Tag Archives: money in politics

How donors distort democracy

What would America look like if donors didn’t rule the world? It’s an interesting question and one worth pondering as the 2016 Presidential campaigns kick off. Available data reveals that donors not only have disproportionate influence over politics, but that influence is wielded largely to keep issues that would benefit the working and middle classes off of the table.

Do donors really rule the world? Recent research suggests that indeed they do. Three political scientists recently discovered that a 1 percent increase in donor support for a policy leads to a 1 percent increase in the probability the president supports the policy, if the president and donor are in the same party. On the other hand, they find no similar effect from general public opinion on presidential policies. In another study, Brian Schaffner and Jesse Rhodes find, “the roll call voting of members of Congress may be more strongly associated with the views of their donors (including outside donors) than with those of their voting constituents.” So who are these donors?

First off, donors are rich. Michael Barber performed a survey of about 2,870 donors who gave more than $200 in the 2012 election. The chart below shows the distributions of income and wealth, and donors are far richer. Fewer than 3 percent of donors reported an annual family income of less than $50,000 and more than 30 percent had an income greater than $350,000.

Donors are also whiter than the general public. Research suggests that 90 percent of federal contributions greater than $200 in the 2012 general election came from majority white neighborhoods. A study of the 2009 New York City municipal election finds that, at the highest levels of giving, the donor pool is least diverse. A study of Seattle’s 2013 election suggests that more than a quarter of contributions came from 391 contributors (0.07 percent of the population) who gave $1,000 or more. The research also shows that while Seattle is 67 percent non-Hispanic white, the neighborhoods from which more than half of contributions came from were 80 percent white. Other research suggests that donors are also disproportionately male.

Donors are also more conservative than the general public. There are two ways to show this. First, we can examine the preferences of the hyper-rich who make up the vast majority of donors. Benjamin Page, Larry Bartels and Jason Seawrightinterviewed some of these individuals, who make up the richest 1 percent of the population. Within their sample, 21 percent had helped bundle for candidates, and 68 percent had contributed money to candidates (an average of $4,633 over the 12 months before the survey). As the charts below show, these donors are more likely to oppose government ensuring that all Americans have healthcare coverage. In addition, while majorities of the general public favor national health insurance and are willing to pay more in taxes to provide health coverage to everyone, majorities of the wealthy disagree.

On issues of inequality, an interesting divide occurs. The rich agree with average Americans that inequality isn’t necessary for America’s prosperity and that income differences are too large. But, while the general public sees government as a way to reduce inequality, namely through taxes on the wealthy, the wealthy vehemently disagree.

Another source on differences between the donor class and the general public is the 2012 CCES, which political scientists Didi Kuo and Nolan McCarty recently analyzed. The chart below shows the preferences of ordinary Americans, the donor population in general, and then specifically Republican donors on a broad swath of issues. The data show that donors tend to be more conservative. Even without addressing partisan affiliation, donors are more likely than non-donors to support the extreme House Republican budget (17 percent of non-donors vs. 21 percent of donors in favor) and the Bowles-Simpson deficit reduction package (47 percent to 54 percent). In addition, they are more likely to favor exempting contraception from the insurance mandate (37 percent to 45 percent). Republican donors, meanwhile, overwhelmingly supported exempting contraception from the mandate (88 percent). Finally, while the split between donors and non-donors on the ACA is small, only 9 percent of Republican donors supported the law, compared with 24 percent of Republicans who were non-donors.

In the absence of the donor class then, our policies on economic issues would be more progressive. Adam Lioz has argued that policies would also be more racially equitable, noting that, “the drive for racial equity in America faces a serious headwind: the role of private wealth and big business in our political system.” Lioz outlined how big money has helped fuel mass incarceration, the subprime mortgage crisis and slow the passage of paid sick leave.

The solution to big money is two-fold. First, we need mass voter participation. The path is simple: Eliminate unnecessary barriers to voting, shift the burden of registration off of people and onto the government and expand nonpartisan mobilization efforts. But that won’t be enough as long as donors rule democracy. So we should broaden the donor pool with a vibrant public financing system. Evidence from New York suggests that a donor-matching system could increase the diversity of the donor pool, further bolstering democracy. Demos has profiled a number of candidates that fight for working class and non-white Americans but were massively out-raised by their opponents, and showed how small donor democracy would boost their chances of winning. Candidate Eric Adams, when commenting on the New York public matching system noted that, “a large number of people who contribute to my campaign have never contributed to a campaign before.” A world in which big donors are less powerful is a world where average Americans have more of a say in politics.

This piece originally appeared on Salon

Why does the GOP hate college?

