This election saw record campaign spending from outside groups. What changed to enable such astonishing third-party contributions?
- Citizens United – for the first time in over 60 years, unions and corporations were permitted to spend treasury funds on ads calling for the election or defeat of certain candidates. Prior to the ruling, these organizations were only permitted to advertise around particular issues, not in favor or opposition to particular candidates. Corporate executives can donate business funds to nonprofits to advertise on behalf of the corporation anonymously — without anyone ever knowing where the money originated — providing incentive for CEOs reluctant to have a company openly endorse candidates in the past.
- New FEC interpretation – The FEC has not required as much disclosure about advertising as it has in previous years, releasing a rule revision requiring only funds specifically donated for advertisements be disclosed. This made it possible for contributors to avoid disclosure by simply not specifying where their money should be spent. Half of the commissioners narrowed the margin for disclosure requirements even more, allowing funds to be designated for advertising and still avoid disclosure, as long as the contributors didn’t specify for which ad the money would be spent. This drastically decreases the donation disclosure.
- Super-PACs and the Speechnow aftermath – Citizens United opened the door for unlimited spending, which may have been the Pandora’s Box that led to the verdict in Speechnow.org v. FEC. Thanks to the D.C. Circuit Court of Appeals (and the U.S. Supreme Court who later refused to hear the case to overturn the verdict), groups can now identify as “independent expenditure committees,” allowing unlimited contributions from unlimited sources, though they must register as PACs.
To recap: thanks to two anti-regulatory court rulings, now groups can receive unlimited contributions fro
m unlimited sources, then spend in unlimited amounts with fewer restrictions, as long as they continue to register with the FEC. The changing of the guard in the Capitol when the newly-elected Congressmen are seated should afford more changes, and less regulation, thanks to small-government favoring Republicans. Stay tuned!