Chris Christie, shown here at a campaign event Nov. 30 in Loudon, New Hampshire, has become a proponent of overhauling the U.S. campaign finance system.

Chris Christie, shown here at a campaign event Nov. 30 in Loudon, New Hampshire, has become a proponent of overhauling the U.S. campaign finance system.

Earlier this week Republican presidential hopeful, Governor Chris Christie, spoke out about against our current campaign finance laws: “If you think that’s a good system,” he said, “then what you think is that I should spend almost every minute of every day raising money.” He was specifically referring to the $2700 limit on individual campaign contributions. But many believe the Supreme Court’s 2010 Citizen’s United ruling and laws that allow political advocacy groups to keep donor names secret present are more of a concern. How the current campaign finance system is shaping the 2016 race for the White House

Guests

  • Richard Hasen professor of law and political science at the University of California, Irvine; author of "Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections", Yale University Press, 2016
  • Matea Gold reporter covering money and politics, The Washington Post
  • Fredreka Schouten reporter, campaign finance and lobbying issues, USA Today

Transcript

  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Earlier this week, New Jersey Republican presidential hopeful Chris Christie railed against the $2700 limit on individual campaign contributions, but many believe our campaign finance system has many more problems. Joining me to talk about the current system, how it's shaping the 2016 presidential race, Matea Gold of The Washington Post, Fredreka Schouten of USA Today and joining us from a studio at NPR West in Los Angeles, Richard Hasen of the University of California Irvine.

  • 10:07:38

    MS. DIANE REHMDo join us with your own questions, comments. Call us on 800-433-8850. Send an email to drshow@wamu.org. Follow us on Facebook or send us a tweet. And welcome to all of you.

  • 10:07:56

    MS. MATEA GOLDGreat to be here.

  • 10:07:58

    MS. FREDREKA SCHOUTENGreat to be here.

  • 10:07:59

    MR. RICHARD HASENHappy to be with you.

  • 10:08:00

    REHMThank you. And Fredreka, I'll start with you. Explain the limits that Governor Christie was talking about and how they affect campaign strategy.

  • 10:08:13

    SCHOUTENWell, as a presidential candidate, Christie and his rivals cannot raise more than $2700 in the primary election from an individual. However, we are in the era of superPACs and outside money and superPACs can raise unlimited amounts. Here's the dilemma for Chris Christie. SuperPACs supporting his rivals have raised a lot of money and they are hitting him with hard ads in New Hampshire.

  • 10:08:43

    REHMSo to you, Matea, while Fredreka mentioned superPACs, there are a lot of other ways that people are raising money, corporations, advocacy groups are allowed to fund individual candidates as well.

  • 10:09:04

    GOLDYeah, I think what we're seeing in this presidential race is the full flowering of the Citizens United effect. And so this decision, which was handed down by the Supreme Court in 2010, said that groups could spend and corporations and unions could spend unlimited sums of money independent of candidates and parties. That lead to another court decision that sanctioned superPACs and for the first time, nearly every single presidential candidate has a sanctioned superPAC flanking their campaign.

  • 10:09:34

    GOLDAnd what's happened is, is those groups, especially on the Republican side, have really dominated the early ad wars. Already eight out of ten ads run on the air through mid-December were run by outside groups according to the Wesleyan Media Project.

  • 10:09:50

    REHMNow, do we know how much each candidate has raised up to now, Matea?

  • 10:09:59

    GOLDWe're about to find out at the end of this month. We're going to get a new batch of data. The candidates and their allied superPACs have to report their latest fundraising to the Federal Election Commission on January 31. We do have some information for last year. I mean, what I find really fascinating is there's been very different strategies adopted by the candidates on either side of the aisle in this new era.

  • 10:10:23

    GOLDHillary Clinton and Bernie Sanders, the main Democratic candidates for the Democratic nomination, have really focused on raising donations into their campaigns and have been very successful doing so. The Republicans put a greater premium, tried to stockpile superPACs ahead of their candidacies that they believed would give them a lot more flexibility and air power going into this very competitive GOP nomination fight.

  • 10:10:48

    GOLDAnd we're really seeing mixed impacts and some real questions about whether that strategy is going to prove to be successful.

  • 10:10:55

    REHMAnd turning to you, Richard Hasen, you have just written a new book titled, "Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections." Tell us how you believe the decision by the court on Citizens United has changed the whole election campaign process.

  • 10:11:28

    HASENWell, the fundamental change happened not just in Citizens United itself, but in a series of cases that both the Supreme Court decided as well some lower court decisions and decisions of the Federal Election Commission. And when you put them together, we're moving towards an era where there are very few limits on campaigns and as we've heard, very few effective limits on campaigns.

  • 10:11:51

    HASENSo while an individual cannot give more than $2700 to a presidential candidate or a candidate running for Congress for the primary and another $2700 for the general election, they can give unlimited sums -- and we've seen -- I think there was a report just this morning that AIG's Hank Greenberg is going to give $10 million to the pro-Bush superPAC. Now, these groups are supposed to be nominally independent of the candidates, but the way that the Federal Election Commission is enforcing the rules on coordination, it turns out that these superPACs are working very closely together with the candidates.

