[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
CITIZENS UNITED AT 10: THE CONSEQUENCES FOR DEMOCRACY AND POTENTIAL
RESPONSES BY CONGRESS
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HEARING
BEFORE THE
SUBCOMMITTEE ON THE CONSTITUTION,
CIVIL RIGHTS, AND CIVIL JUSTICE
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 6, 2020
__________
Serial No. 116-74
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available http://judiciary.house.gov or www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
41-288 WASHINGTON : 2020
COMMITTEE ON THE JUDICIARY
JERROLD NADLER, New York, Chairman
ZOE LOFGREN, California DOUG COLLINS, Georgia,
SHEILA JACKSON LEE, Texas Ranking Member
STEVE COHEN, Tennessee F. JAMES SENSENBRENNER, Jr.,
HENRY C. ``HANK'' JOHNSON, Jr., Wisconsin
Georgia STEVE CHABOT, Ohio
THEODORE E. DEUTCH, Florida LOUIE GOHMERT, Texas
KAREN BASS, California JIM JORDAN, Ohio
CEDRIC L. RICHMOND, Louisiana KEN BUCK, Colorado
HAKEEM S. JEFFRIES, New York JOHN RATCLIFFE, Texas
DAVID N. CICILLINE, Rhode Island MARTHA ROBY, Alabama
ERIC SWALWELL, California MATT GAETZ, Florida
TED LIEU, California MIKE JOHNSON, Louisiana
JAMIE RASKIN, Maryland ANDY BIGGS, Arizona
PRAMILA JAYAPAL, Washington TOM McCLINTOCK, California
VAL BUTLER DEMINGS, Florida DEBBIE LESKO, Arizona
J. LUIS CORREA, California GUY RESCHENTHALER, Pennsylvania
MARY GAY SCANLON, Pennsylvania, BEN CLINE, Virginia
Vice-Chair KELLY ARMSTRONG, North Dakota
SYLVIA R. GARCIA, Texas W. GREGORY STEUBE, Florida
JOE NEGUSE, Colorado
LUCY McBATH, Georgia
GREG STANTON, Arizona
MADELEINE DEAN, Pennsylvania
DEBBIE MUCARSEL-POWELL, Florida
VERONICA ESCOBAR, Texas
Perry Apelbaum, Majority Staff Director & Chief Counsel
Brendan Belair, Minority Staff Director
------
SUBCOMMITTEE ON THE CONSTITUTION, CIVIL RIGHTS,
AND CIVIL LIBERTIES
STEVE COHEN, Tennessee, Chair
JAMIE RASKIN, Maryland MIKE JOHNSON, Louisiana,
ERIC SWALWELL, California Ranking Member
MARY GAY SCANLON, Pennsylvania LOUIE GOHMERT, Texas
MADELEINE DEAN, Pennsylvania JIM JORDAN, Ohio
SYLVIA R. GARCIA, Texas GUY RESCHENTHALER, Pennsylvania
VERONICA ESCOBAR, Texas BEN CLINE, Virginia
SHEILA JACKSON LEE, Texas KELLY ARMSTRONG, North Dakota
James Park, Chief Counsel
Paul Taylor, Minority Counsel
C O N T E N T S
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FEBRUARY 6, 2020
OPENING STATEMENTS
Page
The Honorable Steve Cohen, Chairman, Subcommittee on the
Constitution, Civil Rights, and Civil Liberties................ 1
The Honorable Mike Johnson, Ranking Member, Subcommittee on the
Constitution, Civil Rights, and Civil Liberties................ 4
WITNESSES
The Honorable Ted Deutch, Member of Congress
Oral Testimony............................................... 9
Prepared Testimony........................................... 34
The Honorable Pramila Jayapal, Member of Congress
Oral Testimony............................................... 39
Prepared Testimony........................................... 41
Ellen L. Weintraub, Commissioner, Federal Election Commission
Oral Testimony............................................... 45
Prepared Testimony........................................... 48
Robert Weissman, President, Public Citizen
Oral Testimony............................................... 53
Prepared Testimony........................................... 55
Bradley A. Smith, Josiah H. Blackmore II/Shirley M. Nault
Professor of Law, Capital University Law School
Oral Testimony............................................... 56
Prepared Testimony........................................... 58
Ciara Torres-Spelliscy, Professor of Law, Stetson University
College of Law
Oral Testimony............................................... 71
Prepared Testimony........................................... 73
LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING
Statement by the Honorable Jerrold Nadler, submitted by the
Honorable Steve Cohen, Chairman, Subcommittee on the
Constitution, Civil Rights, and Civil Liberties................ 6
Items for the record submitted by the Honorable Ted Deutch,
Committee on the Judiciary..................................... 10
Items for the record submitted by the Mary Gay Scanlon, Committee
on the Judiciary............................................... 92
Items for the record submitted by the Steve Cohen, Committee on
the Judiciary.................................................. 106
APPENDIX
Items for the record submitted by The Honorable Steve Cohen,
Chairman, Subcommittee on the Constitution, Civil Rights, and
Civil Liberties................................................ 112
Items for the record submitted by The Honorable Mike Johnson,
Ranking Member, Subcommittee on the Constitution, Civil Rights,
and Civil Liberties............................................ 119
Items for the record submitted by The Honorable Doug Collins,
Ranking Member, Committee on the Judiciary..................... 124
CITIZENS UNITED AT 10: THE CONSEQUENCES FOR DEMOCRACY AND POTENTIAL
RESPONSES BY CONGRESS
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THURSDAY, FEBRUARY 6, 2020
House of Representatives
Subcommittee on the Constitution, Civil Rights,
and Civil Liberties
Committee on the Judiciary
Washington, DC.
The subcommittee met, pursuant to call, at 10:06 a.m., in
Room 2141, Rayburn House Office Building, Hon. Steve Cohen
[chairman of the subcommittee] presiding.
Present: Representatives Cohen, Raskin, Swalwell, Scanlon,
Dean, Escobar, Jackson Lee, Johnson of Louisiana, Jordan,
Cline, and Armstrong.
Staff Present: David Greengrass, Senior Counsel; John Doty,
Senior Advisor; Madeline Strasser, Chief Clerk; Moh Sharma,
Member Services and Outreach Advisor; Anthony Valdez, Staff
Assistant; John Williams, Parliamentarian; Jordan Dashow,
Professional Staff Member; James Park, Chief Counsel,
Constitution Subcommittee; Will Emmons, Professional Staff
Member, Constitution Subcommittee; Matt Morgan, Counsel,
Constitution Subcommittee.
Mr. Cohen. The Committee on the Judiciary, Subcommittee on
the Constitution, Civil Rights, and Civil Liberties, will come
to order.
Without objection, the Chair is authorized to declare
recesses of the subcommittee at any time.
I welcome everyone to today's hearing, ``Citizens United at
10: Consequences for Democracy and Potential Responses by
Congress.''
I will now recognize myself for an opening statement.
Can you hear me?
Can you hear me now? [Laughter.]
Well, I am not going to talk that way. I will try to talk
closer to the microphone. Thank you.
This year marks the 10th anniversary of the Supreme Court's
deeply troubling decision in Citizens United v. Federal
Election Commission. That decision has resulted in the
corrosion of our democracy, giving a disproportionate weight to
monied interests and drowning out the voices of ordinary
Americans. Today's hearing will examine the extent of this
corrosion and explore ways to repair the damage that the flood
of dark money into our political system has wrought as a result
of that decision.
In Citizens United the Supreme Court struck down as
unconstitutional a ban on corporations and unions using their
general treasury funds to make independent expenditures
expressly advocating for the election or defeat of a candidate.
Essentially, the Court held wrongly, in my view, that this ban
on independent expenditures violated corporations' First
Amendment free speech rights.
Citizens United represented an unjustified extension of
Buckley v. Valeo, a Supreme Court decision in 1976 that had
struck down limits on independent expenditures by individuals.
In handing down its decision in Citizens United, the Supreme
Court overturned decades-old precedents that held that the
government could regulate outside spending by corporations and
unions.
The negative effect of Citizens United was immediately
apparent. The same year that the Supreme Court decided Citizens
United, the U.S. Court of Appeals for the U.S. District decided
Speechnow.org v. FEC, striking down Federal limitations on
contributions by individuals to political committees that only
made independent expenditures.
Taken together, these two decisions resulted in the rise of
the so-called super-political action committees, or Super PACs.
Because of these decisions, individuals and corporations can
make unlimited contributions to PACs dedicated only to making
independent expenditures whose donor disclosure rules are much
more opaque, allowing them to accumulate massive amounts of
dark money.
It is now 10 years later and we are seeing the negative
corrosive effects of a decade of permitting wealthy mega-donors
and corporations pouring unlimited amounts of money into our
elections. Perhaps now more than ever, many Americans believe
that their elected leaders do not care about them, that
politicians only care about raising money and the people who
fund those Super PACs that help get them elected, prioritizing
narrow interests to the money class or corporations in the
political system people feel is rigged against them. They
believe their voices will be drowned out come the election by
the megaphones bought by dark money, megaphones as if they are
speech. Example after example shows they are right.
For instance, most Americans, including most gun owners,
support universal background checks for gun purchases.
According to a 2018 Quinnipiac University poll, almost all
Americans, including 97 percent of gun owners, support
universal background checks. Despite the fact that enacting
universal background checks would be overwhelmingly popular,
the Grim Reaper, also known as Mitch McConnell, the Majority
Leader, has so far refused to take up H.R. 8, the bipartisan
Background Checks Act, which the House passed nearly a year
ago. Perhaps not surprisingly, since 2016, the National Rifle
Association has spent more than $54 million on outside spending
efforts, including $34 million raised from its dark money arm.
That is a lot of money and has a big impact on who wins
elections and influences the opinions on gun ownership.
Similarly, Americans overwhelmingly support lowering
prescription drug prices. According to the Henry J. Kaiser
Family Foundation, more than 70 percent of Americans believe
drug costs are unreasonable and that drug companies are putting
profits before people. Similarly, a study conducted by Politico
and the Harvard School of Public Health found that 92 percent
of Americans favor lowering the rates for prescription drugs as
an important health policy priority. Even President Trump
during his Show of Shows, also known as the State of the Union
address earlier this week, in a speech that could otherwise
best be described as a campaign rally masquerading as a reality
TV show, called on Congress to pass a bill to dramatically
lower drug prices. Yet for years Congress has done nothing.
Why? It probably has something to do with pharmaceutical
companies' army of lobbyists backed up by massive amounts of
dark money raised by allied Super PACs.
Sadly, I can name policy after policy area, from climate
change to Wall Street regulations meant to avert another
economic meltdown, where Americans overwhelmingly believe that
Congress should take action, yet Congress has failed to take
such action when confronted by massive and targeted outside
spending by dark money organizations.
And the people that benefit from that are the leaders of
the Senate and the leaders of the House, and generally they are
not going to favor giving up a tool that gives them more power,
particularly on the side that has the most money.
The very real danger here is that the American people,
convinced that their voices will be drowned out by mega-donors
and corporate interests, will lose faith in the enterprise of
self-government and indeed turn to demagogic and anti-
democratic forces. It is for this reason that I support a
constitutional amendment to overturn Citizens United. I am a
co-sponsor of H.J. Res. 2, the Democracy for All Amendment, and
I thank Representative Deutch for working so hard on that for
many, many years. Passing a constitutional amendment is one way
to bring the dark age of the Super PAC to a definitive close.
