The issue of political spending is one that has garnered a lot of attention this election cycle. Both candidates are associated with 501(c)(3) organizations and have faced scandals recently regarding how they collect and spend charity money. Clinton faced allegations that she granted access to the State Department to wealthy Clinton Foundation donors. Trump was fined by the IRS for his use of Trump Foundation money to fund the campaign of Florida Attorney General Pam Bondi, allegedly to encourage her office not to pursue further investigation of Trump University. The two scandals are fundamentally different, but are two sides of the same coin. Clinton’s scandal is about the possibility that she was selling political access to raise money for a charity. The charges against Trump involve using money that was raised for charity to buy political access for himself. The Trump Foundation has some additional issues, ranging from allegations of self dealing and an investigation by the New York Attorney General, who recently ordered the foundation to stop accepting donations.

But the Bondi allegations against Trump raise more questions than just whether Trump is fit to serve as president. They bring up the issue of what exactly the difference is between a 501(c)(3), a 501(c)(4), a 527, and a myriad of other institutions that can blur the lines between a charity and a political organization. The IRS has rules governing these categories but the rules are not always clear. And while the purpose of these rules is to keep donations to charities tax deductible to encourage that behavior, while not providing the same benefit for political speech, it is not always clear whether the rules are doing an effective job. We want to encourage both charitable donations and political speech, but we only use the tax code to incentivize charitable donations.

How exactly do we draw distinctions between what is charitable and what is political, and how do tax incentives come into play?

Distinctions Without Much Difference

There are several main flavors of tax-exempt organizations that may engage in what a lay person would think of as either political spending, charitable work, or both. They are each referred to by their section of the tax code and the differences are fairly technical but important to understand.

The first type of organization is a 501(c)(3). Both the Trump Foundation and the Clinton Foundation are examples of this type of group and the purpose of a 501(c)(3) is supposed to be purely charitable. Meaning that this group has the greatest restrictions on it in terms of what kind of political activity it can engage in. This doesn’t mean that they can’t engage in ANY political activity, because they actually can. But their ability to endorse a candidate is curtailed. They also can’t spend money on a campaign. They are still able to do some lobbying and political advocacy, as long as that advocacy is not promoting a specific legislative agenda or candidate but rather is educating the public.

In exchange for complying with these rules, 501(c)(3)s are permitted to accept unlimited donations from benefactors whom they do not have to disclose and those benefactors can claim the donations they give as tax-deductions.

A 501(c)(4) has slightly different trade-offs. These groups can engage in political activities as long as those political activities are not their primary purpose. And they can endorse candidates, lobby, educate the public on their issue, and accept unlimited anonymous donations. However, because of their increased political activity, those donations are not tax deductible.

A 527 is the most political of the three. Political spending is in fact the entire purpose of these groups, which means they come with added strings such as only being able to accept limited donations that are non-deductible and the donors can no longer be anonymous. They can’t “lobby” but they can endorse and even exist for the purpose of electing certain candidates. And although the donations made to a 527 are not tax deductible the organizations themselves pay limited taxes—501(c)(3)s or 501(c)(4)s pay none. That is why even if your donors can’t deduct what they give to you from their taxes it is still very beneficial for these organizations to comply with the rules to keep their tax-exempt status. (And why the IRS fined Donald Trump for his donation to Pam Bondi from his 501(c)(3)).

To see the difference between a 501(c)(3) and a 501(c)(4) more clearly check out this video:

Facts and Circumstances

To summarize, a 501(c)(3) is what you would think of when you think of a “charity.” And a 501(c)(4) is a “social welfare” organization. While not a charity per se, they are supposed to be serving the public good through their advocacy. We want to encourage political behavior, particularly from diverse viewpoints, and promote political speech. Granting tax-exempt status to social welfare organizations, or 501(c)(4)s, is one way to facilitate that. The only question is how do we determine what is a social welfare organization, and therefore worthy of these benefits?

The rule for what qualifies as a social welfare organization is very vague. The standard is whether the organization is “primarily engaged” in social welfare activities. The IRS does not give a bright-line rule regarding what percentage of activity is required to be social welfare versus political in order to qualify. It may be a 51/49 split in terms of how they spend their funds, or essentially whatever the IRS deems appropriate. According to the IRS, deciding this issue is a “facts and circumstances test.” A very vague standard indeed, which opens the door to making determinations about which groups qualify based on something other than numerical data and the appearance of, if not actual, favoritism for different political viewpoints.

But if these organizations are doing good work (which may depend on your political point of view but let’s go off the assumption that all political speech is a social good) then why should we care so much about a 501(c)(4) getting tax exempt status to encourage it?

The key issue is actually part of a multi-step process that revolves around the size of donations and the disclosure involved. A 501(c)(4) can accept an unlimited amount of donations and also does not need to disclose its donors. By contrast a Super PAC is required to disclose who donates to it. But when the donor to the Super PAC is a 501(c)(4)–and these organizations often ally with each other so that one cause will have a whole string of different arms that have different tax-statuses and abilities–all they need disclose is the name of the 501(c)(4). So a billionaire who wants to influence electoral politics can donate $100 million dollars to a 501(c)(4), which doesn’t have to tell anyone where that money came from. The Super PAC attached to that group then takes that donation from the group, and does disclose that it came from the group, but that doesn’t let the public know that our billionaire friend essentially donated $100 million dollars to that Super PAC. We therefore have no way of tracing whether an organization or politician allied with that Super PAC ever paid back that favor.

Kim Barker from the Washington Post does a good job of explaining this line of reasoning in why we should care about the 501(c)(4) designation and its uses.

Conclusion

It makes sense that we would want to structure a policy that allows organizations for political advocacy to not pay taxes. It lets organizations form that otherwise might not be able to afford to do so, which enables minority viewpoints to be more easily heard by the public. Regardless of what those viewpoints are, that’s a healthy thing for the republic. Granting tax-exempt status to 501(c)(4)s, even if the IRS definition of social welfare is not that clear, might therefore be a good idea.

The trouble occurs when other organizations can then manipulate the special rules given to social welfare organizations to siphon money into campaign funding and electoral politics. That kind of political speech, the support of a specific candidate, is not the same kind of social good and is not currently what we want to give incentives to. If it was, then we would grant the exact same tax privileges to 527s and other political groups that we do to 501(c)(4)s or to charities.

The ability to do this is in part because the rules of engagement and alliances between these organizations have gotten very complicated and very fuzzy. If there is no rule as to what “education” is versus “advocacy” versus “lobbying” then the distinctions between these groups lose much of their meaning. But the greater problem is the concept of anonymous donations. In a political system that depends on the open and vigorous exchange of ideas keeping donations to any kind of political organization, whether they are merely engaged in “advocacy” or in direct electioneering, is counterproductive. If we are going to equate money with political speech, the public needs to be able to know who is saying what, which means knowing exactly where all political spending comes from.

Rather than eliminating various tax benefits to organizations we want to encourage (such as charities and social welfare organizations) we could instead require the disclosure of donors for all groups. Then if a billionaire donates to a 501 (c)(4) and that group donates to its sister Super PAC we can easily trace the funding of the Super PAC back to the original donor. It does not take care of the concern about the amount of money that an individual can give to a political cause, which is a separate problem, but it does solve the anonymity that keeps the public from being fully informed about politicians, their supporters, and the wide range of groups engaging in political activity. And if there is a reward exchanged in the future from the politician to the billionaire donor, we will be able to trace that too, and determine if there was a quid pro quo arrangement.