In the last week, the chasm between Republicans and Democrats on higher education has become clear. On the one hand, Democrats have begun a sustained push for debt-free higher education. Hillary Clinton will make the issue central to her campaign and both House and Senate Democrats introduced a resolution calling for debt-free higher education. While Democrats see public higher education as a public good that contributes to economic growth and innovation, Republicans see higher education as a consumer good that only the wealthy should enjoy. These two visions will collide in 2016, the vision of everyday Americans and the vision of the plutocrats.

While the proposals are still taking shape, President Obama has already pushed for free community college, and has expanded an income-based repayment program. On the other hand, Republicans have released proposals that would open up higher education funding to massive cuts, particularly programs that give low-income students a shot at the American dream. Republicans have proposedremoving guaranteed funding for Pell Grants, meaning that every year low-income students would worry about getting their legs cut out from under them. Already, Pell Grants have lost a large share of the value, from funding 76 percent of a student’s college costs in 1980 to 30 percent in 2014.

Republicans have called for an end to an Obama program that would prevent a graduate’s monthly student loan bill from exceeding more than 10 percent of their income and offer debt forgiveness after 20 years of repayment. Such a program is standard in other developed countries. After Obama proposed free community college, Republicans were quick to distance themselves from him again there. (John Boehner, for instance, created a page full of Taylor Swift gifs opposing the proposal, for some reason.) The difference in vision couldn’t be clear. On one side is the American vision of an opportunity-based society. On the other side is the plutocratic vision of limited upward mobility and a permanent ruling class. As the chart below shows, the cost of college can cost more than 80 percent of a low-income family’s annual income, compared with only 20 percent for wealthy families. Further public cuts will pull college even further out of reach.

What’s interesting about the Republican agenda, though, is that for a policy so widely shared among party elites, it’s actually deeply unpopular with voters. In agroundbreaking study two years ago, Benjamin Page, Jason Seawright and Larry Bartels examined the preferences of the wealthiest Americans, who are notoriously hard to poll. What they discovered is that the wealthy are strongly opposed to things that average voters support, and that education was one of the deepest chasms (see chart).

Data from the Progressive Change Campaign Committee shows that Americans overwhelmingly support debt-free higher education; but, particularly important, a majority of Republicans (56 percent) even support it.

A recent YouGov poll asked respondents the following: “Do you think it’s a good or a bad idea for the government to pay so that students can attend college for free?” Among those earning less than $40,000 a year, 66 percent said it’s a good idea, compared with 33 percent of those earning more than $80,000 a year. But what’s key is that the middle class ($40,000 to $80,000) overwhelmingly support the lower-income respondents, with 60 percent saying free community college is a good idea.

There are two possible reasons for the rich being out of step with average Americans: The wealthy were far less likely to say they knew someone who wanted to attend college but could not (37 percent of those earning more than $80,000, compared with 56 percent of those earning between $40,000 and $80,000); and they were also less likely to say it’s a good idea to “encourage every high school graduate to attend college” (53 percent compared with 67 percent).

The chart below shows the portion of the YouGov poll dealing specifically with Obama’s community college proposal, which has broad support nationally.

What’s particularly surprising is that 42 percent of Republicans support the plan, even though the question explicitly notes that the proposal was released by Obama. The plan would cost $60 billion over the next decade (or roughly two years’ worth of funding for the F-35 stealth jet — which still cannot fire its gun).

Over the last two decades, an increasingly radical conservative base has pulled the Republican Party out of line with the American people. The rich control the Republican agenda, and they are pulling the party not just to the right of the average voter, but also their own voters. In the 2016 election, progressives need to frequently bring to the forefront of the debate the issues on which they stand firmly with the majority of Americans. Issues like universal childcare, universal paid sick leave and higher minimum wages. The centerpiece should be good jobs and upward mobility. By forcing Republicans to choose between plutocrats and voters, debt-free higher education is crucial to such a campaign.

This piece originally appeared on Salon. 

The true cost of Citizens United: The Roberts Court’s darkest hour revisited

Co-written with Liz Kennedy. 

It’s been five years since the Supreme Court decided Citizens United, which allowed unlimited corporate money into the political system and increased the domination of democracy by the wealthy elite. Money has indeed overwhelmed the system since 2008. This rise of big money in politics has endangered democracy and emboldened those who want to put democracy up for sale to aggressively attack the modest campaign spending regulations that still remain.

A recent Demos report explores how, since Citizens United, the following have occurred:

  • In the 2012 election .01 percent of all Americans contributed more than 28 percent of all individual contributions.
  • In the 2012 election, Sheldon Adelson spent an estimated $150 million, $98 million through dark money channels. In 1980, by contrast, the largest donor gave $1.72 million (inflation-adjusted).
  • A 2013 study finds, “millionaires receive about twice as much representation when they comprise just 5 percent of the district’s population than the poorest wealth group does when it makes up 50 percent of the district.”
  • Another 2013 study finds that the richest 1 percent of Americans are “extremely active politically and that they are much more conservative than the American public as a whole with respect to important policies concerning taxation, economic regulation, and especially social welfare programs.”

