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Testimony by Anu Dathan before the Illinois Campaign Finance Reform Taskforce on January 17, 2013.
Thank you for the opportunity to testify before the Illinois Campaign Finance Reform Taskforce. My name is Anu Dathan, and I’m the Program Associate with the Illinois Public Interest Research Group. Illinois PIRG is a non-profit public interest organization, and as such, we support campaign finance reform that will help level the playing field for voters and candidates by reducing the role of big money in elections.
As the first presidential campaign cycle since the Supreme Court’s Citizens United ruling, the 2012 election lived up to its hype by breaking previous records for total spending and exaggerating the electoral power of wealthy individuals and special interests.
For example, Illinois PIRG found in our recent report, Billion-Dollar Democracy, that nearly two-thirds of all outside spending in the Illinois Congressional and state legislative races came from Super PAC donors. At the federal level, the presidential candidates raised $313 million from all of their 3.7 million small donors. That amount was matched by the top 32 Super PAC donors giving an average of $9.9 million each. The fact that a handful of megadonors can match over 3.7 million average citizens giving what they can undermines the principle that every citizen should have an equal say in our democratic process.
The moneyed special interests are translating their greater electoral role into increased influence over public policy in two basic ways: First, by helping elect candidates who share their values and second, by limiting the range of acceptable policy positions which candidates may take if they want to remain competitive—effectively shaping the agenda in Springfield and in Washington. Super PACs received 86% of their funds from elite, wealthy donors and businesses last year. Allowing special interests to fund attack ads on candidates distorts our democracy in an attempt to ensure that our elected officials put powerful special interests and out-of-state interests above the common good. This is especially true in Illinois, where 89% of outside spending came from wealthy donors outside the state. New research shows that because special interests and the wealthy hold different policy priorities than does the general public, their dominance of elections actually skews public policy. Those who try to win or keep public office are caught in a never-ending arms race, forced to raise more and more money to keep up with both opposing candidates and a potential onslaught of outside spending fueled by any special interest.
Another troubling trend in 2012 is that of “dark money”. Due to a lack of disclosure requirements, we are seeing floods of money from unknown sources.
Some donors and business interests chose to hide their identities behind for-profit corporations seemingly set up for this exact purpose. In 2012, several large donations to Super PACs, including the single largest business contribution to a Super PAC, came from shell corporations that sprang up overnight, funded by unknown donors. They are corporations with no previous reputation or known business activities and from which we will likely never hear again.
Illinois PIRG’s recent report found that a full third of funds spent by outside groups on Illinois state House races came from “dark money.” So for all of the state House campaigning that Illinoisans saw that were not sponsored by a candidate or a political party, a third of the time it was not possible for viewers to determine who financed the communications intended to influence their votes. The situation is even more drastic nationally, where 58% of outside spending on the presidential race’s TV ads came from dark money.
A new Illinois PIRG and Center for Media and Democracy report, Elections Confidential, found that donations from entities identified as shell corporations accounted for nearly a fifth of all business contributions to Super PACs in the 2012 election cycle, a total of nearly $17 million.
It doesn’t have to be this way. There are various policies that would lead to a campaign finance system addressing the undue influence of unregulated outside spending in our elections and empowers average citizens.
- Amend the Constitution to clarify that the people have the right to democratically enact content-neutral limitations on campaign contributions and spending by individuals and corporations in order to promote political equality. The only complete solution to the problems presented by unlimited outside spending is to amend the U.S. Constitution to clarify that the First Amendment was never intended as a tool for corporations and the wealthy to dominate the political arena. Illinois’ legislature should join 11 other states and pass a resolution calling on Congress to send to the states such an amendment to ratify.
- Match small contributions with public resources to encourage small donor participation and provide candidates with additional clean resources. Candidates who demonstrate their ability to mobilize support in their districts should receive a public grant to kick-start their campaign, and be eligible for funds to match further small donor fundraising. This would both encourage average citizens to participate in campaigns and enable candidates without access to big-money networks to run viable campaigns for federal office. While Congress should enact this policy at the federal level, the state of Illinois should also pass matching systems to enhance elections under their jurisdictions.
- Encourage small political contributions by providing vouchers or tax credits. Encouraging millions of average-earning Illinoisans to make small contributions can help counterbalance the influence of the wealthy few. Several states provide refunds or tax credits for small political contributions, and the federal tax code did the same between 1972 and 1986. Past experience suggests that a well-designed program can motivate more small donors to participate. An ideal program would provide vouchers to citizens up front, eliminating disposable income as a factor in political giving.
- Protect the interests of shareholders whose funds may currently be used for political expenditures without their knowledge or approval. The Illinois Legislature should require for-profit corporations to obtain the approval of their shareholders before making any electoral expenditures, including contributions to other organizations that engage in political activity (such as 501(c)s and Super PACs); and require any for-profit corporation to publicly disclose any contributions to a 501(c)(4) or 501(c)(6) organization that makes an independent expenditure, funds an electioneering communication, or contributes to a Super PAC. If Congress fails to act, Illinois can pass legislation enacting these requirements in their elections.
- Expand the “electioneering communications” windows to account for the length of modern campaigns. To facilitate full disclosure of election-related activity in the modern campaign era, Illinois’ elections commission should expand the electioneering communications windows to begin 120 days before the first presidential primary and January 1st of each election year for congressional elections.
- Require Super PACs to include basic information about the tax and political committee status of their institutional donors in disclosure filings. This simple adjustment by Illinois’ elections commission would make it far easier for concerned citizens to “follow the money.”
These solutions won’t be easy to enact. But, the good news is that the Illinois public is squarely on the side of reform. And, thanks to the conspicuously undemocratic role of money in the 2012 elections there is more attention to the problems with our democracy, and energy behind fixing them, now than perhaps at any time since the aftermath of Watergate in the mid-seventies.
Now is the time to finally build a democracy in which the size of a citizen’s wallet does not determine the strength of her voice.
 Bowie Blair, Billion-Dollar Democracy, Illinois PIRG (2013)
 Bowie, Blair, Elections Confidential, Illinois PIRG (2013)
 Thomas Cmar, Towards a Small Donor Democracy: The Past and Future of Incentives for Small Political Contributions, U.S. PIRG Education Fund (2004).
 See Bruce Ackerman and Ian Ayres, Voting with Dollars: A New Paradigm for Campaign Finance (2002).
 See e.g. Citizens Actually United, available at http://www.demos.org/publication/citizens-actually-united-bi-partisan-opposition-corporate-political-spending-and-support
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