There is almost nothing that is against the law when it comes to spending political money. The 2012 presidential race was the most expensive in the history of the United States. Interestingly enough a significant amount of its money did not come from campaigns but rather from outside groups. In United States of America money is monopolizing the political discourse. who is responsible for that? The SUPER PACS! What are the SUPER PACS and what do they do? These outside spending groups – sometimes referred to as dark money groups - serve as megaphones for millionaires and they have all the resources to drown out the average citizens’ voice. They are decreasing the power of average citizens to influence the political outcome of the elections and to increase the influence of businesses and commercial interests. To understand the magnitude of who is behind the scenes pulling the strings join us for The Money Lobby.
Romney and Obama Speechs
Piro: 2012 presidential election was the most expenzsive in the
united states. Signi?cant amount of money did not come from spending
campaigns but rather from outside groups. this spedning, by superpacs
and similar gorups has changed the face of campaigns and elections of the
Piro: I have invited my friends over to discuss the issue and watch
the ?nal presidential debate. Terry — who works at a non—pro?t at colombia
university, Aneida — a former student of mine who did research on Occupy
Wall Street and Mehmet — a colleague of mine at State University of New
Mehmet: They had spent over a total of billion combined, back in
in 2004. This had been a trend for a while, the increased amount of
spending, of course this was before the Citizens United Decision. So the
trend in spending had already been increasing in massive amounts, but
with the recent Citizens United ruling, spending has increased not just by
presidential campaigns but by outside groups trying to in?uence what is
happening, in terms of trying to in?uence voter decisions, in?uence the
public. So private interest is now directly involved in the presidential
campaign. This has obvious implications about whose running. You have to be a rich man to
run. A rich man with connections. The democracy well what we understand as a democratic
process seems more like a...p|utocracy.
Piro: Right and what it means for individuals who want to give
small amounts of money. Does it matter at all? Like if I want to make a
small donation to a political campaign. If that is going to be countered by
a huge donation, it is going to discourage me from giving at all.
.(04:48) Anieda: Its interesting you say that because lot of my friends
that were so enthusiastic about voting in 2008 are not voting this year
for this exact reason that you saying. This is my ?rst time to vote, I just
became a citizen and I'm looking forward to voting, but I am
disappointed in how the funding is crowding out the voices. However
if we don't vote then what's left? Then the hope is completely gone.
At least voting keeps people engaged in the process and debate and hopefully things will
change in 8 years from.
Piro: As we're talking about the super—pac, because many would
argue this means this means privatization of politics. its a great example
democracy itself in established Western liberal democracies is undergoing
a crisis. So for instance as we are talking about the Super PACs it is a great
example because many would argue that this means privatization of
politics. Big interests, be it public or private, commodify the public sphere
by in?uencing or sponsoring one or another public entity. This inevitably
results in lack of transparency, lack of accountability. So then what is democracy? This is
the big question...
Piro: After Teddy Roosevelt's campaign was dirtied by a large
corporate fundraising scandal, public outcry led to the passage of the
1907 Tillman Act, America's ?rst attempt at campaign ?nance reform,
banning campaign contributions by corporations. The Publicity Act of
1910 enacted the ?rst donor disclosure requirements. In 1947, with the
Taft—Hart|ey Act, Congress expanded the ban on contributions to unions.
In reaction, unions set up the ?rst Political Action Committees (PACs),
which went on to become a major force in the world of American campaign ?nance.
Richard Briffaultz The argument was that labor was now becoming
as powerful as corporations and they should be treated the same. This
leads to a new round of campaign ?nance regulation in 1971. Congress
passes Federal Election Campaign Act which has some spending limits in it
and a lot improved disclosure. And in 1974 in response to Watergate,
Congress revises those laws and imposes fairly tight limits on both
contributions to candidates, spending by candidates, contributions to and
spending by parties and spending by independent groups supporting or opposing candidates
and enhanced disclosure and for the ?rst time adopts a public funding system for presidential
Piro: The Supreme Court had a major impact on campaign ?nance
in 1976 where the court said that money is an expression of speech, so
therefore individual spending cannot be restricted.
