From Citizens to Shareholders: A Story of Campaign Finance Regulatory Relocation

Abstract

This thesis investigates how the historical development of campaign finance on multiple dimensions – congressional, jurisprudential, and regulatory – has unfolded in the post-Watergate era. It works to ferret out the precise ways in which de facto and de jure deregulation in modern campaign finance history have unfolded. It begins by analyzing the political history surrounding the creation of the Federal Election Commission (FEC), a history that ultimately rendered the commission unable to enforce campaign finance laws. Then the analysis turns to the law itself, reviewing the historical development of the corporation and the precedents leading up to Citizens United. This paper understands Citizens United as a case that compounded the institutional failure of the FEC, one that additionally moved corporate political spending to within corporate governance structures established through state corporate law. The paper ultimately argues that it was the synergy between de facto and de jure deregulation (both presented in the historical analysis) that relocated corporate campaign finance regulation from the FEC to the Securities and Exchange Commission (SEC), a relocation that altered the underlying logic of campaign finance law from a body of law conceived to protect citizens, to one conceived to protect shareholders and corporations. The thesis concludes by demonstrating how much of the “innovation” in campaign finance law, especially as exemplified by privately negotiated shareholder agreements, is ultimately a reflection of institutional decay.