A C.L.U.R.T. REPORT
CAMPAIGN FINANCE REFORM: SUMMARY OF DISCUSSION
Our discussions took place during six Monday evenings in March and April, 1999, at the Lakewood Public Library. Attendance ranged between four and eight people.
Discussion was confined to the financing of federal elections. Lack of time prevented our broadening the discussion to the state and local level.
Not much attention was paid to limitations on contributions, nor
was there marked enthusiasm for it. About half of the time
was devoted to specifying the goals of campaign finance regulation.
To achieve all of the goals, or even all of the most important ones, was
seen as exceedingly difficult, and most of the group’s efforts were devoted
not to improving the campaign finance process, but rather to making it
less important.
The Goals of Campaign Finance Reform
After some discussion and refinement, these goals were listed:a) To uphold First Amendment freedom of expression.
b) To raise the level of political discussion in campaigns.
c) To insure equal access or representation.
d) To make elections fair, or open, for all “reasonable” candidates.
e) To reduce/minimize the need for a candidate to spend time in fundraising.
f) To restrict the influence of multinational corporations and other foreign influences.
g) As an overall purpose: To identify and elect the best people for the offices. (This was more or less agreed to be equivalent to having the best, i.e. fairest, process.)
What is equal access and why is it desirable?
The goal of equal access received some attention. By “access” was meant the ability to influence an office-holder’s decisions, either through lobbying or by offering contributions as incentives.
There were two views as to how campaign contributions deny equal access and why this is wrong:
One view sees influence as applied at the ballot box. It is based on the “One person one vote” principle, which holds that every person’s wishes or interests are to count for just as much as any other person’s, and that a person’s wishes or interests are expressed through his or her vote. When sizeable campaign contributions are made (or indeed, when any contributions are made), the contributor gains more influence than that represented by a single vote, and so the contributor’s wishes or interests count for more than those of other individuals. This contradicts the equality expressed by “One person one vote.”
Gerrymandering was mentioned in this connection, by analogy with campaign contributions. Gerrymandering has been used as a way of insuring that certain groups, e.g. minorities, don’t count. In other words, it’s a way of denying equality, and as such has been condemned. (Sometimes, however, racial gerrymandering is used in an attempt to make sure that the votes of minority groups do count.)
The other view sees influence in the relation between a legislator (after election) and his/her constituents. It appeals to the principle that a legislator ought to represent only his/her constituents and ought to represent them equally. In being influenced by contributions, a legislator is not representing all of his/her constituency equally.
(This raised the long-standing question as to how a legislator should respond to the particular wishes of constituents. Does the legislator simply vote the way the majority of constituents want? Or according to his/her conscience, regardless of what the voters think? However important this question is, it is not relevant to financial contributions and the influence they bring.)
Finally, any view that sees campaign contributions as making for
unequal influence must assume that contributions really do influence the
way legislators vote. This premise was questioned by one of the participants
who cited a study claiming to show that most legislators vote their consciences
no matter what contributions they receive. Several members of the
group found this hard to believe. In any case it might be argued
that the claim is irrelevant: Assume all legislators do vote
their convictions. Nevertheless, as long as the size of campaign
contributions determines who is elected, the predominant contributors will
be able to decide which convictions get represented in the legislature.
They will act as a filter, rejecting those whose convictions they oppose
and advancing those whose convictions they favor. Thus the legislature
will be biased in favor of the large contributors, notwithstanding the
fact that the legislators themselves feel no such bias in the way they
vote.
The question of the fund-raising burden
In answer to the goal of reducing a candidates’ fund-raising burden,
it was claimed that candidates should be required to spend their time raising
money, because fund-raising provides a test of persuasiveness and other
needed qualities. It was answered that different abilities are involved
in fund-raising and legislating. Another contention was that candidates
may not spend much time in fund-raising.
ISSUES:
The Overall Framework
After enunciating the set of goals, the group turned to questions concerning how the goals are to be achieved, or whether they can be achieved.
Campaign financing, it was pointed out, is part of a larger set of relationships involving politicians, voters and contributors, which can be summarized in this way:
CONTRIBUTORS AND CANDIDATES:
On Limiting Contributions
One way to regulate campaign financing, of course, is to limit the
amount of money that can be donated to a campaign fund.
Conventional wisdom may look mainly to this solution, but this group did
not.
On the other side it was said:
It was argued that contribution limits have little effect on candidates’ money-raising behavior. If large contributions are allowed, candidates will spend as much time as possible cultivating millionaires so as to keep ahead of their opponents; if only small contributions are allowed, candidates will spend as much time as possible cultivating as many contributors as possible. In other words, it’s the competition between candidates that drives them to spend so much time in fund-raising and puts such a burden on them. However, this may be true only up to a point, the saturation point at which more money is of no use.
