1. MONEY IN POLITICS REVIEW & UPDATE “ This political system is awash in money... The effect of all this, unfortunately, leads to cynicism and the frustration of the American people and their lack of confidence in the system. It’s got to change...” Senator John McCain January 12, 2012

2. SURVEY ON MONEY IN POLITICS ( 2015 BLOOMBERG POLL) 1. The Supreme Court’s ruling that corporations and unions may spend unlimited amounts on political causes should be overturned Nearly 9 out of 10 – & over 80% of both major parties - agreed 2. Campaign finance should be reformed so that a rich person does not have more influence than a person without money. 87% of all Americans agree

3. REASONS FOR OPPOSING RESTRICTIONS ON MONEY IN POLITICS Money allows the funding of modern communications, which is essential to reach voters. First Amendment guarantees free speech Government should not regulate political speech Political communication informs the voters. A candidate taking contributions does not mean as an elected official s/he will do favors for the contributor

4. WOULDN’T IT BE NICE IF IT WERE THIS EASY?

5. REASONS FOR RESTRICTING MONEY IN POLITICS Full disclosure could insure voters have access to sufficient info Enhance political equality. Enable candidates to compete equitably Prevent distortion of the election process. Combat corruption and undue influence in government through special access and special treatment. Reduce time spent on campaign fundraising.

6. SUPPORTERS OF RESTRICTING MONEY IN POLITICS SEE…

7. LWV POSITION ON CAMPAIGN FINANCE Methods of financing political campaigns should: Ensure the public’s right to know Combat corruption and undue influence Enable candidates to compete more equitably Allow maximum citizen participation in the political process This position is applicable to all federal campaigns for public office — presidential and congressional, primaries as well as general elections. It also may be applied to state and local campaigns. This position was last revised in 1982.

8. LWV WORK ON MONEY IN POLITICS Using this position, the League has worked toward two main goals in recent years: Transparency in financing political campaigns Fighting big money and its influence in elections and government

9. QUESTIONS/AGENDA How did we get here? What is the current situation? Why is this important to me? What are the challenges? What can I do?

10. 1 st PRESIDENTIAL ELECTION: GEORGE WASHINGTON ELECTED! Unanimous vote of electors (69 votes) 43,782 popular vote out of ~3 million people, including slaves <1.3%

11. CHANGES TO MAKE SYSTEM MORE DEMOCRATIC End property, tax payments and religious requirements African-American men get the vote and all people get equal treatment under the law Popular election of senators (17 th amendment) Expansion of the direct primary to eliminate the power of party bosses

12. CHANGES TO MAKE SYSTEM MORE DEMOCRATIC Women’s suffrage (19 th amendment) White primaries banned Elimination of poll tax and literacy tests 18-20 year olds get the vote (26 th amendment)

13. BUT ALL ALONG, $$ IS CAUSING CONCERN “Money is the mother’s milk of politics.” Jesse M. Unruh, Democratic politician and California State Treasurer, 1966

14. ANDREW JACKSON: THE FIRST MODERN CAMPAIGN (1828) Hired a campaign staff to raise $$ for rallies, parades, buttons, food and booze, and votes Rewarded supporters with political posts “To the victor belongs the spoils.”

15. “Never before was a candidate placed under such great obligation to men of wealth” - Noted Historian Election of 1872 1/4 of campaign funds donated by ONE person

16. “There are two things that are important in politics. The first is money, and I can’t remember what the second one is.” Mark Hanna, iron and coal magnate, campaign manager for Republican William McKinley 1896 McKinley raises $16 MIL (approx $460 MIL today)

17. ELECTION OF 1904 Teddy Roosevelt calls for Congress to ban “corporate contributions for any political purpose”

18. RESPONSES BY CONGRESS TO $$ IN POLITICS’ SCANDALS 1867 - 1 st law associated with campaign finance 1907 - BAN campaign contributions from banks and corporations 1910 - 1 st law requiring disclosure & contribution limits 1939 – Hatch Act 1947 - BAN campaign contributions from unions (Taft-Hartley Act)

19. $$$ IS LIKE A RIVER—IT ALWAYS FINDS A WAY

20. THE BEGINNING OF PACs—1940s Unions, trade associations, corporations and individuals form Political Action Committees (PAC) VOLUNTARY ASSOCIATIONS to allow members to donate $$$ to campaigns and political parties CAVEAT: can NOT use $$$ from general funds

21. “NOT GIVING BACK CHECKERS” 1952 -Potential VP candidate defends taking $1000s in secret donation Makes Checkers speech

