Dodge the Money by Publicly Funding Elections

Posted February 22, 2008 at 1:36pm

Money, it appears in this campaign cycle, does grow on trees. Some $552 million already has been showered on the presidential candidates, breaking all previous fundraising records for primary elections and more than doubling the substantial sums ($273 million) raised during the same period in the 2004 election.

Wealthy individuals who want to give all they can to parties, candidates and political action committees can pony up $65,500 to just the parties over a two-year election cycle, or as much as $108,200 in all three categories. The sky-high total represents a stunning 225 percent of the average national income for a family of four in 2006 and is clearly an unreachable target for most voters.

Notwithstanding this cash bonanza, Roll Call’s editorial page recently proposed a bad bargain for voters: swapping increases in contribution limits for increased regulation of 527 groups (named for a provision of the tax code) and 501(c)s that do electioneering (“The Money Dodge,” Feb. 13).

We do need half of this proposal. Both 527 groups and 501(c)s are likely to play a significant role in the Swift-Boating of candidates in the 2008 election. These groups operate without enough sunlight on their role, funding and intentions. When an election is at stake, voters should not be kept in the dark about the interests that seek to influence its outcomes. Both 527s and the mammoth 501(c)s that can easily comply can and should be regulated as political action committees, which would require disclosure of funding sources and go a long way toward shedding light on the current murkiness around independent expenditures.

There is little reason to exempt from regulation 501(c)(4) organizations that also maintain political action committees, 527s and hundreds of staff. The 1986 Supreme Court case that focused on the difficulties of regulating disclosures by tiny, local groups has been wrongly applied by the Federal Election Commission to the entire nonprofit sector. While the court then anticipated that “the class of organizations affected by our holding today will be small,” over the past 20 years, hundreds of 501(c)s have been used as vehicles for electioneering and to evade disclosure. Whether rules can be crafted to illuminate electioneering by large 501(c)s should be the subject of a re-examination of FEC policy.

But the second part of Roll Call’s modest proposal is uncalled for. Given the unprecedented flow of both small and large money into campaign coffers, the audacity of asking for yet more cash is rather breathtaking. A substantial body of research shows that contribution limits enhance competition for challengers and lower the margin of victory for incumbents.

Considering the paltry number of federal races in which meaningful competition exists, and the steep incumbency advantage already redistricted into the system, further increases in limits are a terrible idea. The real answer is not to make political action committees (shudder) more “in charge,” as the editorial suggests, but to decrease the influence of special-interest dollars by establishing a robust, voluntary system of public funding for elections.

The solution to the problem of special-interest money in politics is not to allow more special-interest money. Public funding enables viable candidates to stand on their own two feet and mount a real campaign that is not dependent on special-interest monies. No one step could be more helpful to weaning American elections off their addiction to private cash. While independent expenditures will continue, candidates will be less dependent on the wealthy interests who run the ads and bankroll campaigns, because public financing will give candidates the means to speak for themselves.

Our choice is not between the rock of electioneering by independent groups and the hard place of more power to the political action committees. Instead, we need a third way, and voluntary public funding is that way.

Laura MacCleery is the deputy director of the Democracy Program at the Brennan Center for Justice at NYU School of Law.