Demos means “the people” of a nation, and it is the root word of democracy. Yet the diverse members of our extraordinary American demos have never enjoyed equal access to the rights and freedoms of democracy. Our founders set out the aspiration for a democracy where everyone had an equal say, but it has taken movements of people over generations to expand the promise of full citizenship to all Americans, from the Reconstruction Amendments, through women’s suffrage, the Voting Rights Act, the 26th Amendment, and beyond. In many ways, America’s history has been a march towards greater political equality. Today, that struggle continues. After the election of our first African American president and record levels of voting by people of color, reactionary politicians have erected more barriers for citizens than we have seen in 40 years. Today, voting freedoms of millions of Americans are unduly burdened or denied altogether and millions of aspiring citizens await their own chance to have a vote—leaving America with an electorate that is not at all representative of our diverse demos. At the same time that the rights of citizenship are becoming more difficult to attain, the Supreme Court’s dismantling of campaign finance rules has led to the hollowing out of the ultimate promise of citizenship: a say over the policies that shape our lives. Demos’ 2013 report Stacked Deck: How the Dominance of Politics by the Affluent and Business Undermines Economic Mobility in America revealed that the dominance of politics by the wealthy and organized business interests has left the majority of Americans with little to no independent influence over policy, particularly unable to win reforms that would improve economic mobility at a time of worsening inequality. Stacked Deck sounded the alarm about a growing class of super-citizens, whose increasing influence contrasted jarringly with the diminished citizenship rights of so many Americans of color. This follow-up report, Stacked Deck: How the Racial Bias in Our Big Money Political System Undermines Our Democracy and Our Economy, reveals how the distortions of money in politics also hold back the policies that would advance racial equity and fulfill the promise of a multiracial democracy. It finds that a campaign system dominated by a narrow set of donors who are overwhelmingly (at least 90 percent) white diminishes the importance of communities of color to our elected officials as a whole. Underrepresented in government and among the wealthy interests with the most access to government, African Americans, Latinos, Asian Americans and Native Americans are less able to win policies that would improve their communities, on issues from fair lending to criminal justice. A provocative implication of the report’s findings is that the leadership of the movement for a representative democracy must itself be more representative, a challenge that we at Demos are taking up directly through new partnerships with racial and economic justice organizations. At Demos, we believe that our great diversity is what makes the experiment of American democracy a beautifully radical one, and one that is far from finished. The conclusions of this report call on us to admit that designing a system of campaign finance that is not biased by race or class is not only fair, but it is the only way that America can truly be a democracy—with a government of, by, and for all the people. Heather C. McGhee President EXECUTIVE SUMMARY One hundred and fifty years after the Reconstruction Amendments and more than a generation after the civil rights revolution, achieving true racial equity remains a central challenge of our time. Both structural barriers and racially biased policies contribute to a racial wealth and income gap that is higher today than at any point since the Federal Reserve began tracking it 30 years ago. And the drive for racial equity in America faces a serious headwind: the role of private wealth and big business in our political system. While the undemocratic role of big money hurts us all, its consequences are particularly dire for people of color, who are severely underrepresented in the “donor class” whose large contributions fuel campaigns and therefore set the agendas in Washington and state capitals across the country. Race intersects with our big money system in two important ways. First, because donor and corporate interests often diverge significantly from those of working families on economic policies such as the minimum wage and paid sick leave, people of color are disproportionately harmed because a larger percentage are poor or working class. Second, and more profound, our nation’s legacy of racism and persistently racialized politics depresses the political power of people of color, creating opportunities for exploitation and targeting—exemplified by the subprime lending crisis, mass incarceration, and voter suppression laws. The dominance of big money in our politics makes it far harder for people of color to exert political power and effectively advocate for their interests as both wealth and power are consolidated by a small, very white, share of the population. Summarized below are this study’s findings on (1) the racial bias inherent in our big-money political system; (2) our policy recommendations on how to make government more responsive to all people; and (3) five case studies detailing the real-world impact of money in politics on people of color and examples of how to shift power from wealthy interests to all voters. The Racial Bias Inherent in Our Big-Money Political System Recent research has demonstrated that a) the rich have different policy preferences than the general public; and b) the government is sharply more responsive to the preferences of the wealthy than to those of the average voter. The economic bias in our political system creates and sustains similar racial bias because the donor class as a whole and campaign contributors specifically are overwhelmingly white; and because the policy preferences of people of color are much more similar to those of the general public than to those of the rich. The top 10 percent of wealth holders are more than 90 percent white, whereas the rest of the country is less than 70 percent white. A significant majority of campaign money at the federal and state levels comes from a small number of elite donors (less than 1 percent of the population) making large contributions (of $1,000 or more). More than 90 percent of $200+ federal contributions in the 2012 election cycle came from majority white neighborhoods. When asked whether it’s more important to create jobs or hold down the deficit, people of color agree with lower-income Americans that creating jobs is the clear priority, whereas the wealthy have the opposite view. Elections funded primarily by wealthy, white donors mean that candidates as a whole are less likely to prioritize the needs of people of color; and that candidates of color are less likely to run for elected office, raise less money when they do, and are less likely to win. Ultimately, people of color are not adequately represented by elected officials. A recent study of black candidate success concluded that “the underrepresentation of blacks is driven by constraints on their entry onto the ballot” and that the level of resources in the black community is “an important factor for shaping the size of the black candidate