Corporate Money & The Political Landscape

How Corporate Money Changed the Landscape of American Politics

Since the founding of the United States of America, the access to capital has made a major impact on the development of the nation’s policy and ideology.  James Madison the father of the Constitution stated...“We are free today substantially, but the day will come when our Republic will be an impossibility.  It will be an impossibility because wealth will be concentrated in the hands of a few.  A Republic cannot stand upon bayonets, and when the day comes when the wealth of the nation will be in the hands of a few, then we must rely upon the wisdom of the best elements in the country to readjust the laws of the nations to the changed conditions.” 

It appears to many that American democracy in the twenty-first century is being corrupted by oligarchs and fueled by mass capital.  The ability for an individual to participate in electoral politics by competing for an elected office or voting someone to represent their views is a staple of an efficient democratic government.  Ideally these values are the foundation of our American political system. 

On January 21, 2010 the American political system was changed profoundly.  On this date the United States Supreme Court announced their decision on the Citizens United v. The Federal Election Commission, No. 08-205 (2010) case.  The 5-4 decision undermines and sometimes voids decades of campaign finance legislation, the very legislation that protects the political system from blatant corruption and domination.  In essence the decision grants corporations the status of an individual citizen, without seeming to consider the extreme disparity of power money buys.  The ruling not only gives the corporation unprecedented status, but it shifts priority to shareholders, including foreign investors.  The ruling awards corporate power over the American citizen and our political system.

However, this decision evolved out of a 1971 memo from then Virginia Lawyer and then future Supreme Court Justice Lewis Powell.  Powell felt obligated to suggest that it was essential to galvanize business interest because the American economic system was under attack.  Powell stressed that business must realize that political power is necessary and that it must be used aggressively in order maintain longtime wealth and success.  This paper will attempt to suggest that the case of Citizens United v Federal Election Commission has changed American politics in a profound way by helping to increase corporate power and increase corporate spending which drowns out the voices of the average citizen.

Increase Corporate Power

The Court granted corporations extensive constitutional protections even before Citizens United.  Thom Hartman noted (The Crash of 2016, p.44)…”In 1976, in Buckley v. Valeo, the Supreme Court ruled that political money is speech, implying those with more money have more free speech, implying those with more money have more free speech in our political system.”  The truth is that corporations wield enormous power in Congress and in state legislatures.  Citizens United allows corporations to flex their financial muscles and pressure officials to support their positions or risk attack in their next election.   

According to MacLean (Democracy In Chains 2017, p.229)…While media attention has focused on the impact of Citizens United on the presidential and congressional races, the opening of the spigots in state judicial races may prove more consequential over the decades ahead as corporate donors invest in those they believe will interpret the Constitutions and the laws in their favor.  The Republican majorities rushing through “radical reform” know that citizens of their states are likely to turn to the only branch of governmental left that might blunt the blows.  That is why the large donors have invested so heavily in judicial races: to elect judges who will allow the revolution to go forward.  One North Carolina insider summarized the danger bluntly:

“Loose the courts, lose the wars.”

Increase in Corporate Spending

Most Americans want to limit spending during political campaigns.  If you poll liberals and conservatives, Republicans and Democrats you would probably find that a large majority would favor limits on campaign spending and say the high cost of campaigning discourages many good candidates from running for political office.  While perceptions of influence are subjective, there’s clearly more money in the U.S. political system now than at any time since the campaign finance reforms of the 1970s, according to a new Pew Research Center data analysis of contributions and spending. That’s the case whether you look at Presidential, House or Senate election.

According to Desilver and Van Kessel of the Pew Research Center...The 2014 midterm Senate election was the costliest ever - or at least since 1974, when modern disclosure rules kicked in.  The 2014 election featured several competitive races, the outcomes of which would determine control of the Senate; Democrats and Republicans fought and spent fiercely.  DeSilver and Van Kessel’s analysis of the Campaign Finance Institute data, concluded that nearly $1.1 billion was spent on 2014’s Senate races by candidates, parties and outside groups, 25% more than in the previous off-year cycle of 2010.  The biggest increase was in non-party independent expenditures, which soared from $105.6 million (inflation-adjusted) to $387.3 million.

