Farewell to Campaign Finance Reform--Good Riddance!
Is it because the man who delivered the coup de grace, President Barack Obama, is a Democrat who often uses the language of reform? Perhaps. The silence that greeted Obama’s decision to abandon public financing and raise virtually unlimited money for his campaign grows louder with every tightlipped media week. One reason may be a lack of knowledge of the history of this tormented and tormenting subject. When you realize how long and how contradictorily – and hypocritically -- Americans have debated the role of money in politics, it is hard resist the conclusion I have recommended in the title of this article.
The debate began in the Constitutional Convention, when a wealthy southerner proposed that the presidency should be limited to people with a net worth of $100,000 – well over a million dollars in today’s money. Benjamin Franklin took the floor to declare he opposed anything “that tended to debase the spirit of the common people.” A cascade of nays soon drowned the southern proposal. Liberal idealism, personified by Franklin, had triumphed.
Fast forward to 2009. A New Jersey political insider discussed with me next year’s gubernatorial election. Governor Jon Corzine, whose net worth is an estimated $300 million, is running for reelection, confronting a stagnant economy, a four billion dollar state debt and ex-federal district attorney Chris Christie as a probable opponent. Christie has put record numbers of politicians, most of them Democrats, in jail. But my insider friend told me Democrats are unworried. Corzine is expected to spend $60 million for his campaign, guaranteeing a victory.
In the beginning there were no campaign finance laws. Money was not regarded as a menace in American politics. There were a lot of rich men around in 1790. The distribution of wealth was roughly what it is today. The top ten percent of the population controlled well over half the wealth and cash. That realistic—and rich—man, President George Washington, firmly backed Secretary of the Treasury Alexander Hamilton’s plan to create financial stability in the new republic by reassuring the wealthy. Hamilton went a step further and formed a political party, the Federalists, which claimed to represent the new nation’s best and brightest, as well as richest.
Thomas Jefferson organized a political party to oppose Hamilton’s tilt toward the rich. New York became a battleground state in the election of 1800, the first to take place after Washington’s death removed his tacit blessing of the Federalists from the political picture. Jefferson’s lieutenant in New York, Aaron Burr, who was running for vice president, politicized a lower middle class chowder and marching society known as The Society of St. Tammany. They helped swing New York behind Jefferson and Burr and as Tammany Hall dominated the politics of the Empire State for the next hundred and fifty years. Tammany welcomed otherwise despised Irish immigrants who brought with them from the Ould Country the fine art of paying people to vote, stuffing ballot boxes, and beating up would-be opposition voters.
Fighting the rich cost money and the party of the people, soon named the Democrats, found the answer in New Yorker William Larned Marcy’s pronunciamento, “To the victor belongs the spoils.” Public offices were up for grabs in every election and it seemed logical to expect officeholders to kick in a percentage of their salaries to protect their jobs. This swiftly became standard practice in both parties. The heirs of the Federalists, the Republicans, elected Abe Lincoln president in 1860 thanks to bushels of cash shipped to the Midwest by New York’s GOP. When Lincoln ran for reelection in 1864, he ordered everyone on the federal payroll, down to the mailmen, to cough up a percentage of their salaries.
The Democrats were the first to turn to a simpler solution: a rich candidate. In 1876, they nominated Samuel Tilden, a wealthy New York lawyer, who bankrolled two-thirds of his $150,000 campaign – the equivalent of at least $2 million today. The race ended in a deadlock that could only be broken by the electoral votes of three southern states. New York Republicans, under the leadership of John Reid, the managing editor of the New York Times, put men with suitcases full of money on trains roaring south and bought enough votes to put their man in the White House by one electoral vote.
So called “moderate” Republicans, most of them disillusioned former abolitionists who had abandoned black Americans to their fate in the Reconstruction South, turned to a new crusade, civil service reform. Hoping to break the grip of the Old Guard on the Republican Party, they browbeat Congress into banning contributions from top federal officeholders. But state and city civil servants were still expected to pay pay pay when election day loomed. National politicians turned to corporations, who were in the process of amassing immense wealth. “When you need money the place to get it is from them that have it,” remarked Boise Penrose, the Republican boss of Pennsylvania. In Washington DC dismayed pundit Henry Adams was soon writing: “The moral law has expired.”
