The University of Texas at Austin
  • Opinion: The real effects of corporate spending in elections

    By Steve Bickerstaff
    Steve Bickerstaff
    Published: Feb. 3, 2010

    Steve Bickerstaff is an adjunct law professor at the School of Law.

    Many persons, including the president of the United States, have offered their perspective on the ruling by the Supreme Court in Citizens United v. Federal Election Commission allowing corporate expenditures in federal, state and local elections. Most of the comments have focused on corporate ads in political campaigns. In my view, the possibility of such ads is the least consequential of the real effects of the decision.

    The leading winners from the Court’s decision are the powerful incumbent officeholders. Corporations often have a great deal at stake in legislative decision-making. Therefore, they are anxious to win the favor of current officeholders who they perceive are in a position to help them on important pending or planned legislation. This effect was shown in 2002 when then-congressman Tom DeLay raised $749,000 from 20 corporations in support of his Political Action Committee (Texans for a Republican Majority). Many of the corporate executives knew at the time that the contributions were of questionable legality and little or nothing about DeLay’s plans for the funds. They knew only that DeLay wanted the funds and that pleasing DeLay was important to the corporation’s objectives in Congress.

    While not all politicians are as wily, partisan and self-confident as DeLay, the Supreme Court decision in Citizens United essentially opens the treasuries of corporations to federal, state and local officeholders for “pet” political projects or causes that powerful incumbents favor. There are a myriad of ways in which such corporate funds can be used for the direct or indirect benefit of powerful officeholders without the funds actually becoming “contributions” to the incumbent under the law. I am confident that powerful officeholders at every level of government will find a way to use these funds.

    Of course, corporations benefit, too, but not in the manner ascribed by most commentators. There will be corporate political ads expressly advocating the victory or defeat of certain candidates, but these will be the exception. Based on the 2002 experience in Texas, it is various associations of businesses (for example, the Chamber of Commerce, Texas Association of Business, Texans for a Republican Majority) that will use media to influence voters. These associations though will more often affect elections through voter identification and turn out projects that are very effective, but much less transparent than ads. It is local officeholders and legislative incumbents in “competitive” districts that are most vulnerable.

    The greatest victory for corporations, however, is not necessarily in a corporation’s newfound right to use media for or against a candidate, or even in their newfound ability to fund campaign-related activities. Instead, it is how corporate influence is enhanced in the subtle private exchanges that occur between officeholders and corporate lobbyists regarding legislative matters. In future exchanges, the corporate lobbyist is endowed with the implicit threat that, if the officeholder ignores the corporation’s legislative needs, the corporation may fund (directly or indirectly) a campaign against the incumbent. Or, equally implicit in the exchange, is the possibility that, if the officeholder helps the corporation, the incumbent may expect the corporation to help with independent ads or campaign expenses in later campaigns. The potential corrosive effect on the making of legislative policy is great, but the unspoken nature of such exchanges is essentially unmanageable and the participants beyond prosecution.

    Another effect on corporations is ironic. Some corporations did not want the new power given to them by the Supreme Court because, in the past, these corporations used the federal and state ban on the use of corporate funds in campaigns as a means of resisting the expectation of officeholders for financial support. The ban on the use of corporate funds provided a convenient screen. That screen is now gone. It is reasonable to ask how corporations will handle this new exposure.

    The potential implications of the Supreme Court opinion are immediate (2010 elections) and monumental. Both federal and state law can and must be changed to control the abuses possible under the ruling. Options exist, but timely action is of the essence.

    • Quote 2
      Terry said on Feb. 19, 2010 at 11:16 p.m.
      I think one point that is missed in the article is the Free Speech implication. Under McCain-Feingold, certain kinds of groups could purchase political ads prior to an election, and certain kinds of groups could not. At its core, this ruling seems to affirm that free speech is a cornerstone of our republic, particularly in the period leading up to an election. That is why I think this decision is a very positive development, and should be applauded by anyone who wants to see the country steer back toward its founding principles.
    • Quote 2
      Brice said on Feb. 19, 2010 at 1:32 p.m.
      These are all interesting predictions, but I know of no evidence that they have played out as you describe in the 24 states that have long permitted corporations unlimited independent expenditures w/r to state and local races. Why would one expect different behavior on the federal level?
    • Quote 2
      Thad said on Feb. 19, 2010 at 12:42 p.m.
      What about big labor influence in campaigns? Do you also have an issue with that? Do you have a problem with how much money was poured in by big labor to elect Obama? The SEIU spent over $60 million to elect Obama and Andy Stern would be very happy to let you know that. That's real influence in the White House. Health and Human Services Secretary Kathleen Sebelius and Labor Secretary Hilda Solis were appointed precisely because of big labor's influence. The list goes on.
    • Quote 2
      GFB said on Feb. 19, 2010 at 8:01 a.m.
      What is needed is term limits; this decision steers the process in exactly the wrong direction.
    • Quote 2
      Anne said on Feb. 10, 2010 at 11:54 a.m.
      Can someone explain why corporations have constitutional rights? Corporations exist for tax and liability reasons.
    • Quote 2
      David Powell said on Feb. 5, 2010 at 3:10 p.m.
      Excellent analysis. Thank you for posting this.
    • Quote 2
      Greg Harm said on Feb. 4, 2010 at 10:33 p.m.
      Well put, Mr. Bickerstaff. Let us hope all will read this.
    • Quote 2
      Melvin Netzer said on Feb. 3, 2010 at 7:09 p.m.
      I came across your article while researching corporate influence. I doubt Citizens United will net much difference. Our government already panders almost exclusively to corporate interests. The democratic values falsely paraded in congress are rarely evident in their voting record. I am waiting for NBC's "fleecing of american" segment to feature the congress and show how each bill primarily benefits a corporate interest. I do appreciate someone with relevance making a statement. Even though the message gets lost when it deserves a bigger stage.
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