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Funding the Beast: Free Speech v Campaign Finance Reform |
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If there is one problem at the heart of all others in American politics, it is the influence of the moneyed few on public welfare.
Six months into the 2008 presidential race and primary candidates are breaking fundraising records Left and Right. Armed with the right to free speech guaranteed in the First Amendment, parties and their candidates are leaping into another campaign season unharnessed by spending limits, fundraising restrictions, or meaningful caps on soft money expenditures. So with America aggressively hailing itself as the global arbiter of democracy these days, how does its campaign financing compare to that in other countries?
First, a recap on current campaign finance rules in the US. Most of today’s laws governing campaign finance were introduced in 1971, with the Federal Election Campaign Act (FECA). FECA imposed rules for reporting all contributions and expenditures, and was strengthened in subsequent amendments to limit contributions and establish the Federal Election Commission (FEC).
Current fundraising limits for congressional and presidential campaigns apply to “hard money†from individuals, organizations, and political action committees, donated either directly to candidates or to their parties. (Corporations and unions are both banned from directly contributing, although they are allowed to establish political action committees that can donate on their behalf.)
Perhaps the most undermining change to these regulations was the 1976 Supreme Court case Buckley v Valeo, in which the Court upheld direct contribution limits but struck down restrictions on total spending and on the money individuals and organizations could spend privately on behalf of a candidate. The grounds of this decision were that spending private funds to influence elections was a form of Constitutionally-protected free speech. However, many agree that Buckley effectively gave big business the right to drown out the “voices†of public interest groups, non-profits, and average Americans seeking to influence elections.
Also in 1976, public financing of presidential campaigns was introduced. Funded from a check-off on the federal income tax form, public financing allows candidates who reach a certain fundraising threshold to qualify for matching funds from the government that, if accepted, obligate the candidate to observe certain spending limits. Until 1996 virtually all qualifying candidates accepted the matching funds and limits, but in the 1996 Republican primary, and again in 2000, Steve Forbes opted out, allowing him unlimited spending rights. In 2000 this sparked his opponent for the GOP nomination, George W Bush, to do the same, setting an inevitable trend that continued in the 2004 and 2008 races.
Already in the 2008 race most of the leading candidates for both parties, including Clinton, Obama, Edwards, Romney, and Guliani, have opted out of public campaign financing for the primaries, which means they are free to raise and spend as much money as they like for their campaigns. Unfortunately, Congress has failed to introduce public financing for Congressional races, causing average campaign expenditures for a single seat in the Senate to exceed $3.3 million per candidate in 2006.
By far the most significant improvement to campaign finance rules came in 2002 with the McCain-Feingold Act (also called the Bipartisan Campaign Reform Act), which drastically reigned in “soft money†donations – a long-standing loophole in campaign finance regulation that allowed virtually unlimited “indirect†donations for things like voter registration drives and, importantly, “issue advertising.†In June of this year, however, the Supreme Court essentially threw out the limits on issue ads, again citing the First Amendment.
Money Where the Mouth Is
Opponents of aggressive campaign finance restrictions insist that a candidate’s ability to raise and spend money – even through large private donations — is an important reflection of his or her popularity, and limiting it would therefore undermine the democratic process. The First Amendment, they argue, is fundamentally a protection of the freedom of expression, which surely includes how one expresses themselves financially. A couple years ago I was sitting with the uber-wealthy owner of a major American sports franchise watching a game, listening to him reflect on local campaign contribution limits. Having just finished construction on a new stadium, the team owner (admirably) bragged about using no public funds, and wanted to support city officials who would enforce the same for other teams. “Make them report where all the money came from,†he said. “But I should be able to give as much as I want to the candidates I like!â€Â
What’s more, following the passage of McCain-Feingold, many organizations seeking tax exemption for being “political†in nature, but refusing to register as political action committees (which would oblige them to observe campaign finance rules) were heavily fined for soft-money violations. These so-called “527 organizations†included groups from both sides of the issues, including the League of Conservation Voters and MoveOn.org.
But whether we like the “cause†or not, and whether it’s through “hard†or “soft†donations, political action committees, or private expenditures on behalf of a candidate, the question remains: how much should a single party be permitted to influence the outcome of American elections? More to the point, how appropriate is it to apply First Amendment free speech protections to something as fundamentally unequalizing as money?
Foreign Funds
Other democracies give us hints. Many countries, including Canada, France, Belgium, Spain, Israel, and New Zealand, enforce outright spending limits on campaigns. In Britain overall spending for general elections is limited to $30 million for a national campaign for each party. (Compare this to the $265 million already raised collectively by the 2008 presidential candidates, and the eventual $500 million expected to be necessary for each of the nominees.)
