Money Talks, and Nominates--and Elects

Stephen H. Unger

April 10, 2007

Is There a Problem?

What's wrong with letting rich people, big corporations, and big unions pay for election campaigns? They can afford it and it's one less burden on the backs of taxpayers. In return for their contributions, multi-millionaires and corporate CEO's get "access" to office holders. They get to sit at a dinner table with a senator, maybe even get photographed standing next to a president. A very important contributor might get to be ambassador to Costa Rica. Where is the harm in that? Rather than discuss this theoretically, let's start with a look at a real-life scenario where some of the participants expressed themselves with unusual frankness.

This is about the passage in 2000 of legislation bolstering the H-1B program, which enables US corporations to hire programmers and engineers, among others, from low-pay countries. An important result has been severe career damage to hundreds of thousands of American residents. The following passage is from an article by Norman Matloff:

The votes in favor of the measure [H-1B in 2000] were overwhelming, 96-1 in the Senate and a unanimous voice vote in the House. Prominent members of Congress openly admitted that this was due to the industry's monetary clout. Sen. Robert Bennett (R-Utah) remarked, "Once it's clear [the visa bill] is going to get through, everybody signs up so nobody can be in the position of being accused of being against high tech. There were, in fact, a whole lot of folks against it, but because they are tapping the high-tech community for campaign contributions, they don't want to admit that in public." A major supporter of pending legislation which would increase the H-1B quota, Rep. Tom Davis (R-Va.), said, "This is not a popular bill with the public. It's popular with the CEOs . . . This is a very important issue for the high-tech executives who give the money."

So perhaps those who give big bucks to candidates may get something more in return than ego boosters. They may not all be public spirited citizens doing their best to grease the wheels of democracy. Could there possibly be a connection between the more than $11 million in political contributions by the gambling industry in 2006 and the rapid proliferation of casinos in the US? Did the $17 million in campaign contributions (2004) of the pharmaceutical industry have anything to do with the fact that legislation establishing prescription drug insurance prohibited the government from negotiating for large discounts?

The above relates to influence exerted on legislators after they take office. But campaign contributions are also a major factor in determining who gets elected--or is even seriously considered as a candidate for office. Ideally, in a democracy, people exert control over public policy by electing those candidates whose positions on major issues they agree with, and who they think are most likely to develop those positions effectively. One would therefore expect that leading candidates for office would be those most in accord with public opinion on the important issues, and that voters with views that are not extreme would be able to find on the ballot candidates that they would feel comfortable voting for and who have a chance of winning. But consider the 2004 presidential election.

A large portion of the electorate was unhappy about the Iraq war, believing that we never should have started it and that we should at least initiate steps to terminate our military action there. Most Americans, concerned about health care, favor a universal health care program, resembling that in Canada. Substantial numbers of Americans are concerned about the effects of our foreign trade policies on jobs in the US. But neither major party candidate advocated termination of the Iraq war. Neither of them advocated anything like a Canadian type national health program. Both favored essentially the same foreign trade policies now in effect. So large numbers of voters (or potential voters) could not vote for a viable candidate whose views they were satisfied with. How come?

During the Democratic primaries there was at least one candidate, Congressman Dennis Kucinich, whose positions on the above issues were those mentioned as supported by large numbers, perhaps majorities, of Americans. But he was never considered a "viable" candidate for nomination. The reason was that he had no substantial financial resources. Most voters never heard of him as the press and broadcast media would not "waste" time or space on a candidate without the money to pay for a full-scale campaign. There is clearly a feedback effect at work here, in that, without public exposure, Kucinich had no chance of raising money in the form of small contributions from many people. In effect, the major party candidates are selected by those with deep pockets, well in advance of primary elections. Of course, this would not have been a problem if Kucinich had been personally wealthy.

The same scenario, in a perhaps stronger form, is unfolding right now as the 2008 election approaches. Again we have a few candidates for the Democratic nomination who have acquired huge amounts of money (Clinton and Obama each raised about $25M in the first quarter of 2007, and Edwards "only" $14M) and are thereby the only ones being discussed in the media. While they are not clones, they differ little on any important issues, including those treated above. Again Dennis Kucinich is in the race. As before, he represents different views, but views held now by an even larger number, probably by a majority, of Democrats. But, still not the darling of those able to write large checks, he is again being treated as a "fringe" candidate, virtually ignored by the media, even by The Nation Magazine, whose editorial views are, on most important issues, not substantially different from his."

