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Other Reforms
By Michael Waldman – 06/20/08
An edited version of this posting appeared as a guest post on the Anderson Cooper 360 blog June 20.
Barack Obama's decision to opt out of public funding for the general election is not a surprise. It was so well telegraphed, he should take out a patent.
The presidential public funding system worked well for three decades after it was enacted in the early 1970s. It leveled the playing field, boosted competition and reduced corruption. Think of it this way: in the first five elections under presidential public funding, a challenger beat an incumbent president three times. There's no congressional district in America with that much competition!
But the presidential system needs repair, for reasons among those prompting Obama to turn away the federal funds. Principally, candidates simply don't get enough money to mount a fully strong race in a modern election. The amount, when it was set, was about two thirds of the amount spent by the McGovern campaign of 1972—in other words, two thirds of the least successful presidential campaign in modern history!
The real question is what will Barack Obama—or John McCain—do to reform the system when one of them takes office?
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Tags: Democracy, Campaign Finance Reform, Contribution Limits, Other Reforms, Disclosure, Public Financing
By Kelly Williams – 06/16/08
Former lobbyist Jack Abramoff will be sentenced this September, according to papers filed by prosecutors and defense attorneys this week in federal court. Mr. Abramoff has been safely tucked away in a federal prison camp in Maryland since 2006 on bank fraud charges. Congress reacted to the scandal by passing reform legislation: This past January 1, the
Honest Leadership and Open Government Act (HLOGA) of 2007 went into effect, requiring more substantive and accessible disclosure of political and charitable contributions by registered lobbyists, among other changes. The first reports of these contributions are due on July 30 and should make for interesting reading.
With reform legislation in place and Mr. Abramoff's expense account out of reach, one might be tempted to breath a sigh of relief. One piece of this important legislation has yet to be implemented, however—HLOGA required the FEC to adopt rules for disclosing "bundling" by lobbyists. "Bundling" is the gathering of checks from multiple donors otherwise meeting the requirements of law which are then turned over "in bulk" to politicians—the virtues and risks of this practice should be self-evident to those who care about meaningful campaign finance reform. The lack of a quorum at the FEC has prevented the adoption of the rules, effectively neutering this part of the only ethics reform legislation to come out of Congress in recent years. True reformers should insist that passage of these rules is at the top of the agenda of a reinvigorated FEC.
Tags: Democracy, Campaign Finance Reform, Contribution Limits, Other Reforms, Disclosure
By Laura MacCleery – 06/13/08
Some cases are just too ugly even
for the Supreme Court, it appears. Last week it refused to grant review to a
claim from Washington State that challenged an important principle: the
requirement that outside groups disclose their electoral spending.
The group in question, called the
Voters Education Committee (VEC), was a classic astroturf 527 group (named thus
for a section of the tax code), that omitted to register with the state as a
political committee. Its one donor—the Chamber of Commerce—funneled it a
whopping $1.5 million as part of a 25-state campaign in 2004 to push
its agenda in key Attorney General and state Supreme Court races around
the country.
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Tags: Democracy, Campaign Finance Reform, Other Reforms, Disclosure
By Ciara Torres-Spelliscy – 04/21/08
Cross-posted from the ACS Blog
April 22, the Supreme Court will
hear oral arguments in a case testing the constitutionality of the so-called
"Millionaires' Amendment" of the Bipartisan Campaign Reform Act ("BCRA," also
known as "McCain-Feingold"). The Millionaires'
Amendment passed in 2002 as part of a reform package to update and improve the
nation's campaign finance laws.
The Millionaires'
Amendment,
somewhat
levels the playing field for opponents of self-financed candidates who plan to spend
$350,000 or more of their own money on their campaign for federal office. Once a candidate for federal office spends
more than $350,000 of personal funds on a campaign, their opponent
will be allowed to raise private funds in amounts that are triple the normal
limits—up to $6,900/person/election—and can coordinate additional expenditures
with his or her political party, up to a cap.
The Amendment also requires certain financial disclosures from both
candidates so that the FEC can monitor when the cap has been reached. In all cases, the self-financed candidate can
spend as much money as he or she desires.
The law was
challenged by Jack Davis, of New York,
who alerted the FEC that he intended to spend $1 million dollars of his own
money in his 2006 run for Congress. In
the case, he argues that it is unconstitutional under First and Fifth
Amendments, and
claims that the additional benefits for his opponents chilled his own
speech.
