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McCain-Feingold’s Soft Money Sidestep

Christopher D. Smith

During late January 2000, I was privileged to witness firsthand a small portion of the political combat held in the frozen hell of central New Hampshire. While in the town of Franklin, a group of Bill Bradley supporters and I learned of a John McCain for President rally to be held in a local VFW just down the street. In full Bradley regalia, we dropped in to find out what all the McCain hysteria was about.

The fuss most certainly wasn’t about McCain’s speechmaking which, although ostensibly sincere, was flat. The crowd, consisting of both veterans and non-veterans, did not seem to notice. They were more interested in paying their respects to a man whom they deeply respected, and more importantly, who seemed to get it. In that room, I sensed the same combination of sincere appreciation and hope that had been present at Bradley campaign rallies. There was a difference, however. With McCain, the intensity of hope and appreciation was much stronger. This memory has resurfaced as I’ve watched the U.S. Senate debate S.27, the latest campaign finance reform legislation to be spearheaded by McCain and his Democratic co-sponsor, Sen. Russell Feingold of Wisconsin.

When man encounters the profound, he is forced either to become equally weighty or instead find himself crushed. In McCain’s case, his profound encounter was with the millions of American voters who saw in him a genuine people’s champion, a neo-Teddy Roosevelt. This was profound, of course, because prior to the 2000 presidential election, McCain had done little beyond campaign finance reform to suggest that he was inclined or ready to carry the banner of popular reform. However, to know McCain is to know that he has encountered the profound twice before in his life, both as a Vietnam POW and as one of the scandalous Keating Five, and each time he has responded with gritty determination to surmount the obstacle. McCain’s response to the large wave of support he received throughout the nation in 2000 was to transform himself into the Senate’s resident reformist crusader. In forcing a two-week debate and vote on campaign finance reform, he and Feingold have managed to do what would have been impossible two years ago.

This is a real achievement. However, this achievement shouldn’t blind those who support campaign finance reform in principle from seeing the truth about S.27. The McCain-Feingold bill is bad legislation.

The biggest flaw in McCain-Feingold lies in its obsession with soft money. McCain and Feingold identify the proliferation of soft money contributions as the bane of the federal election system. Soft money consists of contributions made to political parties technically for party-building activities, but are often solicited directly by candidates, and then secretly earmarked for expenditure on their campaigns. Soft money donations differ from hard money contributions -- contributions made directly to a candidate’s campaign and which are subject to strict limits and donor disclosure requirements -- in that they are often bigger. Much bigger. As total campaign spending has leaped upward over the last few election cycles, soft money fundraising has also lurched dramatically upward. Federal election candidates and the two major political parties increasingly and more brazenly flout the current campaign finance laws in their escalating efforts to raise soft money funds.

The proliferation of soft money is evidence that candidates increasingly mock campaign finance laws and are too dependent upon the support of a small group of wealthy donors, and it should bring our condemnation. The McCain-Feingold bill recognizes the importance of upholding our laws and proposes to ban all soft money. This assumes, of course, that those laws were worthwhile in the first place, which they are not.

Our current campaign finance system, which was built mostly in the 1970s, also suffered from a woeful misunderstanding of the role of money in politics. In the bad-old days when elections were free, people voted, and campaigns were lawless, candidates often only needed to find a few wealthy supporters willing to foot the bill for all campaign expenses. There were many cases of elected officials relying on one or two major contributors for all their campaign finances for the duration of their multi-decade careers.

Unfortunately, this often led to corrupt unwritten quid pro quo agreements between candidates and their contributors. The ’70s reforms tried to remedy this by limiting the amount of money candidates could accept from any individual or corporate contributor. The logic was that, by limiting the amount a person or corporation could contribute to a campaign, candidates would have to rely on a much broader base of financial support, thereby reducing the influence of any single contributor and the potential for corruption.

The most significant effect of the ’70s laws was to increase dramatically the difficulty in raising campaign funds. As campaign budgets have grown along with TV advertising rates, candidates, including federal elected officials, have been forced to devote more of their time to asking larger numbers of wealthy supporters (since by and large, neither the working poor nor the middle class donates very often) for contributions. Contributors usually want something in exchange. Candidates and elected officials offer the only things of value to the contributor: access to them and their votes.

The proposed soft money ban is problematic because it simply perpetuates the problem. Banning soft money will force future candidates to depend more heavily on hard money contributions, which will lead to more abuse of the hard money limits by the use of tactics such as “bundling” and PAC donations, in addition to forcing candidates and elected officials to spend more of their time on campaign fundraising rather than doing the “people’s business.”

Further, the soft money ban will prevent political parties from providing financial help to candidates without either vast personal wealth or a teeming campaign treasury, further aggrandizing the emerging wealth boundary which limits the ranks of candidates only to the rich. In turn, this will imperil the political parties. Although this will perhaps cripple terminally the major political parties, it will also destroy outright the viability of future third party movements. Also, by any reasonable reading of the First Amendment, the soft money ban violates the Constitution, and will likely be struck down by the conservative Rehnquist Court.

The McCain-Feingold bill’s most disappointing flaw, however, is that it totally misses the real purpose behind campaign finance reform. By focusing on soft money, it fails to address the issue which leads the public to believe its politicians are corrupt: the unequal and exclusive influence created by the monopoly the wealthy have over the pool of potential campaign funds. When campaign funding is easier to get, the wealthy will hold less sway. Therefore, the only serious way to deal with this problem is to consider a move toward voluntary full public financing of federal elections. Otherwise, candidates will continue to peddle influence, only under a different cover.