Robert Samuelson

It's Not Reform, It's Deception

By Robert J. Samuelson
Wednesday, February 13, 2002; Page A27

"Washington think" is less about logic than political hustle. If you favor something, you attach it to a popular cause -- say, homeland security. If you oppose something, you attach it to an unpopular cause -- say, Enron. Bear this in mind as the House debates the Shays-Meehan "campaign finance reform" bill, named after sponsors Christopher Shays (R-Conn.) and Martin Meehan (D-Mass.). The Enron scandal (it's said) demonstrates the corruptness of big political contributions and the need for an overhaul. The argument, though highly seductive, is complete make-believe.

Only by the lax standards of "Washington think" would anyone treat it seriously. It's all innuendo: Enron collapsed because some executives behaved unethically; Enron executives also made political contributions; therefore, the contributions are tainted and the system is rotten. In reality, Enron would have collapsed even if its executives hadn't contributed a penny. The connection between the bankruptcy and political giving is fictitious. Perhaps contributions bought Enron some influence in shaping the White House's energy plan. But given the Bush administration's pro-market views, does anyone truly believe the energy plan would have been much different without Enron?

The real lesson is that when Enron desperately needed help, its contributions bought no influence at all. In the 1999-2000 election cycle, Enron, its executives and employees made about $2.4 million in contributions, says the Center for Responsive Politics. Republicans got 72 percent, Democrats 28 percent. That's a lot of money -- but not compared with total contributions. In the 2000 election, all House and Senate candidates raised more than $1 billion. Bush and Gore raised $193.1 million and $132.8 million. Political parties and committees raised hundreds of millions more.

Even if Enron deserved help (it didn't), few politicians would have risked public wrath by rushing to its aid. What this episode actually shows is that the breadth of contributions insulates politicians against "undue" influence by large donors. Since the early 1980s, the details of campaign fundraising and spending have changed enormously. But the debate's basic issues have stayed the same and can be distilled into a few questions:

Is campaign spending too high? No. In 2000, all campaigns -- including state and local elections and ballot referendums -- cost about $3.9 billion, according to the forthcoming book "Financing the 2000 Election" from the Brookings Institution. This is less than four one-hundredths of 1 percent of our national income. It's less than Americans spend annually on flowers ($6.6 billion in 1997).

Do contributions systematically favor one party over another? No. Since the early 1980s, politics has become more -- not less -- competitive. The closeness of the Bush-Gore election and the present congressional split (Republican House, Democratic Senate) attest to that. Candidates need to raise a threshold of contributions to campaign effectively. But more money doesn't guarantee victory. The Brookings book cites many cases where poorer candidates won. In Michigan, incumbent Republican Sen. Spencer Abraham spent $13 million but lost to Debbie Stabenow, who spent $8 million.

Do rich contributors control Washington? No. Sure, the wealthy sometimes get undeserved tax and regulatory breaks. But generally they're fighting a rear-guard defense against higher taxes and more regulations. Even after Bush's tax cut, the wealthiest 10 percent of Americans pay roughly half of all federal taxes. Most government benefits (for Social Security, Medicare, Medicaid, food stamps) go to large middle-class or poor constituencies.

Are big campaign contributions a large source of public discontent? No. In a recent ABC News-Washington Post poll, respondents rated the government's top 10 priorities. "Campaign finance" finished last, with 14 percent. Last April -- before terrorism and the declaration of a recession -- it was also last, with 15 percent.

Do restrictions on campaign contributions curb free speech? Yes. Because modern communication -- TV, mailings, phone banks, Internet sites -- requires money, limits on contributions restrict communication. If communication isn't speech, what is it? The Supreme Court mistakenly blessed some contribution limits in Buckley v. Valeo (1976) but also equated free speech with free spending. As long as the court maintains that free speech involves free spending, putting more restrictions on contributions to political candidates and parties is self-defeating. It simply encourages outside groups (unions, industry associations, environmental groups) with their own agendas to increase campaign spending to influence elections.

The true parallel between Enron and campaign finance is one that "reformers" avoid. Enron's cardinal sin was deception. The company evaded clear financial reporting. Similarly, "campaign finance reform" fosters continuous deceptions. Because politics requires money and is fiercely competitive, every new restriction on contributions inspires ways around the limits -- evasions that, though legal, are denounced as "abuses." Why should writing laws that predictably invite evasion be considered a good or moral act?

If Shays-Meehan becomes law, the cycle will continue. It bars most "soft money" political contributions and restricts some "issue ads" before elections. The Supreme Court might toss out some or all of the new limits as unconstitutional. If it doesn't, political operatives will skirt the restrictions. Opinions are divided on which party might benefit. Perhaps neither. Whatever happens, Shays-Meehan will hardly take big money out of politics. The only way to have true "reform" without this legislated hypocrisy is to amend the Constitution and place limits on the First Amendment. Somehow a distinction would have to be created between "spending to communicate" and "communicating."

To make this case would be difficult. In this reporter's opinion, it would also be undesirable. It would stifle political competition and sow resentment. But perhaps reformers can convince the American public otherwise. If they think campaign money is fundamentally corrupting democracy, honesty compels them to take the amendment route. Until they acknowledge that, they will be guilty of the same sins as Enron's executives. They will be describing the world as they wish it to be seen, not as it actually is. Here lies the genuine Enron analogy.


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