Conflict of Interests: Campaign Finance Reform and Interest Groups at the State and National Levels

by Jeffrey K. Finley

In the last year, reform proponents have proposed legislation at the state and federal levels. Both the U.S. House and the Senate have recently considered pro-reform bills but have not adopted them. Politicians in state governments are also debating the need for campaign finance reform in their states. The proponents and opponents of campaign finance reform in Illinois, which has the least restrictive campaign finance laws of any state, use many of the same arguments as the proponents and opponents of reform at the national level. Interest groups have become active and influential participants in the growing debate about whether federal and state campaign laws need revision and, if so, which reforms would improve the electoral process.

Recent campaign scandals have galvanized the resolve of interest groups that advocate both campaign finance reform and increased enforcement of existing campaign laws, but average U.S. citizens remain largely ambivalent about reform. The financing of political campaigns generated a significant amount of national news coverage in 1997-- before the death of Princess Diana eclipsed news coverage of everything else. The campaign scandals increased public awareness of the enormous cash needed to run an effective political campaign. Nevertheless, the public seems largely ambivalent about the scandals. A Wall Street Journal/NBC News poll ranked campaign finance reform as less important than Social Security reform, Medicare reform, a balanced budget, expanded education support, childcare tax credits, and tax cuts. Forty-five percent of those polled considered campaign finance reform an "absolute priority," while 52 percent said it "can be delayed." Cynicism explains the poll's results. Fifty-eight percent said campaign finance reform "would have no effect" on "the influence that the wealthy and special interests have on elections," while only 31 percent said reform "would have a positive effect."⁽¹⁾

Although Republicans have often endured criticism for questionable fund-raising, most of the recent allegations of corruption involved the Democratic Party and the 1996 Clinton-Gore reelection campaign. Vice President Al Gore admitted he made eighty-six fund-raising calls from the White House.⁽²⁾ The calls may have violated the obscure Pendleton Act of 1883, which prohibits the solicitation of contributions on federal property.⁽³⁾ Gore, however, protested, "There is no controlling legal authority that says any of these activities violated any law."⁽⁴⁾ The vice president also endured criticism for a campaign appearance at a Buddhist temple in California. The temple's nuns testified to Sen. Fred Thompson's Senate hearings, which investigated the alleged abuses, that they used temple money to reimburse other nuns' individual contributions to the Clinton campaign.⁽⁵⁾ Rumors of foreign contributions abounded as John Huang, a former Democratic fund-raiser, was accused of funneling donations from China to the Democratic National Committee.⁽⁶⁾ The Senate hearings ultimately closed without proof of foreign influence, but they revealed the importance of money in the contemporary electoral process. Roger Tamaraz, who gave $300,000 to the DNC in the hopes of securing Clinton's support for an Asian oil pipeline, testified to the senators that contributions influence policy. "Next time I'll give $600,000," he said.⁽⁷⁾

Pro-reform interest groups often fall in the moderate and liberal range of the political spectrum, although some liberal groups such as labor unions and the American Civil Liberties Union oppose several reform proposals. The pro-reform groups can be divided into two categories: partisan Democratic interest groups and political action committees (PACs)--such as the Democratic Congressional Campaign Committee and the Democratic Senatorial Campaign Committee--that hope campaign finance reform will damage the GOP's power and public interest groups that advocate campaign finance reform for the "collective good, the achievement of which will not selectively and materially benefit the membership or activists of the organization."⁽⁸⁾ The support of Democratic interest groups for campaign finance reform may seem ironic in light of the allegations of financial abuses by the Clinton-Gore campaign and the Democratic Party. Interest groups that align themselves with President Clinton, however, are following the president's lead. Clinton endorsed the McCain-Feingold legislation, although he raised $500,000 at two fund-raisers--sponsored by the Democratic Congressional Campaign Committee, a partisan political action committee--for Democratic candidates while the bill was being debated in the Senate.⁽⁹⁾

The partisan Democratic interests believe that stricter campaign-finance laws would hinder the Republican Party's receipt of large contributions from wealthy donors and business groups. If the amount of Republican contributions decreased because of new campaign finance laws, the Democratic Party would not have to resort to the controversial fund-raising tactics it used in 1996. The groups support reform for pragmatic reasons and oppose restrictions that limit their interests. Thus, like President Clinton, the groups endorse campaign finance reform while they continue to use practices that would be banned under most reform plans. Therefore, a legitimate discussion of pro-reform groups must focus on the most dedicated reform advocates--public interest groups--while ignoring Democrat-affiliated PACs that only support reforms benefitting their party.