Amendments in 1979 to the Federal Election Campaign Act pave the way
for what becomes known as ”soft money,” which allows corporations,
unions and individuals to give unlimited amounts to national campaign
committees for ”party—bui|ding activities,” famously bene?ting Bill Clinton.
Richard Briffaultz The McCain—Feingo|d which was passed in 2002
and the Supreme Court upholds in 2003 in a way is a restoration of the
campaign ?nance system that existed in the late '70s or early '80s before
soft money and issue advocacy began to drive big holes into it.
Piro: In 2010 two major court decisions paved the way for the
creation of Super PACS. The ?rst one was Citizens United vs the FEC.
Citizens United is a conservative non—pro?t organization that created the
Anti—Hi||ary Clinton documentary during the 2008 presidential primary
campaigns. The organization was stopped from advertising the
documentary on TV on the basis of the Bi—partisan Campaign Reform Act.
Citizens United took the issue to court. The court ruled that the Bipartisan
Campaign Reform Act violated the ?rst amendment rights to freedom of speech because it
banned political spending by unions and cooporations. This was based on the idea that
money is essential to disseminating speech. The ruling speci?ed that while corporations and
union backed groups cannot directly campaign for a candidate, they can use their treasury
funds to attempt to persuade voters. the majority of court justices agreed that this would
not lead to corruption. The second court case was Speechnow.org vs FEC. Speechnow is a
non—pro?t thats sought to raise money to advocate for or against federal candidates. They
questioned the constitutionality of the spending limits imposed on them. The court case
concluded that since independent spending is not seen as corruptive, it should not be
limited. Therefore the spending of donors to organizations like Speechnow and the spending
of the organizations themselves should not be limited. Still, as with PACS these organizations
must report donors to the FEC. This new breed of political organisations became super PACS.
Mehmet: Now, you only need one wealthy donor to become a viable candidate. W
ahd candidates in the primary process who had only one or two rich backers such as New
Terry: It is extremely frightening. Because you think about the Koch brothers and
organizations like that. You know multi multi millionaires or billionaires even. And like you
say now they have that freedom and put a stamp and say, you know, you are going to be our
candidate. But that being said, it has always been, in America, for the most apart, it's about
money. I won't say you have to be a rich man to run, because Obama is not. But what is
makes me think is why is this happening? This is happening because the supreme court
ruled this way. That to me is the biggest travesty of all this mess.
Mehmet: We can argue its been happening before, ltsjust more out in the open
now. They are more brazen about openly taking up public space and public realtime and
expressing to views to in?uence the public.
Terry: But we had an actual law that would limit the amount
Mehmet :They found ways to get around it, I think before
Piro: In an environment like this, where Super PACs are in?uencing the elections, and
citizens, regular citizens, like ourselves, are left with very little little options to in?uence the
elections, what is the alternative?
Terry: Maybe it has to do with people voting on a local or state level, that may have
something to do with it
Piro: Assuming they are more responsive than on national
Terry: Right, I think you can possibly have more in?uence on your representatives
on your local and state level. And I de?nitely think civil society.
Piro: What effect does this have on future elections? Some would argue that it's
privatizing politics, so depending on how much you are donating to the super pac— that will
inevitably have an effect on what the outcome of the election will be.
Shot of daytime New York and ending shot of Piro entering NYSEC building.
Piro (voice): The gathering at my place raised some
interesting questions and money and politics so I wanted to speak to
some people who might have some insights. Could the court rulings
really have such an impact on campaigning, and if so, to what extent
Liz Kennedy: Citizens United represented a really sharp break
from prior campaign ?nance jurisdiction which had understood that
the government could regulate money in politics. In Citizens United,
Justice Kennedy decided that it was only ’quid pro quo’ corruption
that might be a justi?cation for upholding campaign ?nance rules:
Ira Glasserz The law used to be, that if you were very wealthy,
like George Soros or David Koch or Sheldon Adelson, you could spend
an unlimited amount of your own money buying ads that voiced your
opinion. But if you and two or three other people wanted to pool your
contributions, you were limited to doing via a PAC, which is an
organization that supports or opposes a candidacy, you were limited to
$5,000. There was another case, not Citizens United, but a case called
Speechnow, which basically struck that down.
