It’s time for liberals to get over Citizens United

Repealing the controversial decision is a pipe dream. And there are more promising avenues for campaign-finance reform.

From the moment the 2010 Supreme Court ruling Citizens United v. FEC came down, it scandalized liberals. The decision heralded the “hostile corporate takeover of our democratic process,” Rep. Rosa DeLauro (D-CT) thundered at the time.

In 2017, a commissioner of the Federal Election Commission resigned, claiming “since the Supreme Court’s Citizens United decision, our political campaigns have been awash in unlimited, often dark money.”* This was the animating sentiment of Bernie Sanders’s 2016 campaign for president; he even went so far as to claim that billionaires are simply “buying elections.”

This idea has given rise to a new liberal battle cry: Repeal Citizens United! Unfortunately, that tactic is naive and misguided, and relies on a misunderstanding of the law and politics surrounding the case. As we approach the 2018 congressional elections — and beyond that, the crucial presidential election of 2020 — it is more vital than ever to have a clear view of where this ruling fits into the mosaic of campaign finance law.

Such understanding will, in turn, shine light on what can be done to make the election process fairer and make politicians more responsive to all their constituents, not just the big spenders.

Some cities and states are already experimenting with programs that strengthen the voices of ordinary voters. Building on such efforts is likely to have far greater effects than continuing to demonize Citizens, whose logic is defensible on First Amendment grounds.

Most widespread in liberal circles is the idea that Citizens opened the floodgates to massive amounts of corporate spending in politics. But as many legal scholars have argued, the floodgates were already open. Citizens is not responsible for the massive amounts of money showered on favored candidates. Nor is it responsible for the rise of so-called dark money in politics.

Citizens didn’t upend our campaign finance system. It was a logical next step, given past court decisions.

Let’s put the hated decision into context. The inundation of elections with private cash is not the result of Citizens but rather was facilitated by the 1976 decision Buckley v. Valeo. That case established the legal framework sanctioning billions of dollars of independent private campaign spending. In it, the Court ruled that limits on campaign donations — direct donations to candidates — are constitutional but said it was unconstitutional to limit non-donation expenditures, such as independently funded advertisements.

Such independent spending — which cannot be coordinated with candidates, according to the Court — was protected under the First Amendment as not just speech but political speech. The idea is that money is a necessary instrument for supporting a political candidate, whether it’s paying for yard signs or taking out an ad in the newspaper.

Not unreasonably, the Court ruled that limitations on independent expenditures would constitute limitations on one’s ability to support a candidate through any number of media. Placing a dollar limit on such expenditures would arbitrarily prevent certain kinds of campaign support simply by the fact of how expensive they are.

Our inability to trace campaign donations to their source — the dark money issue — is the result of the lack of federal regulations to make disclosure mandatory. And such regulations are legal; the Court said as much in Citizens, with eight of nine justices agreeing on that point! The only thing standing in the way of transparency is congressional stonewalling. In 2010, Republican senators defeated a disclosure law 59 to 39, which would have made it more difficult for donors to use legal loopholes to hide their identities.

Citizens simply has not had the seismic legal impact that many think. Since Buckley protected money as speech, the only question was whether corporations were legitimate speakers. It may surprise some to hear, but the Court had already answered this question in 1978. In First National Bank of Boston v. Bellotti, the Supreme Court recognized a corporate right to free speech, concluding that the value of speech in the course of political debate does not depend on the identity of the speaker. Citizens simply followed the precedent of these two cases.

So when liberals intone that “corporations aren’t people,” thinking they are making a knock-down argument against Citizens, they miss the point. Citizens did not make corporations persons. And corporations do not need to be persons to receive First Amendment protections. Citizens upheld the liberty, provided by Bellotti, of corporations to speak, and they speak under the rules provided by Buckley.

The details were debated by expert lawyer Floyd Abrams and First Amendment scholar Burt Neuborne not long after Citizens came down. Abrams noted that even the liberal Justice John Paul Stevens, dissenting, recognized that the Court has “long since held that Corporations are covered by the First Amendment.”

Neuborne, in response, argued that corporations lack dignity and a conscience, which he thinks underpin the human right to free speech. But Justice Kennedy, writing for the slim five-justice majority, cited the long history of First Amendment protections for corporations. The Court had sided heavily with the Abrams view.

The Court seems inclined to limit the definition of “corruption” to explicit bribery

The only remaining question was whether there could be a justification for the government’s curtailing of that speech. Abridging political speech falls under the strictest category of judicial scrutiny; any law that does so must be justified by a “compelling state interest.”

