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The Comeback of Campaign Finance

Bill Clark/CQ Roll Call File Photo
Ten years after his Bipartisan Campaign Reform Act was enacted, Sen. John McCain says campaign finance rules are in tatters and more reform is needed.

Ten years after they celebrated the enactment of their sweeping ban on unregulated campaign cash, Sen. John McCain (R-Ariz.) and former Sen. Russ Feingold (D-Wis.) have revived their assault on big money.

The two are not plotting some grand new reform or launching a public relations tour — though they did tape a public radio segment together recently. But a decade after the McCain-Feingold law was signed by the president (March 27, 2002), the erstwhile allies are delivering a strikingly unified message: The campaign finance rules are in tatters, scandals will follow, and voters will once again demand reform.

“Thanks to a naive and politically ignorant decision by the United States Supreme Court, obviously it has been largely dismantled,” McCain said in an interview about the law that he authored with Feingold. “And the consequences are manifesting themselves every day in what will someday be, sooner rather than later, a huge scandal.”

Feingold struck a similar note.

“We put a brick on top of a wall, and the brick is intact, but the wall was smashed by the Citizens United decision,” Feingold told Roll Call. “It has turned the election system into a joke.”

Feingold stressed, however, that the centerpiece of the McCain-Feingold law, officially the Bipartisan Campaign Reform Act, remains intact: the ban on soft money fundraising by federal officials. For all the super PACs ushered in by the Supreme Court’s 2010 ruling to deregulate corporate and union campaign spending, lawmakers, candidates and party officials remain barred from directly asking CEOs and wealthy donors for unrestricted checks.

“It’s a federal crime if a Member of Congress calls up like they used to do and says to a big company — Microsoft or AT&T — ‘Give us $500,000 for a dinner next week,’” Feingold said. “They can’t do that.”

Of course, the line between candidates and the super PACs that back them can be a blurry one. Laws that bar such political action committees from coordinating with candidates and parties are loosely enforced, at best.

Federal Election Commission regulations now permit politicians to appear at super PAC events, as long as they don’t ask for donations larger than the federal limit — a setup that strikes some as a wink and a nod away from soft money fundraising.

“As the pressure mounts, people are going to see that this [super PAC money] isn’t independent in any way, shape or form, and it does have a corrupting influence,” Feingold said.

First Amendment champions blame the McCain-Feingold law itself for shifting political money toward outside groups and away from parties and candidates. GOP presidential hopeful and former Massachusetts Gov. Mitt Romney has said the solution is to throw out the limits on contributions for all political players, not just super PACs.

The soft money ban “is dislocating the natural flow of money in the political process,” election lawyer Jan Baran of Wiley Rein said. “The participants who are most accountable and the most transparent, which are candidates and political parties, are the ones who may not accept or use soft money. I don’t think that makes sense.”

“In light of the changed landscape since the law, I think it’s almost indisputable that the law is hurting political parties,” concurred Bradley Smith, chairman and co-founder of the Center for Competitive Politics.

Some campaign finance experts counter that the soft money ban actually strengthened the parties.

“The parties redirected their efforts and raised even more than before
McCain-Feingold, and they did it in a way that stimulated participation, stimulated mass donors,” said Michael Malbin, executive director of the nonpartisan Campaign Finance Institute. “It proved to be beneficial to the parties, not harmful.”

But few dispute that the political system has changed radically since the
McCain-Feingold reforms. Even the notion that two Senators on opposite sides of the aisle would collaborate on a bill of any kind is “absolutely impossible” to imagine today, said Thomas Mann, a senior fellow in governance studies at the Brookings Institution.

“You build a record, you have some big scandals, and you get an array of forces in power, and you can get something done,” Mann said. “But that took years to do with McCain-Feingold, and it took Enron to pull it off.”

The law was enacted in the wake of the accounting scandal that led to the bankruptcy of Enron Corp.

Little wonder that both McCain and Feingold look to the courts, not Capitol Hill, when asked what lies ahead. The McCain-Feingold law itself did not take effect until the Supreme Court upheld its constitutionality in McConnell v. FEC in 2003. Seven years later, McCain recalled going with Feingold to the Supreme Court, now under new and more conservative leadership, to hear the Citizens United oral arguments.

“Very seldom in my life have I been more depressed,” McCain said, “because the absolute ignorance of campaign finance reality by many of the judges, especially [Antonin] Scalia, astounded me.”

Feingold, who now heads a PAC dedicated to reversing Citizens United, suggested the Supreme Court may come to regard that ruling in a different light. Justices Ruth Bader Ginsburg and Stephen Breyer suggested recently that the Citizens United ruling should be revisited.

Feingold said: “I think they’re taking judicial notice of the fact that the court has opened up an incredible loophole in our system and has fundamentally changed the way that our democracy works, in a negative way.”

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