Money in American Politics
A key Occupy Wall Street issue

By Mark Engler

To the teacher:

One major concern of Occupy Wall Street protesters across the country is getting corporate money out of politics. Corporate donations to both Democratic and Republican politicians have been growing each year. Big business's huge influence in our political system has prompted the protesters - and many other citizens - to wonder whether politicians can truly serve in the interests of the vast majority of Americans.

This lesson consists of two student readings. The first reading takes a general look at how U.S. campaigns are financed and at the extent to which corporate donations to political campaigns are a growing, bipartisan problem. The second reading examines more closely the impact that accepting corporate money has on politicians. Does corporate money cause politicians to legislate in a way that is favorable to big business? Can there be a counterbalance to the influence of corporate money in U.S. politics? The readings are followed by discussion questions aimed at getting students to think critically about the question of money in politics.

Student Reading 1:
The Growth of Corporate Money in US Politics

One major concern of Occupy Wall Street protesters across the country is getting corporate money out of politics. Corporate donations to both Democratic and Republican politicians have been growing each year. Big business's huge influence in our political system has prompted the protesters - and many other citizens - to wonder whether politicians can truly serve in the interests of the vast majority of Americans.

Running for office in the United States, especially national office, is an expensive endeavor. Candidates must hire campaign workers, travel around the country to make appearances, and pay for media ads of all kinds. Unless a candidate is extremely wealthy and can finance their own campaign, this money comes from donations. Small donations from individuals represent a portion of this money. However, candidates increasingly rely on donations from corporations.

Advocates of campaign finance reform argue that if corporations are able to donate large sums of money to candidates, then those candidates will feel beholden to their corporate donors and advance legislation that favors big business at the expense of the vast majority of Americans. The Occupy Wall Street movement has sharpened this argument and revived public discussion about campaign finance reform.

Writing in support of the Occupy Wall Street movement, Zaid Jilani, a blogger for the website ThinkProgress.org, notes the scope of the problem of corporate money in American politics. He cites numerous instances where donations from the financial sector coincided with decreased regulation of banking:

On November 12, 1999, President Bill Clinton signed into law the repeal of the Glass-Steagall Act of 1933, a Depression-era law that created a firewall between commercial and investment banking. Repealing this law was one of the top legislative goals of the financial industry. In the 1998 election cycle, commercial banks spent $18 million on congressional campaign contributions, with 65 percent going to Republicans and 35 percent going to Democrats. Securities and investment firms donated over $40 million. The mega-bank Citibank spent $1,954,191 during that cycle, and it was soon able to merge with Travelers Group as a result of the repeal of banking regulations.

Between 2008 and 2010, when new financial regulations were being written following the financial crisis, the finance, insurance, and real estate industries spent $317 million in federal campaign contributions, with $73 million of that coming from Political Action Committees (PACs). The hold of campaign contributions is starkly bipartisan.

As Sen. Jim Webb (D-VA) explained to Real Clear Politics in an interview last year, he couldn't get a vote on a windfall profits tax on bonuses at bailed out banks due to campaign contributors. "I couldn't even get a vote," Webb explained. "And it wasn't because of the Republicans. I mean they obviously weren't going to vote for it. But I got so much froth from Democrats saying that any vote like that was going to screw up fundraising.

(http://thinkprogress.org/special/2011/10/12/341801/the-other-occupation-how-wall-street-occupies-washington/)

It appears that the problem is only growing. With each successive election, the amount of money in US politics continues to climb. The website OpenSecrets.com, which is dedicated to tracking campaign finances, noted in early 2008 that fundraising for that year's election cycle had already surpassed funding for every election prior to 2004. Presidential candidates are also vowing to raise more money then ever. This summer, the Obama campaign announced its intention to raise as much money or more than it did in 2008. As the Associated Press reported:

Obama's advisers have told donors privately they hope to match or exceed the $750 million they raised in 2008, anticipating a stiff challenge from Republicans amid rocky economic conditions. Obama has acknowledged he will need to re-energize supporters who were inspired by his message of hope and change three years ago but may be discouraged by the economy and the pace of change.

(http://www.huffingtonpost.com/2011/07/13/obama-fundraising-2012-dnc_n_896813.html)

On January 21, 2010, the Supreme Court of the United States made a landmark decision in the case Citizens United v. Federal Election Commission. The ruling overturned previous efforts to limit donations to campaigns. Specifically, it struck down a key aspect of the McCain Feingold Act of 2002. That law had restricted corporations and unions from using their general treasury funds to make "electioneering communications," television ads or appeals in support of a specific candidate for office.

Some conservatives celebrated the ruling. They believe that government limits on how much corporations (or anyone) can spend to promote their point of view amounts to a violation of the First Amendment's guarantee of free speech. Corporations should be able to participate in the public debate over ideas, they argue - even if that takes the form of campaign contributions.

But others decried the court's decision to allow corporations to spend as much money as they please in support of candidates. They argue that this only strengthens the sway of corporations over elections and that this distorts the American political system.

