Ashley Scarborough
Markets, Government, and Corruption
Intersession Course 2010
Final Paper
Corrupt Appearances:
The Connection between Money and Politics in the United States
Money and politics is a hot debate in the United States,
especially after the 5-4 Supreme Court ruling today, January
21, 2010 that eases restrictions on corporation campaign
spending. Citizens United v. Federal Election Commission,
Docket No. 08-205 (2010). Within hours of the ruling CNN.com
had hundreds of reader comments posted in response to the
ruling on a web board like feature that allows readers to
“sound off”1. While there was the occasional libertarian
response that viewed the ruling a success for the First
Amendment, the general tenor of the comments and the comments
that topped the “most liked” list were critical of the opinion
and expressed extreme cynicism about the role of money in the
political process.
In the United States one right that every citizen is
distinctly aware of is the right to Free Speech. Even in
elementary school yards you might overhear a child declaring
their First Amendment rights to their peers or even a teacher.
Americans cringe at the thought of having their First Amendment
1
http://www.cnn.com/2010/POLITICS/01/21/campaign.finance.ruling/index.html?hpt=T1
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rights trampled on. With this right Americans assume also a
right to be heard. Most citizens of the United States do not
think that lack of wealth or clout should affect their ability
to get their message to representatives in government, yet this
is precisely the battle that has been going on with lobbying
and finance reform in government.
Difficulties regulating lobbying and campaign finance have
arisen because both areas are considered protected by the First
Amendment. Yet by allowing these activities to go widely
unregulated, the ability of the ordinary citizen to exercise
his or her own First Amendment right to petition the government
diminishes. While at the same time the wealthy are able to pay
to have their messages heard, either through television
advertisements or through powerful lobbyists who are able to
get the private ear of government officials.
The nexus between money, clout and influence is clear.
Lobbyists frequently petition government officials to further
their organization’s agenda. These same organizations can often
be counted on to donate large sums of money to campaigns during
election years. Money is crucial to the ability of a public
official to get elected, so one could expect that the pressure
to bow to the requests of big donors is high. Alienating an
interest group that can be counted on to provide significant
campaign dollars can be devastating for a campaign, even if
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that interest group only represents the concerns of a small
minority of constituents.
Yet, the government is hesitant to place too many
regulations on lobbying under the guise that lobbying is
activity protected by the First Amendment. Under strict
scrutiny regulations on lobbying must be narrowly tailored to
serve a compelling state interest. State and Federal
governments have been able to establish regulations that pass
constitutional muster primarily through requiring spending
disclosures. Yet citizens and politicians probably agree that
disclosure is only the tip of the iceberg and disclosure
requirements are not enough to effectively curve the impact
money has on the decisions of government officials.
Some countries have recognized this problem and have
outlawed lobbying altogether as a corrupt activity, but for
democratic governments this is probably not the best solution.
The fundamental principle of democracy, and that which the
United States was founded on is that it should be “a government
of the people, for the people, and by the people”2 requires that
citizens be allowed to petition government officials. To do
away with lobbying altogether would severely hamper all
citizens’ access to officials as it would likely block
2
Abraham Lincoln, “The Gettysburg Address” Although not one of the founding documents, it is still widely
quoted today and its interpretation of democracy is at the center of the citizens understanding of their role in
government.
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constituents ability to pass around petitions, call, and meet
with representatives personally.
Another major issue and one that is often related to
lobbyists in that provide campaign donations and soft money
through advertisements is that of campaign finance. The Supreme
Court has more or less ruled that money equals speech and has
declared donations and expenditures protected under varying
levels of First Amendment scrutiny.
This paper will explore the problems with current lobbying
and campaign finance regulations and possible changes that
would help reduce the appearance of corruption in American
politics.
Influence Peddling: The Lobbyists
Influence peddling is the practice of using one's
influence with persons in authority to obtain favors or
preferential treatment for another, usually in return for
payment. It is well known that there is a “revolving door” in
Washington, D.C. and in most state governments. Individuals who
are elected out of office or serve their term limits will often
find jobs with lobbying organizations after their service in
the government. These individuals wield significant power and
influence with their former colleagues, and find it much easier
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to schedule private meetings with former colleagues than an
average citizen.
