Michigan Governor Unleashes “Citizens United on Steroids”

It's part of an agenda to tip the playing field in one direction.

Steve Arwood, chief executive officer of the Michigan Economic Development Corp., from left, Rick Snyder, governor of Michigan, and Thomas Farley, president of NYSE Group Inc., ring the opening bell at the New York Stock Exchange (NYSE) in New York, U.S., on Friday, May 8, 2015. U.S. stocks rose after a rebound in hiring last month bolstered optimism that economic growth is accelerating, but not fast enough to warrant higher interest rates in June. Photographer: Michael Nagle/Bloomberg via Getty Images
Steve Arwood, chief executive officer of the Michigan Economic Development Corp., from left, Rick Snyder, governor of Michigan, and Thomas Farley, president of NYSE Group Inc., ring the opening bell at the New York Stock Exchange (NYSE) in New York, U.S., on Friday, May 8, 2015. U.S. stocks rose after a rebound in hiring last month bolstered optimism that economic growth is accelerating, but not fast enough to warrant higher interest rates in June. Photographer: Michael Nagle/Bloomberg via Getty Images Photo: Michael Nagle/Bloomberg/Getty Images

Less than six hours after its passage by the Republican-controlled state legislature, Michigan Gov. Rick Snyder signed into law this week a measure that, effective immediately, allows candidates to raise unlimited sums of money for super PACs, which can then promptly spend that money supporting those candidates — or attacking their rivals.

It also allows consultants to simultaneously work for a campaign and a super PAC at the same time, making a joke of the supposed independence of the two groups.

It’s a brazen move for Snyder, who is term-limited out of office in 2018, to so fully embrace the post-Citizens United world dominated by big-money super PACs. Watchdogs warn that the law — which they have described as “Citizens United on steroids”— effectively creates an end-run around the state’s limits on campaign contributions and further obliterates the already-thin line that is supposed to maintain super PAC independence from candidates. That opens the door for the state’s wealthy donors to wield even more influence over the political system.

The move is part of a long-running Republican strategy, rarely matched effectively by Democrats, to tilt the political playing field in a partisan direction. On top of sophisticated gerrymandering, right-to-work laws have smashed the electoral power of unions in states where they’ve been enacted, such as Michigan and Wisconsin, which have tilted right as organized labor has been suppressed. Add to that voter suppression laws targeting minorities, college students, and anybody else suspected of voting Democratic, and Republicans are able to create a field in which majority support of an agenda is not necessarily required.

By winning at the state level and enacting laws that benefit the party in future elections, state GOP parties have been able to put once blue states in play, which paved the way for Donald Trump’s surprise victory in November.

Opening the campaign finance floodgates is part of that agenda. “Gov. Snyder rode in to Lansing on the white horse of transparency but will leave cloaked in secrecy, driving a hearse carrying our democracy,” Lonnie Scott, executive director of Progress Michigan, said in a statement on Wednesday. “Today it has been made clear that Gov. Snyder is doing everything he can to cement his legacy as one of the least transparent and most spineless governors Michigan has ever had.”

Snyder claims the law simply provides legal clarity by codifying the U.S. Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission, which declared that corporations and labor unions are allowed to make unlimited amounts of independent campaign contributions. “The Supreme Court of the United States ruled on this issue more than seven years ago, and still there has been confusion about how this decision affects Michigan law,” Snyder said in a statement Wednesday. “Under the bills signed into law today, the Department of State finally has clear statutory authority to regulate independent expenditure committees, to mandate registration and reporting of contributions and expenditures, and to investigate and punish entities violating those regulations.” (Citizens United applies to federal election law, not state law, but many states have changed their laws in the wake of the ruling to avoid legal challenges.)

However, as campaign-finance watchdogs point out, this law goes above and beyond what is set out by Citizens United. “This is bad policy wrapped in lies,” said Paul S. Ryan, vice president of policy and litigation for Common Cause, which advocates for stronger regulations on campaign finance. “The notion that Citizens United somehow leads to this is false.” The ruling does not say that states have to allow candidates to raise money for super PACs.  

In fact, the Supreme Court reasoned in Citizens United that unfettered spending by outside groups is permissible on the grounds that it is truly independent from candidates. Since then, federal candidates and their enterprising lawyers have aggressively pushed the boundaries of federal regulation in ways that have turned aligned super PACs into shadow campaigns. Still, as porous as they are, there are federal regulations that aim to limit coordination, including restrictions on the type of information and strategy that campaigns and super PACs can share with each other. The Federal Election Commission appears to require a 120-day cooling-off period before a campaign staffer can theoretically do strategic work for a super PAC. While the FEC allows federal candidates to raise money for super PACs, they are restricted to soliciting $5,000 per donor.

