Lippo Suction

The "good-government" crowd caused this mess. Who believes they can clean it up?


The worst [election] in modern times," writes former Common Cause president Fred Wertheimer in The Washington Post. "The Real Scandal Is What's Legal," intones a Newsweek headline. The political establishment, journalists, and lots of other folks are apoplectic about the role money–including some apparently illegal campaign contributions–played in the recent election. Much like health care in 1993 and immigration in '95, campaign finance reform could be the stealth political issue of 1997–one that barely registers on the radar screen during the campaign yet dominates the policy agenda the following year.

The Clinton campaign and the Democratic National Committee spent the final two weeks before the election trying to divert attention from a series of scandals involving millions of dollars in potentially illegal contributions from foreign businesses and governments, possibly coming from Indonesia, South Korea, and China. Current laws prohibit campaign contributions from foreign governments, citizens, or businesses. (It is legal, however, to accept money from the American subsidiaries of multinational companies or from individuals who have their green cards and could eventually become citizens.) Nor was the Dole campaign blameless: A prominent Massachusetts business owner and fund raiser paid a $6 million fine because he improperly reimbursed employees who wrote checks to Dole. "The most powerful people in the country," writes Wertheimer, "have proved in the 1996 political season that they do not believe the law applies to them."

The appropriate first response, as Wertheimer acknowledges, is to enforce the laws on the books. Taking campaign money from foreigners or laundering it as the Dole supporter did are criminal offenses that can lead to big fines or jail sentences. But the reformers aren't content to apply old laws. They want to add new restrictions on fund raising.

Echoing Common Cause and the Naderite groups, Bill Clinton, Bob Dole, and Ross Perot all agree that money from political action committees should be banned or strictly limited. All would also restrict or eliminate "soft money," the unlimited supply of dollars that individuals, businesses, and interest groups can give to political parties. And they would prohibit campaign contributions from non-citizens, even those who will eventually become Americans and who must already live under U.S. laws. In addition, Perot, along with Senator-elect Sam Brownback (R-Kan.) and Sen. John McCain (R-Ariz.), would prevent House candidates from raising money from outside their districts and Senate candidates from getting money outside their states. McCain would require television stations to set aside free time for candidates; Perot would force candidates to give back any unspent campaign funds after each election.

It's hard to believe that candidates and campaign operatives who so shamelessly break existing laws will miraculously become solid citizens after the laws become even tougher to obey. And that pesky First Amendment would invite immediate, probably successful, legal challenges to restrictions on soft money–and to laws limiting contributions to lawmakers who don't happen to hale from your hometown.

The good-government types are right when they say the problem is power. But the power they worry about is the wrong kind. The clout wielded by well-connected individuals, businesses, and advocacy groups is less troublesome than the coercive might of government. When the actions of legislators, agencies, and bureaucrats can bankrupt you, enrich you, or send you to prison, campaign contributions seem like a logical form of protection money. And most of the changes under consideration would further concentrate power in the hands of the reformers–the people who caused this mess. As an election day Wall Street Journal editorial pointed out, the current campaign scandals are a direct consequence of post-Watergate laws that were championed, if not drafted, by Wertheimer, Nader, and their good-government allies.

Instead of allowing the airwaves to be cluttered with hundreds of inane and occasionally offensive campaign ads paid for voluntarily (unless if they're from unions, but more on that later), the goo-goos now want to coerce outlets to set aside contiguous chunks of air time for candidates to spout inane and occasionally offensive platitudes. And it's a scary prospect to contemplate giving the likes of Nader, Wertheimer, Perot, or any other national nanny enforcement powers to police political activity and hector those who disagree with them.

A growing number of election watchers, including former Republican presidential candidates Pete du Pont and Alan Keyes and conservative columnists Tony Snow and Mona Charen, suggest a different type of reform: Repeal limits on private campaign spending or contributions but require full disclosure of funding sources. Snow, for instance, would "make politicians document on a daily basis the source and value of every contribution, whether it be money or elbow grease."

Requiring disclosure does compromise the privacy of donors, but when people are trying to influence policy, it's not a bad idea to know who wants to buy what. More troubling, however, is the demand to document every jot and tittle. Keeping records costs time and money. And federal and state election officials have a legendary disregard for the First, Fourth, and Fifth Amendment rights of political advocacy organizations. Large PACs and trade associations hire expensive legal advisers to help them navigate arcane campaign laws; smaller groups with fewer dollars often get socked with major fines merely because they didn't fill out forms correctly or file them properly. Requiring full disclosure would only enhance the tendency of election agencies to occasionally act like, well, jack-booted thugs. (See "Gagging on Political Reform," October 1996; "Disclosure Flaw," March 1996; "The Price of Political Speech," page 15.)

A more sensible approach would set reasonable reporting thresholds. Individuals or groups who contribute, say, $1,000 or less to a cause need not disclose anything. And set a sensible level for the amount of donated labor and equipment that can go unreported. Above those levels, make political contributors open their books. The law should neither stifle genuine grassroots activism nor encourage fat cats to conceal their motives.

Bob Dole did suggest one reform that would directly reduce the coercive power of the state: Pass a law implementing the Beck decision. In 1988, the Supreme Court ruled that the dues of union members can be used for only one purpose: the maintenance of each member's contract. Dues can't fund political activities, or help organize another work site, or buy cars and houses for union bosses. Unions can, of course, voluntarily raise money for all these and more. But members have the right to get back the portion of their dues that support outside activities.

Neither the Labor Department nor the National Labor Relations Board has enforced Beck. And in this election alone the AFL-CIO spent more than $70 million on ads for Democratic candidates. Grover Norquist of Americans for Tax Reform points out that, if only 10 percent of union dues funded political action (campaign workers, phone banks, computer equipment, and so on), unions illegally spent $1 billion in the 1996 election cycle to try to defeat Republicans. Since the GOP retained control of Congress, and exit polls indicated that about one-third of households with union members voted for Dole, reining in labor bosses could reach the top of next year's agenda.

Enforcing Beck would send the right signal about campaign reforms. Let information and influence flow through as many outlets as possible. Intelligent changes in campaign laws might not keep the Wertheimers of the world from nagging us, but they would make it easier to tune them out.