Posted August 16, 2006 by Fred Wertheimer and Trevor Potter A Response to Reform CriticsOn August 8, 2006, The New York Times published an opinion piece by Democrat Robert Bauer and Republican Jan Baran, both of whom long served as lawyers for their political parties, and also have represented other major players in the campaign finance arena. In their Times piece, however, Bauer and Baran appear as bipartisan sages crossing party lines to agree that the nation’s campaign finance laws, enacted to prevent corruption and the appearance of corruption, are bad for the country and doomed to fail. Their shared position should not be surprising. Capitol Hill is as polarized today as it has been in recent memory, but the one thing most Democratic and Republican party lawyers and operatives consistently agree on is that they do not like campaign finance laws. Bauer and Baran have spent decades advising their political parties and other big money clients about how to deal with the campaign finance laws. They have also been opposed to reforms proposed to address campaign finance scandals involving their clients, such as the corrupt soft money system, which ultimately turned into a $500 million national scandal and disgrace. Bauer and Baran were opposed to the reforms that were enacted in the Bipartisan Campaign Reform Act of 2002 (BCRA) to ban political party soft money and to curb the use of corporate and labor union funds to influence federal elections through sham “issue ads.” Baran then argued, unsuccessfully, in the landmark Supreme Court case, McConnell v. FEC, that the reforms were unconstitutional. It should come as no surprise, therefore, that Bauer and Baran now profess in their role as bipartisan observers that these reforms are too complex and have failed to work. If Bauer and Baran could have had their way, we would be back to $100,000 and $250,000 and $1,000,000 soft money contributions from corporations, wealthy individuals and labor unions serving as the primary currency in Washington. Unlike Bauer and Baran, however, the American people, the Congress and the Supreme Court concluded that these huge contributions are corrupting and a dangerous threat to our democracy. Before BCRA was enacted, reform opponents made impassioned claims that the legislation banning soft money would starve and destroy the parties. Senator Mitch McConnell (R-KY), for example, told his Senate colleagues that the passage of BCRA would mean “the mutual assured destruction of the political parties.” In fact, however, nothing of the kind occurred. Operating without soft money, the national parties raised more money for the 2004 elections than they had in past elections when their total funds included soft money contributions. And both parties greatly increased their numbers of smaller “grassroots” contributions. This was recognized by Washington Post columnist David Broder, a long time advocate of strong political parties, who wrote after the 2004 election, “As one who has been skeptical of the claimed virtues of the McCain-Feingold campaign finance law [BCRA], I am happy to concede that it has, in fact, passed its first test in the 2004 campaign with flying colors.” Bauer and Baran however are not prepared to make a similar concession. They ignore the pre-BCRA arguments that the political parties would be starved for resources without soft money, an argument that can no longer be credibly made. Instead, they take the tack that the record sums raised by the parties and others in 2004 show the reforms didn’t work. They do this by setting up a straw man, claiming that the goal of reformers was to “drive money out of politics,” and that the reforms failed to accomplish this, because in the 2004 elections “fund-raising records fell beneath the frenzied pace of collections by candidates, parties and interest groups.” But, of course, the goal of BCRA was not driving money out of politics. The goal was to remove huge, corrupting contributions from our politics and to ensure compliance with longstanding contribution limits and prohibitions. BCRA achieved this goal in getting rid of the huge, unlimited soft money contributions to the political parties that most people in the country recognized had a corrupting influence on our officeholders. BCRA accomplished this, furthermore, while the parties proceeded to raise record total amounts of money and to receive unprecedented numbers of smaller “grassroots” contributions. Bauer and Baran may think this is a bad result for the parties and evidence of a failed reform, but we think it is a good result, and precisely what BCRA set out to accomplish. Bauer and Baran also offer up the current corruption scandals in Washington as evidence that BCRA did not work. In their op-ed piece, they attempt to somehow blame BCRA for a host of political ills – from bribery scandals to negative campaigning. The logic behind attempting to lay the Jack Abramoff and “Duke” Cunningham scandals on BCRA’s doorstep for failing to stop corruption, completely escapes us. Bribery of public officials was illegal before the passage of BCRA, remains so today and must continue to be rooted out to protect the integrity of our government. BCRA did not affect the bribery laws, nor make them obsolete. BCRA instead sought to eliminate what some have called “legalized bribery” by eliminating six-and seven-figure, influence-buying contributions and it achieved that goal. Reform supporters made clear from the outset of the fight to enact BCRA that it was not intended to deal with all of the campaign finance problems in Washington, but focused on addressing the biggest abuse in the system, the use of soft money to circumvent the campaign finance laws. Reform supporters also made clear that additional reforms would be necessary. The recent corruption and lobbying scandals in Washington confirm the need for such reforms, and we are supporting legislative efforts to address the existing problems in the financing of presidential and congressional candidates and to strengthen the lobbying laws and congressional ethics rules. Bauer and Baran also should be willing to support such reform efforts to address the corruption scandals we all agree have occurred. Bauer and Baran in their op-ed piece are casually dismissive of proposals to fix the presidential public financing system. They state