Politics and the One Per Cent

In 2010, the U.S. Supreme Court struck down regulations limiting the amount of money corporations and unions could spend on political advertising. U of T law professor Yasmin Dawood has studied the implications of this decision for the electoral process. She spoke recently with U of T Magazine editor Scott Anderson.

What impact do you see this Supreme Court decision having?
It allows corporations and unions for the first time to spend unlimited amounts on ads that support or oppose specific candidates. More important, though, it redefines the legal meaning of “corruption.” Before this decision, corruption meant “undue political influence” leading to the actuality of – or the appearance of – corruption. The court has radically narrowed the understanding of corruption to mean only “quid pro quo” corruption: cash donations in exchange for legislative votes. This makes it much more difficult for the state to regulate political advertising.

The decision also stated that independent spending (that is, not by political parties and candidates) is not “corrupting.” This has led to the rise of “superPACs” – ostensibly independent organizations that can accept unlimited funds from corporations, unions and individuals and spend unlimited amounts on political messages. This has been a sea change. The original PACs, or “political action committees,” had contribution limits of about $5,000. Also, superPACs technically are not permitted to co-ordinate with a candidate. But this is a fiction. The superPAC that’s associated with Mitt Romney is run by his former campaign aide. Legally speaking, it’s not part of his campaign. But most people would find it hard to imagine that it’s completely separate from Romney’s campaign.

How do you think the superPACs are affecting the electoral process?
The superPACs influence the debate, mostly through the negative advertising. Mitt Romeny’s PAC has spent millions going after Newt Gingrich, flooding the airwaves with negative ads. SuperPACs have been doing the dirty work of the campaign. They are going after the opponents in a way the campaign typically does not.

Do you think the superPACs will affect who runs for office in the U.S., or who gets elected?
I don’t think superPACs will determine the outcome of the presidential election, but they might affect close congressional races and the primaries. They’ve certainly changed the tenor of this electoral process, with a lot more negative advertising, and they’ve raised the amount of funding that candidates need to be viable. What concerns me most about the superPACs, though, is that they’re corrupting. If someone gives you $5 million when you’re running for office, you’d probably do your best to vote for legislation they favour, or at least get it onto the agenda. The court has argued that such contributions are corrupting. Yet the superPACs are receiving massive donations and are very closely connected to the candidates. So the court’s argument about the corrupting influence of large donations should apply to superPACs.

Could the rise of the superPACs have longer-term effects?
I think they will skew public policy and cause economic inequality in the U.S. to worsen. Will the government pass legislation that actually helps the 99 per cent or even the bottom 50 per cent given that corporate interests and wealthy individuals have a greater influence than ever on the electoral process?

Do campaign financing rules mitigate the influence of the wealthy and the powerful?
Any limit on contributions or spending will help level the playing field. That being said, campaign finance rules are non-democratizing in other ways: they protect incumbents, since contribution limits make it more difficult for challengers to raise the necessary money to go after incumbents, and spending limits make it more difficult for challengers to spread their message. Regulations are also negative in that they give a greater relative voice to other elites, such as media. The question becomes: What situation do you ideally want and how do you get there? You don’t want people with extreme wealth to dominate the electoral process. But you do want challengers to be able to raise enough money to mount an effective campaign. You also want individuals or groups of citizens to be able to criticize the government. It’s a complicated trade-off.

How do we know if we’ve got it right?
It’s easier to know when it’s not being done well than when it is being done well. My sense is that the U.S. has gone too far in allowing the wealthy to take over the process. In Canada, it may sound odd, but the regulations are far too egalitarian. The limitations are so stringent that they dampen the free speech of ordinary citizens and corporations.

Generally speaking, to reduce the likelihood of the wealthy dominating the electoral process, we would want a limit on direct contributions to candidates, and strict disclosure rules. You’d want to have enough spending so that criticism is possible, so you could ask, ‘How much money would you need to run an ad across the country?’ That might be your benchmark, to allow citizens or groups of citizens to mount an opposition. How much do challengers need to run an effective campaign? Again, that’s a question we can get data on, and use as a benchmark.

These factors have to be a lot more nuanced than what we have now. They’ve got to recognize that on the one hand we want to protect liberty and free speech, but also balance that with equality. The U.S. has privileged liberty at the expense of equality. In Canada, it’s the other way around: a huge emphasis on equality, but arguably not enough liberty. With campaign finance regulations, liberty and equality will always be in tension with one another. But that’s fine. A democracy is better when you keep that tension and try to find a compromise between the two.

Any thoughts on what Occupy Wall Street is saying about money and politics?
The movement has drawn attention to the fact that the one per cent is able to dictate the terms of the game, both in politics and the financial markets. It shows that people are becoming frustrated by the erosion of democracy – and that the process and outcome now appear to be skewed in favour of entrenched, privileged interests. Campaign financing is definitely a piece of that story.