by Joan Mandle
This paper is a very brief overview of the movement to change the campaign financing system in the United States. For more information, see references and websites referred to throughout the paper.
I. Campaign Finance Law
The initial reform of the campaign financing system occurred between 1971 and 1974. It was largely a response to the Watergate scandal, but it was also an attempt to remedy the negative publicity that attended the public's learning of an individual donor who literally delivered a suitcase of cash to Richard Nixon's re-election campaign. Many members of Congress felt they needed to do something to restore the public's dwindling faith in government. Their response was to pass a series of laws known as the Federal Election Campaign Act (FECA).
The FECA legislation altered a number of aspects of the financing of election campaigns for federal office. For the first time, it established rules that limited contribution levels to candidates and parties. This regulated money came to be known as "hard money." Individual contributions to any single candidate were limited to $1,000 in the primary campaign and $1,000 in the general election of any given year.
Second, although corporations and unions were prohibited from giving money directly from their treasuries, FECA allowed Political Action Committees (PACS) to be organized by individuals, unions, organizations, or corporations. These PACS could collect voluntary contributions from individuals of up to $5,000 (often from members of the unions or employees of corporations that established the PAC). The PACS then were allowed to contribute directly to candidates. Their contributions too were regulated, with "hard money" limits to a single candidate of $5,000 in the primary and $5,000 in the general election.
FECA also created a mandatory reporting system for all contributions to and all expenditures made by campaigns. Money associated with election campaigns would now be "disclosed" and made public periodically, according to a schedule established by the newly organized Federal Election Commission. This Commission was created by FECA to oversee the implementation of the disclosure system, and to rule on any failures to comply by candidates.
Finally, in another pathbreaking move, FECA established a voluntary system of public financing for the Presidential primaries and general election. Those candidates who chose to accept public financing had to agree to spending limits in both the primary and the general elections. The primary system was a matching system of public financing, with the government offering to match private funds raised by candidates, up to a stated limit. For the general election, the candidate received full public financing in exchange for refusing any private contributions and for limiting her/his expenditures. From its inception through 1996, all Presidential candidates voluntarily participated in this public financing system until 2000 when George W. Bush refused public money and financed his presidential primary bid exclusively with private money.
Much of the complex system established by FECA has remained in place despite court challenges. Over the years the Supreme Court has upheld much of the original law - most importantly the provision for contribution limits, which it has argued are necessary to avoid the appearance of corruption of candidates by large donors. But in the most important challenge to the law, Buckley v. Valeo in 1976, the Court struck down the limits on campaign spending that the Congress had passed. They stated that any constraint on candidate expenditures - of either their own money or money they had raised - constituted a limit on their right to free speech and was therefore unconstitutional.
II. Reform Strategies
Since the middle 1970s, it has become increasingly clear that FECA is a weak tool, inadequate to deal with the growing problems created by our present system of campaign financing. Though FECA was ostensibly passed to control the negative influence of big donors on election campaigns, many believe that the dominance of big money is today worse than ever. In the first place, the number of PACS that are raising money and contributing to candidates continues to mushroom, growing from a few hundred in the 1980s to thousands today. Second, the cost of campaigning has risen exponentially. The total amount of money spent in races at the federal (and also at the state and even at many local levels) has doubled and tripled every few years, with no end in sight. In addition, the number of competitive races is declining, as the advantages of incumbency overwhelm opposition. Typically, well over 90% of the members of Congress who run are returned to office each election cycle, with most incumbents both out-raising and out-spending their opponents. In fact it has become routine for incumbents to amass large "war chests" between election years precisely to discourage serious challenges.
In response both to these obvious problems and also to polling data indicating that a large majority of Americans favor reform of the financing system, a number of strategies have emerged to attempt to change the way election campaigns are financed.
A ) One strategy is legal, focusing on an effort to overturn the Buckley decision. Criticism of the 1976 Supreme Court decision was initially strong and continues today, with a number of groups (including the National Voting Rights Institute www.nvri.org) and the Brennan Center for Justice http://www.brennancenter.org/dynamic/subpages/CFr6.pdf) working to overturn Buckley. Overturning the decision would open the way for possible passage of legislation allowing limits on expenditures. But overturning Buckley might also allow those who want no contribution limits to hold sway.(See Joshua Rosenkranz, 1998, 1999).
B) A second strategy, adopted by many reform groups since the 1970s, has been to lower contribution limits at the federal, state, and/or local levels. Since the Court approved the FECA limits on contributions to candidates, many reformers have sought to lower the legal limits in order to make money a less important ingredient in political campaigns. Groups such as Common Cause and the USPIRG have a long history of fighting for lower contribution limits. But very low limits at the state and local levels have often been struck down by the courts, as happened for example in the mid-1990s in California when a statewide initiative mandating $100 limits to candidates was never implemented. And candidates, especially challengers, have complained that low contribution limits would force them to spend even more time raising money and less time working on legislation or social policy issues.