pool.” Candidates of color raised 47 percent less money than white candidates in 2006 state legislative races, and 64 percent less in the South. Latino candidates for state House raised less money than non-Latinos in 67 percent of the states where Latinos ran in the 2004 election cycle. In a typical election cycle, 90 percent or more of the candidates who raise the most money win their races. Ninety percent of our elected leaders are white, despite the fact that people of color are 37 percent of the U.S. population. Latinos and Asians are more than 22 percent of the population, but hold fewer than 2 percent of the elected positions nationwide. In 2009, just 9 percent of all state legislators were African American and 3 percent Latino, compared with 13.5 percent and 15.4 percent of the total population, respectively. In a 2011 study, researchers found that white state legislators of both major political parties were less likely to reply to letters received from assumed constituents with apparently African American names (like “DeShawn Jackson”). Record corporate political spending on election campaigns and lobbying has amplified the political exclusion of people of color. The policy outcomes resulting from this big-money campaign finance system fail to address the needs of people of color, and in some cases actively restrict progress on racial equity in America. Policy Recommendations The pathway to a fairer country is through a stronger democracy. A key to promoting economic mobility and racial justice for people of color is to give these communities more say over the decisions that affect their daily lives. To accomplish this we need to both curb the influence of the wealthy, white “donor class” and amplify the voices of all Americans, including people of color, so that elected officials will listen to and work for all of their constituents, not just a privileged few. This requires reclaiming our Constitution from a runaway Supreme Court and matching small political contributions with public funds. Restoring Our Constitution In cases such as Buckley v. Valeo, Citizens United v. FEC, and McCutcheon v. FEC, the Supreme Court has stepped in to dismantle democratically-enacted policies intended to prevent wealthy interests from translating economic might directly into political power. We can transform the Supreme Court’s approach to money in politics so the Court overturns its own bad decisions—just like the justices have reversed course on New Deal economic protections, racial segregation, LGBT rights, and more. We can accomplish this by developing and promoting robust interpretive frameworks that go beyond fighting corruption as compelling values that our Constitution protects; mobilizing allies across the political spectrum and within the legal community to support these ideas; ensuring that newly appointed justices share the public’s common-sense understanding of the role that money should play in our electoral system; passing cutting-edge laws at the state and local levels; and fighting back in the courts to establish an enduring interpretation of the Constitution that empowers the people to pass sensible limits on the use of big money. We can amend the Constitution to clarify that the people have the power to rein in the influence of big money. Matching Small Contributions with Public Funds The best way to encourage candidates to listen to constituents and help people of color have their voices heard in the political process is to match small contributions with public funds. Matching small contributions six-to-one or more and providing a voucher or tax credit to small donors can encourage millions of Americans to participate through $25 or $50 contributions that actually matter, providing the incentive for candidates to reach out to—and listen to—average voters, not just big donors. Studies of New York City’s matching system and similar grant-based systems in Arizona and Connecticut have shown that such programs can significantly increase the diversity of the donor base and help more candidates of color run for office and win elections. The Government By the People Act (H.R.20) and the Fair Elections Now Act (S.2023) are leading proposals to bring a small donor matching system to the federal level. Growing Momentum Fundamental change is always difficult to achieve, but momentum is growing for several reasons. The silver lining of the Supreme Court’s extreme interventions on money in politics has been unprecedented public awareness and concern. A growing list of civil rights, environmental, workers’ rights and other progressive organizations are coming together to embrace the insight that enacting transformative change around their first priority issues requires strengthening our democracy and reducing the role of big money. Public support for common sense solutions remains exceptionally strong across party and ideological lines. There have been important recent victories, with the prospects for bigger wins on the horizon. Together, these factors provide real cause for optimism in the face of a daunting problem. Case Studies on Money in Politics and Racial Equity Three case studies demonstrate how big money thwarts progress on racial equity; a fourth shows how a fairer system for electing public officials can lead to policies that better serve our communities; and a fifth tells the story of how a community-based organization is building the power of people of color to fight back. And, the stories illustrate the two basic ways race interacts with our big money system. The first two case studies examine how the power of big money combined with systemic racism has fueled two of the most destructive policies targeted toward people of color: the prison industrial complex and predatory mortgage lending. The third and fourth case studies examine two ostensibly race-neutral policies—the minimum wage and paid sick days—that have disproportionate impact on the lives of people of color, who are over-represented among the working class. Private Prisons and Incarceration. Incarceration in the U.S. has increased by 500 percent over the past three decades, with people of color vastly over-represented in our nation’s prisons and jails. This is the result of policies that have put more people in jail for longer sentences despite dropping crime rates, policies boosting the bottom line of the growing private prison industry. The Subprime Lending Crisis. Because of rampant discriminatory lending practices, the subprime-lending crisis hit people of color especially hard. Banks and other mortgage lenders used millions of dollars of political contributions and lobbying to weaken and circumvent consumer-friendly regulations, resulting in the largest loss of wealth in communities of color in American history. The Minimum Wage. The federal minimum wage has remained stagnant, losing real value over the past several decades. Raising the wage to $10.10 an hour would lift more than 3.5 million workers of color out of poverty, but Congress has instead prioritized policies favored by the wealthy. Paid Sick Leave. The U.S. is one of the only prosperous democracies that does not guarantee even minimal paid sick leave to all employees, which would improve public health and disproportionately benefit Latino workers. A paid sick leave proposal was bottled up in the Connecticut legislature until the state passed a “fair elections” system that enabled