Campaign Finance: Philanthropy’s Agenda

Late last year the Supreme Court, with vigorous rhetoric but by the thinnest of margins, upheld the 2002 Bipartisan Campaign Reform Act, the most sweeping campaign-finance reform legislation in a generation.

In McConnell v. FEC, the court said the campaign law, often called McCain-Feingold, after its Senate sponsors, was a constitutionally valid effort to prevent political corruption. Nonprofit groups that pushed for the campaign-financing changes — and the foundations like ours that have supported them — were pleased by the victory. But we all know that philanthropy will need to continue to be vigilant. As the court itself acknowledged: “We are under no illusion that [Bipartisan Campaign Reform Act] will be the last congressional statement on the matter. Money, like water, will always find an outlet.”

Because money always seeps into politics, nonprofit groups promoting the public interest on issues such as education, health care, and clean air find themselves crowded out by powerful opposing interests that contribute heavily to politicians. That’s what led grant makers with an interest in those issues, as well as those working to encourage democracy and public participation, to support campaign-finance reform efforts. Besides, no one else has the same incentives to push for change: not the special interests themselves, nor the incumbent politicians who have become addicted to their money.

The Bipartisan Campaign Reform Act is the latest in a century-long effort to curtail the political influence of big money. The new law prohibits national parties and candidates from soliciting or spending “soft money” — contributions structured to sidestep limits in previous campaign laws — and it regulates “issue ads” designed to circumvent limits on electioneering advertising spelled out in a Supreme Court decision known as Buckley v. Valeo.

In rejecting the charge that such limits unduly restrict free speech, the justices said the court should show “proper deference to Congress’ ability to weigh competing constitutional interests in an area in which it enjoys particular expertise.” It also said the court should give Congress “sufficient room to anticipate and respond to concerns about circumvention of regulations designed to protect the integrity of the political process.”

“Concerns about circumvention” — that’s next on the agenda for nonprofit organizations concerned about election reform. Among the key issues that demand attention:

Evasion. Watchdog groups are monitoring the political players for attempts to sidestep the restrictions on soft money and issue advertising. They have raised concerns that some issue-oriented political committees, known by their tax-code status as “527s,” are reinjecting soft money into federal election campaigns. And they have challenged charities sponsored by politicians that promise access in exchange for big donations.

Enforcement. Federal Election Commission rules drafted a year ago are rife with loopholes. For example, despite the ban on national parties using soft money, the commission would allow parties to use it to finance their conventions. Several groups joined Rep. Christopher Shays, Republican of Connecticut, in challenging these rules in court. A decision is expected next month.

Problems with the election commission are hardly new. Many of the abuses over the last 25 years, including soft money, arose because of the way the commission applied earlier campaign laws. The commission was arguably designed to fail. Commissioners are in effect appointed by the political parties and equally balanced between them, a recipe for accommodation and deadlock. Three current commissioners are on record opposing the campaign law. Even if they want to enforce it, the agency has limited investigative and enforcement powers. All this has led to calls to reform the election commission or replace it altogether.

Presidential campaigns. Reforms enacted after Watergate created public financing for presidential candidates, which from 1976 to 2000 have enabled 82 candidates to run for president, and 5 to win.

But by 1996 the system was overwhelmed by huge amounts of soft money. And in general the unrealistically low spending limits, low matching funds, and scarce resources haven’t kept pace with contemporary campaigns. George W. Bush opted to forgo public financing in 2000 when he ran for president and has done so again this year, as have the Democrats John Kerry and Howard Dean. Nonprofit groups have proposed reforms to get this system back on track.

Communications policy. The single most important factor in driving up campaign costs and stimulating the appetite for soft money is the high cost of television advertising, which consumed an estimated $1-billion in the 2002 election cycle. News coverage of candidates and elections has at the same time been declining. Again, nonprofit organizations have proposed policies to make it easier and cheaper for candidates to get access to the public airwaves, and legislation on this issue is pending in Congress.

Many of the nonprofit groups pushing for campaign-financing changes didn’t exist a decade ago. Their energy and effectiveness has been remarkable. Also important has been the support of a handful of foundations that collectively invested about $60-million from 1999 to 2003 in research, policy development and advocacy projects, and litigation. Especially critical was the massive documentation of the abuses of soft money and issue advertising — a record that the Supreme Court repeatedly cited in its decision — and the legal research that helped lawmakers shape the law to withstand constitutional challenge.

Because “money, like water, will always find an outlet,” this is no time to relax. If a new flood of private money is not to drown out the public interest in the future, foundations and nonprofit groups will have to keep vigilant, endlessly watching for cracks in the dam.

Lawrence N. Hansen is vice president of the Joyce Foundation, in Chicago, which has supported numerous campaign-finance projects. Mary O’Connell is director of communications at the foundation.