Liberty for citizens, or only for politicians?

Seven simple tools by which to judge any campaign finance legislation

By Jim Babka
President, Inc.

Washington is a very confusing place. Where else would reform -- of the income tax code, the campaign finance process, or anything -- make things more complicated and employ a dizzying array of legal terms intelligible only to lawyers and accountants?

What everyone needs -- and I hope you want -- are a few simple principles by which to judge campaign finance reform legislation. So here are seven tools that you can use to make sense out of the existing laws, the proposed new restrictions, and the changes we propose that would really reform this awful system.

The seven tools are really seven questions:

  1. What did the Founding Fathers think about campaign regulation?

  2. Who benefits most from campaign finance "reform"?

  3. Why is compulsory disclosure considered a good thing?

  4. Does "reform" change anything or give us more of what we have already?

  5. Is money a form of speech?

  6. What is a "special interest"?

  7. What would help to solve the apparent campaign finance problems?

1. What did the Founding Fathers think about campaign regulation?

To hear John McCain tell it, campaign finance reform is necessary to save democracy from the weaknesses of the 1st Amendment. The Founders would have disagreed.

In Federalist Paper No. 10, James Madison spoke about the problem of political factions, or what we today call "special interests." During the founding of our Republic, many were concerned that the tyranny of the majority faction would trample the rights of all others. Madison wrote that factions are natural and have always existed. What did Madison believe was the solution to these factions? Was it regulation?

Madison wrote, "Liberty is to faction what air is to fire." He didn't want to regulate, he wanted a vigorous debate of ideas.

Yet many people, concerned with the corruption of politicians, the selling of influence, and bloated size of government have unwittingly accepted the premises of the campaign finance reform movement. I think they'd have an argument with James Madison.

But then and now only one thing makes such a free and vigorous debate possible: money. Without it, few will hear a candidate's message, and even less will believe he is relevant. Gobs of cash are the great equalizer.

Curiously however, while challengers benefit greatly from any spending they do, incumbents don't. In fact, the more money an incumbent spends on their campaign, the more likely they are to lose. A well-funded challenger is the biggest threat to an incumbent. Former House Speaker Tom Foley is a case in point. During his last campaign the more money he spent (and he spent a lot) the lower he dropped in the polls, and he lost on Election Day.

Incumbents understand that money is more valuable to challengers than it is to them. So incumbents try to use the natural advantages of their office to fend off challengers, which brings us to our next question.

2. Who benefits most from campaign finance "reform"?

Incumbency is like a political credit card. A politician in office has a wealth of resources to draw on, none of which he owns or has created, to help his future campaigns.

Incumbents already have a huge advantage in raising so-called "hard money." Hard money is the term for regulated contributions given directly to candidates, limited to $1000 per election at the federal level.

The secret to success when contributions are limited is to raise more of them. Fortunately for incumbents, access to their office and their influence is a very marketable commodity.

Through a process properly called "bundling," even corporations, whose donations are illegal, can use money to gain access. Bundling occurs at fundraising events put on by industry and interest groups. Often the groups are very conscientious about making sure the right "source code" is placed on their donors checks. In that way they assure that the officeholder will be aware of their contribution when they come calling.

For challengers, raising limited hard money donations with no access to sell, $1000 at a time, is like filling a swimming pool with a teaspoon!

In addition, the incumbents, via constituent services, are able to make a good impression on their constituents by helping them navigate the red tape of big government. Ironically, that same congressman dispensing the help probably voted for the red tape that is causing the problem!

Plus, Representatives and Senators are able to send mailings to their constituents describing all the good things they are doing for you in Washington, D.C., all with postage paid for by the taxpayers. This is called the franking privilege, which all by itself is, frankly, unfair.

These factors make it almost impossible for a challenger to raise enough money to defeat an incumbent. And there are only two ways around this barrier if you're a challenger:

  1. You can be a millionaire and fund your own campaign with your own money. That's legal. But most people aren't millionaires.

  2. You can seek the help of your political party committee.

Political parties are the only groups who can raise enough money to help challengers in targeted races. And even then it can only be done through the clever use of so-called "soft money" contributions that parties are allowed to raise in unlimited amounts to fund their operations and party building activities.

Incumbents hate "soft money," because it's the only thing left that endangers their power and influence. And, not coincidentally, along comes John McCain attempting to further shield himself and his fellow incumbents by making "soft money" illegal.

3. Why is compulsory disclosure considered a good thing?

Nowadays, few people question the propriety of disclosure of campaign contributions. Even conservatives and some libertarians have come to the conclusion that we must know who is behind the Congressman, or who is funding a particular commercial. Some Americans believe that disclosure is essential to the proper operation of democracy.

Let's carry this premise to its logical conclusion.

How many Americans insist their "oughta be a law" requiring the media to divulge their "governmental sources?" Imagine the trouble Woodward and Bernstein would've had if they'd had to disclose who "Deep Throat" was.