candidates to run for office without depending upon wealthy donors and special interests. Following this change, Connecticut became the first state in the nation to guarantee paid sick leave. Voting Rights in Minnesota. TakeAction Minnesota recently demonstrated how organizing in communities of color can help defeat restrictions on the freedom to vote. Now, as they turn to expanding the franchise for formerly incarcerated people, TakeAction and its allies are building power for a multi-year strategy that connects voting rights and money in politics, breaking down silos and continuing to build the movement for a fairer and more inclusive democracy. INTRODUCTION The one ideal that nearly all Americans can agree upon is that through hard work and determination everyone should have a chance to improve her life circumstances regardless of race, gender, or class. At the same time, Americans strongly believe in political equality—the notion that civic life should be a level playing field and everyone should have an equal voice in the decisions that affect their lives. Yet today, there is widespread recognition that our nation is not living up to either of these cornerstone ideals. New research demonstrates that economic inequality is deepening1 and that this trend is likely to continue without aggressive intervention.2 This widening gulf between the rich and the rest of us, combined with lax rules that facilitate the direct translation of economic might into political power, has produced a system in which our government is sharply more responsive to the needs and priorities of the wealthy than to the public as a whole—a system that appears to more closely resemble a plutocracy or an oligarchy than a government of, by, and for the people.3 People of color experience this gap between our ideals and our reality even more sharply than do white Americans, as the historical legacy of exclusion from both our economy and our democracy remains deeply embedded in current social and economic structures. Both structural barriers and biased policies contribute to a racial wealth and income gap that is higher today than at any point since the Federal Reserve began tracking it 30 years ago.4 Mass incarceration—driven by a misguided drug war—has ravaged entire communities.5 And, people of color face daily indignities from racist “stop and frisk” style policing,6 with the increasing militarization of local law enforcement driving up the stakes of each encounter.7 One hundred and fifty years after the Reconstruction Amendments and more than a generation after the civil rights revolution, achieving true racial equity remains a central challenge of our time. But the drive for racial equity in America faces a serious headwind: the role of private wealth and big business in our political system. While the undemocratic role of big money hurts us all, its consequences are particularly dire for people of color, who are severely underrepresented in the “donor class”8 whose large contributions fuel campaigns and therefore set the agendas in Washington and state capitals across the country. Money and politics have been linked since the beginning of our republic. Concentrated private wealth has long played an outsized role in our electoral and political systems, and politics has long been a rich man’s game. For example, over the past two centuries only two percent of members of Congress have come from working class backgrounds.9 And, in 2002, congressional candidates received the majority of the money they raised from individuals in contributions of at least $1,000—from just 0.09 percent of the population.10 The American people are well aware of the undemocratic role of big money in our political system and throughout our history have taken concerted action to mitigate its effects.11 But, time and again, the Supreme Court has stepped in to eviscerate basic protections against translating wealth directly into political power.12 In 1976, the Court struck key provisions of Congress’s post-Watergate reform law and signaled its skepticism of policies intended to limit the role of big money.13 Two recent rulings, Citizens United v. FEC14 and McCutcheon v. FEC,15 have opened the door to unlimited outside spending by billionaires and corporations, and shifted the balance of power in candidate fundraising even more sharply towards the elite “donor class” and away from ordinary citizens.16 These cases have made a bad situation far worse, with large majorities of Americans correctly perceiving that government is far more responsive to the priorities of the narrow donor class than to the needs of the general public.17 The consequences have been severe. In our 2013 report Stacked Deck: How the Dominance of Politics by the Affluent and Business Undermines Economic Mobility in America, Demos examined how deficits in our democracy lead to policies that benefit the already-rich, stalling economic mobility and undermining basic economic security for working families struggling to stay afloat.18 This report focuses specifically on how our big money system holds back the cause of racial justice, by examining the disproportionate damage political and economic inequality has wrought in communities of color. Race intersects with our big money system in two important ways. First, race intensifies the exclusion of people of color because they are less affluent, on average, than whites. The interests of large donors and major corporations often diverge significantly from those of working families on core economic policies, and when government is more responsive to the donor class, people of color are disproportionately harmed. Second, and more profound, our nation’s legacy of racism and persistently racialized politics creates opportunities for exploitation. The dominance of big money in our politics makes it harder for people of color to exert the necessary political power to advocate for their interests and push back successfully against attacks on their communities. We begin the report by analyzing how our big money campaign finance system entrenches political inequality for people of color, marginalizing the voices of communities that have already faced countless barriers to full and equal participation in our political system. We then provide concrete policy recommendations for forging a democracy in which the strength of one’s voice does not depend upon the size of her wallet. Finally, we examine the role that money in politics plays in five specific areas of policymaking that have profoundly and disproportionately affected people of color: 1) the growth of the private prison industrial complex; 2) the subprime lending crisis; 3) the stagnant minimum wage; 4) the recent passage of paid sick leave legislation in Connecticut after the enactment of publicly funded elections; and 5) the fight to protect basic voting rights. These case studies illustrate the distinct ways in which race intersects with our big money system. The first two examine how the power of big money combined with systemic racism has fueled two of the most destructive policies targeted toward people of color. The third and fourth stories examine generally applicable policies that may not be a direct result of clear racial targeting and yet have had disproportionate impact on the lives of people of color, who are over-represented among the poor and working class. In addition, the Connecticut paid sick days