08superpac1-articleLarge-v2

In the first part of this serial of articles we examined the general role of money in the election process in the USA and concluded that it has a huge impact and relevance. We proposed a solution (public financing of elections) for that specific situation, but it only applies to just a few election areas in the sense of federal state (Arizona, Maine) or some of their districts. The key information that we have to bear in mind is that “big money” or “big business” are neglecting consequences of their actions. Of course, these consequences are directly connected to quality of citizens’ lives. From the first part of this serial, we can derive the first “pillar” of money politics: going after particularistic interests in order to get more profit, therefore neglecting consequences for “ordinary” people.

The second part of this serial is focused on “middle man” (intermediary channel) through which money comes to political campaigns and does its thing. This channel is called Political Action Committee (PAC), but the more popular and viral term is super PAC (label super came into being when larger and larger sums of money have been raised in these kind of association). To show the reader how the super PAC concept works, I will lean on The Money Lobby documentary movie from 2013. Let me start with historic, but not so surprising fact: the 2012 presidential elections in the USA were the most expensive in American history. Of course, most of the money came from outside groups (super PACs). Before the concrete definition of a super PAC is given, I will go through some legislature pieces of past century in order to explain the origin (“the birth”) of PAC concept. In 1907 Tilman Act was introduced. This was the first attempt of reforming a way in elections campaigns were financed in the context of Theodore Roosevelt’s large corporate funding campaign scandal. Main feature of this particular act was banning corporate contributions to election campaigns. Tilman Act was followed by Taft-Hartley Act which was introduced in 1947, and now, together with corporate donations, union’s contributions to election campaign were also banned. As a reaction, unions established Political Action Committee (this was not a PAC that is acting in nowadays elections). In 1974, public financing was statutory. Maybe the most important moment in this short historical review of PACs’ origins happened in 1976, when the Supreme Court “established” money as expression of speech. Because it represents freedom of expression, money cannot be limited to an individual. In 1979, few amendments were passed on Federal Election Campaign Act forming co called “soft money”. It allows corporations, unions and individuals to donate unlimited amount of money to National Campaign Committees. Money was intended for party activities.

Finally, we are in 2010 when two decisions (cases) enabled “creation” of Super PACs. First case was Citizen United (conservative non-profit organization) versus Federal Election Commission. Citizen United was accused of violation of Bipartisan Campaign reform Act because it launched anti Hilary Clinton documentary movie in public (later, advertising the documentary on TV was banned). The whole situation ended up on the Supreme Court. The Supreme Court concluded that Bipartisan Act infringed the first amendment rights. Therefore, it concluded that money cannot be donated directly to candidates, but it can (and shall) be donated through Political Action Committees (PACs). The goal of this move was to preclude spread of corruption within political system. Second case was Speech Now.org (organization that is raising money for, or against federal candidates; its main preoccupation is to reassess constitutionality of limited spending that were imposed on them) versus Federal Election Commission. This case’s outcome was the conclusion of the Supreme Court that individual spending is not corrupted so it should not be limited (the same is with giving money to Speech Now.org or organization as such but in these cases donors must be registered in Federal Election Committee). To put it simply: before this conclusion, an individual was able to give unlimited amount of money, but when individuals decided to join into a group and then place a donation, this donation was limited. This provision was knocked down by Speech Now.org case. The aftermath of both cases could be summed up like this: donations do not go directly to candidate or a political party, they go to organizations (PACs), and this organization puts money in indirect support of particular candidate or political party. The key feature in this PAC concept in to be independent, to keep your distance (from candidate/party).

So what exactly Super PACs do? Super PACs can: raise money from individuals, corporations, unions and other organizations; they can spend unlimited amounts of money on supporting or opposing candidate(s). Super PACs cannot: make direct campaign contributions; they cannot coordinate a specific candidate. Basically, a candidate need just one millionaire to become viable in election competition. Another relevant PAC’s function is to promote someone’s candidacy. Where does the Super PACs’ money go? Most of the money is used for buying a TV commercial space. To be more precise, it is used for so called “attack ads”. These ads can be a form of election slogan which is short, catchy and designed parole. It may be seen as a sort of “microtest” through which election actors (in this case not direct actors – Super PACs) are determined to influence voters’ opinions so they could get their votes. The purpose of this paroles/slogan is to draw attention to some issue or candidate, to simplify complex reality of political system and to polarize voters. “Attack ads” are often provocative or even mobilizing (in the sense of an election appeal) types of election slogans.

There are some problems with Super PACs. First of all, it is a quid pro quo system. That means that millionaires are not giving “free” money. Behind money, there are interest which are expected to be fulfilled after a potentially successful election. Second, Super PAC system could be a conduit for dark money because of identity protection (non-transparency) of donors. How is that possible? The donor, the source of money, gives the money to some organizations that is tax exempt non-profit corporation (these organizations are specified by Internal Revenue Service (IRS) code; e.g. social welfare groups, trade association groups). The tax exempt non-profit corporation decides what to do with the money: it can spend it or it can give it to the Super PACs. In that way, donors may avoid submitting reports of expenditures which are formally necessary, their identity is shielded and the most important thing – interests that are behind donation remain publicly unknown. Except these concrete problems we can acknowledge some phenomena that are not consistent with liberal democracy. Those are: domination of private interests, non-transparency, lack of big players’ liability and privatization of politics. All this could lead to greater political abstinence (voters do not feel close to political elites and they do not feel politically empowered and influential).  Deeper repercussion is losing faith in the whole political establishment which is proportional with the level of establishment’s legitimacy. From this part of serial we can derive the second “pillar” of money politics in just one word: non-transparency. In the third (the last one) part of Money Politics serial we shall deal with global monetary system and the way it functions.

Image Source: http://www.nytimes.com/2012/07/08/magazine/can-the-democrats-catch-up-in-the-super-pac-game.html