Celebrate the Citizens United Decade

The ruling has empowered small-dollar donors and political outsiders, not corporations.

‘Last week,” President Obama declared a decade ago, “the Supreme Court reversed a century of law that I believe will open the floodgates for special interests—including foreign corporations—to spend without limit in our elections.”

Mr. Obama was wrong in almost every respect about Citizens United v. Federal Election Commission, which the court decided on Jan. 21, 2010. Hysterical predictions about Citizens United—then-Rep. Ed Markey, among others, compared it to Dred Scott—haven’t held up.

Contrary to Mr. Obama’s assertion about a century of law, Citizens United overturned portions of McCain-Feingold, a campaign-finance law that wasn’t even 10 years old, and another law from 1947. Those laws prohibited unions and corporations, including nonprofits, from voicing support for or opposition to candidates for federal office.

Citizens United didn’t affect the longstanding ban on corporate contributions to candidates, and it didn’t legalize foreign political spending in the U.S. Most Russian online ads in 2016 would have been protected under the First Amendment even before Citizens United, because the ads didn’t urge a vote for or against a candidate.

Far from handing power to the 1%, Citizens United unleashed rapid political diversification. Since the ruling, the White House or Congress has changed parties in every federal election except 2012. Twenty eighteen saw the highest midterm voter turnout in a century. Small-dollar donors are more coveted than ever. Donald Trump raised more money from donors who gave less than $200 than any candidate in history.

Since Citizens United, party outsiders such as Mr. Trump and Bernie Sanders have risen to national prominence. And money hasn’t been able to buy elections as predicted. Sheldon Adelson donated record amounts to Republican super PACs in 2012 but failed to prevent strong Democratic victories. Democrats Tom Steyer and Michael Bloomberg came up empty after putting huge sums of money behind climate change and gun control.

Hillary Clinton outspent Mr. Trump 3 to 1 in 2016. Congressional leaders and big-time fundraisers such as Reps. Eric Cantor (R., Va.) and Joe Crowley (D., N.Y.) lost their seats to primary challengers who spent a fraction of what the incumbents did. Incumbent re-election rates in the House never dipped below 94% from 1996 to 2008, but did in 2010, 2012 and 2018.

Citizens United deserves a share of credit for all these trends. The decision made it easier to promote (or criticize) a candidate without help from party leaders or media elites.

Perhaps the worst prediction was that Citizens United would allow a corporate takeover of democracy. The New York Times accused the justices of having “paved the way for corporations to use their vast treasuries to overwhelm elections” and “thrust politics back to the robber-baron era of the 19th century.”

A decade later, most spending comes from the same place it always has: individuals who donate directly to candidates, up to legally limited amounts. Corporations contribute well under 10% of federal political spending, Their voice is not dominant—and voters have a right to hear it. Justice Anthony Kennedy and his colleagues didn’t hold that “money is speech” or “corporations are people.” The ruling was part of a healthy shift in favor of free speech in politics—a trend that began with 2007’s Wisconsin Right to Life v. FEC, and continued through 2014’s McCutcheon v. FEC.

The questions is whether the justices think their work is done. If they truly want to empower democracy, they should continue to look skeptically at regulation of campaign finance. Political speech, after all, is at the core of the First Amendment’s protection.

Mr. Smith served as chairman of the Federal Election Commission, 2001-05, and is chairman of the Institute for Free Speech.

The Bloomberg Effect: Huge Spending Transforms 2020 Campaign Dynamics

Michael Bloomberg has spent roughly three-quarters of the amount spent by all other presidential campaigns combined on ads

The presidential election is 10 months away, but Michael Bloomberg’s long-shot campaign is running like it’s already late October.

The candidate has spent $217 million so far on television and digital advertising, mostly ignoring the Democratic primaries and squarely challenging President Trump. The total is roughly three-quarters of the amount spent by all other campaigns, including Mr. Trump’s, combined.