One such objective, some suppose, is stopping corruption, a clear threat to the integrity of Congress. And indeed, in Randall v. Sorrell (2006), the Court reaffirmed that combating “corruption” rises to the level of a compelling state interest. But in Citizens, Justice Kennedy said the only kind of corruption that would count in this context is the most direct kind: “quid pro quo” corruption, which covers only vote-buying bribery.

No such vote buying was at issue in Citizens, since the controversy centered on the release of a privately funded campaign video during an advertising “blackout” period. Such off-limits periods, established by the McCain-Feingold legislation, paid insufficient heed to the Court’s precedents on money as speech and the high bar for restricting political speech.

In response to Kennedy’s narrow conception of corruption, Harvard Law professor and onetime presidential contender Lawrence Lessig has advocated for a broader idea of corruption. In his book Republic, Lost, Lessig spells out his notion of “dependence corruption,” whereby Congress is unduly responsive to big donors because they are dependent on them for campaign money.

He takes pains to argue on “originalist” grounds, hoping to appeal to the conservative majority of the Court, who attempt to cleave closely to the meaning of words as they are found in documents at the time of the Constitution’s drafting. Alas, his arguments have largely fallen on deaf judicial ears.

Where does that leave us?

We are almost certainly stuck with Citizens, not to mention Buckley and Bellotti. The major hope of many concerned lawyers and academics in the runup to the 2016 election has been dashed: the hope of filling the late Justice Antonin Scalia’s seat with a more liberal justice who might help reverse the decision. Instead, reformers got Neil Gorsuch.

So even if there were a stronger legal argument to be made against Citizens, that argument won’t attract enough votes in the Supreme Court. Desperation has led some, like Sanders, to push for a constitutional amendment limiting corporate campaign spending. But beyond being a pipe dream, given the institutional challenges, this tactic fails to take seriously the intricate First Amendment questions at issue.

The upshot of the Sanders campaign is its demonstration of the strength of a candidacy funded by small donations. As a candidate, Sanders rejected Super PAC funding in favor of donations averaging well under $100. Since Super PACs are the primary means individuals and corporations funnel their money to campaigns, it is historically noteworthy that a candidate without such support was capable of seriously contending for the presidency.

The lessons to draw from Sanders’s campaign is not that the system is healthy. Instead, we should conclude that the medicine to cure it may take the form of enabling citizens to make more Bernie-size donations. As of late, there has been an uptick in under-$200 donations to congressional races. In order to make such donations a staple in our democratic process, they should be supported by legislation.

Such a program has been introduced in Seattle, which gives away “democracy vouchers,”which could serve as a national model.

The basic idea is simple: Every eligible voter in Seattle receives $100 in vouchers, which they can freely donate to campaigns in the local city elections. This means every voter can participate in the pre-election process by using their money to “speak up” for candidates they endorse, and it enables lesser-known candidates to find financial support without bending the knee before big money special interests.

Theoretically, this ensures that every citizen has a baseline level of equal participation in the political process. It expands our understanding of political equality beyond “one person, one vote” to a wider notion of equal opportunity for electoral participation.

The local focus is a crucial first step to reshaping public participation in campaigns. As ACLU national legal director David Cole has argued, the most likely path to substantial federal campaign finance reform is by winning small victories in cities and states. Fostering state- and local-level initiatives accomplishes several things.

First, it draws more citizens into the debate over the proper role of money in politics — an essential step toward a sustained national conversation.

Second, it allows for political and legal experimentation. Because the Supreme Court is unpredictable, especially given the uncertainty of Justice Kennedy’s swing vote, attempting several strategies at once for public funding increases the chances that a constitutionally passable version is found.

More experiments also mean more models that can be used as contrasts to the federal system, making the weaknesses of the federal system all the more clear.

Third, such an approach will spark important legal work, which is far from a purely academic matter. By pursuing ballot initiatives and enacting local laws that address money in politics, we will invite legal challenges by entrenched, moneyed interests. This forces judges to issue ever more opinions on what is constitutional, justifying themselves along the way.

Higher courts will receive appeals and further scrutinize this reasoning. This, in turn, will attract legal academics like moths to a flame, whose work will be cited by advocates and courts.

All of this will arm the public with constitutional arguments to defend the integrity of our democracy.

There is no guarantee that all of this will be enough to counterbalance the power of big money in elections. But we can hope that bottom-up political activism will light a fire underneath the complacent rump of Congress. Increased national dialogue, successful local and state initiatives, and a proliferation of academic criticism of current law and policy all generate real political pressure.

