Federal Election Commission Research Articles

Campaign Finance Regulation: The Resilience of the American Model

The current term of the United States Supreme Court, which began this past October, is notable for its concentration of cases testing the permissible scope of federal regulation of business. But if this term's docket reflects the pressure faced by the American economic model a model marked by lax regulation, faith in private choices and market outcomes, and toleration of large inequalities in results then this term will likely also mark a reaffirmation of that model in the context of free expression. In September the Court held a rare off-schedule oral argument in Citizens United v. Federal Election Commission, a case that may result in significant changes in the constitutional status of American campaign finance law. A Citizens United presents the Courts emerging conservative majority with an opportunity to deregulate corporations campaign speech by finding restrictions on that speech to violate the First Amendment. Depending on the breadth of the Courts holding, Citizens United may well result in the triumph of the American economic model in the context of the political marketplace exactly when that model is coming under severe strain on other fronts.

Democratizing the Delivery of Legal Services

One of the most significant problems faced by the legal profession in the twenty-first century is the ineffective delivery of legal services. Millions in need of legal representation are unable to afford a lawyer and thousands of lawyers are unemployed. We are desperate for a solution to democratize access to the law through efficient and affordable delivery of legal services. Noted law scholars and economists have argued over the years that corporate ownership of law firms can offer a solution to this problem. For example, corporations like Wal-Mart or Google are especially adept at disseminating services and information to the mass public. These kinds of corporations are also financially situated to make substantial capital outlays and await a later return on the investment. Both of these attributes make corporate ownership of law firms an appealing avenue for increasing access to legal services. Yet professional conduct rules in all fifty states ban corporations from owning or investing in law firms. This Article identifies a First Amendment jurisprudential thread that establishes important constitutional interests in corporate ownership of law firms, interests held by both corporations and individuals. The Supreme Court initially recognized First Amendment protection for the delivery of legal services by a corporate entity in NAACP v. Button and most recently confirmed in Citizens United v. Federal Election Commission that a corporation, whether non-profit or for-profit, enjoys the same free speech rights as an individual. Under this precedent, blanket bans on corporate ownership of law firms cannot survive. This expanded understanding of First Amendment rights for corporations parallels the economic realities of modern law practice and the regulatory changes underway in the United Kingdom and Australia. Now is the time for regulators to embrace the benefits that can accrue from corporate ownership, in particular the democratization of law through the delivery of more accessible and affordable legal services.

AGAINST DEMOCRATIC CONTRACTUALISM

Democratic Rights is a rich, provocative and ambitious book. In it, Corey Brettschneider invites readers to embrace a new conception of democracy—a conception that helps dispel the tension between ...

Citizens United, Public Health, and Democracy: The Supreme Court Ruling, Its Implications, and Proposed Action

The 2010 US Supreme Court Citizens United v Federal Election Commission 130 US 876 (2010) case concerned the plans of a nonprofit organization to distribute a film about presidential candidate Hillary Clinton. The Court ruled that prohibiting corporate independent expenditures for advocacy advertising during election campaigns unconstitutionally inhibits free speech. Corporations can now make unlimited contributions to election advocacy advertising directly from the corporate treasury. Candidates who favor public health positions may be subjected to corporate opposition advertising. Citizen groups and legislators have proposed remedies to ameliorate the effects of the Court's ruling. The public health field needs to apply its expertise, in collaboration with others, to work to reduce the disproportionate influence of corporate political speech on health policy and democracy.