Americans are increasingly skeptical of claims that democracy by the wealthy is compatible with their interests. In a recent study commissioned by CNBC and Burson-Marsteller, 73 percent of American consumers believe that the government is more on the side of corporations than average citizens. Research by Pew suggests that trust in government has reached an almost record low, and the most recent ANES data find that 63.4 percent of Americans earning less than $30,000 agree (24.5 percent “strongly agree”) that public officials don’t care what people think.

As Jedediah Purdy notes in Dissent“Unlike early Americans, who were obsessed with the decline and fall of republics, the justices seem to suppose that, once established, democracy cannot fail. This view flies in the face of history. It also suggests why the justices seem so complacent about the danger that their own rulings will erode democracy.” Purdy is correct, and the evidence is strong the dominance of money in politics has already overpowered the voices of middle-class Americans and Americans of color. As the evidence above suggests, Americans have very little voice in democracy, and increasingly feel that their government is not responsive. Low voting rates, particularly among the poor (far below average among OECD countries), are a symptom of our crisis of democracy. A recent poll finds that 54 percent of Americans who don’t vote say they don’t pay attention to politics because the political system is too corrupt.

But this is not the end of the story. Although a small group of unelected justices has attempted at every turn to weaken democracy — since 2006 the Roberts Court has struck down every money-in-politics law it has considered and removed critical protections for voting when it gutted the landmark Voting Rights Act —  it’s up to Americans to take it back.

Here are some proposals:

Public Financing

To counter the influence of big money in politics we need structures that encourage small donors to get involved. Such a system would mean that politicians would be dependent on, and thus responsive to, their constituents, not just rich donors. Connecticut is a great example of public financing. In Connecticut, 90 percent of legislative candidates and both gubernatorial candidates participated in that state’s clean elections program. Thesecandidates report being able to spend more time with their constituents. Once candidates were no longer exclusively dependent on wealthy donors and businesses, the influence of lobbyists decreased, which has been cited as an important step in guaranteeing paid sick leave to workers and raising the minimum wage.


In Citizens United, the justices upheld the constitutionality of disclosure, and in fact assumed that all the new money allowed into our politics would be transparent to voters,writing, “prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.” But an effective disclosure system does not yet exist, and our political system is awash with undisclosed political contributions (see chart). Disclosure of political spending serves voters’ interests in knowing who is funding a political message and about a candidate’s financial allegiances; protects against corrupt political deal-making; and prevents circumvention of campaign finance protections such as contribution limits by allowing monitoring. In the current system, corporations and unionsface different disclosure regimes, with unions required to disclose their political spending. The FEC should update their rules, which a federal judge found created an “easily exploited loophole.”

Reclaim the Constitution

It is key that the Court recognize our Constitution’s core values of equal voice and democratic accountability, and adopt a more common sense standard for corruption (one supported by a majority of Americans). Justice Ruth Bader Ginsburg has said, “if there is one decision I would overrule, it is Citizens United. I think the notion that we have all the democracy that money can buy strays so far from what our democracy is supposed to be.” Leading First Amendment scholar and former University of Chicago Law School dean Geoffrey Stone writes “that these five justices persist in invalidating these regulations under a perverse and unwarranted interpretation of the First Amendment is, to be blunt, a travesty. These decisions will be come to be counted as among the worst decisions in the history of the Supreme Court.” That’s quite a feat for our Supreme Court, given its ugly history.

Getting money out of politics should not be a partisan issue – a recent survey of likely voters finds that likely voters (including Republicans) are more apt to support than oppose public matching funds for small donations and public funding for elections. Majorities from both parties support disclosing corporate spending (see chart) and more than a million people have signed a petition supporting a proposed SEC rule to require publicly traded corporations to disclose their political spending.

The problem, of course, is that the same people who benefit from money in politics are pulling the strings right now. The American citizens are united in opposing money in politics. Now, we need a mass movement from ordinary Americans to take back our democracy.

Originally published on Salon.

The great American rip-off: How big-money fuels racial inequality

In the wake of Citizens United, large donors dominate the political landscape, with 84 percent of the money spent in 2014 coming from contributions greater than $200. The big money explosion is complete. In 1980 the largest political donor gave $1.72 million (in 2012 dollars); in 2012, the largest donor gave $56.8 million, or 33 times as much. It’s obvious that this big money bias favors the rich over the poor, but new research suggests it may also hamper racial equity.

