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Campaign Contributions

In: Social Issues

Submitted By kdulcio
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The slow evolution of federal campaign finance regulations, beginning with the Tillman Act in 1907, undercuts dramatic proclamations that Citizens United indicates a privileged where corporate interests trump the public interest and politicians do the will of the highest bidder. Corporations in the early twentieth century not only faced scattered and weak enforcement of the Tillman Act's contribution ban and thus no great deterrent to violating the ban, but also exploited glaring legal loopholes that allowed them to bankroll their favored campaigns with relative ease.

Even after the enactment of independent corporate expenditure restrictions, corporations faced minimal barriers to political spending on television or in other national media. Until the FEC's creation in 1974, the ban on independent corporate spending on elections was not rigorously enforced. The relevant time frame for evaluating the decision's practical consequences is, at the very longest, the period after Congress substantially amended FECA in 1974. Campaign contributions as emphasized here discusses the ways in which contributions are made to influence new or incumbent candidates to support a particular agenda based on factors that impact the candidate personally, such as the raising of significant funds to help a candidate be re-elected, or environmental issues to even social issues are of concern.

Since the last decade, millions upon millions of dollars have been spent in state judicial elections, primarily by contributors with an interest in the outcome of litigation. Spending large sums of money on judicial elections is not a new phenomenon, but following the Supreme Court's Citizens United decision, the amount spent in these elections will likely increase. Given reported cases of judicial impropriety and public opinion polls indicating a loss of faith in the judiciary, campaign contributions to judges and candidates have already taken a toll on the sanctity of the nation's judicial system. Logically, it can be expected that if judicial campaign contributions continue to increase, the damage to the judicial system will grow as well (Ghosh, A. 2011).

While judicial solicitation bans are not a comprehensive solution to the problems associated with judicial campaign contributions, the bans serve as a safeguard against unchecked judicial quid pro quo and the appearance of judicial quid pro quo. Until our country stamps out the root risks to judicial impartiality and independence that stem from judicial elections, upholding the bans-perhaps by analyzing them under the Buckley framework-is an important step toward ensuring that court cases are not won by the parties with the deepest pockets (Ghosh, A. 2011).

Critics deplore campaign finance laws as barriers to the free exchange of ideas, similar to trade restrictions. In their view, the government should not be trusted, nor did the framers intend it to be trusted, to decide who can and cannot speak. Proponents, in contrast, focus on the particular dangers inherent in allowing unlimited corporate wealth to dominate the electoral process: the advantages corporations enjoy in amassing capital; the risk of corporate money corrupting, or at least unjustifiably influencing, the political process; and the marginalization of individual voters (Bingham, F. 2011).

Despite public dismay over the holding in Citizens United that corporations enjoy First Amendment protection commensurate with individuals. There is ample reason to doubt the decision’s practical significance. Judicial constructions of federal statutes limiting corporate spending on elections have constrained the FEC’s power to control the flow of money into elections, since the Supreme Court’s 1976 decision in Buckley v. Valeo. Additionally, Citizens United struck down a limited prohibition on corporate-funded ads, which had only been in operation since 2002(Bingham, F. 2011).

Although the decisions doctrinal commands will bear significance for as long as it remains binding precedent, its limited practical effect should caution against overstated outrage. After Citizens United, the government may no longer limit independent corporate spending on political elections. Whether or not such spending expressly advocates for or against a candidate for federal office it cannot be limited. The view adopted in Citizens United of the corporation as a political constituent with full First Amendment rights is a modern development, but it has origins in industrial-era jurisprudence (Bingham, F. 2011).

In the late nineteenth century, the American business corporation underwent a dramatic period of growth, associated with the rapid industrial changes of the "Gilded Age." A general concentration of wealth in the hands of a few coincided with growing popular distrust of industrial elites perceived to be enriching themselves at the expense of the general public (Bingham, F. 2011).The industrial expansion and perceived abuses of capitalism led to a reform movement aimed at limiting corporate influence over the legislature and restoring control of the political process to voters. During the Progressive Era in the late nineteenth century, movement leaders railed against the use of corporate money to finance political candidates, claiming that it tended to corrupt the political process (Bingham, F. 2011).
The influential lawyer Elihu Root, for example, argued in 1894 for a New York state constitutional amendment "to prevent the great aggregations of wealth from using their corporate funds, directly or indirectly, to send members of the legislature to these halls, in order to vote for their protection and the advancement of their interests as against those of the public." Root, a key proponent of later reforms, believed that laws against bribery were insufficient to guard against the undue influence corporations wielded and the consequent erosion of popular confidence in government (Bingham, F. 2011).It is a concern by many that through the decision of Citizens United campaign contributions from corporate entities would increase at an alarming rate and it would go practically unregulated and without restraint. The impact was not as intense as expected due to the growing role of the Internet in political campaigns (Bingham, F. 2011).
The Internet’s role in particular, has allowed voters to choose their preferred sources of information. Stories and opinion pieces are selected by individuals for their own information consumption. Online newspapers, journals, and blogs provide a wide variety of choices from which voters can select political messages. These sources have opened public officials to heightened and more readily accessible scrutiny, as voters can find and share content quickly and cheaply. Free and easily accessible information online diminishes the reach and scope of traditional television advertising, and therefore mitigates the practical impact of Citizens United (Bingham, F. 2011).