that the presidential system has “lost significance and credibility” and note that neither major party candidate chose to utilize it in the 2004 presidential primaries. What they leave out, however, is that the presidential public financing system served the country well for most of its thirty-year existence and that it can continue to do so in the future if Congress acts to fix the system. One of the nation’s leading campaign finance scholars, Anthony Corrado, wrote in 2005 that at the time the presidential system was enacted in 1974, “public funding was heralded as the most innovative change in federal campaign finance law in American history,” and that “It remains so to this day.” The presidential public financing system has been used by Republicans and Democrats, conservatives and liberals, front-runners and long-shots. Every Republican and Democratic president elected since 1976 has used the public financing system to finance their general election races. These include Presidents Jimmy Carter, Ronald Reagan, George H.W. Bush, Bill Clinton and George W. Bush. All of them, except President George W. Bush, also used the system to pay for their presidential primary races. In addition to all presidential winners since 1976, all of the major party opponents they faced in the general election and almost all of the presidential candidates from both major parties who ran in the primaries since 1976 have used the public financing system to pay for their races. The system, furthermore, provided for competitive elections, with challengers winning the presidency in three of the six presidential races run under the system that involved incumbents and challengers. While the system clearly worked, Congress has failed to make any adjustments or modification in the system since it was enacted in 1974. Thus, for example, the spending limits for the presidential primaries have not kept pace with reality and have become too low to accommodate the costs of running a competitive, modern-day presidential primary campaign. As a result, in the 2004 presidential primary elections, major candidates in both parties, including President George W. Bush, Senator John Kerry and former Governor Howard Dean opted out of the presidential primary public financing system. Presidential candidates who participate in the primary public financing system today are faced with being financially overwhelmed by an opponent who rejects public financing and chooses to spend private contributions without being subject to any spending limits. Legislation recently introduced by Senator Russ Feingold (D-WI) and Representatives Marty Meehan (D-MA) and Christopher Shays (R-CT) would make a series of reforms to repair the presidential public financing system and bring it into line with the realities of our current presidential campaigns. The legislation would:
A failure to repair the presidential public financing system would return us to arms-race spending in presidential campaigns, with big-money fundraisers and private influence-money playing a central role in financing the campaigns, and the front running presidential candidates having enormous financial advantages over the rest of the candidates. If the two major party presidential nominees in 2008 are funded only by private contributions, for example, they are likely to spend a combined one billion dollars on their primary and general election races, with a pivotal role being played by big-money fundraisers, each providing six- and seven-figure total sums to the major party nominees. The next major campaign finance reform battles will include efforts to fix the presidential public financing system and to establish a similar system for congressional races. As for the last major campaign finance reform battle, Bauer and Baran dismiss the landmark Supreme Court decision in McConnell v. FEC upholding the constitutionality of BCRA as a narrow ruling that “Congress may actively legislate against the ‘circumvention’ of campaign rules, an eerie acknowledgement that the laws, forever failing in their aim, must be continually amended.” They combine this with an attack on the efforts to replace the failed Federal Election Commission (FEC) with a new, effective campaign finance enforcement agency. This is a rather interesting combination of positions on their part. Bauer and Baran’s “narrow” ruling in McConnell affirmed the constitutional validity of the limits and prohibitions that apply to contributions made to federal candidates and their political parties. The decision shut down a $500 million corrupt soft money system and also curbed widespread circumvention of the ban on corporate and labor union funds being spent in connection with federal elections, in the form of campaign ads disguised as issue ads. In the McConnell decision, furthermore, the Supreme Court made clear that it was the FEC that created the soft money system which resulted in massive circumvention of the campaign finance laws. The Supreme Court strongly rebuked and admonished the FEC for having “subverted” and “invited widespread circumvention” of existing campaign finance laws by passing regulations that established the soft money system. It was the FEC, not the law, as Bauer and Baran would have us believe, that failed here, the same FEC they now want to protect against any basic reforms. The periodic need to fix and strengthen campaign finance laws is an ongoing process, and always has been. Adjustments and modifications are necessary as times and circumstances change. That does not mean, as Bauer and Baran, argue that the laws are “forever failing in their aim.” The presidential public financing system enacted in 1974 did not “fail.” As noted earlier, the system worked well for most of its existence, and then reached the point where repairs became necessary for its continued viability. What did fail in 1974, however, was the decision by Congress to reject, by a narrow House vote, a similar system for congressional races. We have been paying the price for this decision ever since – from the ever growing role played by influence-money in Congress to the enormous financial advantages congressional incumbents have over their challengers. The battle to prevent circumvention of campaign finance laws also is an ongoing process, with party lawyers and operatives constantly looking for ways to get