The GOP and Campaign Finance

Making the Republicans’ timidity on this issue worse, the Democrats, in the era of the Clinton-Gore abuses, are drenched in hypocrisy — witness Mrs. Clinton’s record-breaking accumulation of soft money. Yet it’s hard for Republicans to condemn this hypocrisy when they are immobilized on campaign finance reform — saying nothing, doing nothing, trying their best to block every proposal for change.

The Republicans need to emerge from their total opposition to any serious reform, because the signs are that they will suffer for it. They fought a losing battle in the House in 1998, while managing to stop action in the Senate, but it isn’t clear they can continue to block all action — let alone win the political contest. So instead of fighting, they would be better off devising a workable plan of their own. Being anti-everything cannot help the Republican cause.

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In the campaign finance fights after the Republicans took control of Congress in 1994, the Democrats vigorously pressed to limit all kinds of campaign contributions — except those from organized labor, which, of course, is very good for them. (This followed little or no interest in campaign finance reform by Democratic leaders in the 1970s and 1980s, when they controlled Congress.) The Republicans, after some tossing and turning to find a rationale for the existing system, which they saw as giving them an advantage, seized on the First Amendment with this argument: Contributing money to a political campaign is a form of speech, and it is unconstitutional to limit free speech. The Supreme Court endorsed this view in Buckley v. Valeo (1976), and it remains the law of the land.

Court rulings and constitutional arguments notwithstanding, my sense is that people are appalled by the state of campaign finance in America today. Is this an issue that disturbs them night after night, day after day? Certainly not. But you have a situation where the Republicans, who put themselves forward as a reform party in 1994, look less and less like a reform party by stonewalling on this issue.

If the Republicans are truly going to change things — bringing us less government, less spending, less regulation — they had better have clean hands. They cannot be seen as the lackeys of the special interests that will benefit from these changes. And to have clean hands, they have to propose a meaningful reform of the way we finance campaigns.

The system now in place, which was created by the 1974 campaign reforms in reaction to Watergate, is a classic case of unintended consequences. The 1974 law spawned political action committees (PACs), which became another means to increase the influence of special interests in federal elections. And the law’s rigid, non-indexed $ 1,000 limit on contributions has made it difficult to finance a campaign. A $ 1,000 contribution today is worth less than one-third of what $ 1,000 was worth 25 years ago — not only because of inflation, but also because television is a much more important part of the equation than it was back then.

If it were up to me, I’d remove the limits altogether. But that won’t happen. Meantime, the loopholes in the current system for so-called soft money have created tremendous slush funds of special-interest cash. Soft money can be given in unlimited sums, so long as it is not spent on a particular candidate’s campaign. This has ushered in abuses common in both parties but spectacularly illustrated by Hillary Rodham Clinton’s campaign for senator from New York. A joint committee set up by Mrs. Clinton’s campaign and the Democratic Senatorial Campaign Committee simultaneously solicits capped donations to her campaign and unlimited soft-money donations to be spent on her behalf. This arrangement allows corporations to make otherwise illegal contributions, and wealthy donors to contribute far more than the legal limit for direct gifts to a candidate. While the cap on individual donations is $ 1,000 for the primary and $ 1,000 for the general election, contributions to this “New York Senate 2000” committee are often in the tens of thousands of dollars, and many come from places like Texas, California, and Mrs. Clinton’s native Chicago.

One Republican who has tried to stake out a reformist position is senator John McCain of Arizona, who joined forces with Democratic senator Russell Feingold of Wisconsin to sponsor a comprehensive campaign finance bill in 1998. A big problem with the McCain-Feingold bill is that McCain, in his eagerness to get campaign reform passed, bought into what could be called the union waiver: Labor PACs are effectively exempted from the limits imposed on business and industry PACs, which tilts the playing field unfairly to the Democrats’ advantage. If the unions don’t get hurt very much, it’s not really reform. In 1999, McCain said he would insist on new labor union restrictions, specifically a variant of “paycheck protection” to bar involuntary deductions from a worker’s pay for political contributions, adding that the same protection should apply to corporate shareholders.

The question is, can the two parties put together something that really hits on labor?

