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Bradley A. Smith
Campaign Finance Reform’s War on Political Freedom
An ongoing danger, despite two recent court victories
1 July 2007

In February 2006, Norm Feck learned that the city of Parker, Colorado was thinking about annexing his neighborhood, Parker North. Feck attended a meeting on the annexation, realized that it would mean more bureaucracy, and concluded that it wouldn’t be in Parker North residents’ interest. Together with five other Parker North locals, he wrote letters to the editor, handed out information sheets, formed an Internet discussion group, and printed up anti-annexation yard signs, which soon began sprouting throughout the neighborhood.

That’s when annexation supporters took action—not with their own public campaign, but with a legal complaint against Feck and his friends for violating Colorado’s campaign finance laws. The suit also threatened anyone who had contacted Feck’s group about the annexation, or put up one of their yard signs, with “investigation, scrutinization, and sanctions for Campaign Finance violations.” Apparently the anti-annexation activists hadn’t registered with the state, or filled out the required paperwork disclosing their expenditures on time. Steep fines, increasing on a daily basis, were possible. The case remains in litigation.

Should Americans care about what’s happening in Parker North? They certainly don’t seem to. A LexisNexis search finds just three stories, all in Colorado papers, that mention the dispute. That’s it: no commentary by columnists, no national network reports, not even coverage by a single major blogger on this application of campaign finance law to the most basic community political activity. The lack of interest is in a way understandable, since campaign finance reform, whether on the state or federal level, is at once forbiddingly complex and seemingly irrelevant to most citizens’ lives. People tend to see reform as affecting only the powerful—lobbyists, big corporations, “fat cats”—not ordinary Joes. With some notable exceptions, even conservatives, who overwhelmingly believe that the First Amendment protects one’s right to spend money on a candidate, don’t pay much attention.

But as Norm Feck’s story shows, that’s a riskily blasé attitude. Campaign finance reform is creating an intrusive regulatory regime that’s steadily eroding Americans’ political freedoms. Making matters worse, it does little or nothing to combat corruption. Its proponents, mostly on the left, have chiefly used it to bolster their own political fortunes and to undermine limited, constitutional government.

This year marks the 100th anniversary of the first federal campaign finance law, the Tillman Act. Named for its sponsor, South Carolina Democratic senator Ben Tillman, the act banned corporate contributions to federal campaigns, and as such remains the backbone of federal campaign finance regulations. Tillman was a racist who advocated lynching black voters and almost single-handedly established Jim Crow in the South. The new law fit neatly with his segregationist agenda, since corporate “money power” primarily backed anti-segregationist Republican politicians.

The modern era of campaign finance reform has an equally partisan origin. From the mid-1960s on, opinion polls showed steady erosion in public support for big government and liberalism. Republicans made substantial congressional gains in 1966, and two years later Richard Nixon won the presidency. By 1970, Democrats feared—with good reason—that their longstanding electoral majority was in jeopardy. There were three ways that they might turn things around, observes Cato Institute election-law expert John Samples: persuading the public to embrace their big-government philosophy, changing that increasingly unpopular philosophy, or “preventing or at least hobbling the translation of the shifting public mood into electoral losses and policy changes.”

The Democrats chose Number Three, and looked to campaign finance reform as a way to achieve it. The Federal Election Campaign Act (FECA), which Congress passed in 1971 (and amended three years later), would, Democrats hoped, strike at the heart of Republican political power—while leaving untouched their own sources of influence, such as union-organized volunteers. The law tightly limited both political contributions and any expenditure that might “influence” an election. It also mandated disclosure of political contributions as small as $10, established a system in which taxes financed part of presidential races, and set up a bureaucracy, the Federal Election Commission (FEC), to enforce the new rules. In Buckley v. Valeo (1976), the Supreme Court struck down the expenditure limits on First Amendment grounds, and held that the disclosure requirements, as well as limits on contributions to non-candidate political organizations (the National Rifle Association, say), would apply only when the group receiving the donations “explicitly advocated” the election or defeat of a candidate, through such phrases as “vote for Smith.” Still, even as truncated by the Court, the new law left American politics more heavily regulated than at any time in history.