The Perverse Effect of Campaign Contribution Limits: Reducing the Allowable Amounts Increases the Likelihood of Corruption in the Federal Legislature

The regulation of campaign finance brings together a number of vexing issues. Citizens United v. Federal Election Commission and the cases that have followed have brought a great deal of attention to constitutional issues surrounding campaign finance rules. Virtually no attention, however, has been given to the viability of limits on campaign contributions as a means of controlling corruption. This article does so. The article recognizes the importance of institutions but does not anchor itself in an institutional approach but instead assigns a degree of rationality to legislators in the United States. If legislators are to some degree rational, it is possible to roughly account for the factors that a legislator will consider when deciding whether or not to act corruptly. Understanding how those factors might interact leads to the conclusion that limiting campaign contributions might actually lead to more corruption among legislators. Limiting the amount that may be contributed does not reduce the amount that a legislator needs to be reelected, but it does make it hard to raise money and thus increases the value of contributions. Lobbyists who bundle small contributions to make large ones, thus have even greater leverage over legislators. Understanding why legislators might choose to act corruptly does not excuse the legislators’ conduct; the article ends with a discussion of how this approach to understanding corruption in the United States could contribute to more meaningful reform.

Riding the Waves of Money: Contribution Dynamics in the 2008 Presidential Nomination Campaign

The 2008 primary was the most nuanced and expensive nomination contest in history. We investigate how this massive battle for contributions played out over 2007 and the first half of 2008 by analyzing the daily dynamics of candidate contributions using the Federal Elections Commission's collection of individual contributions. Not surprisingly, Giuliani and Clinton were the leaders in contribution momentum during the latter parts of the so-called money primary. This pattern abruptly changed in 2008 as both parties experienced a structural change in contribution flows. While Iowa and New Hampshire placements helped their causes, the South Carolina primary was by far the most rewarding early contest for Obama and McCain. Furthermore, primary victories do not benefit all candidates equally, as Clinton and Huckabee gained far less than their counterparts in response to their early victories.

The Obliteration of Equality in American Campaign Finance Law (and Why the Canadian Approach is Superior)

This article discusses the U.S. Supreme Court’s rejection of equality as a democratic value that may sometimes justify limits on campaign spending. Although the U.S. Supreme Court has long voiced skepticism of egalitarian rationales for campaign finance regulation, it has sometimes allowed equality to come in through the back door, disguised as an anticorruption rationale. Citizens United v. Federal Election Commission obliterates equality as a rationale for regulation in any form. Its prohibition on egalitarian justifications applies to both the inputs and the outputs of the democratic process. In other words, spending limits may not be used to equalize citizens’ ability to elect candidates to office (“electoral equality”) or to equalize citizens’ influence on decisions made by those in office (“policymaking equality”). The consequence of equality’s banishment is an impoverished political dialogue about campaign finance regulation in the United States. Those in the public sphere are unable to talk honestly about the most important value that regulation might serve. The article traces the roots of equality’s banishment from campaign finance discourse, explains how Citizens United makes things worse, and suggests a path toward a more constructive U.S. jurisprudence. In so doing, it uses Canadian campaign finance law as a counterpoint, one that highlights flaws in the American approach. The two countries stand at opposite ends of the spectrum when it comes to equality. Canada’s Parliament and Supreme Court have embraced an egalitarian vision of democracy with the same gusto that the U.S. Supreme Court has disowned it. This difference has major consequences on the public discourse surrounding campaign finance regulation and the very structure of democracy. The article starts with a discussion of Buckley v. Valeo and its progeny, including cases that subtly depart from that decision’s anti-egalitarian refrain. It distills from this line of precedent four democratic values: (1) liberty, (2) equality, (3) anti-corruption, and (4) competitiveness. Historically, the battles over campaign finance in the U.S. have mostly focused on the values of liberty and anti-corruption. But the really important question is how to promote equality without diminishing fair competition. After assessing the Court’s renewed anti-egalitarian turn in Citizens United, the article contrasts Canadian constitutional law, showing how it does a better job of affirming the sometimes competing values at stake in the regulation of campaign finance. It closes by assessing the prospects for a rebirth of equality as a rationale for regulation, should the composition of the U.S Supreme Court change.

