Scandal or System?
excerpted from the book
Dollars and Votes
How Business Campaign Contributions Subvert Democracy
by Dan Clawson, Alan Neustadtl, and Mark Weller
Temple University Press, 1998
p199
Campaign finance violations in the I996 election were the most
serious since Watergate. "What we saw in this election cycle
was nothing less than the breakdown of the campaign finance system,"
said political scientist Anthony Corrado. "The system we
created in the I970s essentially collapsed.... It's the Wild West
out there. It's anything goes." The system collapsed in a
dozen different ways, with every rule being bent past the breaking
point and politicians assuming they didn't need to worry about
enforcement, from soft money to issue advertising to reporting
requirements.
p207
REFORMING THE SYSTEM
Everyone is talking about campaign finance reform. But what
kind of reform? The answer varies. If the problem is occasional
abuses by renegade 3 fundraisers, then the only change needed
is a system of improved enforcement; and if the major recurring
abuse is accepting (indirect) Asian money, the solution is to
scrutinize-if necessary, to harass-any Asian American contributor.
If the problem is that the public has (momentarily? irrationally?)
lost faith in the system, and now sees democracy for sale, then
the solution is to address the most visible symbol of this-soft
money-and make cosmetic changes elsewhere, loudly proclaiming
that this is a thorough reform. For campaign finance insiders-a
tiny fraction of the population, but crucial for policy decisions-the
problem is that politicians are having to work too hard to raise
money. The solution is to find some way to reduce the cost of
campaigns (typically, through limited free television time), while
seeing to it that the margin of success continues to depend on
campaign contributions from big-money donors, which is, after
all, the system that put these politicians into office. Most campaign
finance experts analyze the Issue in ways generally similar to
the political insiders. Academic "expertise," and certainly
media punditry, generally depends on possessing views certified
as "reasonable" by those with power-that is, by politicians,
the media, business, and big-money campaign contributors. For
most members of the American public-and for us-the problem is
an entire system that is institutionally corrupt, that coerces
politicians to put dollars over voters, that buys off democracy.
The solution, therefore, must be a complete overhaul and the introduction
of a fundamentally new system.
THE PURPOSE OF REFORM
A naive observer might think that campaign finance reform
is about reforming campaign finance. Nothing could be more mistaken.
The voters want to reform the system. Politicians have a variety
of other priorities. In order, they are probably as follows:
CONTINUING TO GET RE-ELECTED. From the politicians perspective,
their own election is proof that the current system works-or,
at least, their own election shows that talented individuals with
noble ideals often win. In order to be elected, politicians must
be master fundraisers; they are therefore likely to conclude the
money primary serves a useful purpose.
MAINTAINING GOOD RELATIONS WITH BIG CONTRIBUTORS. Supporting
real reform would offend these contributors, and that's a huge
risk, since politicians assume that whatever "reform"
is enacted, the system will continue to be dominated by big money,
and reelection will continue to depend on the support of these
donors. Moreover, most members hope that when they leave Congress
they will make a lot more money. That nearly always means going
to work for business, either directly (as an employee) or indirectly
(as a lobbyist or consultant).
MAINTAINING THE LEGITIMACY OF THE SYSTEM. For those with power,
up to a point a cynical and alienated public has as many advantages
as disadvantages, since it means that politicians and business
are left to run the system themselves. However, if too many people
conclude the system is rotten, that creates the potential for
mass mobilization demanding a fundamental change in the system.
That's a risk that neither politicians nor business wants to run.
During the I930s, Joseph P. Kennedy declared, "I felt and
said I would be willing to part with half of what I had if I could
be sure of keeping, under law and order, the other half. In order
to forestall the possibility of again facing such a situation,
many of the rich and powerful-and even more politicians-are concluding
that some kind of change, one that can plausibly be sold as reform,
would be at least useful and is perhaps necessary.
GAINING PARTISAN ADVANTAGE. Some sources of money strongly
favor the Republicans, other sources favor the Democrats. If there
is to be "reform," each party concludes that regulation
needs to be tightened for the money that goes to the other party.
In the I996 election cycle, the Democrats raised almost as much
soft money as the Republicans; the Republicans had small but significant
advantages for both PAC and individual contributions. Republicans
receive almost no labor money; coincidentally, they are convinced
that labor (despite its comparatively small scale and marginal
status) is the worst offender, and hence the area most in need
of new regulation.
ACHIEVING REAL REFORM. Many politicians are committed to democracy.
Their understanding of what that means, and their visions of how
to achieve it, may differ from our own, but a great many members
of Congress- though by no means all of them-would like to see
reform, as long as it doesn't drastically reduce their chances
of getting elected, hurt their relations with big-money contributors,
or hurt the chances of their political party.
SERIOUSLY CONSIDERED REFORMS
In the wake of the I996 election, only one reform proposal
was taken seriously and given a realistic chance of being enacted-the
McCain-Feingold bill, sponsored by Republican Senator John McCain
(Arizona) and Democratic Senator Russell Feingold (Wisconsin),
and thus a bill with bipartisan credentials. (McCain, currently
the Senate's most visible campaign finance reformer, was one of
the "Keating Five-senators who, in the late I9805, accepted
large donations from Charles Keating and interceded for him with
federal regulators; Keating's savings and loan subsequently went
bankrupt, costing taxpayers more than $2 billion.) Although "McCain-Feingold"
was always the focus of debate, the bill's provisions changed
frequently. In September I997, Feingold acknowledged that "the
question of what will be in the bill is still very much up in
the air."
The fluid and shifting character of campaign finance discussions
makes it impossible to focus on a single package of compromises.
