Vol. 13 No. 8 (August 2003)

INSIDE THE CAMPAIGN FINANCE BATTLE: COURT TESTIMONY ON THE NEW REFORMS, by Anthony Corrado, Thomas E. Mann, and Trevor Potter (editors). Washington, D.C.: Brookings Institution. 2003. 333pp. Paper $28.95. ISBN 0-8157-1583-8.

Reviewed by Neil Snortland, Department of Political Science, University of Arkansas at Little Rock. nesnortland@ualr.edu.

INSIDE THE CAMPAIGN FINANCE BATTLE: COURT TESTIMONY ON THE NEW REFORMS contains an edited collection of the written testimony submitted by expert and fact witnesses to a three-judge D.C. District Court in the challenges to the Bipartisan Campaign Reform Act (BCRA) of 2002 in McCONNELL v. FEC (2003). From over 200 witnesses and 100,000 pages of written testimony, the editors selected the “best” testimony, not on the legal issues facing the court, but on whether the changes in campaign finance over the past decade have so corrupted the political process as to justify the restrictions imposed by the new law and whether the law will diminish the importance of political parties, chill speech on public policy issues during elections, and inadvertently elevate the influence of interest groups relative to the parties.

The expert witnesses included political scientists, and the fact witnesses included politicians, party officials, political consultants, and donors. Although the court filings may be found on-line (www.campaignlegalcenter.org), a goal of the editors “is to make testimony in this historic case available to a more general readership” (p.ix), and by so doing to provide “a rich portrait of contemporary campaign finance practices, the way those practices developed, and the likely implications of the new law for this regime” (p.7). The lack of an index, although understandable given the rapid production of the book, reduces the utility of the volume for the reader.

Two major developments motivated those seeking the BCRA. The first was the increasing importance of soft money, the popular term used for unlimited contributions by corporations, unions, and individuals to party organizations to be used for get-out-the-vote (GOTV) and party building activities. The second was the increasingly aggressive use of issue advertisements as electioneering tools, with so-called sham issue advertisements favoring or opposing clearly identified federal candidates but avoiding the express words such as “vote for” or “reject” that, under BUCKLEY v. VALEO (1976), would bring the advertisements under the requirements of the federal law.

The BCRA eliminated soft money for the national parties and federal candidates and officeholders, allowed limited soft money for state and local parties (the Levin Amendment), banned corporations and unions from spending treasury money on “electioneering communications” (i.e., issue advertisements that refer to a federal candidate), and required all other electioneering communications broadcast within thirty days of a primary election and sixty days of a general election to be regulated under existing federal contribution and disclosure laws.

The first part of the book presents contrasting testimony on whether soft money has strengthened or weakened political parties and on the probable impact of the law on party organizations. The second part presents contrasting views of the legitimacy of issue advertisements that refer to federal candidates during elections and the impact such advertisements have on federal elections. The final section covers testimony on whether the data from public opinion polls support the conclusion that soft money and issue ads produce the appearance of corruption among the public sufficient to justify the BCRA’s restrictions.

Thomas E. Mann traces how a series of administrative rulings by the Federal Election Commission (FEC) allowed soft money to undercut the 1974 amendments to the Federal Election Campaign Act (FECA), amendments designed to prevent the use of corporate and union treasury money to finance federal campaigns. He places special emphasis on the 1996 failure of the FEC to do anything about the use of soft money to finance campaign advertisements (i.e., sham issue advertisements controlled by President Clinton and Dick Morris in the presidential election), a failure that opened the floodgates for parties and interest groups to seek ever increasing amounts of soft money. Mann argues that because elected officials control the national party organizations, and that because these officials are intimately involved in raising and spending soft money, that “parties do not dilute the influence of large donors or insulate elected officials from direct connections with these donors; they instead facilitate and broker such connections” (p.35).

Mann concludes that by 2000, at the latest, soft money and national party issue advertisements were primarily used to influence federal elections. He calls the idea that soft money primarily was used for party building and GOTV a “transparent lie,” and charges that “parties, elected officials, and private interests have been linked in a deceitful game … characterized by a constant search for funding conduits and rationales that allow political actors to evade the strictures of federal election law” (p.35). Given Mann’s view of the situation, the BCRA is amply justified; however, he sees it only as an “incremental step” to fix campaign finance law (p.36).

