Reform School

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Reform School

With crisis comes opportunity. The current campaign finance scandals offer the first chance in years to enact meaningful reform instead of slapping the system on the wrist.

by Jonathan Cohn

By far the most important campaign finance issue Congress must wrestle with is how to close the “soft money” loophole. Although current laws set strict limits on what individuals or political action committees can give to candidates, there are no limits on soft money donations to political parties. Worse, in 1996 the parties dropped any pretense of distinguishing between campaign money and party money, systematically using soft money to finance TV advertising on behalf of presidential candidates. This produced an unprecedented demand for large contributions — soft money donations tripled between 1992 and 1996 — and ultimately led to the Clinton campaign’s fundraising abuses.

A ban on soft money is at the heart of the McCain-Feingold bill, the bipartisan reform legislation that is now struggling in Congress. McCain-Feingold would also limit out-of-state money in congressional races. All too often, the sources of those donations are PACs looking for government contracts or tax breaks. Moreover, such contributions give an unnatural advantage to incumbents, who have greater access to lobbyists.

A third major initiative of the bill would eliminate donations from PACs. The logic here is deceptively simple: If PACs by their very nature represent special interests, then why not get rid of them altogether? Trouble is, PACs provide one of the only means for the nonwealthy to influence politics, enabling less well-off groups such as teachers, nurses, and union members to pool their resources and exert at least some balancing influence on the process.

McCain-Feingold stands little chance of passing in the GOP Congress, but President Clinton is reportedly considering other ways to close the soft money loophole. While that would be a good start, wringing the money out of politics will also take some more sweeping reforms:

A Stronger FEC The Federal Election Commission, which is responsible for enforcing campaign laws, is famously one of the most toothless agencies in Washington. A board of six commissioners oversees the FEC and must approve all investigations or prosecutions by majority vote. Since each party appoints three members, only the most blatant violations of law are enough to break the usual three-three deadlock. Solving this impasse would begin with replacing the current FEC commissioners (two of whom have served since the 1970s) with aggressive, nonpartisan watchdogs. It would also help if Congress appropriated more money for the underfunded agency — and stopped micromanaging the appropriations as a means of undermining the FEC’s investigative capabilities.

Instantaneous Electronic Disclosure Currently, the FEC requires disclosure of campaign contributions on a monthly basis for presidential elections, quarterly for congressional races, and on whatever schedule the parties agree on for unregulated soft money. Factor in the monthlong bureaucratic delay between disclosure and entry into the FEC’s electronic database, and contributions received late in a campaign are easily traceable only after the election — when it’s too late for voters to take them into account. Most campaigns already keep track of donations by computer, then print the figures out for submission to the FEC — which in turn translates them back into electronic form. If the campaigns relayed the information electronically, the FEC could easily implement instantaneous disclosure.

Public Financing This is the most important — and, unfortunately, the most politically difficult — of the reform steps. Under a public financing system, taxpayers would subsidize political campaigns directly; in exchange for receiving public money, candidates would agree to abide by overall spending limits. This would accomplish two things: First, it would reduce the need for campaign fundraising. Many lawmakers rightfully complain that fundraising is a distraction from their duties. Second, if candidates were assured public money, they wouldn’t need to court donors with tax breaks, federal contracts, and other forms of pork that cost taxpayers billions every year. (The Cato Institute cites $60 billion in “corporate welfare” subsidies per year. By comparison, the total tab for all federal elections last cycle — the most expensive in history — was $2.7 billion.)

Of course, even if public financing completely severed the link between donors and candidates, interest groups and wealthy individuals could still influence politics through their own independent expenditures on organizing and advertising. But constitutionally, there’s not much we can do to keep well-financed interests from weighing in on the political process.

That’s why the least-discussed campaign reform is one of the most important: strengthening the institutions that speak for average citizens — organizations that command attention from lawmakers not because they spend money on campaigns but because they represent large numbers of voters. Corrupt fundraising, you see, isn’t just a cause of democracy’s disintegration — it is also a symptom of it.

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