Resources

The Washington Post: Emails Reveal How Foundation Donors Got Access To Clinton and Her Close Aides At State Department

Think Progress: Trump Foundation Illegal Self-Dealing

Law Street Media: Charitable Trusts: Can Greed Ever Be Good? 

Outside the Beltway: 501(c)4 vs 501(c)3 vs 527

Bolder Advocacy: Introduction: The Types of Exempt Organizations And What They May Do

Open Secrets.org: 527s: The Basics

Open Secrets: Types of Advocacy Groups

Daily Kos: 501(c)(3)s, 501(c)(4)s, and the rest. A primer.

The Washington Post: Let’s Back Up: How Is The IRS Supposed To Scrutinize 501c4s Anyway? 

The Sunlight Foundation: The Difference Between Super PACs and Dark Money Groups

Mary Kate Leahy

Mary Kate Leahy (@marykate_leahy) has a J.D. from William and Mary and a Bachelor’s in Political Science from Manhattanville College. She is also a proud graduate of Woodlands Academy of the Sacred Heart. She enjoys spending her time with her kuvasz, Finn, and tackling a never-ending list of projects. Contact Mary Kate at staff@LawStreetMedia.com

The post Faux Anonymity: How Do We Effectively Encourage Political Speech? appeared first on Law Street.

When word broke Monday that Donald Trump’s campaign was essentially broke, having raised only $1.3 million to Hillary Clinton’s $42 million at the end of May, Twitter quickly reacted with the trending hashtag  #TrumpSoPoor.

The hashtag taunts the presumptive Republican nominee who prides himself on funding his own campaign because he’s “REALLY RICH!” 

Trump better hope that rich mindset of his can pay for his future campaign expenses. In the meantime, Twitter is fiercely chiming in with #TrumpSoPoor to point out the irony of Trump’s shrinking pockets.

#TrumpSoPoor He’ll have to start paying taxes

— Jocelyn Plums (@FilthyRichmond) June 21, 2016

#TrumpSoPoor even his fact check bounced

— Andrew Tumilty (@AndrewTumilty) June 21, 2016

One user called out GOP public assistance resentment.

#TrumpsSoPoor the @GOP is making him take a drug test before they give him any financial assistance.

— Raoul_Duke (@RaoulDuke99) June 21, 2016

#TrumpSoPoor he’s applying for public housing pic.twitter.com/D24IETllKk

— etymology of hip (@indianainsomnia) June 21, 2016

Another speculated Trump’s racist comments were taken from Ted Nugent, who has plenty to spare.

#TrumpsSoPoor He gotta borrow his racism from Ted Nugent.

— (((Crash Thompson))) (@TehRockCritic) June 21, 2016

Don’t think they forgot about that time Trump started a for-profit college that targeted poor people.

#TrumpSoPoor he’s being targeted by Trump University as a potential student.

— Bethany Albertson (@AlbertsonB2) June 21, 2016

Trump already wants Mexico to pay for his wall, but why not his campaign too.

#TrumpSoPoor he’s going to ask Mexico to pay for his campaign.

— BWD (@theonlyadult) June 21, 2016

#TrumpSoPoor he’s the first male politician in history to get less money than a woman working in the same position.

— (((Charles Clymer))) (@cmclymer) June 21, 2016

Needless to say, Donald Trump obviously doesn’t know what experiencing poverty is like, and the hashtag has received criticism for playing on the pain that vulnerable people face.

#TrumpSoPoor liberals made a hashtag so they could make fun of all the things actual poor people have go through everyday & not feel guilty.

— D (@Delo_Taylor) June 21, 2016

But #TrumpSoPoor is not about making fun of poverty and the problems poor people face, rather it is shooting sarcasm at a presidential candidate who has boosted himself repetitively as self-made and rich (as though these are the very best qualifications for the leader of a country.) This sarcasm is pointed at the self-aggrandizing candidate of a party.

Further, let’s not forget Trump was never poor or even struggling because 20 percent of his campaign expenditures are funneled back into Trump businesses. Trump is taking “self-funded campaign” to a whole new level because this campaign is clearly funding himself. While this could become an unsuccessful campaign due to failures to prioritize expenditures such as ad time, which will become necessary in the general election, Trump and his businesses are doing just fine.

Don’t worry about the state of Trump’s campaign fund though, Trump sent out his first fundraising email Tuesday, promising within that it would be “the most successful introductory fundraising email in modern political history.” Hopefully its success can beat the monumental introductory fundraising emails of ancient political history. 

Ashlee Smith

Ashlee Smith is a Law Street Intern from San Antonio, TX. She is a sophomore at American University, pursuing a Bachelor of Arts in Political Science and Journalism. Her passions include social policy, coffee, and watching West Wing. Contact Ashlee at ASmith@LawStreetMedia.com.

The post #TrumpSoPoor that He Can’t Afford to Defend Himself on Twitter appeared first on Law Street.

This is the first article in a two-part series about Lee Drutman’s plan for political reform. Click here to read the introduction. The second part gives a more in-depth look at his policy proposals and their potential consequences. 

In a recent paper, Lee Drutman, a Senior Fellow at the New America Foundation’s Political Reform program and professor at John Hopkins University, proposes a bold new plan to end government dysfunction. While he sees several structural issues with the American political system, he remains skeptical of the populist calls for reform, which are generally criticized as being utopian and unrealistic. Drutman’s ideas for reform are certainly interesting and worthy of discussion, but the context in which he talks about reform is equally as important.

Most, including Drutman, believe that significant structural reforms are needed to help get the government working again, but it’s worth questioning whether a populist upheaval is necessary. More to the point: do we need a political revolution?

Click here to read Lee Drutman’s paper, “Political Dynamism: A New Approach to Making Government Work Again”

Realism and Reform

Before laying out his proposals, Drutman first identifies the inherent challenge involved with reforming the American style of democracy–balancing a government of the people, by the people, and for the people with the need for expert policymakers. He notes that both of these principles, which he calls majority rule and technocracy, have their drawbacks and benefits. It is clearly important to have citizens involved in the government, but at the same time is is important to be realistic about their ability to act as informed voters. Most people don’t have the time to become an expert on every topic, which is why we have a representative democracy in the first place. But experts themselves can get too caught up in policies while losing touch with the needs of the American people. A balance would bring people into the political system to help them choose and empower the proper experts and policy entrepreneurs.

Most liberal visions of reform involve restraining the influence of lobbyists, interest groups, and money in order to end what many see as corruption and return politics to the people. On the conservative side is the desire to reduce the scope of government so that corrupt politicians can’t serve themselves. But Drutman sees both these visions as utopian and unrealistic.

Trying to remove interest groups and big business from the equation has proven to be nearly impossible, and doing so may even impede those who wish to lobby in the public interest. Getting rid of career politicians and stripping Congress of its resources only leads to inefficiency and cutting out “career politicians” makes it harder to create good policy.

Rather than seeking to limit the influence of outside interests or cut government resources, Drutman argues that reforms should try to empower from within. Instead of limiting the amount of dealmaking, maybe we should make more deals, but with everyone sitting at the table. As Drutman puts it, “The answer, in short, is more politics.”

An Uphill Battle

Drutman argues that his plan is the most realistic approach to fix politics, but the existence of polarization and inequality–the very same issues he seeks to resolve–makes his plan all the more challenging to accomplish. But that remains the case with any sort of reform, or in Congress’s current case, passing legislation to begin with.