Public interest groups are the most vocal supporters of campaign finance reform. Some of them, however, have practical problems with getting reform passed because of previous conflicts with members of both parties and the low amount of money that they contribute to political candidates. By opposing financial access to candidates, public interest groups often alienate the legislators whose support is needed to pass campaign finance reform. Notable public interest groups include Common Cause, the League of Women Voters, the Public Interest Research Groups, Public Campaign, and the Joyce Foundation.

The 250,000-member Common Cause is arguably the most prominent public interest group. "Liberal Republican" John Gardner, a former member of the Democratic Johnson administration, founded the group in 1970 and used advertisements and mailings to disseminate its message. The organization recruited about 230,000 members during its first year of existence.⁽¹⁰⁾ Garner said he founded the group because "Americans were hungry for trustworthy information about their government and a way to right the wrongs so apparent in Washington, D.C. and their state capitals."⁽¹¹⁾ Common Cause uses its annual operating budget of $10 million to publish investigative studies that single out campaign abuses by other interest groups and specific politicians--a practice by which the group lobbies through intimidation rather than accommodation.⁽¹²⁾ Its aggressiveness may not win it many congressional friends, but the interest group credits itself with such past legislative victories as financial disclosure laws for members of Congress; disclosure requirements for lobbyists; and a ban on meals, vacations, and other gifts to congresspersons.⁽¹³⁾ Common Cause lobbied unsuccessfully for two recently blocked reform bills: the McCain-Feingold bill in the Senate and the Shays-Meehan bill in the House.

The 150,000-member League of Women Voters, one of the oldest public interest groups, advocates campaign finance reform at the national, state, and local levels.⁽¹⁴⁾ Since its inception in 1920 during the women's suffrage movement, the organization has served as a powerful player in U.S. politics.⁽¹⁵⁾ Despite its name, the League of Women Voters welcomes both male and female U.S. citizens to join. The organization's support of campaign finance reform has led it to form coalitions with other public interest groups.⁽¹⁶⁾ In the wake of House Speaker Newt Gingrich's blocking of the Shays-Meehan bill,

President Becky Cain asked the group's members to urge House members to sign a discharge petition that would automatically bring the bill to the House floor for debate and a vote. In announcing the petition effort, Cain and Eleanor Revelle, a key League leader, emphasized the importance of cooperation with like-minded interest groups:

Reform opponents will be calling many of these offices as well. We need to generate a high volume of pro-reform calls. Other reform-minded organizations including Common Cause, Public Citizen and PIRG will be making calls as well.⁽¹⁷⁾

The League of Women Voters of Illinois, which also began in 1920, has formed similar coalitions with other statewide groups.⁽¹⁸⁾ Two of its leaders, President Jan Flapan and Doris Pierce, serve on the steering committee of the Illinois Campaign for Political Reform, which was formed as a cooperative effort between the League of Women Voters of Illinois Education Fund and the Joyce Foundation.⁽¹⁹⁾

The national and state Public Interest Research Groups, which are affiliated with consumer advocate Ralph Nader, combine "the expertise of professionals with the power of citizens in defense of clean air and water, strong safeguards for consumers, a free and vigorous democracy, and a way of living today that ensures a better quality of life tomorrow."⁽²⁰⁾ The Illinois Public Interest Group successfully urged the Illinois Senate to create a task force on campaign finance reform in 1996. The group currently wants to require Illinois candidates to raise 75 percent of campaign funds from citizens in their districts.⁽²¹⁾

