SpeechNow.org and the Birth of Super PACs

By Steve Simpson

March 26 marked the second anniversary of SpeechNow.org v. FEC, a watershed campaign finance case that IJ litigated along with the Center for Competitive Politics.  SpeechNow, which freed groups to do what individuals could always do—raise and spend unlimited amounts of money for political speech—gave birth to the controversial “Super PACs” that have become so instrumental in this year’s elections.  But along with this unique new way for Americans to express themselves during elections came a relentless campaign of misinformation waged by supporters of campaign finance laws and many in the media.  This campaign appears to have had some impact.  In a recent poll, 69 percent of respondents said they think super PACs should be outlawed.  So it seems a good time to shed some light on what Super PACs are and why they are a boon to free speech in America.

Simply put, Super PACs are groups that can raise funds free of the contribution limits that apply to other Political Action Committees as long as they do not make contributions to candidates.  Normal PACs are allowed to make contributions to candidates or to spend their money on political advertisements, but they can accept no more than $5,000 from any one person per year.  Super PACs, by contrast, can accept donations in unlimited amounts, but they must spend that money on their own political advocacy and cannot give any of it to candidates.  Their spending is known as “independent expenditures” because they cannot work or “coordinate” with candidates in devising or disseminating their ads.

IJ client David Keating created SpeechNow.org for exactly that purpose—to give Americans a more effective way to express their views during elections.  Before SpeechNow was decided, individuals were permitted to spend unlimited amounts of their own money on independent ads that supported or opposed candidates, but individuals who joined with others were limited to $5,000 apiece.  That was fine for someone like George Soros or Warren Buffet, who could afford to finance their own ad campaigns, but anyone of more limited means was out of luck.  If they weren’t satisfied with contributing small amounts to candidates or existing PACs, they had no way to impact an election.

SpeechNow and the Super PACs it created changed that.  They have made it far easier for Americans to impact political debates by giving them the ability to quickly raise funds to express themselves in particular elections or about particular candidates or issues.  The results have been dramatic.  Super PACs have made the Republican primaries extremely competitive and forced the frontrunners to pay more attention to the concerns of constituencies they otherwise could have ignored.  As David Keating and fellow IJ client Ed Crane wrote in The Wall Street Journal, Super PACs have arguably made the Republican primaries “a horse race, not a coronation.”

Even so, so-called campaign finance reform groups and many in the media have waged a relentless campaign of misinformation against Super PACs, falsely claiming that they are giving millions in “secret donations” to candidates and “buying” elections.  But a long list of wealthy political losers like Ross Perot, Michael Huffington, Meg Whitman, Jon Corzine and Mitt Romney himself shows that the “money-buys-elections” canard is false.  Money buys the opportunity to present one’s views to voters, but it is the voters who ultimately decide whether those views are persuasive.  Nor are Super PACs pumping millions into campaign coffers.  They can only spend their money on their own independent speech; they cannot contribute to candidates.

It shouldn’t surprise us that some Super PACs are run by people with connections to candidates.  Anyone with the knowledge and experience to run an expensive political ad campaign is likely to have connections to at least one candidate.  They must still comply with the law, which prohibits coordination and requires independence.

As for the claims that wealthy donors and corporations are funneling millions in secret donations to Super PACs, it is false.  Super PACs must disclose their donations just like other PACs.  And a recent study by the left-leaning groups Demos and U.S. PIRG found that almost 94 percent of donations to Super PACs could be traced back to their original source.  If there are any other government programs with a 94 percent success rate, we’d like to know about them.

There has rarely been a time in American history when large portions of the public have not been opposed to someone’s speech—from war protestors, to writers of racy literature, talk radio hosts, flag burners, and many more.  That’s a good reason to take this occasion to celebrate not only SpeechNow and Super PACs, but the Framers for having the foresight to give us the First Amendment.

Steve Simpson is an IJ senior attorney.