Is it Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process

What do lobbyists do? Some believe that lobbyists’ main role is to provide issue-specific information and expertise to congressmen to help guide the law-making process. Others believe that lobbyists mainly provide the firms and other special interests they represent with access to politicians in their “circle of influence” and that this access is the be-all and end-all of how lobbyists affect the lawmaking process. This paper combines a descriptive analysis with more targeted testing to get inside the black box of the lobbying process and inform our understanding of the relative importance of these two views of lobbying. We exploit multiple sources of data covering the period 1999 to 2008, including: federal lobbying registration from the Senate Office of Public Records, Federal Election Commission reports, committee and subcommittee assignments for the 106th to 110th Congresses, and background information on individual lobbyists. A pure issue expertise view of lobbying does not fit the data well. Instead, maintaining connections to politicians appears central to what lobbyists do. In particular, we find that whom lobbyists are connected to (through political campaign donations) directly affects what they work on. More importantly, lobbyists appear to systematically switch issues as the politicians they were previously connected to switch committee assignments, hence following people they know rather than sticking to issues. We also find evidence that lobbyists that have issue expertise earn a premium, but we uncover that such a premium for lobbyists that have connections to many politicians and Members of Congress is considerably larger.

Nonsense and Worries in Citizens United and Its Aftermath

Do Corporations have a constitutional right to donate money to organizations that engage in electioneering? The US Supreme Court has recently decided that they do. Citizens United v. Federal Election Commission held that restrictions on a corporation’s expenditures for “electioneering communication” or other speech that advocates the election or defeat of a candidate were unconstitutional under the First Amendment of the US Constitution.This case has generated an enormous commentary in the legal literature, much of it quite critical of the opinion. Most of the critical commentary has emphasized two bad results that are claimed to flow from the decision. First, these commentators have presumed that, as result of Citizens United, the floodgates will be opened, sending a torrent of corporate money gushing in and elections will come to be, in substance, more like auctions than democratic choices. Second, many have been quite concerned that the corporate origins of all this money make it much more destructive to the political process. Part 2 of this essay will discuss why these arguments are overblown and unpersuasive. The floodgates were already open, and the problem is large amounts of money coursing through the political process which has been subject to little effective control for some time. The money, not its corporate origin, is the real concern. (Many of the commentators have emphasized technical points of Constitutional Law and traditional ideas of good practice in constitutional interpretation, topics that are beyond the scope of this essay.)Yet there are real worries that grow out of this case, and Part 3 will survey these. Citizens United is less of concern for what it actually commands in this opinion, but, if it is seen as a major step in a continuing journey, it is of much more concern for what it shows about where the journey is going.

The Evolution of Citizens United v. Federal Election Commission

(2011). The Evolution of Citizens United v. Federal Election Commission. Free Speech Yearbook: Vol. 45, No. 1, pp. 131-140.

The Political Speech of Charities in the Face of Citizens United: A Defense of Prohibition

The Supreme Court’s decision in Citizens United v. Federal Election Commission makes a Supreme Court challenge to the tax law rule that prohibits charities from involvement in political activities more likely, and a reexamination of the political speech of charities necessary. Part I of the Article surveys the history of the political activities prohibition in order to emphasize that it was not a reactionary policy but quite considered, and that there are strong State interests supporting it, including protection of the definition of charity from further dilution. Part II of the Article analyzes Citizens United in detail and argues that if the Supreme Court considers a challenge to the political activities prohibition, Citizens United is distinguishable: the purpose of the political activities prohibition is not to suppress speech but to define charity; the legal setting is tax and not campaign finance; unlike the campaign finance rule, violation of the political activities prohibition is not criminal; and the political activities prohibition is by nature a rule associated with a tax status rather than a ban on corporate speech. Accordingly, the political activities prohibition, unlike the campaign finance rule, is not a burden on speech and therefore is constitutional. Part III of the Article discusses cautionary notes to the analysis of Part II, and explains that even if there is a constitutional defect to the political activities prohibition, the political activities limitation on the charitable deduction nonetheless would survive. Regardless of the constitutionality of the political activities prohibition, Part IV examines a number of possibilities for a charitable tax status in which political activity is allowed, and argues that the current rule is the best option. The Article concludes that the prohibition represents the evolution of a century of wrestling with the subject of political activity and charity, and the wisdom that the two are not compatible. Such wisdom should not be contravened.

