Texans know that democracy is being undermined at the Capitol in Austin by big money. Texans want to restore their sovereignty but many are hesitant to act because they buy the myths of reform opponents that nothing can be done. This article exposes the falsehoods behind the three big myths of campaign reform opponents. First, it tackles the myth that reform won’t work because big money will always get around any laws and find a way into politicians’ pockets. Then it looks at opponents’ arguments that contribution limits just hurt challengers, at a time when we desperately need to end incumbent entrenchment. Lastly, it examines the constitutional canard that money equals speech.
Myth 1. The Bucket Will Always Leak: Campaign Reform Can’t Work Because Money Will Always Find A Way To Politicians.
Opponents seek to undermine support for campaign reform by fostering public cynicism. They confidently assert that reform is pointless because big money will always find a way around laws to remove it from the process. People listen to this argument because they saw the federal campaign finance system fall apart in the 1990s. Federal contribution limits and the corporate prohibition became nullities, as the political parties were allowed to raise unlimited soft money (funds from what are supposed to be prohibited sources—corporations and unions—and in huge amounts over the federal contribution limits). Soft money, which began as a trickle in the late 1970s from misguided agency regulations, became a $500 million tsunami by 2002 before McCain-Feingold passed.
Since McCain-Feingold went into effect, right after the November 2002 elections, it has—contrary to many media stories—worked well. The new legislation has accomplished two goals, both fairly modest: 1) breaking the connection between soft money special interest donors, the national parties, and federal candidates by banning the parties and candidates from raising soft money; and 2) stopping the use of soft money to broadcast sham issue ads that attack candidates shortly before the election. (Unfortunately, there was no congressional will for more fundamental reforms, such as public financing).
Opponents predicted that big money would find a way around the new law and that the parties would starve financially. They were wrong. No longer are the national parties and federal candidates raising soft money. Five hundred million dollars in soft money—the largest, most self-interested contributions—have been removed from America’s political process.
And like “tough love,” which forces addicts to end their self- destructive habits, eliminating soft money has been good for the political parties. It has forced them to raise money from average Americans. To date, the Republican Party has increased its direct mail donors by 1,000,000 people and the Democratic Party has done so by 800,000 (a huge 200 percent increase for the Democrats).
Presumptive Democratic presidential nominee Senator John Kerry has raised almost as much as President George Bush—$180 million in hard money from 1 million donors. Between March and June 2004, Kerry raised $139 million, more than $30 million each month. This despite the dire predictions of Democratic insiders who said that the party had to rely on 527s (political entities not subject to McCain-Feingold) for soft money, or the Bush campaign’s millions would swamp Kerry.
Both major parties can and are thriving on smaller donations from regular Americans; they don’t need big special interest soft money. While Republicans have replaced all their soft money with hard money (money in compliance with contribution limits and with the corporate and union prohibition), Democrats lag a little behind, replacing 90 percent of their soft money. Democrats had become more dependent on soft money and hadn’t focused until very recently on small-donor fundraising. But as John Kerry and Howard Dean have shown, Democrats can raise plenty of hard money from their faithful.
Both parties will be stronger for raising donations from their regular supporters rather than corporate America and a few Daddies Warbucks. The parties actually will have to listen to average Americans’ concerns. They no longer will hear just the loud voices of the powerful few that used to give big soft money—and who want something for their investment (such as corporate welfare, non-competitively bid government contracts, regulatory loopholes, tax breaks, and no government protection of consumers).
Critics, however, say soft money has simply moved from the parties to 527s. These groups, named for section 527 of the tax code that authorizes them, are intended to influence elections, but technically are not political action committees and therefore are not subject to McCain-Feingold’s restrictions. Prominent 527s are the Democratic groups America Coming Together and The Media Fund (which receive millions from billionaire George Soros) and the Republican group The Leadership Forum (headed by a former aide to House Majority leader Tom DeLay).