As money has come to play a larger role in politics, it has opened up the political system to the abuse of a few of the very wealthiest Americans, an ascendant donor class. However, due to racialized distribution of wealth and income in the United States, this “donor class” is overwhelmingly white (see chart).

This means that campaign contributions primarily come from white donors. An AP investigation of 2012 to  super PACs and presidential campaigns finds that more than 90 percent of those contributions came from white neighborhoods. Demos’ analysis of the top 10 Republican and Democratic donors finds that, “All of these donors appear to be white.”

These biases are important; gaps on issues like the budget deficits, inequality and paid sick leave break down more strongly on race lines than they do along class lines, for example. On other issues, there are salient racial divides, and political scientists find that people of color are better represented when their representative is of the same race (white legislators, even Democrats, are not as responsive). There are therefore substantial differences between white and nonwhite opinions on important issues, and it therefore is worrying that money in politics is so skewed toward white donors.

Campaign contributions matter for access and agenda-shaping. Research shows that campaign contributions from businesses can lead to lower corporate taxes. A study of the telecommunications industry finds that political spending leads to less stringent regulation. Recently, Christopher Witko finds that campaign donors are more likely to get a government contract. In a recent field experiment, donors were more likely to obtain a meeting with a Congress member. Campaign contributions and lobbying, then, not only influence whether a policy is enacted — but whether that policy is even considered.

As Adam Lioz notes in the case studies he discusses in the Demos report, “When elected officials are dependent on corporate donors to fund their campaigns, business interests enjoy disproportionate sway over the policymaking process.” One case study is the private prison industry, which has benefited enormously from the incarceration boom. Between 1990 and 2009, the number of inmates housed in private prisons increased 17-fold (the number held in government prisons doubled). Investigative reporter Lee Fang hasextensively documented how private prisons have taken over immigration detention and lobbied extensively for stricter immigration enforcement. The largest private prisons have spent millions lobbying at the federal and state level, particularly in periods during which immigration laws were under consideration. Lioz also links money in politics to predatory lending, which disproportionately impacted people of color and was left loosely regulated because of powerful monied interests.

As noted above, one way to increase the political system’s responsiveness to people of color is to get them elected into office — but money in politics hampers progress here. A 2006 study of state legislative races finds that candidates of color raise far less money than white candidates, and the problem is worse in the South, where most blacks live. This hampers turnout: Political scientists Thomas Holbrook and Aaron C. find that in mayoral elections, “the effect of the total amount of campaign spending on turnout is notable.”

Without significant reform, the rich will gain a stranglehold on our political system. Recent developments, however, suggest that America is going in the opposition direction — from adopting proposals straight from Citigroup lobbyists to the attempt to increase the cap on donations to political parties 10 times its current limit. Over the long term, Citizens United and McCutcheon need to be overturned, but with the current composition of the court this is unlikely. There are still reforms that can be made. Congress should pass the Disclose Act to stop the flood of dark money. Lobbying regulations have been shown to increase political equality. Public financing increases donor diversity and reduces the time candidates have to spend with big money donors. National parties should do more to recruit candidates of color and working-class candidates. Same-day registration would increase turnout among the poor and people of color, which research shows would combat the big money bias in our political system. The tough part about getting these reforms passed: They have to be passed by politicians who are already bought and paid for.

That doesn’t mean there is no hope. Evidence suggests that states with lower gaps in voter turnout have higher minimum wages, lower inequality and stricter lending laws. In Connecticut, the passage of public financing allowed Dannel Malloy to make paid sick days a core part of his campaign. Lindsay Farrell of Connecticut Working Families’ saidthat public financing “allowed him to be competitive in a race at that level without compromising on an issue like paid sick days.” In Minnesota, a grass-roots organizing campaign led by TakeAction Minnesota stopped an ALEC-backed photo ID law. Someday, there may well be a politician who, like FDR, says to monied interests, “We know now that Government by organized money is just as dangerous as Government by organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred.”

This piece originally appeared on Salon.

Why Washington’s gridlock won’t go away

Pundits have suggested that the Republican control of U.S. Senate will lead to a new era of bipartisanship, which will offer new solutions on immigration, the environment and tax reform. These arguments are extremely myopic. A critical look at the recent structural shifts in the American political system shows that the gridlock in Washington is caused by increasing inequality and benefits the rich.

To be sure, Congress is facing an almost unparalleled level of gridlock. Since President Barack Obama took office in 2009, we have seen an unprecedented use of the filibustervery little major legislationlong delays in mundane appointments, government shutdowns and highly partisan attacks on a progressive legislative agenda.

To understand the current congressional gridlock, it’s important to look at who is benefiting from the stalemate. A recent report published by the University of Tennessee at Knoxville found (PDF) that gridlock in the U.S. political system benefits the rich and has significantly contributed to rising inequality. The findings have been confirmed by Alfred Stepan and Juan Linz, who conclude that the structure of the Senate, the majority-constraining capacity of veto players and the filibuster all contribute to rising inequality.