How many people want government compelled disclosure of the names, addresses, vocations and employers of persons who "volunteer" for campaigns? After all, some people's time is quite valuable.

Or how many people believe we need to end the secret ballot? Is it possible that some people voting for particular candidates because they expect to receive special favors from the government if the candidate wins?

This could be done. After all, the secret ballot isn't required by the Constitution. During the colonial period many government officials were elected by voice or a show of hands. This practice didn't die out entirely until the 1860s. And paper ballots didn't become popular until early in the 19th century. At first, voters made their own ballots and brought them to the polls. Then political parties started printing ballots and the polling places became akin to an open auction. Ticket distributors would fight with each other and the elderly were scared away. And that's why we have secret ballots today -- to protect the voters from reprisals and threats of violence.

But shouldn't we also want to protect political donors from potential reprisals from candidates they didn't support, especially if the candidates the donors opposed are elected to office and have the power of government behind them?

This seems obvious, but for some reason we've gone the opposite way on financial disclosure. Why? Anonymous political documents predate the settling of our country. The first was a document written in the 1570s under the fictitious name Junius Brutus. In English it's titled A Defense of Liberty Against Tyrants. According to historians, this document played a role in the destruction of the Stuarts, then the royal family of Great Britain. And this document also influenced America's patriots.

There are other pre-revolutionary examples, including the story of John Peter Zenger, whose case was a precedent for the 1st Amendment freedom of the press and the concept of fully informed juries.

Another example was John Dickson, a colonial patriot who anonymously protested the preponderance of taxes by Parliament in his Letters from a Farmer in Pennsylvania. Add to this list, Thomas Paine's Common Sense, which was published with the byline "An Englishman."

But the best examples occurred during the debate over the Constitution itself. Publius, the pseudonym of James Madison, Alexander Hamilton, and John Jay, wrote the Federalist Papers. And let's give equal time to "Brutus," "Federal Farmer," "Centinel," and "Cato" -- all of them took the anti-federalist position. (Too bad they lost.)

The list goes on, but the point is this: Government-compelled disclosure is unconstitutional and un-American.

Does disclosure have its place? Sure it does. Any campaign can choose to report its donors to the public and most probably would because the voters might want it (although there was no disclosure at all before the 1970s); and politicians tend to give voters what they want, whenever they can. Voluntary disclosure might even be more reliable because campaigns could hire companies like Price Waterhouse to provide validity to their disclosures. In a regulation-free atmosphere, campaigns most likely would compete with their opponents to provide the clearest disclosure. They might even subject their reports to independent audits. This would be in marked contrast to the obscure forms that are now filed with the Federal Election Commission.

4. Does "reform" change anything or give us more of what we have already?

Watch out for the "Goo-goos" -- the good-government types. They believe the problem is poor ethical management, not too much government power. In other words, government would work fine if, for example, we took the influence of money out.

There are two fallacies at work here.

First, faith that government works. Government doesn't work -- the bigger it is, the truer this becomes. Government does almost everything in the most inefficient and expensive manner possible. It rewards the powerful and well-connected members of our society. And government get its way by exerting force on someone -- that is, if necessary, it hurts someone.

Second, the notion that we can legislate money out of campaigns. Money will always find its way in. As the laws become more and more complicated, attorneys and accountants will be the only ones to benefit, as they will be paid to find loopholes. The result will be that money will go deeper underground; even politics can have a black market. Instead of knowing more about what's going on or gaining increased accountability from elected officials, goo-goo style regulation generates more and more hidden or underground activity.

Government sucks so much of our national wealth into its coffers -- all the while it stretches its tentacles into virtually every part of our lives - so it's no wonder some people are willing to spend vast sums of money to influence it. The solution to the problems posed by goo-goo reformers is not to restrict the ability of citizens to express themselves through campaign contributions, but instead, to bind politicians down to the Constitution -- the 10th Amendment in particular. As Michael Cloud has observed, "The problem is not the abuse of power, it is the power to abuse."

5. Is money a form of speech?

John McCain, appearing on "This Week" with Sam & Cokie, said, "The Supreme Court has said, 'Money isn't speech -- speech is speech.'" And on another Sunday morning talking-head show he paraphrased Justice John Paul Stevens, saying, "Money isn't speech -- it's property."

The problem with those quotes is simple: McCain is wrong. In the landmark campaign finance case, Buckley v. Valeo, the Court acknowledged that it's necessary for money to be spent if speech is to be heard. Printing flyers, running ads, hiring consultants, and taking trips are all ways by which a candidate or concerned citizen attempts to make his message heard. All these things cost money. The Court understood that dollar limits gave the government the ability to ration and control the political speech that supposedly is protected by the First Amendment.

Reluctantly, the Justices allowed Congress to impose hard money limits on the amount of dollars raised, in order to guard against the appearance of impropriety with elected officials. And with even greater reluctance, they broke from all previous precedent and permitted government-compelled disclosure, because they saw no other way to enforce the limits.

