Multi Billion Dollar Elections in America

It is no secret that American elections cost a lot of money. But is it really true that the role of undisclosed cash donated by the ultra rich threatens to accelerate the erosion of trust in the country’s political system?

By Anil Madan

About two weeks ago, at the end of this past January, The New York Times published an analysis of what is often referred to as “dark money” spending in the 2020 presidential election and concluded that the Democrats had managed to invade what was once the province of the Republicans and perhaps even surpassed them in dark money spending.

As the Times explains, “dark money” became a pejorative term as the liberal Democrats warned of the threat of corruption posed by corporations and billionaires spending unlimited sums through loosely regulated nonprofit organizations which did not disclose their donors’ identities.

Money in Politics – It’s all a part of the business of Democracy. Pic – American Academy of Arts and Sciences

For decades, the Democrats proceeded on the assumption that it was commonly accepted that the Republicans were more adept at raising campaign money through corporations and nonprofit organizations. In fact, it seemed a given that businesses would tend to support Republican candidates more than Democratic candidates. Missing in this calculation was the simple fact that there are ultra rich Americans on both sides of the political spectrum.

Something else was also missing. That is the realization that elections in America, particularly presidential elections, are a national obsession falling somewhere in the confluence of a religious revival, a championship sporting event on the order of the World Series or Super Bowl, pure reality TV, and the best thing in interactive experiences since one had to use a knife to slice one’s own bread.

So, The Times finds that in the 2020 election, “the Democratic Party embraced dark money with fresh zeal, pulling even with and, perhaps by some measures, surpassing Republicans.” The key finding is that examining spending by the top 15 most politically active nonprofit organizations generally aligned with each party shows that the Democratic Party spent more than $1.5 billion in 2020 compared to roughly $900 million by the Republican Party for a total of $2.4 billion. This doesn’t account for the approximately $1 billion additional that each candidate spent.

A shadow political infrastructure

It is no secret that American elections cost a lot of money. And as spending by presidential aspirants has climbed from $500 million to $1 billion, and spending by the major parties has approached and now exceeded $1 billion, there has been much hand wringing. The Times, for example, lamented that the spending levels “reveal the growth and ascendancy of a shadow political infrastructure that is reshaping American politics.”

But is it really true that the role of undisclosed cash donated by the ultra rich threatens to accelerate the erosion of trust in the country’s political system? Many point to the election processes in other countries, notably the United Kingdom where the election season is very short.

Of course, there has been a somewhat sudden surge of campaign spending by nonprofit organizations and PACs (Political Action Committees). This is, in part, the result of the Supreme Court’s 2010 decision in the case of Citizens United v. Federal Elections Commission. Citizens United was a conservative nonprofit organization that sought to advertise and promote a movie critical of Hillary Clinton who was a candidate for the Democratic Party’s nomination for president in 2008. A law called the Bipartisan Campaign Reform Act prohibited an “electioneering communication” within 30 days of a primary election or 60 days of the general election by any corporation, non-profit organization or labor union.

The law also prohibited such organizations from making any expenditure, at any time, from its general funds advocating the election or defeat of a candidate. The first part of the case was easy. A prior restraint on expression about elections was clearly unconstitutional and the promotion of the movie “Hillary” could not be restrained by the government. But the court went further. The Supreme Court held that the prohibition of expenditures by corporations, nonprofits and labor unions violated the First Amendment. In effect, money represents access to the media and other outlets in order effectively to express facts and opinions about elections. There is nothing more important for a Democracy that such expression be unfettered.

Is there cause for worry? In short, are the concerns about possible corruption valid? I am inclined to think not. It was reasonably clear that the Democratic Party’s answer to the perceived Republican edge in donations and spending, was to harness donors on its side of the bipartisan chasm. And they have done so admirably.

I was struck by the different approaches taken by the authors of the Supreme Court’s majority opinion and of the dissenting opinion.

Justice Kennedy writing for the majority stated: “Independent expenditures do not lead to, or create the appearance of, quid pro quo corruption. In fact, there is only scant evidence that independent expenditures even ingratiate. Ingratiation and access, in any event, are not corruption.” And he noted that independent expenditures were not the equivalent of “soft money” used to gain access.

Justice Stevens, on the other hand, wrote: “Corruption can take many forms. Bribery may be the paradigm case. But the difference between selling a vote and selling access is a matter of degree, not kind. And selling access is not qualitatively different from giving special preference to those who spent money on one’s behalf. Corruption operates along a spectrum, and the majority’s apparent belief that quid pro quo arrangements can be neatly demarcated from other improper influences does not accord with the theory or reality of politics.”

Wealth, recognition and access

I get Justice Stevens’ point but perhaps the short answer is that if there is corruption, it can be handled by laws prohibiting the same. But I acknowledge that these are fine distinctions. On the other hand, there really is no practical way to keep those who have great wealth from gaining greater recognition than those who do not. And from there, access is but a short step.

We can perhaps look at the issue from a different perspective. First, the Democratic Party’s success in countering Republican money-raising and expenditures shows that any relative advantage can be readily neutralized.

It is also fair to ask if nearly equal levels of spending do nothing more than provide the public with access to the positions and platforms of opposing candidates and parties. After all, isn’t this what Democracy is all about, having an informed electorate? One can argue that the barrage of information does not necessarily mean the electorate is more informed. But at bottom, there is at play the core truth about the notion of free speech and free expression: the way to counter one side’s speech is with more speech on the other side. In this sense, the findings reported by The Times are heartening and cause for cheer rather than concern.

The truth is greater than all of this. Elections and electioneering are big business in America. The presidential campaign is effectively a four-year cycle. For example, from the time that President Obama was elected to Senator Mitch McConnell’s declaration that the single most important thing the Republicans wanted to achieve was that he be a one-term president, the campaign for 2012 was on. As President Clinton’s term came to an end, there was rampant speculation that Hillary Clinton would run for a Senate seat in New York—never mind that she had not once been a resident of New York State—and would eventually be the Democratic Party’s candidate in 2004 or 2008. Similarly, Elizabeth Warren was touted as a Senatorial candidate while still a professor at Harvard Law School and as a presidential candidate when she became Senator.

The point is that campaigns start early and aside from presidential nominees, those competing in primaries have to raise money. Even as President Biden was inaugurated, there was speculation that Donald Trump would run a third time. And now there is talk that Governor DeSantis of Florida is a likely challenger.

But the election industry is bigger than that. The impact on television, radio, and other media outlets is palpable from advertising dollars to content generation, talk shows, analysis, commentary, national debates, and more. From campaign advisors and strategists, to pollsters, fund-raisers, communications strategists, advertising professionals, speechwriters, and media types, there is a huge swath of people earning a living off the election cycle. If it contributes a few billion dollars to GDP, that is not something to be dismissed or to be wary of.

To keep all this in perspective, we might reflect on the fact that last Sunday’s Super Bowl was projected to generate some $7.6 billion worth of bets from gamblers.

A gamble on our nation’s future with a combined $2.4 billion spent by nonprofits, and $4.4 billion by them and the two major candidates combined, doesn’t seem all that much in context, does it?

It’s all a part of the business of Democracy. Perhaps we should focus on whether we produce results that are any better or worse than we see around the world. Putting aside the phony “democratic” elections in places like China, Russia, Iran, Belarus, Turkey, etc., if we compare the recent Prime Ministers of England, India, Israel, Australia or Canada, or the recent presidents of France or any number of countries, we may not be getting more bang for our buck, but a lot of people make a living off this hocus pocus in the U.S.

Cheerz…
Bwana

* Published in print edition on 18 February 2022