The question then becomes, Why have we not seen the same level of gridlock in our lifetimes?

The growing economic power of U.S. elites coincides with increasing political dominance. Numerous studies have shown that the U.S. political system is no longer responsive to the electorate. In part this is because the United States’ political system is designed to be slow moving, with multiple checks and balances. In addition, as with other developed countries, the United States has incredibly low voter turnout. The 2014 midterm elections saw the worst voter turnout in 72 years (a dismal 36.3 percent of eligible voters). Higher voter turnout is positively correlated internationally with higher income redistribution (PDF, see chart on page 27). A vast body of literature shows that low-income voter turnout leads to more-left-leaning governments. The U.S. political system has had persistent class bias, but in the past these factors did not prevent stymie important legislation that benefits the poor.

AJAM Figure1

The dramatic reduction in top tax rates and the deregulation of finance in the 1980s opened the door for mass inequality. Rising inequality had three important effects on U.S. politics. First, it allowed the rich to take over the political system. Research shows (PDF) that the richest 0.01 percent of Americans now provide 40 percent of political contributions — up from 10 percent in 1982.

AJAM Figure2

By nearly every measure, the rich are far more likely to participate in the political process, and the superrich make up most of the donors. A 2013 study in The Journal of Economic Perspectives found (PDF):

In 1980, the top contributor … gave $1.72 million (in 2012) dollars, nearly six times the amount given by the next largest contributor. In 2012, the two largest donors were Sheldon and Miriam Adelson, who gave $56.8 million and $46.6 million, respectively. Other members of the Forbes 400 accompany the Adelsons; 388 current members are on record as having made political contributions. They account for 40 of the 155 individuals who contributed $1 million or more to state and federal elections during the 2012 election cycle.

At a time when Congress increasingly dominated by superrich (and white) politicians, these contributions buy enormous political influence. A similar study by Jesse H. Rhodes and Brian F. Schaffner found (PDF) that “millionaires receive about twice as much representation when they comprise just 5 percent of the district’s population than the poorest wealth group does when it makes up 50 percent of the district.” As Duke University professor Nicholas Carnes has demonstrated (PDF), “representatives from working-class occupations exhibit more liberal economic preferences than other legislators, especially those from profit-oriented industries.” But those measures often die or are shelved in deeply gridlocked Congress.

Second, rising inequality has created ideological structures. As the rich grow richer, they justify their wealth by inflating their sense of intelligence and superiority. The poor and middle class begin to accept this narrative,forgoing their desire for redistribution. Since individuals understand inequity by relating it to their circumstances, higher inequality leads to its growing acceptance. Given the United States’ racist history, whites try to avoid feeling being in the last place by punitively harming blacks. In turn, the rising inequality erodes the social trust necessary to reduce inequality.

“The best policy response to growing inequality is to enact universalistic social welfare programs,” Bo Rothstein and Eric Uslaner, wrote in a 2005 study (PDF) published by World Politics. “However, the social strains stemming from increased inequality make it almost impossible to enact such policies.” Because the rich views the poor as personally responsible for their failings, they see no reason to help them up the ladder. A recent Gallup poll found that fewer Americans than ever believe that hard work can help one get ahead in life. Data from the American National Election Survey shows the percentage of people who say the government is run “by a few big interests looking out for themselves” has grown dramatically. (See chart below.)


Finally, amid rising inequality, both Republicans and Democrats have moved to the right, rejecting liberal economic policies to woo wealthy donors. Democrats have struggled to maintain their coalition of single women, people of color and educated progressives. In fact, as Benjamin Page, Larry Bartels and Jason Seawright noted in the journal Perspectives on Politics last year (PDF), “on economic issues wealthy Democratic respondents tended to be more conservative than Democrats in the general population.”

Studies show that the strength of unions is a far more important bulwark against inequality than the number of Democrats in Congress. “The effect of the Democratic Party [on the rate of financial deregulation] is not very large, but rather varies along with the strength of unions,” writes Christopher Witko in an upcoming paper on the rise of finance. He argues the Democratic Party has been attempting to win the votes of professionals (that is, rich people), pulling them to the right. Other studies confirm that the decline of unions has led to steep rise in inequality.

Meanwhile, the wealthiest Americans have increasingly favored one party. In a 2003 paper, Nolan McCarty, Keith T. Poole and Howard Rosenthal examined 40 years of data and found that “partisanship has become more stratified by income.” In a later study, the researchers show how tight polarization tracks with inequality (PDF, see chart on page 108) and wages in the financial sector. American National Election data also confirm the rising class polarization of the electorate, particularly at the 68th to 95th income percentile range, which went from a nearly 40 point margin preference for Democrats in 1952 (58 percent Democratic, 20 percent of Republican) to a 5 point margin for Republicans (43 percent Democrat, 48 percent Republican) in 2008. In the 2008 elections, the poorest Americans (below the 16th income percentile) preferred Democrats by 42 points, while the richest (above the 96th income percentile) preferred Republicans by 40 points.

