Best Campaign Reform: Raise the Contributions Ceiling

This week the U.S. Supreme Court issued a decision in one case involving campaign finance (from Arizona) and chose not to review another case (from Connecticut).

The ruling in the Arizona case (Arizona Free Enterprise Club's FreedomClub PAC v. Bennett) overturned a state law that gave greater taxpayer subsidies to candidates who have opposing candidates or independent groups that spend more than they do.  Fairfax County Electoral Board member Hans von Spakovsky wrote about this case in Human Events:

The Arizona law challenged in Arizona Free Enterprise Club v. Bennett benefited candidates for state office who accept public financing. The law allowed them to receive more taxpayer money in direct response to the campaign activities of privately financed candidates and independent groups....

Chief Justice Roberts concluded that this matching funds provision imposed a substantial burden on the political speech of privately financed candidates. Every dollar that the candidates spent on their own campaigns resulted in more government funding for their opponents, and spending by independent groups had the same effect.

This Arizona law hindered the political speech of independent groups even more than the speech of privately financed candidates. If an independent group opposed a publicly financed candidate, every dollar it spent guaranteed government funds to the very candidates the group opposed—as well as other publicly financed candidates in the race.

In the Connecticut case (Connecticut v. Lenge), the Supreme Court turned down an appeal by the Green Party, challenging aspects of that state's public campaign financing law. Ballot Access News explained the central issue of the case on March 25:

This case challenges the Connecticut public funding law which says that all candidates for state office who wish to receive public funding must receive a certain number of small contributions; however that is all that Republicans and Democrats need to do, but in addition, independent candidates and the nominees of new parties must submit a petition of 20% of the last vote cast to receive equal public funding. They must submit a petition of 10% of the last vote cast to receive any public funding.

These two campaign-finance cases brought to mind an article I wrote 15 years ago this month on the broad subject of campaign funding. In it, I argued that the problem was low contribution limits, which (among other things) force candidates to spend more time fundraising than reaching out to voters.

Here is the article as it appeared in The Metro Herald (Alexandria, Virginia) in June 1996. You'll note that the names have changed -- as have some of the numbers -- but the principles remain the same:

The Best Campaign Reform: Raise the Contributions Ceiling

Richard E. Sincere, Jr.

According to a report in The Hill, a weekly newspaper that covers Congress, a group of Republican House members, including Majority Whip Tom DeLay (R-Texas) has broken with House Speaker Newt Gingrich (R-Ga.) and Majority Leader Dick Armey (R-Texas) on the issue of campaign finance reform. Gingrich and Armey have endorsed a plan to prohibit political action committees (PACs) from giving money to congressional candidates. The Hill reports in its May 29 edition that "dozens of rank-and-file Republicans ... have denounced the proposal."

Good for them. These Republicans are risking their careers (by challenging the House leadership) on a question of principle.

What principle might that be? After all, PACs are widely derided as the root of corruption in politics, since they channel campaign contributions to candidates from businesses, labor unions, and other special interest groups.

That is precisely why they are valuable. It is an unassailable, fundamental tradition of American politics for individuals to come together, on the basis of shared interests, to form groups with the intention of influencing political and social affairs. We are guaranteed this right of association by the First Amendment to the Constitution. To deny this is to call into question the validity of our basic political freedoms.

PACs began to be created in the mid-1970s, in the wake of two major campaign "reform" packages and the Watergate scandal. Previously, candidates were permitted to accept contributions from individuals, business corporations, labor unions, trade associations, political parties, and other groups and institutions. The new federal laws -- which, incidentally, established the bureaucracy and reporting requirements of the Federal Election Commission -- required such groups to establish separate committees to funnel campaign funds and set strict contribution limits.

Those limits on contributions have not changed since 1974, even though the cost of running a political campaign has risen significantly. (Individual contributions are limited to $1,000 per campaign, while PAC contributions are limited to $5,000.) As a result, politicians -- both incumbents and challengers -- must devote the bulk of their time to fundraising, rather than to the vital job of meeting voters and expressing their views on the issues.

In other words, campaign finance "reform" has had the perverse effect of strengthening the incentives to seek funds from any and all sources, with candidates feeling forced to make promises to many different special interests just to keep their campaigns afloat. A second result is that highly qualified, highly motivated citizens are deterred from participating in the political process as candidates because fundraising has become so distasteful. This is the major reason why Jack Kemp, a former congressman and cabinet secretary, refused to throw his hat into the ring for this year's presidential contest. Kemp represents only the tip of the iceberg of concerned citizens who fail to contribute their time and talent because campaign laws discourage them.

Former presidential candidate Lamar Alexander has suggested, based on his experience, that the campaign contribution limits should be raised. His suggestion does not go far enough.

The best campaign finance reform would be to eliminate contribution limits altogether, but to require strict reporting of the sources of contributions. Campaign finance reports would be available for the press and public to examine. Such scrutiny would alert voters to any "funny business" and would inform us when special interests might have unseemly influence over a particular candidate.

Politicians could be judged by their votes and their actions: Has Bob Dole introduced legislation particularly beneficial to Archer Daniels Midland, after that company has given him millions of dollars in campaign contributions? Has Ted Kennedy voted in lock step with the AFL-CIO, after labor unions have given him millions? Does the chairman of the House Education Committee take contributions from the National Education Association, or from the Home School Legal Defense Fund? If so, how does it affect his performance? These questions can be asked and answered in the full light of day.

This is the system that Virginia law provides for state and local elections. Virginia has no limits on contributions, but campaign finance reports are open to public scrutiny. During campaign years, these reports must be filed on a frequent and regular basis. Local newspapers pay draw attention to any "red flags" that arise. This gives opponents and voters an opportunity to question and challenge candidates on the basis of their campaign funding sources.

Campaign contribution limits force candidates to become beggars when they should be taking their case to the voters. If the limits are lifted, candidates will be better able to do their job and voters will be better able to judge them on their merits -- and therefore make better choices on Election Day.

That is why the House Republicans who are challenging Newt Gingrich deserve praise and encouragement. They have demonstrated both independence and integrity by taking a stand on principle.

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Richard Sincere is chairman of the Libertarian Party of Virginia.

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