by
Herb Engstrom
Santa Clara County Democratic Club
5974 Friar Way, San Jose CA 95129
(408) 446-1609  herb@hengstrom.net

• On Feb. 9, 1998 San Jose Police Chief Lou Cobarruviaz announced he would not run for Santa Clara County sheriff because he was "uncomfortable with personally raising funds."
• On Feb. 4, 1998 former White House Chief of Staff and Monterey Congressman Leon Panetta declined to run for governor of California: ''I would have to spend about 90 percent of my time in a campaign raising money,'' he said.
• Also on Feb. 4, 1998 State Senator John Vasconcellos also declined to run for governor: ''it is not in me to beg'' for the enormous amount of money a successful campaign requires, he explained.
• On Jan. 20, 1998 Sen. Dianne Feinstein announced she would not run for governor. No doubt still fresh in her memory was the very expensive Senate campaign she had run against multi-millionaire Michael Huffington, who financed most of his own campaign.
• Sen. Paul Simon, (D-Illinois) retired in 1996 and commented "Fund raising has a corrupting influence on all of us." He went on to illustrate with a story: He returns to his hotel late at night after a hard day campaigning and learns that 10 people had called during the day, one of whom had made a very large donation to his campaign. "Which call," he asked, "do you think I'll return?" This startling admission comes from perhaps the most honest, dedicated, and effective senator we have had in recent years.

Campaign finance reform: Why we need it.

    As the above examples illustrate, the difficulty in raising the large sums of money required for campaigns these days is discouraging capable candidates of running. The American people are denied choice in candidates. They are left with only to choose among those whose personal fortunes enable them to defray the costs of campaigning - people like Ross Perot, Steve Forbes, Michael Huffington, Al Checchi, and Jane Harman. When would we ever see elected people of the caliber of Abraham Lincoln or Harry S. Truman?
    I read recently of an estimate that under current campaign practices, incumbents receive, on the average, three times as much in donations as challengers. That was great for the Democrats while they controlled Congress. Now with Republicans in control, Republicans benefit not only from natural supporters in the business community but also from incumbency. In that business donates to Republicans about seven times as much as to Democrats even before incumbency is taken into account, Democrats might be looking at a long, cold political winter.
    There is a more serious problem with current practices than simply electing good people, and that is the effect that campaign donations has on our elected officials. As Michelle Cottle put it writing in the Washington Monthly of September, 1997: "The American public is getting ripped off thanks to a campaign system that bestows enormous influence upon moneyed special interests, while turning our national leaders into high-class panhandlers."
    Does money buy influence? Are big donations made only because donors want to promote democracy and an open discussion of ideas? Uh-huh. In his book The Best Congress Money Can Buy Philip Stern cited many examples of the corrupting influence of large campaign donations by interested organizations. One example was a bill to provide a subsidy to sugar growers. The bill was voted into law on September 26, 1985. Stern measured the numbers of legislators voting for the bill and compared them with the amounts that those legislators had received from sugar growers. The result is tabulated below:

On that same day Congress passed a dairy subsidy bill, a hospital cost containment bill, and an automobile bill. The estimated cost to consumers was $38 billion for a single day of legislation.
    There are only two factors in an election campaign: people and money. If money is allocated equally, people become the decisive factor. Those political parties that can best recruit and motivate campaign workers will, ultimately, prevail. Isn't this how democracy is supposed to work? Consequently, isn't it clear that money distributed unevenly between the major parties undermines democracy?

Current proposals

    Campaign finance reform is alleged to be a sleeper as an issue -- that is, people don't lose sleep over it. But the Santa Clara County Democratic Club has undertaken a campaign finance reform petition drive, and we see great enthusiasm for the movement. Our only opposition comes from people who confuse us with the anti-labor initiative on the June ballot, proposition 226, disingenuously named the "Campaign Reform Initiative." That initiative would prohibit the democratically elected officials of labor unions from using union funds to support candidates and to back legislation of interest to working people. It would not place the same restrictions on the undemocratically chosen executives of major corporations from backing their candidates and issues.
    Democracy is more than elections: It requires also the availability of choices and knowledge about those choices. When the media is so dominated by major corporations and by groups like National Association of Manufacturers, the insurance industry, etc. all of essentially one perspective, our democracy is in jeopardy. Here in California proposition 208, enacted in 1996, limits campaign contributions in an attempt to eliminate the influence of big money donors to candidates and parties. It hasn't worked. The effects have been:

• To require public officials to spend even more time looking for small contributors.
• To allow very rich candidates (Steve Forbes, Michael Huffington, Al Checchi, Jane Harman) to gain an enormous advantage.
• To allow unlimited contributions for "independent efforts" or "party building" through the "soft money" loophole of the Campaign Finance Reform Act of 1974
• To encourage even more corruption with attempts either to skirt the law or to press its limits.