  • 10:12:28

    HASENThe upshot is that you have groups that are essentially the alter egos of the candidates that are running campaigns or shadow campaigns for the candidates and people can get the same kind of influence they could get by giving them millions of dollars directly to candidates, but without breaking those rules, the few rules that remain in place.

  • 10:12:48

    REHMFredreka, are there any candidates who have opted out of these various schemes?

  • 10:12:56

    SCHOUTENWell, Bernie Sanders, who has made billionaires and millionaires, you know, the heart of his campaign against campaign finance and corruption, he has said, look, I don't want help from superPACs. I mean, that has been the heart of his campaign. Donald Trump rails against big money and superPACs as well. He's an interesting case because there was a superPAC that had some ties to his campaign, that had been very active. He has since, as a result of reporting by Matea and others, has disavowed any relationship to those superPACs.

  • 10:13:34

    SCHOUTENAnd so he is saying, look, I'm going to put my own money into this race. He is getting some donations from small donors who are attracted to his message. And so you have a handful of them, but, I mean, you know, even Secretary Clinton who has said, look, I really want to change -- reform Citizens United, I'd love a constitutional amendment, even she has -- participating in the system and has two superPACs that are working closely because she says, I can't tie my hands behind my back.

  • 10:14:06

    REHMMatea.

  • 10:14:08

    GOLDWhat I think is so remarkable is that the proliferation of these groups is now at such a level that it's really registering with voters. And it's something that I think one of the reasons Christie actually addressed this was because he got a question about it and actually the candidates are repeatedly getting questions about this on the campaign trail. There is now, actually, I think, a palpable backlash against the way that the system is working.

  • 10:14:33

    GOLDAnd so while at the same time candidates are really trying to maximize the freedom they have to raise money and have their allies raise money in these different fashions, they're also having to contend with a really serious disgust in the electorate about the role of wealthy donors. It's something that has propelled both Bernie Sanders and Donald Trump's campaigns. I mean, it's very interesting if you look at the outsider candidates of both the parties, they are really getting a huge burst of energy from people who don't like the system the way it's running right now.

  • 10:15:04

    SCHOUTENAbsolutely. I mean, at least 16 states have now signed a referendum or taken some action saying, we would like to see Citizens United overturned. We'd like a constitutional amendment. And there is going to be an issue on the ballot in California this November also seeking voter advice on this. I mean, there are people who are deeply concerned.

  • 10:15:26

    REHMRick Hasen, how do you see action at the state level sort of addressing these issues and doing so without a return to the Supreme Court?

  • 10:15:42

    HASENWell, there's very little that can be done in terms of making fundamental change to our campaign finance system with the current Supreme Court. That is, you have a Supreme Court divided five to four with five justices, the five more conservative justices, taking the position that very few limits on money is politics are consistent with the first amendment. So what's happening at the states is that it's a kind of a political action to express discontent with what the Supreme Court has done, but I don't think that it's going to actually affect those five justices.

  • 10:16:17

    HASENAnd in my book, "Plutocrats United," I end with the idea that the way to get change is actually not through a constitutional amendment, which raises all kinds of problems, which we can talk about, if you'd like, but to change the Supreme Court. In our polarized society, the easiest way to amend the constitution is for five justices to change their minds or to have new justices. And so I think as we look ahead to the 2016 elections, when it's January 20, 2017, and the new president is installed, there will be four Supreme Court justices over the age of 80 and a chance to perhaps have up to four appointments to the Supreme Court.

  • 10:16:54

    HASENThis could change the balance of power on the court. So what's happening in the states is, I think, laying the groundwork for a political movement to try to change the Supreme Court to change the money in politics equation.

  • 10:17:05

    REHMMatea.

  • 10:17:06

    GOLDI think there's also another possibility that's worth noting is that, if anything, the rules could actually get looser in the coming years. The argument that Christie is making about candidates raising unlimited sums is an argument that conservatives have been making for a long time, since the McCain/Feingold Act cut down on the abilities of parties to raise large sums of money. They have argued this is -- Citizens United is a natural byproduct of what they view as a very flawed law.

  • 10:17:33

    GOLDAnd that candidates and parties are now operating with their hands tied behind their backs and that the whole system would be better off if we lifted the cap on contributions to candidates and parties.

  • 10:17:45

    REHMMatea Gold, she's a reporter covering money and politics for The Washington Post. Fredreka Schouten is at USA Today. Rick Hasen is professor of law, author of "Plutocrats United." Short break. We'll be right back.

  • 10:20:02

    REHMAnd we're back talking about how campaign finance laws are actually affecting campaigns and how they're run. We have a huge group of people running on the Republican side. We have three people on the Democratic side. We have a Facebook comment from Julia, who says, Bernie Sanders has been outspoken about this since it started. Where is his coverage? Matea.

