Going After the Big Bucks

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The 2016 election has thrust populist candidates and big-spending outside groups to center stage. These trends further marginalize the traditional role of the national political parties.

Thrown on defense by angry voters, self-financed candidates, and billionaire donors who thumb their noses at the political establishment, party leaders are struggling to reclaim power. A growing chorus of political analysts, election lawyers, and even some progressives argue that the solution is to give parties the same freedom to raise unrestricted, high-dollar contributions that super PACs and other outside groups now enjoy. That, presumably, would partly restore the influence of parties, and serve as a more democratic counterweight to freelance mega-money.

On paper, the notion that parties should operate by the same rules as freewheeling non-party players has appeal. Parties fully disclose their activities, are accountable to and committed to turning out voters, and act as a moderating force on political polarization—so the argument goes. By contrast, unrestricted super PACs and politically active tax-exempt groups are beholden to ideological super-donors and often operate outside the disclosure rules.

“The most influential actors in elections should be those who also have to pay the price of governance,” says Nathaniel Persily, a professor at Stanford Law School, whose book Solutions to Political Polarization in America proposes strengthening the parties by injecting them with big money.

But in the real world of American elections, turning parties into super PAC clones would only weaken them in the long run, as well as reinforce the dominance of super-donors in elections. Voters already disgusted over political money would turn their ire on parties aligned with billionaire elites. Political polarization, which reflects deep divisions within the American electorate, would not magically evaporate under new campaign-finance rules. Parties already enjoy more freedom to raise big money, moreover, thanks to a Supreme Court ruling last year and to new rules that Congress has tacked onto spending legislation.

“I think we would see the parties shift their focus from engaging average voters to instead engaging a handful of billionaires,” says Paul S. Ryan, deputy executive director of the Campaign Legal Center. “That doesn’t improve the parties; that doesn’t improve democracy.”

The strongest argument against liberating the parties to raise even more big money, however, is the obvious history lesson delivered by the soft-money era of the 1990s. Before Congress banned unrestricted soft money in 2002, the political parties collected tens of millions in unlimited contributions from corporate CEOs, lobbyists, and moneyed interests. The upshot was a series of scandals involving Lincoln Bedroom sleepovers and special favors for big donors that gave the parties a black eye.


Loosening the Reins

To be sure, there’s agreement on both sides of the aisle that political party rules are due for an update. Court rulings and changes in campaign-finance laws have almost uniformly cut against the parties in recent decades.

The first blow came with the soft-money ban, best known as the McCain-Feingold law because it was authored by Arizona Senator John McCain, a Republican, and then-Senator Russell Feingold, a Wisconsin Democrat now running to recapture his old seat. The 2002 ban did not decimate party fundraising, as some had predicted. Indeed, the parties raised more in hard (restricted) contributions in the election immediately after the ban’s enactment than they had under the soft-money system.

But the McCain-Feingold law did trigger a spending spike by so-called 527 groups, a type of independent political organization, named for its tax-code designation, that may collect unlimited contributions. Such groups spent $424 million in 2004, according to the nonpartisan Campaign Finance Institute. And while Democrats have partly made up for the loss of soft money by collecting more low-dollar party contributions, Republicans have seen party receipts dip overall in the last three election cycles.

The soft-money ban hit state parties especially hard. That’s because state parties must now follow federal rules and restrictions even when they back state candidates and mobilize voters.

“This approach ignored the fact that there are 50 other campaign-finance regimes that regulate state and local elections, several of which are wholly incompatible with federal law,” argued election lawyers Neil P. Reiff, a Democrat, and Donald McGahn, a Republican and former Federal Election Commissioner, in joint testimony on Capitol Hill last year. “Also ignored was that our party committees had been a stabilizing force in our democracy for almost 200 years, and an effective way for citizens to participate in politics at the grassroots level.”

The second and more severe blow to the parties came with the Supreme Court’s 2010 ruling to deregulate independent political spending. That ruling ushered in a new generation of unrestricted super PACs, which may raise unlimited contributions as long as they act independently of candidates and parties, and politically active tax-exempt groups that operate outside the disclosure rules.

“They set up these outside organizations that are like tent circuses,” says Ray La Raja, an associate political science professor at the University of Massachusetts at Amherst, of the deep-pocketed donors now bankrolling influential non-party groups. “They come into town, they put on a show, and then they disappear.”

