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    Money Talks
    The State of Campaign Finance: It Could Be Worse

    By Dwight Morris
    Special to
    Friday, Jan. 23, 1998

    While the well-chronicled excesses of the 1996 presidential race provided the most compelling case for campaign finance reform in more than 20 years, only the most naïve observer could be surprised that the great reform debate of 1997 produced no significant change. As the Washington power brokers have proved time and again over the past decade, those who could have an impact on the system have no inclination to change the way campaigns are financed.

    The fight at the national level has focused on federal fund-raising practices in the recent past. But the larger picture includes a threadbare, patchwork system of campaign finance reporting in the states, where 36 gubernatorial seats are at stake this year. Those governors will preside over the next congressional redistricting, a process that will largely determine which party controls Congress from 2002 through 2011.

    Nonetheless, the national debate has firmly held onto both reformers' imaginations and the headlines for more than a year.

    Reform Hits Dead End in Congress

    Congressional Republicans all too clearly demonstrated their opposition to campaign reform in last year's formal floor debate, proudly claiming to be protecting free speech. Democrats have favored a more subtle approach, loudly proclaiming their support for reforms only when they had absolutely no chance of being enacted.

    That strategy is nothing new. In 1992, congressional Democrats used campaign finance to give weight to their lip service on campaign finance reform. Anxious to embarrass then-President George Bush, they passed legislation providing for public funding of congressional campaigns, a measure he had repeatedly threatened to veto. When Bush made good on his threat, Democratic presidential nominee Bill Clinton criticized him and promised to make meaningful campaign finance reform a hallmark of his first term in office. However, once Democrats controlled the White House and both houses of Congress, campaign reform did not seem quite so important.

    After losing control of Congress in 1994 and facing an embarrassing stream of revelations about the fund-raising practices of their president and the Democratic National Committee, Senate Democrats again picked up the banner of campaign finance reform. Knowing the watered-down McCain-Feingold bill would never pass the Senate, let alone be introduced in the House, Democrats unanimously backed the measure. Knowing he would never have to sign it and mindful of his own tarnished image, President Clinton jumped on the bandwagon.

    The 1998 campaign season undoubtedly will be loaded with another round of reform rhetoric, and the inevitable promises probably won't produce anything noteworthy. But while reformers lament the federal campaign finance system, those despairing about the future of our democracy can take comfort in knowing that things could be much worse. The federal campaign finance system could mirror the reporting in most of the 50 states, where disclosure of contributions and expenditures is largely a dream.

    State Disclosure 'Inconsistent' at Best

    All states collect some information on donations to state candidates and party committees, but most make no attempt to computerize those records. Thankfully, the Federal Election Commission keeps a database on all donations to federal candidates of $200 or more (the database for 1996 contains more than 1.3 million donations). Otherwise, it would be impossible to document the $1.5 million that Native American tribes donated to federal Democratic candidates and party committees during the 1996 election cycle. The tribes donated that money, of course, in hopes of influencing the Clinton administration's decisions on issues from gambling licenses to the return of tribal lands.

    Even with computerized contribution data, the information in various state databases frequently discourages all but the most superficial analysis. In Minnesota, for example, candidates and party committees must report individual donors' addresses and employers. Unfortunately, the state left that information out of its electronic database, preferring instead to "flag" entries to indicate whether the required information was correctly reported. This system may help force campaign committees to comply with the law, but it makes a mockery of public disclosure.

    And that is the good news. In many states, such as New York, candidates and parties are not obligated to report a contributor's employer, making it impossible for even the most diligent reporter or citizen to comb through thousands of donations to find out where a political committee gets its money.

    Different Priorities in Each State

    Also, many states deal corporations and labor unions what amounts to a free hand in the donation game. In Texas, corporations and unions are limited only in the amount they may give to judicial candidates; they can make unlimited contributions to political party committees and candidates. However, perhaps recognizing that such contributions might look unseemly, the law stipulates that donations must cease 60 days prior to the election.

    Distinguishing between so-called "hard money" and "soft money" is key in New York. With slightly different terminology than federal statutes, New York election law differentiates between "hard" funds – donations to candidates either directly or through parties specifically advocating a candidate's election – and "soft" cash – donations used for party-building efforts including issue advocacy advertising. Corporations cannot donate more than $5,000 in hard money during any year, but, as one election official put it, they are free "to empty the bank" when contributing to both parties' "housekeeping" accounts.

    Anyone who thinks the $25,000 federal annual hard-money contribution limit for individuals is too low would love the New York model, where individuals can give $150,000 every year. That's in addition to whatever they care to donate to those housekeeping accounts.

    Limiting donations from political action committees (PACs) apparently is a priority in Louisiana. State law restricts giving partly based on the PAC's size. "Big PACs" – certified as having more than 250 members willing to donate at least $50 during the preceding year – may donate $10,000 to any candidate for statewide office. "Small PACs" can donate only $5,000.

    In addition, some Midwestern election officials show a good deal of trust in their state political parties. In North Dakota, state party committees file disclosure reports only once each year. In South Dakota, the Democratic Party didn't list the dates it received contributions. Evidently that's an accepted practice, since no one asked party officials to file an amendment.

    In fact, since virtually none of the states keep electronic records of contributions, there is no way to know whether anyone is enforcing any of the rules that do exist. Documenting whether someone had violated New York's $150,000 individual contribution limit would require leafing through tens of thousands of pages each year with a hand-held calculator.

    When it comes to campaign reform, let's hope the federal government never looks to the states for help.

    © Copyright 1998 Campaign Study Group

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