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.