  • 10:20:41

    GOLDWell, I think we and other news outlets have devoted a lot of space and time to covering the Sanders phenomena, which has been remarkable. And one thing that I think -- in the context of money and politics -- is really striking about the way he's run his campaign is not only did he denounce Super PACs, as Fredreka mentioned, but he has really been able to build on what President Obama showed was possible, which is, if you get enough people to give you small donations -- $5, $10, $20 -- over and over again, you can raise tens of millions. He's actually already surpassed the number of contributions that President Obama had received at this point in his campaign and he has over 650,000 individual donors.

  • 10:21:24

    GOLDThat is the kind of strategy and small-donor fundraising that can actually really be successful, despite the fact that there's an ability of a large Super PAC to raise huge sums of money.

  • 10:21:37

    REHMSo, for example, can you tell us what is publicly known thus far about how much Bernie Sanders has raised, how much Hillary Clinton has raised, Matea?

  • 10:21:52

    GOLDSo Hillary has also been very successful with small donors. Not quite a large of a small-donor base as Sanders. But she's already brought in $115 million for her campaign by the end of last year. I believe Sanders is somewhere around $70, $73, $74 million. And that --they are really having, as I mentioned earlier, much more success raising money directly into their campaigns, as opposed to the Republicans, which have been focused early-on in the cycle raising money into their Super PACs.

  • 10:22:22

    REHMAnd, Fredreka...

  • 10:22:23

    SCHOUTENMm-hmm.

  • 10:22:24

    REHM...recently you interviewed Charles Koch. He's apparently not getting involved in the primaries. Talk about his perspective.

  • 10:22:35

    SCHOUTENRight. So for listeners who don't know, I mean, Charles Koch is obviously a billionaire industrialist out of Kansas who is -- has built an enormous political structure, that almost rivals what the Republican Party has built, to advance his libertarian principles. He has not yet put his, you know, finger on the scales in this primary. He is holding back. He wants to see what candidates are saying. He had been looking and his organization has provided the opportunity for several candidates to speak before donors and other activists that are affiliated with them. So Jeb Bush has spoken to them, Carly Fiorina, Marco Rubio, Ted Cruz. But at this point he seems to be holding back.

  • 10:23:27

    SCHOUTENAnd a lot of people are going to watch them very closely. Because his organization is on pace, according to the fundraisers, to raise about $900 million over the two-year cycle. That is an extraordinary amount of money. About $300 million will be put directly into electoral politics at the federal and state level. They do a lot of grassroots work. They do a lot of, you know, they -- building data. They are building a very complex organization. So they're going to have an impact on the election...

  • 10:24:03

    REHMWhoa. Yeah.

  • 10:24:04

    SCHOUTEN...and will be supporting the general election nominee -- the nominee in the general election no matter what.

  • 10:24:10

    REHMAll right. And, Rick Hasen, we have a tweet from Lew, who says, I think the problem, or I thought the problem could be changed by changing the campaign finance laws. Difficult for sure but easier than a constitutional amendment. What say you?

  • 10:24:35

    HASENWell, there are only so many laws that could be changed consistent with what the Supreme Court has said in its cases. And so, if you wanted to impose a limit on Super PACs, well you can't do that because there was a limit on PACs. It said that no one could give more than $5,000 to one of these committees that plays in this area. And that's what the United States Court of Appeals for the D.C. Circuit, in a case called Speech Now Struck Down. So you can't make fundamental change with this Supreme Court.

  • 10:25:04

    HASENHere's the things you can do. First, we could greatly improved disclosure. We've been talking so much about Super PACs, one of the bigger problems in terms of disclosure comes from groups that are organized as so-called 501 (c)(4) or (c)(6) groups. These are social welfare groups or trade associations that don't publicly disclose their donors. They are playing an increasing role in the elections. So we don't even know where the money is coming from. So that's one thing that can be done.

  • 10:25:29

    HASENThe other thing that could be done, consistent with what the Supreme Court has said, is new forms of public financing. And so, in New York City, for example, they have multiple matches for small donations. In my book, "Plutocrats United," I argue we should give everyone campaign finance vouchers. Give everybody $100, who is a voter, that they could allocate to candidates, to parties, to interest groups, which could then be doled out. These things are consistent with what the Supreme Court has said. They would be improvements.

  • 10:25:58

    REHMHmm.

  • 10:25:58

    HASENBut we cannot get fundamental change without a Supreme Court change.

  • 10:26:02

    REHMAnd, Fredreka, on Rick's point of anonymous donors, Marco Rubio has gotten a lot of money from anonymous donors.

  • 10:26:15

    SCHOUTENRight. So there are two outside groups that are supporting his candidacy. And one is called the Conservative Solutions Project. And it is organized under a 501 (c)(4) section of the Tax Code.

  • 10:26:29

    REHMAnd tell us what that says.