I also urge Leader McConnell to take up H.R. 1, the For the
People Act, which I believe Representative Sarbanes championed,
which would enact reforms that would expose dark money donors.
And I thank Representative Jayapal for all her work on this
issue as well. She has another bill that goes a little further.
Passing a constitutional amendment to overturn Citizens
United should be our ultimate goal. In the meantime, however,
Congress should take whatever action it can to stop the flow of
dark money into our elections that threatens to erode even
further the American people's faith in democratic self-
government.
I look forward to our witnesses' testimony and I thank them
all for appearing here, and all the citizens that have been
involved in this issue, and I now recognize the Ranking Member,
Mr. Johnson, for his opening statement.
Mr. Johnson of Louisiana. Thank you, Mr. Chairman, and
thank you all for being here. I know this is an issue that
concerns a lot of Americans on both sides, and it will not
surprise you that our side over here has a very different view
of the issue.
Before I get into my opening remarks, it is incumbent upon
me to remind my good chairman here that it is a violation of
House rules and decorum to refer to the Majority Leader of the
other house as the Grim Reaper. Even if he does so himself, we
can't do it here.
Mr. Cohen. I'm out of order. So ruled. [Laughter.]
Sustained. Overruled. [Laughter.]
Mr. Johnson of Louisiana. No objection.
We believe the Supreme Court's decision in Citizens United
issued a decade ago was based upon a long line of prior Supreme
Court precedents and was in accordance with our proud
constitutional history regarding the First Amendment.
As the late Justice Scalia pointed out in his concurrence
in Citizens United, the original meaning of the text of the
First Amendment clearly supports the majority's decision. This
is what he wrote: ``In 1791, as now, corporations could pursue
only the objectives set forth in their charters, but the
dissent provides no evidence that their speech in the pursuit
of those objectives should be censored. Most of the Founders'
resentment towards corporations was directed at the state-
granted monopoly privileges that individually-chartered
corporations enjoyed. Modern corporations don't have such
privileges and would probably have been favored by most of our
enterprising Founders. The individual person's right to speak
includes the right to speak in association with other
individual persons. Surely the dissent does not believe that
speech by the Republican Party or the Democratic Party can be
censored because it is not the speech of an individual
American. It is the speech of many individual Americans who
have associated in a common cause, giving the leadership of the
Party the right to speak on their behalf. The First Amendment
is written in terms of speech, not speakers. Its text offers no
foothold for excluding any category of speaker, from single
individual to partnerships of individuals to unincorporated
associations of individuals to incorporated associations of
individuals.''
This is not just a conservative's view. As you know, the
American Civil Liberties Union, which most Americans regard as
a left or far left organization today--I do--seems generally
supportive of the Citizens United decision. On its website
today you can find the following statement: ``In Citizens
United, the Supreme Court ruled that independent political
expenditures by corporations and unions are protected under the
First Amendment and not subject to restriction by the
government. Any rule that requires the government to determine
what political speech is legitimate and how much political
speech is appropriate is difficult to reconcile with the First
Amendment. Our system of free expression is built on the
premise that the people get to decide what speech they want to
hear. It is not the role of government to make that decision
for them. Unfortunately, legitimate concern over the influence
of big money in politics has led some to propose a
constitutional amendment to reverse the Citizens United
decision. The ACLU will firmly oppose any constitutional
amendment that would limit the free speech clause of the First
Amendment.''
I don't find myself in agreement with the ACLU very often,
but I think they got that one right. You see, the ACLU and
Justice Scalia appear to be on the same page, and that page is
the parchment of our First Amendment.
I suspect much of what we will hear today at this hearing
will be repetitions of the sorts of erroneous statements that
none other than President Obama made about the Citizens United
decision during his 2010 State of the Union address in which he
opined, ``The Supreme Court reversed a century of law that I
believe will open the floodgates of special interests,
including foreign corporations, to spend without limit in our
elections.''
Every clause of that sentence was incorrect. Citizens
United didn't reverse a century of law. The Tillman Act of 1907
banned corporate donations to campaigns, and such donations
remain banned. Citizens United overturned a 1990 precedent that
allowed banning independent spending by corporations, which was
itself a stark anomaly in our First Amendment law, as it was
the only time the Court had allowed a restriction on political
speech for a reason other than the need to prevent corruption.
Second, the ``floodgates of special interests'' weren't
opened. Instead, dams preventing the free flow of speech were
removed. We may not always like that speech, but that is what
the First Amendment is about. As Professor Brad Smith, whom we
will hear from today, explained recently, ``The New York Times
accused the justices in Citizens United of having paved the way
for corporations to use their vast treasuries to overwhelm
elections and thrust back to the robber baron era of the 19th
century.'' A decade later, most spending comes from the same
place it always has, and that is individuals who donate
directly to candidates up to legally limited amounts.
Corporations contribute well under 10 percent of Federal
political spending. Their voice is not dominant, and voters
have a right to hear it.
Third and finally, Citizens United said nothing about
foreign corporations spending in political campaigns. Indeed,
in 2012 the Supreme Court explicitly upheld such restrictions
in Bluman v. Federal Election Commission. Obviously, there is a
lot of misunderstanding and misinformation and even, dare I
say, fake news circulated about the Supreme Court's Citizens
United decision. But I expect at least part of today's
discussion may help us correct those misinterpretations, and I
look forward to hearing from all of our witnesses here today.
I am going to apologize in advance before I yield back. A
lot of us have multiple things going on this morning, so we may
be in and out, but it is not a reflection on our view of the
importance of this subject matter and this hearing.
I yield back. Thank you.
Mr. Cohen. Thank you, Mr. Johnson.
Now, Mr. Nadler, who is not present, gave us a statement
for the record, and we thank Chairman Nadler for his
participation in other ways.
[The information follows:]
MR. COHEN FOR THE OFFICIAL RECORD
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Mr. Cohen. Does Mr. Collins have a statement to enter? No?
We welcome our witnesses and thank them for participating.
Our first panel will be made up of members of Congress who
worked hard on this issue. I will introduce each witness, and
after the introduction I will ask them for their testimony.
Your written statement will be entered into the record in
its entirety, and you get 5 minutes, and you know the rules of
the 5 minutes and the lights.
The first witness is Representative Ted Deutch.
Representative Deutch represents the 22nd Congressional
District in the State of Florida. He is the Chairman of the
House Ethics Committee, Chairman of the House Foreign Affairs
Subcommittee on the Middle East, North Africa, and
International Terrorism, and a long-time member of this House
Judiciary Committee.
He is a co-sponsor or the prime sponsor of H.J. Res. 2, a
proposed constitutional amendment that would effectively
overturn the Citizens United decision and permit Congress and
the states to regulate campaign finance.
Mr. Deutch, you are recognized for 5 minutes.
STATEMENT OF THE HON. THEODORE E. DEUTCH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Deutch. Thank you. Before I begin my testimony, Mr.
Chairman, I ask the following documents be included in the
record: written testimony of bipartisan advocates from around
the country, including Jeff Clement, President of American
Promise; John Pudner, the Executive Director of Take Back Our
Republic; Jim Rubens, the former Republican New Hampshire state
senator; as well as business executives, farmers, educators,
health workers from Ohio, New Jersey, Michigan, California,
Tennessee, Pennsylvania, and Kansas.
Mr. Cohen. Without objection.
Mr. Deutch. Thank you.
[The information follows:]
MR. DEUTCH FOR THE OFFICIAL RECORD
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Mr. Deutch. Thank you, Chairman Cohen, Ranking Member
Johnson, and members of the subcommittee. It has been 10 years
since the Supreme Court's disastrous decision in Citizens
United, and I am here today to call for a constitutional
amendment to overturn it.
In the 5-4 majority opinion, Justice Anthony Kennedy
dismissed concerns about corruption caused by limitless
spending. He wrote, ``The appearance of influence or access
will not cause the electorate to lose faith in our democracy.''
But it has.
The decision knocked down longstanding bipartisan campaign
finance laws.
There are three primary problems that have crystallized in
the Citizens United decade. First, extreme election spending
destroys any hope of political equality in America. Second,
current disclosure and anti-coordination rules have not
prevented corruption or stopped foreign interference. And
third, very few very wealthy individuals have extraordinary
influence. Government institutions too often focus on their pet
projects rather than on the public will.
Citizens United unleashed a torrent of billions of dollars
into our elections. In the 20 years before the Citizens United
decision, $750 million of outside spending. In the 10 years
since, over $4.5 billion.
Dark money groups are not required to disclose their
donors. Their spending jumped from $129 million in the 10 years
before the decision to $1 billion since. The 10 families who
spent the most in our elections in the Citizens United decade
spent a total of $1.2 billion.
Now, to put that in perspective, it would take 6 million
Americans spending $200 each to match the spending of these 10
families. This flood of spending has distorted the agenda in
Congress, and we now know that it is sapping America's faith in
our democracy and our government.
Eighty-four percent of Americans think that special
interests come first here. Last year the House passed the For
the People Act and the Voting Rights Advancement Act, and these
bills would require disclosure and end gerrymandering and make
it easier to vote and protect voting rights. But statutory
changes alone can't fix the problems created by Citizens
United.
The Democracy for All Amendment would allow reasonable
limits on campaign spending. Americans want to get big money
out of our elections. The amendment rejects the Supreme Court's
claim that only quid pro quo bribes can corrupt politicians.
Our amendment would level the playing field. It would promote
political equality, and it would protect the integrity of our
government institutions and elections.
I want to thank the millions of advocates and hundreds of
organizations who built the movement to get money out of
politics. Twenty states and over 800 local governments are
calling for a constitutional amendment, and we wouldn't be here
today without them.
I want to thank Vice Chair Raskin, Representative McGovern,
Representative Katko, and Senators Udall and Shaheen for
joining me in introducing this bipartisan amendment. And I want
to thank the 210 co-sponsors, including Congresswoman Jayapal
and many members of this subcommittee, for their support.
And to be clear, this issue is not partisan among the
American people. In 2018, the University of Maryland reported
that 75 percent of Americans, three-quarters of all Americans,
support a constitutional amendment to allow for limits on
election spending. That includes 85 percent of Democrats, 70
percent of Independents, and two-thirds of Republicans.
We must overturn Citizens United to fulfill the ideals we
affirmed at our nation's founding. The Democracy for All
Amendment is necessary because your status in our democracy
should not depend upon your status in our economy. Whether you
work three jobs and barely get by, or you own three homes and
you barely work, the eyes of our law, the eyes of our
government, our elections, must see all Americans as equal.
This amendment will get money out of our elections. And most
importantly, it will put voters back in charge.
With that, Mr. Chairman, I appreciate the time, and I yield
back.
[The statement of Mr. Deutch follows:]
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Mr. Cohen. Thank you, Mr. Deutch. Very well timed and very
well delivered.
Ms. Jayapal is next. Representative Pramila Jayapal has
been a leader in Congress on many, many progressive issues. She
represents the 7th Congressional District of Washington State.
She is a member of the House Judiciary Committee, where she
sits on the Immigration and Antitrust Subcommittees. She is a
senior Whip for the Democratic Caucus and Co-Chair of the
Congressional Progressive Caucus and the Women's Working Group
on Immigration. She is the sponsor of H.J. Res. 48, a proposed
constitutional amendment providing that the rights protected by
the Constitution of the United States are the rights protected
of natural persons only.