Congressional Democrats also drove the next major extension of campaign-finance regulations, the 2002 McCain-Feingold law—though of course one of the bill’s cosponsors, Arizona senator John McCain, was a prominent, if unconventional, Republican. McCain-Feingold banned a kind of fund-raising in which the GOP had a growing advantage: “soft money” contributions to political parties that could fund party building and political-issue ads stopping short of express advocacy. It also restricted the ability of incorporated organizations—like the NRA—to broadcast ads that so much as named a candidate within 60 days of an election, and it raised the limit on direct, “hard money” donations to candidates. Democrats were by now a Congressional minority. But enough endangered Republicans—hating the ads that targeted them—joined the Dems and McCain to get the bill passed.

The extent of the regulatory web now in place is evident even when advocates of free speech score an occasional victory. In June, the Supreme Court, by a narrow 5–4 margin, held in Federal Election Commission v. Wisconsin Right to Life that the government may not prevent citizens’ organizations from broadcasting ads that discuss pending legislative issues within 60 days of an election. The decision usefully prunes back one tentacle of the McCain-Feingold law. But the bulk of over 400 pages of FEC regulations remains intact. The opinion has no effect on the law under which Norm Feck faces prosecution, or the regulations that frustrate other Norm Fecks across the country.

Campaign finance reform neatly accomplishes Democrats’ goal of muffling political speech on the Right. Reformers seldom state that goal explicitly, of course; instead, they claim that reform gets rid of the political corruption that supposedly follows from large campaign contributions. Yet study after study shows that contributions play little or no role in how politicians vote. One of the most comprehensive, conducted by a group of MIT scholars in 2004, concluded that “indicators of party, ideology and district preferences account for most of the systematic variation in legislators’ roll call voting behavior.” The studies comport with common sense. Most politicians enter the public arena because they hold strong beliefs on public policy. Truly corrupt pols—the Duke Cunninghams of the world—want illegal bribes, not campaign donations.

Reformers also often claim to seek something more radical than eradicating corruption: equalizing political influence. During the debate over McCain-Feingold, numerous members of Congress repeatedly picked up on the “equality” theme. “It is time to let all our citizens have an equal voice,” argued Georgia congressman John Lewis, a Democrat. Missouri senator Jean Carnahan, another Democrat, complained that “special interests have an advantage over average, hard-working citizens.” Susan Collins, the liberal Republican senator from Maine, wanted “all Americans [to] have an equal voice.”

Yet political influence comes in many shapes, and campaign finance reformers have little interest in equalizing all of them. Take, for example, large foundations—a major source of political influence. The assets of liberal foundations such as Carnegie, Ford, and MacArthur dwarf those of their conservative counterparts: Ford’s assets top $10 billion, MacArthur’s $4 billion, while the Right’s giant, the Bradley Foundation, commands just $500 million. Campaign finance reform leaves foundations untouched.

Other important sources of influence include academia and Hollywood, both tilting to the left—and both left alone by the reformers. Consider how the law applied to Michael Moore’s anti-Bush film Fahrenheit 9/11 and to competing conservative films released in the run-up to the 2004 election. A number of complaints filed with the FEC charged Moore and others with campaign finance violations; both the movie and the advertising surrounding it, the complaints asserted, amounted to illegal contributions to the Kerry campaign. Despite Moore’s public statements that he’d made his movie to help defeat Bush, the FEC dismissed all the complaints, noting, among other things, that the film was a commercial rather than a political effort.

But when the conservative organization Citizens United tried to release a film responding to many of Fahrenheit 9/11’s anti-Bush assertions, the FEC advised it that any public broadcast or advertising close to the election would be subject to McCain-Feingold regulations. Similarly, when Second Amendment activist David Hardy sought to release a movie before the election favoring gun rights and portraying President Bush favorably, the FEC ruled that campaign finance restrictions applied. In both cases, the FEC based its conclusion on the fact that the conservative producers, unlike Moore, weren’t normally in the movie business.

Then there’s the press—and who would deny that it has great political influence? Nevertheless, campaign finance reform leaves it unregulated thus far. More than that: as restrictions on private campaign spending grow, the free coverage that politicians get from the press becomes more and more important. And that coverage, especially coverage by the national press corps, regularly demonstrates a leftward bias, as many studies have shown. During the 2004 presidential race, the press didn’t remind Americans about John Kerry’s harsh criticisms of his fellow soldiers in Vietnam, or pose questions about the nature of his military service; neither did it dwell on President Bush’s strong post-9/11 leadership. Those tasks, it’s worth noting, were left to two conservative political organizations, Swift Boat Veterans for Truth and Progress for America, whose highly effective campaign ads engaged in the kind of political speech that campaign finance reform chokes.

