Clean Money, Clean Elections

In 2003 President George W. Bush signed the Medicare prescription drug bill. In addition to the 952 lobbyists that “drug companies, HMOs, their trade associations and industry-funded advocacy groups deployed’ to Capitol Hill to insure passage of the bill, 21 drug and HMO industry executives or lobbyists raised a total of $3.4 million for Bush’s 2004 presidential reelection campaign. The bill, which clearly favors the profit interests of drug and HMO companies at the expense of taxpayers by prohibiting Medicare from negotiating volume discounts for drugs and disallowing a preferred drugs list, was sold to Congress based upon a projected cost of $395 billion over 10 years. Richard Foster, the chief actuary for Medicare, was ordered not to disclose his projection that the true cost of the bill would be $551 billion. Foster’s boss, Tom Scully, who happens to be Bush’s appointee as the chief administrator for the Centers for Medicare and Medicaid Services made the order while at the same time failing to disclose to Congress that he was interviewing for employment with a number of the bill’s beneficiary drug companies. While this is one of the more gratuitous examples of an evidently quid pro quo arraignment between the President, the Congress and the pharmaceutical industry, this is just one example of many i.e. National Energy Policy Act and the oil and coal companies, the Bankruptcy Reform Act and commercial banks and creditors, Class Action Bill and the varied health interests, etc.

It may be true that the small yet powerful special interests of the drug companies in this case were in some way deemed more important than the interests of the taxpayers by the President and members of Congress but reasonable people are left wondering if major campaign contributors’ interests are being served before the people’s. In a country where the majority of police officers are considered to be guilty of an ethics rule violation for accepting a free cup of coffee, contributor’s interests being serviced after receiving millions of dollars of campaign contributions provides a glaring example of hypocrisy for those making the laws that officers swear to uphold. Despite attempted campaign finance reform in 1971, 1974 and 2002, appearances of the most fundamental ethical violations are still rampant. Publicly funded campaigns are an alternative reform proposed by Rep. John F. Tierney (D-MA) and Rep. Raul Grijalva (D-AZ) and cosponsored by 40 Democrats. The proposed bill is H.R. 3099 or the “Clean Money, Clean Elections Act.’

The act would require that potential House candidates meet a specified threshold of public support before they receive public financing for their political campaign. According to the authors of the act, privately funded elections undermine democracy for a number of reasons including that they violate “the democratic principle of `one person, one vote” by “allowing monied interests to have a disproportionate and unfair influence within the political process,’ they give the appearance of “diminishing a Member of the House of Representatives’ accountability to constituents,’ create conflicts of interest “perceived or real’ and impose “large, unwarranted costs on taxpayers through legislative and regulatory outcomes shaped by unequal access to lawmakers for campaign contributors’ (such as the example illustrated above). The authors also contend that privately funded elections drive up the costs of campaigns and force out candidates without wealth, make races less competitive by giving a clear financial advantage to incumbents and burden Representatives by forcing them to constantly raise campaign funds instead of tending to the needs of their constituents. They believe that the bill will counteract these problems and thereby “enhance American democracy.’

Are publicly financed campaigns capable of doing all that their proponents contend? Most critics oppose the proposal based upon ideological grounds and/or because the initiative would shrink the ability of small minority special interests to influence the creation of policy favorable to them. Opponents to publicly financed elections include free-market think tanks like the Cato Institute, Goldwater Institute, Pacific Research Institute, the John Locke Foundation, in addition to lobbying groups such as Pharmaceutical Research and Manufacturers of America (PhRMA) and literally thousands of corporations representing every industry including oil, gas, tobacco, insurance, health products, beer, wine and liquor special interests, among others.

