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«2-1-2013 Special Interests After Citizens United: Access, Replacement, and Interest Group Response to Legal Change Samuel Issacharoff NYU School of ...»

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New York University Law and Economics Working

New York University School of Law

Papers

2-1-2013

Special Interests After Citizens United: Access,

Replacement, and Interest Group Response to

Legal Change

Samuel Issacharoff

NYU School of Law, Issacharoff@exchange.law.nyu.edu

Jeremy Peterman

NYU School of Law, jrp381@nyu.edu

Follow this and additional works at: http://lsr.nellco.org/nyu_lewp

Part of the Constitutional Law Commons, and the Politics Commons Recommended Citation Issacharoff, Samuel and Peterman, Jeremy, "Special Interests After Citizens United: Access, Replacement, and Interest Group Response to Legal Change" (2013). New York University Law and Economics Working Papers. Paper 328.

http://lsr.nellco.org/nyu_lewp/328 This Article is brought to you for free and open access by the New York University School of Law at NELLCO Legal Scholarship Repository. It has been accepted for inclusion in New York University Law and Economics Working Papers by an authorized administrator of NELLCO Legal Scholarship Repository. For more information, please contact tracy.thompson@nellco.org.

Special Interests After Citizens United: Access, Replacement, and Interest Group Response to Legal Change Samuel Issacharoff & Jeremy Peterman 1 Abstract: The legal literature on campaign finance law and the political science literature on how and why interest groups mobilize use different methodologies to get at overlapping issues. This review integrates some of these insights to better understand the relationship between interest group participation in elections and changes in campaign finance law. The post-Citizens United world of law created some regulatory vacuums that only some groups tried to take advantage of. For example, little corporate money found its way into SuperPACs or groups engaging in independent electoral advocacy. We argue that understanding interest groups’ objectives of using contributions to candidates to obtain access, on the one hand, or using independent expenditures to install friendly candidates in office, on the other, is key to analyzing how interest groups respond to legal developments. We also argue that while interest group participation in elections increased in 2012, the party centric federal election system was largely resilient to increased interest group mobilizations highlighting the difficulties with the replacement-oriented strategy.

In the public eye, the world of campaign finance exists in two eras: before and after the Supreme Court’s landmark decision in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010). Without doubt, the jurisprudential impact of that decision is widely exaggerated with even the privately funded attacks on the Cabinet nomination of former Senator Charles Hagel – an activity outside the electoral arena that has never been regulated by campaign finance laws – being popularly described as a result of the Supreme Court’s 2010 ruling.

But the Supreme Court’s constitutional protection of corporate and labor union independent speech at least coincided with a renewed explosion of private money in elections, and particularly with the rise of the Super PACs, the latest organizational vehicle for spending limitless amounts of private money to influence electoral politics. Correlation may not be causation, but a wary public is more likely to credit the intuition that where there is smoke, there must be fire.

And the public has every reason to be wary. The 2012 election brought seemingly unchecked private money to the fore of the campaign narrative like no election before. In turn, that money allowed interest groups to establish a substantial presence in the national debates. Candidates ran campaigns as usual, Reiss Professor of Constitutional Law, New York University School of Law; Law Clerk, United States Court of Appeals for the Seventh Circuit. The authors would like to thank Bruce Cain for helpful comments.

2 Forthcoming – Annual Review of Law & Social Science but many candidates were supported by Super PACs that functioned as surrogate campaigns unconstrained by contribution limits. Largely unregulated interest groups spent over $1.2 billion on advertisements supporting or opposing candidates for federal office and contributed $433 million more directly to candidate campaigns. 2 One couple gave nearly $100 million to interest groups supporting conservative candidates, with perhaps the saving grace that all of the candidates supported by their money lost.

For the legal reformers concerned by this state of events, the fear of influence by specific interests over electoral outcomes and public policy is more the product of concerns about unequal resources, particularly for the disadvantaged sectors of the society, than about interest group strategies overall.

As well captured by David Strauss (1994), most concerns about the role of money in politics reflect deeper worries about equality and the nature of democratic politics than concerns over money itself. When the Supreme Court augured in the era of judicial review of the political process in the 1960s, it held out the aspiration that all citizens should have an equal influence in political life. 3 Implicitly or explicitly, much of interest group scholarship is premised on the claim that the equality of citizenship norm is being violated by the greater access and influence of some as opposed to others. Were interest groups able to form costlessly and have power directly proportional to their strength of support among the citizenry, there would be few interesting questions to investigate beyond the obvious how did this miraculous system form? This is not the system we have, so interest group scholars are left to investigate questions ranging from what impact interest groups have on elections to what conditions are necessary for successful interest group formation.





Our focus in this review is the relationship between changes in federal campaign finance law and interest group formation and participation in national politics. Despite significant legal changes and the jarring influx of private money in the 2012 election, the influence of interest groups on campaigns changed less than might have been expected. In particular, the claims of massive corporate interest group spending did not materialize, and interest groups did not appear to wrestle influence over campaigns away from the candidates and their parties.

The most significant new group actors were Super PACs affiliated with a party or candidate, and the largest donors were wealthy individuals with broad Unless otherwise noted, the data cited come from the Center for Responsive Politics.

Several of the canonical cases in this line are Baker v. Carr, 369 U.S. 186 (1962) and Reynolds v.

Sims, 377 U.S. 533 (1964) in which the Supreme Court developed the one person one vote doctrine by finding that population disparities between electoral districts within states violated the Equal Protection Clause of the constitution, as well as Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990), overruled by Citizens United v. Fed. Election Comm’n, 558 U.S.

