Picking Up the Tab for Campaign Finance Reform
Despite the glut of media interest in campaign finance reform, the average voter remains frustrated, sensing something's wrong in the current political system and stymied as to how to reform what scarcely can be understood. The challenge isn't new, but strategies are changing. Focusing on reform is Common Cause, a nonpartisan lobbying group founded in 1970 on behalf of citizens. Jay Heck, executive director of Common Cause in Wisconsin, says addressing the role played by Political Action Committees (PACs) is essential to reform.Nearly all interest groups have PACs, some more than one. Each has to meet requirements recognized by the government. Political committees vary in size depending on the organization, but most have less than 10 members, likely selected by their respective organization's board or chief executive. The members collectively decide how to disburse the PAC's funds. They can, and do, give money directly to individual candidate's campaigns, political parties and even to other PACs.In making their decisions, PAC representatives often interview and are solicited by political candidates. They have to register and abide by federal and state rules, which are many and vary between federal and state requirements according to the type of PAC. For example, some PACs at the federal level can't contribute more than $5,000 per candidate and must give to a minimum of five candidates.PACs are derided by voters as being part of the problem, but they're nevertheless perfectly legal. All federal PACs have to report to the Federal Election Commission (FEC) on their contributions and disbursements. PACs originated as a means to reintroduce corporations and unions into federal elections. Corporations, since 1907, and unions, since 1943, have been prohibited from making direct contributions to federal political campaigns. Although corporations and unions didn't comprise all interest groups of that era, they certainly were among the most powerful. For a while their banishment caused many to consider the problem of reform solved. But people under-estimated the creativity of corporations and unions in finding a way back into the game. PACs made this possible. Technically, the money PACs contribute doesn't come from the organization, but from individual members. The distinction is especially important since no union or corporate revenues can be spent on anything other than administrative costs of a PAC, such as the cost of printing.According to Leon Heck, professor emeritus of political science at the University of Wisconsin-Madison, as long as the contributions are shown to be voluntary on the part of individual members, corporations and unions are back in the business of directing campaign contributions.Individuals can contribute to political campaigns on their own without a PAC, and many do. However, if they do, they'll have to write checks. Cash contributions are prohibited in federal elections in excess of $100. And depending on the election, they're limited as to how much they can give. For example, $1,000 per election is the limit for direct support of federal candidates. However, when an individual gives his or her money to a PAC and lets it write the check, the interest of the organization is advanced and the PAC can write larger checks, $5,000 to federal candidates, and more checks to other candidates known to be receptive to the organization's appeals.Banc One's PAC recently started its annual fund drive, when all employes above an unspecified salary level are asked to contribute, says Tim Elverman, Banc One's Midwest director of government relations. The amount is up to the individual and no one is required to contribute. However, "hand delivering" the invitations to contribute has proven successful. "We are very proud of our Banc One's 75-percent positive response rate," says Elverman.Contributions are even more convenient and lucrative when individuals consent to payroll deductions."Every Banc One contributor receives a written report on which candidates received the PAC's contributions," says Elverman, describing a practice not common among PACs. "Sixty percent of a Wisconsin employe's contributions are promised to go toward the Banc One Wisconsin PAC for Wisconsin elections only, and the other 40 percent goes to the national Banc One PAC." In the Wisconsin Education Association Council (WEAC), an education union affiliated with the NEA, the union's members automatically contribute to WEAC's PAC in addition to paying their dues, unless they request a refund, says Terry Craney, president of WEAC."This system of a reverse dues check-off contributes twelve dollars per faculty and six dollars per support staff like secretaries and cooks," says Craney. Although modest contributions by themselves, the figures add up when taking into account that the union has 65,000 Wisconsin members.Unions initiated the concept of PACs precisely because their members never could compete with large donations from corporate kings. Some viewed PACs as a tool of reform when they officially became recognized under the 1974 Federal Election Campaign Act in the wake of Watergate. But corporations weren't slow to make use of the tool as well.UW-Madison's Epstein considers PACs a legitimate means of collecting money."They are regulated and everything is in the open," he says.PACs report their contributions to the government and their records are open to the public. "Open to the public" doesn't mean reports are disseminated widely, easily accessible or readily decipherable to the average citizen. Some proposed reforms, such as electronic