In reading the policy papers of the free-market think tanks regarding publicly financed elections it becomes clear that their stated belief that the free-market is better suited at accomplishing goals than the government has caused them to manipulate and obfuscate pertinent facts related to the reform and draw conclusions that are dubious at best. While the General Accounting Office (GAO) concluded in a May 2003 report that it is “too early to draw causal linkages to changes, if any, that resulted from the public financing programs in the two states,’ Maine and Arizona. However, after studying the publicly financed election initiative in Maine, Patrick Basham, Senior Fellow at The Cato Institute, was able to conclude that publicly financed elections “offers few public benefits’ by drawing links to changes that the GAO was unable to 7 months later. Additionally, after just 2 election cycles economist Robert Franciosi, former Director of Urban Growth and Economic Development Studies at the Goldwater institute concluded in November 2001 that publicly financed elections “provide no benefits.’

The Pacific Research Institute, though publicly against the use of taxes to fund most government initiatives, claims in a October 2006 paper that publicly financed elections “divert money from more pressing needs’ such as “education, public safety, and transportation.” The Editorial Director and author of the paper for the Pacific Research Institute Lloyd Billingsley, makes the point by quoting Massachusetts House Speaker Thomas M. Finneran, a staunch opponent of Clean Elections from a state legislature that has refused to fund the initiative. Proponents on the other hand such as the national consumer advocacy organization “Public Citizen,’ cite statistics that publicly financed Congressional elections would account for $1.3 billion or .0005% of all federal outlays or $3 per eligible voter, per year. Additionally, Public Citizen contends that,
“Congress spends about $47.4 billion each year in direct earmarks that pay back wealthy donors, special interests and big business, costing each citizen of voting age $220 a year. Besides earmarks, compensation for supporters also takes the form of tax cuts for industries such as big oil in the midst of record-breaking profits and for subsidies to drug companies.’

Furthermore, according to Public Citizen the states that already have publicly funded elections pay much less than the $3 per eligible voter;
“In Maine, the cost per voting age resident was $2.05 for the 2004 elections; while in Arizona, public funding for the 2004 elections cost only $1.61 per voter per year. Connecticut’s appropriation for its new public financing law, set to go into effect in 2008, amounts to only $6.24 per voting age resident, and it probably will end up not even costing that much.’

These are just small examples of the reality that almost all of the arguments made by these free-market think tanks can be factually rebutted or proven to be the cause of some other effect. However, for the sake of brevity this paper will cover their major obfuscations in order to address the realities of public financed elections. It should be mentioned that while the arguments and conclusions made by many free-market think tanks against publicly financed elections are debatable, this paper will not draw such uncertain conclusions and only seeks to point out the factual pros and cons of the proposal.

Just as these institutes fail in making convincing factual arguments against publicly financed elections many of them also fail at pointing out legitimate possible problems, such as what are the unintended consequences of such a proposal? Much like any government funded proposition there will certainly be some level of fraud and misappropriation of funds but to what extent depends upon the levels of oversight. If H.R. 3099 proposes that the Federal Election Commission (FEC) be strengthened to administer funds, what will be the additional costs for the bureaucracy and exactly how will FEC police abuse and fraud? How will the FEC be empowered to control fraud? In light of the slow response of the FEC to 527 groups that have sprung up after the Bipartisan Campaign Finance Reform Act of 2002 (BCRA), how will they deal with unforeseen problems? (Saxl) Will they have the authority to make changes? Will the commission be protected from the transient concerns of the politics of the moment? Will funding be insured and for how long? At this point we can only speculate as to the answers to these questions but it is important to note that H.R. 3099 doesn’t specifically address these issues.

Considerations of these questions may be a moot point as the legislation has very little chance of success so long as there are significant numbers of politically entrenched Republicans and Democrats in Congress that have been enriched by the status quo, not to mention the almost assured veto by President Bush. The situation is a catch-22 whereby the potential changes that could be brought about by publicly funded elections can presumably only be brought about by those not benefiting by the privately financed system. With the thousands of well-financed private interests working around the clock to insure that this bill gets killed it will most likely not make it out of committee barring a groundswell of public support.

