How Money in Politics Corrupts Democracy and How We Can Fix It.

“I gave to many people, before this, before two months ago, I was a businessman. I give to everybody. When they call, I give. And do you know what? When I need something from them two years later, three years later, I call them, they are there for me. And that’s a broken system.”
— Donald Trump in 2015 (Republican Primary Debate)

Money in politics (aka. Campaign Finance) refers to the influence that wealthy private donors have on our elected official through lobbying and direct monetary contributions to electoral campaigns. It is the suspicion of a majority of Americans that our representatives respond to their rich donors instead of the will of the American people, as they are constitutionally obliged to do in a republic such as ours. This suspicion of corruption has also been confirmed by academic research, which has found that public opinion has almost no influence over the laws passed by our congress. The problem has gotten so bad that notable public figures who oppose money in politics, like Senator Bernie Sanders and President Jimmy Carter, have called America an “oligarchy” due to the fact that our policy making process no longer hinges on public needs or opinion, but rather the preferences of a wealthy few. First, we shall examine the policy venues that legalized and perpetuate the influence of money in politics, then we will analyze the evidence confirming the corrupting influence of money in politics, and finally, we shall explore public opinion on the matter, and political solutions that can be deployed to remedy this situation.

Importance to Society

The reason money in politics matters to our society is because it undermines the principle of “one person one vote”, which is the foundation of our republican form of democracy. Representation of the people’s will is what our country was founded on, and in large part what the Revolutionary War was fought over. Our founding fathers envisioned a nation free of tyrants that ignored the will of the people and proceeded in accordance with their own affairs. Somehow we have circled the course and arrived at a similar situation once again. The only difference between the 1700s and the 2000s is that instead of a king and the church ruling us, we have billionaires and corporations who elect politicians that bend to their will, instead of the will of the people who elected them. There are also structural differences in the way politics operates when comparing the 1700s and the 2000s to be sure, but the system achieves the same result in the end, which is immense income inequality between the rich and poor economic classes.

Policy Venues Responsible for Campaign Finance Deregulation

 The policy venue most responsible for enabling rich private interests to capture our government is the Supreme Court of the United States. Four landmark cases can be held most responsible for the transformation of America from a republic to an oligarchy. They are, as listed by relevance: Buckley v. Valeo (1976) : Which ruled that money is speech and that prohibiting election spending is unconstitutional because it violates the First Amendment, First National Bank of Boston v. Bellotti (1978): Which ruled that corporations are equivalent to human beings with first amendment rights, and they are free to donate money(aka. corporate speech) to ballot initiative campaigns, Citizens United v. FEC (2010): Which held that, “freedom of speech prohibited the government from restricting independent political expenditures by a nonprofit corporation”. Which allowed corporations, PACs, unions, and other private entities to donate large sums of money in elections, and McCutcheon v. FEC (2014): this ruling expanded the power of private interests by destroying the money flood gates by ruling that FECA limits on campaign contributions that individuals can make in a two year period were unconstitutional. Essentially allowing unlimited amounts of private money to flow into elections, and completing the corruption of our democracy.

The second policy venue responsible for the perpetuation of money in politics is the U.S Congress, which is where the politicians vetted and financed by the wealthy elites go to make sure that no campaign finance regulation passes through congress, and no labor laws that might hurt industry profits are passed through congress. Thirdly, we have The Executive Branch, most presidents after Nixon have obeyed the will of their private donors, rather than the people, for instance, Bill Clinton repealed the Glass-Steagall Banking regulations which gutted banking safeguards of the New Deal and let bankers gamble with depositor money with no rules, and Obama promised to “change the way Washington works” in 2007 and promised to address climate change, but he ended up not prosecuting a single banking executive and expanding artic drilling so that bankers and oil companies can make money at great detriment to the American people; not surprisingly Obama’s top donors in 2008 were banks like Chase, and Goldman Sachs (OpenSecrets.com). Finally, we have the state and local legislatures, which are the places where money in politics has the least influence and it remains the best venue to reverse the corrupting influence of money in politics. Corporate and banking interests have overwhelming influence on all federal branches of government at this point, but their influence on state and local politicians are significantly weaker compared to federal politicians.

