Nel's New Day

October 22, 2013

SCOTUS May Put Democracy Up for Sale

More than $100 million—that’s how much the ten highest-paid CEOs in the U.S. each received last year. Two of them each got at least $1 billion. Together these ten men collectively took home over $4.7 billion. A poll shows that 2,259 U.S. CEOs saw an average income rise of 8.47 percent last year, although that was less than the two previous years.

Of the top 10 earners in 2012 all received the majority of their compensation for the year from share schemes. One executive, George Maffei, received $254.8 million as CEO of Liberty Media Corporation and another $136.4 million as CEO of sister company Liberty Interactive. He also profited more than $250 million on the exercise of 3.1 million options at Liberty Media Corporation in 2012. As head of Liberty Interactive, Maffei exercised an additional 12.3 million options for a profit of more than $132 million.

For the rest of us, the median household income was $51,017 in 2012, unchanged from the prior year. Wages fell about 9 percent from an inflation-adjusted peak of $56,080 in 1999. Last year’s average pay package of a Standard & Poor 500 CEO was $13.7 million.

These ten CEOS are part of the 500 people who can buy democracy from the United States if SCOTUS strikes down almost all remaining limits on donations to political campaigns. Two weeks ago, at the height of the government shutdown, the U.S. Supreme Court heard McCutcheon v. Federal Election Commission. McCutcheon wants to eliminate aggregate limits on individual contributions, claiming that these violate free speech.

Burt Neuborne, law professor and founding legal director of the Brennan Center for Justice at New York University Law School, said, “If these advocate limitations go down, 500 people will control American democracy. It would be ‘government for the 500 people,’ not for anybody else.” Both Chief Justice John Roberts and Scalia appear ready to hand over the country to these 500 people, eradicating the past 225 years of democracy in the nation.

Current law, thanks to Citizens United, has uncontrolled expenditures in campaigns, but contributions are limited through the amount given to any particular candidate or committee and through the total that can be given to everyone. At this time, the limit in an election cycle is $5,200 an individual candidate, $32,400 to a national political party, $10,000 to the state party, and $5,000 to as many PACs as the donor wants. The aggregate comes to about $123,200, which McCutcheon says is too small.

Without the aggregate limit, one person could donate up to $3.6 million, an amount that Justice Antonin Scalia says isn’t much money. He might be right when if he’s talking about someone like George Maffei because that sum is only 0.0035 percent of his annual income. But for the rest of people, it’s an annual salary for almost 70 people combined. A big difference in power.

Justice Ruth Bader Ginsburg pointed out that aggregate limits promotes “democratic participation” that keeps the “super-affluent as the speakers that will control the elections.” Scalia used his snarky attitude to respond, “I assume that a law that only—only prohibits the speech of 2 percent of the country is okay.” Better to “control the speech” of 2 percent than 98 percent.

When Roberts was questioned as a nominee for SCOTUS justice, he said that he didn’t believe in overturning precedents. His history since being approved shows a different perspective. Ruling in favor of McCutcheon would be another rejection of an earlier Supreme Court decision. The ruling of Buckley v. Valeo, a 1976 case, decided that limits on contributions “entail only a marginal restriction” on speech because contributions to political debate “involves speech by someone other than the contributor.”

An amicus brief from Reps. Chris Van Hollen (D-MD) and David Price (D-NC) argues that allowing larger individual contributions would create the reality or appearance of corruption, and the government has a compelling interest in preventing this corruption. “Very large political contributions create both the risk that officeholders and potential officeholders will be tempted to forsake their public duties and the opportunity for corrupt bargains.”

Seven Supreme Court justices, including Justice Anthony Kennedy who wrote the Citizens United decision, voted to uphold the federal ban on soliciting large contributions in McConnell v. Federal Election Commission: “Very large contributions for national parties presented corruption concerns regardless of how those contributions were ultimately used.”

Van Hollen and Price concluded:

“Permitting the parties and their candidates to solicit and receive contributions of millions of dollars from individual donors would again foster the appearance that our officeholders and our government are for sale.”

A February 2013 YouGov poll found 44 percent of Americans think the 2012 election cycle’s aggregate limit of $46,200—raised to $48,600 this cycle—to federal candidates was already too high. Just 12 percent think there should be no limit. A 2012 Brennan Center for Justice survey found that 69 percent of respondents disapproved of the Citizens United decision, making it one of the most unpopular Supreme Court decisions in history. A poll also shows that 55 percent of people in the United States reject the concept that money is equivalent to speech. Citizens United, giving the wealthy the right to excessive campaign donations, was a catalyst in dropping public confidence in the Supreme Court to 28 percent.

Justice Stephen Breyer wants to dodge making a decision. His suggestion, not well taken, was to send the case back to the lower court to create an actual factual record.

Justice Elena Kagan came up with the best idea, rolling back the court’s Citizens United ruling: “I suppose that if this court is having second thoughts about its rulings that independent expenditures are not corrupting, we could change that part of the law.”

In an op-ed piece, Dana Milbank addressed the irony of the Supreme Court staying open and hearing a case that will most likely continue the high level of dysfunction in Congress.

“The court has failed to undo the partisan redistricting that has left the House of Representatives hopelessly polarized. It has furthered Americans’ cynicism toward politics with nakedly political rulings such as Bush v. Gore. Above all, it has created a campaign finance system that is directly responsible for the rise of uncompromising leaders on both sides of the Capitol.”