Many of the "reform" packages include proposals to permit
more latitude for certain kinds of contributions, and as always
with Congress, the devil is often in the details. It is, however,
useful to consider some of the proposals that are widely discussed
and that are likely, in one or another form, to be incorporated
into any reform legislation:
LIMIT INDIVIDUAL DONATIONS. Individuals are now limited to
$1,000 per candidate per election and $25,000 total per year,
but a number of state ballot initiatives have sought to decrease
contributions to as low as $100 per person per candidate. The
simplicity of the $100 (or $200 or $300) limit is appealing and
the logic of the approach-"limit what rich people can donate
to an amount ordinary people can contemplate"-tends to win
votes. Lower courts, however, have several times (District of
Columbia, Missouri and Oregon) rejected the $100-limit proposal
on the grounds that it interferes with free speech. Aside from
the legal obstacles, the consequences aren't clear: It would certainly
help to create a Congress of millionaires who funded their own
campaigns and would encourage "independent" spending;
it might also lead to a form of contribution brokering, where
key individuals lined Up $100 contributors.
LIMIT PAC DONATIONS. The current limit of $5,000 per candidate
per election enables a PAC to give $10,000 to a candidate who
faces both a primary and general election. The intent of both
the current law and the proposed reforms is to limit the size
of the donation to an amount so small that it couldn't influence
a member's behavior.
Even with today's limits, a single PAC donation is rarely
large enough to make a member change a vote on a major, visible,
contested issue. Therefore, the proposal won't change much in
this regard. Relatively small donations, however, are sufficient
to gain corporate PACS access to members to win "minor"
wording changes that the public never hears about. The average
corporate PAC donation in I996 was $I,3I3 to House members and
$I,942 to senators. Many proposed revisions would not touch these
access donations. Moreover, if the limit were reduced to $500
(one-tenth of the current limit), the likely consequence would
simply be an expansion of the steering committee approach ...
Corporations that wanted access would join a member's steering
committee, get ten other corporations to give the $ 500 limit,
and earn credit with the member for raising $5,000. The total
amount corporations gave and members received might not change
at all.
BAN CORPORATE, LABOR, AND TRADE ASSOCIATION PACS. This ban
was proposed by President Bush in I989. More recently, it became
a part of one of the many versions of the McCain-Feingold proposal
endorsed by President Clinton in I996. Assuming it could withstand
legal challenges-which is far from certain-one principal effect
would be to cause a switch from PAC giving (relatively easily
monitored) to individual or soft money donations (much harder
to track).
As powerful as they are, however, PACS account for only one-quarter
of the funding for congressional campaigns. Assuming PAC money
might actually be abolished and not turn up in other forms of
contributions, that still leaves 75 percent of congressional campaign
money untouched.
BAN SOFT MONEY. Great! Let's do it. This significant reform
has wide backing and may actually pass. But then the issue of
political inequality remains. The problem of unequal political
influence resulting, in part, from a privately funded campaign
system existed long before the soft money scandals and certainly
will not go away if soft money is abolished. A return to the campaign
finance system of I990 or I988 is not, to our minds, the goal
of reform.
LIMIT SPENDING. To hold down the cost of campaigns, limits
could be set on the total amount a candidate could spend during
a campaign. The Supreme Court has outlawed spending limits, however,
unless they are part of a plan where candidates voluntarily accept
public funding in exchange for agreeing to abide by a spending
limit. Even if this hurdle could be overcome (and with the current
composition of the Supreme Court that seems unlikely), spending
limits without additional changes would turn out to be an incumbent-protection
program. Why? Incumbents have important built-in advantages-name
recognition, a chance to make news through their actions, free
postage for congressional business, money to hire staff (some
of whom will work in the district servicing constituents), and
so on. Therefore, in order to beat an incumbent, a challenger
needs to be able to spend a substantial amount of money. If maximum
campaign spending is legally set at a low figure, incumbents will
be virtually impossible to dislodge. This is contrary to what
most supporters of this provision probably anticipate.
GIVE TAX CREDITS FOR DONATIONS. This type of reform is intended
to empower ordinary citizens by giving them extra money to make
campaign donations. In Minnesota and Arkansas, for example, individual
contributors can receive tax credits of up to $50 ($100 for couples)
per year for campaign contributions. The small government subsidy
is unlikely to make much difference to either donors or candidates.
Only 4 percent of the people in the United States make any campaign
contributions at all, and $ 50 is probably not enough to entice
many more into becoming donors. Moreover, any tax-based policy
will be utilized more by the affluent than by the working class.
Federal candidates get 80 percent of their money from contributions
of $200 or more. Less than I percent of the U.S. population makes
donations of this size. The experience in Minnesota is illustrative:
62,000 individual tax filers applied to the state's refund program
in I995, down from 72,000 in the I994 election year-compared to
a state population of 4.4 million. The danger is that tax credit
for political contributions ends up being a tax reduction for
a select few.
PROVIDE TV TIME. Walter Cronkite and many others advocate
providing candidates free or reduced-rate television time, for
which candidates could be required to run longer, positive, message
ads. This reform appeals as a measure of public financing that
(supposedly) doesn't need to be paid for by Congress or the taxpayers,
although in practice it's almost certain that television stations
would be compensated with some hidden-from-the-public benefit.
Straight public financing permits candidates to decide how to
use their money; free television time coerces campaigns to become
more television-centered and less concerned about personal contacts.
Moreover, television is significantly more important at the presidential
level than at the congressional: House incumbents spent 25 percent
of their reelection money in broadcast advertisements and challengers
35 percent.
p216
ECONOMY AND POLITY: CONTRADICTORY PRINCIPLES
Our society takes private property, the "free" market,
and the buying and selling of anything and everything as givens;
it accepts the idea of someone owning a book, an idea (through
a patent or copyright), a contract for a person's services, an
animal, or a tree. With few exceptions, the person (or corporation)
who owns these has the right to do anything and everything with
them. If a corporation has the patent on a process that would
substantially improve a product, but lower company profitability,
the corporation is under no obligation to use the patent-or let
anyone else use it-even if it would make the world a better place.
If you buy a house with a dozen large, pleasant shade trees, many
over one hundred years old, it is your right to chop them all
down as soon as you become the legal owner, with no regard to
the effects on the environment, your neighbors, or those who will
come after you.
