Election Spending Skyrockets After 'Citizens United'

NEAL CONAN, host:

This is TALK OF THE NATION. I'm Neal Conan, in Washington.

In January, the Supreme Court issued a landmark decision in a case called Citizens United that effectively rewrote campaign finance laws. Corporations and unions, the court ruled, have the same free speech rights as individuals and can spend as much as they would like to influence public debate.

Like individuals, they are still restricted on how much they can donate to individual candidates, but they can run unlimited ads on issues or ads that attack candidates for one position or another.

Regulations also allow them to hide the source of that spending, and, well, that all contributes to what promises to be record spending for a midterm election.

Later in the hour, the media circus that's erupted amid the shrines for the trapped miners in Chile. But first, we'll follow the money.

Few know more about all this than our own Peter Overby. If you'd like to pick his brain on money and the midterms, give us a call: 800-989-8255. Email us: talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.

Peter Overby's title is correspondent for power, money and influence. Peter, with a title like that, you must get a lot of bribes.

PETER OVERBY: It hasn't happened yet. I keep waiting. No.

(Soundbite of laughter)

OVERBY: But it hasn't happened yet. One small, but meaningful addendum to what you said: Corporations and unions cannot give money directly to candidates and the national party committees. They never could, and they still can't. That was not part of the Citizens United case.

CONAN: But it's not effectively, this is not about contributions to candidates. It's about contributions that affect the national debate.

OVERBY: Right. What the decision did was open the doors for the corporations and the unions to be full-throated participants in the political campaigns. They can run ads that say, you know, vote for Joe Dokes, he's a hero, and vote against John Smith. He's a crook.

CONAN: That sort of thing.

OVERBY: Yeah.

CONAN: And have we seen an actual effect from this?

OVERBY: That's a great question. We've seen a little bit. The classic example is the ad, excuse me, the ad that a group in Minnesota put up supporting the Republican candidate for governor there. And the ad had money financing it from Target and Best Buy, among other corporations.

And Target got a huge amount of grief for this. The candidate has very conservative social views that are pretty dissonant with Target's marketing image of being sort of hip, urban, you know...

CONAN: The old Target image, yes.

OVERBY: Precisely. Yes. Target was not the one that put the money in. It was Target that was interested in a better business climate, which this guy is promising to give to Minnesota.

CONAN: And there are any number of circumstances, though, where people say we can't identify who is funding these ads.

OVERBY: Right. The Target case is noteworthy because the group that they gave to is a political committee that has to disclose, under federal and state law. There is a lot of money flowing now into what are called 501(c)(4) groups -sorry for that - advocacy groups that are not considered political committees in the federal election law.

They're not political committees, but they are playing politics extremely vigorously this cycle.

CONAN: And as we look at these various groups, what's the difference between these kinds of ads and the ads that we saw - for example, well, the Swiftboat ads that everybody denounced as factually challenged a few years ago in the John Kerry campaign? They weren't what's the difference between those and these?

OVERBY: Legally, the difference is that Swiftboat Veterans was a political committee, had to disclose its donors. And under the Citizens United decision, they can use Swiftboats could use that corporate money, if it were around now, to say, you know, John Kerry lied about his military record - which is what they said - so you should vote for George Bush. They could add that.

I see. And before, they could only say John Kerry lied about his military record, and therefore is not trustable, or something like that.

OVERBY: Exactly. And the...

CONAN: Just to go back one more time before we get a lot of emails - widely disproven. Okay.

OVERBY: Yes, okay. I'm not talking about content here. I'm just talking about message. The thing about this nuance in the message is that even most candidate ads don't say vote for or vote against. So, in a way, what the decision mainly does is it gives corporations a higher comfort level in getting involved in this.

They're not as close to some legal line that they might accidentally go over, and the corporate counsel might view this less skeptically now.

CONAN: And as we see how this money is flowing in, is it going well, tracing the money, for one thing. Do these committees and groups, after the election, have to disclose who funded what?

OVERBY: Some of them do. Some of them don't. The advocacy groups, the 501(c)(4)s, don't. A 501(c) organization, under federal tax law, basically does not have to disclose its donors. There are very few exceptions to that.