example shows what we can accomplish when our elected officials have the opportunity to run for office by appealing to ordinary voters, not just wealthy donors and special interests; and the final story demonstrates how organizing in communities of color to protect the freedom to vote can build long-term power to address the role of money in politics. The goal is to connect the dots and make explicitly clear what many already suspect or feel: that our political system underserves communities of color; that the outsized role of large campaign contributions from a small number of wealthy, white contributors is a key reason; and that solving this problem is a critical component in the larger drive for racial equity in America. Let us be clear: people of color have always been underserved by the political structures in the United States; that is nothing new. What is novel, and dangerous, is how comprehensively wealth has come to dominate our politics, how easily and smoothly business elites and other wealthy interests are able to translate economic might into political power. We are caught in a vicious cycle in which the rich pour money into elections; secure political power; and write rules that keep themselves wealthy and the rest of us struggling to get ahead. This is a cycle that builds upon itself in a dangerous feedback loop. And, it’s a cycle that freezes out people of color and entrenches existing hierarchies based upon centuries of race-based oppression. This is an old problem with new urgency. Solving it remains part of the unfinished business of the civil and voting rights movement.19 THE RACIAL BIAS INHERENT IN OUR BIG-MONEY POLITICAL SYSTEM The initial Stacked Deck report highlights how affluent and business interests dominate both political participation and campaign spending, and as a result are able to set the policy agendas in Congress and state capitols, and translate their priorities into actual legislation—policies that benefit the already-wealthy at the expense of building a strong and diverse middle class. The key elements of this story are that a) the rich have different policy preferences than the general public, and do not prioritize policies that support economic mobility; and b) the government is sharply more responsive to the preferences of the wealthy than to those of the average voter. Princeton scholar Martin Gilens examined the connection between public preferences and policy outcomes in his important 2012 book Affluence and Influence, and he concluded that: The American government does respond to the public’s preferences, but that responsiveness is strongly tilted toward the most affluent citizens. Indeed, under most circumstances, the preferences of the vast majority of Americans appear to have essentially no impact on which policies the government does or doesn’t adopt. . . . .The complete lack of government responsiveness to the preferences of the poor is disturbing and seems consistent only with the most cynical views of American politics . . . . [M]edian income Americans fare no better than the poor when their policy preferences diverge from those of the well-off.20 Strikingly, when the preferences of the top 10 percent of income earners diverge from the rest of us, the 10 percent trumps the 90 percent. And, as Larry Bartels wrote in his 2008 study Unequal Democracy, “the preferences of people in the bottom third of the income distribution have no apparent impact on the behavior of their elected officials.”21 More recent research by Gilens and the Northwestern political scientist Benjamin Page has confirmed this troubling conclusion. Gilens and Page find that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.”22 They conclude that “[i]n the United States…the majority does not rule—at least in the causal sense of actually determining policy outcomes.”23 The Donor Class is Overwhelmingly White While this bias toward the rich is troubling for all Americans, the concern is amplified for communities of color. Due to historical and persistent structural inequalities, people of color are underrepresented among the wealthy who drive policy outcomes and over-represented in the bottom third of the income distribution—the millions of people who Bartels finds have no discernable influence on the policies that affect their lives. More than half of African American households and close to half of Latino households have incomes that put them at the bottom third of the income distribution (see Figure 1). In contrast, the top income strata are overwhelmingly white. The top one percent of income earners are more than 90 percent white, and the top 10 percent are approximately 85 percent white (compared to 63 percent of the population).24 The same goes for total wealth, which is likely a better reflection of the ability to influence politics (see Figure 2).25 The White Donor Class Does Not Share the Views or Priorities of People of Color Race and class are not the same; but in the United States they are inextricably intertwined. Not surprisingly, on key issues, the views of people of color have more in common with the policy preferences of the general public than with those of the rich. These differences are very clear on questions of how to structure the economy and what role the government should play. For example, in December 2013 the Washington Post asked “Do you think the federal government should or should not pursue policies that try to reduce the gap between wealthy and less well-off Americans?”26 White respondents held very similar views to those earning at least $100,000 per year—in both groups a bare majority (53 percent) said the government should try to reduce inequality.27 Respondents who were people of color, however, supported government fighting inequality at a much higher rate, a rate similar to that of less affluent Americans. Fully two-thirds of respondents who were people of color supported government action to reduce the wealth gap, along with 63 percent of those making less than $50,000 per year (see Figure 3).28 When asked if federal government policies favor the wealthy or the less well-off, people of color felt exactly the same as people making less than $50,000 per year: 70 percent believe policy favors the wealthy versus favoring less well-off Americans.29 Those making more than $100,000 still believed policy favors the wealthy but not by nearly as much—58 percent to 36 percent believing it favors the less well-off.30 When asked whether it is more important to create jobs or hold down the deficit, people of color agree with lower-income Americans that creating jobs is the clear priority, whereas the wealthy have the opposite view (see Figure 4).31 The differences are even more pronounced on this issue between the general public and the very rich. A survey of Americans with a median wealth of $7.5 million and an average income of more than $1 million revealed that they list reducing the deficit as the nation’s top priority in an open-ended question much more often than do members of the general public, who more often listed unemployment (see Figure 5).32 The preference gap plays out on issues beyond the economy, and in some cases touches directly upon issues of racial equity. For example, a majority of whites believe that “blacks and other minorities receive equal treatment as whites in the criminal justice system” as do half of those making more than $100,000 per year.33 Yet