While it is certainly true that no system is perfect and publicly financed elections will present entirely new and unforeseen problems, we should not disqualify the proposal as a potential remedy for the problems that grip our privately funded system. In stark contrast to the Medicare Prescription Bill (MPB) illustrated at the beginning of this paper, “Maine Rx’ provides an example of the possibilities of publicly funded elections. Unlike MPB where the lobbying arm of the pharmaceutical industry PhRMA wrote the legislation affecting their bottom line, “clean election’ candidates like Maine’s Senate Majority leader, Chellie Pingree, worked towards providing discounted drugs to Maine’s uninsured and poorest citizens in direct opposition to the pharmaceutical industry who immediately filled for injunctive relief following the passage of the bill. (Oliphant) The bill remarkably passed through the state Congress nearly unanimously even after one of PhRMA’s lobbyist, who was determined to kill the bill, slipped Pingree a note that read “based on the position the two of you are taking, you will never receive any more contributions from us.’ Pingree added that the lobbying arm of the pharmaceutical industry was essentially saying “you can’t pass this law in the state of Maine.’ Because of “clean elections,’ they did anyway.

H.R. 3099: Clean Money, Clean Elections Act. GovTrack. 24 November 2006.
http://www.govtrack.us/congress/bill.xpd?bill=h109-3099

Aaron, Craig “The Medicare Drug War: An Army of Nearly 1,000 Lobbyists Pushes a Medicare Law that Puts Drug Company and HMO Profits Ahead of Patients and Taxpayers.” Public Citizen: Congress Watch. June 2004. 24 November 2006. http://www.citizen.org/documents/Medicare_Drug_War%20_Report_2004.pdf

“Campaign Finance Reform: “Early Experiences of Two States That Offer Full Public Funding for Political Candidates.” Government Accountability Office. May 2003. 24 November 2006. http://www.gao.gov/highlights/d03453high.pdf

Billingsley, Lloyd. “No Clean Sweep: Ten Reasons Why Proposition 89’s ‘Clean Money and Fair Elections’ Proposal is Wrong for California.” October 2006. 26 November 2006. http://pacificresearch.org/pub/sab/entrep/2006/CA-props/Prop89.pdf

Franciosi, Robert J. “Is Cleanliness Political Godliness? Arizona’s Clean Elections Law after Its First Year.” Arizona Issue Analysis #168. November 2001. 27 November 2006. http://www.goldwaterinstitute.org/Common/Files/Multimedia/17.pdf

“The Cost of Clean Elections: Myths and Facts About the Costs of Public Funding.” Public Citizen. 27 November 2006. http://www.cleanupwashington.org/action/page.cfm?pageid=106

Saxl, Michael and Maeghan Maloney. “The Bipartisan Campaign Reform Act: Unintended Consequences and the Maine Solution.” Harvard Journal on Legislation. Vol. 41. 2004. 27 November 2006.
http://www.law.harvard.edu/students/orgs/jol/vol41_2/saxl.pdf

Oliphant, Thomas. “FCC Fight Helps Energize Common Cause.” Boston Globe. 24 June 2003. http://www.commondreams.org/views03/0624-02.htm

Palfreman, Jon. “The Other Drug War.” Frontline. 2003. 27 November 2006. http://www.pbs.org/wgbh/pages/frontline/shows/other/etc/script.html

CAMPAIGN FINANCING

SPEECH BY SAM SMITH
AT US CAPITOL RALLY, OCTOBER 26, 1999
I have three objections to our current system of campaign financing.

The first is literary. Being a writer I try to show respect for words, to leave their meanings untwisted and unobscured.

This is alien to much of official Washington which daily engages in an activity well described by Edgar Alan Poe. Poe said, “By ringing small changes on the words leg-of-mutton and turnip, …. I could ‘demonstrate’ that a turnip was, is, and of right ought to be, a leg-of-mutton.”

For example, for centuries ordinary people have known exactly what a bribe was. The Oxford English Dictionary found it described in 1528 as meaning to “to influence corruptly, by a consideration.” Another 16th century definition describes bribery as “a reward given to pervert the judgment or corrupt the conduct” of someone.

