Take Back Our Republic works to reform a broken system

Draining the Swamp: Campaign Finance Reform (Again)

The election of Donald Trump has been accompanied by a loud chorus of “Drain the Swamp!” from the citizenry, by which they mean a lot of different things. The phrase, made popular once again by Mr. Trump on the campaign trail, is usually associated with an anti-establishment desire to rid Washington D.C. of the corruption, cronyism and insider-dealings that most Americans believe drive federal politics. Mostly the singers in this oft-recurring chorus seek to purge the town, literally built on a swamp, of lobbyists and “special interests.” Tilting at this windmill, to mix some metaphors, is difficult as the Constitution specifically protects the right of the individual to “petition their government,” i.e. lobby, and the size, scope and complexity of the modern American state makes this no easy task, requiring the help of experts. Add in the massive scope and financial power of the federal government, and the fact that every interest is “special” to someone, and it is unlikely that any regulation or action by the feds will ever rid the town of lobbyists.

From this chorus, then, we might expect the refrain to change to “get money out of politics,” an equally quixotic quest, but certainly one more easily addressed by regulation and legislation. Republicans and Democrats alike are likely to agree with the statement “there is too much money in politics.” Unfortunately for them past efforts to curtail this flow of cash, notably McCain-Feingold, have crashed on the rocks of cleverness, and have resulted in bureaucratic burdens that do little to stem the flow of money but instead support both incumbency and enhance the power of the best funded groups.

The problem with these efforts is that there is actually not “too much money” in politics, but instead too few donors. The issue is not the total amount given, but the concentration of that giving among the few, and the accrual of benefits, or the perception of the accrual, by those same few.

John Pudner, Executive Director of “Take Back Our Republic” (www.takeback.org) wants to take that very issue on, and has a series of initiatives that are likely to garner support from conservatives and liberals alike. “We want rules that make it easier to participate and harder to cheat,” John told me over coffee in Alexandria this week.

Take Back Our Republic is a 501(c)(3) public charity that “believes that individual participation in the American political system is the best way to preserve and strengthen our liberty.” They advocate “returning political power to individuals and ending the system of escalating campaign contributions by corporations, labor unions and special interests.” John himself is a passionate champion in the fight against “transactional giving” in politics, or the “self-serving moneyed interest[s] who seek government subsidies and special treatment at a significant cost to taxpayers” based on their political contributions.

Americans spent $2.3 billion in the 2015-2016 election cycle (Presidential, Senate and House races, FEC data, www.fec.gov). Given that roughly 136 million people voted, that comes to only about $17 per voter. But few people actual donate money, even if they vote, and only a tiny fraction of donors give more than $200, which accounts for 70% of the money given. There are only about 1.5 million $200+ donors, so their average is only $1140 per donor. When you factor in the largest donors, who give tens of thousands or even millions of dollars each to campaigns, independent expenditure groups, PACs and parties, you end up with a very small pool of people influencing politics through the spending of money. In such a system it is nearly unavoidable that large donors will have huge influence with candidates and elected officials. (https://www.opensecrets.org).

Take Back Our Republic advocates for multiple improvements in the system over the traditional McCain-Feingold-type regulations that have been so ineffective, bureaucratic and counter-productive.

First, they endeavor to get foreign money out of the system, advocating for H.R.4177, the “Stop Foreign Donations Affecting Our Elections Act,” which would prohibit unverified internet credit card contributions. This bill had 83 Co-Sponsors in the last Congress, and is likely to pass in a future session. H.R. 4177 would require that all internet credit card transactions “disclose the credit card’s verification value” and certify that the “billing address associated with the card is located in the United States or, if the contribution comes from an individual U.S. citizen living outside of the United States, the individual gives the committee the U.S. mailing address he or she uses for voter registration.” This requirement was removed from practice by the first Obama Campaign, and is, in my opinion, a no brainer if you want to end foreign donations. (https://www.congress.gov/bill/114th-congress/house-bill/4177)

Second, Mr. Pudner argues, convincingly, for an increase of the $200 reportable level of contributions to something closer to $500, or even $1000. This would enable donors concerned about facing retaliation for political donations to participate in a more substantial way before by-name reporting kicks in. Given that the $200 level is so low when compared with the large donor average, this is likely to increase the percentage of money given by individual donors – and the corresponding importance of such donors.