It’s the game plan the billionaire used in his campaign for mayor of New York City in 2001, when he outspent his competitor nearly 5 to 1. Big spending has also made his philanthropy a dominant force on climate change, gun control and other issues. And it is how he has managed his lucrative business, paying up to bring in talent.

The flow of cash—dubbed the Bloomberg effect by media-measurement firm Advertising Analytics LLC—has upended the financial dynamics of the election. Television ad rates jumped 45% in Houston after the Bloomberg campaign bought $1 million worth of ads in November, Advertising Analytics said. The campaign paid as much as double the going rate for staff and promised jobs to workers through November, whether or not Mr. Bloomberg stays in the race. The candidate now has 1,000 campaign staffers.

It’s a big part of the reason roughly $20 billion is expected to be spent on political advertising this election cycle, dwarfing the previous record of $12 billion in 2016, according to media research firm, Borrell Associates.

“Everything about what Bloomberg is doing is unprecedented,” said Rufus Gifford, former finance director for Barack Obama’s presidential campaign. Mr. Bloomberg remains a long shot, Mr. Gifford said, “but when you have Donald Trump as president and one of the 10 richest people running for president, anything can happen.”

Late Show

Michael Bloomberg has hugely outspent other presidential candidates, and is focusing on Super Tuesday and later primaries.

Spending on local TV ads

TARGET STATES BY PRIMARY DATE

Bloomberg

$177.2M

Feb. 3

Iowa

Feb. 11

N.H.

Feb. 22 Nev.

Feb. 29 S.C.

March 3

Super Tuesday*

Steyer

March 10 N.D., Wash., Mo.

Miss., Idaho, Mich.

Sanders

Buttigieg

March 17

Fla., Ohio, llI., Ariz.

Warren

Yang

March 19 Ky.

Biden

March 24 Ga.

Klobuchar

April 7 Wis.

Trump

April 28 N.Y., Pa.

Gabbard

Delaney

May 19 Ore.

Patrick

June 2 D.C., N.M.

Bennet

*Alabama, Arkansas, California, Colorado, Maine, Massachusetts, Minnesota, North Carolina, Oklahoma, Tennessee, Texas, Utah, Vermont, and Virginia.
Notes: Figures include future bookings, which are subject to change; don’t include national and digital ad spending. Data from Jan. 1, 2019 to Jan. 15, 2020.

Source: Kantar/CMAG
Ana Rivas/THE WALL STREET JOURNAL

Kevin Sheekey, Mr. Bloomberg’s campaign manager, said there’s more to Mr. Bloomberg’s candidacy than his spending, pointing to wealthy but politically inexperienced candidates such as Meg Whitman or Ross Perot who failed in the past. “Money won’t just determine elections,” he said. “You have to have a record and a message.”

Lots of rich people have run for office, lots of candidates have claimed excellent business credentials and many have claimed to have top-flight data operations, which Mr. Bloomberg emphasizes. What sets his campaign apart is his $55 billion checkbook.

Mr. Bloomberg is No. 9 on the Forbes list of the world’s richest people, ahead of each of the Google founders, either Koch brother and the wealthiest members of the Walton family. A person familiar with the plans said he could spend $500 million on the primaries alone, and Mr. Bloomberg hasn’t ruled out spending $1 billion before November if needed.

“Certainly it’s going to be disruptive,” said Robert Wolf, former chairman and CEO of UBS Americas and a longtime Democratic donor. “We just don’t know how yet.”

Spending by Mr. Bloomberg, shown in Los Angeles earlier this month, has upended the financial dynamics of the election. PHOTO: FREDERIC J. BROWN/AGENCE FRANCE-PRESSE/GETTY IMAGES

Mr. Bloomberg, who was mayor of New York from 2002 to 2013, is currently supported by 6% of voters, compared with 27% for former Vice President Joe Biden in the Real Clear Politics average of polls. More voters have a negative than a positive view of Mr. Bloomberg, according to a Quinnipiac University National Poll from mid-December.

