Campaign Spending

Transcript for: 
Campaign Spending

MS. DIANE REHM

10:06:54
Thanks for joining us. I'm Diane Rehm. Now that the primaries are over, the real battles begin. They're increasingly expensive, and this year there's a twist. Organizations advocating for a particular candidate are no longer required to disclose their donors. Joining me to talk about implications of the new rules on campaign spending, Sheila Krumholz of the Center for Responsive Politics, Jan Baran, he's an attorney in private practice, specializing in election law, former general counsel to the Republican National Committee, Brody Mullins is a reporter for The Wall Street Journal, and Jane Mayer is staff writer at The New Yorker. Do join us, 800-433-8850. Send us your e-mail to drshow@wamu.org. Feel free to join us on Facebook, or send us a tweet. Good morning, everybody.

MR. JAN BARAN

10:08:11
Good morning, Diane.

MS. SHEILA KRUMHOLZ

10:08:12
Hi, Diane.

REHM

10:08:12
Jan Baran, explain what the rules are this time around, how they're different and why?

BARAN

10:08:20
Well, we're talking about spending by outside groups and individuals that is regulated by federal law in connection with federal campaigns. So we're talking about this year campaigns for the U.S. House and U.S. Senate. And the rules, for some time have been that certain individuals and certain groups can spend money without limit. As long as they're not collaborating with the campaigns, they're called independent expenditures. And we've had some changes over the last 10 years, partly caused by the McCain-Feingold law, partly caused by Supreme Court decisions, which define who can spend money and under what circumstances and when the money that's being spent is subject to public disclosure through filings with the Federal Election Commission.

BARAN

10:09:16
The Supreme Court, earlier this year, in Citizens United v. FEC, ruled that corporations and unions cannot be prohibited from spending money that expressly advocates the election or defeat of named candidates that says vote for or against candidate Jones or candidate Smith. Technically, prior to that time, corporations and unions could finance public advertising that didn't have these so-called magic words. But simply said -- well, candidate Smith or candidate Jones has this position on this issue. Call up candidate Jones and candidate Smith and tell them what you think about that position. Now, these content restrictions have been eliminated for corporations and unions for the first time.

BARAN

10:10:11
And not withstanding the fact that there's no prohibition, when they make this type of spending, they do have to file these reports disclosing that they spent the money. However, they only have to disclose the source of funding if somebody gives money to a group or to an individual for the specific purpose of financing those particular ads. But if somebody just gives money and says, you know, you can spend this money any way you want to, the source of that funding is not subject to disclosure.

REHM

10:10:44
Jan Baran, he's an attorney in private practice, specializing in election law. Sheila Krumholz, what difference do you believe these new rulings make in our election process?

KRUMHOLZ

10:11:01
These court rulings are tremendously important and concerning to us as an organization that supports transparency and disclosure of money in federal elections. It's really the first time in decades -- and, really, almost basically a century of precedent overturned -- allowing corporations, unions, trade associations to directly influence elections. And, now, we have no way of knowing, really, who the true sources of that money are, bankrolling these efforts that are really directly targeting our vote in November.

REHM

10:11:43
So what difference does that make?

KRUMHOLZ

10:11:49
The difference is that when folks at home sit down to watch these ads, they are no longer going to be able to see the true sources behind them and be able to weigh what is being alleged in these ads against the source. They're not able to consider the source behind these advertisements.

REHM

10:12:14
Sheila Krumholz, she is executive director of the Center for Responsive Politics. I want to turn to you now, Brody Mullins. What do we know so far about the amount of money that has been spent on midterm elections and how that compares to four years ago?

MR. BRODY MULLINS

10:12:39
Well, the thing about campaign finance is that every year is a record year. Every year, they spend more than the previous four years, and that's really going to continue this time. The new element -- because of the Citizens United decision -- is that corporations and a lot of conservative groups are really dumping money into these elections like never before. We've added up to about $300 million that corporations and conservative groups are going to spend just on the congressional elections. You know, as mentioned earlier, a lot of these donations -- most of these donations -- are undisclosed. They'll primarily be for advertisements in favor of Republican candidates.

MR. BRODY MULLINS

10:13:17
And it'll really make a difference in states like Nevada and California where there are incumbent Democratic senators who've raised a ton of money, who had a huge fund-raising advantage over their Republican challengers. And, now, all of a sudden, you've got these new groups who will cut out and help make up that difference.

