The Campaign Finance Safeguards of Federalism

• Jurisdiction: United States,Federal
• Publication year: 2014
• Citation: Vol. 63 No. 4

The Campaign Finance Safeguards of Federalism

Garrick B. Pursley

THE CAMPAIGN FINANCE SAFEGUARDS OF FEDERALISM

Garrick B. Pursley^*

Abstract

This Article provides the first systematic account of the relationship between campaign finance and federalism. Federalism—a fundamental characteristic of the constitutional structure—depends for its stability on political mechanisms. States and their advocates and representatives in Congress, federal agencies, political parties, intergovernmental lobbying groups, and other political forums work together to check federal interference with state governments. Entire normative theories of federalism depend on the assumption that this system of political safeguards is working effectively in the background.

But the federalism and constitutional theory literatures lack a rigorous account of the effects of dramatic political change on pro-federalism political dynamics. Building that account is particularly timely now. Political safeguards work only if states retain significant political influence. But, as recent elections vividly demonstrate, Citizens United has created a new class of political operators—of which Super PACs are emblematic—whose potential political influence may be limitless.

This Article's thesis is that Super PACs have the capacity to undermine all conventional political safeguards of federalism, pushing states far enough down the hierarchy of political influence to dramatically reshape our system of government. This insight highlights the underappreciated extent to which Citizens United may have long-term structural consequences other than its effects on democratic representation. These developments have significant normative implications for federalism theory—at a minimum, they require reexamining the common assumption, central to numerous normative claims, that national political process is a durable channel for state self-defense.

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They also suggest new normative claims concerning campaign finance doctrine. If sustaining federalism is a compelling governmental interest, then federalism problems may justify new campaign spending restrictions despite the First Amendment and the reasoning of Citizens United, which otherwise appear to preclude further reforms.

Introduction..............................................................................................783

I. Politics in Federalism Theory.....................................................790

A. The Normative Significance of Political Safeguards..................791
B. The Varieties of Political Safeguards.........................................798

II. Disrupting the System...................................................................805

A. Federal Campaign Finance Law—FECA to BCRA ...................807
B. Citizens United and the Birth of Super PACs.............................814

III. Super PAC Politics and the Political Safeguards of Federalism.......................................................................................819

A. Incentives to Accommodate State Preferences...........................820
B. Political Parties..........................................................................828
C. The Intergovernmental Lobby....................................................841

Conclusion..................................................................................................852

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Introduction

The 2012 election cycle, with over $6 billion in total campaign spending, was the most expensive in U.S. history.¹ Super PACs and other noncandidate, nonparty groups spent an unprecedented $1.3 billion, the vast majority of which came from a small set of "ultra-wealthy megadonors"² : Over sixty percent of Super PAC money was donated by 132 individuals giving at least $1 million each, and ninety-eight percent came from fewer than 2,800 donors giving at least $10,000 each.³ The two presidential campaigns raised $394 million from donors, contributing less than $200 each—an amount that Super PACs raised from only 630 donors who each contributed at least $100,000.⁴

The advent of Super PAC politics in the wake of Citizens United v. FEC⁵ has changed federal elections and the incentives faced by federal candidates. The explosive growth in electoral spending by Super PACs and other organizations answerable to neither candidates nor political parties—much less voters—threatens to capture and divert the policymaking apparatus to serve the agendas of megadonors, drowning out the influence of less wealthy or less disciplined constituencies. Among the displaced are those who press state-government interests in federal policymaking—the "federalism constituency" that is essential to the operation of federalism's political safeguards. Despite the longstanding consensus that political safeguards exist and are important stabilizers of the constitutional structure, the interactions of campaign finance with federalism have gone almost completely unexamined.

This Article provides the first systematic account of those interactions and explores the implications of Citizens United—particularly the growing power of Super PACs and similar independent campaign spending groups—for federalism's political safeguards. Different models of political federalism

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emphasize the importance of different segments of the federalism constituency; but unregulated electoral spending by independent entities swamps that constituency's influence in general and thus undermines nearly every form of political safeguard for federalism proposed in the literature. Diminishing the effectiveness of political safeguards, in turn, shifts the burden of sustaining federalism to a judiciary with demonstrably limited capacity to implement structural constitutional norms. These effects require reworking positive and normative federalism theories and, if federalism's value is significant enough, revising federalism or campaign finance doctrine to counteract the consequences of Citizens United.

Citizens United sparked serious criticism⁶ and rekindled debates about elections and democracy in general;⁷ subsequent extension of the Court's reasoning to license unlimited fundraising and spending by outside groups like Super PACs added fuel to the controversy.⁸ The "firewall" separating Super PACs from candidates and parties is porous at best; thus, "in practice a [Super PAC] is part of the campaign of the candidate it is aiding," and their expenditures are "for all practical purposes contributions to the candidates" for which outside benefactors likely expect something in return.⁹ Other changes in

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campaign finance law redirect donations from political parties to these groups, circumventing the parties' moderating effect that might otherwise temper megadonor demands.¹⁰

The ramifications for democracy are significant. The results in 2012 appear comforting—the largest Super PACs lost two-thirds of the races they funded;¹¹ and while the majority of outside spending was directed against Democratic candidates, President Obama was reelected and a number of Democratic Senate and House nominees won, despite large Super PAC outlays on behalf of their opponents.¹² But it is a mistake to conclude that Citizens United and its progeny have been proved insignificant.¹³ Megadonors appear undeterred and say they'll spend more on the next election.¹⁴ And there are subtler but potentially more significant effects to assess: Increased outside spending exacerbates the "polarizing, attack orientation of contemporary political advertising"¹⁵ and heightens the potential capture of officials by interest groups—long the central concern of campaign finance regulation.¹⁶ Elected officials have different incentives now: If they say the right things and vote the right way, they gain access to a new unlimited mountain of campaign money; but if they act against outside-group interests, they face the prospect of that mountain supporting a challenger. This dramatically increases the influence of

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large donors over federal officials' agendas.¹⁷ Even candidates who oppose Super PACs and outside spending have to rely on them to stay competitive.¹⁸ These dynamics also threaten democratic participation by expanding the perception that wealthy interests control the government¹⁹ and by decreasing candidates' incentives to cultivate broader bases of smaller donors.²⁰

Unexamined so far, however, are the effects of Super PAC politics—and, indeed, of modern campaign finance law generally—on federalism.²¹ Federalism and campaign finance seem unrelated at first blush—the structure of government presumably does not change from election to election. A central thesis of this Article, however, is that they are connected in important ways. First, Citizens United and its progeny have changed the structure of American politics in ways that have serious implications for federalism's political safeguards. Second, damage to these safeguards may undermine federalism's democracy-enhancing benefits—expanded opportunities for civic participation, enhanced accountability, responsiveness, etc.—that might otherwise compensate for expanded interest-group influence.²² Shoring up the system of political federalism against these threats might form part of a systemic solution to the broader problems Citizens United creates for democracy.

One core thesis common to political safeguards theories is that judicial efforts to protect federalism have been ineffectual²³ and that state governments

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nevertheless remain viable components of the constitutional system.²⁴ Therefore, some nonjudicial mechanism(s) must have helped preserve the states' viability.²⁵ While most scholars agree that there are such mechanisms, there is significant debate about their nature.²⁶ Some cite the incentives generated by states' roles in constituting the federal government and the subnational constituencies to which most federal officials are answerable;²⁷ others emphasize...