Post-McCutcheon super JFCs: a pathway to exposure and disclosure.

Author:Mangini, Petra A.
Position:Joint fundraising committees
 
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Introduction

What can be done in 730 days? The possibilities are seemingly endless--this is America after all. However, to the incumbents and candidates fighting to win votes for a seat in either the chamber of Congress or the Oval Office, those days are seemingly numbered. Just about every one of those days is spent fundraising inside, and occasionally outside, of the Beltway. (1) Since the competition is so intense, consultants planning fundraisers are forced to be creative in order to attract the most attendees possible. Fundraising events include everything from breakfast and policy discussions, (2) cocktail receptions, (3) spending a weekend at a Major League Baseball spring training camp (4) or skiing, (5) to even attending a Taylor Swift (6) or Beyonce concert. (7) The cost to attend one of these events often starts around $1,000 for an individual and $2,500-$5,000 for a Political Action Committee (PAC). (8) Although, for a more intimate setting, one may prefer to host a candidate in their home (9) or the home of an officeholder to fundraise. (10) These types of events are designed to provide various levels of access to the candidate base on the level of contribution. (11) Looking to have a conversation with Hillary Clinton in support of Hillary for America at home with some friends? The contribution levels for such an event are as follows: $1,000 to be a friend; $2,700 to be a Champion, which includes a photo with Hillary; $10,000 to be an event co-host raise, which includes a reception with Hillary; and finally $27,000 to be a host raise, which includes a reception with Hillary and membership in the Hillstarters program. (12) These types of events are common for officeholders on both sides of the aisle. In fact, there are hundreds of them throughout the year. (13) Officeholders attend these events whether they are in a race or not, because it is a means to an end, and that end is winning their election.

For those keeping track of time and curious as to when these officeholders set asie the competition to keep their jobs and actually perform their elected jobs: there are days allotted for legislative work. In the first session, members of the 113th Congress in both the Senate and House Chambers spent 156 (14) and 160 (15) days in session, respectively. In the second session, members in both the Senate and House Chambers spent 136 (16) and 135 (17) days in session, respectively. Although for most Americans--candidates and voters alike--everyone one is just waiting for that second Tuesday in November of the election year to arrive, which marks the end of the obnoxious and overbearing phone calls, radio spots, emails asking for donations, and television advertisements from invading everyday life.

Campaign finance laws have been created, built up, and chipped away at for nearly as long as this country has existed. The first substantive piece of legislation to regulate campaign finance was the Federal Election Campaign Act (FECA), enacted in 1971 by Congress and later amended in 1974 to, among other things, create the Federal Election Commission (FEC). (18) Since that time, there has been additional legislation, two other government agencies added to regulate money, and endless cases to support and challenge those laws. (19) At the same time, the fundraising industry has evolved to become the nation's strongest and largest political machine.

The overall issue surrounding campaign finance reform lies within the effects of the remaining regulations coupled with the deregulation of campaign finance laws. The main result has been ineffective redirections of the flow of money into campaigns. There are eight entities that raise political money, abiding by different rules on contribution limits and disclosure of both expenditures and donors--plus three government agencies each regulating different entities. (20) It is easy to see why this issue is relatively complex with no simple solution. At the time, the 2014 midterm election suggested an atmosphere ripe for competition, indicating further campaign finance regulation on the horizon.

Part I of this Note provides a timeline of campaign finance law, beginning with the creation of the FECA and the regulations that were added to the FECA. The Buckley (21) case is reviewed, providing the oldest remaining distinction in campaign finance law aimed at preventing corruption. Finally, ending with enactment of the Bipartisan Campaign Reform Act of 2002 (BCRA), (22) which has transformed our campaign finance laws leading up to McConnell, (23) Citizens United, (24) and McCutcheon. (25)

Part II provides a synopsis of McConnell, (26) Citizens United (27) and McCutcheon, (28) which have been the latest cases to drastically change the financial landscape of campaigns. This section describes the contribution limitations "then and now" as a result of each ruling and evaluates the implications and effects of the rulings to future election cycles.

