Restrictions on Campaign Contributions- A Good Thing?

The Supreme Court's 2010 decision in Citizens United v. Federal Election Commission held that Congress cannot limit expenditures in political campaigns as long as the spender, who might be an individual or an organization, including a corporation or union, is not affiliated with or acting in concert with the candidate or political party. The Court held that such "independent" expenditures are not campaign donations, which can be regulated; they are pure expressions of the political preferences of the donors.

Some of the expenditures are made directly by donors to buy political advertising, but most (84 percent of the roughly $100 million in such "independent" expenditures already made in the current presidential primary campaign) are given by the donors to political action committees (called "super PACs"), which channel the expenditures into political ads or other methods of influencing political opinion. This is sensible intermediation since the donors are unlikely to be knowledgeable about creating or buying or placing ads.

The Supreme Court allows donations to political campaigns to be regulated (and limited) because of fear that donations unlimited in amount corrupt the political process, because the candidate recipient knows that a donor of a large amount of money expects something in return, usually favorable consideration of a policy that would benefit the donor, and hence a large donation is likely to be a tacit bribe. But the Court, rather naively as it seems to most observers, reasoned in the Citizens United case that the risk of corruption would be slight if the donor was not contributing to a candidate or a political party, but merely expressing his political preferences through an independent organization such as a super PAC—an organization neither controlled by nor even coordinating with a candidate or political party.

The criticisms of the Court's reasoning are several. First, the notion of "coordination" is vague, and tacit coordination with a candidate or a party seems to occupy the same never-never land as tacit collusion in antitrust law. It can be quite effective yet is hard to condemn as actual coordination. Allies of the candidate or members of the party can run the super PAC, and without even talking to the candidate or to party officials can figure out what kind of political advertising will be helpful to the candidate. Most super PAC advertising has been negative—that is, has attacked opponents of the candidate whom the super PAC favors—because positive advertising would be difficult without explicit coordination; the reason is that candidates tend to be vague and protean about what they favor, in order to maintain their freedom of action and reaction, so a super PAC could operate at cross-purposes with its favored candidate if it advertised in support of a program that it thought the candidate would favor. In addition, negative political advertising is usually more effective than positive.

It thus is difficult to see what practical difference there is between super PAC donations and direct campaign donations, from a corruption standpoint. A super PAC is a valuable weapon for a campaign, as the heavy expenditures of Restore Our Future, the large super PAC that supports Romey and has attacked his opponents, proves; the donors to it are known; and it is unclear why they should expect less quid pro quo from their favored candidate if he's successful than a direct donor to the candidate's campaign would be.

So the real question is whether campaign donations, in whatever guise, should be limited. There are two arguments. The first and less is that, as with brand advertising, advertising pro and con competing politicians tends to be offsetting; the argument is that if the contestants' spending is limited, this will not affect the outcome of the contest but merely reduce its cost. But the argument is weak because it fails to account for the need of a new entrant to spend more heavily than incumbents in order to offset the cumulative effect of earlier expenditures. Even if the producer of some famous brand stopped advertising altogether, it would be years before consumers began to forget about the brand and stop buying it, but a new entrant would have no existing body of consumer good will to fall back on.

The stronger argument for limiting campaign donations is the corruption argument, which I have just suggested is as strong against the super PACs as it is against direct campaign donations. But again there is the concern with new entrants. If a candidate's name is Bush or Clinton or Kennedy (and he or she is related to a former President who bore one of those names), the candidate enters a political campaign with an information advantage by virtue of belonging to a well known political dynasty extending over two or more generations (hence like an established brand). An unknown may need to spend more than one of those dynasts to pull even. Yet it hardly seems feasible to fix a limit on contributions and then raise it for new entrants.

That said, I think the emergence of new media in the Internet era make the corruption argument stronger than the new-entrant argument. The reason is that the Internet greatly reduces the expense of disseminating information, whether about a candidate or anything else. The number of over the air radio and television stations is limited and likewise the number of newspapers and magazines, but nowadays most people are getting their information, including political information, from social media, blogs, tweets, and other modes of communication, effectively infinite in number, accessible costly over cell phones, laptops, and other electronic devices. These technologies for creating, disseminating, and receiving information at very low cost should enable any candidate with a persuasive message to reach a large audience of potential voters, and should thus favor new entrants in political as in other markets—provided they are not allowed to be drowned by enormous expenditures by super PACs.

We saw the effect of the new information technologies at work in the 2008 Democratic primary season, when the relatively unknown Barack Obama defeated the much better known Hillary Clinton, and we have seen it again and more dramatically (consistent with the rapid expansion and adoption of these technologies) in the current Republican primary campaign. Michelle Bachman, Herman Cain, Rick Perry, Ron Paul, and Rick Santorum, none of whom was nationally prominent (Santorum had once been, but after his one-sided defeat for reelection to the Senate in 2006 had lapsed into obscurity), were able to compete effectively with the better-known candidates (Romney and Gingrich), and lost because of lack of support rather than lack of campaign funds. True, Santorum and Gingrich were both bolstered by super PACs, but they were hammered by Restore Our Future, thus providing a good example of offsetting "arms race" political expenditures.

But could it be that the more that is spent on political campaigns, the more informed the voting public becomes? This suggestion is hard to take seriously. Political candidates seem to have a very condescending view of the American electorate; almost no information is conveyed by political advertising. Debates and other campaign appearances provide voters with insights into the character and intelligence of candidates, but positive political advertising is largely a mode of hagiography, and negative of defamation.