Policy Perspective 1000

February, 1997

Campaign Finance:
Unprincipled Reforms, Counterproductive Results

Many Oregonians are discouraged by today's shrill political campaigns that grow longer and more expensive. Reformers are set to re-regulate campaigns - especially contributions; but this reflex has already triggered enough harm. Campaign rules are important, but they have little effect on the greater problem of money in politics. The traditional campaign finance reform debate is a distraction. It diverts attention from the core problem of money in politics: the size, scope and power of government.

The public broadly favors reducing the role of money in politics - but not at the expense of the right to free speech protected by the First Amendment.

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances." - The First Amendment to the U.S. Constitution

Thomas Jefferson offered valuable guidance to campaign reformers when he voiced a sentiment widely-held to this day:

"To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical."

This Policy Insight advances three principles for campaign finance reform. First, all contributions should be voluntary. Second, campaign finance limits and disclosure should be voluntary; and disclosure information should be accurate and readily available to the public. Finally, reducing the role of money in politics cannot be accomplished by campaign regulations. It depends on reducing the size, scope and power of government.

Principle #1: All contributions should be voluntary.

Public subsidy. Taxpayer-subsidized campaigns amount to compelled contributions for propagating opinions. This method of financing political speech flat-out fails the Jefferson test and stretches the First Amendment to its breaking point.

Public financing of campaigns is broadly opposed by the public but, like most subsidies, is favored by the political elite. Public financing means every taxpayer is forced to support all candidates who qualify, regardless of their opinions. Conversely, when a donor gives voluntarily, only the candidate whose view the donor supports gets the contribution. (This is a good argument for privatizing party primary elections: many are forced to support that which they oppose.)

Subsidies of any kind serve to further politicize society. In particular, taxpayer-subsidized campaigns put politicians in charge of allocating the money. That contradicts the publicly-shared goal of reducing the importance of money in politics.

Forced Donations. By law, many workers must join a union to keep their jobs. Those unions exact compulsory dues and spend a significant portion of them on union officials' political agenda. Thus, to keep their jobs, workers are often required to support political views with which they disagree. This forced support also flunks the Jefferson test.

Regulated utilities are an example of corporations that owe their existence or well-being to legislated monopolies, concessions, or bureaucratic approval. Such corporations are often among the largest donors to political parties and campaigns. Because the law denies consumers any choice among competitive suppliers of these utilities, the result is the same as a public subsidy for political campaigns.

Unions and corporations should express political advocacy using only the contributions of voluntary donors. In that manner, the volume of their campaign spending would not be driven by the force of government action, and their donations would pass the Jefferson Test.

Principle #2: Voluntary limits, voluntary disclosure.

"Congress shall make no law ... abridging the freedom of speech..."

Campaign restrictions and mandates appear to violate both the letter and spirit of the First Amendment. Reformers who authored the "good government" post-Watergate 1974 amendments to the Federal Election Campaign Act nakedly challenged the First Amendment's broad protection of free speech. While most of the new restrictions were held unconstitutional by the Supreme Court, contribution limits and mandatory disclosures were left standing. Unfortunately, these reforms are the foundation for the extreme restrictions of Oregon Ballot Measure 9, passed in 1994, which the state's Supreme Court wisely overturned in February 1997 on first amendment grounds.

Under the regime of campaign restrictions and disclosure mandates, elections in Oregon and congressional elections in other states are now characterized by shallow, bland candidate campaigns; intractably high reelection rates; dominance by entrenched politicians; and low voter turnout.

Contribution and expenditure limits. Mandatory finance limits benefit incumbents, who have many avenues to gain public attention. Restrictions hurt challengers, who depend more on campaign contributions and expenditures to increase their name recognition and promote their ideas.

Campaign restrictions amount to modified censorship, a form of speech prohibition. Contrary to stated goals, the restrictions have actually driven spending by organized special interests sky high; special interest money has been pushed into the unofficial "black market" where it continues to protect established relationships and arrangements. Due to the campaign limits, soft money and so-called independent expenditures now account for a large share of total campaign spending, both in Oregon and nationwide. Adding new "targeted" campaign restrictions will only accelerate these trends.

Disclosure. Nearly 40 years ago the Supreme Court ruled that mandatory disclosure of financial supporters has a "chilling effect" on rights to free association and free speech. Mandatory disclosure also results in the proliferation of misleading front groups to camouflage true sources of support. Allowing politicians' rules to govern the campaign disclosure process amounts to having the foxes guard the hens. No-one can expect the rules to be fair.

Alternately, by trusting the voters, voluntary campaign finance disclosure is self-policing and self-regulating. If disclosure is important to voters, then candidates may agree among one another on standards. But candidates will be disappointed on Election Day if they have either chosen not to disclose; disclosed with insufficient accuracy or detail; or feasted upon special interest groups' contributions.

Falsified voluntary campaign disclosure should be subject to harsh penalty. Beyond that, government's role should be neutral and generally limited to collecting and providing public access to accurate and timely, voluntarily-disclosed campaign finance data.

Principle #3: The role of money in politics determined by the size, scope and power of government.

