Recent Changes in the Economics of Voting Caused by the Arrival of Super PACs

Over the past decade, the economics of elections have been dramatically altered by the effects of the U.S. Supreme Court’s landmark decision in Citizens United v. Federal Election Commission (2010). That decision abrogated the longstanding federal prohibition on corporate electoral spending and eventually led to the widespread proliferation of “super PACs”—political action committees that can raise and spend unlimited amounts of money, including funds from corporations, labor unions, and wealthy individuals, so long as they do not coordinate with a candidate’s campaign. Consequently, the overall amount of money being spent on our elections has increased exponentially, and wealthy special interests have spent astonishing sums, through super PACs, supporting their preferred candidates for public office.

The advent of super PACs has altered the basic calculus of voters’ ability to meaningfully participate in the democratic process. For decades, candidates were limited in the amount they could receive from any particular donor—a limit that still applies to candidates’ campaigns—requiring candidates to cast a wide net to find more financial support for their candidacy. No longer. Super PACs have created a superstructure that completely overshadows campaign fundraising, in which a wealthy donor can provide as much money as they want to super PACs backing the candidate who best advances their private interests. As a result, a well-connected candidate with a few deep-pocketed benefactors can effectively compete and defeat a candidate with a much broader network of donors who contribute no more than the individual maximum—currently $2,900 per election—to directly support the candidate’s campaign. In the arms race of political fundraising, super PACs are nuclear weapons; candidates who lack them are at a fundamental, and typically insurmountable, disadvantage.

The imbalance between super PACs and campaign committees dramatically reduces the average voter’s ability to meaningfully influence elections and raises obvious corruption concerns. Because wealthy donors can contribute unlimited amounts to super PACs supporting their chosen candidates, their voice in the political debate is as loud as their pocketbook allows. That support, in turn, never goes unnoticed by the candidates whose political prospects are buoyed by wealthy donors’ largesse. In the post-Citizens United era, it has never been easier for a billionaire to dominate political dialogue and drown out the voices and concerns of everyday voters. Thus, super PACs provide the drumbeat for our nation’s collective march toward plutocracy.

Compounding the problem is the fact that, often, the public is denied basic information about who is truly financing super PACs. One of the lesser known corollaries of Citizens United was the Supreme Court’s emphatic reliance on public disclosure as a vital tool to provide voters with the information necessary to evaluate the content and sources of corporate political speech. As Justice Anthony Kennedy explained, in a section of the Court’s opinion joined by eight of the nine justices: “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

Yet, in the 12 years since Citizens United, disclosure has been consistently undermined by torrents of “dark money” flowing to super PACs. “Dark money” refers generally to political spending by a concealed or unknown source, and, as the phrase itself suggests, it is anathema to Justice Louis Brandeis’s well-known maxim that sunlight is the best disinfectant for combating corruption. When a super PAC’s financial contributors are cloaked in darkness, voters bombarded by the super PAC’s political ads are denied information essential to weigh those ads in context and consider whether the speaker’s interests align with their own. In this way, wealthy donors may gain influence with candidates in exchange for their surreptitious support while the candidates avoid the potential political consequences of cashing in on that support, creating the ideal conditions for corruption to flourish. In the most egregious cases, dark money flowing to super PACs has even been found to have originated from foreign nationals and federal contractors, both of which are categorically forbidden from making political contributions.

Although super PACs are legally required to disclose their donors, wealthy contributors often conceal their identity by funneling super PAC contributions through an intermediary—most commonly a nonprofit or LLC with an anodyne name that isn’t required to disclose its donors. With the contribution structured this way, the intermediary entity’s name is publicly disclosed on the super PAC’s campaign finance disclosure reports, while the wealthy individual’s identity remains secret. Using intermediaries to conceal contributor identities is illegal, but wealthy individuals nevertheless began making dark money contributions to super PACs almost immediately after Citizens United. The practice continues today, and few of the wealthy individuals who have financed super PACs with dark money have ever been identified—let alone investigated, fined, or prosecuted. Most of the dark money flowing to super PACs goes undetected, resulting in millions of dollars in opaque electoral spending exerting an invisible gravitational pull on our elections toward wealthy donors’ favored candidates.

