Campaign Finance 101

Long, long ago (2002, actually) there was enough of a centrist bent in this country to force legislation through Congress that appalled special interest groups on either end of the political spectrum and benefited the country.  The kind of legislation that would advance broad national interests at the expense of highly funded, extraordinarily organized and vocal constituencies.  Think labor unions, insurance companies, big oil, trial attorney associations, Wall Street, pharmaceuticals, teachers’ unions and the like.

What I’m referring to was the Bipartisan Campaign Reform Act, better known as McCain-Feingold, named after its chief sponsors in the Senate.  This was in those heady days after the 2000 election before Sen. McCain sold his soul to the devil in order to ensure his own political survival.  Russ Feingold, one of my favorite Senators, worked with Sen. McCain beginning in 1995 to push through the legislation, at great political cost to both of them.  The bill was filibustered by Sen. Mitch McConnell on many occasions, but the forces of good ultimately prevailed, forcing then President Bush to sign the bill into law, even though he had reservations about its ‘constitutional’ merits.

McCain-Feingold was important for two main reasons.  It, for the first time, mandated disclosure and regulation of ‘soft money’ contributions.  Soft money is different from hard money in the respect that hard money contributions are limited by the government.  Soft money, prior to 2004, when the law took full effect, never had been.  Hard money contributions go directly to the candidates/campaigns.  Soft money goes to ‘advocacy’ groups that can air political ads, billboards, and the like.  So, while you can contribute only a limited amount of money to a candidate/campaign directly, until McCain-Feingold took effect, you could fund your candidate without limit through actors that weren’t directly affiliated with said candidate/campaign.

The second reason was that it banned ads paid for by special interest groups or corporations within certain timelines of elections.  The candidates could still run their own ads, but the effect was that there was going to be less of them, because they had to be paid for with hard money, and they had to come from the campaign.

So, special interests promptly found a way around the regulations.  The FEC, when they tried to crack down on the groups (commonly referred to as 527s, after the provision of the IRS code that defines them), went after not only conservative groups (Swift Boat Veterans for Truth) but liberal groups as well (League of Conservation Voters and Moveon.org).  Not surprisingly, both ends of the political spectrum were equally guilty.

Earlier this year the Supreme Court heard a case called Citizens United v. the Federal Election Commission.  The end result was a 5-4 (like most of the rulings these days) ruling in favor of the special interest group which essentially said that special interest groups and corporations have the same free speech rights as you and me.  And that any attempt to regulate political contributions from them was unconstitutional.

This is the first election cycle after the ruling.  And what we’ve seen is a dramatic surge in unregulated, undisclosed contributions to both parties in the form of surrogates.  The trend has been favoring the Republicans through this election cycle.  But ultimately, it’s damaging to everyone in the country.

Call me crazy, but I’m of the opinion that Goldman Sachs* is not a person.  I do not believe that Goldman has the same constitutional protections that I have.  That’s not to say that Goldman doesn’t have certain of those constitutional protections, but in my mind, Goldman is not a living, breathing person (though they have been compared to a ‘giant vampire squid’).  Goldman Sachs has far more money at its disposal than John Q. Public can ever hope to muster, let alone spend on campaign contributions.  But the effect of the Citizens United finding essentially gave those same rights that you and I enjoy specifically in the area of political speech to Goldman Sachs.  Even though, clearly, Goldman Sachs is not a human being.

And those rights are being used.  Much to our detriment.  What’s going to happen is this: the electoral money men will continue with this until something comes to light.  As Al Hunt predicts (correctly, I think), just given the volume of cash that’s being involved, someone, somewhere, in a position of authority, is going to get caught with their hand in the proverbial cookie jar.  The public will be incensed, there will be an uproar along with the accompanying political backlash that’ll get Americans to care about who’s paying for these ads.  Only at that point will our federal government be forced to act.

But, in the meantime, brace yourself for electoral corruption of a degree we haven’t seen in my lifetime.  We’re seeing it now.  It’s going to be ugly.  And it’s going to get worse before it gets better.

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*I’m using Goldman Sachs solely for the sake of argument.  It could be any corporation or special interest group.  That they are not the most popular firm in the US these days, well, I’m going to be coy and just chalk that up to coincidence.

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