- Historic Sites
The Long, Stormy Marriage Of Money And Politics
… or why in America campaign-finance reform never succeeds
November 1998 | Volume 49, Issue 7
Until money and free speech can be disentangled—which may be never—the debate is likely to remain academic.
The three men sued to overturn FECA, and a year later the case went before the Supreme Court. What came out of this imbroglio was a now-familiar blend of paradox and good intention and pragmatism. The Court threw out all limitations on money used to voice political opinions not directly connected to a candidacy, because prohibiting this kind of spending was a violation of the First Amendment. The same reasoning led the justices to demolish any limitation on what a candidate could spend in his own behalf. In a dictum still reverberating through our political system, Justice Potter Stewart said: “We are talking about speech, money is speech and speech is money, whether it is buying television or radio time or newspaper advertising, or even buying pencils and paper and microphones.”
But the justices also ruled that there could be limits on direct contributions to candidates, because that money passed out of the giver’s hands and hence no longer belonged to him as speech. They argued that the intent of FECA, to remove the taint of corruption from the political process, made this limitation justifiable.
The frustrating distinction between “hard” money (contributions) and “soft” money (expenditures) was born here. Hard money went directly to a campaign; soft money went anywhere else. Subsequent decisions have widened the soft-money playing field to continental proportions. In 1978 the Court ruled that corporations have First Amendment rights not much different from individuals’; more than a few lawyers concluded that the justices had implicitly declared the 1907 Tillman Act barring corporate contributions unconstitutional. In 1996 the Court ruled that a series of savage advertisements run by the Colorado Republican Federal Campaign Committee against the senatorial candidate Tim Wirth were “independent expenditures” protected by the First Amendment, not “coordinated contributions” to his opponent.
In this relaxed atmosphere PACs, representing business, labor, and assorted special interests such as education and the environment, began to proliferate. In 1974 there were 608 PACs giving $12.5 million. By 1996 there were 4,079 giving $200.9 million. The Federal Election Commission was partly responsible, having issued several opinions that permitted corporations to tap employees as well as stockholders for these artificial entities and even to contribute directly from their treasuries, showing little concern when a PAC and a company were nearly indistinguishable in their interests. PACs have developed habits that do little to increase competition in Congress. They give about 90 percent of their election-year millions to incumbents—that is, to the people who can deliver favors.
In the 1980s, as the Democrats scrambled to catch up with the revivified Republicans under Ronald Reagan, Rep. Tony Coelho, head of the Democratic Congressional Campaign Committee, decided that the party of the people could attract business money by the tens of millions. Inevitably this policy involved the party in deals that looked a lot like bribes. By the time the decade ended, Jim Wright, the Democratic Speaker of the House, had been driven from office by conflicts of interest, and Coelho himself had resigned one jump ahead of the House Ethics Committee. Toward the end of Coelho’s tenure, one fundraiser said, “The Democratic party doesn’t stand for anything anymore.”
In the nineties, labor unions, seeking to regain their old clout, have poured millions into the Democrats’ coffers via PACs. Among the biggest givers have been the American Association of State, County and Municipal Employees and the National Education Association. In 1996 they gave $7.3 million. For those with a sense of history, the irony is disquieting. We are back to extracting a percentage of government employees’ income to finance political campaigns, but now we call it union dues.
So we come to the money-drenched election of 1996. The $990.6 million total reflects only the visible part of the iceberg, the national committees. There was no requirement to report how much soft money was funneled to state party organizations. Then there was the “issue advocacy” sector, in which theoretically independent groups such as labor unions bought TV and radio time to purvey their views, to the tune of at least $75 million—again with no requirement to report a cent. A study by the nonpartisan Center for Responsive Politics (CRP) estimates that the real total expenditure figure for 1996 is $2.2 billion.
During the campaign, monitors such as CRP virtually threw up their hands. “There are no limits, there are no rules,” a CRP spokesman said. Each candidate received $62 million in public funding, but this did not stop each party from raising almost $100 million in soft money. Fred Wertheimer, former president of Common Cause, summed up the spectacle in scathing terms. He said President Clinton had broken his “legally binding commitment to the American people.” In accepting public funding, Clinton had agreed to limit the money he raised and spent from other sources. “He exceeded the legal cap by $45 million,” Wertheimer says.