And so a group like Americans for Job Security, for instance, which is a (c)(4), we don't know who's funding it. It's been around for several election cycles. We don't know who funded it then. We don't know who's funding it now.

CONAN: And by the way, when you refer to these groups by those numbers, those abstruse-sounding numbers, this refers to their tax status.

OVERBY: Yes, yes. And I'll try to stay away from those.

(Soundbite of laughter)

CONAN: Well, we all try to stay away from those. 800-989-8255. Email us: talk@npr.org. We're talking about campaign finance laws, how they've been changed by the Citizens United case, which was decided by the Supreme Court in January. Our guest is NPR's correspondent for power, money and influence, Peter Overby. 800-989-8255 if you'd like to pick his brain about this law. Email us: talk@npr.org. And we'll start with Joe, and Joe's on the line from St. Louis.

JOE (Caller): I'm doing quite well. My question was: With the Citizens United law, do you think that the Republicans in the Supreme Court used the timing of the Democratic democracy that's in Washington right now to make the ruling, or do you think that it was just inevitable that it would happen when there was a Democratic House, Congress and president?

CONAN: Oh, so the timing of the decision coming in the effectively about a year after Barack Obama was sworn into office as the president of the United States. Peter?

JOE: Yes.

OVERBY: The timing really has to do with the case that brought it there, the case by a group called Citizens United. And the case originated during the Democratic primaries in the '08 presidential cycle.

Citizens United, in the the issue that came before the court was making a movie documentary and advertising a movie documentary about Hillary Clinton. They were trying to knock her out of the running.

JOE: Okay.

OVERBY: So, yeah. So it started there, and this is - it was pretty much on a fast track because it was such a hot issue. Everyone knew that it was a hot issue, and so there was real pressure to get it up through the court system pretty quickly.

CONAN: And Joe, thank you very much for the call. And it's fair to say that this was the position of some in the Republican Party. Mitch McConnell - the minority leader in the Senate, now the minority leader in the Senate - argued all along that parts of the McCain-Feingold campaign finance law were violations of free speech.

OVERBY: Mm-hmm. That's right. Although it's sort of odd that the back when McCain-Feingold was on the floor, and I watched this, the idea pretty much was that full disclosure was a great thing, and that as long as we knew who was financing these things, this was good.

As things move along, that argument from conservatives gets more nuanced, that full disclosure is good when it's money going to candidates and party committees, but maybe there are some groups that should be able to participate in the political debate without us knowing who they are.

CONAN: And was that part of the Supreme Court decision, or is that part of, well, regulation?

OVERBY: That's it was not part actually, it was not part of Citizens United, clearly, because excuse me they - the justices said in some detail that disclosure's important, that they said we've never had a situation before where corporations are spending money on politics, and we have the ability for instant disclosure on the Internet.

And they sort of celebrate the idea that the instant disclosure will, you know, will bring sunshine to this. But they didn't tell Congress to do anything about it.

CONAN: Let's go next to Kirsten. Kirsten is in San Antonio.

KIRSTEN (Caller): Good afternoon. I have a quick question regarding these organizations that don't have to disclose who their donors are. If I'm a candidate that one of these organizations puts an ad out, whether radio or TV, if it is completely false, how what is my recourse to sue for slander? Is the organization sued, even though you don't really know who they are or who's funding them?

CONAN: A slander law is very difficult to prove in this country, but Peter Overby.

OVERBY: Yeah. Slander law is not something I know a great deal about. On the face of it, I'd say that as a candidate for public office, you'd have a hard time making your case.

But there are arguments, legal arguments going on behind the scenes all the time between campaign - lawyers for campaigns and lawyers for the advocacy groups battling over the details of the ads.

You know, the campaign will write to the TV station, saying you've got to take this ad off the air because it is making false statements, because the TV station is vulnerable in this, as the messenger. They're in the crossfire here.

And so the campaign will write that letter. Then the group will write its letters defending the statements in the ad, and it goes back and forth.

CONAN: We're talking with NPR thank you, by the way, Kirsten, for the phone call. Appreciate it. We're talking with NPR correspondent Peter Overby. If you'd like to pick his brain on money and the midterms, give us a call: 800-989-8255. Email us: talk@npr.org.

