Reforming Campaign Financing

Reforming Campaign Financing
By Senator Paul Simon

• Dear Mr. President:
• Bought and Paid For
• Reforming Presidential Campaign Funding
• Winner Spending Per Vote (Opponent`s Spending)
• Time and Money
• Endnotes

[Paul Simon is a former United States Senator from Illinois. He now serves as director of the Public Policy Institute at Southern Illinois University in Carbondale. After serving in the Illinois House of Representatives and then in the Senate from 1955 to 1969, he became a U.S. Congressman and then a U.S. Senator from 1975 until his retirement in 1996. He holds 39 honorary doctorates and has written numerous books, almost all of which deal substantively with ethical issues. The article carried here is excerpted from We Can Do Better, a book of letters addressed to President Bill Clinton proposing practical steps which are needed for the good of America and all Americans. "Reforming Campaign Financing" is an issue of major and primary importance, as timely now as it was when it was first written. Senator Simon here proposes common-sense solutions for one of our nation`s most pressing problems. It is a vital part of a blueprint for turning the country around and giving our children and grandchildren a brighter and better future. It is printed here with Senator Simon`s permission.]

Dear Mr. President:

The mixture we have of money and politics undercuts our democracy. This issue, Mr. President, is fundamental. Those with power and wealth use our democratic process to add to their power and wealth. And the public sees a distorted system that should address fundamental problems but doesn`t. What aggravates the public and intensifies its cynicism is not the unpopular vote a Senator or House member casts-the public does not expect us to agree with them at all times-but there is the belief that many legislative decisions are made because of heavy campaign contributions. Prior to his conviction on several charges of fraud and embezzlement, when reporters asked Charles Keating, a generous donor to political campaigns, whether the hundreds of thousands of dollars he contributed to campaigns influenced the conduct of the recipients, he replied, "I certainly hope so." That`s the way the system works.

In addition, people in politics spend too much time raising money. If it were only the fact that we waste the most precious resource we have, time, that would be bad enough, but the methods of financing campaigns pervert the democratic process and do not serve the nation`s needs. You have had your share of experiences with this demeaning system.

The campaign finance reform bills passed by the Senate and house in 1993 offered slight improvements but gave us thin soup, when what we need is meat and potatoes-genuine reform. You need to press harder to make the public see the flaws in our present system and understand that it needs wholesale change, and soon.

Bought and Paid For

Over and over on the Senate floor, I see the process that should be serving the public being twisted to serve those who contribute to our campaigns. The public senses this. Their perception is of people donating money that buys votes in Congress or contracts and appointments from the executive branch. The practice usually is not that crude or direct, but too often the net effect is about the same. This is not a new phenomenon. In his Decline and Fall of the Roman Empire, Edward Gibbon wrote more than two centuries ago: "The wisdom and authority of the legislator are seldom victorious in a contest with the vigilant dexterity of private interest."[i] He wrote of ancient Rome, but he might well be speaking of modern America.

Here`s an illustration from my recent experience: I voted with you on the North American Free Trade Agreement, widely known as NAFTA. I started the process uncertain as to how I would vote, reading all I could, finally coming to the conclusion that it would create jobs and serve the nation`s interest. After going through the studies by various groups, I decided that it was not even a close call. For the cause of this nation`s working men and women, for our economic future, and for the cause of better relations with our neighbors, I supported NAFTA. But my long-time friends in the labor movement were not happy, and one respected official told a small gathering that I had been the recipient of more than $600,000 in contributions from them in the last election. He implied clearly that I had been bought and paid for and that there was something unethical about my voting against those who had been so generous to my campaign. Another time, when I served in the state legislature, someone asked me how I could vote against this measure, involving some point of the law about monuments in cemeteries, when he had donated $200 to my campaign. I volunteered to write a check giving him his money back. He declined. Years later, someone who had raised money for me said that he felt I owed him a federal judgeship. He does not have the temperament to be a good federal judge, but if the call had been marginal, his comment to me, no matter what his qualifications, would have precluded me from recommending him for a judgeship.

This system affects all of us. I have never made a promise involving my official duties in return for a campaign contribution. But if I arrive home late at night or at a hotel in Chicago at midnight and there are twenty phone calls waiting, nineteen of them from people whose names I do not recognize, the twentieth from someone who gave me a $1,000 campaign contribution, at midnight I will not make twenty phone calls, but I might make one. Which one will I make?