After discussing the paper on Tuesday, Drutman revealed why he remains hopeful that Congress might consider a change. “You see this over and over again, when members of Congress retire the thing that they complain about is, ‘I spent all of my time raising money and it was no fun’,” he said. New programs like donor matching could actually make Congressmen enjoy their jobs more and feel better about their work. While it remains a tall order, doing so could be in the self-interest of politicians.

Click here to read the second part of the series that focuses on Drutman’s solutions.

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post Do We Need a Political Revolution? appeared first on Law Street.

Very few people are satisfied with politics nowadays. Polarization seems to have put Congress in a constant state of gridlock while inequality reaches unprecedented levels. The cycle of wealth and influence also appears to be self-reinforcing as the wealthy are able to influence the government to help protect their advantage. As a result, people have lost nearly all of their faith in public institutions–approval of Congress has reached new lows and people are more disaffected than ever before.

Lee Drutman, Senior Fellow at the New America Foundation and professor at John Hopkins University, makes the case for what America really needs: reform. At an event hosted at the New America Foundation’s offices in Washington, D.C., Drutman presented a paper titled, “Political Dynamism: A New Approach to Making Government Work Again.” At the event, Drutman made the case for reform and outlined his bold plan to make government work in an era of political polarization and growing inequality.

Rather than upend the whole system, he calls for evidence-based proposals to realign it in with the common good and end government dysfunction. Rather than cut out the influence of interests groups and big business, maybe we need to establish balance–put people and general welfare interests groups on the same level as corporations.

Click here to read Drutman’s paper titled, “Political Dynamism: A New Approach to Making Government Work Again.”

The event left me with a question, and some answers–check out the two parts:

Part I: Do We Need a Political Revolution?

Part II: Lee Drutman’s Bold Plan to Fix Government Dysfunction

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post The Government is Broken, Can We Fix it? appeared first on Law Street.

The crowded 2016 election may get yet another face, but the newest candidate might run on a uniquely one-dimensional platform. Lawrence Lessig, a Harvard Law professor and government reform advocate, launched a presidential exploratory committee this week, but unlike most candidates, Lessig’s potential campaign will focus on reforming politics by removing the influence of money. If elected, he will consider his presidency a mandate to fix the political system–and then promptly step down.

In a video released this week, Lessig announced that if the leading Democratic candidates do not make government reform the single focus of their campaigns, and if he is able to raise $1 million from small donors by Labor Day, he will declare his candidacy for the Democratic nomination. But what truly makes the possibility of Lessig’s campaign unique is his promise to hold the presidency only until meaningful reform is passed, after which he would resign–allowing the elected Vice President to assume the presidency. See the video below for Lessig’s announcement:

So what are Lessig’s ideas for government reform? His three-point plan, which he calls the Citizen Equality Act of 2017, involves “the equal right to vote,” “equal representation,” and “citizen funded elections.” This plan combines existing reform policies to, among other things, remove voting barriers, stop gerrymandering, and institute a voucher or public fund matching system for campaign donations.

The underlying problem that Lessig emphasizes is the idea that in the current American political system, every citizen does not enjoy equal representation from elected officials–or in Lessig’s words, “the system is rigged.” Much of this hinges on his issues with the current campaign finance system, in which wealthy donors are able to pour unlimited amounts of money into Super PACs and Social Welfare Organizations (for more information on campaign finance see LawStreet’s explainer here). According to Lessig, all current political issues pale in comparison to what he calls “citizen equality,” because absent this equality, Congress’ agenda will remain controlled by the small number of people who fund their campaigns.

One of the most interesting aspects of Lessig’s announcement is his idea of a “Referendum President,” who would hold office only as long as it takes to enact reform, then promptly resign–allowing the elected Vice President to assume office. If Lessig does run, he intends to make his campaign about his reform package rather than his capacity to carry out the duties of the Presidency.  In his announcement video, Lessig said, “The candidate is the referendum. The campaign is for that referendum.”

This isn’t the first time Lessig has attempted to use novel methods to reform politics. In 2014, he created the Mayday PAC, which spent close to $7.5 million to support Congressional candidates who favor campaign finance reform. While the PAC was not particularly successful–only two of the eight candidates that it supported won their elections in 2014–the idea of using a “Super PAC to end all Super PACs” was certainly unique. This time, however, Lessig seeks to gain a much broader base of support, rather than soliciting support from “50 billionaires.”

Lessig’s campaign may seem like a long shot, and it likely is, but there is a good chance that he will at least launch a campaign. There are two conditions that must be met in order for him to declare his candidacy after Labor Day. First, he must raise $1 million in the next 26 days–he has currently raised nearly $150,000 so far this week. Second, he will only run if no leading Democratic candidate promises to make his reform agenda the primary purpose of their campaign. While several of the candidates have called for campaign finance reform, and some even want a constitutional amendment along those lines, Lessig says that they must do more to make their goals credible.

Another remaining challenge for Lessig is the upcoming Democratic debate. If he does run, he will almost certainly need to participate in the debate in order to have a reasonable shot at the Democratic Nomination. Per the Democratic Party’s rules, candidates must poll at over one percent in at least three national polls to qualify, a threshold that Lessig believes he will be able to reach. In an interview with the Washington Post, Lessig said, “If we can be in the debates and frame this issue in a way that becomes compelling, then I think there’s a chance to see it take off.”

While his campaign might be a long shot, if you think campaign finance and political reform are important you may want to keep an eye out for Lessig’s campaign. He may fail to get enough support for a successful campaign, but his efforts could elevate the issue of campaign finance as the 2016 race heats up.

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post Lawrence Lessig: Campaigning to Not Be President appeared first on Law Street.

Ever since Illinois Republican Aaron Schock stepped foot in Washington D.C. he’s been making headlines. He was one of the first millennials to be elected to Congress, in 2009. He gained prominence for his flashy Instagram account, constant presence at the gym, weird office re-decoration possibly inspired by television show “Downton Abbey,” and persistent gay rumors. All of those things, in addition to his millennial status earned him applause from some and criticism from others. Either way, one thing is certain: Aaron Schock was certainly a character. A character that Washington is losing, as Schock announced his resignation yesterday after weeks of financial scandal allegations. But I want to be clear about one thing: Schock isn’t resigning because he’s young, or because he’s a millennial. He’s resigning because he’s a corrupt idiot.

Schock’s downfall essentially came from the fact that he spent way too much money. Some of that money was campaign donations, which he is accused of spending for personal use. He also used taxpayer money for things like private flights, and he was untruthful when filing things like spending reports and travel reimbursements. Some of the best allegations about Schock’s spending include:

• A personal photographer named Jonathan Link. Schock paid Link and his studio more than $50,000 last year and listed that cost as “personnel.”
• He requested mileage reimbursements for miles driven in his car for both official government business and campaigning; however, his car had less than half of the miles on it he claimed he had driven.
• He paid to take his interns to a sold-out Katy Perry concert.
• His “Downton Abbey” inspired office cost $35,000, but was designed by the wife of one of his donors. Many have argued that it was an “inappropriate gift.” The Washington Post described Schock’s private office as including “a drippy crystal chandelier, a table propped up by two eagles, a bust of Abraham Lincoln and massive arrangements of pheasant feathers.” Overall, Schock has spent more than $100,000 to renovate his various offices.