22. FEDERAL ELECTIONS CAMPAIGN ACT (FECA)1971 First attempt to pass comprehensive reform Legitimizes PACs for corporations and unions Spending limits (including self-funded candidates) Stricter reporting for donations and spending After 1972 election, >7,000 cases of law violations turned over to the Justice Department

23. 1972-1974 WATERGATE SCANDAL Campaign finance and other abuses CREEP “Hush money”

24. REACTION TO WATERGATE SCANDAL: FECA AMENDMENTS, 1974 Limits contributions to campaigns by individuals, parties, PACs Limits on spending in presidential and congressional campaigns Creates the Federal Election Commission (FEC) to oversee compliance Creates voluntary system for public funding of presidential campaigns

25. SUPREME COURT RULES ON CAMPAIGN FINANCE AGAIN & AGAIN & AGAIN

26. BUCKLEY VS. VALEO (1976) CHANGES EVERYTHING The Supreme Court makes a distinction between Contributions—CAN lead to corruption & CAN be limited AND Expenditures—are FREE SPEECH & Do NOT lead to corruption This distinction is still the linchpin of campaign finance law.

27. AND CANDIDATES RESPOND BY??...FINDING LOOPHOLES 1979—”SOFT” $$ BEGINS POURING IN… Hard Money: given directly to candidates Soft Money: given to political parties for “party building” activities Unlimited amounts of money from unions and corporations begin flowing into national parties $$ starts finding its way into specific campaigns

28. MORE LOOPHOLES, MORE MONEY, MORE SCANDALS Keating S&L Scandal (1991) Clinton Lincoln Bedroom Scandal

29. ANOTHER WAY AROUND THE LAW: 527s Groups avoid registering with the FEC as PACs to avoid FECA disclosure rules and contribution limits Run issue ads  NO contributions to CANDIDATES  NO EXPRESS ADVOCACY

30. SUPREME COURT RULES—EXPRESS ADVOCACY EXCEPTION for NON-PROFITS—501(c)

31. But NO EXCEPTION for:

32. CONGRESS STEPS BACK IN: 2000 527s—MUST DISCLOSE DONORS

33. REACTION TO SOFT MONEY LOOPHOLE & 1996 election scandal: THE MCCAIN-FEINGOLD BILL (BCRA), 2002 Congress steps back in…again...in a BIG way Bans soft $$ contributions to political parties Bans sham issue ads Bans use of corporate and general funds for ads that mention candidates close to elections (electioneering communications) Creates Millionaires’ Amendment Creates “Stand by Your Ad” law (My name is….. and I approve this message) 2003—UPHELD by Supreme Court

34. WHITTLING AWAY AT THE LAW 2007 - Court overturns limitation on outside group political ads close to the election 2008 – Strikes down Millionaires Amendment 2008 – Extends both rulings to states RESULT: BIG increase in outside political ads

35. CITIZENS UNITED Eliminated limits on contributions and expenditures by independent outside groups Who are these groups? Super PACs and politically active non-profits Affirmed the right of all corporations to spend unlimited money independently (i.e., cannot coordinate with campaigns) Ban on corporate contributions to candidates remains Overturns regulations & upholds disclosure of spending on issue ads Upholds disclosure requirements in elections

36. CITIZENS UNITED DECISION (2010): 5-4 “All speakers... use money amassed from the economic marketplace to fund their speech, and the First Amendment protects the resulting speech.” (2010)

37. CITIZENS UNITED MAJORITY OPINION “ This Court now concludes that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.” Justice Kennedy

38. JUSTICE STEVENS’ DISSENT Before Citizens United the Court “did not rest our holding on a narrow notion of quid pro quo corruption. Instead we relied on the governmental interest in combating the unique forms of corruption threatened by corporations, as recognized in Austin’s anti-distortion... rationale.”

39. QUID PRO QUO… A Latin phrase that means “this for that.” An explicit agreement by a candidate or elected official to perform a specific act in exchange for something of value. The Court narrowed quid pro quo corruption so that it’s virtually the same as bribery.

40. TO SUMMARIZE: Citizens United Role of Congress limited due to Supreme Court decisions. Supreme Court ruled First Amendment ensures that speech cannot be limited. Corporations granted same free speech rights as individuals by Supreme Court. Definition of corruption narrowed to quid pro quo. 40 The role corporations and influence in government is an historical problem.

