Uprooting the Money Tree



Politicians - and their loyal brigade of lawyers, consultants, advisors and spin doctors - are experts at locating loopholes in even the most tightly-constructed regulations, particularly when the stakes are high.

Campaign finance legislation, where the stakes are hundreds of millions of dollars and those sitting in Congress have the most to gain from maintaining the status quo of complex and ineffective stipulations, is certainly no exception.

In such a climate, the passage of the Shays-Meehan bill by the U.S. House of Representatives on Feb. 14, the most comprehensive restructuring of the current campaign finance system since its construction in the post-Watergate era, is no small feat. In recent years, parties and candidates have become increasingly reliant on soft money, which would be eliminated under the proposed legislation, dramatically altering the electoral playing field.

Soft money is money contributed to the political parties for "party building" or "get-out-the-vote" activities that are not subject to the stringent contribution limits levied on candidates for federal office. In practice, however, the money is not spent on bumper stickers or registration tables or local party barbeques to attract members, but instead is utilized by wealthy individuals, labor unions and corporations to flout federal regulations and make a mockery of campaign finance laws.

As one campaign scholar wrote, "the legal framework to curb campaign finance has become little more than an annoyance, not a real constraint on the behavior of the contestants."

While an individual can give only $1,000 to the candidate of his or her choice, Coca-Cola or Philip Morris can funnel six- and seven-figure donations in the form of soft money to political parties for the express purpose of influencing federal elections.

The Democratic Party received about half of its funds in the 2000 election from soft money donations while soft money contributions accounted for a little over a third of the Republican Party bankroll that same year. Big donors, including the Communications Workers of America, the National Rifle Association and Enron, poured nearly half a billion dollars of soft money into party coffers in the 2000 elections.

Plugging the soft money gap, however, will not stem the tide of big money in politics. The Shays-Meehan bill, despite its best intentions, is merely another patch job that attempts to close one loophole while ignoring the fundamental flaws of the current system. The bill simply invites politicians to search for new loopholes - a trend supported by the bleak history of campaign finance reform.

If the Shays-Meehan ban on soft money is codified into law, big donors and parties will simply look for other ways to divert funds toward influencing elections. More millionaire individuals and corporations may shift their money to independent expenditures - money spent entirely independent of candidates or parties and completely under the radar of disclosure and limit requirements.

Special interests may also simply channel campaign funds through state and local parties where there are fewer restrictions on donors and it is much more difficult to follow the money trail. The bottom line is that Shays-Meehan will only change who Microsoft and Bill Gates write their checks out to; it will not prevent those checks from being written.

Perhaps the most controversial component of the Shays-Meehan bill is its prohibition of broadcasting "issue ads" 30 days before a primary or 60 days before a general election. Groups as diverse as the ACLU and the U.S. Chamber of Commerce are screaming First Amendment violations. Both organizations spent millions in the 2000 elections.

Issue advocacy ads, which gained prominence during the 1996 election, are a loophole stemming from the Supreme Court's decision in Buckley v. Valeo. The Court ruled in 1976 that the FECA only applied to political communications that "expressly advocated" the election or defeat of a candidate. As long as ads avoided the magic words of "elect," "defeat," "reject" or "vote for," they fell beyond government regulation.

The result was a ridiculously broad standard under which ads adroitly danced around the magic words, clearly attempting to influence elections while expertly steering clear of disclosure requirements.

While a ban on issue ads two months prior to an election may be constitutionally suspect, the ads must be regulated to a certain extent. A study by the Annenberg Policy Center found that the majority of so-called "issue ads" are not about issues at all, but rather attack particular candidates whose names and faces are often used. Since these ads operate beyond FECA regulations, voters are often left unaware of who is funding the TV spots and what interest they represent.

In the 1999-2000 cycle, groups sponsoring issue ads included "Americans for Job Security," the "Coalition for Affordable Quality Healthcare," "Committee for Good Common Sense" and "Citizens for Better Medicare."

These ambiguous names are inherently deceptive. Who isn't for common sense or job security? "Citizens for Better Medicare" was actually funded by the pharmaceutical industry - not concerned citizens at all. By camouflaging the identity of individuals who fund such ads, citizens are deprived of the information necessary to accurately assess their validity, compromising the electoral process.

If passed, the Shays-Meehan bill will undoubtedly be challenged in court, probably all the way to the Supreme Court. Before rigidly applying the decades-old Buckley standards, the justices should consider the country's experiences in the last 30 years: spiraling campaign costs, the decrease in competition at the congressional level, fundraising disparities between challengers and incumbents, the explosion of undisclosed issue ads and the increased appearance of self-financed candidates such as New Jersey Democrat Jon Corzine.

First Amendment protections, while cherished, are not absolute. The state can and should curb unbridled campaign contributions when there is a "compelling state interest" to do so.

Equalizing the playing field so the best candidate is not always the richest candidate, enhancing the competitiveness of campaigns so that elections are not merely rubber stamps, mitigating the effect of big money on public policy decisions, enabling representatives to spend more time governing than fundraising and improving the belief of ordinary citizens that their voices, not just their wallets, count are all compelling justifications for regulating political spending.

As the Annenberg report concluded, "money is indeed speech, with the largest bankroll having the loudest voice and the voice of those with limited means effectively drowned out."

America needs meaningful campaign finance reform, not a patchwork approach to tinkering with a system that has outlived its usefulness.