Open Forum

A campaign finance system should serve two goals: prevent the untoward influence of accumulated wealth, such as corporate wealth, and encourage effective participation by individual citizens, particularly at the grassroots level. Reform has traditionally utilized two methods to achieve these goals: limitations on contributions and expenditures and public disclosure of the use of money in politics.

Campaign finance reform has been desperately needed since the U.S. Supreme Court reviewed post-Watergate reform in Buckley v. Valeo. Buckley struck down limits on campaign expenditures, but upheld limits on contributions. The result has been nearly three decades of federal candidates raising money in relatively small amounts to feed an increasingly insatiable demand for expenditures, chiefly for paid media. Meanwhile, the political parties were free to raise money in larger amounts, sometimes derisively referred to as soft money (a term without a consistent meaning, aside from “bad†money).

The recent McCain-Feingold legislation, like the uneven Buckley decision, purports to ban soft money at a national level and seeks to close perceived loopholes at the local level. Unfortunately, the law has not diminished the influence of big money in politics and has made grassroots participation extremely difficult. The effects of the law could very well be the permanent decline of political parties and the untraceable dispersal of political money.

County parties are the frontline of grassroots politics. We answer calls from citizens wanting a yard sign, asking where to vote, or thinking about running for office. In Texas, county parties have substantial obligations in running primary elections and assisting in general elections. In a large county like Dallas, we have to find several hundred competent people willing to work for one day to staff the polls on Election Day. Although county parties receive state funding for these election duties, it is not enough to staff the office year-round to answer the most common questions from citizens: How do I get involved? How do I make a difference?

County parties also coordinate local campaigns for judge, sheriff, tax assessor-collector, county commissioners, and other local offices. We recruit and assist a “farm team†of politicians from whose ranks future state officeholders may rise. While congressmen are on the ballot every general election, federal races are rarely so in play that a county party’s federal efforts outweigh the local ones. This year, most of my job as County Chair consists of helping to elect judges, a sheriff, a tax assessor-collector, and maybe a state representative or two. But McCain-Feingold doesn’t view it that way.

Historically, urban county parties have segregated monies into four different accounts, depending on the source and amounts of contributions:

Primary— funded by candidate filing fees and the state, strictly limited to primary expenses

Administrative— corporate and union funds, strictly limited for use on certain “administrative†expenses such as rent and computer equipment, and spent only during times of the year distant from the general election

State— large contributions and contributions from the campaign accounts of state and local elected officials

Federal (also known as hard money)— smaller contributions and contributions from donors who have not “maxed out†federally by giving the cumulative, individual limit in federal contributions.

Before McCain-Feingold, county parties financed get-out-the-vote (GOTV) activities with a combination of state and federal money. Of every dollar spent, about 75 percent came from the state account and about 25 percent from the federal account. This ratio makes sense: while almost all of the county party’s efforts were focused on local candidates, if the presidential nominee or a local congressman was on the ballot, some efforts assisted the federal candidate.

McCain-Feingold has created a new category of money and a new method of matching federal funds. Parties now have “Levin†funds, named after Senator Carl Levin (D-Michigan), who carried the amendment to McCain-Feingold that created the category. Levin funds are contributions from individuals who have already reached their individual federal limit or from partnerships including such individuals.

McCain-Feingold now requires that federal money be matched with Levin, rather than state funds, leaving no real use for state funds during a general election. Moreover, if a staff member spends more than 25 percent of his or her time in a given month on “election activities†(imagine that) then his or her salary must be paid with all federal hard money. Salaries are a major expense for county parties. As a result, instead of about 25 percent of our expenditures being financed by federal money, the ratio this fall may be as high as 85 percent.