Public Campaign, one of the newest reform organizations on the national and state scene, promotes its campaign-finance-reform plan, Clean Money Campaign Reform. The plan calls for full public financing for campaigns of candidates who reject private contributions, limit spending, and shorten the length of their campaigns. The group believes that "in order for our government to serve the interests of its people, the elections of government officials must be financed by the people." The group claims taxpayers do not object to the use of tax money to fund campaigns "when [they] realize that the cost is relatively low."⁽²²⁾

The Chicago-based Joyce Foundation uses philanthropy to advance campaign finance reform. Using its $750 million in assets, the foundation advances the cause of campaign finance reform by funding interest groups and researchers that directly promote campaign finance reform.⁽²³⁾ In December 1996, it committed to spend $6 million during the following three years to promote both state and federal campaign finance reform.⁽²⁴⁾ Deborah Leff, the foundation's director, explained the Joyce Foundations approach: "You entice smart, creative people to work on the problem, to do research or start a center or initiate a policy. You try to release the creativity of others for the benefit of the world, to make a difference in people's lives."⁽²⁵⁾ In its home state of Illinois, the Joyce Foundation has given grants to the Illinois Campaign for Political Reform and the SIU Public Policy Institute's reform efforts. The Joyce Foundation, however, has its share of detractors, such as legal scholar Bradley A. Smith, who accuse the foundation of hypocrisy for spending millions to promote its agenda while criticizing interest groups' use of money to promote their goals. "Giant foundations, such as the Schuman and Joyce foundations and the Pew Charitable Trust, spend millions of dollars promoting campaign reform but would not have their influence limited," Smith wrote.⁽²⁶⁾

Although formed in late 1997, the Illinois Campaign for Political Reform already has become a major force in advocating campaign finance reform in Illinois. The group was founded by the League of Women Voters Education Fund after it received funding from the Joyce Foundation to start the group. Former Sen. Paul Simon and Illinois Lieutenant Gov. Bob Kustra serves as the group's co-chairs. The group describes itself as "a nonpartisan citizens' organization with broad-based support from civic, government, religious, business, and labor groups."⁽²⁷⁾ Indeed, the ICPR Steering Committee includes representatives of the AFL-CIO, Sara Lee, the Illinois Farm Bureau, the Sierra Club, the Illinois Ethnic Coalition, the Chicago Tribune, the Illinois Education Association, the Illinois Manufacturers Association, Protestants for the Common Good, and Illinois Issues magazine.⁽²⁸⁾ Such a diverse group may have trouble reaching a consensus on controversial reform issues. Although in its infancy, ICPR has already had one successful project. All major candidates in the 1998 gubernatorial candidates submitted timely campaign disclosure reports to the ICPR Internet site. When launching the web site, ICPR Director Cynthia Canary proclaimed, "The public has a right--and a need--to knows who funds campaigns. We want to make it easier for voters to get this information and tougher for special interests to buy electoral votes."⁽²⁹⁾

Opponents of campaign finance reform argue that further government intervention into the activities of interest groups would violate the democratic principles on which the United States was founded. No new groups have been established to fight campaign finance reform, but such powerful interest groups as the National Rifle Association, the American Civil Liberties Union, the Christian Coalition, and the National Right to Life have expressed their opposition to recent reform proposals. (Because the reform opponents are well-known, unlike the more obscure pro-reform groups, a description of each is unnecessary.) The anti-reform groups tend to be conservative, because of conservatives' traditional distrust of government regulation. People should not, however, view the campaign-finance-reform debate as a struggle between liberals and conservatives. The liberal ACLU also rejects most recent and pending campaign-finance-reform bills, such as McCain-Feingold, that it believes "would do nothing to repair our system while unconstitutionally limiting our First Amendment rights."⁽³⁰⁾

Reform opponents accept the view--espoused in James Madison's Federalist Papers--that a diversity of interests and the republican form of government would keep any faction from dominating the political system.⁽³¹⁾ Madison wrote, "Liberty is to faction what air is to fire . . . But it could not be a less folly to abolish liberty, which is essential to political life, because it nourishes faction, than it would be to wish the annihilation of air."⁽³²⁾ The anti-reform interest groups agree with conservative columnist Tony Blankley's application of Madison's philosophy of interest-group pluralism to the modern political climate:

