America's New Shadow Democracy

A new report by the People For the American Way (PFAW) has been released that investigates the negative effects of the Citizens United v. FEC ruling for U.S. Democracy. The Supreme Court’s 5-4 ruling in Citizens United v. FEC (2010) held that the First Amendment right of free speech applies with little distinction to both individuals and corporations. Since Buckley v. Valeo (1976) established campaign spending as a form of protected speech, the Court’s decision allows for corporations to engage in political spending and to donate unrestricted funds from their general treasuries to other political organizations, effectively overturning decades of state and federal campaign finance laws. Fearing effects of greater corporate influence on American political democracy, Justice Stevens in his dissenting opinion warned that corporations can “amass and deploy financial resources on a scale few natural persons can match,” but are not “themselves members of ‘We the People’ by, whom, and for whom our Constitution was established.”

Although “we the corporations” now have a constitutional right to contribute money to independent expenditure groups, they are not bound to publicly disclose the sources of their funding. Even though the majority opinion in Citizens United upheld Congress’s right to enact disclosure laws, acknowledging that such “transparency enables the electorate to make informed decisions” without “impos[ing] a chill on speech or expression,” today’s 501 (c)4 and (c)6 organizations are under no obligation to disclose their their financial backers but are increasingly engaged in electioneering advocacy across the country.

While we do not know who is funding such organizations, we do know that the groups which played a significant role in the 2010 elections are overwhelmingly backing right-wing candidates. “Outside groups raised and spent $126 million on elections without disclosing the source,” according to the Sunlight Foundation, which “represents more than a quarter of the total $450 million spent by outside groups.” Republican candidates largely benefited from the downpour of undisclosed money, as pro-GOP groups that did not reveal their donors outspent similar pro-Democratic groups by a 6:1 margin. The nonpartisan Center for Responsive Politics reports that of the top ten groups which did not disclose their sources of funding, eight were conservative pro-GOP organizations.

A post-election report by Politico found that organizations such as Crossroads GPS, the US Chamber of Commerce, the 60 Plus Association, and the American Action Network, “backed by millions in corporate cash and contributions by secret donors,” coordinated with each other and the National Republican Congressional Committee to ensure that “vulnerable Democrats got the full brunt of GOP spending.” By coordinating their political activities, many of these groups were able to increase the number of Democrats facing a deluge of negative advertisements, making Democrats in once-safe seats more vulnerable to defeat.

Citizens United and related judicial and administrative decisions have also allowed for the emergence of so-called Super PACs, which can take in unlimited amounts of money from corporations and individuals. A number of the new political organizations have been exposed as front groups for the oil and gas and insurance industries and Wall Street moguls, and new revelations reveal that some groups even receive substantial funding from federal government contractors and foreign businesses. Corporate dollars are also financing many Tea Party and other conservative “grassroots” organizations, giving “astroturfing” an even more prominent role in American politics.

The Center for Responsive Politics reported that conservative outside groups spent $188.8 million in 2010, while left-leaning groups spent less than half that amount. In the last ninety days of the election, the twenty largest conservative outside groups ran 144,182 television ads, and seventy-seven percent of those ads came from organizations which do not disclose their donors.

Legislative remedies, most notably the currently stalled DISCLOSE Act, will bring more transparency to the process while still leaving corporate intervention in electoral politics mostly intact. Due to the sweeping language of the Supreme Court’s ruling in Citizens United, only a constitutional amendment can effectively overturn the decision.

This report looks into the groups that, armed with the 5-4 Citizens United decision, promoted their pro-corporate agenda and built a wall of conservative propaganda across America during the recent election cycle. Many groups originated in the aftermath of Citizens United and directly cite the ruling as essential to their founding; others had been active for years but gained new funding, energy and prominence as a result of the decision. What they all had in common was a relentless desire to discredit progressive ideas and elect pro-corporate candidates to office across the country. As discussed below, they also shared an alarming tactical bent for deceitfulness and distortion in the campaign process. (read more)