When we come back, who's cashing in on this flood of campaign money? And is it fair?

Stay with us. I'm Neal Conan. It's the TALK OF THE NATION, from NPR News.

(Soundbite of music)

CONAN: This is TALK OF THE NATION, from NPR News.. I'm Neal Conan, in Washington.

Weeks before what will be the most expensive midterm elections in history, we're following the money. At least $3.7 billion, maybe as much as $4 billion by one count will be spent this time around. That's in spite of the dragging economy.

So who's spending it? Who's giving it? Who's cashing in the most? Peter Overby is with us, NPR's correspondent who covers money, power and influence. If you'd like to pick his brain on money and the midterms: 800-989-8255. Email us: talk@npr.org.

And joining us now is Ezra Klein, who blogs on economic policy for the Washington Post. He joins us from the studios at the newspaper. Nice to have you back on the program.

Mr. EZRA KLEIN (Economic Policy Blogger, Washington Post): Hi, Neal.

CONAN: And Sean Parnell, president of the Center for Competitive Politics in Alexandria, Virginia. He's been kind enough to join us here in Studio 3A. Thanks very much for coming in.

Mr. SEAN PARNELL (President, Center for Competitive Politics): Thank you for having me, Neal.

CONAN: And Ezra, beginning with you, we're not talking about the constitutional basis of the Supreme Court decision anymore. But you point out Democrats have, as a result of it, been outspent seven-to-one in recent weeks. How's that changing things?

Mr. KLEIN: Well, that comes from a new Washington Post analysis we did I think about a week or two ago, and it's changing things in the way money changes things, right.

And one thing that I think is important here is it doesn't just change things in an election. A candidate with a lot of money who outspends a candidate with very little money is likely to win.

It changes things in the next election and the one after that, by creating a new normal in which candidates can expect if they cross powerful interests, that the powerful interests can spend an unlimited amount of money to make an example of them. It makes them much, much, much less likely to cross that interest.

CONAN: And is it...

Mr. KLEIN: So what you're creating is a bigger stick for the most powerful people in America.

CONAN: And is it your argument that this decision and the new world structurally favors one party over the other?

Mr. KLEIN: It is structurally favoring Republicans for now. Republicans are raising about seven or eight-to-one, although Democrats raised, I believe, more money than Republicans did in 2006. So this does go back and forth.

What I would say is that structurally, this is a bad thing for citizens. It is a bad thing for those of us who are not part of large corporations who have tens of millions of dollars to spend in order to push politicians back into line for our preferences.

CONAN: Sean Parnell?

Mr. PARNELL: Yeah. I think that maybe Ezra's not giving quite the complete picture. While the independent spending does seem, at this point, to favor Republicans, the fact is that at the level of national political parties, the congressional and senatorial campaign committees, the candidates themselves, the Democrats still enjoy a very substantial fundraising edge.

What Citizens United, what speechnow.org, what the current environment permits is it allows independent voices to come into the political process and actually aid challengers that would otherwise be swamped by the, in this case, the incumbent Democrats. In future years, it may well be independent spending that is helping, you know, Democrats who are helping incumbent Republicans.

So I don't think that it's really accurate to simply say that oh, well, the structure, you know, fundamentally favors Republicans. And one final thing, you know, there are plenty of voices, fairly powerful voices, on all sides of this.

Ezra talks about, you know, candidates not wanting to cross powerful interests. Well, the AFL-CIO and the SEIU are - have pledged to spend about $100 million, I think, in this election, which is more than the chamber is talking about, spending about...

CONAN: Chamber of Commerce.

Mr. PARNELL: ...yeah, the Chamber of Commerce is talking about spending. So unless you're going to go to Congress and basically do nothing, you're going to cross either the Chamber of Commerce or the AFL-CIO. So I simply don't think it's very, you know, realistic to say that candidates are going to shy away from taking positions.

CONAN: Ezra Klein, it's fair to say, you talked about corporations, unions are included in this, too.

Mr. KLEIN: And it goes back to the - back to my analysis. I mean, I believe my friend here thinks he's disagreeing with me, but I don't believe we are. He's saying very rich, very powerful interests from both sides will have a much, much large effect on campaigns, and so am I. I'm saying that that is a bad thing.

