What You Need to Know About Citizens United and Democracy

By: Becky Rafter
Tuesday, July 24th, 2012

(A report-back on the Funding Exchange’s June, 2012 political education call with Maxim Thorne, Esq)

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“Money [aka ‘speech’] in politics is striking at the very nature of our democracy.” – Maxim Thorne

In 2010, the Supreme Court ruled, in Citizen’s United v. Federal Elections Commission (commonly referred to as Citizens United, and here as “CU”), that corporations and unions can spend money on electioneering – supporting candidates directly and asking people to vote for them. Citizens United, a tax-exempt 501 (c)(4) organization, proposed airing negative videos about then-Senator Hillary Clinton on the eve of a presidential primary. The ruling was in their favor – and forever changed the landscapes of politics, speech and money for the foreseeable future. However, 501(c)(3) organizations – which are tax-exempt and donations to them are tax-deductible – may also be given new freedoms under the court’s ruling.

For the most part, progressives loathe CU and are working to challenge it in several ways, many described below. However, progressive organizations are not utilizing key resources and strategies newly available to them under SCOTUS’s ruling. This is just one of the main points made by Maxim Thorne, who riveted guests on Funding Exchange’s July 10th political education call, Citizen’s United: What’s Possible for Donors and Activists. (Click to listen to the excerpts from the call) Thorne argues that 501(c)(3) organizations under current laws are actually quite safe to dip their toes into some political waters. In fact, he is encouraging them to dive right in.


After the call, participants requested more information on the issue and specific steps they can take to move his ideas forward. While we at Funding Exchange believe that Professor Thorne is onto something strategic – pointing out that forces opposed to social change are already using CU in new ways and that we, too, can be more sophisticated in our solutions to CU – we also recognize the lack of critical voices in the process of determining strategies moving forward: particularly those of grassroots organizations with overt racial justice agendas.

Funding Exchange has been investing in grassroots organizing and movement-building for nearly 35 years. This power can be further harnessed by utilizing tools made available through the Citizens United, and solutions must be analyzed, enhanced and embraced at the grassroots. This article invites Funding Exchange stakeholders and field partners to unite three elements: the incredible work already being done in the field, the arguments espoused by Thorne, and the untapped ideas inherent in those communities that continue to be the hardest hit by this war being waged by the super wealthy.

Funding Exchange has always played a crucial role advancing collective learning and collective giving. Today we see a need to bring together organizations, donors and leadership across age-old divides of ideology, sector, class, race and issue in an effort to challenge CU. This can happen by supporting current efforts and creating radical new ways to change the very culture and systems that have rooted CU in the first place: that profit trumps people.

This article begins with a brief overview of strategies being used in the field already. These are examples of outstanding organizations. (This is not an exhaustive list; if your organization was missed, please accept our apologies and feel free to comment on the FEX blog about your work.) Then it goes into detail about Thorne’s analysis of CU followed by his suggestions of ways to challenge the ruling. It concludes, with specific next steps for Funding Exchange stakeholders and allies, how to plug in and help turn the tide in what is a defining issue of our time – Citizens United.

Current Strategies in the field

The Supreme Court is demonstrating its commitment to loosening restrictions on money in politics. They proved this again recently by overturning Montana’s campaign finance limits. Not even states’ rights are getting in the way of this Court as it heaves forward.

The following organizations and coalitions are addressing CU through traditional 501(c)(3) and/or 501(c)(4) efforts. As we will see in section two, Thorne suggest that organizations such as these can also be doing electioneering and utilizing nontraditional activities in their efforts. 

National Level Grassroots Organizations[1] 

Move to Amend[2] – Through coalition building and mobilizing individuals, Move To Amend is calling for an amendment to the US Constitution to unequivocally state that inalienable rights belong to human beings only, and that money is not a form of protected free speech under the First Amendment and can be regulated in political campaigns.

Common Cause[3] – Through their Money In Politics issue area, Common Cause believes the problem with money in politics is not so much the amount that is spent on campaigns as it is who pays for them, what they get in return, and how that affects public policy and spending priorities. They are working on several campaigns, including DISCLOSE ACT (which was just defeated), which would have provide the public with basic information about campaign expenditures made by outside groups to Super PACs); the ALEC Whistleblower case;[4] and the latest New York Public Financing Campaign that could serve as a model for other states.

People for the American Way[5] – Through the Government by the People campaign they are tracking state bills and creating education around CU.

Center for Political Accountability[6] – They are spearheading a highly visible and effective campaign for corporate political disclosure by directly engaging companies to improve disclosure and oversight of their political spending. spearheading a highly visible and effective campaign for corporate political disclosure by directly engaging companies to improve disclosure and oversight of their political spending.

Public CampaignIn order to dramatically reduce the role of big special interest money in American politics, Public Campaign focuses on Fair Election reform. Fair Election reform helps keep legislator from being forced to rely on special interest donors to pay for their campaigns. Instead, candidates have the opportunity to raise small donations from their grassroots base to qualify for Fair Elections funding, which ends their reliance on special interest campaign cash.