Mr. Davis lost
on all counts in the lower court, which
found that the Millionaires' Amendment did not burden his speech since it "places
no restrictions on a candidate's ability to spend unlimited amounts of his
personal wealth to communicate his message to voters, nor does it reduce the
amount of money he is able to raise from contributors."
Instead, the court
held, the statute merely "provides a benefit to his opponent, thereby
correcting a potential imbalance in resources available to each candidate." Thus, the statute "preserve[s] core First
Amendment values by protecting the [opposing] candidate's ability to enhance
his participation in the political marketplace." The court also rejected Mr. Davis's equal
protection argument, because he had failed to show that Section 319 treats
similarly situated persons differently. It
is this opinion that Davis
seeks to overturn in the Supreme Court. The Brennan
Center for Justice submitted
an amicus brief in support of the FEC's
position.
The Davis case has
its roots in the seminal case of Buckley
v. Valeo, which (in)famously stands for
the proposition that money is speech. What
Buckley actually says is,
A
restriction on the amount of money a person or group can spend on political
communication during a campaign necessarily reduces the quantity of expression
by restricting the number of issues discussed, the depth of their exploration,
and the size of the audience reached. This is because virtually every means
of communicating ideas in today's mass society requires the expenditure of
money.
242 U.S.
1, 19 (1976). Buckley stuck an uneven balance that we have been living with ever
since. It is constitutional to regulate
political contributions but it is unconstitutional to regulate expenditures, including
expenditures by a wealthy candidate on his own candidacy. Despite the fact that most self-financed
candidates end up losing their elections for lack of a strong base of support
among voters, post-Buckley,
self-financed candidates, who can make a huge media buy with a single check,
have often had a demonstrable funding advantage over other candidates, who must
gather hundreds of small contributions before making a similar advertising purchase. As races for Congress have grown more
expensive over time, parties have increasingly turned to candidates who can
afford to self-finance to run for election.
This trend could discourage candidates of lesser means from running for
office. The Millionaires' Amendment was
a response by Congress to this Buckley-inspired
doctrinal inequity.
This case will
be a key test of how hostile the Roberts Court has actually become to campaign
finance regulation on the heels of 2006's
Randall v.
Sorrell (striking down $200-$400 contribution limits as being
too low and invalidating expenditure limits in Vermont) and 2007's FEC v. Wisconsin
Right to Life II (invalidating the application of BCRA's electioneering
communications regulations to a political ad by a nonprofit. BCRA defines "electioneering communications"
as television and radio communications that refer to a clearly identified
candidate for federal office, that are publicly distributed within 60 days
before a general election or 30 days before a primary election, and are targeted
to the relevant electorate.)
Mr. Davis and his amici have argued that disclosure under the Millionaires' Amendment is
particularly burdensome. This is the
first chance since the 2003 decision in McConnell for
the Court to opine on disclosure burdens, a subject which at that time garnered
8 supportive votes from Justices on the Court. Disclosure is widely viewed as the least
restrictive tool in the campaign finance toolbox.
This case is
also an opportunity for the Court to clarify (1) whether the specific $350,000 "trigger"
provision in the Millionaires' Amendment is permissible, and (2) whether
generally mechanisms to equalize funding among candidates with different
financial resources are allowable. While
the endorsement of such a mechanism has been adopted by lower courts in the
public financing context, the Davis case is
the first time that the Supreme Court will entertain this type of argument when
both candidates are using private funds.
If the Court
would like to rid itself of this case on mootness grounds,
it certainly has the opportunity, since the 2006 election is undoubtedly
over. If the Court would like to avoid
the merits it could also punt based on Mr. Davis's failure to establish an
actual injury since although Mr. Davis spent significant sums of his own money in
his 2006 race for Congress, his opponent did not utilize of any of the
Millionaires' Amendment's benefits.
Tags: Democracy, Campaign Finance Reform, Contribution Limits, Other Reforms, Public Financing
By Laura MacCleery – 04/15/08
Cross-posted from the Huffington Post
Sen. Barack Obama's comments last week provided grist for renewed speculation about whether or not he will accept public financing for the general election. With no apparent sense of irony, he said to a roomful of donors at a high-ticket fundraiser that "we have created a parallel public financing system" of free-flowing Internet donations.
This remark may be a signal that Obama is considering using private money for the general election, which would make him the first candidate to do so since the election of President Nixon (before public funding was an option). It certainly is a clear sign that the explosion of small donors will require us to take a fresh look at the structures of campaign finance law.
