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'The First Amendment is not a stop sign against reform.' (American Civil Liberties Union)(The ACLU Vs. Public Citizen: A Debate on Campaign Finance)(Cover Story)

Campaign-finance scandals dominate the headlines. Public sentiment for reform is at its highest level since the Watergate era. Yet it seems like the opposition to reform this year is bolder, and the odds are getting longer. Even the McCain-Feingold bill, which many reformers characterize as only a weak first step, faces heated and determined opposition. Free marketeers aligned with the ACLU and the Christian Right denounce attempts to reform the loophole-ridden, corruption-breeding system we now live with as attacks on the sacred right of free speech.

It is no longer laughable in Congress to talk about getting rid of all limits on campaign contributions. "The reforms enacted after Watergate failed," critics say. "Let's just get rid of all restrictions, disclose everything, and let the public decide." That such a proposal gets a respectful hearing in Congress and on the editorial pages of major dailies shows how far the debate has moved.

Now, more than ever, progressives need to make federal campaign-finance reform a priority. And while it is important to keep long-term goals in mind, incremental solutions may offer our best chance to make progress toward more sweeping change. Giving up altogether is simply not an option, unless we don't care that the public thinks Congress is up for auction, that voter turnout is at an all-time low, and that corporate money drowns out the voices of average people both in the legislature and on the campaign trail.

The simple reason why we need campaign-finance reform is that money influences policy.

The players are different, the legislative issues come and go. But the one constant in our political system is the need for money. Lots of it. Candidate and party spending in the 1996 elections topped $2 billion. Hundreds of millions more were spent in unreported "issue ads." The constant search for funding to run campaigns costs us dearly. Candidates and elected officials spend inordinate amounts of time raising money, and the pressure to cross the line into improper or even illegal activity can test the resolve of even the most ethical politicians.

It would be one thing if the people with big money to spend on elections were merely civic-minded or disinterested rich people, or even just wealthy ideologues from across the political spectrum, but they're not. Nor does a broad cross-section of the public make political contributions. Less than one-third of 1 percent of the population gave contributions totaling more than $200 in the 1996 election. A huge proportion of the campaign cash that politicians raise comes from business interests, giving them special access to and influence over the legislative process.

Take two major policy debates of the last two Congresses: health care and the new telecommunications law.

Remember the Clinton plan? Thirty-seven million Americans with no insurance? Harry and Louise? The Democrats squabbled, the Republicans obstructed, and the legislation imploded.

During the ill-fated health-care debate, campaign money flowed freely from those with an economic interest in shaping the legislation. According to the Center for Responsive Politics, individuals and PACs associated with the health industry (including doctors, hospitals, nursing homes, HMOs, and drug companies) made more than $37 million in contributions to candidates, split evenly between Democrats and Republicans. The American Medical Association alone contributed more than $2.5 million. At least sixty members of Congress who sat on one of the five committees with jurisdiction over the healthcare legislation received more than $50,000 in contributions from these health-industry PACs and individuals.

In the end, opponents of reform won. Today, the number of uninsured Americans is more than forty million, and the corporatization of our health-care system continues unabated.

Fast-forward to the next Congress. The Republicans are in control and undertaking a massive rewrite of the telecommunications laws. A titanic struggle ensues among the Baby Bells, the long-distance phone companies, and the cable TV companies that want to compete for each other's business. The money flows again: According to the Center for Responsive Politics, in the 1996 election cycle the cable companies contributed more than $2 million to candidates and parties, the long-distance companies gave nearly $4 million, and the Baby Bells coughed up an astonishing $6.2 million.

As a result of that fight, consumers found themselves out in the cold. Cable rates went up, and the networks got an enormous government giveaway: The whole digital television spectrum is now theirs for free.

It is not just the colossal struggles of big-money interests on major legislative issues that show the need for reform. Tax loopholes and corporate-welfare give-aways manage to find their way into legislation with little or no public discussion.

We're all now familiar with the $50 billion tax break that Senate Majority Leader Trent Lott, Republican of Mississippi, and House Speaker Newt Gingrich, Republican of Georgia, engineered for the tobacco companies. When that deal was exposed, the public outcry forced Congress to repeal it. Tobacco companies' soft-money contributions of $5.7 million to the Republican Party in 1996 and another $1.6 million in the first six Months of this year surely greased the wheels for that effort to slip one by us.

And How about the $280 million special tax break for Amway Corporation? Amway Chairman Richard DeVos and his wife have already contributed $1 million in soft money to the republican party this year. That follows on the heels of the $315,000 that Amway gave to the Republicans in the 1996 cycle, and the $2.5 million--the biggest single contribution ever--the company contributed in 1994.

Maybe Amway would have gotten its tax break, and all major legislative fights would turn out exactly the same if the interested parties didn't make campaign contributions. Maybe. But I doubt it. One poll showed 86 percent of Americans believing that campaign contributions influence policy decisions--and that poll was taken before the current scandals. Public perception is important. It affects whether people trust the Congress to do the right thing. And it affects whether people feel it is worth participating in the political system on election day.

Opponents of campaign-finance reform, like Senator Mitch McConnell, Republican of Kentucky, love to wrap themselves in the Constitution. The ACLU is a willing accomplice. The 1976 Supreme Court decision in Buckley v. Valeo, which out limits on campaign expenditures by candidates, is their battle cry. They argue that every reform proposal aimed at reducing the domination of the political system by big money violates the First Amendment. "Money equals speech," they proclaim. "The First Amendment is not a loophole."

It isn't. But it's not an impenetrable roadblock to reform, either. There is nuance in this area of the law that the ACLU and Senator McConnell prefer to ignore.