La Raja is co-author with his colleague Brian F. Schaffner of an influential book that argues for lifting limits on the political parties, on the grounds that it would combat political polarization. In Campaign Finance and Political Polarization: When Purists Prevail, La Raja and Schaffner point to research showing that in states where parties can raise and spend money without limits, legislatures are less polarized. Parties are driven by pragmatism, La Raja argues, and will therefore put money behind moderates in primaries under more-relaxed fundraising rules.

“I just want things to be simpler, more clear, more transparent, more accountable,” La Raja insists.


Not So Fast

It would be an admirable goal—if only parties could live up to it. During the soft-money era, parties didn’t spend their extra money on grassroots get-out-the-vote activities, but on high-dollar campaign-style ads. Party cheerleaders portray them as disinterested players that temper the influence of big donors and promote lofty democratic goals. Yet the national political parties are typically run by elected officials immersed in fundraising and deal-cutting.

The parties, moreover, have far less power to counter the forces of political polarization than their champions allege, says Michael Malbin, a longtime scholar of the political parties who heads the Campaign Finance Institute. Malbin’s research has found that parties spend most of their money in general elections and not on contested primaries, though some would argue that Democratic leaders in particular have a history of investing in business-friendly candidates adept at raising money from the financial sector. In any case, as New America’s Lee Drutman has noted, the number of competitive House districts and Senate seats is now so small that parties have few opportunities to invest in contested races.

There’s substantial evidence that freeing the parties to raise unrestricted money would invite another round of soft-money abuses. The McConnell v. FEC court record describes in detail how, during the soft-money era, party leaders asked lawmakers to raise soft money from donors who had business before their congressional committees; how donors were rewarded with plush ski getaways, dinners, retreats, cocktail parties, and special briefings with members of Congress; and how parties then directed the money raised to specific candidates at the request of donors. Contributors complained of being shaken down, and lawmakers described how donors got what they asked for on the House and Senate floors.

“The political parties have taken advantage of the desire of donors for special access by structuring their entire fundraising programs to entice larger donations with the promise of increased and more intimate access to federal officials,” wrote U.S. District Court Judge Colleen Kollar-Kotelly in the lower-court ruling that referred the McConnell challenge to the Supreme Court. “The political parties have also pressured donors to give donations, playing off donors’ fears of denial of access or political retribution. From this record it is clear that large donations, particularly unlimited nonfederal contributions, have corrupted the political system.”

The memory of those soft-money days helps explain why political scientists are split over proposals to deregulate the political parties, and why such scholars as Malbin argue that limits should be lifted only up to a point. The danger of nixing party contribution limits altogether, as La Raja and others propose, is that big donors could then circumvent the $2,700 per-election cap on contributions to candidates by funneling money through the parties.

There’s a middle way between letting parties languish under old rules that disadvantage them and throwing out party contribution limits altogether. Parties should be free to spend as much money as they like in coordination with candidates, argue scholars at the Brennan Center for Justice at New York University’s School of Law, but only when that money takes the form of relatively low-dollar checks as opposed to super-sized contributions.

The Brennan Center drew raised eyebrows earlier this year when it proposed lifting the cap on the amount that parties may spend in coordination with candidates. But in its report “Stronger Parties, Stronger Democracy: Rethinking Reform,” the center backs lifting the cap on coordinated party spending only when political parties are subject to “reasonable, fully-enforced contribution limits.”

The Brennan Center, along with a long list of reform advocates, congressional Democrats, conservative activists, and Tea Party Republicans on Capitol Hill, objected to Senate Majority Leader Mitch McConnell’s December campaign to lift the party coordinated spending limits.

A better way to revive parties, say a growing number of good-government advocates, would be to match low-dollar party contributions with public funding. It’s a model that is being tested on state and local candidates in Maine, New York City, and elsewhere, as Justin Miller reported in The American Prospect’s Fall issue.

La Raja and other scholars promoting party deregulation regard low-dollar donors askance, citing research that suggests donors giving small campaign checks tend to represent the ideological extremes. But in his research on New York City’s public matching funds system, Malbin found that matching low-dollar contributors actually diversified the donor pool. Encouraging parties to cultivate ties with average Americans would strengthen them far more in the long run than sending them back down the path of hitting up wealthy high-rollers. It also diversifies the candidate pool.

“The parties’ most important function is to connect citizens, voters, to the political process by simplifying the choices and mobilizing them,” says Malbin. “A public match gives party officials a stronger incentive to do that work, instead of raising the easy money.”

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