The Price of Corruption
66 Pages Posted: 26 Aug 2014 Last revised: 4 Oct 2015
Date Written: August 25, 2014
The Supreme Court recently held that campaign contributions under $5200 do not create a “cognizable risk of corruption.” It was wrong. This Essay describes a nexus of timely contributions and special-interest legislation. In the most noteworthy case, a CEO made a first-time $1000 donation to a member of Congress. The next day that representative introduced a securities bill tailored to the interests of the CEO’s firm.
Armed with this real-world account of how small-dollar campaign contributions coincided with favorable legislative action, the Essay reads McCutcheon v. Federal Election Commission with a critical eye. In McCutcheon the Supreme Court assumed that small-dollar donations do not pose a risk of corruption, and accordingly struck down aggregate contribution limits on the theory that the base limit of $5200 provides enough of a bulwark against corruption. This Essay suggests otherwise. The fact that the price of corruption is lower than commonly understood has fundamental repercussions for campaign finance law.
Keywords: McCutcheon v. FEC, election law, Buckley v. Valeo, campaign contributions, campaign finance, Federal Election Campaign Act, JOBS Act, corruption, Securities and Exchange Act of 1934, SecondMarket, Wawa, shareholder registration thresholds, Section 12(g)
JEL Classification: K22, K39
Suggested Citation: Suggested Citation