At a news conference last week, Senator Charles Schumer (D-NY) and Rep. Chris Van Hollen (D-MD  ) introduced the principles for the latest round of political campaign finance reform. This issue was met with great urgency on the heels of the Supreme Court's decision in favor of the group Citizen's United in it's case against the Federal Elections Commission. In the case, the Supreme Court overturned a 10 year ban and nearly 100 years of precedent to allow corporations to contribute directly to, and to provide advertising for candidates seeking political office. The law up to this point provided that corporations could only contribute to or promote positions on issues rather than candidates.

The intention of the preceding law was to "level the playing field" so that corporations with deep pockets would not dominate smaller voices in the debate, or cause individual politicians to become beholden to certain interest groups or corporations. Fighting this sort of influence buying is a popular issue among the citizenry that sees politics as a dirty business mired in corruption. The latest incarnation of campaign reform, the McCain-Feingold bill, was awash in good intentions, but as the saying goes - the road to hell is paved in good intentions. Out of it grew the Political Action Committee or PAC, the MoveOn.orgs and Swiftboaters that have served as a conduit for these funds as a way to circumvent existing law. What was originally a bunch of bloggers with an issue, has grown into a multi-billion clearing house for contributions to the Democratic and Republican parties.

This latest proposal sounds rooted in common sense. There are five principles:

1) Corporations that are foreign owned or foreign controlled (defined as the foreign entity having an interest of 20% or more, or having a foreign national as being in charge of US operations) would be prohibited from participation in direct campaign financing or advertising.

2) Business that hold government contracts (not defined by Schumer or Van Hollen) would be prohibited from using profits from government contracts to participate.

3) Full disclosure of the source of funding must be made public. The current system provides for a PAC to accept money from a corporate entity and act as that entity's agent. For example, MoveOn.org, a key supporter of democrat causes could accept funds from any number of corporations, but the source of the advertising or funding would be listed as MoveOn.org. Now MoveOn.org would be required to list all contributors and dollars amounts in reporting to the FEC

4) Disclaimer - along the same line, if a corporation sponsors an advertisement, they would be required to have the CEO get up and do an "I'm Joe Smith, Chairman of XYZ Corporation, and I approved of this message". In the case where several companies contribute to an advertisement, the top 5 contributors must be listed in the advertisement.

5) Equal time must be provided for the opposition candidates to present rebuttal to advertisements.

On the face of it, these all seem to reflect a common sense approach. Foreign countries should not be influencing domestic politics. If you profit from doing business with the government, the profit you make (source being tax dollars), should not go towards promoting someone who will get you more tax dollars. Their should be honest disclosure of a candidate's sources of funding. All candidate's should be heard. There aren't many Americans who could argue against any of this without sounding like they were in favor of buying politicians outright. It is also the lazy way out to make the argument that there will always be lobbyists and corporate money flowing to DC, and this amounts to little more than tossing a rock in the flow of the money stream. It is not enough to stop the flow, just divert it in it's delivery to the intended candidate. Aside from lazy, it's very fatalistic.

It does however, make great press to rail against corruption and buying access. As this debate develops, it will be the tendency of the Democrats to favor these controls. It will be the tendency of the Republicans to oppose them. The public will have the tendency to go with the Democrats on this one. A winning issue, even if it were a bad one, usually trumps a principled stand.

What makes this a popular issue is the recent Supreme Court decision, Citizens United vs the Federal Election Commission. In it the Supreme Court ruled 5 - 4 that corporations do indeed have the right to back a candidate. The case itself involved the production of a "documentary" attacking Hillary Clinton during her presidential campaign in much the same way as Michael Moore's "Fahrenheit 911" sought to disrupt GW Bush's second run for the White House. The FEC prohibited the movie’s release on the grounds that it was a corporation providing an advertisement directly against a candidate in violation of the law. Citizen’s United, formed in the wake of the film’s failure to be released sued on several grounds. Key among them was the first amendment right granted by the US Constitution to freedom of speech – in particular freedom of political speech.