Mr. Bloomberg said he entered the race at a moment when polling data suggested voters placed less importance on ideology and more on finding a candidate who could beat Mr. Trump. His campaign believed Mr. Trump was winning the race and was going unchallenged in political ads in competitive states as Democratic candidates focused on the primary battle.

At the time, Massachusetts Sen. Elizabeth Warren was surging. Polls showed Mr. Biden beating Mr. Trump but within the margin of error. Ms. Warren’s policies, such as a wealth tax, would likely hurt Mr. Bloomberg, and she is generally disliked by his circle of wealthy New Yorkers, according to a longtime staff member. Mr. Bloomberg has said he will back whoever wins the nomination, even if it is Ms. Warren or Vermont Sen. Bernie Sanders.

Off the Map

Michael Bloomberg, who entered the presidential race just two months ago, has already spent roughly three-quarters of what the rest of the candidates combined have spent on TV, radio and digital ads.

Total ad spending

Bloomberg

$216.8 million

Steyer

143.0

Sanders

26.4

Buttigieg

24.3

Warren

19.8

Biden

11.7

Others

33.4

Trump

50.3

Note: Between Jan. 1, 2019 and Jan. 15, 2020.  Figures include future bookings, which are subject to change.

Source: Kantar/CMAG

To offset criticism that he was running out of his own self interest, Mr. Bloomberg pledged $15 million to $20 million to register 500,000 voters before the election. His attacks on Mr. Trump are part of that effort.

“There’s a sense that Bloomberg is doing something that the party can’t do—going negative on Trump,” Mr. Gifford said. “It’s work that the party doesn’t have the money to do, and other candidates don’t have the ability to do.”

After Mr. Trump’s campaign said it had bought a 60-second TV spot during the Super Bowl on Feb. 2, the Bloomberg campaign bought a 60-second spot that will target the president. The Bloomberg campaign declined to disclose how much it was spending for the spot, but advertising tracker Kantar/CMAG estimates it is worth $10 million.

Bloomberg spending has drawn Mr. Trump’s attention. When the campaign aired an ad saying the president had broken his promise of protecting those with pre-existing health conditions, Mr. Trump pushed back on Twitter and labeled Mr. Bloomberg “Mini Mike.”

Facebook ads for Mr. Bloomberg. PHOTO: MIKE BLOOMBERG 2020

Mr. Bloomberg’s campaign said that because he started late, it is focusing on the Super Tuesday votes on March 3, rather than the early voting states such as Iowa and New Hampshire. The plan plays to Mr. Bloomberg’s financial advantage and minimizes his weaknesses—shaking hands and making small talk with voters, and giving stump speeches. The Super Tuesday states, where 40% of delegates will be chosen, instead depend more on television and digital advertising.

In addition to huge TV spending—$193 million on ads since his campaign began—the campaign has spent heavily online. It spent $16.1 million on Google ads as of Jan. 11 and $6.8 million on Facebook as of the end of December according to Kantar/CMAG.

Mr. Trump has spent $6.5 million on digital ads, and Tom Steyer, the other billionaire Democratic candidate, has spent $5.6 million since Mr. Bloomberg entered the race in November, as of the end of last year.

The Bloomberg campaign is offering field organizers salaries of $6,000 a month. For state data directors, it’s between $10,000 and $12,000 a month, according to job postings.

The campaign’s 1,000-person payroll is more typical of an operation in the final months before Election Day. Mr. Biden has roughly 400 campaign staffers, while Mr. Sanders has built an 800-person staff.

Spending Strategy Michael Bloomberg vastly outspent hiscompetitors during his campaigns for NewYork City mayor.New York mayoral campaign spendingSource: New York City Campaign Finance BoardNote: Mr. Bloomberg ran as a Republican in 2001 and2005, and as an independent in 2009.
M. BloombergM. GreenF. FerrerW. Thompson200120052009$0 million$25$50$75$100$125

The former mayor’s late entry into the race has forced the campaign to “create a sense of momentum and hope people will actually jump on,” said a person familiar with Mr. Bloomberg’s state operations.