Last one. Full shot of Aaron Schock’s office. http://t.co/PJ1NGekafQpic.twitter.com/2SjsGQlKhp

— Ben Terris (@bterris) February 3, 2015

Overall, it seems pretty clear that Schock’s spending practices weren’t really in line with helping his constituents, but more with helping Schock himself.

Many of his colleagues are disappointed because they saw him as a rising, attractive Republican star. With an active presence on social media that included pictures with people like popstar Ariana Grande, he was more prominent for many young people than say, Senator Lindsey, “I’ve never sent an email” Graham. In a party that has long struggled to connect with young people, Schock seemed like a shoe-in to help fix that problem. But not everyone was so impressed with the Congressman. Politico, which broke the story yesterday, reported:

Schock’s associates — many of whom are afraid to speak for attribution, fearing potential legal action — say a combination of immaturity, sloppiness and an oversized ego led to his downfall. He came to Congress as an eager 27-year-old, raised a lot of money and spent it at a rapid clip.

I think that’s partly right. I think he did have a huge ego, was incredibly sloppy with his position, and was incredibly immature. That being said, politicians get slammed on this kind of stuff all the time, particularly in Schock’s home state of Illinois. I’m not sure what’s in Illinois’ water, but more than 1,500 holders of various political offices in the state have been convicted on corruption charges in roughly the last 40 years. That includes four out of seven of its most recent governors. Schock may have been sloppy, immature, and egotistical, but I don’t think he’s alone.

The issue isn’t that a millennial politician can’t be successful. Schock’s fellow millennials include Representatives Tulsi Gabbard, Patrick Murphy, and Elise Stefanik, none of whom seem to have the same spending issues. Young people need to get involved in politics–from the most recent midterms alone, it’s obvious we’re lagging in participation. It really is pretty clear Schock didn’t get nabbed because he’s young or  likes to travel. He got nabbed because he, like so many other politicians, became entitled and thought he was untouchable.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post Aaron Schock’s Age Didn’t Do Him in, His Idiocy Did appeared first on Law Street.

It’s official, the 2014 elections were the most expensive midterm elections in history, costing a total of $3.77 billion, or roughly $46 per vote according to voter turnout estimates. Even more surprising is the fact that there were fewer donors in the 2014 midterms than in any election since 1990, according to the Center for Responsive Politics (CRP). This means that not only was this the most expensive midterm election in history, its funding came from fewer people than in years past. Additionally, voter turnout estimates indicate that the percentage of eligible voters who cast ballots in November was the lowest since World War II.

Read more: Campaign Finance: Free Speech or Unfair Influence?

All things considered, the 2014 midterm elections reveal a disturbing trend in American politics, one where a shrinking group of Americans funds elections and voter turnout among the entire population continues to decline.

Spending Breakdown

Candidate and party spending was over $2.7 billion in the 2014 election, according to estimates from the CRP. One possible reason for the increase in the 2014 election was the McCutcheon v. FEC ruling, which struck down the cap for how much an individual can spend in an election cycle while leaving in place limits for individual races and organizations.

An additional $768 million was spent by a variety of independent groups that are not directly affiliated with campaigns.Outside expenditures can come from Super Pacs, 527 organizations, and 501(c) groups that the IRS categorizes as social welfare organizations.

These social welfare organizations are allowed to engage in political activity as long as it is not their primary focus, which in practice means that political spending must account for less than 50 percent of the organization’s budget. In essence, these groups are able to collect unlimited funds from donors, whose names they do not need to disclose, then spend that money on political advertising with a small set of restrictions. For more background information on campaign finance and dark money check out this explainer by Law Street’s Alexandra Stembaugh.

This chart, from the Center for Responsive Politics, details the sources of political spending in the 2014 election by party. For more information on spending in the 2014 election, look at the CRP’s overview.

2014 Election Spending by Category and Party, Source: Center for Responsive Politics

Fewer Donors, More Money

Another one of the Center for Responsive Politics’ major findings about the 2014 election was that the increase in total donations actually came from fewer donors when compared to the 2010 election (the previous midterm). In fact, the number of donors decreased in every category of campaign spending.

According to Russ Choma from the Center for Responsive Politics,

“There were just 434,256 identifiable individual donors to candidates in the 2014 election. That’s 107,000 fewer than there were in the 2010 election.”

CRP identified 773,582 donors in the 2014 election–a decrease of nearly 11 percent relative to the 2010 midterms–yet average contributions rose over 36 percent to $2,639 per donor. It is important to note that these numbers come from FEC data, which does not include donor information for individuals who give less than $200. In terms of outside spending, there were 6.4 percent fewer donors, but the average donation per donor rose nearly 450 percent, going from roughly $1,800 to over $8,000 per donor.

Are liberals catching on to dark money?

Although Republicans/conservatives maintained their significant advantage in dark money spending, accounting for nearly 75 percent of total spending, Democrat/liberal groups did see large increases.

Source: Center for Responsive Politics

The chart above illustrates the recent trends in dark money spending. Conservative groups retained their healthy lead in dark money in the most recent election, going from $119.9 million in 2010 to $124 million in 2014. Dark money spending among liberal groups increased by over 300 percent since 2010, going from $10.7 million to $35.7 million in 2014.

It is important to note that these numbers are limited to what is disclosed to the FEC. Regulations for 501(c) organizations only require disclosure of political spending that occurs 30 days before a primary election or 60 days before a general election. However, the Center for Responsive Politics found that these organizations tend to run “issue” ads outside of these windows to discuss political issues without reporting their spending. As a result, actual political spending likely exceeds the total disclosed to the FEC.

Lower Turnout

Finally, preliminary estimates indicate that only 35.9 percent of eligible voters participated in the 2014 election, the lowest turnout since 1942. This number taken from estimates by the United States Election Project at the University of Florida, which uses voting statistics for the highest office on each state’s ballot to estimate total voters (highest office is used because total vote counts are not available for every state).

These estimates indicate that only six states had a voter turnout greater than 50 percent, while eight states had rates below 30 percent. Although midterm elections historically have lower turnout rates relative to presidential election years, the 2014 election was low even for a midterm. For comparison, voter turnout in 2010 was 41 percent of eligible voters, and the 2012 presidential election had a turnout of 58.2 percent.

The chart below shows voter turnout from 1789 – 2014

Source: United States Election Project

In a time where Americans’ opinions of the government are near record lows, apathy among the general population seems to explain the turnout. Everyone loves to poke fun at headlines that claim Americans are more approving of lice, telemarketers, Genghis Kahn, and even Nickleback than of Congress, but the turnout for the recent election truly reveals the state of political engagement among the public.

While average Americans are less willing to cast a ballot, a small subset of the population is exhibiting more interest in politics than ever before. In a time where people overwhelmingly disapprove of their government and want to limit the role of money in politics, one would think showing up on election day is the next step, but sadly the opposite occurs.

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post The Votes Are In: 2014 Election Was Most Expensive & Least Representative appeared first on Law Street.

The Supreme Court saw an unusual and unexpected moment of chaos yesterday when protesters interrupted Chief Justice John G. Roberts’ announcement of opinions. There were only seven of them but they made quite a ruckus. Right as Roberts began speaking, one yelled, “We are the 99 percent.” Others yelled demands such as “one person, one vote.” Eventually, they were escorted out of the chamber. The group taking credit for the protest is 99Rise and they were arguing against the 2010 Citizens United decision that ushered in a whole new era in the way that politics and money interact. Today was the fifth anniversary of that historic decision.