Congresswoman Jayapal, you are recognized for 5 minutes.
Thank you.
STATEMENT OF THE HON. PRAMILA JAYAPAL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Ms. Jayapal. Chairman Cohen, Ranking Member Johnson, and
members of the subcommittee, thank you so much for the
opportunity to testify on my bill, House Joint Resolution 48,
the We the People Amendment.
Ten years ago, the Supreme Court issued its 5-4 landmark
ruling in Citizens United v. Federal Elections Commission. The
implications of Citizens United reach far beyond electoral
politics and political donations. It has had a profound impact
on our elections, our policymaking, and our daily lives.
And that is why I am proud to sponsor H.J. Res. 48, the We
The People Amendment, a comprehensive solution to the Citizens
United decision. Corporations and the few ultra-rich have
hijacked our elections for far too long. The We The People
Amendment would put power back to everyday people by ending
corporate personhood and clarifying that money does not equal
free speech.
Citizens United established political spending as protected
speech under the First Amendment of the Constitution and
further prevented the government from limiting corporations and
other entities from spending money on candidates in elections.
This established a dangerous precedent of corporate personhood
that the We the People Amendment reverses by specifying that
the rights provided by the Constitution are for real people,
individuals, not corporations.
The Supreme Court's decision empowered the Federal
Elections Commission to allow outside groups to accept
unlimited political donations, giving corporations and the
ultra-rich unrestricted power in elections. This created an
enormous imbalance in power in which the average American's
ability to influence elected officials is dwarfed by large
corporations.
As we in Congress grapple with critical issues such as
climate change, immigration, and an inequitable health care
system, we must recognize the power that those with financial
stakes in these industries such as the oil and gas, private
prison, and insurance companies exert in our elections.
The We the People Amendment would regulate political
donations and mandate public disclosure to ensure transparency
and public accountability.
Yet, the impact of Citizens United is not limited to the
role of money in politics. The freedom of expression granted to
corporations in Citizens United led to the decision in Hobby
Lobby v. Sebelius. The Court granted a corporation the ability
to opt out of provisions of the Affordable Care Act in order to
deny basic health care to women employees on the basis that a
corporation has religious liberty. It puts corporate rights
over a woman's right to make decisions about her own body, and
it is one more reason why we must limit corporate personhood
beyond elections.
Research has found, as my colleague Mr. Deutch said, that
77 percent of Americans believe that there should be limits on
the amount that both individuals and groups can spend on
campaigns. The time has come for Congress to intervene. I am a
proud co-sponsor of H.R. 1, the For the People Act, and of
Congressman Deutch's Democracy for All Amendment. I believe
that Congress and the states must do the important work of
regulating campaign contributions and distinguishing between
people and corporations when creating campaign finance
legislation.
The We the People Amendment goes further, to end corporate
constitutional rights and ensure that our democracy is really
of the people, by the people, and for the people. I believe our
democratic values are worth more than what corporations can
pay. In the Citizens United dissenting opinion Justice Stevens
wrote, ``corporations have no consciences, no beliefs, no
feelings, no thoughts, no desires. Corporations help structure
and facilitate the activities of human beings, to be sure, and
their `personhood' often serves as useful legal fiction. But
they are not themselves members of `We the People' by whom and
for whom our Constitution was established.''
As members of Congress, we are here to serve the people,
not to serve corporations. We are here to ensure that our
democracy is sustained by We the People, and that we in
Congress, the elected members, elected by our constituents,
must listen only to We the People.
I look forward to working with my colleagues on this
committee to reverse the harmful impacts of Citizens United and
advance the goals set forth in this amendment, and I thank the
movement around the country that has forced us to take on this
issue.
I yield back.
[The statement of Ms. Jayapal follows:]
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Mr. Cohen. Thank you, Ms. Jayapal, for your representation
and your testimony.
I thank the first panel for their testimony and their work,
and dismiss them and call up our second panel of witnesses.
Can those of you in the back hear me any better, or is it
still a problem? Good. Thank you.
Normally I do not have the witnesses sworn in or affirmed,
because I think that we shouldn't put people in that particular
position, and it is against the law, Section 1001 of Title 18
of the U.S. Code, to testify before Congress in an untruthful
manner which could subject you to penalties and fines. I think
that is sufficient.
Mr. Johnson, who unfortunately is not with us now, is a
firm proponent of having the oath administered, and I had
thought that people would always tell the truth knowing that
they are subject to fine or imprisonment, or at least fine, to
lie to Congress.
But yesterday Mitt Romney, what was an historic day in
Congress, showed me that at least one person, at least one
person, because they swore their oath to God, it made a
difference. So in honor of Mitt Romney and showing that one
person truly does have concern about not giving false witness
because they swore an oath to God, I am going to ask the
witnesses to stand and be sworn in.
Do you swear or affirm under penalty of perjury that the
testimony you are about to give is true and correct to the best
of your knowledge, information, and belief, so help you God?
Thank you.
Let the record show the witnesses have answered in the
affirmative.
Our first witness is Ellen Weintraub. Ms. Weintraub is the
Commissioner of the Federal Election Commission, a position she
has held since 2002. She served as Chair of the FEC on three
different occasions, most recently in 2019. She briefly served
as Counsel to the House Ethics Committee.
Commissioner Weintraub received her J.D. from Harvard Law
School and her B.A. from Yale.
Ms. Weintraub, you are recognized for 5 minutes. You know
about the 5 minutes, the red light, the green light.
You are recognized.
TESTIMONIES OF ELLEN WEINTRAUB, COMMISSIONER, FEDERAL ELECTION
COMMISSION; ROBERT WEISSMAN, PRESIDENT, PUBLIC CITIZEN; BRADLEY
SMITH, JOSIAH H. BLACKMORE II/SHIRLEY M. NAULT PROFESSOR OF
LAW, CAPITAL UNIVERSITY LAW SCHOOL; CIARA TORRES-SPELLISCY,
PROFESSOR OF LAW, STETSON UNIVERSITY COLLEGE OF LAW
TESTIMONY OF ELLEN WEINTRAUB
Ms. Weintraub. Chair Cohen, Ranking Member Johnson, and
members of the subcommittee, thank you for inviting me to
testify today. It is a pleasure to be part of such a
distinguished panel, and a particular pleasure for me to appear
with my old friend and former colleague, Brad Smith. I
compliment the minority on selecting such an esteemed panelist.
In the decade since Citizens United, according to the
Center for Responsive Politics, we have seen $1.2 billion given
to candidates, parties, and outside spending groups from just
the top 10 contributors. We have not seen who is behind the
nearly $1 billion that has been spent by dark money groups that
keep their donors secret. And there has been $4.5 billion in
non-party outside spending, 12 times as much per year as in the
20 years before Citizens United.
This spending flocks to the most competitive races, where
it has the biggest impact, especially where control of a
chamber is up for grabs. From 2000 to 2006, pre-Citizens
United, not surprisingly, candidate spending exceeded outside
spending in the top 10 most expensive Senate races in every
single race. But by 2014, after Citizens United, outside
spending topped candidate spending in seven of those top 10
races. And in those races, the outside groups spent an average
of 80 percent more than the candidates.
But even in the face of Citizens United, there are steps
that Congress can take right now to reduce the risk of
corruption, to address important issues like coordination,
coercion, disclosure, and foreign national spending. Some of
these solutions are well-known to members of this subcommittee:
H.R. 1, which passed the House in 2019, contained many useful
reform proposals, requiring better disclosure of large donors
to political committees; clarifying that the foreign national
political spending ban applies to ballot issues; creating a
small-dollar matching public financing program; creating a
Democracy Vouchers pilot program; reforming the financing of
inaugural committees; requiring shell companies to disclose
their beneficial owners; extending electioneering
communications disclosure requirements to online ads; and
requiring a public file of online political ads.
One reform that would aid in the important effort to
exclude foreign money from our system was in an earlier version
of H.R. 1. That provision would have required corporations that
are spending in politics to certify that they are complying
with the foreign national political spending ban. I urge you to
restore it if the bill is introduced in a future Congress.
The Supreme Court, in upholding contribution limits in
Buckley v. Valeo, recognized ``the reality or appearance of
corruption inherent in a system permitting unlimited financial
contributions, even when the identities of the contributors and
the amounts of their contributions are fully disclosed.'' But
contribution limits have been undermined by joint fundraising
committees that collect upwards of half-a-million dollars per
donor; by so-called cromnibus accounts, which allow
contributors to give to the national party committees more than
$1.5 million per person per election cycle; and by outdated
coordination standards that cannot bear the weight that Super
PACs have placed on them.
Super PACs are premised on the fiction that they are
entirely independent of candidates, and therefore the money
raised by Super PACs supposedly cannot corrupt those
candidates. In reality, candidates appear as special guests at
fundraisers for the so-called ``independent'' Super PACs
supporting them.
Super PACs are established by close family or current or
former staff of the candidate. Candidates publicly announce
which Super PACs they favor and encourage people to support it.
Candidates post videos of themselves for the apparent purpose
of inviting Super PACs to use it in ads.
Congress should adopt new law making crystal clear that if
we are going to have independent spending groups, they must be
truly independent of the candidates.
In empowering corporations, Citizens United created
opportunities for unscrupulous employers to pressure their
employees to engage in political activity on behalf of
management's favorite candidates. Congress should adopt new
laws to protect employees from political coercion.
The proliferation of Super PACs in the post-Citizens United
era has also given rise to new opportunities for con artists.
Scam PACs have become an increasing problem that calls out for
strengthening the anti-fraud provisions.
The chief concern when Citizens United unleashed corporate
political spending was that Fortune 1000 companies would use
their enormous financial might to dominate political discourse.
That has not been the biggest impact. Instead, it is the
billionaire mega-donors whose role has been super-charged in
the Super PAC era. The top 1 percent of Super PAC donors
accounted for an astonishing 96 percent of funding to these
groups in 2018. No statute, no regulation, no FEC advisory
opinion can touch this problem. Only a judicial or
constitutional reversal of Citizens United can get at the root
of it.
And while I know this is not within the House's purview,
the FEC could really use some new commissioners to restore our
quorum and let us do our job. So, tell your friends.
Again, thank you for inviting me here today, and I look
forward to your questions.
[The statement of Ms. Weintraub follows:]
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Mr. Cohen. You are welcome. And thank you, Ms. Weintraub,
for your testimony.
Our second witness is Mr. Robert Weissman. Mr. Weissman is
President of Public Citizen. He is an expert on corporate and
government accountability, including the effect of money in
politics. Prior to joining Public Citizen, he worked as
Director of the Corporate Accountability Organization of
Central Action from 1995 to 2009. From 1989 to 2009, he was
Editor of Multinational Monitor, a magazine that tracks
multinational corporations.
Mr. Weissman received his J.D. from Harvard magna cum
laude. He is recognized now for 5 minutes.
Where did you get your undergraduate degree?
Mr. Weissman. Harvard.
Mr. Cohen. You had a long lease.
TESTIMONY OF ROBERT WEISSMAN
Mr. Weissman. Thank you very much, Chairman Cohen and
members of the committee.