Enamored as we are with buying and selling as the best way
to handle virtually any problem, and with private property and
the "free" market these concepts are not considered
good policy in the political realm. "The best Congress that
money can buy," to use Will Rogers's phrase, is a pretty
terrible Congress, because some things aren't supposed to be for
sale. In fact, it is illegal to sell some things (marijuana, but
not tobacco or alcohol), and some actions are regarded as noble
if done for disinterested motives, but are illegal if done for
cash. Thus, members of Congress are supposed to help their "friends"
and constituents, to shape legislation to serve their interests,
but it is illegal to explicitly offer to sell either a legislative
outcome or even their best efforts to produce such an outcome.
It is similarly illegal to offer to (directly) pay a member of
Congress for such services. Doing so is called bribery. In the
economic marketplace the people with the most money are supposed
to have more impact than others, but in politics each person is
supposed to have one and only one vote, and explicitly buying
and selling political influence is taboo. Instead of directly
buying and selling, corporate PACS give gifts to members, creating
loose but nonetheless binding networks of obligation.
The disjuncture our society creates between politics and economics
is at the heart of this book. Economic democracy is regarded as
not just impractical, but somehow immoral. It is "obvious"
that people can't and shouldn't vote to determine how their workplaces
are run. Even democratic combinations of workers to negotiate
with owners-that is, unions- are regarded with skepticism, and
tolerated only if they stay weak and limited. The only "efficient"
way to operate a "private" enterprise is by having the
owners have dictatorial powers; these powers are then used to
create bureaucratic systems to control recalcitrant employees.
Economic democracy would be the worst form of socialism: hopelessly
utopian, totally unworkable. At the same time most people feel
it is equally obvious that democracy is the best, in fact, the
only acceptable, form of government. In politics, democratic procedures
are not regarded as inefficient or utopian; instead they are viewed
as imposing certain short-run costs, but for enormous long-run
benefits. Virtually everyone in the modern United States firmly
holds both that the economy must be operated on the basis of "free"
ownership of "private" property, with those who have
the money in control of all key decisions, and that the polity
must be based on "one person one vote," with money not
allowed to exercise a disproportionate influence.
No contradiction is seen between these two beliefs, held with
equal surety. We, however, argue that these two practices do contradict
one another; it is difficult or impossible for a society with
enormous disparities of wealth and income to maintain equality
in politics. As long as people with money are allowed to use it
to influence politics, those with the most money will have disproportionate
influence both on election campaigns and on the shaping of public
policy. The fiction may be maintained that every person's vote
counts equally-in fact, the people with the most wealth may insist
on this loudly and vehemently-but the reality is that "money
talks," and those who have the gold make the rules. This
is the underlying problem that must be confronted by any attempt
at campaign finance reform. If this issue is not J addressed in
some way, the almost certain outcome of any reform is that rather
than ending the ability of money to influence politics, one specific
practice will be prohibited, and one or more new practices will
emerge.
p218
THE AIMS OF REFORM
One of the corporate executives we interviewed explained why
he'd be opposed to abolishing private money in campaigns: "I
think the members would be less accessible because I think they
might start running it strictly for the votes." That, of
course, is precisely the point. For us, it is the hope; for him,
it was the fear.
We prefer a system where members of Congress run "strictly
for the votes" rather than for the money, and where members
are concerned with what the majority of their constituents want,
not with the wishes of big contributors. Below, we outline our
proposal for campaign finance reform. That proposal has four principal
aims:
The first and primary aim is to do as much as possible to
see to it that each individual has equal representation. Those
with wealth and power should not be able to use them to gain extra
influence. We therefore wish to create equality in campaign funding,
making it more difficult for corporations to use campaign contributions
to gain access to or influence over candidates.
Second, the system should be as democratic as possible. If
congressional incumbents are practically unbeatable, then democracy
operates only once a generation, when a member dies or chooses
to retire. Throughout the post-World War II period, incumbents
have been almost certain of reelection. In I988, for example,
the figure was 98 percent, and even in the I994 upheaval more
than go percent of the incumbents running for reelection won.
Moreover, in most years more than go percent of members ran for
reelection, so that a very high proportion of House members have
stayed from one term to the next. It has not always been so. In
the nineteenth century turnover was far higher. The rate of members
staying from one term to the next was below 50 percent for seven
straight elections beginning in I842, and above 60 percent for
only two elections between I852 and I884.
Any reform of the campaign finance system should aim to increase
the number of competitive races. Studies indicate that the problem
is not overspending by incumbents, but underspending by challengers.
In order to run a competitive race, challengers need to be able
to spend enough money to get their message out to voters. Challengers
who can raise enough money to do so are usually competitive; challengers
who are drastically outspent can rarely make the race competitive.
In I988, in better than 4 out of s races (8I.4 percent), one candidate
spent more than twice as much as the other. Only 3.2 percent of
these races were competitive (that is, decided by margins of 10
points or less, e.g., 55 percent to 45 percent). In the remaining
I out of s races the underfinanced candidate had at least half
as much money as the funding leader. A much higher proportion
of these races were competitive-about 4 out of 10 (39.I percent).
Therefore, a reform proposal needs to ensure adequate funding
for challengers.
Third, members of Congress should spend their time on issues
rather than on fundraising. "Half of all senators surveyed
by the Center for Responsive Politics and almost one-quarter of
the House members said that the demands of fundraising cut significantly
into the time they devoted to legislative work. Another 12 percent
of the senators and 20 percent of the House members said fundraising
had some effect on legislative time." Moreover, members should
spend time on major issues, not on writing individual exceptions
to legislation for actual or potential campaign contributors.
Finally, the system should maintain these characteristics
over time. Lots of smart, powerful, and sharp operators will do
their best to subvert the system. If they are allowed to do so,
they will undermine every positive feature of the reform.
Our goals for campaign finance reform are not shared by corporate
executives or most members. Public statements aside, most members
don't want to be in competitive races. Corporate personnel think
it perfectly appropriate for wealthy individuals and organizations
to use money to get additional access and influence. They want
members of Congress to have to raise money privately, because
then members will provide preferential access to corporations.