The seven people escorted out of the chamber have also been charged with violating a law by making “a harangue or oration, or utter[ing] loud, threatening, or abusive language in the Supreme Court Building,” among other charges. An eighth individual was also slapped with conspiracy-related charges but it’s unclear how he or she was involved.

99Rise has now dubbed them the “Supreme Court 7.” They appear to be a grassroots-type organization that seeks to take the influence of big money and corporations out of politics. Their website outlines the group’s main goals as the following:

We thus seek a Constitutional Amendment and supplemental federal legislation that would guarantee the principle of political equality, as well as ensure that neither private wealth nor corporate privilege could be used to exercise undue influence over elections and policymaking. To this end, we are committed to deploying the most powerful tool of social and political change: strategic nonviolent resistance.

Despite the splash that the protesters made in the media with their actions, not everyone was that impressed. According to ScotusBlog, Roberts muttered “Oh, please” while all the chaos was going on.

After the protesters were taken out of the chamber, the justices continued with business as usual. One of the more closely followed cases of this term–Holt v. Hobbs–was decided. SCOTUS unanimously decided that Gregory Holt, a Muslim prisoner in Arkansas, should be allowed to grow a short beard in accordance with his religious beliefs.

Regardless of what happened in the Holt v. Hobbs case, however, the protesters ended up being a bigger news story. It’s rare that people interrupt government procedure like they did today, particularly in somewhere as stoic as the Supreme Court.

From an actual goal-oriented perspective, 99Rise’s choice to interrupt the Supreme Court doesn’t make that much sense. While it obviously handed down the Citizens United decision, it has no ability to enact the type of reform, like an amendment, that 99Rise ostensibly is looking for. That being said, from a public relations standpoint, it made total sense. A relatively unknown group got the chance to brand itself, put its message out there, and create martyrs out of its seven members who were arrested.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post Protesters Interrupt SCOTUS Over Campaign Finance appeared first on Law Street.

The 2014 midterm elections weren’t the only reason to pay attention to political news this year. Keep scrolling to check Law Street’s top 10 political stories of 2014.

1. BridgeGate: 7 Reasons to Watch the Chris Christie Scandal

This winter, revelations about Governor Chris Christie’s involvement in the shutting down of the George Washington Bridge came to light. The whole scandal raised a lot of questions about Christie’s ability to be a contender on the national stage, quite possibly as the 2016 Republican Presidential nominee. Whether or not Christie chooses to run, there will be a lot of eyes on his handling of “Bridgegate.”

2. Marijuana Legalization: Let’s Be Blunt 

The states of Colorado and Washington voted to legalize recreational marijuana in 2012, and the sale and use started moving into the public sphere earlier this year. However, given that Colorado and Washington were the first two states to do so, many were left with questions about how exactly the legalization worked, what affects it could have on society, and how the Washington and Colorado laws would interact with federal law.

3. Drone Rules: Are They Enough to Protect Civilians?

Drones have evolved from being a futuristic fantasy to real part of American military strategy. However, like any new innovation, the legality is developed after the technology itself. In early 2014, the Obama Administration’s drone strike policies were a hot topic of conversation, especially after the disclosures regarding a December 2013 strike in Yemen.

4. Hobby Lobby: They Want to Remove the Corporate Veil — and Your Birth Control Coverage

Image courtesy of [Annabelle Shemer via Flickr]

Another hot political topic in 2014 was the Supreme Court case that’s widely become known as Hobby Lobby. It questioned whether or not the Affordable Care Act (ObamaCare) required employers to provide contraception for their employees, regardless of the company’s religious beliefs. Concerns about the case extended far beyond whether or not those particular employees would get contraceptive coverage, as it could have set a dangerous precedent for all sorts of discriminatory policies.

5. Obamacare Is Here to Stay! But It Still Kind of Sucks

Image courtesy of [Daniel Borman via Flickr]

The much maligned Affordable Care Act (Obamacare) finally went into effect this year, with the first open enrollment period. The act provided healthcare for many who previously didn’t have it, but that doesn’t mean that it was anywhere close to perfect. Partisan bickering over the law remained steady, but the Affordable Care Act can certainly be considered a step in the right direction.

6. Stuck in McAllen: Jose Vargas and the Texas Immigration Crisis

This summer, the arrival of undocumented youth at the Texas border sparked political debates, some outrage, and acts of compassion. One of the biggest advocates for these young people was a man named Jose Vargas, a prominent undocumented immigrant who works as a journalist and advocate. When Vargas traveled to McAllen, Texas, one of the towns most heavily affected by the arrival of the children, he was briefly detained and then released–cementing his status as one of the lucky few.

7. Debating Minimum Wage in America

As the cost of living in the United States continues to creep upward, and the American economy rebounds from one of the worst economic crises in recent history, many people still struggle to meet ends meet. Minimum wage jobs are an important sector of our economy–but what exactly do we mean when we say minimum wage? It’s an important political question that has yet to find an exact answer.

8. “Gay Panic” Defense Outlawed in California

For some time, the “gay panic” defense served as a way to claim a sort of self-defense in regards to hate crimes. While it doesn’t have a strong track record of actually succeeding, there were no laws specifically forbidding it. This fall, California became the first state to actually ban the “gay panic” defense, an important step in the fight against homophobia.

9. Campaign Finance: Free Speech or Unfair Influence?

In the wake of Citizens United and other landmark court decisions, our rules about campaign finance have seen some extreme changes in the last few years. These changes will have a huge impact on the 2016 Presidential elections, and pretty much every election moving forward, unless more changes happen. Given the topsy-turvy world that is the debate over campaign finance, anything is possible.

10. Just Get Ready For It: Another Clinton in the White House

We’ve all barely recovered from 2012, not to mention this year’s midterms, but speculation about 2016 has, predictably, already begun. Probably the Democratic front-runner at this point, Hillary Clinton has a lot of support. There are many reasons to get on the Hills bandwagon–including feminism, foreign policy, and her awesome facial expressions.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post ICYMI: Top 10 Political Stories of 2014 appeared first on Law Street.

The world of politics is changing, and quickly. Between technology and the current state of campaign finance laws, the political landscape looks very different than it did just a few years ago. We’re starting to see the backlash of those changes now, and the noticeable difficulty of laws keeping up with all these changes. The actions of the GOP on Twitter in the recent midterm elections are in one of those murky gray legal areas at the intersection of campaign finance and technology.

CNN discovered that GOP campaigns had set up fake Twitter accounts during the midterms that spewed gibberish. For most of us, such a sight would indicate that there was some sort of spam account at work, and we would ignore it. But according to CNN, that gibberish could be decoded–and the decoded messages were internal polling data. Ostensibly, an outside group, such as a PAC, could look at that message, decode it, and figure out which campaigns were in need of an extra monetary push.

The thing about Twitter is that it’s pretty easy to hide in plain site. If all you’re doing is tweeting out gibberish, the only good way to find you is to search for the gibberish, or to search for the user. Interestingly, the GOP was quite glib about some of these accounts–one was named after Bruno Gianelli. West Wing fans will recognize him as a political campaign operative who was in favor of using soft money to get the President re-elected.

Current campaign finance laws allow outside groups to work on behalf of candidates, as long as they don’t explicitly coordinate with candidates’ campaigns. So the question that no one can really seem to answer is whether or not these Twitter accounts were legal. Given that they were public accounts–although very difficult to decipher public accounts–they don’t really seem like behind-closed-doors coordination that the FEC attempts to prevent.