Bob Biersack: How can I spend as much money independently
as I want but I can't get together with two or three my friends and do
the same thing without any limitation? And the speech now said yes,
that doesn't make any sense and so as long as all you're doing is
working independently of the candidates themselves, are not giving
money to anybody not making contributions to a candidate or you are
not making a contribution to a party or organization. So by itself that
would've meant just plain people but in combination with Citizens
United which came very close to the same time and said not only can
people do this now, but organizations and unions and corporations and trade associations in any
really any other kinds of entity to make the same independent expenditure. So now you put
these two things together, I can't be limited if I joined together with the group and there's no
restriction on the source of the funds as long as we are independent now you got the
circumstance, the situation that we faced in 2012.
Ira Glasserz :There are a lot of people who reacted to the
Citizens United decision by saying ’corporations aren't people and
therefore shouldn't have the same sort of ?rst amendment rights as
people do, as live human beings do.’ That is a very very short sighted
position; especially for liberals to take. Virtually every cause
organization is incorporated. If you were part of the civil rights
movement, it was carried through the NAACP and other civil rights
organizations that were incorporated. Every cause is carried by an organization of citizens
whose private contributions support the cause through an organization that was
incorporated. Soto say that corporations don't have ?rst amendment rights is to say that the
NAACP is not free to speak in the 1960s.
Piro: In 2012, the top 3 Superpac spenders were America
Crossroads, Restore our Future and Priorities USA Action. 90-100%
spending done by these groups was used for attack ads. What are
Superpacs and what do they do?
Liz Kennedy: Superpac isjust a term that was coined to
describe political action committees that are independent
expenditures only, so-there is a lot of ways in which money ?ows
through our system and in the past it has either gone directly through
the parties or directly through the candidates themselves, there has
also been some outside moves through outside spending principally
growing in the last decade but we really hadn't seen too much of a
move towards that prior to of course the decision in Citizens United.
Jamie Chandler: Let me just quickly encapsulate what the big
problem with Superpacs is. The ?rst part of the problem with
Superpacs is you are giving very wealthy individuals an opportunity to
eject large sums of money into presidential campaign and that then
makes the candidates more in common on appealing to them than
appealing to the large electorate. So the large amount of money is
going into democratic process.
Liz Kennedy: One of the biggest issues we've seen with
Superpacs and with the rise of this unlimited contribution vehicle is that
they're also a conduit for dark money. What the california fair election
practices and Stephen Colbert has referred to as ’legal campaign money
laundering.’The Daily Show Footage: Colbert and Steward Discuss Superpac rules.
Meredith McGehee: The Colbert report did a remarkable job of
using satire and humor in explaining the inadequacies of the current
campaign ?nance system, demonstrating what a Superpac actually is, how
there's this farcical notion that the Superpac is not coordinating with the
candidate and then showing how through the Super pack, then the dark
money group, money is transfered to ”shhh”. Showing how from the dark
many group it disappears off the facing and goes to charity and no one
knows where the money has come from and what is being spent. This
happening as he was doing this satire on the air. It was happening in reality.
Piro: Why should anyone care?Because if you are not able, if you
feel disempowered as an individual to make a difference or to in?uence the
decision making process of your elected representatives, chances are you
are going to lose faith in the political establishment. And once you lose
faith in the political establishment, once that happens, the establishment
loses legitimacy to govern you. i.e. once the bonds between citizens and
the government ceases to exist, for whatever reason, I mean the Super
PACs may be one way of facilitating this, this unfortunate process. Because
of the way media portrays politicians and because of the way that politicians are
communicating with the people, the public is becoming cynical of the entire process.