But it will not help us move forward if enthusiasm for this influx of small donors obscures the facts. Money from large donors is not exactly going the way of the dinosaurs—79 bundlers for Obama have hit up their friends for aggregate contributions of $200,000 each. Still, it is certainly indisputable that having more small donations and less reliance on a tiny pool of wealthy people is a happy development in a democracy.
A true public financing system allows candidates to avoid $2,300-a-person fundraisers like Tuesday's event. But it could look quite different from what we have now, which forecloses any private fundraising in the general election if a candidate accepts a public grant. Indeed, the development of a "parallel" system suggests a way to update the moribund presidential public funding program.
> Read entire piece here.
Tags: Democracy, Campaign Finance Reform, Other Reforms, Public Financing
By Laura MacCleery – 04/07/08
Cross-posted from a Roll Call editorial.
For the first time ever, presidential candidates have managed to turn small donors into their greatest funding source, sending signals that the small-donor revolution — a mere experiment by Howard Dean just four years ago — has officially arrived. In February 2008, according to a Campaign Finance Institute analysis of the latest official campaign receipts, Sen. Barack Obama (D-Ill.) raised 56 percent of his contributions in increments of $200 or less, while Sen. Hillary Rodham Clinton (D-N.Y.) raised 52 percent in similar amounts.
But this February was the first time the much-celebrated small donors of these campaigns exceeded the halfway mark in overall receipts. And looking further down the ballot, there is little sign that the small-donor revolution is taking root. In Congressional politics, the world of small donors is decidedly smaller.
February's presidential numbers reveal some key, unrevolutionary trends. First, the gains were notably lopsided between the parties. While both Democrats in February raised a total of $30.5 million from these small donors, Republican candidates, overall, collected only $5.1 million from the same group. Arizona Sen. John McCain brought in a mere 20 percent from donors who gave $200 or less.
Second, large donors are still a significant part of the overall take. Even in February, CFI reported that donations of $1,000 or more were 22 percent, 25 percent and 67 percent of the Obama, Clinton and McCain campaigns' contributions, respectively.
It also is too early to say whether the small-donor welcome mat will stay out very long. In January, CFI research shows that 46 percent of Obama's $36 million and 35 percent of Clinton's nearly $20 million came from contributors donating $200 or less. McCain raised 24 percent of his contributions ($2.6 million) from these small donors. Who's to say February's numbers weren't just a spike in the enthusiasm surrounding Super Tuesday?
More critical, however, is whether this small-donor frenzy spills over into the hundreds of far less visible Congressional campaigns that lack the fanfare of national change. CFI reports that Democratic and Republican Senatorial candidates are collecting just 6 percent to 22 percent of their funds from small donors. In total, in 2007, donations of $200 or less were a mere 17 percent of all Senate contributions and 27 percent of House-raised funds.
Congressional incumbents, predictably, have the highest reliance on deep-pocketed donors. Pre- election-year fundraising comparisons reveal that incumbents in 2007 took in six to seven times more money from large donors (giving $1,000 or more) than from contributors in the $200 or less category.
And Congress is where concerns about the influence of money on politics should be most acute. Last session, Congressional ethics scandals sent two Members of Congress to jail for influence-peddling, and there have been three additional indictments of lawmakers thus far, as well as five Members who reportedly are still being investigated by law enforcement. In Alaska, state-level scandals made one of the most senior Members of the Senate, Ted Stevens (R), the target of a federal investigation. And it may not be over yet. Notorious super-lobbyist Jack Abramoff is, according to the latest press reports, still cooperating with investigators.
So, despite the rise of a small-donor democracy, contribution limits still very much matter and are likely to matter for some time to come. The soft-money ban in the Bipartisan Campaign Reform Act of 2002 deserves much of the credit: By prohibiting corporate and union contributions to political parties, BCRA pushed candidates to reach out more broadly for individual support.
Looking forward, both meaningful limits and transparency rules are important for the health of an exciting new wave of reforms — public funding systems — because they keep overall costs reasonable and inform the public about all of the players seeking to influence the outcome of elections.
Indeed, without a system of limits in place, it will be hard for publicly funded candidates to keep up with the spending of privately financed competitors. And a robust system of disclosure of independent expenditures enables public funding systems to release more public money when warranted by an influx of outsider money into a race. Limits and disclosure are critical complements to the public funding systems that have succeeded in Arizona and Maine.
Limits can be tailored to specifically value the significance of small donors by allowing innovative vehicles like small-donor political action committees. These special PACs collect contributions in more limited amounts from individual donors than PACs generally can, but they also can give more total money to each candidate than other types of PACs. In this way, small donors make a big splash without rules that could elevate the influence of the wealthy above other voters.