The tension between the Supreme Court's treatment of contributions and expenditures is nothing new, but the Citizens United Court puts serious pressure on the doctrinal edifice of campaign finance law. The results future challenge to campaign contribution laws will be either erosion of the rules upholding the constitutionality of campaign contribution limitations to candidates or, greater incoherence in judicial doctrine. (Hasen, R. 2011).

The Citizens United majority went out of its way to state that its opinion did not have direct implications for the constitutionality of contribution limitation laws. According to Hasen, R. (2011) contribution limits "have been an accepted means to prevent quid pro quo corruption," and Citizens United "has not suggested that the Court should reconsider whether contribution limits should be subjected to rigorous First Amendment scrutiny." The Court explained that "The Buckley Court recognized a sufficiently important governmental interest in the prevention of corruption and the appearance of corruption.” This followed from the Court's concern that large contributions could be given 'to secure a political quid pro quo.

It further explained that restrictions on direct contributions are preventative, because few if any contributions to candidates will involve quid pro quo arrangements. Nevertheless, sustained limits on direct contributions to protect against the reality or appearance of corruption. On the surface the Court appears to have carved out a safe harbor for contribution limitations to candidates. But there is tension just below the surface (Hasen, R. 2011).

In Buckley, the Court recognized that bribery laws only dealt with the most flagrant exchanges of money for political outcomes. Campaign contribution limitations were justified because of the concern about undue influence that extended far beyond concern about quid pro quo corruption. Contribution limitations have been treated as prophylactic, necessary to prevent both corruption, rather broadly defined, and preserve voter confidence in the integrity of the electoral process. The ones whom opposed contribution limits have argued that the Supreme Court should read the definition of corruption narrowly and should require actual evidence that contribution limitations are necessary to prevent corruption or its appearance (Hasen, R. 2011).

The Court has repeatedly rejected such arguments, using deferential standards to judge the constitutionality of contribution limitations, with a broad reading of the term "corruption" and an extremely lax evidentiary standard. This entire approach is now in considerable tension with the Court's dicta in Citizens United. If access and ingratiation are not corruption and corruption is really limited to quid quo pro corruption, then contribution limitations would appear to be in serious danger of being struck down. As Heather Gerken argued, the Citizens United dicta evincing a stingy definition of corruption could have implications well beyond imposing spending limits on corporations (Hasen, R. 2011).

If 80 percent of the public "oppose the recent ruling by the Supreme Court that says corporations and unions can spend as much money as they want to help political candidates win elections," how many people would welcome a ruling allowing direct corporate contributions to candidates? A Gallup poll conducted right after the Court decided Citizens United found that although a majority of Americans believed that giving campaign contributions is a form of free speech and that the corporations, labor unions, and others should be subject to the same campaign finance rules as individuals, 76 percent of respondents supported corporate and labor union contribution limits, and 61 percent supported individual contribution limits. In the same poll, a majority of Americans thought it was more important to limit campaign donations than to protect free speech rights (Hasen, R. 2011).

Although these findings would likely give the Justices considerable pause before overturning core campaign contribution limitations, it does not mean that the Court's campaign finance jurisprudence is likely to remain stagnant. Campaign finance issues are barely understood by the public and generally not a national priority. Extreme opinions like Citizens United are likely to get the public's attention. Assuming this same five- Justice majority stays on the Court, the Justices will be presented with many less-salient ways to loosen the campaign finance rules. However, complete deregulation, along the lines proposed by Justice Thomas, would take political courage to issue additional politically unpopular decisions. It is not clear that there are five Justices willing to spend considerable goodwill and political capital on such a strategy (Hasen, R. 2011).

