The New Money Party

Editors' Note: This piece has been corrected.

It turns out banks aren't the only things that can be too big to fail. Michael Steele, the chairman of the Republican National Committee, seems securely ensconced in his position despite his frequent off-message remarks, massive overspending on travel and luxury items, and his invocation of the race card at the oddest moments. Sure, race will protect him somewhat -- he won the chairmanship because the party elders liked the idea of an African American chair more than the reality of Steele -- but he's hardly the first high-ranking executive to have "failed upward" -- a phenomenon white men have been taking advantage of for decades.

Often it's easier to work around such people than to remove them. And work around him is exactly what the Republican Party seems prepared to do. At least one "shadow RNC" is being formed, under the name American Crossroads, with a virtual Social Register of GOP names, including Karl Rove and former RNC Chair Ed Gillespie, behind it, and a stated goal of raising $50 million for the 2010 midterms. Other conservative leaders, such as Tony Perkins of the Family Leadership Council, have encouraged donors to give to independent right-wing organizations, rather than to the RNC, which spent more than it raised during the first quarter of this year.

These work-arounds will get a boost from the Supreme Court's decision in Citizens United v. FEC -- not so much because it changed the rules of campaign finance but because the public perception that it did (reinforced by progressives overstating its impact) has allowed Republican operatives and lawyers to convince their corporate clients they need to change the way they do business. The independent committees that will be created to work around Steele will also be able to absorb large corporate contributions, so long as they don't coordinate their spending with the candidates.

I have been a minimalist about the real impact of Citizens United, but the Michael Steele work-around changes my analysis. It's not so much that it will change the amount of money coming directly or indirectly from corporate interests. I still think, for example, it's unlikely a corporation will decide to target an unfriendly lawmaker and take her out with massive spending. But the emergence of these independent committees, driven by corporate contributions, will change the balance of control over where money goes and who decides how to spend it. And that matters, quite a bit.

Campaign reformers in the U.S. have always been primarily worried about the sources of money: Money from corporations, labor unions, and big contributions are seen as more worrisome than public money and smaller contributions from individuals. Whether that money goes to political party committees, candidates, or outside committees has seemed less significant, since it's the money itself that is potentially corrupting.

But there are significant reasons to be at least as concerned about where the money goes -- between candidates, parties, or outside committees -- as about who gives it. Shifting the bulk of money away from candidates and the campaign committees they control (neither of which, even under Citizens United, can accept corporate contributions), as well as shifting them further away from the political party committees, which are similarly constrained, and into independent committees is likely to produce a different and more dangerous kind of politics.

There is greater potential for corruption, not just because these committees can be funded with corporate contributions but because the fundraising operatives running these committees are effectively designing the campaigns, making choices about the issues to emphasize and the attacks to run. Because independent committees and the candidates they support are prohibited from coordinating their efforts, candidates effectively lose control of the money and message backing them -- even if those prohibitions are sometimes dodged. Republican and Democratic operatives, those who can raise and aggregate money, and the bigger donors will have power far beyond that of the candidates, elected officials, or parties. This creates far more potential for corruption than when money, and control, are in the hands of candidates.

Unlike parties and candidates, independent committees don't have to worry about their long-term reputations. They are essentially unaccountable. The Republican Party plans to be around for decades into the future. It has to worry about its long-term reputation. But independent committees can be use-once-and-burn vehicles. There's a reason we haven't heard recently from the Swift Boat Veterans for Truth, the independent committee formed to take down John Kerry in 2004 -- like a basketball player sent in to commit six fouls, such operations have one purpose only and can disappear when they are finished.

Finally, independent committees are likely to play a more polarizing role. While parties can choose an early strategy of mobilizing the ideological base, by Election Day, they have to build majorities that include swing voters and independents. The incentives for independent committees are different -- by mobilizing the ideological base, they generate not just votes but more and more donors. Their clout, unlike the party's, derives only from money.

As four moderate political scientists who recently put forward a comprehensive campaign-finance proposal note, "Political parties are unique institutions in American politics. Party organizations are the most important collective agencies in our political system, performing functions that aggregate diverse interests in ways that are designed to appeal to a broad range of voters." Their proposal would allow parties to spend unlimited amounts in coordination with candidates, but only from small contributions from individuals. While that aspect of the plan attracted little attention compared to more controversial proposals for public financing of campaigns, it would nonetheless shift the power away from independent committees and back to the parties and candidates, despite Citizens United.

The good news, for Democrats and progressives, is that the shadow campaigns run by independent committees are highly inefficient and usually ineffective. Half-coordinated and half not, they stumble over each other, competing as much with one another as with the opposition party. As an example, when Democrats were largely dependent on such shadow campaign operations, in 2004 (through groups such as Americans Coming Together, Voter Fund, and America Votes) it was something of a mess, especially compared to the candidate-driven campaign of 2008. Working around Michael Steele's incompetence will come at a considerable cost to the party, especially one that is accustomed to strong hierarchical control. But the damage that a Republican operation driven by independent committees and their donors could cause in 2010 and 2012, boosted by Citizens United, goes well beyond the results of those elections.

Correction: The explanation of the comprehensive campaign finance proposal was incorrect -- donors are in fact limited in what they can contribute.

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