Signs of hope

Disclosure laws are not out of reach in the coming years, and increased participation in local elections, subsidized by voucher systems, may usher in increased voter turnout for national elections. Higher turnout has been shown to heavily favor one of the two major political parties. Hint: It’s not the Republicans.

Liberals should take note of the recent special election in Pennsylvania’s 18th District. Outside donations for the Republican candidate, Rick Saccone, were more than five times larger than for the Democrat, Conor Lamb. Yet Lamb pulled off the upset, showing money isn’t everything. He drew strength from a well-mobilized, engaged electorate.

Such vigor can be stimulated in elections across the country — particularly if we provide concrete, monetary means for voters to participate in the selection of their representatives.

Rather than continuing to rail against Citizens United, reformers should pursue strategies that increase democratic participation and encourage voter turnout.

 

Alarm as Guatemala bans head of UN anti-corruption body from country

Human rights officials and activists have warned that the rule of law in Guatemala is under threat after a UN-backed special prosecutor was banned from re-entering the country – the latest in a series of clashes between the government and an international anti-corruption commission.

The country’s human rights ombudsman, Jordán Rodas, said in a statement on Tuesday that the government’s actions destabilize the rule of law, and expressed his dismay at “the arbitrary measures of the Government of the Republic that undermine democracy”.

Anti-corruption activists fear that the pioneering anti-corruption work of the UN-backed International Commission Against Impunity in Guatemala, Cicig, is now at risk.

Cicig has launched a string of prosecutions against high-level officials, including the former president Otto Pérez Molina.

Guatemala’s current president, Jimmy Morales, and his family are also the subject of multiple corruption investigations. On Friday, Morales announced he would not renew Cicig’s mandate, which ends in September 2019.

A staunch US ally, Guatemala was one of the handful of countries that backed Trump’s decision in December to recognize Jerusalem as the capital of Israel and moved its own embassy to the city just two days after the US relocated its diplomatic mission.

In the past, the US has been among Cicig’s strongest supporters, but it has not clearly condemned Morales’s recent attempts to derail the commission’s work. In May, Senator Marco Rubio placed a hold on $6m of US funding to Cicig, claiming the panel was being manipulated by radical elements.

Cicig’s success in bringing down corrupt officials, judges and lawyers has soared during the five-year tenure of the head commissioner, Iván Velásquez.

But on Tuesday, the government announced that Velásquez, currently in the US, would not be allowed back into the country, alleging that he was a threat to order and public security.

The decision to declare Cicig commissioner Iván Velásquez as a threat to national security is an absurdity. The only threat to national security is the arbitrary and illegal action of a ruler accused of accepting illegal financing,” Iduvina Hernández, the director of the Association for the Study and Promotion of Security in Democracy in Guatemala, told the Guardian.

Morales, a former TV comedian, has been accused of illicit campaign financing during his 2015 run for president and is currently facing proceedings in congress that could strip him of his immunity from prosecution, though previous attempts to do so have failed.

Last year, Morales declared Velásquez persona non grata, but a successful constitutional court challenge filed by the ombudsman Rodas reversed the measure.

Oswaldo Samayoa, a constitutional lawyer and university professor, considers the ban of Velásquez to be a violation of the 2017 ruling.

“It’s a violation of the principle of constitutional legality. It involves the disobedience of the president and therefore a crime has been committed,” he told the Guardian.

The opposition congresswoman Sandra Morán shares the widespread view that Rodas and the constitutional court are the targets of legislative reform under consideration this week in congress. The reforms would transfer powers from the supreme court to congress that can facilitate the ousting of officials, including constitutional court judges.

“If they replace one judge, the balance of power shifts,” Morán told the Guardian. “It would mean that they would have total control.”

Guatemala has a long history of authoritarian rule, particularly during a 36-year armed conflict in which US-backed state forces carried out acts of genocide against the indigenous Mayan population. Despite a 1996 peace deal, the conditions that led to the conflict remain, and the country’s fraught peace has been plagued by organized crime, drug trafficking, violence and corruption.

The UN secretary general, António Guterres, asked Velásquez to continue at the helm of Cicig from outside Guatemala until there is more clarity on the situation, the UN said on Tuesday.

But Jorge Santos, the director of Udefegua, a national human rights group, warned that there is a danger that Morales could disregard, dissolve or otherwise attack the constitutional court.

Right now in the country there’s a really major risk of a return to the old patterns that gave rise to the Guatemalan dictatorship,” he said.

