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Follow the Dark Money

The down and dirty history of secret spending, PACs gone wild, and the epic four-decade fight over the only kind of political capital that matters.

But it was serendipity as much as money or momentum that nudged McCain-Feingold over the edge. On May 24, 2001, Jim Jeffords, Vermont's junior senator and a lifelong Republican, defected from the GOP and declared himself an independent. For the first time in history, control of the Senate changed hands without an election. Sen. Trent Lott (R-Miss.), a staunch opponent of McCain-Feingold, relinquished the title of majority leader to Sen. Tom Daschle (D-S.D.). "Jeffords flips, Daschle comes into control, and we can see the finish line," recalls Bob Schiff, Feingold's top lieutenant on campaign finance.

The rest of 2001 saw McCain, Feingold, and their fellow reformers fight off an onslaught of amendments aimed at kneecapping their bill. Finally, in the winter of 2002, after the House passed its version of the legislation by a 51-vote margin, the Senate easily green-lighted the bill. McCain-Feingold headed to the desk of President George W. Bush.

At 7 a.m. on March 27, 2002, the duo's seven-year campaign ended as it began: with a phone call. A Bush White House aide phoned McCain at his home in Arizona to inform him that the president had signed McCain-Feingold into law that morning. There was no signing ceremony, no Rose Garden press conference. A commemorative pen would be delivered shortly to McCain's Capitol Hill office.
 

That same morning, a few blocks east of the White House, a staffer from a law firm representing the National Rifle Association stood shivering on the front steps of the US District Court and holding a sheaf of papers. The staffer's instructions were to file the NRA's lawsuit challenging the constitutionality of McCain-Feingold the minute the courthouse opened. With the ink still wet on the two senators' crowning achievement, the assault began.

By beating the other challengers to the court that morning, the NRA earned the naming rights to what promised to be a blockbuster case destined for the Supreme Court. National Rifle Association v. FEC, the legal textbooks would read.

Then Sen. Mitch McConnell, one of Washington's fiercest foes of campaign finance laws, stepped into the fray.

A stiff, jowly conservative born in Tuscumbia, Alabama, McConnell was known mostly for two things: his encyclopedic knowledge and mastery of congressional procedure, and his First Amendment zealotry. McConnell slammed McCain-Feingold as a "legislative sledgehammer" that would smash the First Amendment's free speech protections to bits. The law, he argued, "constitutes the most threatening frontal assault on core First Amendment values in a generation."

On the day Bush signed McCain-Feingold, McConnell filed a suit of his own challenging the new law's constitutionality. He'd already assembled a murderer's row of lawyers to argue his case, among them then-Stanford Law dean Kathleen Sullivan, First Amendment guru Floyd Abrams, and James Bopp Jr., a shrewd attorney who had built a career out of demolishing campaign finance laws. Though McConnell had filed his suit after the NRA, he wanted his name on the case. And so in a rare move, McConnell brokered a backroom deal with the NRA to swap the group's name for his. The case would be called McConnell v. FEC. "He wanted it; he was the leader," recalls Cleta Mitchell, an attorney for the NRA on the McConnell case. "The NRA knew it would be foolish to make a mortal enemy of a powerful senator over something like naming rights."

It wasn't the first time McConnell had set out to gut the nation's campaign finance laws. Long before he challenged McCain-Feingold, McConnell had trained his sights on the FEC. If he couldn't get rid of campaign finance regulations altogether, he knew defanging the nation's elections watchdog would weaken enforcement.

"If you can deregulate money in politics, you can buy the policy outcomes your prefer," says the Campaign Legal Center's Paul S. Ryan.

In 1998, after the FEC launched probes of Newt Gingrich's political slush fund, GOPAC, and Pat Robertson's Christian Coalition, McConnell took aim at the commission's top lawyer, a fast-talking Queens native named Larry Noble. Noble was an FEC lifer who'd joined the commission soon after it opened in 1975. No fan of Noble or his aggressive style, McConnell wrote an amendment essentially firing him and slipped it into a $27 billion funding bill for the Treasury Department, Postal Service, and other federal agencies. Democrats howled in protest; the New York Times published four editorials in Noble's defense, calling McConnell's amendment an "attempted lynching." (McConnell denied specifically targeting Noble.)

