"Money On My Mind" is a monthly column by Jay Mandle. The views expressed here are those of the author, (not necessarily those of Democracy Matters or Common Cause), and are meant to stimulate discussion.

September 2006
By Jay Mandle

An August 8 New York Times op-ed attacked campaign finance reform as a quixotic effort to do the impossible. The authors, Jan Witold Baran and Robert F. Bauer point to the fact that even with the passage of the Bipartisan Campaign Reform Act (BCRA) in 2002, record levels of spending occurred in the 2004 elections. They further argue that the scandals that emerged during 2005 involving the lobbyist Jack Ambramoff and former congressman Duke Cunningham demonstrate that laws cannot “quash corruption.”

Baran and Bauer advocate what they describe as a system of “laissez-faire campaign finance.” That is, they want no restrictions on campaign spending or expenditures. Their editorial points to Virginia as a place where the kind of laissez-faire system they seek is present. Let’s take a look at what is happening in that state to see just what it is that Baran and Bauer are defending. I went to the web site of the Virginia Public Access Project to examine how recent gubernatorial races were financed.  

It is clear that running for governor in Virginia is increasingly expensive. Even after adjusting for inflation, the combined amount of money spent by the major candidates grew by more than 50% between 1997 and 2001, and then by another 25% between 2001 and 2005. Twice as much money in real terms was spent in 2005 as had been the case in 1997.

Where did all this money come from? The brief answer is that it was donated by rich people associated with a relative handful of industries. Table 1 indicates that in all three elections since 1997, roughly 90 percent of the money received by the candidates came in the form of large donations, contributions of $500 or more. Interestingly, there is nothing to choose between the two parties. Both Republican and Democratic candidates were all but totally dependent upon a contribution level that only the wealthy can afford.

Table 1

Percentage of Contribution Provided by Donors of $500 or More

Year / Republican Candidate / Democratic Candidate

1997 / 92 / 89

2001 / 91 / 92

2005 / 86 / 87

Source: Virginia Public Access Project, http://vpap.org

But the Democrats and Republicans in Virginia are not only similar in their dependence on big donations. The donors who were most important to the two parties were, to a remarkable extent, the same people. In both 2001 and 2005 contributors associated with only five industries - real estate, retail services, finance and insurance, health care and technology and communications - were among the top six contributors for both Republican and Democratic candidates in 2001 and 2005.

There were some differences between the parties. Lawyers make important donations largely to the Democrats as do unions. The energy sector and the transportation industry largely gave to the Republicans. But the fact remains that in the elections of 2001 and 2005 more than 40% of the money raised by both Republican and Democratic candidates came from a handful of sources that were big contributors to both parties.

Obviously a tiny monied elite is calling the shots in Virginia. This really is an awful situation. The fact is that whatever the party affiliation of state’s governor, (a Republican in 1997 and 2005; a Democrat in 2001) the same funders continue to occupy positions of influence and privilege. The top donors made certain that both major parties in Virginia were financially dependent upon them. That their political donations did indeed have an impact is made clear by the fact that those dominant contributors continued to make, and even increase, gifts to both sides. If the donors were not satisfied with the benefits they were receiving, it is certain that they would have called a halt to such large financial outlays.

But in their support of unregulated campaign finance, Baran and Bauer ignore the damaging consequences for democracy that result from a system like Virginia’s. Instead, their evaluation is that, with its unregulated regime, the state has not been left with “a dysfunctional and corrupt government….” Maybe not. But the fact remains that the financial base upon which the structure of Virginia politics rests is nothing if not elitist. Baran and Bauer say nothing about this parody of democracy.

The fact that their defense of Virginia’s elitist system of campaign financing puts Baran and Bauer on the side of political inequality is never stated explicitly. They lay low for a good reason. Endorsing political inequality would be to oppose a deeply held norm in American culture and political thinking, namely that in politics everyone should have an equal voice. Because they neither have such a commitment nor understand that the American people do, it is not surprising that they are perplexed by the “constant clamor for more reform and regulation.” They just do not get it. Americans oppose the inequalities structured into the political system, and are seeking ways to put an end to the dominance of a donor elite.