Suppose, just for a laugh, that we wanted to design the worst possible campaign finance system. Suppose we wanted to force politicians to think more about raising money than about legislating. Suppose, to compound things, we also wanted to ensure that the money arrived under circumstances that made it look as much like a bribe as possible. How might we do it?
In the first place, we’d make fund-raising as difficult and time-consuming as possible. Instead of holding one big annual fundraiser, or relying on a crash month of fund-raising in the autumn of election years, we’d force politicians to spend virtually the entire electoral cycle grubbing for money. Second, we would tempt politicians to rise money in ways that made them look like crooks. We might, for instance, make it dramatically more convenient to get money from narrow pressure groups than from persons motivated by a broad range of national interests. Finally, we’d open up blatant loopholes in the rules and create substantial incentives for exploiting them.
Of course, we wouldn’t have to do any of these things: They’ve all been done already. And in the name of good government, no less.
American politicians must incessantly grub for money because the maximum legal donations have been set at $ 1,000 (for individuals) and $ 5,000 (for political action committees), amounts unchanged since 1974. For a big-state candidate for the House of Representatives — whose polling, consultancy and advertising costs can quickly pass $ 1 million — that means tapping a minimum of 200 different donors every two years, and usually many more.
A competitive Senate race can cost upwards of $ 5 million. Bob Dole, Phil Gramm, and Lamar Alexander will each spend between $ 15 million and $ 20 million on his presidential nomination bid. Thus, before ever submitting themselves to the judgment of the voters, federal politicians must first win the approval of America’s caste of political donors. It no longer suffices to find an eccentric millionaire or two to back you: A serious presidential aspirant must win the backing of more than 10,000 affluent givers. Which is why Dole, Gramm, and Alexander have spent their last pre-election year buttonholing rich people rather than explaining in detail the use they hope to make of the presidency.
Politicians very naturally find all this buttonholing irksome and wasteful. As a result, political action committees, which can give five times as much as individuals, have become the preferred source of money for busy congressmen and senators. But unlike individuals, who are motivated surprisingly often by disinterested civic-mindedness, political action committees exist exclusively to promote specific material interests. The chairman of Exxon might give $ 1, 000 to a candidate because he agrees with the candidate’s views on abortion, or defense spending, or federal aid to the arts. The various energy industry PACs, however, distribute their largesse on the crassest quid pro quo basis. And Congress has seized the opportunities presented by the PAC-finance system by hugely multiplying the number of subcommittees, ensuring that almost every congressman has some important quos to return for the PACs’ quids. When reformers allege that the system of financing congressional elections has deteriorated into legalized bribery, they come uncomfortably close to the truth.
But even this is not the worst of it. For the finance system, perverse as it is, is perforated by loopholes almost designed to undermine the public’s faith in the integrity of elections. The campaign finance rules ignore the vast sums, known as soft money, that donors give to the national and state Republican and Democratic organizations for “party building.” Soft money is exempt both from donor caps — until bad publicity forced him to cancel it, President Clinton had been planning a springtime $ 100,000-a-plate dinner for the Democratic National Committee — and from feederal disclosure rules. Probably the single largest sources of soft money are the trade unions: The big unions (especially the big public-sector unions) can mobilize armies of “volunteers” for favored candidates without triggering federal scrutiny.
Even more startling, a few lucky people can exempt themselves from the campaign finance rules by the simple expedient of spending their own money. A Ross Perot, Michael Huffington, or Steve Forbes can spend unlimited millions or billions in pursuit of office, cementing the already widespread perception that American politics is a rich man’s game.
Altogether it can lairly be said that of all the liberal social reforms of th e 1970s, the 1974 campaign finance laws may provide the most spectacular illust ration of the law of unintended consequences. Intended to reduce the influence of big money in congressional and presidential ejections, they instead force ev ery federal office-seeker, from the president on down, to waste vast amounts of time begging for driblets of money. The millionaire money-men who used to finan ce elections have been banished, it’s true, but only to be replaced by Rolodex- men who can pull together the big shots of a hundred American cities for tund-r aising receptions and dinners. Similarly, by favoring gifts from political acti on committees over donations from individuals, the 1974 reforms diminished the importance of conscientious citizens, and maximized the importance of ad hoc economic interest groups.
In a hideous addendum to the law of unintended consequences, most of the campaign finance reforms now being promoted would only make matters worse. Limits on campaign expenditure, as favored by liberal groups like Common Cause, would only inflate the significance of “soft money.” Public funding of campaigns, the pet reform of more hot-headed liberals, would put officials of the federal government in charge of deciding who should — and who shouldn’t — count as a legitimate candidate for public office. Banning PACs, without any offsetting changes, would slash the maximum donation from $ 5,000 to $ 1,000, effectively forcing politicians to spend five times as much of their time grubbing for money as they do now.
Liberal political reformers imagine that by capping campaign spending America could somehow purify its politics, replacing vulgar and deceptive radio spots with lofty Lincoln-Douglas-style debates and serious-minded presentations of positions in 30-minute unpaid public service announcements on television. The far likelier effect of campaign expenditure caps, though, would be to invite cheating and to deprive less attentive voters even of what little information they now get to guide their vote. Presidential contests, remember, are governed by state-by-state spending caps. Candidates who can afford to do so frequently violate the limits on spending in Iowa and New Hampshire, happily trading a big Federal Elections Commission fine the next year for a crucial primary win now.