only 41 percent of those making less than $50,000 believe this, and only 26 percent of people of color.34 And, when asked what is most important to help them achieve the American dream, wealthy and white respondents listed lower taxes as their first priority, whereas people of color and lower income Americans both listed access to an affordable college education as their top choice.35 But, access to college without family wealth is also being thwarted by the gap in priorities between the wealthy and the rest of us, and our debt-for-diploma system disproportionately affects people of color. Seventy-eight percent of the public believes that the federal government should make sure that everyone who wants to go to college can afford to do so, but just 28 percent of the very wealthy agree (see Figure 6).36 Meanwhile, college costs have risen far beyond inflation and family income over the past few decades.37 This is due in part to policy shifts at both the state level—where states have cut student funding by 22 percent over the past decade38—and federal level, where grant aid has failed to keep pace with increasing need.39 This helps explain a persistent gap in college graduation rates by race. The most recent data show that of those who entered college in 2005, 62 percent of white students earned degrees within six years, versus 51 percent of Latino students and just 40 percent of black students.40 These figures underestimate gaps because they do not include community college and part-time students—populations that are both less likely to graduate and comprised of a higher proportion of students of color.41 Students of color are also more likely to take on debt to pay for college. Over four-in-five (81 percent) of African American bachelor’s degree recipients borrow at public four-year schools, compared to 63 percent of white students.42 Latino and African American students are also far more likely than white students to borrow at private non-profit schools as well. At every type of institution and for every type of degree (including associate’s degrees), African American graduates in particular are forced to borrow more to attain a degree or credential. The clear differential in policy preferences between the wealthiest Americans and people of color on critical issues means that when Congress focuses on the priorities and preferences of the wealthy, it enacts policies that cater far more to the interests of white households and ignores the priorities of the diverse and vibrant communities of color throughout the United States. Wealthy, White Individuals Dominate Campaign Funding As we noted in Stacked Deck, this differential responsiveness is caused by skewed rates of political participation of all kinds across the income spectrum, but particularly the influence of campaign contributions. These same factors are at play for people of color. Due to historic marginalization, unnecessary barriers to voting,43 and restrictive voting laws,44 voter registration rates and turnout have typically been lower for people of color than for white citizens.45 Solving these problems is rightfully an urgent priority for civil rights and pro-democracy organizations.46 But, this is a critical yet incomplete part of the recipe for political equality. Ensuring that every vote counts only goes so far if the choices voters face at the polls are limited and skewed. Ensuring real, functional political equality requires addressing the role of money in politics. As with the differential influence of the rich over working families, wealthy white Americans are able to multiply their impact on public policy most significantly when they break out their checkbooks, spending large sums to shape the electoral, and hence policy, landscape in America. So, the lack of attention given to people of color is in part due to the racial disparity in campaign contributions and the resulting relative lack both of candidate focus on these communities’ priorities and of elected officials of color. Large Donor Dollars Fuel Campaigns Election campaigns in the U.S. are financed predominantly by a small number of elite donors making large contributions.47 Far less than one percent of Americans gave $200 or more to a federal candidate, party, or PAC in the 2014 election cycle, and yet these contributions represent more than two-thirds of the total money these entities raised.48 The sharp increase in “outside spending” in recent elections has been fueled by unlimited contributions to Super PACs, non-profits, and trade associations.49 Fundraising by federal candidates—while subject to contribution limits—is not much more democratic. Candidates for the U.S. Senate in the 2012 election cycle, for example, received 64 percent of the funds they raised from individuals in contributions of at least $1,000—from just 0.04 percent of the population (see Figure 7). These crucial direct contributions help determine who can mount an effective campaign for office and who has the best chance to win. Combining outside spending with candidate, party, and PAC fundraising paints a grim picture. The Sunlight Foundation calculated that more than one-quarter (28%) of the money fueling the 2012 federal elections came from one ten-thousandth (0.01%) of the population.50 State and local campaign finance rules vary, but in most places an elite donor class is responsible for a large majority of campaign funds as well.51 In the 2012 elections, state-level candidates raised nearly two-thirds of their funds in $1,000+ contributions from individuals and PACs, while less than one percent of the population contributed any funds at all.52 Small donors gave just 16 percent of candidates’ funds.53 Large Donors Are Overwhelmingly White We have long known that large donors are more likely to be wealthy, male, and white than the rest of the population. According to a nationwide survey funded by the Joyce Foundation during the 1996 congressional elections, 81 percent of those who gave contributions of at least $200 reported annual family incomes greater than $100,000.54 This stood in stark contrast to the general population at the time, where only 4.6 percent declared an income of more than $100,000 on their tax returns.55 Ninety-five percent of contributors surveyed were white and 80 percent were men.56 And, while a comprehensive analysis of the race of individual campaign donors is not available, there are some useful proxies. First, Census Bureau data on the racial composition of communities across the country can tell us how communities of color are represented—or underrepresented—among large donors. In the 2004 presidential election, for example, the vast majority of individual contributions of at least $200 came from majority non-Hispanic white neighborhoods.57 President Bush raised 91.7 percent of his $200+ contributions from majority white neighborhoods and Senator Kerry raised 89.3 percent from majority white neighborhoods.58 This trend continues, as more than 90 percent of $200+ contributions in the 2012 election cycle came from majority white neighborhoods.59 Of the $1.38 billion in itemized contributions to 2012 presidential campaigns, less than four percent came from Latino neighborhoods, less than three percent came from African American neighborhoods and less than one percent came from Asian neighborhoods (see Figure 8).60 We do have some direct data at the very highest levels. The upper echelon of