REHM

10:13:37
And what's the overall percentage of money coming from those undisclosed sources now?

MULLINS

10:13:47
It's really a good question, and it's hard to answer because we're still in the middle of the cycle. The -- in the last three election cycles, the amount of money coming from outside groups is only about 10 percent of the total, which doesn't sound like that much. Now, it's growing. It's growing fairly quickly. I think, it has gone from 7 percent to maybe 11 or 12 percent. However, that 10 percent is an aggregate for all campaigns. Now, as you know, only a small percent of campaigns are competitive. Ninety-eight percent of incumbents win elections. So if you take that 10 percent of money and put it into this small percentage of races that are contested, it could mean a really big difference.

REHM

10:14:28
Brody Mullins, he is a reporter for The Wall Street Journal. Turning to you now, Jane Mayer, in a piece last month you wrote for The New Yorker, you wrote about the billionaire brothers who are waging a war against Obama. Tell us about that story and how it fits in to this question of overall undisclosed sources of money.

MS. JANE MAYER

10:14:58
Well, it was a close-up look at two particularly big players in American politics right now -- Charles and David Koch, who, between the two of them, own the most part of Koch Industries, which is the second largest privately held company in America. Between the two of them, they're worth $35 billion, which is a fortune that places them number three behind Bill Gates and Warren Buffett in terms of wealth in this country. And they've actually been longtime activists. Oh, it's interesting. They've been doing -- they've been involved in American politics since the 1980s and even before. Their father was one of the founders of the John Birch Society or at least -- maybe founder is the wrong word.

MS. JANE MAYER

10:15:39
He was in on the ground floor at the very beginning of the John Birch Society, and so he, too, was very politically active. And at any rate, they have been pouring money into American politics for at least 30 years. But they've had a particular sort of metamorphosis during this whole Tea Party period, which is what I was interested in. Because basically the Tea Party, in some ways, represents a popularization of many of the ideas that they've long supported. And it's kind of a big success for them. They are extreme libertarians. They oppose -- they really pretty much demonize the federal government in many ways. They oppose everything from public schools to Social Security to taxes of all kinds to environmental regulations.

MS. JANE MAYER

10:16:22
And these policies are very good for their business because they're petrochemical manufacturers and refiners. And they also are people who just ideologically are opposed to a strong federal government. So anyway, they've been pouring money into American politics and particularly against Obama. And so I was taking a look at the role that just a few, very deep-pocketed players with vested interests can have now in American politics. And one of the things I wanted to do in the story was figure out how much money they've really put in to American politics and how much they're putting in right now. And I think what I discovered was, as Sheila was saying, that you can't really tell. And no matter how hard you try, you can't pin it down completely because there are so many ways to pour undisclosed money in.

MS. JANE MAYER

10:17:14
I mean, I could figure out that they were -- that they've spent something like a hundred and -- over $100 million over the last 10 years through their various foundations that's declared. But there are many ways you -- that somebody who's worth, you know, whatever they -- $17.5 billion apiece -- can pour private money into American politics right now. And there'll be no fingerprints.

REHM

10:17:36
And this morning's New York Times has a lead editorial that they now -- the Koch brothers themselves -- apparently are very involved in an anti-climate change state referendum out in California.

MAYER

10:17:54
Yeah, it's fascinating because this is Proposition 32, it's called. It's a piece of legislation that was pushed by Republican Governor Schwarzenegger and had bipartisan support. It, sort of, sets targets for cutting down on greenhouse gas emissions and carbon emissions. And they are pouring money into an attempt to overturn it. And they are along -- they are oil refiners, but the thing is they don't even do any business in California. They're out-of-state, big, deep-pocketed interests pushing against California's laws.

REHM

10:18:28
Jane Mayer, she is a staff writer for The New Yorker. When we come back, we'll talk more about these undisclosed donors to political campaigns.

REHM

10:20:02
And as we continue to talk about unnamed donors to various political campaigns, we're joined now by Congressman Chris Van Hollen, Democrat of Maryland, Chairman of the Democratic Congressional Campaign Committee. Good morning to you, sir. It's good to have you with us.

REP. CHRIS VAN HOLLEN

10:20:25
Good morning, Diane.

REHM

10:20:26
You and Senator Chuck Schumer proposed legislation that would require more disclosure. Tell us about why you believe this is important.