Third, Take Back Our Republic wants to return to the Reagan-era regulations that provided a tax deduction for campaign contributions. Until 1986 individual donors were able to deduct up to $200 in donations from their federal taxes, under the assumption that political campaign contributions amounted to participation, and participation was good for America. That assumption remains true, but today donations cannot be deducted. Five states do provide a tax deduction (OH, OR, MN, VA and SD), but that is not widely known and the deductions are small. Again, if the intent is to spread the power of money across a wider population, this seems like a good idea. Former Virginia Governor Jim Gilmore is featured prominently on the Take Back Our Republic website supporting the idea, commenting “it would encourage small donors to contribute to help select their elected officials – from President to City Council. Second, it would enable taxpayers to keep a little of the money they normally give the IRS.” Legislation is working its way through the congressional machine, and it is possible that this deduction could be revived. Conservatives should like keeping money away from the IRS, among other benefits, and liberals who want to increase the participation rate of small dollar donors should like this as well.

These are all good initiatives, and with some debate and give-and-take likely to be successful. It is in the last initiative we spoke about where the difficulty lies, however, and that is “disclosure.” Take Back Our Republic argues for increased disclosure of campaign contributions of all types, writing “all efforts should be made to let the voters know who is behind the campaigns being run. The citizens are then best equipped to determine if they believe a particular donor stands to benefit from a particular candidate winning.” Mr. Pudner readily admits that this drive for increased disclosure has its detractors, mostly conservative, who fear reprisals for political giving. Kimberly Strassel argued convincingly in her book “The Intimidation Game” that liberal groups have become expert in using disclosure laws to attack those who support their political opponents and to silence dissent. While it is possible to outlaw blatant reprisals against such donors, such as being fired from a job, there are many other avenues available to those wishing to silence opponents by destroying their reputations, businesses and careers. Raising the individual donor reporting requirement will help in a small way, but larger donors and organizational donors will continue to be subject to this type of harassment no matter what laws are put in place to protect them. We live in a nation with freedom of speech, and there is really nothing that can be done to protect a company, for example, from a social media campaign directed against their customers launched in retaliation for that organization’s support to a candidate or cause. All that said, conservatives are wise to look at some form of disclosure as an alternative to the Democrat’s quest to gut the Citizens United decision and ban corporate contributions outright.

Draining the Swamp is likely to be a long battle. We can start by fixing the unintended (presumably) consequences of the McCain-Feingold Campaign Finance Reform legislation that have tilted the money game away from the citizenry, candidates and parties and towards the largest donors. Getting foreign money out of our elections is a good start, and other initiatives proposed by organizations like Take Back Our Republic can do even more to fix the situation. Disclosure laws are rife with danger, however, and should be addressed very cautiously if we want to increase, not decrease, participation.

The fact remains, however, that the best way to reform the system is to increase the participation rate of the common citizen. If more people gave more money, then the power of the large donors might be dissipated to some extent in the future. Donating to candidates and issue campaigns is a form of political participation, yet most Americans avoid it. Many of those same Americans are the loudest voices in the choir calling to drain the swamp. At the risk of angering huge swaths of the electorate, I’ll say it clearly – more Americans should donate, and they should donate more. If they did the power of the people would increase and the power of the big donors would decrease.

One can only dream.

  • Stephen Spiker

    Good article, Jay, and some really interesting ideas I hadn’t considered before.

    • Jay McConville

      Thank you – an interesting and complex topic. Clearly something has to be done.

  • John Harvie

    How about we eliminate the FEC?

    • Jay McConville

      Can you share some more on that?

      • John Harvie

        I was referring to Federal Election Commission.

        http://www.fec.gov/pages/brochures/pubfund.shtml

        • Jay McConville

          No, I understand that. Just wondering how eliminating federal matching would address the issue of too much money from too few donors. I can see an argument against federal matching, and I’m likely to support that, but for small-government reasons not campaign finance reasons. Would be interested in the campaign finance angle if you have an idea on that.

  • Lawrence Wood

    A large load of ideas here (assumptions as well) regarding why money is pumped at an increasingly rapid rate year after year through various old and new contributing mechanisms into our political electoral process to achieve a goal that has varied little from it’s base historical motivation – to leverage external (non vote based) influence and direction on legislative and regulatory acts of our governing processes.

    Forgive me my simple mindedness but I have always viewed the issue as a simple pipe, with an input side and an output end with a major issue being the diameter in the actual size of the pipe which has grown exponentially allowing accordingly for massive growth in the amount of content volume (cash) it is enabled to carry and distribute.

    Almost all modern attempts to gain a sense of control or even grasp the nature of the issues has been directed at the input side of the pipe (or diameter of the pipe itself) either via campaign contribution regulation like the McCain-Feingold Campaign or as far back as 1971 when Congress tackled the issue of Campaign Finance Reform legislation by passing the Federal Election Campaign Act. The results largely have been that nothing so far devised seems to have effectively worked to stem this tide of cash. Why so little impact?