You know the answer. And that means that the financially articulate have an inordinate access to policymakers, including to those who are the most careful on how these matters are handled. But what about the unemployed person who needs access, who probably does not follow the intricacies of legislative maneuverings and certainly will not make a significant campaign contribution? That person is lost in the process. That is the reason I have so many town meetings in Illinois, so that access is there for everyone, but that is a weak substitute for fundamental reform. The present system causes what former Representative Henry Reuss of Wisconsin calls "a psychological mortgage on members."

Are there no pluses to the present system? There are some, but the liabilities far outweigh the assets. When people contribute, they feel more involved in a campaign and are more likely to take an active role. One of the ironies is that a free political rally for a candidate for the U.S. Senate, for example, usually draws a modest crowd. But if there is a charge of $100 a plate for a dinner, a reasonably effective committee selling tickets, there will be a larger crowd, and those gathered tend to be opinion molders. That may be more a commentary on the nature of our political meetings than a tribute to fund-raising dinners.

The traditional political rally is designed to enthuse the party faithful and often fails to do even that. The usually "We`re all good and they`re all bad" speeches turn off independents, and the free (and usually noisy) beer-and-burgers events appeal to the physically hungry more than the politically hungry. And you and I both know that no one is more certain of his or her position on any number of issues than an uninformed citizen who has had six beers.

One of the positive things you did, Mr. President, during your campaign was to shift the significant dialogue away from the political rally and over to the television and radio talk shows. Not only did you reach much larger audiences, you partially bypassed the political reporters who tend to ask process questions rather than issue questions. The woman on the call-in program whose husband is dying of cancer asks questions about health care, and that reflects the concerns of the American public. The reporter who asks why you slipped four points in the latest poll is straining to find some new angle to a story because he or she has heard you give essentially the same speech for the twentieth time. My instinct is that if political rallies were more reflective of the talk show format, with genuine dialogue, there would be more interest and greater understanding of the issues. The danger with the nature of today`s political rallies is that they encourage massive oversimplification of complex issues and are too easily abused by small-time demagogues.

Reforming Presidential Campaign Funding

The funding of presidential races offers an example of genuine reform-and also demonstrates the reality that reform is never a fully completed process, that reforms eventually must be reformed. In a presidential primary, matching funds are available to candidates who raise at least $100,000 in twenty states in individual contributions of $250 or less. That helps candidates of limited means and is good. But the rules under which the funds can be spent are unworkable, as the Federal Election Commission acknowledges.

The great problem-where additional reform is needed at the presidential level-is in the fall run-off after the conventions. In your race against former President George Bush in 1992, you both received a grant of $55.2 million from the check-off that citizens may use when filing their federal income tax forms. That is the amount a candidate should spend in the general election, and for several elections after its passage it worked that way. But soon "soft money" entered the picture, money given by corporations, labor unions (neither of which can give directly to federal candidates), and individuals, all of whom donate to the national and state political parties and to their offshoots. In 1992, the national parties received $67.8 million ($36.2 million for Republicans, $31.6 million for Democrats) in soft money, and 43 percent of this soft money came in contributions of $50,000 or more.

The rules for disclosure of "hard money," direct contributions to federal candidates, are good and strict, as they should be. The rules on disclosure for soft money are considerably weaker. The amounts given to state parties and their creations in 1992 still have not been totaled and may never be. The soft money hemorrhage has significantly weakened presidential finance reform and should be halted.

The congressional campaign reform legislation that passed the House and the Senate in 1993, in differing versions, does offer slight improvement, but the emphasized word must be slight. To achieve significant improvement we should shift the focus.

There has been a preoccupation with the political action committees (PACs) as the great source of evil. I would vote tomorrow to get rid of PACs, but if the aim is reform, you can place that one far down the list of changes that would really make a difference. In other words, if the aim of campaign finance reform is to score 100, give two points to eliminating PACs, with ninety-eight to go.

