On June 25 the U.S. Supreme Court ruled that its controversial Citizens United decision would apply to state campaign finance laws. In a 5-4 finding, the court affirmed the rights of corporations to finance political activity in the states, rejecting a December 2011 judgment from the Montana Supreme Court, which had invoked a 1912 law that banned corporate expenditures state politics.
By the time the case reached the highest court, 22 states had signed on to challenge Citizens United. The Supreme Court's decision paves the way for an increased role for corporations in state campaigns, with new SuperPACs allowing companies to spend -- and spend, and spend -- to either support or attack candidates for state elected office.
But even before the court's decision, the State Integrity Investigation had uncovered institutional and functional flaws in political financing laws across the country, giving free reign to corporations and political action committes to wield undue influence in election campaigns.
Texas Gov. Rick Perry's presidential campaign was boosted, albeit briefly, by the Citizens United decision, but Perry was already used to receiving big donations from political action committees. Perry's campaign fund a slew of high-value donations from corpoate interests, according to the Texas Ethics Commission website.
The instances of commercial largesse include a total of $180,000 from Gulf States Toyota Inc. PAC, which represents a large network of Toyota dealerships in southern states; Perry also received $100,000 between October 2005 and November 2008 from Big City Capital LLC, a PAC representing Nevada-based gambling investors who were also lobbying the Texas legislature at the time.
With that kind of money flowing into Perry's campaign warchest, it should come as no surprise that Texas got a 60 percent 'D-' grade for corruption risk in the political financing category. Despite admirable marks on public access to campaign finance records, the state received low marks on nearly every other measurement in the category: Texas reporter Kelley Shannon found that Texas has a complete absence of limits on donations to political parties, and also allows unlimited donations from PACs and lobbyists to individual candidates like Perry.
Pennsylvania has similar issues with its campaign finance system, which was given a 46 percent 'F' grade for corruption risk. The state has no limits on donations from political action committees or individuals, including lobbyists. In law, corporate donations to candidates and political parties are banned, but that prohibition doesn't work in practice. "Industries are still capable of funding candidates," writes Pennsylvania reporter Peter Durantine, citing a flood of campaign contributions from executives and employees in the natural gas industry, with a total of $856,000 going to Gov. Tom Corbett over a 10-year period.
In Georgia, the state that ranked 50th overall in the State Integrity Investigation, reporter Jim Walls gave the state a near-perfect score for its laws on individual candidate campaigns, but documented numerous loopholes that allow for corporate influence in state elections.
"Ex-Speaker Glenn Richardson's PAC, the MMV Alliance Fund, raised hundreds of thousands of dollars from corporations, often during the legislative session, when political donations to lawmakers are otherwise illegal," Walls wrote, assigning Georgia a 58 percent 'F' grade for the politcal financing category.
Likewise, corporations and PACs exploit regulatory defects in Oregon, which got a 62 percent 'D-' grade in political financing -- its second worst category score out of the 14 under review. Reporter Lee van der Voo found the laws on the books lacking, but even greater problems with implementation. Relying on the research of Common Cause Oregon director Janice Thompson, van der Voo found that some potential influencers weren't even tied to a particular candidate's platform, and sought only to buy a few friends in the legislature.
"PACs also joined corporations in making donations designed to secure access rather than support a political ideology, such as making donations the day after the election, giving $2,000 or more, or first providing funding to one candidate, then providing contributions to the winning candidate after the election," van der Voo wrote. "Some simply contributed to both candidates."
With only a handful of exceptions -- Connecticut, Rhode Island, and Hawaii, to name a few -- campaign finance laws and practices are deeply flawed across the United States, and beyond, according to Nathaniel Heller, Executive Director of Global Integrity.
"We know from fieldwork in more than 120 countries and through gathering more than 200,000 data points that political financing problems are the number one corruption risk around the world, including in the US," Heller said.
Previously:
Big money fuels state politics, often without transparency or oversight
