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Secret campaign donations -- so what?
Nonprofit social welfare organizations may become more potent political donors than super PACs. And they don't have to disclose who gave money.
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Campaign finance regulation is an endless game of Whac-A-Mole. There’s always something popping up to respond to new rules, from soft money to 527 groups to super PACs. This year, the scrutinized group pouring tens of millions into races is the 501(c)(4). That clunky IRS alphanumeric refers to nonprofit social welfare organizations. Because of a loophole, they can also finance political activity. Their donors can give as much as they want, with no public disclosure.
Our reporting on campaign finance with PBS's Frontline got us thinking about a provocative question about anonymous donations. What’s the big problem with them, anyway?
Tackling the question is tricky because it’s so rarely asked. There are fierce arguments about campaign finance, of course, but they’re largely about who (or what) can give and how much. Few people publicly stick up for secret donations. The discourse is dominated by groups opposing secrecy, like Democracy 21, which is led by Fred Wertheimer.
"Secret money spent in elections leads to corruption and scandal," Wertheimer says.
Try to argue against that and one sides with sinister-sounding things: secrecy, anonymity, dark money. All while the opponent stands with open government, sunshine laws, transparency. The very language of the debate is arrayed against the argument before the facts are even presented.
But some do make the counterargument, like John Samples of the libertarian Cato Institute. Ask him about anonymous donations, and he doesn’t use the word secret.
“I think they’re private in the sense that people have a right to be free of sort of undue harassment,” Samples argues.
He wraps anonymous giving in the blanket of privacy. There’s an important distinction between secret and private. Notre Dame psychology professor Anita Kelly spends a lot of time thinking about these issues, though outside the political sphere. She specializes in information people hide from each other. Through the lens of her research, secret and private are totally different.
“Secret information is information that we hide from another person or a group of people and we know that they expect access to that information,” Kelly explains. “Private information is hidden information that we keep and we understand other people don’t expect to know that information.”
It all depends on the expectations of the people from whom the information is hidden. Imagine a banker concealing embezzled money. That’s secret, because his boss and the bank’s shareholders expect to know what’s going on. But if he doesn’t tell his boss that he’s cheating on his wife, that’s private. It’s just not his company’s business. (“But it wouldn’t be private regarding his wife,” Kelly points out.)
Kelly declined to rule on whether political giving is secret or private. Her field is psychology, not politics. But inviting political thinkers to work with her ideas produced some intriguing results.
“I think that’s a great framework,” says University of Chicago political philosopher Ben Laurence, who immediately knew which category he would place political donations in.
“Citizens have a right to know who is behind the attack ads,” he contends. “Given that they have this right to know, the campaign contributions cross that line from privacy to secrecy.”
Another political philosopher, Georgetown University’s Jason Brennan, disagrees, saying donors deserve the anonymity in the same way voters do.
“If you know how people spend their money just in the same way that if you know how people vote and then you have power, you can use that to retaliate against those people,” Brennan says.
Brennan is in the same camp as Samples with his belief that donations are private, not secret. Disclosing campaign giving draws a road map for people in power to retaliate against those who gave to other candidates. For them, a check written to support a politician or idea is as private as the checkmark made behind the drawn curtain of a voting booth. Think of political donations as private instead of secret and they don’t sound so obviously diabolic.
Presented with Kelly’s framework, Tufts University philosopher Lionel McPherson first said he thought donors could give privately as long as groups buying political ads provide information about their leaders and agenda. But in a move befitting one who thinks deeply for a living, after further reflection, he offered a different solution, based on magnitude.
“There’s a big difference between giving $50 or $100 and giving $5 million,” McPherson says. “A person who’s giving $5 million, even if it’s that person’s legal right, seems to me that they no longer have a claim to privacy. They’re no longer really operating as a typical equal citizen.”
Those big checks McPherson is concerned about add up. The Center for Responsive Politics says six years ago, campaign spending by groups that don’t disclose their donors was minimal. But in 2010, anonymous donations accounted for four in 10 dollars spent by outside groups.
They’re spending even more this year -- though how much won’t be fully known until after the election. And we still won't know who gave. As for the question of what the big deal is about those donations, how people answer depends on whether they consider the giving secret or private.