The consensus seems to be that they’re probably not completely legal, but no one really cares enough to do anything. It appears that maybe-coordination like this is sort of like the jaywalking of election season. Everyone does it, probably, but no one’s really going to get caught. Daniel Tokaji, a professor at Ohio State’s law school said:

It may bend common sense, but not necessarily the law. A lot of things you and I would consider coordination are not coordination under the law. I don’t think sharing polling data is going to be enough to establish that the campaign was materially involved in decisions about content, target audience or timing.

This isn’t a one-sided issue, either. Both political parties have tried using technology to get around campaign finance coordination laws, and both parties have been accused of foul play. The FEC probably isn’t going to do anything about it, and that’s fine, but as the rules surrounding campaign finance in general change so drastically, there’s a need for our rules to progress along with them.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post GOP Accused of Illegal Coordination Over Twitter, No One Really Cares appeared first on Law Street.

In an ideal world elections would be determined by a competition of ideas. But in today’s world, politics in the United States is determined by fundraising, wealth, and access. Regulations stipulating how campaigns can be financed determine who can donate how much in elections and what the money can be used for. Some argue campaign donations should be protected as a form a free speech while others see these donations as giving the wealthy undue political influence. Read on for the history, controversy, and future for campaign finance reforms.

What is campaign finance?

Campaign finance refers to all money raised to support political candidates, organizations, parties, or initiatives in elections. Any successful political campaign typically costs a significant amount of money. Money is needed to cover travel expenses, pay for political consulting, and to communicate with voters. Advertising costs are by far the most significant expense in heated political campaigns.

This fundraising takes a new turn with corporations and wealthy individuals interested in spending as much as possible to support their candidate. At the federal level, campaign finance is regulated by the Federal Election Commission (FEC). At lower levels, it is governed by state and local law. Most campaign spending comes from private groups, but qualifying presidential candidates can opt to use public money.  Regulation typically takes the form of disclosure, contribution limits, and the limits that come with public financing. The strange array of political terms surrounding campaign finance often makes it hard for people to follow the actual debate.

• Political Action Committees (PACs) – the private groups that fundraise from individual contributors to spend money for political purposes. PACs are necessary since corporations and unions cannot directly donate money to a candidate or national party committee.
• Super PACs – emerged more recently due to Supreme Court decisions. These organizations have no legal limit on the amount they can spend so long as they are politically independent of the actual campaign.
• Hard money – includes donations regulated by the FEC that are made directly to political candidates by individuals and corporations. The names of those who contribute and how much they contribute are publicly available.
• Soft money – known as an indirect donation, it is often given to a political party rather than a candidate and thus can avoid certain legal limitations.
• 527 organizations – refers to advocacy groups like traditional PACs and political parties, named after their IRS code and tax-exempt status.

Watch below for more on how campaign finance works:

What is the history of campaign finance?

Numerous laws and Supreme Court cases have attempted to regulate campaign finance. Typically it is not until a political scandal that there is a push for more stringent regulation in financing.

Tillman Act

In 1907 the Tillman Act became the first ever campaign finance law after Theodore Roosevelt faced questions about which corporations funded his campaign in 1904. The Act banned corporate contributions to national campaigns; however, the law lacked any real method of enforcement.

Federal Election Commission Act (FECA)

In 1971 modern campaign finance rules were born. FECA instituted disclosure requirements for federal candidates. The Act was rewritten in 1974 after it surfaced that Richard Nixon used corrupt funds in his re-election campaign. These amendments established a system of regulation and enforcement through the Federal Election Commission. FECA also created new public financing for presidential elections to limit the influence of money. The new law put limits on individual contributions to candidates, contributions to PACs, total campaign expenditures, and spending by individuals or groups to a specific candidate.

The constitutionality of FECA was challenged in the case of Buckley v. Valeo. The Supreme Court upheld the limits on individual donations and disclosure requirements, citing the compelling state interest to prevent corruption. However, the Court stated that the limits on what campaigns and individuals could spend was a violation of the First Amendment. Further, disclosure could only apply to communications expressly advocating for a candidate. There are three key takeaways from the case:

1. Free speech allows individuals to spend unlimited political money.
2. TV or radio ads that expressly advocate for or against a specific candidate, by using words like “elect” or “defeat,” must be financed with regulated money.
3. Corporations, unions, and individuals can contribute unlimited “soft money” to political parties in an effort to influence campaigns. This encouraged many companies to set up PACs to donate.

Bipartisan Campaign Reform Act

In 2002 the Bipartisan Campaign Reform Act, or McCain-Feingold Act, was passed after it came out that wealthy Democratic donors were given special privileges and the Party had illegally accepted foreign money. The Act prohibited corporations and unions from donating directly to candidates. However, it did not regulate 527 organizations. Because of this many soft money activities previously funded by parties were now done by 527 groups.

Watch a musical overview of the history of campaign finance below:

How is campaign finance regulated today?

Rules regarding campaign finance continue to change, making many things fair game that were once illegal.

Citizens United v. Federal Election Commission

In a January 2010 5-4 decision, the Supreme Court ruled that the government cannot prohibit corporations and unions from spending money for political purposes. Essentially this allows corporations and unions to spend as much as they want on campaigns.

In the March 2010 case of Speechnow.org v. Federal Election Commission, the Federal Court of Appeals for the D.C. Circuit unanimously ruled there should be no contribution limit to groups that only make independent, uncoordinated expenditures to a campaign.

These rulings led to the rise of super PACs. Super PACs are known formally as “independent-expenditure only committees” because they cannot make contributions directly to candidates but instead spend on political advocacy independently of campaigns. Unlike regular PACs, these super PACs have no legal limit to the funds they can raise from various groups, provided they are operated correctly.

Watch the story of Citizens United v. FEC below:

McCutcheon v. Federal Election Commission

In April 2014, a 5-4 decision by the Supreme Court struck down caps on what individuals can contribute to federal candidates in any two-year election cycle because they restrict the democratic process and violate the First Amendment.

Public Funding

At the federal level, public funding is available for presidential campaigns. If a candidate agrees to limit his spending according to a formula, the candidate will receive a matching payment for the first $250 of each individual contribution in the primary campaign. Additionally, the candidate receives financing for the national nominating convention and general election campaign. Candidates have to qualify for funding by privately raising $5,000 in at least 20 states. If a candidate refuses matching funds, she is free to spend as much money as she raises privately. In the 2012 election no major candidate opted to take public funds since candidates can typically raise and spend more on their own. The price of a winning election today has made public funding near obsolete.

What are the arguments surrounding campaign finance reform?

Many of the Supreme Court justices who ruled on recent campaign finance cases decided that spending money for political purposes is equivalent to free speech and should be protected by the First Amendment. The same reasoning extends to corporations, in citing that corporations are made up of individuals and should enjoy the same political rights as individuals. Those who argue for fewer donation restrictions cite their rights guaranteed by the First Amendment.

Opponents argue the lack of restrictions gives the wealthiest unfair influence over the government. Senator John McCain (R-AZ) told Retro Report, “If money is free speech, then the wealthiest people in America are those that get to speak the most freely.”

For example, a study by the Sunlight Foundation found that just one percent of the top one percent of the United States population accounted for 28 percent of all disclosed contributions in the 2012 elections. In a statement Senator Mark Udall (D-CO) echoed these findings: “The American people are angry that a billionaire can dole out $3.6 million to influence an election — meanwhile, it would take a full-time minimum wage worker 239 years to make that much money.”