Money in politics leads to dangerous levels income inequlaity: The evidence

One major way that money in politics impacts society is by depriving the working class of their fair share of income. This happens because the interests of the working class and management are diametrically opposed to one another. In a capitalist system like ours, where corporate management try to squeeze every penny they can in profits, the rights of the workers get short changed for corporate profits, and if our elected representatives are dependent on the corporate CEOs and executives (management) for their campaign re-election, which is indeed the case now, then it is not hard to see why the working class keeps losing out while the rich keep getting richer. This correlation is not just logical but it is reflected in the data. According to the Scientific American, “The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%” (Fritz, 2015). Another study by Norton and Kiatpongsan, asking Americans to estimate the wage ratio between CEO and worker found that Americans thought it was 30 to 1 and they thought, ideally, it should be 7 to 1, but in reality it is 354 to 1 (Norton et al. 2014). Money in politics is the reason that the rich have been able to capture so much wealth to the detriment of the poor and middle class of our country, because the interests of management have been able to drown out the needs of the workers due to management’s ability influence candidates with financial contributions. After all, the CEOs and executives in a company have much more financial resources than their workers, therefore able to wield much more political influence.

Furthermore, a study done by the Organization for Economic Co-operation and Development, analyzing the share of income growth going to three different income brackets in the top ten western industrialized nations from 1975 to 2007, found that the U.S came in last in income equality. Denmark came in at number one with 90% of the economic gains going to the bottom 90% of the population, while only 2% of the gains went to the top 1%. On the other hand, in the U.S over 47% of the income gains went to the top 1%, 35% of the income went to the top 10%, and the bottom 90% of Americans only gained about 18% of the income (Strachan, 2014). This is during a time that Americans were working harder than ever and producing more and more products with increasingly efficient technology. Furthermore, according to a study done by the Economic Policy Institute, productivity and hourly compensation have drastically diverged from each other from 1973 to 2015. Net productivity rose in this interval by 73.4 %, while hourly compensation stayed at a measly 11.1%, which means, “that although Americans are working more productively than ever, the fruits of their labors have primarily accrued to those at the top and to corporate profits” (Bivens & Mishel, 2015). It is not a coincidence that the pay gap started to widen right after the Supreme Court ruled that corporations are people and they are allowed to spend money to influence public elections.

money Corrupts Politics: the Evidence

                A study done by professors from Princeton and Northwestern University, examined the extent to which the American political system responds to the will of the American people, compared to the will of interest groups that represent corporations and wealthy private interests. The researchers used four theoretical forces of influence to measure the democracy level of America, these were: Majoritarian Electoral Democracy, Economic-Elite Domination, Majoritarian Pluralism, and Biased Pluralism. After their analysis of 1779 laws passed, from 1979 to 2002, they concluded that the needs of the people at the 90th percentile of income and their allied lobbyists were satisfied by lawmakers over 90% of the time, and the will of the average American and of, “mass-based interest groups” had a, “near zero, statistically nonsignificant impact upon public policy” (Gilens & Page, 2014). This evidence speaks to the validity of Bernie Sanders’ criticism of America being an oligarchy, because it demonstrates how a handful of moneyed elites, due to their financial influence, have skewed the legislative process in their favor.

We have anecdotal evidence from many credible individuals with direct experience in political office who have spoken out about how money biases politics in favor of the rich. For instance, Congressman Richard Bolling (in office 1949-1982) from the fifth district of Missouri, spoke about the corrosive effects of money in politics. Bolling believes that money in politics is the issue that prevents congress from acting on a multitude of issues, because money creates a dependency on the part of elected officials on special interest groups who can aid them in getting reelected, so their voices end up drowning out the needs of the public. He notes that the first time he ran for congress in 1948, it cost $2,500, but it rose to $205,000 by 1984. Cost of living expenses went up 4 times but campaign funding increased by 20 times (Bolling, 1986). These increases coincide with the passage of landmark court cases like Buckley and Bellotti, which caused a huge influx of cash to pour into political campaigns by corporations and other private entities. Bolling also explains the rise of PACs, and interest groups, he attributes it to the rise of the federal budget in the 1970s, as government coffers expanded more groups got involved to make sure they can earmark some of that money for themselves. Former president Jimmy Carter also spoke out about the corrosive impact of money in politics in 2015 saying, “Now [the United States is] just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. senators and congress members. … So now we’ve just seen a complete subversion of our political system as a payoff to major contributors …” (Schwarz, 2015).

