Corporate Democracy: Likely Fallout From Supreme Court Citizens United Decision

The impending Supreme Court decision in Citizens United v. Federal Election Commission,
which could be announced as early as Tuesday, is expected to
significantly expand the role of the most powerful special interests in
financing American elections. The Court appears poised to turn its back
on more than 100 years of law and pave the way for corporations and
unions to spend unlimited amounts of money on direct campaigns to elect
or defeat federal candidates.

Such a dramatic decision would further reduce trust in government
policymaking and take our country in the wrong direction. It is hard to
imagine how America achieves real progress and tackles critical
challenges - like health care, climate change and the economy - when
our elected representatives are locked in an all-out fundraising arms
race that makes them both more dependent on and vulnerable to the
powerful special interests opposed to change.

In preparation for this decision, Common Cause has prepared a memo
that reviews the potential fallout from this case, the legal history,
examines political spending of corporations versus unions and looks at
a state - California - that allows unlimited corporate political
spending. It also identifies what Common Cause considers the only
viable policy option for moving forward in a post Citizens United
world: a new system of paying for political campaigns based on a blend
of small donors and limited public funding that allows candidates to
run highly competitive races without relying on wealthy special
interests.

"The path to the future should be small-donor democracy, not corporate democracy," said Common Cause President Bob Edgar.

Lifting the ban on corporate political spending could unleash a flood
of money into the political system and further diminish the public's
voice. Precisely how much money is hard to say, but consider the
following:

• Last year's Congressional and
  Presidential election was the most expensive in history, with total
  political and issue advertising exceeding $3 billion nationwide.
  Corporations and unions could more than double this amount - every
  election - if they put as much into political ads as they already spend
  lobbying Congress, $6 billion in the last election cycle.
• The
  health and insurance industries alone spent more than $1.6 billion
  lobbying Congress during the 2008 election cycle, nearly double the
  $896 million that all winning congressional candidates (435 House
  candidates and 35 Senate candidates) spent on their campaigns during
  the same period.
• PhRMA recently
  launched a $150 million advertising campaign to support Senator Baucus'
  health care plan (without a public insurance option) - more than the
  $140 million spent by all 55 winners of hot congressional races in 2008
  combined. That's one trade association on one bill.
• In
  the 2008 elections, winning candidates for the House of Representatives
  spent an average of $1.4 million - roughly equivalent to what the
  health care industries are spending per day so far this year to lobby
  Congress on health care reform.
• If
  the Supreme Court lifts the ban on using corporate profits for
  political spending, corporations would likely spend vastly more than
  labor unions. During the 2008 election cycle, corporations outspent
  organized labor 4:1 on PAC contributions, but 61:1 on lobbying.

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