The final word was that there is a sort of dilemma built into the
question of contribution limits: If we raise limits, money-raising
may become easier, but we get away from equal access. If we lower
limits, we promote equal access, but money-raising become more difficult.
(The problem of “soft” money was mentioned only once, and never discussed. However, it is implied in the futility thesis, to be discussed next.)
Most of the discussion concerning limits was devoted to by-passing contribution
limits or campaign finance regulation overall. This took the form
of arguing that contribution limits are futile, or of arguing that the
real problem lies deeper than campaign finance, or of devising reforms
that would undercut the need for campaign funds.
ISSUES:
Is it easier to raise a given amount from many small contributors or from larger contributors?
Is there a saturation point in spending, beyond which further contributions are no longer useful?
The Futility Thesis
The “futility thesis,” as it will be called, holds that there is no point in trying to restrain campaign finances, because any money that someone wants to put into a campaign (in one form or another) will inevitably find its way there. Money flowing into campaign funds was compared to water running downhill.
This was presented as a fact of experience, but more important, it was backed up by a theoretical explanation which appealed to First Amendment freedom of speech, namely:
Ordinary political speech may not be regulated, and consequently spending on ordinary political speech may not be regulated. So any attempt to regulate campaign financing would have to distinguish between political campaigning (for which spending would be regulated) and ordinary political speech (for which spending may not be regulated).
But such a distinction could not be made on any justifiable basis.
Two bases for such a distinction were suggested:
a) Campaigning is self-interested; ordinary political speech is not. This distinction is not viable, because almost anyone who tries to influence an election is self-interested.b) Campaigning takes place when a candidate speaks for him/herself; otherwise it’s ordinary political speech. This distinction is not viable, because of the enormous number of cases in which someone other than the candidate speaks for his/her candidacy. For example, what about an officer-holder speaking out for the incumbent who has appointed him? Or a religious organization that passes out a voters’ guide to inform its followers as to which candidates hold its views? (Whether we object to these efforts or not often seems to depend on whether we agree with the viewpoint presented or not.)
So in conclusion, the futility thesis asserted two conclusions:
1) The absence of a distinction between campaigning and non-campaigning (ordinary political speech) makes it impossible to say what should be regulated and what should not be.Another possibility offered was to make the candidate “accountable” for anything done on his/her behalf. A related suggestion was that a candidate would have to speak for him/herself in advertisements, rather than having anyone speak for him or her. But there were difficulties in this. To force a candidate to be cognizant of everything that might help him or her would be a great burden. (Furthermore, there was no implication that this would restrict the amount of money spent.)2) There is a continuum, with that which is clearly campaign activity at one end (the “formal” end) and that which is clearly ordinary political speech at the other end (the “informal” end). We can restrict activities at the formal end. But then money will simply gravitate down to the informal end – to the activities that may not be regulated – and will have the same objectionable effect.
The Deeper-Problems Thesis
One member of the group put forth the view that campaign finance regulations are superfluous and futile because the real cause of the problems lie deeper, namely, in the fact that legislators are able to engage in favoritism toward certain groups. If legislators could not do the things that allow for favoritism, then interest groups would have no reason to give them money, and the problems of campaign financing would disappear. In addition, on this view, all campaign financing restrictions are potential First Amendment violations.
Examples of the kind of measures that should be eliminated include tax abatements, agricultural subsidies (including those on tobacco), corporate welfare in general, the minimum wage and trade agreements.
Criticism focused on the distinction between legitimate government measures
and “favors.” Examples of legitimate measures included infrastructure
construction (roads etc.) and laws regulating the number of hours truck-drivers
can drive without rest. It was pointed out that if the legislature
can’t do anything to make some sort of change in society, there is no reason
to have a legislature.
Proposals for Reducing the Importance of Campaign Contributions
The suggestions that it is futile or redundant to restrict campaign
contributions fit in with the approach that was most prominent in the discussions,
namely, that the importance of contributions should be minimized.
Another rationale was the need to improve the level of debate during campaigns.
Proposal for a new and better form of TV debate
One member of the group presented a proposal aimed at both raising the level of political discussion and curbing the objectionable flow of campaign money by minimizing the influence of campaign advertising that campaign money is required for. The plan calls for a better way of presenting candidates on TV and radio.
Candidates would appear on a program run on PBS and NPR. Funding would come from both the government and the private sector. A national organization would be established to run the program.