Kai Ryssdal: We've got a collaboration going with Frontline this month. It's a special investigation into campaign finance, specifically: How did the Supreme Court's ruling in Citizens United -- which said labor unions and corporations could spend essentially as much as they wanted on politics -- how has that changed our campaigns.
Lots of ways, obviously -- maybe the biggest is that what's happening this election cycle is being driven by more money than ever. That money's being spent by campaigns, yes, and parties. Super PACs, of course. Also groups that're known simply as 501(c)(4)s. They're named after a section of the tax code, if you're curious.
But the big difference between them and super PACs is that the 501(c)(4)s don't have to tell anybody where they're getting their money. And they can spend as much as money as they want, as long as that spending is independent of candidates and campaigns.
The upshot of the whole thing is that this year, secret money is buying tens of millions of dollars worth of ad time. That secrecy makes some people uneasy. But why?
Marketplace's Mark Garrison got the assignment.
Mark Garrison: Kai’s question is tricky because it’s so rarely asked. There are fierce arguments about campaign finance, of course, but they’re largely about who can give and how much. You don’t hear many people publicly sticking up for secret donations. Mostly, you hear from groups fighting against secrecy, like Democracy 21, led by Fred Wertheimer. What’s his problem with secrecy?
Fred Wertheimer: Secret money spent in elections leads to corruption and scandal.
Try to argue against that and you’re siding with sinister-sounding things: secrecy, anonymity, dark money. And your opponent stands with open government, sunshine laws, transparency. The very language of the debate is arrayed against you before the facts are even presented. But some do make the counterargument, like John Samples of the libertarian Cato Institute. Ask him about anonymous donations, and he doesn’t use the word secret.
John Samples: I think they’re private in the sense that people have a right to be free of sort of undue harassment.
To him, donations are private, not secret. Disclosing campaign giving draws a road map for people in power to retaliate against those who gave to other candidates. Keep in mind, nobody questions your right to keep your vote private. For Samples, the check you write to a politician is as private as the checkmark you make behind the drawn curtain of a voting booth. If you think of political donations as private instead of secret, they don’t sound so obviously diabolic.
I wanted insight into why secret donations are such a problem for so many people, so I tapped a couple of psychologists, starting in professor Anita Kelly’s Notre Dame classroom. She specializes in information people hide from each other.
Anita Kelly: Keeping a secret can and often does violate expectations for honest communication in a relationship.
Kelly doesn’t focus on politics. But NYU psychologist Eric Knowles does. He says some secrecy is understandable, such as information withheld for national security reasons. It all depends on credibility.
Eric Knowles: When people have a generally positive impression of somebody, they can tolerate that person keeping secrets.
He says it seems secret donations trouble our mind in a way other secrets don’t, because we don’t trust political operatives.
Knowles: If somebody’s already seen as sort of a wheeler-dealer, then the secrecy has a very different connotation.
And the current campaign finance system is quite a playground for wheeler-dealers. I put the question of secret donations to Tufts University political philosopher Lionel McPherson. He first told me he thought donors could stay private as long as groups buying political ads provide information about their leaders and agenda.
Lionel McPherson: That wouldn’t require that we know everybody who has contributed to help make the ad possible.
But this is a guy who thinks deeply for a living. So after more reflection, McPherson offered a slightly different view, based on magnitude.
McPherson: There’s a big difference between giving $50 or $100 and giving $5 million. A person who’s giving $5 million, even if it’s that person’s legal right, seems to me that they no longer have a claim to privacy. They’re no longer really operating as a typical equal citizen.
So, this is the point in most campaign finance stories where either the badness of a bad guy is declared, or the reporter proclaims both sides had their say and the truth lies somewhere in the middle. Sorry to disappoint. The issue of secret donations is a lot more complex. In New York, I'm Mark Garrison, for Marketplace.