Alternatives

    Some of the alternatives to the present system of campaign finance are these:

• Full disclosure. This is one proposal by Larry Sabato, a professor of government at the University of Virginia. It would require disclosure of all funding sources and expenditures. There are proposals for establishment of web sites that would publicize such sources and expenditures. Such disclosure would certainly desirable but would be most effective only if media monitors and publicizes it.
• Constitutional Amendment. The Buckley v. Valeo Supreme Court decision ruled that spending is a protected form of free speech, and consequently any restriction on campaign spending is unconstitutional. Former Sen. Bill Bradley has proposed an amendment specifically to allow restrictions to be put on spending to overcome Buckley vs Valerio. The problem here is that this requires more tinkering with the Constitution similar to proposals to ban abortions, flag-burning, etc. whenever there is a free speech problem. As one commentator put it, "It's like the 10 commandments with a few parking regulations thrown in."
• Free air time. Paul Taylor of the Free TV for Straight Talk Coalition points out that broadcast air waves are a limited public resource. The government recently gave away spectrum space for digital TV. Estimates of the value of that space at auction are $30 to $70 billion. The broadcasters owe the public. In 1995-6 election some $500 million was spent on broadcast advertising; this is 0.6% of total ad revenues, a trivial fraction of the total. An additional advantage of providing free air time is that it would allow candidate-to-camera ads, which had been produced for Dole and Clinton. Surveys showed the public found these ads "substantive and informative." Free air time is a good idea and ought to be a part of the solution.
• McCain-Feingold. This is (or was) a Senate bill proposed by John McCain, Republican of Arizona, and Russ Feingold, Democrat of Wisconsin. A bill by Christopher Shays, Republican of Connecticut, is the equivalent in House. McCain-Feingold would ban PAC contributions, restrict soft money, and limit contributions. If a candidate accepted voluntary limits on spending the candidate would get discounts on advertising. The bill was strongly supported by President Clinton, and included as co-sponsores Senators Boxer, Feinstein, Moynihan, Wellstone. Glenn, Moseley-Braun, Kerry, Kerry, Dodd, and Thompson, among others. (Fred Thompson of Tennessee was the only Republican to co-sponsor.) This bill wias killed recently due to opposition by Republicans. Some supporters of campaign finance reform opposed it as an inadequate measure that would delay real reform.
• Ornstein-Mann. Norman Ornstein of American Enterprise Instritute and Thomas E. Mann of the Brookings Institution proposed this measure to end soft money, to increase party disclosures, to provide free TV time, and to give tax credits for small contributions from individuals.
• Kerry-Wellstone. Senators John Kerry, Democrat of Nebraska, and Paul Wellstone, Democrat of Minnesota, are proposing legislation for public financing of campaigns and free TV time to candidates abiding by voluntary spending limits. This more or less parallels Maine Clean Election Act (described below) at federal level.
• Doolittle. The bill of Republican Rep. John Doolittle, Republican of California, would repeal all restrictions on contributions and spending, but require full disclosure of donations within 24 hours. Critics feel the bill is aptly named.
• Strengthening the Federal Election Commission. The FEC was created by Congress to oversee elections and campaign procedures. The problem is that since the FEC was created by Congress, it is ineffective in policing Congress. It consists of three Democrats and three Republicans and is consequently deadlocked along party lines on important issues. In the late 70's the FEC tried to audit some members of Congress, whereupon Congress took away its audit power. (McCain-Feingold would restore these powers.). It had the temerity to try to investigate Newt Gingrich's GOPAC, so Congress cut its funding. What could be done to make the FEC more effective? Senator Bob Kerry of Nebraska has proposed: Add a 7th commissioner; provide long term funding; and punish politicians as well as donors of illegal funding. But who would appoint 7th commissioner? Evidently the Republicans as they now control Congress.  Trevor Potter, Republican and former chairman of the Federal Election Commission: "We allow members of Congress to draft the rules for elections that determine whether they will keep their jobs. It is hard to imagine a clearer conflict of interest."
• Carville plan. James Carville, former campaign strategist of Bill Clinton has proposed a radical change. He would raise Congressional pay to $350,000/year but ban receipts of legislators of everything - small gifts to paid vacations. He would ban fundraising by incumbents, but not by challengers, who could raise funds pretty much as they do now. However, incumbents would be paid by from the public treasury 80% of that of challengers, the 20% differential would make up in part for the advantages of incumbency. As far as I know, only Carville is serious about this proposal (and I'm not too sure about that).
• Public financing. Maine and Missouri have passed public finance laws. Paul Wellstone and others have very recently introduced legislation for some form of public financing. Public financing is the most comprehensive of the proposed solutions, and the Maine act deserves examination in detail.

