The Avalanche of Outside Spending

“Money On My Mind” is a monthly column by Jay Mandle. The views expressed here are those of the author (not necessarily those of Democracy Matters) and are meant to stimulate discussion.



September 2017
By Jay Mandle

Donald Trump’s attack on democracy has come in many forms, and it represents a continuing threat. Yet he has confronted strong resistance whenever and wherever the American people have been asked to acquiesce to his authoritarian ways. When requested to turn over voter information so his administration can pursue a fishing expedition to purge voter rolls of millions of law-abiding citizens, state officials have resisted. His effort to intimidate the press has backfired, with reporters more ready than ever to call out his lies. Most heartening of all has been the massive revulsion at Trump’s effort to establish an equivalence between neo-Nazis and their opponents. The massive demonstration and rally in Boston, as well as Trump’s precipitous decline in national polls, make it clear that the American people are not willing accomplices in his administration’s effort to subvert democracy.

Unhappily, that level of resistance has not been mounted to oppose the startling growth in the power of a very small number of multi-billionaires who engage in unlimited “outside spending.” This is a form of political expenditure that is not supposed to be coordinated with candidates’ official campaigns, but nevertheless almost always is. Protected by both a Supreme Court that is indifferent to concerns about political equality, and by a dysfunctional Federal Elections Commission, the dominance of big political spenders has mushroomed since 2010. Two Supreme Court decisions were critical. In Citizens United the Court allowed corporate entities to use their treasuries to influence elections. It then followed up in SpeechNow, a decision allowing unlimited individual contributions to political action committees. With this, the Court enabled rich donors to spend as much on “outside spending” as they chose.

An avalanche of outside spending is the result. According to the Center for Responsive Politics (CRP), in 2008, before the Supreme Court decisions, independent expenditures had totaled about $143 million. But by 2012 that total exceeded $1 billion, and by 2016 it was $1.4 billion. As a percentage of the total spending on political campaigns, outside spending jumped from 4.2 percent in 2008, to 23.7 percent in 2012, and to 30.4 percent in 2016.

The amount of money spent by the individuals involved is simply staggering. Thomas Styer spent $89.8 million during the 2016 electoral cycle, a figure that even exceeded the $77.9 million donated by Sheldon and Miriam Adelson. In all, the CRP reports that each of nineteen individuals (in some cases combined with their spouses) spent $10 million or more. In aggregate, this group accounted for $508 million – 36.9 percent of all outside expenditures in 2016. A new vehicle for the super-rich has been created.

Spent on selected races, outside money is very powerful. In a hotly contested race for the House of Representatives in 2016, Zephyr Teachout’s campaign, relying on small donors, raised $5 million, about $2 million more than did her opponent, John Faso. However, her advantage was more than offset by the $6.2 million in outside spending that opposed her – almost twice the level that opposed Faso. What is remarkable about the anti-Teachout money was that something on the order of $1 million of it came from only two individuals – hedge fund CEOs, Robert Mercer and Paul Singer. Obviously the money deployed by these two individuals is a radical affront to the principle that the political process should be one in which equality of influence prevails.

Outside spending has become the mechanism by which rich donors can evade the few restrictions to their political spending contained in Federal Election Campaign Act (FECA) of 1971. As interpreted by the Supreme Court, that act imposed limits on campaign contributions to candidates in the name of controlling corruption or the appearance of corruption. But because the Court confined limiting contributions too narrowly, the reforms of the campaign financing system that emerged were weak. Limits were permissible only to prevent the explicit trading of favors for money. The influence of money on political outcomes, of course, goes well beyond the corruption involved in explicit quid pro quos. Nevertheless, according to the Court, more subtle ways of influencing politics through campaign donations were not subject to Constitutional control.

Even so, these tepid restrictions mandated by FECA have proved too much for wealthy individuals seeking to dominate politics. They have been empowered by a Supreme Court that has allowed a system of uncontrolled political spending to grow unchecked. With no limitations on outside spending, a handful of individuals can come close to dictating the shape and content of our political process. And it is that form of political spending that is sure to increase in the future.

Political equality, and with it our democracy, is under siege in this country. But Donald Trump is not its only source.

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