Most take issue with the rapid expansion of dark money to organizations under a 501(c)(4) designation by the IRS. 501(c)(4)s are defined as social welfare organizations and are tax-exempt. However, these organizations are allowed to participate in political campaigns so long as their primary purpose is promoting social welfare. Examples of these organizations include the Sierra Club, NAACP, and National Rifle Association.

These organizations do not have to disclose spending on political activity nor the names of donors unless they donate expressly for political advocacy. The use of these organizations for political advocacy has contributed to a sharp rise in outside spending without disclosure. A 2011 report by the Center for Responsive Politics found that since the 2006 midterms, spending from groups that do not disclose donors rose from one percent to 47 percent. Many cite large donations by these groups as a form of legal bribery, with the expectation of political favors following each donation.

Are there new developments in campaign finance?

Many Democrats in Congress have called for an amendment to undo the Citizens United ruling, but that seems very unlikely to happen. Senator Tom Udall (D-NM) proposed an amendment to undo the Citizens United case and instead allow Congress to regulate political money. Numerous Senate Democrats signed on. Harry Reid vowed to bring the measure to the floor, but most agree it has little chance of passing.

Democrats introduced a DISCLOSE Act in 2010, 2012, and again in 2014, which would require organizations that spend $10,000 or more in an election cycle to disclose their expenditures and major donors. Republicans have opposed such bills from the standpoint that they give an unfair advantage to their Democratic opponents. Learn more about the DISCLOSE Act below:

The amount of money spent in elections continues to grow at an alarming rate. The Center for Responsive Politics predicts almost $4 billion will be spent in the 2014 midterm elections, making it the most expensive midterm ever. While the 2010 midterm cost $3.6 billion, 2014 will run an estimated $333 million beyond that. Candidates and parties will spend roughly $2.7 billion, but the explosion of outside money continues to significantly influence the races. Outside groups like super PACs and 527s are expected to spend $900 million on their own. Overall, conservative candidates and groups are projected to outspend liberal candidates and groups by $1.92 billion to $1.76 billion. Expect even more money, especially from outside groups, to come flowing in to the 2016 presidential election.

While there may not be action at the national level, 16 states and more than 500 municipalities have called for a constitutional amendment on campaign finance reform. Yet both sides agree getting rid of dark money and enacting reform will not happen any time soon. Little change will happen without a large, Watergate-esque scandal to bring true reform to campaign finance.

Resources

Primary

FEC: Campaign Finance Reports and Data

SCOTUS: Buckley v Valeo

SCOTUS: McCutcheon v. Federal Election Commission

FEC: Public Funding of Presidential Elections

Additional

The New York Times: The Cost of Campaigns

Politico: Waiting for the Next Watergate

NCSL: Campaign Finance Reform: An Overview

NPR: A Century of U.S. Campaign Finance Law

Washington Post: Campaign Finance: Special Report

Atlantic: Making Sense of McCain-Feingold and Campaign Finance Reform

Washington Times: No Major Takers for Federal Campaign Funds

Open Secrets: Super PACs

Sunlight Foundation: The Political 1% of the 1% in 2012

The New York Times: Milking the Money Machine

Open Secrets: Citizens United Decision Profoundly Affects Political Landscape

Mass Live: Senate Democrats Pushing Campaign Finance Transparency

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Campaign Finance: Free Speech or Unfair Influence? appeared first on Law Street.

In 2012, Wisconsin Governor Scott Walker became the first American governor to survive a recall election. But it was recently discovered that he may have won that election illegally. In court documents released last week, prosecutors argued that Walker was involved in a “criminal scheme” that involved coordinating with outside groups. Special Prosecutor Francis Schmitz also alleges that Walker collaborated with “a number of national groups and prominent figures,” including Karl Rove.

Campaign Finance Law: A Primer

To better understand what Walker is accused of, let’s walk through the basics of campaign finance law. Ever since the Citizens United v. Federal Election Commission Supreme Court Ruling, which allowed corporations to make unlimited independent expenditures for political purposes, Super PACS have been on the rise. Super PACS are allowed to raise as much money as they possibly can and spend as much as they like on politics. The only catch is that they cannot coordinate with actual political campaigns. This means a Super PAC can advocate for a candidate, or for a candidate’s issues, but they cannot have any communication with the candidate’s campaign. Walker is accused of coordinating with Super PACs–generally referred to as outside groups.

Walker’s Case 

If you think all that seems a bit complicated, it’s even harder to figure out if Walker is guilty or not. The prosecutors do have some pretty solid evidence, including email exchanges, that point to there being collaboration between Walker’s campaign manager and outside groups. But the prosecution is currently in an appeals battle to see if the emails will even be admissible, given that a judge has already ruled that the subpoenas used to get this evidence should have never been issued. According to Judge Rudolph Randa, Walker may have found a loophole in campaign finance law, which would render the subpoenas illegitimate.

The loophole that Walker may have taken advantage of is that the ads made by the outside group were “issue ads” and not “campaign ads.” Here is an example of an “issue ad” made by the Wisconsin Club for Growth, one of the organizations accused of collaboration:

And here is a “campaign ad” made by Scott Walker:

The main difference between the two is that in the second ad, Walker says he is running for governor and it’s clearly an ad made to get votes. But the first ad never mentioned an election. It was just raising an issue and asking citizens to call their congresswoman about it. It never asks the viewers to vote for anyone.

This may seem like a subtle difference, but it has huge implications under the law. A “campaign ad” has many more legal restrictions than an “issue ad.” So, because the outside groups exclusively made “issue ads,” Judge Randa ruled that the coordination the prosecutors claim happened is perfectly legal.

A panel of appellate judges is hearing the case now. This case may go to the Supreme Court, as it is a very important issue that requires clarification. If the appellate court upholds  Randa’s decision, then it will be legal for campaigns in Wisconsin to coordinate with outside groups, as long as the outside groups only use “issue ads.” If the case makes it to the Supreme Court, they could rule that this type of coordination must be allowed in all states.

Fortunately, I do not see this happening. Though the same majority that ruled in Citizens United  is still on the court, I think they would rule that this type of coordination should not be allowed. The key to the ruling in Citizens United was that independent expenditures could not be limited. They cease to be independent expenditures when there is coordination, and I do not think SCOTUS would find “issue ads” to be free of any electioneering. The Supreme Court would hopefully see them for what they are–ads to sway voters. The fact that “issue ads” never mention an election is just a disingenuous loophole. Let’s be honest, when was the last time you saw an ad like the one posted above and it wasn’t an election season?

Now, as far as the Scott Walker case goes, it is on hold until the Court of Appeals rules on whether there is even a crime for the prosecution to look into. Then they have to go back to a Wisconsin Court and see if they can even get their subpoenas re-issued. The whole process could take a while, especially if the case makes it to the Supreme Court. And even if the Court of Appeals does rule in the prosecution’s favor, there is still a long way to go before charges can be filed. All factors considered, it seems like this issue will have very little impact on Walker as a 2016 Presidential hopeful.

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Matt DeWilde (@matt_dewilde25) is a member of the American University class of 2016 majoring in politics and considering going to law school. He loves writing about politics, reading, watching Netflix, and long walks on the beach. Contact Matt at staff@LawStreetMedia.com.