  • 10:26:31

    SCHOUTENAnd so these are for groups that are nonprofits that are engaged in social welfare. But increasingly they are becoming very active in politics. And that group has spent more than $9 million in advertising to support Marco Rubio's candidacy so far in the early states. We do not know where the money comes from. They do not have to disclose their donors.

  • 10:26:57

    REHMAnd that sort of leaves all of us out here wondering about those anonymous donors, Matea.

  • 10:27:07

    GOLDYeah. And, if anything, there's been recent actions both in Congress and at the FEC that signaled that there's even less likelihood that there's going to be greater disclosure required of these groups. The FEC has recently taken up some cases involving politically active nonprofits. They have not been able to come to any consensus about whether there should be any prosecution or, rather, enforcement of any violations of potential election code violations. And, in addition, in the recent omnibus bill at the end of the year, they -- the Congress slipped in some language that actually temporarily froze the ability of the IRS to continue a rulemaking that was an effort to try to make it clear what kind of political activities these groups can do.

  • 10:27:54

    REHMAll right. We've got lots of callers. I'm going to open the phones, 800-433-8850. First, to John in Pittsburgh, Pa. Hi there. You're on the air.

  • 10:28:12

    JOHNHello. Thank you. Even if the Supreme Court was stacked with justices who were friendly to campaign finance reform, that wouldn't solve so many problems with campaign finance laws at the state level. For instance, in my home state of Pennsylvania, any candidate running doesn't face any campaign finance limits. So my question is, how do you see change happening at the state level in all 50 states?

  • 10:28:40

    REHMRick Hasen.

  • 10:28:43

    HASENWell, what's happened is that the Supreme Court has stifled change. So states can only have so much maneuvering room. I think, if you had a progressive Supreme Court that came in and said, as I argue it should, we're going to take a very close look at campaign finance laws. But if you can ensure robust political speech, you can enact limits to promote political equality. That's something the Supreme Court for 40 years has rejected. So if the Supreme Court changed that tomorrow, then I think we'd see political action state by state and in some places city by city, enacting new limits, enacting new public financing plans, enacting new disclosure laws.

  • 10:29:18

    HASENAnd we'd see, I think, a very positive reaction in a number of states that would improve things on the state level. And, of course, to get something through Congress these days would be very hard.

  • 10:29:29

    REHMHmm.

  • 10:29:29

    HASENI think we'd have to wait for the right moment to try to push for new federal campaign finance laws. But that all comes after the Supreme Court would give a green light.

  • 10:29:38

    REHMMatea.

  • 10:29:40

    GOLDWhere I think there is some traction in the states is on the disclosure issue, as Fredreka mentioned, and California is considering several different initiatives right now that would force politicians and committees to really provide greater disclosure of the donors who are supporting them. So I think that's something that we are seeing getting more traction at the ground level.

  • 10:29:58

    REHMFredreka.

  • 10:29:58

    SCHOUTENWell, yeah, again, I do think that there is support for that. You know, it's striking what, you know, Chris Christie said -- we talked about this at the opening -- he said, give us, you know, let us have all the money and let's disclose it within 24 hours. We heard Mitt Romney say some things like that, along those lines, in the 2012 campaign. And one reason that the candidates are saying let us have more access to the money is that they can control it directly. They can say, you know, run this ad in this state right now. And they -- and it's also cheaper for them. Under federal law, candidates get the lowest unit rate on television advertising. Super PACs don't.

  • 10:30:35

    REHMHuh. Interesting.

  • 10:30:35

    SCHOUTENWhich is part of the reason that we're seeing this explosion in the cost of this campaign.

  • 10:30:40

    REHMAll right. To Christopher in Navarre, Fla. You're on the air.

  • 10:30:46

    CHRISTOPHERHi. Thank you very much for taking my call.

  • 10:30:48

    REHMSure.

  • 10:30:49

    CHRISTOPHERI actually was just wondering, as somebody who pays attention to the Republican and Democrat side, I was just kind of curious. I noticed, like, Bernie and Elizabeth Warren have been talking about campaign finance reform for many years, since Citizens United. And they were -- they've set up petitions to repeal it. So I was kind of wondering if, you know, the panel, since they're definitely experts, if they could talk more about, you know, I guess Senator Sanders and Elizabeth Warren on, you know, what -- I guess, what they're trying to do to change the -- and the fact that Senator Sanders, I believe his individual donations equal about 80 percent of his money and I believe Hillary Clinton is about 80 percent from, like, banks.

  • 10:31:46

    REHMAll right. Thanks, Christopher. And I hear that little baby in the background. Matea, go right ahead.

  • 10:31:54

    GOLDOne thing that we've seen happen is that Democrats have really taken up this rallying cry of repealing Citizen United in a constitutional amendment as really, I think, largely a way to animate their base. It is, as Rick mentioned, an incredibly high bar to have a constitutional amendment. It's very, very unlikely that that's going to happen. But I think we saw, particularly in the last midterm election, all the Democrats from Harry Reid on down were really pushing this as a way to both spur donations to their campaigns and to the party committees and to get their, you know, party faithful really engaged in the election.