Which sources of influence are regulated and which are not is a choice deeply entangled with tacit assumptions about who benefits from each of those sources. Despite their noble-sounding claims, reformers aren’t really trying to equalize political influence: in fact, they’re doing exactly the opposite, regulating only those sources of influence that they disagree with.

Democrats don’t back campaign finance reform strictly for partisan reasons. They also like it for ideological reasons, realizing that private campaign funding is a major obstacle to regulating the private sector and to expanding government.

The writings of J. Skelly Wright, one of the Seventies’ most prominent reform advocates, are among the clearest expressions of the ideological values underlying campaign finance reform. As a federal appellate judge, Wright upheld all of FECA’s provisions, including spending limits, only to have Buckley reverse him. After that defeat Wright continued to back campaign finance reform, arguing (incoherently) that it was politically “neutral” but also necessary if Congress was to enact a host of liberal policy goals: increased regulation of auto dealerships, a “windfall profits” tax on oil companies, hospital price controls, creation of a superfund for victims of toxic chemicals, and “any other legislation that affects powerful, organized interests.”

To prove his point, Wright cited ballot initiatives in California and Colorado that proposed regulating certain private industries. In both cases, the initiatives began with leads in opinion polls, but suffered defeat after the targeted industries launched ads opposing the proposed regulation. Such private spending, Wright believed, “distort[ed] the expressed will of the people.” His elitist assumption was that the “expressed will of the people” was not the will that they in fact expressed at the ballot box, but rather the pro-regulation stance that he himself embraced.

Wright’s belief that potential targets of regulation shouldn’t be able to communicate directly with voters—since that could “distort” their true opinions—has remained a staple of reform thinking ever since. Here’s the former president of the liberal advocacy group Common Cause: “At the same time there are efforts to regulate them, [you] have oil and gas companies, [you] have trial lawyers, [you] have all the major interests that have an outcome in this election and an outcome in policy being able to pour this money in . . . they want access to influence the political process. It’s corrupting!” We’ve moved, in this astonishing formulation, from the revolutionary battle cry of “No taxation without representation” to something like: “Because of possible taxation or regulation, no representation.”

The same pro-regulation mindset occupied the reform advocates who, in early 2007, sought to include in Congress’s lobbying reform bill a provision that would heavily regulate “grassroots lobbying”—that is, corporate appeals to citizens to voice their opinions on particular issues to members of Congress. (The classic example: the “Harry and Louise” ad that helped torpedo Hillarycare back in 1993.) The Senate stripped the anti-grassroots-lobbying provision from the bill, to the dismay of Meredith McGehee, policy director of the pro-reform Campaign Legal Center, who decried the practice of “Astroturf lobbying.” Apparently when productive businesses, worried about excessive government regulation, try to get voters on their side, that’s Astroturf lobbying—fake and unworthy of protection. But when a foundation-funded organization with no public accountability, such as the Campaign Legal Center, speaks out in Washington, well, those are the authentic grassroots.

Campaign finance regulation, far from improving our democratic processes, has already begun to undermine them in a number of ways. One is the way that it entrenches incumbents in office. Dissenting in McConnell v. FEC, the case that upheld the constitutionality of McCain-Feingold, Justice Antonin Scalia went to the core of the issue: “Is it accidental, do you think, that incumbents raise about three times as much ‘hard money’—the sort of funding generally not restricted by this legislation—as do their challengers?” he scoffed. Scalia also pointed out that McCain-Feingold allowed higher contributions to candidates running against self-financed millionaires—who tend to be incumbents, since self-financed millionaires are usually mavericks challenging established politicians. Moreover, McCain-Feingold severely limited funding for national parties—which, Scalia wrote, are “more likely to assist cash-strapped challengers than flush-with-hard-money incumbents.” “Those who have power will create election rules that maximize the likelihood that they will win reelection,” the Cato Institute’s Samples says. “Campaign finance laws might be, in other words, a form of corruption.”