The DISCLOSE Act, Deliberation, and the First Amendment

The United States Supreme Court decided in Citizens United v. Federal Election Commission that Congress may not prohibit spending on political speech by corporations. President Obama and several members of Congress have sharply criticized Citizens United, and Sen. Charles Schumer and Rep. Chris Van Hollen have proposed the DISCLOSE Act in response to the ruling. DISCLOSE mandates disclosure of corporate sources of independent spending on speech, putatively in the interest of shareholders and voters. However, it is unlikely that either shareholders or voters would be made better off by this legislation. Shareholders could demand and receive such disclosure without government mandates, given the efficiency of capital markets. The benefits of such disclosure for voters are likely less than assumed, while the costs are paid in chilled speech and in less rational public deliberation. DISCLOSE also prohibits speech by government contractors, TARP recipients, and companies managed by foreign nationals. The case for prohibiting speech by each of these groups seems flawed. In general, DISCLOSE exploits loopholes in Citizens United limits on government control of speech to contravene the spirit of that decision and the letter of the First Amendment.

The Sound, the Fury, and the Nonevent: Business Power and Market Reactions to the Citizens United Decision

In the wake of the U.S. Supreme Court decision in Citizens United v. Federal Election Commission , supporters of campaign finance reform argued that American politics would soon be awash in corporate cash and that public policy outcomes would reflect the desires of big business. Using event study methodology to isolate the effect of Citizens United on firms’ stock prices, this article finds that the financial markets did not share this view. Rather, key events in the case did not significantly affect the share prices of those large firms heavily engaged in and sensitive to politics, suggesting that investors expected the decision to have no effect on political and policy outcomes of concern to corporate America.

Corporate First Amendment Rights after Citizens United: An Analysis of the Popular Movement to End the Constitutional Personhood of Corporations

No case in the Supreme Court’s last term was more controversial than Citizens United v. Federal Election Commission (Citizens United). In a sharply divided 5:4 decision, the Court invalidated strict federal campaign finance laws and upheld the First Amendment right of corporations to spend unlimited sums of corporate money to support or oppose candidates in political elections. Although mainstream criticism of Citizens United was fierce and widely publicized, a lesser known response to the case is a grassroots popular movement calling for an amendment to the Constitution establishing that money is not speech and that human beings, not corporations, are the only “persons” entitled to constitutional rights. The movement has ignited a national campaign to reverse the legal doctrine of corporate personhood, a doctrine that has allowed corporations for the last century to claim the same legal rights that natural persons possess. Anti-corporate activist groups revile the dominance of corporate power in modern society and believe now is the time to “overthrow corporate rule.” By orchestrating a nationwide initiative to amend the Constitution, these groups hope to follow in the steps of other social justice movements, like the suffragists and the civil rights activists, who successfully organized to demand legal reform. This Article seeks to bring attention to this burgeoning popular movement and the challenges it faces. The grassroots mobilization of these activist organizations in response to Citizens United raises important questions about the relevance of citizen interpretations of constitutional meaning and the role of law in shaping beliefs. This Article uses the doctrine of corporate personhood and the constitutional amendment campaign as points of departure for a broader analysis of the relationships between social movements, constitutional legal reform, and the expressive function of the law.

Warning: Corporations May Be Hazardous To Your Health

Warning: Corporations May Be Hazardous To Your Health

The Political Ecology of Opinion in Big-Donor Neighborhoods

Major campaign donors are highly concentrated geographically. A relative handful of neighborhoods accounts for the bulk of all money contributed to political campaigns. Public opinion in these elite neighborhoods is very different from that in the country as a whole and in low-donor areas. On a number of prominent political issues, the prevailing viewpoint in high-donor neighborhoods can be characterized as cosmopolitan and libertarian, rather than populist or moralistic. Merging Federal Election Commission contribution data with three recent large-scale national surveys, we find that these opinion differences are not solely the result of big-donor areas’ high concentration of wealthy and educated individuals. Instead, these neighborhoods have a distinctive political ecology that likely reinforces and intensifies biases in opinion. Given that these locales are the origin for the lion’s share of campaign donations, they may steer the national political agenda in unrepresentative directions.