There are even some good things about PACs. For one thing, they can be a means for small donors to contribute. Also, at least now, if the Jones Furniture Manufacturing Company, of which Robert Smith is the president (all names are fictional), gives a House or Senate member $1,000 from its PAC, that donation is listed and clear for all to see. But if the present funding system is not dramatically altered, and the Jones Furniture Manufacturing Company has a serious legislative interest, eliminating the PAC will not stop this company`s efforts to buy access to lawmakers. If the PAC is eliminated, Robert Smith`s wife, Nancy Smith can donate $1,000, listing her occupation as "housewife," and the public will know almost nothing about the source of funds. And with the current growing trend of women not changing their names at marriage, Nancy Smith may well be listed as Nancy Bartholomew, and the trail to the real source of funding for the campaign becomes even fainter.

The other side of the story, however, is that PACs contribute overwhelmingly to incumbents. Even those who manage to offend some of the major sources of funds are helped more by PACs. Let me immodestly use myself, again, as an example. Because I have voted for many cuts in defense spending, sponsored legislation to bring insurance companies under the antitrust laws, have not voted with the big oil companies, and have favored politics generally not supported by the American Medical Association and other big contributors, my percentage of contributions from PACs has been well below average for an incumbent: 17 percent of my campaign contributions came from PACs in my last race, compared to an average of 36 percent for my Senate colleagues, exempting Senator David Boren of Oklahoma and Senator John Kerry of Massachusetts, neither of whom accept PAC contributions. In my 1990 race against Representative Lynn Martin, who later became Secretary of Labor, she received $1,193,642, from political actions committees compared to my $1,480,221, a far above-average amount for a challenger. This undoubtedly helping my funding: The polls showed me winning. PACs don`t like to offend incumbents-and they love winners. Some of those who contributed heavily to my opponent early in the election assured me that after the election, they would contribute to me. And they did.

What we need is public funding of campaigns. Anything short of this may improve the system a little, but only a little. If this idea is properly planned and clearly presented, it will have overwhelming popular support. Political leaders are correct when they piously say, "Opinion polls show that when the public is asked if they favor using taxpayers` money to fund campaigns, they overwhelmingly reject the idea." And then these same political leaders say that they will stand with public opinion "even though I would benefit from a change in the system." What they do not say is that incumbents recognize that the current system is strongly tilted toward reelecting them. Plus there is the never expressed but clear thought on the part of many: "Whatever system got me elected must be pretty good." My experience at town meetings in Illinois is that when the idea of public campaign funding is explained, people are overwhelmingly for it. What is needed is leadership to educate the public about the significance of such a change for them. The public pays for elections now but in the worst possible way: through distorted priorities that reflect law-making for donors rather than law-making to meet the nation`s needs.

Senator John Kerry of Massachusetts introduced an amendment that six of us co-sponsored, calling for a system of public financing of Senate and House races. He proposed a voluntary $5 donation that anyone filling out a federal income tax form could check off and contribute toward campaigns, with no private contributions permitted, except for limited donations in the event of a primary contest.

First, Senator Kerry explained the problem with two illustrations:

The LTV Corporation and the Wheeling-Pittsburgh Steel Corporation both lobbied aggressively for legislation that facilitated their claim to $144 million in tax refunds, despite the fact that prohibitions against those refunds existed where a corporation had done what those very corporations had done, which is cut off the pension plan payments to retirees. So they spent $201,304 in very targeted campaign contributions, some of them directed to two key Senators on the very legislative committees pertaining to that legislation. And all of those companies that have revoked the pensions for over 100,000 retirees , were allowed to claim relief under the new law in a special provision put in for them by the committee on which those two legislators sat.[ii]

Now, whether or not those two legislators did it, the appearances of impropriety screamed out at everybody so much that newspapers and others made direct allegations of impropriety.

Another example:

Northrop Corporation sent well over $250,000 in PAC money to Congress in 1988. And it did so literally at the very moment that the Tacit Rainbow project came up in the Senate. Several thousands [of] dollars were contributed directly to the campaign of a chairman of one of the committees of jurisdiction. And although the anti-radar project had failed four flight tests [and] it had accrued enormous cost overruns, $180 million was budgeted for its continued development and the conflict of interest at the level of appearance once again surfaced in the press.