The 1896 presidential campaign was a climax of sorts. The Democrats nominated a fiery orator, William Jennings Bryan, who proclaimed a readiness to radicalize everything in sight. The Republican Party chairman, Mark Hanna, raised $7 million from terrified corporations and put a standpat cliché expert, William McKinley in the White House. Enraged Democrats and reform Republicans combined to pass a law banning contributions from corporations.
The politicians turned to wealthy individuals, who gave as lavishly as the corporations. Theodore Roosevelt, a reform Republican, declared he would run without this large-checkbook largesse but soon found it necessary take tons of dollars from four discreet tycoons who chose not to embarrass him. Another reformer, Democrat Woodrow Wilson, embraced the same piety but when he ran for reelection against a revived Republican Party in 1916, Woodrow took cash from every rich Democrat he could find.
Meanwhile, some states enacted campaign finance laws. Michigan was one of the first. In 1918, Truman H. Newberry beat Henry Ford in the Republican primary race for the U.S. Senate and went on to win the general election. Ford backers sued, claiming Newberry had exceeded the spending limit of $1,875 per candidate. Senator Newberry was sentenced to two years in jail. The case zoomed to the Supreme Court, which found in Newberry’s favor. Newberry personally had spent next to nothing. His campaign committee had spent $180,000, which was perfectly legal, the court ruled. Poof went that campaign finance law.
In the 1930s, with FDR’s magniloquence mesmerizing voters and Democratic machines in Chicago and elsewhere skimming millions of dollars from the WPA and other federal job programs, the desperate Republicans rammed The Hatch Act through Congress, banning all federal employees from giving money to political parties. The angry Democrats attached a rider that limited a national party from spending more than $3 million per election.
Not to worry. The Republican National Committee expanded the Newberry case option. There would be nothing wrong with individuals giving $5,000 at a pop to a plethora of committees, federal, state and local. The GOP defended another exposed flank by passing the Taft-Hartley Act, banning political contributions from unions, claiming it was tit for “tat” ban on money from corporations. The CIO promptly formed CIO-PAC, a Political Action Committee theoretically independent of its sponsor. It was an invention labor would come to regret.
By now even the most partisan reader will get the picture. The motive in all these attempts to remove money from politics comes down to the ancient Roman motto, Cui Bono, or “Who benefits?” A less lovely way to put it is, “Whose ox is gored?” This was the situation when we blundered into the television age, and the cost of campaigns rocketed into the stratosphere. In 1968, the combined price of the Hubert Humphrey-Richard Nixon slugfest was $100 million. The Democrats had almost 50 committees collecting cash. No one put the role of money more brutally than Joe Napolitan, Humphrey’s campaign manager, who told this writer that another $300,000 would have won the election for his man.
To upend the Republican’s supposed financial supremacy, Democrats in Congress demanded a campaign finance law. They got a first draft in FECA, the Federal Election Campaign Act of 1971. It prevented a wealthy candidate from spending more than $50,000 in his own behalf but set no limit on how much an individual could give to another man’s campaign. It tried to control TV costs by limiting how much a candidate could spend in this crucial zone. Result? The 1972 presidential campaign broke all previous records, exceeding $400 million for both parties.
Meanwhile, Watergate spread its stink through the electoral process. Among the Nixonites’ malfeasances were not a little money laundering for election cash and huge carefully concealed gifts from oil companies and others who needed favors from the federal government. This inspired a citizen’s advocacy group, Common Cause, to browbeat Congress into an overhaul of FECA. The new law introduced public funding of presidential elections, with supposedly reasonable limits: $10 million for a primary and $20 million for a general election. It limited spending for congressional elections as well. It was promptly challenged in the Supreme Court, which proceeded to rewrite it. The justices threw out any limitation on what a rich candidate could spend in his own behalf. In a dictum that still reverberates through our political system, Justice Potter Stewart said: “Money is speech and speech is money, whether it is buying television or radio time or newspaper advertising.” But Stewart joined his colleagues in agreeing that there could be limits on giving money to candidates, because when the cash passed out of the givers’ hands it no longer belonged to him as speech. This dubious distinction continues to torment us. It gave birth to the idea of “hard” money, which went directly to a campaign and can be limited, and “soft” money, which went everywhere else, and can’t be limited because it remains free speech. In this atmosphere, PACs have multiplied exponentially. The soft money playing field widened to continental-sized proportions.