Right now, it is favoring Republicans. In the future, it might favor Democrats, but I don't think it is something we want for our democracy one way or another.

Now, I don't question the constitutional basis of the decision. What I do think it needs to make us wonder about is whether or not the way we're funding these campaigns works on the base level.

One of the ideas that has gained a lot of currency in recent years is something called small-donor democracy, which is where you set up a fund, and small contributions, $250 contributions and under, from individuals like you and me, would be magnified by this fund. They would become $500, $750, $1,000 contributions.

And that way, it would become much more viable for an individual to run a challenge or run a campaign based on no union, based on no corporate money.

But right now, in a world where unions and corporations can come in and spent $10 million, $20 million, $50 million - I mean, if they really want to defeat you, they can spend whatever they want. You really have no recourse against that.

CONAN: Just to a point, Ezra, you work for the Washington Post. I work for National Public Radio. You and me are ethically prohibited from donating anything.

Mr. KLEIN: That's true. We don't donate anything.

CONAN: Anyway, but Sean Parnell, you wanted to get back on the...

Mr. KLEIN: So any politicians hearing me, you get nothing from me.

(Soundbite of laughter)

Mr. PARNELL: Well, no politicians are getting anything from me, either. I don't find any out there that I actually like these days.

But I what Ezra's talking about when he talks about a fund is taxpayer dollars going directly to political candidates. And that's something that, depending on how the poll questions are asked, is kind of popular to wildly unpopular.

Generally speaking, you see a real significant reluctance among the American public to see tax dollars flowing directly into the campaigns of politicians.

And, you know, getting back to what Ezra said a little bit earlier, he's talked about the AFL-CIO and corporations as if these are entities that exist on their own. The AFL-CIO represents millions, if not tens of millions of Americans who happen to be members of unions, or their family members are members of unions.

And, you know, I don't think the AFL-CIO would believe that they are a special interest. I think they would tell you that they represent the interests of lots of Americans, and I think that the shareholders of Exxon-Mobil, the millions of them through their mutual funds, 401(k)s, et cetera, would also tell you that they're not special interests, powerful interests.

They are American citizens, and through the variety of institutions that they participate in - whether it's shareholders or members or donors - it's their interests.

It is, in fact, the American public's interests that are being promoted through groups like the Chamber, like the AFL-CIO, like Planned Parenthood, the National Rifle Association, et cetera.

CONAN: Peter, just a quick check. Two years ago, we were talking about another money phenomenon, and that was small donations through the Internet. How big a factor is that compared to this? Has this overwhelmed that?

OVERBY: Well, a lot of those small donors are sitting this one out, it seems. You don't have anything like the fire for candidates, especially on the Democratic side, that you had two years ago. And the Democrats were the ones with the real advantage in online fundraising.

So you have Republicans who are really pumped about this election. You have business interests that are really pumped. You have the key party organizations. And on the Democratic side, you have a lot of disaffected voters, and you have big donors who have kind of taken a walk.

CONAN: Will, let's see if we can get a caller in on the conversation. This is Tom, Tom with us from Wilmington, Delaware.

TOM (Caller): Hi, you guys got a great show going on. I need to ask: Are these donations, these corporate donations that are mysterious, are they tax-deductable? And won't they have to show it somewhere on their returns, and won't we be able to find out that way?

CONAN: Peter? Or actually, Sean is raising his finger. He may know about this.

Mr. PARNELL: Yeah, donations to, like, 501(c)(4) organizations, trade organizations, are not tax deductable, as I understand it. It's 501(c)(3) organizations, which are completely prohibited from engaging in any sort of electoral activity. Those are the contributions that are tax deductable. But otherwise, no. Yeah, yeah. So...

TOM: So we won't be able to find out at the end of the year?

CONAN: Not that way.

Mr. PARNELL: Yeah, that's right. Sometimes, corporations brag about contributions they make to 501(c)(4)s, but the closer you get to politics, the less likely they are to do that.

TOM: Thanks, guys. I appreciate it.

CONAN: Thanks for the call, Tom. Here's an email question.

Mr. KLEIN: If I could jump in on...

