Campaign Finance Reform
Campaign finance reform is the common term for the political effort in the United States to change the involvement of money in politics, primarily in political campaigns.
Although attempts to regulate campaign finance by legislation date back to 1867, the first successful attempts nationally to regulate and enforce campaign finance originated in the 1970s. The Federal Election Campaign Act (FECA) of 1971 required candidates to disclose sources of campaign contributions and campaign expenditure. It was amended in 1974 with the introduction of legal limits on contributions, and creation of the Federal Election Commission (FEC). It attempted to restrict the influence of wealthy individuals by limiting individual donations to $1000 and donations by Political Action Committees (PACs) to $5000. These specific election donations are known as ‘Hard money’. The Bipartisan Campaign Reform Act (BCRA) of 2002, also known as "McCain-Feingold," after its sponsors, is the most recent major federal law on campaign finance, which revised some of the legal limits of expenditure set in 1974, and prohibited unregulated contributions (called "soft money") to national political parties. ‘Soft money’ also refers to funds spent by independent organizations that do not specifically advocate the election or defeat of candidates, and are not contributed directly to candidate campaigns.
FECA and the Watergate amendments
All of these efforts were largely ineffective, easily circumvented and rarely enforced. In 1971, however, Congress passed the Federal Election Campaign Act, requiring broad disclosure of campaign finance. In 1974, fueled by public reaction to the Watergate Scandal, Congress passed amendments to the Act establishing a comprehensive system of regulation and enforcement, including public financing of presidential campaigns and creation of a central enforcement agency, the Federal Election Commission. Other provisions included strict limits on contributions to campaigns and expenditures by campaigns, individuals, and other political groups.
The new law was immediately challenged on First Amendment grounds in Federal Court, resulting in a landmark Supreme Court decision, Buckley v. Valeo. The Buckley decision recognized that regulation burdened the rights of free speech and assembly, but held that the compelling government interest in preventing corruption or its appearance justified some restrictions on free speech. The resulting decision upheld contribution limits, so long as they were not so low as to prevent campaigns from amassing the resources necessary to communicate effectively with the public, disclosure requirements, and voluntary public financing. It found limits on expenditures to be unconstitutional infringements on free speech. It also restricted the reach of the law to speech by candidates and parties, that is, groups established for the purpose of electing candidates, and to communications that expressly advocated the election or defeat of a candidate, using phrases such as "vote for," "vote against," "support," or "defeat."
Bipartisan Campaign Reform Act of 2002
The Congress passed the Bipartisan Campaign Reform Act (BCRA), also called the McCain-Feingold bill after its chief sponsors, John McCain and Russ Feingold. Final passage in the Senate came after supporters mustered the bare minimum of 60 votes needed to shut off debate. The bill passed the Senate, 60-40 on March 20, 2002, and was signed into law by President Bush on March 27, 2002. In signing the law, Bush expressed concerns about the constitutionality of parts of the legislation but concluded, "I believe that this legislation, although far from perfect, will improve the current financing system for Federal campaigns... Taken as a whole, this bill improves the current system of financing for Federal campaigns, and therefore I have signed it into law." The bill was the first significant overhaul of federal campaign finance laws since the post-Watergate scandal era.
The BCRA was a mixed bag for those who wanted to remove the money from politics. It eliminated all soft money donations to the national party committees--but it also doubled the contribution limit of hard money, from $1,000 to $2,000 per election cycle, with a built-in increase for inflation. In addition, the bill aimed to curtail ads by non-party organizations by banning the use of corporate or union money to pay for 'electioneering communications,' a term defined as broadcast advertising that identifies a federal candidate within 30 days of a primary or nominating convention, or 60 days of a general election. This provision of McCain-Feingold, sponsored by Maine Republican Olympia Snowe and Vermont Independent James Jeffords, as introduced applied only to for-profit corporations, but was extended to incorporated, non-profit issue organizations, such as the Environmental Defense Fund or the National Rifle Association, as part of the 'Wellstone Amendment', sponsored by Senator Paul Wellstone.