To be eligible to appear on the program, candidates would be required to gather a certain number of signatures testifying that he/she is competent and promising. On the program, candidates would be questioned by experienced moderators, chosen by the national organization in charge, in conjunction with local community members and others whom the organization deems appropriate. The candidates would be questioned about their philosophies and about the specific policies they favor. They would be given sufficient time to answer each question. If in the opinion of the questioner and/or moderator they didn’t answer fully and explicitly they would be given another chance. If they still didn’t answer fully and explicitly they would be shown the door.
In addition there would be a structured, reasoned discussion among the candidates, led by an experienced moderator.
One of the assumptions behind this proposal is that the best type of
program – in this case, the best political discussion – will win out with
the public.
Free air time and abolition of 30-second spots
Another proposal to minimize the effect of donations involved regulation of campaign presentations. It prescribed that beginning 45 days before an election, TV and radio stations would have to give half an hour each day to candidates (all candidates who get on the ballot to be eligible). In addition, 30-second spots would be outlawed. These are often the vehicle of mudslinging and fuel the tendency of voters to vote against rather then for.
One criticism of this proposal is that it would bring up free-speech problems. So it would be better to have 30-second spots wither away from lack of attention. Practical difficulties were also mentioned, e.g. the problem of determining the obligations of stations that serve more than one state and a number of Congressional districts (e.g. stations covering the Boston area and southern New Hampshire).
Would the provision of free TV time be accompanied by a prohibition against buying TV time? Probably so.
(It was remarked that free speech doesn’t imply free TV time to enable
one to speak. This is true; however, the proposal here is not based
on the right of free speech, but rather on the need to curb spending plus
the fact that TV and radio stations are licensed to serve the public good.)
Limits on the length of a campaign
A third proposal along the same lines was to limit the length of election campaigns. Two months was the length of time suggested. No campaigns ads in newspapers, TV and radio would be allowed except during that period. (If newspapers could not be regulated, at least the candidates wouldn’t be allowed to pay for ads.)
The first question to come up (comparable to a question related to the futility thesis) is how “campaigning” is to be defined. I.e., what would be the exact provisions? The answer was that primaries would be held just three or four months before the general election, and there should be a limited period (presumably about two months) within which money could be spent on advertising.
Criticisms: Lesser-known candidates need more time to get their message out. The reply was that these candidates are well-known public figures who have lots of time to get their message out. (Counter-reply: In some cases they’re not.)
It was also noted that some elected officials are in the news all the time and thus get free publicity which would not be bound by the campaign-length restrictions. Reply: TV campaigning is where the big money is spent and therefore is the essential thing to restrict.
Another criticism: A candidate who has little money may need a full year to campaign or else will be blown away in the few weeks of the formal campaign period. Reply: The candidate should be provided free time by TV and radio.
Also: Shortening the campaign would just result in greater negativity.
Also, restricting the campaign might lead to other restrictions on the
media which people would be uncomfortable with.
Other Proposals and Ideas
PACS: These were discussed from time to time. The predominant opinion was against them, though if they merely represent a number of individual small contributors they would not contravene the proper voter-officeholder relationship. Labor-union PACs were said to collect their funds involuntarily from union members and therefore were claimed not to represent the choices of many individuals. A suggested solution for this is to separate PAC funds from regular union funds, using only separate voluntary donations.
ISSUE: Do PAC contributions comprise a number of voluntary contributions from individuals?
POLITICAL PARTIES: It was suggested that reducing the power of political parties would decrease the ways of raising and disbursing campaign money. There was little discussion of this.
TERM LIMITS: These were recommended by a couple of members, especially as a way to decrease the power of parties, but there was little discussion on the subject.
ISSUE: What is the effect of term limits on equal access?
INTERNET: This was brought up as a new and better way of communicating campaign messages. It allows the candidate to reach a great number of people at little expense. However, the anonymity of the Internet can be dangerous. This led to a discussion as to how well Internet messages can be traced, with the perpetrator of the Melissa virus as an example. He was caught, but with a great deal of effort.
ISSUE: How well can the anonymity of Internet sources be maintained?
Background Information (handed out at the beginning of the series)
Much has been written about campaign financing and its faults, most of it in the form of complaints and general suggestions, which revolve around a number of basic themes. Putting these together produces a list of concepts and distinctions that can serve as a framework for understanding. I will first present this framework and then describe the present legal provisions governing campaign financing.
CONCEPTUAL FRAMEWORK
-- Where financing might be controlled:
Source (where/when money is given, e.g. restricting how much a person can give)vs.Destination (where it is received)
-- Methods of regulating campaign finance:
limitation of amounts received/given.
providing alternate sources (e.g. public funding).-- in cashdisclosure of contributions
-- in time on TV, or some other thing of value to a campaign.
