Politics

Citizens United’s Corporate Candidate

Now that private-sector groups are allowed to spend unlimited amounts of money in state elections, who’s really running for office?
by | May 2012

Jennifer Shilling says she never intended to be a state senator. She was elected five times to the Wisconsin Assembly, but had rejected repeated entreaties to run for the Senate, in part because she got along well with Dan Kapanke, the incumbent senator in her district. Despite belonging to different parties, the two had collaborated well on matters important to their overlapping constituents, as well as on issues of broader concern such as dental care. Shilling even held season tickets to the La Crosse Loggers, the summer collegiate baseball team that Kapanke owns.

But eventually their relationship crumbled when Kapanke voted in support of budget-cutting and anti-union measures pushed by Republican Gov. Scott Walker. It motivated Shilling to run against Kapanke for his seat, becoming one of six Democrats to challenge Republican state senators last summer in recall elections. She was one of two who succeeded. “Our recall race was a messy, expensive community divorce,” she says.

Shilling raised slightly more than $400,000 -- which alone was more than Wisconsin Senate races usually cost on average -- and Kapanke raised $1.6 million. But both were easily outspent by third-party groups that ran independent expenditure campaigns. “It was just numbing,” Shilling says, “to look at my financial report, knowing what we needed to be competitive and get our messages out.”

As costly as it was, the Shilling-Kapanke race was not even the most expensive among the recalls. All told, last summer’s recall elections cost more than $40 million, shattering all records. They came on the heels of a state Supreme Court race that was seen as a proxy battle over Walker’s agenda, in which the judicial candidates each raised $400,000, but outside groups spent 10 times that much.

All of this, however, is a mere prelude to the battle royale now well under way -- the effort to recall Walker himself for stripping most public-sector workers of collective bargaining rights. That election, set for June 5, will end up costing between $75 million and $100 million. “I’m confident in stating that this will be the most expensive election in the history of the state,” says Ken Mayer, a University of Wisconsin political scientist.

As a state that is consistently competitive, Wisconsin is no stranger to expensive campaigns. As long ago as 2000, Wisconsin was home to the first $3 million state legislative race. And for the past 15 years, its politics, or at least its political finances, have largely been dominated by two interest groups: the Wisconsin Manufacturers and Commerce on the Republican side, and, for the Democrats, the Wisconsin Education Association Council.

But those voices, while still prominent, are now being drowned out by groups with funding from outside the state. New floodgates of money have been opened by Citizens United, the 2010 decision by the U.S. Supreme Court that allows corporations and unions to spend directly from their own treasuries in support of or opposition to political candidates.

Candidates themselves, some fear, are becoming mere spectators when it comes to their own races. The agenda increasingly is being set by outside money. “Candidates, those on the ballots, will be much more of an afterthought than they ever were before,” says Wisconsin state Sen. Jon Erpenbach, a Democrat. “In some cases, candidates don’t even matter.”

It’s not just Wisconsin. About half the states formerly banned corporate political contributions before Citizens United made those measures moot. Now candidates in local, state and federal races each face their own Art Popes, the North Carolina discount store magnate profiled last fall in The New Yorker. Pope spends tens of millions of dollars funding conservative foundations and activist groups in his state. In 2010, Pope, his family and groups that he supports spent $2.2 million targeting 22 legislative races. Republicans won 18 of them, helping them win control of the General Assembly for the first time since 1870.

Super PACs -- the independent organizations that were the creation of Citizens United and which actively campaign on behalf of individual candidates -- also seem to be playing a more prominent role, particularly in presidential politics this year. Restore Our Future, which backs former Massachusetts Gov. Mitt Romney in his presidential run, spent tens of millions on ads decimating his Republican rivals, while those candidates, in turn, were able to stay in the hunt longer than they would have under the old set of rules thanks to the support of a handful of billionaire “sugar daddies.”

For all that, some argue that Citizens United is not yet having that much effect on state-level politics. The National Institute on Money in State Politics recently released a study on independent expenditures between 2006 and 2010. They found no great spike in the immediate wake of the Supreme Court case. “There was hundreds of millions of dollars being spent independently way before Citizens United,” says Ed Bender, the institute’s director.

Just because corporations are now free to spend their own funds directly doesn’t mean that most will. They may continue to be more comfortable giving through groups that act as filters, such as chambers of commerce and trade associations. Many corporations will shy from donating directly, for fear of offending potential customers in a polarized age. After all, as basketball legend and Nike spokesman Michael Jordan once said, Republicans buy sneakers, too. “What Citizens United has done is create new opportunities for the money you’ve set aside for lobbying and political activities,” says Mike Wittenwyler, a campaign finance attorney in Madison, “but it doesn’t mean you’re going to spend double what you did 10 years ago.”

Americans for Prosperity (AFP), a conservative group that receives funding from Art Pope and, especially, Charles and David Koch, brother oil magnates in Kansas, has been among Scott Walker’s most ardent backers. AFP began running television ads touting his record months before the recall election was even formally scheduled. “It certainly fits our mission of advocacy -- policies that lessen the impact of government in our lives,” says AFP Vice President Alan Cobb.

Cobb says that Citizens United has had “no impact” on the group’s strategy. The types of ads it’s running, which aim to educate voters about the governor’s record, were certainly fair game before the Supreme Court decision erased a century’s worth of precedent regarding campaign finance restrictions.

