Everything You Know About Campaign Finance Reform is Wrong
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Everything You Know About Campaign Finance Reform is Wrong

Unfree Speech challenges almost every conventional assumption about the influence of money in American politics, and the consequences of stricter campaign finance reform laws.

Paul Holmes

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Last year, I was invited to attend an event called “Seconding the First,” at which an eclectic mix of entertainers and politicians and business leaders, from Susan Sarandon to Ariana Huffington to Lou Reed to Jeff Bezos came together to celebrate the First Amendment and spotlight instances in which freedom of speech was under attack. The crowd was warm and receptive and welcomed speakers and performers with unfailing enthusiasm until conservative commentator G. Gordon Liddy took the stage to defend corporate free speech and to attack campaign finance reform that would deprive corporations—and others—of the right to express their views during election campaigns.

At this point, it became apparent that the enthusiasm for the first amendment of this audience—united in its self-proclaimed support of one of America’s fundamental freedoms—had its limits. Even people who would consider themselves the staunchest defenders of free speech have apparently come to agree with House minority leader Richard Gephardt, who in 1997 went so far as to suggest that democracy and free speech are incompatible, telling reporters, “What we have here is two important values in conflict: freedom of speech and our desire for healthy campaigns in a healthy democracy. You can’t have both.”

Bradley Smith is appalled—as should we be—that Gephardt’s comment went almost unchallenged in the media. Indeed, most editorials then and now support the notion that it is worth sacrificing the right to self-expression in order to “clean up” the political process. So Smith has written a book, Unfree Speech, which challenges almost every conventional assumption about the influence of money in American politics, and the consequences of stricter campaign finance reform laws.

That the media can be so cavalier about the amendment to the constitution that guarantees their very existence is remarkable (unless you take the cynical view that eliminating the right of others to express their political views will increase the power of professional editorialists, unaffected by reform proposals). But public relations people should be in the forefront of this battle, because if public relations stands for anything it stands for the idea that the market for products and the marketplace of ideas are enriched by free and open discussion, by lively debate, by effective communication.

More important, perhaps, public relations stands—at its best—for trusting the public, for the belief that if the public is provided with information, and allowed to examine all sides of an issue, to weigh the words and motivations of all the parties involved in a debate, it should then be free to make up its own mind. Campaign reformers are reluctant to trust the public with this responsibility. Better for voters not to hear some arguments, reformers say, because voters are not as sophisticated as we are. They’re too easily swayed. (Which usually means they don’t vote the way we believe they should.)

Consider the view of Anne McBride, former president of Common Cause, appearing on PBS in 1996: “At the same time you have efforts to regulate them… you have all the major interests that have an outcome in the election and an outcome in policy being able to pour this money in… money affecting federal elections. It’s corrupting, the American people understand it, and it has really got to be changed.”

McBride’s view has become the conventional wisdom in this country, but as Smith points out, “What she is saying is that if a party has an interest in government policy, that party should forfeit its right to speak during a campaign or to lobby during an election… McBride seems to suggest that individuals and interests affected by government action should sit idly by and take whatever comes their way. They should make no effort to persuade their fellow citizens of the rightness of their cause, because to do so is corrupting. This is the direct opposite of participatory democracy.”

At the outset, Smith asks a straightforward question, “Are efforts to persuade fellow citizens how to vote ‘corrupting,’ or are they the essence of democracy?” But the other questions Unfree Speech raises are more complex:

  • Why do critics see corruption when a candidate changes his position to appeal to financial donors, but not when he changes his position to appeal to newspaper editorialists?
  • Why is it legal for Ross Perot to spend millions on his own candidacy for president, but not to donate those same millions to the campaign of a more viable and popular candidates, such as Colin Powell? 
  • Why is it okay for a campaign volunteer give up $50,000 in earning power to help elect a candidate, while someone without the same communications or political skills can’t donate a similar amount? 
  • If money is not speech, as critics of campaign contributions have argued, what is to stop Congress passing laws that forbid individuals from spending money to produce newspapers, or movies, thus making an end run around the first amendment?

Smith makes it clear that restrictions of campaign activity don’t hurt large corporate donors exclusively. The first group prosecuted under the Federal Election Campaign Act of 1971 (the foundation of today’s campaign finance laws) was the National Committee for Impeachment, a grassroots campaign that took out ads urging the impeachment of then-president Nixon. He cites a case in which a handful of Long Islanders were sued for spending $135 to print a list of their representative’s votes in Congress, and another in which an Ohio housewife was sued all the way to the U.S. Supreme Court for creating fliers on her home computer to fight higher school taxes.

Those “actions would seem to be the very core of First Amendment activity,” says Smith. “True grassroots activism by a single, middle-class suburban housewife. Yet the state of Ohio forced her to litigate against her punishment for six year before she was granted relief by the United States Supreme Court, which held that he activities were constitutionally protected.”

