Is Pseudo Campaign Reform Better Than None?

Within the next few days, Americans who follow the news are likely to be confronted with one of two headlines. Either "Campaign Finance Reform Succeeds," or "Campaign Finance Reform Fails." Be advised: neither declaration will be true.

As of this writing, the Republican leadership in the House of Representative has scheduled a quick vote on what's known as the Shays-Meehan bill. In Washington, this is the final showdown on campaign finance legislation, a matter of fierce and nasty contention within the capital for years. The House measure closely resembles the McCain-Feingold bill that was okayed by the Senate last year, after much squabbling.

In an unusual development, Shays-Meehan is reaching the House floor against the wishes of the Republicans who run the House, such as House Speaker Dennis Hastert, because a majority of House members (including 20 Republicans who defied their party) signed a "discharge petition," a seldom-used device that compels whoever is in charge of the House to schedule a particular bill for a vote.

If the House green-lights Shays-Meehan, Congress will be close to passing the first major change in the money-drenched campaign finance system in decades. President George W. Bush has been signaling to GOPers, Hey guys, don't expect me to veto this thing for you -- especially when Enron's all over the news.

Should Shays-Meehan make it out alive -- Hastert, Majority Whip Tom Delay, and other House leaders are desperately plotting to scuttle the measure -- no one should believe the we've-ended-corruption hurrahs that will follow. The bill does take a strong swipe at one of the main problems of the current campaign system: soft money donations. These are the big-bucks contributions that corporations, rich people, and unions give to political parties. Under federal election rules, an individual can only give $1000 per election to a candidate. The point of this is to make sure no one contributor can gain (or buy) too much influence with a particular candidate. But several years ago, the politicos discovered (or created) the soft-money loophole, under which businesses, individuals and unions toss unlimited amounts of money at the parties; some give over a million dollars. The parties then use these funds to help their candidates.

In other words, soft money turned the political parties into gigantic money laundering operations and dramatically increased the opportunity for moneyed interests to win attention and favors from politicians. (Wouldn't you be sensitive to the wishes of someone who handed you a million bucks -- and might do so again?)

Shays-Meehan, like McCain-Feingold, would prohibit the national parties from accepting soft money -- which would be a positive step. No longer would the Enrons of the world be able to pump millions of soft-money dollars into the political system. (And don't buy the arguments of the anti-reformers who claim Enron got zippo for its money. Until the final days -- when Enron became too hot for its friends in the Bush administration to touch -- the firm did benefit from regulatory and policy decisions made by politicians it had funded.)

But it is not accurate to say, as is often reported in the press, that this legislation imposes a soft-money "ban." Corporations, individuals and unions could still make soft-money contributions to state parties. The legislation does prohibit state parties from putting these funds into federal election activity, though it's a safe bet imaginative bookkeepers will quickly find a way around that restriction. Moreover, contributors could still give up to $10,000 to state and local parties for voter-registration drives, get-out-the-vote drives, and voter education (a.k.a. political ads). Which means a corporation frozen out of the soft-money business on the national level could disburse millions to parties across the country -- an action that certainly will be noted by the candidates who just happen to be aided by the activities underwritten by this money.

The House reform bill, as does its Senate counterpart, also raises the limits on certain types of hard money -- donations sent directly to political candidates. Shays-Meehan doubles the amount individuals can contribute to presidential and Senate candidates. It leaves the current limit in place for House candidates, but, no doubt, there will be an amendment to double that as well.

Moving from $1000 to $2000 may not seem a disastrous step. But this change will permit the very few Americans who ante up the maximum amount to double their influence -- and this is not a demographically diverse group. After all, who can afford to send a thousand bucks to a candidate? In the 2000 election, according to Public Campaign, thousand-dollar donors kicked in $380 million dollars. With the proposed changes, this thin slice of the public -- one-eighth of one percent of the voters -- could dump three-quarters of a billion dollars into campaign bank accounts. As a recent study from the U.S. Public Interest Research Group notes, since the 1990 election, Enron officials made $508,000 in thousand-dollar contributions to federal candidates. Double the hard-money limits, and these executives could have handed out over a million bucks. In fact, U.S. PIRG found that since 1990, Enron and its employees donated nearly $6 million to various politicians. If these bills had been on the books since then, the company and its execs still could have contributed $6 million or more.

Campaign finance is one of those details-driven and mind-numbing topics that is not easy for the non-specialists to follow. So here's a simple bottom-line. Under these bills, one source of special-interest money is curtailed (not banned), while another source of special-interest money is expanded. That is why U.S. PIRG is not supporting these measures, though other reform outfits, like Common Cause, are pushing for them.

And there is an odd partisan irony to the proposed changes. In recent years, the Democrats and the Republicans have played even on the soft-money front, but Republicans have trounced the Democrats when it comes to hard-money grubbing. Consequently, you might assume Republicans wouldn't mind limiting soft money and boosting hard money. Yet the Democrats have been the main force behind these bills. How did this come to be? My hunch is that many Republican foes of this quasi-reform have been motivated by either a reflexive impulse against reform or their own addiction to soft-money (paging Tom Delay) -- or both.

Still, crafty Republicans realize that if this legislation is enacted, the GOP will start the new era with an advantage. Recently Representative Tom Davis, who chairs the National Republican Congressional Committee, told reporters, "Clearly if those who want to eliminate soft money truly believe we should do it, we should make it effective this year. We're prepared for that to happen." Davis, noting that Democrats "rely on soft money more than their GOP counterparts," was saying to the Dems, Go ahead, make my day.

The bills in play are a far cry from the comprehensive reform that would come with public financing of elections -- a system in which various sorts of private donations would be severely restricted and candidates, who can demonstrate a minimum level of popular support, would be offered public funds ("clean money," the reform advocates call it) for their campaigns. For reform-minded citizens, it is a close call whether or not to support the measures now being considered. But it is inevitable that should these bills become law, the politicians will declare the knotty issue of campaign finance resolved, and then they will feel quite free to ignore the remaining (and ensuing) problems. Whatever happens with Shays-Meehan, the need for extensive reform will not fade.

"I almost hope, really hope, that the Democrats pass Shays-Meehan and then get killed by the Republicans in the hard-money," says one longtime reform advocate. "Then they might finally wake up and see that the only solution is public financing." Burn the village to save the village? "You might say that," this person remarked.

Which means the cause of reform may indeed be advanced if the current campaign finance bills triumph -- but perhaps only in the very long run.

David Corn is the Washington editor of The Nation.

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