Campaign Finance Legislation in the U.S.
I accept the point made by Wonkette: "But, omigod, how can anything involving so much money be so boring? And confusing, too! By the looks of things, campaign donations follow the same course of the Kennedy assassination 'magic' bullet."
Nevertheless, I did my best to cover the December Supreme Court case, McConnell v. FEC, in my American Con law class last week. Hey, it's my job!
I tried to finish by giving a sense of where the new loopholes are. My guide, as is so often the case now, was Mickey Kaus, who actually says he is not too worried about the McCain-Feingold law, now upheld by the SC, because he's sure loopholes will be found and used by Americans exercising their First Amendment rights.
I would only add: in the process, many lawyers will get rich.
Here's how I understand it. "Hard" money rules set up a barrier between corporations, labour unions, and individuals, on the one hand, and candidates, campaigns and parties on the other. Money can only flow from one side to the other by following rigid rules on the amount of contributions, total annual contributions, and how money is spent.
The big loophole before McCain-Feingold was "soft" money; supposedly for state and local races, but in fact federal candidates could raise it, advise donors as to whom to give it to, and direct the spending of it, all with none of the hard money rules having an effect. Clinton and Gore became leaders in raising soft money in 1996, but they weren't alone. One ludicrous detail was that soft money was supposed to be used for issue ads, not ads that endorsed a candidate. Many so-called issue ads, however, supported a candidate more subtly and hence effectively than the direct or "express advocacy" ads did.
So the new law is intended to plug these loopholes, and the SC has upheld the attempt to do so. One interesting result: even in the caucuses and primaries that are already underway: if a candidate directs or coordinates a negative ad about an opponent (regardless of where exactly the money comes from?), the sponsoring candidate must appear and say: "I approved this ad." The thinking is that they will be less willing to get really nasty if they have to take personal responsibility. Would the famous "Willie Horton" ads put on by NCPAC be outlawed? I don't think so, unless they were clearly "coordinated" with the Bush Senior campaign.
Question: in what way will people with strong views, especially those with money, be able to organize and direct the money to support candidates and campaigns of their choice? In other words, where are the loopholes?
Kaus (supplemented by other readings) suggests (see just above Wednesday, Dec. 10):
1. A group probably has to be unincorporated--not a corporation or a labour union. (If they are incorporated they are prevented from running last-minute issue ads during a campaign that criticize or praise candidates by name).
2. Unincorporated non-profit groups will probably become vehicles for independent political advertising. The court said that such groups, unlike incorporated groups such as the Sierra Club and National Rifle Association, "remain free to raise soft money to fund voter registration, [get out the vote] activities, mailings, and broadcast advertising." (Washington Post Dec. 11). Anthony Kennedy said, in dissent, that an incorporated environmental group would not be allowed to run an ad, within sixty days of an election, criticizing a specific Congressman for a vote on logging--unless the group formed a PAC (see below).
3. One example might be "527" groups or committees, named after a section in the U.S. tax code. These groups might be able to gather and spend unlimited contributions.
4. It may even be possible that "some especially pure political non-profits will still be allowed to incorporate, because the Court apparently left open a loophole created for such corporations in the MCFL case...."
5. The political parties--"particularly the Democratic National Committee, which has long relied heavily on soft money--are likely to suffer." Their ability to both raise and spend money will be constrained.
"Republicans have traditionally had far more success than Democrats in raising 'hard money'--donations of up to $2,000 for a candidate in an election and $25,000 for a party each year--and the Washington Post expects the decision to seal in place the Republican Party's fundraising advantage." (Kaus Dec. 11). I would just add: the vote for the legislation (60-40) was heavily Democrat; against was heavily Republican. So politicians don't simply vote according to their financial interests? So much for what the Court tendentiously calls "the appearance of corruption."
(President Bush has raised $200 million--apparently all "hard" money; no Democrat has raised nearly that much).
