Mo Money Mo Problems

Recently, I wrote about the potential implications of the Supreme Court ruling in Citizens United vs. Federal Election Commission. Since the ruling, several counteracts to the outcome have been proposed to retain some semblance of order in the campaign finance system. To recap, the ruling in favor of Citizens United overturned standing laws and limits on campaign finance by corporations. As a result, corporations will be allowed to spend freely on political campaigns out of corporate treasury funds. I, like many, believe this decision will be detrimental to the fairness of the political process.

Last week, Senator Chuck Schumer (D- NY) and Rep. Chris Van Hollen (D - Md.) designed a bill, which Schumer introduced to the Senate, to amend the ruling. Schumer, who called the decision, "one of the worst the Supreme Court has ever issued," voiced his desire to pass a bill immediately so that the upcoming 2010 midterm elections are not as vastly affected by the changes in FEC laws. "If we don't act quickly, this decision will have an immediate and devastating impact on the 2010 elections."

The bill aims to prevent foreign corporations from contributing to political campaigns, and ban companies who received bailout money from contributing unlimited funds until they have paid back their federal debts. Additionally, the Schumer-Van Hollen legislation would add transparency to the practice of corporate contributions. It would require corporate disclosure on donations, require that candidates be entitled to equal airtime to rebut corporate advertisements and lastly, and I believe most importantly, "implement stand-by-your-ad provisions on corporate-backed ads."

While I believe the Supreme Court ruling will prove disastrous to the American political system, my last hope lies in the fact that all publicly traded corporations, too, are comprised of individuals with a voice. If Congress passes legislation requiring CEOs of corporations to appear in advertisements and state that they approve the message, there are two potential outcomes that could deter corporations from flooding the market with their funds. First, CEOs and boards of directors would be reluctant to run ads in the first place because of their fear of appearing biased or partisan and losing either investments or business (or both). Secondly, if companies did indeed run ads and shareholders disagreed with their public message, they would sell their stock in that company.

While the Schumer-Van Hollen legislation provides a strong yet reasonable, first response, others are seeking a more aggressive strategy of reform.

Recently, the Fair Elections Now Act was introduced in the Senate by Arlen Specter (D - Pa.) and Dick Durbin (D - Ill.) and in the House by John Larson (D - Conn.) and Walter Jones, Jr. (R - N.C.). The legislation proposes reforms for the public financing of Congressional elections. In addition to a limited amount of federal election funds, candidates would receive four to one federal matching funds for any donation under $100, encouraging them to run grassroots campaigns and involve large amounts of donors in their community and districts. Additionally, Fair Elections would help to offset the cost of media by providing them with media vouchers and by giving participating candidates a discounted rate for broadcast rates.

As Agnes Gund, a philanthropist and noted political donor, acknowledged in a recent editorial for Politico.com, the Fair Elections Now Act targets the fundamental issues of campaign finance, while the Schumer-Van Hollen legislation is more of a temporary measure. "It’s a good start but does not address the root of the problem: the never-ending chase for campaign cash and the influence of special interests in our political process."

As I stated in my previous post, "it seems to me that the Public Financing system is the only way to maintain any semblance of fairness in our election system." While I support the measures outlined in the Schumer-Van Hollen bills, I believe the Fair Elections Now Act is an important step forward in the reform of campaign finance, which I believe is a necessity.