Citizens United is the emblematic decision of the new
Gilded Age in which we live. It represents, it ratifies, and it
worsens the extreme wealth and income inequality that defines
our current societal situation. It has empowered a very tiny
number of people to have a disproportionate, a wildly
disproportionate influence over who runs for office, who wins
elections, what candidates say, what candidates don't say, and
what officeholders do, what officeholders are even permitted to
say and to be taken seriously when in office.
When I say a small number of people, I mean a very small
number of people. Twenty-five individuals are responsible for
half of all Super PAC contributions made since the Citizens
United decision was handed down, 25 individuals; .01 percent of
donors, .01 percent of donors, are responsible for roughly 40
percent of all campaign contributions now.
There is, of course, an important race component of this as
well, given the tracking of race and wealth in our country.
Almost all the top 100 Super PAC donors are white. Our analysis
shows the majority of white zip codes contribute 20 times the
amount to campaigns as majority minority zip codes do. It is
not an abstract issue. It is a deeply-felt issue. It touches
every single issue this Congress and our administration
undertake.
To take one example, as mentioned by Representative Deutch,
the American people overwhelmingly want action on drug pricing.
President Trump himself just called for action on drug pricing.
Ninety percent of people want aggressive action to deal with
drug pricing. They have wanted it for a long time. It hasn't
happened. It is no mystery why. It is due to the
disproportionate political influence of Big Pharma.
To take another example, we face an existential crisis for
humanity in catastrophic climate change. This Congress has been
unable to do anything about it. Why? This traces directly back
to the political power of the dirty energy industries.
This is true for issue after issue, whether Wall Street
reform or food safety or living wage or commonsense gun safety,
expanded Social Security, protecting consumer privacy,
proposing appropriate corporate taxes, dealing with Pentagon
spending, protecting clean water. Almost anything you name is
touched by this issue, and it traces back to the
disproportionate influence of big money in our elections where
the agenda that the American people want overwhelmingly is not
furthered by this Congress because of the political power of
these large entities.
It doesn't have to be so. Citizens United is rooted in a
series of very significant flaws both in constitutional terms,
historic terms, and commonsense terms. It is not just Citizens
United, it is the entirety of modern campaign finance
jurisprudence.
Citizens United itself famously rests on the illogical
assertion that corporations have the same rights to influence
election outcomes as do human beings. There are a series of
other flawed notions that underlay the decision as well,
including that spending on advertising should be given the same
rights of political speech as speech itself. It required the
Supreme Court to contort itself to come up with a very narrow
conception of what amounts to corruption, nothing other than
bribery effectively, yet they even understood how quid-pro-quo
corruption itself would work. They adopted a needlessly cramped
understanding of what corruption is, excluding concerns about
excessive influence and access. And they ignored, most
importantly, the systemic effects of their decision in modern
campaign finance jurisprudence to empower the super-rich and
distort the political system and deny the political equality
that is at the core of what American democracy is all about.
Polling shows that Americans are furious at the state of
affairs. They are outraged by what they perceive to be
widespread corruption, and they overwhelmingly support
fundamental campaign finance reform. Indeed, democratic
legitimacy itself is at stake. Democratic legitimacy itself is
at stake.
The Congress in the face of this must take action. H.R. 1
is a vitally important step. This House has passed it. The
Senate should get on with the business of doing the same thing.
But H.R. 1 is not enough. It cannot deal with the problem of
outside spending. It cannot deal with the problem of self-
financing. And the current trend of Supreme Court jurisprudence
suggests that even elements of H.R. 1 itself might be
threatened in the future by an endlessly creative Supreme Court
majority.
There is overwhelming support for a constitutional
amendment among the American people to overturn Citizens United
and related decisions. It is not supported among Democrats
only. As Representative Deutch said, it crosses party lines. It
is felt throughout the country. It is overwhelming. It is
reflected in 20 states that have passed resolutions calling for
a constitutional amendment, more than 800 cities and towns that
have called for a constitutional amendment. I can't strongly
enough urge this Congress now to take action to pass H.J. Res.
2 and send it to the states for ratification to restore our
democracy.
Thank you very much.
[The statement of Mr. Weissman follows:]
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Mr. Cohen. Thank you, Mr. Weissman.
Our next witness is Mr. Bradley Smith. Rarely is a witness
thanked for coming and complimented by the other side, so you
are special.
Bradley Smith holds the Josiah H. Blackmore II/Shirley M.
Nault Professor of Law position at Capital University Law
School. He is one of the nation's leading authorities on
election law and campaign finance, and co-author of ``Voting
Rights and Election Law,'' a leading casebook in the field. He
previously served for five years as a member of the FEC and
Chair of the Commission in 2004.
He received his J.D. cum laude from Harvard Law School.
Do any of you ever get accepted at another school?
[Laughter.]
And his B.A. from Kalamazoo College.
Professor, you are recognized.
TESTIMONY OF BRADLEY SMITH
Mr. Smith. Thank you, Mr. Chairman and members of the
committee.
I guess I would begin simply by saying that repeatedly
calling a decision a disaster doesn't really make it so, and we
haven't really heard much evidence that actually ties the idea
that people can't enact their preferences to anything that has
come about from Citizens United.
In fact, Citizens United has had a number of beneficial
effects on American society. We were told that it would lead to
an oligarchy, an entrenched group of people who would strangle
American democracy. And yet instead, in the years since
Citizens United, politics in America has been more fluid.
Congressional incumbent reelection rates have declined. That
may not be good news for all of you, but it cuts against
certainly the argument that has been made against Citizens
United.
We have seen that either Congress or the presidency has
changed hands in four of the five election cycles since
Citizens United. There are more newcomers in Congress by about
40 percent each time around. That may be good news for some of
you who are among those newcomers.
Outsiders such as the President himself, such as at least a
contender to the President in the general election, Senator
Sanders, people such as Representative Ocasio-Cortez or former
Representative Braut have been complete outsiders who have
dramatically shaken up the system and defeated entrenched
insiders, typically by spending far less money.
We find that the trend of more women being elected to
office has continued, and there are other things that are just
kind of interesting. For example, the rate of spending increase
in American politics has actually declined considerably since
Citizens United. I don't think that is because of Citizens
United, but it certainly cuts against the notion that this is
some disaster leading to this massive explosion in spending. It
is just not really so.
We find that most money in politics, dramatically so, still
comes from individuals in amounts limited under the law. The
vast majority still comes in limited individual contributions.
But corporate contributions, which make up at most--I don't
know how we want to calculate it and what we do with this small
percentage of money, about 2 or 3 percent that is so-called
``dark money,'' how much we think that might be corporate
money. If we take the worst case, so to speak, the highest case
scenario, we are talking about 5 percent of spending, maybe 6
percent coming from for-profit corporations. That is hardly
drowning anybody out. And, in fact, it is a good thing. The
American people have a right to hear those voices, they should
hear those voices, and polling data shows that they actually
want to hear those voices and believe that business has a right
to comment on issues of concern.
Finally, it is important to remember what the case was all
about. It was the position of the United States Government that
it could censor a book or a movie if that book or movie was at
any stage produced or distributed with corporate funds, like
every other book or movie you have ever bought on Amazon or in
a book store or seen in a theater or seen on cable or streaming
television. That was the position of the government, that you
could censor this. In that respect, the position that four
members of the Supreme Court actually endorsed that is the
truly radical view that we saw in Citizens United.
We have heard a lot in both the opening panel and from my
colleagues here about all these policy initiatives that have
been blocked, and it is curious to me that they all happen to
be policy preferences of the American political left. There is
nothing wrong with the political left having policy
preferences, but the idea that you are not able to enact your
policy preferences unless you can kneecap people who oppose
those is hardly something that the First Amendment endorses.
Indeed, that is why we have a First Amendment, so you can't
kneecap your opponents in order to shut them up so that you can
pass whatever policies you want.
I find it interesting. We had the NRA used as an example.
The NRA has 3 to 5 million members. These are U.S. citizens,
people who are out there, and they care intensely about these
issues. They talk to their neighbors and they work on these
issues, and that is why these things sometimes don't come
through.
I remind you, it is not impossible to pass legislation.
Medicare, Social Security, the Voting Rights Act, the Civil
Rights Act, these things all passed when contributions even
from individuals were unlimited and almost never reported
because there was no enforcement mechanism even on reporting.
So I think when we look at things more rationally, we see
that while the American people certainly don't like Citizens
United when they are asked specific questions like ``Do you
think corporations should be able to speak in elections?'',
when we ask ``Do you think Citizens United should have been
able to show its movie?'', we find that majorities, in some
cases substantial majorities, do, in fact, favor those
positions.
So again, I would say Citizens United has been good for the
United States, but mostly it is really good for the First
Amendment precisely because it does what the First Amendment is
supposed to do. It is a check.
Thank you.
[The statement of Mr. Smith follows:]
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Mr. Cohen. Thank you, sir.
Finally, our last witness is Ms. Ciara Spelliscy. She is a
Professor of Law at Stetson College of Law in Florida. She
teaches election law, corporate governance, business entities,
and constitutional law. Prior to joining Stetson's faculty she
was Counsel to the Democracy Program at the Brennan Center for
Justice at NYU School of Law, where she provided guidance on
the issue of money in politics. She was a staffer for Richard
Durbin up here on the Hill.
She received her J.D. from Columbia University and her A.B.
from Harvard.
Professor, you are recognized for 5 minutes.
TESTIMONY OF CIARA TORRES-SPELLISCY
Ms. Torres-Spelliscy. Thank you. Good morning. My name is
Ciara Torres-Spelliscy. I live in a swing district in the swing
state of Florida. My law students are Republicans, Democrats,
and Independents, and I am here to tell you that American
voters are worried about the state of our elections after the
attacks on our democracy in 2016.
What American voters see from Congress and from the Federal
Election Commission is not reassuring. It looks like they
cannot get out of their own way to protect the integrity of
American elections. This was true before 2016, but after 2016
it is nothing short of excruciating to watch Congress and the
FEC not act in the face of eager enemies.
Now without a quorum, the FEC is more powerless than ever
at a time when the 2020 election already has candidate debates,
large-scale rallies, primary votes, and big political
fundraising to the tune of over $2 billion already.
Nearly a decade ago, I told Congress right after Citizens
United that I could predict two problems with inviting
corporate money into our democracy: a lack of shareholder
consent, and a lack of transparency. And I wish my prediction
had not come true, but it did.
Today I will focus on the lack of transparency, which is
better known as the dark money problem. Dark money has
blanketed our elections since 2008. To date, over a billion
dollars in dark money has been spent in Federal elections
alone. With dark money you can see the public dance, but you
can't see the puppeteer. And after the 2016 election, Americans
really deserve to know whether any of those puppeteers were
foreign nationals or foreign governments.
As I note in my book, Political Brands, we know from the
redacted Mueller Report, as well as indictments of Russians by
the Special Counsel's Office, that Russians were trying to
influence the 2016 election, including by purchasing political
ads on Facebook with rubles. In nearly any other area of the
law, what happens with dark money would be akin to money
laundering. But in election law, most dark money is actually
legal.
The FEC is the primary regulator with the ability to stop
dark money, and instead they have basically done nothing. The
FEC could have started rulemakings to end dark money even
before Citizens United, because the problem appeared before
2010. The typical way that dark money is created is by spending
through an opaque non-profit, like a 501(c)(4) or a 501(c)(6),
and the porous rules at the FEC have allowed donors to remain
anonymous. The only change that has come was at the order of a
Federal court in CREW v. FEC.