CONAN: Ezra, go ahead. I'm sorry.

Mr. KLEIN: If I could just jump in on this, I think it gets to an important point here, right, which is that if we're dealing with people who are really, that are broad interests - and I would happily tell and Exxon and AFL-CIO I consider them special interests.

But if you take that point, and you say these are broad interests working on behalf of the American people, then you have to ask yourself: Why aren't they disclosing it? Disclosure is voluntary. There isn't a law against them saying, listen, this is Exxon's ad. This is the AFL-CIO's ad.

But if, in fact, what they're doing is funneling money through a third party because they don't want to be in front of it, well that probably tells you something, that this is not money that the public, if they heard about where it was coming from, would consider to be their money, would consider to be in their interest.

And so this disclosure element is an important part of this. Nobody's saying corporations shouldn't be able to spend money on American politics or interests shouldn't be able to. But the fact of the matter is that we should know where it's coming from so people can understand the context behind what they're seeing on their television.

CONAN: Sean Parnell?

Mr. PARNELL: Yeah. You know, there is a very strong tradition in America that you do have the right to speak anonymously in politics. You go back to the Federalist Papers. It was not until after the passage of the ratification of the Constitution that it was known that it was Hamilton, Jay and Madison who wrote those.

There's a very famous case, 1958, where the Supreme Court, you know, ruled that no, the state of Alabama did not have the right to force the NAACP to disclose their members and donors. And I think everybody understands why that would have been a terrible thing.

The fact is, lots of donors do prefer to remain anonymous for a variety reasons. You know, just to cite two, there is a tradition in, you know, among many Christians of not revealing their charity. And if you consider donating to a social services advocacy group to be a form of charity, then no, you're not going to want to have that out there.

CONAN: The IRS doesn't, but...

Mr. PARNELL: That is correct. You do have to disclose to the IRS, but, as far as public disclosure, there's lots of reasons people might not want to have their names disclosed. And there's also lots of reasons people might want to simply give to the chamber. The fact of the matter is, if you're a smaller corporation, you don't have the political expertise to be running, you know, a lot of political ads. It's a lot easier for you to simply give your money to the chamber of commerce who does have the expertise. The same thing for Planned Parenthood. You might be pro-choice. You might want to get out there and speak, and you might also think I don't know the first thing about running political ads. I'm going to give it to Planned Parenthood and let them do it.

CONAN: Peter?

OVERBY: I just came back, the end of the week, from Pittsburgh. Andrea Seabrook and I went up there to do a story about outside groups advertising. And we spent a couple of hours one evening in a neighborhood pub, which was a rough assignment, asking people what they thought of the ads that they were seeing on TV, because Pittsburgh is a target for a lot of this advertising - a lot of hot races there. And one of the things that popped out of these ads - really surprised me - was people resented the anonymity of, you know, a group that they couldn't tell who was behind it. And they said, over and over again, that not knowing who's funding the ad discredited the ad for them.

CONAN: It's interesting. Look, I know you're not going to take a position on any these races. But Yuengling or Rolling Rock?

(Soundbite of laughter)

OVERBY: It was a local ale. Sorry.

CONAN: Okay. Anyway...

Mr. PARNELL: And if American voters decide that anonymity is something that bothers them, then they're certainly free to say, you know what, I'm not going to listen to any group that I don't understand who's funding them. But I think when we're talking about the chamber of commerce, everybody pretty much understands what they represent - but there are other groups.

OVERBY: Yeah, a lot of these...

CONAN: Go ahead.

OVERBY: ...a lot of groups aren't the chamber. And one thing we should be clear on, voters did make a decision on this. They elected two guys, John McCain and Russ Feingold, and then they elected a bunch of other politicians. And they communicated their preference to those politicians for a bill that would take away the anonymity of these contributions.

And then the Supreme Court came in and made a different ruling. So we can talk about traditions, but it is very clear there was a - the way we do and make decisions in this democracy. There was a decision made that's anonymous, a very, very large sum of donations were a problem in American politics. We're going to get rid of them. And now, the Supreme Court and, you know, you can argue if it was for good or bad reasons, said, you know, we're not going to allow that.