Most Americans would agree that this seems corrupt,
especially where constituents are concerned that lobbyists do
not have the majority’s interests in mind. It is essentially
influence peddling as these powerful individuals are hired and
paid to take these meetings because the lobbying organizations
realize that certain individuals will have an easier time
scheduling private meetings. However, it would be a violation
of freedom of association to tell government officials that
they cannot take meetings simply because it is an influential
person who has requested the meeting.
It has been difficult to regulate lobbying activity in
Washington for a number of reasons. In the early 1900’s when it
first became clear that lobbying was a problem, bills would be
introduced on the House Floor only to be ignored. Perhaps
because representatives were not quite ready to give up the
benefits received by the schmoozing lobbyists do to get their
way, or maybe because they were concerned about losing
financing and other means of support from lobbyist groups
interested in maintaining their power. Regardless, what began
as an innocent enough activity – individuals following
representatives through lobbies and corridors trying to get
their ear on important issues – was quickly getting out hand
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with large financial and in kind donations being made all over
Capitol Hill with the understanding that the individuals
receiving them would keep in mind the interests of their
generous donors.
The Lobbying Reform Act of 1946 and later the Lobbying
Disclosure Act of 1995 would attempt to remedy the appearance
of corruption primarily by requiring disclosure efforts made by
paid lobbyists to influence the public decision making process
including not only funds spent, but communication that
lobbyists have had with officials. Although the public can see
how much money is being spent, it still does not address the
problem of influence peddling.
One major roadblock that officials have with anticorruption legislation that targets lobbying activities is that
lobbying is considered an activity protected by the First
Amendment. Lobbying in its purist form seems to be exactly what
the Framers were trying to protect:
Congress shall make no law… abridging the freedom of
speech, or of the press, or of the right of the people
peaceably to assemble, and to petition the government
for a redress of grievances.
Yet the framers hardly could have anticipated the extent to
which money and corruption would become involved when
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individuals try to petition the government for a redress of
grievances.
The First Amendment is about the right of the people to
express their grievances without fear of being put in the
gallows for their insubordination. It is not about the right of
the people to spend exorbitant amounts of money in order to
have their grievances heard. Whether the money goes to benefit
the official in power or a third party who will use his or her
influence to affect the decision making process is irrelevant:
both are forms of corruption.
Although Justice Black voted to strike down the Federal
Regulation of Lobbying Act in U.S. v. Harriss, 347 U.S. 612
(1954), as a senator he had said, “There is no constitutional
right to lobby. There is no right on the part of greedy and
predatory interests to use money taken from the pockets to
mislead him.”3 Regardless of the First Amendment concerns and
problems of notice created by the vagueness of the act that
lead Justices Douglas and Black to think it best to abandon the
statute altogether than to rewrite it in the Court, Black’s
quote definitely highlights the problems with unregulated
lobbying.
But even the regulations that are currently in place
cannot possibly fix all of the problems. Former congressman Lee
3
Hearings before a Special Comm. To Investigate Lobbying Activities, 74th Cong. 1st Sess. (1935).
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H. Hamilton wrote about lobbying: Sunshine is a powerful
disinfectant and rather than clamp down on lobbying, I believe
that we would be better off ensuring that it happens in the
open and is part of a broader policy debate. How Congress
Works, Indiana University Press (2004). However, while lobbying
disclosure and strict bribery laws should dispel any outright
bribes and illegal gratuities given directly to public
officials, the lobbyists who are peddling their influence still
have opportunity to slip through the cracks.
The First Amendment and Money: Level of Scrutiny
The Supreme Court applies varying levels of scrutiny to
regulations affecting Free Speech. For example, if the
regulation is aimed at interfering with the expressive
component of the conduct, then the Court must apply strict
scrutiny. See, e.g. Texas v. Johnson, 491 U.S. 397, 406 (1989)
(Applying strict scrutiny to a law prohibiting flag burning
because it offended witnesses.) However, when the regulation
has a purpose unrelated to the content of the expression the
court will apply intermediate scrutiny making it much easier
for the regulation to pass constitutional muster. See e.g.