One thing American voters still do not know is whether dark
money is hiding illegal foreign money. And because the FEC has
largely been stuck in deadlocks, even investigations or
punishment for foreign spending has largely been lacking.
As I discussed in my first book, Corporate Citizen, in a
particularly colorful episode, a foreign pornographer spent in
a Los Angeles election in 2012. This spending violated
longstanding bans on foreign money in American elections,
whether they are Federal, state, or local. But the FEC would
not enforce the law against the foreign pornographer. If the
FEC is not going to stand up to a foreign pornographer, it begs
the question who would they stand up against?
This general lack of enforcement against foreign spending
has sent a terrible message to anyone who was paying attention.
The message is that campaign finance laws are basically not
being enforced at the Federal level by the FEC, and as American
voters face 2020, the Department of Justice is the only cop
left on the beat. But DOJ can only enforce willful and
egregious violations of law. This leaves a vast wasteland of
unenforced campaign finance laws where cheating and corner-
cutting is all but invited.
And this happens as American voters are asked to choose the
next president, all of the members of the House, a third of the
Senate, 11 governors, and 45 state legislatures.
Given the experience of 2016 with Russians breaking
American election laws with abandon, the lesson for North
Korea, China, Iran, or any other hostile nation is that
interference in our elections can be done with little
consequence.
So the FEC needs a full complement of commissioners so that
they can at least act. And if you are serious about reform, you
need to add an additional seat to the FEC so that, like every
other Federal agency, they have an odd number of commissioners
so that they can enforce the law instead of ending in a
deadlock.
And you can improve disclosure by either changing election
laws or changing securities laws, or possibly both. And, of
course, you could expand what Congress can constitutionally
regulate if the Constitution is amended to address Citizens
United and other campaign finance cases like Buckley.
But in our constitutional system, the fate of the nation is
in your hands. Thank you.
[The statement of Ms. Torres-Spelliscy follows:]
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Mr. Cohen. Thank you very much.
We will now have a round of questioning by the members of
the committee, and I will start with myself. We have 5 minutes
as well.
Mr. Weissman, you have a lot of history in corporate
involvement. Give me a little primer on corporations and their
involvement in politics and their ability to spend money. Have
they always been able to spend money in politics? Is it unique
to America? Do different countries allow them to spend money in
politics? And what is the growth or diminution of that?
Mr. Weissman. I think that the statement that was correctly
read from Justice Scalia in his decision that the original text
permits corporations to spend, the original text of the First
Amendment permits corporations to spend money, is inaccurate. I
think Justice Stevens gave a much richer and more correct
reading. The Framers never intended corporations to spend
money, and there are a lot of reasons to think that they
explicitly did not want them to. Justice Scalia's only
argument, really, is the lack of evidence, not that there was
affirmative evidence to enable corporations to spend money.
As you do know, we do have a history of corporations
spending money. It varies by state. In the original Gilded Age,
we had corporations and the robber barons overwhelming
elections and really running as party bosses. There were
reforms put in place to curb that activity, and those reforms
worked relatively effectively throughout much of the 20th
century.
Corporate spending itself really had not been given--there
had been a series of restrictions on corporate spending, and
the Supreme Court itself in an important decision, Austin, had
recognized that the unique nature of corporations, their unique
ability to gather enormous sums meant it made a lot of sense
for the Congress or localities and states to have the ability
to restrict corporate outside spending. That was thrown to the
wind in Citizens United.
Mr. Smith is correct, we have not seen the torrents that
were anticipated. We calculate that about half-a-billion
dollars have been spent by corporations since the Citizens
United decision was handed down, not a small amount, much of it
in really significant ways in local and state elections, as
well as in referenda. We see corporations increasingly exerting
an overwhelming effect with great harm. That is probably more
than I can do right now to give you a cross-cultural story
about it.
But Citizens United really was a break from precedent, both
historic jurisprudential precedent, but also from the previous
100 years of American experience.
Mr. Cohen. You expressed how much money has been put into
campaigns through these Super PACs since Citizens United, the
$7 billion figure I think George mentioned as distinguished
from the $700 billion figure, whatever, the previous 20 years.
Is there any data you have to show if that has affected
Americans' belief that their government is not responsible to
them?
Mr. Weissman. In my written testimony I have extensive
information, and the polling on this is really overwhelming,
about Americans' deep concern with corruption. Asked by one
pollster to rate 22 different attributes of American life, the
campaign spending system comes in last. Only 20 percent of
people are satisfied in that poll with the current campaign
system. That actually is a pretty high number compared to other
pollsters.
The New York Times found that with near unanimity--their
quote--Americans want to replace the current finance system.
The only dispute among Americans they found was whether they
believe that the current system needs fundamental change or
should be completely rebuilt. It is hard to know which one is
the more fundamental thing they are trying to get at.
But we also see very deep concerns about corruption
generally and dissatisfaction with American government, and
really I think a fear that calls into question whether the
government works for them. They are not wrong being skeptical
about that.
Mr. Cohen. Let me ask you, because I only have a little
time left. You said there are 25 top individuals. Can you give
me the top 10 names?
Mr. Weissman. Well, the two top names now are Sheldon
Adelson and Michael Bloomberg. The top 10 I can't give you off
the top of my head.
Mr. Cohen. Thank you.
Ms. Jayapal's bill is different from Mr. Deutch's. Mr.
Deutch's strictly deals with campaign finance, and hers deals
with other issues. I can see a theory that corporations--I hate
to say it because I don't even like the word anymore, but a
Dershowitz theory that if it is good for the corporation and it
is good for the stockholders, then they have a duty to see that
the business goes further and whatever, putting money into
politics that might affect their businesses. But how can you
say that a corporation can express a religious opinion, like in
Hobby Lobby? Is there any basis to think that a corporation
should have a right? They are formed partially so they don't
have to be responsible for liability, immune from liability.
Why should they be able to have a right on what insurance
covers?
Mr. Weissman. Well, I agree and support Representative
Jayapal's bill. It seems extraordinary to me. But to be clear,
that was what the Supreme Court held in Citizens United as
well. If you read the majority's decision, there is a lot of
concern about discriminated-against minorities not having the
right to express their feelings, hopes, and aspirations. The
discriminated-against minorities they are discussing in the
majority decision are corporations. That is the people they
thought were being discriminated against in not having the
ability to express what they feel.
As you say, they don't have feelings, as Justice Stevens
expressed in great detail. They don't have feelings, they don't
hurt, they don't care about the future, they care about profit.
That was lost entirely in the Supreme Court's decision there,
and as well as in the Hobby Lobby case and others.
Mr. Cohen. Thank you, sir.
Mr. Armstrong is sitting in as ranking member, and I will
recognize Mr. Armstrong now for 5 minutes.
Mr. Armstrong. Thank you, Mr. Chair.
Corporations in my town sponsor baseball fields, youth
teams, charities, other things. I am incredibly proud of the
corporate citizens that exist, and without them we would not
have a lot of the services that exist in my local community,
and I think that is very accurate with small towns all across
the country.
Professor Smith, Citizens United not only allowed
corporations to spend, but unions too. Is that correct?
Mr. Smith. Yes.
Mr. Armstrong. And did the AFL-CIO file a brief in the
lawsuit?
Mr. Smith. Yes, it did.
Mr. Armstrong. It has been suggested by Commissioner
Weintraub that the existence of any foreign shareholder in a
corporation--the one-drop rule--should prohibit that
corporation from making political expenditures. How would that
affect unions?
Mr. Smith. Well, there has been a certain effort to whip
up--I will be very blunt here--I think a kind of shameful
effort to whip up hysteria against this idea that foreigners
are coming in to influence our elections. But it is worth
noting that the AFL-CIO, for example, has at least two dozen
affiliates that have the term ``international'' right in their
name, plus many other affiliates that take international
members as well, and those all pay dues to the AFL-CIO. AFSCME
has Canadian affiliates and so on. So, yes, to adopt that kind
of extreme position would essentially shut labor unions out of
political discussion as well.
Mr. Armstrong. Do you know how many?
Mr. Smith. How many members?
Mr. Armstrong. How many unions?
Mr. Smith. I don't know the total. Again, AFSCME has at
least 24 affiliates, at least two dozen affiliates. I remember
calculating it a few years back. It was like 29 or 30 that just
had the term ``international'' in the name. In terms of the
number who have international members, it could be larger.
Mr. Armstrong. Thank you.
Do Super PACs disclose their donors?
Mr. Smith. Super PACs do disclose their donors, the same as
any other PAC that has any contributor in it who contributes in
the aggregate over $200 is disclosed.
Mr. Armstrong. And did Citizens United change any
disclosure laws?
Mr. Smith. No, it did not. Those laws were upheld, in fact.
Some of those laws were challenged and they were upheld in the
decision.
Mr. Armstrong. I will go to my next question. You say in
your prepared testimony that dark money is typically around 3.5
percent of total spending. How do we know that if it is not
disclosed?
Mr. Smith. Sure, that is a good question. You know, we keep
hearing these huge numbers thrown out. ``Oh, it has been $100
billion or $1 billion,'' or whatever. That sounds like a lot.
But if we think about it, it is 2.5 or 3 or 3.5 percent. That
doesn't sound quite so threatening. And we know that sometimes
people say, well, we don't know how much there is because it is
``dark.'' But, in fact, we do, because spenders have to report
all that they spend. So we can look at the total amounts that
are spent. All that dark money means is that an organization
doesn't have to report the names of each and every donor to
that organization.
So even if we assumed all of that were dark money, and some
of it is not--many of these spenders do disclose donors--we get
up to that small figure that has been consistently under 5
percent. And we also find that many of those spenders, by the
way, are very well known to the public. For example, leading
dark money groups include groups like the Environmental Defense
Fund, Planned Parenthood Action Fund, NAACP Action Fund, the
U.S. Chamber of Commerce, the National Association of Realtors.
I just don't think that most Americans are sitting around
going, ``The National Association of Realtors, what are they
about?'' I think most Americans understand the points of view
that are being represented in those cases.
Mr. Armstrong. After Citizens United, are there still
constitutional limits on what disclosures can be mandated?
Mr. Smith. There are. Citizens United did uphold existing
law, but too many people have suggested that gives a green
light to any kind of disclosure. In Buckley v. Valeo, the
landmark campaign finance case, and also in numerous other
cases over the years, McIntyre v. Ohio Election Commission, in
cases outside of the direct political arena such as Thomas v.
Collins, the Supreme Court has limited the ability of the
government to force disclosure of memberships as something that
infringes of First Amendment rights of association, petition,
and speech.
Mr. Armstrong. Where does the majority of speech about
candidate spending on campaign ads come from, both before and
after Citizens United?
Mr. Smith. The vast majority, as I indicated in my opening
comments, does indeed come from individual contributions to
campaigns, and also to PACs. Some people seem to think that
PACs are corporate money, but they are also individual
contributions. It is better to say that a corporation sponsors
a PAC into which employee shareholders can contribute. But
again, that is individual money and not money from the
corporate treasury.