Jonathan S. Krasno and Frank Sorauf argue that soft money has not built stronger parties. They associate stronger parties with higher voter turnout, more competitive elections, increases in partisan attachments among voters, and increases in party advertisements which emphasize the party label, none of which happened despite the huge increase in soft money spending. They see soft money as allowing state parties to purchase expensive campaign activities such as phone banks and direct mail from the campaign supply industry far more than engaging in more effective grass-roots party organizing efforts such as canvassing.

Sidney M. Milkis and Raymond J. La Raja provide sharply contrasting views to those of Mann and Krasno and Sorauf. Milkis argues that the rise of soft money strengthened political parties, allowing the parties to conduct polls, recruit and train candidates, identify and mobilize supporters, and raise funds from a wide variety of sources, thus allowing parties to serve as a buffer between donors and elected officials and diminish the influence of interest groups. In Milkis’s view, the BCRA will only reduce the importance of parties and increase the relative influence of interest groups.

La Raja argues that analyses of how soft money is spent supports the conclusion that soft money has strengthened the relationships among national, state, and local parties, with national committees raising and administering the money and state and local party organizations conducting voter education and turnout efforts and building party organizations. He downplays any corrupting effect of soft money by noting that, contrary to conventional wisdom, many soft money donors give relatively small amounts to the parties. He sees the BCRA as harming the parties and increasing the relative influence of interest groups such as EMILY’s List and the National Rifle Association, groups which are far better able to hide their campaign activities than the parties.

Is the BCRA’s regulation of state party organizations necessary? What impact will the law have on state parties? Donald Green contends that the empirical evidence that state and local party voter mobilization efforts “produce a harvest of votes” (p.100) for federal as well as state candidates, even when federal candidates are not mentioned, justify the BCRA’s ban on national parties transferring soft money to state and local party organizations for party building and GOTV efforts. The testimony of Gail Stoltz, political director of the Democratic National Committee (DNC), may be used to support either Green or La Raja, leaving the choice to be based on whether a stronger tie between national and state parties is a good or a bad thing. Stoltz describes how the DNC oversees a “coordinated campaign” to have state parties “register, identify, and turn out voters on behalf of the entire Democratic ticket, including federal, state, and local candidates” (p.122).

In contrast to Green’s line of reasoning that the BCRA will not impair the ability of the parties to raise increasing amounts of hard money from a wider range of sources, especially given the increased contribution limits under the law, California Democratic Party executive director Kathleen Bowler maintains that the BCRA will seriously harm fund raising and party building activity and thus reduce party influence relative to interest groups. She sees the law as bringing all state party activities under federal control; no matter how indirect an effect an activity has on a federal election it will be considered as “federal election activity” and subject to complex accounting rules requiring at least three separate accounts. She argues that a modern state party will find it very difficult to function effectively with a largely volunteer staff; that soft money has allowed parties to hire staff, consultants, and pollsters who have greatly strengthened state parties. Mark Brewer, chair of the Michigan Democratic Party, sees the BCRA as imposing high compliance costs on his party and argues that the substantial criminal penalties for noncompliance will discourage people from holding state party offices. The accounting procedures are so complex that he estimates the cost of compliance will go to 15% from 10% of his budget, and that the compliance staff will double.

To what extent are issue advertisements shams, cleverly promoting or attacking federal candidates while avoiding disclosure? Does recent research on issue advertisements justify the law’s restrictions? Or is the research too flawed to serve as an adequate justification for chilling political dialogue during elections? According to Jonathan S. Krasno and Frank Sorauf, disclosure is a major protection against corruption, but sham issue advertisements allow the sponsors to mask their identity and make a mockery of the FECA. David B. Magleby analyzes issue advertisements that identify federal candidates during federal elections without expressly urging a vote for or against these candidates, and concludes that advertisements are used more to attack or support candidates than to promote legislative issues. He explains how the regulatory scheme before the BCRA allowed individuals and non-candidate groups to mask their identity and avoid contribution limits. These electioneering advertisements, he concludes, may have a significant effect on election outcomes in competitive elections.

Kenneth M. Goldstein analyzed issue advertisements during the 2000 elections, and found that advertisements by interest groups mentioning federal candidates or elected officials were concentrated before the election, stopping on Election Day, while pure issue advertisements were spread throughout the year. Goldstein argues that the express words standard originated in BUCKLEY is not able to distinguish pure issue advertisements from sham advertisements. However, if the BCRA’s definitions of electioneering advertisements are applied, almost all sham issue advertisements are correctly identified and very few pure advertisements are misidentified.

