(gentle music) - Welcome to Forum 360, global outlook, local view.

I'm your host, Pat Simons.

In 2010 the United States Supreme Court ruled on the landmark case of Citizens United versus Federal Election Commission which has allowed unlimited election spending by organizations interpreting that money as free speech.

It has given rise to dark money and nonprofits that have capitalized on this possibility.

The impact of the ruling spans federal, state, and local campaign finance.

This program will focus on the effect closer to home.

My guest is Dr. Daniel Chand, associate professor of political science and public administration at Kent State University in Kent, Ohio.

His research emphasis is immigration policy and nonprofit advocacy.

Dr. Chand has experience and state level lobbying with a nonprofit public interest law firm and working for political action committees and implementing program evaluations for charitable associations.

He served two years as a Peace Corps volunteer in rural Zambia.

He is author of numerous articles on nonprofits and elections and campaign finance featuring electioneering post Citizens United.

Welcome Dr. Chand.

- Thank you.

- We have a lot to talk about so, and this is a big topic and sometimes very confusing and I'm still learning.

Can you talk about what is the greatest impact of Citizens United on campaign finance that you would cite?

- Sure.

- So that's, that's a big question and I'll give you a synopsis.

I think it's had two really large impacts that most laypeople don't really understand.

The first is it has created a much bigger venue for what's been dubbed by the press as dark money.

And this is money spent on elections where we don't know who the donors were, like where did that money originate from, right?

To be fair there's always been a little bit of money in elections whether federal, state, or local where we couldn't quite figure out where the donations were originating from but dark money is much much much more of an issue post Citizens United.

The other thing, the other big impact that people often overlook is it's shifted where money is spent in elections.

It really hasn't contributed that much to how much money overall is spent.

But prior to Citizens United there was a lot more power by individual candidates and the political parties to determine how the money is spent.

Now that we have dark money, a lot of donor money instead of going to the candidates and the parties is starting to be shifted to these outside groups.

Mostly what we call 501C non-profits.

- Okay.

So if you were to describe the organizations in terms of who, like you mentioned nonprofit, can you differentiate that, what a nonprofit is under this and what is a PAC and what is a superPAC?

- Sure.

So I'll give you kind of a ranking in terms of transparency and accountability in terms of PAC, super PACS and, and nonprofits.

So a lot of people think of PACS as sort of a boogeyman, but the traditional PAC, normal PAC that most people think of are actually quite heavily regulated.

At the federal level PACs can only take money from individuals or from candidate committees or party committees like the DNC, RNC, which also themselves can only take money from individuals, right?

So PACs are very heavily regulated.

They can give money directly to candidates but it's capped at $5,000 per election.

Which is not very much.

They can spend money independently too, but they typically don't.

So PACs and all money donated to PACs I should say is 100% fully disclosed.

Any donation of $200 or more to a PAC has to be disclosed by the Federal Election Commission.

So those are pretty heavily regulated.

Then there's super PACs post Citizens United and another apellate court case called free speech now that came right after super, Citizens United.

That's kind of where super PACs originated.

Super PACs are less regulated than traditional PACs but they are still regulated by the Federal Election Commission.

- Okay.

- So super PACS, they can take unlimited contributions and unlike regular PACs they can take money from individuals but also businesses, nonprofits, anyone, they can take it from whoever they want, no limits, and they can spend in unlimited amounts.

But they can't give it directly to a candidate or a party.

It has to be independent.

- Okay.

- But it's 100% disclosed.

It's fully disclosed.

Any contribution $200 or more disclosed by the FEC.

Then there's 501C nonprofits.

These are not regulated by the Federal Election Commission.

So these are the least regulated.

And these are the, in terms of accountability and transparency these are the biggest problem because nonprofits have of course existed for a long time prior to Citizens United even, but post Citizens United there's now this venue to donate money to them and spend on, spend that money in elections for partisan political purposes.

In other words to elect or defeat specific candidates.

- Well, that has changed from what a lot of people might think about.

PAC use, misuse and super PACS used, like it's not as regulated or not as regulated but it is more highly regulated as you mentioned.

So you talked about fundraising limits.

So let's stick on the nonprofits right now, which seems to be the most open to taking in money.

