April 2, 2006

Consequences of Campaign Finance Reform

Carroll Andrew Morse

In today’s Projo, Scott Mayerowitz reports on the out-of-state funds pouring into the Rhode Island Senate campaign...

Rhode Island's Senate race is hardly a local contest.

Two out of every three dollars raised so far have come from out of state…

With less than six months to go before the Senate primary, donors have contributed nearly $4.3 million, as of the reporting period that ended Dec. 31. That number is expected to grow substantially when new figures are released April 15.

Most of the money so far has come largely from big cities on the East and West coasts.

New York residents donated more than $500,000 by the end of December. California contributors were right behind, with $440,000. Money also flowed in from Massachusetts, Florida, Illinois and Washington, D.C.

What is often overlooked in the debate about campaign finance reform is the effect it has on how candidates spend their time. Mayerowitz's article provides a nice snapshot…
[Matt] Brown has raised 72 percent of his money from out of state, a higher percentage than any other candidate.

Brown's top-giving ZIP code outside Rhode Island is the posh Beverly Hills 90210. In the last four months, Brown has spent at least nine days fundraising in the Los Angeles area, according to his campaign.

[Sheldon] Whitehouse is also tapping national money, with New York his top source so far.

Director Martin Scorsese hosted a Whitehouse fundraiser in his Manhattan townhouse last month, an event cohosted by former Senate Majority Leader Tom Daschle of South Dakota.

These are yet more examples of how campaign finance “reform” has failed. CFR is supposed to reduce the effect of money in politics. Instead, as currently implemented, it makes candidates from everywhere beholden to the wealthy areas of the country where lots of people capable of donating $2,100 to a single candidate can easily gather in one place. To be competitive, politicians have to take time away from discussing ideas with their constituents to work on raising money from out-of-staters.

Incumbents like this system, because it gives them an advantage. Their national level connections allow them to tap into a nationwide fundraising system that can deliver donations from all over the country. Challengers without that kind of access have a harder time raising the money they need to get their message out (unless, for example, the challenger is an independently wealthy former Attorney General with lots of free time on his hands; of course, our system is supposed to be open to more than just independently wealthy Attorney Generals with lots of free time on their hands).

In an OpinionJournal interview from a few months back, former House Speaker Newt Gingrich proposed a creative solution to this problem…

"McCain-Feingold was a very bad bill which strengthened millionaires, weakened the middle class and made it harder for challengers. I would repeal any limit on people giving in the constituency they vote in." But that's not all. He'd also "simply ban all fund-raising in Washington. You can do that by straight out rules of the House and Senate." Admittedly, Mr. Gingrich has filed this proposal under "can't do." But even so, it has an elegance about it that makes it alluring….

"Now what you've got is a dance in which members go to unending PAC [political action committee] fundraisers hosted by lobbyists in order to raise enough money that they can't be challenged, which means they don't have to go home, so they can have more time free to go to more fundraisers hosted by more lobbyists. I just think that system's wrong."

No limits might be extreme, but raising the ceiling on local contributions is a reasonable idea that would increase the amount of time Rhode Island politicians spend listening to -- and ultimately representing -- Rhode Islanders, instead of out-of-state interests.

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Let me first begin by saying that I agree whole-heartedly with CAM.

Let me add this to the discussion:

The recent decision involving 527 groups also poses an interesting storyline for the upcoming elections.

For a few years, 527s such as moveon.org dotted a political landscape that resembled a newfound wild west and had a tremendous impact on both local and national politics.

Now, the FEC has been directed to define limitations on 527s and moveon.org has moved on into the regulated territory of traditional PACs.

While I was, and still am opposed to campaign finance reform as a concept as outlined by McCain-Feingold, political campaigns and interest groups cannot be handcuffed by their principled opposition while political opportunity passes them by. A number of new and old organizations have employed tactics that are in the least, very creative in order to succeed in this new environment. 527s have represented the most popular and technically legal of these methods. Now there seems to be some reason to rethink how effective 527s will be in the future.

When considering the increasing standards being sought on the federal level, we should also look at our own local campaign finance rulings where we have seemingly let the bottom drop out of our regulatory system.

What effect, if any will this federal issue have on Rhode Island where our BOE debacle has actually increased the lawlessness of our political landscape? Without state regulation of campaign finance anywhere in sight, will Rhode Island see an influx of not only campaign contributions, but organizations as well? Will we extend our reputation as a haven for non-profits to include political organizations as well?

I am not a lawyer, and please correct me if I am posing an improbable scenario. But it seems to me that the BOE has been rendered completely impotent for the duration of the 2006 election cycle. What's stopping "special interests" from pouring money into our state? and who takes the lead in exploiting our current state of affairs?

Posted by: johnb at April 2, 2006 9:43 PM

No limits is no more extremem than the concept of Free Speech is extreme.

Posted by: bird dog at April 3, 2006 5:31 AM

Contribution limits would have meant no Eugene McCarthy candidacy. I'm with bird dog. Free speech means no limits. As in "free."

Posted by: Michael Gersh at April 3, 2006 3:31 PM