The new enemies of ‘soft money’

WHERE ARE ALL the conservative defenders of unlimited political donations hiding these days? For years they made a crusade of opposing the McCain-Feingold law, which banned unlimited donations to political parties. For years you couldn’t read the papers for more than a couple of days without stumbling across some conservative enraged at this draconian limitation on political speech. But now that their side is pushing a ban that’s way more draconian, the conservatives -- with their tender free-speech sensibilities -- are nowhere to be found.

If you have no idea what I’m talking about, let me quickly explain.

In 1974, Congress passed legislation limiting the size of donations to candidates. But the law allowed an exception for donations to political parties. These party donations, known as “soft money,” grew into an enormous loophole that rendered the restrictions almost meaningless. If candidate Smith wanted to solicit, say, a $100,000 donation, all he had to do was tell his donor to give the money to the party. The party could then turn around and plow the money back into Smith’s race.

Reformers spent years trying to close this loophole, and in 2002 they succeeded with the passage of the McCain-Feingold law.

Closing the soft-money loophole left those who wanted to bankroll politics big time with one alternative: Spend the money themselves. That’s what happened in 2004. Independent groups -- called 527s, after the section in the tax code that covers them -- raised unlimited sums and bought TV ads on behalf of their preferred candidates. It so happened that most (but by no means all) of that money weighed in on behalf of Democrats.

That last fact, naturally, left Republicans apoplectic. Liberal plutocrats were trying to buy the election! Didn’t they know that only conservative plutocrats were supposed to do that?

Their central target was billionaire financier George Soros, who dumped millions into pro-Democratic groups. House Speaker J. Dennis Hastert (R-Ill.) speculated preposterously that Soros received money from an international drug cartel. Republicans in Congress threatened to block Soros’ bid to buy the Washington Nationals baseball team -- a move eerily echoing crony capitalist states where the ruling party can keep its critics from purchasing major assets.

Because the Democrats lost in 2004, Soros is no longer the target of smear campaigns or Russia-style political intimidation. Instead, the GOP has turned its attention to the task of banning 527 groups from raising donations higher than $5,000.

The House Republican leadership is pushing this measure, and the Republican National Committee is backing it to the hilt. The conservative media, once so outraged over the soft-money ban, has mustered barely a word of protest.

The news media incessantly describe 527s as “shadowy.” Republicans seem to be under orders to use the term, or variations thereof, as often as possible. (As a Bush spokesman put it in 2004, “These shadowy groups are operating as a kind of shadow Democratic Party.”) But 527s have to disclose their contributions publicly.

Indeed, 527s are clearly less corrupting than soft money. The old soft-money system let millionaires exert huge influence over the political system, and it also encouraged crooked quid pro quo trades -- i.e., “I’ll give your campaign a $100,000 donation if you promise to snuff out a regulation I don’t like.”

The 527s still give millionaires disproportionate influence. But they make the quid pro quo trade much harder to pull off; 527 groups can’t coordinate their activities with candidates.

In fact, one of the recurrent Democratic complaints about the 2004 election was that the 527s spent their money in the wrong places and promoted the wrong message. This was one of the reason’s John Kerry’s campaign was such a discombobulated mess.

Don’t get me wrong: There is a perfectly coherent case for banning soft money and the 527s. There’s also a coherent case for banning neither. And, as noted above, you can make a coherent case as well for banning soft money but not the 527s.

The only position that lacks any intellectual justification whatsoever is keeping soft money but closing down 527 groups.

Guess which position most Republicans have taken?