                It is often argued that campaign finance transparency is all we need to solve the problem of money in politics. This was suggested by corporate Democrats like Hillary Clinton in the 2015 Democratic Primary. Lanthrop argues that knowing who is buying our politicians is not enough to solve the problem; the core problem is the bribe (money) itself. He notes that citizens should not have to play watchdog on their representatives to make sure that they are not bought off by wealthy elites. We need a truly democratic system that is fundamentally uncorrupted by the influence of money. To demonstrate the corruption of the system, he provides the example of the Consumer-First Energy Act of 2008, an act designed to protect consumers, and how John Thune, a Senator from South Dakota, who voted against it after he received $117,804 in campaign funding from people who wanted to stop this act (Gas and oil companies, Chamber of Commerce, and Commodity Brokers) and $300 from people who wanted it to pass (Consumers) (Lathrop & Ruma, 2010). This is routinely what happens in Washington. Industry funded groups have much more financial capacity than average citizens, consumer groups, or unions, so they end up being drowned out by the moneyed interests. The reason politicians listen to wealthy donors is because they are constantly trying to raise money to run for office again or to raise money for the RNC or DNC coffers. This creates a vicious cycle where those politicians who side with wealthy donors get elected and populist and/or centrist candidates are never elected, so over time, almost all of congress gets saturated with people who represent the donor class, instead of the people in their districts or states.

                The Democracy Journal reports on the extent to which the economy has been rigged against the American worker and in favor of corporations. They note how corporate taxes were cut right after the 2007-08 economic crisis, but middle class wages have been stagnant for decades. If anyone needed an economic boost after the crash, it was the middle and working class, not the richest banks. They expose the power of corporate lobbying, noting that, “of the eight companies that lobbied the most aggressively between 2007 and 2009, seven saw their tax rates fall from 2007 to 2010, and six saw declines of seven percentage points or more, even as the median company among 200 firms saw its tax rate fall by just 0.2 percent. The savings were worth an estimated $11 billion—which, if entirely due to lobbying, would indicate a return on investment of over 2,000 percent” (Hacker J., 2013). We have seen numerous examples of bills proposed that were written by lobbyists; as NPR reported in 2013, a bill intended to defang Dodd-Frank banking reforms was written by banker lobbyists (Chang, 2013). Politicians and their aides are so busy raising money, and/or so corrupted that they just take the language written by lobbyists and transfer it to the bills that will be proposed on the floor of congress. Despite these blatantly clear examples of pay to play corruption, it has been suggested by some mainstream political pundits (during the 2015-16 primary) that corporations, banks, and rich CEOs who give millions of dollars to politicians don’t expect anything in return, which is one of the most absurd and dishonest statements ever made in the media. Mainly because business people don’t give money away for fun; they make investments, expecting a much bigger return in the future and as the previous numbers indicate, they make a tremendous return on investment through lobbying. Energy companies give money to politicians that will ignore or deny climate change and let them pollute the planet to make a short term profit. Bankers give money to politicians that vote against banking reform and allow them to make risky bets that could possibly crash the economy. Drug companies give money to make sure that drug price controls are never established. Where is the evidence of corruption? The evidence is that on all of these issues, public opinion is against business interests, but our politicians don’t listen to the public, instead they promote the agendas of their donors. Hence, the reason why we don’t have a major plan to fight climate change, why we don’t have drug price controls, and why we don’t have Glass-Steagall level banking reform. There are many more examples where public opinion directly contradicts the actions of our politicians. The reason why they take these undemocratic actions is because of their dependence on high dollar donors.

