How Citizens United may not have played out the way we thought, and how Corporate America lost control of the GOP, but don't worry it's still about the money

by Ken

"How did corporate America lose control of the Republican Party?" asks NYT business and economics columnist Eduardo Porter at the start of his "Economic Scene" column today, "Business Losing Clout in a G.O.P. Moving Right, and I guess that is his subject. But along the way he raises some related but separate questions, and issues, and an assortment of supporting facts, or theories, or contentions, some of which seem closer to facts and others closer to assertions. So it's hard to know exactly what to make of it all, except that (a) it all has to do with money in politics and government and (b) it's all interesting.

Maybe I was thrown because the most striking single point made is a sort of backup to a related proposition -- the proposition being "that corporate money may be playing a much smaller role in the political process than expected," and the backup being that the Supreme Court's infamous Citizens United decision, which said that since corporations have the rights of citizens, their ability to contribute to campaigns is sacred.

What? Okay, here's the case as Porter lays it out:

Concern about the potential consequences of Citizens United stem from a not unreasonable belief that businesses will do anything on this side of the law -- and sometimes beyond it -- to produce legislation that serves their corporate interests.

So when the Supreme Court opened the sluice gate in 2010 allowing unlimited campaign contributions, pretty much every liberal voice in the country believed that a flood of corporate cash was about to deliver the political system to the Republican Party.

It was, President Obama said, "a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans."

Three years later, however, these fears have not quite materialized. Money is flowing to elections like never before. The 2012 elections cost some $6.3 billion, $1 billion more than the 2008 elections, according to the Center for Responsive Politics, a nonprofit group that researches money and politics. Independent spending by outside groups on campaign advertisements and the like topped $1 billion last year.

Corporate America, however, accounted for a comparative trickle. Adam Bonica, a political scientist at Stanford University, points out in a recent working paper that companies openly spent about $75 million from their treasuries on federal elections last year.

Even if all the hidden money funneled into campaigns through private 501(c) organizations had come from businesses -- unlikely given the contributions by noncorporate groups like Planned Parenthood and the N.R.A. -- corporate spending would not reach $400 million, still a small share of the total.

There are a lot of shaky numbers here, and I'd like to see it all vetted by people who are intimately familiar with the ins and outs of corporate giving and campaign finance. But these numbers certainly suggest a reality far different from what we expected in post-Citizens United elections.

Once we wade into explanations for this apparent phenomenon, though, the ground gets shakier. One obvious theory as it relates to expenditures on congressional races: The Congress we have now isn't worth what it would cost to buy, or rent, at least from a corporate standpoint. Though Porter doesn't make the point, Corporate America has gotten pretty much everything it could have wanted from the Congresses that did its bidding before gridlock set in. Of course there's always a corporate wish list, but they're so far down on their list that they're down to minutiae, and realistically they're mostly interested in exercising veto power over, say, crazy stuff like increased environmental regulation. But the fact is that neither this Congress nor any for the foreseeable future has any shot at enacting anything along these lines that Corporate America could object to.

If your interest is ideological, Porter suggests, it may still be worth your while to buy a Congress; hence the rise of the new class of megabucks individual contributors, whose number is heavily weighted to those right-wing billionaires whose free spending has made the Republican Party's lurch to the right affordable. However, if your interest is business, your money is probably better spent on lobbying Congress -- and maybe buying at least an influence-level interest in state legislatures.

Overall, the message is still: It's about the money. Porter concludes:

If big-money people are drowning out the political voice of ordinary Americans rather than big business, American democracy still has a problem. But it is not the problem we thought we had.

Along the way, though, a slew of theories are tossed in the pot. If you're rationing your NYT free clicks, let me save you one.

ECONOMIC SCENE
Business Losing Clout in a G.O.P. Moving Right

By EDUARDO PORTER
Published: September 3, 2013

How did corporate America lose control of the Republican Party?

From overhauling immigration laws to increasing spending on the nation's aging infrastructure, big business leaders have seemed relatively powerless lately as the uncompromising Republicans they helped elect have steadfastly opposed some of their core legislative priorities.

The rift is not only unusual in light of the tight historical alignment between the business community and the G.O.P., but it is also outright incomprehensible after the Supreme Court's Citizens United decision, which allowed companies to spend unlimited amounts from their corporate treasuries on the 2010 and 2012 elections.

Scholars have proposed many reasons for the rise of the anti-government activists that are pulling the G.O.P. to the right, leaving it at odds with a business community used to compromising and seeking favors from government.

But what may be most surprising is how reluctant big business has been to put its money on the line. To put it mildly, if companies could purchase the Congress of their choice, it's unlikely they would buy the gridlocked Congress we have. The seemingly inexorable rise of political partisans -- mainly on the right, but on the left, too -- suggests that corporate money may be playing a much smaller role in the political process than expected.

Concern about the potential consequences of Citizens United stem from a not unreasonable belief that businesses will do anything on this side of the law -- and sometimes beyond it -- to produce legislation that serves their corporate interests.