Then Senator Kerry explained the logic of his amendment:

Think of what it would mean in this country to have the general election campaigns of the U.S. Senators funded by $5 contributions from anonymous people. You do not know who gave you the money. People who care about liberating their Congress from the special interests are the ones who gave it. But whether they be Democrat, Republican or Independent, they have given it because they want us to end the charade of pretending we are trying to set up a system that will help challengers, when in fact the current system is so anti-challenger it is incredible.[iii]

To no one`s surprise, the amendment lost 60-35. All thirty-five Senators voting for the amendment were Democrats, unfortunately. This issue should transcend partisan politics. That thirty-five Democrats bucked the pressures and supported its signals that this is an important battle for the public interest that can be won. One article calling for public financing observed: "Neither Congress nor the President should be looked to as the engine of reform."[iv] The authors suggest there really has to be a grassroots movement to bring about the change. While I strongly favor any public support that can be generated, the reality is that this issue is complicated enough that there will not be any sizable grassroots call for change. However, more than one-third of the Senate is willing to support this needed reform. If you as President of the United States came aboard strongly on this-with one-tenth the effort that you and your staff put forward so effectively on NAFTA-the measure would pass the Senate and the House.

The Honor Roll of Senators who voted for the Kerry amendment:

Daniel Akada
Hawaii

Joe Biden
Delaware

Jeff Bingaman
New Mexico

David Boren
Oklahoma

Barbara Boxer
California

Bill Bradley
New Jersey

Dale Bumpers
Arkansas

Robert Byrd
West Virginia

Kent Conrad
North Dakota

Tom Daschle
South Dakota

Dennis DeConcini
Arizona

Chris Dodd
Connecticut

Russ Feingold
Wisconsin

John Glenn
Ohio

Tom Harkin
Iowa

Daniel Inouye
Hawaii

Ted Kennedy
Massachusetts

John Kerry
Massachusetts

Frank Lautenberg
New Jersey

Pat Leahy
Vermont

Harlan Mathews
Tennessee

Howard Metzenbaum
Ohio

Barbara Mikulski
Maryland

George Mitchell
Maine

Carol Moseley-Braun
Illinois

Daniel Patrick Moynihan
New York

Claiborne Pell
Rhode Island

David Pryor
Arkansas

Harry Reid
Nevada

Don Riegle
Michigan

Paul Sarbanes
Maryland

Jim Sasser
Tennessee

Paul Wellstone
Minnesota

Harris Wofford
Pennsylvania

It is not only the pandering to big contributors that is wrong, it is the huge amount of time wasted by candidates, including incumbents, on raising money, time that should be spent becoming more knowledgeable about the many complex issues. In my last race for the Senate, I raised $8.4 million. But on a per capita basis for the number of voters in the state, mine was one of the least expensive races. Here is the breakdown for the 1990 Senate races, with the amount winners and losers spent, divided by the total Senate vote for that state (with the opponent`s expenditure in parentheses):

Winner Spending Per Vote (Opponent`s Spending)

Joseph Biden, D., DE
$14.16
($1.34)

Ted Stevens, R., AK
8.52
(zero)

John D. Rockefeller IV, D., WV
6.56
( 0.06)

Max Baucus, D., MT
6.54
( 2.34)

Claiborne Pell, D., RI
6.49
( 5.65)

Jesse Helms, R., NC
6.45
( 3.77)

Larry Pressler, R., SD
6.43
( 1.76)

Alan Simpson, R., WY
6.35
( 0.04)

Mitch McConnell, R., KY
5.54
( 3.20)

Tom Harkin, D., IA
5.36
( 5.15)

Larry Craig, R., ID
5.23
( 1.72)

Daniel Akaka, D., HI
5.04
( 6.86)

Bill Bradley, D., NJ
4.93
( 0.41)

Robert Smith, R., NH
4.87
( 1.10)

Pete Domenici, R., NM
4.73
( 0.09)

James Exon, D., NE
3.96
( 2.45)

Hank Brown, R., CO
3.60
( 1.90)

Bennett Johnston, D., LA
3.57
( 1.87)

William Cohen, R., ME
3.02
( 3.14)

Howell Heflin, D., AL
2.90
( 1.56)

Carl Levin, D., MI
2.71
( 0.94)

John Kerry, D., MA
2.69
( 2.24)

Phil Gramm, R., TX
2.56
( 0.44)

Strom Thurmond, R., SC
2.55
( 0.01)

Daniel Coats, R., IN
2.47
( 0.72)

Paul Simon, D., IL
2.36
( 1.51)

