“A hundred million dollars is nothing,” the venture capitalist Andy Rappaport told me back in the summer of 2004. This was at a moment when wealthy liberals like George Soros and Peter Lewis were looking to influence national politics by financing their own voter-turnout machine and TV ads and by creating an investment fund for start-ups. Rappaport’s statement struck me as an expression of supreme hubris. In American politics at that time, $100 million really meant something. Eight years later, of course, his pronouncement seems quaint. Conservative groups alone, including a super PAC led by Karl Rove and another group backed by the brothers Charles and David Koch, will likely spend more than a billion dollars trying to take down Barack Obama by the time November rolls around. The reason for this exponential leap in political spending, if you talk to most Democrats or read most news reports, comes down to two words: Citizens United. The term is shorthand for a Supreme Court decision that gave corporations much of the same right to political speech as individuals have, thus removing virtually any restriction on corporate money in politics. The oft-repeated narrative of 2012 goes like this: Citizens United unleashed a torrent of money from businesses and the multimillionaires who run them, and as a result we are now seeing the corporate takeover of American politics.
As a matter of political strategy, this is a useful story to tell, appealing to liberals and independent voters who aren’t necessarily enthusiastic about the administration but who are concerned about societal inequality, which is why President Obama has made it a rallying cry almost from the moment the Citizens United ruling was made. But if you’re trying to understand what’s really going on with politics and money, the accepted narrative around Citizens United is, at best, overly simplistic. And in some respects, it’s just plain wrong.
It helps first to understand what Citizens United did and didn’t do to change the opaque rules governing outside money. Go back to, say, 2007, and pretend you’re a conservative donor. At this moment, you would still have been free to write a check for any amount to a 527 — so named because of the shadowy provision in the tax code that made such groups legal. (America Coming Together and the infamous Swift Boat Veterans for Truth were both 527s.) Even corporations, though they couldn’t contribute to a candidate or a party, were free to write unlimited checks to something called a social-welfare group, whose principal purpose, ostensibly, is issue advocacy rather than political activity. The anti-tax Club for Growth, for instance, is a social-welfare group. So, remarkably, is the Koch brothers’ Americans for Prosperity and Karl Rove’s Crossroads GPS.