Campaign Finance Part 2 (Problems)

The history of campaign finance “reforms” has been that limits are put in place, and people who want to contribute more than those limits find a way to do so legally or illegally. Illegal examples include laundering contributions through straw donors, such as for example Buddhist monks and nuns of the Hsi Lai Temple (who had taken vows of poverty but still managed to contribute $100,000 to the 1996 Clinton Gore Campaign). Legal examples included “soft money” which was at the time unlimited contributions made to a political party that could be used to support candidates. Soft money was made illegal by McCain Feingold, but those contributions were simply shifted to 527(c) corporations.

To try to prevent private groups from influencing an election, with “issue advertising” McCain-Feingold prohibited mentioning a candidate’s name in a television commercial 30 days before a primary election and 60 days before a general election. Criticizing a candidate is protected so long as you don’t do it close to an election? What happened to the heart of the First Amendment? The Supreme Court fortunately limited this last year in the case of FEC v. Wisconsin Right to Life. But it is still illegal to explicitly advocate voting either for or against a candidate.

The reason money will find a way to reach candidates is because so much money is at stake. Whether it’s a government contract, a provision of the tax code, or an ethanol mandate people stand to make or lose significant amounts of money based on government actions. These people will do all they can to influence those actions. There are three ways to look at contributions designed to influence government action. The most benign is that people will support candidates that agree with them. Want lower taxes, contribute to the candidates that promises to cut taxes. Less benign is the idea that lobbyists “pay to play” making contributions so that they know elected officials will take their calls giving them the opportunity to persuade them. Most malignant is the explicit quid pro quo, do this and we will give you money.

One of the major problems with “reforms” is that they tend to drive contributions underground and obscure where (and from whom) the money is actually coming from. Today it is the “bundlers” that have the most influence. Bundlers put together many smaller legal contributions and give them in one bundle to a candidate. Sometimes this is done legally; sometimes those small contributions are illegally reimbursed by the bundler.

To Be Continued