In more modern times, the Meat Inspection Act of 1917 prohibits giving “money or other thing of value, with intent to influence” to a government official. Simple and wise.

But that was before the lawyers and the politicians got around to rewriting the meaning of bribery. And so we came to a time not so many months ago when the Supreme Court actually ruled that a law prohibiting the giving of gifts to a public official “for or because of an official act” didn’t mean anything unless you knew exactly what the official act was. In other words, bribery was only illegal if the bribee was dumb enough to give you a receipt.

The media has gone along with the scam, virtually dropping the word from its vocabulary in favor of phrases like “inappropriate gift,” “the appearance of a conflict of interest,” or the phrase which brings us here today: “campaign contribution.”

Another example is the remarkable redefinition of money to mean speech. You can test this one out by making a deal with a prostitute and if a cop comes along, simply say, “Officer, I wasn’t giving her money, I was just giving her a speech.” If that doesn’t work you can try giving more of that speech to the cop. Or try telling the IRS next April that “I have the right to remain silent.” And so forth. I wouldn’t advise it.

As George Orwell rightly warned, “When there is a gap between one’s real and one’s declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish squirting out ink.”

My second objection to our system of campaign financing is economic. It’s just too damn expensive for the taxpayer. The real cost is not the campaign contributions themselves. The real cost is what is paid in return out of public funds.

A case in point: Public Campaign recently reported that in 1996, when Congress voted to lift the minimum wage 90 cents an hour, business interests extracted $21 billion in custom-designed tax benefits. These business interests gave only about $36 million in campaign contributions so they got out of the public treasury nearly 600 times what they put in. And you helped pay for it.

Looked at another way, that was enough money to give 11 million workers a 90 cent an hour wage increase for a whole year — or, to be more 1990s about it, to give 21,000 CEOs a million dollar bonus.

This is repeated over and over. For example, the oil industry in one recent year gave $23 million in campaign contributions and got nearly $9 billion in tax breaks.

The bottom line is this: if you want to save public money, support public campaign financing.

My final objection is biologic. Elections are for and between human beings. How do you tell when you’re dealing with a person? Well, they bleed, burp, wiggle their toes and have sex. They register for the draft. They register to vote. They watch MTV. They go to prison and they have babies and cancer. Eventually they die and are buried or cremated.

Now this may seem obvious to you, but there are tens of thousands of lawyers and judges and politicians who simply don’t believe it. They will tell you that a corporation is a person, based on a corrupt Supreme Court interpretation of the 14th Amendment from back in the robber baron era of the late 19th century — a time in many ways not unlike our own.

Before this ruling, everyone knew what a person was just as everyone knew what a bribe was. States regulated corporations because they were legal fictions lacking not only blood and bones, but conscience, morality, and free will. But then the leg of mutton became a turnip in the eyes of the law.

Corporations say they just want to be treated like people, but that’s not true. Test it out. Try to exercise your free speech on the property of a corporation just like they exercise theirs in your election. You’ll find out quickly who is more of a person. We can take care of this biologic problem by applying a simple literary solution: tell the truth. A corporation is not a person and should not be allowed to be called one under the law.

I close with this thought. The people who work in the building behind us have learned to count money ahead of votes. It is time to chase the money changers out of the temple. But how? After all, getting Congress to adopt publicly funded campaigns is like trying to get the Mafia to adopt the Ten Commandments as its mission statement. I would suggest that while fighting this difficult battle there is something we can do starting tomorrow. We can pull together every decent organization and individual in communities all over America — the churches, activist organizations, social service groups, moral business people, concerned citizens — and begin drafting a code of conduct for politicians. We do not have to wait for any legislature.

If we do this right, if we form true broad-based coalitions of decency, then the politicians will ignore us only at their peril.

At root, dear friends, our problem is that politicians have come to have more fear of their campaign contributors than they have of the voters. We have to teach politicians to be afraid of us again. And nothing will do it better than a coming together of a righteously outraged and unified constituency demanding an end to bribery of politicians, whether it occurs before, during, or after a campaign.

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