Former Senator Rudy Boschwitz (Republican-Minnesota) institutionalized
the practice. Those who contributed $I,000 or more received special
blue stamps to place on their envelopes; lesser contributions
entitled people to other-colored stamps; and non-contributors
had to take their chances. Letters were opened and replied to
according to the contribution level; Boschwitz called this "a
nifty idea."
PUBLIC FINANCING
The regulatory model of campaign finance is doomed to failure.
As long as our society continues to have vast inequalities of
wealth, income, and power, the people with the most money will
be able to find ways around restrictive rules. Virtually all current
proposals are intended to limit the ways in which money can be
funneled into campaigns. It is extremely difficult to impose limitations,
because however many rules and barriers are erected, the ingenuity
of the rich, or their hirelings, will always find ways to evade
the regulations. Clinton's Deputy Chief of Staff Harold Ickes
explains, "Money is like water.... If there is a crack, water
will find it. Same way with political money." Moreover, virtually
no meaningful penalties are imposed on those caught violating
the rules. As a result, the regulators are always one step behind
the evaders and shysters.
The alternative approach is to cut the Gordian knot of restrictions
by instituting public financing of election campaigns. In the
early I990s, such proposals seemed utopian. In I992, we argued
that Congress and the president would not institute public financing
unless a popular movement put a gun to their heads. As we predicted,
Washington didn't budge, but state-level referendum campaigns
may do what Congress would never do. In I996, Maine voters adopted
a public financing system, and Public Campaign, a new organization
dedicated to taking special interest money out of elections, is
spearheading a movement around the country to bring about public
campaign financing, one state at a time, if necessary. Real reform
with full public financing, is no longer a utopian dream-it's
on today's political agenda. Other proposals are of course possible,
but Public Campaign's model law is an excellent framework, and
it has helped mobilize and coordinate a major grassroots campaign...
Public Campaign, and its Clean Money Campaign Reform (CMCR),
are-at least for now-bypassing Congress, which has shown an amazing
ability to sidetrack and frustrate reform efforts, and focusing
instead on state-by-state efforts, most notably by putting referendum
questions on the ballot. By taking the issue directly to the voters
in a ballot referendum, it's possible to pass a full reform proposal.
The normal legislative process is highly likely to bury reform
in committee and then change "just a few" details in
order to make the proposal "more realistic"-that is,
to be sure that special interest money continues to provide a
decisive margin in most contests.
State level campaigns necessarily mean that there will be
minor variations from one place to another. And any effort to
present a campaign finance proposal confronts a dilemma: Readers
want enough detail to be sure the proposal is viable-that it won't
encounter an insoluble contradiction-but don't want to be bogged
down in minor provisions of interest only to technocrats and political
junkies. In its broad outlines, Clean Money Campaign Reform limits
campaign spending, prohibits special interest contributions to
those candidates who participate in the system, provides public
financing for participating candidates, and guarantees a level
playing field. The system is completely voluntary. Here's how
CMCR will work for candidates who choose to participate:
QUALIFICATION. To qualify, candidates must collect a specified
number of signatures and $5 qualifying contributions, and these
must come from registered voters in the candidate's state or district.
The required number depends on the office sought, with higher
offices requiring more signatures and contributions. In all cases,
however, the number is set at a modest level that any viable candidate
should be able to achieve. Five dollars is high enough to be sure
that people won't support a candidate frivolously and unthinkingly,
but low enough that virtually anyone could make the commitment.
It's obviously much harder to collect $5 contributions than signatures,
and the number of required contributions might need to be adjusted
based on experience with the law, but a tentative starting point
would be to require I,000 contributions for a congressional candidate.
(Congressional districts usually contain about 500,000 people.)
In order to prevent permanent campaigning, the qualifying
signatures and contributions cannot be collected until three months
before the primary, and must all be turned in by one month before
the primary. Candidates are permitted to raise a limited amount
of seed money from contributions of $100 or less. That money-perhaps
totaling $I0,000 to $20,000 for congressional candidates-can be
raised before the qualifying period; if candidates raise more
than that amount, the excess must be turned over to the Election
Commission; if they spend more than that amount, they are not
eligible for Clean Money campaign financing.
Today, many candidates (and most ballot initiatives) pay to
get the signatures needed to qualify for the ballot, hiring low-wage
workers to do the work. It goes without saying that no candidate
can pay workers to collect their Clean Money qualifying contributions,
and each contribution must be accompanied by a receipt identifying
the contributor and certifying that he or she knew this money
was to help this candidate qualify for Clean Money campaign funding.
One of the attacks on Clean Money Campaign Reform is likely
to be that taxpayers will be forced to shell out for weak and
silly candidates. Senator Mitch McConnell of Kentucky, for the
past several years the Republican leader in the battle against
campaign finance reform, argued against public funding-any public
funding-on these grounds:
If we extend [public financing to congressional] races, every
crackpot who got up in the morning and looked in the mirror and
said, "gee, I think I see a congressman" is going to
be able to reach into the federal cookie jar and get some of those
tax dollars. In practice, of course, as things stand today, crackpots
can run for Congress-or the presidency-as long as they are rich
crackpots... Crackpots would not be able to collect one thousand
$s contributions during a sixty-day period ...
PRIMARY FUNDING. Candidates who meet CMCR requirements will
be guaranteed a set amount of money from the Clean Money fund,
provided that they agree not to raise or spend any private money-even
their own-during either the primary or the general election. Federal
candidates will also receive a specified amount of free and discounted
television and/or radio time.
GENERAL ELECTION FUNDING. Qualifying candidates who win their
primaries, and qualifying independent candidates, will be guaranteed
an additional set amount from the Clean Money fund, as well as
additional free and discounted television and/or radio time.
