appearing in this episode. You can find additional background information on the topics discussed in the show notes, along with the 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 nonprofit 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.