So when the Supreme Court opened the sluice gate in 2010 allowing unlimited campaign contributions, pretty much every liberal voice in the country believed that a flood of corporate cash was about to deliver the political system to the Republican Party.

It was, President Obama said, "a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans."

Three years later, however, these fears have not quite materialized. Money is flowing to elections like never before. The 2012 elections cost some $6.3 billion, $1 billion more than the 2008 elections, according to the Center for Responsive Politics, a nonprofit group that researches money and politics. Independent spending by outside groups on campaign advertisements and the like topped $1 billion last year.

Corporate America, however, accounted for a comparative trickle. Adam Bonica, a political scientist at Stanford University, points out in a recent working paper that companies openly spent about $75 million from their treasuries on federal elections last year.

Even if all the hidden money funneled into campaigns through private 501(c) organizations had come from businesses -- unlikely given the contributions by noncorporate groups like Planned Parenthood and the N.R.A. -- corporate spending would not reach $400 million, still a small share of the total.

Perhaps this should not be surprising. For companies, spending on elections can be risky. Business executives might prefer lobbying, where they spend far more than on campaign contributions, not because the limits are more relaxed but because swaying legislators on both sides of the aisle is more effective at getting what they want. And such lobbying is less likely to kindle anger among consumers, shareholders and other constituents than spending to change the outcome of elections.

"While Citizens alters the ability of corporations to contribute to campaigns, it does not alter their substantial risk in doing so," the political scientists Wendy L. Hansen, Michael Rocca and Brittany Ortiz of the University of New Mexico, Albuquerque, argued in a recent study.

Still, corporations' reluctance to open their checkbooks suggests an intriguing alternative explanation for the rise of Republicans who are willing to defy their will: companies may have spent too little. Their money was swamped by that of big individual donors who are more ideologically extreme. In 2012, the top 0.1 percent of donors contributed more than 44 percent of all campaign contributions. In 1980 their share of contributions was less than 10 percent.

Corporations have a pro-Republican bias, of course. But it is not quite as extreme as pop culture would have it, and is certainly less pronounced than organized labor's pro-Democrat leanings.

Effective lobbying requires both Republican and Democratic friends. Political action committees run by businesses are known for spreading money on both sides of the partisan divide. They give to incumbents. They choose winners. They show little partisan loyalty.

In the 2006 elections, when the G.O.P. controlled Congress, corporate PACs gave 65 percent of their money to Republicans. In 2008 and 2010, after the Democrats had swept both the House and Senate, they split their contributions roughly fifty-fifty.

By contrast, substantial research in political science suggests that individual donors favor more ideological candidates and are less strategic in their giving. Big, frequent donors are particularly extreme.

An analysis of polarization of state legislatures by Michael Barber, a Ph.D. candidate in political science at Princeton, finds that limits on corporate contributions lead to more partisan polarization, while limits on individual contributions moderate it.

There are alternative explanations for the rise of the uncompromising right within the G.O.P.

Mark Mizruchi, a political scientist at the University of Michigan, traces the rift back decades. He put it to me this way: "In the 1970s it would have been inconceivable that Republicans would tell business" to get lost.

Last May, he published "The Fracturing of the Corporate Elite," about business' waning influence over the political process. He suggests the power of the business lobby started waning after it succeeded at beating back government regulation and organized labor in the late 1970s. Corporations then turned to narrow individual agendas and gradually lost force as a collective power that could impose discipline on the G.O.P.

Other analyses have suggested a shift in the party base from the industrial Northeast to the conservative rural South, the ideological polarization of voters and the gerrymandering of House districts into safe partisan seats that favored uncompromising, ideologically pure candidates.

That argument can be carried only so far, however. Jacob S. Hacker, a political scientist from Yale, said that the idea of a rift opening between businesses and the "party of business" was overstated.

Corporations continue to spend more on Republicans, he points out. They are unlikely to jump ship, especially when a Democratic administration is working on new regulations over financial services, health care and energy that business views as potentially onerous.

Despite concerns about the tactics of some Republican ideologues, the Chamber of Commerce and several other business organizations still support many of Republicans' low-tax goals.

And even if corporations didn't turn on the spending spigot, their executives did. Mr. Bonica of Stanford estimates that executives and directors of Fortune 500 companies spent a whopping $217 million on state and federal elections, more than twice as much as the same individuals spent four years earlier. That's about 70 percent of what was spent by more than 1,500 corporate PACs.

But that doesn't undermine the point that the reluctance of corporations to spend on politics is likely to limit their role as a stabilizing force.

Corporate chiefs and other top executives do not put money into campaigns merely to favor their firms. Mr. Bonica finds their giving is more ideological and less strategic than that of their companies. They rarely switch candidates: only 43 of the 1,400 or so executives of Fortune 500 companies who contributed to presidential campaigns last year gave to both sides.

That suggests a new take on the role of money in politics. If big-money people are drowning out the political voice of ordinary Americans rather than big business, American democracy still has a problem. But it is not the problem we thought we had.

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