One major question is obviously: How much money should be
provided to candidates? Voters who are disgusted with politics
might want a low amount, but, perversely, setting a low figure
is a way of protecting incumbents: In order to overcome incumbents'
name recognition (and staff advantage), challengers need to be
able to spend a substantial amount of money. On the other hand,
CMCR candidates would not face any fundraising expenses. Setting
public funding at 20 percent below the amount spent in competitive
races in previous years will likely offer challengers enough to
win; it will also control the overall cost of elections.
LEVEL PLAYING FIELD. What happens if one of the candidates
in a race decides not to enter the Clean Money system and instead
collects massive amounts of special interest money? Clean Money
candidates facing such opponents are entitled to a limited amount
of matching funds (beyond the normal amounts available to all
CMCR candidates); those funds are also available to candidates
who are targeted by independent expenditures
This last provision is a vital element of a workable public
finance proposal. The Supreme Court has ruled that any spending
limits must be voluntary, which in practice has meant "accepted
in exchange for public funding." Candidates who accept public
financing need a guarantee that they can't be outspent by their
opponent. Without this provision, the special interests could
simply work to see that the amount available per candidate is
very low. If public financing provides less than half of what
is needed to run a viable campaign, then anyone relying exclusively
on public financing is almost certain to lose, and candidates
would once again be beholden to the special interests. Having
successfully subverted meaningful public financing, business will
then turn around and say this outcome proves that the people oppose
public financing and love special interests.
If candidates using public financing are guaranteed that they
can match the spending of their special interest-financed opponents,
most of the reason for private fundraising will be undercut. As
a result, nearly all candidates would accept public funding. Although
PACS and individual donations would continue to be theoretically
possible, general election candidates would not want their money,
because, if they accepted it, they would not be eligible for public
financing, and private funding would not enable them to outspend
their opponents.
OBJECTIONS AND ARGUMENTS AGAINST
EXPENSE. The first and most obvious objection likely to be
raised to such a system is expense. The best response is simply
to accept the figures offered by Senator Mitch McConnell (Republican-Kentucky);
in arguing that there is no campaign finance problem, he "said
Federal campaign spending last year [I996] amounted to $3.89 per
eligible voter, 'about the price of a McDonald's value meal."'
That's not much to take big money out of politics. McConnell's
figures are lower than our own calculations, but the principle
remains: for $10 per person per year we could guarantee funding
for all candidates at all levels (federal, state, and local).
A public financing proposal costs nothing from the perspective
of American society as a whole; it simply shifts the expense from
private sources to taxpayers. That does not mean, however, that
taxpayers will pay more. Quite the contrary. Why are "private
sources" (largely business) making these contributions? In
order to cut their taxes. If their taxes go down, who makes up
the difference? Consider just one example of this: In I955 corporations
paid Z7.3 percent of all federal taxes, but in I995 they paid
only II.6 percent. The reduced contributions by corporations meant
that individuals paid more. Total federal tax revenue in I995
was $I,355 billion. If corporations had paid the same share of
taxes in I995 as in I955, they would have paid an additional $213
billion, enough in that one year to provide public financing for
both House and Senate elections for well over a century.
These savings could be multiplied by eliminating any of a
long list of special interest tax breaks...
TAX CHECKOFF. Some will argue that if we are to have public
financing, the money should be raised through a voluntary checkoff
on tax returns. Experience with this system for presidential elections,
it will be argued, indicates that the public does not support
public financing of elections.
The voluntary checkoff system is extraordinary, and in our
opinion, it is intended to subvert public financing. Nothing else
the government funds (depends on voluntary checkoffs. If building
the B-Z relied exclusively on taxpayers voluntarily designating
money, how many bombers would we build? We believe that public
financing of elections should be paid for in the same way everything
else is-out of general revenues. Let voluntary taxpayer checkoffs
be used for the savings-and-loan bailout.
RED TAPE. A third objection to Clean Money Campaign Reform
might be that it would involve red tape and bureaucracy. In fact,
CMCR would reduce the red tape in the current system. At present,
candidates need to keep careful records of both receipts and expenditures.
Receipts are the most difficult to monitor and record, but with
public financing there would be no need for a record of receipts
(after the initial qualifying period). Public funding of presidential
candidates has operated successfully with a minimum of paperwork.
WOULD REPUBLICANS USE IT? For over a decade, Republicans have
steadfastly opposed public financing; the I99I Senate action on
this provision was by a straight party-line vote, and in I997
only four Republicans-but a I forty-five Democrats-supported the
McCain-Feingold bill, which included free television time, a limited
form of quasi-public financing. Republican opposition is important
in two senses. The first is in trying to get the proposal passed.
The other is the question of whether Republicans would use public
financing if it were available; if they did not, the system would
have a partisan character that would undermine its intent. Experience
with the presidential public finance system is, however, reassuring.
Every Republican nominee for president has accepted public financing,
and Republicans have accepted federal money for their nominating
conventions. Public pronouncements are one thing, action quite
another. If the money is available, Republicans will take it.
THIRD PARTIES. Clean Money Campaign Reform permits third-party
candidates to qualify for public funding. Some will see this as
a strength of the proposal; others will be concerned that it will
permit extremists to get public financing for their campaigns.
This is sure to be one of the arguments
used against the reform, but it would clearly be discriminatory
to privilege the Democrats and Republicans-and to qualify any
candidate will have to demonstrate support by collecting signatures
and $5 contributions from registered voters inside their district.
WILL IT LAST? A final objection is that even if the system
sounds good, those with wealth and power will find a way to corrupt
it and evade the rules. We agree: Constant vigilance will be needed
to keep this from happening, and implementation of the system
would have to be accompanied by other changes to plug existing
loopholes and prevent the emergence of new ones. But one of the
most important aspects of CMCR is that it contains a built-in
safeguard to keep it effective: Each candidate has enough money
to communicate his or her message and to warn voters about attempts
to evade restrictions or launch unfair attacks.
No change will be meaningful unless the rules are enforced.
