Corporate Democracy: Likely fallout from Supreme Court Citizens United decision

The impending Supreme Court decision in Citizens United v. Federal Election Commission, which could be announced as early as Tuesday, is expected to significantly expand the role of the most powerful special interests in financing American elections. The Court appears poised to turn its back on more than 100 years of law and pave the way for corporations and unions to spend unlimited amounts of money on direct campaigns to elect or defeat federal candidates.

Such a dramatic decision would further reduce trust in government policymaking and take our country in the wrong direction. It is hard to imagine how America achieves real progress and tackles critical challenges – like health care, climate change and the economy – when our elected representatives are locked in an all-out fundraising arms race that makes them both more dependent on and vulnerable to the powerful special interests opposed to change.

In preparation for this decision, Common Cause has prepared a memo that reviews the potential fallout from this case, the legal history, examines political spending of corporations versus unions and looks at a state – California – that allows unlimited corporate political spending. It also identifies what Common Cause considers the only viable policy option for moving forward in a post Citizens United world: a new system of paying for political campaigns based on a blend of small donors and limited public funding that allows candidates to run highly competitive races without relying on wealthy special interests.

“The path to the future should be small-donor democracy, not corporate democracy,” said Common Cause President Bob Edgar.

Lifting the ban on corporate political spending could unleash a flood of money into the political system and further diminish the public’s voice. Precisely how much money is hard to say, but consider the following:

Last year’s Congressional and Presidential election was the most expensive in history, with total political and issue advertising exceeding $3 billion nationwide. Corporations and unions could more than double this amount – every election – if they put as much into political ads as they already spend lobbying Congress, $6 billion in the last election cycle.

The health and insurance industries alone spent more than $1.6 billion lobbying Congress during the 2008 election cycle, nearly double the $896 million that all winning congressional candidates (435 House candidates and 35 Senate candidates) spent on their campaigns during the same period.

PhRMA recently launched a $150 million advertising campaign to support Senator Baucus’ health care plan (without a public insurance option) – more than the $140 million spent by all 55 winners of hot congressional races in 2008 combined. That’s one trade association on one bill.

In the 2008 elections, winning candidates for the House of Representatives spent an average of $1.4 million – roughly equivalent to what the health care industries are spending per day so far this year to lobby Congress on health care reform.

If the Supreme Court lifts the ban on using corporate profits for political spending, corporations would likely spend vastly more than labor unions. During the 2008 election cycle, corporations outspent organized labor 4:1 on PAC contributions, but 61:1 on lobbying.

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Based in Washington, D.C., Public Campaign is a national nonprofit organization dedicated to advancing comprehensive reform of America’s election laws and works to hold politicians accountable for the favors they do for special interests.