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The Facts on Super PACS: Examining the Impact of Citizens United v. FEC on the 2012 Election Cycle An Honors Thesis Presented by Benjamin Samuel Kahn to the Curriculum and Honors Committee Department of Political Science in partial fulfillment of the requirements for a degree with honors of Bachelor of Arts University of Oregon April 2013 Thesis Advisor: Dr. Joe Lowndes Second Reader: Dr. Priscilla Southwell 1 Table of Contents Introduction 3 Research Design 5 Literature Review 11 History of Campaign Finance Reform 17 Campaign Finance before FECA 17 Development of the Federal Election Campaign Act 23 The Bipartisan Campaign Reform Act 26 Citizens United v. FEC and the Modern Era of Campaign Finance 28 Key Terms 32 Analysis 38 General Analysis of the 2012 Election Cycle 38 Analysis of Individual Congressional Elections 45 Conclusion and Other Thoughts 58 Sources of Data 60 Areas for Further Research 61 References 63 2 Introduction The landscape of campaign finance underwent a monumental change in 2010 as a result of the U.S. Supreme Court case, Citizens United v. Federal Election Commission. Before this, corporations, unions, and individuals were limited in their abilities to influence federal elections, but the opinion of the Court--along with a subsequent U.S. Appeals Court decision and two FEC advisory opinions--opened the floodgates to limitless independent spending by any individual. While they cannot be coordinated directly with campaigns themselves, independent expenditures are believed to be a strategic tool for candidate advocacy. These expenditures are carried out by a variety of groups and organizations, but are most commonly channeled through groups that make independent expenditures their primary purpose--i.e., independent expenditure-only committees, commonly known as super PACs. Two election cycles have been completed since Citizens United, and the initial impact of the decision is clear--independent spending on express advocacy has risen exponentially. However, it is still uncertain if this has any direct effect on election results. This research project will examine and highlight changes to the implementation of campaign finance strategy since Citizens United, and attempt to make a direct correlation between independent expenditures and electoral outcomes using select congressional races from both the House of Representatives and Senate. I hypothesized that the most of the victorious candidates would have a clear monetary advantage over their opponent in both official and independent expenditures, which turned out to be accurate. However, it was difficult to establish a correlation between independent expenditures and success. A causal relationship is evident, but it is hard to distinguish whether expenditures lead to success or visa versa. This paper is organized into six sections. The first will describe the research design and methodology; the 3 second will examine previous campaign finance scholarship pertinent to this study; the third will detail the history of campaign finance in the United States; the fourth will explain key terms relating to campaign finance; the fifth will interpret and analyze the results of the study, and the sixth will provide concluding thoughts. 4 Research Design This research question is centered on discovering the effects of limitless independent expenditures in the 2012 election cycle. The analysis will be in two parts. First, the general properties of independent expenditures throughout the 2012 cycle will be examined, and second, specific congressional races that meet a four-part criteria will be chosen for analysis. The analysis will also take into account observations made from the 2010 election cycle, and cycles before Citizens United. Unlimited outside spending as a policy is still so new that its true implications are mostly unknown. The general analysis of independent expenditures will be driven by both quantitative and qualitative research. Information will be gathered relating to independent expenditure committees (IECs)1, individual and corporate donors, the differences between conservative and liberal independent expenditures, and positive versus negative advertisements. Taking this information into account will help determine the effectiveness of outside spending, and how it differs from past periods of campaign finance operating under different sets of laws. Additionally, it can be determined if specific IECs were more effective than others, and what the motivations were for individual and corporate contributions. The data found will determine the normative method of candidate advocacy in 2012, and can be matched up against the campaign finance practices used in previous election cycles, ultimately helping to understand the changes Citizens United has brought. Attention will be paid to the presidential and congressional races, but since the second part of the analysis explores specific congressional races in much greater 1 See Key Terms, pp. 34. 5 detail, the first part will focus mainly on the unifying or all-encompassing aspects and properties of outside spending. The second part of the analysis will address specific congressional races. The explanation here goes into greater depth in order to make the process for selection clear. There are a number of factors that lead certain races to be good samples and factors that lead other races to be bad samples. First, races that are uncompetitive will be of little use. These races, usually in hyper- partisan districts and states, generally attract little outside spending due to the inability to meaningfully affect electoral discourse. Races that are of interest must be competitive, and must draw in a large amount of IEC spending as a result. Senate races which attracted the largest amount of outside spending were the Virginia, Ohio, Wisconsin, Indiana, Nevada, Florida, and Montana races.2 However, this does not necessarily make them good case studies. States that have competitive senate races along with a competitive presidential contest will not make for good samples. The states that fit this category are Virginia, Ohio, and Florida; polling data consistently shows those states falling within the margin of error. As a result, Super PACs are already heavily invested in the presidential race, which could possibly skew the true effect of independent spending in those states’ senate races. Prospective voters that have been targeted by super PAC advertisements in swing states may be more motivated to make the trip to the polls on election day primarily to vote for the president, and as a consequence, vote along party lines. If this is the case, it will be hard to tell if outside spending on those senate races truly had an effect. To counteract this influence, senate races in states where the presidential contest 2 http://www.opensecrets.org/outsidespending/summ.php?cycle=2012&disp=R&pty=N&type=A 6 was not competitive can be used. Analyzing spending data in these races will provide a clearer understanding of its effects independent from the presidential election. The three criterion established so far for choosing senatorial races for this research are as followed: there must be a large amount of outside spending taking place, the races must be competitive, and the states holding competitive congressional races must not be competitive in the presidential election. One more rule shall be followed to ensure accurate analysis: the exclusion of races with an incumbent. The incumbent effect in elections, in terms of both a financial and a voter base advantage, is well documented at all levels.3 The average incumbent can expect to receive a two or three point advantage over their challenger simply by virtue of currently holding the seat. If that effect is removed, and only races for open seats are included, we can more accurately stitch together a picture of outside spending’s influence. In 2012, there were ten senate races for open seats this year and only four of those were considered uncompetitive. According to the political news website, Real Clear Politics, competitive senate races were in action in Arizona, Connecticut, Indiana, North Dakota, Virginia, and Wisconsin.4 Of those, only Virginia and Wisconsin were considered swing-states in the presidential election, which prevents their inclusion in this analysis. However, the race in Massachusetts can be considered an open contest due to the fact that incumbent Senator Scott Brown (R) was elected in a January 2010 special election following the death of eight-term Senator Ted Kennedy, and had not served a full term. Overall, five Senate races fit the criteria for analysis: Arizona, Connecticut, Indiana, North Dakota, and the exception of Massachusetts. These contests were competitive, in states where the presidential race was decided, were supported in large part by 3 Carson, Jamie, Erik Engstrom, and Jason Roberts. "Candidate Quality, the Personal Vote, and the Incumbency Advantage in Congress." The American Political Science Review, 101.2 (2007): 289-301. 4 http://www.realclearpolitics.com/epolls/2012/senate/2012_elections_senate_map.html 7 independent expenditures, and were contests for open seats. Despite all the similarities between them, each race possessed unique characteristics, mainly concerning the manner of outside spending, competitiveness, and rhetoric. While the unique features of races are important to understanding its outcome, it is intended that the unifying traits of these campaigns will reveal a deeper connection between spending and election success.