The Maine Clean Election Act

    The Maine Clean Election Act (CEA) provides for public funding of state election campaigns. It provides a useful model for other states to follow in that in conforms to the first amendment protections of free speech while discouraging enormous campaign expenditures.

Features:
 

• Beginning in year 2000 candidates for Maine House and Senate who agree to reject private funding may apply for certification under the CEA. Gubernatorial candidates qualify in 2002.
• Certified candidates receive funds 25% less than average spent on the 96 and 98 campaigns.
• If a certified candidate is outspent by a non-certified candidate, the certified receives one-to-one matching funds (up to 2 times the limit for a certified candidate) .
• To obtain certification a candidate:
  • Must demonstrate public support by collecting $5 qualifying contributions from Nov. 1 to March 16: at least 2,500 for governor, 150 for senator, 50 for representative. (Note that the population of Maine is about 1.3 million, less than Santa Clara County, slightly more than San Diego.)
  • May raise "seed money" from individuals limited to $100 per contributor with limits of $50,000 for governor, $1,500 for the Senate, and $500 for the House.
• $2,000,000 is set aside from general revenues to the Clean Election Fund. This is supplemented by unspent seed money and qualifying contributions. ˜ Certified candidates agree to reject all private contributions.
• Contributions to noncertified candidates are limited to $250 for the legislature and $500 for governor.

Public financing: how to get it.

    Private finance costs you in three ways:

• All that money that lobbyists pay to politicians comes out of your pockets through higher prices of the products you buy.
• For their enormous contributions, lobbyists receive in return legislation favorable to their interests, which means even more costs to the public. Example: lobbying by banking interests resulted in deregulation of the banking industry. The resulting Savings & Loan debacle cost the taxpayers an estimated $300 billion.
• We pay our legislators to find solutions to pressing social and economic problems, NOT to waste time in fundraising activities.

    Cost of public financing. In 1996 Republicans spent on the order of $650 million for national elections, the Democrats about $450 million, about $1 billion. Now consider the consequences of deregulation of the banking industry, which was achieved by industry lobbyists. The cost to the taxpayers of the savings and loan bailout was about $300 billion. There is an election every two years. Thus the cost of S&L bailout would fund elections for 600 years! Public financing, even at the obscene levels of 1996 would, if it prevents the bilking of the public treasury, cost far less than the current privately financed system.

    Public Campaign. The SCCDC is collaborating with the Washington based organization Public Campaign. We are circulating the Public Campaign petition calling for "Clean money" - public financing. Public Campaign, we have found, is financed by a number of public spirited organizations, among them the Florence and John Schumann Foundation, whose president is Bill Moyers. Another backer is the Open Society Institute, founded and financed by George Soros in 1979. This organization has 50 offices worldwide, and has worked successfully to bring democracy and a free market economy to the former Communist nations of eastern Europe. The strategy of Public Campaign is to use its resources (an annual budget of about $9 million) where they will have greatest impact - in small states like Maine. Once the ball is rolling, the larger states will begin to take notice. Public Campaign can be reached at  http://www.publicampaign.org .

    What you can do:

• Santa Clara is populous and productive, and therefore more important even than San Francisco. Even San Jose alone is bigger than SF.
• California is most important state in nation.
• You can start the ball rolling. Support public financing. Our voices here are heard throughout the nation.
• Sign the Pubic Campaign petition. It is not specific; it merely says we support public financing.
• Zoe Lofgren supports public financing; 22nd Assembly District Assemblymember Elaine White Alquist has already signed the Public Campaign petition. Write other legislators.
• The election platform of the California Democratic Party has now called for public financing. Vote Democratic!
• Attend the town meetings of politicians, and demand public financing of them.
• Volunteer to circulate the Public Campaign petition. Call Frank Bosche (408) 378-1998 fmbosche@mindspring.com  or Pat Regdon (408) 298-1076 to help out. Offer to speak on campaign finance reform before groups and clubs of which you are a member.