The most important thing to remember when the First Amendment is held up like a stop sign against reform is that the Buckley decision upheld limits on campaign contributions. Candidates can spend as much as they want on their own campaigns, the Court held, but contributions from citizens should be limited. The Court reasoned that candidates have a right, as a matter of free expression, to spend their own money on their own campaigns. But campaign contributions can create corruption, or the appearance of corruption. So, in the interest of democratic government, they can be curbed. The Court therefore upheld limits on individual contributors of $1,000 per candidate per election. It also upheld a limit of $25,000 on the total annual contributions that individuals may make to candidates, parties, and PACs.

The Buckley decision also upheld the system by which we have funded Presidential elections in this country since 1976 with taxpayer money. Simply put, it is constitutional to offer candidates a very tempting inducement--about $60 million in public funds for Presidential candidates in the last election--to limit their spending. The limits in the Presidential system are voluntary. Ross Perot and Steve Forbes decided not to abide by them.

These important components of the Buckley decision, which the ACLU argued against at the time and with which it still disagrees, mean that central provisions of the reform bill introduced by Senators John McCain, Republican of Arizona, and Russ Feingold, Democrat of Wisconsin, would be upheld by the Court. Those provisions--a ban on the unlimited corporate, labor union, and individual contributions to the political parties known as "soft money," and voluntary spending limits for Congressional campaigns, made more attractive by the offer of free and reduced-rate TV time for those who limit their spending--are worthy and constitutional goals. More far-reaching inducements to candidates to voluntarily limit their spending, like providing clean public money for all Congressional elections, would also pass constitutional muster.

Another difficult but not insurmountable problem is the growing use of phony issue ads to make an end-run around contribution limits and the prohibition on corporate contributions to federal elections. Most of the money the political parties raise goes to pay for TV ads. Television is the single greatest expense for most candidates. Candidates are often happy when their contributors channel money into "issue ads."

Thus we've seen the rise of ads that claim to be about important issues, but actually are thinly veiled campaign advertisements. In 1996, one ad accused a candidate of beating his wife. The ad didn't urge viewers to vote against the candidate, just to call him and "tell him we don't approve of his wrongful behavior." Citizens For Reform, the tax-exempt group founded by conservative activist Peter Flaherty that paid for the ad, spent $2 million in the two months before the election to air ads in fifteen Congressional districts. Triad Management, a Washington, D.C.-based political consulting firm run by a former fundraiser for Oliver North, helped steer wealthy donors to the group. At least one made a $100,000 contribution.

Candidates pay for such ads out of funds that are subject to the election laws; outside groups should, too. Buckley itself permits the regulation of ads that expressly advocate the election or defeat of candidates. And in a 1990 decision, Austin v. Chamber of Commerce, the Supreme Court recognized the power of the legislature to address "the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political ideas."

Congress should try to fine-tune the definition of "express advocacy," based on the real-life experience of the 1996 elections. Phony issue ads paid for by corporate funds should not dominate and distort the electoral debate.

Court decisions and FEC rulings, combined with the ingenuity of candidates and outside groups, have shredded the campaign-finance system passed by Congress in the wake of the Watergate scandal. By 1996, we had unlimited campaign spending and unlimited contributions again--only this time through the soft-money and phony issue-ad loophole. And we had more scandals.

How do conservatives respond? By promoting a bill that would make the problem of money in politics even worse. Aptly named for its chief House sponsor, Representative John Doolittle, Republican of California, the bill would wipe out all limits on individual campaign contributions to candidates, PACs, and parties, while requiring all contributions to be disclosed on the Internet within twenty-four hours. The Cato Institute loves this idea: Adam Smith meets the FEC.

A system of unlimited contributions to candidates is frightening to contemplate. Major legislative battles already are cash cows for members of Congress. Under the Doolittle bill, they will be gold mines. Just get on the right committee, open your bank account, and watch the money stream in. The incentive for corporations to launder contributions through employees will be hard to resist and even harder to police. Why raise eyebrows by having twenty-five employees, including some secretaries and clerks, send in $1,000 checks? Just funnel the $25,000 or even $100,000 to your favorite Senator through a wealthy executive.

But won't disclosure solve all these problems? Here's the theory: Just give the public all the information, and if it thinks candidates are for sale to the wrong people, it won't elect them. Sounds good, but it won't work. We actually have a pretty good system of disclosure now. It's not instantaneous, but the information is available fairly quickly, especially in the final month of the campaign. The problem is not disclosure but public access, public understanding, and timing. Not everyone has a computer. Not everyone with a computer has access to the Internet, or the technical capability to obtain campaign-finance information and make sense of it.

Once very rich people can give unlimited amounts directly to candidates or PACs, voters will have an incredible burden added to their decision-making process. And not much information to go on. Even if a vigilant press does its best to help, it won't be enough. The information may also come too late. Political contributions flow throughout the election cycle, as legislation is being considered in Congress. For example, AT&T's PAC distributed $166,000 to federal candidates on a single day in late 1995, the day after a compromise on the telecommunications legislation was reached.

Imagine this scenario: The Doolittle bill is law. Early next year, an electric-utility executive gives $100,000 to the chairman of the Senate Energy Committee, which is marking up the electricity deregulation bill the next week. The Senator, who was re-elected in 1996, drops a provision from the bill that would have prohibited utilities from passing on to consumers all of the costs from their failed nuclear plants. A year later, reeling from your swollen electricity bill, you get on your computer and trace the money, figure out the timing of the contribution and the legislation, and decide to act. Congratulations! You can vote against your Senator in 2002.

Bob Schiff is a staff attorney with Public Citizen's Congress Watch.
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Author:Schiff, Bob
Publication:The Progressive
Article Type:Cover Story
Date:Dec 1, 1997
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