Doubts Arise Over Drive to Reform Campaign Financing

In the face of the mounting outcry about the heavy-handed fund-raising tactics that helped him keep his desk in the Oval Office, President Clinton argued last week that the current system of campaign financing “really worked pretty well” until it became “just outdated.”

But as the struggle now taking shape in Congress to overhaul the campaign financing structure makes clear, the defects in the rules governing political money are deeply rooted, raising grave doubts about whether this new drive for reform can achieve meaningful success.

Congress has not passed comprehensive campaign finance legislation since 1974, in the wake of the Watergate scandal. Many reformers believe that the current controversy over fund-raising by the Democratic Party has created more momentum for change than at any time since the furor that drove Richard Nixon from the presidency.

But the reform efforts face a fundamental problem: Politicians taking on the challenge are in effect regulating themselves, and many of them find it hard to resist putting their self-interest first. This attitude is long-standing and transcends party lines, having more to do with incumbency than partisanship.

As the majority party in Congress, Republican lawmakers are naturally resistant to change.

“My job is to convince the Republicans they can fix the system and still be reelected,” said Sen. John McCain (R-Ariz.), co-sponsor of the most prominent reform proposal on the congressional docket.

*

Among other things, the bill seeks to ban contributions to political parties of so-called soft money--the now virtually unlimited donation of funds from corporations, labor unions and individuals. It is the area of abuse that has caused great embarrassment for the president and the Democrats.

McCain is a redoubtable figure, widely respected in both parties, but so far he hasn’t had much luck promoting the reform plan, co-authored by Democratic Sen. Russell D. Feingold of Wisconsin. McCain’s only recruit from the GOP ranks has been Sen. Fred Thompson of Tennessee, who also heads a forthcoming Senate inquiry into fund-raising excesses by both parties during the 1996 campaign.

Meanwhile, Democrats have their own anxieties about the reform drive. The main worry, said Sen. Paul Wellstone (D-Minn.), is that the GOP majority would eliminate some provisions from the current proposal and substitute others that could leave Democrats at a competitive disadvantage in fund-raising battles.

For example, some veterans of past reform wars speculate that Republicans, who are usually better financed, might try to cut back on the McCain-Feingold bill’s provision for free TV time for candidates, or might seek to tighten restrictions on campaign spending by labor unions, which in 1996 lavished $35 million in dues money on an effort to overturn the GOP majorities in Congress.

Compounding these problems are federal court decisions severely restricting congressional authority to regulate campaign spending, which the judiciary maintains is shielded by the 1st Amendment.

“You are not going to stop the flow of money in American politics,” said University of Virginia government professor Larry Sabato, coauthor of “Dirty Little Secrets,” a study of American political corruption. “So we should stop passing laws which encourage people and groups to use subterfuges.”

Similar skepticism is expressed by Kent Cooper, a longtime authority on the campaign finance system and executive director of the Center for Responsive Politics, a watchdog group. “No matter what passes, people will figure out loopholes very quickly, and you will have money coming . . . through some new avenue.”

Indeed, that has been the pattern of the past, as the statutes enacted by Congress and regulations promulgated by the Federal Election Commission have been overridden by the law of unintended consequences.

For example, while contributions to candidates’ campaigns are limited by regulation, the FEC ruled in 1978 that political parties would not be restricted in the collection of funds for “party building.” At the time, that designation covered such activities as printing bumper stickers and yard signs.

But by the 1996 campaign, the resourcefulness and greed of candidates, their handlers and party officials in both camps had stretched this loophole into a huge pipeline of soft money. Unlimited funds from corporations and labor unions, as well as frequently oversized gifts from individuals, turned “party building” into a $250-million industry, which is now the prime target of reform.

*

“If we can get rid of $250 million in soft money, we can improve the system,” said Fred Wertheimer, former president of the Common Cause watchdog group and an ardent proponent of the McCain-Feingold bill. “You can point to other things that may go on, but they are not going to be of the nature and depth of corruption that is going on today in Washington through soft money.”

Wertheimer, head of a new public policy group called Democracy 21, blames many of the ills of the campaign finance system not on the existing laws but on lax enforcement by the FEC, an agency widely condemned for its flaccidity.

Meanwhile, even as it absorbs criticism for its supposed laxness, the FEC has been rebuffed by the federal courts for its occasional activism. An example occurred when it filed suit against the Christian Action Network for using soft money to pay for television ads that FEC officials asserted advocated the defeat of then-Arkansas Gov. Bill Clinton in his 1992 presidential campaign. That would have exposed the group to the much tougher financial regulations that apply to candidate-related spending. (Individual contributions, for instance, cannot exceed $1,000.)

The group’s commercials--broadcast 250 times in 24 cities under the auspices of the conservative grass-roots group--depicted a sinister likeness of Clinton while the narrator described his support for “radical homosexual causes.”

But in 1995, a U.S. District Court held that the ads failed to meet the narrow standards set by the Supreme Court for defining advocacy of a candidacy. Instead, the court ruled that the commercials merely “represented a form of issue advocacy intended to inform the public about political issues germane to the 1992 presidential election.”

*

Similarly, term-limit groups in 1994 used an ad campaign financed by soft money to attack then-House Speaker Thomas S. Foley (D-Wash.) in his district. Foley, a 30-year House veteran, lost his seat that year.

In the 1996 presidential campaign, both major parties sponsored commercials backed by unprecedented outlays of soft money to help boost their respective presidential candidacies.

Backers of reform recognize that carrying out their mission on Capitol Hill will require flexibility in industrial-strength dosages.

“Remember,” McCain said, “I am willing to negotiate on everything if we preserve three principles: reducing the influence of money in politics, giving a more level playing field to challengers and getting something done.”

What about the danger of giving too much ground and reducing reform to a measure of trivial consequence? “We are a long way from that,” McCain claimed.

Ironically, the best chance for passage of sweeping reform probably depends on the same element of self-interest that underlies the problems the reformers are trying to solve. Proponents of reform are counting on an increase in public indignation over the role of money in politics, perhaps spurred by the Senate hearings this spring, to boost the chances of action.

If public pressure for change intensifies, Wellstone said, “people [in Congress] may feel that even though they don’t want to pass reform, a vote against would hurt them even more than the reform.”