Issue #4, Spring 2007

Mismatching Funds

How small-donor democracy can save campaign finance reform.

Ten years ago, the United States held its first billion-dollar election–that was roughly the amount spent by all candidates for Congress and the presidency put together. The same year brought the first large-scale campaign finance scandal since Watergate, best remembered for the almost accurate metaphor of President Bill Clinton selling overnights in the Lincoln Bedroom in exchange for large contributions to the Democratic Party. And both took place at a time when Americans were deeply disconnected from politics; the 1996 election was the only presidential election since 1960 in which turnout of the voting-age population fell below 50 percent.

In reaction to this dual landmark, the modern campaign finance reform movement was born. It wasn’t the first time Washington had tried to bring the influence of money on our democracy under control. Campaign finance reform had been a live issue since at least the time of Watergate, in the mid-1970s. But since the radical changes of the 1974 Campaign Finance Act, it had been an insiders’ game, with little effort to build a grassroots movement or do more than sand down the rough edges of the system. In the early 1990s, the greatest concern was political action committees (PACs), through which lobbyists and their clients channeled their influence in donations.

But the rise of “soft money” in the mid-1990s–unlimited contributions, often directly from corporations, which had been barred from politics since 1907–made the old worry about PACs seem quaint. In response, a new generation of reformers aimed to make campaign finance reform a public priority. With support from across the political landscape–the editorial boards of almost every major newspaper; a handful of older good-government organizations like Common Cause, Public Citizen, and the League of Women Voters; and newer groups like Public Campaign and the Brennan Center for Justice–elected officials, most notably Senator John McCain, took up the charge.

And a lot of liberal activists turned from other issues to these questions of process. I was one of them. After several years on Capitol Hill working on education, urban development, welfare reform, and taxes, I became convinced that we were spinning our wheels on these narrow substantive issues when it was really democracy itself that was broken. As reformers like to say, campaign finance would be the reform that made all other reforms possible. So when I left Capitol Hill, I went to work for one of the major foundations that was supporting the movement.

Reformers moved in two general directions, which split the movement into roughly two factions. One, Washington-based and incremental, found a fierce ally in McCain and his Democratic counterpart Senator Russell Feingold and set out to ban soft money from federal elections. The other, more ambitious and usually tied (as I was) to other progressive causes, turned away from Washington and toward the states, setting out to stir up popular interest in an idea that long had been dismissed as impractical at the federal level: generous public financing for all candidates.

A decade has now passed, and it’s time to ask some critical questions about campaign finance reform. Has it been worth the money and effort? Has the reformers’ analysis of politics circa 1996 been borne out by events? Have their solutions been plausible–politically, constitutionally, or as policy? Have they broadened the movement beyond the good-government core of public radio listeners and editorial writers? Is economic inequality still reflected in and reinforced by the political process? Is the politics of 2007 improved in any measurable way over the politics of 1996? And if not, is that because real campaign finance reform didn’t happen or because what was passed into law didn’t work?

Steps Forward and Back

Each of the two main factions had some undeniable successes in the decade of reform. The passage of the McCain-Feingold Bipartisan Campaign Reform Act (BCRA) in 2002 was a victory for the cause, and its vindication in the Supreme Court was seen by legal scholars as a significant step toward the Court giving greater deference to legislatures on regulation of money in politics. The publicfinancing faction had notable victories as well, winning ballot initiatives in the late 1990s to create fully public systems (sometimes called “clean money”) in Maine, Arizona, and Massachusetts (although the latter was never implemented and later repealed).

Nevertheless, judged by the most visible results on promises like getting big money out of politics or cleaning up politics, campaign finance reform has been, to put it mildly, a disappointment. Ten years after the first billion-dollar election, the United States is headed into an election in which over a billion dollars is likely to be spent by the candidates for a single office: the presidency. Politics has gotten more expensive at other levels as well. The average amount spent by a congressional candidate in 2006 was $1.3 million, and many states have begun to see million-dollar campaigns for seats in the state legislature.

As for corruption, recent congressional scandals make the banal cash-for access deal of the Lincoln Bedroom episode seem insignificant. The scandals involving Jack Abramoff and other lobbyists and contractors have ensnared a House majority leader, the chair of the House Rules Committee, the chair of the House Administration Committee, and a key member of the Defense Appropriations Subcommittee, and involve hundreds of millions of dollars of public spending. Major policy initiatives, from the Medicare prescription’drug program to the 2004 energy bill, appear to have been wildly distorted by the influence of campaign donors and their lobbyists. During the vote on the Medicare bill, one member of Congress said he was offered $100,000 for his son’s congressional campaign if he would change his vote. Similar examples of direct quid pro quo exchanges abound.

What’s more, the obsolete system of partial public financing for presidential campaigns has slowly collapsed. George W. Bush chose not to participate in 2000, both major party candidates opted out in 2004, and in 2008 it is likely that no major candidate will accept the voluntary spending limits that go with public money in either the nominating or general election campaigns. As for BCRA, that great triumph? The Federal Election Commission (FEC) weakened it through regulations, while election lawyers found its seams and loopholes, so that what’s left resembles the last tattered patch of a toddler’s well-worn baby blanket, just enough to provide a memory of comfort and optimism butnot enough to provide any real warmth or protection. And the Supreme Court has now agreed to revisit one of the most controversial aspects of its decision upholding the law, namely the provision requiring TV ads that mention a candidate to be paid for with regulated funds. If that provision falls, all that would be left is a prohibition on candidates themselves raising soft money, a modest accomplishment.