                Lastly, David Sirota provides an undeniable example of money directing corrupting a politician. Mike Pence had portrayed himself as an anti-gambling politician who promised to stop the expansion of casinos in Indiana, but after the gaming industry and related lobbyists paid 2.5 million dollars directly into his campaign account, he betrayed his campaign promises and proceed to sign, “tax legislation benefiting the gaming industry; by not vetoing the bill, he allowed for the passage of separate landmark legislation permitting riverboat operators to move casinos on shore. His administration also helped a major RGA donor from the lottery industry, GTECH” (Sirota, 2016). Pence would have no other reason to turn back on his campaign promise to limit gambling in Indiana, other than the financial incentive provided to him due to the weak campaign finance laws in his state and in our country overall.

Why money is not speech and corporations are not people

                As BeVier at the California Law Review explains, the Supreme Court’s rational in Buckley and other decisions for allowing private interests to contribute money to election is based on the idea that it, “long had been a customary and a peaceful way of expressing political preferences and thereby of participating in the free discussion of governmental affairs” (BeVier, 1985). SCOTUS was referring to the fact that individual Americans have always been able give a capped amount of money to politicians, so SCOTUS expanded that right to corporations as well, which is a completely illogical and a thoughtless equivocation. First, corporations are fictional legal charters that people invent to generate profit; equating these fictional entities to human beings should be a ludicrous notion to any rational person, but corporate friendly lawyers in Supreme Court robes, such as those who voted in favor of Buckley, were willing to make any excuse to give corporations more power. Furthermore, as Issacharoff from the Harvard Law Review points out, “as formulated in Austin v. Michigan Chamber of Commerce (1990), the inequalities born of wealth are compounded by the unnatural abilities of corporations to amass wealth more readily than can individuals” (Issacharoff, 2010). The bottom 90% of Americans do not have thousands of dollars to spend on electoral campaigns, even for candidates they may love, corporations and their executives (the top 10%) do have that kind of money. So, this means that the first amendment rights of actual American citizens get trampled on when we let corporations (who only exist on paper) donate money to politicians. More money spent ipso facto guarantees corporate dominance of electoral outcomes, because according to a study by the Center for Responsive Politics, “the Senate candidate who spent more money during a race won a whopping 95% of the time”, and “The House candidate who spent more money won 80% of the time” (Hickey, 2012). This corporate dominance also explains the enormous wealth and income gap that was noted earlier. The rich have more influence over all aspects of our economy because they have influenced our politicians to make sure that they can horde most of the wealth generated by their workers, and pay the least possible amount of taxes.

                As for money being speech, we only need to use the example of prostitution to dismantle this outrageous argument; if money were speech, then receiving sexual favors for a fee from a prostitute would be characterized as speech, therefore a person accused of solicitation of prostitution may claim he was simply conversing (using money) with a lady of the night and that the police and the District Attorney have no grounds for prosecution because he is protected by the First Amendment. This argument would be laughed out of the courtroom by all judges in the country, even those that claim money is speech. Yet, they make a similar argument with a straight face to justify corporations bribing our politicians for political favors. Money is property, property that most of us acquire through hard work for business transactions. Using money to buy influence in government is called bribery, which used to be a crime, until SCOTUS legalized it in the 1970s.

Short term solution: Pass stricter anti-corruption laws.

The most comprehensive legislative proposal to weaken the strength of money in politics is the American Anti-Corruption Act (AACA). Which addresses several urgent problems in our current campaign finance system. According to their website, they have a well-defined plan to fix the system, the first priority being, “stop political bribery”. They want to stop bribery by making it illegal for politicians to take money from lobbyists. This act would prevent registered lobbyists from donating to politicians. This is a serious issue because lobbyists don’t just speak on behalf of some group, but they do financial favors for politicians and their aides to win their favor so that at a later time they can influence the content of the bills those lawmakers are proposing. This is a well-documented phenomena that was illuminated by people like Jack Abramoff (Schmidt, 2005), a defunct lobbyist who went to jail for bribery of congress, and now supports fixing money in politics.