The Federal Election Commission has become a joke because it is
unwilling or unable to uphold the law. For example, presidential
candidates have spending limits for each state primary. In I988
in Iowa, the Democratic winner, Richard Gephardt, exceeded his
spending limit by almost $300,000, and the Republican winner,
Robert Dole, exceeded his by $306,000. It was more than three
years before the FEC completed its audit of these campaigns-long
after the presidential nominations were decided. The FEC is often
unwilling even to investigate complaints. Abuses need to be exposed
to public scrutiny even if they ultimately go unpunished. It should
not take a majority of votes to pursue an investigation, but only
a one-third minority, and reports of those investigations should
be publicly available. Congress prefers to move in the opposite
direction, making it more difficult for the public to file complaints
against members of Congress: "Republicans in the House pushed
through a change in ethics rules today [September I8, I997] that
would bar outside groups from lodging an ethics complaint against
a House member."
A new system needs to be implemented in which party loyalists
(who invariably vote a straight party line, leading to tie votes
and no action) are replaced by people committed to upholding the
law. No matter how good the system that is installed, if every
loophole receives official authorization, and no violation is
ever punished, then the system will quickly fall apart. We need
commissioners prepared to take abuses seriously, act swiftly,
impose penalties, and seek criminal sanctions. If corrupting Congress
and the democratic system isn't a serious offense, what is?
Soft money would have to be abolished and independent expenditures
controlled. Abolishing soft money is, in principle, relatively
simple.
FREE SPEECH. Controlling independent expenditures-without
interfering with free speech-is more difficult, but it is not
impossible. For example under current law, issue advertisements
do not come under federal regulations unless they specifically
recommend voting for or against a candidate. Ads escape regulation
unless they use the magic words "vote for" or "vote
against." Under the I997 McCain-Feingold bill, anyone placing
an "issue ad that appeared within sixty days of an election
would have two choices: omit the candidate's name, or meet the
disclosure and donation-limit rules that apply to normal campaign
expenditures ("hard money").
The American Civil Liberties Union (ACLU) has, with much internal
dissent and controversy, attacked many attempts at campaign finance
reform, including the Maine Clean Elections Act. We are unequivocally
in favor of free speech, but the class bias around this issue
is striking. The primary proponents of the "campaign contributions
as free speech" argument are the same Republican conservatives
who usually lead the attack on free speech. Companies can require
their workers to attend "captive audience" meetings
to be lectured on the evils of unions; neither workers nor unions
have the right of reply. If workers speaks up for the union the
company can exclude them from the next meeting. Workers, quite
literally, do not have the right of free speech, at least not
on the job. The ACLU accepts this; it's a non-issue. On the other
hand, a major issue for the ACLU is any law that would simply
require the disclosure of who is paying for independent"
issue advertising-when rich people speak, the ACLU doesn't think
we have a right to know who is speaking. Two explanations of this
are possible: The ACLU is illogical, or rich people are entitled
to more free speech than workers.
ABOLISH ALL RESTRICTIONS. Newt Gingrich and Trent Lott, the
Republican leaders in the House and Senate, argue that the election
system does not need less money; on the contrary, it needs more.
We should, they say abolish all limitations and restrictions other
than public disclosure. We wonder whether next year will bring
an even bolder initiative: Allow members of Congress to sell their
votes to the highest bidder. The logic is impeccable: Free enterprise
demands it, anything else is unwarranted government interference.
ARGUMENTS FOR
The arguments in favor of this system are more powerful, but
they may be more briefly presented. Elections would be far more
competitive. Although challengers would still have less name recognition
than incumbents, they would have enough money to mount credible
campaigns, and for the first time challengers as a group would
have as much to spend as incumbents. Special interests could no
longer use campaign money to increase their access and win benefits
for themselves. It is not only that a member would not be indebted
for a past donation. Members would also know they would never
need to depend on a future donation and could never gain a campaign
advantage by soliciting or accepting such a donation. Corporations
would continue to have substantial clout based on their wealth,
power, and respectability, their ability to maintain a staff of
lobbyists, their advocacy advertising, their networks, connections,
and friendships. But one of their major special interest weapons
would have been eliminated.
The guarantee of public funding for campaigns would give members
of Congress more time to spend on legislation and on keeping in
touch with constituents who are not campaign contributors. As
one of the two corporate executives who supported public financing
said:
I am looking to take off the back of the politician this
terrible concern he has of raising money. He spends too much time
raising money. He spends too much time thinking about raising
money. And I think if you turned around and gave him that time
back-even if he didn't use it for legislation-even if he used
it to think-we'd all be better off. When I first came to Washington
as a kid, Congress wasn't in from July through January. They closed
up for the whole summer months. These guys went home and got to
see their people and thought a lot more about what was going on,
and they came back better people for it. Now they have to spend
all their time raising money. They have to spend all their time
involved in enormous amounts of work that are not productive.
TAKING IT TO THE STATES
A public financing reform plan would eliminate or drastically
reduce the impact of special interest money, would substantially
increase competitive elections, and thus turnover among members
of Congress. But is this realistic? Dick Cheney, at the time a
Republican representative from Wyoming, and later Bush's secretary
of defense, offered a memorable no: "If you think this Congress,
or any other, is going to set up a system where someone can run
against them on equal terms at government expense, you're smoking
something you can't buy at the corner drugstore."
Cheney's view is probably correct-it seems impossible that
Congress
will ever pass these reforms. That's the beauty of Public
Campaign's state-by-state effort and their focus on ballot referendum
questions. Any set of elected officials is likely to amend and
compromise reform until it no longer ,brings much reform, but
referendum questions are decided directly by the voters. The wake-up
call was in Maine in 1996, when voters passed the Maine Clean
Elections Act by a 56 to 44 percent margin. Seven months later,
Vermont's state legislature, by lopsided votes, passed Clean Money
Campaign Reform. In early 1997, the Connecticut House fell just
two votes shy (73 to 75) of public financing for statewide offices.