The law was challenged as unconstitutional by groups and individuals including the California State Democratic Party and the National Rifle Association. After moving through lower courts, in September 2003, the U.S. Supreme Court heard oral arguments in the case, McConnell v. FEC. On Wednesday, December 10, 2003, the Supreme Court issued a ruling that upheld the key provisions of McCain-Feingold; the vote on the court was 5 to 4.
Since then campaign finance limitations continue to be regulated in the Courts. In an interesting case, in 2005 in Washington State, Thurston County Judge Christopher Wickham ruled that media articles and segments were considered in-kind contributions under state law. The heart of the matter focused on the I-912 campaign to repeal a fuel tax, and specifically two broadcasters for Seattle conservative talker KVI. Judge Wickham's ruling was eventually overturned on appeal in April of 2007, with the Washington Supreme Court holding that on-air commentary was not covered by the State's campaign finance laws. (No New Gas Tax v. San Juan County).
In 2006, the United States Supreme Court issued two decisions on campaign finance. In Wisconsin Right to Life v. Federal Election Commission, it held that certain advertisements might be constitutionally entitled to an exception from the 'electioneering communications' provisions of McCain-Feingold limiting broadcast ads that merely mention a federal candidate within 60 days of an election. On remand, a lower court then held that certain ads aired by Wisconsin Right to Life in fact merited such an exception. The Federal Election Commission appealed that decision, and in June 2007, the Supreme Court held in favor of Wisconsin Right to Life. In an opinion by Chief Justice John Roberts, the Court declined to overturn the electioneering communications limits in their entirety, but established a broad exemption for any ad that could have a reasonable interpretation as an ad about legislative issues. Indicating the new Court majority's temperament, Roberts' opinion declares flatly, "Enough is enough."
Also in 2006, the Supreme Court held that a Vermont law imposing mandatory limits on spending was unconstitutional, under the precedent of Buckley v. Valeo. In that case, Randall v. Sorrell, the Court also struck down Vermont's contribution limits as unconstitutionally low, the first time that the Court had ever struck down a contribution limit.
Criticisms of campaign finance reform
In addition to criticisms grounded in the First Amendment, campaign finance reform is often criticized for its unintended consequences, including less competitive elections, the propagation of extremely complicated instructions, and the discouragement of political giving.
Most opponents claim that CFR infringes on free speech and violates First Amendment rights. The argument is that the purpose of the free speech clause of the First Amendment is the guarantee that people have the right to publish their political views. Under this view, when the laws prohibit people from advocating for or against political candidates by restricting the content of political advertising, the laws are in conflict with the constitutional guarantee of freedom of political speech.
Many opponents have charged that changes to campaign finance laws can produce unintended harmful consequences. For example, many political scientists say that the rise of PACs helped hasten the weakening of political parties in the United States, as candidates grew more entrepreneurial in their fundraising and gained access to campaign finance outside of party channels; opponents have noted (and decried) this unexpected change which has resulted in unusually long periods of fundraising and proportionally less time for campaigning. Another example is that disclosure requirements may lead individuals to avoid giving to challengers, and increase giving to incumbents, as individual large donors might wish to avoid angering the current office-holder. Restrictions on giving and spending also seem to benefit incumbents, further entrenching them from effective challenge.
Others argue that money can never be separated from political influence. This has become painfully true with the influence and power exhibited in the 2004 elections by 527s such as Swift Boat Veterans for Truth and Moveon.org. These two groups, among others, spent nearly $400 million on influencing the most recent elections, namely by heavily criticizing, respectively Sen. John Kerry and Pres. George W. Bush.
Critics of CFR form a broad coalition, as both conservative interest groups and liberal interest groups are vehemently opposed to CFR.
In addition, many opponents point out that campaign finance regulations are excessively complicated. This, they say, prevents ordinary citizens from participating in the election process (especially from running for office) and limits participation to a wealthy elite who can afford the legal apparatus necessary to run. In modern campaigns, legal and accounting expenses are significant percentage of the overall budget. Opponents also claim that excessively complicated rules discourage participation more generally by dissuading people from even attempting political work or activism.