-- Ceiling vs. floor – i.e., limiting the maximum a candidate (or
whoever) can be given, vs. providing a minimum amount sufficient for a
candidate to run a campaign and get across ideas.
-- “Hard” vs. “soft” money:
“Hard” money” is that which is regulated because its spending is directly related to a specific election campaign. “Soft money” is that which is not regulated because it is not so related to the specific campaign. This distinction is claimed by many to be a non-distinction, and so has become somewhat infamous.
-- Cash spent by a campaign, vs. the things that a campaign
spends the cash on – e.g., TV ads, polls, postage, operation of an office.
(If we don’t want to regulate the cash, do we want to regulate the things
it can buy?)
-- Collective vs. individual amounts: Looking at what each individual contributor may give, vs. what all donors may give; or what the donor may give to one candidate vs. what he/she may give in toto.
-- Types of player: Individuals; special-interest groups (usually represented through PACs); political parties.
-- For legislative campaigns: money from inside the district vs. money from outside
-- Initial stages of campaigns (primaries and before) vs. campaigns as a whole
-- One-sidedness of certain situations or systems: e.g., advantages for incumbents in the present situation (franking privilege, or publicity that comes from being in office); or advantages for candidates who are wealthy.
-- Major complaints against the current system (or no system):
Undue influence on officeholders (“buying” them).also the appearance of undue influence, leading to cynicism.Excessive demands on officeholders’ time, due to the need to raise money. (And potential candidates refusing to run for office because of this need.)Degrading of political debate through the TV ads which the campaign money buys. (With less money, it is argued, candidates would have to turn to better ways to get their message across.)
Inequalities favoring incumbents (including the tendency of donations to flow mainly to incumbents) and wealthy candidates.
WHAT THE LAW SAYS
This describes the law covering federal elections.
We must distinguish, on the federal level, between presidential
and congressional elections. The presidential elections are open
to public funding for those candidates who choose it, while congressional
elections are not.
The law makes a crucial distinction between:contributions – money given to other people (candidates, usually) to spend on elections.vs.expenditures – money spent, usually by the candidate, to achieve election.
The present law is complicated, but the essential and most
important provisions and other aspects are these:
CONTRIBUTIONS:
Individuals may contribute $1,000 per candidate per election; and $20,000 per year to a national party committee; and $5,000 to other political committees; with a $25,000 maximum on the aggregate.
Political Action Committees (PACs) may give $5,000 per candidate per election; and $15,000 to a national party committee; and $5,000 to any other political committee. (This is for PACs defined as “multicandidate,” which includes most of them.)
Candidates are not limited in the amounts they may give to their own campaigns except by the provisions attached to public funding (below), which limit contributions to $50,000 in personal or immediate family funds.
These contributions are prohibited: from foreign nationals (non-green-card holders), national banks, corporations and labor unions; those of more than $100 in cash and $50 given anonymously.EXPENDITURES:Political party committees may give $5,000 per candidate per election (if “multicandidate”), and $5,000 to any other political committee. National senatorial or party committees may give $17,500 to a Senate candidate per year of election.
For candidates: No expenditure (spending) limits, except for presidential candidates who choose to accept public funding (below).PACs: No limits on expenditures for messages to support or oppose candidates, when these are made “without coordination or consultation with a candidate.”
Political parties (in addition to contributions);for House candidate (multi-district state) -- limitation according to a formula which amounted to $30,910 in most House races in 1996For Senate candidates (or House at-large candidates) – limitations according to a formula which allowed from $61,820 to $1.4 million in 1996 (depending on the number of eligible voters).
For Presidential candidates: 2 cents per eligible voter, plus COLA. (amounting to $12.4 million in 1996)
PUBLIC FUNDING (PRESIDENTIAL ELECTIONS):
Presidential candidates may choose to accept public funding. If they choose to accept, they agree that they will spend no more than the amount of public money they receive. This applies to party nominees in the general election and to primary candidates.
General elections (major parties): The amount per candidate was $61.8 million in 1996. (based on $20 million in 1974 plus COLA for the time since then.)Minor parties in general election: They receive an amount proportionate to the ratio between the number of votes they received in prior elections and the number of votes received by major party candidates.
For new parties: Retroactive funding is given if they receive 5% of the popular vote.
Primary elections: Qualifying candidates (those who raise a certain amount through contributions of $250 or less) get their contributions of $250 or less matched by public funds up to spending limits set for individual states and the nation as a whole.
In addition, political parties may get public funding for nominating conventions, and may spend no more than the amount received ($12.4 million in 1996).
