Peter Thiel’s Government Shutdown and McCutcheon v. FEC

“I no longer believe that freedom and democracy are compatible.” – Peter Thiel

Dear concurrers: I’m excited to be guest blogging this month. Look forward to comments and discussion–there’s a lot going on (a shut down, a major Supreme Court decision), and I’ll just be posting thoughts, reactions, ideas, related to politics, power, and the Supreme Court. I will likely be focusing on McCutcheon v. FEC (nice summary by Rick Hasen here). Today, I have just a few thoughts about the government shutdown: namely, I want to connect it to the last big Supreme Court case, Citizens United. Unlike Peter Thiel, I think freedom and democracy are compatible, so long as there are good structural rules in place enabling their co-habitation. One set of those structural rules are those that create barriers to unlimited political giving and spending.

Remember this ad?

Hillary: The Movie

It should be on your mind for two reasons.

First, because it was the reason for the decision that enabled unlimited corporate and SuperPAC independent expenditures directed towards particular candidates. As you’ll recall, this was the 30 second ad for the movie that the nonprofit Citizens United wanted to play on broadcast television right before the Democratic Presidential Primary, in potential violation of electioneering laws. Citizens United led to SpeechNOW, which led to the capacity to raise unlimited money for SuperPACs like the Club for Growth, which could then freely electioneer.

This enabled Peter Thiel–who made over $600 million on his facebook investment– to give $2 million to Club for Growth. Thiel is the largest Club for Growth donor.

Club for Growth spent over $5 million supporting Ted Cruz’ primary challenge last year. It was a long shot challenge, but Cruz prevailed. And then went on to work on shutting down government.

I am sure some members of Congress favoring the shut down have sincere ideological opposition to government, and to the Affordable Care Act. But many of them have also adopted Thiel’s anarchism for instrumental reasons that have nothing to do with their districts, and everything to do with their memory of the Cruz primary, and their awareness of the threat if they are insufficiently anarchistic. They aren’t expressing their views: they are expressing Thiels.

Second, a week from today, the Supreme Court will hear oral argument in McCutcheon v. FEC. The question is the constitutionality of aggregate contribution limits in federal elections. Should Peter Thiel be limited to give $48,600, total, to all federal candidates, or should he be able to express himself more fully, and give an unlimited amount so long as he abides by the per-candidate limits. As Hasen writes, he could then functionally write a $3.6 million check to Cruz, who could then dole it out to other elected officials.

For those who think that culture is irrelevant, they might argue that Thiel can already spend his heart out anyway—in independent expenditures—so the cap doesn’t do much.

But the precise nature of the interaction matters, and the way the court talks about it—as a threat to society or as a salutary public service—matters, too.

One of the underappreciated aspects of the Citizens United decision had to do with culture, respect, and power. Kennedy’s decision legitimated individuals with decision-making power within businesses using the corporate form to use those business treasuries for political influence. It also legitimated and normalized wealthy individuals spending millions for policy reasons. Once something is part of a legitimate political strategy, it becomes normal, and once corporate political spending becomes completely normal, it becomes stupid not to use when it would improve the bottom line, and the welfare of the decision-makers. (Think Apple). Moreover, billionaire individuals who didn’t want to run their own political operations suddenly had the architecture to support their easy political involvement. (think Thiel). He gave $100,000 to a 527 in 2007, but his major spending followed Citizens United.

After Citizens United was decided, many people suggested that it wouldn’t have a great impact because a corporation with a good lawyer could use existing rules to influence politics—that was true. But using rules to circumvent a sanctioned activity has different emotional meaning than exercising a speech right–a positive good–as described by the Supreme Court.  I don’t know whether Thiel, in particular, would have spent millions on getting Cruz and similar politicians elected if he had to do so through the unwieldy mechanisms of a 527 and issue ads–perhaps. But there is ample evidence that the equalizing statement that money, like water, flows to its highest source is wrong–the flow of money seems to be related to the cultural legitimacy and the logistical roadblocks (or dams, to complete the metaphor) in the way. Or rather, it flows there a lot slower when the Supreme Court isn’t helping it out.

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2 Responses

  1. Ken Gordon says:

    Yes it has always been clear that there was a conflict between freedom and democracy. Unlimited freedom is what the lion has in the jungle. He can eat all the small mammals he wants. If you make a rule or pass a law that their are limits it interferes with his freedom. A red light interferes with freedom. There cannot be unlimited freedom and also justice, equality or democracy. Finding the balance is why Federal judges and members of Congress are paid more than the minimum wage. It takes some thinking. Thinking isn’t in style these days. It also interferes with freedom.

  2. AYY says:

    Okay, well you asked for comments, so let’s start at the beginning:
    “Peter Thiel’s Government Shutdown . . . ”

    Thiel didn’t shut down the government. Obama did.

    “Peter Thiel–who made over $600 million on his facebook investment– to give $2 million to Club for Growth. Thiel is the largest Club for Growth donor.

    Club for Growth spent over $5 million supporting Ted Cruz’ primary challenge last year.”

    He gave $2 million and they spent $5 million and he shut down the government? To put things in perspective wouldn’t we want to know how much the casino industry gave to Harry Reid, or how much Soros or the Hollywood media types gave to left wing causes. I don’t have the figures but I’ll bet it’s way more than $2 million.

    “It was a long shot challenge, but Cruz prevailed. And then went on to work on shutting down government.””

    Nope. See there’s a Senate and a House. Cruz is in the Senate. The Senate majority leader is Harry Reid. He’s the one who has a lot more to do with shutting down the government than Ted Cruz. We also have an Executive Branch. That’s what the President is in charge of. He doesn’t seem to want to negotiate. Last I checked he was going to veto a bill to fund the NIH during the shutdown so that kids suffering from cancer would get treated.

    “I am sure some members of Congress favoring the shut down have sincere ideological opposition to government”

    I don’t think any of them favor the shut down. Of those who are willing to support the shutdown, many of them are Democrats. They comprise a majority of the Senate. They tend to favor big government. I can’t think of anyone in Congress who has an opposition to government.

    “But many of them have also adopted Thiel’s anarchism for instrumental reasons that have nothing to do with their districts, and everything to do with their memory of the Cruz primary, and their awareness of the threat if they are insufficiently anarchistic.”

    I don’t think “anarchism” means what you think it means.

    “They aren’t expressing their views: they are expressing Thiels”

    Are you talking about Obama and Reid, or did you leave them out of the picture? If you mean those who oppose Obamacare, then Obamacare is not the most popular legislation that was ever passed. If you mean those who are concerned about the debt ceiling, then Thiel might have a point.

    “It also legitimated and normalized wealthy individuals spending millions for policy reasons ”

    Hah. What do you think Soros was doing with his money before Citizen’s United?

    “money, like water, flows to its highest source is wrong”

    Okay I agree with that. Water flows downhill.

    “Or rather, it flows there a lot slower when the Supreme Court isn’t helping it out.”

    It’s that darn First Amendment again.