AJAM Figure4

Widening class divide

The increasing class divide within the two parties has made gridlock inevitable. But Republicans automatically win from gridlock. The asymmetric partisanship of the last six years is driven by a simple dynamic: Government inaction benefits the wealthy and harms the working class. When Republicans are in the majority, they hollow the government out from the inside with tax cuts, deregulation and austerity. When they are not in power, the easiest way to benefit the rich is to dither. In essence, the GOP serves a 1 percent agenda, based entirely on making government fail. “We should not be judged on how many new laws we create. We ought to be judged on how many laws we repeal,” House Speaker John Boehner said in a moment of honesty earlier this summer.

Rising economic and political inequality have coincided over the past three decades. As the rich have grown richer, they have been able to exercise more political power. Their aim is to allow laissez-faire to do its dirty deeds by preventing the government from working for the poor and middle class. As a result, conservative-leaning rich Americans oppose reducing economic inequality. (See chart below.) Politics is nothing more than a class war by other means. The problem is that the poor are losing. Nothing that happened in this year’s midterm elections will change that.

AJAM Figure5

This article originally appeared on Al Jazeera

When Retailers Shop the Season Doesn’t End at Christmas

Co-written with Catherine Ruetschlin, Senior Policy Analyst at Demos.

Unfortunately for voters, the $3.7 billion spent over the most recent election cycle did not come with a gift receipt. Despite being rung up as the most expensive midterm in US history, nearly two-thirds of Americans sat out the election—the lowest voter turnout in more than 70 years. Those who didn’t turn-out were disproportionately low-income people, who are increasingly shut out of the political process. It makes sense to see growing disillusionment with politics alongside massive outside spending, since the interests of ultra-wealthy donors are unlikely to reflect the experiences of most citizens. On issues like the minimum wage, the divergence can be stark. That is one reason why low-wage retail workers are making their case for better working conditions in big-box parking lots for the third straight year of Black Friday strikes. They need a public forum on the Walmart economy, and big-box retail took the last one on the shelf.

In our recent paper, Retail Politics: How America’s Big-Box Retailers Turn Their Economic Power into Political Influence, we found that the six largest big-box retailers in the US spent $30 million on campaign contributions and lobbying during the latest election cycle—that’s six times more than they spent in 2000. Walmart and Home Depot, in particular, rank among the top campaign spenders in the nation. And this spending is not like consumption spending on, say, some cheap imported merchandise, it is an investment with real returns.


Political spending of big business is as much about flooding the process with friendly faces as it is about establishing access once the election is over. The campaign and committee donations of wealthy interests first fill the playing field with candidates who share their priorities, and then elevate the issues they care about most. Over time, big-box retailers have supported Republicans over Democrats by a clear margin of 2-to1. But in the 2014 cycle these companies spent their political dollars widely, giving on both sides of the aisle—and even donating to opposing candidates in contested races.


This campaign spending combines with millions of dollars in lobbying to allow those with the fattest wallets to shape the country’s political agenda. As a result, the small population of affluent Americans sees their priorities reflected in our legislative objectives, even when the majority of the country disagrees with their preferences. For example, taxes were the most frequently lobbied issue by big-box retailers in 2014 by a large margin. This legislative area has proven lucrative for business in the past—experts in corporate strategy research show that a 1 percent increase in businesses lobbying expenditures yields a lower effective tax rate of between 0.5 and 1.6 percent for the firm. Yet when there is conflict between big corporations and other interests over policy change, policy sides with big business lobbyists the vast majority of the time.

Meanwhile, the increase in big-box retail’s political spending occurred at the same time that the most important lobby for workers floundered. Previous research by our organization, Demos, has found that unions are the only interest group that consistently lobbies in the interests of average Americans. However, data from the Center for Responsive Politics show that business interests outspend unions 15 to 1. The democratic chorus in Washington has shifted from one that is broadly in favor of business interests to one virtually devoid of any other voices. It is unsurprising in this context that after an almost two-decade fall, the share of Americans saying that government is “run by a few big interests,” is as high as 70 percent.


That loss of trust in the equal democratic voice for all Americans also reflects where the money is. According to data from American National Election Studies, unskilled workers  are more   likely to agree that government is run by a few big interests than their white collar and professional peers. That perception is reinforced by the escalating importance of private money in elections, and it shows an intuitive read of the very real problems with democracy, like research that suggests the preferences of average Americans simply won’t change much in Washington.