6. Independent groups such as 527s would be a wild card. The most successful groups at fund-raising, while loyal to a party, may not be exactly in sync with that party's nominee. Does this simply mean the candidate will be more free of major fund-raisers (as sponsors of the bill, the Court majority and good government types presumably want)? Or will it force the nominee to publicly state a disagreement with ads or messages that clearly come from the nominee's own party? To spend money countering this not-quite-on message? On the other hand, if the two (nominee and "independent" fund-raising group) start to make sure their messages coincide, even as to timing, is this "coordination," hence illegal? This is where the question comes up again: wouldn't they be simply exercising their First Amendment rights? (See Kaus December 25).
7. Some real-world examples. Washington Post, Dec. 14: "New pro-Democratic organizations such as America Coming Together (ACT), Voices for Working Families (VWF), America Votes and the Media Fund [run by Harold Ickes, former Clinton staffer] have stepped in this year to attempt to fill the vacuum created by the soft money ban. These groups are accepting large contributions from labor unions that the parties are prohibited from accepting. [As I understand it, labour unions are allowed to donate to Political Action Committees (PACs), which can donate to parties, subject to strict rules including disclosure of the name of every donor. There are many reasons why individuals might prefer not to be named in public, and why this requirement might appear as an unconstitutional limit on their right to be heard]. Most are explicitly opposed to President Bush." Some Republican and other groups claim these pro-Democratic groups are violating federal law and FEC regulations by funding partisan activities, not simply "political participation" activities such as voter registration.
8. Nat Hentoff has complained in the Village Voice (Jan. 15) that wealthy individuals are as free as ever to "spend any amount, at any time, from their personal funds, to advertise opposition to, or support of, any candidate in a national election--provided they do not contribute those funds directly to a political party or candidate." This is what George Soros is intending to do in order to contribute to the defeat of G.W. Bush--but he will use 527s as well.
9. The Open Society Institute (and Soros Foundations Network), funded by "George Soros and Soros family philanthropies" says on their website that they have funded organizations including "Public Campaign, Common Cause Education Fund, Democracy 21," and others. They also funded factual research to support the legal defence of the McCain-Feingold legislation. The OSI says the new law restricts the activities of large individual contributors such as Mr. Soros. "Before the new law, such donors could, and did, contribute millions of dollars to Republican and Democratic committees in support of candidates for federal office. Before the new law, such donors could, and did, contribute to organizations that ran advertisements in the weeks before the election, naming candidates for federal office and criticizing or praising them."
"Under the [new law] large contributions can no longer be made to these party comittees or to fund ads that mention candidates in the heat of an election. Nor can large donors or the groups they fund coordinate in any way with candidates or political parties. This is intended to reduce the influence of large contributors by limiting their role to efforts that focus exclusively on issues or seek to maximize voter participation in the election."
There it is again--the reference to issues, as if support for a cause is not likely to be seen--at once--as support for one candidate, and/or criticism of another. That has always been the "loophole" created by "issue" ads.
10. The New York Times, Jan. 16, has the debate expanding on two fronts. On the one hand, Republicans in Congress are threatening to investigate pro-Democrat "527" groups to see if their activities--especially spending on ads--are undermining or violating the new law. Representative Bob Ney, an Ohio Republican who is Chairman of the Committee on House Administration, has written to representatives of some groups asking that they attend a hearing. They have declined, so he is at least vaguely threatening to subpoena them and force them to appear. This article mentions the goup Voices for Working Families, and says there are very few Republican groups of this kind that are raising significant money. On a blog called Washington Dispatch (Jan. 15), Frank Salvato mentions ACT and MoveOn.org, which has been closely linked to Howard Dean.
11. The Times also mentions that the FEC has announced that it will consider new regulations "that could determine whether so-called 527 committees can continue to raise and spend millions in unlimited soft money contributions from companies, labor unions and wealthy donors."
12. Finally, the good old IRS is involved as well. NewsMax.com, Jan. 17: A new ruling has been issued: "Under the Internal Revenue Code, social welfare organizations, unions and trade associations generally are permitted to engage in advocacy or lobbying related to their exempt purposes. However, they may engage in only limited political campaign activity."