HOLLEN

10:20:41
Well, we think voters have a right to know who is bankrolling these political advertisements on television and let the voters decide -- you know, based on the funders -- how credible the ad will be. And we think it's fundamental to our democracy that people not be allowed to spend millions of dollars of secret money to influence campaign. So what we're asking for is transparency and disclosure. Tell the voters who is behind the ad and, you know, let the voters, you know, use that information to judge how they're going to respond.

REHM

10:21:23
But, Congressman, what difference does it make? Aren't voters going to vote the way they want to vote, no matter whose money is behind an issue or a candidate?

HOLLEN

10:21:39
Oh, I don't think so. There's a reason a lot of these secret special interests are spending millions of dollars anonymously. It's because they recognize that it does matter to voters -- who's paying for something. I mean, hypothetically, if you saw an organization called, you know, the clean notions campaign, running ads about -- on an energy issue or, you know, oil and gas issue, and you found out it was funded by a big oil and gas company, it would change your perceptions of the ad. And these people running the ads know it. Otherwise, they should just disclose voluntarily. I mean, we'd like that, to have a law requiring people to disclose.

HOLLEN

10:22:21
But there's a reason, Diane, that people are keeping this secret because they know it does matter to voters. And they know that that information will be filtered by the voters in terms of deciding whether to run an ad. I should also point out that, you know, these groups, you know, they may be organized around a particular issue. But, you know, they can run ads on anything they pick, trying to influence the outcome of elections. And...

REHM

10:22:48
Give me an example of an egregious ad that you've seen that voters do not recognize. Who or what is behind it?

HOLLEN

10:23:02
Well, there's a group called -- you pick your ad. I mean, we made efforts to get lots of these ads off the air, and some of them get pulled off temporarily because of their distortions. But there's Americans for Prosperity organization that we know a little bit about now. I mean, it's funded largely by the Koch brothers and Koch Industries. That's K-O-C-H, not Coke, as in the real thing. And this is a group of business interests that benefited greatly from the Bush economic policies and agenda. And they would like nothing more than to go back to those same economic policies.

HOLLEN

10:23:42
And so, you know, people see this title Americans for Prosperity. I think if they know who's behind it, they'll recognize that this organization is not interested in anyone's prosperity but their own. And that's the reason they're spending all this money. They're spending money to try to elect candidates who support their particular economic agenda -- in this case, going back to the Bush economic policies, including getting rid of the Wall Street Reform bill that we passed. They've opposed our efforts to clamp down on these perverse tax loopholes that encourage corporations to ship jobs overseas. So they've got an economic agenda. So our point is simply this, just tell us all the people who are behind it. Tell us who the interest groups are. I mean, let's have transparency and disclosure as part of the democratic process.

REHM

10:24:35
And I gather that the House passed your legislation in June but faced stiff opposition from Republicans in the Senate. The Senate is considering a pared down version. What would that mean?

HOLLEN

10:24:57
Well, I think they're looking at a number of options. As you mentioned, a few months ago there was a vote, and it was blocked by Republicans. There are enough senators supporting the bill to get it passed. There are more than 50 senators in support of the bill, but you had a filibuster. You had 59 senators supporting the end of culture -- letting the bill come to a vote, but not a single Republican. They -- despite a lot of statements over the past year saying that they supported the notion of disclosure and transparency, when it came time to actually vote for greater transparency and disclosure, they weren't there.

HOLLEN

10:25:36
So Senator Schumer, I think, is looking at some changes. It's not clear what changes would have to be made at this point. And I think he's really extended an invitation to Republican senators saying, you know, you've been on record in the past for saying you support transparency and disclosure. A number of Republican senators were strongly critical of the Supreme Court's decision in Citizens United. And yet they haven't come forward to say, you know, here are the changes we want to see in the legislation.

REHM

10:26:05
All right. Here, I want to read to you an e-mail we've just gotten from Andrew, who says, "I realize this e-mail is going to be ignored, but I wanted to get this off my chest." So it's not going to be ignored, Andrew. He says, "Why is it okay for George Soros, Warren Buffett and Bill Gates to spend millions on Democrats? Why is it okay for labor unions to spend millions on Democrats, but now, all of a sudden, that people who happen to be organized as corporations have the right to contribute, you guys have a problem?"

MAYER

10:26:53
Can I -- I've had a lot of...

REHM

10:26:56
This is Jane Mayer, Chris Van Hollen.