There are no Black Friday bargains when it comes to political contributions, but there are ways to make small-dollar donations matter more to those on the receiving end. Public finance, federal matching of small donors and effective lobbying regulations can amplify the voices currently drowned out by big money, and begin assuring Americans that democracy is not for sale.

This piece originally appeared on Huffington Post. 

The SEC should shine a light on dark political donations from corporations

Co-Authored with Liz Kennedy.

Nate Silver has already dubbed the 2014 election as “the least important in years.” But this year’s midterms are still breaking records for at least one thing: Secret political spending.

A historically unprecedented amount of dark money has already been spent to influence the outcome of the elections. As of July 15, more than $34 million in dark money had been spent on the 2014 election cycle. That is more than 15 times the $2 million–plus in dark money spent at this point in the 2010 midterms, and three times the $11 million in dark money spent at this point in the 2012 elections.

Dark money means political spending where the identity of the underlying source of the funds is not public. The Supreme Court’s Citizens United decision in 2010 allowed new political spending from corporations, and subsequent decisions removed limits on so-called independent spending. Now, sophisticated political players who want to exercise power without accountability are channeling their political spending through 501(c)(4) “social welfare” groups that aren’t required to disclose their funders.

The price we pay for this failure of transparency is a loss of information for voters, and a lack of accountability for both the spenders and beneficiaries of dark money.

Since most outside spending comes in a flurry in the last month of the election, we can expect these numbers to keep on rising. In 2012, 60 percent of dark money was spent on or after Oct. 1. If these trends hold, dark money totals this year will certainly break the 2010 midterm record and may even surpass the over $300 million in secret spending in the 2012 elections.

On Wednesday, the U.S. Senate Rules and Administration Committee held a hearing to promote transparency in election spending. They’re considering legislation that would require all outside political spending groups to disclose their significant donors (the DISCLOSE Act), and a bill that would require candidates, parties, and PACs that are already covered by federal disclosure laws to disclose their major donors more rapidly and electronically (the Real Time Transparency Act). As Sen. Angus King (I-Maine) explained in the hearing, just knowing that “Americans for Greener Grass” paid for an ad isn’t really disclosure, because it doesn’t tell you anything about the agenda of whoever is providing the financial support for the group.

The Supreme Court was wrong when it assumed that the new corporate political spending the justices allowed in Citizens United would be disclosed to the public and to a corporate donor’s shareholders, since there are no legal requirements that corporations disclose all of their political spending.

Congress attempted to respond to the Citizens United decision and create a comprehensive disclosure system in 2010, when the DISCLOSE Act was approved by majorities in both chambers of Congress, but then failed by one vote to overcome a party-line filibuster in the Senate. Some critics argued at the time that the bill unfairly regulated corporations while requiring less disclosure from unions. As we explain in our new Demos paper, this is far from the truth. Corporations and unions face very different rules and requirements for their political spending. Labor unions must publicly disclose all of their political spending to the Department of Labor. But in the wake of Citizens United, there are many avenues through which corporations can spend money in politics while hiding their financial support for particular candidates or causes.

Both unions and corporations must disclose to the FEC any direct political spending made to finance independent expenditures and electioneering communications, but the similarities end there. Unions are required to report the money they spend not just in federal elections, but also for state and local office. Corporations are not subject to these same requirements, except in a few states that have strengthened their disclosure laws. Unions are required to report get-out-the-vote campaigns, voter education campaigns, fundraising, and any politically related litigation expenses. Corporations are not. Unions are required to disclose all donations to 501(c)(4) groups on their Schedule 17 form. Corporations are not.

Why does this matter? Corporate donors spend big: The U.S. Chamber of Commerce spent $69,506,784 on elections in 2010 and 2012, without identifying the source of those funds, and was the biggest outside spender in the 2010 elections. And according to the research of Martin Gilens, the Chamber of Commerce and other corporate donors lobby against the expressed preferences of most Americans.

In contrast, unions advocate in favor of the expressed preferences of most Americans. Gilens notes that “unions would appear to be among the most promising interest group bases for strengthening the policy influence of America’s poor and middle class.” Corporate spending and union spending aren’t just different in terms of how they are regulated, they also represent the interests of different groups. It’s time to put unions on the same footing as big corporations.

Citizens United changed the game, but the rules have not kept up. Just as unions report their spending to the Department of Labor (which posts the reports online), the Securities and Exchange Commission has the authority and responsibility to require that corporations report their direct and indirect political spending to their shareholders, who have a right to know if and how their investments are being used for political purposes. A group of legal scholars has petitioned the SEC to mandate corporate disclosures in the interest of shareholder accountability. In response to the huge support it has received, the SEC added consideration of the rule to its agenda but has sincedropped it in the face political pressure.