Can you confirm then that that money can originate from anyone anywhere and they do not, it can even come in from outside the United States?

- Oh yeah, yeah.

I mean there's really no limit on where nonprofits can take money, from whom nonprofits can take money.

To be clear there's lots of different nonprofits.

There are what we, most people think of what are called 501C3 nonprofits, right, like charitable nonprofits, like your local food bank right.

And those are, those are wonderful.

Everyone loves the local food bank but there are other different types of nonprofits.

So most money spent in elections post Citizens United is spent by what are known as 501C4 social welfare nonprofits.

- Okay, so there's a term.

- That's right and these have existed for a long time.

The ACLU is a 501C4, the National Rifle Association or the Sierra Club.

These are 501C4s.

They usually in the past existed for lobbying purposes, to lobby on policy.

But post Citizens United what's happened is lots and lots of donors and lots of activists have used them as a venue to spend on partisan electioneering.

And because there's really no limits on how much you can give to a nonprofit and the IRS doesn't have any rules forcing disclosure of donors for nonprofits, now lots of money that used to go to candidates or parties or even traditional PACs has been shifted.

and it's going to those nonprofits because there's no regulation of them basically.

- You spoke of established nonprofits, but you, they can form nonprofits for this purpose specifically.

What kind, you may have mentioned a bit of this, but what kinds of election activity can be funded through the nonprofits that serve that purpose?

They use the term electioneering communication.

Is that one of those things and, and what all things can they do?

- Yeah, so electioneering communication is a legal term.

It originated in a Supreme Court case called Buckley versus Vallejo in 1974.

But then later Congress put it explicitly in federal statute and something called the bipartisan campaign for reform act of 2002.

And technically in a nutshell, I guess you could say an electioneering communication is a political ad.

So it's an ad that airs within 30 days of a primary election or 60 days of a general election that identifies a candidate for office.

That's an electioneering communication.

And post Citizens United, yes, nonprofits have been purchasing electioneering communications that expressly advocate for the defeat or election of individual candidates.

Prior to Citizens United, they weren't able to do that.

They could do what was called issue ads but they weren't able to like expressly advocate for the election or defeat of candidates around election time.

- Now this would entail other forms of media, all forms of media.

Oh, even like a postcard mailing or something of that.

Can you, can they lie?

Or can they say untruths in that messaging?

- Yeah, yeah.

First amendment, someone doesn't have to, to be honest in a political ad and the courts have generally said that political speech is the most protected type of speech.

So if you want an analogy, for example the Federal Trade Commission has rules on truth in advertising.

So if you know, if Bayer is marketing a new drug and they say this you know helps solve whatever element, they have to have some study.

They have to be able to back that or they could receive a fine from the FTC.

But political speech, it's much less heavily regulated because it receives more protection under the first amendment.

So if, if a nonprofit wants to say Tim Ryan wants to ban all guns even though that may not be true, they can run that ad.

And there's really nothing that the candidate or his supporters can do about that.

- There's a great deal of weight put on voters to sort through all this messaging.

Now the majority of justices held in Citizens United that the ruling did not present a substantive threat of corruption provided it was not coordinated with a campaign.

So can you describe the relationship between a nonprofit who's in the business of doing this and a candidate?

- That's a really excellent question.

So when the court majority ruled in Citizens United, they said, okay, these outside groups, they can spend money on elections independent of the candidates and the campaigns.

The organization actually in Citizens United, the actual group Citizens United in the Citizens United versus FEC ruling was a 501C4 nonprofit that wanted to run ads during the democratic primary that were for an anti Hillary Clinton movie right.

But they were able to say well look, we're not a part of her campaign or any of the other candidates' campaigns.

This is all independent spending.

And the Supreme Court kind of bought into that reasoning.

They said as long as this money is spent independently then you can avoid corruption because it's not, it's not like you're part of their campaign.

This is you spending and exercising your free speech separate from the candidate or the political party.

So the IRS does have rules against these outside groups and the campaigns coordinating, but it's very difficult to enforce those rules.

- Okay so it's, it's hard to know if they have breached that relationship.

- Occasionally, occasionally that type of thing is prosecuted but it's a rare thing.

- Thank you.

Let's talk about dark money for a minute.

That gets a lot of press.

