USA Today reported that "the House's powerful tax-writing committee approved a bill Thursday that would ban the IRS from collecting the names of donors to tax-exempt groups." In an interview with the paper, "Freedom Partners chairman and Koch Industries executive Mark Holden said Americans have the right to 'anonymous free speech.'" This type of unlimited, unaccountable, political spending is an existential threat to our political institutions.
For a case study in the corrupting influence of unlimited, unaccountable, political spending by special interests like Koch Industries and Freedom Partners, consider the curious case of Kansas. In 2013, Rolling Stone reported:
when the 2012 Republican primary rolled around, Brownback and his supporters recruited an army of right-wing challengers and targeted the moderates [in the state House and Senate] with unprecedented alacrity. Not to mention cash: During the primary, outside spending from groups like Americans for Prosperity (a lobbying group founded by the Koch brothers), the Kansas Chamber of Commerce (run by former Koch employees), the Club for Growth [unknown to Rolling Stone, Club for Growth also received funding from the Koch network in 2012] and Kansans for Life totaled, according to varying estimates, somewhere between $3 million and $8 million.
For a sense of how far $3 million to $8 million goes in local elections, Rolling Stone reported that the entire campaign budget for one of the moderates targeted was $35,000. Koch Industries was richly rewarded for its generosity:
[Former State Senator Dick] Kelsey figures he probably voted with Brownback 98 percent of the time, but he publicly opposed the governor's budget after he realized it would lower his own tax burden to zero. "The bill was designed, frankly, to take care of Koch Industries," Kelsey says. "I could see that it took money from very poor people and benefited me, personally, too significantly. And I'm not poor."
The bill that Kelsey referred to enshrined the Koch LLC Loophole into law. We have reported extensively (1, 2, 3, 4, 5) on the popular opposition to this loophole, the impact of this loophole on the 2016 Kansas budget debate, and Koch-affiliates recent efforts to ensure that it is not repealed. When the issue was debated in 2015, Koch-affiliate NFIB previously flexed its muscle in a show of strength that deterred legislative action. Legislators appear to fear the wrath of Koch Industries more than they fear the wrath of voters; given its impact in past elections, that fear is not irrational.
According to one state legislator, the Koch LLC Loophole allows 2,400 high income (>$500,000) Kansans to shield $3.4 billion a year from state income taxes. Applying the 4.6% state tax rate that applies to income over $15,000 implies that this law costs the state roughly $150 million in annual tax revenue that it would otherwise collect from its 2,400 highest-income taxpayers. While it is unclear how much of this income accrues to the state's wealthiest individual (Charles Koch) and his associates, it is fair to say that Koch Industries, and its associates/affiliates, have likely received a considerable financial return on its Kansas political spending.
In fact, Charles Koch all but admitted as much in his interview with ABC's This Week, when he said:
What have we gotten for it [political involvement]?
There have been some good things, particularly at the state and local level.
Justice Stevens' dissent in the Supreme Court case Citizens United v. FEC, which made it possible for a single source of outside money to be more feared by Kansas legislators than the voters themselves, foresaw its effect:
The Court's ruling threatens to undermine the integrity of elected institutions across the Nation".when corporations grab up the prime broadcasting slots on the eve of an election, they can flood the market with advocacy that bears "little or no correlation" to the ideas of natural persons or to any broader notion of the public good. The opinions of real people may be marginalized".The Court's blinkered and aphoristic approach to the First Amendment may well promote corporate power at the cost of the individual and collective self-expression the Amendment was meant to serve.
Stevens' dissent also stated:
It is fair to say that "[t]he Framers were obsessed with corruption," which they understood to encompass the dependency of public officeholders on private interests. They discussed corruption "more often in the Constitutional Convention than factions, violence, or instability." When they brought our constitutional order into being, the Framers had their minds trained on a threat to republican self-government that this Court has lost sight of.
While the danger of quid pro quo corruption is clearly understood by most, consider Kansas a case study for what can happen when public officeholders view their positions as more dependent on patronage from private interests than the will of voters.
Note: this article was originally published to our diary on DailyKos.