Campaigns Will Be Reformed When Pigs Fly
by SUSAN F. RASKY
Milwaukee Journal Sentinel, April 6, 2002: A15
The headlines called it the most sweeping overhaul of
campaign finance laws since Watergate. Editorial writers rhapsodized that it would sever
the link between federal officeholders and the raising of huge, unlimited sums from rich
individuals, corporations and unions. And when the Senate finally sent it to President
Bush for his signature, its chief sponsor, flush with the praise of his Capitol Hill
colleagues and an almost fawning political press corps, declared that this newest
installment of campaign finance reform would take about $500 million of "soft
money" out of political campaigns.
Maybe it will cure baldness, too.
Nothing seduces Washington as much as a reform crusade, especially if the adjective
"bipartisan" can be attached to it. That the substance of the reform is
questionable from the get-go, that it is guaranteed to prompt legal challenges, that it
ultimately amounts to far less than the ardent reformers once promised, is beside the
point. What matters, as any accomplished storyteller knows, is the crusade itself. Long
and difficult are good. Better still is an aura of struggle against sinister forces --
organized labor, big business, special interests. Not just soft money but sewer money in
the overheated rhetoric of one East Coast editorial page. Add a charismatic leader who
prevails against all odds -- in this case, maverick Republican senator and chief Bush
nemesis John McCain of Arizona -- and the plot is obvious.
Straight-talking Vietnam War hero battles sewer money. It's almost mythic.
In the final telling, that campaign finance story -- as opposed to the messier one
explaining what soft money really is and how little about it will actually change under
the new law -- became irresistible to members of Congress and to Washington insiders who
have followed the reform crusade for the past several years.
The most important change in the law actually deals with "hard money,"
substantially raising contribution limits that Congress set for individuals in 1974. Hard
money contributions are subject to strict reporting requirements and are easily traceable,
and their increase will almost certainly benefit Bush in his re-election campaign.
The president underscored the splendid absurdity of what the reformers ultimately
embraced. He signed the legislation without cameras or ceremony, then immediately flew off
to raise $3.5 million in behalf of GOP candidates in the South, a sizable chunk of which
was soft money. Since the law won't take effect until after the November election,
collecting that soft money is perfectly legal.
And with some relatively simple accounting and organizational changes for political
activists, collecting it will also be perfectly legal once the law kicks in. That will be
true even if the U.S. Supreme Court upholds the dubious constitutionality of provisions
that ban certain types of political advertising within 30 days of a primary or 60 days of
a general election.
But the new law specifically bans soft money contributions to national political parties,
so how could that be? Contemplate what attorney Steve Lucas and others call the
"shadow party." Lucas is a campaign finance expert at a Republican political law
firm. In fairly short order, he expects that both the Republican and Democratic parties
will be spinning off what amount to soft money subsidiaries, entities that will be able to
collect unlimited sums from corporations, unions and wealthy individuals and then dole the
money out, as the parties themselves have been able to until now, for either issue
advocacy or independent expenditures in behalf of candidates.
Issue advocacy is the term of art for political advertisements, most commonly TV
commercials, that stop just short of saying vote for or against a particular officeholder.
"Tell Congressman John Doe you don't approve of federal budget boondoggles" is
an example of the type of ad that might air in the House member's district around election
time -- or, perhaps, with the appropriate name adaptations, in the districts of a dozen
House members targeted by the national party.
Independent expenditures are made expressly in behalf of a particular candidate, but they
cannot be coordinated with the candidate's campaign. An example: "Vote for Jane
Smith, the candidate who cares about clean air and water."
Both types of political communication are already being used by politically active
interest groups such as the Sierra Club or the National Rifle Association. And the new law
may lead to more such activity by these groups, financed with soft money.
But the shadow parties Lucas describes are another animal altogether. On paper, they would
look something like the interest groups, which for tax purposes are generally organized as
non-profits under Section 501(c)(4) of the Internal Revenue Code. In reality, they would
operate with the know-how, sophistication and unofficial blessing of the national
political parties, although under the new law they would be prohibited from coordinating
with any candidates or the national and state political parties.
So why not the "Friends of Republicans Club," headed by former Republican
National Committee chairman Haley Barbour? Or the "Friends of Democrats Club,"
headed by Charles Manatt, former chairman of the Democratic National Committee?
The way Lucas reads the new law, shadow parties could probably maintain under the same
legal roof separate bank accounts to handle their 501(c)(4) issue advocacy and their more
explicit, non-profit political activity covered by Section 527 of the tax code. Names of
individual soft money donors would have to be disclosed to the Internal Revenue Service
for the 527 accounts, but donors to the issue advocacy account could likely still hide
behind such meaningless labels as "Citizens for Good Government."
In other words, almost nothing about soft money -- which the public has been told is the
rotting core of democracy -- actually changes.
Even the ban on federal candidates acting as soft money fund-raisers -- the
"solution" to the much-proclaimed problem of the appearance of quid pro quo and
impropriety -- turns out to be pretty flimsy. Nothing in the new law prevents a federal
candidate or officeholder from being the keynote speaker at a fund-raising event for a
shadow party (or interest group).
True, the candidate or officeholder cannot directly solicit funds, but nothing prevents
said candidate from having a private meet-and-greet with the biggest of the big donors
before the main event or from being chatted up about a donor's legislative wish list.
Since they can't talk about political money, what else are they going to speak privately
about, except the very thing we regard as a conflict of interest, Lucas observes with some
amusement.
At a law firm that handles political lawyering for Democrats, veteran attorney Joseph
Remcho sees much the same scenario of shadow parties replacing the national parties as
vehicles for collecting and dispensing soft money. "The new law is one more step in
making individual candidates less accountable," he says. "There is no way you
keep the money out of politics. You are simply pushing it to private entities."
It's funny, Remcho adds, "We think it's perfectly OK to spend $1 billion to see
'Titanic,' but to spend $500 million on core political speech is somehow bad, because
people have been told there is too much money in politics."
That perception about money and politics, indeed about politics in general, isn't likely
to improve in a system where political parties are replaced by elite fund-raising circles
operating with minimal obligation to ordinary voters. It may actually be the biggest
overhaul of the campaign finance system in a generation, but hardly one anybody should be
proud of.