The central role of money in elections has at least one more detrimental consequence. Almost from the moment a legislator takes office, it becomes necessary to start building up a war chest for a re-election campaign. This is particularly problematic for members of the House of Representatives, whose terms of office are only two years. Huge amounts of time and energy go into this process. The member is forced to attend all sorts of dinners and other money raising events. Meetings must be held with volunteers engaged in fund raising. Much thought has to go into devising fund raising schemes. Consideration might have to be given to positions on certain issues of particular concern to potential large donors. This is all time that is not going to be spent on what a representative is supposed to be doing. While senators face elections much less frequently, the amount of money needed is so much greater, now averaging something of the order of $5M per campaign, that they must spend similar proportions of their time raising money.

Public Funding of Presidential Elections

In 1907, President Theodore Roosevelt proposed that presidential election campaigns be publicly funded. In the seventies, the idea was implemented by the Presidential Election Campaign Fund law, which is still in force. Funding is via voluntary $3 checkoffs on income tax returns. Candidates in major party primaries who are able to raise sufficient money in at least 20 states can receive public funds matching contributions not exceeding $250 each up to a limit of about $18,655,000. They must agree not to spend more than about $45M. The amounts are indexed for inflation every four years. (The particular numbers given here are for 2004.) For the general election, each major party presidential candidate received (in 2004) $74,692,000. They were not permitted to raise any additional campaign funds. All major party candidates since 1974 have participated in the arrangement for the general election, but in recent years several leading candidates have opted out for the primaries. It appears that most, if not all, front runners for both major parties will not accept any public funding for the 2008 presidential election. Third party candidates cannot participate unless their party candidate has received at least 5% of the vote in the last presidential election. They could receive funds retroactively if they get 5% in the current election.

What's the Answer?

There are several problems with the above outlined public funding law. It applies only to presidential elections, it supplies only about half of the primary funding, major candidates, who expect to be able to raise a lot more money privately, are opting out, and it is of little help to third parties unless they are very large. So it really doesn't reduce the role of money in politics by very much. There are at least two components of this problem. One is to find an alternative way to supply candidates with campaign funds. The other is to reduce the amount of money needed. A promising approach that focuses mainly on the first aspect, addressing the second to a lesser extent is Clean Elections.

The idea here is to provide qualifying candidates with enough public funding to wage reasonable campaigns. Participation is voluntary and candidates qualify by obtaining some minimum number of small ($5-$10) contributions from voters. In return, they must agree not to spend any more money, including their own, on their campaigns. Should rival candidates not participating in the program begin outspending them, then additional matching funds are provided, up to some limit. The great benefit is that publicly funded candidates do not have to balance the expressed interests of voters against the demands of those bankrolling their careers.

Starting in 2000, elections under Clean Election laws were held in Maine and Arizona. In Maine these elections were for Governor, State Assembly and State Senate. In Arizona, in addition to state legislators, all state-wide offices were covered. The system seems to be working successfully in both states, with most candidates choosing to use public funding. The current Arizona governor was elected with clean money under this law. Starting in 2007, all elections in Connecticut for state-wide offices and for the state legislature will be held under a Clean Election law. Other states are moving in this direction, with a limited experiment to be held in New Jersey and with the system being applied to judicial elections in North Carolina. The most recent development is The Fair Elections Now Act, a bipartisan bill introduced by Senators Durbin and Specter; a corresponding house bill is expected soon. This would extend the clean elections concept to congressional elections. Funding would, of course, be federal. Should this become law, and if the other states emulate Maine, Arizona, and Connecticut, only presidential elections would remain "unclean".

What about the cost? The idea of taxpayers giving money to politicians for use in spouting off to us on TV and sending us junk mail sounds crazy. But then quantum theory also sounds crazy. What about our present system? What could be crazier than having those making and executing the laws governing our lives dependent on donations from big corporations and a small number of super-rich people? As was pointed out above, those who now pay the lion's share of campaign expenses do so because it is a very profitable investment, and the profit comes out of our pockets in a multitude of ways. Certainly the quality of the people in politics is degraded by the fact that not many decent, competent people are willing and able to spend a large portion of their time begging for money.

And we are not talking about all that much money. What is involved is of the order of perhaps five to ten billion dollars annually nationwide. If it is worth several billion dollars a week to "bring democracy to the people of Iraq" (if you don't believe this reason, click here and I'll give you another!), what is it worth to bring democracy to our own country?

A side effect of the public funding concept discussed here is that the trend toward increased cost of election campaigns would probably be reversed. The "financial arms race" among candidates would be ended. Provision for discounted rates, or even some free TV air time for campaign statements and debates can be included in the clean elections laws. One factor that contributes to high cost is the length of the campaign season. Election campaigns in the US are far longer than in virtually every other country. This period could be shortened by national legislation reducing the interval between nominating conventions and election day, and between primary elections and the nominating conventions.