Representative Linda Smith of Washington state was a conservative Republican who favored campaign finance reform, and as such, she was “adopted” by a left-leaning coalition put together by Common Cause. When she advocated paycheck protection, Republicans immediately endorsed the idea. Her new Democratic and liberal friends dropped her flat.

Nor did the Republican endorsement of paycheck protection manifest a serious endorsement of reform. Senate majority leader Trent Lott and his close ally, senator Mitch McConnell of Kentucky, made clear that their amendments to McCain-Feingold limiting labor PACs were meant to be “poison pills.” They were intended not to improve the bill, but to kill it by forcing the Democrats to vote against the entire reform. They said this openly, thereby conceding that they’re not very serious about finding a way to real reform.

McConnell, the chairman of the National Republican Senatorial Committee, has taken a maximalist position in refusing to countenance any change in the current system. Even his rhetoric is apocalyptic: “Take away ‘soft money’ and we wouldn’t be in the majority in the House and the majority in the Senate and couldn’t win back the White House,” he said in April 1999. “Hell’s going to freeze over before we get rid of soft money.”

I just can’t agree with him. Are Republican ideas so unpopular that the party must rely on an increasingly suspect system of raising money to keep itself in power? I’m not prepared to cede the high ground to the Democrats, and neither should any conservative. Granted, provisions of the original McCain-Feingold bill (before it was watered down in October 1999) — restricting voting guides that rate members of Congress and limiting public utterances by private groups in the final weeks of a campaign — went much too far and were skewed against conservatives. But by holding to an intransigent position, Republicans take themselves out of the game.

There is a small but growing number of Republicans who say that although the system of financing we have may produce a lot of Republican money, it is not helping the Republican party as much as people like Lott and McConnell think.

Linda Smith was a lonely conservative Republican reformer during her four years in Congress (1995-98). She proposed to limit campaign contributions to those coming from the candidate’s state or district, so that candidates could no longer run to New York and California for the big money. That idea had been suggested previously by the influential Vin Weber, a congressman-turned-lobbyist serving on a Republican campaign finance advisory board, but it generated no interest from either party.

This would be a valuable reform in cleaning up politics. The purists say that it hurts the First Amendment, but I don’t know how pure they really are. From what I can see, they are the ones benefiting from the current system, and they can’t see the bigger picture: Rejection of all campaign finance reform is hurting the Republican party and its cause.

Chuck Hagel, a first-term senator from Nebraska, has said that the system has to change. It didn’t help the Republican party all that much in 1992 or 1996, he says, and the party will have to clean up the system if it is to regain the high ground.

Hagel was encouraged by a lot of people in the Senate Republican caucus, including some very senior committee chairmen, to run against McConnell’s reelection as chairman of the campaign committee. They argued that somebody had to take the blame for failing to win Senate seats in 1998. Since they did not feel comfortable trying to punish Lott for failing to establish a Republican agenda in his leadership of the Senate, it had to be McConnell. He had raised piles of money to no other purpose than burnishing the GOP’s money-grubbing reputation.

But when Hagel ran, he got only 13 votes, to 39 for McConnell. Welcome to Washington! This proved yet again how hard it is to accomplish reform within the culture of the congressional parties.

Campaign finance reform represents an important opportunity for the Republicans, but it would have to be championed by somebody outside Washington who could stand behind a plan that really did reform the system, without a clear benefit for either side. It would have to restrict labor, but it would also have to restrict soft money from corporations.

Let me be clear: It’s not going to be easy to bring around the party leadership to this point of view after so many years. It’s all a matter of how much the Republicans want to be a real radical reform party. The voters are looking more and more for candidates with clean hands, and to have clean hands, the Republicans have to get rid of the PAC/soft-money system.

I think there’s a lot of merit to that position. Eliminating PACs and soft money would make for a better system, and it would help the Republicans in the presidential campaign if they could say that they support anti-regulatory, low-tax positions not because they are getting big PAC checks, but because they believe in the merits of their case.

The Republicans also would be well advised to come out against all the subsidies that parties and candidates receive from the government. Consider the $ 3 checkoff for financing the presidential campaign that’s on everyone’s federal income tax form. Every year, the number of people who say that they want their money to finance elections keeps declining: from 27.5 percent in 1976, when the checkoff began, to 12.5 percent in 1997, the last year for which IRS statistics are available. The percentage drops a little every year.