Tell us about what it is, how it enters elections, and what is the underlying intent of using dark money.

- Yeah so there's you know kind of several parts to that.

I'll say upfront, legally speaking there's no such thing as dark money.

It's a term that the press and campaign finance reformers use but it's a good kind of summation of a problem.

And that problem being there's lots of money being donated by big money donors, corporate interests, individuals to influence elections whether it's federal elections, state elections, or local elections.

Now that's always been the case, but prior Citizens United there was more regulation on disclosing who those donors were.

Post Citizens United now, because these nonprofits, these outside groups can spend on elections and they can expressly advocate for the defeat or election of candidates, and because they don't have rules themselves forcing them to disclose their donors, dark money's become much more of a big issue.

And there's a lot of incentive.

There's a lot of incentive for donors, especially businesses to donate to nonprofits as opposed to regulated, FEC regulated entities like candidate committees, or PACs right?

- Because they can be identified.

- If they donate through the traditional means through a party committee or through what's called a political committee like a PAC, or a candidate committee that's all disclosed.

And then they could face backlash from whomever.

So we'll give you a good example.

In 2010 it was actually shortly after the Citizens United ruling, Target, the corporation Target donated money to a very socially conservative candidate for, for governor in the state of Minnesota, where Target's corporate headquarters is located.

Now that, that candidate opposed gay marriage and a lot of gay rights activists targeted and they said we don't wanna shop at Target.

They, they started protesting it.

Target said okay we won't donate to that type of person anymore.

But that was only disclosed because Minnesota's state campaign finance laws required that contribution to be disclosed.

Post Citizens United if you donate to a nonprofit and they're spending in a federal election, there's no, there's no requirement that a donation from Target or Walmart or any other corporation be disclosed.

So they're avoiding that potential backlash from the people who might disagree with their political contribution.

- So it's fair to say that it does, it does affect transparency and accountability.

- Absolutely.

The ruling, the ruling has had a huge impact on accountability and transparency.

- If you're just now tuning in, this is Forum 360.

And my guest is Dr. Daniel Chand of Kent state university.

We're talking about money influence in local elections post Citizens United.

So going to the local elections.

A lot of people know about these issues at state and federal but they may not realize that there's increasing effect locally.

So can local governments limit donation amount and instill penalties or enforce penalties to make campaign finance more fair, competitive, and transparent?

- So that's, that's complicated and one of the reasons why is local governments in political science terms, we always say local governments are creatures of the state.

They only exist through the power of the state allowing them to exist.

If the state of Ohio wanted to abolish the city of Hudson it could technically right?

So any authority that local governments have to regulate something like campaign finance, it has to be done within the confines of what the state law allows them to do.

They can't make stricter say donation limits or things like that unless the state law explicitly allows them to do it.

- Okay.

- Now some states have actually fairly strict disclosure rules on money spent in elections.

Some of those states are states like California which are very liberal.

Some of those states are states that are actually quite conservative.

And you might be surprised to hear, like for example Alaska has some of the strictest campaign finance disclosure rules out there.

If you donate to a political campaign in Alaska, even if it's a nonprofit and they're spending on, on a campaign, that organization has to disclose their top donors within a television ad.

- Okay.

- Right.

So Ohio unfortunately if you care about transparency, Ohio doesn't have those type of rules.

So local governments really are kind of powerless to enforce those type of rules if the state doesn't explicitly kind of give them the authority to do it.

- Even if the local government's under home rule?

- Yeah even if, even if that was the case.

Yeah, even if that was the case and part of the problem too for local government, this does not just limit to campaign finance rules, it's kind of, it applies to all types of regulation.

Part of the problem with enforcing regulation at the local level is whenever you have regulation you need some agency or bureaucratic entity to go out and enforce that regulation.

It's not like criminal law where you can just have cops go out and arrest people right?

So without that bureaucratic entity local regulations tend to kind of become voluntary in nature.

Do you wanna follow it or not?

- Okay well, that's a good point.

I think that, that people might ask that question if they can do more regulation locally.

I wanted to move on to a dissenting opinion in Citizens United by justice John Paul Stevens.

He said quote a rejection of the common sense of the American people who have recognized a need to prevent corporations from undermining self-government.

Unquote.

