McCain-Feingold Turns Five

“This week marks the fifth anniversary of the enactment of the Bipartisan Campaign Reform Act, also known as McCain-Feingold,” wrote political scientists Norman Ornstein and Anthony Corrado Jr. in the “Outlook” section of the Washington Post on April 1. “McCain-Feingold has worked — even better, faster than its architects imagined.”

Gosh, that’s a mouthful — even coming from two who admit near the close of their article that they were part of a working group that helped to structure the BCRA legislation banning so-called “soft money” from the national political parties after the ’02 elections. What makes it particularly over the top is that, while a predictable conclusion from a pair of theorists who have long pedaled greater statist controls over campaign spending, the 5th anniversary of the measure they hail generates quite a different view from just about anyone active in politics who has to deal with the law.

“It was a dark day in history,” is how Mark Stephens, executive director of the National Republican Senatorial Committee (NRSC) during the ’06 election cycle, characterized the fifth anniversary of BCRA. According to Stephens, the landmark campaign finance measure “limits political speech, weakens the national parties by limiting how you can spend money, and codifies the independent expenditure structure. It also ads criminalizes politics with stiff penalties for those who violate the ban on the soft money or make contact with those who can spend it. For those who value their involvement in politics, that’s truly frightening.”

Saul Anuzis, state Republican chairman of Michigan, agrees. He could well have been speaking for his Democratic counterparts or fellow GOP state chieftains nationwide when he said that “the inability to coordinate campaigns between state and federal candidates is very inefficient, burdensome, and confusing to most activists. McCain-Feingold has been a huge inconvenience to party organizations.”

Let’s get something straight now: in contrast to fellow conservatives who take out their anger over the legacy of McCain-Feingold on its Republican author, I don’t question John McCain’s motives at all. Indeed, I always felt the Arizona senator was the epitome of intellectual honesty when he spoke of the problems when “a cause becomes a business.” Gerard Baker of the Times of London, who recently spent time with McCain on a trip to Europe, put it well when he told me “the concept of limiting money that influences lawmakers to create more earmarks and pork barrel spending in the budget is an honorable one — and a conservative one, from the standpoint of limiting spending.”

Republicans Sens. Sam Brownback (Kan.) and Fred Thompson (Tenn.), I believe, were motivated by the same honorable intentions when they voted and worked for the bill that President Bush signed into law in ’02. BCRA-hater Mark Stephens says that “a lot of lawmakers who voted for McCain-Feingold did not have evil intent and probably did so to fight the perceive impact of lobbyists.” But, he quickly added, “it didn’t turn out that way at all. It was ultimately bad for liberty and democracy.”

Where Ornstein and Corrado Are Way Off

In singing hosannas to BCRA, Ornstein and Corrado point out that in the last two elections held before the measure became law, “the national parties raised a total of $2.1 billion, nearly half of it unregulated ‘soft money’ — six and seven figure donations from corporations and wealthy individuals. In the two elections since, the parties raised exactly the same amount, but all in ‘hard money’, meaning smaller contributions from individuals and PACs. The parties had to shift their focus to the recruitment of small donors. Both have taken advantage of the Internet and other fund-raising tactics to add more than a million new grass roots supporters to their donor rolls. Small donors are now the largest source of party money.”

As Benjamin Disraeli once said, “There are lies, and damned lies, and statistics.” While they have the statistics right, Ornstein and Corrado conveniently fail to mention the end result of this. Cleta Mitchell, former legal counsel to the NRSC and one of the nation’s premier authorities on campaign finance legislation, does.

“Just because the parties are raising more individual dollars begs the question,” Mitchell told me, “The NRSC, for example, owns the building it’s in and the computers in it. If repairs are required on the building or the computer breaks down — things that used to be covered by soft money — the hard money from those individual donors now must be used. Donations that would have gone to support candidates now go to basic operations.”

Is that really so bad? “You bet,” said Mitchell, who had to grapple with the new maw of regulations on a daily basis during the last election cycle. Prior to McCain-Feingold, about 37% of the operating budget of the NRSC was soft money that would go to things such as computer and building repair, leaving the remainder to go to candidates. Now, with that money off the table, 100% of the committee’s budget is used for operating costs as well as backing candidates. Although the parties are indeed raising more individual donations, Mitchell observes, that their money is now covering things other than support for candidates must raise increasing questions among “normal people” who want to support campaign committees.