MAYER

10:26:57
Hi. I've seen a lot of e-mail along this line and a lot of blogging along this line. And one of the things that I wanted to say was, I think it's a mistake to assume that just because one writes about -- in our case, the Kochs in this instance -- that it's giving a pass to George Soros or anybody else. And in particular, at The New Yorker before I ever wrote about the Kochs, I wrote a 7,985-word piece about George Soros and his influence in the 2004 campaign when he was pouring money into that. We write about -- you know, I think the question is a bipartisan question. And the country needs to think a lot about what kind of rules it wants and whether there should be sort of everybody equal citizen spending, or there should be some uber-citizens who get to spend a whole lot more and kind of have an extra influence.

MAYER

10:27:48
And right now, that's how things are. And there are those citizens on both sides. That said, I will say -- having written both about the Kochs and about George Soros and spent a lot of time on both of them -- George Soros is transparent. He believes in transparency. It's one of the things that he can talk you blue in the face about, in fact. But he is very open about where he's spending his money.

REHM

10:28:10
Chris Van Hollen, going back to you, what are the chances that you'll have any kind of a vote on your bill before the midterms? And even if you did, I gather it would not apply to the midterms.

HOLLEN

10:28:28
Well, as you mentioned, it passed the House. And I think that they're going to try and bring it up again in the Senate for a vote. In order to get it to a final vote, they have to get 60 votes, which means they have to get at least one Republican senator. Not clear yet whether they'll be able to do that. And as you said, in order -- if they were to get one, they probably have to modify it in a way that unfortunately did not apply to these elections.

HOLLEN

10:28:54
Just to go to the caller's question, I want to be very clear -- and I think Jane alluded to this -- but this bill requires disclosure for everybody. In other words, it doesn't matter whether you're, you know, trying to support a Republican candidate or a Democratic candidate or independent candidate. The rules apply across the board, and I would hope that we would agree that this is important for our democracy, that we have that kind of transparency because otherwise you really can have, with -- under our current laws and rules -- people secretly channeling millions and millions of dollars into the campaigns without anybody's knowledge, trying to obviously influence the outcome.

REHM

10:29:41
But here is my last question for you. How are you going to get people to care about this issue?

HOLLEN

10:29:53
Well, the president has been talking more and more about it. And we're just trying to raise people's awareness about the ads they're seeing on television and get people to ask themselves the simple question, who is paying for these ads? Why aren't they telling us who they are? What particular interests are being served by these ads? Whether it's on the right or the left, it happens to be the case. But right now, you've got -- as of today, about $22 million that have been spent on House races by these right wing groups compared to about $3 million that have been spent by labor groups. The labor groups are telling people who they are. They are established, you know, labor groups.

HOLLEN

10:30:34
But there's -- we just believe the American citizens should be asking themselves that question and look very critically at these ads. Regardless of what the messages are, ask themselves, whose interests are being served? Why is it that this particular group may be supporting the candidate they're running ads for? Who's behind them? And demand to know, demand to know or demand that the candidate on whose behalf these ads are being run, you know, take responsibility (unintelligible)

REHM

10:31:08
So -- but even if they demand to know, Congressman Van Hollen, what's the likelihood that they will get to know?

HOLLEN

10:31:21
Well, that's exactly the problem, Diane. Unless we pass the disclose act, it's unlikely that these interests will voluntarily disclose their big financers because, otherwise, they would have done it voluntarily. And the reason they don't want to tell you is because they recognize very clearly that voters have that information. And to get that information out, it will, in many cases, undermine the credibility of the message in the ad. I mean, for example, if you're watching an ad that's against healthcare reform, and you'd find out that's it's been run by a big health insurance company that's been raising their premiums on you every month, that, you know, voters can connect the dots there. And it has been clear in some states -- like California that require greater disclosure -- that it has had an impact on the credibility of the ads when the voter finds out who's bankrolling the ad and what particular economic interest they have in the outcome of the vote.

REHM

10:32:22
Congressman Chris Van Hollen. He is Democrat of Maryland, chairman of the Democratic Congressional Campaign Committee. He and Sen. Chuck Schumer have proposed legislation that would require more disclosure as to funding of various political campaigns. Thank you so much for joining us, sir.

HOLLEN

10:32:52
Good to be with you, Diane.