Republicans on the House side kept up the fight McConnell had started. On the evening of October 1, 1998, their attack on Noble burst into public view on the House floor when Democrats vowed to block the Treasury and postal bill until Noble was safe. Millions in funding for anti-cybercrime efforts, the DARE anti-drug campaign, and an entire fleet of Black Hawk helicopters were in limbo.

Noble watched wide-eyed as this drama played out on his TV back home in Maryland. "Wow, Dad," Noble's 11-year-old son marveled. "I can't believe you're worth 16 Black Hawk helicopters."

Throughout the 2000s, McConnell also reshaped the six-member FEC by exerting control over the nominating process. Former commissioner Brad Smith, whom McConnell tapped for the post, recalls, "He essentially said, 'We need to put Republicans on the FEC who favor our point of view on regulation.'" McConnell leveraged his Senate clout to install ideologues hostile to campaign finance law. One of them, Donald McGahn, later told a group of students at the University of Virginia Law School that he simply would not enforce the laws he'd been hired to uphold. "I plead guilty as charged," he said.

Eventually, McConnell's FEC strategy would pay off. The number of 3-to-3 deadlocks on enforcement actions averaged 1 percent between 2003 and 2007; it shot up to 16 percent in 2009 and was 11 percent in 2010. For much of 2008, the FEC was so tangled that the commission lacked the minimum four-person quorum to even function. Political outfits have capitalized on the commission's hobbled state. The percentage of groups disclosing their donors dropped by more than 43 percent between 2004 and 2010.

But while McConnell succeeded in his behind-the-scenes maneuver, the fight he'd put his name on didn't go so well. Conventional wisdom suggested the Supreme Court would side with McConnell in the challenge to McCain-Feingold. Instead, the high court's 5-to-4 decision, handed down on December 10, 2003, upheld nearly the entire law, humbling McConnell and his legal team. McConnell v. FEC is now remembered as a high-water mark for the reform community.
 

VI. In the Hands of the Court

James Bopp Jr. read the 300-page McConnell decision in disbelief back at his law office in Terre Haute, an old southwest Indiana mining town of 70,000 on the banks of the Wabash River.

An unassuming Hoosier with neatly parted silver hair and a cool, measured demeanor, Bopp was a central figure in the conservative movement to deregulate campaign finance that, in the 2000s, took the fight to Wertheimer and the reformers, brought the Citizens United case, and helped usher in super-PACs. Before, conservatives and libertarians had struggled to organize themselves on money in politics. "You had the ACLU, a few cranky libertarian sorts, a stray report from the Cato Institute, and some lackeys in the fight trying to preserve their own interests," Smith says. "That began to change after McConnell." At the heart of that pushback was Bopp.

Bopp's crusade dates back to his early childhood. Born into a conservative Midwestern family, the conversation at home often revolved around politics and government, he recalls, and young Jim devoured books on conservative and libertarian philosophy. At Boy Scout camp in rural Indiana, Bopp remembers reading the works of Austrian economist Friedrich Hayek, a founding father of the libertarian movement, by flashlight in his tent. "I never had a heart," Bopp jokes today. "I only had a brain."

Bopp attended Indiana University (he still has basketball season tickets) and law school at the University of Florida, and then, in 1978, he got hired as general counsel for the group National Right to Life. The turning point in his legal career came in 1993. Ten days before a statewide election, a Democratic judge blocked two Virginia anti-abortion groups from distributing voter guides on the basis that the pamphlets violated electioneering laws. Outraged at what he saw as a body block on the organizations' free speech rights, Bopp got the judge to lift the injunction the day before the election. But the damage to their campaign had been done. At the next meeting of National Right to Life's state chapters, Bopp urged the groups' leaders to go on the offensive. "Sue ahead of time," he advised them. "Get rid of these laws so [you're] not victimized like that."