Not that tighter enforcement would make things any better: By reducing the amount of campaign advertising, strict caps would probably depress voting statistics even further perhaps to the abysmal levels recorded in municipal elections, where voters similarly often lack the most rudimentary information about which candidate stands for what. More ominous still, countries that have taken expenditure limits seriously (Canada is one) have/bund themselves banning advertisements, posters, and leafletting by independent individuals and groups during elections in a desperate attempt to equalize spending by all sides.
And the proposal currently being mooted by certain conservatives — requiring politicians to solicit money only within their own district or state — would achieve the most perverse effect of all. Imagine yourself a congressman from, say, Wvoming. As it is, you depend heavily on energy- industry PACs for campaign funds. But you can always hope to mitigate the power of your main donors with gifts from PACs, individuals, and groups around the nation who care about your vote on non-energy legislation: trial lawyers or tort reformers, advocates or opponents of abortion, protectionist auto companies or dealers in imported cars. Take away those sources of money and you’re pretty much locked in the room with the coal companies. A ban on out-of- district money would compel Wisconsin congressmen to serve the dairy industry Washington congressmen to serve the aerospace industry, southern Florida congressmen to serve the sugar industry, and Manhattan congressmen to serve banks and investment companies, even more slavishly than they do now.
Real campaign finance reform would attempt to reverse the mistakes of the past 20 years, rather than march even further down an ever more crooked road. Real reform would begin with a very simple question: What are we trying to accomplish?
Almost everyone agrees that politicians should spend less of their time raising money, should receive the funds they need in ways less likely to obligate them to their donors, and should generally behave in ways that assure the public that the political system operates in an honest and above-board way, with no special favors granted. Reformers have thus far tried to achieve these worthy ends by piling restriction on restriction. Their projects have ended in disaster. It’s time to try something new.
Let’s begin by realizing that campaigning for office in a colossaI country where most people rely on television for their information will always be costly. Congressional districts average 500,000 residents. Even if we limited spending to a buck a person, that represents a big sum of money.
Still, the need to raise large sums need not, of itself, turn politicians int o full-time money-grubbers. If they could raise their money in bigger chunks, t hey could spend much less time at the task. Which is why the most vitally neede d of all campaign finance reforms is — paradoxical though it will sound to som e — a sharp increase in the maximum permissible personal donation. A $ 10,000 limit on individual gifts for elections to the House and a $ 100,000 limit on g ifts for senatorial and presidential elections would balance the two imperative s of campaign finance reform: making fund-raising less time-consuming, on the o ne hand, while minimizing candidates’ dependence on any single donor. And to ma ke sure the policy stays effective, the limits sho uld be indexed for inflation.
Once large donations could be made directly to the candidate — which every candidate prefers — the evil of unaccountable and undisclosed soft money would tend to wither away.
This proposal would go a ways toward mitigating the problems created by the exception permitting wealthy individuals to spend unlimited amounts of money on their own candidacies. That exception derives from a 1976 Supreme Court ruling, Buckley v. Valeo, and so cannot easily be repealed. But it probably can — and should — be limited. Already, self-financed presidential candidates who exceed Federal Election Commission spending caps lose their access to federal matching funds. Congress should test how much further the court will permit such restraints to go. Possibly candidates who chose to finance themselves could be rendered ineligible for gifts from anyone else. That would race future Ross Perors and Michael Hurtingtons with a stringent choice: Play by our rules or play by your own — and take the political consequences.
In addition, the time may have come to re-examine the ban on direct contributions by trade unions to political candidates. Donations by trade unions and corporations to politicians have been banned since the 1940s, on the theory that union and corporate funds are held in trust for union members and corporate shareholders, many of whom will hold different political views from their leaders or managers. This concern is still a real one in the case of corporations. But in the 1989 Beck decision, the Supreme Court ordered unions to inform their workers of the proportion of their dues expended on political causes and to give members the option of requesting a rebate of that money. Post-Beck, union donations begin to look much more representative of their members’ wishes than they used to.
At the same time, action should be taken against trade union soft-money contributions. Hotels are not allowed to “volunteer” free reception space, free food, and free drinks to political candidates; by the same principle, unions should not be allowed to “volunteer” their members’ unpaid services as campaign workers. Individual unionists should have the same right to donate their time to a cause as anyone else. But beyond a certain level — say, when more than 5 percent of a candidate’s volunteers come from any single union local — it becomes disingenuous to suggest that these union workers are spontaneously offering their services. Past the minimum threshold, the market value of volunteer work by union members should be considered a donation from that union and should be subject to the same $ 10,000 and $ 100,000 limits that bind everyone else.
Whenever the time comes to revisit the campaign finance laws, Congress ought to try to implement one last reform, perhaps the most important of all, but unfortunately the hardest to codify into law. Americans must somehow liberate themselves from utopian visions of how democracy works. A democratic system of government gives everyone, no matter how ignorant, a voice in the selection of political leaders. That is right and just. But it also implies that democratic politics can never attain the standards of high-mindedness and lair debate that liberal campaign reformers yearn for.
The huge size of America only aggravates the problem. So long as America remains a democracy, politicking will have to be simple and it will have to be loud; which means it will have to be vulgar and it will have to be expensive. No reform can fix that. Campaign reformers who try will almost certainly succeed only in making matters worse.
By David Frum
