Tuesday, April 19, 2005

From Bad to Worse

Byron York writes in NRO about the next step in the continuing saga of campaign finance getting worse and worse with each "reform" law. Link.
Next week the Senate Rules Committee is expected to consider the "527 Reform Act of 2005," sponsored by Republican Sen. John McCain, which would impose on 527s the same contribution limits that now apply to other political-action committees. No longer would the groups be able to accept seven- and eight-figure, Soros-style contributions. And that will be the end of the 527s, at least as they existed during the 2004 campaign. "There is less and less enthusiasm for organizing 527s, since Congress is signaling that it is inclined to legislate them out of existence," says election-law expert Jan Baran.

Under the immutable laws of political spending, however, the money is already going elsewhere. And this time, it is likely to go to 501(c)(4) organizations, known in short as C4s, named for the subsection of the Internal Revenue Service code which allows their formation. "The C4 is a tax-exempt vehicle that could be used as an alternative in most, if not all, cases," says Baran.

C4s are allowed to engage in unlimited lobbying, and can also engage in partisan campaigning, as long as that campaigning is not the group's "primary" purpose, according to the law. [...]

And one more thing. For megadonors, C4s have an enormous advantage over the old-style 527s: They are not required to disclose their contributors. One could give $10 million, or $20 million, or any sum, and remain anonymous. [...]

So now, after years of campaign-finance reform, we are entering an era in which a donor can give an unlimited amount of money to an unaccountable group without any public disclosure. Before McCain-Feingold, big donors gave fully-disclosed money to the political parties, which, because they represented the entire coalition that made up the Democratic or Republican parties, were far more accountable to the public than the new, outside, groups became.

Any campaign finance reform faces three problems that prevent it from ever improving the situation. 1) No mater what the Supreme Court has said, it is a blatant violation of the First Amendment. The Founders were specifically referring to political speech when they wrote the amendment. It may be deemed to also include pornography, but there is no rational way to find an exception for political speech. 2) The only "campaign finance reform" that can ever pass in Congress is one that the Representatives and Senators believe will hamper challengers far more than incumbents. Every "campaign finance reform" law is intended as an Incumbent Protection Act. 3) Multibillionaires have better lawyers than Congress has. Congress can never pass a "campaign finance reform" law that these smarter lawyers will not find ways around.

The only true needs of campaign finance reform are transparency and rapid dissemination of information to the public. The Internet allows the details of large donations to be reported almost instantly to all voters. As long as the voters know well before the election the identity of the donors, their affiliations, and the amount they donated, no other reform is needed. We need knowledgeable voters. The "reforms" we have had so far have encouraged keeping voters in the dark, by emphasizing limitations on money available to the candidates that they need to inform the voters of who they are and where they stand on the issues. This is expensive, and the candidates and the parties, not independent, unanswerable groups, should have the funds.


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