At the moment, virtually every American is served by [interest groups]. The Sierra Club represented environmentalists to the tune of more than $7 million in the 1995-96 electoral cycle. The National Rifle Association spent $4 million for gun owners. Farmers, union members, and pro- and anti-abortion-rights advocates all had their groups spending money on campaigns nationwide.⁽³³⁾

Reform opponents also argue that campaign finance reform interferes with the First Amendment guarantee of freedom of speech. Sen. Mitch McConell, a reform opponent who led the filibuster of McCain-Feingold, compared limiting the actions of interest groups to restricting the content of newspapers:

Congress can no more dictate how much or in what manner a citizen, group, candidate, or party may participate in our democracy than it can tell newspapers, TV, networks or magazines how they may report on politics or how large their circulation may be.⁽³⁴⁾

The National Rifle Association has celebrated the inability of Congress to pass substantial campaign finance reform. Its newsletter stated, "McCain-Feingold's defeat assured, at least temporarily, that NRA could continue to communicate critical election information to its members concerning the views of candidates on firearms-related issues."⁽³⁵⁾ The Christian Coalition also claims that McCain-Feingold and Shays-Meehan would restrict its

First Amendment rights by restricting "voter guides, scorecards, and Action Alerts" from

"even mentioning a candidate's name sixty days prior to an election."⁽³⁶⁾

The National Right to Life and the ACLU are especially outspoken in their insistence that the current group of campaign-finance-reform bills violate their First Amendment right to free speech--further proof that politics really do make strange bedfellows. The pro-life organization has released statements that both mention the ACLU's opposition to recent reform bills and sound strangely flattering of its traditional adversary:

The ACLU is absolutely wrong on abortion, but it is also an organization that takes seriously the First Amendment right of citizens to disseminate information and commentary on politicians' positions on issues--even issues that the news media often brands as "emotional" and "divisive," such as abortion.⁽³⁷⁾

The Right to Life has even threatened to lower its approval rating of pro-life legislators who support campaign finance reform.⁽³⁸⁾ Meanwhile, the ACLU has lobbied fervently against the legislation. In a letter to anti-reform Sen. McConnell, the group's leaders stated:

If any reference to a candidate in the context of advocacy on an issue rendered the speaker or the speech subject to campaign-finance controls, the consequences for First Amendment rights would be intolerable . . . It may be inconvenient for incumbent politicians when groups of citizens spend money to inform the voters about a politician's stands on controversial issues, like abortion, but it is the essence of free speech and democracy.⁽³⁹⁾

It should be noted that the ACLU does not consider itself an enemy of campaign finance reform, just current reform proposals. The ACLU enthusiastically supports public financing of campaigns, which some reform proponents favor, but rejects any legislation that limits the freedom of interest groups to either attack or praise specific politicians.⁽⁴⁰⁾ Campaign-finance-reform approaches vary. The four most common proposals are disclosure, contribution limits, spending limits, and public financing. All supporters of campaign finance reform advocate some form of disclosure. They differ, however, on their attitudes toward the remaining three proposals.

Disclosure is the release of the identities--and sometimes the occupations and employers--of the persons or groups that contribute to a political campaign. The Federal Election Campaign Act (FECA) provides detailed disclosure requirements at the federal level. FECA requires a candidate's campaign to record all contributions of fifty dollars or more. If a contributor gives at least $200, the campaign must tell the Federal Election Commission the donor's name, occupation, and employer. Independent expenditures--spending by interest groups or persons apart from a candidate's campaign that, nevertheless, promote the candidate--must also be reported to FECA.⁽⁴¹⁾ All states have some form of disclosure laws, but the laws differ greatly. Some states set the minimum threshold for contribution disclosure as low as fifty dollars, but other states set it as high as $1,000. Most states require disclosure of independent, expenditures, but a few do not.⁽⁴²⁾ The availability of disclosure documents to the general public also differs among states.