Firms that contribute more money receive a larger number of contracts but that firm reputation and past contracting relationships are important determinants of contract award decisions. Past contracting relationships are the most important determinant of contract awards in this study. The results confirm that managers balance political and technical considerations in an attempt to fashion programs that serve the public good. Asking whether Contracts are awarded on the basis of political or other factors is misguided since all these factors play a role in the awarding of many contracts (Witko, C. 2011).

Campaign contributions could influence the decision making of public managers and that political considerations do not entirely crowd out other considerations but that public managers balance these factors with others in their decisions. Also political considerations and technical program needs are not necessarily in conflict. The favoring of certain contractors for partly political reasons arguably led to inflated costs in both Iraq and the Gulf Coast, which reduced the efficiency of government programs. Efficiency is a significant criterion by which to judge government contracting since it is often justified with reference to the greater efficiency of the private sector (Witko, C. 2011).

The highly publicized contracting abuses of recent years, has received the attention of policy makers and various contracting reforms have been proposed. A greater emphasis needs to be placed on competition for contracts, but even this unobjectionable change will not entirely eliminate the importance of political factors because of the subtle way that political considerations usually influence decision-making. These reforms will also undoubtedly have unintended consequences. More competition for contracts may reduce the influence of politics but may aggravate monitoring problems. Contracting is inherently political, and the influence of politics is extremely complex and variable across different contracting decisions, and any successful reforms must recognize this complexity (Witko, C. 2011).
Internal motivations and political preferences affect individuals’ giving and candidates’ positioning decisions in two ways under different assumptions about the relationship between money and votes. The belief is that individuals are rational, seeking to maximize their objectives no matter whether they have expressive or instrumental motivations. Different objective functions are proposed which correspond to these different motivations and show that the variation in motivations leads the rational person to behave differently. Contributions that do not produce votes, can only expressive motives that lead to individual giving and policy disparity (Shieh, S. & Pan, W. 2010).

If contributions affect votes in the presence of uninformed voters, the contributed money can be used to persuade the uninformed. Both motives result in giving and disagreement, with contributions being larger and policies more separated under expressive motives. It is important to place an emphasis on the candidates’ goals. Expressive voters contribute only if candidates maximize their shares of votes instead of the probabilities of winning. In regards to the uninformed voters, both motives lead to donations if candidates value money to a certain extent depending on the amount. As for the motivations, divergence arises only if motives are expressive. The fundamental nature of this measurement is that candidates must take voters and contributors’ reactions into account when choosing their positions (Shieh, S. & Pan, W. 2010).

Therefore, this provides insights into the positioning strategies of candidates who are concerned about the consequential effects of platforms on donations. If the sequence of moves is changed, i.e., with contributors proposing plans to candidates, then the voters/contributors need to take the candidates’ reactions into account when calculating their proposals. The expected changes, then, are values of positions and donations, while the above mentioned conditions for giving and policy deviation will remain unchanged. According to, Edelman (1992) which studied an issue like this by considering the interactions between two candidates and one political interest group in two Alternative games, with candidates and the donor moving first, respectively (Shieh, S. & Pan, W. 2010).
According to Edelman (1992) the sequence of play does not change the balanced outcomes qualitatively, as only the Magnitudes of equilibrium values are affected. Expressive and instrumental motivations are considered as being mutually exclusive. This treatment allows us to see the contrasting effects of these two motivations toward giving in a clear way. These two motivations may or may not be either/or, but rather synergistic considerations in an individual’s giving decision (Shieh, S. & Pan, W. 2010).

An individual may give for various reasons; to express ideological preferences and as insurance. For an individual with such mixed motives, their objective function is a weighted sum of equations; and their objectives under purely instrumental and purely expressive motives, respectively. If all individuals have mixed motives, candidates maximize their shares of votes plus donations; and candidates maximize their probabilities of winning plus donations. The expected outcome is that there are donations although with smaller amounts as compared to the purely expressive large ones in a traditional setting (Shieh, S. & Pan, W. 2010).

A marginal movement towards the center increases the share of votes incrementally but reduces the expression-based donations marginally. Such a trade-off, then, prevents the candidate from moving perpetually to the center. If motivations are purely instrumental, this trade-off will not arise, for a candidate can simultaneously increase his share of votes and possible donations by moving closer to the center. This is the case where the introduction of expressive concerns can alter the result significantly. A marginal movement towards the center leads to a jump in the probability of winning and a marginal decrease in expression-based donations, with the former dominating the latter such that neither candidate can stop the centripetal process (Shieh, S. & Pan, W. 2010).