Britain also bans paid political advertising on TV or radio, reducing the total cost of campaigns. Instead, each of the main parties is allotted an equal amount of free air time to put across their message.
In Europe, campaigns are financed publicly, requiring considerably less money overall. The emphasis is more often placed on parties, rather than the candidates themselves, with most EU states providing equal funds to the major parties to finance their campaigns. In this report one political observer, speaking of Germany, explains:
We consider political parties very much part of our political system, so we don’t actually have a problem with financing them out of taxpayer’s money.
A survey of 104 countries with campaign finance rules reveals that 41% impose spending limits, 22% ban paid political advertising and 79% offer free political broadcasting. A further 59% directly subsidize campaigns with government money.
Experts admit that even in the presense of such rules, there are ways private companies still manage to influence candidates, such as by offering them lucrative employment positions after they leave office. But in general, despite numerous major campaign finance scandals in Europe, the biggest problem is one of enforcement of existing laws. Far more subdued is the debate abroad over campaign finance reform, because unlike in America, citizens are satisfied with the rules they’ve enacted.
And the “results” are indeed promising. In a 2003 survey of business executives (”Political Finance,” pg 31), the World Economic Forum found that respondants in democracies with strong campaign finance rules like Finland, Sweden, the Netherlands, and New Zealand gave their countries a low corruption rating when asked about the policy consequences of legal political donations, while the US is the only industrialized country whose respondants gave it a high corruption rating. It turns out restricted campaign expenditures and public financing (among other “novel” things like universal voter registration and weekend voting days) often result in the election of candidates that more accurately represent the people, resulting in more policies that benefit social welfare in health, education, energy policy, trade, labor, and more.
Comparative Edge
So, in looking overseas, what alternative means of financing campaigns seem most effective in keeping elections more level? And are Americans ready for these measures where they conflict with a person’s First Amendment right to freely “express” themselves with a checkbook?
Perhaps the single most effective measure Americans can take in reforming how campaigns are financed is by capping expenses. If parties and candidates simply aren’t allowed to spend beyond a certain dollar amount, then their incentive to concentrate on fundraising, versus getting out a coherent, qualified platform is eliminated.
Banning paid political advertising and allotting each party free, equal media time ensures that the public’s exposure to candidates is balanced, and not simply a function of how much air time they can afford. Such measures shift the emphasis of “getting out the message†from quantity to quality: the better you can use your five minutes (rather than the more minues you can buy) the better your chances of winning.
Disclosure requirements, restricting private expenditures on behalf of a candidate, regulating who can contribute, and publically funding elections are all measures America has toyed with, but not to the greatest possible extent. Despite efforts to limit the size and origin of donations and offer public financing to candidates, Americans have clung to their raging First Amendment rights and designed campaign finance regulations that still “let the money speak,” giving the “biggest†voice, and vote, to the wealthy.
Campaign funding represents one of the most important, and yet least democratic links between private interests and the government. It is one half of the two-way flow of money between big business and policymakers: whether through campaign funding (with corporate profits) or government hand-outs (of taxpayer money), in America these two entities subsidize each other. As is true of healthcare, education, energy, tax, and many other areas of policy, if the US seeks to improve the quality of its democracy it would be wise to turn an open-minded eye to democracies overseas.
Illustration by Quinn Stephens
Campaign finance reform seems to be picking up steam, at least as you hear the democratic candidates talk about it. I’m for a complete overhaul (no lobbyist money, indeed no donations at all), publicly funded, etc…
That kind of change comes slowly. For now, I’d like to see the candidates swear off lobbyist money (as Edwards and Obama have), or at least swear off those lobbyists that are against a candidate’s policies (ie. Not the ones that are the AFL-CIO or the Sierra Club).
Spending reform? for polital debates? This is a terrible idea!
They make thier money the same way as others by doing fundraisers, if they have the money to speak, then why shouldnt they? are you going to block thier messages? The first ammendment states freedom of “Press” and “speech”. This says that We can say whatever we want *(As long as it doesnt cause a riot)* and Newspapers can print what they want *(As long as it is not slander)*.
Cheif justice Warren Burger, ruled that Fundraisers and Expendetures are protected as ‘Speech acts’
I do however feel that limiting what they can say about other candidates. I absolutely love listening to the candidates list all the reasons you shouldn’t vote for thier rivals, yet give no reason as to why you should vote for them.