You Can’t Follow the Money
In The United States, you can put your money where your mouth is — it’s a constitutionally protected right. But so can the largest corporations in the world.
It’s been nearly 14 years since the Supreme Court’s ruling in Citizens United v. Federal Election Commission (FEC), a landmark decision that reversed campaign finance restrictions under the First Amendment. The case ushered in a new era for American democracy — one where corporations have an outsized, often unaccountable influence on politics. The history of Citizens United helps one understand how we elect and govern today.
The case was brought forth by the conservative 501c4 (read: a non-profit that can engage in unlimited advocacy for the so-called public welfare) organization Citizens United, which challenged the FEC for blocking the advertisement of a corporation-funded film critical of Hillary Clinton ahead of the 2008 Democratic primaries. It was prevented from airing due to the Bipartisan Campaign Reform Act of 2002, which prohibited corporations from using their general treasury to fund electioneering communications, or any broadcast advertisements related to candidates, within 30 to 60 days of a primary or general election. There is more context about why this specific film qualified as electioneering rather than journalistic or artistic inquiry — you can read more about it here.
The challenged rule was part of a larger Congressional effort to prevent corruption within our political system, which began in 1907 with the Tillman Act and continued into the 1970s with the Federal Election Campaign Act. Subsequent challenges to aspects of these laws were successful, most notably Buckley v. Valeo of 1976, which established money as a form of speech and created a fairly weak distinction between electioneering and the election finance law-exempt issue advocacy. However, these challenges mainly focused on individual liberties rather than those of corporations.
This is not to say that the latter didn’t still try to influence elections. Regulations were compromised by the emergence of connected Political Action Committees (PACs) between the 1940s-70s, which allowed organizations to create and fundraise separate monetary reserves for political purposes. Nonetheless, connected PACs were limited in how much they could contribute and were unable to coordinate with specific candidates. They were also required to disclose their financial data — including how they allocated funds from named donors, who had to be affiliated with the sponsoring corporations or unions as an employee, member, etc. — to the then newly-formed FEC.
It was in this landscape that Citizens United v. FEC arrived at the Supreme Court in 2010. The 5–4 vote determined that corporations, unions, and other special interest groups could engage in unrestricted political spending. Only a few weeks later, the U.S. Court of Appeals for the D.C. Circuit determined in SpeechNow.org vs FEC that PACs — that were now able to fundraise from the very entities that sponsored their creation, rather than needing to go through individuals within them — could not be restricted in how much money they accepted. This led to the creation of independent-expenditure only committees, which are better known as Super PACs.
But the existing requirements for PACs, including public disclosure of both their expenditure and financial contributors, still applied to Super PACs. So wealthy corporations, unions, and individuals began turning to organizations like Citizens United as well.
Armed with non-profit status and the (loosely defined) guise of public welfare, 501c4s were the ideal vehicle for election spending — they report their total expenditures and donors privately to the IRS rather than the FEC. Organizations realized that they could benefit from the deregulation of corporate political spending without facing the same level of public and legal scrutiny that PACs did. The number of groups applying for 501(c)(4) status almost doubled from 1,751 to 3,357 in the years following the case, as reported by a 2013 Treasury Inspector General’s report. In short, Citizens United saw the formal introduction of dark money in American politics.
Both Republicans and Democrats caused the unprecedented rise of both Super PAC and undisclosed spending. In 2008, the last Presidential election year before Citizens United, outside group spending totaled approximately $575 million, of which $102 million (up from $5 million in 2006) was dark money. In 2020, Super PACs spent approximately $2.1 billion, while dark money accounted for an additional $1 billion in federal campaign spending. And this wasn’t a grassroots campaign by any means — just 20 corporations accounted for over a third of all Super PAC donations reported to the FEC.
Campaign finance reforms of the 20th century are all but gone. Today, elected officials are in the pockets of the very entities they are tasked with regulating. Dark money further prevents any public accountability within our system. It helps explain why we’ve made limited progress on issues even a majority of Americans support — the most ironic of which is the reduction in influence of special interests and corruption in Washington.