Given this lurching pace, it’s no surprise that elite supporters of campaign finance reform have drifted away. The foundations that had supported the movement, such as the Pew Charitable Trusts, the Ford Foundation, and George Soros’s Open Society Institute (where I worked from 1997 to 2004 and which was a key supporter of public financing), have either had second thoughts or turned to other issues of political reform. The new progressive activists of the “netroots” are mostly either indifferent to reform or, as with Daily Kos founder Markos Moulitsas Zuniga, openly oppose it. And African-American and Latino activists remain unmoved by the insistence of the white, affluent campaign finance reformers that they should see the issue as more important than traditional agenda items like voting rights or policies to improve their economic prospects. Even McCain, whose reputation for free thinking and integrity was based on this issue and without whom the modest achievement on federal reform would have been impossible, has left the field.

The difficulties of campaign finance reform and the waning of its institutional support point to an uncomfortable fact: All along, there had been doubt among even progressives and Democrats about its value. Even as they marched in lockstep support of BCRA, many admitted that they thought it would hurt their party, which was more dependent than Republicans on soft money because the Democratic Party did not have as reliable a base of individual hard-money donors. (Those who can, after BCRA, give up to $2,000–now $2,300–per election cycle, usually do not hail from the Democrats’ poor or middle-class base.) Their fears were never realized, if only because other channels for large contributions emerged and the Democrats finally developed their own base of individual donors. But as the arc of politics has begun to swing back toward the left, many progressives have begun to think that process reforms, such as campaign finance, might not be so important after all. Real progress would require enormous political effort and luck, they reason, and if we had the energy and were blessed with those political circumstances, why not use it to enact something like universal health care? This is the old “reform that makes all others possible” argument turned on its head–if reform were possible, wouldn’t everything else be possible as well? Given that political capital is finite, why spend it on pure process reforms? Unsurprisingly, while they moved quickly to pass ethics and lobbying reform, campaign finance reform was barely on the new Democratic majority’s agenda (although recently a number of Democratic governors have indicated support for public financing).

Ironically, there have been some tremendously positive developments in our politics. The political culture of 2006 is not merely a more expensive and more corrupt version of 1996. While the policies are much worse, the public is engaged with politics as never before; voter turnout has increased; and–perhaps because of the stark choices created by the apocalyptic politics of the current administration–politics is significantly more substantive. Moreover, the Internet and new technologies–from cell phones to powerful database and mapping programs–have fundamentally changed how politics is practiced. The 72-hour program, Karl Rove’s massive neighbor-to-neighbor effort to identify and turn out voters, has been emulated by the Democrats, a healthy development that would have been difficult to execute a decade ago. In addition to this return of retail, face-to-face politics, we have seen the emergence of a true small-donor fund-raising base in both parties, a base driven more by ideas and passion about the direction of the country than by a desire for access to promote a particular interest.

This, in turn, has affected who can run and which voices are heard. It still takes a lot of money to run for Congress. But in the past, if you wanted to run, you would have to go to, say, the Democratic Congressional Campaign Committee (DCCC) and ask for help. The committee would reply, in effect, “call us when you have $150,000.” But where would you get $150,000? Very few people are connected enough to get that start. The netroots, however, have given candidates an alternative, and while many successful candidates in 2006 were recruited directly by the DCCC, there are some who were able to go to the party from a position of strength because they had met the viability threshold through raising money from a small-donor base. As a result, they could be more outspoken on issues and more independent of the party’s consultants, as well as independent of lobbyist money.

Thus, we stand at a critical point in the history of campaign finance reform: A movement that has so far largely failed to change the system, at least on the terms promised, has witnessed the system change around it and now has the chance to effect a lasting transformation. But first it must revisit the principles on which it was founded.

Questioning the Assumptions

Where should reform go now? Before attempting to answer that question, let’s first note that there are two groups to whom the questions about the effectiveness of campaign finance reform would be of no interest. The first are reformers themselves, particularly the BCRA advocates. To many of them, the solutions are evergreen, and failure is the inevitable result of trying to convince politicians to fix politics. All elected officials, they reason, are beneficiaries of the existing rules and resist changing them. Skeptics in the netroots, the Democratic establishment, and minority groups are written off by reformers as just looking for ways to gain influence.

This attitude has two effects on the movement. First, it makes it impervious to criticism, as any skeptic can be dismissed as a self-interested agent. Second, it renders the movement oddly complacent about its own ineffectiveness. Failure reinforces the underlying assumption that all politicians are corrupt, instead of leading reformers to reexamine their assumptions. In reality, elected officials have been the best friends reform has ever had, and “the people” the worst. Reformers in the mid-1990s dreamed of going over the heads of legislators to pass reform through ballot initiatives. Yet no statewide ballot initiative for reform has passed since 1998, and quite a few have failed spectacularly, including in Oregon and Missouri in 2000, Ohio in 2005, and California in 2006. (To be sure, several cities have embraced public financing by voter initiative, including Portland, Oregon.) Meanwhile, the only significant progress toward reform has come from elected legislatures, even if they often acted reluctantly. Besides passage of the BCRA at the federal level, there is the recent enactment of full public financing by Connecticut’s legislature, an experiment with public financing in a few legislative districts in New Jersey, and legislative improvement of older systems in Minnesota and several localities.

Issue #4, Spring 2007
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Mike Kennedy:

Everyone should have equal right to lobby their Senators and congressmen. Paid lobbyists make it unequal to poorer American citizens. It should be a criminal offense punishable by mandatory prison terms, to accept or pay money to lobby any government official, worker, Senator, Congressman or members of their staffs.

Jul 27, 2013, 10:26 PM

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