  • 10:32:32

    REHMFredreka.

  • 10:32:33

    SCHOUTENAnd Bernie Sanders did introduce legislation for a constitutional amendment. He has done that. He has been at the forefront of this. And, again, we're seeing, you know, sort of his ideas are drawing a lot of small donors. He came within $4 million of Hillary Clinton's fundraising in the last quarter.

  • 10:32:51

    REHMBut you know what fascinates me? Early on, hadn't Jeb Bush raised something like $37 million and everybody thought he would be not only the frontrunner but the candidate, Fredreka?

  • 10:33:08

    SCHOUTENWell, his Super PAC raised $103 million...

  • 10:33:11

    REHMOkay.

  • 10:33:11

    SCHOUTEN...during the first six months of last year. And so, right, I mean, he was going to do it. But this election is showing that money can't buy you love, right? (laugh) Because his Super PAC has spent very heavily. They're already at more than $47 million to help advance his campaign. And yet he's languishing in the polls.

  • 10:33:32

    REHMAnd you're listening to "The Diane Rehm Show." I know you wanted to add to that, Matea.

  • 10:33:40

    GOLDYeah. I was just going to mention that one thing that I think is really striking is to look at the size of the donations that people are giving. Bush has been really hampered because he has gotten donors from the very beginning to give that $2,700 max that Fredreka mentioned earlier. Once donors have given that amount, they cannot give any more to him in the primary election. So he's sort of running into a wall with his donors. Unless he can expand his donor base, it's very hard to really increase your donations, when you're relying just on big givers like that.

  • 10:34:10

    REHMAnd, Rick Hasen, what about the Federal Election Commission itself. What's going on there? Lots of gridlock, perhaps?

  • 10:34:24

    HASENWell, the Federal Election Commission is divided. There are six commissioners. The law says that no more than three can come from any single political party. What we have now are three Democrats, or two Democrats and an Independent who votes with the Democrats, and three Republicans. And they're dividing on ideological lines, with the Republican commissioners taking the view that much of what the Democrats want to do is unconstitutional and not supported by the law. And so they have formed a kind coalition to block new laws that would -- or new regulations, I should say, that would expand the rules to allow for better disclosure, to limit coordination and the Democrats have taken the view that these things need to happen.

  • 10:35:07

    HASENBut I did want to go back for one moment to your point about the position of the Democrats. Hillary Clinton, too, has called now for a constitutional amendment. She said she would have a litmus test for Supreme Court nominees to make sure that they would want to overturn Citizens United. Democrats have been using this as a rallying cry. But, in fact, they haven't done very much to try to improve things. So the first time that they try to come up with a new law to fix the disclosure problems, they tacked on provisions that would kill the law in the Congress. And so if they would have kept a kind of a clean approach to fix disclosure, there are things that could have been done.

  • 10:35:43

    HASENAnd I think Democrats in -- when it comes to campaign finance, starting with President Obama, say one thing but actually do something else. And many Democrats are actually happy with the new post-Citizens United world.

  • 10:35:53

    REHMMatea.

  • 10:35:54

    GOLDIt's really striking that this era has really blossomed during the Obama administration. And he came into office talking in very strong terms about the insidious power of money in politics and wanting to curb that. And Citizens United happened, you know, right as his administration was starting and was something he spoke out against very strongly, early on. But he has not devoted a lot of political capital to this issue. You know, obviously, his advisers say he's had a lot of other urgent crises on his plate. But I think it is a sense, as Rick mentioned, there's a sense of enormous frustration among critics of the current system who feel that he has not been a strong advocate.

  • 10:36:31

    SCHOUTENAnd we should recall that President Obama was the first political -- major party political nominee to walk away from the public financing system because he was so successful raising money on his own. He didn't want to sort of accept taxpayer money and deal with the limits on his spending had he accepted taxpayer money.

  • 10:36:51

    REHMAnd what kind of a difference could that have made?

  • 10:36:55

    SCHOUTENWell, again, I mean it sort of marked the beginning of the end of the public financing system. I mean, right now, the only person who has qualified to accept public money is Martin O'Malley, in this election.

  • 10:37:08

    REHMInteresting. All right. Fredreka Schouten of USA Today. We'll take just a short break. When we come back, more of your calls, your email. I look forward to speaking with you.

  • 10:40:01

    REHMAnd welcome back. Here's an email that apparently represents a number that we've received and it's from Peter, who says, do we have any idea how much foreign money is getting into this year's election campaigns? Do we have any notion about who is getting the most foreign support? Fredreka.

  • 10:40:30

    SCHOUTENOkay, now, for starters, I should make it clear that it is illegal for foreigners to donate to candidates. Let's be clear about that.

  • 10:40:39

    REHMTo American candidates.

  • 10:40:40

    SCHOUTENTo American candidates.

  • 10:40:41

    REHMAll right.

  • 10:40:41

    SCHOUTENYou can be a green card holder and -- but, you know, you cannot be a foreign citizen or a foreign company and donate to candidates.

