The Campaign Finance Limit Illusion:

We Need Public Financing, not Fake Reform

Progressive Populist (March 15, 2002)

By Nathan Newman

The Shays-Meehan campaign finance bill has been called the "Kenny Boy" bill in honor of Ken Lay and the blatant corruption of politics by Enron officials that helped finally overcome GOP leadership opposition to the bill.

The problem is that the bill as written will do very little to change anything and in some ways will make it easier for rich individuals like Ken Lay to dominate the political process.

Federal campaign finance laws tend to focus on the fruitless quest to stop rich people from getting their money into the process, periodically sticking political fingers in the dike of corporate money, only to see new leaks of cash springing out of loopholes that are inevitably left available.

With Shays-Meehan, where the money will soon gush is already obvious. The large soft money checks to the national party committees may disappear, but the same billions of corporate dollars will merely be diverted into multiple rivelets across the national political landscape. In fact, Shays-Meehan took a giant step backward by doubling the individual contributions that can be given to candidates from $1000 to $2000 in both the primary and general election campaigns. Individuals and corporations will also be able to give $10,000 to each of the fifty state party committees.

So how much could Ken Lay contribute under the new rules?

Since husbands and wives can each contribute separately, the Lays could contribute a combined $1 million to fifty state party committees ($20,000 to fifty state organizations), double that if they contribute to both parties to hedge their political bets. And the Lays could contribute a combined $8000 to each of the 535 Congressional and Senate candidates of their choice for their primary and general elections, for a total of $4,280,000 in "hard money" for Congressional campaigns.

Limiting wealthy households to giving "only" $5.28 million per election cycle is reform?

Power in the political process will flow to those who can tap these rich individuals and distribute the multiple $2000 checks to the waiting hands of candidates across the country. Enter Ken Lay again, since his power over policy in the Bush administration came not just from his personal contributions but from his ability to tap other rich folks in and around the Enron enterprise. The Bush campaign last year lined up a whole committee of "Pioneers" who pledged to raise $100,000 in smaller checks from other wealthy individuals. Bush's fundraising Pioneers included not just Ken Lay, but the Arthur Anderson partner who ran the Houston office overseeing Enron who was "relieved of his duties" in January, and included three partners at the law firm of Vinson & Elkins which signed off on Enron's corporate schemes that defrauded its employees and investors.

Now, I don't think there is any way in a democracy to prevent people with money from using their money in the political process. If it's not in big checks, it will be in lots of little checks. If not in direct contributions to candidates, it will be in contributions to parties or political action committees or through independent expenditures or, if worse came to worse, through buying the media itself to support their positions -- see Rupert Murdoch's purchase of the New York Post and creation of Fox News to support his rightwing views. Any attempt to stop corporate money will, rightly, fail on the shoals of the first amendment.

Which doesn't mean progressives have to lose hope on improving our elections. But we have to give up on restricting "bad money" in elections and the campaign spending limit illusion embodied in Shays-Meehan (and its Senate McCain-Feingold equivalent).

Instead, we need to support reforms to increase the presence of "good money" from average working families in elections. The problem with our elections is not that too much is spent on them, since we probably get better information on our choices in soap than the choice in candidates, but that the message is so one-sidedly from the corporate side. We need public financing of legislative elections, but financing that magnifies the voices of working families and alternative voices. The present system of matching funds in Presidential primaries does nothing to increase the influence of small contributors.

One alternative that has been implemented in a number of states is the so-called " Clean Money Campaign Reform" promoted by groups like Public Campaign to fund candidates based not on the amount of money they raise but on the number of small contributors they can muster. Arizona and Maine have already implemented such clean money initiatives with great success and Massachusetts citizens voted in 1998 to do so with a system which awards competitive amounts of financing to any qualifying candidate in exchange for candidates agreeing to accept contributions of no more than $100. In Massachusetts, the law awards funds ranging from $24,000 to run a state legislative race (based on demonstrating support from 200 small contributors) to $2,550,000 to run a governor's race (based on demonstrating support from 6000 small contributors). Incumbent politicians in the state had been refusing to appropriate the needed funds, but the state supreme court has just ordered them to come up with the money, so this year's election may give some unexpected underdogs a real chance at election.

Public Campaign estimates that it would cost about $1.3 billion per election cycle to implement similar system at the national level, a small cost to assure that candidates unbeholden to corporate interests could stand a chance of being elected.

Still, as the Massachusetts experience shows, such systems are still vulnerable to incumbent politicians sabotaging or manipulating the inevitable revisions needed in financing formulas to their own advantage.

A better reform at the national level might be to simply give a credit to every citizen, deducted from their taxes, which could be given by the voter to any political party group or independent organization they wish. Those organizations could then support whatever candidates they choose, on the condition that those candidates could take either the voter voucher money or regular corporate contributions, but not both. This would take the government out of the business of deciding which candidates are worthy of public funds and instead empower organizations with broad support to have a greater voice in our politics.

A $20 per year tax credit "voucher" could be sold politically as a modest proposal, but it would inject billions of dollars from average voters into each election cycle. Instead of a futile attempt like Shays-Meehan to promote a purely negative limit on spending, such a "one person, one vote, one voucher" system would be a far better positive solution to enhance the voice of average voters.

Nathan Newman is a longtime union and community activist, a National Vice President of the National Lawyers Guild and author of the forthcoming book NET LOSS on Internet policy and economic inequality. Email or see