A Primer: The Impact of Recent Law on Union Political Participation

Published October 29th, 2014 -  - 10.29.14

With Election Day less than a week away, campaigns efforts’ to mobilize and persuade voters all over the country are in full swing. But it is not just campaigns that are striving to influence voters’ decisions; corporations, individuals, issue-oriented organizations and unions are all weighing in on candidates and initiatives through ad buys, campaign contributions and organized grassroots efforts. While the debate about big money in politics continues, it is beyond dispute that this area of the law has changed significantly in the past decade.

Below is Part One of a primer of recent law that effects union political participation. Check out Part Two for more information about restrictions on the use of dues of workers who object to union political activity, as well as more information about disclosure requirements. Section A of this post covers recent case law regarding political expenditures made by unions and corporations. Section B covers the specific rules of the game and how unions participate financially in the political process.

     A. Unlimited Union and Corporate Political Expenditures

This section discusses how the holdings in Citizens United and Speechnow.org have combined to allow unions and corporations to make unlimited political expenditures. These holdings in turn have resulted in the birth of the infamous Super PAC.

Citizens United v. Federal Election Commission

In its 2010 Citizens United holding, the Supreme Court struck down a decades-old federal ban on independent expenditures by corporations and unions. Citizens United allows corporations, unions and other organizations to spend unlimited sums from their own treasuries to fund political advertisements advocating for or against specific federal candidates. In doing so, the Court announced that the First Amendment does not permit a distinction between individuals and corporations when it comes to independent political expenditures. The Court upheld the financial reporting requirements for independent expenditures and electioneering communications, and the ban on corporate and union contributions to candidates.

Speechnow.org v. Federal Election Commission

In another 2010 case, the D.C. Circuit Court of Appeals held that the provisions of the Federal Election Campaign Act that limit the contributions individuals may make to SpeechNow.org, and the contributions that SpeechNow.org may accept from individuals, violate the First Amendment. That holding was followed by the creation of a new brand of political action committee, the independent expenditure-only committee commonly called a Super PAC.

Super PACs are prohibited from directly contributing any money to political candidates or political parties. However, Super PACs may raise unlimited sums of money from corporations, unions, individuals and associations, then spend unlimited sums to overtly advocate for, or against, political candidates. Like traditional PACs, Super PACs are legally required to report their donors to the Federal Election commission on a monthly or quarterly basis. According to OpenSecrets.org, as of October 18, 2014, 1,220 groups organized as Super PACs have reported total receipts of $462,494,032 and total independent expenditures of $235,863,403 in the 2014 cycle alone.

Citizens United and Speechnow.org taken together mean that corporations and unions can donate unlimited amounts of money to Super PACs, who can then make independent expenditures on their behalf in federal races–running ads or sending mail or communicating in other ways with messages that specifically advocate the election or defeat of a specific candidate, with no restriction on sources of funds and amounts spent. The only requirements are that the organization has adhered to FEC rules in organizing and registering the PAC, and the keeping of records and timely filing of financial reports that include donor lists as well as itemized expenditures.

     B. Financial Participation of Unions in Politics

This section discusses the contribution and expenditure rules that govern union and corporation political involvement leading up to an election. The section discusses the use of political action committees that make contributions to candidate campaigns, and corporation and union use of expenditure only committees, or Super PACs, to raise and spend unlimited sums of money for political advertising for or against candidates.

How Unions Can Spend and Donate Money Within the Rules

Under the new rules, ads and mailers that are produced by unions, corporations, or Super PACs can’t be coordinated with the candidates. This rule has proved very difficult to enforce, particularly given that the agency tasked with enforcement, the Federal Election Commission or FEC, is structurally weak. The agency is “composed of commissioners whose appointments are tightly controlled by the Members of Congress and political parties they regulate, and [is] hobbled by a chronic lack of funds.” By design, the commissioners are typically deadlocked on decisions of any great significance, since the FEC is composed of six members, no more than three of whom can be members of the same political party, which has played out to mean that at any given time the agency has had three Republicans and three Democrats as commissioners.

Contributions to Candidates

Citizens United did not displace limits on direct contributions to candidate campaigns.* The federal campaign contribution rules still apply, including bans on direct “soft money” contributions from unions, corporations and other groups that require these groups to use political action committees (PACs), groups organized for the purpose of raising and spending money to defeat or elect candidates should they choose to make federal political donations. PACs must abide by the contribution limits, which allow them to give $5,000 to a candidate committee per election (primary, general, or special). PACs can also give up to $15,000 annually to any national party committee, and $5,000 annually to any other PAC. PACs themselves may receive up to $5,000 annually from any one individual, PAC, or party committee. To see a list of the top PACs giving to candidates in 2013-2014 election cycle, or in past elections, check out Open Secrets. Union PACs have contributed over $41 million to federal candidates so far in the 2014 election cycle.

Interestingly, PACs were actually of union creation, with the Congress of Industrial Organization forming the first PAC in 1944 to support the re-election of President Roosevelt. The PAC got its money from voluntary contributions from individual union members rather than union treasuries, making it compliant with the then applicable Smith Connally Act of 1943, which forbade unions from contributing to federal candidates.

Political Expenditures

Unions can now donate unlimited sums of money to Super PACs that can make expenditures on their behalf, and they have taken advantage of this right. In 2014, labor has donated $47.8 million to outside spending groups, another term for expenditure only PACs. That is a lot of money, but labor donations to outside spending groups account for less than 15 percent of donations made to such groups this cycle. Industries like Finance, Insurance and Real Estate have donated over $80 million to outside spending groups, and Ideological/Single Issue Groups have donated over $76 million. Just those two donor industries combined make up 50 percent of the money that has gone to outside spending groups so far in this election cycle. What this means is that while labor is no small fry in the outside spending game, it doesn’t come close to the magnitude of corporate spending interests and the presence they have in American campaigns.

Union New GOTV Rights

In this post-Citizens United world unions also have an increased ability to do get out the vote (GOTV) and voter education. Prior to the ruling unions were only permitted to use treasury funds to contact union members regarding participation in elections, because use of treasury fund in encouraging wider political participation would have been a violation against the ban on union independent political expenditures. But since the significant change in the legal landscape, unions can now use general treasury funds to contact nonunion voters and so can now reach out to entire neighborhoods or voter lists rather than just their membership lists.

This post has covered campaign finance and spending laws that apply equally to both unions and corporations. However, under the current state of the law, unions have additional restrictions regarding the use of treasury funds and the ways unions can raise money for political activities, restrictions that do not bind corporations. Part Two of this primer will cover these union specific restrictions and how they impact union political participation.

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