Reason Foundation

Reason Foundation

"Secret Money from God Knows Where"

Campaign cash and finger-pointing in the post-Citizens United era

Katherine Mangu-Ward
October 27, 2010

There’s no doubt that having cash on hand helps win elections, up to a point.

And thanks to Citizens United, there are some new ways for candidates to pull corporate and special interest cash for campaign season advertising. Which means two things: (1) Vast new pools of gettable and spendable money, and—more importantly—(2) an exciting new way to vilify your opponents.

Consider the now-famous line uttered by Democratic Majority Leader Nancy Pelosi (Calif.) at a Democratic fundraiser last week: "Everything was going great and all of a sudden secret money from God knows where—because they won’t disclose it—is pouring in." Or this one from Obama about the origins of Republican money: "You don't know. It could be the oil industry. It could even be foreign-owned corporations. You don't know because they don't have to disclose."

As it happens, Citizens United hasn’t been a major factor in determining the raw number of dollars dumped into election spending this year. Spending by outside groups is only expected to come to about 10 percent of the money spent in this cycle, and much of that spending was legal even before Citizens United.

Democrats are making a fuss over their supposed spending disadvantage in this area the way that high school girls start talking about how they have cramps right before a field hockey game—they’re looking to explain away bad performance. But Pelosi and Co. should be careful where they point that dirty money narrative, because Republican donors aren’t the only ones enjoying the new freedoms brought on by Citizens United.

Democratic donors are catching up. The biggest special interest donors on the Democratic side have long been public sector unions. While the National Education Association has dominated the Democratic donor list for years, in this cycle the American Federation of State, County and Municipal Employees (AFSCME) blew past the teachers, giving a total of $87.5 million so far, including taking out a loan to give another $2 million as the race barrels toward the finish line. That total makes AFSCME the biggest outside spender of this election cycle. And no matter what Obama and Pelosi imply, those millions aren't going to Republicans.

Unions have always spent big money on elections, including get-out-the-vote campaigns and other efforts that involve moving bodies around. But now, thanks to Citizens United, they can spend their money more freely on political advertising as well. This cycle $17 million of AFSME’s cash will go to political ads supporting Democrats.

Democrats are also getting in on some of that non-disclosed non-profit dough through the newly-created America's Families First Action Fund. In the last two weeks, the group has spent more than $5 million on 19 House races, and plans to spend twice as much again before Election Day.

Around this time of year, those kind of dollar figures get poll watchers hot and bothered, but the real question is whether we’re seeing a fundamental change in the way elections are funded. For now, while a few million at the last minute can seem like a big deal, the total of semi-secret dollar dumps made possible by Citizens United are small. And in the long term, the structural changes may actually be for the good.

One upshot of increased spending by interest groups could be a reduction in the power major parties hold over candidates. Normally, when a question of party discipline looms in the House or Senate, savvy incumbents allowed themselves to be whipped into shape, afraid of getting checkbook slapped by party bosses. According to The Washington Post, a third of all independent expenditures reported to the Federal Election Commission this year comes from the two major parties, compared to 54 percent in 2008 and 80 percent in previous cycles.

Pelosi decided to go after those obese feline Republicans and their undisclosed donors at a dinner where the price of admission was $50,000 per couple. The meal was expected to bring in about $600,000 for the Democrats. Sure, that’s the old fashioned way to do things. But it’s not clear why Obama and Pelosi are so eager to go on the record claiming that extracting fistfuls of Franklins from The Rich (capitalization in Democratic party original) at schmoozy dinners is virtuous, while taking cash from unions, pro-business groups, or other special interests that aggregate small dollar amounts from lots of little guys is vicious.

Katherine Mangu-Ward is a senior editor at Reason magazine. This column first appeared at

Katherine Mangu-Ward is Editor in Chief, Reason

Print This