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 has alleged that Menendez misused the power of his office to benefit a donor who gave a pro-Democratic super PAC $600,000. That's not even possible, according to the unanimous decision of the U.S. Court of Appeals for the District of Columbia's 2010 SpeechNow case. 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 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 it was drawing the logical corollary that individuals could contribute as much as they would like to such supposedly unthreatening groups.
The trouble with this "logic" is that it presumes donors inhabit an artificial political world in which they give only to independent spending organizations. In reality, 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 and party favorites, they are intensifying the threat of quid pro quo exchanges.
The bare, uncontroversial facts of the Menendez case demonstrate the dangers.
Ophthalmologist Salomon Melgen was a longtime donor to Menendez and his party. 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, earmarked for Menendez' 2012 reelection race, to a super PAC.
This pattern is common. In the 2012 election cycle, all of the top 100 individual donors to federal elections (including spouses and dependent children) 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 also contributed to candidates and parties, with 94 supplying $60,000 to $415,000. Each contributor funneled 99 percent to 100 percent of his or her 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 deregulation-minded 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 decisions on the merits. One of them, the U.S. 9th Circuit Court of Appeals covering California and six other states, 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, along with court-ordered discovery, documenting the dangers of unlimited contributions. Such evidence will be needed when the composition of the Supreme Court eventually changes. A number of appeals courts have recently undergone dramatic changes as a result of appointments by President Barack Obama. The four new Obama appointees on the D.C. appellate court and the seven new ones on the 9th Circuit would probably provide a more sympathetic audience for a well-researched case.
Second, presidential leadership could, over time, help mobilize federal agencies, Congress and public opinion against unlimited contributions. The president could appoint strong successors for the four federal election commissioners who voted to allow candidates to solicit limited funds for super PACs. It is almost shocking that, despite all the talk in both major political 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 and billionaires. Voters should put their favorites on the spot.