Real Campaign Finance Reform

Washington is broken. This is an opinion that most can agree on, as evidenced by recent polls showing that only 13% of Americans approve of Congress’ job performance. The Occupy protesters are very fragmented in their views, but one of the few things that they generally agree on is the need to eliminate corruption in politics that is caused by financial support. This is a notion on which I happen to agree with them (albeit probably the only one).

Money breeds corruption. That’s just an unfortunate reality. That doesn’t mean, however, that we can’t do anything about it, nor does it mean that we have to restrict individual freedoms to do so. The single, most glaring example of corruption is without a doubt, our elected officials in Washington D.C., as well as our elected officials at the State and local levels. Politicians no longer represent the interests of their constituents or the public at large. They represent the interests of their special interest supporters and their own personal political careers.

Here’s how we fix it.

First, just in case there is any wonder as to how much of a problem this has become, take a look at the tables below, which show campaign contributions by industry or sector from 1989 through 2012. I have also included the percentage of those donations showing which political parties were the recipients of those donations. The first table is the top 11 “political” sectors, meaning organizations whose primary purpose is lobbying on behalf of themselves or others. The second table is the top 11 industries, made up primarily of businesses. (for more detail, visit InfluenceExplorer.com)

1989-2012 Campaign Finance, provided by InfluenceExplorer.com
Click to open in a new window

These groups have given over $12 BILLION to politicians since 1989, and this is only a sampling of the top industries. It’s not just big business either, which is why I separated the numbers into two tables. Political groups (unions, lobbyists, PACs, non-profits, etc.) gave over $3 BILLION during this period. Can there really be any argument at all that we have allowed our politicians to be corrupted? Can anyone say with a straight face that we don’t need to reform campaign finance?

We need to enact real campaign finance reform if we want to have any hope of reversing the tide. If we allow our politicians to continue to be influenced by businesses and “non-profit” organizations, then how can we possibly expect them to make decisions that will benefit anybody other than those groups? Attempts to do so have been made in the past, many of which either failed or accomplished the exact opposite of what they were supposed to (McCain-Feingold, for example).

The issue is problematic however, due to the fact that reform may be interpreted as encroaching on the Constitutional right to free speech. To be successful, we have to recognize the fact that despite the rulings of activist courts, money is not speech. Speech is speech. Though money certainly is the vehicle by which we may choose to exercise our freedom of speech, it is not speech and limiting the means in which money can be spent does not prevent anyone from exercising that right.

The First Amendment to the Constitution guarantees the right to free speech, as well as the right to lobby the Government, by stating that (emphasis added):

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

This clearly shows that Americans have the right to say what they want and to lobby their Government. It does not, however, guarantee the right to bribe a political candidate or organization, and it certainly does not entitle anyone to tax breaks or preferred tax statuses for doing so. When the founders used the word “speech” in the First Amendment, that is precisely what they meant. It is not unreasonable to define some basic guidelines as to how money can be spent to exercise that right, nor does it “abridge” that particular liberty. If the contrary were true, we wouldn’t have any campaign laws in the first place, as they all would have been ruled as being unconstitutional.

Here’s a simple plan to fix it:

1. Individual Donations

Individuals can donate to any political candidate, organization or cause they choose, up to a limit of $5,000 per year. A reasonable maximum contribution limit is necessary to prevent uber-wealthy individuals from exerting a disproportionate amount of influence. Without a limit, people like Warren Buffett could donate $1 Billion to a campaign and effectively “buy” an election. This still provides a means for political candidates to fund their campaigns. The difference is that they will have to do so based on their merits and not on promises of political favors.

2. Organizational Donations

Organizations, whether business or political entities, can continue to spend money to lobby the Government, however they can not make direct contributions to candidates or their affiliations and they can not spend money that will benefit those candidates even on an indirect basis. Lobbying efforts will have to be made on the merits of their argument (as the Founders intended) and not on the basis of a politician benefiting from those efforts. This will exclude organizations from allowing a politician to use their private jet or their vacation retreat in the Bahamas and it will also prevent these organizations from “coordinating” individual donations from their employees or members.

3. Tax Deductions / Exemptions

All tax deductions, credits, exemptions and “preferred” tax statuses will be abolished. If an individual wishes to spend their money in support of a candidate or organization, they are free to, but will not get a tax break for doing so. Organizations will no longer enjoy “non-profit” tax exempt statuses. They can pay taxes just like every other business and make no mistake, these political organizations are businesses. They will no longer have the ability to solicit donations from individuals based on anything other than the merits of their cause.

4. Issue Ads (527s)

Organizations will still be able to spend their money as they choose to support a cause, provided that any and all advertisements and supporting materials are issue based and do not identify, directly or indirectly, any political official, party or organization. Once again, this requires them to argue the merits of their cause instead of allowing them to operate as shill organizations.

Is this a perfect solution? No. Will there be unintended consequences? Absolutely, Yes.

If we want to fix the problem though, we can’t let perfect be the enemy of good. Our current campaign finance laws are so full of loopholes that, like our tax system, will always be a breeding ground for corruption unless we throw them out the window and start over. We need to start with a basic foundation that provides the necessary guidelines to prevent corruption, while at the same time, protects the individual right of free speech and the right to lobby the Government. Unintended consequences can be addressed as need be with small amendments to this framework.

Remember, the Founders knew that the Constitution wasn’t perfect and would undoubtedly need to be amended in the future. They knew that they couldn’t possibly foresee societal changes that may take place at some point in the future, so they included the ability to change the Constitution as necessary through Article V. This foundation for our Government has served us well (when we’ve chosen to abide by it, that is).

Campaign Finance Reform has to be the cornerstone of our attempts to fix our Government and to set our country back on the right course. If we don’t fix the primary motivations of our elected officials, how can we possibly expect that they will take the necessary steps to fix any of our other problems?


Photo by P.O. Arnäs

Comments are welcome. Please feel free to keep the stupid ones to yourself.