< From Milk Prices to SuperPACs


Friday, November 04, 2011

The path of campaign finance regulation has been long and twisted, leading all the way back to Watergate. Picture this:  The year?  1971. The place? The White House. The industry using illegal campaign money to grease the wheels? Big Milk. Here's NPR's Peter Overby:

PETER OVERBY: If you go to the Watergate tapes, you can hear Nixon meeting with the milk producers in the Cabinet Room, joshing with them. And then later that same day, there's a tape of an Oval Office meeting with Nixon and his advisors. They all agree that the milk subsidy isn’t going to be cut, it’s going to be raised.

At the end the tape, John Ehrlichman, the domestic advisor, makes a joke about, “Let’s all go get a glass of milk while it’s still cheap.” And everybody laughs.

BROOKE GLADSTONE: [LAUGHS] Very funny. But that encounter with Big Milk was a big scandal at the time, right?

PETER OVERBY: The milk producers wanted to give two million dollars to help Nixon get reelected. That was a scandal. Then, as now, direct contributions from corporations to political campaigns was illegal.

BROOKE GLADSTONE: And that led to the creation of the Federal Election Commission?

PETER OVERBY: Right. You had several laws coming through Congress as the Watergate scandal evolved. First it was disclosure by the candidate committees and the party committees, then laws that encouraged the rise of political action committees. Things stayed on an even keel for a few election cycles. And then in the late eighties you had the rise of soft money, corporate money and union money and money from rich individuals going to the party committees.

BROOKE GLADSTONE: In reaction to that, there was the great bipartisan effort known as McCain-Feingold.

PETER OVERBY: The way to look at it is the Watergate era laws set limits on the amount of money and the kind of money that could come into federal election campaigns. Soft money was a way around that. McCain-Feingold cut off the flow of soft money. As soon as McCain- Feingold became law, there were efforts to poke holes in it. And it's been gradually perforated.

BROOKE GLADSTONE: Okay, so one of the ways it was weakened, I believe, was the rise of – and I wish these things didn't all have numbers attached to them - groups called 527s. One of them famously gave rise to the term “swiftboating.” How did they work around McCain-Feingold? And do they still matter?

PETER OVERBY: The appealing thing about them was that they had no contribution limits. They could spend as much as they wanted, from any source they wanted, on mostly attack ads. And in the early days there was no disclosure. Politicians on both sides were targeted. They didn't like it. Congress passed a law forcing disclosure.

After that a lot of the outside money shifted to another type of group, the 501(c)(4) issue advocacy groups.


Wait a minute, I think I know those! Those are those tax-exempt groups that are not supposed to devote the majority of their money to political ads, right?

PETER OVERBY: To political spending, yeah. The way 501(c)(4)s are working nowadays, a lot of them, they are running attack ads during campaign season and during the off season. They’re running ads on legislation in Congress, tying it to certain incumbents or certain parties.


So the message is a partisan slash ideological message, but it's not crossing over the line of what would be considered campaign “express advocacy” messaging.

 BROOKE GLADSTONE: What I learned essentially from Stephen Colbert, is that if you create one of these entities, you can funnel that non-disclosed money into the Super PAC and all anybody needs to know is that it came from that 501(c)(4).

PETER OVERBY: Right. There are several Super PACs that have 501(c)(4)s running alongside them. American Crossroads is one. Crossroads GPS is the (c)(4) sidekick.

There's a Rick Perry Super PAC that has a 501(c)(4) connected to it. And the Super PAC that’s supporting President Obama also has a (c)(4) connected to it.

BROOKE GLADSTONE: So, again, just as the description of what constitutes campaign ads is pretty much meaningless, so, it seems, is this disclosure requirement, what with the creation of these non-disclosing sidekick organizations that can funnel money. So every restriction is basically zeroed out by a loophole practically from the outset.

PETER OVERBY: And, in fact, the coming battle over political money is whether there should be as much disclosure as there has been. There's a big push on the conservative side to limit disclosure, saying that the message is the important thing and the electorate doesn't gain anything really by knowing who's behind the message.

BROOKE GLADSTONE: Do you think when we look back, the election of 2012 will seem like the Wild West?


It seems that way now. I'm not sure that by the time we get to 2016 or 2020 it's still gonna look that way. There's a steady evolution in the judicial thinking away from anti-corruption rationale that was prevalent in the seventies and toward the ascendancy of First Amendment free speech rights. With the justices that are on the Supreme Court, it seems like the die is cast for things to continue that way for quite awhile.

BROOKE GLADSTONE: So you're talking about potentially going from the Wild Wild West to Mad Max.

PETER OVERBY: No - no comment.


Okay, Peter. Thank you very much.

PETER OVERBY: Sure, glad to do it.

BROOKE GLADSTONE: Peter Overby is – the greatest title in NPR history – NPR’s Power, Money and Influence Correspondent.


Coming up, a law that was designed to protect children is being broken - by parents.

BROOKE GLADSTONE: This is On the Media.