National Level Coalitions

Connecting the Dots: NAACP, Communication Workers of America, Sierra Club, Greenpeace, Public Campaign, Common Cause, Public Citizen, People for the American Way and others are working to create dialogue and trainings around the intersection of two major obstacles to democracy: voter suppression efforts and the flood of money into political system. They are working to connect the dots between who is pushing corporate personhood efforts and who is suppressing the vote at the same time. Their 2012 plan provides opportunities for state legislation mirroring successes on the national level.

Funders Committee for Civic Participation (FCCP)’s Money in Politics Working Group – This collaborative brings together funders focusing on money in politics. Co-chaired by Marc Caplan (Piper Fund) and Laleh Ispahani (Open Society Foundations), they convene strategic conversations, funder briefings and share the latest about what’s happening in grantmaking and in the field. They’re also working to collaborate with funders across issue areas to help build a common agenda together that looks at the connections of the corporatization of our democracy across all issues areas.

Thorne’s Three Main Points and Recommendations

Thorne asks us to think outside the box and outside ideological, class and sector traditions, before the arc of change bends beyond our grasp. He asks us to hold two truths at once: that money in politics is corrupting, but that we must still fight fire with fire.

He cautions that now is not the time for progressives to ‘unilaterally disarm’. He asks: where can we weaken this cycle? Especially when the cycle gives a lot of capital to the right and people who have an interest in reducing the voice of lower income people and enhancing the voice of those with money?

Thorne’s Three Main Points: 

 1.     The Court’s argument laid out in CU might apply to 501(c)(3) (tax-deductible) organizations.  The Pandora’s Box is opened: Why stymie the free speech of tax-deductible, tax-exempt corporations while permitting it for other tax-exempt and for-profit corporations? Indeed Thorne is not the only one who realizes SCOTUS is headed in this direction. In 2010, a handful of individuals formed a 501(c)(3), used it to campaign against Democratic candidates, then closed it down. It appears they got letters of complaint from the FEC and IRS, but that is all.

 2.     Even though the US is supposed to be a representative democracy, the super rich have outsized influence over our country. And whatever they do, they believe in their positive and noble motivation, regardless of which side of partisan divide they may fall. Yes, even liberal wealthy people who support good causes stop short of committing to fully dismantling the economic status quo. CU has not helped this cause. CU has re-rigged the old rules so that big money triumphs. The 1% has become exponentially richer. If you add up the total assets of all 75,000 grantmaking foundations in the US and double the number, it will roughly equal the total assets of the 400 wealthiest people. The assets of the 400 individuals have exploded to unfathomable levels in only 20 years; meanwhile, it took centuries to amass the wealth held by the 75,000 foundations.

3.     The lurking danger for progressive politics may be what happens to religious 501(c)(3) organizations. Professor Thorne cautioned us about the potential hazards of loosening subsidy restrictions on churches, synagogues, mosques and other religious entities because this may weaken further the separation of church and state. This is a frightening slope, and Thorne suggests progressive religious leaders take the lead from the outset and urge for the continuing separation and tax restrictions on their sector. Nevertheless, the current makeup of the Court seems to have the will to lift restrictions on the speech of churches. But if the separation of church and state were to fall, and tax deductible contributions to religious organizations could be used for electioneering democracy in the US will be in a very, very endangered.

Thorne’s Recommendations:

Thorne believes it would likely take a good ten years or more to change SCOTUS’s sentiment on this issue, and twenty years or more to get an amendment to the constitution stating that corporations are not people. While these slow – and important – processes are taking place, what else can be done?

  • START A POLITICAL 501(c)(3): Create a new entity that fights fire with fire. The express purpose of this entity would be to undo CU through political means; and it would operate under the apparent logic of the CU Court.
  • EDUCATION:Invest in disseminating education about what all 501(c)(3)’s can do under this ruling and share new legislative and grassroots strategies in the form of brochures and websites, and other materials.
    • Take a deliberate and aggressive position within the 501(c)(3) realm about what they are allowed to do and what they are more likely to be able to do under CU
  • TACTICS:Grassroots strategies must be advanced that salvage some modicum of one person, one vote instead of the hyper-agency of wealthy people.
    • Creative federal legislation, like focusing on IRS “penalties and subsidies”
    • Public financing of campaigns that can help offset contributions by super rich donors
    • Candidates receiving free TV and radio time to help level the playing field
    • A state-by-state campaign to strengthen the 17th amendment, through which individuals directly elect US Senators, not state legislatures (currently under siege by the Tea Party)
    • A constitutional amendment campaign stating that corporations are not people
  • DECISION-MAKING:Bring on ordinary individuals and people hardest hit by the problems we strive to solve into donor advisory positions and panels to offset the outside influence of super rich people over political and philanthropic spending.
    • New foundations are created all the time – and they need cross-race and –class advising. To think outside the box and bring fresh solutions to problems means expanding leadership
  • GIVING:Embrace giving that actually helps the poorest members of society and be bold.
    • Giving that reaches ethnic minorities is now lower than in the past and is growing at slower rate than overall giving
    • Develop a willingness to engage in giving to direct political work and super PACs – even if its not tax deductible

