The Ticker Quick Views on Politics, Economics and Finance
Why Rich Guys Love Super-PACs, Part II: The Ticker
The Ticker received some expert push-back on last week’s post on super-PACs.
My gist of the original post was that individuals are providing the majority of funds to super-PACs, and since individuals were realistically (which is not quite the same thing as lawfully) able to contribute unlimited sums in elections before the Citizens United ruling, it’s not clear -- at least at this point in 2012 -- what effect the ruling has had on campaign finance.
Trevor Potter, who as Federal Election Commission chairman regularly shocked the world by enforcing the law rather than enforcing his party’s regulatory wish-list, e-mailed from precisely the sort of swank vacation spot where you’d expect to find the glamorous celebrity lawyer to Stephen Colbert’s ultra-dubious super-PAC. Undeterred by the sand between his toes, Potter generously made time to smack your Ticker blogger around.
Discounting the significance of Citizens United is a mistake, he wrote. “It’s worth noting that prior to the SpeechNow decision, which was the direct result of Citizens United, super-PACs did not exist! So individuals could not give more than $5,000 to PACs, which meant that PACs could not raise anywhere near the amount of money that they can now.
"Before Citizens United, individuals who wanted to spend more than $5,000 had to arrange it themselves and put their names on the ads -- yet no one did," he continued. "Otherwise they had to give the money to a 501(c)4 hobbled by legal restraints and tax issues, which made them inefficient and controversial vehicles for individual donors.”
Ticker bloggers, however, do not go down without a fight, even against campaign-law celebrities who are also president of the Campaign Legal Center. What about the Swift Boat Veterans attack on Senator John Kerry in the 2004 presidential campaign? Its funders went far beyond the bounds of a well-regulated $5,000 donation. (Texas homebuilder Bob Perry gave the group $4.4 million.) How is the Swift Boat crew, known as a “527” group, blasting negative ads on behalf of George W. Bush any different than Restore Our Future, a super-PAC, blasting negative ads on behalf of Mitt Romney?
The difference is obvious, Potter replied. Because 527 groups were legally shady, they attracted far less money from fewer donors. True, the FEC didn’t enforce the law, but donors couldn’t be sure that would be the case, and some were unwilling to take the risk. Thanks to Citizens United, super-PACs now enjoy the high court’s “seal of approval.” As a result, hundreds of millions are pouring in.
In fact,this study by Demos and USPIRG found that 726 individuals had contributed at least $10,000 each to a super-PAC
In addition to Potter, election law guru Rick Hasen also took issue with the Ticker post. He pointed me to two posts of his own on his election law blog, in which he says that Citizens United did indeed significantly alter the campaign finance landscape for super-wealthy donors, and not just in terms of donor psychology. Both are worth reading.
(Francis Wilkinson is a member of the Bloomberg View editorial board.)
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