Watchdogs say the Michigan law ignores Citizens United’s emphasis on independence. Not only does the new Michigan law allow candidates to rake in unlimited amounts of money for super PACs, eschewing the meager federal limit, it also allows a candidate’s consultants, vendors, and attorneys to simultaneously work for a super PAC, so long as that person doesn’t pass strategic information between the two. That’s impractical though, since political consultants or ad buyers can’t simply forget what they know about a campaign’s internal strategies. In reality, critics say the law sends a clear message to potential donors that an aligned super PAC is the candidate’s in all but name and that their money will be put to good use for the candidate. “It really does make a mockery of the concept of independence,” Larry Noble, general counsel for the Campaign Legal Center, told The Intercept.

Now, if a candidate running for governor can get a donor to make a six-figure contribution to an allied super PAC, then the $6,800 contribution limit for statewide candidates is rendered useless and the barrier between independent-expenditure groups and candidates all but disappears. Candidates can essentially outsource their campaign operations to an allied super PAC that’s bankrolled by a select few mega-donors. “Multiple Republican lawmakers have said to me, ‘Why would anyone use a candidate committee with this law in place?” said Craig Mauger, executive director of the Michigan Campaign Finance Network, which lobbied against the law.  

One of the law’s leading proponents is Bob LaBrant, a key mastermind behind the Republican Party’s political takeover of the Michigan state government. For decades, he ran the Michigan Chamber of Commerce’s political and legal operations, aggressively pursuing campaign-finance litigation that sought to expand corporations’ political funding power. His efforts brought a case of his before the Supreme Court in Austin v. Michigan Chamber of Commerce, which laid the legal groundwork for Citizens United. Now, in advocating for the state to codify Citizens United and then some, he’s succeeded yet again in pioneering campaign-finance deregulation.

Snyder’s office denies that the state legislation is more permissive than federal law. “Citizens United determined that nonprofits, for-profits, labor unions and other associations can make unlimited contributions for unlimited expenditures,” Anna Heaton, the governor’s press secretary, said in a statement to The Intercept. The state cannot limit the amount those entities can contribute, so provided there is no coordination between a candidate and a committee, the legislation permits a candidate to solicit to a committee.”

“The Secretary of State will have the responsibility to investigate complaints of improper coordination, just like they have for the last seven years,” Heaton added.

Mauger said that proving coordination is nearly impossible and that the new law adds fuel to an already out-of-control fire. Michigan was ranked dead last in a nationwide 2015 study of state accountability and transparency laws conducted by the Center for Public Integrity. The state has a reputation as the dark-money capital of the country thanks to its lax transparency laws and preponderance of 501(c)4 groups and shadowy LLCs, and Mauger predicts that those types of groups will flood unaccountable dark money into super PACs that are now cozier than ever with politicians.

The governor’s office, however, does not share the concern that tax-exempt organizations will exploit the law. “501(c)(4)s, like other entities, can contribute to independent expenditure committees because they, like other entities, have a First Amendment right to engage in political speech,” Heaton said. The new law, she added, “does not deal positively or negatively with so-called ‘dark money.’”

If the new law exacerbates the already-increasing cost of elections in the state, that’s bad news for Democrats, who are headed into the 2018 elections trying to win back the governorship and make gains in the statehouse. Labor unions, which are major Democratic funders, have been dramatically weakened by the Republicans’ passage of a right-to-work law in 2012. Meanwhile, the Republican Party is flush with eager donors like the DeVos family and the Chamber of Commerce.

Michigan’s passage of the law appears to be unprecedented among state governments. Some states, like Minnesota, have made proactive efforts to more clearly restrict candidate fundraising for and coordination with super PACs. But most states have not addressed the matter, creating something of a legal gray area in which there are no statutory limits on coordination or candidate fundraising for independent groups. Michigan, though, appears to be the first state to affirm the right of state politicians to raise unlimited amounts of money for super PACs.

Reform advocates are concerned that Michigan has found an alternative route to more subtly undermine its campaign-finance laws and could provide a roadmap for other states that are wary of eliminating contribution limits outright to follow suit. “It gives them certain amount of cover by saying, this is just codifying Citizens United,” Noble said. “For those states where legislators and governors are worried about public reaction [to campaign-finance deregulation], this could be way to avoid real pushback.”

Top photo: Michigan Gov. Rick Snyder on Wall Street.

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