Scalia, with his “$3.6 million isn’t much money” statement, stays in his bubble through ultra-conservative media sources such as The Wall Street Journal, The Washington Times, and Bill Bennett’s talk radio. He objects to The New York Times as “often nasty.” Those sources don’t point out that most GOP congressional seats are safe because of the SCOTUS-sanctioned gerrymandering.

As Milbank wrote, “A few billionaires have purchased a Congress full of unbending extremists, and the Supreme Court made it all legal.”

The day of the arguments, President Obama said, “There aren’t a lot of functioning democracies around the world that work this way, where you can basically have millionaires and billionaires bankrolling whoever they want, however they want, in some cases undisclosed.” The last time he objected to a SCOTUS ruling on campaign finances, the conservative justices threatened to boycott the president’s State of the Union speech.

A Supreme Court ruling that eliminates federal aggregate donations would likely create havoc in the states currently capping overall contributions. Nine states–Arizona, Connecticut, Maine, Maryland, Massachusetts, New York, Rhode Island, Wisconsin, and Wyoming–had aggregate limits in place for the last two election cycles, but Arizona eliminated the state’s limits. The vast majority, 81 percent, of the 2010 donors reaching state aggregate limits did so in Wisconsin. A donor is fighting in court to overturn the limits, and state legislators are working to double the aggregate limit.

During the argument, the justices appeared to line up on conservative and progressive camps with Roberts toward the middle but leaning toward his usual conservative bent. I doubt if he learned his lesson from Citizens United. 

January 21, 2012

Citizens United Second Anniversary

Citizens United, the Supreme Court ruling that provides unlimited money for candidate advertising, turned two years old today. After it was presented as a narrow case, the court expanded it to allow political ads, usually negative, in the 60 days before an election and stopped the requirement that the sponsors identify themselves. Eighteen months later, the court protected wealthy candidates in Buckley v. Valeo by ruling that money is a constitutionally protected free speech and then struck down a matching funds’ formula in Arizona that provided more money to a publicly financed candidate if a rival spent over a specified amount.

Despite Mitt Romney’s claim that “corporations are people,” not everyone is happy about the end of democracy because billionaires can easily buy politicians. More than one million people have signed online petitions against the ruling, and measures in at least 23 states demand a constitutional amendment to reverse this ill-conceived decision. On the other hand, the U.S. Chamber of Commerce and Republican National Committee seem perfectly happy with the ruling, especially because the conservatives will benefit from over 80 percent of the candidates’ financial help. Newt Gingrich was highly disturbed with the super-PACs  supporting Mitt Romney in Iowa but got over it when super-PACs supported him in South Carolina.

Jeffrey Clements, in Corporations Are Not People: Why They Have More Rights Than You Do and What You Can Do About It, provides a review of the Supreme Court’s increasing rulings on corporations’ money protected as political speech while diminishing individual rights. “Rarely have so few imposed so much damage on so many,” the venerable journalist Bill Moyers wrote in the book’s foreward. He compares Citizens United to the 1857 Dred Scott ruling “that opened the unsettled territories of theUnited States to slavery whether future inhabitants wanted it or not.” According to Moyers, “It took a civil war and another hundred years of enforced segregation and deprivation before the effects of that ruling were finally exorcised from our laws.”

Congress has introduced at least 10 proposals to fix the problem, including one that would revoke the “personhood” status of corporations, thus rolling back over a century of Supreme Court rulings. These all come from the “liberal” side and are unlikely to be taken seriously for a long time.

According to Erwin Chemerinsky, founding dean of University of  California Irvine School of Law and a respected constitutional scholar, individual states could control the runaway spending. One way is to require shareholders to approve corporate political expenditures just as unions have to get approval from their members. Other legislation could prevent a state contractor from spending money for partisan election activities, just as the federal Hatch Act of 1939 did when it limited federal employees from some partisan activities. Montana’s Supreme Court’s has ruled that the state has a compelling interest to regulate how corporations can raise and spend money in elections. The New York state legislature also plans to adopt a public financing regime.

Yesterday’s victory in California supports Chererinsky’s ideas: a U.S. District Court upheld a citywide ban on corporate campaign donations to candidates in San Diego. Judge Irma E. Gonzales said that FEC v Beaumont directed her ruling instead of Citizens United because the earlier case addressed anti-corruption issues.

“According to the Supreme Court, the prohibition on direct corporate contributions was justified by the ‘special characteristics of the corporate structure’ that threaten the integrity of the political process,” according to Gonzales’ decision. It was necessary to “prevent corruption or the appearance of corruption,” Judge Gonzales wrote, explaining the ruling. “Moreover it was necessary to prevent the use of corporations “as conduits for the circumvention of valid contribution limits.”

Polls show that the nation’s populace disagrees with conservative “leadership.” Last Tuesday a Pew Research Center poll showed that 65 percent of voters from both parties familiar with the Citizens United decision consider it a negative impact on politics. The next day a poll from Main Street Alliance, the American Sustainable Business Council, and Small Business Majority revealed that, in a margin of 7 to 1, 66 percent of small business owners believe Citizens United decision has been bad for small businesses, compared to only 9 percent who think it’s positive.

According to one blog, the radical right might be the biggest loser because their super-PACs don’t have the money that “moderate” Romney does. If enough conservatives think that this is a possibility, Congress might work toward erasing this dangerous threat to democracy.

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