In November I997 Massachusetts activists collected far more than
the required number of signatures, guaranteeing that in I998 voters
will be able to decide the issue Public Campaign, headed by Ellen
Miller-formerly the head of the Center for Responsive Politics,
the leading group monitoring campaign spending-received $9 million
in funding from various foundations and is working to promote
drives for ballot initiatives or legislative change in North Carolina,
Georgia, Arizona, Idaho, Missouri, Massachusetts, New York, and
Michigan. In Wisconsin, the coalition to promote public financing
is called Elections not Auctions.
If politics were an old-fashioned melodrama, we could say,
"As soon as the issue goes directly to the voters, they will
be sure to vote to take money out of politics." Unfortunately,
it's not likely to be that simple. Entrenched interests-including
most politicians in office, most of the media, and virtually every
business-have a stake in seeing to it that the people with money
continue to have more access, and more leverage, than average
voters. The moneyed interests will not easily give up their privileges.
The public is confused about campaign finance issues. Responses
to opinion polls vary dramatically, depending on how the issue
is posed; this IS m marked contrast to environmental issues, for
example, where no matter how unfair the question, the public still
favors taking care of the environment. It is easy to point to
poll results that demonstrate broad support for taking money out
of politics. For example, a poll commissioned by the Center for
Responsive Politics found:
Money and politics is seen as a systemic problem, not one
associated with a particular party or elected officials. Seven
in ten (7I percent) people believe the Republicans and Democrats
are about equally likely to engage in questionable campaign fundraising
these days, even though the recent media spotlight has been on
the activities of Bill Clinton and the Democratic Party.... Money
is widely assumed to give the rich and powerful special access
to members of Congress. Three-quarters (77 percent) of Americans
believe that major campaign contributors
from outside a congressional representative's district are
granted more opportunity to make their views known on important
issues than the people he or she was elected to represent. Furthermore,
this is not a case where people tend to criticize Congress but
not their own representative. Fully two-thirds (67 percent) think
their own representative in Congress would listen to the views
of outsiders who made large political contributions before constituents'
views.
Those results accurately reflect one important aspect of public
sentiment, and help explain why 89 percent of the public thinks
the campaign finance system needs fundamental change (50 percent)
or needs to be completely rebuilt (39 percent). At the same time,
however, 43 percent believe that public financing of campaigns
would not reduce the influence of special interests, and 72 percent
opposed "financing political campaigns out of tax money."
This last is opponents' most effective argument: Do you want your
tax dollars to pay for candidates' mud-slinging ads? These ambiguities
and contradictions in public sentiment help explain why the Maine
ballot initiative won by a relatively small margin, despite the
media focus on Clinton's fundraising abuses.
Two options are possible: full public financing of elections
or continued domination by moneyed interests. At present, the
public is unhappy with both of these. Another option appears attractive,
but is, in fact, illusory: Continue private financing but with
effective regulation." It remains to be seen whether the
advocates of public financing can persuade voters that, despite
their reservations about public financing, it is the only realistic
alternative to our current system. If those with wealth and power
can get their act together, they will support a cosmetic pseudo-reform
that will, they hope, undercut demands for true reform.
If a campaign for real reform builds major public support,
business will fight back on two fronts. First, it will mount a
campaign to change public opinion. Corporations will commission
in-depth studies to find out what parts of the proposal have the
most and least support, then will focus as much attention as possible
on those aspects that make the public uneasy. Academic experts
will be hired to prove that the proposals wouldn't work. The mass
media will run numerous interviews with "taxpayers"
who are angry that their money is being used, against their will,
to pay for mudslinging and negative campaign commercials. Members
will loudly insist they are happy to see anybody at anytime and
will be photographed seeking the opinions of poor and middle-income
constituents. Every attempt will be made to undercut support for
reform through what Domhoff has called the "ideology process."
At the same time-for anything except a ballot initiative-business
will undertake a second approach, developing "minor"
modifications that sound harmless but in practice gut the proposal.
They will open loopholes that can be expanded at a later time
when public attention is focused on other issues. Corporations
will aim to create a system where candidates need special interest
money because it provides benefits not available in any other
way, paying for the television ads that provide the margin of
victory in a competitive election or for an increase in the member's
effective personal income.
CONSEQUENCES
If Clean Money Campaign Reform were passed, it would lead
to major changes in three areas: in the character of Congress
as an institution, in the politics of the candidates elected,
and in the power of business.
THE CHARACTER OF CONGRESS. The slowest and most minimal change
would probably be in the character of Congress. In the current
situation, a large fraction of what Congress does is serve as
a peculiar sort of Ombuds office. Senator William Cohen estimates
that "as much as forty percent of staff time is spent in
casework." Rather than spending their time on formulating
legislation or evaluating general policy, members use political
criteria-especially past or future campaign contributions-to make
a host of relatively minor administrative decisions. Despite the
generic use of the term "special interests," a large
majority of these decisions are made for and at the behest of,
business. In some cases, the administrator at the regulatory agency
or executive office is "persuaded" to adopt the member's
interpretation-a persuasion that often depends on fear their agency's
budget will be cut if they don't go along. In other cases, what
ought to be a minor administrative decision is written into law,
an extremely clumsy approach that provides little flexibility
for adapting to changing circumstances. This is not the purpose
for which Congress was intended, and it is a perfectly awful way
to decide regulatory and policy details.
A large proportion of all these political interventions into
administrative decisions are made in response to (or in hopes
of) business campaign contributions. If members knew they could
rely on public funding, this would remove one major incentive
to engage in this process. With a little luck, over time, this
might return Congress to the job of writing legislation and formulating
general policy. At present, the typical congressional contest
is decided on the basis of who is best at delivering pork barrels
and putting in the fix; the edge almost invariably goes to the
incumbent, whose seniority provides extra leverage. If Congress
focused on policy issues rather than minor details, election contests
might be decided on the basis of candidates' stands on the issues
and on whether they had fresh ideas to contribute. In this case,
quite a few current members would be in deep trouble, but the
country as a whole would be better off.
