Campaign Cash Now Sluicing to State Parties

The 1988 presidential election was distinguished by name calling, misrepresentation and a new low in personal vilification. But that’s not all the bad news. The worst is that the system of electoral finance reform, which took from 1971 to 1979 to work out, has effectively been overthrown. This is not to say that anyone acted illegally. If anything, we might point to the success of the 1970s by noting that it took political money men another decade--1979 through 1988--to figure out ways to get around the law.

Federal campaign finance laws were intended to ensure open and fair elections. They focused on money because we have come to equate it with communication, and because it is the easiest thing to measure. The backbone of the federal law is built on limitations and disclosure. Individuals can contribute up to $1,000, organizations $5,000, to candidates in congressional and presidential primaries. Individuals can also give up to $20,000 to the parties, but not more than an aggregate maximum of $25,000 a year to candidates and parties. The security of the law lies in its disclosure provisions--who gave what to whom--and how the money was spent. The laws were aimed at eliminating fat-cat contributors and undue influence of big business.

In 1988 the fat cats came back in force, which is about all we know, except that more money probably went to state parties than elsewhere. We don’t know specifically how much they gave, where it went nor how it was spent, because the information is too diffuse. We know that reports to the Federal Election Commission indicate a greater than 50% increase in state and local party spending that was coordinated with presidential campaigns between the last two elections; between 1984 and 1988, California state parties reported an increase in contributions from $5 million to $10 million for Republicans, from $2 million to $8 million for Democrats. Both parties’ national committees--after a bit of pressure from such groups as Common Cause--published lists of donors who contributed $100,000 or more.

One of the most controversial loopholes in the law is its allowance of independent spending--defined as money spent by an individual or a group in advocating the election or defeat of a candidate, without contact between the spender and the candidate or his election committee. More than $9 million was so spent in the 1980 election; in 1984 that had more than doubled to $20 million. Most of it was spent by New Right groups, such as the National Conservative Political Action Committee and the Fund for a Conservative Majority.

Although the impact of independent spending on the election was never clear, the groups themselves were controversial because they could not be held accountable for their behavior or the nature of their message. Campaign managers considered them wild cards, even when they supported their candidate. Most campaigns and both parties tried to direct funds away from such spending into the mainstream.

Although independent spending was down in 1988, the principal reasons are probably the nature of the campaign and the decline of big spending groups because of death and squabbling among their leaders. The largest spender in this election was a new group, the National Security Political Action Committee, which produced the controversial Willie Horton ad used against Michael S. Dukakis; the committee accounted for more than $10 million of the $17 million in 1988 independent spending.

Because presidential campaigns are publicly funded during general elections, with private contributions prohibited, the parties are the last mainstream vehicle for donors.

State parties were “discovered” in the 1980 election when the Republican National Committee targeted 12 critical states and coordinated $9 million in contributions from big givers, telling them how much to give and where to give it. A donation from California to the Florida state party would be reported in Tallahassee, but no one in California or Washington outside the campaign would know about it. The Democrats made a similar but smaller effort, and both parties have been developing such programs ever since.

The good news is that the money is going to the parties where it has the potential for doing far more for party-building than any reform since the Progressive era. That fact makes Edmund G. (Jerry) Brown Jr.’s decision to take over the California Democratic Party an astute move; if the state parties are the last remaining conduit for big contributors beyond presidential election years, the state parties will be the place to be in the 1990s. With better resources to recruit candidates and run campaigns, the parties would not be as dependent on self-selected candidates, and be more likely to promote those best able and qualified to win office and govern.

When we wonder why we fail to attract the best men and women to public office, we cannot ignore the terrible burdens we put upon them--not the least of which is the ordeal of raising money (a Senate campaign, for instance, now takes an average of $4 million). If the parties can supply most of what it takes to win, without requiring candidates to mortgage homes and empty bank accounts, we would all be better served.

Popular prejudice notwithstanding, political parties serve a critical function in American democracy. They are principally in the business of winning elections, and they cannot win if they put up candidates who fail to represent the interests of the majority of voters because they are too ideological or too corrupt. Increased funding is both to their benefit and ours.

On the negative side, the most important consequence of this boom for the state parties is that it comes at the expense of a belief that campaign reform laws eliminated fat-cat contributors.

While it is no surprise that the GOP is indebted to the business community, the Democrats are just as dependent on large donors--and have been, since the days of John F. Kennedy. They have made substantial strides in the past 10 years, developing a small-contributor base through direct-mail solicitations. While Democrats trail Republicans by 2-1 in fund-raising, the gap narrows every year.

There will be some discussion in Congress this term about the growing proportion of money given by political action committees (PACs) in congressional elections--an issue long-overdue for attention. But the perception of abuse because of fat-cat contributors may be a greater threat to campaign law integrity. This goes to the very heart of reform intention. Whether “soft” money (from individuals and corporations, giving at the national level for state parties) subverts the process, or whether there is only such an appearance, the need for reform seems clear.

The best proposals would not eliminate the money but would make clear the source and amount, so that anyone interested in the flow of influence could tell who did, in fact, give what to whom. All the soft money that goes to the national parties can easily be reported to the Federal Election Commission; so should be all large in-state (more than $1,000) and all out-of-state contributions to the state parties.

Much soft money is already reported one way or another. What is missing is a central reporting location for state parties and any reports at all from congressional campaign committees. It may just be a problem in perception, as the attorneys for the parties contend, but it is a perception related to basic beliefs about what elections are and should be in a democracy.