Money does not buy elections. Ask President Perot, or President Forbes ... or the tobacco interests that opposed Oregon Ballot Measure 44, the recently passed cigarette tax hike. Money does not corrupt politics: politics corrupts money. When something of value can be granted by politicians instead of earned in the competitive marketplace, all roads lead to the capitol. That's why candidates for high school Class President don't spend $1 million to win election. Class Presidents are not courted by gangs of lobbyists: there is little to offer in the way of legislated pay-backs.

Even the total of all campaign spending does not measure the real growth of money in politics. Election expenditures are insignificant when compared to the value of government subsidies and protections granted to politically connected special interests. The public cost of these favors is not counted as part of election campaigns. More than any campaign factors, they determine the role of money in politics.

The public would not be concerned about the money flowing into election campaigns if politicians did not have the authority to dispense so many favors. The favors come in recognizable forms: pork barrel, log-rolling, omnibus legislation, transition rules for tax changes, and end-of-session sausage-making where "they don't even read the bills".

The growing influence of money in politics is not a result of campaign spending practices. Rather, it is a natural result of the growing size, scope and power of government. Thus, to reduce the role of money in politics requires reducing the size, scope and power of government.

Unprincipled reforms: counterproductive results

Politicians are tempted to disregard the liberty guaranteed in the First Amendment. This tendency was well-understood by the original proponents of the Bill of Rights and the U.S. Constitution. Principled campaign finance reformers need to keep the First Amendment close at hand. These 44 words were placed at the front of the Bill of Rights for good reason.

"Congress shall make no law respecting the establishment of religion ..." - because politicians tend to sanction ideology or a "correct" way of thinking.

"Congress shall make no law ... abridging the freedom of speech, or the press; or the right of the people peaceably to assemble ..." - because politicians tend to sanction censorship.

"Congress shall make no law ... abridging ... the right of the people ... to petition the government for a redress of grievances." - because politicians tend to duck accountability for the harm caused by their abuse of government power.

The First Amendment is not mere words printed on a page. In the U.S. Constitution the people delegate and enumerate government powers. Along with federalism, separation of powers, and checks and balances, this doctrine maximizes the protection of individual (or "civil") rights that are generally reserved for the people. Our founding constitutional principles afford liberty the high regard it deserves. The First Amendment is reinforcement.

Opinion leaders, campaign reform advocates, and even some politicians assert that campaign finance reform will ultimately work, but only if there are enough precisely-targeted restraints. No matter how perverse the results, they continue to attack the First Amendment by pushing for more subsidies for political parties and candidates, and more limits on contributions and expenditures.

Calls for more bad medicine are grounded in blind faith, not sound principles, and willfully disregard reality. Campaign subsidies, restrictions, and mandates repeatedly fail the Jefferson Test and fall short when measured in Court according to the First Amendment. Unprincipled campaign finance reforms have not caused progress toward the publicly-shared goal of reducing the role of money in politics. In fact, government meddling in elections has had the opposite effect.

The misguided reformers say they want to reduce the role of money in politics but they don't mean it. Instead, they use the issue as a convenient means to accomplish their more important end - to increase the size, scope, and power of government. That work is best done by incumbents and insiders protected from challengers and outsiders by unprincipled campaign finance laws.

Conclusion
The outcome of elections should not be preordained by government itself through restrictive campaign rule-making. Elections should be left to voters who have as accurate information as possible about candidates' qualifications, positions, and campaign conduct.

Competitive elections, with free speech and substantive discussion, are the legitimate means for an informed public to cast judgment on candidates. Complicated, arbitrary, and volatile finance rules compromise the neutrality of government and fairness of the election process. They should not be fine-tuned. They should be eliminated.

In defense of the First Amendment former Chief Justice of the U.S. Supreme Court Warren Burger wrote, "Freedom is hazardous, but some restraints are worse." The results of the 20-year experiment with campaign finance reform are in. The evidence is clear: laws that violate the First Amendment and fail the Jefferson test do not produce more fair or more free elections. They only produce less-fair, more expensive campaigns.

Successful campaign reforms will be consistent with the First Amendment and will pass the Jefferson Test. Political contributions will be voluntary. Limits will be voluntary, and accurate campaign finance disclosures will be readily accessible to the public. Reforms that disregard these principles will prove to be as counterproductive as their predecessors. The traditional campaign finance reform debate is a distraction. It diverts attention from the core problem of money in politics: the size, scope and power of government.

Detroit News, column of Nov. 9, 1995, "Money myths fuel faulty campaign finance reform" by Bradley A. Smith

Cato Policy Analysis No. 238, Sept. 13, 1995 Campaign Finance Regulation: Faulty Assumptions and Undemocratic Consequences" by Bradley A. Smith, asst. professor at Capital University Law School in Columbus, Ohio

Testimony of Edward H. Crane President and Chief Executive Officer The Cato Institute Committee on House Oversight U.S. House of Representatives November 16, 1995

Just Because it is Called "Reform" Doesn't Mean It's Progress; Campaign Finance Changes Before Congress Would Make Matters Worse by Bruce Chapman, president of Seattle-based Discovery Institute, and former Washington State Secretary of State and Director of the U.S. Census Bureau.

FECInfo: The non-partisan Federal candidate campaign money page

Letter: Campaign finance reform: Disclose, downsize...

PARLIAMENT OF WHORES A Lone Humorist Attempts to Explain the Entire U.S. Government by P.J. O'Rourke, reviewed by Roy A. Childs, Jr., April 1991

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