Now let us look at spending side of the problem. Some candidates with access to really big money (perhaps their own), choose not to accept public funding. They might very well be able to outspend publicly funded rivals by huge margins. Existing and pending clean election laws provide for increasing the allocated campaign funds to match the spending of an opponent, but only to the point of tripling the basic allocation. What if some candidate is able to raise ten times the basic allotment? It seems reasonable to impose limits on the flow of money directly related to elections. In fact, there is a long history of legislation intended to cap campaign spending.

Actually, these efforts fall into two categories: donations to campaign funds, and the spending of money on elections. In both categories, provisions are made for public disclosure of relevant transactions. The most recent effort is the 2001 McCain-Feingold bill. This law includes many good features, but the bottom line is that it has not halted the continual increase in the level of funding deemed essential to a political campaign. Current laws are intended to limit campaign contributions, tho the limits seem too high. But spending limits, also quite high, are hampered by a Supreme Court decision (discussed later) that declared unconstitutional any provision limiting expenditures of a candidate's own money.

There are potential freedom of expression issues entangled with the issue of campaign spending. Suppose that a certain newspaper repeatedly publishes strong statements closely aligned with the position of candidate A on some important election-related issue. Since the newspaper is not part of A's campaign organization, this is not (and should not be) charged against A's campaign spending limit. But if B, an election opponent of A, wishes to respond to those statements, say with a paid advertisement, the cost of that response is considered as a campaign expense. One might hope that this sort of thing would balance out, but that would happen only if the media were, on the whole, reasonably well balanced with respect to the various candidates. This is seldom the case.

While there are federal laws restricting total political contributions in one year by an individual, the Supreme Court , in a 1976 decision, ruled out any limits on how much of their own money candidates can spend on their campaigns. The court said that regulating campaign contributions can be justified by the need to prevent corruption, but that this does not apply to candidates using their own money. They then concluded that restricting people from spending personal funds on their own election campaigns would violate their First Amendment rights to free expression.

The result is that more and more extremely wealthy people are running for office without the need to solicit contributions from anyone else. The Mayor of New York and the Governor of New Jersey are examples of people elected with their own money. There are sharp disagreements, even among civil libertarians [ACLU-1, ACLU-2], about this notion that the right to free expression implies the right to spend unlimited amounts of money in an election campaign. A case could be made that limiting political self-financing to some small amount would be improper, but that was not the issue. There are certainly other situations in which speech is justifiably regulated on grounds other than its content. For example, few would argue that it is wrong on First Amendment grounds to prohibit speeches broadcast from a sound truck in a residential neighborhood at 3 am. Personally, I don't see anything undemocratic about reducing one of the advantages a super-wealthy person has in the political arena. And the first amendment does not exclude laws abridging the right to spend money.


A major portion of election-related verbiage is generated, not by partisan campaign organizations, but by the news media. Media ownership is becoming more and more concentrated and under the control of moneyed interests representing a decreasing portion of the political spectrum. Even if it were possible to restrict direct spending of a wealthy candidate's own money, there is no feasible way of preventing media moguls from influencing elections by distorting news reporting and disseminating one-sided analyses of events.

Perhaps the best we can do is to supply enough funding to each candidate, via the clean elections approach, so that, with the aid of volunteers, every candidate has a reasonable chance of connecting with the electorate. Strengthening existing laws to mandate full and timely disclosure of all campaign contributions and expenditures would also be helpful.

Another problem is the big advantage of incumbency. One small component of this, in the case of senators and representatives, is the franking privilege. Suspending this during the election period would be a small step toward leveling the playing field.

The major role of money in politics might not be so bad in an egalitarian society where differences in wealth and income are not huge. Then anybody who wished to do so could spend money on politics, and the expenditures of a small number of people would not have a disproportionate effect. But in our society, the disparity is so great that a very small percentage of the population can dominate politics. There is no way to prevent big money from being used to influence elections. Maybe gross disparities of income and wealth are incompatible with true democracy.


ACLU-1 Ira Glasser, ACLU Testimony on Campaign Finance Reform Legislation, March 22, 2000.

ACLU-2 Norman Dorsen, "Former ACLU Leaders Break From ACLU Position", June 19, 1998.

CLEAN Fair Elections, "Clean Elections"

COURT Supreme Court, "Supreme Court opinion in Buckley v. Valeo", January 30, 1976.

DURBIN Durbin and Specter, Fair Elections Now Act,

FEC Federal Election Commission, Presidential Election Campaign Fund

HOOVER Hoover Institution, "Campaign Finance History

MATLOFF Norman Matloff, "Need for Reform of H-1B", University of Michigan Journal of Law Reform, Fall 2003, Vol. 36, Issue 4, 815-914. See p. 13.

MCCAIN McCain, Feingold, "Summary of McCain-Feingold", Brookings Institution

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