United States v. O’Brien, 391 U.S. 367, 376 (1968) (Applying
intermediate scrutiny to a regulation prohibiting burning of
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draft cards.) It seems logical to think that legislation aimed
at preventing corruption would be a purpose “unrelated to the
content,” but yet the Supreme Court has not applied
intermediate scrutiny to such regulation.
With regard to limits on campaign contributions courts in
the United States regularly apply strict scrutiny. Buckley v.
Valeo, 424 U.S. 1, 17 (1976) (Explicitly rejecting the O’Brien
test for contributions and expenditures related to political
campaigns); Nixon v. Shrink Missouri Government PAC, 528 U.S.
377, 378 (2000). Buckley v. Valeo was an enormous step in
establishing laws to fight against corruption in that it
validated Congressional legislation limiting campaign
contributions and required reporting of contributions over a
specified amount; however, the Supreme Court declared other
parts of the legislation in violation of the First Amendment
and therefore void. Id. Congress wanted to take campaign
finance regulations several steps further and limit how much
individual candidates can spend on their own campaigns as well
as how much individuals can spend on candidates and their
campaigns independent of actually donating to the candidate.
Id. at 13; 18 U.S.C. § 608 (1970 ed., Supp IV) (also included
in the appendix to Buckley v. Valeo, at 144-236.)
Justice White in his part concurrence and part dissent
criticized the Court for its discrepant ruling on campaign
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finance. Buckley, at 257. He correctly points out the
regulations in question were content neutral and not motivated
by the fear of consequences of the political speech, thus
suggesting a lesser standard of scrutiny than the one applied
by the Court. Id. at 259-60. Justice White also thought it was
unwise not to defer to Congress’s knowledge in their thought
that “limiting independent expenditures is essential to prevent
transparent and widespread evasion of the contribution limits.”
Id. at 262. He points out that without limits on expenditures
that campaign costs will inevitably escalate creating a
pressure to raise funds. Id. at 263. Discrepant laws allowing
unlimited spending but placing a cap on contributions would
unacceptably favor the wealthy and would likely cause those
candidates who were not independently wealthy to incur large
campaign debts that they would be paying off while in office.
Id. at 263.
Justice White also believed that the Court was wrong to
argue that money is speech and it violates the First Amendment
to limit the flow of money to a speaker. Id. at 262. While
campaigns do cost money and Justice White concedes this point,
he expressed that not every campaign expense is directly
related to delivering content and that many politicians are
very effective at getting their message out by spending very
little money. Id. at 263.
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The argument that money is not speech seems to be
furthered in other cases. In Islamic American Relief Agency v.
Unidentified FBI Agents, 394 F. Supp. 2d 34, 44 (D. D. C. 2005)
the court applied intermediate scrutiny when the government
seized the relief agency’s funds stating that the contributions
the agency made for humanitarian relief were not for political
expression. In Islamic American Relief Agency funds were seized
because of suspicion that the organization was linked to
another organization overseas with a similar name, though the
organization was never criminally sanctioned for supporting
terrorism. Federal Ruling could affect Columbia’s Islamic
American Relief Agency, Missourian, Sept. 17, 20094. A later
case under similar facts found this type of seizure to be a
violation under the Fourth Amendment still applied intermediate
scrutiny to the plaintiff’s First Amendment claims. Kind Hearts
for Charitable Humanitarian Development v. Timothy Geithner,
case no. 3:08cv2400 (N.D. Ohio 2009).
While it is arguable that the nation’s interest in
fighting terrorism abroad is a more compelling interest that
fighting corruption in the nation’s political system it still
does not explain why donation of funds made by a humanitarian
agency is subject to intermediate scrutiny under First
Amendment claims while donation of funds made to political
4
http://www.columbiamissourian.com/stories/2009/09/17/federal-court-ruling-could-affect-local-islamic-charity/
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parties or candidates is subject to strict scrutiny. It is
arguable that humanitarian donations are a political statement
in the war against famine or genocide, perhaps more so than a
candidate’s purchase of banquet tickets to make his presence
known to a community.5
There is an inconsistency with how the courts are
determining whether or not a regulation has a purpose unrelated
to the content of the speech. It is not clear why the Court
will apply strict scrutiny to campaign expenditures, but apply
a lesser standard of scrutiny to campaign donations. McConnell
v. FEC, 540 U.S. 93 (2003). While money is sometimes needed to
get your message on television or to hold a political rally
equating money with speech is a dangerous road that threatens
to say that those with more money have more of a right to
speak.
