The Supreme Court's landmark Citizens United v. FEC decision was supposed to change politics forever. The ruling, handed down in January, removed key campaign spending restrictions special interests, creating fears that business would fill their favorite candidates' coffers with unlimited donations, mounting a corporate takeover.
But things haven't worked out that way. The Citizens United ruling got its first big real-world test in last Tuesday's primaries. The results were surprising.
Political ad firms licking their chops over the possibility of big corporate paydays were disappointed; big business generally declined to take advantage of the new loopholes, preferring to stick to more traditional ways of influencing the races instead. Meanwhile, as Mother Jones reported, big labor went wild, spending a ton of money on newly legal TV and radio ads. National unions like AFSCME and the AFL-CIO spent millions of dollars on the Arkansas Democratic Senate primary, particularly, using newly legalized soft money spending to blanket the airwaves with ads explicitly attacking incumbent Blanche Lincoln and endorsing her challenger Bill Halter, a format previously forbidden under the McCain-Feingold legislation the Supreme Court struck down.
Businesses small and large have stayed on the sidelines in the wake of the Citizens United decision, made hesitant by an ingrained corporate culture wary of alienating customers.
There has been no shortage of corporate money in politics before or since the Supreme Court decision, with companies sinking hundreds of millions of dollars into lobbying efforts and campaign contributions in 2009 alone. But businesses have almost entirely avoided the dreaded “express advocacy” ads of the sort used by labor in Arkansas.
Conservative consultants say the imbalance is hardly a surprise based on their own efforts at courting corporations. Fred Davis, a Republican media guru who worked on John McCain’s campaign, says his firm, Strategic Perception Inc., had worked out a big money deal with a corporate client that wanted to run the newly legalized ads in the aftermath of the Citizens United v. Federal Election Commission decision in January. But before the firm could finalize the arrangement, the client abruptly backed out, scared that the tough economic climate would make the ads unseemly to the public and shareholders alike.
“It would have been about a $10 million deal, then they were declining to spend a dime,” Davis said. “Needless to say, I didn’t like it.”
Davis is not alone. Back in April, veteran conservative fundraiser Richard Viguerie was excited about the possibilities for his advertising firm, American Target Advertising, telling The Daily Beast he was “going to rush in while others are taking the temperature of what this means.” But businesses small and large have stayed on the sidelines in the wake of the Citizens United decision, made hesitant by an ingrained corporate culture wary of alienating customers.
“We think we’re ideally suited for this type of work, but it is going to take a little bit of, if not time, then a change of thinking,” Mark Fitzgibbons, president of corporate and legal affairs for American Target Advertising, said this week. Nonetheless, he added, “the opportunities are there.”
The Arkansas race, which Lincoln narrowly won in a runoff on Tuesday, has touched off a fierce debate between labor and Democratic officials over whether the groups’ spending was counterproductive. Political consultants, government watchdogs, and activists also are dissecting labor’s spending for lessons to take away from the result.
Daily Kos founder Markos Moulitsas Zuniga, whose site was closely associated with the Halter campaign, told The Daily Beast on the eve of the primary that he believed the race was a likely template for post-Citizens United spending.
Incumbent Democrats’ “electoral fortunes are probably more threatened by labor money in primaries than they are by corporate money in general elections,” he said. “And [unions] are just getting warmed up. In 2012 it’s going to be a full-on assault.”
Some on the left, like Firedoglake’s Jane Hamsher, have suggested that the race’s outcome should discourage similar soft money spending by unions, as they’ll only provoke an arms race with corporate-financed trade associations like the Chamber of Commerce.
Even among the unions that supported Halter’s candidacy, there is unease about the flow of soft money. Andy Stern, the recently retired chair of the Service Employees International Union—which opposed the Citizens United decision—said he expected the increase in influence by big business would eventually drown out labor’s early gains.
“We just feel like it’s a really bad idea to let corporations spend money on electoral politics,” Stern said. “In the end there is way too much money in corporations compared to anyone else, and public finance is the only answer to this political mess we’re in.”
Asked whether union spending in Arkansas could spur corporations to get more involved in similar efforts, Dave Levinthal, communications director for the Center for Responsive Politics, which tracks money in races and legislative debates, said: “If a group suddenly sweeps in and is spending money hither and yon then it’s to the great peril of the opposition to stand on the sidelines.”
He added: “A lot of spending on one side absolutely can trigger a political arms race where you increase spending exponentially as a result of an initial major push.”
Others said the perception that unions wasted their money might deter corporations from running express advocacy ads. One White House staffer told Politico that unions “flushed $10 million of their members’ money down the toilet” in Arkansas.
“Had Blanche Lincoln been defeated, I think corporations would have been a lot more nervous and maybe thought about it a bit more,” American Target Advertising’s Fitzgibbons said. “But I don’t think Arkansas is going to change corporate minds. They know down the road they may have to rethink things.”
Bernadette Budde, political analyst for the Business Industry Political Action Committee, said she took the results as a sign that the Supreme Court’s decision hadn’t changed anything and that outside groups would face backlashes regardless of their advertising format.
“Throwing your weight around and throwing your money around isn’t going to work, not unless you have a credible message and a credible messenger,” she said.
Corporations that want to back ads but are wary of provoking a political backlash could still hide behind nonprofits and trade associations, which don’t have to disclose their donors and are expected to play a much bigger role in the next two election cycles than in previous years. But the situation could change soon as Democratic lawmakers look to tighten up campaign finance rules in the wake of Citizens United. The DISCLOSE Act, sponsored Senators Russ Feingold (D-WI), and Chuck Schumer (D-NY), among others, would require such organizations to report donors who fund independent expenditures.
Former Senator Norm Coleman, who heads one such nonprofit, the newly created American Action Network, is planning to run express advocacy ads in the coming months on behalf of conservative candidates. The group already dipped its toe into the waters with one reported ad in Pennsylvania’s special election to replace the late Jack Murtha in Congress. This election cycle, Coleman has told reporters, his group plans on spending $25 million in advertising, but he told The Daily Beast he expects his group and other right-leaning efforts to be outmatched by union spending on independent expenditures.
“There are a lot of questions as to what corporations will do, but by nature they’re not as aggressive in supporting one side versus the other,” he said. “It is what it is; we’re not lamenting.”
Benjamin Sarlin is Washington correspondent for The Daily Beast. He previously covered New York City politics for The New York Sun and has worked for talkingpointsmemo.com.