The past decade has revealed another fundamentally flawed assumption of Justice Kennedy’s majority opinion: that the unlimited corporate electoral spending unleashed by the Citizens United decision would be independent of candidates. The documented reality is that super PACs, the primary vehicle by which corporations and wealthy donors make so-called “independent expenditures,” routinely coordinate their activities with candidates’ campaigns. Indeed, they do so brazenly, and with impunity, because campaigns and super PACs alike understand and employ tactics that allow them to communicate while easily evading the federal rules prohibiting coordination.

Because federal campaign finance laws limit the amount that a contributor can give to a candidate’s campaign and prohibit candidates from taking corporate money—restrictions that do not apply to super PACs in light of Citizens United—candidates’ campaigns are prohibited from coordinating with super PACs. This prohibition is supposed to prevent super PACs from using their unlimited fundraising and spending to underwrite a campaign’s expenses, which would raise obvious corruption concerns.

But the reality is that the prohibition is essentially never enforced—at least not by the Federal Election Commission (FEC), the agency charged with administering and enforcing federal campaign finance laws. Although Citizens United was decided more than 12 years ago, the agency has still failed to update its regulations to redefine coordination in light of the major changes over the past decade, including the outsized role that super PACs play in our elections. Advances in digital communication have, moreover, punched countless holes in the legal fiction of super PAC independence. For instance, while the coordination regulations prohibit a candidate from communicating a “request or suggestion” to any outside group like a super PAC, the FEC has absurdly interpreted this prohibition to apply only to private communiques, not public statements. In a recent statement dismissing an administrative complaint that alleged illegal coordination, the FEC appeared to adopt the notion that candidates can communicate instructions intended for allied super PACs, as long as they do so via public-facing social media platforms like Twitter. That interpretation is wildly at odds with any commonsense view of what “coordination” means or how easy it is to communicate with a select audience via public-facing digital platforms.

Indeed, a remarkably common and brazen campaign tactic illustrates the patent fallacy of super PACs’ supposed independence. “Redboxing” is an illegal practice in which a candidate’s campaign publishes specific messaging, often on the campaign’s official website, and uses widely understood visual cues and signal phrases—like a literal red box around the messaging content and phrasing like “voters need to know . . .”—as coded instructions requesting allied super PACs to use the campaign-approved messaging in their ads. In other words, the campaign issues a specific request or suggestion to the super PAC in the virtual “crowded room” of the campaign’s public website. Redboxing, in other words, is illegal coordination; a super PAC that receives its marching orders from a red box on the campaign website is making expenditures that are in no realistic sense “independent” of that campaign.

Super PACs have emphatically shifted the electoral balance of power away from everyday voters and toward wealthy donors able and willing to spend millions of dollars on the candidates who will best cater to their private interests. These donors often structure their contributions to avoid public disclosure, depriving voters of even the basic knowledge about who is spending to influence their vote. And super PACs regularly coordinate their activities with candidates’ campaigns, evaporating the supposed independence that supposedly would have prevented corruption. As long as super PACs are allowed to operate in their current form, the prospects for a more inclusive democracy that reins in the political dominance of the uber-wealthy are very dim.

As long as Citizens United remains the law of the land, super PACs are likely to remain a part of the money-in-politics landscape. But legal reforms and the robust enforcement of campaign finance laws can mitigate their most damaging effects. Congress should pass laws requiring much broader disclosure of electoral spending, including revealing the underlying donors behind politically active nonprofits and shell companies. The FEC must also review and update its coordination regulations to confront the everyday reality of super PAC and campaign operatives communicating, openly and notoriously, to coordinate their electoral activities. To preserve an equitable and inclusive democracy, we need systemic reforms that address the danger of corruption and work to reverse the diminishing electoral voice of the American voter.