Commentary: Four Simple Ways To Clean Up Campaign Finance

The numbers tell it all: In 1996, a staggering $2.6 billion was spent to elect 476 people to federal office. That's over twice the dough spent in 1984 and an amount that tops the gross domestic product of Barbados, Grenada, and Belize combined.

To feed this craving for cash, politicians have resorted to all manner of evasion and self-debasement. President Clinton rents out the Lincoln Bedroom as if it were a Motel 6. Members of Congress spend hours each day "dialing for dollars"--begging donors for just one more check. How bizarre can it get? On Feb. 19, Clinton stirred a New York audience with a call for major reforms to the campaign finance system--then hit up the same crowd for $1 million. As ordinary people abandon the political process, ever more bucks flow to pols through a bewildering maze of political action committees and gimmicks such as "soft money" and "independent expenditures." (table, page 38).

This out-of-control money chase is unseemly, breeds corruption, and undermines voters' confidence in their democracy. "The impact of big money, organized special interests, and political handlers on the public perception of government can hardly be overestimated," says William A. Galston, a former top domestic policy adviser to Clinton.

The Supreme Court, having ruled repeatedly over the past 20 years that campaign giving is a protected form of free speech, has made reform tough. But there's no need to meddle with the Constitution. Campaign finance can be cleaned up, using four simple precepts: Direct contributions by individuals should be encouraged; backdoor gifts laundered through political parties should be banned; challengers should get a fair shot at promoting their views; and every dollar given to a candidate should be promptly disclosed. "You're going to have to pay for politics one way or the other," says former Democratic National Committee General Counsel Carol C. Darr. "But having it come from individual pockets is a real good thing."

While lawmakers are certainly reluctant to change the system that keeps them in power, public pressure to do so will only grow as the sorry details of scandals such as Donorgate become more apparent. And over the next two years, there is a good chance that at least some modest reforms will be enacted.

Here are a few steps that would help fix the mess. They stress individual participation rather than taxpayer financing; require market-based compromises for broadcasters; and offer trade-offs between business and labor, incumbents and challengers, and Republicans and Democrats. And they should pass constitutional muster:

-- Improve disclosure and enforcement. Today, voters must wait months to find out who gives to campaigns, and they often never know who is trying to buy office-seekers until long after an election is over. In the age of computers, they ought to be told within days. "Campaigns should report contributions as fast as they bank them," says Kent Cooper, executive director of the nonpartisan Center for Responsive Politics.

In addition, the toothless Federal Election Commission should be given the power to impose tough penalties. Now, pols routinely evade the rules, since they know the FEC takes years to close a case and rarely does more than issue a slap on the wrist. If any reforms are going to work, the FEC must move swiftly to levy stiff fines--and even overturn elections.

-- Raise individual contribution limits. Today, people can give no more than $1,000 per candidate for each election in direct "hard money." That 20-year-old ceiling should be raised to at least $5,000 and allowed to increase with inflation. That would go a long way toward reducing pols' dependence on under-the-table money. So would requiring candidates to raise at least half of their funds from their own constituents. Allowing massive backdoor contributions from inside-the-Beltway lobbyists only courts abuse.

Still, any new law should also recognize that people participate in campaigns collectively, as well as individually. The idea of like-minded voters joining advocacy groups such as the National Rifle Assn. or the Sierra Club to express their views on public issues is the essence of democracy. And these groups, too, should be encouraged to give to candidates of their choice through PACs. Therefore, double their contribution limits to $10,000, but require full and immediate disclosure.

PACs run by businesses and unions are another matter, however. Today, corporations collect "voluntary" contributions from their employees. The truth is, in many workplaces, there is no choice: Executive pay is inflated to cover political donations, and those who don't go along can see their careers suffer. If companies want to give money to help pols who are good for business, they should do so subject to the $10,000 limit. But they should use shareholder money (making sure that investors know where their earnings are going) and end the fiction that the donations come from employees' pockets. For their part, unions should stop using dues to support candidates. Instead, members should make their own choices--to give as individuals or through labor PACs.

-- Ban soft money. Today, there are no limits on this backdoor cash, which ostensibly supports the general activities of political parties but actually funds candidate races. In the last election alone, more than $250 million was raised this way--nearly all of it funneled to candidates. The worst of the White House's abuses--including its Donorgate contributions from foreign businesses--resulted from efforts to raise soft money. For all that hustle, Clinton and the Democrats still garnered $20 million less last year than did the GOP.

If individuals, companies, or unions really want to give to a party, they should do so directly, in the sunshine. These gifts should be limited to $5,000. Also, these funds should be used only for legitimate party activities. Big penalties should be imposed if candidates steer these funds to their own races--as both Clinton and Bob Dole did routinely in 1996.

-- Curb spending on behalf of candidates by independent organizations. With at least $100 million spent by groups ranging from unions to doctors, this became the favorite loophole of '96 and the money of choice to finance attack ads. The big problem is that money flows from this cash cow completely unrestrained by existing campaign laws. There are no limits on such fund-raising and no disclosure of where these groups get their money or how they spend it. That creates an easy way to spend big bucks on candidates. There is no point in trying to stop these outlays--they'll always find loopholes. Besides, groups such as the AFL-CIO and business coalitions should have the unfettered right to argue the merits of policy issues.

But as soon as an advocacy group buys an ad that mentions a candidate, the rules should change. It should be subject to the same limits and disclosure as PACs and individuals. Each gift by businesses, individuals, or unions to a group that runs such an ad should be considered a direct candidate donation--disclosed and counted against the $5,000 limit.

-- Give challengers a fair chance to get their message across. The best way to do that is to give candidates one hour of free airtime to use as they wish for each election. Office-seekers should be required to qualify by, say, getting names on a petition or raising a minimum amount of money on their own. But one string should be attached: Office-seekers should be required to appear personally in ads, rather than relying on actors to trash their opponents.

Finally, broadcast advertising should be curbed. In some Senate races, fully 70% of all spending goes for TV and radio. If the need for money dries up, so may the dash for cash. In return for giving the free time, broadcasters should be allowed to charge full price for paid ads--which they must now sell at cut rates. But lawmakers should consider limiting political ads to within 60 days of an election. Since challengers rarely have the money to put on ads before that, it wouldn't hurt them. But limiting the time during which ads could air could cut into incumbents' advantage.

No reform will end every abuse. But these changes will begin to restore public confidence in a political system that is increasingly seen as corrupted. The reforms would eliminate the invisible millions that flow to pols and make campaign donations strictly aboveboard. Ordinary citizens may yet feel they can influence an electoral process that few now believe gives them a fair shake.