But the evidence belies the critics’ claims. Party soft money has not migrated to the 527s. They haven’t raised any more money so far this election—$67 million—than they raised in 2000. The reason apparently is that many corporations and big individual donors aren’t giving to 527s because they don’t have a direct connection to the parties and officeholders (which tells you something about these donors’ motivations).
I don’t like 527s and believe we should apply McCain-Feingold’s soft money ban to them as soon as possible. Unfortunately, proposed regulations to apply McCain-Feingold to 527s failed this spring. A hostile Federal Election Commission and Democratic and Republican interest groups undermined the effort. McCain-Feingold is achieving its goals of weaning the parties and candidates off soft money. Reform can and does work.
Myth 2. Rich Angels Will Save Horatio Alger Challengers: Contribution Limits Hurt Competition.
Officeholders often assert that they oppose contribution limits because restricting really big donations will hurt challengers (Why incumbents would care about their challengers is rarely asked). The opposite, however, is true—limits aid challengers.
A comprehensive study by U.S. Public Interest Research Group, which looked at 35,000 election results over 20 years in 45 states, found contribution limits decreased the margin of victory of incumbents. The study also found that the lower the contribution limits, the smaller the incumbents’ margin of victory.
It’s common sense. Limits help challengers because it’s incumbents, not challengers, who are most likely to get lots of big donations. Only incumbents are in a position to provide big donors legislative favors. Big donations to challengers are, after all, a poor investment because the odds are that incumbents will win. Just like Horatio Alger is an economic fantasy—and people rarely, if ever, stumble on a rich patron to pull them up from rags to riches—in politics challengers aren’t going to find many big donors to come to their rescue. And the few they find won’t be angelic.
If no limits actually helped challengers, then Texas should be a national model of competitive elections. But—surprise!—we stink. We ranked 5th among the states in the widest average margin of victory, 47th in having the fewest number of candidates per race, and 5th in incumbent re-election rates (97 percent). As a result, in the 2002 Texas elections 60 percent of all legislative seats had only one major party candidate. Only 15 percent were competitive (generously defined as the winner getting 60 percent or less). Incumbent Texas legislators outraised their challengers more than 9 to 1. The old Soviet politburo had more competition than the Texas Legislature.
Contribution limits will help make Texas elections more competitive. They also will force candidates, challengers, and incumbents, to broaden their support and get more funds from average citizens.
Myth 3. One Dollar, One Vote: Campaign Reform Infringes On Free Speech.
The Supreme Court, whether dominated by liberals, moderates, or conservatives, has always upheld the corporate prohibition and contribution limits against First Amendment arguments. Contributions, the Court has said, do not constitute speech by donors, but rather are simply a means by which donors support candidates’ speech. As long as contribution limits aren’t so low as to prevent candidates from getting their message out to the public, they are a constitutional tool to protect democracy and prevent corruption. In short, the public interest in democracy overrides the quite marginal free speech interests of a very few donors giving unlimited contributions.
Democracy is one person, one vote, not one dollar, one vote. It’s rule by the people, not rule by the rich and powerful. Bill Moyers said it best: “People who have more money should be free to buy more cars, more homes, more vacations, and more gizmos if they want. They should not be able to buy more democracy.”
The corporate prohibition serves to protect democracy. It came about because late 19th-century robber barons and their huge corporate trusts were buying—literally. The prohibition, as the Supreme Court has recognized, is a means to protect democracy from the modern reality of giant aggregations of wealth.
Reform can work to make our voices heard in Austin. Legislators today hear only the siren songs of insurance companies, utilities, polluters, and other powerful interests that want at your wallet. We need to enact reform now in Texas, before corporate soft money proliferates and contributions grow ever larger.
With erupting corporate contribution scandals, we have a real opportunity next session to adopt important reforms in Texas: reasonable contribution limits, closing the loopholes in the corporate prohibition, and creating an Ethic Commission with huevos.
Join us and the Clean Up Texas Politics action team at www.cleanuptexaspolitics.com Democracy in Texas is worth fighting for.
Fred Lewis is an attorney and president of Campaigns for People, a non-partisan, nonprofit organization that supports state campaign finance reform.