Mr. Armstrong. And what role do you think Citizens United
plays in the trend of billionaire candidates like President
Trump in the last election, and in this one Michael Bloomberg
and Tom Steyer, self-funding candidates in expensive campaigns?
Mr. Smith. Well, one thing is that, of course, that was
authorized. Individuals prior to Citizens United, individuals
had the right to spend as much as they wanted. So that really
didn't change by Citizens United. Given the short time, I would
just say that I think we can see that it hasn't really worked.
I mean, Mr. Steyer spent a great deal of money and doesn't have
very much to show for it. You still have to have a winning
message, and all that money does is let the American people
hear, and that is a good thing. The American people have a
right to hear. But it doesn't cause them in some way to vote.
Mr. Armstrong. With that, I will be interested to see if
Mr. Bloomberg is still second now that he is actually running
for president. That will be interesting to follow.
Thank you, Mr. Chair.
Mr. Cohen. Thank you, sir.
Mr. Raskin, you are recognized for 5 minutes.
Mr. Raskin. Mr. Chairman, thank you.
Welcome to all of our distinguished witnesses today, and
all of the natural persons who have come to participate in
today's proceeding.
The first thing that I want to point out is that Citizens
United did not enlarge the free speech rights of any citizen in
the United States, not even CEOs or corporate executives who
could spend already whatever they wanted as independent
expenditures under Buckley v. Valeo. All that Citizens United
did was to transform every corporate treasury in America into a
potential political slush fund and thereby authorize and
empower the CEOs of the corporations to spend whatever they
wanted of other people's money in the corporate treasuries in
political campaigns.
This declaration did transform, to my understanding, two
centuries of jurisprudential understanding of what a
corporation is. You can go back to Chief Justice John
Marshall's opinion in 1819 in the Dartmouth College v. Woodward
case, where he said that a corporation is an artificial entity,
invisible, intangible, existing only in contemplation of law,
possessing only the rights conferred upon it by the state
legislature and not the constitutional rights of the people.
And yet the Roberts court in Citizens United endowed private
corporations, these invisible, intangible, artificial entities,
with the political rights of the people, essentially arming the
CEOs with the power to spend other people's money, as Justice
Brandeis termed it, in political campaigns. And for all of the
reasons stated by the witnesses, that has occasioned a dramatic
change in the character and the quality of American politics.
Now, I favor a constitutional amendment for the same reason
that I support all the constitutional amendments that have
reversed reactionary jurisprudence by the Supreme Court. That
is how we got women's suffrage in the 19th Amendment which
toppled the Supreme Court's decision in Minor v. Happersett,
saying that women did not get the right under the 14th or 15th
Amendment. The 14th Amendment, and the 15th and 13th, of
course, reversed the Supreme Court's reactionary decision in
the Dred Scott case before the Civil War. It is how we got the
26th Amendment. It is how we got the 24th Amendment. Most of
our amendments have been democracy-deepening, suffrage-
enlarging, democracy-perfecting amendments where the people
have to overturn pinched and reactionary understandings of the
Supreme Court.
But until we get there, I wanted to take up an issue that
comes out of Citizens United, because Justice Kennedy's conceit
in his majority opinion is that the corporations are speaking
for the shareholders, the corporations derive their First
Amendment political rights from the First Amendment rights of
the human beings who actually own stock in the corporation. But
there is a problem, which is that the corporations are spending
all of this money and putting money into political campaigns
and dark money channels and so on without ever consulting the
shareholders themselves; and, in fact, in most cases not even
notifying the shareholders. And they have been doing everything
in their power to fight in both the SEC and the FEC efforts to
get just notice to people of how their money in the corporation
is being spent.
I introduced a measure which became part of H.R. 1 which I
call Shareholders United. Shareholders United says that no
corporation shall be allowed to spend any money in politics
until you have first notified the shareholders of the proposal
and they are authorized in advance by majority vote that their
money be spent in a political campaign.
I am wondering if each of you, if you could go quickly--and
forgive us because we have our 5-minute stricture here. But
would you agree that as long as we are living under the regime
of Citizens United, that the shareholders should have the right
to be apprised of proposed political spending by corporations
of their money, and they should have the right to vote on it? I
know there is an argument that there should have to be a 100
percent vote, but at the very least there should be a majority
vote before the corporation goes ahead and spends their money.
And I could start with you, Madam Chair.
Ms. Weintraub. Yes.
Mr. Weissman. Absolutely. And as you know, more than a
million people have requested the SEC to issue a rule to do
exactly what you are suggesting.
Mr. Raskin. Professor Smith, do you agree?
Mr. Smith. No. This is a complex question of corporate
governance and there are many things corporations do, including
things that affect politics, that they don't require
shareholder approval for.
Mr. Raskin. Okay. And Professor Spelliscy?
Ms. Torres-Spelliscy. I wholeheartedly endorse your bill. I
think shareholders should have the right to consent to
corporate political spending, and that would bring American law
in line with the U.K., where shareholders in U.K. companies do
have the right to pre-approve corporate political spending.
Mr. Raskin. Okay.
Mr. Cohen. Thank you, Mr. Raskin.
Mr. Raskin. I yield back, Mr. Chairman.
Mr. Cohen. Mr. Cline, you are recognized for 5 minutes.
Mr. Cline. Thank you, Mr. Chairman, appreciate it.
I would note that one of the things that we have that the
U.K. doesn't have is the First Amendment.
The majority in Citizens United maintain that political
speech is indispensable to a democracy, which is no less true
because the speech comes from a corporation. The majority also
held that the BCRA's disclosure requirements as applied to the
movie were constitutional, reasoning that disclosure is
justified by a governmental interest in providing the
electorate with information about election-related spending
resources.
The Court also upheld the disclosure requirements for
political advertising sponsors and upheld the ban on direct
contributions to candidates from corporations and unions.
What it did not do is overturn centuries of law. Rather, it
overturned portions of McCain-Feingold which had become law in
2002, another law that went into effect in the 1940s, and two
Supreme Court decisions in whole or in part, Austin v. Michigan
Chamber of Commerce from 1990 and McConnell v. FEC from 2003.
So I would ask Professor Smith, in your prepared testimony
you quote part of the oral argument in Citizens United in which
the government argues that as a matter of constitutional law it
can ban books or movies if corporate resources are used in
their production or distribution. Is that correct?
Mr. Smith. Yes.
Mr. Cline. And can we talk about whether this is really a
danger?
Mr. Smith. Yes. Citizens United was rescheduled after that
first oral argument, and in the second oral argument then-
Solicitor General Kagan argued, well, we would never actually
do that. But, in fact, the FEC from time to time has done that.
In a little-noticed 1987 advisory opinion, the FEC informed
U.S. News and World Report that their publication of a book
would not be exempt under the press exemption because it was
not a periodical, that it would therefore be potentially
illegal to distribute a book.
Now, maybe that wasn't noticed so much because in the end
U.S. News wasn't really going to do that. It was dismissed on
other grounds. But the FEC made that point.
Just in the last decade, in 5642, the FEC spent almost two
years investigating publication and distribution of a book, one
that was written by George Soros, and it was eventually
dismissed. But it should be noted that the General Counsel in
that case recommended that the FEC find a violation due to
distribution of a book about policy, a book called The Bubble
of American Supremacy, because it included such radical
statements as ``It is not enough to defeat President Bush at
the polls,'' and ``We can regain the moral high ground only by
rejecting President Bush when he stands for reelection,'' and
that was considered enough that that book could have been
potentially banned.
So I do think it is a real issue.
I would also note that when Justice Kagan, or now-Justice
Kagan, then-Solicitor General Kagan, was asked what about
pamphlets, she said pamphlets we ban, we definitely go in for
pamphlets.
I have here a copy of Common Sense, the great revolutionary
tract by Thomas Paine. It is 54, 58 pages. That includes a
couple of cover pages here. Is this a book or a pamphlet? I
will ask you all to vote for it because you are the legislators
who will get to decide whether or not this can be published or
whether or not this can be banned as a pamphlet.
Mr. Cline. Thank you.
Some of our Democratic colleagues in the Senate have
previously introduced a constitutional amendment to undo or
overturn Citizens United. The amendment would allow Congress to
regulate the giving and spending of money on political advocacy
but explicitly carves out the press. Do you have any views on
that approach?
Mr. Smith. Well again, if I may, Mr. Cline, I want to
briefly address something that my old colleague--we were law
professors going back. You got your J.D. from Harvard, too; is
that right?
I think, Mr. Chairman, that we should probably note that
again.
But in any case, one thing I did want to comment, though,
is that who has benefitted--we haven't seen this torrent of
money from Fortune 100 companies. The corporations that have
benefitted are small corporations, and most of those
corporations can't afford to operate a PAC, they can't afford
to have a lobbyist here, and those are the corporations that
are really benefitting from this, and those are closely held
corporations where I think we can usually find the shareholder
benefits.
Now, your specific question regarding the press, I think
the Supreme Court has never really held that the press has
rights that other American citizens do not, and there is
polling data that shows if you ask people should we limit
spending but the press is exempt, support for limiting spending
drops dramatically. People don't think the press should have
exemptions. In fact, less than 50 percent support restricted
spending if the press is exempt. They don't see any reason why
these guys, just because they are members of the National Press
Club, get to talk about politics, spend a ton of money, Jeff
Bezos can buy a newspaper and spend a ton of money, but
everybody else could not. Again, the Supreme Court has never
recognized some specific right. The press, in other words, is
the ability of all Americans to speak. It is not a right that
adheres to a certain group of people who got a degree from
Columbia Journalism School.
Mr. Cline. Thank you, Mr. Chairman.
Mr. Cohen. Thank you, sir.
Ms. Scanlon, you are recognized for 5 minutes.
Ms. Scanlon. Thank you very much.
I wanted to focus on something that Commissioner Weintraub
mentioned earlier, and that is presidential inaugural funds. I
introduced a bill which was folded into H.R. 1 called the
Inaugural Fund Integrity Act, because of concerns that have
come out about donations to and spending by these funds. Those
funds have grown exponentially during the time since Citizens
United came out. So the Obama inauguration fund in 2012, I
guess, set a $53 million record, and the Trump inaugural fund
just back in 2016 raised over $107 million. So 250 people or
corporations gave 91 percent of those funds, and 47 people or
corporations gave more than $1 million.
There are concerns about these inaugural funds because, in
a way, if you are donating to a candidate you are making a bet.
There is no guarantee they will get in. But if you are donating
to an inaugural fund, that person has already been elected, and
it raises some really serious concerns about transparency and
quid pro quo, et cetera.
I would like to ask unanimous consent to enter into the
record an Open Secrets article entitled ``Companies That Funded
Trump's Inauguration Came Up Big in 2017.''
Mr. Cohen. Without objection.
[The information follows:]
MS. SCANLON FOR THE OFFICIAL RECORD
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Cohen. And let me ask, was that a quid pro quo in
Sondland? Was that in connection with giving money to the----
Ms. Scanlon. I believe he gave $1 million.
Mr. Cohen. Yes, and that was a quid pro quo. Thank you.
Ms. Scanlon. But generally, the purpose in drafting the
Inaugural Fund Integrity Act was to put some limits on both
contributions to and spending by these inaugural funds to try
to block foreign corporations and foreign nationals from giving
money, and we have certainly heard of some issues with that
with respect to Mr. Parnas, to block straw donors and to limit
contributions by corporations.