Illinois provides one example of the recent improvements in disclosure law at the state level. Illinois law requires disclosure of contributions and expenditures that exceed $150. Until recently, the general public had little access to the disclosure reports that were filed with the Illinois Board of Elections (IBE). Only contribution reports were available on computer diskette. Expenditure reports were only available on paper or microfiche. To make matters more difficult, a person who wanted access to contribution or disclosure reports had to fill out a triplicate form that required the person to list his or her job, employer, telephone number, and purpose for examining the report.⁽⁴³⁾ In 1997 the General Assembly passed and Gov. Jim Edgar signed electronic-disclosure legislation. The law requires the IBE to post campaign finance reports on the Internet and allows interest groups to file their records electronically.⁽⁴⁴⁾ Reform proponents, however, do not believe the law provides for timely disclosure, and so the Illinois Campaign for Political Reform has established a web site on which candidates for Illinois office voluntarily submit disclosure reports--months earlier than the electronic-disclosure law requires.⁽⁴⁵⁾

Most campaign-finance-reform proponents support some form of contribution limits that restrict the amount of money individuals or groups can contribute to a campaign. Of course, pro-reform groups differ in their support of specific limits. Some supporters of contribution limits want to limit certain groups, usually corporations and labor unions, from making any contributions to campaigns. Others hope to limit the amount a group or business can contribute, but they do not want to bar specific groups from contributing to campaigns while allowing others to contribute. FECA ostensibly bans contributions from the treasuries of federal contractors, labor unions, and corporations, but that restriction has been essentially subverted by PACs that are affiliated with the banned contributors. Employees can give as much as $5,000 to a PAC.⁽⁴⁶⁾ The PAC can give $5,000 to a candidate in a primary and another $5,000 when the candidate runs in the general election. PACs also demonstrate their influence at the federal and state levels through individual expenditures and a process called bundling, which occurs when an interest group representative gathers individual campaign contributions from its members and then delivers them together to the candidate.⁽⁴⁷⁾

Some campaign-finance-reform proponents also want to impose limits on contributions to political parties. Contributions from interest groups to political parties for party-building efforts are not subject to contribution limits, because a party cannot transfer the contributions, commonly referred to as "soft money," to a campaign account.⁽⁴⁸⁾ Party-building efforts include voter-registration drives and issue advertising, such as DNC advertisements in 1996 that criticized Republican legislators for their alleged willingness to cut Medicare funds. Issue advertising has been criticized by reform advocates who believe the advertisements are intended to help elect specific candidates.⁽⁴⁹⁾ Critics of the current campaign-finance system believe soft money allows interest groups to buy influence with parties, which have influence over legislators. Businesses and certain interest groups contribute soft money to both parties. Archer-Daniels-Midland gave more than $1 million to the GOP in 1992, but it also gave thousands to the DNC, and its president served as co-chair of a Democratic fund-raiser.⁽⁵⁰⁾ During the 1994 general-election campaign period for the Illinois General Assembly, tobacco giant Philip Morris gave $35,000 to House Democrats, $24,500 to House Republicans, $20,000 to Senate Democrats, and $25,000 to Senate Republicans.⁽⁵¹⁾ Reform proponents who argue for various limits against soft-money

contributions agree with Jeffrey M.. Berry's assessment: "The more that parties depend on interest groups for their financing, the more beholden they are to them."⁽⁵²⁾

Some campaign-finance-reform proponents favor the placement of spending limitations upon campaigns--despite the Supreme Court's position on spending limits. In the landmark 1976 case of Buckley v. Valeo, the Supreme Court ruled that contribution limits and disclosure requirements are constitutional, but it declared that spending limits violate the First Amendment. The ruling stated:

The mere growth in the cost of federal election campaigns in and of itself provides no basis for governmental restrictions on the quantity of campaign spending and the resulting limitation on the scope of federal campaigns. The First Amendment denies government the power to determine that spending to promote one's political views is wasteful, excessive, or unwise.⁽⁵³⁾

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