Clinton Proposes Campaign Finance Reform While Raking in Wall Street’s Millions

Part of the Series

Beyond the Sound Bites: Election 2016

Presidential candidate Hillary Clinton announced a campaign finance reform plan Tuesday in a post-Labor Day effort to boost her support after her closest competitor, Sen. Bernie Sanders (I-Vermont), took a nine-point lead over her in New Hampshire polls and continues to gain ground in Iowa among Democratic voters.

Clinton called for overturning the infamous 2010 Citizens United decision that paved the way for dark money groups to mete out millions from corporate donors into federal elections. In addition, the plan proposes using executive authority to require government contractors disclose their campaign contributions. She would also press for the U.S. Securities and Exchange Commission (SEC) to mandate that publicly traded companies disclose their political spending. Lastly, Clinton’s plan would create a publicly funded pool that would match small donations to presidential and congressional campaigns.

“We have to end the flood of secret, unaccountable money that is distorting our elections, corrupting our political system, and drowning out the voices of too many everyday Americans,” Clinton said in a statement. “Our democracy should be about expanding the franchise, not charging an entrance fee.”

Under her public financing matching plan, congressional and presidential campaigns could receive a certain level of taxpayer-matched funds if they raise a minimum amount of small-donation money (that amount has not yet been determined). Candidates who opt in would have lower limits for contributions.

The primary super PAC backing Clinton raised $15.6 million in the first half of 2015 from just 33 donors.

Clinton’s announcement of her reform proposals preempts Sanders’s expected action on campaign finance this week. He was set to introduce a bill that would provide public funding for presidential and congressional campaigns. The timing shows she’s keeping a cautious eye on Sanders, who has eschewed support from super PACs and has drawn tens of thousands of people at his campaign stops across the nation.

Sanders has made campaign finance reform central to his campaign and was the first member of Congress to introduce a constitutional amendment that would reverse the Citizens United decision in 2011. Clinton has also previously supported such an amendment.

But unlike Sanders, Clinton has accepted support from super PACs and outside spending groups — the types of groups that she now says she wants to rein in with her new plan. Clinton has so far raised the most campaign funds of any major-party candidate, about $47.5 million, according to the Center for Responsive Politics. The primary super PAC backing her, Priorities USA Action, raised $15.6 million in the first half of 2015 from just 33 donors, according to a filing with the Federal Election Commission (FEC). The Priorities PAC indicated in August that it had guaranteed $20.5 million in commitments since that filing, according to The New York Times.

The July FEC filing showed big banks and investment firms continue to be among Clinton’s top donors this year, with Morgan Stanley and JPMorgan Chase reappearing on her FEC filing this cycle. According to a MapLight analysis the FEC data, employees of Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Bank of America Merrill Lynch have already contributed about $290,000 to her campaign committee through June 30.

Over the course of her entire career, from 1999 to 2016, Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase have been four of her top five all-time contributors. The fifth contributor is the multinational law firm DLA Piper.

Clinton has been criticized by progressives for her acceptance of big-money contributions and her close ties to Wall Street banks, finance firms and donors. Bill and Hillary Clinton together have helped to raise more than $1 billion from industry donors during the past two decades, landing them among the most prolific campaign fundraisers in U.S. history, according to The Wall Street Journal.

“It’s not as if Clinton should get a pass — or any other candidate should get a pass — from a critical look at where their support comes from because they say good things about reform,” Robert Weissman, president of the advocacy group Public Citizen, told Truthout.

Though Weissman acknowledged that Clinton’s proposals would be beneficial if implemented, he noted that she is simply articulating a position on campaign finance reform that has become the mainstream consensus within the Democratic Party over the last five years.

Reform supporters like Weissman have been disappointed before by grand campaign promises from presidential hopefuls.

“By overwhelming margins, Americans agree that our political system is broken,” he said. “Every candidate running for president knows this, and virtually every candidate claims that his or her presidency would restore integrity and return power to the people…. Clinton’s policy proposals are not the first from presidential candidates, and we trust they will not be the last. We look forward to a campaign spending reform contest.”

Bill and Hillary Clinton together have helped to raise more than $1 billion from industry donors during the past two decades.

President Obama also made promises on campaign finance reform during his campaign that crumbled during the course of his presidency. He refused to accept public financing during his 2008 presidential campaign, even after he had publicly spoken out against the role of money in politics. After the Citizens United decision, he promised to refuse money from super PACs, but appeared at an event that his campaign explicitly called a “donor event, but not a fundraiser,” indicating his willingness to give special access to big-money contributors. During the 2014 election cycle, he raised money for two super PACs supporting House and Senate bids.