For Discussion:

1. Do students have any questions about the reading? How might they be answered?

2. Why do advocates of campaign finance reform believe that money in US politics is a bigger problem than ever before?

3. Do you think that it is a problem that national campaigns are more expensive than ever before? Why or why not?

4. Some people might argue that increased campaign spending gives Americans even more opportunities to debate the issues and hear from the candidates about their different stances. Do you agree? Why or why not?

5. In the case cited by writer Zaid Jilani, do you believe that campaign contributions from the financial industry had an impact on Congressional debates about regulation of the banking sector?

6. According to the reading, what was the impact of the Citizens United v. Federal Election Commission ruling?

7. Do you believe that corporations and unions should be allowed to use money from their general funds to make independent advertisements in support of or in opposition to political candidates?

Student Reading 2:
Peddling Influence: How Much Does Money Affect Our Politicians' Decisions?

We know that corporate money is a big factor in political campaigns. But do donations really affect politicians' decisions once they take office? Advocates of campaign finance reform argue that, indeed, they do. These critics believe that the ever-growing importance of corporate campaign donations in deciding the outcomes of elections leads elected officials to advance legislation that is favorable to corporate interests. In fact, former Senator Russ Feingold went so far as to say that corporate money in campaigns and the prevalence of corporate lobbyists in Washington, DC, amounts to a system of "legalized bribery."

But while these arguments make common sense, it's often hard to prove that a politician voted in a certain way because of campaign contributions he or she received.

On October 25, the New York Times ran an article that profiled an effort by business groups to roll back government regulations on new medical devices. The Times reported that Rep. Erik Paulsen, a Republican from Minnesota, appeared before the House oversight committee in the spring of 2011 to argue for easing these regulations. He subsequently received generous campaign donations from the affected industry. As the Times notes:

One afternoon last spring, a little-known congressman from Minnesota made an impassioned plea before a House oversight committee.

Rein in the Food and Drug Administration's uncertain approval process for new medical devices, urged the Minnesota congressman, Erik Paulsen, or Minnesota and other states stand to lose up to 400,000 jobs because of lost investment in the device industry.

Over the following month, Mr. Paulsen's campaign committee took in $74,000 from people with a stake in device regulation, much of it from executives affiliated with venture capital funds and their spouses. Now Mr. Paulsen, a two-term Republican, is a sponsor of a bill that would make it easier to bring new medical products to market.

(http://www.nytimes.com/2011/10/26/business/venture-capitalists-join-push-to-ease-fda-rules-for-medical-device-industry.html?_r=1&pagewanted=print)

Paulsen denied that his testimony had been influenced by the contributions he later received. According to the Times:

Mr. Paulsen, the Minnesota congressman, did not respond to requests for an interview. But a spokesman, Tom Erickson, said that the lawmaker's testimony this spring was unrelated to any campaign donations and reflected his long-held view that the FDA was undermining an industry crucial to Minnesota.

In 2002, concern about the impact of large donors led Senator Feingold, then a Democratic senator from Wisconsin, to team up with Republican Senator John McCain to pass the McCain-Feingold Act. The act put limits on the amount of money a national party committee could raise and spend on candidate and issue campaigns. It also limited ads paid for by corporations and unions in the run up to elections. But, as noted in the previous reading, in 2010 the Supreme Court overturned key aspects of McCain-Feingold, allowing corporations and unions to again pay for "electioneering communications."

The Occupy Wall Street movement spurred new action on campaign finance reform. Dylan Ratigan, a host for the cable news network MSNBC, launched a campaign called "Get Money Out" that calls for a Constitutional amendment to limit the influence of money in politics. To date over 230,000 people have signed a petition in favor of the proposal. Harvard Law School professor Lawrence Lessig suggested possible wording for such an amendment:

No non-citizen shall contribute money, directly or indirectly, to any candidate for Federal office. United States citizens shall be free to contribute no more than the equivalent of $100 to any federal candidate during any election cycle.

Notwithstanding the limits construed to be part of the First Amendment, Congress shall have the power to limit, but not ban, independent political expenditures, so long as such limits are content and viewpoint neutral. Congress shall set forth a federal holiday for the purposes of voting for candidates for federal office.

(http://www.getmoneyout.com/)

Reform advocates hope that such an measure would end the system of "legalized bribery" in US politics and decrease the ability of large donors to buy influence in Washington.

For Discussion:

1. Do students have any questions about the reading? How might they be answered?

2. Do you believe that Minnesota Representative Erik Paulsen was influenced by campaign contributions when taking his stance on the government regulation of new medical devices? What was Rep. Paulsen's response to charges that he had been influenced by campaign donations?

3. What was the McCain-Feingold Act? What became of it?

4. Do you think protests can act as a counterbalance against the influence of corporate money in the American political system?

5. What are the pros and cons of a constitutional amendment limiting the amount of money a political candidate can receive?

6. If the US did ban corporate money in politics, how might it change our political system?

This lesson was written for TeachableMoment.Org by Mark Engler with research assistance by Eric Augenbraun.

We welcome your comments. Please email them to: lmcclure@morningsidecenter.org.

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