Campaign veterans said money won’t necessarily bring in the best staff and said many experienced staffers want to work for people they support. Other campaigns, including Ms. Warren’s and Mr. Sanders’s, already have operations in Super Tuesday states and are ramping up hiring in later states.

Mr. Bloomberg has spent in markets that haven’t been targeted by other Democrats. His campaign has plunked down $21.2 million on television advertising in Texas, where none of the leading Democrats have spent a penny. It has spent $8.4 million in Pennsylvania, which doesn’t hold its primary until April 28.

It has even poured resources into smaller states that are typically not on the primary radar. In Idaho, it has spent $979,000 so far; in Utah, $1.6 million.

“He is going far, far ahead of where the rest of the guys are scrumming,” said Kip Cassino, executive vice president at Borrell Associates, the media research firm. “He is basically saying, ‘I’m not going to win in Iowa, and I am not going to get out there and kiss pigs. And I won’t win in New Hampshire, but I will win in the rest of the states, and I will get the states that most everyone didn’t care about before.’ ”

Bloomberg Announces 2020 Democratic Presidential Campaign
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Bloomberg Announces 2020 Democratic Presidential Campaign

Bloomberg Announces 2020 Democratic Presidential Campaign
“I’m running for president to defeat Donald Trump and rebuild America,” Mr. Bloomberg said when he announced his candidacy. Photo: YANA PASKOVA/GETTY IMAGES

At the beginning of January, candidates had spent close to $540 million on political ads in the presidential race over the prior 12 months, about 10 times what would have been expected at this point in this election cycle, Mr. Cassino said.

“We have never seen anything like this,” Mr. Cassino said, referring to Mr. Bloomberg’s spending. “We are only just starting to see how distorting this might be.”

Mr. Bloomberg’s potential handicaps among Democratic voters include his support for Republican candidates in the past, including former President George W. Bush. Other issues that could hurt are his support for charter schools in his education-reform efforts, and the stop-and-frisk policy he adopted as mayor, in which New York police had wide latitude to detain and search passersby for contraband. A federal judge eventually ruled the policy violated the constitutional rights of minorities. Mr. Bloomberg apologized for the stop-and-frisk policy before he kicked off his campaign.

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What are Michael Bloomberg’s chances at the Democratic nomination, as of today? Why? Join the discussion below.

Some Democrats fear Mr. Bloomberg could drag out the primary with his limitless budget, or use his money to try to influence the leading candidates, hoping to pull some of them to the political center, which he sees as the way to beat Mr. Trump.

Mr. Bloomberg’s team said the data operation he is building will benefit Democrats overall, which he said are far behind the Republicans on the gathering and use of voter data. His data firm, Hawkfish LLC, launched in the spring. It has hired Facebook’s former chief marketing officer and the former CEO of Foursquare, the location tracking firm.

As New York mayor, Mr. Bloomberg announced an operation in 2012 to reduce the sale of illegal firearms. PHOTO: JOHN MINCHILLO/ASSOCIATED PRESS

Mr. Bloomberg has cited his research and spending on the 2018 midterm elections as evidence of his commitment to the party’s success. Democratic candidates won 21 of the 24 races in which he was involved. In most races, the spending focused on digital advertising early in the election cycle and TV advertising closer to election day, when ad reservations were more expensive and Republican groups could not as easily counter their message.

In an Oklahoma House of Representatives race, which appeared to be a long-shot for the Democrats, Mr. Bloomberg unleashed a wave of last-minute ads that attacked the Republican candidate. Democrat Kendra Horn won by a few thousand votes.

“I supported 24 candidates who were good on guns and good on environment, and 21 of them won, and that flipped the House,” he said at a recent campaign stop in Philadelphia. “So if it wasn’t for that, you wouldn’t have Pelosi and you wouldn’t have impeachment.”

Technology and Politics (Exponent Podcast)

In 2014, Ben and James were talking about the system being “rigged”, anticipating political developments slightly more than 1 year later.