DISCLOSURE
All federal candidates and all political committees operating in federal elections must file regular reports with the FEC or (in case of Senate candidates) with the Secretary of the Senate. These include cash on hand, receipts, expenditures, etc. Specific identification must be provided on contributions and expenditures of more then $200 per year (giving name, address, occupation, and principal place of business of donor or recipient).
FEDERAL ELECTION COMMISSION
The election laws are administered by the Federal Election commission, an independent agency of six members appointed by the President and confirmed by the Senate (three members from each major party).
BUCKLEY v. VALEO -- Supreme Court decision (1976)
This landmark decision ruled on the Federal Election Campaign Act (passed in 1971 and amended in 1974).
What this ruling did, most importantly, was to strike down mandatory limitations on independent expenditures (i.e. expenditures not directly related to a campaign, or in other words, “soft money”), as well as candidates’ expenditures of their own money, and overall campaign expenditures. The reason for this was that such limitations violate First Amendment rights of free speech. (The decision has been widely criticized.)
However, the decision did allow voluntary expenditure limits, as provided for in the presidential public-funding plan.
Also, it upheld limits on contributions.
SOFT MONEY AND RELATED LEGAL LOOPHOLES
The term “soft money,” in its widest sense, refers to money which is spent for a political purpose yet is not explicitly directed to help a particular candidate in a particular election and is thus exempt from the restrictions outlined above. There are various forms:
Contributions to state and local parties. Since these are state activities, they cannot be regulated by the federal government. Thus (lacking strong restrictions laid down by state governments), state parties can spend large amounts of money on activities that will benefit presidential or congressional candidates, without actually contributing to that candidate’s campaign – for example, on voter registration, polls, or generic advertisements. This is “soft money” in the specific sense of the term. (In 1996, according to one report, the major parties raised $262 million in such funds.)
Independent expenditures, so-called. Due to the Buckley ruling, individuals or groups can spend unlimited amounts to support specific candidates, as long as those efforts are made “without coordination or consultation” with the candidates.
Issue advocacy. This refers to advertising that advocates certain positions on prominent issues, and thus helps candidates that agree with those positions. Since it does not expressly urge election or defeat of specific candidates, it is not covered by the restrictions mentioned above. Similarly, a group may issue voters’ guides which help candidates friendly to that group’s views.
Bundling. This does not involve soft money as such, but it is a way
of violating the spirit of the campaign-finance laws. It consists
of putting together a number of contributions, each of which meets the
legal limit ($1,000 for an individual), so as to make a bundle which is
far larger than the legal limit, and making clear that the entire bundle
is given for one purpose. This might be done by a professional fundraiser,
for example, or by a CEO who solicits the executives under him to contribute.
SOME NUMBERS ON THE EXTENT OF CAMPAIGN SPENDING
Congressional candidates spent over $764.3 million in 1996.
The average cost for a winning House candidacy in 1996 was $679,000; for a winning Senate candidacy it was $3.8 million.
In the 1994 congressional races, 34% of candidates’ money came from individuals who gave over $200 per candidates; 20% came from individuals who gave less than $200 per candidate; 24% came from PACs; 14% was the candidates’ own money.
-- G.B. (Thanks for the help to John Guscott and staff at the Library and to the office of Sen. Mike DeWine.)
Conclusions and Arguments (At
the beginning of the first meeting, participants were asked to list all
arguments on all sides of the question. The following is a list of
the arguments given.)
REASONS FAVORING RESTRICTION:
Public financing, i.e. a pool of money provided by the government and divided up amongst candidates, would limit spending. It would also limit “access” to candidates, however.
Charging a tax on unrestricted political commercials and using the tax to fund commercials for candidates who agree to limit spending, would tend to even up the advertising by candidates.
Campaign financing benefits incumbents unfairly.
In 1996, every House incumbent who spent less than $500,000 won.(Incumbents who campaign during hours of 9 to 5 should have be docked for the time.)
Only 3% of challengers who spent that little won.
Challengers who spent between $500,000o and $1M won 40% of the time.
Challengers who spent more than $1M won five out of six races.
REASONS FAVORING ABSENCE OF RESTRICTION:
Campaign finance restrictions amount to restrictions on the First Amendment. This is a dangerous precedent. It doesn’t get to the root of the problem, e.g., morals and ethics; corporate welfare favors; complex laws prone to bending and inadvertent violations.
Unlimited private funding, i.e. individuals and corporations being allowed
to give unlimited funding to candidate(s) of choice, allows unfettered
“access” to candidates.
CONCLUSIONS/RECOMMENDATIONS: