Big Money Is Still Warping US Politics

While the question of the influence of money on the political system dates back to the nation’s founding, campaign finance has become a controversial legal issue only much more recently. Throughout much of American history, politicians devoted relatively little time on the campaign trail or, once in office, to fundraising and instead tapped their respective stable of wealthy donors to bankroll elections. For instance, in 1968, Robert F. Kennedy was able, in just a few weeks, to raise the $11 million that would make it possible for him to enter the presidential race at the last minute.

However, members of Congress grew increasingly concerned about the rising costs of running elections, especially as television advertisements were becoming an important part of campaigns’ strategies. Between 1956 and 1968, spending on all US campaigns doubled from $155 to $300 million, while campaign expenditures on media increased from $10 million to $60 million.

These growing costs convinced members of Congress that it was time to bolster the weak campaign finance laws. In 1971, Congress passed the Federal Election Campaign Act, which included full disclosure of campaign contributions and the names of donors, limits on media advertising spending, and limits on the amounts candidates could give to their own campaigns.

When the Watergate scandal broke the next year, it offered the chance for reformers to go even further. Among the many improprieties to come to light during the investigation was the fact that Richard Nixon had received a slew of improper and unreported donations — including $200,000 in cash delivered in a briefcase, a $2 million unreported contribution from his friend Clement Stone, and several large gifts from foreign corporations.

In response, Congress passed a series of sweeping amendments to the Federal Election Campaign Act in 1974. These included the creation of the Federal Election Commission, public financing of elections, and stringent restrictions on donations by individuals, PACs, and corporations. However, Congress did not put limitations on contributions to the parties’ “nonfederal accounts” or the money they used for local and state party-building activities, such as get-out-the-vote drives and voter registration.

This aspect of the law created the distinction between “hard money,” or official contributions, and the squishier category of “soft money,” or nonfederal contributions. While this distinction would become critical to the development of later fundraising practices, it was not the part of the new law that initially caused controversy. Rather, groups from across the political spectrum denounced the new rules as violating the First Amendment. An ideologically diverse coalition led by Sen. James Buckley of the Conservative Party filed a suit arguing that the government could not regulate how much a citizen could spend to make their voice heard.

The Supreme Court would famously agree. In Buckley v. Valeo (1976), the court struck down the limits on campaign expenditures for candidates accepting federal financing, on the grounds that it violated the First Amendment to restrict the amount that a candidate could spend to persuade people of their positions. The court did rule that it was permissible to require disclosure of donations and to establish reasonable limits on contributions by individuals to campaigns.

Buckley sent politicians in search of new means of amassing funds that operated within its parameters. This quest would elevate the significance of PACs, which the 1974 law had legitimated. It also led to the creation of new independent committees, since in Buckley, the court ruled that expenditures by independent groups should not face restrictions as long as they did not openly advocate for or against specific candidates.

These rules provided an important blueprint for campaigns, which the Republican Party immediately recognized. In the 1980 election, the GOP began to form or rely on existing independent committees to spend millions on issue advertisements. In addition, the Republicans also increased their hard money reserves through an extensive direct-mail operation targeted at more modest contributors.

GOP fundraising prowess left the Democrats flat-footed, and they scrambled to catch up. The Democrats had little in the way of the direct-mail operation the Republicans had developed and so found soft money to be the best option to stay competitive. By 1986, soft money accounted for 28 percent of the annual receipts for the Democratic National Committee (DNC) while it was just 5 percent of those of the Republican National Committee (RNC).

Over the next decade, that percentage rapidly rose for the Democratic Party. Throughout the 1980s and early ’90s, Democrats substantially intensified their soft-power fundraising, which they called a “necessary evil.” When he ran for president in 1992, Bill Clinton promised to end big-money domination of American politics, but once in office he all but abandoned any efforts to push campaign finance reform.

Donations increasingly became a metric by which pundits measured the success of a campaign and the likelihood of victory. The money fed a new army of political consultants, and a new style of campaigning was born in the process. While campaigns had utilized experts in mass communication and polling starting in the 1920s, political consulting did not become a full-blown business until the 1970s. Consultants provided candidates new strategies based heavily on professionalized techniques relying on careful studies of the electorate conducted through polling and focus groups, which they then applied to new forms of advertising, especially on TV.

Dick Morris, a self-described Machiavelli, was the master of this approach — which he put to service for candidates of both parties. He became most famous as the “dark knight” of the Clinton administration, who was brought in after Democrats suffered a bloodbath in the 1994 midterms. Morris’s strategy relied heavily on polling and television ads, preferring an “aerial war” over the airwaves rather than a “ground war” of grassroots mobilization. His relentless polling included commissioning a 259-question survey to shape the key points of Clinton’s 1996 State of the Union address.

Morris and his team also deployed polling information to develop extensive TV advertisements, which ran virtually nonstop for a year leading up to the 1996 election. Some 125 million Americans viewed a Clinton issue ad at least three times a week in the lead-up to the election.

While Clinton won a decisive victory in 1996, it did not come without a cost. Beyond persuading Clinton to take morally abhorrent positions like approving a draconian version of welfare reform in the summer of 1996, Morris spent roughly a million dollars a week on advertising alone. This spending forced Clinton into relentless fundraising and ended up ensnarling him in a scandal over a large number of donations he received from Asian business executives.

This controversy created new momentum for campaign finance reform legislation. Russ Feingold and John McCain first introduced their sweeping legislation in 1997, though it did not pass until almost five years later. The famed McCain–Feingold Act put firm restrictions on soft money and issue advocacy ads.

But wealthy donors found a new loophole in 527 groups (named for sections of the federal tax code that give them tax-exempt status). These were not covered by McCain–Feingold since they were technically unconnected to parties. The tool became especially favored by big Democratic donors like Peter Lewis and George Soros, who began to give millions to purportedly independent groups such as America Coming Together and the Young Voter Alliance during the 2004 election cycle. The most famous 527 group, however, was the right-wing-led Swift Vets and POWS for Truth, who attempted to discredit Democratic presidential nominee Sen. John Kerry’s record as a naval officer in the Vietnam War.

At the same time, Democratic candidates harnessed the internet to draw in more small-dollar donations. It was a tactic pioneered by Howard Dean in the 2004 Democratic presidential primary but carried on by the formation of ActBlue, which many credited as critical in the success of Barack Obama’s 2008 presidential run. At the same time, the internet boom also enriched Democrats in another way, as Silicon Valley millionaires and billionaires became an important new source of contributions.

In light of these developments, Obama launched a new trend in 2008 when he became the first presidential candidate to forgo federal matching funds so that he could spend more than the limit of $84.1 million. It established a new precedent. Since then, candidates in presidential general elections have systematically rejected public funding.

Obama’s champions would defend this choice given his heavy reliance on small-dollar donations. While inarguably a more democratic way to fundraise, that money largely served similar ends: ads and paying for consultants and pollsters, who the internet did not make any cheaper. In fact, consultants began offering a whole new set of strategies and tools designed specifically for the digital age. And Obama did not of course cultivate his political career on small donations alone.

The Supreme Court’s 2010 Citizens United put this entire system on steroids. Outside spending in federal elections grew; this money helped further enrich consultants and pollsters, who became ever greater parasites on the political system as they found a panoply of new clients to create strategies and advertisements for. Between 2008 and 2012, the revenues and billing by the top fifty political consulting firms grew by 66 percent due to the rise of now-permissible independent expenditures.

In the process, a sense of inevitability set in among members of both parties and the public. While in the first years after the decision there was a great deal of attention paid to the issue of campaign finance, in the last decade — beyond the occasional exposé on specious dark money spending — it failed to sustain much political attention. Many Democrats at least feigned distress, but they would frequently compare fundraising to an “arms race” and suggest that unilaterally disarming would risk full-blown disaster.