Mark Hatfield, R., OR
2.15
( 1.35)

Albert Gore Jr., D., TN
2.08
( 0.01)

David Boren, D., OK
1.55
( 0.16)

Paul Wellstone, D., MN
0.74
( 3.44)

Nancy Kassebaum, R., KS
0.52
( 0.02)

Here`s another flaw: Four incumbents in 1990 had no opposition: David Pryor of Arkansas, Sam Nunn of Georgia, Thad Cochran of Mississippi, and John Warner of Virginia. All are good legislators, but it is reasonable to assume that if we had a system in which an opponent would have the same amount of money to spend as a sitting Senator, the incumbents would have been challenged and the process of democracy would have been aided. No-choice elections are not elections.

As you look at the figures for the 31 contested Senate races, the person with the greater campaign treasury won in all but three. In all but three cases also the sitting senator outspent (usually by a substantial margin) the nonincumbent. And in all but one case, the sitting senator won.

Time and Money

People ask, how do I raise $8.4 million for a Senate race in Illinois? Not easily. I spend time in my home state but I also travel to New York, Los Angeles, and other cities where I can pull together a handful of people to raise funds. Particularly in an election year (which is every other year in the House), I`ll spend an hour or two on the telephone almost every day, raising funds. Because it is illegal to do this from the Senate and House offices, that also means spending ten or fifteen minutes getting to and from a nearby nongovernmental office to make the calls. Each year, thousands of people who visit the Senate and House chambers when we are in session are appalled at the few members who are on the floor participating in debate. Part of that is because committee meetings are often going on at the same time. (In this one respect, state legislative bodies have better rules. When state legislative bodies meet, most members are present to hear the debate.) But the visitors in the gallery who are appalled at the small numbers on the floor of either the House or Senate would be even more appalled if they knew this reality: If they are visiting the chambers in an election year, in all probability there are more House and Senate members making phone calls to raise money at that point (except for the time we are casting votes) than are on the floor of either chamber. Would we be serving the public better by listening to and participating in debate rather than making phone calls to raise money? To ask the question is to answer it.

Authors Ellen Miller and the late Phil Stern exaggerate when they wrote: "Money has become the medium of political participation in America today."[v] But that is closer to the truth than it should be. And they make this valid point: "We would never allow competing litigants to pay jurors or judges. Similarly, self-interested private money has no place in our public legislature and elections."

It is not only the campaign contributions that a candidate receives that can influence votes in the Senate and House, it is also the awareness of the money that can be shifted to the opposition candidate and used against an incumbent. "What a great thirty-second commercial they can use against me on this vote" is a sentiment heard over and over when members cast votes they believe to be in the national interest, but politically imprudent.

One senator`s chief of staff told me: "Most senators would much rather ignore the special interests, but under the present rules of financing campaigns, they cannot." All of us belong to some "special interests." Teachers, for example, should not be ignored because they are a special interest. But too often, the larger the campaign purse, the greater the influence in the political process.

One of the finest persons ever to serve in the United States Senate, Paul Douglas, used to quote an unknown English poet:

The law locks up both man and woman,
Who steals the goose from off the Common.
But lets the greater felon loose,
Who steals the Common from the goose.

One of the influential men of the nineteenth century, British author John Stuart Mill, wrote:

One of the greatest dangers of democracy…lies in the sinister interest of the holders of power: it is the danger of class legislation; of government intended for…the immediate benefit of the dominant class, to the lasting detriment of the whole. And one of the most important questions demanding consideration…is how to provide efficacious security against this evil.[vi]

It is the evil we have not yet addressed effectively.

The old line of finding truth in humor is true in the observation of Ronald Reagan (though no friend of campaign financing reform): "I thought politics to be the second-oldest profession. I come to realize that it bears a very close relationship to the first."[vii]

Rush Limbaugh is not my favorite authority on most matters, but listen to his response to a question from a writer for the National Review on whether he would ever seek public office:

I have no desire [to do it]. Primarily because…to be elected to anything, you have to walk around like this-with your hand out. And you have to beg people to put something in it. Somebody always does, and they want repayment. And not with dollars. It`s going to be with your soul, it`s going to be with a portion of your soul. I don`t look at it as fun.[viii]

But some who read these words may ask, "If the system is that bad, why do you use it?" Former Senator William Proxmire of Wisconsin is the only member in recent history who ran and got reelected without raising campaign funds. Had he not chosen to retire, he would have been reelected again. After my election to the Senate, I approached him about the idea of running without fund-raising in Illinois. In strong terms he advised me against it. In a state with a smaller population like Wisconsin, he told me, it is difficult but possible, but it would be impossible in a state with the population of Illinois. That means that unless a person considering a Senate race is independently wealthy-and I am not-a candidate depends on contributions to raise the money necessary for a campaign and has to use the present system, bad as it is.