Future proposals will no doubt evolve in appreciation of the burgeoning growth and power of small donations. Certainly, the landscape of money in politics is being transformed in encouraging ways. The influx of small money is a great sign that politics is engaging voters, and it does improve the health of our democracy. But in all the thrill and excitement, we should not forget that contribution limits are playing an important role in making this revolution possible — and ensuring the voices of small donors aren't drowned out by big money and special interests.
Tags: Democracy, Campaign Finance Reform, Contribution Limits, Other Reforms, Public Financing
By Laura MacCleery – 03/27/08
(Cross-posted from The Hill Blog)
Recent weeks have seen a ratcheting up of promises by outside groups to spend hundreds of millions of dollars in the presidential race. On the right, $2 million is expected from a conservative 501(c)(4) called "Defense of Democracies" for election-related opposition to House Democrats who oppose the President's electronic spying plan. Another non-profit, Freedom's Watch has pledged to spend some $250 million opposing the Democratic nominee.
And progressive groups recently floated a $400 million target for both electioneering communications and voter mobilization efforts. While the Campaign Finance Institute reports that a record $143 million was spent in 2006, that then-shocking total today looks like chump change.
A short history of how we got here is in order. As a new legal analysis and summary by the Brennan Center makes clear, before passage of the Bipartisan Campaign Reform Act of 2002 ("BCRA"), campaign finance laws applied only to "express advocacy" - an advertisement for or against a candidate that used specific "magic words," such as "vote for" or "vote against." This test made it impossible to distinguish "sham issue ads" (ads that avoided these magic words, but were nonetheless intended to influence an election) from genuine issue ads (ads that advance a position on a public issue)...
Continue reading this piece at The Hill Blog.
Tags: Democracy, Campaign Finance Reform, Contribution Limits, Other Reforms, Disclosure, Public Financing
By Ciara Torres-Spelliscy – 03/14/08
The New York Times has
reported that "Federal prosecutors are investigating whether Gov. Eliot Spitzer used campaign funds in connection with his meetings with prostitutes, including payments for hotels or ground transportation..."
So what exactly can a politician in New York do with campaign funds? Sadly, he or she can do a lot that isn't related to campaigning for office.
On its face, New York Election Law § 14-130 bans personal use of campaign funds, stating that "[c]ontributions received by a candidate or a political committee . . . shall not be converted by any person to a personal use which is unrelated to a political campaign or the holding of a public office or party position."
While this may be clear enough, over time, the law has been given such a strained interpretation in practice that candidates can and do utilize campaign funds in many ways that would appear to the average voter to be, in fact, personal.
For example,
opinions issued by the State Board of Elections permit candidates for elected office to use campaign funds: 1) to cover travel costs between their home jurisdictions and Albany; 2) to pay for memorial services for lawmakers who have died; 3) to give money to a charity of choice; 4) to pay for child care services; 5) to pay for receptions for campaign contributors; 6) to pay for portraits of retiring public officials; and 7) to pay for the production of a public access cable television program about governmental issues.
Beyond specific opinions from the Board of Elections sanctioning these particular uses of campaign funds, there is little further definition and, certainly, no laundry list of what is allowed or prohibited to guide the public, candidates and regulators. This lack of legal guidance gives candidates and elected officials far too much latitude to decide the boundaries of the law for themselves. The ambiguity about personal use has led to situations where New York lawmakers routinely use campaign funds to pay for non-campaign items.
For example, Senator Majority Leader Joseph L. Bruno, who will soon assume the duties of Lt. Governor, infamously used campaign funds to pay for his pool cover and then claimed that it was a legitimate campaign expense. In another
egregious case, Senator Martin Connor spent over $70,000 on his car as a "campaign expense" during a period when he faced no primary or general election opponents.
Other Albany lawmakers have been caught using campaign funds to pay for cell phones, country clubs, sporting events tickets, legal bills, meals and pet food. The Brennan Center
has long advocated that New York revise and clarify the law so that it could actually prevent politicians from using campaign funds to attend baseball games or buy kibbles. And, the Brennan Center has also pointed out the other
many flaws in New York's decrepit campaign finance system.
Fortunately for Spitzer's campaign contributors, he can't weasel through the personal use loophole because the same section of the election law also states that "[c]ontributions received by a candidate or a political committee may be expended for any lawful purpose." (emphasis added). Therefore, if Spitzer did use campaign funds to break state or federal law, it would appear that he violated state campaign finance laws.
Tags: Democracy, Campaign Finance Reform, Contribution Limits, Other Reforms
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