 Funding Exchange’s Suggested Next Steps

As a public foundation, Funding Exchange is anxious to engage the broader community in this discussion, namely organizations with an explicit racial justice analysis. As 501(c)(3) organizations become politicized, what does this mean for communities that face the bulk of this country’s discrimination and abuse of power? An important next step is to systematically include more voices, ideas and resources in this discussion and in planning action steps. Distilling complex legal analysis, opening up spaces and making decisions together across differences could enhance, compliment and develop strategies like those mentioned above.

To invest in new activities, bolster current work and impact CU from the ground up, Funding Exchange suggests the potential next steps:

1.     FEX donors and activists can form a giving community to support education, training, planning, collaboration, organizing and grantmaking as determined by the group. This could be a landmark place for people to think and give collectively in order to move forward crucial ideas.

2.     FEX donors and activists can converge to brainstorm the short- and long-term impact of CU and Thorne’s analysis. The group can consider Thorne’s recommendations, assess work in the field, create new solutions that resonate within their communities and establish leadership in the group. The group could meet virtually using the latest technology or meet in person. Any Funding Exchange stakeholder would be invited to take part – grantees, donors, grassroots activists, community leaders, partners, academics, religious leaders, researchers, allies, funders, groups featured in this article and those who would bring a perspective about international impact.

3.     FEX donors and activists can expand and support coalitions by sharing the solutions and analysis put forth by the convergence with other groups already organizing against CU, such as those mentioned in this article, if they are open to receiving support and  new voices.

4.     FEX donors and activists can support the strategies already in place that feel meaningful to them (such as work described above) – Funding Exchange staff can provide further support in identifying organizations and strategies that align with individuals’ interests.

We at Funding Exchange believe in Maxim Thorne’s hypothesis; and given how crucial the CU ruling is, we believe that all voices must be included in this debate, to guide us, and to ensure a level playing field. Thorne states, “A strong civil society sector fueled by philanthropy is one of the great things about the US; but our current system, with supersized philanthropists calling most of the shots and setting public policy at unprecedented levels, is also an attack on our democracy. And we need to be thinking about how to democratize and engage people who are not wealthy with cross-race and cross-class dialogue with very super wealth philanthropists.” We could not agree more.

Conclusion

Instead of wrenching open valves just to help the rich get richer, it is time to help make it rain for everybody. Maxim Thorne asks, are members of the upper class willing to challenge how wealth and power are distributed in the US? And Funding Exchange asks, is everyone willing to share leadership across lines of race, sector, class and other marker of difference in order to address this issue?

What Thorne’s presentation shows us is clear – we are in a war. And we’re losing ground. We are outspent. Out organized. We stand on our moral high ground, afraid to use the tools, however creative or collaborative, they could be, made available to us under the CU ruling. But we need to use these tools to engage people to get involved in this fight. This fight for the future of our communities, not only in the US but around the world.

Funding Exchange has always been a catalyst for the progressive movement. We see bringing ideas like these to the public as a very important role. We have never shied away from provocative ideas. And we want, and need, our friends and supporters to have access to these ideas as well. It is our hope that work in the field can be strengthened, that Thorne’s recommendations be taken into consideration and that leadership emerges from the grassroots organizations, especially those fighting racial injustices. And as multiple strategies converge – direct action, nonviolent civil disobedience, movement building, organizing, leadership development, mobilizing, legislative, justice system-focused, and perhaps even direct influence over elections – let’s figure it out, together.

“There is a movement way beyond Citizens United to undo about every protection that we have taken over more than a century to expand democracy and keep to the principal of one person, one vote.”   -Maxim Thorne

 


[1] Also Center for Media and Democracy has a Tell ALEC Companies to Stand Down! campaign.

[2] Other groups with amendment-specific campaigns include Amend 2012, Free Speech for People and Get the Dough Out.

[3] Other groups working with Common Cause on the NY Financing campaign include Public Citizen, Communications Workers of America, Public Campaign, Working Families Party and others.

[4] Thorne believes that ALEC, which has violated the IRS restrictions on political speech even though it is a 501(c)(3), will be victorious. He believes the court would rule in support of ALEC, citing that IRS restrictions cannot infringe on the right of free speech.

[5] Alliance for Justice analyzes current and upcoming judicial cases, as well as historical trends, such as a recent poll entitled Americans’ Attitudes Toward the Corporate Court

[6] CPA is a member of the 100-strong Corporate Reform Coalition

 

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