filing, are attempts to remedy those obstacles. That reform is being considered by the Governor's Blue Ribbon Commission on Wisconsin Campaign Finance Reform, chaired by Dr. Don Kettl, who sees some promise in electronic filing."For one thing it would standardize the form and shorten the time of processing the PAC reports," says Kettl. "Figures could be posted in twenty-four hours rather than the several months that it takes now during an election. Anyone could then access the report for free on the Internet, and, most importantly, it could be organized and more easily searched for a specific contribution."Unlike other proposed reforms, increasing the disclosure of campaign contributions enjoys near universal political support. But efforts to circumvent disclosure persist."Bundling" was a technique created to help hide the influence of PACs. According to Common Cause's Heck, PACs have turned members on to bundling, a technique in which individual members of an organization write checks and the stack is delivered by a representative of the organization to a candidate's campaign."Employes may write a check in their name, their spouse's name, and their children's names," says Heck.Together with other members' checks, they're reported to the FEC as individual contributions, with no mention of the organization's name. The candidate usually is well aware of which organization delivered the "bundle," and could react accordingly. Although it's legal, it cheats the spirit of campaign disclosure rules since an organization is seeking influence in the guise of individual contributions. One could argue that PACs do the same thing.A more sophisticated form of bundling, known as conduits, has emerged. "Like bundling, conduit money is recorded as individual contributions, but like a PAC only one check is delivered to the candidate by the organization," says Heck.Conduits are new enough that only a few states have laws regulating them. Wisconsin is among the few. In the state's campaign financing records, if a "C" is next to an individual's name, then that contribution is part of a conduit. But if you didn't know what the "C" stood for, you wouldn't be the wiser.Banc One has a conduit called Banc One Wisconsin Personal Contributions Account. In addition to furthering the organization's interest, Elverman says, "Conduits are attractive to contributors because they get to decide which candidate will get their money, whereas with a PAC, that decision is made by the committee."Craney reports WEAC has no conduit. Elverman and Craney both support campaign finance reform in principle, as long as it doesn't erode advantages their organizations have.Part of the battle for reform involves educating voters about the language of campaigning. "Hard money" is money that finds its way directly to a candidate's re-election team, usually used for advertising. Every candidate has such a hand-picked team, often called a "re-election committee." Hired for that purpose, it keeps money-handling at arms length from the candidate to avoid the appearance of impropriety.Conversely, "soft money" is money given to political parties to be spent on "party recruitment" or "increasing voter turnout," legitimate efforts. But as Common Cause's Heck says, "The definition of these has become so blurred as to become meaningless."The result has been large amounts of money spent on ads that obviously are in favor of one candidate over another, though it might not be spelled out explic itly. Instead of "vote for so and so," such ads might instead say, "Your congressman is against something of interest to you. Call him and tell him what you think.""Both major parties have hard and soft money accounts," says Heck. "They can use the hard money to directly assist any of their candidates. They are limited in the amount they can give and it is traceable, But it's the soft money that is more alarming. It's not limited and it is difficult to track its effect on an election."Similarly, interest groups have been known to misuse "issue advocacy" ads, which can be purchased with corporate or union revenues to advance a social or political cause. For instance, there's nothing wrong with running an ad against abortion. Although controversial, it's a free expression of speech. If the same ad encourages the election or defeat of a candidate, it crosses the line from issue advocacy to "express advocacy," for which PAC funds can be utilized but not corporate or union funds.Express advocacy ads encourage votes for candidates. There's nothing wrong with that, as long as they're designed and paid for by a group or individual independent of a candidate's or party's efforts. It is important that such "independent expenditures" truly be independent."If it looks like a duck, talks like a duck and walks like a duck, we should be able to call it a duck and force it to comply with election laws and regulations," says Kettl.The debate over ads, in Heck's view, spotlights the crux of the problem -- television. Television's importance in reaching voters has forced candidates to raise more money than ever before. Even though federal candidates currently get 30-percent reductions on regular advertising rates, it's still enormously expensive.Paul Taylor, spokesperson for Free TV for Straight Talk Coalition, reported in a recent interview with newsman Jim Leher that campaign money spent on television ads nationwide skyrocketed from $25 million in 1972 to $400 million in 1996.As a response, partial public financing of campaigning should play a role, according to Heck. Public funding of congressional campaigns lacks support in Washington, although the