This was a case that by precedent had favored the government’s position. It was, in all aspects, the government’s case to lose, and lose they did. The argument presented by the Attorney General’s office was incompetent at best, and mindlessly ignorant of Constitutional protections at worst. During the period where the Court questioned the attorneys for both sides The Attorney General’s office not only dropped the ball, but went over, picked it up and handed it to the opposition. The government allowed linkage of film media to print media. Questions were asked to determine the FEC’s action would be if this film was a book, rather than a film. In order to remain consistent, the government’s attorney responded that the FEC would block it’s release as a book as well. Leading down a path of questions from all justices, the government’s attorney by degrees argued that if any portion of a book was critical of a candidate it’s release would be blocked – even a single sentence. It was on that over the top statement that the Supreme Court went into deliberations.

The Supreme Court must base it’s decisions on the Constitution of the United States, not on the incompetency of a lawyer. Established law comes under scrutiny from time to time as society evolves. Many times precedent holds, and on occasion it is overturned. Whenever established law is overturned there must be a solid basis for breaking precedent rooted in the Constitution. The new interpretation of law settled upon Articles 1 and 14 - freedom of speech and equal protection under the law. Rights are generally held to apply to individuals, so the linkage between these two is essential to the interpretation. A corporation, being a government creation (a “corporation” is a legal designation defined by the government, allowing it to operate, and designating it a tax status), is in large part subject to whatever regulation that the government cares to issue.

A corporation is also a tax entity – it pays taxes to the government from of it’s profits just as an individual pays taxes on his income. Taxes pay for government operation. A founding tradition of the United States is the concept that echoes in the revolutionary slogan “taxation without representation is tyranny”. Under the equal protection clause, if a taxpayer as an individual is allowed to contribute and promote a candidate, then a corporation, as a taxpayer has an equal right to do the same. A logical extension of this principle holds that any taxpaying entity has the right to representation in government, and therefore has the right to promote the candidate of their choice.

For all of the hue and cry, it seems that the Supreme Court got this one right. Following it to the logical conclusion, principles 1 and 2 of the proposed campaign reform bill are flat out unconstitutional. Passage will guarantee an instant appeal to the Supreme Court. Principles 3 and 4 can also be argued against as “undue burdens” by not being required of all contributors. Principle 5 can be argued as an undue burden by broadcasters and media outlets, by forcing a contribution to a political candidate in the form of free advertising. That will trigger a counter suit by the original advertiser arguing undue burden in the form off being charged for what is being provided free to other candidates. And around and around we go…

Common Sense Dictates

Benign, beneficial ideas sometimes carry the most unforeseen risk. Unintended consequences always occur. Outrage is seldom a good basis for policy. There we go – three platitudes in a row - all sound good and all mean little. It is much the same with this action to reign in the “special interests” through regulation of political speech. The money will find it’s way into political campaigns by whatever path has the least resistance. McCain-Feingold proved that in no uncertain terms. True campaign finance reform would make it counter-productive for a candidate to try to out-fundraise his opponent. There are very limited ways to do that, and most of them would fall under the category of unconstitutional as well. Those that do not would require ratification of a constitutional amendment. Since the truest reform is a system that would discourage incumbency, real campaign finance reform will likely never happen.

A trend that we have observed is that it is usually the party at the disadvantage that clamors the hardest for campaign finance reform. As a practical issue it is not prone to a workable solution, but it resonates with voters who feel that all government seats are up for sale. With that in mind, we at TPP wonder what the purpose this proposed bill would serve. We see on the political landscape a Democrat party in disarray. President Obama’s poll numbers are tanking. Two governorships and the senate seat held by Senator Edward Kennedy for better than 40 years have been claimed by Republicans riding into office on the anger of the electorate. The electorate is angry because the Democrat majority is even more tone deaf to the desires of the American people than the Republicans were before them. With anger as the motivating factor, and no viable proposals to address the needs of the country in sight, power will just continue to swing back and forth until some workable solutions start to present themselves. In a two-party system one is left with limited choices. The Democratic majority is now sitting as the political equivalent of a deer caught in the headlights. This attempt under the cover of campaign finance reform seems more designed to derail the Republicans (who are expected to be helped by this ruling), rather than any real attempt to take the money out of politics. Common Sense dictates that coming up with policies that the American people want implemented would be a better policy for both parties than trying to jigger election finance laws to grab or keep some advantage.

RLB