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Is Campaign Finance Reform Actually Necessary?

July 21, 2014
Today there is mounting anxiety that corporations and certain elite individuals are corrupting politics by spending excessive amounts of money on electoral campaigns. People blame the Supreme Court’s decisions in Citizens United andMcCutcheon for deregulating the election campaign system. Congress has responded to this hostile climate by introducing Senate Joint Resolution 19 in order to reform the controversial electoral system.

Author: Sophia Dai, L’16

Today there is mounting anxiety that corporations and certain elite individuals are corrupting politics by spending excessive amounts of money on electoral campaigns. People blame the Supreme Court’s decisions in Citizens United andMcCutcheon for deregulating the election campaign system. Congress has responded to this hostile climate by introducing Senate Joint Resolution 19 in order to reform the controversial electoral system.

Historical attempts to regulate campaign financing were ineffectual and often created new problems.The aim of the 1971 Federal Election Campaign Act (FECA) was to increase donor accountability by requiring more transparency and disclosure in federal campaigns. Congress increased the regulation in 1974 to cap campaign contributions. Proponents of the bill argued that the wealth of certain individuals would corrupt politicians and the political system as a whole.  As a way of circumventing these contribution caps, PACs (political action committees) became essential to national elections. Although PACs existed prior to FECA, they were primarily used by unions and were insignificant to elections. Since donors were no longer able to contribute unlimited amounts personally to campaigns, they began to donate substantially to PACs in the 1980’s and 1990’s. Donors, no longer subjected to individual caps or disclosure requirements, spent more than they had prior to the 1974 FECA Amendment. Despite the intentions to eliminate political corruption and excessive spending in federal campaigns, FECA essentially helped generate more spending by establishing powerful PACs.

In further efforts to reform campaign financing, Congress passed the 2002 McCain-Feingold Act, or the Bipartisan Campaign Reform Act (BCRA). This act sought to prohibit national party committees from raising and spending funds not subject to federal limits, and banned corporations and unincorporated entities from placing broadcast ads to name federal candidates. Proponents of BCRA argued this bill would decrease the amount of campaign spending, increase accountability by politicians, and would ultimately lead to more equalization between the electorate. To avoid the provisions in the Act which banned soft money, wealthy contributors gave huge amounts to independent organizations under §527 of the IRS code.  Before BCRA, parties and candidates had to take responsibility for the quality of political discourse. After BCRA, “shadow parties” (short-lived special interest groups that focused on particular issues or elections) became extremely influential.  Because more respectable organizations were unable to use soft-money funds to create ads, these unknown groups were able to run more attack ads that were substantially more damaging and less accountable. The consequence of this regulation decreased accountability and transparency rather than increased it.

Since 1974, total congressional campaign spending has increased from $77 million to $1.8 billion in 2010. Reform measures to decrease spending and corruption have not been successful. The $2,500 cap set on individual donations to individual campaigns pushed money into independent groups (PACs, 527s, and 501(c)4s). Wealthy individuals now funnel substantial money into Super PACs. These independent, expenditure-only committees are not subject to campaign limits and as they act as independent organizations, politicians are able to deny involvement with these groups. Today, there are about 1,090 Super PACs contributing actively in federal elections and as of July 2014, these groups reported total spending at $242,129,104. These groups only exist to circumvent the contribution cap, and they create less accountability in political campaigns. If Congress eliminated these contribution caps, it would eliminate the need for these organizations entirely.  According to the paper, “Do State Campaign Finance Reforms Reduce Public Corruption?” by scholars, Adriana Cordis and Jeff Milyo, reform efforts have little effect on reducing public corruption.  If the Democrats hope to actually eliminate “corrupt” politics, then campaign finance reform measures need to be repealed.

Senate Democrats have recently introduced a constitutional amendment in order to combat excessive spending in politics. SJ Res 19 would effectively amend the First Amendment to enable Congress to prohibit corporations from contributing money during federal electoral campaigns. This bill is aimed at restoring democracy to the American people who have lost their voice in politics to big business and the elite class. It essentially seeks to reverse the Citizens United and McCutcheon decisions, but it goes substantially further than reversing the Supreme Court—it alters our present concept of free speech and muzzles corporations. Take in the gravity of that statement. Aside from child pornography and cases in which speech is used to incite panic, free speech has never been infringed upon. The Bill of Rights has never been successfully amended and for good reason. The fundamental principles that bind our nation should not susceptible to frequent changes.

This amendment essentially attacks all corporate entities, including the Sierra Club, the NAACP, and every labor union. But while it denies corporate free speech, it expressly exempts media corporations such as MSNBC, CNN, and Fox News from this absolute restraint. So while the ACLU will no longer be able to contribute money during elections and exercise their speech, the NY Times can. This arbitrary selection by Congress of who suffers the restraint sets a dangerous precedent: a legislature that can pick and choose who has a right to speech is far too powerful. Any enemy of the current party in power could be silenced.

Harry Reid and Senate Democrats in the Senate Judiciary Committee frequently name Charles and David Koch as examples of vile tyrants of industry who have corrupted the electoral system with excessive money. But this comparison is attack is unjust in light of the 2012 electoral numbers. President Obama raised $715,677,692.

SJ Res 19 has little chance of passing the Senate, let alone receiving enough support to actually amend the Bill of Rights—and the Democrats know it. In order to pass a constitutional amendment in the Senate, 67 senators need to vote for it, and for the 113th Senate, that requires at least 12 GOP votes. As this amendment has about nil chance of receiving bipartisan support, the effort here is little more than political posturing to vilify Senate Republicans before the 2014 elections. There is too much money in American politics, but the solution does not lie in wasting tax dollars on introducing and pushing a bill that has no possibility of success.

Senator Ted Cruz (R-TX), in a rather cheeky but undeniably clever move, proposed an alternate amendment to Senator Durbin’s amendment, which simply reiterated the First Amendment. Essentially, anyone who voted against his amendment would vote against one of the most fundamental provisions in the Constitution that has been ingrained in American culture for over 200 years. Although this move might be criticized as pointless and pert, the point he makes is not. By allowing Congress to restrict free speech now, even in this limited capacity, we inch away from an ideal that we will not be able to return to.  In order to preserve the freedoms that are so meaningful to us, we cannot move away from the past. Any advance beyond these original principles is not a move towards progress but a step away from it. Instead of abandoning freedom of speech so impulsively due to a momentary, contemporary problem, we must return to the First Amendment.  As President Coolidge said, “If all men are created equal, that is final. If they are endowed with inalienable rights, that is final.” Our right to freedom of speech is final and we cannot allow any backtrack.

Editor’s Note: Sophia Dai was recently wrote a summer dispatch on Penn Law’s website. Sophia’s dispatch is “is one in a series of firsthand accounts by Law School students about how their summer employment opportunities are preparing them for their legal careers. Dai is spending her summer clerking in the U.S. Senate’s Judiciary Committee.”  Read the dispatch here.



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