 

Are the recent debates on net neutrality, the protests of Google buses, even SOPA a sign of things to come? Building on Ben’s article The Net Neutrality Wake-up Call Ben and James discuss the intersection of technology and politics.

  • Why do people in technology tend to dislike politics?
  • Is net neutrality really that important and understanding open loop unbundling
  • The tech industry and creative destruction: is it good for society when companies go out of business?
  • The impact of money on politics
  • Why tech and politics are on a collision course
  • What we can do to effect change on an individual basis

Links:

The Debt-Peonage Society

Today the Senate is expected to vote to limit debate on a bill that toughens the existing bankruptcy law, probably ensuring the bill’s passage. A solid bloc of Republican senators, assisted by some Democrats, has already voted down a series of amendments that would either have closed loopholes for the rich or provided protection for some poor and middle-class families.

The bankruptcy bill was written by and for credit card companies, and the industry’s political muscle is the reason it seems unstoppable. But the bill also fits into the broader context of what Jacob Hacker, a political scientist at Yale, calls “risk privatization“: a steady erosion of the protection the government provides against personal misfortune, even as ordinary families face ever-growing economic insecurity.

The bill would make it much harder for families in distress to write off their debts and make a fresh start. Instead, many debtors would find themselves on an endless treadmill of payments.

The credit card companies say this is needed because people have been abusing the bankruptcy law, borrowing irresponsibly and walking away from debts. The facts say otherwise.

A vast majority of personal bankruptcies in the United States are the result of severe misfortune. One recent study found that more than half of bankruptcies are the result of medical emergencies. The rest are overwhelmingly the result either of job loss or of divorce.

To the extent that there is significant abuse of the system, it’s concentrated among the wealthy — including corporate executives found guilty of misleading investors — who can exploit loopholes in the law to protect their wealth, no matter how ill-gotten.

One increasingly popular loophole is the creation of an “asset protection trust,” which is worth doing only for the wealthy. Senator Charles Schumer introduced an amendment that would have limited the exemption on such trusts, but apparently it’s O.K. to game the system if you’re rich: 54 Republicans and 2 Democrats voted against the Schumer amendment.

Other amendments were aimed at protecting families and individuals who have clearly been forced into bankruptcy by events, or who would face extreme hardship in repaying debts. Ted Kennedy introduced an exemption for cases of medical bankruptcy. Russ Feingold introduced an amendment protecting the homes of the elderly. Dick Durbin asked for protection for armed services members and veterans. All were rejected.

None of this should come as a surprise: it’s all part of the pattern.

As Mr. Hacker and others have documented, over the past three decades the lives of ordinary Americans have become steadily less secure, and their chances of plunging from the middle class into acute poverty ever larger. Job stability has declined; spells of unemployment, when they happen, last longer; fewer workers receive health insurance from their employers; fewer workers have guaranteed pensions.

Some of these changes are the result of a changing economy. But the underlying economic trends have been reinforced by an ideologically driven effort to strip away the protections the government used to provide. For example, long-term unemployment has become much more common, but unemployment benefits expire sooner. Health insurance coverage is declining, but new initiatives like health savings accounts (introduced in the 2003 Medicare bill), rather than discouraging that trend, further undermine the incentives of employers to provide coverage.

Above all, of course, at a time when ever-fewer workers can count on pensions from their employers, the current administration wants to phase out Social Security.

The bankruptcy bill fits right into this picture. When everything else goes wrong, Americans can still get a measure of relief by filing for bankruptcy — and rising insecurity means that they are forced to do this more often than in the past. But Congress is now poised to make the bankruptcy law harsher, too.

Warren Buffett recently made headlines by saying America is more likely to turn into a “sharecroppers’ society” than an “ownership society.” But I think the right term is a “debt peonage” society — after the system, prevalent in the post-Civil War South, in which debtors were forced to work for their creditors. The bankruptcy bill won’t get us back to those bad old days all by itself, but it’s a significant step in that direction.

And any senator who votes for the bill should be ashamed.