Dr. Janet McMullen 

• Do politicians owe a political debt to those who pay for their campaigns?
• To what degree is fund raising taking exorbitant amounts of candidates' time, and when that candidate is an incumbent to what degree do fund raising responsibilities impair the incumbent's ability to do his or her job?
• To what degree does this mean that politicians can be bought and sold?

It also makes citizens believe that they don't really count for much. Why would he/she pay attention to what I want, when somebody who donated thousands of dollars wants something else? 

What do contributors get from candidates they support? 

• Access to the politician -- that may mean a brief introduction or a visit over coffee
• Time which means more than mere access--it might mean opportunity to present your case about an issue of concern or contention
• Participation in special events such as state dinners, etc.
• Attention to and possibly favor for the contributors cause or concern.  In some cases it may be overt proactive attention; in others, it may mean some issues are not addressed because they would complicate life or business for contributors.

President Clinton's problems with fund raising questions and associations with dubious benefactors from China and other foreign countries illustrates some of the problems. At the very least, the issue raises questions that compromise a candidate/government official's credibility and creates a negative distraction. Ellen Miller, of the Center for Responsive Politics, contends that if the system is reformed, "we are going to lose the right to call ourselves a representative democracy." (Lawrency and Hasson, 1996)

After the 1996 campaign, there was considerable cry for campaign reform, especially with regard to "soft" money. What is that? Why the fuss? That's what we're going to examine.

There are a number of excellent web sites with detailed and well-written explanations about these issues. I will outline the basics in the lecture, but I will expect you to check out these sites, print out the appropriate pages, and be responsible for the information therein.

The amount of money in a campaign war chest is one the vote vital attributes a candidate can have. One November 5, 1998, the day after the 1998 elections, Tim Russert began discussing the "next contest" on the TODAY program. He noted that in the last few elections, the candidate with the most money 12 months in advance of the election wound up winning the election. 

In 2000, the Presidential campaign was projected to cost more than $1 BILLION dollars.

So you see that candidates find themselves pulled in two opposing directions....

• They have to have the money....
• They also want to retain their independence, their credibility, and do their job....

Background:

The Watergate situation precipitated a number of reforms, including financial reforms in the campaign system. Investigation of the Watergate scandal revealed that millions of dollars had been funneled into Richard Nixon's campaign fund. The public outcry that followed led to reforms which limited the amounts of contributions which could be made by any individual or political action committee. It also restricted contributions to American citizens or American subsidiaries of foreign countries.  

Here are some of the changes that took place as a result of the Federal Election Campaign Act amendments of 1974:

• The Federal Election Commission (FEC) was established in 1975 to supervise the campaigns and the enforcement of the Federal Election Campaign Act (FECA) with the following responsibilities:
  • provide public disclosure of campaign contribution amounts
  • enforce the mandated limits and prohibitions on contributions
  • supervise public funding of Presidential elections
• Six members 
  • appointed by the President 
  • confirmed by the Senate
  • six year terms
  • no more than three of the same political party (You will notice this structure is very similar to the FCC structure and operation)
• Chairman rotates among the members each year with no member serving as chairman more than once during a six-year term

The Public Financing of Presidential Campaigns was designed to reduce the flow of contributions into the campaign coffers.  There is a voluntary check off on tax forms. The federal government will match up to $250.00 per individual contribution to candidates in primary elections who qualify.  In the general election, presidential candidates receive a lump sum if they agree not to accept any more private donations.

Limits were also established for the amount of money and individual or corporation could contribute to a candidate.  

• Individual contributions = $1000.00 in the primary and $1000.00 in general election.  No more than $25,000 total contributions.
• PAC contributions = $5000.00 in the primary and $15,000.00 in the general election with NO LIMIT on total contributions

Some limits on spending were struck down by the courts because it was determined that nearly all methods of political communication now required the spending of money.  Therefore limiting how much money could be spent was limiting freedom of political speech.

What Can NOT Be Done:

• Non-citizens may NOT contribute to federal, state or local U.S. candidates or parties unless they have a "green card."
• Non-U.S. corporations or companies may NOT contribute to U.S. candidates or parties at the local, state or federal level.
• Foreign governments may NOT contribute to any of the above as well, but U.S. subsidiaries of foreign corporations MAY contribute.