To determine what kind of money should pay for expenses, we have to analyze each expense. If the expense is a paycheck, we have to keep and review timesheets to see if the employee spent too much time on “election activities.†(McCain-Feingold deems all election activities, such as voter identification and GOTV, as federal election activities.) If the expense is for voter contact, we have to determine what was said to the voter. If a federal candidate was mentioned, we must use 100 percent federal money. If only local candidates were mentioned, we can use a mix of federal and Levin funds. Imagine telling an enthusiastic canvas worker that she cannot utter the words “Kerry-Edwards.†Effectively policing our own grassroots workers is practically impossible. In short, state and local parties have been federalized. Traditionally, local officeholders pooled their money in the county party to fund a coordinated GOTV campaign. McCain-Feingold relies on the false presumptions that all state money is bad, soft money and that all “election activities†are federal. Consequently, that state money is now of little use to us.

McCain-Feingold also frustrates by complexity. Campaign finance law is inherently muddled. The statutes and regulations leave many questions unanswered. The law is always changing. There is very little black and white in the law and lots of gray. Even before McCain-Feingold, complying with the law often required an educated guess. McCain-Feingold has created whole new swaths of gray.

With this complexity comes a price for compliance. To be safe, an urban county party needs a full-time staffer concentrating on accounting and compliance—but that’s after we figure out what the law probably is. The Dallas County Democratic Party has been fortunate to have two volunteer compliance lawyers. Together they have donated nearly $30,000 in legal services—more than two months of expenses for the party. If they had not donated their time, the party could not have afforded their services. This high cost of compliance does not promote true grassroots participation.

To make matters worse, political litigation has now become partisan sport. In my first two years as county chair, I went through three lawsuits. Now I am facing the first election cycle with McCain-Feingold and with one of the most hotly contested congressional races in the country—the battle between Congressmen Martin Frost and Pete Sessions in Dallas County. No matter how hard we try to comply with the law, a court may ultimately find after-the-fact violations as new judicial interpretation of the statutes are issued. The inevitable mistakes are likely to serve as fodder for a politically motivated Federal Election Commission (FEC) complaint or lawsuit directed as much at Martin Frost as at any actual wrongdoing by the local party. Such potential, and perhaps unavoidable, legal liability for a volunteer county chair does not encourage political participation at the grassroots.

McCain-Feingold also gags party officials. We can no longer safely talk to nonprofit civic organizations. At a 2002 training session on McCain-Feingold’s new rules, I listened to a 30-minute discussion on whether party officials such as myself could even serve on the boards of non-election-related nonprofits—as though something evil would come from my serving on the board of the Housing Crisis Center.

On the national scene, there has already been much talk of “527sâ€â€”nonprofit, political organizations nicknamed after the section of the federal tax code that authorizes them. The ban on any soft money nationally has broken the Democratic National Committee into an alphabet soup of 527s, each serving a specialized function. Moving America Forward (MAF) registers Latino voters in swing states. American Coming Together (ACT) mobilizes voters in swing states. The New Democratic Network (NDW) promotes a centrist Democratic message. And MoveOn.Org puts out message in swing states and over the Internet. Entrepreneurial fund-raising is the game. Whoever can raise the money calls the shots. Rather than having institutional coordination via the national parties, we have a wild west of 527s. Extreme capitalism meets politics.

With the proliferation of 527s, following the money has become more difficult. Just reviewing the Democratic Party’s compliance report will not tell a citizen even a small portion of the money story. The limitations on parties have driven the money elsewhere. The dispersal of political money diminishes disclosure and transparency in the political process, thwarting the goal of campaign finance reform.

National, state, and local political parties are subject to oversight by national delegates, executive committee members, and precinct chairs. 527s concentrate political power in the hands of the few. A citizen seeking an answer to the question “how do I make a difference,†should no longer ask the parties. We have been gagged and hog-tied by regulations and limitations. McCain-Feingold would have better served the citizenry by learning from the failed limitations experiment of Buckley and casting more light on the electoral process via disclosure and transparency.

Susan Hays is the chair of the Dallas County Democratic Party. Although a lawyer, she knows that a lawyer who represents herself has a fool for a client.