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Statement on the Anniversary of Citizens United

Thursday, January 26, 2012

M. President, I rise today to talk about one of the worst Supreme Court decisions in the history of the court.  Two years ago, the Supreme Court handed down the landmark decision, Citizens United, and with it, they gave corporations a blank check to utterly destroy our political system.  I’d like to take a few minutes this afternoon to tell you about the practical impact of this decision, how it threatens our democracy, and why we need to do something about it.
 
Let me start with the punch line.  In Citizens United, the Supreme Court ruled for the first time that corporations are guaranteed the same free speech rights as real people to influence elections.  The Court had previously held that money or campaign contributions are speech, so functionally that means that corporations are now able to spend as much money as they want, whenever they want, in any election in this country.  Let me tell you how.
 
You may have heard a lot about PACs.  PAC is short for political action committee, and it is an entity that is separate from a campaign that can run political ads on issues or support or oppose a candidate.  They can also give a limited amount of money directly to campaigns.
 The idea behind them is that if a number of citizens share views on an issue—say the environment—they can pool their resources, make their views known, and influence an election.  They can run ads to call for the election of a candidate that supports those shared beliefs.  But a PAC cannot coordinate with that candidate’s campaign—it’s not supposed to be an extension of that campaign.
 
Prior to Citizens United, corporations could get involved in the political process, but there were special protections in place.  They couldn’t use their money to make a direct contribution to a campaign, and they couldn’t buy political ads to directly influence elections.  Instead, they had to give money to a PAC, and how much they could give was very tightly restricted.  Corporations could only use their treasury funds to pay to set-up and administer a PAC, and could not use any money to expressly advocate for the election or defeat of a candidate.  And their executives, like all other individuals, could only write checks up to $5000 to these PACs.
 
Citizens United began the process of unraveling these protections when it found that companies could give unlimited money to PACs for the purpose of running ads directly advocating for or against a candidate—this kind of activity is called “independent expenditures.”
 
There is one line from the Supreme Court’s opinion that I think is worth sharing with you, because it highlights for me just how absurd the thinking of the Court was on this case.  It said quote; “[I]ndependent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.”  Unquote.  My emphasis added.
 
This one line that is so flawed and so out of touch with reality is what has spawned the complete unraveling of our campaign finance system, and it has opened the floodgates for political spending.   A subsequent case, FreeSpeechNow.org v. FEC continued what Citizens United started by finding the contribution caps—the limits on what corporations and wealthy individuals can give to PACs—to be unconstitutional. 
 
The combination of these two court cases is what gave rise to what is now known as a Super PAC.  As a result, many regular PACs have now given way to these Super PACs.
 
What does this mean in practice?  It means that corporations can now give an unlimited amount of funds, directly from their general treasuries, to PACs, and that those funds could be used to run ads supporting a candidate or running attack ads against their opponents.  And because the cap on contributions to PACs was eliminated for individuals as well, now CEOs and other super wealthy individuals can write multi-million dollar checks to influence elections. 
 
This entirely undermines the restrictions that were put in place on how much an individual or corporation can give to a candidate running for office—you just give however much you’d like to the candidate’s Super PAC—and they buy ads that support that candidate’s election.  Or what we have seen a lot of—they run negative attack ads that smear another candidate.
 
A super PAC is not a new legal entity, it’s just a PAC that started to bundle together these unlimited corporate donations with unlimited donations from super rich individuals with the goal of supporting or defeating certain candidates.  Let’s be clear — these super PACS are not about issues.  They’re about campaigning for candidates—even though they ostensibly can’t coordinate with the official campaign.  And legally, a candidate can’t even force them to stop! 
 
As so many people have noted, in this new political reality, it would be unilateral disarmament—and ultimately electoral defeat—for elected officials to run away from Super PACs.  That’s why the system needs to be changed.
 
But it gets even worse.  In a post-Citizens United world, you often can’t even find out where the money is coming from.  PACs and super PACs have to disclose several times a year where they get their money from.  But companies often don’t want you to know that they’re giving lots of money to elect or defeat someone.  So they do something that looks a lot like money laundering, except it’s absolutely legal.
 
They might create and give money to a shell corporation, which in turn donates to the super PAC.  When you look at the records for the super PAC, which are published only about quarterly, you’ll see the shell corporation, but not the original source of the money.
 
A company might give money to one shell corporation, which in turn could give money to another PAC, and so on, until it finally reaches the ultimate super PAC.  And with records published so infrequently, it’s nearly impossible to trace back to the original corporation.   
 
And to make matters even worse, many super PACs have been able to get permission from the Federal Election Commission to delay their disclosure statements, rendering all of these supposed disclosures completely useless.
 
So back to the punch line—corporations can now spend an unlimited sum of money to buy elections, and the American people generally won’t even know about it.   Corporations and super wealthy individuals no longer have to play by any sensible rules when it comes to the checks they write for campaigns.  Citizens United ushered in the wild, wild west of political spending.  But don’t take my word for it.  Let’s look at some numbers.
 
In the 2010 election, outside groups spent over $280 million on political ads and other campaign expenses.  This is more than double the amount spent by outside groups in 2008 before the decision, and it’s more than five times the amount spent by these groups in 2006.   
 
The Chamber of Commerce alone spent more than $32 million on campaigns in 2010, which is more than any other single outside group, and it’s nearly double the amount it spent in 2008.
 
