McCain-Feingold Hasn’t Changed a Thing
By Tania Valdemoro
Bruce Cain speaks to
the seminar fellows.
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LOS ANGELES - As President George W. Bush’s reelection war chest brims with $158 million and Senator John F. Kerry, the presumptive Democratic nominee, struggles to catch up with $41 million in his own coffers, supporters of the recently enacted McCain-Feingold campaign reform law wonder if prohibitions on raising and spending soft money contained in the law will reduce corruption and influence-peddling in politics.
The answer is “no,” said Bruce Cain, Robson Professor of Political Science at the University of California at Berkeley and director of the Institute of Governmental Studies. He specializes in analyzing the effects of campaign finance laws, legislative districting laws and voting rules.
Cain provided a critical assessment of the Bipartisan Campaign Reform Act of 2002 (BCRA), commonly referred to as “McCain-Feingold,” in a keynote address to approximately 30 journalists who were attending a three-day seminar covering the topic of money in politics held on the campus of the University of Southern California. The conference was hosted by the Western Knight Center for Specialized Journalism, the Annenberg School for Communication, and the Center for Responsive Politics. The project was made possible through the generous support of the Knight Foundation and The Pew Charitable Trusts.
Sean Treglia, a former program officer with The Pew Charitable Trusts in Philadelphia and a leading proponent of campaign reforms, told journalists in his introduction to Cain: “We felt it was important for you to hear a range of perspectives about regulating money and the First Amendment. Bruce Cain is a well known elections scholar, highly respected in the reform community as a leading supporter of campaign finance reform - who also happens to be critical of the McCain-Feingold legislation.”
“Enacting campaign finance reform through BCRA was wrongheaded because the reforms didn’t essentially change the regulatory framework underlying campaign finance,” Cain said. “Instead, competition through candidates’ greater use of the public financing system and more transparency and disclosure are reforms that will do more to restore integrity in the campaign finance system,” he added.
BCRA bans national party committees from taking, raising or spending soft money. It prohibits federal candidates from fund-raising soft money in federal elections. It raises hard money contribution limits to $2,000 from $1,000 for individuals. BCRA also restricts the use of soft money by preventing independent groups from using it to pay for broadcast ads that mention a federal candidate’s name and are broadcast to more than 50,000 viewers within 30 days of a primary or 60 days of a general election in the district or geographic area in which the candidate is running for office. These groups can use hard money subject to disclosure and limits contained in BCRA to run such ads.
Cain explained that the movement for campaign finance reform was a response to regulatory failures in the early 1990s. Under the old laws, the political parties were allowed to use soft money for party-building activities. But due to a series of regulatory decisions by the Federal Election Commission, the funds were able to be funneled into campaigns in the form of so called “issue ads” on TV (ads that were in fact thinly disguised election ads designed to support or oppose particular candidates). Cain said. “By the 2000 cycle, half a billion was spent by the two parties in soft money on these [thinly disguised election] ads. The reform community said, ‘There’s a hole. Let’s plug the hole.’ “
But BCRA has not necessarily reduced the total amount of money in the system, said Cain, although he acknowledged that it is too soon to tell. Even worse, the soft money ban seems to be creating an entirely new set of loopholes in the campaign finance system, he said.
BCRA is affecting the major political parties differently. For example, “Democrats pushed for reform, but it was the Democrats who relied on soft money the most to remain competitive with Republicans, who have always been able to raise more hard money. The BCRA ban on soft money puts Democrats in a difficult position because it severely limits the amount of special-interest money they can raise - and yet it was that money which kept them competitive in the past. The problem is Democratic voters are turned off when Democrats are taking special-interest money,” said Cain. “Furthermore,” he predicted if big loop holes in the law develop, Democratic voters would take their frustration out on their own party’s candidates. On the other hand, “you could tell Republican voters that developers are contributing to Republican candidates and they have no problem with that,” said Cain.
Despite some Democratic candidates’ fears of voter outrage over their ties to special interests, BCRA has led to the creation of more special-interest groups created specifically in an effort to oust Bush in the November election. Known as 527 organizations - so named because they are regulated under Section 527 of the Internal Revenue Code - they are expressly designed to participate in electoral politics and in essence act as a stand on for the Democratic Party. Ostensively independent groups such as MoveOn.org and The Media Fund raise soft money for candidate issue ads, get-out-the-vote efforts and voter mobilization - the very soft money the party relied on to conduct the same activities prior to BCRA but now is prohibited from raising and spending. Leaders within the Democratic Party are concerned that these 527 groups will eventually take over many of the election related activities traditionally reserved to the parties and ultimately render them irrelevant.
Due to a loophole in the law, many 527 groups do not have to register with the FEC as a political committee as are therefore not subject to the BCRA prohibitions. The issue has come before the FEC which has not decided yet whether 527s such as MoveOn.org and The Media Fund which are not required to register and report to the FEC and therefore not subject to BCRA’s soft money ban, should be registered as political committees with the FEC. Requiring them to do so would prohibit them from using soft money for their activities.
(Editor’s Note: In a recent decision that stunned the reform community, subsequent to this conference the FEC decided to postpone the decision as to whether 527 groups such as MoveOn.org should be subject to BCRA until after the 2004 election effectively allowing such groups to raise soft money at least through the current election cycle).
“It’s more than ironic the Democratic Party is being saved by the loophole in BCRA. Where would John Kerry be if 527 committees didn’t raise money to place ads in support of him?” asked Cain, referring to the fact that BCRA does not regulate fund-raising by 527 organizations.
Furthermore, Cain said campaign finance reform at the federal level causes problems at the state and local levels. The federal candidate ban on raising soft money prevents them from participating in down-ballot fundraising efforts. “You get at city council and board of supervisor levels. It chills participation,” he said.
And what will all this mean for the journalists covering the campaigns? Said Cain: “Explaining this system in a cogent way is the most important thing you’ll be doing in the next decade.”
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