Part III develops some clarity on the vehicles used by individuals, corporations, and organizations to exercise their right to political speech and association. Additionally, this section looks at the future of the expanding dynamic of political machines, such as the Joint Fundraising Committee (JFC), which is likely to develop as a result of the implications of the McConnell, (29) Citizens United, (30) and McCutcheon (31) decisions.

Part IV explains the current proposal for disclosure reform, the Real Time Transparency Act of 2014. (32) Additionally, Part IV provides an example of voluntary disclosure undertaken by United States companies, demonstrating the method individual, mega-donors, and mega-donor backers use to disclose their identities, and highlights certain individuals who have exposed themselves as mega-donor backers. Finally, this Note concludes with an assertion that McCutcheon (33) has created a self-correcting mechanism, the Super JFC, which would likely develop a path to more disclosure in the future.

  1. The Evolution of Money in Politics--The Groundwork

    The fear of election improprieties has existed since the first elections were held in the United States. In the beginning, "there were concerns over candidates buying votes and accepting donations in exchange for a variety of incentives, including promises of jobs in the new administration." (34) Fast forward 104 years from the first substantive campaign finance law passed through Congress (35) to 1971, when the initial version of one part of our campaign regulation system was enacted, FECA. (36) The FECA laid out regulations for federal political campaigns. Due to a lack of enforcement and oversight, one individual believed that winning reelection came at all costs and took advantage of each worst-case scenario possibly imaginable. Enter President Richard M. Nixon and the infamous Watergate scandal. (37) Watergate involved "secretive, illegal corporate contributions, trades of cash for favors and, of course, break-ins--led to arrests, numerous convictions, and a presidential resignation." (38) Promptly following the scandal, Congress decided the best course of action would be a series of hearings that ultimately lead to the amendment of FECA. In 1974, Congress created the Federal Election Commission "to oversee the administration of federal election law." (39) It also expanded the Act by creating the first disclosure requirements for donations, setting limits for particular contributions, and developing the public financing of presidential elections. (40)

    Whenever a campaign finance law case enters the Supreme Court's docket, the challenge is most often based on alleged FECA breaches of fundamental First Amendment rights of freedom of political speech and association. The Court has ruled these rights extend to the conduct of campaigns for political office finding, "in a republic where the people are sovereign, the ability of the citizenry to make informed choices among candidates for office is essential, for the identities of those who are elected will inevitably shape the course that we follow as a nation." (41)

    The first challenge to the 1974 amendments of FECA came in 1976 when the Supreme Court heard Buckley v. Valeo. (42) At issue was the legality of contribution and independent expenditure limits to political campaigns. The Court upheld the restrictions on individual contribution limits to campaigns and candidates as a means to protect the government's interest against quid pro quo corruption and the appearance of corruption. The Court believed that the limit on a contributor's ability to donate to a candidate or political party was only a "marginal" restriction on his ability to engage in free communication. (43) In contrast, the Court found the expenditure limits were an unconstitutional restriction on the amount of money an entity could spend on political communication during a campaign, "reducing] the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached." (44) The Court acknowledged that communication in our society requires money--lots of it. It noted campaigns' increasing dependence on the use of television, radio, and additional mass media as expensive, yet indispensable, modes of communication for effective political speech. (45) The takeaway from Buckley (46) was that the Court distinguishes between the contribution and expenditure limitations, the former of which are inherent to preserving government interests. (47)

    The next step in reform was the enactment of the Bipartisan Campaign Reform Act of 2002 (BCRA) better known as the McCain-Feingold Act. (48) In 1998, the Senate Committee on Governmental Affairs issued a six-volume report of its investigation into the 1996 federal elections with "particular attention to the effect of soft money on the American political system, including elected officials' practice of granting special access in return for...

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