It gets a little fuzzy if the non-citizen has a green card but lives outside the U.S. 

Contributors looked for loopholes, and they found them....and the best one turned out to be "soft money."

SOFT MONEY is defined as contributions to political parties for the purpose of building the party and turning out voters. It could be used for phone banks, advertising, direct mail, etc, but it is not to be used for specific candidates. That may have been the intention, but it isn't the way has worked out. Soft money has been used in specific campaigns and has been "legal" because the specific ads have dealt with "issues" and an incumbents voting record or position on them. This practice began in the mid-eighties and has been growing ever since...... 

A 1996 Supreme Court ruling determined that political parties could spend as much as they wanted on those "issue ads" as long as they were not connected officially with a candidate's campaign.  

According to Common, Nov. 2, 2000,  by October 18, 2000, candidates raised $393 Million in soft money. (Common Cause, 2000)

Because of limits on individual contributions, Political Action Committees (PACS) formed to champion those "issues" and created major funnels for money for political advertising, even though limits were imposed on how individual candidate contributions.  Nothing stopped a PAC from contributing to dozens, if not hundreds of candidates across the nation, it so desired.  Even more money was contributed as "soft money" for issue ads or "party building." 

Another way to get around the restrictions is Bundling.  In this case, a contributor or lobbyist, gathers individual contributions from several sources and takes them all in a "bundle" to the campaign.  The contributions are actually "individual" contributions, but because the lobbyist delivers them, the lobbyist's role is remembered--especially when a "bundle" of $50,000 or $100,000 is delivered --far above what an individual PAC could contribute.

Leadership PACs can also be formed.  These are set up by a member of Congress for the support of ANOTHER candidate's campaign.  Donors can contribute here and it allows another chunk of change to the candidate.  There are several other loopholes which can be used here.

REQUIRED READING:  "Reporter's Guide To Money in Politics Campaign 2000"  Common Cause  http://www.commoncause.org/pressroom/ 

Serious allegations have been leveled concerning campaign fund raising in the last several years.  

• The DNC was required to give back money illegally accepted (more than $2.8 Million) much of it from foreign nationals.  (There are restrictions about foreign contributions because of concern a foreign country or entity could "buy favor" of our government officials which could be counter to the national interest.)
• Questionable fund-raising tactics: donors were allowed to spend the night in the Lincoln bedroom or meet the President, some without out adequate security checks.
• Vice President Al Gore was criticized for making solicitation for funds by phone from his vice presidential office, a practice not generally allowed by Federal Law.

Campaign Finance Reform:

For the last four years, campaign finance reform has been a major topic of debate. Senator John McCain vows it will be a forefront issue when the new Congress convenes in 2001.  However, not much has happened since 1996.  Democrats tend to support limits on soft money which Republicans tend to favor.  Republicans don't generally favor that because they say it does nothing to limit what unions can do with their dues to support political candidates (usually Democrats).  Republicans say than increasing limits on individual contributions would reduce the necessity of endless fundraising.  We'll have to see what happens......

The American public does not seem to see campaign finance reform as a significant issue.  A Gallup poll conducted in 1999 found that only 39% of the public believed campaign finance reform should be a high priority issue. 

The McCain-Feingold Bill laid a groundwork for campaign reform, even though it died in Congress in 1996.  Some of the key issues in campaign finance reform were included:

• Voluntary spending limits
• Incentives to comply with such limits such as free/discounted broadcast time (needless to say, the NAB and broadcasters LOVED this one...)
• A ban on PACS
• If such a ban were deemed unconstitutional, PAC contributions should be limited to $1000 per candidate per election
• Limits on out-of-state fundraising
• Ban on soft money
• Ban on PACs set up by members of congress (Leadership PACs)
• Ban on spending campaign funds for personal use
• Tighter restrictions on spending to insure that "issue ads" are not coordinated with candidate campaigns. 
• Allow ONLY U.S. citizens to contribute
• Prevent Unions from using compulsory dues for political contributions   (USA TODAY, 10/28/96)

For a look at the 2000 Presidential Candidate's positions on the issue, see " Campaign Finance Reform" and interview in USA TODAY  http://www.usatoday.com/news/e98/issues/reform.htm 

Key Links:

Much of the information you need is readily available on the web. In the interest of time and efficiency, I'm going to provide you with links to those sites. Print off what you need.