Bopp has been in attack mode ever since. With anti-abortion groups as ready-made standard bearers, he has challenged and defeated more than 150 campaign finance laws. In recent years, he's represented same-sex marriage opponents in California and Washington state in a broader effort to topple donor disclosure laws. (See Mother Jones' May/June 2011 issue for an in-depth profile of Bopp.)

Paul S. Ryan, senior counsel at the pro-reform Campaign Legal Center, says Bopp's use of the culture wars to attack political money regulations is central to understanding his influence and success. "Bopp recognizes something that few on the left recognize: that campaign finance law underlies all other substantive law," Ryan says. "If you can deregulate money in politics, you can buy the policy outcomes you prefer."

Hammer Time Dark-money disaster: GOP Majority Leader Tom "The Hammer" DeLay snuck around a ban on corporate donations by funneling them through the Republican National Committee back to Texas Republicans.
Key figure: DeLay, who was convicted of money laundering and sentenced to three years in prison, all while condemning "the criminalization of politics." He's currently out on bail while appealing.
Backlash: DeLay lasted just three weeks on Dancing With the Stars.
In 1997, Bopp created the James Madison Center for Free Speech, which once counted McConnell as an honorary chairman, to give fellow conservatives a platform in the political money trenches. Sometimes that meant battling members of their own party—including Ken Mehlman, who as RNC chairman called for a ban on outside 527 groups during the 2004 election. Elected as an RNC delegate in 2005, Bopp pressed the party to embrace a deregulatory position on campaign finance. Freedom to raise and spend campaign money without restrictions, he says, should be "a central part of our philosophy."

Bopp brushes aside questions about the wisdom of wanting more cash sloshing around politics when most of the public wants less of it. He doesn't buy the argument that more campaign giving erodes public trust in government—and if it did, he says, that would be a good thing: "People should rely less on government anyway. The less government there is, the better off we all are."
 

By the mid-2000s, the campaign finance deregulation movement had fully blossomed. Brad Smith had left the FEC and formed the Center for Competitive Politics, a rival to Common Cause and Wertheimer's campaign finance reform group Democracy 21. The Institute for Justice, a libertarian law firm, waded into campaign finance legal fights in hopes of knocking down regulations. And Bopp was plowing ahead with his right-to-life cases and other election-related lawsuits. "All of this created a new esprit de corps," Smith says. "For the first time, it was okay to walk around Washington and say it's respectable to oppose campaign finance reform."

Bopp and his allies also saw their fortunes radically improve with the arrival of John Roberts and Samuel Alito to the Supreme Court during George W. Bush's second term. Reformers and legal experts argue, in fact, that the switch from Sandra Day O'Connor to Alito marked the single most crucial moment in the past decade of the money wars. In an instant, the key fifth vote in McConnell was replaced by Alito, a reliable conservative with a libertarian streak.

The effect was near-instantaneous. In 2007, Bopp argued in FEC v. Wisconsin Right to Life that McCain-Feingold's ban on running issue ads 30 days before a primary and 60 days before an election was unconstitutional. The court had upheld this very provision four years earlier; the Roberts court killed it. Then, in January 2010, the court ruled 5-to-4 in Citizens United—another case brought by Bopp (though he didn't argue it before the court)—that corporations and labor unions are entitled to the same free speech protections as people and so can spend directly from their general treasuries on unlimited independent expenditures. Citizens United had arrived at the court as a minor case with few implications for campaign finance. But Roberts and his fellow conservative justices used the case to issue a ground-shaking decision that demolished decades of precedent. (Later that year, a DC appeals court relied on Citizens United in a case called SpeechNow.org v. FEC, argued by Brad Smith's Center for Competitive Politics, which ushered in super-PACs.)