41. MONEY IN ELECTIONS Lobbying Hard Money Candidates Caps on Contributions Disclosure Soft Money Political Parties & PACs  Caps on contributions  Disclosure Super PACs Independent Expenditures No Caps on Contributions or Expenditures Must disclose donors Dark Money 501(c)(4)'s No Disclosure No Cap on Contributions Expend Only 50% On Electioneering Fundraising Bundling

42. WHO’S GETTING THE MONEY?

44. ELECTION SPENDING 1998-2014 From Open Secrets.org Spending Examples 2004 – Bush and Kerry raise $500 MIL 2008 – McCain and Obama raise $1B+ Obama rejects public funding 2012 – Obama and Romney spend $1.2 B Parties/Outside Groups spend $1.5 B Both reject public funding

45. FEDERAL ELECTION SPENDING LIMITS 2015-16 2014 McCutcheon Decision ended all aggregate limits

46. IT IS THE 2016 ELECTION….BUT JUST LIKE 1872…

47. MOST OF THE $$ STILL COMES FROM A FEW DONORS

49. 2016 RACE AS OF SEPTEMBER 30, 2015 (money in millions)

50. SO WHO RAISED THAT ADDITIONAL $15.5…

51. AND WHO RAN THIS AD?

52. A FEW THINGS YOU SHOULD KNOW ABOUT ADS Most campaign ads – some of which are very negative – aren’t necessarily coming from the candidates themselves. Nearly half are from Super PACS. Almost all outside ads are negative. According to a 2013 report issued by the Wesleyan Media project: in the GOP presidential nomination race of 2012, there was a more than 1600 percent increase in interest-group sponsored ads aired as compared to 2008.

54. REGULATORY APPROACHES Adopt a Securities and Exchange Commission rule governing corporate political expenditures. Strengthen and enforce 501(c)(4) political activity rules by the IRS. Enforce campaign finance laws (action by the FEC and state regulatory agencies) 54

55. FEDERAL ELECTION COMMISSION Six member bipartisan federal commission Enforcement, regulatory, and interpretive authority over federal campaign finance law. Four votes required to act.  Most votes now are 3-3

56. CONGRESSIONAL OPTIONS Congress can pass laws to Require full disclosure of donors who fund through outside spending Strengthen coordination rules Adopt public funding for all federal candidates Prohibit members of Congress from receiving donations from interests they regulate

57. ADDITIONAL APPROACHES Seek to have Buckley and/or Citizens United overturned by the Supreme Court Use of “democracy” vouchers: Seattle just passed in 11/2015; Oregon also has Work to elect a Congress committed to reform

58. CONSTITUTIONAL AMENDMENT SOLUTION Proposal for Constitutional amendments to reform MIP 16 states have called for the use of a national convention Opponents criticize lengthy process Proponents say would generate public awareness

59. IT CAN GET COMPLICATED From the Friends Committee on National Legislation (FCNL)

60. WHAT STATES CAN DO Protect voter rights including access Publically funded elections Clean election reforms Full Disclosure End Coordination

61. WHAT YOU CAN DO Learn how politics is financed at federal, state and local levels. Participate in community education forums. Use Money in Politics Review resources found on the League Management site: http://forum.lwv.org/category/member-resources/our-work/money- politics-reviewhttp://forum.lwv.org/category/member-resources/our-work/money- politics-review Join League and participate in the Money in Politics’ study and consensus. Familiarize yourself with money in politics issues by reading the background papers

62. WHAT YOU CAN DO: BE INFORMED Local Elections State Elections National Elections Encourage your friends, families and neighbors to be active, involved citizens like you!

63. LEAGUE UPDATE Build member understanding and agreement on the extent to which political campaigns are protected speech under the First Amendment. Consider: What are the rights of individuals and organizations, under the First Amendment, to express their political views through independent expenditures and the finance of election campaign activities; and How those rights should be protected and reconciled with the interests set out in the current LWV position

64. QUESTIONS/AGENDA How did we get here? What is the current situation? Why is this important to me? What are the challenges? What can I do? QUESTIONS?

65. THANKS TO THE CENTER FOR RESPONSIVE POLITICS (OPENSECRETS.ORG) FOR CHARTS AND ELECTION INFORMATION A WORKS CITED PAGE IS AT THE END OF THE POWERPOINT SCRIPT RESOURCES

66. LEAGUE MEMBERS PLEASE BE SURE TO JOIN US FOR THE MONEY IN POLITICS CONSENSUS MEETING JANUARY 13, 2016 THANK YOU FOR ATTENDING!