Introducing the expressive motivation into the discussion of individual giving is important, because this motive leads one to contribute regardless of the candidate’s probability of winning, and thus explains why individuals contribute to candidates with rather small chances of winning. Individual’s internal motivations constitutes a small step that is the reason “the idea of a campaign contribution as a form of consumption needs more empirical and theoretical development . . .the theoretical Underpinnings of small campaign donations are not well understood.”(Shieh, S. & Pan, W. 2010).

Quite predictably, stories surrounding scandals about money in politics keep resurfacing in the headlines of newspapers. In 2009, for example, two peers were suspended from the House of Lords for six months after being accused of offering favors for cash. A Lords committee found them guilty of being willing to change laws in exchange for cash In the US, concern about the influence of special interests on politics, through the vehicle of campaign contributions, is amplified by the rapid rise in the campaign expenditures of candidates running for office. The topic of campaign contributions and campaign spending has received new scrutiny since the 2010 US Supreme Court decision Citizens United v Federal Election Commission, which allows corporations and unions to spend unlimited sums on advocating the election or the defeat of a candidate (Stratmann, T. 2011).

Using a proposed theory is useful in helpful to examine under what conditions political favors are granted in return for campaign contributions. One of the perhaps oldest lines of research in the area of campaign contributions and special political favors is the examination of the effect of campaign contributions on voting behavior. Some studies address the causation issue using instrumental variable methods. Nonetheless, the mixed findings suggest that legislative voting behavior is not primarily determined by special interest contributions (Stratmann, T. 2011).

One way of overcoming the nagging causation issue that the allocation of campaign contributions may simply reflect legislator’s positions is to hold representatives' positions constant, and examine whether they alter their vote for or against special interests when they receive higher or lower contributions from these interest groups. Voting is only one dimension of legislative work. Voting is studied because it is easily observable, but also because it is the best measure of interest group influence. Money donated to advocate the election or defeat of a candidate is different from contributing to the candidate (Stratmann, T. 2011).

While the winning candidate may be grateful to the corporation that advocated defeat of his opponent, a direct quid pro quo may be less likely if the corporation gives the money directly to the politician. Another approach for testing the importance of contributions is to link contributions to stock market performance. Scholars have started to examine the effect of corporate campaign contributions on the fortunes of the contributing firms. Discussions about money in politics often center on the tension between providing information and corruption (Stratmann, T. 2011).

According to the US Supreme Court, the main justification for capping contributions is that large contributions may result in corruption; the incumbent will hand out favors to the contributor. Before thinking from an economic perspective about whether contributions should be capped, it is necessary to consider benefits and cost of contributions, regardless of whether or not the constitution justifies the capping of contributions. One concern regarding the capping of contributions is that caps are an incumbent protection device. In particular, capping contributions too low may have adverse effects (Stratmann, T. 2011).

If limits were set to zero, in a private campaign financing system, challengers could not rely on contributors for the financing of campaigns. However, the concern that low contribution limits lead to uncompetitive elections may not be justified. A recent study for the American states examined whether contribution limits of 500 USD and below have uncompetitive effects. That study showed that low limits do not have uncompetitive effects, and that states with limits of USD 500 and below have more competitive elections in races to state assemblies relative to states with contribution limits of USD 1,000 or higher (Stratmann, T. 2011).

The consequences of caps could limit corruption and, at least over some range, reduce the incumbency advantage. Besides capping contributions, some have advocated the capping of campaign expenditures of candidates. The US Supreme Court, however, struck down such expenditure limits because they considered this an inappropriate infringement free speech (Stratmann, T. 2011).
Certain conditions, may give rise to an ethnic policy cycle within the presidential electoral cycle. This was the case in the Cuban American case between 1992 and 2004. The electoral basis for the ethnic cycle is similar to that of the political economic policy cycle elucidated by Tufte. However, Tufte, left unaddressed the "behind the scenes" impact that moneyed, organized interests may have in influencing both policy and voter preferences (Eckstein, S. 2009).

The ethnic cycle from 1992 to 2004 rested on policy variance in presidential election and nonelection years. In election years, incumbent presidents who sought to retain office implemented policies that ethnic lobbyists pressed for, which helped to win votes. When the policies conflicted with concerns of governance, in nonelection years presidents reversed election-year measures or left they unenforced. In nonelection years, presidents also were more likely to take non electoral considerations into account in their policymaking (Eckstein, S. 2009).