So in your experience, Commissioner Weintraub, can you tell
us what kinds of issues you are seeing with respect to
transparency and donations in these inaugural funds?
Ms. Weintraub. Well, as you know, Congresswoman, there
really is not that much law governing inaugural funds, which is
interesting in light of the point that you just made, that
people have already been elected, so there is no risk there,
you know who you are giving the money to.
I am concerned that there is, for example, no limitation on
contributions in the name of another, which is a core provision
of the rest of the Federal Election Campaign Act, and that is
not part of the restrictions on inaugural funds. There is a
limit that says you are not supposed to get foreign money, but
then there is no way of really getting behind that because you
don't have a restriction on contributions in the name of
another. So how do you know that the people who say they are
giving the money are actually giving their own money and that
it is not coming from a foreign source or some other source?
So I think there are big transparency problems with the
current regime, and I applaud you for your efforts to try to
fill some of those holes.
Ms. Scanlon. So basically, if we did some of what the
Inaugural Fund Integrity Act tries to do, which is apply the
restrictions that apply to other campaign finance to inaugural
funds, that would help the process?
Ms. Weintraub. Absolutely.
Ms. Scanlon. Okay. And it just seems like that is important
this year given the fact that someone will be elected president
and we will be dealing with another inaugural fund, so now
might be a good time to put some brakes on what is going on.
Mr. Weissman, do you have anything to add there?
Mr. Weissman. First to applaud you for the effort, and also
to sort of elaborate on it. We don't know where the money is
spent, for one thing. So in terms of the quid pro quo analysis,
or more generally a richer corruption analysis, there is worry
about issues of self-enrichment. If a donor knows that not just
a committee but the president or people around the president
may benefit, as, in fact, was the case, because we know that
some of that money was wasted at the Trump Hotel, that is a
real incentive to give the money in expectation of some policy
coming out of it.
That Open Secrets article that you entered into the record
I believe refers to, for example, a million-dollar contribution
from Dow Chemical. Dow Chemical soon found that it was able to
get benefits on specific regulatory matters on pesticides out
of the Trump EPA. It was exactly the kind of corruption that
should be intolerable in our system, and we do need safeguards
to prevent this from going forward.
Ms. Scanlon. Okay. Thank you.
I yield back.
Mr. Cohen. Ms. Dean, you are recognized for 5 minutes.
Ms. Dean. Thank you, Mr. Chair. I appreciate the chance to
hear from the testifiers to talk about this important issue.
I think I will start, please, with Commissioner Weintraub,
and this reflects some of the comments we just heard from
Professor Smith.
Some say that the proliferation of private money in our
politics is not the result of Citizens United. Citizens United
held that corporations have a First Amendment right to spend
sums independently to support or oppose candidates for office,
yet few for-profit corporations spend money on political
campaigns in their own names, so Citizens United can't be all
that bad they say.
However, a simple review of the numbers shows that there is
a problem, and it is tied directly to the Supreme Court's
ruling. In the pre-Citizens United 2008 presidential election,
outside spending totaled about $338 million. We saw that within
your testimony. And in the 2012 presidential election, the
first after the Supreme Court's decision, outside spending
totaled over $1 billion.
Can you speak to how Citizens United, which is the premise
of this underlying hearing, changed the influence of money in
the political process despite a dramatic increase in overt
corporate expenditures?
Ms. Weintraub. Well, there are a variety of ways that
Citizens United has had this huge impact, which I think
everybody gets that. In the first place, when corporations
spend--and corporations can give to Super PACs. Super PACs
disclose their donors, but the corporations often will be a
shield against disclosing who really is behind the money. So
you'll get the ABC Super PAC reporting that they have a
million-dollar contribution from the ABC 501(c)(4), and who is
giving money to the ABC 501(c)(4)? Well, we don't know that. So
there is a huge transparency problem that arises immediately
from letting corporations give.
But as I said, really I think the biggest impact of
Citizens United is that it really took the gloves off with the
broad language in Citizens United about how ingratiation and
access can't possibly be corrupting. First of all, I think that
flies in the face of most people's commonsense understanding.
If it is corrupting to give $3,000 directly to your campaign
account, how could it not be corrupting to give $3 million to a
Super PAC that is doing nothing but trying either to elect you
or to defeat you? How does that not have any potential for
corruption? I think most people really don't get that and think
it doesn't really make sense, and that is part of why it is
such an unpopular decision, because it flies in the face of how
people think about corruption.
But this broad language really emboldened a lot of folks
who I think before were thinking, well, boy, somebody might
think this is corrupting if I gave a million dollars to try and
defeat a candidate or to elect a candidate, so maybe I
shouldn't do that. Now they find out, whoa, I can't possibly be
held accountable for that, so therefore I am going to up my
giving. All this freedom, it only affects this very narrow band
of people who have a million dollars to put into a campaign, or
in some cases multi-million dollars. That is not freedom for
most Americans. Most Americans aren't going to be able to
partake of that additional liberty that the Supreme Court has
granted them, and it does reframe the debate. It does involve
billionaires just sort of dominating the political discourse in
ways that are sometimes not transparent.
We have seen folks go through incredible permutations of
moving money from one organization to another organization to
another organization because they are afraid we might pierce
the first veil, but then we won't get through the second or the
third or the fourth veils. There is somebody who is litigating
this up to the Supreme Court right now to try and hide the
money. So there has been an explosion in the role of these
mega-donors, and I think that really has been the biggest
impact.
Ms. Dean. I have just a little bit of time left. There is
so much more I would like to ask you, but I did take a look at
what you said in your testimony about how the impact of H.R. 1
would be helpful in this area. Quickly, on the issue of
coordination, you just described very logically how things are
non-transparent and hidden. How about the notion of if I say it
publicly, we didn't coordinate? Can you speak to the problem of
that Super PACs cannot coordinate with candidates, and yet how
we so easily see folks getting around that?
Ms. Weintraub. Well, the coordination rule was written
before Super PACs existed, and despite my repeated efforts to
launch a rulemaking to update them in light of Citizens United,
I have never been able to get the four votes to do that at the
FEC. I feel compelled to say that all of the things that
Professor Torres-Spelliscy was complaining about at the FEC, I
was on the other side and trying to get those things done. We
have candidates who show up at Super PAC events and tell their
supporters that is my favorite Super PAC, you can go ahead and
support them and you will be supporting me, and people post
things publicly and try to get around it. Well, it is not a
secret conversation. I am telling the world that I love that
Super PAC, I am telling the world that here is what would be
useful to me, I am posting this video on my webpage.
Some of it is silent. There is no purpose in having this
roll up on anybody's webpage other than for somebody else to
just lift it and incorporate it into a campaign commercial on
their behalf.
Ms. Dean. Thank you very much.
Has my time expired, Mr. Chairman? Thank you very much for
your indulgence.
Mr. Cohen. Thank you, Ms. Dean.
Ms. Escobar, you are recognized.
Ms. Escobar. Thank you, Mr. Chairman.
And thanks so much to our panelists, really appreciate you
all today.
Ms. Weintraub, I have some questions about the Commission,
just some things that I am really curious about.
When was the last time the Commission met with a quorum?
Ms. Weintraub. That would have been August, August of 2019.
Ms. Escobar. Okay. And how many cases are awaiting a
hearing?
Ms. Weintraub. We have roughly 300 enforcement matters, and
right now over 100--last time I checked it was 119 of those
were awaiting some kind of decision from the commissioners,
which it requires us to have four commissioners to make that
decision.
Ms. Escobar. And how far back in terms of the cases that
are waiting to be adjudicated by you all, how far back do those
complaints go in terms of when they were first reported to the
FEC? Do you know?
Ms. Weintraub. There are a variety of beginning dates for
the complaints. There is a five-year statute of limitations,
and particularly in the reporting area sometimes there is a
continuing violation even after the event that you are
reporting happened, you have an ongoing obligation to report
what money came in and what money went out. So sometimes we are
able to extend. Sometimes we get tolling agreements. But for
the most part, we are limited to a five-year statute of
limitations, and the clock is ticking on a number of the cases
that are sitting in front of us right now.
Ms. Escobar. And I will give you an example of why there is
probably no incentive for the President and others to ensure
that we have a functioning FEC. In my community of El Paso,
Texas, the President came and had a campaign rally, and he owes
the City of El Paso over half-a-million dollars for all of the
services that the city, that the local government had to
provide. The Center for Public Integrity back in June actually
reported that this is not a single instance where a campaign
has failed to pay its bills, its outstanding debts. In fact,
for the Trump Campaign this is a pattern, and there are a
number of local governments.
So it is a vicious cycle, unfortunately. There is no
incentive for the President to want accountability by having a
fully seated, fully functioning FEC because he might be held
accountable, and we know how he feels about accountability.
Ms. Weintraub. I don't want to comment on any particular
case, but let me just say that when we lost the quorum last
August when one of my colleagues decided to resign, I had two
other colleagues who resigned two years ago and three years
ago, respectively. So there was a very long run-up to this when
we had two vacancies, one D, one R, when this could have been
fixed so that we wouldn't have been in this situation last
August when the most recent commissioner left. Why those seats
weren't filled for two and three years, I really can't tell
you.
Ms. Escobar. Yes, we can only wonder why.
Thank you so much for your response, Ms. Weintraub.
Mr. Weissman, we have seen incredible, hugely consequential
involvement from Russia in our elections, and this meddling in
our elections is not limited to Russia. We now know after what
happened yesterday, the acquittal, that there will not be
accountability for inviting foreign assistance into our
elections. At least for the President, there is no
accountability.
So many of us are obviously very concerned about outside
involvement in our elections. You mentioned that Citizens
United allows foreign actors to influence those elections as
well. Is that correct?
Mr. Weissman. Not legally, but yes.
Ms. Escobar. Can you expand on what that involvement might
be?
Mr. Weissman. The reporting that has come out from the Lev
Parnas tape is really instructive about how this all might go
down. That tape, where most of the attention was focused on the
conversation about Ukraine, it was really a donor event. It was
a Super PAC donor event, actually, where the donors were given
direct access to the President. The New York Times reported
they were given access to go and pitch, as if they were on
Shark Tank, their preferred policy preferences. A couple of
those donors were Lev Parnas and Igor Fruman, who, according to
the indictment against them, had donated money from a foreign
source that they had laundered through an LLC.
In this instance it was discovered. You have to assume that
in most instances it is not going to be discovered.
Also present at the event was a Canadian steel mogul who is
not permitted to give money to affect U.S. elections but was
able to use his U.S. subsidiary to run money to U.S. elections.
So there are a lot of mechanisms, some of which are legal and
some of which are not legal but have been super-powered by
Citizens United, and we have to assume it is happening much
more than we know.
Ms. Escobar. Thank you so much.
I am out of time. I yield back. I appreciate it.
Mr. Cohen. Thank you.
Ms. Jackson Lee.
Ms. Jackson Lee. I want to thank all of the witnesses for
their commentary today.
Let me say that I am a proud co-sponsor of H.R. 1, which I
hope the Senate turns on the light and allows us to pass that
legislation, because some of this will change. Some have argued
that the Court should revisit the question, but we know the
skewing of the Court now, unfortunately.
I am just going to ask a brief question and then a pointed
question to the Commissioner. Thank you for your leadership.