TK Citizens United Dark-money disaster: In a January 2010 decision, the Supreme Court ruled that limits on outside political spending by corporations and unions violate the First Amendment. Paved the way for the creation of super-PACS.
Key figure: Chief Justice John Roberts; justices Samuel Alito, Anthony Kennedy, Antonin Scalia, and Clarence Thomas; and legal mastermind James Bopp.
Backlash: Increasing calls for a constitutional amendment to undo Citizens United. (See our DIY guide to undoing Citizens United.)
Wertheimer called Citizens United "a disaster for the American people" and "the most radical and destructive campaign finance decision in Supreme Court history." The American Enterprise Institute's Norman Ornstein says the decision was as misguided as the 1857 Dred Scott v. Sandford ruling denying slaves the right to citizenship. "The Roberts court is going to go down in history in the same way [Chief Justice] Roger Taney and his court went down in history with Dred Scott," Ornstein says. In his 2010 State of the Union, President Obama himself lambasted the high court for having "reversed a century of law that I believe will open the floodgates for special interests."

The Roberts court's hostility to limiting money in politics has forced the reformers to overhaul their strategy. The Campaign Legal Center's Paul S. Ryan says groups like his now struggle to fund legal defenses of what's left of campaign finance law. Donors see any legal strategy dead-ending at the Supreme Court—and Ryan agrees. "With the Supreme Court the way it is," he says, "why bother?"

The reformers have instead taken the fight to Congress with legislation bolstering disclosure in campaign giving and political ads, but they have little to show for it. The 2010 DISCLOSE Act died in the Senate after Republicans, led by McConnell, filibustered the bill. A slimmed-down version of the legislation, introduced in March, faces similarly long odds. It's a tough time, Wertheimer admits, to be a reformer in Washington.
 

Stymied in the courts and in Congress, the fight against super-PACs and dark money in politics is now being waged in the streets. Buoyed by the Occupy movement, activists nationwide are knocking on doors, lobbying state lawmakers, and rallying at courthouses in an effort to ensure campaign finance is not a back-burner issue.

On December 15, in 83 towns and cities, from Burlington, Vermont, to Anchorage, Alaska, people gathered in living rooms and kitchens to discuss Citizens United and a constitutional amendment to neutralize its effects. In a recent poll, 6 in 10 people said they disagreed with Citizens United; 8 in 10 said there was "too much big money" in politics.

Reformers know the success of their long-shot campaign means tapping into that sentiment. Short of a constitutional convention, passing an amendment, for example, requires the support of two-thirds of the House and Senate and the assent of 38 state legislatures. "The challenge is overcoming that skepticism about the amendment," says Robert Weissman, president of Public Citizen. "The only way to do that is to build a movement."

After condemning the decision, President Obama bent to the post-Citizens United reality and urged supporters to give to the super-PAC backing him.

At the same time, Bopp and his allies continue their push to dismantle the remaining campaign finance laws. Their latest target: the century-old Tillman Act, which bans corporations from donating directly to candidates. Should Tillman fall, companies won't need PACs, super-PACs, or shadowy nonprofits; they'd simply hand checks to the candidates themselves and could theoretically create innumerable shell companies to skirt the existing $2,500 donation cap.

Absent from this struggle is President Obama. After condemning super-PACs, he bent to the post-Citizens United political reality and urged his supporters to give not only to his campaign but to the super-PAC supporting him, Priorities USA Action. (Despite Obama's blessing, Priorities has come nowhere close to raising as much money as the pro-Romney super-PAC Restore Our Future or Karl Rove's American Crossroads.) And with his decision to rely solely on private donations in 2008 and 2012 in order to get a leg up on his opponent, Obama has undercut the public financing system created in Watergate's aftermath. To compete with Obama and appease Republican allies during the last presidential race, John McCain also backtracked on his campaign finance convictions (but ultimately ended up accepting public financing).

Super-PACs, seven-figure checks, billionaire bankrollers, shadowy nonprofits: This is the state of play in what will be the first presidential election since Watergate to be fully privately funded. Faced with this money-drenched system, reformers respond: It won't last. The pendulum is poised to swing once again. "I promise you, there will be huge scandals," McCain said in March, "because there's too much money washing around, too much of it we don't know who's behind it, and too much corruption associated with that kind of money." Russ Feingold, McCain's longtime legislative partner, agrees. "When this kind of money is changing hands secretly, it's almost automatic that there will be a scandal," Feingold says. "And this scandal could be the mother of all scandals."

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