A still more insidious problem than incumbents’ self-dealing is the way that campaign finance regulation discourages true grassroots political activity. Longtime Washington campaign finance attorney Jan Baran jokes that McCain-Feingold’s official acronym, “BCRA,” stands not for “Bipartisan Campaign Reform Act” but for “Before Campaigning, Retain Attorney.” Samples adds, more seriously: “Today no one should exercise his First Amendment rights without advice from counsel, preferably one schooled in the intricacies of campaign finance regulation.”

Consider two examples. During the 2000 presidential race, four men placed a homemade sign, reading VOTE REPUBLICAN: NOT AL GORE SOCIALISM, on a cotton trailer along a Texas highway. The FEC spent nearly 18 months investigating the incident, because the sign lacked the legally required information about who had paid for it. And in 2004, NASCAR driver Kirk Shelmerdine spent $50 to affix a BUSH-CHENEY ’04 decal to an unsold spot on his car’s advertising space. The FEC admonished him for making an unreported campaign expenditure. Such cases are not merely examples of bureaucratic excess, points out campaign finance lawyer Bob Bauer, a lonely anti-reform voice in Democratic circles: under today’s intrusive laws, Shelmerdine’s activities ought to have set off an FEC inquiry.

Nor are such cases rare. While serving on the FEC from 2000 to 2005, I kept a file of letters from political amateurs caught in the maw of campaign finance laws. Many of these people had no lawyers; none had the least intent to corrupt any officeholder; all thought that they were fulfilling their civic duty by their involvement in campaigns.

A Texas dentist wrote: “It is 5:30 PM on Good Friday. Today, like many days previous, I have taken time away from my business and my family to respond to the Commission. . . . I am being pursued by the Commission to pay over $30,000 from my personal funds.”

A CPA who had served as a volunteer campaign treasurer, and who was facing over $7,000 in fines for improper reporting, wrote: “No job I have ever undertaken caused me more stress than this one. I was frightened and concerned every day that I would do something wrong.”

Another volunteer treasurer asked the Commission to waive its fines: “We were just honest, hard working, tax paying Americans who wanted to make a difference . . . at this point, we are so disillusioned with the [legal] difficulty of running for office that we wonder why anyone other than a professional would attempt to do so.”

A retired high school teacher wrote: “I taught, and believe, that we have the best government in the world. I was happy to be part of the process. . . . I made every attempt to comply and am now being fined $600 for a misunderstanding.” The letters flowed in—from lawyers, teachers, doctors, retirees, all facing investigations and fines for their volunteer political activity. One summed up: “I will NEVER be involved with a political campaign again.”

Though they claim to speak for average citizens, reformers don’t care much about the way their reforms hurt those citizens. Trevor Potter, president of the Campaign Legal Center and a McCain adviser, has dismissed complaints by arguing that campaign-finance laws are no more complex than antitrust or patent laws. “They are worth the inconvenience and lawyers’ fees they generate,” says Potter—who also heads the campaign finance practice at the upscale law firm of Caplin & Drysdale, where partner billing rates can range upward of $750 per hour.

Despite the labyrinthine complexity of campaign finance law, the reform community is busily expanding regulation even further. For example, the FEC’s regulations implementing McCain-Feingold specifically exempted much Web activity from regulation. So the law’s lead House sponsors, Democrat Marty Meehan of Massachusetts and Republican Chris Shays of Connecticut, sued successfully in federal court to force the FEC to regulate more Web activity, and then defeated a congressional effort to codify an Internet exemption to the law. The ensuing FEC rules took a light hand, but the troubling fact remains that individual online activity is now subject to regulation. (See “The Plot to Shush Rush and O’Reilly,” Winter 2006.)

Another disturbing regulatory trend is to go beyond regulating the money that funds speech to regulating the speech itself. For example, in the Shelmerdine case, the FEC valued the driver’s “contribution” not at the $50 that it cost him to place a decal on his car, but at several thousand dollars—what the FEC determined to be the advertising spot’s monetary value. Similarly, if an executive instructs his secretary to type a fund-raising letter, the FEC values the contribution not at the cost of typing the letter, but at the amount of money that the letter raises. This move dramatically expands the reach of campaign finance laws: not only can the FEC limit funds that can be used for speech, but it can limit speech itself by assigning it a monetary value. And it opens the door to all kinds of mischief: for instance, the FEC could determine that a posting on a popular blog was worth thousands of dollars.

