The Short, Unhappy Life of Campaign Finance Reform
Commentary: Everyone seems ready to bury the McCain-Feingold law -- including those responsible for enforcing it.
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Senators John McCain and Russell Feingold needed all of seven years to nurse their campaign finance reform bill through a reluctant Congress. The bill's opponents needed all of three hours to start strangling it.
The McCain-Feingold law, which seeks to outlaw large political donations, is nearly a year old now and still gasping for each breath it draws. It's under pitiless assault from every corner of the political universe -- unions, corporations, right-to-lifers, civil libertarians, gun owners, broadcasters, Christians, fat cats, purists who think it doesn't go far enough, Democrats, Republicans, Congress, the White House, and even the regulators who are supposed to enforce it. Its fate is in the hands of the U.S. Supreme Court, which will rule this summer on a raft of constitutional challenges. But no matter what the court decides, the resistance mounted by the armies of the status quo has already made for a sobering spectacle -- full of naked hypocrisies, petty vanities, low politics, high farce, and, yes, a vexingly difficult clash of core values in a democracy. It has also provided a useful reminder about the pitfalls of reform. Somewhere, surely, Lord Macaulay is grinning in his grave.
This is the saga of the long, hard "morning after" for McCain-Feingold. It begins on March 27, 2002, the day the bill was signed into law. The measure outlaws the half-billion dollars of unlimited checks -- so-called soft money -- that flood the coffers of the political parties each election cycle. (Contributions that go directly to individual candidates have been limited by law since Watergate.) As keeper of the world's thickest Rolodex of political donors, President Bush has little use for a ban on soft money, and even less for McCain, his tenacious rival for the GOP presidential nomination. In different circumstances, the president might well have vetoed McCain's bill. But in the spring of 2002 the Enron scandal was raging, and the $312,500 that the president's pal "Kenny Boy" Lay and other top Enron executives had given to Bush's gubernatorial campaigns in Texas had become a political embarrassment. It wasn't the best time for the White House to derail the most important campaign finance reform legislation Congress had passed in a generation. Besides, there were so many other willing executioners.
So Bush bit his lip, dispensed with the usual Rose Garden ceremony, and put his signature on the bill early that morning in the privacy of his office. McCain and Feingold only learned of the signing afterward. The one politician Bush's staff did tip off was Senator Mitch McConnell (R-Ky.), the self-styled Darth Vader of campaign finance reform. A pompous man even by the lofty standards of the U.S. Senate, McConnell immediately rushed into court to secure the "naming rights" to a lawsuit that he hopes will become both a landmark constitutional case and his own great political legacy.
McConnell v. Federal Election Commission is a consolidated case with 84 plaintiffs, running the gamut from the Chamber of Commerce to the AFL-CIO, from the California Democratic Party to the Republican National Committee, from the Christian Coalition to the ACLU. All contend that in one way or another, the bill infringes on their rights to free speech and association. The plaintiffs certainly make for strange bedfellows, but the grander irony of this lawsuit is the identity of the defendant -- the Federal Election Commission. That's the agency charged with enforcing the law. It's also the agency that has spent the past year sabotaging it. Most egregiously, the FEC adopted a regulation that allows the Democratic and Republican parties to create new shell organizations that can continue to collect the unlimited soft money that the bill sets out to ban. Democrats wasted little time in setting up something called the Democratic State Parties Organization to funnel five-, six-, and seven-figure checks to candidates. Not to be outdone, political operatives closely identified with the National Republican Congressional Committee and gop House Majority Leader Tom DeLay created the "Leadership Forum" as a "conduit" for soft money. As one longtime GOP fundraiser boasts, "This is the way politics and campaigns will be run under the new law."
The shell organizations incensed McCain, who is suing to have the regulations overturned. The FEC, he fumed, "ignored the plain language of the law, the clear intent of Congress, the legislative history, and even the recommendations of the agency's own general counsel and professional staff."
