Outside Spending in the 2010 Midterm Elections

by Andrew Wolf

Michael Luo’s article “Money Talks Louder Than Ever in Midterms” in Friday’s edition of the New York Times is alarming for citizens concerned with the role of outside interest groups in elections.

According to Luo, a series of legal developments over the past three years have eased restrictions on campaign financing and regulation of interest groups [1], culminating with the Supreme Court ruling in Citizens United v. Federal Election Commission that the government may not ban political spending by corporations in candidate elections [2].

In general corporations have not directly spent money on political advertisements, but this year millions of dollars have been channeled to 501(c) interest groups – tax-exempt organizations (“social welfare” organizations, labor unions, and trade associations named after the provision in section 26 of the United States Code) that are able to accept large donations from corporations or individuals without having to disclose them. The money has largely benefited the GOP and has been used by groups such as Crossroads GPS, Americans for Prosperity, and the American Action Network, to run advertisements attacking candidates in key battleground states including California, Pennsylvania, Nevada, Wisconsin, and Washington, under the radar of the Internal Revenue Service and the Federal Election Commission [3]. Readers undoubtedly remember the influence of so-called 527 political organizations on previous elections. 527s are required to disclose donors [4].

In response to the Citizens United ruling, Representative Chris Van Hollen (D-MD) introduced legislation aimed at increasing transparency with respect to spending in elections. The Democracy Is Strengthened by Casting Light on Spending in Elections (DISCLOSE) Act would require organizations disclose the identity of large donors in campaign advertising, among other things. The legislation passed the House, but failed to advance in the Senate.

The lack of transparency in campaign spending is troubling. Not only are corporations and unions able to unduly impact elections, so too are anonymous donors. Meanwhile, voters are at a disadvantage, unable to judge the credibility of individual advertisements. This all undermines the democratic process. The question moving forward is will the 112th Congress act to limit outside spending in future elections? Time will tell.

[1] Luo, Michael. “Money Talks Louder Than Ever in Midterms.” The New York Times. October 8, 2010. A13.

[2] Liptak, Adam. “Supreme Court Blocks Ban on Corporate Political Spending.” The New York Times. January 22, 2010. A1.

[3] Editorial. “The Secret Election.” The New York Times. September 19, 2010. WK8.

[4] Luo, Michael. “Ad Buying By G.O.P.-Leaning Groups Alarms Democrats.” The New York Times. September 14, 2010. A1.