Richard Briffaultz :They are federally registered political committees
so they do have to disclose their donors. Above a certain relatively low
threshold—i think 200 dollars—and they've got to report their
expenditures. In order for them to engage in the unlimited spending, that
spending has to be independent—it cannot be coordinated with the
candidate. So in the most general way, they've got to keep their distance.
That doesn't mean they can't copy each other.
Liz Kennedy: What you see is money being given from an
original source but their identity shielded because they can give to an
organization that is a tax exempt non—pro?t corporation. They are
referred to by their title in the IRS code as 501C4's which are essentially
social welfare groups or 501 C6's which are trade association groups like
the chamber of commerce. Anyone can give any amount of money to
those organizations and know that their identity will not be disclosed to
the American people, then those groups can spend that money themselves or they can give it
to a Superpac.
Piro: In order to sway the general public, superpacs use most of
their money to buy expensive airtime on national and local television for
attack ads. they highlight the other candidates ?aws and are sometimes
very hard hitting and direct. The characters in the ads are usually
someone the average American can relate to.
Michael Beckelz:A few big dogs are the main super packs out
there in 2010 in organization called American crossroads was the biggest
super pack in terms of fundraising that was a group that was started by
GOP strategists Karl Rove and Ed Gillespie those are very powerful
in?uential Republican strategist Karl Rove used to work for president
George W. Bush and Gillespie used to work as the chairman of the
Republican national commission. So these are professional political
operatives who set up a group and unlike previous political action
committee, Superpacs had the advantage of being able to take unlimited amounts of money
and they couldn't donate that money to other candidates but what they could do was run ads
that said pretty much whatever they wanted attacking a candidate, supporting a candidate.
Craig Holman: I am Craig Holman and I am the government
affairs lobbyist for public citizen. As the government affairs lobbyist, I
focus on issues that deal with money in politics that can be campaign
?nance reform, governmental ethics, lobby reform, those types of
issues.That money totally goes undisclosed what we have seen by the
way and just in 2010 we don't have ?nal ?gures for 2012 but in 2010 we
do have ?nal ?gures. Right after the Citizens United decision happen
2010 was the ?rst election that we saw its impact and there was a 427%
increase in outside spending in 2010 elections. 427%! We don't know where that money
came from because most of it went into the 501(c4)'s and so totally undisclosed and all we
know there a whole lot more money coming in elections and we don't know where it's
Piro: According to OpenSecrets.org, Superpacs received over
$838m and spent just $622m in the 2012 elections cycle. The Superpac
that raised the most money, Restore our Future, raised $153m for
Romney. Prioritized USA Action which supports Obama raised just over
$79m. Overall $1.2b was spent in the 2012 — a signi?cant increase than
the last 22 years.
Michael Beckelz: Restore Our Future is the main pro—Mitt Romney
super PAC. It was started by several former Romney advisers, again a very
elite set of political operatives worked on-Restore Our Future's behalf
trying to elect Mitt Romney and the main Democratic super pac was a
group called priorities USA action and that group's mission was to help
reelect President Barack Obama. Priorities USA Action is produced a lot of
attack ads going after that Romney for his time at Bain capital.
Priorities USA Action ad: Romney's worldview
Liz Kennedy: These outside spending groups serve as mega
phones for millionaires and really allow those with the largest ?nancial
resources to drown out the voices of the average American citizen who
havejust as much right to be represented by their elected of?cials.
Michael Beckelz: The number one super donor was a billionaire
casino owner named Sheldon Adelson. The number one super donor
among democratic circles was Fred Ikner from Chicago. He is involved in
several media companies and was active on a lot of fronts supporting
various democratic superpacs. The amount of moneyjust doesn't quite
stack up to what Sheldon Adelson gave. Sheldon Adelson accounted $1 for
every $9 that superpacs raised.
Piro: It is uncommon for average Americans to make large
campaigns contributions. Less than 1% donated more than $200 to any
candidate or pac or political committee. You can see the voice of big
money in political ads that bombard voters leading up to elections.