In the 1980s, as the Democrats scrambled to keep up with the triumphant Republicans under Ronald Reagan, who was funded by hundreds of corporate PACs, they decided to compete for business money. It marked the birth of “pay to play,” a phrase that describes what people who hope to get government contracts or favorable regulatory rulings must do. By the end of the decade, the Democratic Speaker of the House, Jim Wright, had been driven from office by conflicts of interest, and Tony Coelho, head of the Congressional Campaign Committee, resigned one jump ahead of an ethics investigation. One disgusted fund raiser said: “The Democratic Party doesn’t stand for anything any more.”
In the Clinton era, fundraising techniques sank to new lows. The President was desperate to repair his image after the Democrats lost control of the House of Representatives in 1994. Ironically, Clinton had begun his presidency as an announced foe of soft money. When advisors told him his only hope of reelection was a hugely expensive TV campaign, that reform vanished from his agenda. From October 1995 to the Democratic Convention in 1996, the Clintonites spent $2 million soft dollars a week running nonstop TV ads that revised Bill’s image from a liberal to a tough-on-crime balanced-budget moderate. Givers got perks ranging from seats on Air Force One to overnights in the White House’s Lincoln bedroom. From January to November 1996, the president appeared at 237 fundraising dinners and raised $120 million soft dollars. At one point he told advisor Dick Morris: “I haven’t slept in three days; every time I turn around they want me to be at a fund raiser.”
The TV overhaul worked. Clinton was reelected. The Center for Responsive Politics, which monitors money spent in elections, reported that the 1996 presidential candidates spent $990.6 million, but the actual expenditures, counting undocumented soft money, was at least $2.2 billion. “There are no limits, there are no rules,” a CRP spokesman virtually wailed.
Inevitably, Congress made another try at cleaning up the moral swamp it had created. In 2002, the lawmakers passed a “Bipartisan Campaign Reform Act,” sponsored by Senators John McCain of Arizona and Russ Feingold of Wisconsin. In spite of its pious name, BCRA did nothing but add a blizzard of new regulations, which inspired one critic to remark that initials should stand for “Before Campaigning Retain Attorney.” In a desperate attempt to control soft money, BCRA barred corporations and labor unions from financing “electioneering communications” 30 days before a primary election and 60 days before a general election. Put more bluntly, soft money TV ads could not mention a candidate’s name in the period when voters were most interested to learn something about him or her. This inspired another critic to suggest BCRA should be called “The Incumbent Protection Act.”
So we staggered onward to the election of 2008, in which Senator Obama suddenly announced after his nomination that he would not accept public financing. Senator McCain, as one of the authors of BCRA, could not do likewise without major embarrassment. So he accepted $84 million in public financing and did not raise any more money after the GOP convention. Meanwhile, the Obama team raked in staggering amounts of dollars from all corners of the nation and the globe. The result: Barack Obama became President Elect by outspending McCain $712 million to $326 million. In battleground states such as Florida, McCain was outdollared by 3-1 and 4-1. Most of this cash, it need hardly be added, went for TV ads. McCain lost Florida by 2.81 percentage points; other swing states went to Obama by equally thin margins.
In no way am I denigrating the superb campaign that Mr. Obama and his advisors ran. He deserves his historic victory. I only wish it had been achieved on a level playing field.
Will any sane candidate ever accept campaign finance limitations again? I hope not. Why should superrich men like Governor Jon Corzine and New York Mayor Michael Bloomberg be allowed to spend millions to win reelection and those who oppose them remain forbidden to contribute more than two or three thousand dollars per person? Bloomberg virtually purchased the New York City Council to win repeal of a term limits law that would have prevented him from running for a third term. Now, after announcing he was withdrawing from the Republican Party, he is angling for permission to run on the Republican line. A hapless GOP spokesman said:: “Bloomberg has bought us and sold us [but] let’s be real. He’s got $20 billion.”
Why are we tolerating this gross distortion of our election laws? As Justice Potter Stewart said, “money is speech and speech is money.” That dictum sums up the folly of campaign finance reform. All the rest is partisan posturing and hypocritical political correctness.
In 1919 America succumbed to a bizarre demand by well intentioned idealists and made taking a drink illegal. After fourteen years of hypocrisy and corruption, we voted Prohibition into oblivion. We can also go cold turkey on campaign finance laws —NOW. Can President Obama possibly object?