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On Feb. 13, the House of Representatives is scheduled to vote on a reform measure that would virtually ban corporations and labor unions from giving "soft money" -- unregulated contributions -- to political parties. Citing the huge sums thrown around by companies such as Enron and Global Crossing, reformers now feel they have all the ammunition they need to finally pass campaign-finance reform. These restrictions would make it much harder for big contributors to buy unlimited access to lawmakers and policymakers, they say.
It'll still be a hard-fought vote. The House Republican leadership opposes such changes, and President Bush, who is avoiding this fight partly because of his long political and personal ties to former Enron CEO Kenneth Lay, has opposed such proposals in the past. But even if the measure does pass, it will be little more than symbolism.
Restricting contributions won't fix the problem. Here's why: The Supreme Court ruled a few decades ago that giving money to politicians is a form of speech, and thus protected by the Constitution. Until the Supreme Court changes its view, bans on certain kinds of campaign giving are doomed.
FAT-CATNIP. Here's a better solution: Instead of trying to restrict the flow of unregulated soft money, just lift the $1,000 limit that individuals can give directly to candidates and the $5,000 limit per election that political action committees can contribute. But at the same time, require that every dime be immediately and fully disclosed.
Today, too many contributions are hidden until well after an election is over. If a politician wants to take $100,000 from a company, fine. Make him disclose it right away -- and then let him explain to the voters why he isn't bought and paid for.
Reform groups like to think Enron's fall has finally given them a leverage to pass their proposals. After all, the now-bankrupt Houston energy company has become a poster child for fat-cat contributors. It was a huge financial backer of George W. Bush in his campaigns for both governor of Texas and the White House. It spread cash all over Capitol Hill and in the past three years has dumped an extraordinary $6 million on political parties and individual candidates, according to the nonpartisan Center for Responsive Politics.
Enron's erstwhile auditor, Arthur Andersen, was also generous, according to the center. The accounting firm gave Bush $146,000 for his Presidential race, out of a total of $640,000 in campaign contributions in 1999-2000.
BUSINESS AS USUAL. Just ban these contributions, and all will be right with the world, reformers argue. Politicians will become statesmen, ready to serve the public interest instead of the special interests. And Americans will once again have confidence in their public officials.
Unfortunately, everything is wrong with this theory. For one thing, post-September 11, public support for elected officials is higher than it has been in memory, Enron notwithstanding. Real folks never cared much about the nexus between money and politics. They care less now.
More to the point, arguing that Enron -- or any special interest -- can buy political influence misreads how Washington works. If there's a scandal here, it involves a form of legal extortion, not bribery. Companies and unions don't buy politicians. Rather, the pols usually shake down the givers. Enron wasn't a raging bull, muscling its way through the corridors of power. Instead, it was a cash cow -- milked by pols, lobbyists, and consultants for untold millions of dollars. Enron was actually extraordinarily naive about the way Washington works.
FOOLS AND THEIR MONEY. In truth, lawmakers took Enron's money for doing things they were going to do anyway. And Washington's hired guns took fat fees -- and lots of credit -- for arranging deals that were already arranged. Does anybody think that Bush -- a conservative former oilman -- backed energy deregulation just because Enron gave him campaign money? Of course not.
In the end, what did Enron get for its money? So far, it doesn't appear that the company got much at all. Certainly no intervention from Bush or his Administration when it really needed help. In a transparent system, such an intervention would have been political suicide, leaving people even more outraged than they already are.
Nowadays, companies give money to pols even when they don't have to. CEOs have come to believe that they can get access to an elected official only with a check. Mostly, that's not true. But nobody believes it.
GENUINE REFORM. Curbing soft money won't change the power equation in Washington. Alas, if these contributions are limited, pols and their pals would soon find other ways to spread the dough. Already, companies and unions are rewarding their friends and punishing their enemies with completely unregulated issue advertising. Did you ever wonder who those groups who give themselves names like "Americans for a Better America" really are? They're just the same corporations and unions, only they don't have to identify themselves. Here again, introducing more sunshine into the system would work as a great disinfectant.
The unending fund-raisers, the negative ads bankrolled by nameless benefactors, and the belief that money buys access have corrupted Washington. The problem needs to be fixed. But banning soft money won't do it.
Gleckman is a senior correspondent in BusinessWeek's Washington bureau. Follow his views every Tuesday in Washington Watch, only on BusinessWeek Online Edited by Douglas Harbrecht
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