C) A third strategy was to curtail the growth of so-called "soft money" contributions. This is money that is not regulated by law. It does not go directly to candidates but rather to political parties, and is not limited in amount. This effort culminated in success when in the Congress in March 2002 passed the first significant campaign finance reform since FECA. The Bi-Partisan Campaign Reform Act (BCRA), also known as McCain-Feingold for its Senate sponsors, Senator John McCain(R-Az) and Russ Feingold (D-WI) was passed with the help of national groups like Common Cause and the Sierra Club.
The effectiveness of BCRA in regulating big private money in election campaigns, however, has proved to be ambiguous at best. On the one hand, the banning of unlimited contributions to national parties was tied to an increase in the "hard money" limit that individuals could contribute to candidates. BCRA doubled the amount of money that could go directly to a candidate, allowing individuals to contribute $2,000 in the primary and $2,000 in the general election to an individual candidate up to a total of $37,500 over a two year election cycle. Individuals can also now give "hard money" up to $25,000 to a national party and $10,000 each to state parties. BCRA also ruled that ads that "referred" to a federal candidate could not be broadcast within 30 days of a primary and 60 days of an election. Furthermore, political committees that are independent of a particular campaign designated "527"s -- are not regulated by any federal law.
Thus the reality is that the problem of private money in politics has not disappeared. But the problem of "hard money" persists not only because of its overall amount in campaigns. While hard money contribution limits attempted to ensure that no one individual could contribute enough money to "corrupt" a candidate, in fact those limits have long been circumvented by a technique known as bundling. Bundling enables a single individual or group to take credit for raising large amounts of "hard dollars" that go directly to a particular candidate. Bundling works by a group or individuals' collecting the maximum "hard money" ($2,000) contribution from a large number of individuals (often family members, friends, or colleagues in a law firm or corporation, but also sometimes members of organizations advocating certain social policies.) The money is "bundled" together and then delivered to the candidate with a clear understanding of who is responsible for the "bundle." The candidate is then as beholden to the "bundler" as she/he would have been to an individual contributor who made a campaign donation of hundreds of thousands of dollars.
D) A fourth reform strategy speaks directly to this "hard money" problem by advocating the public financing of elections. Public financing is not a new model of campaign finance reform, for it has been implemented in one form or another for decades at both the local and state levels (and of course in the Presidential primary). The system is voluntary; that is a candidate cannot be coerced into participating in a public financing system. If, however, he/she chooses to participate, the candidate in return for public dollars voluntarily agrees to limit her/his overall campaign spending. The Supreme Court has ruled that limiting expenditures in this way is constitutional because it is voluntary. Thus public financing schemes are a mechanism to control campaign spending, at least for participating candidates. Only public financing has been able to reform campaign financing by limiting both contributions and expenditures.
The most common form of public financing is a matching system. In a match, a candidate is offered public money that matches the dollars she/he has raised from individual donors. In existing systems the match ranges from one public dollar for every private dollar donated, as in Oakland California's local ordinance, to four to one as in New York City's public financing system. In most matching systems, only smaller contributions are matched, thus raising the importance to candidates of smaller contributors. A significant number of states and cities have some public financing as part of their campaign financing system. By making public money available, partial public financing systems begin to erode the dominance of private funding, but it is also the case that, depending on the size of the match, private "hard money" often still plays a significant role in campaigns run under this system.
A newer system of public financing that has been implemented at the state level is full public financing. This innovative model, often referred to as Clean Money or Clean Elections, eliminates most private money from campaign financing by offering candidates the full amount that can be legally spent on a race in return for their voluntary agreement to raise no private dollars. In the states of Maine, Massachusetts, and Arizona as well as the city of Albuquerque, New Mexico voters passed Clean Money/Clean Elections legislation by initiative; and in North Carolina, New Mexico, Vermont, Connecticut and the city of Portland, Oregon full public financing systems for specific races have been passed by the legislature. (The Massachusetts law was invalidated by an act of the legislature). Some of the results of Clean Money/Clean Elections systems that are in place have been to increase the diversity of candidates, with increased numbers of women and minority individuals running for office, and to create more competitive elections. Both Republicans and Democrats have run as "Clean Candidates." (See Common Cause's publication "The Benefits of Clean Elections Reform" as well as Public Campaign's materials on Clean Money/Clean Elections.
III. Conclusion
The fight for a system of financing elections that allows every citizen to have a voice in the decisions that affect us all is central to a democracy. Each person deserves equal respect in influencing laws and policy. As long as only a tiny fraction of individuals fund campaigns, our laws and policies will fail to reflect the will of all the people. There is widespread agreement that the campaign finance system is broken, and thousands are working hard to fix it. There is clearly no simple answer to so complex a problem and our strategies no doubt will continue to differ, but together we can begin to erode the poisonous effects of big money on our political system.
|