Another provision of the AACA to end bribery is to stop lobbyist bundling, which is a process by which lobbyists combine the money they get from their biggest donors into huge lump sums that they can donate to politicians; this make politicians want to please lobbyists to make sure that they keep funding their reelection campaigns. Another crucial provision is to stop the revolving door between congress and lobbying. According to a study by the congressional watchdog group Legistorm, “Nearly 5,400 former congressional staffers have left Capitol Hill to become federal lobbyists in the past 10 years, and 400 former U.S. lawmakers also have made the jump to lobbying” (Farnam 2011); it is currently the case that most politicians leave Washington and go right into being a lobbyist for any private industry that will have them. They use the political contacts and networks they formed while in office to push the agendas of private industry, bypassing the will of the people. This act, “stops elected representatives and senior staff from selling off their government power for high-paying lobbying jobs, prohibits them from negotiating jobs while in office, and bars them from paid lobbying activity for several years once they leave”.

Lastly on bribery, the AACA prevents lawmakers from fundraising during work hours. It is a fact that is attested to by most politicians that they have to, “dial for dollars” (Tracy, 2013) to make it in Washington. It has become an expected routine for politicians now. This is a problem because it prevents them from actually legislating, and passes the job onto their aides or interns. Politicians don’t even know the fine details of the bills they vote on due to this preoccupation with fundraising. It also narrows the legislative perspective of politicians. If the people you talk to everyday are wealthy donors who can donate big money to your campaigns, then you start to see their interests as your own, and sometimes unconsciously, you will pass laws that benefit your donor constituents, instead of the public at large. The AACA also has other provisions such ending dark money groups by requiring them to disclose all their donors online before any funding can be done. Additionally, the AACA ends gerrymandering permanently, by creating independent commissions to set district limits, which prevent politicians from divvying up districts to suit their electoral chances. There are other provisions in the AACA to improve electoral democracy such as requiring ranked choice voting, making all primaries open, enforcing current laws on SuperPacs, and closing lobbying loopholes. Given the current make up of congress, most of the AACA’s legislative remedies will not pass congress, because both parties are corrupted by money in politics. Big money is the reason most of these politicians won in the first place, so they do not want to bite the hand that feeds them, which is why we need a long term solution that does not depend on congress.

 

 

Long term Solution: A Constitutional Amendment to get money out of politics.

                The best way to eliminate the corrupting influence of money is to pass a constitutional amendment which states that corporations are not people, money is not speech, and that all public election should be funded by the government with a prohibition on private donations. The most successful and noteworthy group attempting to get money out is WOLFPAC. WOLFPAC was founded by Cenk Uygur, the host of TYT, in 2011. WOLFPAC’s “Free and Fair elections Amendment” correctly diagnoses the problem and has a clear path to a solution. In order to pass a constitutional amendment, we must first convene a constitutional convention, which we are allowed to do through Article V of the U.S constitution. The path to a convention is a long and hard one, but it is one that can be done given the enormous public support for ending the undue influence of lobbyist and the mega-rich in America. A poll conducted by Public Citizen in 2014 found that 61% of the American people solidly opposed Citizens United, which was a 2010 Supreme Court case that granted unprecedented spending power to political action committees with very little disclosure laws. The same poll found that 78% of Americans believe that reducing the influence of money in politics was very important to them. Furthermore, they found that 60% of Americans want a complete overhaul of the current campaign finance system. Lastly 62% of American believe that, “the current election system allows the voices of a few to drown out the many using million-dollar microphones” (Public Citizen, 2014). A New York Times/ CBS News poll found that 66% of Americans believe that the wealthy have more influence over our politicians than average Americans. The same poll found that 80% of Americans believe that money has too much influence over politics. And finally, 55% believe that politicians who win due to money in politics carry out the agendas of their donors “most of the time”, as opposed to the agenda of the public at large (NY Times, 2015). These numbers are similar or greater in every reputable scientific poll conducted on the subject. It’s a public consensus at this point that wealthy donors have more influence over our political lives than the average American.

This growing public discontent toward money in politics is also reflected in the success that WOLFPAC has had in five states so far in just six years after its creation in 2011. They have hundreds of volunteers in every state showing up to their politicians and urging them to propose bills to end money in politics. In order to actually convene an Article V Convention, reformers must get 34 of the 50 states to call for a convention, and get 38 of the 50 states to pass the “Free and Fair Elections Amendment”. Congress has passed 27 amendments to the constitution; about half of those were called for by way of Article V Conventions. No conventions actually took place, because the threat of a convention was enough to scare congress into action. It is the hope of WolfPac to provoke a similar fear in congress and force them to act on this issue as well.

