Patterns of Failure: Why Campaign Finance Laws and Regulations Undermine Disclosure and Transparency

0:00I'm thrilled to be here. I've attended many of these conferences and it's my first chance to get to speak. I wear many hats. I'm a recovering attorney and I hope that you won't hold that against me. I earn my living as a political consultant and thus help elect some of our elected officials and there's no way you can hold that against me more than I do myself. My company is based in Gainesville, Florida and I teach part-time at the University of of Florida, the Home of Communism in North Central Florida. I'm not the only non-communist in my department, but I am the only one who was a Ron Paul delegate to the convention last fall and who voted for Ron Paul in the primary a month or so ago. And when I tell colleagues this, they know I'm a Republican, I've been patted down for horns and whatever.

0:52I can only admit to being a Republican, actually something far worse than a Republican, I guess, in their eyes, but when I tell them that I voted for Ron Paul, they look at me bug-eyed and say, no, you didn't, and I go, yeah, yeah, I did, and then I try to explain to them why, and you know, it's like, whatever. Anyway, I am pleased to tell you that it's not the Poli Sci Department, it's the English Department that hosts the International Marxist Conference, and it will be next weekend. If If you're bored, go to Google and do it and look at the theme and some of the post-modern transformative talks that they'll be giving and I guarantee you'll hop a flight to Gainesville to come down for 15th through the 17th of March.

1:40In my spare time, I'm finishing a dissertation on the topic of campaign finance reform, which is what I'm going to be criticizing ruthlessly today. By way of background, for most of our lives, most of us have heard about the need for campaign and Finance Reform and right after every reform suddenly we have to do another one. Well why is this? What most people don't know is that we've been reforming campaign finance for over a hundred years now and some of the goals from the beginning were to keep out money from the wealthy, from the unions and from the corporations and of course to end corruption. My research question is, what went wrong? And the preliminary, I guess, answer is, other than everything, not much.

2:26Well while it won't come as a surprise to anybody here, out in the rest of the world, it's a complete shocker that the failure of campaign finance reform is the fault of incumbents, reformers, experts, government, in short, the reforms themselves. And the culprits are the very sponsors of reform. So we not only have a government-induced crisis that's made worse with every reform, but it ends up that they've gotten exactly backwards for over a hundred years. Based on the diagnosis that money is the corrupting influence in politics, Congress, the courts and reformers have prescribed various remedies. My basic argument is that all of these remedies have failed based upon a fundamental misdiagnosis of the underlying problem. Now I think that The corrupting influence in politics is power, not money, but that's another story for another day.

3:18The foundations of our modern campaign finance system are the twin pillars of, on one hand, the disclosure laws, the who gave it, who got it, lists that they're published of contributions and expenditures to campaigns, and on the other hand, the regulation of sources and amounts. I think most of us know that in a federal campaign, an individual can only give $2,500 have different limits. But while the disclosure laws are sort of good in theory as they add some transparency to a very complicated and confusing process, the legal and regulatory system built around them has rendered the disclosure laws negligible at best and undermine the transparency that they're seeking. In other words, they work across purposes with one another rather than complement one another.

4:06So rather than fulfilling the promise of the reformers to add transparency to the system To create public trust in government, our campaign finance laws do almost exactly the opposite. They foster secrecy and promote distrust. So after a hundred years of reform, to end the corruption of money, there's now more money than ever in politics. And after a hundred years of trying to make campaigns less negative, they're more negative. And to top it off, our First Amendment free speech rights have been trampled in the name of reform by incumbent politicians wanting to shut us up, specifically 30 and 60 days before elections. And after 100 years of reform, we also seek to solve virtually the exact same problems that we were trying to address in 1907 when the first Campaign Finance Reform Act was passed by Congress.

4:56I suggest that our reforms have made the problems worse due to the problem being misdiagnosed. If the diagnosis were correct, the reforms would have worked. My paper and dissertation explore these failures in detail but what I want to run through briefly today are the premises, promises and unintended consequences of campaign finance reform. Some of the premises of the reformers for reform were and are that there's too much money in politics, though they never say how they know that or what the right amount is or that when you add up everything that's spent over a two-year period of time, which It's an election cycle that it averages out to be about $10 per person over the two-year period of time, which might account for why voters are not real smart sometimes.

5:48But anyway, apparently there's too much money in politics, corruption. Money is this corrupting influence in politics. They talk about the undue influence of special interests, whatever those are and whatever undue influence is. They talk about conflicts of interest which they define it in a very, very broad manner such as if you have a boundary dispute with your neighbor or something and you're advancing your own interest, that's a conflict of interest. It's not very narrowly tailored like we would think an elected official not disclosing a financial interest to these people, a conflict of interest, is anybody advocating on their on their own behalf, which of course a lot of people call democracy.

6:36Another promise of the reformers or premise is that there's inequality and secret money. Some of the promises that the reformers have been making for over a century if we pass the reforms is that there'll be no corruption, we'll have equality, we'll have a deliberative democracy, whatever that is, we'll have a true democracy, there'll be trust in government, we'll have an educated and enlightened electorate, we'll have clean elections, we'll have no Here are some of the results after 100 years of reform. The Tillman Act of 1907 banned all corporate money, yet every cycle corporations participate in federal elections to the tune of hundreds of millions of dollars. The Taft-Hartley Act of 1947 banned union money in federal elections, yet every election cycle, unions participate to the tune of hundreds of millions of dollars.