Courts instead should apply the O’Brien test to
regulations aimed at preventing corruption such as those
related to campaign donations and lobbying disclosure because
the motivating purpose is unrelated to the content. Laws that
are content neutral such as the one examined by the Buckley
Court need not be subject to exacting scrutiny. Ward v. Rock
Against Racism, 491 U.S. 781 (1989) (Holding that content
5
List of acceptable campaign expenditures under Wisconsin law. http://elections.state.wi.us/docview.asp?
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neutral regulations regarding the volume of sound systems used
in concerts is subject to intermediate scrutiny).
The argument has been made that donations to campaigns are
directly related to the content of the speech because it allows
the politician to get the message out there. This has been
especially true since television became an important medium
used in elections and even legislation. However, across the
board expenditure limits would be content-neutral and still
allow candidates to spend money to get their message out to the
public, and at worst it would just force them to use their
money more efficiently.
Further, campaign expenditure regulations still pass
strict scrutiny. Even content based restrictions on time,
place, and manner can pass strict scrutiny if the regulation is
narrowly tailored to serve a compelling government interest.
The war against corruption is most certainly a compelling state
interest. Justice White emphasized the importance of restoring
and maintaining public confidence in federal elections, and in
doing so he believes it is important to eliminate the
impression that these elections are a function of money.
Buckley, at 265. Specified spending limits that do not quash
any candidate’s opportunity to speak, but instead level the
campaign playing field could be narrowly drawn, and arguably
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were so when Congress first attempted to establish spending
limits. See Buckley.
Justice White trusted Congress, a body of individuals well
versed in campaign finances and their potential to corrupt the
political process, in their decision to place limits on
campaign expenditures. Id. at 266. Who better to understand how
money corrupts politics than those who very careers depending
on being reelected at the end of their terms. As the current
law in the United States stands, money does equal speech, and
political candidates are allowed to spend as much as they can
afford or borrow to get their message out to the public.
Campaign Donations: A Thing of Value
The illegal gratuity statute in 18 U.S.C. § 201(c)(1)(A)
makes it illegal to give public officials anything of value
“for or because of any official act performed or to be
performed by such public official,” and section (B) makes it
illegal for public officials to accept such gratuities. The
statute is clear, and the Supreme Court affirmed in U.S. v. Sun
Diamond Growers of California, 526 U.S. 398 (1999) that it is
illegal to give gratuities for past acts as well as future
acts. Yet, this is precisely the relationship that many
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lobbying organizations and other campaign donors have with
government officials.
Because there is no expenditure limit, campaigns can often
become a battle of money: who can afford more air time. Because
legislators and the President are elected positions their job
security depends on being able to win the next election and the
ability to win the next election is very dependent on the
ability to raise finances. Thus these government officials are
consciously aware of how their decisions in office will affect
campaign donations. This is especially true for members of the
House of Representatives who serve short two year terms.
Ideally the officials would pay more attention to the fact
that it also takes votes to win, and therefore act according to
the desires of the majority of the constituents. But it would
be too optimistic to believe that organizations who regularly
offer big money and the interests of the wealthy minority who
can afford to make campaign donations do not regularly take
precedent over the middle and working class majority. Because,
after all if you have money you have the power and means to
control the message.
These campaign donations that come in year after year are
things “of value” as worded in 18 U.S.C. § 201. Even if the
donations given do not go directly into the pockets of
government officials, the government officials do directly
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benefit from these contributions in that they aid in providing
job security and they prevent the officials from taking on
personal debt to cover campaign expenses. When these donations
are given to individual campaigns because the candidate offers
a platform that the donor agrees with, this relationship seems
innocent enough. However, candidates know where the money comes
from in their campaigns, and once elected into office officials
can too easily lose the ability to exercise personal discretion
when looking at proposed legislation because their principled
donors will want their agenda furthered. An agreeable
performance will be rewarded with a generation campaign
donation during the next term. A wrong vote could mean that
valuable monetary and public verbal support will be lost.
