Five myths about super PACs
By Trevor Potter,
by Trevor Potter The Supreme Court’s ruling in Citizens United allowed them. Political candidates rely on them. And Stephen Colbert parodies them. But as a former chair of the Federal Election Commission and the lawyer behind Colbert’s super PAC — Americans for a Better Tomorrow, Tomorrow — I find that most people don’t understand the role that these largely unaccountable organizations play in American politics. As the GOP primary race draws to a close, let’s take a look at some common misconceptions about groups powerful enough to evade traditional limits with a single bound.
1. Super PACs are transparent because they are required to report the names of donors.
Under federal law, political action committees must report the names of their donors. And under the Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling, corporations are permitted to spend money on political speech. So super PACs — allegedly independent political action committees that can collect unlimited cash — regularly disclose corporate contributors.
But transparency can be a bit blurry at times. In 2011, the Mitt Romney-linked Restore our Future super PAC reported a $1 million contribution from “W Spann LLC.” Never heard of it? Neither had several enterprising reporters, who learned that its address in New York was the same as that of Bain Capital — Romney’s former firm. After the press demanded to know what Romney was hiding, a former Bain executive came forward to say that the donation was his. He had given it through a shell corporation that his lawyer had created for that purpose.
How often does this happen? What if W Spann had been funded by another corporation or a foreign national — one whose lawyers had been a little less obvious when picking an address? Disclosure isn’t the same as transparency.
2. Super PACs don’t corrupt politics because they operate independently of the campaigns they support.
In Citizens United, the high court said that the government may regulate only political activity that has the potential to corrupt and that independent corporate spending does not fall into that category.
But the Federal Election Commission permits “common vendors” (such as pollsters and media firms) to be used by candidates and super PACs. It lets candidates solicit funds for super PACs, endorse them and appear at their events. Financial backers of these groups can travel with candidates and advise them on policy. And the people running them can be closely tied to the candidates.
Sheldon Adelson and his family donated $16.5 million to a super PAC supporting Newt Gingrich, Winning Our Future — more than 85 percent of its receipts. He also conferred privately with the candidate in Las Vegas. Foster Friess, who bankrolled the pro-Rick Santorum Red White and Blue Fund, traveled with Santorum to campaign events and stood beside him onstage. Gov. Rick Perry’s super PAC manager, Mike Toomey, was a business partner of Perry’s campaign manager and a former chief of staff to the governor. And Bill Burton, head of the super PAC backing President Obama, is a former White House aide.
Super PACs are essentially another bank account for candidates — one that, because of Citizens United, can accept unlimited money. The court created a constitutional right for corporations and unions to make “independent expenditures” that are not really independent. Such spending links candidates to major funders who want something from government, and this may be corrupting.
3. Corporations were banned from political activity until the Citizens United decision.
Corporations and unions routinely participated in federal elections before the ruling. They could pay for and control political action committees that could raise and spend unlimited money on advertising on behalf of candidates, but the funds had to be voluntarily contributed by individuals — executives, shareholders, employees or union members and their families. In addition, corporations and unions could endorse candidates, sponsor candidate appearances and pay for voting drives.
Of course, individuals have always been able to spend unlimited money to help elect or defeat candidates through political advertising. The difference now is that corporations and unions can act as individuals, spending their shareholders’ and members’ money without their consent or knowledge.
4. Billionaires gave the same amount of money before Citizens United.
While individuals had been able to make unlimited independent expenditures to support political campaigns since the Supreme Court’s 1976 decision in Buckley v. Valeo, they were strictly limited in how much they could give directly to candidates and couldn’t hide behind a political committee such as a super PAC. Instead, they had to put their names on ads, disclosing that they had paid for them. Few were willing.
Now, we are seeing individual contributions unlike any before. Since billionaires can disappear behind anodyne PAC names such as Restore our Future, they are opening their pocketbooks.
While about 20 percent of super PAC money comes from corporate sources, billionaires and companies wary of publicity can also donate to tax-exempt organizations, such as Crossroads GPS — Karl Rove’s group — and the U.S. Chamber of Commerce. None of these have to disclose their donors. And after Citizens United, these groups can also spend unlimited amounts on campaign advertisements for candidates, though most of their budget must go toward “social welfare” — which can include “issue ads” and lobbying.
In his concurrence in Doe v. Reed, a case that dealt with disclosing referendum signatures, Justice Antonin Scalia did not mince words when he wrote of the dangers of politics without disclosure: “Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed.”
5. Super PAC spending will make the difference in the presidential election.
Super PACs have spent more than $100 million on the 2012 Republican primary race, and Obama has encouraged Democratic donors to contribute to liberal super PACs to compete. Will this unprecedented wave of money wash over the general-election contest this fall?
Probably not. In 2008, the two major parties spent $1.5 billionwithout super PACs. With that type of money around this fall, it will be difficult for super PAC dollars to have the same effect they have had in the primaries. While these groups may spend money in key states to influence the presidential race, it is far more likely that they will concentrate on close Senate and House contests, where an extra $5 million or $10 million would be a large percentage of campaign expenditures — and could make a huge difference.
Trevor Potter, a former chairman of the Federal Election Commission, is president of the Campaign Legal Center. He is a member of the law firm Caplin & Drysdale.
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