POLITICAL CHANGE. Public financing would also lead to a change
in who would win elections, and in the political stands they would
take. In our interviews we found that corporate PAC directors
believe virtually every member of Congress is prepared to "be
reasonable" and "help them out." If there are members
with a different view, they have either learned to keep quiet
about it, or they have been effectively silenced and are generally
unable to interfere with the special benefits corporations win
through the access process. Members go along in order to raise
money themselves and to keep corporations from sending floods
of money to their challengers.
The conventional wisdom is that public funding would help
Democrats and hurt Republicans. Certainly support for such proposals
is more common among Democrats than Republicans, one indication
of their own assessments of who would benefit. Perhaps this is
so, but if Democrats were the main beneficiaries, they would not
necessarily be the Democrats currently in Congress. As G. William
Domhoff, Walter Dean Burnham, Thomas Byrne Edsall, and others
have argued, today's Democratic party has a split personality.
Republicans get lots of money from business, and virtually none
from labor, women's groups, or environmentalists. Democrats, by
contrast, get significant amounts of money from business as well
as labor. In I988, Republicans received $19.7 million from corporations
and only $2.7 million from labor. Democrats received $26.4 million
from corporations and $32.7 million from labor. As a consequence,
the Democratic party has a split personality, and business (but
not labor) has leverage with both major parties. The advantages
of public funding would be greatest for those Democrats who are
not able to raise money from business. That is, public funding
would be of much more benefit to candidates such as Jesse Jackson
or Paul Wellstone than it would be to Charles Robb or John Dingell.
As a consequence, the character of the Democratic party might
shift, and business-oriented Democrats might find themselves a
beleaguered minority.
BUSINESS POWER. Finally, public funding of congressional campaigns
would reduce the power of business. Not eliminate it: While campaign
finance is one important tool business uses to influence politics,
it is not the only one. If full public funding were instituted
and all loopholes were plugged, thus establishing a level playing
field for campaign finance, business would still have a privileged
position. Large corporations would continue to:
I. Dominate the economy and be able to make hundreds of key
decisions influencing people's lives (and therefore, their votes).
2. Fund think tanks to prepare analyses and reports advancing
a business point of view.
3. Collect and provide information that the government doesn't
have (often information that business fights to keep the government
from getting).
4. Be able to hold out the prospect of lucrative future employment
for the member and/or key staff aides.
5. Maintain large staffs of lobbyists.
6. Communicate directly with stockholders.
7. Control access to employees for political and other purposes.
8. Engage in advocacy advertising.
9. Frustrate policies through a refusal to cooperate.
And in a host of other ways, to shape the character of the
society-the options available and the costs and benefits associated
with them.
PEOPLE POWER. If corporations would continue to be so powerful,
is there any point in fighting for campaign finance reform? Is
it possible to win against so much might? And if we did win, would
anything really change? That these questions need to be addressed
is one of the strongest indications of business hegemony. Once
people believe that it isn't possible to change the system and
that the struggle to do so can only lead to grief and frustration,
the power structure has won more than half the battle.
Real social change is possible. In the early I960s, poor and
vulnerable African Americans transformed Southern race relations.
Thousands of nameless people put their lives on the line; many
made enormous sacrifices. Their struggles have not (yet) brought
equality, but they did end the Southern racial caste etiquette
system, and they brought a resurgence of black pride and awareness.
A similar story could be told of the women's movement- which itself
owes a considerable debt to the black movement.
A less dramatic struggle more directly linked to corporate
power makes the same point. In the early I960s, auto safety was
presented as depending entirely on safe drivers. Ralph Nader raised
the heretical idea that perhaps cars were also a cause of accidents-and
had the data to prove it. General Motors responded with a vicious
campaign, even hiring detectives to dig up dirt on his private
life.
Did Ralph Nader's campaign totally transform U.S. society
and the power of business? No. Did it have any real effect on
people's lives? Absolutely. In I965, for every I00 million miles
driven, 5.3 people died in automobile accidents. If that rate
had still applied in I994, an additional 80,000 people would have
died in auto accidents.
People sometimes argue that such reforms only make the system
more stable and resistant to change. Perhaps that is true in some
instances. In other instances, what Andre Gorz called a "non-reformist
reform" provides immediate benefits to people and makes it
easier to win future reforms. Did the auto safety campaign Nader
launched produce a significant change in the way people think
about business? Yes. Did it make it people more or less willing
to consider additional reforms? Obviously, much more willing.
We would argue that Clean Money Campaign Reform is also a
"non-reformist reform." It proposes a reform that can
be won, and one that if won will substantially weaken business
power. By itself, will it transform American society? No. Will
it have an impact? Yes. Will the end of corporate campaign contributions
and the emergence of public financing make it easier or more difficult
to make future political changes? Clearly, easier. Will continued
struggle be necessary to elect good people and to fight business
power? Certainly. Will electoral politics be enough? No. Business
exercises power on many different fronts and that power must be
opposed on every front.
Today, more than at any time in the last two decades, real
social change is on the agenda. Campaigns for public financing
of elections are one element of that, but by far the most important
is the revival of the labor movement. The new leadership of the
labor movement-John Sweeney, Richard Trumka, and Linda Chavez-Thompson-is
committed to building a labor movement that is a movement, not
just a bureaucracy. One small part of that is the AFL-CIO's recent
decision to support public financing, which represents a dramatic
shift from its long-standing opposition to any system that diminished
the importance of labor political action committees. Far more
important are its efforts to seek and build alliances with other
social movements, to stand up not just for trade unionists but
for all working people, and to take as its first priority organizing
new workers, not just servicing those already in unions. Just
as business operates on many fronts, so must a movement for social
change. A revived labor movement is one encouraging sign, but
it cannot succeed if it stands alone. In order to contest business
power, we need to commit ourselves to many other sorts of struggle:
for the liberation of women, people of color, gays and lesbians;
to create alternative media and sources of information; to build
our own think tanks; to transform schools, colleges, universities,
and teaching.
Dollars
and Votes
Index
of Website
Home
Page