  • 10:40:48

    REHMOkay. All right.

  • 10:40:49

    SCHOUTENWell, we've had a couple of interesting examples. For instance, a few years ago, in California, there was a local ballot initiative involving the pornography industry. And a group of activists said, look, if you're going to be in a porn movie, you need to wear a condom. And a film distribution company based in Luxembourg spent a lot of money trying to defeat that initiative. They were not successful. The local activists won. This came up to the federal election commission, which declined to get involved, but in December, they were penalized by the authorities in California.

  • 10:41:28

    GOLDYes, and I think this is one of those examples that sort of catches everyone's attention because of the facts involved, but we've seen a couple cases in which we've seen evidence of attempts to put foreign money in campaigns. There was also a case in a San Diego mayoral election in which some money from, I believe, a Mexican businessman was found to have made its way into one of the campaign coffers. The big question is whether any foreign money is going into these 501 C4 advocacy groups which we mentioned.

  • 10:42:01

    GOLDBecause we do not know the source of these donations and these groups are punitively not political committees, they don't have to disclose their donors. We really have no way of knowing where the money's coming from. And critics of these groups who say that they're really exploiting their, you know, tax position to try to get involved in politics and avoid disclosure, say this is the big risk involved in these entities.

  • 10:42:24

    REHMAnd Fredreka, you mentioned inversions. American companies going abroad because of tax breaks.

  • 10:42:32

    SCHOUTENFor tax breaks, and so there's a big question about, you know, if a company says I'm now based in Ireland, so if, you know, how much of that is considered foreign money? It's a big question mark.

  • 10:42:45

    REHMExactly. All right, let's go to Mary Jo, who's in Grand Rapids, Michigan. You're on the air.

  • 10:42:54

    MARY JOHi, thank you. I guess my comment is much more an overview or far reaching, but I really think, maybe after I'm gone, but there's going to be from the electorate, or citizens, a gradual move, where I think we have to get the money out elections, period. And use more of a government funded, much more like Europe does.

  • 10:43:23

    REHMAll right, Richard Hasen, what do you think about that? Is that on the horizon?

  • 10:43:30

    HASENWell, again, back to my main point, which is that there's only so much that the Supreme Court's going to allow, and, you know, I think if, you know, you think about what the main problem is, you mention Jeb Bush getting 110 million dollars from his Super PAC and yet not doing so well. Money doesn't buy you Jeb. But what it gets you, and what it gets you especially, below the Presidential level, I'm least worried about money on the Presidential level. What it gets you at the level of the House of Representatives, what it gets you at the state and local level.

  • 10:44:04

    HASENIs not only a chance, a greater chance for the wealthy to influence who is taken seriously as a candidate, but it also gets you much better public policy. And so, if you look at the kinds of laws that Congress passes, if you look at the kinds of laws that state governments pass, they pass laws that tend to benefit the wealthy, that tend to benefit those who are at the top of the economic ladder. And those at the bottom, with very little influence, they can't use their campaign contributions and their lobbying to try and get their stuff enacted into law.

  • 10:44:35

    HASENAnd so the real problem with money in politics is that we're allowing those with the greatest economic power to translate that economic power into political power. That's the kind of fundamental rethinking that we need at the Supreme Court level and then at the state and the Congressional level.

  • 10:44:51

    GOLDAnother impact, I think, that we've seen, is that it's actually changed the mechanics of our politics. We're seeing this really in a striking fashion this cycle, when early on, people, many of the candidates, the Republicans delayed their announcing their official candidacies in order to maintain a non-official status so they could work more closely with the groups that were raising big money for them. So, candidates such as Jeb Bush and Scott Walker and others spent a lot of time working in concert with super PACS in order to help them bring in these big dollars.

  • 10:45:24

    GOLDAnd actually, this changed the whole timeline of their candidacy. And I think the fact that they're spending a lot of time with these donors that have the capacity to write seven, eight figure checks has also been a big change.

  • 10:45:37

    SCHOUTENOne of the ways that manifested itself you're starting to see now are the ads that are being run by the super PACS. They delayed becoming official candidates for a very long time and they shot footage, with their super PACS, talking into the camera, doing interviews that are now running now that folks are officially in the campaign. So, there is a Jeb Bush 15 minute documentary produced by the super PAC with lots of interviews with Jeb Bush pre-candidacy.

  • 10:46:08

    REHMAll right, and to, let's see, Tyler, in Leonard Town, Maryland. You're on the air.

  • 10:46:17

    TYLERHi. Thank you for taking my call.

  • 10:46:18

    REHMSure.

  • 10:46:19

    TYLERI had a question for the panel. I was curious as to why they do not feel that campaign finance disclosure, how does that not violate the first amendment and why is that not a violation of free speech?

  • 10:46:32

    SCHOUTENThe Supreme Court says that it's not. I mean, the Supreme Court and the Citizens United decision said disclosure is, you know, it's fine. It does not violate the Constitution. It's fine to know who's giving the money. I mean, you are finding in some circles, and I'm perhaps picking up on this from your listener, concerns that if people know who's giving the money, that somehow there will be a backlash. That they will pay a price for speaking out. But the Supreme Court says, disclosure is A-OK.

