The summer of reform: campaign finance laws return to the congressional agenda

Reason, August-Sept, 1998 by Michael W. Lynch

Campaign finance reform is back. Declared dead in the Senate after its supporters failed to overcome a filibuster in late February, the issue was thought to have suffered a similar fate in the House when a March reform bill failed to pass.

But the rank and file rebelled against the House leadership, and the issue is back on the agenda. Chastened by its own members for restricting debate on earlier proposals, the House leadership lurched to the other extreme and opened the door to a debate that may last all summer.

Congress began debate with a freshman-backed bill. Eleven substitute amendments to completely replace this bill were cleared for debate, and roughly 600 amendments to these amendments were to follow suit. While there are many ideas in circulation, the one preferred by reform enthusiasts is embodied in bills sponsored by Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.) and Reps. Christopher Shays (R-Conn.) and Martin Meehan (D-Mass.). These bills would severely restrict the ability of political parties to raise and spend "soft" money, which is not subject to federal contribution limits. National political parties use soft money for "party building" efforts, such as public opinion polling and voter registration drives. Soft money is also frequently transferred to state parties and advocacy groups, which spend it on state and local elections.

In addition, these proposals seek to regulate independent issue advocacy ads, which, under the U.S. Supreme Court's 1976 Buckley v. Valeo decision, fall entirely outside the purview of federal regulation as long as they avoid such magic words as "vote for" or "vote against" a candidate. (See "Gagging on Political Reform," October 1996.) The proposals would empower bureaucrats to decide if ads are intended to influence electoral outcomes.

For their part, Republicans are still pushing "paycheck protection," which would force unions to get annual permission from their members to use any dues money for political activity. A June initiative to bring paycheck protection to California failed by a 53.5 percent to 46.5 percent margin and led to a large union turnout. (According to exit polls, however, a third of union-member voters cast their ballots for the measure.)

Before federal legislators embrace any of these proposals, they ought to see how some of their most cherished ideas are playing out in the states.

As documented in a Wall Street Journal editorial last August 5 and a month later by Jonathan Rauch in The New Republic, Congress need look no further than Feingold's home state to see what happens when bureaucrats become political speech police. Wisconsin has long been a "good government" state that prohibits unions and corporations from participating in electoral politics. In 1996, independent issue advocacy hit the state full force, with Wisconsin Manufacturers and Commerce, Americans for Limited Terms, and the Sierra Club all running ads on their pet issues.

Days before the election, first-time candidates, incumbents, and citizen activists went crying to the Wisconsin Election Board (WEB), which regulates the state's campaigns. Regulators took the groups to court, where judges ordered the ads off the air while the WEB looked into the whether they constituted "express advocacy," even though none of the ads used commonly accepted trigger phrases. Ultimately, the board found that the ads constituted express advocacy since, as WEB attorney George Dunst told the House Judiciary Subcommittee on the Constitution in September, even without the magic words, the Board felt "the message of 'elect or defeat' had been intended and conveyed."

This episode should disabuse anyone of the notion that such rules will be enforced without the taint of politics. When it came time for the election board to administer discipline, it fined Americans for Limited Terms and Wisconsin Manufacturers and Commerce, but not the Sierra Club.

Nor is paycheck protection a worthy reform. Washington state took the paycheck protection path in 1992, when Republicans worked to pass a comprehensive campaign finance reform initiative, I-134. In exchange for agreeing to contribution and spending limits and disclosure requirements, conservatives were given a four paragraph section that required unions to get annual permission from their members for political action committee contributions. "I-134 was sold to Republicans solely on the basis that it would curtail [union] spending," recalls Brett Bader, a longtime Washington state Republican campaign consultant.

Republicans bought a lemon. It didn't take long before paycheck protection was undone, first in practice and then in law. Even with the restrictions in place, union PAC money grew each election cycle - from $3.3 million in 1992 to $3.4 million in 1994 to $4 million in 1996 - indicating that either union members love to underwrite left-wing politics or the law was erratically enforced. And when it appeared that one union, the Washington Education Association, had violated the law, the rules were simply changed.