around the laws. When it comes to these laws, however, the key to the circumvention problems has not been the “cleverness” and “creativity” of party lawyers and operatives, or the failure of the campaign finance laws. Rather it has been the abject failure of the FEC to do its job and the role played by the agency in opening up loophole after loophole in the laws. The FEC, which is supposed to enforce the campaign finance laws, has been the principal enabler for the circumvention of the laws. As noted above, the Supreme Court recognized this in the McConnell case, when it bluntly stated that FEC soft money regulations had “subverted” and “invited widespread circumvention” of the campaign finance laws. Other courts also have recognized this destructive role played by the FEC. For example, in a case brought by Representatives Christopher Shays (R-CT) and Marty Meehan (D-MA), federal district court Judge Kollar-Kotelly struck down fifteen regulations issued by the FEC to implement BCRA as contrary to the law. In doing so, Judge Kollar-Kotelly issued a stinging rebuke of the FEC, ruling that one provision “runs completely afoul” of basic campaign finance law, another “severely undermines FECA [Federal Election Campaign Act]” and would “foster corruption,” another “would render the statute largely meaningless,” another has “no rational basis.” The judge also found that the FEC’s actions “runs contrary to Congress’ intent” and “creates the potential for gross abuse.” The D.C. Court of Appeals also sharply rebuked the FEC when the agency unsuccessfully appealed this decision, concerning five of the fifteen regulations struck down by Judge Kollar-Kotelly. The Court of Appeals made findings with regard to these five regulations such as, “The FEC’s definitions fly in the face of [Congress’s] purpose because they reopen the very loophole the terms [‘solicit’ and ‘direct’] were designed to close;” and “the FEC’s rule far exceeds any exemption BCRA would permit” and “runs roughshod over express limitations on the Commission’s power;” and one regulation “appears particularly irrational” and “makes no sense.” In the Shays and Meehan case, we have seen an incredible example of the failed FEC in action: the FEC creates the soft money system, Congress passes legislation to end the soft money system and the FEC then adopts numerous regulations to open soft money loopholes in the new law enacted to close the original FEC-created soft money loopholes. The brazenness of the FEC in ignoring congressional intent has not been lost on observers. As The Washington Post in an editorial ( August 21, 2005) pointedly stated, “QUESTION: WHEN is a ban on federal officeholders raising huge soft-money checks not a ban? Answer: When it’s enforced by the Federal Election Commission.” Another Washington Post editorial (Aug. 4, 2005) aptly summed up the performance of the FEC, stating, “Assigned by Congress to write regulations implementing the McCain-Feingold campaign finance law, the [FEC] has instead spent the past few years writing and defending rules that would undermine it.” The New York Times in a editorial (September 21, 2004) similarly questioned the performance of the FEC stating, “the FEC is a blight on American politics that must be scrapped and replaced with nonpartisan regulators who have the interests of voters, not politicians, at heart.” Editorials have run in other newspapers around the country challenging the FEC for failing to do its job, from The Boston Globe to Newsday to The Philadelphia Inquirer to The Kansas City Star to the Los Angeles Times. It is in this overall context that the congressional sponsors of BCRA have proposed legislation to replace the FEC with a new enforcement agency. The legislation would create a new independent agency, the Federal Election Administration (FEA), to replace the FEC. The new enforcement agency would include a Chairman and two other members appointed by the President and confirmed by the Senate. No two members of the FEA could be from the same party, thereby ensuring that no political party would have a majority on the agency. The Chairman would have powers to manage and administer the agency, but would have no greater role than any of the other members in making substantive agency decisions, such as enforcement and rulemaking decisions. The FEA would use impartial administrative law judges to hear and decide campaign finance enforcement proceedings, an approach currently used by a number of other agencies to provide for independent, impartial decisions, but not used by the FEC. The new agency also would have real enforcement powers, including the power to find that violations of law have occurred, to directly impose civil penalties and to issue cease and desist orders. Such enforcement powers are available to other agencies but are not available to the FEC. It is quite easy to understand why Bauer and Baran choose to make their stand with the FEC as it currently exists and to oppose a new enforcement agency. The parties they have represented have done quite well in the past under the rulings and actions, or inactions, of the discredited agency. The long-standing FEC track record, however, is clear. The agency has failed to enforce the laws as Congress has written them and as the courts have interpreted them. As The Washington Post aptly stated in an editorial ( July 11, 2003), the FEC “is an agency that was designed to fail, and at that task, at least, it has succeeded brilliantly.” The FEC needs to be replaced with a real enforcement agency. Effective campaign finance laws are essential to protect against corruption and the appearance of corruption, to foster competitive elections and to provide all citizens with a fair opportunity to participate in our elections. Campaign finance laws can and do work. (To read Trevor Potter's "McCain-Feingold: A Good Start" in The Washington Post, click here.) The battle to maintain effective laws that are properly enforced, and to enact campaign finance reforms that are needed, is an ongoing and difficult challenge. It is a battle that must be fought and can be won. Fred Wertheimer is President of Democracy 21. Trevor Potter is President and General Counsel of the Campaign Legal Center and a former Chairman of the Federal Election Commission. |
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