James L. Gibson raises methodological and substantive issues with the research by Krasno on the 1998 election and Goldstein on the 2000 election. Gibson provides a secondary analysis of the data, reporting that they are full of inconsistencies and errors, that the key measure of the study requires “highly subjective assessments,” and that he cannot replicate the results. Thus, he argues, the conclusions are “built on a house of cards” (p.217) and should not be accepted. Krasno replies to Gibson’s criticisms, asserting that even with the imperfections typically found in social science, “a careful and informed analyst can count the number of pure issue ads that would have been affected by BCR and create from that count a reliable and precise estimate of the legislation’s impact” (p.233).

Robert Y. Shapiro’s analysis of public opinion polls concludes that the majority of the public sees large contributions as providing interest groups with undue influence and opening the path to corruption, disapprove of soft money contributions to parties, and generally support the provisions of the BCRA. Mark Mellman and Richard Wirthlin similarly argue that the public believes that elected officials spend too much time raising money for their parties and that large soft money contributions improperly influence legislation. Contrast this popular belief with Mann’s concession that “[p]arty, ideology, constituency, mass public opinion, and the president” have more to do with voting in Congress than contributions (p.33).

In contrast, Whitfield Ayres’s analysis of public opinion polls concludes that the BCRA has little chance of decreasing the public’s belief in the appearance of corruption in politics. As with most complex issues of public policy, the public’s knowledge about the issues of campaign finance is shallow at best. Substituting hard money for soft money in questions produces the same results because the public doesn’t know the difference between hard and soft money. If the polls show anything it is that the public’s concern is with money itself, not soft money. Because of the public’s skepticism about money and the fact that the BCRA increases hard money limits, the law is unlikely to reduce the concern among the public about undue influence and corruption in politics. Shapiro rebuts Ayres by arguing that predictions based on current public opinion data are speculative, that how the public will view the law will depend on how it is implemented, and that Ayres’s failure to find a relationship between trust in government and opinions on campaign finance merely show his failure to apply appropriate multivariate analyses.

David M. Primo also disputes the proposition of the reformers that soft money contributions and issue advertisements contribute to the appearance of corruption, which, in turn, leads to a decline in confidence or trust in government. His analysis finds that trust in government rose at the very time when elected officials were becoming more dependent on soft money and large donors. Several factors may lead to a rise or fall in the public’s trust in government, including evidence of actual corruption, but campaign finance is not one of them. Public opinion data do not justify the BCRA when open-ended questions are used. Americans regard campaign finance reform as having a very low priority and many do not believe that a new law on the subject could make a significant change in government.

What are we to conclude from this mass of argument and counter argument? We do know that the divisions reflected in the testimony carried over to the decision of the district court on May 1, 2003, with no consensus on findings of fact. The three judges wrote in excess of 1,600 pages of opinions and orders in a decision so complex that they needed a four-page chart in a per curiam opinion by two of the judges to guide readers through the mass of issues being litigated and the various positions of each judge (http://www.dcd.uscourts.gov/02cv582a.pdf , pp.12-15).

In brief, the judges found that national parties could continue to raise soft money for GOTV and voter registration activities, but the ban on parties’ expenditure of soft money for sham issue advertisements was upheld. The ban on federal candidates and officeholders raising soft money also was upheld. The court rejected the thirty-day and sixty-day definition of electioneering activity, but upheld a back-up definition that includes any communication that supports, promotes, opposes, or attacks a candidate for federal office at any time, prohibiting financing of such advertisements from corporate or union treasuries, but allowing these advertisements to be paid from political action committee (PAC) funds subject to disclosure to the FEC.

In an unusual action, the Supreme Court set aside September 8, 2003, four weeks before the usual opening day of the first Monday in October, to hear the case, granting four hours of oral arguments for each side, and posted a special page on its website (http://www.supremecourtus.gov/bcra/bcra.html) to allow easy access to court filings.

REFERENCE:

Thomas E. Mann, A District Court Panel Rules on Campaign Finance: What Does the Decision Mean? The Brookings Institution, May 5, 2003, http://www.brook.edu/views/op-ed/mann/20030505.htm.

CASE REFERENCES:

BUCKLEY v. VALEO, 424 U.S. 1 (1976).

McCONNELL v. FEC, 02-cv-582 (2003), http://www.dcd.uscourts.gov/mcconnell-2002-ruling.html).

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Copyright 2003 by the author, Neil Snortland.