Guatemala’s president tries to shut down anti-corruption group investigating him

Last year, Morales tried to expel the head of CICIG, Colombian prosecutor Iván Velásquez, but the Consitutional Court blocked the move.

Over the past week, the conflict has flared up again. On Friday, Morales said he would not renew CICIG’s mandate, which expires next year. The same day, Guatemalan military vehicles stood guard outside CICIG’s offices and descended on a central plaza. On Tuesday, Morales ordered that Velásquez, who has led CICIG since 2013, not be allowed back in Guatemala.

. On Tuesday, Morales ordered that Velásquez, who has led CICIG since 2013, not be allowed back in Guatemala.

.. While Velásquez remains in the United States, the work of CICIG continues, said a spokesman, Matias Ponce. The organization, which has about 200 staff members, is also waiting for the Guatemalan government to renew work visas of CICIG’s foreign staff, he said.

Apart from blocking Velásquez’s entrance into Guatemala, the Morales government this year removed 25 police personnel assigned to guard CICIG, cutting its security force in half.

Morales has argued that CICIG, as a foreign body that receives U.S. funding, constitutes a violation of Guatemalan sovereignty and that Guatemala’s own judicial institutions should be handling such graft cases.

CICIG works in conjunction with the Guatemalan attorney general’s office in building corruption cases.

In a letter to U.N. Secretary General António Guterres last week, Morales said CICIG has had more than “sufficient” time over the course of its mandate to achieve its goals.

.. “For some time now, there have been efforts to derail anti-corruption efforts in Guatemala and continued attacks against the commission and the commissioner,” said Adriana Beltrán, a Guatemala expert at the Washington Office on Latin America. Morales’s actions, she said, are “his attempt to protect himself, given the continuing probe against him.”

.. CICIG works in conjunction with the Guatemalan attorney general’s office in building corruption cases.

.. CICIG was set up in 2006 to bolster Guatemala’s weak judicial institutions. At the time, impunity was rampant in the country, and murders were hardly ever solved. The group, composed of investigators from around the world, used sophisticated investigative techniques, wiretapping and examination of financial records to pursue high-profile crimes. Its work became a model and inspiration in Latin America, where corruption often goes unpunished.

But CICIG has also been polarizing. Critics see it as overzealous and manipulated for political reasons. Earlier this year, Sen. Marco Rubio (R-Fla.) put on hold $6 million in State Department funding to CICIG, saying he was concerned that Russia had “manipulated” the group into pushing for the prosecution of a Russian family in Guatemala.

CICIG’s investigation against Morales had also been gaining steam. Last month, Velásquez, along with Guatemalan Attorney General María Consuelo Porras, asked the nation’s Congress to strip Morales of his immunity from prosecution. A congressional commission has been formed to weigh the request.

Partying Like It’s 1998

start with a country that, for whatever reason, became a favorite of foreign lenders, and experienced a large inflow of foreign capital over a number of years. Crucially, the debt thus incurred is denominated in foreign currency, not domestic (which is why the U.S., also a recipient of large inflows in the past, isn’t similarly vulnerable — we borrow in dollars).

.. Whatever the shock, the crucial thing is that foreign debt has made your economy vulnerable to a death spiral. Loss of confidence causes your currency to drop; this makes it harder to repay debts in foreign currency; this hurts the real economy and further reduces confidence, leading to a further decline in your currency; and so on.

.. Indonesia came into the ’90s financial crisis with foreign debt less than 60 percent of GDP, roughly comparable to Turkey early this year. By 1998 a plunging rupiah had sent that debt to almost 170 percent of GDP.

.. How does such a crisis end? If there is no effective policy response, what happens is that the currency drops and debt measured in domestic currency balloons until everyone who can go bankrupt, does. At that point the weak currency fuels an export boom, and the economy starts a recovery built around huge trade surpluses.

..  stop the explosion of the debt ratio with some combination of temporary capital controls, to place a curfew on panicked capital flight, and possibly the repudiation of some foreign-currency debt.

.. get things in place for a fiscally sustainable regime once the crisis is over.

.. Malaysia did this in 1998; South Korea, with U.S. aid, effectively did something like it at the same time, by pressuring banks into maintaining their short-term credit lines. A decade later, Iceland did very well with a combination of capital controls and debt repudiation (strictly speaking, refusing to take public responsibility for the debts run up by private bankers).

.. Argentina also did quite well with heterodox policies in 2002 and for a few years after, effectively repudiating 2/3 of its debt.

  • .. You need a government that is both
  • flexible and
  • responsible, not to mention
  • technically competent enough to implement special measures and
  • honest enough to carry out that implementation without massive corruption.