310 (2010), in which the Supreme Court expressed concern about the ability of corporations to “exert an undue influence” on elections.

Special Interests After Citizens United 3 ideological goals, not traditional interest groups seeking to influence specific policies. What explains this response?

There are overlapping but oddly disconnected discussions on interest groups and campaign finance law in the legal and political science literatures that when combined help illuminate this relationship. We argue that understanding interest groups’ political strategy is essential for understanding the response to legal developments. Strategy helps us understand both what new groups will form and how existing groups will alter their participation in electoral politics in response to legal change. As we will set out, interest groups engage the electoral arena through two basic strategies: ensuring access to the elected representatives, whoever they might be, or trying to determine who gets elected. For the most part, corporations seek advantage vis-à-vis their business rivals on issues that are not traditionally partisan and need access to accomplish that, assuming that to greater and lesser extents all elected officials will be their allies. Other interest groups, like unions or ideological organizations, are not so fortunate. For them, the identity of the elected official and her specific political orientation is generally critical.

Whether a group is access or replacement-oriented is the key to understanding how an existing group will likely respond to a changed regulatory environment. Access-oriented groups are unlikely to take advantage of new campaign finance innovations or engage in significant independent spending, while replacement-oriented groups are likely to be on the front lines.

With respect to group formation, while the availability of money is critical for new groups to overcome the collective action problems that often hinder formation, a group’s (or a potential group’s) likely strategy helps explain which types of interest groups will form when money becomes more available. We begin with a discussion of the laws governing campaign finance and the leading work on interest group theory. We then refine the insights we glean through discussion of two cases of legal change: the Bipartisan Campaign Reform Act and the subsequent Citizens United and SpeechNow decisions.

The Legal Framework Campaign finance law is an intricate web of state, federal, and constitutional law. The First Amendment of the United States Constitution limits how government may regulate political participation. In a series of decisions over the past forty years culminating most recently with Citizens United, the Supreme Court has created constitutional limits on the regulation of political speech. (Pildes 2004; Hasen 2011). This created a federal regulatory system based on federal statutes as modified by Supreme Court decisions, and as overseen by a weak and largely ineffectual federal agency, the Federal Elections Commission.

This has also made legal reforms at altering the susceptibility of the electoral system to interest group influence a Sisyphean task. The constitutional limits on regulation created holes in the regulatory framework, the effect of which is wellForthcoming – Annual Review of Law & Social Science described by the hydraulic imagery popular in the literature (Issacharoff & Karlan 1999). Groups that want to participate are adaptive, resilient, and everpresent as they navigate the convoluted byways of the campaign finance regulatory morass.

The modern era of federal campaign finance regulation begins with the Federal Election Campaign Act of 1971(FECA) and the Supreme Court’s decision in Buckley v. Valeo, 424 U.S. 1 (1974), that immediately followed. Following the Watergate scandal, Congress through FECA sought to curb the role of money in politics by limiting the amount of money individuals could contribute to candidates and groups that engaged in electoral advocacy while also limiting candidates’ demand for money by limiting how much candidates and outside groups could spend in support of a campaign. In Buckley, the Supreme Court effectively created a new system of regulation, upholding FECA’s contribution limits, but declaring unconstitutional the efforts to limit candidate expenditures.

This created a gap between the demand for funds and the ability to satisfy that demand efficiently through large donation fundraising.

In turn, the divide between the tightly regulated domain of contributions and relatively unregulated sphere of expenditures created great incentives for circumvention of the regulatory framework by which the wielders of money sought alternative means of exerting influence. Interest groups and individuals seeking to influence campaigns could make limited contributions directly to candidates but they could also support a candidate by engaging in their own advertising without limit, as long as the money was spent independent of political parties and the candidate’s campaign.

The Court did permit regulation of one group of expenditures – corporate and union express advocacy within 60 days of a general election. In campaign finance jargon, “express advocacy” refers to advertising expenditures that expressly advocate the election or defeat of a candidate, as opposed to “issue advocacy” that seeks to opine on a particular issue and does not clearly endorse or oppose a particular candidate. The distinction was often evanescent, as issue ads would blast a particular candidate but end with the anodyne request to “Call John Smith” to inquire about the allegations (Briffault 1999). At least under the formal strictures of the Buckley framework then, corporations and unions were permitted to run issue advertisements in the months before elections but not express advocacy advertisements. This remained true until 2010, when the Supreme Court in Citizens United declared limits on corporate and union express advocacy unconstitutional so long as there was no coordination with candidates or parties that would bring the advocacy within the domain of regulated contributions.

FECA also established a legal process for the regulation of interest group activity in the form of political committees, commonly known as PACs. 4 Under Interestingly, the political committee, which ostensibly creates some greater burdens on

–  –  –

FECA, a “committee, club, association, or other group of persons which receives contributions aggregating in excess of $1,000 during a calendar year or which makes expenditures aggregating in excess of $1,000 during a calendar year,” 2 U.S.C. § 431(4)(A), and has the “major purpose” of electoral activity, must register with the FEC as a political committee. Political committees are subject to certain contribution limits discussed in more detail below, and they are required to disclose their activities to the FEC. This means disclosing the identity of their donors and the amount of money spent on contributions and expenditures.

The “major purpose” requirement was a limitation created by the Supreme Court in Buckley and unfortunately lacks a clear definition. 424 U.S. at



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