This Campaign Reform Sure Beats None


By Richard S. Dunham You'd be hard pressed to find an American who doesn't think the system of financing federal elections needs to be changed. Well, maybe Senator Mitch McConnell (R-Ky.) and the National Rifle Assn., but they're among the precious few. The real question, now that President Bush has quietly signed the Bipartisan Campaign Reform Act of 2002 into law, is whether this legislation improves the system or makes it worse. On that, I have to agree with the President, who said on Mar. 27 that the law, "although far from perfect, will improve the current financing system for federal campaigns."

This new law has its detractors (see BW, 4/8/02, "Campaign Reform's Dangerous Aftershocks"). But let's not forget the bottom line. The amount of money spent on campaigns has spiraled out of control, especially with the influx of unlimited "soft money" contributions from corporations, labor unions, and wealthy individuals. In the 2000 election cycle, the soft-money take reached $495 million.

So-called "issue ads," often scurrilous attacks financed by shadowy front groups, have skewed the policy debate in Washington toward special interests with wads of cash and clever media consultants. And antiquated disclosure laws make it difficult to determine in a timely manner who is contributing to political causes.

RED HERRINGS. The new law curtails soft-money contributions to national parties, tries to close the issue-advocacy loophole, and greatly enhances public disclosure. These are three major steps in the right direction. Again, quoting President Bush: "The provisions of the bill will go a long way toward fixing some of the most pressing problems in campaign finance today. They will result in an election finance system that encourages greater individual participation, and provides the public more accurate and timely information, than does the present system."

Let's not get sidetracked by the two red herrings of the campaign-finance debate. The first specious argument is that because the reform law isn't perfect, it's bad. In the 15 years it took for reformers to triumph, a number of compromises were made by chief sponsors John McCain (R-Ariz.) and Russ Feingold (D-Wis.) in the Senate and Representatives Christopher Shays (R-Conn.) and Martin Meehan (D-Mass.) in the House.

Loopholes were included to win the support of moderate Republicans and members of the Congressional Black Caucus. Yes, the law does nothing to assist candidates forced to run against millionaire opponents who are permitted to spend as much of their own cash as they wish on their own campaigns. Yes, it was necessary to cut deals. That's the nature of the legislative process. But will the law, on the whole, reduce the corrupting influence of huge contributions by wealthy individuals and corporations?

HIGHER LIMIT. That's the real question, and the answer is yes. By banning soft money to federal candidates and national parties, the law forces office-seekers and party organizations to broaden their base of individual contributors. That's bound to democratize the political system.

Another smart change: Doubling the amount of money that individuals can donate in each contest from $1,000 to $2,000. This reform is long overdue. The $1,000 limit has been in place for a quarter-century and has been eroded by inflation. One reason political parties switched to soft-money solicitations was the difficulty in raising large amounts of hard money. That will change now.

Overall, it won't be impossible for businesses, labor unions, and the rich to dominate the political dialogue through multimillion-dollar infusions of cash. But it will be harder for them to drown out other voices. That's a good thing.

SUPREME TESTS. The second red herring of reform foes is that the new law violates the First Amendment by limiting freedom of speech through restrictions on advertising and donations. True, the McCain-Feingold bill limits contributions and restricts some attack ads in the closing days of campaigns. But the Supreme Court, in its 1976 Buckley v. Valeo decision, upheld the section of the Watergate-era reform that capped individual contributions at $1,000 and political action committee donations at $5,000. While Americans have a right to free speech, the court held, there isn't a right to unlimited speech.

It's just a question of where to draw the line. And it's true some of the new restrictions on issue advocacy might not pass constitutional muster. Critics make a valid point when they note that individuals, groups, and businesses should be able to spend as much as they'd like to advocate any position on any issue. But many issue-advocacy ads are simply campaign commercials masquerading as issue advocacy. If they had been campaign ads, they would be subject to federal regulation.

The result: wealthy individuals and interest groups are using the cloak of the First Amendment to skirt campaign-finance laws. Whether this provision is ultimately upheld or not, its goal was noble.

PLENTY OF SWAY. Reform foes also argue that the new law could hurt national parties and increase the influence of extremist factions by abolishing soft-money donations. To the contrary. McCain-Feingold will force the two parties to broaden their bases by soliciting a greater number of smaller hard-money donations. For the past decade, special interests have come to dominate both parties by lavishing money on the organizations, often at a million dollars or more a pop. In the old system, the Republican Party came to be dominated by the far right and the Democratic Party by the far left. Could the new system be less representative of the general public? Probably not.

Interest groups will still have plenty of sway in the new system. Organizations such as the conservative Club for Growth, which bundles contributions from its members to candidates espousing its supply-side agenda, and EMILY's List, which bundles donations to pro-choice Democratic women, will continue thrive in the post-soft-money era.

And if the Supreme Court strikes down the issue-advocacy provisions of McCain-Feingold, politicians would rush to exploit the opportunity -- possibly with little or no public disclosure. These situations exist today. Even if you're critical of them, the recently enacted law certainly won't make the situation any worse.

NONSTARTER. As McCain himself admits, his reforms "will not cure public cynicism about politics. Nor will it completely free politics from influence-peddling or the appearance of it. But [if]...we make even small progress in this direction, I think we have rendered good service to our country."

Short of public financing of federal elections, it's impossible to completely eliminate the corrosive role of big bucks in campaigns. Money and politics have long been inseparable in America. And public financing is a nonstarter on Capitol Hill. As long as politicians are human, "money talks and bull---- walks," as one indicted ex-congressman said to an undercover FBI agent two decades ago.

Taken as a whole, the Bipartisan Campaign Reform Act of 2002 will make money talk a little more softly. And that's a good thing for America's democracy and political parties. Dunham is a White House correspondent for BusinessWeek's Washington bureau. Follow his views every Monday in Washington Watch, only on BusinessWeek Online


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