The banning of soft money from national parties and many state parties (depending on the laws in individual states) strikes at the White House itself. During the last campaign cycle, fellow White House correspondents repeatedly got Press Secretary Tony Snow to say that the President’s visits on behalf of candidates nationwide were held more in private homes not open to reporters rather than at massive outdoor rallies as in the past. Finally, I asked Snow why this was so and he explained that the cost of massive rallies could not be borne in many cases by hard dollars alone, that after Air Force One and its accompanying staff were covered, it was less and less feasible to have a major rally rather than a smaller gathering in a home with the President.

“We live in the world of McCain-Feingold,” was how Snow summarized the more limited atmosphere to me.

In triumphal terms, Orstein and Corrado proclaim that “[t]he most striking result of McCain-Feingold has been the spectacular resurgence of political parties. . .our parties are richer and stronger at the grass roots.”

Those are from academics who have studied the theory and facts and figures of campaign finance legislation. Listen to what a genuine state party chairman says about the “resurgence” at the “grass roots:”

“McCain-Feingold has been a huge inconvenience to party organizations,” according to Michigan’s Anuzis, “We had to hire a full time person just to comply with reporting and compliance issues. The need to coordinate and separate certain kinds of fund-raising, ask for multiple checks from donors and the record-keeping required is not only an inconvenience but it makes the process much more difficult.”

Again, Mitchell’s concern about whether “normal people” will continue to donate is raised by worries about dealing with the maw of more complex regulations that Anuzis cites.

Inevitably, campaign finance reform proponents say that the soft money they have kept from the national parties is still in use, that no liberty has been curtailed. Ornstein and Corrado point to “studies of campaign-related ads in 2004 and 2006 [the first two election cycles in which McCain-Feingold took effect] showed that the airwaves remained filled with ads sponsored by outside groups or individuals who were free to run and all ads they wished.”

True again. These are the so-called 527s, groups that can be created because of a loophole in the tax code and can spend soft money with no limitations. But, as Saul Anuzis points out, this has undercut tremendously the party organizations Ornstein and Corrado claim in the same breath are strengthened because “527s are much less accountable and allow donors to actually have greater influence than before. McCain Feingold has forced many major donors to various 527s and clearly those who want to circumvent the intent of the law, can.”

And it is harder to track down who is bankrolling or Club for Growth or any 527 until after the election is over. As Mark Stephens recalled: “Before McCain-Feingold, when committees like ours had soft money, we had to report them promptly at periodic cycles during the election year. Now, the 527s don’t report who their donors are until after the election is over. And they report to the IRS, not the Federal Election Commission.

“With 527s, you don’t have any idea where an ad is coming from. The parties have no control over the advertising for any of their candidates. How that increases the role of political parties is a mystery to me!”

Criminalizing violations of BCRA is what has most people who work in campaigns and politics the most worried. Saul Anuzis says that the “inability to coordinate campaigns between state and federal candidates is very inefficient, burdensome and confusing to most activists.” Mark Stephens and Cleta Mitchell both expressed concern that the possibility of massive fines or even worse for donors who write the wrong check or a campaign committee that places that check in the wrong account will discourage more people from being involved in the political process. In Stephens’ words, “those kinds of penalties are bad for liberty and bad for democracy. And that’s really frightening.”

A nervousness about donations, more individual donors for overhead, and less accountability for where campaign money is coming from — all are the legacy of McCain-Feingold on its fifth birthday and certainly not a case for Ornstein and Corrado to crow that the legislation is “Reform That Has Really Paid Off.”

In tweaking current presidential candidates who call for the legislation’s repeal, Ornstein and Corrado cite the case of Fred Thompson, a key player in its enactment, telling a reporter as he pondered a run for president: “I’m not prepared to go there yet but I wonder if we shouldn’t just take off the limits and have full disclosure with harsh penalties for not reporting everything on the Internet immediately.”

A case of admitting a mistake or just one of trying to excuse something that won’t be popular with people who could nominate him for president? Only Thompson can answer that. But one point that could be answered: would the system be better off now without the shackles placed on it, without the penalties that unnerve donors and activists, and without the new maw of regulation? Considering the results of McCain-Feingold so far, it’s a question worth exploring.