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Published on Friday, January 22, 2010 by The New York Times

Lobbyists Get Potent Weapon in Campaign Finance Ruling

by David D. Kirkpatrick
WASHINGTON — The Supreme Court has handed a new weapon to lobbyists. If you vote wrong, a lobbyist can now tell any elected official that my company, labor union or interest group will spend unlimited sums explicitly advertising against your re-election.

“We have got a million we can spend advertising for you or against you — whichever one you want,’ ” a lobbyist can tell lawmakers, said Lawrence M. Noble, a lawyer at Skadden Arps in Washington and former general counsel of the Federal Election Commission.

The decision seeks to let voters choose for themselves among a multitude of voices and ideas when they go to the polls, but it will also increase the power of organized interest groups at the expense of candidates and political parties.

It is expected to unleash a torrent of attack advertisements from outside groups aiming to sway voters, without any candidate having to take the criticism for dirty campaigning. The biggest beneficiaries might be well-placed incumbents whose favor companies and interests groups are eager to court. It could also have a big impact on state and local governments, where a few million dollars can have more influence on elections.

The ruling comes at a time when influence-seekers of all kinds have special incentives to open their wallets. Amid the economic crisis, the Obama administration and Congressional Democrats are trying to rewrite the rules for broad swaths of the economy, from Detroit to Wall Street. Republicans, meanwhile, see a chance for major gains in November.

Democrats predicted that Republicans would benefit most from the decision, because they are the traditional allies of big corporations, who have more money to spend than unions.

In a statement shortly after the decision, President Obama called it “a green light to a new stampede of special interest money in our politics.”

As Democrats vowed to push legislation to install new spending limits in time for the fall campaign, Republicans disputed the partisan impact of the decision. They argued that Democrats had proven effective at cultivating their own business allies — drug companies are spending millions of dollars to promote the administration’s health care proposals, for example — while friendly interest groups tap sympathetic billionaires and Hollywood money.

After new restrictions on party fund-raising took effect in 2003, many predicted that the Democrats would suffer. But they took Congress in 2006 and the White House two years later.

While Democrats pledged new limits, some Republicans argued for bolstering parties and candidates by getting rid of the limits on their fund-raising as well. Several cases before lower courts, including a suit filed by the Republican National Committee against the Federal Election Commission, seek to challenge those limits.

Thursday’s decision, in Citizens United vs. the Federal Election Commission, “is going to flip the existing campaign order on its head,” said Benjamin L. Ginsberg, a Republican campaign lawyer at the law-and-lobbying firm Patton Boggs who has represented both candidates and outside groups, including Swift Boat Veterans for Truth, a group formed to oppose Senator John Kerry’s 2004 presidential campaign.

“It will put on steroids the trend that outside groups are increasingly dominating campaigns,” Mr. Ginsberg said. “Candidates lose control of their message. Some of these guys lose control of their whole personalities.”

“Parties will sort of shrink in the relative importance of things,” he added, “and outside groups will take over more of the functions — advertising support, get out the vote — that parties do now.”

In practice, major publicly held corporations like Microsoft or General Electric are unlikely to spend large sums money on campaign commercials, for fear of alienating investors, customers and other public officials.

Instead, wealthy individuals and companies might contribute to trade associations, groups like the Chamber of Commerce or the National Rifle Association, or other third parties that could run commercials.

Previously, Mr. Noble of Skadden Arps said, his firm had advised companies to be wary about giving money to groups that might run so-called advocacy commercials, because such activity could trigger disclosure requirements that would identify the corporate financers.

“It could be traced back to you,” he said. “That is no longer a concern.”

Some disclosure rules remain intact. An outside group paying for a campaign commercial would still have to include a statement and file forms taking responsibility. If an organization solicits money specifically to pay for such political activities, it could fall under regulations that require disclosure of its donors.

And the disclosure requirements would moderate the harshness of the third-party advertisements, because established trade associations or other groups are too concerned with their reputations to wage the contentious campaigns that ad hoc groups like MoveOn.org or Swift Boat Veterans for Truth might do.

Two leading Democrats, Senator Charles E. Schumer of New York and Representative Chris Van Hollen of Maryland, said that they had been working for months to draft legislation in response to the anticipated decision.

One possibility would be to ban political advertising by corporations that hire lobbyists, receive government money, or collect most of their revenue abroad.

Another would be to tighten rules against coordination between campaigns and outside groups so that, for example, they could not hire the same advertising firms or consultants.

A third would be to require shareholder approval of political expenditures, or even to force chief executives to appear as sponsors of commercials their companies pay for.

The two sponsors of the 2002 law tightening the party-fundraising rules each criticized the ruling.

Senator Russ Feingold, Democrat of Wisconsin, called it “a terrible mistake.” Senator John McCain of Arizona, the Republican presidential nominee in 2008, said in a television interview on CNN that he was “disappointed.”

Fred Wertheimer, a longtime advocate of campaign finance laws, said the decision “wipes out a hundred years of history” during which American laws have sought to tamp down corporate power to influence elections.

But David Bossie, the conservative activist who brought the case to defend his campaign-season promotion of the documentary “Hillary: The Movie,” said he was looking forward to rolling out his next film in time for the midterm elections.

Titled “Generation Zero,” the movie features the television host Lou Dobbs and lays much of the blame for the recent financial collapse on the Democrats.

“Now we have a free hand to let people know it exists,” Mr. Bossie said.

Copyright 2010 The New York Times Company
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