Soft money may fall on hard times

0 Comments | Insight on the News, July 21, 1997 | by David M. Mason

A friend who tends to ignore politics picked up an article on "soft money," thinking it might be about an easy way to earn some extra cash. In fact, that's what soft money is for political parties: a way to collect funds outside the limits and regulations on federal election spending.

Soft-money donations have become controversial because they can be huge (up to seven figures, in some cases), and because of President Clinton's unseemly enthusiasm for seeking them at White House coffees and sleepovers. Proposals to limit them have been introduced in Congress. In what amounts to a plea to "stop me before I pander again," Clinton has asked the Federal Election Commission, or FEC, to ban soft money for political parties.

But banning soft money would be unworkable and unconstitutional. To understand why, it might be useful to review how soft money became a problem in the first place.

After Congress finished the last round of campaign-finance reform in 1979, political activists, as they always do, followed the line of least resistance. Since "hard money" -- direct contributions to candidates -- now was heavily regulated, new political activities gravitated toward less-regulated areas. Soft money has become nearly as important as hard money. The Democratic National Committee raised nearly as much soft money ($102 million) as hard ($108 million) during the last two years.

Originally, the term "soft money" was used almost exclusively to describe labor unions' use of their general treasury funds -- which cannot be given to candidates -- to promote candidates or causes to their own members. As political parties tested the outer limits of federal campaign regulation, the term came to be applied to unregulated party activities such as voter registration, headquarters construction and state and local activity. Later, groups interested in specific issues began running ads discussing politicians' positions on those issues, but without an appeal to vote in any particular way

It often is said, incorrectly, that the FEC "created" soft money and therefore can regulate it. In fact, the FEC merely defined the parameters of regulation, establishing accounting rules to keep regulated and unregulated activities separate. One wonders if those who argue for the FEC's power to regulate soft money have thought through the implications of their argument. If either Congress or the FEC can abolish or arbitrarily limit soft money merely because the FEC defined certain of its attributes, then Congress or the FEC could abolish or limit any of our liberties.

Today, the term "soft money" is applied to activities as diverse as a union newsletter endorsing a candidate, the Harry and Louise ads on the Clinton health plan, donations to state campaigns -- anything other than donations to, or spending on behalf of, federal election campaigns. The only element common to all the things that have been called "soft money" is that they are not regulated under the Federal Elections Campaign Act, or FECA.

Issue advertising by nonparty ideological groups is the type of soft money that rankles politicians the most. A proposal from a bipartisan group of congressional freshmen would regulate televised issue ads. Sen. Max Cleland, a Georgia Democrat six months into a six-year term, called for new regulations after a barrage of ads in his state urged him to vote for the "partial birth" abortion ban. A "Blue Dog" Democrat reform bill would limit such ads because "the candidate risks losing control of the tone, clarity and content of his or her own campaign."

The politicians" ill-concealed reason for limiting issue advocacy is that they don't want pesky citizens bringing up issues they would rather ignore. In a classic "I'm from the government and I'm here to help you" story, politicians are attempting to use disgust with their own campaign tactics as an excuse for shutting up anyone who criticizes them. Republicans can't stand labor unions' "issue ads", Democrats are outraged at Christian Coalition "scorecards"; and both of these types of speech are paid for by soft money. Unsurprisingly, politicians from both parties are trying to figure out how to stop soft money

Their attitude was expressed most strikingly by House Minority Leader Richard Gephardt of Missouri when he declared in February: "What we have is two important values in conflict: freedom of speech and our desire for healthy campaigns in a healthy democracy You can't have both." Gephardt, of course, has it exactly backwards. The First Amendment's guarantee of freedom of speech was designed precisely to ensure a healthy democracy. You can't have one without the other.

Fortunately, courts generally have realized what is going on and have limited FECA to what the Supreme Court called "express advocacy" in its landmark 1976 decision Buckley vs. Valeo. For Congress to go further in regulating issue-oriented spending inevitably would encroach on the right to free speech. Freewheeling political debate would be impossible if citizens or organizations had to guess about the legality of every statement they made. Regulation of political discussion requires "bright-line" tests, with specific words such as "vote for," "elect" and "defeat" required to trigger regulation.