Jamie Chand|er:”It's funny because whenever you ask the voters
in the poll how they feel about elections, the ?rst thing that they will say
is that the negative ads turn them off, but they are the most effective way
to turn the tide for candidate, to make their campaign better. So you can
I! see 100 good things about somebody, but as soon as you say one bad
thing about somebody—that's what the electorate remembers. But it all
really with a negative ad to be successful, it all really boils down to how
it's crafted. It's really propaganda. There are certain kinds of messaging
that are involved to in?uence a person's frame on the candidate: their
emotional feel, their personal feel and so forth. So what these advertisers do is they test these
ads with a focus group and they determine what the best is and then that is what becomes
the big add on the airwaves. Negative ads are also helpful to the candidate because they
generate free press.
Ira Glasserz: What people dislike about the so—called negative ads
is not that they are critical, you can't run a campaign without being
critical of your opponent, it is not that they are critical, what people
mean by negative ads that they don't like are irresponsible ads or
scurrilous ads, things that people say that you can never catch up to, that
aren't true. That is much more likely to happen in a situation where the
candidate is not accountable for the speech because it is the independent
person who is saying it. If David Koch goes out and runs an ad that is outrageous, you can't
hold Romney responsible for it, because by law they were supposed to be separated. But if
Koch gives Romney the money, and he takes out the ad, and then something in that ad is
irresponsible, then he can be held accountable . so to a large extent, the growth of the
superpacs severed accountability by the candidate for what was said on his behalf and that is
not a good thing. I can go out on a quarter and start talking — maybe a dozen people will walk
by me but if you want to reach a signi?cant number of people in an election you have to
spend money. Money and speech aren't the same but one depend on the other and thats the
fear, its a real fear. If only one side gets to reach people with their message it will distort
democracy. The question is what can you do about that?
Richard Briffaultz: What was striking about the 2012 electoral
cycle, particular in the primary period, was how many committees were
organized to speci?cally enhance speci?c candidates. They were set up by
former aids candidates and we hadn't seen that before. They could only be
described as ’alter—egos'. There were restictions on their ability to contact
the candidate (they had to operate independently) but these were people
who were former campaign treasurers, former chiefs of staff, former aids.
Meredith McGehee: The amount of money in my view is not the
problem. The problem is where the money is coming from and what the
expectations are in return. What happened in the elections i.e who won
and who lost is obviously important. But what is going to be even mroe
critical is what goes on now among capital hill when all of these donors
come in to cash in on their money. I think Americans full know this, they
just feel helpless to do anything about it. they know big money buys access
and in?uence What they don't know is what to do about it.
Jamie Chandler: Superpacs are here to stay so if you can't get rid
of or mitigate this ?ow of money from these few wealthy individuals what
problems can you instead solve?
Meredith McGehee:First step: disclosure. There is no reason this
113th Congress shouldn't pass the disclosure bill to make sure that the
money spent to in?uence the outcome of our elections is disclosed,
wregardless of the source. Second, the IRS. We have a president who says he
supports campaign—?nance reform. He has an IRS that has allowed the
I current rules to be so ridiculously interpreted and kind of Alice in
Wonderland interpretation. There's something the IRS can do right away to
change the rules about how you count political money and so far they've
taken no action. The Federal election commission. If you simply had commissioners who
actually did enforce the law and interpreted in the spirit of the law, you can get rid of these
candidates centered super packs like restore our future the Romney super pac or Priorities
USA that are run by the cronies of the po|iticians.That's a ?xable thing to do!. Fourth, there is
legislation pending in Congress and I think you are going to see it introduced again to try and
change the incentives in the system. There is a system right now in campaigns in which the
candidates really have no reason to do anything other than pursue the large money and there
is very few incentives for an average American to give. That needs to change.
Fred Wertheimer: The empowering citizens act ?rst of all would
enact new curbs on super PACs. More importantly, it will empower tens of
millions of citizens to make small contributions and counter the role of
super PACs. if you have large sums of money coming from many citizens,
then you dilute the power of super PACs, you reduce the potential for
corruption and you give candidates or alternative way to raise money to
?nance their elections, where they don't have to sell their souls to big-
Craig Holman: Now that this election is over, hopefully we're going
to see a lot of public pressure on the new Congress. A lot of public pressure
on the new congress, demanding that the pass legislation to open up the
books on money in politics, get some real transparency going on there and
perhaps even approving a constitutional amendment resolution. The
American public understands that democracy is under danger and they really
want something done about this that this.
