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Money and Politics
Who Owns Democracy?

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t whoever they want to support and give them as much as they want to give. If everyone knows who's giving the big money, their views and actions will come under more scrutiny," he said. Full disclosure of gifts, he said, would deter corruption without the anti-democratic side-effects of current regulations.

Needed: Trust in Democracy

Pastor Greer's political views may not appeal to everyone, but neither his views nor opposing views should be suppressed by government fundraising regulations, say Choice Three supporters. What's behind these regulations? Who are the "moneyed interests" that the prior choices find so fearful? Wealth is spread across America, among Independents, Republicans, Democrats, liberals, moderates, and conservatives. Who are these "special interests" who hire lobbyists to do their selfish bidding? At its best, democracy is a fair competition of ideas and interests. Just about every professional, trade, business, consumer, religious, and issue advocacy organization has ideas on how the nation should spend public funds and make public policy. Every citizen has special interests, and many are members of organizations that hire lobbyists on their behalf. That's America.

Myths and scare tactics have gotten us into today's campaign finance mess, say Choice Three supporters. Our representative system of democracy has withstood the test of time and, until the 1970s, worked well without much regulation of campaign finance and without radically shifting power by widespread use of ballot initiatives and referenda. Then the Watergate scandal precipitated a rush to regulate political contributions, restricting everyone's freedom in a vain attempt to control money and political power. But freedom isn't easily regulated, and the reform effort backfired, in this view. The way regulations systematically distort politics is far, far more destructive to democracy than the occasional bribery scandal had ever been. Political gridlock is epidemic. Elections are tipped towards incumbents, celebrities, and the rich. Other good candidates don't run for office or can't raise enough money to compete. To revive democracy, we need more money for campaigns and less regulation to ease fundraising and spur discussion of differing perspectives.

Freedom, Disclosure, and Campaigns

The poet William Stafford has warned that, "If you purify the pond, the water lilies die." In a similar way, Choice Three supporters maintain that excessive regulatory efforts to purify elections of dirty money is wilting democracy. Nothing can stop political corruption -- which erupts relatively rarely in America -- but strictly enforcing fuller and faster disclosure of donations would strongly deter every possible type of campaign finance abuse, in this view. As it stands now, disclosure rules are pretty much of a joke across the nation, according to the Center for Public Integrity, a nonprofit research organization. In fact, the center reports that most disclosure laws have actually been designed to thwart public awareness of political gifts.

Democracy's core problem is that, while nearly everyone agrees election campaigns are important, hardly anyone wants to pay for them. What is the source of money for this essential democratic endeavor? Only about 10 percent of Americans contribute time or money to political campaigns. This pattern is as old as American history, and candidates from all parties have bankrolled their own campaigns or turned to a relatively small group of donors.

What keeps the system honest? This pattern of fundraising, with its lack of populist appeal, stirs up significant public and partisan debate and media scrutiny -- all of which helps keep the whole system relatively healthy and honest. So it's a mistake to see this messy debate as a reason to impose regulations, which can only throw a monkey wrench into democracy's machinery.

Consider a partisan example: In the 1968 presidential primary campaign, Republican leaders were quick to criticize U.S. Senator Eugene J. McCarthy, a Democrat who raised record amounts of money, much of it from a handful of major donors who gave up to $500,000 each. An historical analysis of fundraising in Law.com, an Internet publication for lawyers, concluded, "Adjusted for inflation, the 1968 McCarthy campaign raised more money from private donors than George W. Bush has to date" -- that is, September 1999 in the presidential primary campaign.

"I couldn't have run for president if it hadn't been for big-money contributors," the 83-year-old McCarthy told Law.com in 1999. While he said there is no proof that "big money corrupts politics," he said there is plenty of evidence that federal campaign finance regulations have the effect of "putting limits on who people can vote for." Government's role, he said, should not be to control political discussion, but should be restricted to prosecuting corruption and ensuring that the public knows the source of all political donations.

Misjudging a Problem

Choice Three attributes some of today's problems to a highly controversial split decision by the U.S. Supreme Court in 1976. On one hand, the court struck down limits on campaign spending, finding that they would infringe on a candidate's free speech right to spread his message. On the other hand, the majority of justices broke with logic, in this view, by ruling it was permissible to put limits on citizens' contributions to candidates. The court said that such donations were protected, too, but could be limited for "compelling" reasons, including efforts to prevent corruption. But Choice Three agrees with Chief Justice Warren Burger, who dissented from the majority on this point. He wrote that government should not be allowed to limit citizens' contributions. He said such limits would have a "chilling effect" on grassroots political activity and discriminate against many candidates, especially challengers who often need large contributions to launch campaigns. In the last 25 years, Justice Burger's gloomy forecast has been proven accurate, say Choice Three supporters.

Limits on political donations and free speech are often justified by concerns that money can be used to buy elections or a legislators' vote on important matters. But Choice Three notes that many independent studies have concluded that the primary factors in determining a legislator's vote are: party affiliation, ideology, and constituent concerns. Donors, whether they are citizens or political action committees, generally contribute to favored causes and candidates who share their views.