campaign donors provides a significant percentage of overall funds and is completely white—which is hardly surprising given that the racial wealth gap is at historic levels, leaving fewer people of color in a position to make very large contributions.61 The top ten Republican donors collectively gave over $130 million in 2012.62 The top ten Democratic donors collectively donated $43.3 million in the same election.63 All of these donors appear to be white.64 Small Donors Are Much More Likely to Reflect the Diversity of the Population In contrast, there appears to be significant racial diversity among small donors.65 A preliminary analysis of donors in New York City’s 2009 municipal election conducted by Public Campaign shows that donors giving $10 or less live in neighborhoods that are more racially diverse than the city as a whole.66 These donors live in neighborhoods where people of color comprise 62 percent of the population, versus 56 percent of the population of the city overall.67 Donor diversity falls as contribution level increases.68 By the time donations reach $250, most of the donor diversity has been lost.69 Donors contributing between $200.01 and $250 have average neighborhood racial diversity of 30 percent, far less than the 62 percent of very small donors (see Figures 9, 10, & 11).70 A similar analysis by Michael Malbin of the Campaign Finance Institute concluded that small contributors come from a much more diverse range of neighborhoods than large donors and “there can be little doubt that bringing more small donors into the system in New York City equates to a greater diversity in neighborhood experience in the donor pool.”71 It is important not to minimize the hard-won gains made by various communities of color in recent decades. As more people of color own businesses and build wealth, more African Americans and Latinos than ever are in a position to make large campaign contributions.72 Nevertheless, the broader trend holds: large campaign donors remain disproportionately white. In fact there appears to be a fairly straightforward inverse relationship between contribution size and donor diversity. African Americans and Latinos are just as likely as whites to make small contributions, but as size of contribution increases, fewer come from predominantly black or Latino neighborhoods. The lesson here is clear: people of color are not any less politically engaged or motivated to give than white Americans;73 but because of significant discrepancies in wealth they simply lack the ability to make large contributions at nearly the same rate. People of Color Have Less Influence The dominance of white donors disadvantages people of color in two key ways. First, candidates running for office (of all races) are less likely to prioritize issues of concern to Americans of color because they are forced to spend a significant majority of their time dialing for dollars to wealthy (usually white) donors. Second, communities of color are underrepresented in elected office, as candidates of color without access to networks of wealthy (usually white) donors find it more difficult to compete in the “wealth primary” necessary to run competitive campaigns.74 Corporate Political Spending Amplifies Political Exclusion The outsized influence of money does not stop with wealthy white individual donors. Corporations assert undemocratic control over policy outcomes in several ways: campaign contributions from employees and associated Political Action Committees (PACs) and direct spending from their treasuries—often filtered through trade associations or 501 c(4) organizations that do not have to disclose their donors—help elect public officials friendly to their profit-driven agendas; and lobbying sitting officeholders skews legislatures’ priorities towards special-interest giveaways at the expense of the public good. The elections following the Supreme Court’s Citizens United decision have seen unprecedented levels of campaign spending by groups other than candidates or political parties.110 For the first time, non-party outside spending topped $1 billion.111 It’s not possible to determine precisely how much of that came from corporate treasuries because more than $300 million in outside spending was conducted by nonprofits and trade associations that are not required to disclose their donors.112 Given that for-profit corporations were not permitted to spend money directly on federal elections prior to 2010, however, it’s safe to say that there’s more corporate election spending than ever before. In addition to the high level of election spending, corporate interests spend billions to influence the legislative process in Washington and state capitals across the country. The top 20 federal lobbying interests—dominated by business associations and industries such as pharmaceutical companies and securities and investment companies—spent more than $4.1 billion on lobbying in Washington during 2012 and 2013 alone.113 Comprehensive information on state-level lobbying is not available.114 The predictable result is that, as Justice Nelson of the Montana Supreme Court has commented, “corporations wield enormous power in Congress and in state legislatures. It is hard to tell where government ends and corporate America begins: the transition is seamless and overlapping.”115 This exacerbates the problems stated above because organized interests such as corporations “do not seek the same policies as average citizens do” and yet “organized interest groups have a very substantial independent impact on public policy,” with the influence of business groups nearly twice that of mass citizen groups (largely because there are so many more business interests in the game.116 The fact that corporate boards are dominated by whites likely makes corporate spending even less responsive to the needs of people of color. In 2012, for example, 86.7 percent of Fortune 500 corporate board seats were held by whites, with only 7.4 percent held by African Americans and 3.3 percent by Latinos.117 Big Money Dominance Has Real Consequences for People of Color The undue influence of wealthy donors and big business runs counter to basic notions of democratic fairness and equality. But, for people of color the problem is much more than theoretical, as they are not adequately represented or heard throughout the policy process. As a general matter, white constituents likely have better access to and the open ear of their white representatives. For example, in 2011 two researchers sent letters to state legislators using the names “Jake Mueller” or “DeShawn Jackson” and including partisan signals.118 They found that “putatively black requests receive fewer replies” and concluded that “white legislators of both parties exhibit similar levels of discrimination against the black alias” but that “[m]inority legislators do the opposite, responding more frequently to the black alias.”119 This is consistent with other research that has found, for example, that local election officials exhibit bias against Latinos.120 This bias and the general lack of diversity among elected officials translates into real policy outcomes that harm vulnerable communities. Numerous studies have shown that “[t]hrough shared experiences and a deep understanding of community, minority representatives (‘descriptive representatives’) are more likely to advocate for issues of importance to their communities