  • 10:47:02

    REHMTell me what used to be the case in the campaign progression as to how it contrasts with now? For example, if a candidate lost in Iowa, then lost in New Hampshire, that candidate was pretty much out. What's changed, Matea?

  • 10:47:26

    GOLDWell, the rule in these Presidential races is usually that momentum turns into money. And so, when your momentum hits the wall, usually you run out of money to continue your campaign. One big experiment we're going to see this year is whether candidates who really have trouble making it into the top tier of the placement in Iowa and New Hampshire will be able to have extra life in their campaigns because their well-funded allies on the outside will continue to give them air cover. Can get them to South Carolina and Nevada and Florida by running ads on their behalf.

  • 10:48:00

    GOLDI think we're already seeing signs of the limits of that approach earlier this year. Both Rick Perry and Scott Walker were forced to drop out of the Republican contest because they did not have sufficient funds in their campaign coffers, even though their Super PACS had millions of dollars left over.

  • 10:48:16

    REHMSo, tell me the rule as it applies to a PAC or their own money.

  • 10:48:24

    GOLDWell, so the PACS cannot coordinate directly with the campaign. And so, they have to independently figure out what the candidate's needs are. And try to provide those. It leads to a lot of winking and sort of public indication of signs. They use the media often to try to convey what their hopes and dreams are for what's next in the strategy. But one of the problems is that operationally, candidates need resources to get from one place to another. To hire staff, to reach voters. So there are limits to what a Super PAC can do on that level.

  • 10:48:54

    SCHOUTENI mean, we've seen a little bit in Carly Fiorina's camp. They've been experimenting a bit. Carly Fiorina post her schedule online on Google Calendar and a Super PAC that's supporting her shows up and sort of sets up chairs and tables and is trying to help her operationally. I mean, she hasn't been doing very well in the polls. And so that's a bit of an experiment because Super PACS, traditionally, have been most effective in terms of advertising. Not in terms of building the ground game on behalf of a candidate.

  • 10:49:28

    GOLDAnd I do think one thing we should emphasize that makes this year so unusual is the Trump impact. I mean, never before have we had a candidate who's had so much success with just free media. He just began running advertising, but this is really a year in which paid media, which is the kind of term of art used in politics for commercials, TV commercials, are not having the same kind of impact as before. And the -- Trump's rivals argue it's because he is sucking up all the oxygen.

  • 10:49:53

    REHMExactly.

  • 10:49:54

    SCHOUTENWell, and Trump himself said he's running about two million dollars of advertising a week.

  • 10:49:59

    REHMRight.

  • 10:49:59

    SCHOUTENAnd he said...

  • 10:50:00

    REHMOf his own money.

  • 10:50:01

    SCHOUTEN...of, of his own money. He is getting some money from other people.

  • 10:50:04

    REHMSure.

  • 10:50:05

    SCHOUTENAnd he said, look, I don't know if I need it, but I don't want to take any chances.

  • 10:50:10

    GOLDHe also said, I feel guilty not spending money.

  • 10:50:13

    REHMWow. Well, you never know. Let's go to Gainesville, Ohio. Brian, you're on the air.

  • 10:50:23

    BRIANYes, thank you for taking my call, Diane.

  • 10:50:26

    REHMSure.

  • 10:50:26

    BRIANI have a question and a comment. First of all, are contributions to the social welfare organizations tax deductible? And then my comment is is it right to call them social welfare organizations when they're so clearly have a political motivation? And I'll take my answer offline.

  • 10:50:44

    REHMAll right. Thanks. Fredreka.

  • 10:50:45

    SCHOUTENThey are not tax deductible. There is considerable debate about whether they are social welfare organizations and as Matea said earlier, the IRS was trying to devise rules to deal with this and talk about, you know, how much political activity is too much? Congress and the Omnibus spending bill that just passed in December said, cut it out. You can't proceed with that rule making. At least, not for the life of the spending bill.

  • 10:51:12

    REHMRick Hasen, what about those 501 C4's?

  • 10:51:16

    HASENWell, I think what we're seeing is a kind of devolution of the campaign finance system. So, Citizens United and these other cases have started us down a road and what happens whenever there's any kind of legal change is that politicians and consultants push the envelope. What we saw after the Citizens United and the rise of Super PACS was Karl Rove setting up a 501 C4 to engage in this activity. He did it. The IRS did not respond by clamping down on what he was doing.

  • 10:51:48

    HASENThe FEC did not respond by clamping down. And so you see these groups moving further and further. We've heard from Matea and Fredreka about how these Super PACS have moved from just running ads to actually being shadow campaigns. And I think as we look ahead to the 2020 elections, if things don't change, we're moving to a system where the limits are really going to become meaningless. It's not going to be Super PACS next time that are going to be coordinated with campaigns. It will be anonymous 501 C4 organizations.