Ira Glasserz :The major thrust in campaign ?nance reform laws in
the last 40 years has been to restrict spending and speech. There is an
alternative. If the problem is that you have 80% of the money, to enable
you to speak and be heard, whereas I only have 2% and it would be unfair to
run against each other because your message gets out and mine doesn't-
the remedy of that is to increase the ?oor and not to lower the ceiling.
Fred Wertheimer: We can't put spending limits on candidates
anymore. because there are outside groups that can come into their
campaigns and spend unlimited amounts of money. What we need to do is
get access to large amounts of clean campaign ?nancial resources. In my
opinion, we need to drown the big money system with lots of small
Piro: One of the biggest effects of super pacs that we should really
pay attention to is that by sponsoring ads, Super PACs are shaping the
political discussions in the media and shifting the attention of the American
public away from the real issues, such as money in politics, to good vs. bad,
democrat vs. republican etc.
Meredith McGehee: Well the federal election commission does
exactly what it was designed to do which is nothing. It is designed for
gridlock. It's an agency that is done very little to change any of the rules
about how super pacs actually run in the real world.
Liz Kennedy: We've heard a lot of concern of course from elected
of?cials who are now existing in a new realm of kind of a wild west of
money in politics where its just about who has the biggest gun and there
really isnt a sherif anymore since the FEC has really stepped back from
taking a strong enforcement role in making sense of our current system.
Bob Biersack: It was never designed to be a really forceful or
aggressive kind of organization; there were good reasons for that. You don't
want some bureaucrats in Washington imposing themselves in speci?c
elections around the country where they're effectively going to be able to
decide who wins and who loses , who gets to run for of?ce ?rst place that
feels bad to us. As we are Americans, we don't really like that.
Meredith McGehee: What is missing is the public interest here.
The whole purpose of the money in politics is to have discussion so that the
public interest is part of that. When you get here in Washington you get the
publicans versus the Democrats average—American obviously can be left out
very easily. The ’money in politics’ issue in Washington is really the umbrella
issue if you care about, you know, the environment or student fees etc. The
important decisions made in here in washington are, for a large part,
determined by what money comes into this town washing around in
different ways and has a huge in?uence on what decisions get made.
Fred Wertheimer: The interesting thing is the citizens of the
country totally object to this new system that the Supreme Court has
created. They know that corporate expenditures can buy in?uence over
government decisions . They believe that those expenditures are closer to
bribery than they are to free speech. They overwhelmingly think that super
pack should be made illegal. They overwhelmingly believe that the secret
money that is being laundered elections should be required to be disclosed.
Bob Biersack: We are talking about almost $600 million raised from
210 donors. People who would ?t on a single airplane— that number of
people was able to put more than half of billion dollars in the process this
Meredith McGehee: I have some faith that members of Congress
want to change it because many of them looked at this last election and
both were horri?ed and now I will tell you they're scared to death that they
are going to the next victim. My fear is that in this world of super pacs and
the dark money groups, this anonymous money, is that most Americans will
say my money doesn't matter, my voice as a matter and they turn off and
not only become cynical, they become apathetic and in a democracy there
is probably nothing more dangerous.
Piro: The great American poet Walt Whitman noted that the
history of democracy could not be written because democracy as he and
others knew it had not yet been built. Let's not fool ourselves, we don't live
in a perfect democracy. The point isn't that money is pouring in, which we
all know, the point is that the money is monopolizing the political discourse
and sti?ing the voices of average citizens. That said, let's not forget that
historically, democracy or not, people will rise to the occasion if the
government no longer serves the interests of the majority. So if the
government wants to preserve its own legitimacy, it must acknowledge that there are limits to
what citizens will take.
Cinematic shots of Supreme Court, Congress, people voting signs with credits