REHM

10:32:53
Thank you. And you're listening to "The Diane Rehm Show." I wonder if we can talk for a moment, Brody. The congressman referred to $22 million raised so far coming from corporations, $3 million from unions. Is that about right?

MULLINS

10:33:17
He said how much money has been spent so far in some of his House raises. And to be fair, Republicans spent -- plan on spending a lot more of their money in Senate races, I believe. However, I think at the end of the day, the numbers will be fairly equal. I mean, one of the strange things about campaign finance is that if you go to the Federal Election Commission, which tracks campaign finance spending, and say to them how much money was spent on the 2008 elections -- or in this case 2010 election -- they will never be able to tell you. No one knows exactly how much money is being spent. And part of that -- not entirely -- but part of that is from labor unions. Labor unions spend a lot of money in elections, mainly by getting volunteers to go knock on doors, by putting flyers in their monthly newsletters saying, you vote for this person. You vote against that person. But most of that is not disclosed, and having a group of people go out and knocking on doors matters. That makes a big difference, and that's not disclosed.

REHM

10:34:20
Jan Baran, to what extent do you think that this expanded ability to contribute to political campaigns has really energized both sides?

BARAN

10:34:33
I think that's a very good point, that, really, energy in the political arena is cyclical. I mean, if we were talking in 2008 about where all of the independent spending and all the fundraising was occurring, it would be over in the Obama campaign and with the Democrats who vastly outraced and outspent the Republicans in that election. The energy in the 2010 off-season election, however, is reversed. Clearly, there's much more energy in the conservative Republican side as of right now. However, I have to point out that when it comes to spending thus far -- and Brody is right that we're going to have much more data after the election because a lot of the reporting really kicks in starting Sept. 2, under the disclosure laws.

BARAN

10:35:24
But up to now, the spending has been pretty much equal. And it has been in some very unusual races, particularly with the special elections that we had earlier this year. In Massachusetts, in the special election to fill former Sen. Kennedy's seat, that -- which occurred before the Citizen United case -- there was about $2.5 million spent on each side on behalf of Coakley, the Democratic candidate, and Sen. Scott Brown, the Republican candidate, by unions and corporations under the old rules. In fact, there was so much money spent in that election that a week before it occurred the broadcasters in Massachusetts and the surrounding area announced they had no more television or radio time to sell.

BARAN

10:36:11
So we are witnessing two things in my view. One, is you have a growing familiarity with the rules, an incentive to spend. And I think we're going to see it being spent on both sides although if the energy keeps up, it's likely to be a little more on the conservative Republican side this year.

REHM

10:36:33
Jane.

MAYER

10:36:33
You know, I mean, there's a tendency, I think, to think. Well, since both parties are spending equally, gee, it's fair. But I actually think -- there was a piece that caught my eye that's in the Harvard Political Review right now that I thought makes a good point, which is that this kind of -- this arms race, in fact, has some downsides, which is that both parties become more and more alike, because they both have to get so much money. And they have to raise it from the same places. So you see more and more -- the Democrats are going to the hedge funds and Wall Street for their money. And it makes -- you know, it probably has some connection to why, when there's financial regulation reform, it's barely toothless.

REHM

10:37:14
And there was a recent incident in Minnesota over a Target donation. Do you know about that, Jan?

BARAN

10:37:25
Yes. And I think this is -- in perhaps an unintended way -- a little related to the comments of Congressman Van Hollen, which I'd be glad to comment on after the break.

REHM

10:37:35
All right, after we come back. And we'll take your calls as well. Stay with us.

REHM

10:40:03
And just to round out that last point, let's talk about the Target incident in Minnesota. Jan Baran.

BARAN

10:40:14
Oh, there was a group organized in Minnesota that solicited and received donations from several corporations, including the Target Company. And they then sponsored some advertising in support of a particular candidate. The candidate and the advertising became controversial because of the candidate's position on gay rights, which was unrelated to the advertising content. But because Target was disclosed as the funder and because it was -- had a reputation for supporting gay and lesbian rights, there were protests launched against the company for supporting this type of ad. And there was even a proposed...

REHM

10:40:58
Hmm.

BARAN

10:40:58
...boycott of the company, which I don't think has been successful or there's been a great deal of publicity. This does relate to the points of Congressman Van Hollen was trying to make when he was with us in support of his bill called the Disclose Act, which he says, simply wants disclosure. It was Anatole France who once commented on the majesty of the law that it applies equally, that both the rich and poor are prohibited from stealing bread or from sleeping under bridges. And in his unique way, he was commenting on the fact that laws can apply equally, but they affect people in a different way.