But it doesn’t matter who the actual victims of the zeal for reform are, it’s clear that corporations are the target of most reformers, and it ought to be equally clear that the rights of corporations are worth defending. Smith does with masterfully, presenting compelling arguments to suggest that almost everything we think we know about campaign finance is wrong.

According to Smith, “Arguments that favor increasing limitations on private contributions to and spending by candidates and political committees rely generally on one of four allegedly factual observations: first, too much money is spent on political activity; second, campaigns funded with large contributions are not representative of public opinion, and tend to drown out campaigns that would otherwise more directly address voter concerns; third, a candidate’s spending largely determines electoral results, that is, money ‘buys’ elections; and fourth, money exerts a powerful corrupting influence on the legislature.”

Smith demolishes these arguments—or at least points out the flaws in each—one by one. The idea that there’s too much money in politics, for example, depends on a belief that there is a “right” amount of money to spend on politics, and that we have exceeded it. Smith puts campaign spending in context—Procter & Gamble and Philip Morris spend about the same amount on advertising each year as is spent by all political campaigns and all political parties—and suggests that communications spending is actually a democratizing force. “Without such spending,” he points out, “candidates are at the mercy of a small group of political journalists to interpret and inform the public of the candidate’s message.”

As for the notion that money buys elections, “correlation is not the same as cause and effect…. The strong correlation between money and victory may stem simply from the desire of donors to contribute to candidates who are likely to win, in which case the ability to win attracts money, not the other way around.” A rigorous crunching of the numbers suggests that the relationship between fund-raising ability and success is less clear than many reform proponents would have us believe. Indeed, “the problem is not that some candidates ‘buy’ elections by spending ‘too much’ but that other candidates spend too little to reach the mass of voters. The solution is to spend more all around, not less.”

But he reserves his most damning criticism for the suggestion that money corrupts either individual legislators—pointing out how few concrete examples critics have been able to produce—or “the system.” Says Smith, “Many reform advocates seem to consider it ‘corruption’ if a lawmaker merely votes in a manner consistent with the desires of those groups or individuals who have contributed to his campaign…. But to find corruption we must assume that the representative is acting against his or her own best judgment… against the wishes of a majority of his or her constituencies… and that this is being done in order to gain a campaign contribution…. How likely is any legislator to do such a thing for a mere campaign contribution?”

If the current influence of campaign donations is not nearly as pernicious as reformers would have us belief, nor are the consequences of reform nearly so benign. Says Smith, “Campaign finance reform efforts, based on ever-increasing regulation of the political process, have entrenched the status quo; reduced the choices of both candidates and issues; made the electoral system less responsive to popular opinion, while favoring special interests; strengthened the power of select elites; and limited opportunities for grassroots political activity.”

Contribution limits, he says, favor incumbents by making it relatively harder for challengers to raise money. First, challengers need more money to get their message across, because incumbents have higher awareness and a track record that is already familiar to many voters, and second, the need to raise campaign cash from a large number of small donors benefits those who have a database of past contributors. The inability to accept large donations from a handful of donors means that the only “outsider” candidates tend to be independently wealthy. 

“For example,” Smith says, “Ross Perot’s 1992 presidential campaign was possible because Perot was able to spend millions to advance his own candidacy. However, contribution limits made it illegal for Perot to bankroll the campaign of a more plausible challenger, such as General Colin Powell.” To illustrate the difficulty of raising funds for an outsider candidate, he uses the analogy of an individual trying to persuade a bank to finance a new business venture: “Imagine how much more difficult, and discouraging, the task would be if no one bank could loan over $5,000. The entrepreneur would have to convince not one, but 20 banks before his or her business could get under way.”

Furthermore, to succeed in an environment in which money must be raised from a broader base of donors, candidates are wise to stress platitudes “that will offend as few potential contributors as possible.” The need to raise money from a broad base may even lead to more negative campaigning, “for if the candidate risks losing contributions by discussing issues, the most obvious available option is to focus on the negatives of one’s opponent.”

Smith’s hostility to reform even includes an antipathy for plans that would ensure transparency, so that voters know where candidates get their money and can make their own judgments about whether their elected officials have been unduly influenced. He cites that long tradition of the “anonymous pamphleteer” in arguing that individuals should not be forced to reveal their identities, and makes the common sense suggestion that how our representatives vote should be more important than why they vote that way: judge them on their deeds, rather than their motives.

On this point, reasonable people might disagree, but if anonymity is good for individuals, it should be eschewed by corporations, who have a duty to their stakeholders to be transparent in the political involvement. That transparency alone should be enough to ensure the integrity of the process, and the right of voters to make up their own minds, in full possession of the facts, and having listened to all sides of the argument. That’s the way democracy is supposed to work.

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