The Road to Nowhere

For three decades, campaign-finance reform has been high on the liberal agenda. Not only that, it seemed like a winning cause: It played well in the media, attracted vigorous activist support and even, it seems, made its mark on Congress when the McCain-Feingold bill passed this March. And yet, moneyed interests have more power in Washington and in state capitals than ever before. Their influence may even expand come November, when the new campaign-finance laws kick in.

This is not how things were supposed to go. But it's also not that surprising: Although the passage of McCain-Feingold (or the Bipartisan Campaign Reform Act) was a political victory, it was also a weak reform. Some groups tout its centerpiece -- a ban on "soft money," meaning unregulated contributions from wealthy individuals and corporations to national parties -- as a powerful bulwark against special-interest influence. Others see the measure as a modest step on the road to reform. Either way, the victory was more an archival retrieval than a bold step forward. Soft money was prohibited in the wake of Watergate, but the Federal Election Commission (FEC) gutted that ban. The same thing could easily happen again, as McCain-Feingold faces today's ideologically driven FEC, along with courtroom challenges from political parties and special-interest groups.

Last month the FEC issued rules for implementing the law that also succeeded in undermining some of the bill's key provisions. For instance, McCain-Feingold attempted to restrict the spending of state parties on "federal election activities" such as voter registration drives. But the commission's rules allow state parties to spend more soft-money donations on activities that influence federal elections. Some reform advocates may file suit against the FEC; others are considering asking Congress to exercise the underutilized Congressional Review Act to repeal the commission's ruling. Such action, however, requires a majority of votes in each house, along with President George W. Bush's signature. Passing the legislation was hard enough the first time.

Even if the FEC can be beaten back, McCain-Feingold will likely be circumvented. Big money is already shifting from the national parties to outside groups. Political action committees (PACs) raise and contribute money to candidates, parties and other PACs, and they pump their own money into "independent expenditures," meaning efforts to elect or defeat candidates. They have become a staple of national politics, with nearly every major issue group and federal candidate forming a PAC. Silicon Valley money man Thomas Siebel recently collected more than $2 million from his top executives to form a PAC. It took him just a few weeks.

November will surely see an infusion of hard money and PAC money into both parties. Seventy-five percent of total contributions in 2000 were hard money. Unlike soft money, most hard money goes directly to candidates' coffers. And limits on it have actually doubled with the passage of McCain-Feingold. That was one of the many unfortunate concessions that got the bill through.

With all these potential channels for big money, perhaps it's not surprising that some Democratic presidential contenders are reportedly considering opting out of partial public financing in the 2004 cycle. Presidential candidates can apply for funds from the government only if they agree to certain fundraising limits. Bush found those limits to be too restrictive in 2000; if he didn't adhere to them, he figured, he could raise more money than he would by dipping into public funds. There's a good chance that the Dems' 2004 candidates might follow his example.

The reform community, meanwhile, has moved on to a new battle: proposed legislation that will award federal candidates reduced rates for airtime on television and radio. The National Association of Broadcasters will never stand for it. What's more, even if such legislation were to pass, candidates would go on spending the same amount of time raising the same amount of money they did before. They'd just have the added benefit of paying less for more time on the air.

Achieving real reform on the federal level was bound to be tough. That's why activists have long sought to promote campaign-finance reform on the state level, with the hope that the strategy would then "trickle up." The idea was to establish, through ballot initiatives, public funds that state candidates could tap into to run "clean" -- that is, without private financing. But even where these measures were initially successful, they've been undermined by courtroom battles, by the actions of businesses and interest groups, and even by lawmakers.

Four states -- Maine, Vermont, Arizona and Massachusetts -- have approved public financing measures in the last four years, and all have suffered migraines for their trouble. Four years after a ballot initiative passed in Massachusetts, the state Legislature's Democratic leaders are still unwilling to cough up the funds. A number of candidates are running clean in Arizona -- but the state's clean-money law faces court challenges. Governor Howard Dean slashed Vermont's public fund in his 2003 budget, and Maine's system, the undisputed success story of the state experiment, doesn't offer candidates enough money to run truly competitive statewide races. When similar measures made the ballot in Missouri and Oregon in 2000, they got creamed. Now there are no states that can realistically look to ballot victories anytime soon.

What the states can look to is a dramatic influx of out-of-state checks. Although McCain-Feingold banned soft money to the national parties, it doubled limits -- from $5,000 to $10,000 -- for the state and local party committees. In the 2000 elections, according to a recent study by the Center for Public Integrity, the Center for Responsive Politics and the National Library on State Money and Politics, state Democratic and Republican parties raised more than $300 million independent of the contributions they got from their national counterparts. Imagine what those numbers will look like with the hard-money cap set twice as high. We can also expect greater behind-the-scenes coordination between these local committees and the national parties.

Three decades of effort have come to little. Why? Because the laws have not been properly implemented, and because reform groups have not been able to keep them from being undermined. Liberals spent the last 10 years pushing for a soft-money ban because they failed to shore up the post-Watergate one. At the same time, the focus on soft money sapped funding and attention from the most necessary reforms of all: full public financing for all federal candidates.

Under the circumstances, reformers could be forgiven for feeling a bit like Sisyphus, rolling the same boulder endlessly up the same hill. In order to move energetically forward, the reform community needs to rethink its strategies and its short-term goals. It's hard to imagine any reform legislation sticking without a public and a judiciary prepared to take it to the mat. And there are already some initiatives that point the way forward in this regard. They are long shots and provide only small pieces of the grand strategy that's needed, but those pieces could turn out to be crucial.

The National Voting Rights Institute, for instance, crafts legal cases that apply the Constitution's equal-protection clause to the campaign fundraising system. According to the institute, the current fundraising structure is tantamount to a poll tax: It imposes a financial barrier that prohibits participation in the political process by those who have little or no access to wealth. And if the inequality issue -- and the current outrage over corporate plunder of workers -- plays well with the public, Public Campaign and the Sierra Club, among other organizations, may well be on to something with their campaign to hold antireform politicians up to public scrutiny for their positions. If these sharpshooters can raise enough money to become valued players in the hardball world of congressional campaigns, campaign finance could gain the status of gun ownership or reproductive rights -- that is, of an issue by which candidates live or die.

There is certainly no silver bullet on an issue as complex and integral to the American experiment as the role of money in politics. The notion that little has been accomplished in the last three decades will be hard for reform advocates to swallow, but claims to the contrary seem willfully naive given the reality of today's money-driven, donor-beholden political machines. It's time for the reform community to collectively consider the failures -- and the underdeveloped opportunities -- that have emerged from the last generation's battles. It's also time to begin thinking anew.

Correction: The print version of this article lists hard money as 40 percent of total political giving. Hard money in the 2000 election cycle was 75 percent of total giving.