Super-Donors Lead the Way for Democrats

December 16,  2016

A hallmark of our post-Citizens United politics is that super-donors explicitly affirm their right to determine how parties and candidates act.

More than five weeks after Hillary Clinton’s defeat, Democratic politicians and operatives are still reeling from the shock. None have systematically examined why Hillary lost, and how a grotesque buffoon could have become our President. Luckily, or maybe not, the party’s donors have stepped up to the plate.

As reported yesterday in Politico,

the wealthy Democrats who helped pump over $1 billion into Clinton’s losing effort have been urging their local finance staffers, state party officials, and campaign aides to provide a more thorough explanation of what went wrong. With no dispassionate, centralized analysis of how Clinton failed so spectacularly, they insist, how can they be expected to keep contributing to the party?

On one level this is good – somebody has to do it. It is also unremarkable. Mega-donors in both parties have been asserting their influence ever more brazenly. They pay the piper so they expect to call the tune. Or as one fundraiser said about Clinton’s defeat: “A lot of people are saying, ‘I’m not putting another fucking dime in until someone tells me what just happened.’”

I don’t mean this as a criticism of politicians or of donors. Overwhelmingly, these are patriotic, well-intentioned people. They are working within the realities of a system they did not create. But is this democracy? What happened to “one-person-one-vote”? This is much more like one-person-one-million-votes.

 2016 – Year of the Super-Donor

As revealed by the Wall Street Journal, by mid-October some $370 million had been raised for super PACs in the presidential campaign. About 85% of this money was given to support Hillary Clinton. Of this $370 million, nearly three-fifths – $213 million – came from just sixty individuals. This takes the impact of big money on our politics to a new level.

In crafting strategy and making policy, politicians have had to consider the wishes of thousands of individuals who each “maxed out” their individual contribution of about $5,000 to each candidate’s campaign. They talked to their bundlers, and got some sense of what some donors were thinking. But now they hear directly from individual donors who give money not in thousands but rather in millions. Our leaders learn quite precisely what actions will please or displease their powerful patrons. Some donors are active enough – Sheldon Adelson comes most obviously to mind – to make or break a candidate.

Trump hasn’t finished choosing his cabinet and already four major donors or fundraisers have gotten the nod: Willbur Ross as Commerce Secretary, Betsy DeVos for Education, Steven Mnuchin at Treasury, and Andy Puzder as Labor Secretary. Although Trump has taken rewarding donors to a new level, the pattern is bi-partisan: Commerce Secretary Penny Pritzker was Obama’s national finance chair for the 2008 election.

Some major Democratic donors, impatient with the party, are thinking about running for office on their own account: J.B. Pritzker, for Governor of Illinois, John Morgan for Governor of Florida, and Tom Steyer for Governor of California. These are talented people with a lot to offer. But should wealth be an automatic ticket to viability as a candidate?

A Remedy: Turn Voters into Donors

No one talks much about campaign finance reform these days, and for good reasons. Republicans oppose any reform. So at least until 2018, and probably until 2020, reform is dead on arrival at the federal level.

Just as daunting, the Supreme Court’s conservative majority – soon to be resurrected by the addition of a Trump appointee – holds that money given or spent in politics is free speech, protected by the First Amendment. They’ve struck down just about every law that limits campaign cash. But there is another way.

Two Yale Law professors, Bruce Ackerman and Ian Ayres, devised a solution in their book Voting with Dollars (Yale, 2002). Simplifying their approach, it works like this. The federal government gives every registered voter a campaign cash account. Every year each voter gets, say, thirty dollars. The voters then go on line and assign their campaign cash to the parties and candidates of their choice.

This public financing mechanism, instead of limiting political speech, increases its volume and multiplies its sources. It would be a clear victory for First Amendment values. So long as no new limits are placed on private donations, even the badly politicized Roberts court would find it difficult to strike it down.

At sixty dollars per two-year cycle and 200 million registered voters, that’s $12 billion. This surpasses or nearly equals the total spending on state and federal elections in 2012. (The uncertainty comes from the lack of reliable numbers on independent spending at the state level.)

A New Campaign Issue for Democrats?

A federal law creating this mechanism will likely be impossible for the next four years. But Democratic-led states could create their own versions of it, which would be useful test cases. And Democrats could also make an issue of it in the 2018 and 2020 campaigns.

If we want to regain the ground we’ve lost during the past eight years, we need to offer the voters something more compelling than just resisting Trump, as important as that work is. Robust public financing would be real change – a big step toward restoring democracy. And if there’s one thing voters wanted above all else in 2016, it was change, including change in a political system that everyone knows is broken.