Perhaps that argument for the necessity of excessive fundraising would hold up if it was translating into a string of victories. But increasingly, it has not. After all, in October 2024, Kamala Harris set a record for the biggest fundraising quarter ever, raising $1 billion in a three-month period and $378 million in September alone (through a combination of small donations and very big ones). The campaign spent the money freely on major events, paid media, and professional staff.

This fundraising success apparently produced a great deal of (over)confidence among campaign staffers, but the election results showed that dollars don’t always translate into votes. As one Joe Biden staffer put it bluntly: “How did you spend $1 billion and not win? What the fuck?”

One lesson here is the need to reallocate spending priorities to focus on voter outreach rather than hiring expensive campaign consultants. Harris especially proved that an effective ground game and campaign agenda can’t be bought. At the same time, as Sanders and others have pointed out, the lavish donations she received from Wall Street and other corporate sectors made Harris retreat from any hints of economic populism, especially the regulatory agenda that the Biden administration had pursued.

You might have thought this experience would teach establishment Democrats a lesson. But in the New York City mayoral race, the party’s next major test, many of them were at it again in their quest to get Andrew Cuomo elected. A group of leading Democrats (including multibillionaire Michael Bloomberg) formed Fix the City, the largest super PAC ever created with over $25 million. It unleashed a deluge of ads that ran ad nauseum during the NBA playoffs as well as a torrent of mailers with negative messages about his main rival, Zohran Mamdani.

There has been much discussion of the ways Mamdani has run a campaign that is the polar opposite of Cuomo’s. Mamdani built on a set of practices that the New York City chapter of the Democratic Socialists of America (DSA) has developed over the last few years. Rather than using extensive polling and online ads to microtarget voters, the campaign actually listened to New Yorkers, deploying an army of 50,000 volunteers. Mamdani’s campaign staff estimates that volunteers knocked on 1.6 million doors and had almost 250,000 conversations with voters. The campaign paired this grassroots outreach with an extremely savvy social media campaign that proved much more effective, and cheaper, than the pro-Cuomo advertisements.

What is especially notable is Mamdani did most of it through the money allotted by New York City’s public matching election funds system, which provides $8 for every dollar donated by a city resident, up to $250 per person. Mamdani reached his cap a full three months before the election, the fastest rate of any campaign in history.

Mamdani’s campaign, therefore, suggests the promise of public campaign funding. It also speaks to the need for the Democratic Party to renew its efforts to, at the very least, limit outside spending, and for its candidates to stop forgoing public matching funds. Even this might be harder than it sounds. Recently, a group of eight Democratic senators sent an open letter to Democratic Senate minority leader Chuck Schumer and party chair Ken Martin urging the DNC to pass a resolution restricting super PACs and other forms of dark money from the party’s primaries. The senators suggested it was vital for the party to take a stand ahead of the 2026 midterms and to show voters they were serious about overturning Citizens United.

Democratic Party insiders quickly dismissed the call. A former Harris staffer, Ammar Moussa, rehashed the argument Democrats have given for years, chortling, “Let’s tie one hand around our backs while [letting] Republicans spend unlimited money.” This response shows just how entrenched the reluctance to reform the system has remained among mainstream Democrats. The quest for overturning Citizens United will be even harder to achieve given the current composition of the Supreme Court. In fact, the court is scheduled to hear a case in the fall that would further weaken campaign finance regulations.

The Mamdani campaign nevertheless points to two important alternatives that don’t require federal action or the overturning of legal precedent. First, it shows the power of publicly financed elections. While it might be difficult to establish public financing at the federal level in the foreseeable future, more cities and states could follow New York’s lead. Second, Democratic campaigns (and independent progressive campaigns, for that matter) in the future should look to the model of Mamdani rather than Harris.

In addition to being cheaper, this would free Democratic candidates from the constraints of the failed strategies of the insular consultant class and instead force them to be responsive to the needs and desires of ordinary people. It therefore provides a path for the making of a more cohesive and stable pro-worker coalition.