There are those who argue that a change to public financing will help Democrats more than Republicans, because generally Republicans have an easier time raising money. Opponents of public financing for presidential campaigns used that same argument, because Republicans generally collected and spent more in presidential races than Democrats. Since the income tax check-off reform passed, we have seen three Republican presidential victories and two Democratic wins, including yours. Because the House has been in Democratic hands since 1955, and because incumbents raise money more easily than challengers, it is probable that over time public financing would create a shift away from the Democratic lock on the House. But the electorate is not predictable under any system, and that is good. When Alaska and Hawaii were admitted to statehood, for example, Alaska had two Democratic Senators and Hawaii had two Republican Senators, and the political calculators predicted that the two states would remain in that position long into the future. They erred: Today Alaska has two Republican Senators, and Hawaii has two Democratic Senators.

A system of public financing will give incumbents less of an advantage. In 1974 the spending difference between House incumbents and challengers averaged $17,000. By 1990 it had reached $308,000. In 250 of the 435 House races that year, the winner outspent the loser by at least ten to one.[ix] Opponents of public financing argue that incumbents have much greater name recognition and other advantages. But incumbents also have the disadvantage of a record that can be dissected, distorted, and criticized. Balancing spending in general elections will remove the financial advantage for incumbents.

One restriction that you are subject to, Mr. President, that House and Senate members are not, is term limitation. People who advocate a constitutional amendment for term limits in the Senate and House make a mistake, in my judgment, on the grounds of both merit and practicality. The merit argument is that to change officeholders simply for the sake of change is not wise in an increasingly complex world. (I confess some conflict of interest on this argument.) I could give many examples of members in both political parties who have mastered highly technical areas and whose loss to the Senate would be a loss to the nation. Senator Bennett Johnston of Louisiana is one. He can enter into an extremely sophisticated discussion with scientists on the merits of various technical projects that fall under his jurisdiction. His substantial knowledge in this area, unmatched by anyone in either the House or Senate, is a national asset.

The practical reality is that to enact term limitations requires a constitutional amendment and that takes a two-thirds vote of the House and Senate. You would probably get more votes in Congress to move the nation`s capital to Las Vegas. It simply won`t happen.

A system of public financing would make the reelection of incumbents less certain. That would bring meaningful and selective change. Incumbents would be forced to hold more town meetings in place of fund-raisers and pay more attention to weighty issues rather than hefty donors.

As candidate Bill Clinton pointed out during the 1992 campaign, we need to change the way we finance campaigns. You have shown your concern. Although it is a somewhat delicate matter involving congressional turf, you need to exert more leadership toward this end as President Bill Clinton.

Sincerely,

Paul Simon

——————————————————————————–

[i] Edward Gibbon, Decline and Fall of the Roman Empire, Great Books of the Western World, Mortimer Adler, ed., (Chicago: Encyclopedia Britannica, 1952), p. 393.

[ii]Congressional Record, Senate, May 27, 1993, p. 6664.

[iii] Ibid., p. 6665.

[iv] "Democratically Financed Elections," by Ellen Miller and Philip Stern in Changing America, edited by Mark Green, (New York: Newmarket Press, 1992), p. 760.

[v] Ibid., pp. 760-761.

[vi] John Stuart Mill, Representative Government, Great Books of the Western World, Mortimer Adler, ed., (Chicago: Encyclopedia Britannica, 1952), p. 369.

[vii] Ronald Reagan, quoted in "Of Many Things," by George W. Hunt, America, November 7, 1992.

[viii] Quoted in "The Leader of the Opposition," by James Bowman, National Review, September 6, 1993.

[ix] "Democratically Financed Elections," by Ellen Miller and Philip Stern in Changing America, edited by Mark Green, (New York: Newmarket Press, 1992), p. 761.

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