Outside groups spent more on political advertising in 2010 than the official Democratic and Republican party committees.
 
But that was 2010 when corporations and the super wealthy were just beginning to understand the utility of this amazingly misguided decision.  The last several months have given us example after example of what big money can do to control the political process. 
 
Now I may not agree with the views of all of the Republican primary candidates — or any of them for that matter — but I do believe everyone deserves a fair shake when they run for office.  And a fair election is just not possible when corporations and wealthy individuals can swoop in and drown out the voices of hundreds of thousands of Americans with a single fat check. 
 
Former Speaker Newt Gingrich pulled off a surprise win in South Carolina.  But I would venture to guess that it wouldn’t have happened if Mr. Gingrich’s Super PAC hadn’t received a $5 million check from one guy, a multi-billionaire from Las Vegas.  This Super PAC, also known as the group Winning Our Future, used the money to pay for attack ads against former Governor Mitt Romney.   And just a few days ago, it was announced that the wife of the same billionaire wrote another $5 million check to Mr. Gingrich’s Super PAC to help him out in Florida.
 
Now, I wish I could offer an example of a company writing a similar check, but as I mentioned before, there’s just no way of knowing if they did or didn’t, because they don’t have to disclose it and they can take steps to hide it.   But this example of two $5 million checks from one couple—who just happened to be willing to talk about their donations—should show just how big we’re talking.  This is very, very big money.  And it is happening now.
 
To be fair, Mr. Romney has his own super PAC, called Restore Our Future, and it is currently outspending every other super PAC in Florida by 20 to 1.  I wish I could tell you how this is possible, but the first disclosure statement for this campaign season isn’t until the end of this month.  And even then, it’ll be hard to trace back to individual companies or people, through all the shell corporations and other PACs. 
 
And this is only the beginning—hold on to your hats.  Over the next ten months, I predict we will not just see a flood, but we will see a tidal wave of political spending by corporations and the wealthiest of the wealthiest Americans—the vast majority of whom are also running these corporations. 
 
What will that mean?  It means it will be hard for $25 individual contributions to make an impact when compared to a single $5 million check from a super-wealthy, and super self-interested, individual.  Your voice, and the voices of millions of Americans like you, will be overwhelmed by the voice of a corporation or uber-wealthy individual that can write multi-million dollar checks without blinking an eye.   And all of this is going to happen under a shroud of secrecy. 
 
We may not know who is bankrolling these groups, but we do know who is hurt by them.  And it is all of us.  Democrats and Republicans alike. 
 
And no matter where your ideology falls, or what political party you associate with, I think you should agree with me that this process just isn’t fair.  This isn’t right, and it is something we need to change. 
 
Congress tried to do something about this a little over a year ago, when we took up Senator Chuck Schumer’s DISCLOSE Act.  Despite overwhelming public support for disclosure laws, this tremendous piece of legislation did not pass.  It failed in the Senate by one vote.  I’m sad to say that every Democrat voted for it, and every Republican voted against it.
 
That’s a very disappointing outcome, because this is an issue that affects candidates of both parties—it’s one we should all be able to get behind. 
 
We are all hurt by corporations that can write enormous checks to their favorite politician—and we are all hurt when wealthy individuals can shield their contributions from the public by donating to shell groups and phony organizations that do nothing but pass those dollars on to help the candidate of their choice.  This is a matter of transparency and accountability and fairness, which should cut across the entire political spectrum.    
 
Although we may not agree on everything, I do think we can all agree that we need to do more to bring greater transparency to the election process.  A number of my Republican colleagues agree with me on this point—and had agreed for years before the Supreme Court further unraveled restrictions on corporate spending. 
 
A good friend of mine, Senator Jeff Sessions, has said, quote: “I don’t like it when a large source of money is out there funding ads and is unaccountable….  To the extent we can, I tend to favor disclosure.”  Unquote. 
 
Senator John Cornyn, another colleague of mine on the Senate Judiciary Committee, has stated, quote: “I think the system needs more transparency, so people can more easily reach their own conclusions.”  Unquote. 
 
And Senator Orrin Hatch said, quote: “The real issue, if we really want to do something about campaign finance reform, is disclosure, disclosure, disclosure.” Unquote.   
 
Even the Republican candidates for President agree with me.  Mr.  Gingrich has noted, quote, “These super PACs have huge amounts of money….  They’re totally irresponsible, totally secret, and I think it’s a problem.”  But he has gone on to say, quote: “We learned in Iowa if you unilaterally disarm you might as well not run.”  Unquote.
 
And that is a problem we all need to recognize—and we all need to deal with.  Republican presidential candidates are dealing with it now, but soon it will be the Democrats turn. 
 
I have teamed up with a number of my colleagues—Senators Whitehouse, Merkley, Tom Udall, Bennet, and Shaheen—in an effort to come up with a solution to this daunting problem.   I would like to see Congress take up and pass legislation that will, at a very minimum, force greater transparency to this out of control spending. 
 
We are going to be working hard to bring our Republican colleagues to the table and to get their agreement on a path forward. 
 
Disclosure will not fix all of the evil effects of Citizens United, but it is certainly a step forward.  I hope my colleagues will join with us in this effort, and I hope to be back on the floor many times in the coming months to urge my colleagues to reform our broken campaign finance system.   
 
Thank you, M. President, and I yield the floor. 

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