What to Do About Campaign Finance Loopholes

What to Do About Campaign Finance Loopholes

What to Do About Campaign Finance Loopholes

Political reporters are fixated on the candidates’ endless money chase and the expected flood of corporate funds into shadow campaigns. But they have forgotten why we care.


Let’s set the record straight once and for all. The Supreme Court opened the soft-money floodgates in Wisconsin Right to Life v. Federal Election Commission last June, but it did not change disclosure rules. The real problem is that disclosure alone does not get us open, honest and accountable government, and closing every loophole won’t either. What we need is public funding of federal elections, and we need it ASAP.

Contrary to a number of recent news reports (the New York Times article of November 12, “A New Channel for Soft Money Starts Flowing,” is a good example), the Supreme Court has not sanctioned political advertising without disclosure. The Foundation for a Secure and Prosperous America would not be subject to disclosure rules for its current South Carolina ads featuring Senator John McCain, even if the Supreme Court had never decided the Wisconsin Right to Life case. (I leave aside the question whether the “foundation” should have been set up as a PAC.) The law that the Court reviewed does not kick in until thirty days before a federal primary election, and we’re not there yet, even in South Carolina. When we do get there, the ad sponsors will be subject to the usual disclosure requirements. The Court did not touch them. (Not yet, at least.)

The June case was a challenge to a specific provision of the Bipartisan Campaign Reform Act (“BCRA,” or “McCain-Feingold”), which barred corporations from using treasury funds for “electioneering communications”–certain political ads aired thirty days before a federal primary or sixty days before a general election. Wisconsin Right to Life is a nonprofit corporation that is covered by BCRA, and it wanted to use its treasury funds to run electioneering communications about Senator Russ Feingold and the filibuster of judicial nominations. The Supreme Court ruled that the ads were advocacy about an issue, not against Feingold, so the nonprofit could use its treasury funds for those ads.

Media critics are right when they report that the Supreme Court opened the door for more spending. It is fair to say, as the Times did, that “thanks to the recent Supreme Court decision,” more soft money will start flowing. But the Court did not sanction secret financing of political advertising, and groups running electioneering communications should know that they are still required to disclose major donors and disbursements. In other words, if the South Carolina ads continue to run during the period thirty days before the state’s mid-January primary, the undisclosed financiers of those ads will have to be disclosed (unless they contributed less than $1,000). If the advertisers don’t disclose, they will violate federal law.

The media’s relentless, and relentlessly narrow, focus on the ads and the spending obscures the deeper problem with our campaign finance system. We are fixated on the candidates’ endless money chase and the expected flood of corporate funds into shadow campaigns. But we have forgotten why we care. The point is not to eliminate money from the political process but rather to ensure that we have open, honest and accountable government.

For that, we need fundamental reform, not just devices to close up loopholes. We need public funding of presidential and Congressional campaigns. With public financing of elections, elected representatives can respond to the interests of voters instead of worrying about the deep-pocketed donors on the lookout for loopholes.

Public funding won’t stop the constant hunt for loopholes; that game will continue as long as wealthy interests want to influence politics. But loopholes just wouldn’t matter as much if candidates had a meaningful alternative to private largesse. That option is public funding, and it is already working in states and localities around the country.

Federal bills have already been introduced for presidential and Congressional public funding. This is not rocket science. What are we waiting for?

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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