How Super PACs are Auctioning our Democracy to the Highest Bidder -- And How We Can Fight Back

By now there’s been no shortage of reporting on the tremendous influence Super PACs have had on the Republican presidential primary.  From Sheldon Adelson single-handedly extending Newt Gingrich’s campaign to pro-Romney Super PAC Restore our Future running more than 12,000 TV ads in Florida, their super-sized footprint has been felt across the country. 

In a new report, called Auctioning Democracy: The Rise of Super PACs and the 2012 Elections, we take a comprehensive look at Super PAC fundraising—from their advent in the wake of 2010’s Citizens United Supreme Court decision through 2011 Federal Election Commission year-end filings. 

Our findings confirm that Super PACs represent much of what is wrong with American democracy rolled neatly into one package: they provide a convenient avenue for for-profit businesses and wealthy donors to dominate the political process with a flood of sometimes secret cash.

Business Money

Contrary to the Supreme Court’s flawed Citizens United ruling, for-profit businesses should not be permitted to spend treasury funds to influence elections.  This spending is usually self-interested, and undermines political equality by allowing those who have achieved success in the economic sphere to translate this success directly into the political sphere.  

Yet, Super PACs have provided a convenient avenue through which more than 550 for-profit businesses have contributed more than $30 million, accounting for 18% of total itemized Super PAC fundraising since their inception.

Secret Money 

Despite lofty talk of disclosure and transparency in the Citizens United opinion, Super PACs have provided an avenue for secret money to influence elections. 

Our analysis of FEC data shows that 6.4% of the itemized funds raised by Super PACs since 2010 was “secret money” not traceable to its original source, from 501(c)(4) nonprofits or other Super PACs that themselves raised secret money.

As the chart below shows, secret money spiked just before the 2010 election, and we expect to see an unprecedented surge flowing to Super PACs as we approach November. 

Wealthy Contributors 

Our research confirms what has also been widely reported—that the vast majority of Super PAC fundraising comes from a tiny number of wealthy individuals and institutions. 

Of all itemized contributions from individuals to Super PACs, 93% came in contributions of at least $10,000.  Only 726 individuals, or 23 out of every 10 million people in the U.S., made a contribution this large to a Super PAC. More than half of itemized Super PAC money came from just 37 people giving at least $500,000.

Our big-money system, fueled by Super PACs, is bad for democracy because it gives wealthy individuals and institutions unfair influence over who wins elections; and because, despite the Supreme Court’s out-of-touch reasoning, winning candidates are likely to feel more accountable to big donors who helped elect them than the constituents they are supposed to represent. 

This violates the spirit of the “one-person, one-vote” principle and a basic premise of political equality: the size of one’s wallet should not determine the strength of one’s voice in our democracy. 

It might not systemically skew politics or policy outcomes if these well-heeled donors were like the rest of us—if on average they had the same life experiences, opinions about issues, and political views as average-earning citizens. 

But, unsurprisingly this is not the case.  We’ve long known that large donors are more likely to be wealthy, white, male, and conservative on economics. 

A recent Russell Sage Foundation report confirms this.  The authors found meaningful distinctions between the wealthy respondents they surveyed and the general public on economic issues such as the relative importance of deficits and unemployment.

Fighting Back 

So, we’ve determined that Super PACs are like kryptonite for our democracy.  What can we do to fight back against this menace?

Our report names concrete policy solutions to help stanch the flow of unlimited money into democracy. 

To name a few, Congress and the States can add a layer of accountability to corporate electoral spending by requiring publicly traded corporations to get shareholder sign-off on political spending, as is the norm in European countries where businesses are allowed to spend in elections. The Securities and Exchange Commission can require businesses to disclose their political spending, removing the opportunity to cloak spending through non-profits. And, Congress can enact proactive tools that encourage more small donor participation in campaign financing, like vouchers or tax credits. 

But, ultimately, the people must act together through Congress and the state legislatures to amend our Constitution to make perfectly clear that the First Amendment is not—and never was—intended as a tool for use by wealthy donors and large corporations to dominate the political process.

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