  • 10:52:15

    HASENSo, not only will there be huge amounts of money flowing into the system from the wealthiest individuals and corporations and possibly even foreign money if we can't track it down through these LLCs and other corporations, but the public won't know who's giving that money. And so, it's a pretty dire future unless we can get some fundamental change.

  • 10:52:37

    GOLDI just want to mention the IRS did attempt to try to scrutinize some of these groups when they really came on the scene with force in the wake of Citizens United. And that led to a huge scandal in the agency. They were using terms like Tea Party and Patriot to screen groups for extra scrutiny. And that caused a huge problem for the agency that they're still struggling to recover from.

  • 10:52:58

    REHMAnd you're listening to The Diane Rehm Show. Let's go to Dan in Nashua, New Hampshire. Hi there.

  • 10:53:10

    DANThank you for taking my call.

  • 10:53:11

    REHMSure.

  • 10:53:13

    DANAs you've observed, New Hampshire's in the midst of a very busy Presidential primary up here. I've been struck by how much the issue seems to be getting raised by voters at candidate events. I've been to a few already and there's even a campaign called the New Hampshire Rebellion that's been walking all across the state like that late New Hampshire reformer Granny B to try and force this issue. And it does seem like there's been some response. All three Democrats and even some of the Republicans seem to be calling for specific reforms. And so, I wondered if your panel sees this issue getting enough political traction in other states to actually make some of these reforms possible in Washington after the next election.

  • 10:53:51

    GOLDWell, it obviously depends what the makeup of Congress is and who's in the White House. I mean, as I said earlier, I do think if a Republican actually wins the Presidency, and they control, Republicans control both houses of Congress, we could actually see a further loosening of the rules or we could actually see candidates and parties have the ability to raise larger sums if not unlimited sums of money. I mean, there is a real deadlock in Congress in trying to move on any of these issues. Disclosure had a tiny bit of momentum five years ago, but has really gone nowhere since.

  • 10:54:19

    REHMAnd in the Omnibus Bill, what happened?

  • 10:54:23

    GOLDWell, there was an effort to really stall the IRS from trying to clarify its rules when it comes to nonprofit political activity. And that's a temporary measure. It remains to be seen whether they'll take that back up and when, but, I mean, as of right now, there's really nothing happening in Washington on this -- in this front in a legislative way that really has any momentum.

  • 10:54:39

    SCHOUTENThe Omnibus Bill...

  • 10:54:41

    HASENThere is something happening on the court front, which, it's not on peoples' radars yet, but it will be. There's a new challenge to try to strike down what remains of the McCain/Feingold Law, the so-called soft money limits. Those limits limit how much a political party can take from large donors. I think within the next couple of years, a case is going to make it to the Supreme Court where we could well see if it's the same members of the Supreme Court, the Supreme Court get rid of the rest of McCain/Feingold, and a lot of those millions that are flowing into these outside groups going into parties.

  • 10:55:10

    HASENSome people think that would actually be better than what we have now, but it's certainly would allow people to get more access to elected officials through political parties.

  • 10:55:19

    SCHOUTENI was gonna say that going back to the Omnibus, there also has been an effort by activists to have the Security and Exchange Commission require that public companies disclose their political activity to donors. And one of the things that the Omnibus Bill said is don't consider that either.

  • 10:55:38

    GOLDAnd I think that was something that's a big question mark, whether the SEC was ever going to take that up. To Rick's point, I mean, the idea of money being able to flow back to parties on a limited sums, I think is something that is very possible to happen. And it's something that would take us back to pre, pre-Citizens United and pre-McCain Feingold. I mean, all of these laws and these rulings have sort of been an equal and opposite reaction to one another. It will be interesting to see if we go back full circle back to the 90s.

  • 10:56:07

    REHMI wonder. Talking about Rick's point that really we have to concentrate on the Supreme Court as we vote, I'm not sure people are thinking that way, Matea.

  • 10:56:21

    GOLDWell, I think if you talk to activists on both sides of the spectrum who are pretty energized...

  • 10:56:27

    REHMBut the ordinary voter?

  • 10:56:30

    GOLDWell, ordinary voters are really focused on their daily lives, you know. I don't know how much this is going to be a swing issue. And that's something that has yet to really be proven in an election, whether a campaign finance issue can move a campaign or a race. I mean, it seems to be, I think, an undercurrent and part of the greater discussed with politics as usual we're seeing this year. But I'm not sure we're going to see something wholesale pushing the campaign.

  • 10:56:56

    REHMMatea Gold of the Washington Post, Fredreka Schouten of USA Today. Richard Hasen, Professor of Law and Political Science at the University of California Irvine. And author of a new book titled, "Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections." Thank you all so much.

  • 10:57:27

    GOLDGreat to be with you.

  • 10:57:28

    SCHOUTENNice to be here.

  • 10:57:29

    HASENThank you so much.

  • 10:57:29

    REHMAnd thanks all for listening. I'm Diane Rehm.

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