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Holes In Campaign Gift, Spending Rules Exploited Parties Pay For ‘Issue’ Ads, Unions Run ‘Educational’ Ads

The 22-year-old system of federal limits on campaign donations and spending is falling apart because candidates, parties and unions have figured out how to get around the rules established by the Federal Election Commission, using the First Amendment protections carved out by the U.S. Supreme Court.

From Bob Dole’s gymnastics on the edge of the presidential spending limit and the “issue advertisements” that both parties are running with their presidential candidates’ faces dominating the television screen, to the “educational advertisements” that the AFL-CIO is buying with union dues and the soaring “soft money” contributions (frequently from corporations or unions), the system invented after Watergate is almost as porous as its predecessors.

One goal of the 1974 federal Election Campaign Act, and a weaker 1971 law, was full disclosure of campaign contributions, and that has worked well. That is especially true since 1991, when public disclosure of soft-money contributions began. They are donations that are exempt from most federal rules and are funneled from national to state parties.

But the law was also intended to curb the impact of special-interest money, particularly after the discovery of the suitcases of cash the Nixon campaign had collected from corporations. That has failed.

“I don’t know anybody who thinks the system works,” said Don Fowler, national chairman of the Democratic Party.

Buy now, pay later … maybe

Scholars, self-styled reformers and an occasional savvy politician speaking on condition of anonymity say the collapse of the system is encouraged by the certainty that federal authorities will never act before an election is over, a fact that encourages taking chances.

“As one of my dear friends used to say,” said a high-ranking national politician, “‘Remember, they hold the trials AFTER the election.”’ But the frankest analysis of how little the laws inhibit current election practices was offered by Steve Rosenthal, political director of the AFLCIO. Discussing the television advertisements that the organization is running to attack vulnerable House Republicans, he said, “If somebody handed me a magic wand and said there is no election law, I would do exactly what I am doing now.”

The labor federation’s advertisements censure Republicans for votes on the minimum wage and Medicare, but never use the words “vote for” or “vote against.” That enables them to be treated as “educational,” not “political.”

But, Rosenthal argues, that is a much more effective way of persuading a voter than just telling him or her what to do.

Suggested cures

Experts offer various prescriptions to repair the system that they agree is sick. Republican national chairman Haley Barbour said, “Spending limits not only do not work, they have the perverse effect of making special interests more powerful and more influential” because they find ways around the rules and their unlimited donations have greater impact.

He would retain reporting but abolish the limits on contributions - $1,000 for individuals and $5,000 for political action committees - and on spending - $37 million through the conventions for presidential candidates.

David Boren, president of the University of Oklahoma and for 12 years one of the Senate’s most consistent advocates of new campaign laws, said he believes the “system is in total collapse.”

He said that if ordinary Americans were ever to have their faith restored in the idea that everyone’s vote counted equally, the First Amendment should be amended to permit limits on campaign spending and to let Congress to write laws to spell out what limits were needed.

Specifically, he would want limits not only on contributions and spending, but also on unlimited spending by rich candidates and curbs on so-called independent expenditures, spending by individuals or organizations without any contact with the candidate or party being financed.

A more moderate approach is urged by several scholars. David Magleby, a professor of political science at Brigham Young University, said the presidential system could be improved by raising the spending limits for campaigns, which are adjusted for overall inflation but have not kept pace with the steeper rise in campaign costs.

But some of the problems of this year’s campaign are out of Congress’ reach. Dole overspent largely by fighting off the independent candidacy of Steve Forbes, who spent as much of his own fortune as he wanted. In 1976 the Supreme Court said any attempt to limit what an individual could spend for himself violated the guarantee of free speech.

Beating around the bush

The court has also said that advertisements have free-speech protection and has defined as issue ads almost anything that does not include phrases like “vote for” and “elect,” or “vote against” and “defeat.” By running such advertisements, the two national party committees can evade the $12 million limit on direct help to their candidates.

The loopholes these definitions have created even bemused Dole. Last week he was discussing Republican Party advertisements that the Republican National Committee is running showing his biography. Speaking to television executives, he said, “It’s called ‘generic.’ It’s not ‘Bob Dole for President,”’ he said. “It never says that I’m running for president, though I hope that’s fairly obvious, since I’m the only one in the picture.”

Lee Ann Elliott, chairwoman of the Federal Election Commission, defended such advertising, saying, “We have been begging people to listen. We have been begging people to talk about the issues. Now that it is happening, I don’t see this as a bad thing.”

She said she thought attack advertisements were very useful because “the people look to the negative advertisements because they get information from them.”

She took no stand on speeding up commission procedures to make it possible to deal, before Election Day, with the formal challenges to the AFL-CIO’s activity of which polls show the majorities of union members disapprove - or to Dole’s reliance on state parties to pay most of the costs of his events.

“From a commissioner’s point of view,” she said, “that would be nice. But from a candidate’s point of view, just in the heart of a campaign, to have to stop, review everything and answer that, makes it very, very difficult.”

Taking issue with issue advocacy

Fred Wertheimer, an architect of the 1974 law, disagrees and blames the Supreme Court for the loopholes in the laws, saying the court’s definitions of issue advocacy “provide a license to cheat” and the justices were utterly out of touch, employing “a Mars concept when it comes to this issue advocacy stuff.”

The court is expected to rule soon on whether state parties can attack the other side’s candidates in “issue advertisements” that do not count against spending limits. The National Republican Senatorial Committee is assuming the court will allow that practice, counting its advertisements attacking Democrats as part of an unlimited get-out-the-vote account.

But Wertheimer blames Congress for blocking incremental changes, especially those to curb soft money. The parties collect vast sums, like the $1,583,228 that Philip Morris, the tobacco and food conglomerate, has given Republican committees since Jan. 1, 1995, or the $250,000 that Stanley Druckenmiller, a bond trader, gave the Republican National Committee on Aug. 30, 1994.

Wertheimer said, “What we are dealing with is not a constitutional question, it’s a matter of political will.”

Those huge contributions, now coming in at double the 1992 rate, are spent in those states where they would be legal.

Brigham Young’s Magleby blamed the press, too, for not probing adequately into the motivations for enormous contributions. He said sweeping changes were inevitable when the next disgrace caught public attention. “What is going to trigger this is going to be a scandal,” he said. “It will happen. The only question is when.”

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