than non-minority or non-immigrant candidates.”121 For example, the New American Leaders Project found that “minority elected officials, particularly immigrants, are far more likely to introduce and champion legislation that is welcoming to immigrants” and that states with no Latino or Asian American state legislators are “the most likely to pass punitive anti-immigrant policy…”122 Add the power of lobbying and campaign contributions to the baseline of underrepresentation and the results can be tragic. The disproportionate and heavily-armed response of local police to protests in the aftermath of the recent slaying of Mike Brown in Ferguson, Missouri is the most recent example. The Ferguson police are accountable to a white mayor and an 80 percent white city council in spite of a local population that is two-thirds black.123 And, the increasing militarization of local police has been driven in part by a federal government program that has resulted in the transfer of more than $4.3 billion in free equipment from the Department of Defense to local jurisdictions.124 This “1033 Program” is quite profitable for defense industry contractors as it increases demand for their products. When some members of Congress pushed to end it in June of 2014, the proposal was defeated 62-335 and MapLight reported that “[r]epresentatives voting to continue funding the 1033 Program have received, on average, 73 percent more money from the defense industry than representatives voting to defund it.”125 As an addendum to this report we provide five case studies that show how the role of money in politics has profound effects on the lives of people of color. Three of these examples show how destructive public policies skewed by big money fall squarely on their backs—on issues ranging from mass incarceration and inhumane conditions in private prisons to matters of basic economic security such as housing policy and a living wage. A fourth case study tells the story of how Connecticut guaranteed paid sick leave, demonstrating how a fairer system for electing public officials can lead to policies that better serve all of our communities. A final story, authored by state-based partner TakeAction Minnesota, demonstrates how their work organizing in communities of color to defeat restrictions on the freedom to vote is building power to push back on big money in politics. White Donor Class Domination is a Policy Choice, Not An Inevitable Condition It is likely that the wealthy have enjoyed more political influence since the beginning of time; and in the United States this has always been tied to race. But, we do not have to allow wealthy individuals and interests to translate economic might directly into political power. We can create strong policies that mitigate the influence of the donor class, amplify the voices of all voters regardless of wealth, and in the process produce outcomes that are more favorable to people of color. In a 2014 study, for example, Baylor University political scientist Patrick Flavin examined spending priorities in the various states between 1962 and 2008, and compared them with campaign finance laws.126 Flavin concluded that: campaign finance laws do have important effects on public policy decisions that matter most for disadvantaged citizens…Specifically when states more strictly regulate the financing of political campaigns, they tend to devote a larger portion of their spending each year to redistributive programs such as public assistance and housing and community development. This relationship between stricter laws and more spending holds even after accounting for differences in the ideology and partisanship of a state’s citizens and elected officials over time and, importantly, does not extend to policy areas that are not typically considered redistributive.127 In other words, the way we set the rules of the game for our democracy can have a significant impact on the substantive policy choices we make as a society. In the following section, we offer specific policy recommendations to forge a democracy in which the size of one’s wallet does not determine the strength of her voice. Matching Small Contributions with Public Funds There are also powerful ways to immediately put voters, including people of color, in the center of our democracy rather than billionaires and special interests. One key strategy is to match small contributions from average citizens with public funds. This way a $50 contribution from a constituent can be worth $350 or more to a candidate for elected office. Public matching funds can change the way candidates run for office, allowing them to spend more time reaching out to—and listening to—voters and less time dialing for dollars and holding exclusive events for those who can afford to give $1,000 or more. Evidence also suggests that matching programs and similar grant-based systems (in which candidates raise a threshold number of small contributions from local constituents and receive a lump sum public grant) can diversify the donor pool, giving candidates greater incentive to prioritize the needs of people of color. New York City employs a system that matches the first $175 of a local resident’s contribution to qualifying city council or mayoral candidates six-to-one.135 This is not ideal targeting because it still subsidizes part of a large contribution. Yet because of the significant match, the program enjoys robust participation from low-income communities and communities of color across the city.136 Nearly 90 percent of the city’s census blocks were home to at least one small donor for a city council race.137 In contrast, State Assembly campaigns, for which no comparable program exists, received small donations from only 30 percent of the city’s census blocks.138 In one example, 24 times more small donors from one poor, predominantly black neighborhood gave to City Council candidates (with a matching program) than to State Assembly candidates (without one).139 Critically, small contributions from diverse neighborhoods were far more important to City Council than to State Assembly candidates—in the case of contributors from the Bedford-Stuyvesant neighborhood of Brooklyn, 11 times more important.140 These programs don’t just work on a local level. Once Connecticut introduced a grant-based public financing system, the legislature passed a slate of policies that helped working families including a statewide EITC, a minimum wage increase, and the country’s first statewide paid sick days policy.141 In addition, more people of color, women and younger candidates were able to run for office and win. Latino representation in the state legislature reached its highest percentage in 2012 and women make up 32 percent of the legislature.142 The result is a legislature that more closely mirrors the demographics of the state. Arizona also employs a grant-based system of public funding for elections. The system more than tripled the number of contributors to gubernatorial campaigns between 1998 and 2002, and increased the economic, racial, and geographic diversity of contributors.143 Candidates participating in Arizona’s “clean elections” system raised twice the proportion of their contributions from heavily Latino zip codes than did privately-funded candidates.144 A second important strategy is to provide vouchers or tax credits to encourage more moderate and low income Americans to make small political