by publius
One of the most important post-election stories is the RNC’s lawsuit to strike down soft money bans as unconstitutional. Specifically, the RNC wants to restore unlimited donations for “state” or “non-federal” purposes (pdf complaint here – via Hasen). This is a huge story – particularly given the looming redistricting state elections of 2010.
Two quick observations: First, the suit is a blatant attempt to relitigate the issue before the new Roberts Court. The Court – on a 5-4 vote with O’Connor – decided this precise issue in 2003 in McConnell, and upheld the ban. The RNC is politically gaming the Court – and I fear the conservative Justices will play along.
Second, make no mistake – unlimited state donations will effectively eliminate the federal soft money ban (which the RNC technically isn’t challenging). As I’ll explain below, the federal/state issue is a distinction without a difference. If the state ban is lifted, the federal ban will be completely gutted.
After the jump, I’ll first discuss why soft money bans are good ideas generally. Next, I’ll get into some of the more specific legal issues with the RNC’s complaint.
In short, soft money bans are good because they help prevent rich people and corporations from buying government. As Krugman explained in Conscience of a Liberal, one problem with excessive inequality is that it allows those at the top to essentially shape government to their ends.
A perfect example is Schumer’s opposition to the hedge fund manager’s tax. At modern hedge funds, the janitor is taxed at nearly double the rate the hedge fund managers are. But hedge funds give a lot of money to Schumer’s committee, so there you go.
The best way to level these types of playing fields is simply to reduce inequality – thus preventing a tiny minority of Americans from having such disproportionate influence. To reduce inequality, you might prefer pre-tax policies (like strong unions), or you might prefer post-tax policies (taxing top brackets at sharply higher rates). But since America is currently doing neither, it’s important to at least make it harder for rich people and super-large corporations to purchase national political parties. They have enough influence as it is – they don’t need the help.
So that’s why we need soft money bans.
Turning now to the legal issues, note that the RNC is narrowly focused on securing soft money for “state” and “local” parties, not federal. This more narrow argument has two benefits. The first is political – the argument will appeal to federalist/states right people (people like Kennedy). The second benefit is more purely legal — the seminal case (Buckley v. Valeo) requires federal campaign finance restrictions to be limited to activities that affect federal races. Otherwise, they would be unconstitutional. Thus, the RNC is arguing that soft money donated for state purposes has no effect on federal races.
This argument sounds reasonable, but it’s wrong – and everybody in politics knows it. Re-establishing state soft money donations would eviscerate the federal soft money ban. That’s because the RNC (and the DNC) can’t really be divided into federal and state wings. To hold otherwise, is to elevate an extreme formalism over political reality.
More specifically, it’s impossible to neatly segregate the RNC’s “state” activities from its “federal” ones. According to the RNC’s complaint, they want to use unlimited state donations to do things like register voters and conduct GOTV operations (first in 2009, but ultimately in elections that include federal races). In fact, the complaint explicitly notes that funds will be used for redistricting efforts for 2010 (including lobbying and litigation). All of these activities quite clearly affect federal races, particularly the redistricting activities, which seems like the RNC’s weakest link.
But even assuming we could meaningfully divide state from federal activities, the ban is still a good idea. That’s because unlimited donations at the state level will inevitably buy access at the federal level. The RNC (like the DNC) is a big organization – and the left hand knows exactly what the right hand is doing.
Don’t take my word for it – both the congressional sponsors of McCain-Feingold and the Supreme Court expressly found that banning state soft money is necessary to prevent parties from circumventing the federal bans. Here’s an excerpt from McConnell, the Supreme Court case upholding the soft money ban:
[Congress’s] conclusion, based on the evidence before it, was that the corrupting influence of soft money does not insinuate itself into the political process solely through national party committees. Rather, state committees function as an alternate avenue for precisely the same corrupting forces. Indeed, both candidates and parties already ask donors who have reached the limit on their direct contributions to donate to state committees. There is at least as much evidence as there was in Buckley that such donations have been made with the intent–and in at least some cases the effect–of gaining influence over federal officeholders.
. . .
[The Court then quotes some of this evidence:] “It is . . . not uncommon for the RNC to put interested donors in touch with various state parties. This often occurs when a donor has reached his or her federal dollar limits to the RNC, but wishes to make additional contributions to the state party” . . . The 1998 Senate Report found that, in exchange for a substantial donation to state Democratic committees and candidates, the DNC arranged meetings for the donor with the President and other federal officials.
It’s important to see the big picture here. The GOP got walloped in fundraising by the Obama model – a model that makes Obama the least structurally beholden President in modern history. To counter this model, the GOP has decided that it needs to redirect its efforts to securing the right of rich people to donate as much as possible. And they want to open these spigots before the critical redistricting races of 2010.
All that said, restoring soft money would also taint the Democrats. It’s frankly great that the Dems no longer have to go begging Hollywood and other rich liberals for tons of money. The dependence on Hollywood, for instance, leads quite directly to our god-awful intellectual property regime. (Yes, money still goes to 527s, but I think those are different beasts from the actual political party, which is much more tightly and institutionally connected to individual legislators.)
For all these reasons, it’s important that this story isn’t allowed to fly under the radar.
That all seems a correct analysis to me.
(No, no quibbles at all! It’s a miracle! ;-))
It’ll be interesting to see if McCain takes a stance on this, by the way. I’m assuming the RNC waited until after the election to file suit because a) there couldn’t have been a resolution until after the election anyway, so it would have been a distraction to the campaign, and also it would have been an embarrassment while McCain was the nominee.