BE SURE  to check "Money Troubles." by Dan Froomkin of the Washingtonpost.com staff posted on 9/4/98.  You will find this five-part article at http://www.washingtonpost.com/wp-srv/politics/special/campfin/campfin.htm

The Federal Election Commission site is the place to get the latest information. Check it out at http://www.fec.gov/

Be sure to check the "Citizens Guide to Federal Campaign Contributions and the Law" at http://www.fec.gov/pages/citnlist.htm (consider that required reading).

How much money are we talking about? LOTS!!

You can get information on how much money was spent in the 1996 Presidential campaigns at "Financing the 1996 Presidential Campaigns" at http://www.fec.gov/pres96/presgen1.htm .

Links from that site will provide information on the amounts of money raised for this election and as well a data broken by state, etc. LOTS of good stuff here!

CRP has a page entitled "Who Paid for the Last Election" with all the data on where the money originated. Find that site at http://www.crp.org/pubs/bigpicture/overview/bpoverview.htm .

You can also get information about "who got what from whom" at the FEC site (fec.gov) 

CNN has a Campaign 2000 Fundraising Site at http://www.cnn.com/ELECTION/2000/resources.fec.reports/ 

Here you will find information on the receipts, disbursements and cash on hand for each presidential candidate.

The Center for Responsive Politics tracks campaign spending by state and other classifications. Find them at http://www.crp.org/  

At their site, you can find the totals for the Presidential Race 2000 at http://www.opensecrets.org/2000elect/index/AllCands.htm 

There have been numerous attempts at campaign finance reform, including this year and the year before.

For an excellent historical summary of those attempts, see the USA TODAY article at http://www.usatoday.com/elect/es/es477.htm (Common Cause, 1996)

What has the influence of the alcoholic beverage industry in Congress? See the article at http://www.commoncause.org/publications/booze_toc.htm

The influence of the cigarette industry is documented at http://www.commoncause.org/publications/tobaccotoc.htm

the Common Cause site at : http://www.commoncause.org/ . They have list of publications which can be found at http://www.commoncause.org/publications/campaign_finance.htm

All semester we have discussed why the public appears to be so distrustful and disillusioned with our political system. A recent study suggests that such distrust may stem from voter concerns about big money having more influence over their elected officials than voter interests . (Project Vote Smart, 10/30/98) See the press release at http://www.vote-smart.org/news/9810/cyn.html .

Assignment: Go to one of the above sites, and draw some conclusions about the positions of the public official and the types of financial support he/she has been given. This doesn't have to be a LONG effort, just be able to write a paragraph or two discussing and supporting what you found. I might use this as a potential essay question. You may find another site linked from the main AL site at CRP which will break down various types of donations.

I suggest that you print off the informational pages for which I have provided links. Go through them carefully (use that good old hi-lighter) and pull out the key rules and definitions. Those things should help you when it comes time for (Oh! NO!) a quiz (!!!!!!) or when you need them for that final exam.

Additional Resources:

• Birnbaum, Jeffrey H. and Viveca Novak. "The Corporate Dole." CNN Time All Politics 9/23/96
• Common Cause. "History of Attempts at Finance Reform." USA TODAY 10/28/96.
• Lawrence, Jill and Judi Hasson. "Donations to Both Parties Skirt the Limits Set By Reform." USA TODAY. 10/26/96.
• Project Vote Smart. "Cynicism, Mistrust and the Sheer Numbers of Candidates Have Overwhelmed Voters, Study Finds." Press Release. 10/30/98.
• Moore, David.  "Public: Major Changes Needed in Campaign Finance System, but Issue is Low Priority.'  Poll Releases  Gallup Organization.  10/22/99  http://www.gallup.com/poll/releases/pr991022.asp 
• USA TODAY.  "Candidate's Plans for Reform". 10/28/96  Downloaded 10/28/96 http://www.usatoday.com/elect/es/es476.htm 

Copyright, 2000

Dr. Janet McMullen

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