Restrictions on campaign speech violate the First Amendment unless they are aimed at preventing either corruption or the appearance of corruption. The definition of corruption is thus central to campaign finance jurisprudence. In Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), the Supreme Court defined corruption narrowly, to include a quid pro quo exchange and nothing else. In this Note, I examine the viability of that definition by combining two previously dissociated bodies of literature—one exploring the Court’s varying definitions of corruption in campaign finance cases and the other addressing the proper role of a representative in a democracy. I argue that, although any viable definition of corruption must be based on an underlying theory of representation, no commonly accepted theory of representation underlies the narrow quid pro quo definition adopted in Citizens United. Thus, I suggest the Court take up another campaign finance case soon, so that it can either (1) articulate a theory of representation that justifies its narrow quid pro quo definition of corruption or (2) reconsider that definition.
The Securities Law Implications of Financial Illiteracy
Every financial literacy study conducted over the last few decades concurs: Americans, including American investors, are financially illiterate. This Article argues that America’s financial illiteracy poses a significant, widespread, and long-term challenge for our federal securities regime because that regime is premised almost entirely on disclosure as the best form of investor protection and, by extension, on investors’ ability to understand disclosure. By advancing a typology of investors and their disclosure needs, this Article further argues that we may have significantly underestimated the extent of the financial illiteracy problem based on at least two flawed assumptions. First, we have presumed that the financial illiteracy problem is limited to retail investors—individuals (as opposed to institutions) who invest directly in the securities markets and who represent a small segment of the overall investor population. However, such a presumption fails to sufficiently account for the literacy concerns of individuals who invest indirectly in the market in the form of holdings in mutual funds, pension funds, and other institutions, and who comprise a substantial segment of the market. The second flawed presumption relates to the notion that disclosure is not intended for the individual retail investor. Many insist that disclosure is intended for sophisticated institutional investors and financial intermediaries who provide signals to less sophisticated investors about suitable investment choices. However, the anecdotal and empirical evidence suggests not only that our presumptions about the sophistication of institutional investors and intermediaries are debatable, but also that such actors do not perform their signaling function as effectively or as consistently as we presumed. Thus, the effort to minimize the financial literacy problem through reliance on these other investors is misguided. Finally, this Article contends that the very fact that regulators have sought to combat financial illiteracy for more than two decades without appreciable changes in financial literacy rates suggests that the problem may be long-term and that the reform of choice—investor education—may require supplementation. Based on these conclusions, this Article insists that we must grapple much more seriously with the financial literacy problem and offers suggestions about the best path forward.
Subsidizing Segregation
What drives administrative officials to enforce the Constitution in particular ways? This Article recovers a forgotten civil rights struggle that sheds light on that question. Long after Brown v. Board of Education, federal education officials continued to fund segregated schools, arguing that their agency bore no immediate responsibility for implementing the Equal Protection Clause. In the present, that position seems deeply surprising—even at odds with the rule of law. But the administrators did what their agency had been designed to do: extend the federal role in education without thereby extending federal constitutional rights. Congress engineered the federal Office of Education, predecessor to today’s Department of Education, with the goal of providing federal support for schools while avoiding federal enforcement of the Constitution’s equality principles. Legislators and their allies found support for that approach in a different constitutional goal: deference to states’ authority within the federal system. The resulting institutional framework of federal support without federal rights enforcement endured until the Civil Rights Act of 1964 transformed it.
Civil rights leaders’ battle to enforce Brown’s principle against the federal government illustrates a basic feature of administrative constitutionalism: agencies can be designed to serve, or disserve, a broad range of constitutional goals. Any particular agency’s approach to the Constitution will reflect the enduring influence (and variability) of administrative mandate and structure. Those aspects of institutional design are shaped by Congress and the President, often in light of underlying divisions over the Constitution’s mandates regarding federal power, administrative authority, and substantive rights. As a result, an agency’s constitutional interpretations may reflect the outcomes of prior political struggles over constitutional principles, which become embedded in and transmitted through the agency’s specific institutional traits.
Understanding why agencies enforce the Constitution in specific ways thus requires understanding how political actors in Congress, the White House, and beyond have structured those agencies over time. That truth, encapsulated in the struggle over federal subsidies for segregation, also illuminates a key reason that racial segregation and inequality have been so difficult to uproot: much of the federal administrative state was initially designed to coexist with discrimination, not combat it.