Now, the question is, how do we get around that if we want to? But this is not, you know, this is not like we have broken with tradition. We have made a decision as a (unintelligible) to change our elections in a way that we thought would make them more legitimate and...

Mr. KLEIN: But the court makes a lot of decisions that a lot of people don't like. But quickly...

Mr. PARNELL: Right. Quickly, I would just say that we actually did have an election where John McCain got to take - make his case to the American public, and instead, they chose to elect Barack Obama. So...

OVERBY: But that was not on McCain-Feingold.

CONAN: All right. Let's...

OVERBY: Obama supports disclosure.

CONAN: Ezra Klein there, from The Washington Post, where he blogs on economic policy. Also with us, Sean Parnell, president of the Center for Competitive Politics. And Peter Overby, NPR's correspondent who covers power, money and influence. You're listening to TALK OF THE NATION from NPR News.

Email question from Don(ph) in Ann Arbor. Don't many ostensibly American corporations have significant foreign ownership? Thus, how can we be sure foreign influence is not part of the mix when corporations are allowed to contribute to American election campaigns? And, Peter, I know this was part of the Democratic argument.

OVERBY: Yeah, and how good a part of it the argument it is, I can't say. I mean, we don't know, you know, if there is foreign money coming in for advertising. You know, we don't know. We do know that the part of the law that bans foreign money - foreign money from individuals - money from foreign individuals, money from foreign corporations. We do know that that part of the law is intact after Citizens United. Citizens United didn't address that. But it's also true that there are people who see an opening here, that it's starting to become a gray area - whether corporations, because so many of them reach across international lines, there's a question whether that ban on foreign money is going to stay there.

CONAN: Let's see if we can get one more caller in before we have to go, and let's go to - Erika(ph), are you there? Hello, Erika, are you there?

Mr. WILLIAM DAVIDSON(ph) (Caller): Hello.

CONAN: Hi. Oh, I'm sorry. This is obviously not Erika. But go ahead.

Mr. DAVIDSON: Oh, this is...

(Soundbite of laughter)

Mr. DAVIDSON: This is William Davidson. I cannot believe I'm on the air, because I didn't even get to the screener.

CONAN: Well, that was my mistake but go ahead.

Mr. DAVIDSON: Okay. My question is, Mitch McConnell said that, you know, the bill for disclosure would just simply be, you know, a naked attempt by the Democrats to gain political advantage. So my question is, I guess, to Sean, what exactly is the disadvantage to the Republicans of disclosing the truth about who the contributors are?

Mr. PARNELL: Sure. That the disclose act had many provisions. One of them - and this was the one that probably was most contentious in terms of tilting the playing field away from Republicans - was basically a requirement that any corporation that had government contracts over $10 million would be completely prohibited from engaging in any independent expenditures. Now, to give you some idea of what we're talking about, we're not just talking about Boeing and Raytheon, companies where I think everybody would say yes. These are companies that are primarily government contractors. We're talking about PepsiCo, because Pepsi it turns out sells a lot of their products to the military PX system, who then sell to our men and women in uniform.

So it was a very broad-based ban that, just a brief review by my organization, found that about half of the 50 largest corporations in America would be completely prohibited from engaging in any independent expenditure, meanwhile no unions would be affected by it. That was probably one of the biggest points of contention there. There was also some stuff that would require corporations that had even minority foreign ownership would be banned, that there was no similar provision affecting unions. Unions do have foreign membership, but it is very clearly designed to limit what are seen as pro-Republican voices while giving pro-Democratic voices a pass.

CONAN: Very quickly, we're almost out of time, but Sean, would you favor some regulation that says you must disclose - universal?

Mr. PARNELL: Universal, heavens, no.

CONAN: Ezra, would you prefer a universal disclosure law?

Mr. KLEIN: I would.

CONAN: All right. That was Ezra Klein, the economic policy blogger at The Washington Post. Sean Parnell with us, here in Studio 3A, president at the Center for Competitive Politics. Our thanks, as well, to NPR's Peter Overby who covers power, money and influence.

Mr. OVERBY: Good to be here.

CONAN: Up next, the rescue of 33 miners in Chile may begin today. The drama up to rivals that below. Stay with us. It's the TALK OF THE NATION from NPR News.

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