REHM

10:41:39
Sheila, do you want to comment on that Target ad?

KRUMHOLZ

10:41:43
Well, I just want to say I think that's a good example of a corporation spending money, getting caught up in something they would -- you know, in retrospect, I think they wished they had not made that investment because it flies so directly in the face of their stand on gay rights. But it's notable that here's a public corporation spending money, and most corporations will not spend directly for or against candidates precisely because they don't want that retribution from their customers. So we're not going to see direct investments from corporations in big ways in advertising.

REHM

10:42:12
All right.

KRUMHOLZ

10:42:12
But it's going to be indirect through, perhaps, front organizations.

REHM

10:42:15
Here's an e-mail from Nancy in Cincinnati, who says, "I think your commentator is missing the point. The point is hidden contributions Obama made had more money in the 2008 election, but it was not from groups with hidden contributors. It was from people who put their names on the contributions of less than $2,400 each." Jan?

BARAN

10:42:47
Well, that's -- that is true of both sides when it comes to contributions that actually go to campaigns. But in terms of money that's spent independently in the campaigns by these so-called outside groups, the funders of groups like, you know, the Chamber of Commerce or the group that Congressman Van Hollen mentioned, Americans for Prosperity, are not disclosed because of the current law. On the other hand, one of the biggest spenders in these campaigns is organized labor. It's the AFL-CIO, the Service Employees Union. Of course, they get their funding in a different way. I mean, they get that...

REHM

10:43:26
But that's why I want to understand the comparison between the spending of corporations and the spending of unions.

MULLINS

10:43:37
Well, if you start by just looking at contributions to outside groups to spending on advertisements on behalf of candidates, labor unions has spent far more money than corporations in the last decade. This year, I think things are going to change. I think, this year, corporations are going to outspend labor unions. But thus far, the labor unions have spent far more money. And I think that part of that is a natural development because Republicans were in charge. Yet President Bush was in the White House, Republicans controlled the House and the Senate. Corporations were happy. They didn't have much to fear. Whereas labor unions and liberal groups are on the defensive, and they know if they wrote million dollar checks to groups, they could have an influence. And they have. Now, we've got the opposite. President Obama is in office. Democrats control the House and Senate, and businesses are on the defensive. So the situation has switched.

REHM

10:44:30
Jane.

MAYER

10:44:30
You got to -- there's -- excuse me, a piece in The New York Times this morning, though, that -- that's -- that quotes a labor leader saying we can't -- we don't have the financial club to match what Corporate America is doing in this cycle right now. I don't know if it's true or not, but that is -- that was Richard Trump who was saying that.

REHM

10:44:48
Sheila.

KRUMHOLZ

10:44:50
Well, that may or may not be true. It remains to be seen. And, unfortunately, because of the lag in disclosure, even when we have it, we won't get that until well after the elections are over.

REHM

10:44:56
Or it could be years before we know. Isn't that the other problem here?

KRUMHOLZ

10:45:03
There are many problems in disclosure. And another one that's going to come -- confront us very soon is the lack of disclosure about bundlers. We have had some voluntary disclosure by the presidential candidates in past cycles about their bagmen -- you know, the really important people who are gathering mega-money for these campaigns. And that's going to confront us again next year.

REHM

10:45:24
All right. To Syracuse, N.Y. Good morning, Gideon. You're on the air.

GIDEON

10:45:29
Good morning, Diane. And I love your show.

REHM

10:45:32
Thanks.

GIDEON

10:45:32
Thank you very much. I -- my question is -- you know, my concern is that at a certain point when we allow corporations to speak and afford them the same sort of rights as individuals, that in fact they distort the political dialogue to the point where it actually makes it impossible for government to function properly. So if it's the bailout in determining where money should go, that there is a disproportionate impact that the corporate form gives money interest in comparison to an individual, and, I guess, I was thinking of Andrew's e-mail earlier in the show and the difference between a George Soros and a corporation. I don't feel so bad about a corporation -- I mean, excuse me, I don't feel so bad about George Soros giving money that he is -- that is his alone. But I do have a problem with a corporation, which is just a bunch of individuals pulling their resources to augment their voice. And -- so my question is, isn't there a difference?

