All for a worthy cause.

Photographer: Andrew Harrer

U.S. Campaign Finance Makes for a Fair Race After All

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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Here's some evidence that the financial side of the current presidential election is not "rigged," as candidates, and particularly Senator Bernie Sanders, like to say. Sanders out-raised Hillary Clinton in January, and "non-establishment" candidates in general have been doing great so far as far as campaign funding goes. 

The Sanders campaign recently boasted that it had raised $20 million in January from 770,000 contributions (about $26 on average, and 70 percent of the donations smaller than $200). The Clinton campaign only raised $15 million, as its manager Robby Mook says in e-mails to supporters, complaining that Clinton has been "dramatically out-raised," which makes it hard for her to compete in New Hampshire where's she's "heavily outspent on the airwaves."

QuickTake U.S. Campaign Finance

Sanders is not the only candidate undermining the widespread theory that U.S. elections are inherently corrupt, especially since the 2010 Citizens United decision of the U.S. Supreme Court, which held that advertising in favor or against candidates by outside groups should be protected as free speech.

On the Republican side, Marco Rubio is now considered the most promising establishment candidate. Yet in the money race, Rubio is behind supposed rebel Ted Cruz: In 2015, Rubio raised $70 million, counting both his campaign funds and super-PACs (political action committees, a major source fund-raising), and Cruz collected $88.6 million. In the final quarter of the year, Cruz's campaign was taking in an average of $223,000 a day, while Rubio had to make do with $154,000. And Donald Trump, of course, hasn't raised much at all, using mostly his own money, and he came in second in Iowa.

The theory that the party elite ultimately chooses the candidate has been severely tested this year, and a corollary to that theory -- that the elite's darlings have a meaningful financial advantage -- is now in doubt, too.

"Meaningful" is the key word here. To be effective in 2016, a candidate doesn't appear to need much more money than his or her rivals. There's simply no way to spend all that money effectively.

Clinton campaign manager Mook's complaints are probably a little disingenuous. Clinton, unlike Sanders, can rely on outside funds for ad spending. On Dec. 31, the last date for which data are available, she had $38.1 million on hand in her campaign fund and $36.8 million in super-PACs, while Sanders, who prides himself on not using a super-PAC, just had $33.6 million. (There is a super-PAC supporting him, anyway -- one associated with a registered nurses' union but, true to Sanders's promise, it is not funded by millionaires and billionaires). Clinton, who has backers like George Soros and Warren Buffett, doesn't need more small donations to outspend Sanders by a factor of two if she wants to. But should she?

Even with the money he has, Sanders had inundated every possible medium. I've seen his ads in tiny local newspapers that his young support base doesn't read, and I've heard them on conservative talk radio stations where one might think they could only enrage the audience. To be fair, he also uses the social networks a lot, and they are where his core audience is. He's got enough for everything.

Sanders's message about not taking money from billionaires goes down well with his audience, but then Clinton could be just about as visible and active as he is if she only accepted the maximum permissible personal donations of $2,700 from Soros and Buffett.

With the money he had, Cruz put Iowa through the wringer, knocking on tens of thousands of doors a day, filling mailboxes with sometimes controversial mailers, jamming the airwaves with ads attacking his main opponents, Trump and Rubio. You couldn't go anywhere in Iowa without hearing about Cruz or seeing signs of his campaign activity.

If he had more money, would he have been able to do much more? If he had been, Iowans probably wouldn't have noticed: They were Cruz-saturated by the time the caucuses were over.

Former President Jimmy Carter called the Citizens United ruling "legalized bribery." He may be right, but bribes don't always buy the service for which they are paid, and a bigger bribe doesn't really get you a better service. Jeb Bush has discovered this after out-raising everyone except Clinton and outspending the whole field in 2015.

There is a certain minimum of cash a candidate appears to need so he or she can run an effective campaign. In the final three months of 2015, that appeared to be about $25 million (Trump spent much less because of his knack for getting free media attention). Iowa showed that those who spent significantly more didn't gain much by that.

There's an old adage in advertising: "80 percent of the budget is always wasted, but you never know which 80 percent it is." With the intensive polling that accompanies a political campaign and the primary votes taking place one after the other, it should be easier for candidates to figure that out. Besides, more money inevitably comes to those who perform better than expected, as Sanders, Cruz and Rubio are all undoubtedly going to find out. In the end, that makes for honest competition, not corruption.

The Supreme Court may have given the green light to more inefficient spending in 2010, and that made the subsequent campaigns more expensive, but it certainly hasn't made the current campaign unfair or rigged in favor of entrenched interests. It offends left-wing sensibilities to see so much money burned rather than, say, given to the needy, but just look at Bernie Sanders gleefully throw his cash around for the sake of a socialist revolution, and it won't feel as bad. It's all for a worthy goal.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor responsible for this story:
Therese Raphael at traphael4@bloomberg.net