contributions. A tax credit has enjoyed support from presidents Kennedy, Truman, and Eisenhower and benefited from years of experimentation at the federal and state levels.145 Experience shows that a properly designed credit can be an effective way to increase participation by non-wealthy constituents.146 On the federal level, the Government By the People Act (H.R. 20) would encourage small donor participation by matching truly small contributions (up to $150) six-to-one or more; establishing a $25 refundable tax credit for small donors; and providing additional resources to candidates who meet a threshold limit for small donations to help fight back against outside spending.147 The Fair Elections Now Act (S.2023) is a similar bill in the U.S. Senate.148 The NAACP supports both of these bills.149 Can These Reforms Really Pass? Any reform that fundamentally changes the way that candidates run for office will be challenging to achieve. But, momentum is growing for several reasons. First, the silver lining of the Supreme Court’s extreme interventions on money in politics has been unprecedented public awareness about the problem. A majority of Americans are actually familiar with the Citizens United ruling, which is very rare for a Supreme Court case;150 and during the 2012 Republican primary elections, Steven Colbert led a national seminar on the absurdities of Super PACs. Next, a growing list of civil rights, environmental, workers’ rights, and other progressive organizations are coming together to embrace the insight that enacting transformative change around their first priority issues requires strengthening our democracy. Led by the NAACP, the Communications Workers of America, the Sierra Club, Greenpeace, and now Common Cause, more than 50 organizations with a collective membership of millions of Americans have come together under the banner of the Democracy Initiative. These organizations are cooperating and coordinating as never before on addressing the role of big money, protecting the freedom to vote and fighting gridlock in the U.S. Senate. Finally, public support for common sense solutions remains exceptionally strong across party and ideological lines. A 2012 poll showed that by wide margins Americans strongly oppose unlimited corporate spending in politics and the outsized role of large donors more generally; and also support the transformative solutions presented above, as well as more incremental changes such as improving the transparency of political spending.151 More recent polling has confirmed this public support.152 No matter party or creed, it appears that the vast majority of Americans believe that we should come to the political table as equals, with an equal voice over the decisions that affect our lives. This momentum has expressed itself in a string of recent victories, with the prospect for bigger wins on the horizon. Twenty-five states have some form of public funding for election campaigns, including three states with comprehensive, small donor-oriented public funding programs.153 California, Delaware, Hawaii, Massachusetts, North Carolina, and Vermont have all passed laws to increase transparency of political spending in 2014.154 The most populous county in Maryland passed a small donor matching program in late 2014 by unanimous vote.155 And after two hard-fought campaigns and near-victories, advocates in New York will continue to press to bring a small donor matching system to the nation’s second-largest state. The leading federal reform bill has 160 co-sponsors in the U.S. House;156 and, as noted, a constitutional amendment recently received majority support in the U.S. Senate. Meanwhile, community-based organizations such as TakeAction Minnesota and ISAIAH are building the power of communities of color as part of a multi-year strategy to reduce the role of money in politics. The success of their campaigns on voting rights and other issues can serve as examples of how to connect the money in politics field to a broader pro-democracy agenda, which will help build the mandate for a fairer and more inclusive political process. Nobody is under any illusions that reform will come easily. Profound change never does. But, by channeling widespread public support through improved organizational cooperation and activist mobilization critical victories are within reach. CONCLUSION Despite the long-standing struggle for racial equity in the United States, we have a long way to go before our nation lives up to its highest ideals. Several factors contribute to the lived experiences and economic insecurity of people of color. Many of these are highly complex and deeply embedded in American society—from interpersonal, institutional, and structural racism to the type of unconscious bias that leads well-intentioned people to act in ways that perpetuate racial hierarchy. But, there is at least one impediment to progress that is clear and soluble: the undemocratic influence of big money in politics, which plays a substantial role at every stage of the policy process. The wealthy, white donor class has different policy priorities than do the general public, including people of color. Large individual donors and corporations help determine who can run effectively for office and who wins elections, filtering out candidates of color and ensuring that those who do run are more attuned to the priorities of the donor class. Then, corporations engage actively in the policymaking process through millions of dollars in lobbying, pursuing policies that have no relation to public support and that often further marginalize vulnerable communities. Ultimately, elected officials are nearly exclusively responsive to the preferences of the donor class, and people of color have their voices marginalized. The cumulative effect of this big money system is a set of policy outcomes that has held back our decades-long drive towards racial equity and economic opportunity in the United States. The case studies that follow examine just a handful of examples of how this process results in real harm to communities of color on a daily basis; one example of how different money in politics rules can produce better outcomes; and one story of how we can organize to win future reforms. Civil rights leaders have rightly prioritized pushing back on systemic attacks on the freedom to vote, and that fight must continue. But, the right to vote is incomplete without the chance to vote for candidates who have not been preselected by the largely white donor class. The right to cast a ballot and the ability to advocate for chosen candidates without being drowned out by billionaires and big business are flip sides of the same coin: the fundamental American right to an equal voice in the political process, akin to the principle of one person, one vote. Clarifying that the people have the right to enact common-sense limits on big money in politics and matching small contributions with public funds to amplify all of our voices can help put people of color’s needs and priorities onto the agenda in Washington and state capitals across America. In this way, curbing the influence of big money in politics is part of the unfinished business of the civil rights movement. And, it is a necessary step to finally forge a democracy that is truly of, by, and for all the people.
Posted on: Fri, 02 Jan 2015 19:30:01 +0000
Trending Topics
Recently Viewed Topics
© 2015