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What the McCutcheon decision means

- April 2, 2014

This is a guest post by political scientist Lee Drutman, who is a senior fellow at the Sunlight Foundation.
The Supreme Court on Wednesday issued a decision saying there is no constitutional justification for aggregate two-year contribution limits to candidates and party committees. The decision will turn an unequal campaign finance system into an even more unequal system of campaign finance. It will further empower small set of elite donors who have the means and the motive to play an even more important role in the setting of agendas, positions and candidates. And it will probably benefit Republicans more than Democrats.
So now what? Political operatives will, of course, come up with new ways to take advantage of a post-McCutcheon world. Whether it is through joint committees or through some proliferation of affiliated PACs, these operatives will almost certainly soon be in a position to ask a donor to write a seven figure check and then distribute that money in a way that was not possible prior to the ruling. The awkward super PAC dance of independence and non-coordination can end.
This will almost certainly make parties and party leaders more important and super PACs less important. Some donors may still prefer to give to super PACs because they get to be in control of how the money gets spent (think Michael Bloomberg). But party leaders will be going after these donors hard, and they can make a convincing pitch: “Your money goes further with us. We can buy ad rates more cheaply. Also, we can make coordinated strategic decisions.” The unsaid pitch will be: “We will listen to your concerns more seriously if you give us the money directly.” As party leaders control more money, their influence will grow.
Now combine the increased power of party leaders with the increased power of a few hundred donors over those party leaders. Political influence just got a whole lot more concentrated.
As political scientists Benjamin Page, Larry Bartels and Jason Seawright explain in a recent paper, the rich are not like the rest of us – and not just because they have more money. They also have very different political priorities, particularly on issues of economics and government spending. And as political scientist Marty Gilens has shown, when rich people and poor people disagree on policy, elected officials almost always side with rich people.
Already, large donors essentially play the role of congressional gatekeepers. It’s hard to get elected to Congress without their support. At the very least, this means candidates spend a lot of time being sympathetic to donors’ concerns. As Sen. Chris Murphy (D-Conn.) put it succinctly, “I talked a lot more about carried interest inside of that call room than I did in the supermarket.” At the worst, it means candidates specifically tailor their policy positions and priorities to these donors.
In the 2012 election, 28 percent of the contributions from identifiable sources came from just 31,385 individuals, a number equal to one ten-thousandth of the U.S. population (a.k.a. the 1 percent of the 1 percent).
But even most of these super-donors came nowhere close to the aggregate limits that the court struck down. So what happens if we narrow our focus to just the top 1,000 donors? These are the donors most seriously committed to shaping our politics – the people who most likely to have influence in the super joint committees that Justice Stephen Breyer warns of in his dissent.
To be in the top 1,000 donors in 2012, you would have had to pony up at least $134,300 – slightly more than the $123,000 aggregate limit that was struck down. These donors mostly got into this upper echelon by giving to super PACs. Of these donors’ aggregate contributions, 79 percent went to super PACs. By contrast, 11 percent went to party committees, 6 percent went to candidates, and 3.2 percent went to regular old PACs. On average, these top 1,000 donors gave to 13 different candidates. Only a quarter gave to 17 or more candidates.
What else do we know about these super-elite donors? They are almost twice as likely to be Republicans than they are to be Democrats. Of the top 1,000 donors in 2012, 580 gave at least 90 percent of their party and candidate contributions to Republicans, as compared to 326 who gave at least 90 percent of their party and candidate contributions to Democrats. (This doesn’t count super PAC money, since super PACs are technically non-partisan.) Given that these donors will be able to give more money to candidates and parties directly, Republicans are likely to have an advantage.

Second, they are far more likely to come from the financial sector than any other sector. Just over one third of these donors work in the financial sector. No other sector comes close. This means Wall Street and Greenwich billionaires are likely to become even more important players in funding elections.
drutmanfigure2In his decision, Chief Justice John Roberts argues that disclosure can save the day: “With modern technology, disclosure now offers a particularly effective means of arming the voting public with information.” But if campaign finance disclosure stands a chance of working, it needs to be real-time disclosure. And right now it is not.