REHM

10:46:42
Jan Baran.

BARAN

10:46:43
Well, constitutionally, the Supreme Court has ruled, over decades, that independent spending is protected by the First Amendment, whether you're a billionaire or a political party or a pack or, in this case, a corporation or a union. It may come as news to the caller and your listeners, Diane, but even before the Citizens United case, 26 states and the District of Columbia had no prohibition on corporate spending in campaigns, that they -- prior to that, under state law, for state campaigns could spend as much money as they wanted to as long as they filed reports with the State Election Commission. And under that system, you know, there was no evidence, up to that time, that business organizations had a overwhelming role.

BARAN

10:47:41
In fact, the evidence was that when it came to independent spending, they were the number three or number four spender of that sort. First being, again, organized labor, second, wealthy individuals and, in some states, Indian tribes, you know, were spending more money than corporations. So it's not to say that there isn't a theoretical possibility that some source of spending in our political system could overwhelm it through its wealth. That, however, has not happened either with billionaires or with corporations or unions or other forms of associations that participate in this type of spending thus far.

REHM

10:48:21
Jane.

MAYER

10:48:22
I -- this is a question for Jan 'cause he's the expert on campaign finance. Listen, I'm not. But have -- are -- have any of these states allowed for unlimited anonymous spending the way that the new entities, these 501 (c)(4)'s do?

BARAN

10:48:41
Well...

MAYER

10:48:41
And has there been nationally anonymous unlimited spending as there can be now?

BARAN

10:48:48
Well, the short answer is yes, in the sense that anonymity has occurred in the spending. For example, if the Sierra Club or the Chamber of Commerce or the National Right to Work Committee spent money, they do not have to disclose where they get their money as an organization. But they did have to file a report and say, we spent this money, and this is how much we spent, and this is what the advertising was that we spent it on. In terms of disclosure of the sort that the disclose bill is seeking, they basically want to know -- and they want to discourage -- any money that's being raised even by established organizations like the Chamber of Commerce or the Sierra Club -- just as examples -- they want to discourage them from spending money by basically discouraging contributors from allowing their donations to be spent for that purpose.

REHM

10:49:44
Brody.

MULLINS

10:49:45
I think it's also a broader consequence of this increase in spending on -- by outside groups, whether it's the right or left that -- it's doesn't really matter. Before 2002, the unions and wealthy individuals and corporations could give million-dollar contributions to the political parties. And that made the political parties the single, strongest, most influential force in politics. And what political parties do, whether they're on the right or the left, is unify the party, bring people together, bring your -- in the Republican Party, Mike Castle, who is the most liberal of the Republicans, on the right and some of your most conservative members on -- rather the other way around, on the right, bring them all together. Now that political parties can't raise these contributions and these money are -- these funds are going to outside groups, the political parties are becoming less influential.

REHM

10:50:34
And, now, individuals and corporations can donate...

MULLINS

10:50:38
And they have their own...

REHM

10:50:39
...directly to candidates.

MULLINS

10:50:40
And they have their own agendas. They have their agendas...

REHM

10:50:42
Brody.

MULLINS

10:50:43
...which means, I think, that it's leading to the polarization of politics that you have no unifying, moderating force in politics.

REHM

10:50:52
Sheila.

KRUMHOLZ

10:50:53
I think that's a really important point because at least we knew back in the days (unintelligible) money to the national party committees, who they are and see in the DNC were. And, now, we have these front groups -- potentially fly-by-night groups -- that pop up, drop a ton of money at the last minute when the opponent cannot respond to it. It's too -- they don't have the time to raise the money or even run the ads, or they -- and the ad time is bought up. They can't respond. And then these organizations can disappear. You know, the Swift Boat Veterans for Truth, they had a fine years after they had essentially disbanded. It was, you know, too little, too late.

REHM

10:51:27
Now, Sheila, what is your concern beyond the fact that voters will not necessarily know who's behind what they're voting for? Does -- or do your concerns go farther?

KRUMHOLZ

10:51:46
Well, we're not a reform group, so we're not advocating for public financing or, you know, no regulation. I mean, there -- this really spans the gamut of folks wanting totally anonymous donations. Some would say, we should just have them all secret, and then nobody can gain any advantage to others, saying we should get private money out of politics. Our position is, we need to -- as long as we have private money in politics, we need to know where it's coming from so that people can judge the credibility of the source, spending money, running the ads and understand how money fuels our system so that they can make the best choice of (unintelligible)

REHM

10:52:20
All right. To Charles in Enfield, N.H. Good morning, you're on the air.