Viewed from the vantage point of an ethnic group with money, connections, and organizational assets, plus a political agenda and votes to deliver, presidential elections provide an opportunity to influence national policy. Cuban American lobbyists and PAC contributors benefited especially from their ethnic group's demographic concentration in the largest "swing" state and their high voter turnout. They were especially effective when not challenged by more moneyed, better-organized, multistate-based business interests (Eckstein, S. 2009).

Although the aforementioned conditions were conducive to the formation of an ethnic policy cycle, the outcome was not inevitable. How presidents used their discretionary power was not predetermined, and their interventions transpired amid changing circumstances, including bilateral crises. Yet even in the face of bilateral tensions, the underlying dynamics and logic of the ethnic electoral policy cycle influenced presidential responses. President Clinton, in particular, responded to intergovernmental tensions by tightening the embargo in ways that were unrelated to the crises at hand but consonant with the wants of influential Cuban Americans well positioned to shape policy (Eckstein, S. 2009).

The influential Cuban Americans had emigrated in the first years of Castro's rule. They perceived themselves as exiles and coveted a barrier across the Florida Straits as impermeable as possible. Innocent post Soviet era émigrés, without money, organization, or votes to parlay, who wished to bond and share income across borders, paid the greatest price, under the circumstances, for the Cuban government's wrongdoing that fueled the bilateral feuds. Reversal and non-enforcement of politically driven ethnic policies in nonelection years; point to short-term election concerns that may conflict with longer-term concerns of governance (Eckstein, S. 2009).
Even if they are never enforced, however, policies initiated to win ethnic votes may alienate other key constituencies. From a state institutional vantage point, an ethnic policy cycle premised on special interests may generate undesirable consequences that prove difficult to reverse. The Cuban American experience also suggests that an ethnic policy cycle may not endure if the conditions that contributed to its formation dissipate. If the ethnic leadership, and the ethnic electorate in whose name they claim to speak, becomes divided in what they want, the bedrock for a policy cycle may shatter (Eckstein, S. 2009).

Cuban American influence remained important in the 2008 election, but that year, for the first time, U.S. Cuba policy became contested terrain; and the debate shifted from maintaining the status quo to loosening the embargo. Embargo tightening was off the political radar screen. That no presidential candidate ran as an incumbent and one contestant refused PAC money and therefore was not beholden to special ethnic interests also worked against a refueling of the ethnic policy cycle. How Obama, as President, responds to the incipient shift in ethnic dynamics remains to be seen (Eckstein, S. 2009).

Some early studies fail to find the important campaign effects, and some researchers believe this lack of effect and take it at its apparent worth. They see campaign spending as having “minimal consequences”. In reality conservative insight would suggests that money buys important political influence. According to Grier campaign contributions do not matter much when it comes to incumbents in the House elections. Sometimes the special interest groups have to pay a high price or higher campaign contributions to influence the politicians towards their side even though the voters oppose the policy. Most special interest groups oppose government regulations of private industries, and will not contribute towards leftist policy makers (Maniadis, Z. 2009)


Campaign contributions come in many different forms from diverse cultures with different agendas. Some contributions may support a particular candidate’s campaign for a first time election to a political office; others may support an incumbent candidate with a particular agenda which is supported by lobbyist of special interest groups and voters alike. Yet other forms of campaign contributions come in the form of continuing contributions toward a political party which support the agendas of special interest groups and create an impact on others issues such as environmental issues; such as like linking contributions to stock market performance. Scholars have started to examine the effect of corporate campaign contributions on the fortunes of the contributing firms. Discussions about money in politics often center on the tension between providing information corruption. Another concern is the culturally driven social issues are of which was the case of the Cuban American exiles.

In the periods from 1992 -2004 there existed policy variances in presidential elections in which, incumbent presidents who were interested in retaining office implemented policies that ethnic lobbyists supported, and in turn gained them votes. When the policies conflicted with concerns of governance; in nonelection years the presidents reversed the election-year measures or left them unenforced. In nonelection years, presidents also were more likely to take non electoral considerations into account in their policymaking.

These groups continue to contribute towards their desire elected Official because that Official is going to pass the legislature that the special interest group supports. Now with the recent Supreme Court decision not imposing any limitations or restrictions on the amount that these special interest groups can contribute, it stands to reason that the law that will be passed will be those laws that are influenced by these corporations with large pockets and not the average voter. Due to the decision of Citizens United campaign contributions from corporate entities would increase at an alarming rate and it would go practically unregulated and without restraint.

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