Naturalizing the Artificial Citizen: Repeating Lochner's Error in Citizens United v. Federal Election Commission

In March, the Supreme Court of the United States, in a 5-4 vote, handed down Citizens United v. Federal Election Commission, a sweeping ruling providing more protection for corporate political media spending as First Amendment “speech” than ever before. This article demonstrates that Citizens United nullified a century of democratic will by representing First Amendment protection for such spending to be part of nature rather than a legal construct. If Cass Sunstein's influential assessment is correct that the lesson of Lochner v. New York is the judicial error inherent in imposing such artificial baselines to measure the constitutionality of government regulation, then Citizens United can be understood to repeat that error.

Confronting the Impact of Citizens United

Perceived corporate power has spurred a recent populist backlash, on both political left and political right. In this atmosphere, the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission, granting corporations the right to spend directly on express political advocacy, has become the target of particularly heated critique.This Essay confronts the impact of Citizens United in two respects. Part I first reviews Citizens United’s place in the campaign finance constellation. It argues that although the decision was a bold stroke in many ways, its impact on the scope of permissible campaign finance regulation is far less substantial than commonly assumed. Even if Citizens United’s incremental impact is mild, it nevertheless seems to have the feel of a final straw. The decision has provoked first furor, and then fear, with opponents invoking a broad vision of a dystopian political process overwhelmed by corporations. Yet rarely is the fear of corporate political spending articulated at a level of specificity conducive to assessing, or confronting, the perceived damage. Part II takes up the challenge, parsing the pragmatic concerns at the root of opposition to corporate political spending. It then offers responsive policy proposals - including an approach to protect against monopolization of media channels, an appealingly straightforward disclaimer label to mitigate voter misperception, and a novel application of a recusal obligation to combat the appearance of corruption - all well within the regulatory space undisturbed by Citizens United.

Republican National Committee v. Federal Election Commission, 698 F.Supp.2d 150 (D.D.C. 2010) (three-judge court)

Election Law Journal: Rules, Politics, and PolicyVol. 9, No. 3 RECENT CASES AND MATERIALSRepublican National Committee v. Federal Election Commission, 698 F.Supp.2d 150 (D.D.C. 2010) (three-judge court)Published Online:8 Sep 2010https://doi.org/10.1089/elj.2010.9310AboutSectionsPDF/EPUB Permissions & CitationsPermissionsDownload CitationsTrack CitationsAdd to favorites Back To Publication ShareShare onFacebookTwitterLinked InRedditEmail FiguresReferencesRelatedDetails Volume 9Issue 3Sep 2010 Information© 2010 Mary Ann Liebert, Inc.To cite this article:Republican National Committee v. Federal Election Commission, 698 F.Supp.2d 150 (D.D.C. 2010) (three-judge court).Election Law Journal: Rules, Politics, and Policy.Sep 2010.237-246.http://doi.org/10.1089/elj.2010.9310Published in Volume: 9 Issue 3: September 8, 2010PDF download

Legislative Intervention in Corporate Governance is Not a Necessary Response to Citizens United v. Federal Election Commission

Few recent decisions of the United States Supreme Court have created quite the stir as did Citizens United v. Federal Election Commission. One reason the opinion had such an effect is that it contains a smorgasbord of business-related legal and political issues, including issues relating to election law, ethics, social responsibility, stare decisis, judicial review, selection of Supreme Court Justices, the definition of free speech, and corporate “personhood” for purposes of the First Amendment. Perhaps surprising for a case involving a lawsuit brought by a nonprofit public advocacy organization against the federal agency charged with enforcing federal election laws, the opinion also ventures into one of the most important current issues in corporate governance, the role of shareholders in the business and affairs of a corporation.