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Soft Money: The 'Reform' That Corrupted the System

By Elizabeth Drew
Sunday, November 3, 1996; Page C07


The fund-raising device known as "soft money" – unlimited funds that individuals, businesses and labor unions can contribute to campaigns – which is placing a cloud over President Clinton's much-expected victory and threatens to engulf his second term in scandal (or, more scandal), has a curious origin.

It began, in a change in the law in 1979, as a seemingly nice, innocuous way of allowing state parties to raise funds for such well-meaning activities as purchasing pins and bumper stickers and conducting get-out-the-vote drives. These were given the high-minded term "party-building activities." ("Hard money" is what the parties and candidates raise from individuals and political action committees.) The idea was that state parties should be able to participate in what was then a strictly publicly financed presidential campaign.

It was a "reform" pushed by the Democrats, in particular the chairman of the Michigan Democratic Party, named Morley Winograd, who was also president of the association of Democratic state-party chairmen and close to the United Auto Workers, a major power in his state. Other Democrats wanted to, as one said later, "help Morley and the UAW" and thought it might aid them in Michigan. As in other instances (such as PACs), Democrats thought they had discovered something that would give them an advantage, only to be outdone by the Republicans.

The congressional sponsors of the change didn't remotely contemplate what the soft-money opening has become – a giant, sophisticated operation on the part of the national committees to raise and spend money in unlimited amounts for presidential campaigns and also to send it to state parties to help congressional candidates. As it happened, the Republicans had been looking for just such an opening, and after the change was made, they went to town. When I came across soft money in 1982, a former Republican Party finance director told me, "We were very excited about it."

Now, soft money is by far the largest source of funding for the presidential election – it leaves the public financing in the dust. And soft money is also being raised by the congressional campaign committees themselves. At first, the raising of soft money didn't even have to be reported, but the Democrats admitted to raising between $3 million and $4 million for the 1982 elections, and the Republicans raised more. In the current campaign cycle, according to the reports through Oct. 16, both parties have already raised nearly three times more than they did in the 1992 election: $95.4 million by the Democrats and $111.6 million by the Republicans.

Though it is the Clinton campaign that has been caught apparently raising illegal funds from foreign nationals – thus causing the current furor – the Democrats are still getting out-raised. This, despite the president of the United States' obsessive, and unseemly, fund-raising. That he, like Dole, was shamed into making a speech on campaign finance reform doesn't begin to undo the damage to the dignity of the presidential office.

We shouldn't let the foreign angle, intriguing as it is, distract us from the bigger problem, which is the legalized corruption that the unceasing race for money – by candidates for Congress as well – has brought to our political system. Bills that are passed, or not passed, amendments that are adopted, the quiet work that goes on in committees and subcommittees, as members of Congress themselves will attest to privately, can be and are affected by who has given more cash. Access to members of Congress – and to the president himself – is bought and sold. The purchase of ambassadorships, which so scandalized us during the Nixon period, and which was supposedly ended by the 1974 reform law, is now commonplace. The nation was shocked then that numerous individuals had given as much as $50,000; now $200,000 is no big deal. (The Republicans sell "season tickets" for $250,000.)

The moral isn't that reforms don't work. The moral is that the consequences of reforms should be thought through, and that the reforms themselves should be periodically and automatically reformed. The wrong-headed (not so say bone-headed) Supreme Court decision in 1976, Buckley v. Valeo, which equated money with speech, narrowed the range for reforms but didn't preclude them.

The court reasoned that absent public financing, as provided for presidential campaigns, spending by candidates (as opposed to private contributions) couldn't be limited. This leads to the logical conclusion that there should be public financing of congressional races as well. The soft-money window should be shut down. The costs of campaigns – and the amount of time that candidates have to spend raising money – could be considerably lowered by requiring free air time for congressional as well as presidential contests. The broadcasters will yelp as they mine their public resource, but they can afford it, and the mind of man and woman can figure out how to work out the media market for New Jersey. The less radical proposals floating around might help, but they leave more room for trouble.

Politicians balk at trying to sell the public on public financing, but politicians are supposed to lead, and there is a strong case to be made that public financing would cost the taxpayers far less than the current systems does (in special provisions, unwarranted tax breaks and subsidies and unneeded government contracts, etc.).

We have had campaign finance scandals before. Since 1974, the pattern has been that the noise died down before long and little was done. Bill Clinton's new-found seriousness about the subject – he never really stayed with it or made it a priority – and Bob Dole's belated espousal of reform won't be enough. The politicians won't do anything significant unless the pressure stays on them. Short-lived indignation won't work.

If we let them get by with doing little or nothing once again, it's our fault.

Elizabeth Drew is writing a book about the struggle for political power in America.


© Copyright 1997 The Washington Post Company

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