With few numbers left to crunch, most political dollar tabulators are estimating an overall cost of $4.2 billion for the 2004 election, well above the $3.2 billion for the 2000 cycle. A cursory glance through the analyses of commentators and academics would lead one to believe that a revolution in small-donor fundraising occurred, wresting election funding–and the clout in Washington that goes with it–from the grasp of fat-cat donors. If only that were true. While last year’s election saw a notable increase in voter mobilization and turnout, and a rise in participation by small donors, the dirty little secret of American politics in 2004 was the increased importance of big-dollar check writers. Not only did a whopping pile of large “soft money” donations–contributions not regulated by federal law and meant to support general “party building” activities–find its way into the pockets of the 527s (named after a previously obscure crevice of the federal tax code), but the parties and their candidates actually intensified their dependence on the tiny sliver of Americans who wrote them $2,000 checks, the maximum allowed under the new law. Only in Arizona, Maine and North Carolina, where Clean Elections systems offered full public financing to candidates who qualified by raising a large number of $5 contributions, did small donors and average voters really take charge.
This is not to say that there weren’t some important developments at the federal level. In 2003-04, the most notable successes in small-donor fundraising were the early Howard Dean campaign and the late John Kerry campaign. Dean’s use of the Internet and direct mail to raise money allowed him to establish a base of small donors–people giving $200 or less–and run ahead of the traditionally funded Democratic field for much of 2003. Kerry, on the other hand, led the “big money primary” early. But once he became the presumptive nominee, the small money rolled in. Before March 1, 2004, Kerry raised 18 percent of his funds in small contributions; from March through August (when he formally became the Democratic nominee and ceased direct fundraising) the percentage increased to 40 percent.
Meanwhile, over at the Democratic National Committee, chairman Terry McAuliffe launched an unprecedented drive to win contributions from small donors–the kind the GOP had wooed successfully for years. His efforts caused such contributions to rise to new levels, and Democrats pulled ahead of their counterparts in this regard. But at the same time, McAuliffe deepened the party’s dependence on large-dollar contributors. Under his tenure the party’s heavy hitters nearly quadrupled their hard-money largesse and the small-donor slice of giving shrank from 53 percent to 46 percent of the total. Here are the hard facts: In 2000 small donors (those giving $200 or less) gave $58.8 million out of a total of $110.8 million raised from individuals by the DNC. In 2004 contributions from small donors amounted to $165.2 million out of $355.6 million. In other words, as the DNC sought to make up for the loss of soft-money giving to the national parties–which the Bipartisan Campaign Reform Act (BCRA) of 2002 banned–it was the larger donors giving as much as $2,000, not the smaller ones, who expanded their relative importance to the party.
While it may appear to some in Washington that a $2,000 check writer is not a “large donor,” to the vast majority of Americans–who make less than $50,000 a year and who rarely, if ever, make even a modest campaign contribution–such donations are another confirmation that the US electoral system is dominated by the wealthy, whose interests are protected by elected officials. And unfortunately, McAuliffe’s expanded reliance on big-dollar, hard-money contributors is more representative of the political money picture in the 2004 elections than is the grassroots fundraising by both the Dean and Kerry campaigns.
Both major presidential candidates smashed existing private fundraising records by relying heavily on sophisticated bundling operations in addition to their activist base. Bush raised $293 million and Kerry $252 million; in 2000 Bush raised $126 million and Gore just $49 million. A relatively small group of money brokers–a thousand or so men and a few women known as Rangers and Pioneers on the Bush team and as vice-chairs and co-chairs on the Kerry team–worked hard to organize givers able to donate at the maximum level of $4,000 per couple. On the Republican side, these mega-donors may have garnered far fewer headlines than the Swift Boat Veterans, but their impact on government policy has been far more significant. For example, Bush’s bundlers brought in nearly $25 million from the finance, insurance and real estate sector, which has profited mightily from his tax cuts and stands to make billions more if he succeeds in privatizing Social Security.