Endless Loopholes
Weeks before Sen. Trent Lott
buried the McCain-Feingold campaign-finance reform bill in parliamentary
procedure, the Washington establishment of political parties, candidates,
advocacy groups, and campaign-finance lawyers were already figuring out how to
peck the law to death if it passed.
And peck
they would have. At first glance, McCain-Feingold seemed the perfect antidote
to the recent fund-raising scandals at the White House and the national party
committees. But McCain-Feingold's nobly conceived ban on soft-money
contributions (funds designated by the party for nonfederal use, including
party building and state-election activity) and its restrictions on issue
advertisements would have changed little.
Currently, election law permits national party committees
such as the Democratic National Committee and the Republican National Committee
to accept unlimited soft-money contributions and redirect them. But
McCain-Feingold's prohibitions on soft money would have merely moved the
fund-raising action to the states, because the bill does not regulate state
party committees. The Democrats and Republicans have state party committees in
every state. Created as separate entities from their national counterparts,
they are in large part regulated by state law. Generally, state law is more
permissive than federal law. For example, more than half the states allow
corporate contributions and labor contributions, while federal law prohibits
such contributions. Many states have no limits on the amount that may be
contributed. Usually, a national party committee does not use its soft money to
directly support state or local candidates. Instead, a national party committee
transfers those funds to state party committees, which in turn support state
candidates.
To evade
McCain-Feingold's soft-money ban, contributors would cut out the middleman and
make their donations directly to the state party committee. Although
McCain-Feingold prohibits a national party committee from "directing"
soft-money contributions to others, it does not prohibit national and state
committees from coordinating in other ways. For example, a national party
committee could still coordinate the fund-raising efforts of the various state
parties and exchange information, as long as it did not solicit or direct
contributions to those state parties.
McCain-Feingold also does not prohibit one
state party from coordinating and directing contributions with others. Because
the law doesn't require state party committees to be located within their
respective states, they might well open offices in Washington, D.C., to
coordinate fund-raising efforts. Imagine a scenario where the Republicans'
state party committees set up a single office representing all of the
Republican state party committees, rent space from the RNC, and hire their own
fund-raisers. I'm sure this idea has already dawned on the state party
committees. If McCain-Feingold passed, the party committees could conduct
business as usual with the slight inconvenience of rearranging lease agreements
and adjusting the names on their payrolls.
Under
current federal election law, expenditures on issue-related speech--that is,
ads that don't expressly advocate the election or defeat of a candidate by
using words such as "vote for," "elect," or "defeat"--are exempt from the
prohibition on corporate contributions and the limits on individual
contributions. (The exemption does not apply if the person behind the ad
coordinated it with a campaign.) An ad that identifies a candidate and
discusses his voting record on an issue is not subject to election-law
prohibitions and limits unless words of express advocacy are used.
McCain-Feingold would ban all such issue-related ads that
air 60 days prior to an election and clearly identify or depict a candidate.
But any politician worth his salt could evade this restriction. First, he'd
create and air all of his issue advertisements outside the 60-day period.
Second, he'd be creative about the contents of the ads he broadcast inside the
60-day period. McCain-Feingold does not ban ads inside the 60-day period that
discuss important issues in an election without identifying a candidate. Once
again, it's easy to imagine party committees and advocacy groups making
inventive and persuasive ads that don't depict or refer to a candidate, but
strike the same themes as the campaign's ads established outside the 60-day
period.
Ultimately, campaign-finance
laws only inconvenience campaigns as the lawyers figure out how to circumvent
them and the courts dismantle them as threats to First Amendment rights to free
speech. The heap of rules and prohibitions that survive these challenges are
subject to the law of unintended consequences, usually causing an effect that
is the opposite of the original intention.
"Money is like water," said
former Clinton aide Harold Ickes about campaign finance in a recent New York
Times Magazine profile. "If there is a crack water will find it. Same way
with political money."