Stop Controlling Political Ideas

Democracy is often called a marketplace of ideas, and like any marketplace, it needs some basic rules to deter fraud. But when government exerts too much control over the operations of a market -- whether it's a market for political ideas or airline tickets -- competition is stifled, monopolies develop, and service lags. Today's over-regulated political marketplace has created comparable distortions in politics, Choice Three says. The rules are so complex that candidates almost continually violate technical provisions and courts are continually having to interpret what they mean. Supporters say that proposed reforms would only make matters worse by trying to fix things that aren't broken, such as the following:

  • Political action committees serve a good purpose. These committees have been around since the 1950s and were encouraged and formalized by Congress in 1971. At that time Congress saw them as a way to increase the political influence of citizens, by allowing them to form organizations to collect small contributions and disburse large gifts to favored causes and candidates.
  • So-called "soft money" strengthens the democratic process. In 1974, Congress banned soft money, the unlimited contributions to political parties. But after the 1976 elections, it was clear the ban had inadvertently reduced political parties' ability to buy bumper stickers, hold rallies, advertise, and conduct many other traditional grassroots activities for increasing voters' awareness of issues. The ban was repealed in 1979, for good reason.
  • Issue ads are protected political speech. In 1974, Congress sought to limit the use of advertisements placed by individuals or organizations to advocate political positions. But the Supreme Court would not let the law take effect, ruling that nothing is more central to the right of free speech than the right to openly and freely advertise political views.
  • Not enough money is invested in the democratic process. Apart from some extraordinarily expensive campaigns, total campaign spending around the country is quite low, according to the Cato Institute, a policy research organization in Washington, D.C. The institute's Peggy Ellis, referring to 1996 elections, wrote that "If you look at every race in the country, from dogcatcher to President, the amount spent is less than $10 per eligible voter. As a society, we spend more on potato chips ... than we do on politics."

What Can Be Done?

Choice Three supporters generally favor the following measures:

  • Strengthen democracy by permitting citizens, political action committees, and political parties to make unlimited contributions to candidates and to advertise their positions on any issue or candidate.
  • Strictly enforce a new requirement that all political contributions be promptly and fully disclosed.
  • Crack down on efforts to hide contributions by funneling money through front-organizations and third parties.
  • Require political advertisers to prominently disclose their identities and true sources of funding in their ads.
  • Impose heavy fines and jail sentences on anyone who violates disclosure laws.
  • Repeal all other campaign finance laws, as they distort politics without creating any benefit. In particular, repeal laws that require taxpayers to subsidize election campaigns of candidates, even ones they oppose.

In This View

  • Campaign finance reforms have backfired, systematically distorting politics in a far more destructive way than the occasional bribery scandal ever did. The way to deter corruption in a free country like ours is not with regulations that gum up the system but with a single, strictly enforced requirement for prompt disclosure of all political contributions.
  • Restrictions on fundraising promote political gridlock. Because laws sharply restrict how much citizens can contribute, challengers can't raise enough money to run competitive races and incumbents can't be dislodged.
  • Campaign finance laws defy compliance and, thus, tarnish politics as nearly all politicians exploit loopholes to raise the money they need to communicate with voters in election campaigns.
  • Exorbitantly expensive campaigns make headlines, but overall, political campaigns cost less than Americans spend on potato chips.
  • Americans have a right to free speech, which in this view includes unlimited freedom to express financial support for candidates. Limiting a citizen's contribution to $1,000 per candidate per election is like granting citizens permission to travel, but allowing them to spend only $1,000 per trip.
  • For two centuries, the nation managed quite well with few regulations on political fundraising. In a recent case before the U.S. Supreme Court, the Missouri attorney general acknowledged that there was no evidence of widespread corruption in the days when contributions were unlimited.

In Contrary Views

  • Letting the rich write bigger checks, as this choice advocates, is not likely to reduce Americans' anger about the moneyed interests getting their way in politics.
  • In our democracy all citizens are supposed to have an equal voice and equal access to their elected representatives. But when politicians are big-time fund-raisers, wealthy donors gain greater access and influence. It's time to reform campaign fundraising practices.
  • Choice Three argues that better public disclosure of gifts would make politics cleaner and more honest. Really? Right now politicians openly accept gifts from special interests with matters pending before government. Recall one infamous example: the banker Charles Keating raised large amounts of money for five U.S. Senators in the late 1980s. They subsequently pressured federal agencies to allow Keating's federally insured -- and soon-to-be-bankrupt -- savings and loan company to remain open. The senators' lobbying effort cost taxpayers billions of dollars.
  • This choice jeopardizes democracy by freeing the flow of money in politics without assuring citizens of any better way to hold elected officials accountable. Voters should have the final say, by being able to enact and repeal laws, and to recall officials.
  • Is money the equivalent of speech, as this choice suggests? Courts have ruled repeatedly that political contributions represent a generalized form of support, and are not political speech. "Money is property; it is not speech," U.S. Supreme Court Justice John Paul Stevens wrote in a 2000 decision upholding limits on individual contributions.

For Further Reading / Publicize All Political Donations, Don't Regulate Them

  • Filip Palda, How Much is Your Vote Worth? The Unfairness of Campaign Spending Limits (San Francisco, CA; Institute for Contemporary Studies, 1994).
  • Bradley Smith, "Campaign Finance Regulation: Faulty Assumptions and Undemocratic Consequences" (Washington, D.C.: Cato Institute, 1995). This article can also be found online at www.cato.org/pubs/pas/pa238es.html
  • www.aclu.org is the Web site for the American Civil Liberties Union, an organization dedicated to protecting citizens' civil liberties. See online article, "What's Wrong with Pending Legislation That Seeks to Regulate Issue Advocacy?" at www.aclu.org/congress/cfr061698a.html

Contents Introduction Choice 1 Choice 2 Choice 3 Summary


Money and Politics
Who Owns Democracy?

A project of Information Renaissance and National Issues Forums Research




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