    I have a rather straightforward opinion and that is we have consistently and tirelessly in some cases been attacking the wrong end or the pipe – the input side, while we could be much more effective by focusing on the output end and it’s resultants. The input side of the question drags in all the complex issues and problems of dealing with human nature, the rights of the citizenry vs. public corporations, labor and other issue oriented free “associations” as well as the source and origination of the flow (cash) itself.

    The output side is rather simple as it most generally connects to a single output source (regardless of whether it is in the form of a campaign organization or other political action structure) that is either associated with a single individual or small group of individuals for the sole purpose of securing some form of influence with this elected (or running for election) individual or small collective. This on the surface of the problem would seem much easier to both wrap you mind around as well as devise solutions to address the problem.

    A major condition that the individuals and groups pumping the cash into this process most desire to accomplish besides seeing their cash provide return on investment in the form of positive influence is “consistency” on the output end of the pipe. That is why it should be no real revelation to anyone that the accelerating growth in cash volume in the system has been accompanied hand in hand with the growth of extended incumbency in elected office by a growing majority of our elected officials (cycle after election cycle). Attack the output end through either constitutional or legislative measures to restrict office tenure and you will break the mechanism.

    I certainly don’t underestimate the difficulty in accomplishing this action as it will likely require external pressure from the voter base to achieve but compared to wandering in the tangles of the input side for another few decades and producing solutions that solve little this would be a major disruption to the entire cash flow process by introducing elected office uncertainty and transitoriness into the entire influence manipulation effort.

    Is it “the” answer, probably not, as human nature always finds workarounds but it does introduce a serious inhibiting flaw into today’s often far too comfortable cash contribution “partnerships” and that is UNCERTAINTY. Any time the cash investment is large a major hobgoblin is always lack of predictable and stability. In my opinion it would accomplish this effect with a lot with little legislative or societal complications or impacts they were we are focused on the issue today.

    • Jay McConville

      Interesting thoughts and I thank you for them. I think the issue on the output side is that the costs associated with campaigning (and winning) continue to drive campaigns to raise more and more money. Almost all people (and organizations) give for the sole reason that they already agree with the candidate, and expect that the candidate already agrees with them, on their central issue of concern. They do not give on some expected windfall should the candidate win, or to change a candidates position. Donors give because they expect a candidate will do certain things, not because they think that their contribution will cause the candidate to do those things. It is the push to “pay the bills” that drives the campaign to seek more contributions, which in the worse cases leads to a potential for quid pro quo. In all my experience with campaign finances, I have never seen a quid pro quo request, and do not expect I ever will. That the public perceives such arrangements as common is inarguable, however that doesn’t mean they truly are. A defense contractor, for example, might use their PAC to support a candidate that they already know supports a program they have. That’s not a quid pro quo. That some may try to influence a candidate to support something they otherwise might not, especially when that candidate is broke and unable to fund a winning campaign (and believe me, most campaigns are run on a shoe string), is the problem we are all trying to avoid. Having ample money available from a wide array of donors without such specific interests is at least a part of the solution, IMHO.

      • Lawrence Wood

        I agree, that if you look at for example Trump’s recent Republican record breaking fund raising effort that surpassed $100 million plus cash raised from “small” donor solicitation (those who gave $200 or less), that this is based on general candidate policy agreements.

        But while I was not suggesting in my comment anything so crude as a quid pro quo for donation investments yet there was certainly in my experience a clear understanding in terms of future expected support from candidates given the often large internal staffing and outside contract retainers almost all major corporations employ in election support efforts, as well as, by extremely wealthy private individual contributors.

        I can recall over a decade ago the review process at executive committee meetings of these specific corporate expenditures that even then were at the mulit million dollar level, equivalent to a small department budget and over seen by a compliance officer with a direct interface into the board. There was nothing hit or miss about the cash expenditure and expected return to any of the investment.

  • mark Jawsz

    Great article, Jay, and I could not agree with you more about raising the disclosure requirement to $1,000, or even to $2,000, which is a nice chunk of change, but not big enough to grant the donor special access or curry favor with the recipient.

  • MD Russ

    Jay,

    One of the most realistic and pragmatic analyses that I have ever read on Bearing Drift. Very thought-provoking and if we still taught Civics in high school (damned shame that we don’t) this would be required reading.

    The pamphleteers of the late 18th Century, from Thomas Paine to the Federalists Papers authors, were the voice of political discourse that forged our exceptional republic. Today, the need is still as great, but the cost of mass media today is so much more and must be egalitarian in its source.

    Nice job.

  • mezurak

    Gotta hand it to Trump. He’s hiring the best subject matter experts when it comes to swamps. The participation rate of Trump’s voters should be increasing any day now.

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