But John McCain has demonstrated that he is his own parody. On his Straight Talk Express website, McCain urged supporters to sign a petition for campaign finance reform. From there he wrote, "Along with your petition, I hope you will send a contribution of $75, $50, $25, or whatever you can afford at this time. Your contribution will send a clear message that we have the strength and resources to get our reform agenda passed."

Charles Lewis, executive director of the Center for Public Integrity said, "It looks peculiar for a senator to be raising money so he can reform. The problem for McCain is that it costs money to get your message out."

Perhaps Senator McCain would like to correct himself. He could say, "Money isn't speech, unless I need to be heard."

6. What Is a "Special Interest"?

Equally interesting is the amount of demagoguery McCain is willing to resort to in advancing his agenda. For example, without any evidence, he says Congressmen take bribes or sell their votes to the highest bidder. It's one thing to say that office holders give preferential access to large donors, but quite another thing to accuse them of selling their votes and taking bribes, as McCain does. Examples abound of his over-the-top rhetoric. But I have a personal favorite.

What is a special interest? The phrase litters the campaign finance debate landscape. Proponents of campaign finance restrictions, like Common Cause and McCain, say "The special interests are scared of this bill." As evidence each points to the labor unions, the National Right to Work Committee, the ACLU and the Christian Coalition - all of which opposed McCain-Feingold.

Interestingly, John McCain, the Straight Talk Express, and Common Cause were part of a coalition called Some of its members are AARP, American Heart Association, American Lung Association, Campaign for Tobacco-Free Kids, Children's Defense Fund, Episcopal Church, Sierra Club, and the United Methodist Church. What does John McCain call these salt-of-the-Earth groups? "Public interests."

So if you agree with John McCain you get the altruistic, feel-good label "public interest." But if you disagree with John McCain, you're a selfish, conniving "special interest." This means if you've ever given money to the ACLU or the National Right to Work Committee, or any other group that doesn't support McCain-Feingold, you're a special interest!

7. What would help to solve the apparent campaign finance problems?

Enter Please visit our site regularly, read our email communiques on RCR Report, and monitor our plan to fight the House version of McCain-Feingold, called Shays-Meehan - because it's not dead yet. But that's the defensive side of the battle.

It's time to move to the offensive. is providing support and publicity services to a proposed legal challenge that calls for disbanding the Federal Election Commission, ending compulsory reporting, ending contribution limits, ending taxpayer-financed welfare for politicians in the form of matching funds, and ending legally imposed "bipartisan" debate committees.

There's good reason to believe such a full-frontal challenge will succeed.

First, it's never been tried before.

Second, Buckley v. Valeo was based on congressional testimony about the expected results from the newly passed campaign reforms of the 1970s -- all of this testimony was hypothetical and highly speculative. A quarter of a century later we have hard evidence to demonstrate that the Buckley decision didn't solve the problems it pretended to. And the majority ruling of the Court came with an invitation for individuals and parties to demonstrate damages after the law had been in effect. To date, no one has accepted the invitation. We plan to.

Third, in a forthcoming report on, we'll show how Justice Thomas has attracted Justices Scalia and Kennedy in calling for overturning Buckley. And Justice Stevens also made it clear in the recent ShrinkPAC Missouri case that he would not have subscribed to the constitutional reasoning in Buckley had he been on the Court.

Even Justices Ginsburg and Breyer have openly expressed a willingness to revisit the Buckley decision, and although they have given no indications of how they would vote, they have not defended Buckley. With such lukewarm support for Buckley, Justices Thomas, Scalia, and Kennedy might very well persuade another two justices to join them in bringing about Buckley's demise and a restoration of the constitutional freedoms we've lost with regard to political campaigns.


Those, like John McCain, who support restrictions on political speech should be asked what part of the phrase "Congress shall make no law" they don't understand.

The 1st Amendment was designed to protect your right to speak out against political authority and to freely associate with others to make your voice heard. Clearly money is speech, for without it the speech can't be heard by more than a handful of people. The solution lies not with more regulations that empower incumbents, but rather with freedom for all.

It's time to fight bad legislation like McCain-Feingold and Shays-Meehan, but our real future lies in pursuing a bold legal strategy.

Days before McCain-Feingold was to be debated in the US Senate, columnist George Will called an old colleague, Paul Weyrich of the Free Congress Foundation. He got right to the point, "I hope you and yours are doing everything you can to defeat McCain-Feingold in the House." Weyrich said his troops were gearing up as they spoke. To which Will replied, "I assumed that was the case, but I wanted to be sure. This is the end of the world, you know."

It may not be the apocalypse, but the enactment of McCain-Feingold would signal the death of an already bruised and battered 1st Amendment. And without the 1st Amendment, well, it really would be the end of hope -- an apocalypse for Freedom.

We don't need any politician, even war heroes like Senator McCain, to protect us from getting too much of the 1st Amendment. But vigilance is the price we pay for Liberty -- and you can pay it by making a tax-deductible contribution to our lawsuit (payable to The US Justice Foundation) or by supporting the public education and lobbying efforts of