Presumptive Democratic presidential nominee Hillary Clinton has promised to address campaign finance reform within the first 30 days of her presidency.
In a June video, she spoke about proposing constitutional amendments to overturn Citizens United, the 2010 Supreme Court decision that prohibited the government from restricting independent political expenditures by a nonprofit corporation, and whose principles extend to for-profit corporations, labor unions and other associations. The decision has led to the creation of so-called Super PACs or Political Action Committees that were heavily regulated under campaign finance law.
Clinton is scheduled to accept the Democratic nomination for president on Thursday and is leading polls over her Republican rival Donald Trump in most of the swing states that will determine the election. Campaign reform was not a key issue Monday on the first day of the Democratic convention. The major speakers Massachusetts Senator Elizabeth Warren, Democratic presidential candidate and Vermont Senator Bernie Sanders and Michelle Obama focused on soothing upset Sanders's supporters and unifying the party.
Republicans have praised the Citizens United decision, saying that affirms freedom of speech principles. But Democrats believe that it has enabled wealthy individuals and organizations who typically favor Republican candidates to have too much influence on elections, and in turn, over policies. Though barred from coordinating activities with specific candidates, Super PACs, can advocate for or against them.
Prior to Citizens United, corporations and unions were prohibited from making donations and individuals were allowed to contribute only up to $2500.
Critics of Citizen's United say that it ushered in an era of unlimited political giving by individuals and groups that have large amounts of money at their disposal. They say that it has accountability gaps because Super PACs do not have to disclose the identity of political non-profits and limited liability corporations who are making donations.
Many of the highest profile Super PACs support Republican causes. They have been set up or are heavily supported by prominent financial services executives, including hedge fund managers.
In this election, hedge fund contributions have totaled a whopping $101 million, with approximately $84 million raised from soft, outside money with no restrictions on the amount. Nearly 70% of those hedge fund donations went to Republican causes.
But Democrats have also made effective use of Super PACs.
A pro-Clinton Super PAC, Priorities USA Action , has spent around $36 million in 2016. The Clinton campaign has raised 71% of its donations from large individual contributions. (By contrast, Sanders, a vocal critic of Citizens United, raised 60% of his $220 million war chest from small individual donations.)
High-profile hedge fund managers who are among Clinton's biggest donors include:
- George Soros, a prominent Democrat, who has contributed more than $12 million towards super PACs since 2015, with his largest donation of $7 million to Priorities USA Action.
- James Simons, founder of Renaissance Technologies, who has contributed approximately $10 million over a similar period, with $7 million to Priorities USA Action. Renaissance Technologies uses sophisticated mathematical formulas to make investments.
- Donald Sussman who donated more than $10 million, with $6 million to Priorities USA Action.
In a recent interview, Supreme Court Justice Ruth Bader Ginsburg said that her "impossible dream" would be overturning Citizens United. Barring that unlikely development or new legislation that waters it down, the new reality is Super PACs and more big money flowing into politics.