The Inside Story Of How Citizens United Has Changed Washington Lawmaking

When Supreme Court Justice Anthony Kennedy cast the deciding vote to gut a century of campaign finance law, he assured the public that the unlimited corporate spending he was ushering in would “not give rise to corruption or the appearance of corruption.” Because those authorized to give and spend unlimited amounts were legally required to remain independent of the politicians themselves, Kennedy reasoned, there was no cause for concern.

Just five years later, in a development that may be surprising only to Justice Kennedy, the Supreme Court’s 2010 decision is reshaping how, how much and to whom money flows in Washington.

How the flood of money released by Citizens United v. Federal Election Commission has changed elections has been the subject of much discussion, but the decision’s role in allowing that same money to soak the legislative process has largely gone unreported. According to an extensive review of public documents held by the FEC, the U.S. Senate and the Internal Revenue Service, as well as interviews with lobbyists and policymakers, Kennedy’s allegedly independent spending has become increasingly intertwined with lobbying and legislation — the precise appearance of corruption campaign finance laws were meant to curb.

Politically active nonprofits, known as “dark money” groups for their ability to shield the identity of donors, and super PACs, which take unlimited sums of money but must disclose donors, have become dominated by lobbyists and other political operatives with close ties to leaders in Congress. Meanwhile, businesses with issues before Congress are pumping increasingly more money into the lobbyist-connected organizations.

The Supreme Court initially established a narrow definition of corruption in the 1970s, but Citizens United used it to blow open the gates that had been holding back corporate money. The 2010 decision came as the U.S. legislative system had evolved into a near parliamentary system of party-line voting and expansive party networks extending seamlessly from the Capitol to party headquarters to lobbying firms to outside political groups. Most top congressional legislators now have “leadership teams” — informal but internally recognized groups of aides-turned-lobbyists who help raise funds.

To the lobbyists working in the system he helped create, Kennedy’s vision of political spending is unrecognizable. “I think Justice Kennedy’s view on this was naive at best,” one lobbyist told The Huffington Post, reflecting a rare bipartisan consensus. “People are going to do what’s allowed under the law.”

The Supreme Court majority’s casual dismissal of the possibility that the Citizens United ruling could lead to corruption or the appearance of corruption was necessary from a judicial perspective. Citizens United and a subsequent lower court ruling essentially hold that the First Amendment prevents the government from restricting political spending independent of the candidates and parties. Yet the courts had long recognized Congress’ authority to regulate the financing of campaigns and the lobbying process in order to maintain the citizens’ trust in a democratic government. Where the choice had been between the sanctity of elections on the one hand and an unfettered interpretation of the First Amendment on the other, the courts chose to protect elections — because without a trusted government, there is no First Amendment to speak of.

Kennedy and the other four justices, therefore, had to insist that independent political spending could not lead to corruption or the appearance of corruption — no threat of corruption meant no congressional authority to regulate that spending.

It is difficult, however, to look closely at the way laws are being made today without acknowledging at least an appearance of corruption. Congressional aides to whom HuffPost spoke all said that their own members of Congress were certainly not influenced in an untoward way by the corporate funds pumped into efforts to re-elect them, but that it was easy to see why the public might assume that to be the case. Five years later, the judicial logic of Citizens United has unraveled.

Political advisers closely associated with House Speaker John Boehner (R-Ohio), Senate Minority Leader Harry Reid (D-Nev.) and Senate Majority Leader Mitch McConnell (R-Ky.) serve as both operatives on their behalf and lobbyists for corporate clients with business before Congress. The clients are encouraged to give generously to super PACs associated with the respective lawmakers, according to lobbyists familiar with the widespread strategy.

Trevor Potter, one of the top election lawyers in the country whose clients include Sen. John McCain (R-Ariz.) and comedian Stephen Colbert, warns that this arrangement creates exactly the appearance of corruption that courts have used to justify campaign finance limits.

“It does make a significant difference to have lobbyists involved because then you have the very lobbyists who seek official action from the members being the conduits to the money,” Potter said. “It makes them valuable to their clients because they have a good relationship with the member, and they have a tight relationship with the member because they have access to the money from their clients.”

They’re making use of the opportunity. A connected super PAC and nonprofit manned by lobbyists tied to Boehner have collectively received millions from interests in the insurance, drug, energy and other industries. Big-money groups associated with McConnell have been funded by coal companies, insurers and hospitals. Mining and gambling businesses have given directly to the super PAC associated with Reid, which is staffed by two Reid confidantes, one of whom advises the lobby shop that represents those companies while she also prepares to run the senator’s 2016 re-election bid. All these companies have hired lobbyists who are connected to those same lawmakers as well as to the big-money groups and who are also working on issues over which Congress has much sway. The groups they fund have spent big to put and keep Boehner, McConnell and Reid in the driver’s seat.

Tony Podesta, a Democratic super lobbyist with the Podesta Group, told HuffPost that he has encouraged his corporate clients to give to super PACs and dark money nonprofits. “It’s unfortunate that we have the decision Citizens United, but as long as that’s the law of the land, then Democrats and Republicans are both active in these kinds of endeavors,” he said.