But now that he’s just Senator McCain again, will he back his old stance, or maintain his wilted obeisance to much of The Base, which already cast him into the our pits for his Opposition To The First Amendment over these issues?
The third paragraph after the jump piqued my interest. Suppose equality of the electorate somehow magically materialized: racially, financially, whatever. Who, then, would check the power of government? Do you imagine it would submit to the voters?
“Who, then, would check the power of government? Do you imagine it would submit to the voters?”
Let me be the first to say: huh?
I agree completely with this post. I worked in elections during the soft-money era, and the effect was corruption at the bottom (walking-around money) combined with undue, overweening influence at the top of the people and organizations who could deliver the big money. Tens of thousands of dollars would land in the last week of the campaign.
It was the complete opposite of the Obama funding, which allowed for the planning and execution of a genuine, volunteer-driven get-out-the-vote effort. The old way reinforced the power of local bosses; real organizing of the kind just seen empowers volunteers and the voters they reach.
And while we’re on the subject of campaign financing, 527 donors must be made public from the time they begin giving. There’s no excuse for a repeat of the disgusting 2003-4 performance of the combined Kerry, Gephardt, and Lieberman forces ganging up on Dean in Iowa with plausible deniability because the donors to “Americans for Jobs and Health Care” didn’t have to be disclosed for months. 527s are “shadowy” only because of the weak donor disclosure rules, so end them.
And Senate candidates need to enter the 21st century by submitting campaign reports electronically, as is already true for House campaigns.
Let me put that another way. If you minimize the ability of groups to combine resources in a political cause – then who is the politician beholden to? I live in california where the public employees unions appear to control every candidate. How do soft-money restrictions weaken the hold of such union contributers? I see you point at the rich and the big businesses as special interests. What about the unions who feed at the public trough?
Okay. I guess I’m ignorant. So walk me through this. Soft money to parties, whether for state purposes or federal purposes, is bad. But soft money for 527’s is okay. Can a 527 aggregate money to work on redistricting issues? And if the rich and big corporations making big soft money contributions is bad. What is it that labor unions do?
And where can I go to see the complete list of Obama donors and amounts? I am quite curious about the stolen credit card/many small donations from one person stories I’ve heard. Sure, most of his donations were legit. But, still … let’s shine alight on Mr. Transparent Government.
gary- i’m framing that comment. 🙂
Just to support the point about “a distinction without a difference,” though it doesn’t look like there’s any real quarrel:
I worked for the Obama campaign for the final month (GOTV). My paystub says “Missouri Democratic Party.” I don’t know enough about donations, etc, to know how that all shakes out, but I assume that’s exactly what you’re talking about.
So? Ask the states to do the regulating. Jeeze, does EVERYTHING have to be done at the federal level to make you guys happy? It’s like you don’t believe states actually exist, and have laws of their own…
Personally, when they made the jump from corruption, to the appearance of corruption, they lost me. I can control whether what I do is corrupt, I have no control over whether you think it looks corrupt. “The appearance of corruption” is an open ended excuse to regulate.
Which I guess is the point.
“First, the suit is a blatant attempt to relitigate the issue before the new Roberts Court. The Court – on a 5-4 vote with O’Connor – decided this precise issue in 2003 in McConnell, and upheld the ban. The RNC is politically gaming the Court – and I fear the conservative Justices will play along.”
Huh? Isn’t that pretty much how you think the Supreme Court operates/is supposed to operate? You get a divided decision on a non-clear issue at one point and then you can get it the other way later when the justices change.
I would have sworn you were defending that kind of thing in the recent death penalty cases (Supreme Court specifically rules that the death penalty for 17 year old murderers is fine, then turns right around later and the Constitution has magically changed in the face of an increasing number of states who want to allow such penalties?) Am I misremembering?
As far as campaign bans go, I’m pretty confident that money has diminishing returns in these cases. There have been a vast number of campaigns that dumped in ridiculous amounts of money and still lost.
If inequality causes more political power imbalance then we are comfortable with, that isn’t likely to vanish under any conceivable campaign finance scheme. The history of such bans is–pass the law, it effects precisely one campaign at most, then people have moved on to other things.
Also, why in the world are you ok with 527s? They seem to have all of the exact same problems that you worry about, just in a slightly different format.
@Joe:
I don’t think that’s really what publius is talking about. In the wake of McCain-Feingold, most state parties have set up federal election committees, which report to the FEC every 30 days for the rest of their existence and allow the state parties to fund activities that are prohibited to the local committees (e.g., paying for phones for phone banking, ads or mailings that name federal candidates, sample ballots, etc.).
I’m surprised to hear that your state party is funding organizing staff directly, rather than through a federal entity, but if it was only for the last month it might be through the pool of money (with a fairly low limit, but I don’t know what the dollar amount is) that can be spent for anything including activities to support federal campaigns.
In Virginia, where state elections take place in the off season, it’s pretty easy to distinguish spending for state vs. federal campaigns. And we do in fact have no limits on contribution size and few limits on who and how can spend that money, but also require immediate reporting (literally every day at the height of the campaign). The issue for the RNC is getting that same kind of situation in the vast majority of states where state and federal elections take place at the same time — so they can then dump in money and say it’s all for non-federal campaigns.
i’m not “ok” with 527s. i don’t like them. but i should have been more clear about why i put that last point in there.
the argument against soft money bans is that they’re irrelevant b/c money will jsut go elsewhere. my point is simply that, even if true, I’d prefer that money go to 527s outside the system than to the DNC and RNC
I’m confused by the “intellectual property” regime comment…please explain.