So is there common sense missing from Citizens United in how it's unleashed this money source?

- You know I wouldn't focus too much on the Citizens United ruling.

It was problematic.

I don't entirely disagree with it and I'm not even sure it should be overturned nor does it need to be overturned.

I think that the most people would say it's, it's common sense I guess that if you're gonna spend money in elections and I'm not talking about a couple hundred dollars, or even a thousand, I mean if you're spending tens of thousands of dollars or even millions of dollars to influence the outcome of elections though, people should be able to know where that money came from.

And that's not controversial.

If you look at poll after poll, 80 plus percent of Democrats and 80 to 90 percent plus of Republicans say if you're gonna spend money to influence the outcome of elections, we should be able to know that.

And so I would say yes, post Citizens United, the fact that all this dark money is able to be able to be spent, that's I guess you could say a lack of common sense.

But Congress could solve that if the political will was there.

- So can you cite I things, aspects of Citizens United that actually strengthen election integrity and assist voters in well-informed decision making?

- No, there's no, there's nothing.

There's no aspect of Citizens United that I would say increases transparency.

Or if you're concerned with accountability there's no aspect of the ruling that, that creates that.

I guess if you wanted to look at the positive.

I've worked with nonprofits before and I've, I'm on the board of a state level nonprofit.

You know nonprofits are a venue through which we can express our will and become active and Citizens United allowed, it created more freedom for nonprofits and not just nonprofits, unions, and even for-profit corporations to get involved in elections.

So from one perspective you could say that that's, that's a good thing, but because there were no existing rules by the IRS forcing nonprofits to disclose their donors that means that all this money spent by nonprofits on elections is quote dark money.

- So perhaps some of this could be remedied through IRS.

- Yeah, so right now the IRS is prohibited from forcing nonprofits that spend on elections to disclose their donors.

But there has been federal legislation that's been proposed and has kind of at times come close to becoming law that would force these nonprofits that spend on elections to disclose their donors.

There's something that's passed the house of representatives a couple times.

It's called the disclose act.

The first time it passed was in 2010.

And if that were passed into law, it would say okay, any nonprofits that spend on partisan electioneering and most nonprofits to be fair do not.

501C3 nonprofits can't at all right?

But any 501C4 nonprofits or 501C6 nonprofits that spend on partisan electioneering, if the disclose act were to come law they would have to disclose their donors.

- So do you feel like we have seen the full effect of Citizens United or is there more to be revealed?

- I think, I think at this point we can safely say we know what the system is post Citizens United.

And I think a lot of people, I would say even including myself when Citizens United was, was initially handed down we kind of saw where this was coming.

This was going to create a sort of new venue for spending on elections without that transparency, without donor disclosure.

So yeah, I don't think there's there's any more surprises post Citizens United.

The surprise might be if Congress gets the will to actually resolve some of the problems from the ruling.

- So if I gather what you're saying, it's not likely this will be overturned.

- No.

- And it could possibly, any negative effects could be mitigated if the legislature would say the IRS has to have these roles.

- Yes, absolutely.

Yeah so to be clear, the conservative majority of Citizens United did not reject the idea of transparency and donor disclosure rules.

Clarence Thomas did but that was, he was the one person by himself.

But actually the majority in the decision and Justice Kennedy who wrote the majority decision actually defended the idea of transparency and said explicitly there's nothing in this ruling that prohibits forcing donor disclosure.

So they, they even kind of knew that there was this potential of nonprofit money being spent in elections right?

- Right.

- But the Supreme Court can't go out and create law and say okay now IRS you enforce these disclosure rules.

That's up to Congress to do that.

- Well it seems like in the meantime voters need to be very critical about what is being said, where the money's coming from, what the messaging is.

And it puts an extra responsibility on us as voters to be sure that we understand the origins of the messaging, who's paying for it.

If we can even find that out.

It's been an excellent discussion.

Thank you so much.

It's a complicated subject.

And I think that this will at least, I want to spur the interest of the public to think more about this.

I wanna thank Dr. Daniel Chand, associate professor of political science and public administration at Kent State University for this important discussion about changes in campaign finance post Citizens United, particularly its influence on local elections.

This is Pat Simons for Forum 360.

Thank you for joining us.

Have a great day.

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