In the House of Representatives, Speaker Boehner maintains a tight network of former aides who have decamped to K Street. Through these aides, he is tied to a dark money nonprofit and related super PAC that have spent millions to help him become speaker and to maintain and expand his GOP majority. The House leadership’s agenda regularly aligns with that of the clients of the lobbyists who give to these groups.

The Air Line Pilots Association, a Podesta Group client, gave $100,000 to Senate Majority PAC in 2014. Another Podesta client, the Partnership for Quality Home Healthcare (then known as Home Health Advocacy Coalition), gave $125,000 in 2014.

These lobbyists’ clients also gave to Patriot Majority USA, the related dark money group. According to tax returns, the Partnership for Quality Home Healthcare and yet another Podesta client, the Alliance for Quality Nursing Home Care, gave a combined $1.5 million to the nonprofit from 2011 to 2012.

“I’m a supporter of both groups and urge people to support both groups,” said Podesta, who personally contributed $50,000 to Senate Majority PAC in 2012.

Before there was a Senate Majority PAC, there was another Democratic nonprofit acting as a key node in the flow of money from lobbying interests to help elect helpful politicians. Citizens for Strength & Security Action Fund, and its later iterations, provides what may be the clearest example of how outside spending groups are used by lobbyists to curry favor with leaders in Congress.

The story begins back when Congress debated and passed the Affordable Care Act. An immense legislative accomplishment for President Barack Obama and congressional Democrats, the law was also the subject of a massive, still-ongoing lobbying campaign. The U.S. Chamber of Commerce spent tens of millions of dollars trying to defeat the reform bill, much of it provided by America’s Health Insurance Plans, a lobbying association for health insurers. The chamber also spent millions more trying to defeat reform proponents in the 2010 election.

The preeminent interest group spreading money around Washington on health care reform, however, was the pharmaceutical industry. Under the stewardship of former Rep. Billy Tauzin (R-La.) — whose leap from writing the Medicare prescription drug law to lobbying on K Street led to an eponymous rules change in Congress — Pharmaceutical Research and Manufacturers of America worked behind the scenes with the White House and then-Sen. Max Baucus (D-Mont.) to advance the legislation. PhRMA’s chief requirements: that the new law not reverse the ban on re-importing drugs and not grant authority to Medicare, Medicaid or any new entity to negotiate lower drug prices.

In return for abandoning those two longstanding Democratic Party goals, Democrats would get PhRMA’s support, which included directing millions of dollars to outside nonprofits to pay for electoral and advocacy ads. Along with other industry groups like the Federation of American Hospitals and reform proponents like Families USA, PhRMA launched Americans for Stable Quality Care in 2009. The new dark-money nonprofit raised and spent $46 million that year to fund a barrage of ads backing Obama’s health bill.

And then, two months before the law passed in March 2010, the Supreme Court handed down the Citizens United decision, allowing corporations to fund electoral efforts through nonprofits like Americans for Stable Quality Care. The group quickly changed its name to Citizens for Strength & Security Action Fund and transformed into an overtly political operation.

PhRMA pumped $2.5 million into that group in 2010 to help pay for ads supporting the election of Sens. Michael Bennet (D-Colo.), Joe Manchin (D-W.Va.) and Patty Murray (D-Wash.). Their seats were vital to maintaining the Democratic majority in the Senate.

The pharmaceutical lobby also put $2 million into another Democratic nonprofit called America’s Families First, which operated as a donor fund and redistributed what it raised. It gave $2.3 million to the get-out-the-vote group America Votes, $1.5 million to Democratic super PACs, $461,000 to Defenders of Wildlife Action Fund and $370,000 to Citizens for Strength & Security Action Fund, among others. All of these named groups were active in supporting Democrats in the 2010 election.

Finally, PhRMA boosted Sen. Baucus, the main congressional architect of health care reform, by sending $500,000 to an obscure group called Montana Growth. In 2013, the little known group funneled $400,000 of that money over to the Stronger Montana Fund and Montana Hunters & Anglers Action, both Democratic dark-money nonprofits, to support a possible re-election campaign by Baucus.

The Stronger Montana Fund put $275,000 into a pro-Baucus issue ad early in 2013, but Baucus ultimately chose not to run again. He has since been named U.S. ambassador to China by President Obama.

One big-money Democratic operative said that while both sides accept this new corporate cash, Democrats have a harder time getting it — there are only so many PhRMA deals on the table.

Republicans have been increasingly moving their fundraising and spending away from super PACs and toward dark money groups, which allow them to conceal the source of the money.

The Democratic operative guessed that at this point, Republicans may be taking in 100 corporate dollars for every one that reaches Democrats. “We don’t really know — it’s at least 10-to-1.” She added, “The truth is Democrats don’t get much [501(c)(4)] corporate money, and that’s because their interests often aren’t aligned. I’d gladly have c4s shut down — that would be a huge boon for us.”

The Huffington Post