7:30The publicity acts of the 1910s and 1920s, the post-Watergate reforms of the 1970s, McCain-Feingold, which worked its way through in the 90s and was passed in 02, ostensibly sought to limit the activity of wealthy fat cats. And yet, every election cycle, wealthy fat cats participate to the tune of tens of millions of dollars in our elections. They created public funding of presidential campaigns, but it's now routinely rejected and or abused. Each cycle costs more than the last when they sought to get money entirely out of the process. Each cycle seems more negative than the last. Each cycle seems less transparent than the last, with the advent of 527s after McCain Feingold.

8:18All the money that used to go to political parties now went to these mysterious 527s The empirical failures of 100 years of reform have been so profound and pervasive that I have bunched them into several distinct types of failure. Enforcement, Fungibility, Transparency and Unattended Consequences. In terms of the failure of enforcement, the Tillman Act of 1907 had literally no teeth in it at all.

9:04The Publicity Act had no teeth in it at all. The original FEC, Federal Election Commission that passed in the early 70s, had no teeth. It was then struck down by the Supreme Court and they brought it back and they made it have teeth, but the politicians made it where there's six voting members of the FEC, three of which have to be Democrats and three of which have to be Republicans. So that sort of takes the teeth out of that. In the old days, Senate reports were not kept. Any reports that were filed were thrown away or you couldn't get a copy of them. In a former life, I worked for the Republican Party of Florida, and in 1992, I got a lawsuit from the Federal Election Commission that was investigating the 1988 George Bush primary campaign.

9:55I don't know how many lawyers are in here, but to file a lawsuit, you have to have jurisdiction and venue and a proper case, and you have to not let the time lapse. Funds. Anyway, I filed a motion to dismiss for waiting four years to pursue something, and they wrote me back and said that they had waived that, which of course you can't do. Anyway, fungibility. Basically, money is fungible. So when they ban it in one place, it goes somewhere else. In the original Tillman Act, they said you could only have one committee per county. So if you're in a congressional district, say in North Florida, where you 15 counties, you set up 15 committees. Of course corporate money. Well before 527s and super PACs, corporate money had plenty of places to go. Independent expenditures, soft money, give money in the name of another. This is where the boss of the corporation gives $2,500 to each of 20 different employees who then make a contribution to whatever. You give money to the convention. The RNC and the DNC put on their conventions and their

11:05are paid for by the taxpayer funds under the Presidential Campaign Financing Act, but also they get corporate dollars and a lot of these big corporations give hundreds of thousands if not millions to the convention. They also give it to leadership committees, somebody who may be running for Speaker of the House or President of the Senate or trying to get ready to run for President in a few years. One thing too, polling. One of the things corporations do and unions do is do extensive polling for politicians and the corporation pays for it, it's never disclosed, and then after 10 days, it's considered old information, so you can do a poll, wait 10 days, and then give it to somebody, you can also give money to a political party, transparency, the failures of transparency, let's be clear, they really don't want transparency, that's something that the reformers and the media, and I guess the do-gooders want, but the politicians don't, but there's been all kind of problems with transparency,

12:03Transparency. For example, in the state of Florida where I am, everybody in Florida's reports have to be filed before the election. If you're in Congress or Senate, you get to file your final report after the election. The forms are difficult and essentially impenetrable. They're supposed to be who gave it, who got it, but they're really not. Unintended consequences. There's too many of those to really get into, but a good one is the Presidential Matching Fund. They set this up so that the taxpayers could pay for elections rather than have people who are interested in elections paying for elections. So they have this checkoff on your tax form that you probably see every year. What you may not have noticed is that 10 or 15 years ago, they asked you yes or no, do you want to give $1 to this fund?

12:53Well, so many people were not giving that they had to raise it to three dollars and now no is not an option on there. So they're still having problems funding it. In fact, if you consider that a poll, and I do a lot of polling in my business, polls essentially you get a representative sample of the body that you're polling and then you can make inferences from that. Well, in terms of the 130 or 140 million Americans who file tax returns, that's kind of like the map in Alice in Wonderland that was real size, and 90% of the American public that files tax returns do not check off that box every year. So the Presidential Trust Fund is pretty much depleted.

13:40Another unintended consequence was the 527s, which sprang up right after McCain-Feingold, And one of the reasons that happened was the reformers, knowing best, thought it was very odd that the Republicans would support their nominees and the Democrats would support their nominees and so they stopped money going to the political parties. So that money is going to go somewhere, so it went to 527s. The biggest unintended consequence is the super PACs, which came about merely because the Supreme Court upheld the First Amendment, which says something to the effect of Congress This Shall Make No Law, or something like that. By the way, super PACs are funded by wealthy fat cats, unions and corporations.

14:25To bring it all together, there's a passage from the infamous Citizens United case that's priceless and says it all. Campaign finance regulations impose unique and complex rules on 71 distinct entities for 33 different types of political speech, for which the FEC has 568 pages of regulations, 1,278 pages of explanations and justifications for those 568 pages of regulations, and 1,771 advisory opinions. All of this reminds me of an old southern saying, when you're up to your ass in alligators it's a fine time to recall that your goal was to drain the swamp. Thank you very much.