America Doesn't Need Another CREEP
There is a fresh Super PAC on the scene called CREEP. This is an homage to the original Committee for the Re-Election of the President or (CREEP ‘72), which broke campaign finance laws in the reelection of Richard Nixon. As revealed by the Watergate investigations, sins CREEP ‘72 committed included accepting illegal, laundered corporate contributions $10,000 at a time—often in cash. The last thing this country needs is another CREEP or another Watergate.
Unfortunately, the risk of a modern, Watergate-scale money-in-politics scandal is magnified by the Supreme Court’s Citizens United decision, which invites unlimited corporate and union expenditures into elections.
June 17, 2012 marks the 40th anniversary of Watergate. Of course, saying the word “Watergate” is an instant Rorschach test. The word could mean anything from an edifice, to an illegal entry, to an Executive exit. What was actually at the heart of the scandal was not a botched burglary, but rather good old-fashioned corruption and graft.
Here is a refresher course on some of the quid pro quo corruption in the Nixon White House: $250,000 contributions for ambassadorial appointments, a $400,000 pledge to pay the RNC’s 1972 convention tab by ITT in exchange for settling an anti-trust case on favorable terms, and a $2 million contribution pledge for $100 million in price supports for milk. Not pretty, especially when you remember that those figures are in 1972 dollars. (In 2012 dollars, those amounts would be roughly $1.4 million, $2.2 million and $11 million, respectively.) The money for the DNC burglary at the Watergate building also included illegal campaign contributions. The ultimate victim of Nixon’s so-called dirty tricks was the American voter.
Because the Senate’s Watergate hearings were broadcast on television, the revelations of White House misconduct, including the campaign finance shenanigans, were beamed right into American living rooms. Just when it looked like the disgraced President would be held accountable, Ford’s pardon allowed Nixon to walk off into the sunset scott-free.
Watergate and its aftermath led to a grassroots campaign to clean up the way Washington did business. Congress reacted to Watergate’s corruption with a raft of new of laws ranging from the Special Prosecutor’s statute (to prevent another Saturday Night Massacre), the Tunney Act (to require anti-trust settlements like ITT’s to go before a judge), the Foreign Corrupt Practices Act (to bar companies from bribing foreign officials to get business) and the Federal Election Campaign Act of 1974 (FECA) (to provide strong campaign finance rules for federal candidates).
Some of the Watergate reforms fared better than others. FECA was besieged from the moment President Ford’s signature on the law dried. The Supreme Court took big and small bites out of FECA in 1976 in the Buckley v. Valeo case, coming to a misguided conclusion that money is speech. The Court doubled down on this nonsense in Citizens United holding, a “prohibition on corporate independent expenditures is thus a ban on speech.”
Those hostile to campaign finance reform have waged a 35 year assault on FECA (and its kid brother BCRA for a decade), running the gamut from attempts to pick apart FEC regs word by word, to facial challenges which claim whole sections of the federal election statutes are unconstitutional. For over three decades, the litigation in this area has been relentless.
For much of that time, there was a tit-for-tat stalemate in campaign finance lawsuits. The regulators got to keep disclosure, contributions limits and public financing, while the deregulators got to spend as much as they wanted on ballot measures and issue ads.
However, deregulation of money-in-politics law has been ascendant at the Supreme Court ever since John Roberts donned his Chief Justice robe for the first time six years ago. In that short time, campaign finance laws have been rapidly stuck down. The Court invalidated Vermont’s contribution limits as too low, struck the federal Millionaires’ Amendment for discriminating against the rich, killed the federal corporate expenditure limit and tried to mangle every state public financing system from the inside out. What is left today after this string of decisions are fewer restrictions in key areas of campaign finance than existed in Nixon’s day, like the ability of corporations and unions to spend freely in federal elections.
In Nixon’s 1972 election, spending by American corporations in support of his reelection would have been illegal. But 40 years after Watergate, thanks to Citizens United, corporations and unions can spend as much as they want for and against all federal candidates. The only limit is the size of their bank accounts. Is it any wonder that former presidential candidate John McCain keeps going off message to predict a huge scandal because of Citizens United? As Senator McCain said, “I promise you, there will be huge scandals because there’s too much money washing around, too much of it we don’t know who’s behind it and too much corruption associated with that kind of money. There will be major scandals.”
The policy options to address today’s money-in-politics problems have been curtailed by five Supreme Court Justices, but there are still constitutional actions state legislators, federal regulators, Congress and the President can undertake to address the issue. This is not the time for a do-nothing government to sit by as elections go dark, and Super PACs become the new normal. Democracy has a right to defend itself from corruption, both the venal quid pro quo variety and the equally insidious strain of expenditures for access.
Starting at the top, the President can issue executive orders about transparency in the executive branch contracting and could appoint FEC Commissioners who believe in robust enforcement of existing campaign finance laws.
Congress could improve transparency for both voters and investors so that the public can at least see which corporations are spending in elections. Furthermore, Congress could give shareholders a “say on politics” through a vote. And it could offer pubic financing to congressional candidates who need an alternative to the dialing-for-dollars marathon that federal elections have become. The DISCLOSE Act, the Shareholder Protection Act, and the Fair Elections Now Act could accomplish these policy goals.
Many pre-existing federal regulations were not written with corporate political spenders in mind. Federal regulators could spruce up their regulations to match the new post-Citizens United political spenders. The FCC took an important step forward on April 27, 2012 by adopting a new rule to require greater transparency for political ads by TV broadcasters. (I’m looking at you: IRS, SEC, and FEC.)
For example, there is a petition pending before the SEC from ten prominent law professors asking for a new disclosure rule for publicly traded companies that spend in elections. This petition has received over 250,000 comments in support, including comments from quotidian small investors, Members of Congress, state comptrollers, state treasurers and money managers with hundreds of billions of dollars of skin in the game. SEC Commissioner Aguilar has voiced strong support for the transparency petition as well, but his agency has yet to take up rule-making. The lack of a new SEC rule leaves investors and voters in the dark.
Finally, states could scale these same reforms for state elections as well. Right after Citizens United, Iowa adopted a law requiring board approval of corporate political spending, Connecticut beefed up its on-ad disclaimer requirements, and Maryland decided shareholders should know when corporations are spending in its elections. These forward-thinking states have moved faster than their federal counterparts.
A Watergate redux feels palpably close when money’s role in choosing a viable candidate waxes, as transparency simultaneously wanes. After all, once the general election is over, all of those big independent spenders can come knocking at the White House door with a wish list worthy of the Nixon era: a plum appointment, a favorable resolution of messy federal investigation or some good old fashioned graft at the tax payers’ expense.
The threat when a mega spender makes a lobbying visit in Washington is implicit: give me what I want, or next primary season, I’ll use my millions to back a different and more obedient horse.