Opinion

The Great Debate

from Breakingviews:

James Hoffa: Let sun shine on corporate donations

By James Hoffa
The author is a Reuters Breakingviews guest columnist. The opinions expressed are his own.

Companies increasingly are playing an outsized role in U.S. elections. In many cases, they donate money to advocate controversial policies that could antagonize their customers and undermine their businesses. Because so many of these contributions are not disclosed, however, shareholders are left in the dark and unable to evaluate potential conflicts or risks.

Investors are demanding improved corporate disclosures through shareholder resolutions and by urging the Securities and Exchange Commission to adopt new rules. Despite hundreds of thousands of letters from investors urging the agency to take action, it dropped the issue from its list of regulatory priorities earlier this year.

While some companies have done the right thing by making all their political expenditures public, there are still too many publicly listed ones that refuse to raise the veil of secrecy regarding their political giving.

The Teamsters invests more than $100 billion in the capital markets through affiliated pension and benefit funds. In addition, our members trade as individuals and as participants in employer-sponsored plans. We are part of a growing chorus of shareholders concerned about political spending.

Roberts Court: Easier to donate, harder to vote

Chief Justice John Roberts’ first sentence of his majority opinion in McCutcheon v. Federal Elections Commission, striking down important limits on campaign contributions, declares “There is no right more basic in our democracy than the right to participate in electing our political leaders.”

A look at the Roberts Court’s record, however, shows that this may not be its guiding principle.

Through a series of rulings, the court’s conservative majority’s rulings have instead made it easier for big-money donors to influence elections — while making it harder for many Americans to use the only political influence they have: their vote.

McCutcheon: Should the rich speak louder?

On Wednesday, the Supreme Court handed down its most important decision on campaign finance reform since Citizens United. The decision, McCutcheon v. Federal Election Commission, seemed to divide along familiar ideological lines, with Chief Justice John Roberts writing the majority opinion for five conservatives and Justice Stephen Breyer, writing the dissent for the four liberals.

What really divided the court, however, wasn’t partisan politics pitting Republicans against Democrats but two conflicting views of the First Amendment. Which view you embrace depends on whether you see the McCutcheon decision as a principled triumph for unpopular speech or a First Amendment disaster that will ensure that a handful of the richest Americans can use their vast resources to drown out the voices of everyone else.

The First Amendment view embraced by Roberts and his conservative colleagues is rooted in individual liberty. There’s no right in our democracy more fundamental, Roberts began, than the First Amendment safeguards for “an individual’s right to participate in the public debate through political expression and political association.”

Making every voter equal

The venture capitalist Tom Perkins recently suggested that he should have a greater voice than others in selecting our government because he’s rich. “You pay a million dollars in taxes,” he told the Commonwealth Club in San Francisco, “you get a million votes. How’s that?”

Perkins later insisted that he had intended to be outrageous. As most Americans understand politics, however, he was just stating the obvious.

Instead of extra votes on Election Day, we who are wealthy enough to give money to politicians get special access before, and influence after, as candidates pursue the cash that is the life’s blood of their election campaigns. The more you give, the more access and influence you have. It’s as simple as that.

What’s behind JPMorgan’s push for worker training?

Just a few weeks before federal prosecutors announced a nearly $2 billion settlement with JPMorgan Chase over Bernie Madoff’s fraudulent accounts, chairman and chief executive officer Jamie Dimon sat alongside former Congressman and White House Chief of Staff Rahm Emanuel at an Aspen Institute forum in the biology lab of Malcolm X College to tout the embattled bank’s five-year, $250 million, multi-city investment in job training. The bank would commit $15 million for “workplace readiness and demand-driven training” in Chicago.

JPMorgan is not alone in its quest to change how it is seen. Goldman Sachs recently extended its 10,000 Small Businesses plan to Detroit, the latest of a number of cities to receive cash from the investment bank. There’s a reason beyond the corporate charity push for all the giving. The financial industry is facing a sea change in electoral politics. It is increasingly operating in a polarized political system that has placed a premium on accountability. Populist and ideologically extreme constituencies are needed for primaries and general elections in which fewer middle-of-the-road voters participate. Loyalties change quickly if pols don’t sway the way their bases want. Elected and would-be elected officials can rely on campaign cash from super PACs and independent expenditures involving wealthy contributors like Sheldon Adelson, George Soros and David Koch. Campaigners don’t have to rely as much on Wall Street as a unit.

Politicians, especially Democrats, benefit from denouncing financiers. As Ben White and Maggie Haberman reported in Politico, “at both ends of the political spectrum, the titans of American finance today find themselves alienated from politics to a surprising degree.” White and Haberman document an environment in which President Obama labels them “fat cats,” the left demonizes and the Tea Party Republicans just shun. So when someone like White House Senior Adviser Valerie Jarrett mentioned Goldman Sachs’ 10,000 Small Businesses in an interview with White, it shows the benefits an outfit like JPMorgan get from courting charitable initiatives, even if they delve into murky policy terrain.

The Supreme Court ‘s Gilded Age redux

The Supreme Court belongs to the small club whose members seem to assume that saying something makes it so. It deals in precedents — not the same thing as dealing in history. It prefers obiter dicta to the messiness of the past.

In his Citizens United opinion, Justice Anthony Kennedy wrote, “By definition, an independent expenditure is political speech presented to the electorate that is not coordinated with a candidate.”

