Money in Politics: Campaign Finance & Reforms in the US
Money's influence in politics has become an increasingly significant issue in American democracy, particularly in the wake of the Supreme Court's Citizens United ruling in 2010. As a result, the role of big money, hidden wealth, and other forms of political spending in shaping public policy and the voting process have drawn the attention of citizens, politicians, and researchers alike. This article examines the impact of political financing, campaign finance laws, and the broader implications for American politics and the electoral system. Some key examples and statistics that illustrate money's role in politics include the 2012 presidential election, in which candidates and outside groups spent a combined total of $2.6 billion, and the 2016 election, which saw spending surpassing $6.5 billion.
Table of Contents
∘ The Influence of Money in Politics
∘ Campaign Finance Laws
∘ Policy Recommendations for a More Equitable Political System
∘ Implications of Political Finance
∘ Conclusion
∘ Sources
The Influence of Money in Politics
The Role of Big Money
Big money refers to large sums donated by wealthy individuals, corporations, and special interest groups to political advertising and political action committees (PACs). These donors often have an outsized political influence, as candidates and political parties rely heavily on their financial support during election cycles. In return, these supporters may expect candidates to support policies that align with their interests, leading to the disproportionate impact of money in the political system. For example, the fossil fuel industry has been known to donate large sums of money to candidates who oppose environmental regulations. At the same time, pharmaceutical companies often contribute to candidates who are against price controls on prescription drugs.
Dark Money
Dark money is a term used to describe political expenditures by nonprofit organizations and other groups that are not required to disclose their contributors. This type of political financing can result in a lack of transparency and accountability, as it is difficult for the American public to trace the flow of money and its impact on the political process. The prevalence of secret money has increased in recent years, partly due to the Citizens United ruling, which allowed corporations and unions to spend unlimited amounts of money in support of, or opposition to, political candidates. According to the Center for Responsive Politics, dark money spending in federal elections reached a record high of $336 million during the 2018 midterm elections.
Foreign Influence: The Chinese Communist Party
In addition to domestic sources of money influencing politics, foreign entities such as the Chinese Communist Party (CCP) have also attempted to sway American policies and elections through financial means. The CCP uses a variety of strategies to gain influence and advance its interests in the United States. By investing in American companies, funding think tanks and academic institutions, and making campaign contributions through intermediaries, the CCP seeks to shape policy decisions and impact political races. These actions by the CCP present a complex challenge that needs to be addressed to safeguard the integrity of American democracy.
The CCP, through state-owned enterprises and private companies with close ties to the government, has made significant investments in vital American industries, such as technology and entertainment. Chinese companies are allowed to list on U.S. exchanges without being subject to the same financial and corporate disclosure rules as U.S. firms, and they raise money on Wall Street by using complex investment vehicles such as Variable Interest Entities (VIEs), which are essentially only exacerbating massive U.S. investor losses at the hands of the CCP.
- Funding Think Tanks and Academic Institutions:
The CCP has also provided funding to American think tanks and academic institutions, which can lead to biased research and analysis on issues related to China. The CCP funds primary think tanks in Washington to push them toward the Party line, and many of those think tanks provide policy recommendations to Congress. The CIA has warned of extensive Chinese operations to infiltrate American institutions, stating that "The CCP provides 'strings-attached' funding to academic institutions and think tanks to deter research that casts it in a negative light. The influence of think tanks on U.S. foreign and national policies has increased significantly since 1980. These institutions generate new ideas for policymaking, assess existing policies, draw attention to neglected issues, and provide independent analysis.
- Campaign Contributions Through Intermediaries:
While direct foreign contributions to American political outreach are illegal, the CCP has been accused of using intermediaries, such as American citizens with ties to China or businesses with connections to the CCP, to make campaign contributions. These contributions can give the CCP indirect influence over American politicians and their policy positions. In addition, the CCP is notorious for directing Chinese businesses to pursue partnerships and mergers with U.S.-based firms to gain access to strategic technology and information, which has aided government "efforts to shape."
Campaign Finance Laws
Federal Election Commission
The Federal Election Commission (FEC) is the independent regulatory agency responsible for enforcing campaign finance laws in the United States. The FEC oversees campaign fundraising and spending, disclosure requirements, and other aspects of the campaign finance system. However, critics argue that the FEC is often hampered by partisan politics, which can lead to inconsistent enforcement and weak regulations. For example, in 2019, the FEC was left without a quorum for several months due to the resignation of one of its commissioners, effectively rendering the agency unable to enforce campaign finance laws.
Campaign Finance Reform
Various campaign finance reform efforts have been proposed and enacted in response to concerns about the influence of political donations. These reforms aim to limit the role of the financial impact on politics by imposing restrictions on campaign contributions and spending, increasing disclosure requirements, and providing public financing for candidates who agree to abide by certain spending limits. However, the effectiveness of these reforms remains a subject of debate, as many argue that they need to go further in curbing the influence of big donors and hidden funding in American politics. For instance, the Bipartisan Campaign Reform Act of 2002, also known as the McCain-Feingold Act, sought to address the influence of heavy spenders in politics but was criticized for not doing enough to stem the flow of non-transparent money.
Policy Recommendations for a More Equitable Political System
To address the financial influence on politics, ensure that every voice matters in the democratic process, and counteract the Chinese Communist Party's (CCP) intervention in American politics, several policy recommendations can be considered:
- Public Financing of Elections:
Implementing a public financing system for political messaging can help level the playing field for candidates, reducing their reliance on big donors and special interest groups. This could involve matching small donations with public funds, providing candidates vouchers to distribute to supporters, or allocating public grants for candidates who agree to adhere to specific spending limits.