Featured image courtesy of [WisPolitics.com via Flickr] 

Matt DeWilde

Matt DeWilde is a member of the American University class of 2016 majoring in politics and considering going to law school. He loves writing about politics, reading, watching Netflix, and long walks on the beach. Contact Matt at staff@LawStreetMedia.com.

The post Scott Walker on a Legal Tightrope appeared first on Law Street.

Limits on campaign contributions continue to slip away, with high courts ruling against them. First, in the Supreme Court case McCutcheon v. Federal Elections Commission, and then on April 24, U.S. District Judge Paul A. Crotty struck down donation limits in New York. Surprisingly, Crotty acknowledged that there is a link between campaign finance and corruption. Unfortunately, he felt compelled to rule against the measures aimed to prevent this phenomena due to the possibility of infringing on first amendment rights. Many feel that this issue is black and white; namely, that campaign donations are a right of free speech or that they are ruining democracy. Yet, I think it is fair to say that the judicial branch is in a difficult position. A majority of Americans want campaign finance reform, yet, any attempt to do so could be a violation of constitutional rights (so it seems based on recent rulings).

While I would like to see reform, I acknowledge that there is a more concerning problem underlying the push for campaign contribution limits, and it starts with the obvious question, “why exactly do people want to limit contributions in the first place?” The desire to limit campaign contributions arises from the fear of a distorted power distribution. Simply, the people who have the greatest wealth will have the greatest influence in politics.

In order to run a strong campaign, you need a lot of capital, and thus, politicians require significant financial backing. If someone voluntarily provides a politician with large financial donations, then by de facto the politician owes that financial backer, and hence, the corruption referred to by Crotty ensues. The fact that finances are so important in political elections principally gives citizens of wealth more potential value and gives them greater potential access to politicians than regular citizens.

But let’s back up for a minute. We need to ask the next question that naturally follows, “why does it require a lot of money to win elections?” And this question gets us to the root of the problem. Politicians need a substantial amount of campaign finances in order to capitalize on the public’s immediate perception. Unfortunately, Americans are not educated on domestic and international politics and it shows in the polls. As Cato Unbound reports,

numerous polls show that voters grossly underestimate the percentage of federal spending that goes to entitlements such as Social Security and Medicare, while greatly overestimating the amount spent on foreign aid[..] Widespread political ignorance isn’t limited to spending and health care[..] only 42% of Americans can name the three branches of the federal government: executive, legislative and judicial.

American’s knowledge regarding international affairs shows even less promise. So how does the American electorate make political decisions? They rely on heuristics in order to decide whom and what to vote for. A heuristic is essentially a cognitive shortcut that allows us to make decisions quickly, and one of the most commonly employed cognitive shortcuts is the availability heuristic. In the words of Albert Phung, when using this heuristic, people “rely on immediate examples that come to mind. The availability heuristic operates on the notion that if something can be recalled, it must be important.”

Political campaigns know this, and that is why they are constantly trying to get as much attention as possible, which requires a lot of money. Does the term ‘soundbites’ ring a bell? If people hear what a certain candidate is going to do over and over, they begin to think it is important.

The reason we fear unlimited campaign contributions is because the American people do not make educated voting decisions and instead, they are heavily influenced by how many soundbites they are subjected to. If every person were to decide who to vote for based on their own research, it wouldn’t matter how much money politicians raise and spend. But the sad fact remains that American’s do not do the research. My favorite example of this is the Associated Press Report Homer Simpson, Yes — 1st Amendment ‘Doh,’ survey results. According to the AP, “the new McCormick Tribune Freedom Museum found that 22 percent of Americans could name all five Simpson family members, compared to just 1 in 1,000 people who could name all five First Amendment freedoms.”

[ThinkProgress] [Investopedia] [Gallup] [SupremeCourt.Gov]

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Bo Donoghue

Featured image courtesy of [Wonderlane via Flickr]

Bo Donoghue

Bo Donoghue is a student at The George Washington University. Contact Bo at staff@LawStreetMedia.com.

The post Campaign Donation Limits: Why We Really Need Them appeared first on Law Street.

Money has always been a big part of politics, and campaign finance laws have been put in place to curb potential corruption. But the Supreme Court continues to rule on parts of campaign finance laws- most recently allowing individuals to give money to more campaigns in the case McCutcheon v. Federal Elections Commission. Is this one more way to allow big money into politics, or a protection of free speech?

Campaign contributions are protected as free speech under the First Amendment, but with restrictions in order to prevent corruption. Since 1976 in Buckley v. Valeo, the Court has ruled that campaign contribution limits can be enforced as “primary weapons against the reality or appearance of improper influence stemming from the dependence of candidates on large campaign contributions.” Basically, it’s fine to limit contributions from individuals to avoid corruption. And understandably so- it isn’t unreasonable to think donating huge sums of money from an individual to a campaign could lead to some kind of favoritism toward that person.

So to combat that potential, the government set a cap for the amount of money an individual can contribute to campaigns, and it’s been like this since 1976. Currently, that limit is $5,200 to each campaign over a two-year period. As time has gone on, the courts have continued to rule more on the side of campaign contributions as free speech, making those laws less restrictive, and continuing to hold them as protected free speech under the First Amendment.

One of the most recent examples was in the case Citizens United v. Federal Election Commission, where the Court ruled restrictions on how much money unions and corporations could donate weren’t legal. Liberals saw this as a way to equate corporations to people, and conservatives saw it as an expansion of First Amendment rights.

So McCutcheon tackled another part of the campaign finance puzzle: caps on individual donations… kind of.

Prior to this ruling, there was a limit on how much money an individual could donate to one campaign, as well as a cap on how much an individual could donate to campaigns total. Individuals could give up to $5,200 to any one candidate, but no more than $123,200 total during a two-year election cycle. And of that $123,200, only $48,600 could go to individual campaigns. The Supreme Court held on Wednesday that that total limit, the $123,200, was unconstitutional, while the caps on donations to individual campaigns still stand.

So, what does this mean in practice? Basically, wealthy people can give money to more candidates… but they can’t give more money to one candidate. Again, liberals have gotten upset-worried that increasing the amount of money individuals can donate to campaigns will somehow unhinge a balance of power, or make a system already centered on money even more uneven. But to be frank- this decision doesn’t change a whole lot of anything, and it’s constitutionally sound.

If the goal of campaign finance limits is to combat corruption (legitimate corruption, not just speculative or hypothetical corruption), then giving a limited amount of money to a few more candidates really isn’t a huge problem.  Individuals won’t be able to wield more influence over one candidate because to individual caps are still in place.

Still, there is concern that this ruling only helps the wealthy, as they’re the only ones who would be able to give this much money to campaigns in the first place. But more important than worrying about rich people giving money to campaigns is worrying about what the First Amendment protects. The First Amendment, time and again, has protected campaign contributions as free speech. Arbitrary limits on one kind of free speech are no better than arbitrary limits on another.

Though it’s easy to get caught up in thinking allowing the wealthy to give more money to a campaign isn’t fair, the McCutcheon decision by the Supreme Court upholds rights guaranteed by the First Amendment. The only restrictions the courts should impose on campaign limits are ones that protect against corruption and limiting the amount of campaigns individuals can donate to do not protect against corruption.

[Supreme Court] [Oyez] [Washington Times] [Citizens United]

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Molly Hogan (@molly_hogan13)

Featured Image Courtesy of [Flickr/Tracy Olson]

Molly Hogan

Molly Hogan is a student at The George Washington University and formerly an intern at Law Street Media. Contact Molly at staff@LawStreetMedia.com.

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