If that sounds farfetched, consider that in Washington State a trial court ordered that radio disc jockeys John Carlson and Kirby Wilbur report their on-air talk as campaign contributions. The Washington State Supreme Court reversed the case this April, but the court didn’t base its decision on the First Amendment, instead ruling that the statute in question didn’t cover radio talk. In a footnote, the court specifically noted that “nothing in our decision today forecloses the legislature, or the people via the initiative process, from limiting the statutory media exemption.”

Such an intrusive regulatory regime is but a logical step toward the holy grail of campaign finance reform: a fully regulated, taxpayer-funded system of political speech. Richard Hasen, an oft-quoted expert on campaign finance whom the media regularly portray as a moderate voice for reform, has proposed limiting citizens’ financial participation in politics to a government-provided voucher, and prohibiting any other private funding of political speech. Edward Foley, a former Ohio state solicitor and director of Ohio State University’s influential election-law program, has made a similar proposal. Both experts would extend their regulations even to newspaper editorial pages. Hasen explains that he’s trying to solve the “Rupert Murdoch problem”—just in case you had any doubt about whom he’s got in his sights.

Conservatives, historically uninterested in mobilizing against “reform,” have tended to depend on the courts to strike down the worst laws. Indeed, many believe that President Bush signed McCain-Feingold because his legal advisers assured him that the courts would never tolerate the law’s new restrictions. But the Supreme Court has been erratic in protecting political speech. In McConnell v. FEC, the case that upheld McCain-Feingold, the Court gave political speech less protection than Internet pornography, simulated child pornography, topless dancing, tobacco advertising, and the dissemination of illegally acquired information.

Last term, the Supreme Court did step back from the abyss. In Randall v. Sorrell, it struck down expenditure limits and very low contribution limits (including limits on volunteer time) in Vermont, while in Wisconsin Right to Life v. FEC, it held that there might be constitutionally necessitated exceptions to McCain-Feingold’s limits on broadcast ads mentioning a candidate within 60 days of an election. (The latter case will be back before the Court this term, since a lower court has held that Wisconsin Right to Life’s ad indeed merited such an exception.)

These are encouraging developments, but free-speech advocates shouldn’t count too heavily on the Supremes to do the heavy lifting. The main reason that the Court decided last term’s cases differently from McConnell is that Justice Alito had replaced Justice O’Connor, giving the Court a 5–4 majority in favor of a more robust interpretation of the First Amendment. But two members of that majority are over age 70. It is unlikely that President Bush will get another judicial appointment; it is equally unlikely that a Democratic president, or a President McCain, would appoint pro-speech judges to the Court.

It also seems doubtful that the Court will ever take a stand against campaign finance regulation in toto. Justice Kennedy, part of the 5–4 pro-speech majority, is a staunch supporter of free speech in individual cases, but unlike Justices Scalia and Thomas, he has been unwilling to hold that all contribution limits are unconstitutional. Absent a clear constitutional bar to regulation, a future Court may remove whatever restraints this Court places on the legislature—much as the McConnell Court did to Buckley’s curbs on FECA.

“I have come to doubt that the masses of the people have sense enough to govern themselves,” wrote Ben Tillman, the founder of federal campaign finance reform, in 1916. Eighty years later, House Minority Leader Richard Gephardt famously described the battle over campaign finance reform as “two important values in direct conflict: freedom of speech and our desire for healthy campaigns in a healthy democracy. You can’t have both.”

Many a tax- and regulation-prone politician, stymied by real political debate, would agree with both men. But Norm Feck and his Parker North neighbors, Washington deejays Carlson and Wilbur, the Texas dentist facing $30,000 in fines, and tens of thousands of NASCAR fans realize that free speech is not a bar to healthy democracy but a cornerstone of it. It’s imperative that we speak up to defend freedom of speech—before that very speaking up becomes impossible.

Bradley A. Smith is the former chairman of the Federal Election Commission, the chairman of the Center for Competitive Politics, and a professor of law at Capital University Law School in Columbus, Ohio.

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More by Bradley A. Smith:
In Defense of Political Anonymity
The Citizens United Fallout
Paterson’s Political Fix
More . . .
This story was cited in:
RealClearPolitics
Club for Growth
Power Line
HorseRaceBlog
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