Campaign Finance

Campaign finance has once again hit the spotlight with the recent US Supreme Court 5-4 ruling in Citizens United v. Federal Election Commission in which the majority of the Court decided that corporations have the same free speech rights under the First Amendment that individuals do.  The result of this decision will be millions, if not billions, of additional corporate money funneled into political campaigns.  It may not come directly from corporations, who might be hesitant to identify with a specific political figure or ideology, but it will be deployed through their trade associations and other avenues to the candidates they support.

This issue is not new.  William McKinley's campaign manager, Mark Hanna, stated "All questions in a democracy are questions of money," while running a $16 million campaign, receiving direct contributions from corporate treasuries in exchange for a big business policy agenda.

In Theodore Roosevelt's 1905 State of the Union address, he warned of the dangers of the large corporations effect on society.  "The fortunes amassed through corporate organization are now so large, and vest such power in those that wield them, as to make it a matter of necessity to give to the sovereign--that is, to the Government, which represents the people as a whole--some effective power of supervision over their corporate use. In order to insure a healthy social and industrial life, every big corporation should be held responsible by, and be accountable to, some sovereign strong enough to control its conduct."  Roosevelt called for a ban on all contributions to any political committee for any political purpose.  This call to arms resulted in the 1907 Tillman Act.

The Tillman Act specifically prohibited direct contributions from corporations and businesses to political parties and election committees. As with all well-intentioned laws, a work-around was quickly discovered.  Corporations gave employees substantial bonuses with the understanding that the bonus would be donated to the company endorsed candidate.

Since 1907, a variety of campaign finance reforms laws have passed, requiring everything from full disclosure of where money came from to limits on how it can be spent. Corporations have formed PACs (political action committees) financed by donations to wield their political power.  More recent legislation has stipulated time periods in which political ads financed by PAC's can be shown.

The historical issue has always been how to protect elections from the undue influence of wealthy, powerful corporations.  The 2010 Congressional races will let us know the extent of the impact of Citizens United v. Federal Election Commission.