Business people think they would still get to talk to their representatives without soft money, only they would no longer be required to pay for the privilege. They also would avoid endless time spent at fundraisers eating insipid food and listening to even more insipid speeches. But it's a mystery why executives think they would prosper if campaigns were dominated by union (i.e., public employee) volunteers and the Washington media, and if no incumbent ever needed to worry about losing an election, not even the little bit they must worry now. (In 1998, 395 of 401 House members seeking re-election succeeded, a rate of nearly 99 percent.) If soft money contributions were banned, the realities would come home to them after a cycle or two, and the logic of the situation would dictate that the former soft money contributors would start funding more issue advocacy, conducted outside the political party structure.
The federal government is now involved in every area of national life, and people with high stakes in government actions need to communicate about those actions. Those stakes need not be economic: Studies indicate that most campaign contributions are motivated by ideology, not financial interest, and those who think the government should go in a certain direction will wish to make their views known. Why would anyone think that candidates should have a monopoly on communications about themselves and their opponents, to the exclusion of interested outsiders? Only an incumbent could love this idea.
One can be sure that a ban on soft money would soon be followed by an escalation in reformist fire at the terrible "loophole" of issue advocacy, whereby those who care about political issues spend money on them. What many "reformers" really fear is not the power of money but the power of ideas, especially ideas skeptical of government. The true agenda is to suppress these; the corrupting influence of money is simply a convenient rationale.
Web of Regulations
Exhibit A for this conclusion is the reformers' attitude toward the Internet, which is becoming the newest "loophole." Instead of rejoicing that the new medium reduces the costs of communication and thus creates great opportunities to cut the tie between money and political speech, the FEC has tried to use the fact that it costs some money as a jurisdictional hook to limit it.
Four years ago, CompuServe wanted to create an "Election Connection '96" that would have offered free Web sites to all candidates. No, the FEC said; that would be an illegal corporate contribution.
In 1998 a Connecticut man named Leo Smith put up a Web site advocating the election of one candidate and the defeat of another in a congressional race. He argued this was not an expenditure because his marginal cost was zero. No, said the FEC; because the Web site was of value to the candidate, it counted as an expenditure and was subject to regulation.
A year later, the FEC was presented with a Web site called DNET (Democracy Net) designed by the League of Women Voters and another nonprofit entity to provide comprehensive information on elections. It decided this was not an expenditure and was therefore OK. But the commission did not simply repudiate its CompuServe opinion. Instead, it noted that it had considered a number of factors, and that "although all of these factors are relevant, different facts with respect to a particular factor may or may not lead to a conclusion that a website's activities are permissible." In other words, the FEC reserves the right to do whatever it pleases, without explanation.
The story does not end there, because the nonprofits then sold DNET for $30 million to a commercial operation, which is running it as grassroots.com, where it does many things that CompuServe and Leo Smith were forbidden to do. This has triggered a formal complaint to the FEC from the conservative National Legal and Policy Center, which wants to make sure the FEC does not give breaks to the politically correct that are not available to all.
In the meantime, the FEC, faced with a deluge of requests for clarification of its Internet policies, has punted. In December 1999 it issued a request for comment on all aspects of Internet use in campaigns. It received more than 1,200 responses (all of which can be read at www.fec.gov/internet. html) and is now digesting them. The word on the street is that the commission has no intention of doing anything before November, so everyone is left to speculate about what rules apply and what risks they face if they run afoul of what the FEC decides in the future. With any luck, the pressures of the Internet will trigger the demise of the whole system by making the FEC's efforts to micromanage political speech patently impossible.
Real Reform
"That's not a bug," the computer joke goes, "it's a feature." So it is with campaign finance regulation. The loopholes are the only good part of the system. Instead of fretting about how to close them, we should be figuring out how we ever went down such a ridiculous path in the first place, and about how to inoculate the body politic against future folly.
The core idea that too much is spent on elections is downright silly. In 1995-96, federal elections cost about $11 per potential voter. The federal government that year spent about $1.7 trillion, which is about $8,600 per voter; indirectly allocated huge additional chunks of resources; and affected people's well-being in all sorts of other, noneconomic ways. And we are supposed to be appalled that educating the citizenry about the people we put in charge of these activities costs $11 per voter? Clearly, the problem is the reverse: There is gross underinvestment in political information, a problem exacerbated by the reform laws.
Equally wrong-headed is the idea that most campaign contributions are motivated by a desire for favors. There is a real, though limited, problem with federal corporate welfare payments and associated unsavoriness, but on big issues contributions do not matter much. Business cannot buy votes on Social Security, or defense, or the minimum wage. Bradley A. Smith, a law professor at Capital University in Ohio and a shrewd scholar of the process, wrote in 1996: "Those who have studied voting patterns...are almost unanimous in finding that campaign contributions affect very few votes in the legislature. The primary factors in determining a legislator's votes are party affiliation, ideology, and constituent views and needs. That has been reflected in study after study over the past 20 years....Donors contribute to candidates believed to favor their positions, not the other way round." (Smith, whose skepticism about current regulations scares the so-called reformers, was confirmed as a member of the FEC in May.)
The final rationale trotted out by the reformers is the "appearance of corruption." Even if the system is not really corrupt, people think it's corrupt, so the government (i.e. incumbents) should regulate it to avoid this appearance. Unfortunately, the Supreme Court has been sympathetic to this nonsense, which is odd because in every other area of First Amendment jurisprudence such arguments get the summary rejection they deserve.
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