No one who has watched the FEC operate over its 28-year history could be surprised by its most recent handiwork. It has always been a "captive agency" -- one whose sympathies line up squarely with the institutions it regulates. In the case of the FEC, this is not an accident; it's by design. The agency has six appointed commissioners, all of whom serve at the pleasure of the political parties and elected officials whose behaviors they are supposed to constrain. By law, the commission is made up of three Democrats and three Republicans -- and, by law, tie votes result in no action. (Guess what happens when the parties disagree?) But if the agency is toothless, it isn't harmless. In the late 1970s, it issued a series of rulings that gave rise to the soft money loophole in the first place. Now, a generation after opening the loophole, the FEC is leading the charge to keep reformers from closing it.
Democratic and Republican party leaders have been taking in the action at the FEC with the satisfied smirks of high school students greeting their favorite substitute teacher. Just before the bill was to take effect last fall, Democratic National Committee Chairman Terry McAuliffe summoned his party's 40 top fundraisers to a meeting to reassure them that campaign finance reform was "nothing but junk," according to one participant. Never mind that Democrats in Congress had provided the lion's share of the votes to pass the bill; never mind that the DNC was on record supporting it. Can McCain-Feingold survive all this hostile fire? Parts of it probably will. The bill's central plank, the ban on soft money to political parties, is in sync with a long line of U.S. Supreme Court decisions that have held that Congress can limit contributions to prevent the appearance or reality of political corruption. Among the most telling evidence the new law's defenders presented in court last year was a nationwide survey showing that 71 percent of adults believe that members of Congress will vote for a bill in order to please a campaign contributor, even when they believe the bill is not in the best interest of the country. It's hard to imagine a more sweeping indictment of our new Gilded Age of politics -- or a more muscular argument in favor of the ban on soft money. As the Supreme Court noted in a recent case, "The cynical assumption that large donors call the tune could jeopardize the willingness of citizens to take part in democratic governance." Even if the court follows its own precedent and upholds the soft-money ban, however, it will also need to outlaw the new shell organizations if it wants to break the unsavory link between large contributions, political parties, and legislation.
Another part of the new law is built on more fragile constitutional footing. It seeks to impose limits on contributions used to finance the so-called sham issue ads that air during political campaigns and that in the past three election cycles have become a favorite weapon of corporations, unions, and interest groups. These are the ads that close with a tag line that's some variant of "Call Congressman Smith and ask him why he voted 12 times to raise your taxes." It's easy to see why McCain and Feingold felt the need to regulate them; without restrictions on the financing of such ads, much of the soft money their bill bans from political parties would wind up paying for sham issue ads instead, where they would have the same potential to corrupt the political process. But it's also easy to see why groups from all points on the ideological spectrum are up in arms. They argue that the very essence of the First Amendment protects the right of individuals and groups to sound off against their government. That's essentially what most of these ads do: They say Congressman X is a bum because he voted against Legislation Y. So the court must find a way to balance two fundamental rights -- the right of free speech versus the right of Congress to protect the integrity of the political process against corruption.
There's one final irony in all these firefights: The bill at the center of the action is really a rather modest stab at reform. It doesn't go anywhere near two bolder proposals: putting limits on campaign spending and providing public financing or free TV time for candidates. Instead, McCain-Feingold simply tries to close the loopholes that eviscerated the last major campaign finance bill, which was passed on the heels of the Watergate scandal. Campaign finance reform has always played out according to rhythms that Lord Macaulay would recognize: first scandal, then legislation, then loopholes; then a new scandal, followed by more legislation, then new loopholes; and so on. In the past century, each cycle has taken roughly a generation to complete, with key legislation enacted in 1907, 1947, 1974, and 2002. This time around, it took the opponents of reform only a matter of months to start creating new loopholes. If the courts allow their handiwork to stand, the new scandals won't be far behind.
Image: Steve Brodner