Supposedly, a communication that identifies a candidate for public office, during a campaign, and so on, is forbidden for tax-exempt organizations. (Such as 527s?) The Gun Owners of America are cited to the effect that "the new rule will have a bigger chilling effect on political speech than the McCain-Feingold law." (See on this Jacob Sollum in Hit and Run).
13. Media corporations are pretty well exempt from all restrictions on what they can say, and when. The NRA is supposedly considering purchasing a media corporation.
Update Feb. 14: More from Kaus:
Feb. 9: linking to Jake Tapper: "Jake Tapper has another pay-and-play Kerry special interest story in which there is absolutely no quid pro quo. ... Alas, it took this particular special interest more than a year after Kerry did it a favor to organize a fundraiser for him, rendering the scandal potential limited. ... But Tapper also has a very clear explanation, at the end of his piece, of why Kerry's ostentatious refusal to take PAC money is another phony bit of posturing. (Kerry accepts 'bundled' contributions from CEOs, a much more lucrative policy. There's no dollar limit to bundling--in this case, a high-tech CEO funneled Kerry more than $100,000 by gathering smaller individual donations. PAC donations, in contrast, are limited to $5,000. Who needs them?)."
Then, Feb. 11:
"Shrum v. Ickes: Their rivalry has now become a big deal. ... One of them decides what Kerry's deepest beliefs are! The other will control $100 million in independent anti-Bush advertising and is resisting Shrum's cookie-cutter Gore-rerun populism. ... Ickes has become a powerful interest that stands in Shrum's way! ... John Ellis is all over the story, and correctly asks if the NYT will report it or suppress it. ... P.S.: The job of negotiating an Ickes-Shrum truce is obviously Bill Clinton's, although it could be tricky if Clinton, as mediator, gets accused of 'coordinating' Ickes' allegedly 'independent' ad campaign with Shrum's official campaign. But presumably Clinton can,without violating campaign finance laws, at least tell Ickes to shut up.(Clinton may well already have done that.) ... P.P.S.: The New York Observer's Ben Smith started this. ... P.P.P.S.: I claim to have foreseen the Ickes vs. campaign tension--but I thought it would be between Ickes and the Dean campaign. ... The pro-McCain-Feingold implication stands, however--Kerry may not 'owe' contributors to Ickes' fund the way he 'owes' contributors to his own campaign. (Indeed, he may resent Ickes' backers if Ickes keeps sniping at his 'populist' strategy.) So even if big contributors have found a way around McCain-Feingold's soft-money restrictions, the corrupting consequences are not the same."
UPDATE Feb. 27: Kaus is still on this. (Scroll down to Thur. Feb. 19: "Psst! Isn't the celebrated, goo-goo 'Stand by Your Ad' provision of the McCain-Feingold law, the one that's had such an impact discouraging negative spots in the current campaign, transparently ... you know ... unconstitutional?") See also here. (Scroll down to Tuesday, Feb. 24, beginning, "Do not leave your dogma in the karma unattended!". Also ) Now he says his biggest concern is the "stand by your ad" provision mentioned above. A candidate has to appear and/or say: "I support this ad." The result has been a spate of bland ads; but more seriously, Kaus says the First Amendment is being violated when candidates are told something they must say in an ad.
George Will has also weighed in. As he points out, the unelected FEC now has more power than ever to say what actual candidates, winning actual votes from the sovereign people, may and may not do. In their first big decision since McConnell, the FEC has simply muddied the waters. Leaders of 527s are convinced they can do what they want; fans of McCain-Feingold are convinced the activities of 527s are properly restricted, especially insofar as they are "coordinated" with an actual campaign.
Update March 5: David Tell in the Weekly Standard tries again to explain it all. He begins by admitting that the one big FEC decision so far can be interpreted as either favouring or restricting the 527s. His own view, however, is that the new legislation will hurt the 527s--hence the Democrats, and help the Republicans, sooner rather than later. In fact he seems to predict there will be enforcement measures against some of the major anti-Bush organizations.
Discussion on Tapped (Nick Confessore) and Eschaton (Atrios): Atrios picks up on Nick Confessore's concern that Republicans have sources of soft money that have not been publicized as much as the Democratic ones.
|
