Experts don't expect huge fallout from Citizens United decision in first quarter

Campaign finance experts don’t expect to see a huge fallout from the recent Citizen United Supreme Court ruling in the first-quarter fundraising reports.

Wednesday marks the end of the first quarter and it also marks the first fundraising period since the Supreme Court’s landmark decision on campaign finance reform.

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But experts don’t expect a tidal wave of new money, mainly because the January decision affected corporations and unions, which tend to save their funds for a final campaign push.

“We suspect closer to Election Day it will happen more and more frequently but how much more frequently is the big question,” said Dave Levinthal, the communications director for the Center for Responsive Politics.

There were only two primaries in first three months of 2010 – in Illinois and Texas, which tended to keep outside spending down.

But that could pick up later in the year, especially in the second and third quarters, as May and August are big primary months.


“It may be a little too early,” said former Federal Elections Commission Commissioner Michael Toner, who’s now a partner at Bryan Cave LLP. “We may have to wait until July or a little later.”

“The third quarter will be interesting,” said Skadden Arps Slate Meagher and Flom’s Kenneth Gross, a former general counsel for the FEC. “But my feeling is it isn’t going to be eye popping.”

The experts said the forms they will be looking at are the Form 5 individuals, which are filled out by non-profit corporations, and the 527 forms, which are filed with the IRS.

Gross believes the amount of money in politics will remain about the same, with the non-profits spending their campaign funds through the individual expenditures, instead of through 527s groups, which cannot spend money directly on campaigns but can only conduct issue advocacy.

Because of the Citizens United ruling, the individual expenditures can be applied directly to individual candidates, which the 527s cannot do.

“It’s old wine in a new bottle,” Gross said.

The experts also expect the Supreme Court will consider the recent RNC case, where a D.C. district court ruled the Republican National Committee cannot raise soft money, the unlimited contributions from corporations and individuals that was banned in 2002.

“It’ll be the next major decision in campaign finance reform,” Toner predicted.

The ban on soft money is one of the few parts of the McCain-Feingold campaign finance law to survive court challenges.

“The court likes election law cases. I think they find them interesting,” Gross said.

But any possible ruling on that case is expected to affect the 2012 race and not this cycle.

Meanwhile, first-quarter fundraising reports are due to the FEC by April 15th. Expect individual candidates to be releasing their numbers between now and then.