Really? The equation of money with speech has gotten a lot of well-deserved attention, but the inelegant “not coordinated with a candidate” seemed attached only to define “independent.” Does the phrase mean that if expenditure was coordinated with a candidate it was not political speech and thus not protected?  We are about to find out.

Why doesn’t Mitt Romney contribute to his own campaign?

Lately, Mitt Romney has been so consumed with fundraising that his aides have had to defend his absence from the stump. Like his foe, the Republican nominee is in the midst of a frenzied financial arms race. But one hugely wealthy individual has not yet been persuaded to part with much cash to support the Republican cause: Mitt Romney himself.

Mitt Romney is hardly the first wealthy individual to seek the White House. John F. Kennedy once quipped he had received a telegram from his father: “Don’t buy another vote. I won’t pay for a landslide.” But Romney, for whatever reason, has failed to use his personal wealth to pay his campaign’s bills. His refusal to self-finance is one of the mysteries of this campaign.

After all, if Romney were to help fund his own bid, he would have ample company. In 1976, the U.S. Supreme Court ruled that it would violate the First Amendment to limit what candidates can spend on their own behalf. Ever since, wealthy office-seekers commonly have ponied up. John Kerry lent more than $6 million to fund his Iowa caucus drive in 2003. Hillary Clinton lent her campaign over $11 million four years later. Steve Forbes gave his 1996 campaign $32 million, and spent nearly $37 million four years after that. Ross Perot spent $63 million to finish strongly in 1992, back when that was real money.

We need to make campaign finance a civil rights issue

Two Supreme Court decisions (Citizens United v. Federal Elections Commission and, later, American Tradition Partnership v. State of Montana) and an appellate court decision (SpeechNow v. Federal Election Commission) are fundamentally transforming our political system and our democracy to a degree we may not grasp until the results of this year’s elections become clear. Never has our electoral process been more captive to vast – and mostly anonymous – sums of money from a handful of large corporations and wealthy individuals.

For all the scorn rightfully heaped on Citizens United, however, it’s actually SpeechNow v. Federal Election Commission that has been most destructive. SpeechNow allows not-for-profit organizations to accept unlimited contributions from individuals for independent expenditures, and this decision birthed both “super PACs,” which can accept unlimited contributions but must disclose donors, and “tax-exempt organizations” which are not subject to the disclosure requirements that apply to candidates, parties, PACs and super PACs.

Under these recent court decisions, a handful of immensely wealthy individuals and CEOs and boards of directors of large corporations now legally direct tens of millions of dollars to funding an overwhelming stream of political ads on behalf of candidates from whom they obviously expect some sort of fealty once the candidates are in office.

Democracy for sale – or billionaires’ folly?

It was said of Andrew Carnegie that he gave money away as quietly as a waiter falling down a steel staircase carrying a tray of tall-stemmed glasses. Not so the sotto voce superrich donors who are spending so much to keep Mitt Romney from declaring himself the winner of the Republican nomination.

With their chosen candidates out front, swinging at each other as they glad-hand from state to state, the multimillionaires and billionaires a mere million is nowhere near enough to join this exclusive club – keep themselves out of sight, sitting around in a smoke-filled back room playing high-stakes hold ’em for the soul of the GOP. Not literally, of course, though many of them made their fortunes gambling everything on their hunches.

It is the common view, heard nightly around dinner tables of liberal-leaning citizens, that democracy is being bought and sold in front of our noses and that the Founding Fathers – most of whom, by the way, were comfortably well off and happily paid their way into politics – would be spinning in their mausoleums if they knew how the monarchy they defied has been replaced in the brave republic they founded by an aristocracy of the super-wealthy they never could have imagined.

Where campaign finance needs to go now

By Zephyr Teachout
The views expressed are her own.

In the mid-1990s, Arizona voters faced a pretty normal problem: their government was corrupt. Legislators were thinking about wealthy donors, not their constituents. Some of those donors were giving money legally (through campaign contributions), and some illegally (through bribes—think AZScam). But whether illegal or legal, the problem was the same: the elected officials had their minds on the sources of cash, instead of the problems of the state. It wasn’t good for democracy, since candidates without a lot of wealthy friends just weren’t going to run for office.

Arizona voters decided to push for public financing of elections. But they worried that candidates might not use the public financing because the amounts provided—for example, around $15,000 for legislature races—could come up short. Would it be enough if a self-financed candidate spent all his money, or the Chamber of Commerce unleashed a flood of attack ads? Candidates might get cold feet; instead of opting into public funding, they’d choose to raise money the old fashioned way, calling rich people who knew lots of other rich people, and telling them whatever they needed to hear.

So Arizona had two choices. It could pass a law to give the hypothetical nervous candidate a high default lump sum of public funding for her campaign, insurance against a big money dump. Or it could pass a law that gave the nervous candidate extra funding if the feared event happened: if the rich candidate or the Chamber of Commerce spent over a certain set amount she’d get an equal amount to be able to fight back. Arizona chose the second option—why use state money when it wasn’t needed? After a threshold, a publicly funded candidate was automatically given an additional $1 for every $1 spent by the self-financed candidate or attacking outside groups. The law didn’t prohibit anyone from spending money. And it was automatic, so it didn’t discriminate on the basis of any ideology.

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