The Supreme Court’s recent decision ended restrictions on
corporate funding for political candidates not only complicates
the gratuities issue, but it threatens to favor Republican
politicians who tend to benefit more from the support of large
corporation which have the financial means to offer monetary
support. “SCOTUS Deals Big Blow to Campaign Finance Reform,”
TruthDig.com (Sept. 21, 2010). President Obama reacted to the
decision by saying, “It is a major victory for big oil, Wall
Street banks, health insurance companies and the other powerful
interests that marshal their power every day in Washington to
drown out the voices of everyday Americans.” “Supreme Court
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Eases Restrictions on Corporate Campaign Spending,” CNN.com
(Sept. 21, 2010).
Even Justice Kennedy who sided with the majority admitted
that the decision will likely lead to a battle between money
and the message, but said “The appearance of influence or
access will not cause the electorate to lose faith in our
democracy.” “Supreme Court Eases Restrictions.” Yet, Justice
Stevens read aloud from his dissent that “The Court’s opinion
is thus a rejection of the common sense of the American people
who have recognized a need to prevent corporations from
undermining self-government since the founding.” Citizens
United.
The day the opinion was announced legislators in
Washington, D.C. discussing legislation to try to prevent
unlimited campaign spending and funding, which Senator Charles
Schumer (Democrat, New York) said would be, “poisonous to our
democracy.” “Lawmakers Weigh Ruling On Campaign Finance.” NPR
(Sept. 21, 2010). However, the Supreme Court has overturned
Congressional legislation before in Buckley v. Valeo, so the
legislation would have to be carefully drafted to avoid a
similar result.
On Thursday, September 21, 2010 the ongoing debate over
money and politics became very vocal, with the recent Supreme
Court decision waking many Americans up to this issue. Despite
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the distinct relationship between money and a politician’s
ability to win elections, campaign donations have not been
considered gratuities. While courts have been willing to uphold
limits on campaign donations in the past, this has not a
sufficient means for ensuring that these donations do not
affect their recipient’s actions in office. The recent decision
will likely make the connection between political candidate’s
access to money and their ability to get elected even stronger.
A Comparative Look: Canada’s Fight Against Corruption
The Corruption Perception Index6 compares the public
perception of corruption among countries. In 2009 the United
States was ranked nineteen on the list, giving it a relatively
low perception of corruption on the 180 rankings listed.
Canada was ranked number 8 in the 2009 Corruption
Perception Index, meaning it has a very low perception of
corruption. Because it is such a close neighbor to the United
States, it is useful to draw a comparison between lobbying and
campaign finance rules to see if any differences could be
affecting the public perception of corruption.
Canada’s lobbying regulations are strikingly similar to
the United States’ most recent Lobbying Disclosure Act. Like
6
http://www.transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table
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the United States, the Canadian government and people consider
lobbying to be a fundamental part of the political process and
a useful tool for bring knowledge of the issues and the wishes
of the people to government officials’ attention. “Lobbying,”
The Canadian Encyclopedia (2010)7. As in the United States,
there were concerns in Canada that those with more money or
power would have better access to the government than the
ordinary citizen and out of this concern was born the Lobbyists
Registration Act (Revised Statutes of Canada, 1985, c. 44, 4th
Supp.) After a few revisions, registration details became more
specific with time limits on when certain expenditures must be
disclosed as well as a requirement that lobbying organizations
report any government funding received. “Lobbying,” The
Canadian Encyclopedia. Critics of Canada’s Lobbyists
Registration Act note that government officials are not
required to keep any formal record of contacts with lobbyists
and that the Act only requires disclosure for paid lobbyists,
it does not regulate lobbying activity. “Lobbying,” The
Canadian Encyclopedia.
One major distinction between the United States and
Canada’s regulations controlling how money and influence is
used in politics is found in Canada’s Federal Campaign Laws.
Unlike the United States, Canada has successfully passed
7
http://www.thecanadianencyclopedia.com/index.cfm?PgNm=TCE&Params=A1ARTA0004733
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legislation regulating expenditure limits for election
participants, political parties, and third parties. “Federal
Campaign Finance Laws in Canada,” Mapleleafweb (July 21, 2009)8.
