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Robert Menendez and the dangers of unlimited campaign contributions

Unlimited campaign contributions to outside groups is a problem that won't go away by itself

Federal corruption charges against Sen. Robert Menendez (D-N.J.) challenge the reasoning behind a court decision that has allowed wealthy donors to pour more than $2 billion into “independent spending” groups in the last two election cycles. The Justice Department alleged Wednesday that Menendez misused the power of his office to benefit a donor who gave a pro-Democratic super PAC $600,000. That is not even possible, according to the unanimous decision of the U.S. Court of Appeals for the District of Columbia in its March 2010 SpeechNow case. There the judges asserted that “contributions to groups that make only independent expenditures [in elections] also cannot corrupt or create the appearance of corruption.”

Two months earlier, the Supreme Court had ruled in Citizens United that the government could not constitutionally limit independent spending by corporations and others. It stated that the absence of coordination with candidates and parties both “undermined the value” of the expenditure to the beneficiary and “alleviated the danger” that it would be given as a “quid pro quo for improper commitments.” In SpeechNow the federal appeals court indicated that it was simply drawing the logical corollary that individuals could contribute as much as they would like to such unthreatening groups.

The trouble with this logic is that it presumes donors inhabit an artificial political world in which they are giving only to independent spending organizations. In reality, the major contributors to these groups simultaneously furnish substantial amounts of federally limited “hard money” to candidates and their parties. As a result of these direct contributions, they are financially coordinating with — and often personally close to — their beneficiaries. When they embellish these relationships by contributing large sums to independent groups backing the same candidates, they are intensifying the threat of quid pro quo exchanges.

The bare facts of the Menendez case demonstrate the dangers. Ophthalmologist Salomon Melgen was a longtime donor to Menendez's campaigns. As his requests to Menendez to intervene with federal officials on behalf of his business interests multiplied from 2011 to 2012, he not only supplied the senator with increased amounts of hard money but also contributed huge amounts to a super PAC, which were earmarked for Menendez's 2012 reelection race.

This pattern of giving is common. In the 2012 election cycle, all of the top 100 individual donors to federal elections contributed to independent spending groups, mainly to super PACs. Ninety-nine of them gave $885,000 to $93 million, generally in the $1-million-to-$14-million range. All of these donors also contributed to candidates and parties, with 94 supplying $60,000 to $415,000. Of course, these donations were highly partisan: Each contributor funneled 99% to 100% of his or her total largesse to benefit just Democrats or only Republicans.

This phenomenon has been visible since the explosion of donations to Section 527 independent groups in the 2004 election. Yet the facts of political life were ignored in the SpeechNow opinion, given short shrift in the Federal Election Commission argument in favor of maintaining existing regulations and received only modest attention in reform groups' amici briefs.

There is an urgent need to come to grips with the problem of unlimited contributions to outside groups. Even in New York City, which has the most generous system of public financing of elections in the country, independent spending is now approaching the level of public matching funds in key contests. Although no help can be expected in the short run from the current Supreme Court, two broad steps could move this issue forward.

First, reform forces could pursue state and local legislative and regulatory measures likely to raise the issue in several of the 12 federal appeals courts. Following SpeechNow, only two other appellate courts have issued comparable final decisions on the merits. One of them, the 9th Circuit Court of Appeals, observed that its opinion was partly based on the lack of “sufficient evidence” of the “specter” of quid pro quo corruption.

One advantage of an appellate court strategy would be to generate a corpus of investigative journalism and political science research that would document the dangers of unlimited contributions. Such evidence will be needed when the composition of the Supreme Court changes. A number of appeals courts have recently undergone dramatic changes as a result of appointments by President Obama. The new appointees on the D.C. and 9th Circuit courts would probably provide a more sympathetic audience than before for a well-researched case.

Second, presidential leadership could help mobilize federal agencies, Congress and public opinion against unlimited contributions. To start, the president could replace with strong successors the four federal election commissioners who voted to allow candidates to solicit limited funds for super PACs. It is shocking that, despite all the talk in both parties these days about the imperative of tackling inequality, not a single budding presidential candidate has made it his or her priority to curb super PACs funded by millionaires. Voters should put their favorites on the spot.

Stephen R. Weissman is the former associate director of the Campaign Finance Institute.

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