Political researchers have not only discovered that spending for Senate, House, and Presidential races are up but charitable donations are up.  Say hello to the Koch brothers…Who are the Koch brothers?  Charles and David Koch inherited their father’s oil money and created the multibillion dollar Koch Industries.  With that money, they have supported the arts, built community centers, and pushed a specific political agenda.  The Kochs financially support groups that deny climate change and are adamantly against public education and public transit.  Both brothers are libertarians, but support conservative candidates.  In Jane Mayer’s book (Dark Money 2016 p.278)… Mayer points out that David Koch a longtime admirer of classical ballet donated $2.5 million toward the company’s upcoming season and he had given many millions before. The Koch brothers had become some of New York’s most prominent philanthropist.

Drowning out the voices of everyday citizens

The Supreme Court required electoral districts to be drawn with equal populations because the Constitution “demands” that each citizen have “an equally effective voice.” Hence, “one vote.”  When corporations, or other big money spenders, can flood the airwaves with their own message, it can effectively drown out the voices of other citizens, whose democratic right to political speech deserves no less protection than those with financial resources. 

This undermines the political equity that gives the government legitimacy. 

Gerrymandering can be defined as to create a civil division of an unusual shape within a particular locale for improper purpose; to redistrict a state creating unnatural boundaries and isolating members of a particular political party, hoping a maximum number of the elected representatives will be of that political persuasion.  According to Mayer (Dark Money 2016, p.412)…Gerrymandering was a bipartisan game as old as the Republic.  What made it different after Citizens United was that the business of manipulating politics from the ground up was now heavily directed and funded by the unelected rich.  To do the job, they used front groups claiming to be nonpartisan social welfare groups, funded by contributions from some of the world’s largest corporations and wealthy donors like the Kochs. 

Conclusion

According to Richard D. Wolff Understanding Capitalism (2019 p. 22) Marx said, Capitalism/Corporatism never went beyond those economic models where a few dominate a majority.  Capitalism/Corporatism replaced the dichotomies of master/slave and lord/serf with a new one.  A dominating and exploiting minority was still there, but it had a new: employers.  When big contributors contact officials they get attention. Their economic resources enable them to get a hearing, to offer help with information and expertise – even to draft bills.  Research shows these processes boost the influence of the affluent on the policy topics and ideas of officeholders, biasing the public agenda toward the concerns of the affluent.

Michael Grubel notes (Fordham Journal of Corporate & Financial Law March 7, 2018)…Despite public disapproval of Citizens United and strong advocacy for campaign finance reform in the 2016 elections, it appears unlikely that outside spending will be curbed soon.  In 2016 alone, PACs contributed $1.4 billion to federal campaigns, suggesting that widespread bipartisan support would be necessary to change the current system, and require Citizens United to be overturned.  This approach to American politics will continue to help the rich get richer, disseminate power only to the few, and keep the seldom heard voice, voiceless. 

Works Cited

Greubel, Michael. “Citizens United: 8 Years Later.” Fordham Journal of Corporate & Financial Law. 7, March 2018, https://news.law.fordham.edu/jcfl/2018/03/07/citizens-united-8-years-later/

Hartman, Thom. “The Crash of 2016.” The Plot to Destroy America and What We Can Do to Stop it. Twelve Hachette Book Group, 2013.

“James Madison.” AZQuotes.com Wind and Fly LTD, 2019. 28 July 2019.   https://www.azquotes.com/author/9277-James_Madison

Johnson, Jason. Political Consultants and Campaigns: One Day To Sell. Westview Press, 2012.

Kang, M.S. (2010).  After Citizens United.  Indiana Law Review, 44(243). http:// papers.ssrn.com/sol3 papers.cfm?abstract_id=2389147

MacLean, Nancy. “Democracy In Chains.” The Deep History of The Radical Right’s Stealth Plan

Mayer, Jane. Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Anchor Books, 2016. 

Wolff, Richard D. Understanding Marxism. Democracy at Work 2019.