Potential roadblocks to an amendment

                In conclusion, although a constitutional amendment is the most effective way to stop the corrupting influence of private money in elections and bring back our democracy, it is not an easy task. With most of the other 27 constitutional amendments passed by congress, it was done after a majority of the American people were loudly demanding change, as happened with the civil rights movement influencing the passage of the 23rd and 24th amendments. Luckily for the campaign finance reformers, most of America agrees that money in politics is allowing a rich minority to stifle democracy and have a disproportionate say in legislative outcomes. What people don’t realize so easily, because the media never discusses it, because they themselves are giant corporations who profit from the current system, is that this influence affects every aspect of American life. For instance, the declining education quality and accessibility, failing infrastructure, skyrocketing healthcare costs, climate change, the wealth gap, and income inequality are all tied inextricably to money in politics, because in each of these cases, rich private interests who have a stake in these issues lobby congress and donate to their campaigns to make sure that the money meant for the benefit of the public good ends up helping corporations and banks, or that regulations of these industries never takes place or the regulation that do pass have minimum effect on their profits.

The proponents of a constitutional amendment first need to mobilize the public by explaining how money in politics will personally harm them and their children if the current system is not fixed. Personalizing an issue makes it real for human being and it causes them to act. This mobilized constituency must then put immense and sustained pressure on state legislatures regarding this issue, if they wish to have any success. Another challenge may be getting 38 states to ratify the same constitutional amendment, but if reformers can mobilize enough activists and public support in each state, they most likely will be able to at least convince these state legislatures to include the provision of banning private money in public elections, which is the core of the amendment. It is no doubt a difficult task, but a constitutional amendment would be the most effective and long term avenue to codify into law the idea of true democracy, so that neither congress nor SCOTUS may return us to the oligarchy that exists today.

References

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  2. Bolling, Richard (1986). Money in Politics. The ANNALS of the American Academy of Political and Social Science. vol. 486, 1: pp. 76-85.
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  8. Hacker, Jacob; Loewentheil, Nathan (2013). How Big Money Corrupts the Economy. Democracy Journal. Accessed: 4/29/17; http://democracyjournal.org/magazine/27/how-big-money-corrupts-the-economy/
  9. Hickey, Walter (2012). House Candidates Who Spent More Money Won Their Elections 95% Of The Time. Business Insider. Accessed: 4/29/17 ; http://www.businessinsider.com/congress-election-money-2012-11
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  12. Kiatpongsan, Sorapop; Norton, Michael I. (2014). How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay. Perspectives on Psychological Science. Vol 9, Issue 6, pp. 587 – 593. http://journals.sagepub.com.libproxy.csun.edu/doi/full/10.1177/1745691614549773
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& Fix Our Broken Elections. anticorruptionact.org. Accessed: 4/29/17 http://anticorruptionact.org/whats-in-the-act/

  1. Schmidt and Grimaldi (2005). The Fast Rise and Steep Fall of Jack Abramoff. Washington Post. Accessed: 4/29/17; http://www.washingtonpost.com/wp-dyn/content/article/2005/12/28/AR2005122801588.html
  2. Schwarz, Jon (2015). “Yes, We’re Corrupt”: A List of Politicians Admitting That Money Controls Politics. The Intercept. Accessed: 4/29/17; https://theintercept.com/2015/07/30/politicians-admitting-obvious-fact-money-affects-vote/
  3. Sirota, David (2016). Donald Trump VP Mike Pence Pledged To Limit Gaming, Then Helped Casinos After Campaign Donations. IBT Times. Accessed: 4/29/17; http://www.ibtimes.com/political-capital/donald-trump-vp-mike-pence-pledged-limit-gaming-then-helped-casinos-after-campaign
  4. Tracy, Jan (2013). For freshman in Congress, focus is on raising money.Accessed: 4/29/17; https://www.bostonglobe.com/news/politics/2013/05/11/freshman-lawmakers-are-introduced-permanent-hunt-for-campaign-money/YQMMMoqCNxGKh2h0tOIF9H/story.html
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