But while outside groups have long been able to play a big role when it comes to political debate, now they can dominate. The campaign finance laws that are still on the books mainly restrict fundraising and spending by candidates and parties. Outside groups face no such limitations. “It is the 800-pound gorilla in the room,” says Brian Nemoir, a Republican consultant in Wisconsin. “You have to consider the fact that you have outside groups with the ability to have a heavy influence on the conversation via vast resources. You become pawns in your own race.”

While some corporations shy away from making overtly partisan campaign contributions, others do not. Citizens United has helped make corporate giving easier, not just by easing legal restrictions but by creating new avenues in the forms of super PACs and other “non-party organizations” that can sometimes skirt disclosure requirements and keep their donors’ identities secret, at least for a good while. The types of groups that don’t disclose their donors spent $133 million in 2010, compared with just $875,000 in 2006, according to the Center for Responsive Politics.

“The undisclosed, outside money -- it dominates here,” says Jay Heck, the Wisconsin state director for Common Cause, which advocates for more transparent campaign finance laws. “Sixty to 80 percent of the money in campaigns is undisclosed. We don’t know where it comes from.”

Two days before the Citizens United decision was handed down, the Wisconsin Senate voted, on a strong bipartisan basis, to strengthen disclosure requirements for campaign contributions. But the bill went nowhere in the state House and hasn’t been resurrected since. (Neighboring Minnesota, on the other hand, was one of the few states to enhance its disclosure law -- which the Supreme Court encouraged states and Congress to do.)

As a result, interested observers in Wisconsin have to comb through TV ad schedules in hopes of puzzling out how much is being spent. Who is doing the spending is often a trickier question. The Walker recall is not only drawing attention from the expected labor unions and business groups, but also from vague-sounding groups with names like the Greater Wisconsin Committee and All Children Matter. Political insiders generally have a sense of who is backing such groups, but it’s difficult for citizens sorting through a dozen mailers to figure out just who is paying for them all.

The simple fact is that Wisconsin is now seeing national groups play a larger role than ever before. Walker himself, taking full advantage of a loophole that allows incumbents facing recall to receive unlimited contributions from individuals during the period between a recall petition being filed and an election date being set, spent months flying all over the country collecting six-figure checks. He may end up raising half his treasury from outside Wisconsin, which is unusual for any state candidate.

And many of the groups playing leading roles in the recall campaign are headquartered far outside the state. Because Wisconsin became the symbol of changes to labor-management relations in government, everyone wants a say in how the Walker race turns out. “It’s important to show that these successes can work and are not an albatross politically,” says Cobb of Americans for Prosperity. “If it works in Wisconsin, it’s going to give other governors the gumption to take these things on.”

Erpenbach, the Democratic Wisconsin state senator, says that politicians who receive significant outside support should wear patches on their outfits, just as NASCAR drivers display sponsorships all over their racing suits and cars. But just as big a problem as not knowing exactly who is backing whom, he suggests, is the fact that the groups make it hard for elected officials to represent the concerns of their own districts. Their constituents may not particularly care about the set of issues that are driving most of the campaign spending, but the efforts of the local politicians to speak directly to them may be drowned out by outside groups pursuing their own agendas.

That makes it difficult for legislators to remain independent or seek consensus among their ranks. It’s been clear for years now that legislators have been heavily swayed not just by major campaign donors, but also by the fact much of their money is distributed through leadership PACs that help keep mavericks in line. But the rise of national as opposed to state-based donations can only exacerbate that dynamic. “These groups are all about kill or be killed,” Erpenbach says. “They don’t have to work together or even know each other.”

It’s not just the money that makes it harder for legislators to be independent. It’s the recall process itself. Walker is the first governor to face a recall election since Democrat Gray Davis of California in 2003, but there have been an increasing number of recalls at the local level over the past decade. Recall elections are being held in four Senate districts in Wisconsin this spring. More may be on the way, with two senators facing heat due to their opposition to a mining bill.

“The whole purpose of the recall was to keep legislators more responsive to the people than the interest groups,” says Christian Schneider, a senior fellow at the Wisconsin Policy Research Institute, a free-market think tank. “Now, it’s the opposite -- it’s the special interest groups that have all the money.”

This spring, as was the case last summer, interest groups are playing a lively role in the recalls, sending armies of volunteers and paid staff to knock on doors and call up voters by the millions. They’re delivering messages that have been carefully microtargeted to speak to the concerns of particular villages and townships.

For the most part, they will be preaching to the converted. The state is highly polarized, with polls showing roughly 48 percent of Wisconsin residents opposing Walker, while an equal share support him. (Walker’s support among members of his own party may be the highest of any governor in the country. It’s nearly unanimous.) Although it will seem from certain angles like a huge waste -- tens of millions spent trying to persuade a handful of undecided voters in a do-over election -- the reality is that both parties and aligned groups will be doing their utmost to make sure sympathetic voters make it to the polls, whether it’s Democrats in liberal Madison or Republicans in Waukesha County and other conservative enclaves.

Even in an era of unbridled limits, few campaigns will see the amount of money and the diversity of funding that Wisconsin is witnessing just now. The Walker recall is a special case. But lessons from the campaign will inform the way interest groups operate in other states, including lessons about what kind of spending is most effective and in which amounts.

There’s an old saying in advertising that half the money spent is wasted. The problem is no one knows which half. Questions about relative effectiveness may be the only thing now limiting spending in state politics.

“To attract donors, you have to show value,” says Wittenwyler, the campaign finance lawyer. Wisconsin will be an early, obvious test of where -- and whether -- that value exists.

Homepage photo via Shutterstock

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