Still, others point to the lack of systematic evidence that campaign contributions affect legislators' votes. In this regard, studies by political scientists have found that contributions are generally motivated by ideology and social connections.
Current proposals for reform
Despite the passage of McCain Feingold, reformers continue to promote a large number of new reforms, including restrictions on independent citizens' groups, creation of a more powerful federal enforcement agency, and government or public financing of campaigns.
Concerns about public financing
Supporters of public financing argue that US democracy lacks fairness because wealthy individuals and special interests have far greater political speech because of the contributions far larger than those of ordinary citizens that they can afford to make. They say that the only way to end the corruptive effects of large private contributions from politics is to have the government pay for campaigns.
Supporters of private donations argue that this is an unrealistic goal and say that these are one of the most common means for ordinary citizens to participate in politics. They also say that government subsidization of political speech is contrary to the spirit of democracy and/or freedom.
Many others argue that providing public subsidies for campaigns is simply unnecessary government spending. Although the actual dollar amount is not high (federal elections cost approximately $5B in 2004  when compared to the total budget of the United States at around $3 trillion, critics argue that citizens should not be forced to subsidize with their tax dollars candidates and political speech with which they disagree, or that offends them. Supporters respond that voters shouldn't hear mostly from one partisan side simply because that side is better at raising money.
In some places in which the laws were designed to favor the major parties, such as Connecticut, public subsidies have also faced criticism from minor parties, who often face large hurdles on access to public funds that don't trouble major-party candidates. Other laws, such as those in Arizona and Maine, are designed so that the strongest candidates can qualify for funds regardless of party, while still assuring that fringe candidates won't receive public funds. The proposed Clean Money law in California, defeated at the polls in 2006, would have treated major and minor parties differently but not to the same extent as Connecticut.
Some claim that public financing has already corrupted the political process, with big government advocates buying voters' votes with promises of increases in entitlement programs, welfare, and pork barrel spending. Supporters say that when there's a level playing field, as they claim public funding provides, American voters can be trusted to make the "right" choices, and that elected officials will be accountable only to the voters, because the government paid for their campaigns, not private interests.
One method allows the candidates to raise funds from private donors, but provides matching funds for the first chunk of donations. For instance, the government might "match" the first $250 of every donation. A system like this is currently in place in the U.S. presidential primaries.
Another method, which supporters call "Clean Money, Clean Elections", gives each candidate who chooses to participate a certain, set amount of money. In order to qualify for this money, the candidates must collect a specified number of signatures and small (usually $5) contributions. The candidates are NOT allowed to accept outside donations or to use their own personal money if they receive this public funding. This procedure has been in place in races for all statewide and legislative offices in Arizona and Maine since 2000. Connecticut passed a Clean Elections law in 2005, along with the cities of Portland, Oregon and Albuquerque, New Mexico. 69% of the voters in Albuquerque voted Yes to Clean Elections.
Many other states (such as New Jersey) have some form of limited financial assistance for candidates. Wisconsin and Minnesota have had partial public funding since the 1970s, but the systems have largely fallen into desuetude.
A clause in the Bipartisan Campaign Reform Act of 2002 ("McCain-Feingold") required the nonpartisan General Accounting Office to conduct a study of Clean Elections programs in Arizona and Maine. Although the ensuing report, issued in May of 2003, cautioned that "it is too early to precisely draw causal linkages to resulting changes, if any, involving voter choice, electoral competition, interest group influence, campaign spending, and voter participation," in none of these categories did the study GAO find positive results from Clean Elections systems. ()
- Center for Competitive Politics
- Campaign Finance Institute
- Democracy Matters:Organizing College Campuses
- Democracy by Lottery and Vote: Reducing the Need for Campaigns
- California Clean Money Campaign (www.CAclean.org)
- REAL Campaign Reform.org
- Open Secrets
- Public Citizen's Campaign Finance Reform site
- Buck Buckley Campaign
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