Congress and the SEC now have another chance to act to get this simple principle right. If not, undisclosed corporate spending will continue to poison our democracy.

Let’s pass the DISCLOSE Act

Yesterday, Senators Sheldon Whitehouse, Charles E. Schumer, Michael Bennet, Richard Blumenthal and Elizabeth Warren of Massachusetts re-introduced the DISCLOSE Act, a comprehensive disclosure legislation that came within one vote of overcoming a party line filibuster and adopting comprehensive disclosure legislation. This time, Congress should pass the DISCLOSE Act and require disclosure of contributions to organizations engaged in political spending.

When the Supreme Court struck down corporate and union spending limits in Citizen’s United, Justice Anthony Kennedy wrote for the court that, “disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way.” Later, when court struck down aggregate limits in McCutcheon v. FEC, Chief Justice John Roberts noted that, “With modern technology, disclosure now offers a particularly effective means of arming the voting public with information.” On at least two occasions then, the Court has chosen to remove limits on political spending on the implicit premise that this spending would be disclosed.

Sadly, Citizen’s United did not lead to more disclosure but instead to a wave of dark money. A recent study by the Center for Responsive Politics finds that “the percentage of spending coming from groups that do not disclose their donors has risen from 1 percent to 47 percent since the 2006 midterm elections.” The rise of dark money has been lopsided because unions are held to a far different standard than corporations are when it comes to political spending.

First, unions must publicly disclose all of their spending and also itemize payments over $5,000 with the date, name and address of the recipient, and purpose of the payment. Union members, the general public and journalists have easy access to union political spending with an online, searchable database. Union members can therefore decide whether the union leadership is spending money in line with their preferences and vote out the leadership if they are not. Further, some union members who dislike the way the union is disbursing funds can receive a refund of a portion of their dues. In some instances, public sector unions must seek the consent of members before they can make political contributions.

In addition, unions are far smaller than corporations and rarely use 501(c)4s to influence political campaigns. As Robert Maguire of the Center for Responsive Politics tells us, “even if unions funneled every dime  liberal 501(c)4s spent over the four years from Citizen’s United to present, that spending would still be nearly four times less than what their conservative counterparts spent in 2012 alone.” He notes that, American Encore, a Koch-backed conservative foundation, spent more money on the 2012 election than all of the union spending and liberal 501(c)4 spending from 2010 to 2014 combined.

When unions give to 501(c)4s, they must disclose their donation, when a corporation does, no such disclosure is required. Therefore, corporations now funnel hundreds of millions through “social welfare groups,” which have exploded in the past few years.

Center for Responsive Politics, OpenSecrets.org

Shareholders or employees who disagree with the way a corporation is spending money have no right to redress. While a growing number of corporations (about 100) have chosen to voluntarily disclose their donations, they frequently do so after elections cycles and often choose not to disclose more potentially controversial donations. Even Aetna, which has received praise for its disclosure policies, gave $7 million to two 501(c)(4) groups in 2012 but didn’t disclose their contributions even though they had an agreement with their shareholders. This isn’t the case everywhere: in Britain corporations must receive shareholder consent for their political budgets.

Corporate spending and union spending aren’t just different in terms of how they are regulated, they also represent the interests of different groups. Princeton political scientist Martin Gilens has used extensive polling data to compare the preferences of Americans across the income spectrum with organizations that influence the political process. He notes in his book Affluence and Influence, “based on unions’ strong tendency to share the preferences of the less well-off and the large number of policy areas they are engaged in . . ., unions would appear to be among the most promising interest group bases for strengthening the policy influence of America’s poor and middle class.” Corporate donors and business lobby groups, on the other hand, tend to pursue policies that are not in line with the preferences of most Americans. This bolsters the case for making disclosure for all groups mandatory.

Author’s Calculations based on Affluence and Influence, Table 5.7

In fact, polls show that 9 in 10 Americans believe there is too much corporate money in politics and majorities across the political spectrum support more disclosure. A bipartisan group of law professors have petitioned the SEC to “develop rules to require public companies to disclose to shareholders the use of corporate resources for political activities.” A petition urging the SEC to require corporate disclosure has more than 500,000 citizen signatures as well as the support of more than 70 members of congress and Vanguard Founder and CEO John Bogle.

However, the SEC has removed developing such rules from its agenda. Disclosure is a simple proposal that has been endorsed by the Supreme Court, the American people, law professors and politicians from both sides of the aisle. Recent evidence suggests that disclosure would increase policymaker’s responsiveness to their consituents. In the absence of SEC action, the DISCLOSE Act is the best way forward. While it’s only the first step in taking back our democracy, it should be an easy one.

Originally appeared on Policyshop.