After Citizens United, can you state or re-state what you
think about, very briefly, the amount of money that is now in
the political process?
Ms. Weintraub. Well, the amount of money always goes up, so
let's start there. But I think what we are seeing is a shifting
of money. As I pointed out in my testimony, in the most
competitive Senate races, particularly in years where it looks
like control of the Senate is up for grabs, that is where all
the outside spending goes. And the outside spending in six out
of ten, seven out of ten, depending on which year you look at,
has dwarfed the amount the candidates are spending themselves,
which is really kind of astonishing if you think about it. You
are out there campaigning, and then somebody else is out-
spending you.
Ms. Jackson Lee. Meaning it dwarfs the amount that the
candidate is spending?
Ms. Weintraub. Yes.
Ms. Jackson Lee. It is more than what the candidate is
spending.
Ms. Weintraub. Yes.
Ms. Jackson Lee. Okay. And therefore the voice of the
candidates, plural, may be silenced or blocked out because of
some special-interest undercover PAC that one has never heard
of, but they are coming after you, whoever that is.
Ms. Weintraub. And because the rules on PAC disclosure were
designed for a time when these Super PACs didn't exist, the
PACs aren't on the same disclosure schedule as the candidates
are, and some of them have been very clever about making sure
that they don't have to report up until after the election
itself.
Ms. Jackson Lee. Thank you. Thank you for your service.
Let me use this example. A day or two ago we heard a very
passionate statement on the floor of the United States Senate
from a senator who offered his religious beliefs and his
heartfelt analysis on his decision to vote for the conviction
of the President of the United States under Article 1. Soon
thereafter, he received an onslaught of attacks. One, Trump Jr.
tweeted after Romney announced his decision that he was too
weak to beat the Democrats, so he is joining them now, he is
officially a member of the resistance and should be expelled
from the GOP. Trump Jr. then started tweeting ``#ExpelMitt''
and later tweeted that Romney should be expelled from the
AtSenateGOP. Ingraham called Romney ``the ultimate selfish,
preening, self-centered politician. If he were up for
reelection this year, the people of Utah would have their own
payback against him because they were defrauded by Romney.''
Now, people have argued that Citizens United provides for
free speech. Certainly, the Senator has a right to free speech.
My question quickly to Mr. Weissman and the Professor, to
answer the question if this individual was up for reelection in
2020, having exercised free speech, free speech Citizens
United, how do you think that would be skewed with this kind of
onslaught so that his voice could not truly be heard? If you
would answer that question, my time is running and I would like
to share it between you and the Professor. Thank you.
Mr. Weissman. Yes. So very quickly, it is entirely
appropriate for the people of Utah to make a judgment about
what Senator Romney did. It is not entirely appropriate for
giant Super PACs to come in and out-spend him, which, as you
are implying, is a virtual certainty were he up for reelection
in this coming term.
Ms. Jackson Lee. Silencing his voice.
Mr. Weissman. Overwhelming it at least.
Ms. Jackson Lee. Professor?
Mr. Smith. I will note first I served as counsel----
Ms. Jackson Lee. I'm sorry.
Mr. Smith. I'm sorry, the other professor.
Ms. Torres-Spelliscy. Thank you. So, if I may, since I have
not had many chances to talk, pay-to-play hurts honest business
people because the honest business person wants to be judged by
the metric of the quality of their goods and services. But pay-
to-play skews that entire system by privileging those who will
stay at the Trump Hotel or pay an emolument, and that is a
skewing not only of the political system but of the economic
system as well.
Ms. Jackson Lee. So do you have an answer about Mitt Romney
and the amount of money?
Ms. Torres-Spelliscy. Because I work with a non-partisan
non-profit, I am going to demure on that.
Ms. Jackson Lee. Well, let me thank the gentleman from
Public Citizen for giving me the answer, and I thank all of you
for providing your insight to this very important question.
Mr. Chairman, I yield back.
Mr. Cohen. Thank you, Ms. Jackson Lee.
Mr. Swalwell I believe is next.
Mr. Swalwell. Thank you, Chairman, for hosting this panel.
And thank you to our panelists.
I believe, having been in Congress now for seven-plus
years, that it is dirty money and dirty maps that keeps us in
Congress from reaching the consensus that our constituents have
reached. On most issues, the American people are actually not
really divided. They think we should have background checks,
over 80 percent. They believe we should do overwhelmingly
something about climate. They want to have universal access to
health care. Yet, when we convene in Washington, we find people
that cannot work and meet that consensus.
Having been here and seen the power of the outside groups,
I know that the single reason we can't find that consensus is
the fear that if you were to speak out against your party--
particularly I see this on my Republican colleagues' side--you
will be primaried. You are not going to lose your job to a
Democrat. You are going to lose your job to someone who is more
conservative, and that is the power of outside money. And it is
also the power of dirty maps drawn by politicians to protect
themselves and their friends, and we are interested in doing
all we can to reduce the influence of that.
Now, both Republicans and Democrats have gone to online
platforms that encourage small-dollar contributors, and I think
that is great that smaller dollars can be empowered. But I do
wonder if anyone could address whether you see ways,
considering that foreign money is flowing into our elections,
that because of the reporting requirements for smaller-dollar
contributions are not as transparent, that that could be
manipulated to allow foreign contributions to come in.
Commissioner, I will let you take a crack at that first.
Ms. Weintraub. Well, of course, the committees have an
obligation to ensure that they are not taking foreign money. I
would argue that that obligation goes up with a larger
donation. So if you are getting a million-dollar donation, then
you had better make darn sure, if you are a Super PAC, that
that money is coming from a good place. In fact, we saw an
example of this just recently with a Super PAC that was
supporting Jeb Bush in the 2016 election that took a $1.3
million donation from a domestic subsidiary of a Chinese
company, and it was the Chinese board members who had requested
it, at the request of Neil Bush, who was also on the board.
So we are seeing foreign money come in through corporate
entities. I do worry about what is behind the small donors. We
don't see the names on the small donations.
Mr. Swalwell. I am talking about--Super PACs are their own
issue. I am talking about the candidates' campaign committees,
because I am worried that because of the lack of transparency
requirements for small-donor contributions--I believe it is
$200 and less--that that could be a way, if you have a campaign
that is not checking, confirming, or even if they are in on it,
that is a back door around the rules and that foreign
contributions could make their way in. Is that a concern that
you share?
Ms. Weintraub. It is, because we don't see those names, so
we don't know where the money is coming from.
Mr. Swalwell. Also I wanted to raise a concern about
foreigners working with U.S. campaigns, as you saw in 2016. In
2016, Congress had not imagined prior to that election that
campaigns would take assistance from foreign governments and
not at least report the outreach. I have since introduced
legislation that was included and passed in the House of
Representatives that puts a duty to report on an individual if
they receive campaign assistance, or even an offer of dirt on
your opponent who you should know to be an agent of a foreign
power.
Is there anything else you think we could do to put a duty
on people where we otherwise saw people in the past rely on the
honor code and just do the right thing? What can we do now to
ensure that the FBI would be notified of something like that?
For anyone who wants to take a crack at that.
Ms. Weintraub. As I said in my earlier testimony, one thing
that I think would help would be putting a responsibility on a
U.S. citizen to sign under penalty of perjury that they have
checked and they have verified that there is no foreign money
coming into the campaign accounts.
Mr. Swalwell. Thank you, and I yield back.
Mr. Cohen. Thank you, Mr. Swalwell.
We are not going to have a second round, but I will do
this. Normally if we have a second round, it is 5 minutes. If
any member wants to ask a question, not make a statement but
ask a question, we will entertain one question per member so we
can tie up loose ends.
Does anybody want to ask a question?
Mr. Raskin, you are recognized for a question.
Mr. Raskin. Give me a second to compose my interrogatory
thought, Mr. Chairman.
Given that we live in an age of propaganda and fake news
and disinformation, I am wondering, for any of the majority
witnesses--forgive me, Mr. Smith--to what extent Citizens
United figures into the spending of money to confuse the public
and to add to the propaganda? Is there something about the way
that money has been spent under Citizens United that
contributes to the thick fog of propaganda that overhangs our
politics today?
Ms. Weintraub.
Ms. Weintraub. I think anything that undermines disclosure
makes it harder for us to find out who is behind what we are
seeing online. I mean, people get all sorts of information
online, and I don't think anybody wants to get their news from
a Russian troll farm, but people didn't realize that is where
they were getting the information from last time. So to the
extent that Citizens United, as I have said, has undermined
disclosure, I think it has also contributed to that problem.
Mr. Raskin. Dr. Fiona Hill in her testimony described to us
that Russia is the world's largest Super PAC today, that it
basically operates like a Super PAC in terms of funneling money
and propaganda into our politics, and other societies too.
Mr. Cohen. We will call that a question, and then we are
going to let Mr. Weissman respond, if he wants to.
Mr. Weissman. I am ready. I think two points come to mind.
One, as Commissioner Weintraub said, there is an intersection
between the general cultural impact of Citizens United and the
rise of online advertising, particularly as it relates to lack
of disclosure. So the system we have for disclosure is
basically based on focusing on TV ads, and now we have moved to
where TV ads are being competed with in importance for online
advertising, huge amounts of money coming in. The disclosure
system is really totally inadequate, and I think people are
being confused by that.
There is another component of this. I wouldn't want to call
it propaganda necessarily, because there is a role for negative
advertising and conflictual advertising in speech for sure. But
what Citizens United has done--and Professor Smith's data I
think are misleading but all correct. What it has done is lead
to a rise, a significant rise in outside spending. Outside
spenders are different than candidate spenders in a variety of
ways.
But most significantly perhaps is that they focus
overwhelmingly on negative attack ads. So about 85 percent of
outside spending is devoted to negative attack ads; half or way
less by candidates. Again, there is an appropriate role for
drawing distinctions. I think most Americans feel like we have
way tipped the balance in terms of that kind of advertising. It
is highly emotional in appeal, not really very communicative
around policy or substance, and I think not that that kind of
speech should be censored, but if we are looking at the overall
effect, it has been unhelpful and an unhealthy effect for our
democracy, and it has certainly contributed to the deep
skepticism about how our politics work and the future and
reliability of our democracy.
Ms. Torres-Spelliscy. I guess I would just add that one of
the things that you could have done in 2010 in the Disclose Act
is clarify what counts as foreign for corporate purposes. That
clarity is still needed in the law.
And I would also add that Lev Parnas made a calculated risk
that his corporate spending wouldn't send off any warning signs
when he spent through a Super PAC. The indictment alleges
against him that he has funneled at least $1 million of foreign
money into both state and Federal elections, which I will
reiterate is illegal, whether that money is going into a state
election or a Federal election.
Mr. Cohen. Thank you.
Ms. Scanlon, you are our closer.
You are good? Okay.
Thank you very much to all of our witnesses.
This concludes today's hearing.
We have statements for the record from Citizens United
Action Fund and a letter from Free Speech for People, which we
would like to submit for the record.
Without objection, so done.
[The information follows:]
MR. COHEN FOR THE OFFICIAL RECORD
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Mr. Cohen. This concludes today's hearing. I want to thank
everybody.
Without objection, every member will have 5 legislative
days to submit additional written questions for the witnesses,
which we will submit to you.
With that, we are done. Thank you.
[Whereupon, at 11:52 a.m., the hearing was adjourned.]
APPENDIX
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