But Congress keeps appropriating the money, and a lot of people don’t know that this $ 3 checkoff heavily subsidizes the national conventions of both parties: $ 12 million for each. The Republicans obviously don’t want to give up that money, but I think it would be a daring political move for them to do so. They might have to hold a slightly less glitzy convention, but they would come across as a reform-minded party. There were hints that they might take that step in 1996, but these never reached fruition.

I know that historically it is uncharacteristic for the Republicans to be a reform party, but they are confronted with a great opportunity if they choose to seize it. A reform party appeals to swing voters, who respect politicians who put their money where their mouth is. And the GOP should not ignore the Reform party constituency — voters attracted to candidates as dissimilar as Ross Perot, Jesse Ventura, and Pat Buchanan, all of whom call for the existing campaign finance system to be demolished.

Congress is compromised by the pervasive influence of lobbyists in Washington. Lobbyists sit in on strategy sessions; they are particularly involved in campaign finance. Every major presidential candidate of either party has people in the lobbyist community attending his planning sessions. A high-powered lobbying firm, if it’s a Republican firm, will have a person involved in, and raising money for, each prospective GOP nominee’s campaign. If it’s a bipartisan firm, it’s going to have representatives in both parties.

George W. Bush, for example, early in 1999 called for “Pioneers” — people who would promise to raise $ 100,000 each for his campaign. Lobbyists are likely to know enough potential contributors to raise $ 100,000 in contributions no larger than $ 1,000 per person. The lobbyist-Pioneer, pledging $ 100,000, goes down to Austin and meets Bush, or at the very least the people around him, and makes invaluable contacts. The lobbyists are intimately and inextricably involved in the campaign finance issue.

This process is not a good thing — not for the country or for the party. The economist Milton Friedman often has said that we will never be able to reform the tax code because the lobbying industry has a symbiotic relationship with the politicians: The lobbyists give contributions to the congressmen, and the congressmen do the bidding of the lobbyists. Just as there is a built-in constituency on the Hill against tax reform, so there is a built-in constituency against campaign finance reform.

To break their hold on Congress, we have to get limitations on PACs in congressional and presidential campaigns. And if we can require that candidates raise 70 percent or 80 percent of their campaign money in their own state or district, this will greatly reduce the impact of lobbyists on legislation and on the priorities of the Republican party.

In the summer of 1995, Linda Smith (who was nominated for Congress in 1994 on a write-in) pledged to cheering delegates at Ross Perot’s convention in Dallas that she would clean up the campaign finance mess. A few months later, she was deeply depressed.

“If you don’t stop the flow of money to Congress,” Smith told me that autumn, “people will think that everything we do is attached back to the money of the special interests. I’ve been here ten months, and I’m fed up. I see many of my freshman friends getting used to the stink — forgetting what they came here for.” She told me that Newt Gingrich and the other Republican leaders had lied to her when they promised campaign reform. Gingrich was furious when I quoted her in my newspaper column.

By 1997, the Republicans had solidly turned against campaign reform, accepting Mitch McConnell’s argument that losing the millions of dollars would mean electoral disaster for the GOP, and Linda Smith was a pariah. In 1998, in the midst of a losing campaign for the Senate in which the support given her by campaign chairman McConnell was lukewarm at best, Smith accused Republican leaders of holding up action on a bill in order to milk more campaign contributions. “Isn’t that extortion?” she asked.

Corporate lobbyists wanted nothing to do with Smith or her unsuccessful 1998 Senate campaign against liberal Democratic senator Patty Murray. Neither did conservative voting groups, despite her flawless voting record on their issues. She had a perfect score in opposing abortion, but the National Right to Life Committee did not endorse her because she supported campaign reform (although the organization’s state committee in Washington did back her). Conversely, the national committee supported members of Congress with flawed abortion records because they opposed campaign reform. It was a classic case of Republicans and their supporters confusing what they had come to Washington to achieve.

Robert D. Novak is a syndicated columnist for the Chicago SunTimes. This article is adapted from his forthcoming book, Completing the Revolution: Ten Things Republicans Can Do to Win (Free Press).