CHARLES

10:52:27
Good morning. I would like to comment with -- in the form of a question, I guess, consistency of principles regarding your discussion of the Koch distributions.

REHM

10:52:40
Sure.

CHARLES

10:52:41
I'm willing to accept the libertarian (word?) interpretation of the First Amendment regarding free speech, but I'm sure the Founding Fathers assumed we would know the identity of the speaker or the essayist. For example, for labor unions, if the AFL-CIO gives something, I know their position, but Center for Concerned Citizens, for example, who knows what that position is. I think your -- one of your speakers just commented on that fly-by-night thing.

REHM

10:53:17
All right. Thanks for calling. Jane.

MAYER

10:53:20
Well, I do think that you can learn an awful lot by seeing where the money is coming from, and some of it is very interesting. I'm -- I've been looking at the money behind the Tea Party groups and their, you know, they're a range of groups. But one of the things that pops out when you do sort of take a closer look is that an awful a lot of the people who are involved in organizations that are organizing the Tea Party, are -- they're not new faces to politics. You -- the media describes this as a sort of a grassroots movement that has just popped up and something new. You look at it, and you see many of -- many retreads, many of the same old players...

REHM

10:53:54
Familiar names.

MAYER

10:53:55
You see Dick Armey at the head of FreedomWorks. You see, you know, at American Crossroads, which is not really a Tea Party group, but is -- you see American (word?). You see Karl Rove at Tea Party Patriots, which is a group that -- announcing today that it's raised a lot of money and they're not saying where it came from. There's -- involved with somebody named Gary Aldrich who wrote a book that was trashing the Clintons. I mean, these were people who've been on that sort of edges of politics for a long time. Fred Malek is involved in one of the big groups. He goes back to the Nixon days. So, you know, I mean, I -- it's -- you learn a lot. And I'm sure in the same way you learn a lot when you look at the liberal groups. You -- these are people who've been in the trenches a long time.

REHM

10:54:40
And you're listening to "The Diane Rehm Show." Sheila.

KRUMHOLZ

10:54:45
I just wanted to comment on the Tea Party Express because there, the concern, I think, is a little different. Or there's a new concern raised in a recent New York Times article that talks about Sal Russo in home port and Russo Marsh & Associates is, this organization that really kind of birthed Tea Party Express. It started as, our country deserves better, and the accusation essentially in the story is that they've latched onto the energy behind the Tea Party -- you know, the true grassroots movement to kind of use it, in a way, to exploit it for their own personal gain. And so I wonder if, you know -- there, the story might be slightly different, that donors may not have caught wind of the central role of these long-time GOP operatives that perhaps are using this to their own advantage. And -- but they've been tremendously influential and very strategic in their spending.

REHM

10:55:29
And here's the last e-mail from David in Grand Rapids, Mich., who says, "Wonder where your guests think the Tea Party stands on unlimited individual corporate and foreign government funding for U.S. elections. Seems like they would be against it since it does take power away from the people. Do they stand with the president on this issue?" Jan Baran.

BARAN

10:55:58
Well, I don't know that the Tea Party is in fact a political party. From what I've read, it's seems to be a very dispersed group of individuals.

REHM

10:56:07
But people are making contributions.

BARAN

10:56:10
Well, they are funding a movement of some sort that is not aligned with a candidate. The money is not going to candidates. I would also point out that foreign money, whether it's limited or unlimited, is illegal under federal law and may not be contributed to any candidate for any office in the United States, nor can they spend the money for independent expenditures and things of that sort.

REHM

10:56:38
But just on that point, if you have a corporation with foreign offices, foreign locations, how do you know? How in the world can you possibly know? Sheila.

KRUMHOLZ

10:56:53
Well, we already do have pacts that have -- that are U.S.-based representatives or subsidiaries of foreign corporations. But the real concern now is just that -- if it's giving to a 501 (c), a tax-exempt organization, we have no idea if -- whether it's domestic or government or foreign.

REHM

10:57:08
Sheila Krumholz, Jan Baran, Brody Mullins and Jane Mayer, you also heard from Congressman Chris Van Hollen. Thank you all so much. Thanks for listening. I'm Diane Rehm.
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