The Consequences of Citizens United

Ever since the Supreme Court issued its ruling in the Citizens United case in January, we’ve been warning that the decision would empower corporations to funnel unlimited donations through shadow advocacy groups to directly influence elections.

And guess what? It’s begun.

Just as we (and President Obama) predicted, corporations are already forming and funding political action groups with innocuous sounding names to anonymously support candidates they like and attack candidates they don’t.

For example, the coal industry already has a plan to create a shadow organization to directly advocate against “anti-coal” candidates, obscuring the sources of the organization’s money as they go:

The companies hope to create a politically active nonprofit under Section 527 of the Internal Revenue Code, so they won't have to publicly disclose their activities — such as advertising — until they file a tax return next year, long after the Nov. 2 election.

The U.S. Supreme Court ruled last winter that corporations and labor unions may pour unlimited funds into such efforts to influence elections.

"With the recent Supreme Court ruling, we are in a position to be able to take corporate positions that were not previously available in allowing our voices to be heard," wrote Roger Nicholson, senior vice president and general counsel at International Coal Group of Scott Depot, W.Va., in an undated letter he sent to other coal companies.

Citizens United didn’t just, as some supporters have claimed, allow corporate voices to be heard; it granted corporations unprecedented influence in democratic elections while permitting them to hide their involvement. It’s shadow organizations like this that make one wonder: why are Senate Republicans filibustering the DISCLOSE Act, which would help make corporate involvement in elections more transparent?

Meanwhile, the Minnesota gubernatorial race is providing another textbook example of the problems Citizens United is already causing for our democracy. Taking advantage of their new ability to pour limitless money into elections, several big corporations, including the retail giant Target, donated $100,000 each to a shadow group called Minnesota Forward, which has already produced an ad for Republican gubernatorial candidate Tom Emmer.

Public reaction to Target’s involvement in the race shows just why many politically involved corporations would prefer to remain anonymous:

Emmer is well known as a hardline conservative on social issues. For instance; he opposes gay marriage — a stance that angers some of Target's employees and customers. The company has been known for its gay-friendly employment policies.

Target CEO Gregg Steinhafel tried to address such concerns today with a letter to employees. He wrote, that "inclusiveness remains a core value of our company." That said, he added, "I consider it my responsibility to create conditions in which Target can thrive." And Minnesota Forward has pegged Emmer as the pro-growth candidate.

If the Senate had passed the DISCLOSE Act yesterday, Minnesota Forward would have to be a lot more forthcoming about the sources of its funding. As long as DISCLOSE is filibustered, the group has a lot more leeway for behind-the-scenes political activity. (And, until Congress passes a Shareholder Protection Act, even Target’s shareholders won’t be able to have a say in which political candidates their money is going to support). Voters and consumers have the right to know whether a corporation’s political money is where its mouth is.

Health insurance companies, too, are banding together to take advantage of the newly permissive electioneering rules:

Five of the nation’s largest health insurers are in serious discussions about creating a new nonprofit group and bankrolling it to the tune of about $20 million to influence tight congressional races and boost the image of their industry.

… “The objective is to make the House more accommodating to concerns that have been raised,” says one industry source. “They’re looking at toss-up candidates,” adding that the companies want to “focus resources to influence campaigns.”

Needless to say, like the coal companies, health insurance groups will not have to make their donations to such an advocacy organization public.

A stunning 85% of Americans agree that corporations already have too much influence on our elections; now we have proof that the Citizens United ruling is giving corporations even more power in our democracy. The proliferation of shadow groups doing the dirty work of big corporations makes the task of amending the Constitution to protect our elections from corporate money all the more urgent.

PFAW