Limits on third party expenditures did not make its way
into Canadian law without its challenges as there was judicial
concern about violating the Charter right to freedom of
expression. National Citizens’ Coalition Inc. v. Canada
Attorney General, (Alberta Court of the Queen’s Bench 1984)
(Striking down limits on third parties as unconstitutional);
Somerville v. Canada Attorney General, (Alberta Court of Appeal
1996) (Striking down third party limitations of $1,000 during
an election. However, in 1997 the Supreme Court of Canada ruled
that governments could regulate third party expenditures as a
means of promoting equality in the political process, but the
restrictions could not be written such that third parties would
be excluded from the political discourse. Libman v. Attorney
General Quebec, (Supreme Court of Canada 1997).
With this new
ruling the federal government imposed third party spending
limits with national and local spending limits. 2000 Canada
Elections Act.
Expenditures limits for participants, political parties,
and third parties is precisely what Congress attempted to
enforce in 18 U.S.C. § 608 (1970 ed., Supp IV), but was struck
8
http://www.mapleleafweb.com/features/federal-campaign-finance-laws-canada#overview
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down by the Supreme Court in Buckley v. Valeo. By setting forth
expenditure limits in campaigns the Canadian government
including the Supreme Court is essentially delivering the
message that egalitarian principles in government participation
are an important part of free expression. A step that Congress
attempted to take in the 1970’s, but was unfortunately shot
down by the scrutiny of the United States Supreme Court.
Although McConnell v. FEC, seems to be willing to take campaign
finance regulations a bit further with limits on soft money
requests and advertisements by corporations, campaign
expenditure rules are still subject to strict scrutiny and
Buckley v. Valeo is still good law. McConnell, 540 U.S. (2003).
According to the Corruption Perception Index Regional
Highlights, it is the lack of government oversight in
government finances that is a primary cause of the United
States placement so far behind its northern neighbor. Critics
want less regulation in campaign finance. John Lott, FOX News
contributor goes so far as to say that it is the regulations
that are already in place that contribute to the appearance of
corruption in politics because the government is controlling
too much of the message. “Supreme Court Must Throw Out Campaign
Finance Laws.” (Foxnews.com Sept. 11, 2009.)9 However, as
Justice Black in his dissent in Buckley pointed out, it is not
9
http://www.foxnews.com/opinion/2009/09/11/john-lott-supreme-court-campaign-finance
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about controlling the message: the regulations that have been
put forth are content neutral and should be scrutinized as
such. See Buckley v. Valeo, at 259-60. Rather, campaign finance
laws should be about controlling the flow of money to prevent
corrupt practices in politics.
The Supreme Court of the United States has balked at overregulating campaign finance; however, is interesting to note
that many of the countries with the lowest perception of
corruption including New Zealand (ranked first), Singapore
(ranked third) and Canada have very strict campaign finance
laws which include expenditure limits. (Elections New Zealand10;
Elections Department Singapore11). Perhaps in order to reduce
the public’s belief that politics are corrupt there does need
to be more regulation, even if this means limiting how much
candidates and their supporters spend to exercise their free
speech rights in order to ensure that other interest groups and
even potential candidates are able to get their message out as
well.
10
11
http://www.elections.org.nz/
http://www.elections.gov.sg/candidates_expenseslimit.html
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In Conclusion: The Broader Debate
By declaring expenditure limits unconstitutional, the
Supreme Court of the United States is essentially refusing to
take money out of politics, which is at the very essence of
what corruption means to most Americans. Americans pride Equal
Protection as much as free speech, and although wealth has
never been considered an element defining a protected class,
many Americans are greatly disturbed by the privileges the
upper class enjoys and would appreciate a more level playing
field when it comes to campaign financing.
The fear that is expressed by critics of campaign finance
regulation is that government is already too big, that we need
less regulation rather than more regulation. However, this is
one instance where more regulation would actually put the power
of the government back into the hands of the people by giving
individuals who are not individually wealthy a real chance to
participate in the political process.
Lobbying disclosure laws have helped clean up the lobbying
practice in government. Lobbying is an important tool that
gives people the access to the government, but the regulations
overseeing lobbying as well as campaign finance are lacking
spending limits. Controlling donations was an important start,
and it does help reduce the appearance of candidates being
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captured by single individuals or agencies, but without
spending limits, the wealthy will still rule the political
landscape.
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