2. Strengthening Campaign Finance Regulations:
Enhancing existing campaign finance regulations can help curb the influence of campaign finance. This may include lowering contribution limits, closing loopholes that allow for the circumvention of these limits, and implementing more robust disclosure requirements for political financing, particularly for stealth money groups.
3. Empowering Small Donors:
Encouraging the participation of small donors in the political process can counterbalance the influence of deep pockets. This could involve tax incentives for small political contributions, promoting grassroots fundraising efforts, and implementing programs that amplify the impact of small donations through public matching funds.
4. Overturning Citizens United:
Advocating for a constitutional amendment or new Supreme Court rulings that overturn or limit the impact of the Citizens United decision could reduce the influence of hidden funding and unlimited corporate spending in politics.
5. Enhancing Transparency and Accountability:
Ensuring political financing is transparent and accountable can help mitigate political donations' influence. This may involve strengthening financial openness requirements for political action committees, nonprofit organizations, and other entities engaged in political contributions and increasing the enforcement powers of regulatory agencies such as the FEC.
6. Strengthening Foreign Investment Reviews:
Enhancing the review process of foreign investments, particularly those involving Chinese state-owned enterprises and companies with close ties to the CCP, can help protect vital American industries and limit the CCP's influence. This may include expanding the scope of the Committee on Foreign Investment in the United States (CFIUS) to cover a broader range of transactions and providing additional resources for conducting thorough reviews.
7. Ensuring Financial Transparency for Chinese Companies:
Implementing stricter financial and corporate exposition rules for Chinese companies listed on U.S. exchanges can help reduce the risks associated with CCP-linked investments. This may include requiring Chinese companies to comply with the same auditing and financial reporting standards as U.S. firms and limiting the use of complex investment vehicles, such as Variable Interest Entities (VIEs).
8. Monitoring and Disclosing Foreign Funding in Think Tanks and Academic Institutions:
Strengthening the transparency and oversight of foreign funding in American think tanks and academic institutions can help identify and mitigate the potential influence of the CCP in shaping research and policy recommendations. This could involve implementing stricter transparency requirements for foreign funding, conducting regular audits of institutions receiving foreign money, and promoting transparency in research partnerships and collaborations with foreign entities.
9. Strengthening Campaign Finance Laws to Address Foreign Influence:
Closing loopholes in campaign finance laws that allow foreign entities like the CCP to contribute to political canvassing indirectly can help protect the integrity of American elections. This may involve enhancing transparency requirements for intermediaries, increasing penalties for violations, and empowering the FEC to detect better and address foreign influence in campaign financing.
10. Raising Public Awareness of CCP's Influence Operations:
Educating the American public about the CCP's influence operations can help build resilience against foreign political interference. This may include government-sponsored awareness campaigns, media reporting on CCP influence efforts, and collaboration with social media platforms to detect and address disinformation campaigns linked to the Chinese government.
11. Enhancing Cybersecurity Measures:
Strengthening cybersecurity measures can help protect American political institutions from foreign interference, particularly from cyberattacks and disinformation campaigns orchestrated by the CCP. This may involve investing in cybersecurity infrastructure, providing training and resources for political campaigns and government agencies, and collaborating with tech companies to identify and counter cyber threats.
12. Fostering International Collaboration:
Developing partnerships with other democratic countries to address the challenges posed by the CCP's influence operations can amplify the effectiveness of these efforts. This could involve sharing best practices, coordinating policy responses, and jointly working to counteract CCP's influence on international institutions.
Implications of Political Finance
Special Interests
Special interests, including corporations, labor unions, and other interest groups, often use their financial resources to influence public policy and political processes. Unfortunately, this can result in policies that favor these groups at the expense of the broader American public, undermining the democratic principle of equal representation. For example, the gun lobby, primarily represented by the National Rifle Association (NRA), has spent millions of dollars on lobbying efforts and campaign contributions to block stricter gun control legislation, despite polls showing that a majority of Americans support such measures.
Partisan Politics
The influence of political spending can exacerbate partisan divides as candidates and political parties become more reliant on their financial backers and less willing to compromise on critical issues. This may lead to political gridlock and a need for more progress on important public policy matters. For instance, the issue of healthcare reform has been heavily influenced by money from the pharmaceutical and insurance industries, contributing to the ongoing polarizing debate over the Affordable Care Act (ACA) and other healthcare proposals.
Impact on the Electoral Process
The role of campaign finance can also significantly impact the electoral process, as candidates with access to large sums of money from big donors and unaccountable money groups are often more likely to win elections. This can create an environment in which money, rather than policy positions or qualifications, determines voting success. A notable example is the 2010 California Senate race, in which Republican candidate Meg Whitman spent over $140 million of her fortune on her campaign but ultimately lost to Democrat Jerry Brown, who spent significantly less.
Conclusion
The influence of campaign finance has become a defining issue in American democracy, with severe implications for public policy, political campaigns, and the election-related process. As a result, campaign spending laws and reform efforts have sought to address this issue. Still, much work remains to be done to ensure a more transparent, equitable, and democratic political administration in the United States. As recent election cycles have demonstrated, the influence of political donations is still growing and continues to challenge the principles of fair representation and equal access to the political process. Therefore, ongoing efforts to reform campaign finance laws and promote transparency in political spending are essential to preserving the integrity of American democracy.
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Sources
https://spectator.org/ccp-american-universities-confucius-institutes/
https://www.britannica.com/topic/Bipartisan-Campaign-Reform-Act
https://www.opensecrets.org/news/2022/05/gun-rights-groups-set-new-lobbying-spending-record-in-2021/
https://www.ama-assn.org/delivering-care/patient-support-advocacy/ama-vision-health-care-reform
https://www.diffen.com/difference/Jerry_Brown_vs_Meg_Whitman