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I cannot believe the guest on the show was argueing that keeping contributions private is the same as keeping your vote private. When we vote each citizen is 100% equal. Each person only has one vote. However when we talk about contributions, we are not equal. The rich can contribute more than the poor Donald Trump can vote with millions of dollars while the retired person on social security cannot afford to contribute or doesn't see the point with the flood of big money from special interests trying to buy influence. This is not the democracy stated in the founding documents. I do not believe the founding fathers ever intended that corporations should be considered the same as citizens the same as people. I cannot believe the Supreme Court came to the decision they did. At this point there is no way out of the influence of money without a constitutional ammendment. No law that attempts to limit influence peddling will pass the Supreme Court.
Here's how we'll know who those big "anonymous" donors are: They'll be the folks nominated, and confirmed, next year to be our Ambassadors to London, Paris, Rome, Madrid, Stockholm, Barbados, Prague, Bangkok, the Hague, Vienna and so forth. Just the title that our super rich still need on their resumés. And one that can be bought fairly easily. From either party.
The analogy that compares "private" campaign donations to "private" votes is somewhat misleading. Because my vote is private, my elected representatives never know if I voted for them or not, so they are obligated to represent me fairly. If secret campaign contributions were truly "private", the politicians would also be unable to know the donor's identity. The idea that politicians would not be aware of the sources of large and highly influential fund sources seems somewhat unlikely, if not ludicrous, regardless of whether the donations are to specific candidates or to issue campaigns. I suspect my representatives will be more obligated to big donors than small donors like me, and so I want to know who those donors are, just like my representative knows. Then I have the information I need to hold my representative accountable for his or her actions.
Mr. McPherson says that the more a person donates, the less he is entitled to a claim to privacy, because “They’re no longer really operating as a typical equal citizen.” I would say that you can't define a “typical citizen”. A big concern seems to be about people gaining disproportionate influence by how much they donate. But perhaps the right to privacy should tied to what percentage of your wealth you donate as opposed to a fixed dollar value. Some people with great wealth may donate much more than others, but to them it is such an insignificant amount that they have absolutely no interest in gaining disproportionate influence. Can, or should, we be trying to legislate a person's intent? Of course my comments are off the cuff, but I think there may be other ways of looking at this.
I agree with Lionel. Just like executives at publicly held companies are held to a higher standard for transparency, so should donors who give large sums of money. The more they give the higher the level of scrutiny (and the larger the size of font). Now about those hedge funds. Oh that's right... Gov Romney doesn't have to be as transparent as those executives at publicly held companies. Geez, I wonder how transparent he'll be with the 99% as El Presidente?
One of the tenets of our democracy is "one person, one vote." When everyone has equal influence, privacy is easily defensible. But when an individual or organization has the ability to buy media in amounts wholly disproportionate to its size, potentially flooding certain markets with a one-sided message, the very least we deserve is to understand the source of that message.
In Richmond, California, two city council candidates called for intensifying regulations at the local Chevron plant after a major fire contaminated the air to such an extent that residents were advised to remain in their homes with the windows closed. Suddenly, my mailbox was flooded with hit pieces aimed at creating the impression that these candidates were horrible people. Other candidates were endorsed in glowing terms and expensive billboards. All I had to do to figure out what was happening was to find the small print saying the mailers had been funded by Chevron. I don't think Chevron has to worry about retaliation for exercising its "free speech." Residents already hate the company with all their hearts.
I think the reason for the unease about Citizens United is that it creates different rules for individual/personal and corporate contributions. If I understand correctly, my personal contributions are part of the public record and limited to $2500, whereas corporations can give unlimited amounts of money to SuperPACs and remain anonymous. Even if you convince me that "secrecy" is actually "privacy," that double standard, and the extraordinary leverage it gives corporations, would still bother me.
Since the entire rationale for the political spending arms race is freedom of speech - eg, money equals speech - the contention that such expenditures should be private much less secret undoes the basic 'logic' of unlimited campaign spending. If you do not care to associate yourself with your 'opinion,' you probably need to keep your opinion and your blatant attempts to influence/corrupt the political process to yourself.
PS - My own perspective is that money is not speech at all, but an amplifier. In this case it would appear that it is not speech that is being amplified (surprise, surprise), but power and influence. If we cannot all be involved on the same footing, how does this begin to be fair or democratic?
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