During the 2008 election cycle, President Obama also raised big-money contributions, about $16 million, from the financial industry. He raised less than $7 million in 2012, according to the Center for Responsive Politics.

To campaign finance reformers, Clinton’s plan reads like the wish list they’ve been advocating around for years. However, many remain cautious about their optimism on a number of her proposals, including changing the disclosure rules for outside spending groups, which a Republican-dominated Congress would be unlikely to approve.

Reformers regard her other proposals — forcing government contractors to disclose their donors and using overturning Citizens United as a litmus test for appointing Supreme Court justices — as tangible.

“I’ve [experienced] three governors in New York all promise the perfect campaign finance reform package and then do little or nothing to bring [them] to fruition, and that’s the risk here, … that you have the perfect platform and then no follow-through,” said Ciara Torres-Spelliscy, who is an assistant professor of law at Stetson University and a fellow with New York University’s Brennan Center for Justice. “What I hope is that there’s actually follow-through on some of these things.”

In addition to Clinton and Sanders focusing on campaign finance reform, there is a new contender who has placed the issue at the center of his campaign: Harvard Law School professor Lawrence Lessig formally announced his candidacy for the Democratic presidential nomination this week.

Lessig is running as what he calls a “referendum candidate” on a platform devoted entirely to reforming campaign finance laws and congressional redistricting, pledging to step down and give control to his vice president once he accomplishes his goals. Lessig confirmed his bid for the presidency after his exploratory committee achieved the $1 million fundraising goal Lessig had set for a Labor Day deadline.

“It’s a sort of fascinating moment that shows how much saliency this issue has gained over the past couple of years…. It might be part of the zeitgeist that we get three candidates who are coming out very strong for campaign finance reform,” Torres-Spelliscy said, referring to Lessig, Sanders and Clinton.

But even if Clinton is elected and is able to implement some of her campaign finance reform proposals, activists say that her contributions from big Wall Street donors could influence her policies and presidency.

For example, the Clinton campaign hasn’t expressed a firm position on the Trans-Pacific Partnership (TPP) trade deal that President Obama has championed, but she pushed for the deal at least 45 times during her tenure as secretary of state, and leaked diplomatic cables from WikiLeaks show that her deputies discussed the trade deal with foreign heads of state.

“We have to do our part in making sure we have the capabilities and the skills to be competitive. It’s got to be really a partnership between our business, our government, our workforce, the intellectual property that comes out of our universities, and we have to get back to a much more focused effort, in my opinion, to try to produce those capacities here at home so that we can be competitive in a global economy,” Clinton told MSNBC in April.

Morgan Stanley, which has heavily contributed to Clinton’s campaigns over the years, is one of the main supporters of the TPP as part of the U.S. Business Coalition for TPP. Since 2013, the firm has lobbied to push the agreement. Beyond campaign contributions, Morgan Stanley representatives share many close ties to the Clintons. The firm’s current vice president, Thomas R. Nides, served as deputy secretary of state for management under Clinton and is known as one of her closest confidants.

In much the same way that current campaign finance laws allow unaccountable corporate money to corrupt “our political system, and [drown] out the voices of too many everyday Americans,” in Clinton’s words, the TPP would strengthen corporate rights and diminish average Americans’ in a number of areas, including making it easier for corporations to attack environmental regulations, offshore U.S. jobs and contribute to rising income inequality by spurring job loss and downward pressure on wages.

Perhaps most critically, the TPP would threaten U.S. sovereignty by granting corporations the right to sue the U.S. government in a foreign, private tribunal system that would place firms and multinational companies on the same footing with sovereign nations in a law system removed from U.S. courts. The tribunals would empower private business lawyers to enforce new corporate rights laid out in the TPP, including ordering taxpayer compensation to corporations for any loss in future profits incurred whenever their policies or procedures are challenged.

Clinton has supported other policy positions that arguably erode the U.S. democratic process, including foreign policy positions supporting the United States’s drone program — which has largely remained unaccountable to the public — and continuing to support wars in the Middle East long after a clear majority of Americans opposed them.

Still, Torres-Spelliscy hopes that Clinton’s support for a rule requiring publicly traded companies to disclose their political spending will pressure SEC regulators to establish clear disclosure rules sooner — a step that can be taken no matter who occupies the presidency.

“This is something I’ve been working on for years,” Torres-Spelliscy said, referring to her advocacy for such a disclosure rule. “It’s sort of beyond validating to see what could be a really simple and elegant solution: make a rule … that if you’re spending in politics you [have] to tell your shareholders about it…. Clinton’s support for this might be the thing that tips the balance and might get the [SEC] to move on it.”