As we move into heavy campaigning season, let us reflect on Citizens United. Perhaps the silliest statement in the opinion written by Justice Anthony Kennedy is this:
For the reasons explained above, we now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.
The “reasons explained above” are in fact one reason: in an earlier case, Buckley v. Valeo, the Court ruled that a ban on direct contributions was justified to prevent corruption or the appearance of corruption, but that a ban on expenditures, as opposed to direct contributions, was not. Kennedy quotes Buckley:
“The absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.”
The naïveté, or something worse, of Kennedy and the concurring judge/politicians is breath-taking, as Stephen Colbert and Jon Stewart convincingly demonstrated. But this isn’t funny. There are a raft of academic studies showing that Kennedy and the rest of the CU majority are fools if they really believe what they wrote, and viciously political if they don’t. I reviewed a couple of them here, studies showing that political contributions and lobbying affect law enforcement against corporations and the humans who work for them.
Here are some more. I include some lobbying papers, because the two are closely related. I note that these papers don’t make the inane distinction between expenditures and direct contributions that Kennedy loves so much, probably because they live in the real world. I found all of these papers at SSRN. Quotes are from the abstracts; I haven’t read the papers.
Overall, the results suggest that corporate political contributions cause an increase in the equity value of the contributing firms, and the valuation effects of these contributions are larger for firms that make larger contributions as well as for firms more affected by government policies.
In August 2011, the United States brought a landmark antitrust lawsuit to prevent the merger of two of the nation’s four largest mobile wireless telecommunications services providers, AT&T Inc. and T Mobile USA, Inc. But why are so many elected officials asking the Obama administration to intercede in the Department of Justice’s lawsuit to force a settlement? Why are they approving a merger that would likely lead to higher prices, fewer jobs, less innovation, and higher taxes for their constituents? Does it have anything to do with the money they are receiving from AT&T and T-Mobile?
This Essay examines the recent lobbying efforts in the AT&T/T-Mobile merger. AT&T spent $11.69 million on political lobbying in the first six months of 2011. In addition to hefty campaign contributions, it lobbied lawmakers with $52 steaks and $15 gin-and-cucumber puree cocktails.
But lobbyists, as this Essay outlines, are not the problem. The problem is the combination of lax campaign finance rules and antitrust’s prevailing legal standard, a flexible fact-specific rule of reason.