100 million anonymous fat cats; the next phase of campaign finance reform. - VOTING WITH DOLLARS: A New Paradigm for Campaign Finance - book review

Washington Monthly, May, 2002 by Jonathan Rauch

VOTING WITH DOLLARS: A New Paradigm for Campaign Finance by Bruce Ackerman and Ian Ayres Yale University Press, $29.95

THE SOVIET SYSTEM IS BASICALLY senseless," the Russian dissident Andrei Amalrik once wrote. "Like a paranoiac, it behaves logically; but since its premises are senseless, the same is true of the results." He might just as well have been describing the American system of campaign-finance regulation. It, too, goes through all the motions of being rational, even hyperrational; yet it too is senseless, because its premises are incurably wrong.

The system assumes that private money is evil, that elaborate rules can squeeze out the money, and that the squeezing can be done without infringing on core political freedoms, notably freedom of speech. Wrong, wrong, and wrong. Private money is not an intrusion into politics, it is a part of politics. It can be channeled but not eliminated, nor even reduced more than a little. The attempt to regulate money out of politics mainly pays for the vacation homes of lawyers, while restricting and, increasingly, even criminalizing ordinary political activity.

Washington framed the current campaign-finance laws in the 1970s, around the time it was also trying wage-and-price controls and energy rationing. The latter two policies are long gone and gratefully forgotten, but the dysfunctional 1970s campaign-finance system remains, and continues to command the intense and often dogmatic loyalty of the generation that saddled us with it. True, Washington just "reformed" it. I use the quotation marks because the newly enacted McCain-Feingold-Shays-Meehan bill is no more a real reform than was Mikhail Gorbachev's perestroika. The new law contains one provision--its unprecedented crackdown on political advertising by advocacy groups--that is blatantly unconstitutional, but the Supreme Court will probably knock that out. What will remain is a law that will do some sensible things, on the margins, and also maybe a few not-so-sensible things. But mostly it just piles new 1970s-style rules on top of the old 1970s-style rules, which means it won't work. In the long run, the McCain-Feingold-Shays-Meehan bill's most useful contribution will be to help demonstrate the futility, of patching the 1970s system.

A growing number of reformers--no quotation marks, this time--understand as much. Several states are experimenting, so far pretty successfully, with "clean money" options that publicly finance candidates who turn down private money. On the right, thinkers like Bradley A. Smith (now a member of the Federal Election Commission) are building a formidable, if not wholly satisfying, case for outright deregulation. Then there is the Jonathan Rauch plan, a two-track system that combines the benefits of deregulation (cut red tape) with the benefits of public financing (candidates needn't be professional fundraisers and special-interest dependents). I would provide generous public financing for candidates who didn't raise or accept private money (though parties could raise it for them), but--unlike the "clean money" reformers--I would also eliminate all limits except disclosure on candidates who decided to finance their campaigns privately. Instead of trying to squeeze out private money, the Rauch plan would simply provide an alternative to it and let the voters choose. I thought I was a radical--but then Bruce Ackerman and Ian Ayres came along.

"Campaign finance lives in a time warp, untouched by the regulatory revolution of the past generation," they write. "Command and control, bureaucratic subsidies, and full information are part of the problem, not part of the solution." Their answer is ingenious and audacious. The problem is not too much money and too little information, they say; it is too little money and too much information. Candidates have to beg for scarce dollars from donors whose identities they know, with battalions of lawyers monitoring (and gaming) every transaction.

Ackerman and Ayres, who are both professors at Yale, propose instead to require that all political contributions be anonymous. You could give as much as you wanted to as many politicians as you liked, but the money would go through a blind trust administered by the government. True, you could then simply tell the candidates about your donations. The candidates, however, would have no way of checking, because all contributions would be made through an anonymous "donation booth." The donation booth, like a voting booth, would be shrouded in secrecy: Except for small contributions of $200 or less, no records would link supporter to candidate.

Private donations would tall off somewhat if donors couldn't take credit for them. So Ackerman and Ayres further propose to give every voter a $50 voucher to donate to one or more politicians of her choice. That's about $5 billion--more than the total spent on political campaigns in 2000. The money would be completely clean, and it would be dispensed by people rather than bureaucrats. Candidates would market themselves to voters, saying, "Here's why I deserve your voucher." That would draw ordinary people into the system as political donors. End result: more money, more speech, more participation, more equality. And fewer lawyers.