presidential election already is partially funded by taxes.Wisconsin has had public financing for state elections since the early 1970s. As is the case with public funding at the federal level, Wisconsin allows citizens voluntarily to designate money on their income tax returns for that purpose. Only 8 percent of Wisconsinites do, however."People either don't know about it or don't understand that it does not increase their tax," says Heck. "Also, the small amount raised has had a discouraging effect. Less than 50 percent of state candidates agree to take the money."Those who do must abide by its accompanying spending limits. Peter Bock, Democratic representative to the Wisconsin Assembly's 7th District, is a strong supporter of Common Cause's demand for reform. "Fear of how much an opponent is raising and spending drives other politicians to do the same," says Bock.It's like an arms race out of control. Politicians can't promise anything in return for the money, but the fact remains money is more important than ever. How effective do contributors think their money is?"People who give money believe they are buying at least access, if not outright influence," says Bock. "They are not just doing it out of the goodness of their hearts. They want to be able to come talk to you when they want. And if you consistently vote against them, the next time it's going to be more difficult to ask them for money."Offering a trade of public funding in exchange for a candidate voluntarily limiting their own spending is a good idea," continues Bock. "Also, the amount that Wisconsin gives candidates needs to be increased because we stopped indexing for inflation, and the current public grant is completely out of date."Election laws nationally need to be updated, too, says Heck. "Not much has been done since the 1974 law, and Watergate was the impetus then," says Heck.The electorate gets discouraged because the problem can't be solved once and for all. The pessimistic view is that lobbyists will find new techniques and loopholes."Yes, they are right," says Heck. "And when that happens you fix it again. You shouldn't use that as an excuse to do nothing." Democratic Congressman Thomas Barrett agrees."I would certainly want my car to have a tune up in twenty years time. Our election laws are due for one as well," says Barrett. "I want to spend my time raising my kids, not raising more money for re-election."Common Cause, in conjunction with Campaign for America, recently launched a national petition drive for reform called Project Independence. Heck was on hand in Milwaukee in April 1997, supported by sympathetic politicians, to announce a petition drive and challenge to Congress to adopt a campaign reform bill by July 4, 1997.Wisconsin Democratic Senator Russ Feingold was in attendance and received much support for the McCain-Feingold reform bill, co-authored by Arizona Republican Senator John McCain and currently before the U.S. Senate. Project Independence is backing McCain-Feingold, Heck says, because it's the only campaign finance reform bill President Clinton so far has said he would sign. McCain-Feingold is considered by many to be an ambitious reform of campaign financing laws. It would ban all PAC contributions and all soft money, tighten the definition of independent expenditures and enforce disclosure requirements for them, restrict the amount of money candidates could take from contributors outside their states, ban bundling and contributions by people who can't vote, and ban free mailings, known as franking, by congressmen during an election year. It also would define more clearly the difference between issue and express advocacy, and require group spending on the latter in excess of $10,000 to be reported to the FEC.One aspect of McCain-Feingold likely will raise the ire of television station executives. The proposed bill would require broadcasters to give federal candidates 50-percent discounts on regular advertising rates and force them to provide U.S. Senate candidates with 30 minutes of free air time for their re-elections. Senate candidates would receive that bonus because their constituencies are statewide and therefore harder to reach. Stations that could show a financial hardship by complying would be eligible for an exemption.There's some question as to whether banning PACs would be a constitutional violation of freedom of expression. The Supreme Court has defined campaign contributions in the past as a form of speech. McCain-Feingold contains a contingency clause in the event the Court prevents banning PACs. It would reduce the amount PACs can contribute from $5,000 to $1,000 per candidate and would limit PAC contributions to 30 percent of a federal candidate's campaign spending. Some candidates currently receive 70 percent to 90 percent of their money from PACs.In our free market economy, everyone has a choice as to what products will be produced. In effect, we vote with our dollars. Competition for those dollars ensures that our needs and wants will be met in the most efficient way possible. Here, our voices aren't meant to be equal. The more dollars we possess, the more influence we have. Politically, we're a democracy, with everyone having a single and equal vote. Voting on election day was meant to be the supreme influence over our government officials. It's paramount the economic rules of free market not substitute for the political rules of democracy. The conundrum before us is-- How do we keep our political voice more important than our economic voice?For more information about Project Independence of Wisconsin and the McCain-Feingold bill, call 608-256-2686.