Commentary

A Well Endowed Democracy

By Derrick A. Max
This article originally appeared on National Review Online, April 4, 2000.
Forget whether or not Al Gore is a “fit messenger” on campaign finance reform. Forget his fateful grasp of what constitutes “controlling legal authority.” Forget the issue of poverty-pledged monks doling out cash from their sedate monasteries in California. Forget Al Gore’s iced tea induced potty breaks that caused him to miss significant parts of campaign meetings where legally questionable material may have been discussed. Forget the hordes of foreign donors who have fled the country to escape being questioned or indicted and convicted like Maria Hsia. None of this ultimately matters.

What does matter is that our current system of campaign financing is terribly broken and that the future of our Democracy may well rest on its repair. With Democracy in the balance, I don’t care if Al Gore or Al Capone comes forward with a workable repair — what matters is that a solution be found, and be found quickly. Unfortunately, Al Gore’s newly released campaign finance plan, while grand in its design, will only further damage our already teetering system.

Gore’s proposal begins with the constitutionally-challenged “reform” idea found at the center of every major campaign reform legislation considered (and rejected) to date: a ban on soft money. Because the criticisms of banning soft money are well documented elsewhere, I will merely say that the Supreme Court has repeatedly rejected bans on soft money and has struck down any and all restrictions on spending that are not directly related to the election or defeat of a particular candidate. In short, the first amendment protects the rights of individuals to spend their money to further their ideals as long as that money is tied to the issues and not to the election or defeat of the candidate that espouses and defends those ideals.

The more troubling aspect of Gore’s proposal is his desire to confiscate public airways to “encourage” broadcasters to “voluntarily” provide free air-time to all candidates seeking federal office and to supplement this free-air time with additional time for those candidates targeted by issue ads. This infringement (through strong arm tactics) on the private property rights of broadcasters is troubling enough — but one wonders what rules will be established to determine who qualifies for the free time, what will qualify as “issue advertising” and what level of attack from special interests will qualify for the bonus of even more “free” air time to counter the constitutionally protected speech of others.

The answer to this and many other questions may lie in the more novel aspect of Gore’s new proposal — the establishment of a Democracy Endowment. According to Gore, the Democracy Endowment would be a privately funded endowment established to finance the campaigns of any candidate that agreed to voluntarily limit his or her spending to the amount made available through the Endowment. Unfortunately, I fear this endowment would do for democracy what the National Endowment for the Arts has done for artistic expression — but instead of making a mockery of art through urine stained crosses or chocolate clad dancers, this endowment would make a mockery of the constitution by gutting the first and fifth amendments.

According to Gore, the Democracy Endowment would be funded through 100 percent deductible contributions from private individuals and organizations. The Endowment would need to raise $7.1 billion over the next seven years at a cost to the federal government of $2.13 billion (in lost tax revenue). The interest earned from the endowment would then be used to fund the biannual costs of congressional campaigns. Interestingly, if the Endowment fails to attract its targeted $7.1 billion (an amount in excess of all spending on Congressional campaigns over the last decade combined), Gore plans to outright confiscate airtime from private television and radio broadcasters to make up the difference. On this point, Gore gets extra credit for honesty.

While touted as a “public-private” partnership, the only private part of the Gore proposal is it’s financing (which will never materialize). In order to have the powers necessary to confiscate private airtime and to be able to design, monitor and enforce a new campaign-spending scheme, the Endowment would have to be deputized as another powerful agency of the Federal government.

In the end, it would be unlikely that the Democracy Endowment would be able to raise the targeted amount and thus it would need to confiscate inordinate amounts of airtime from television and radio. The burden of this task, and the likely outcry from cash-strapped broadcasters carrying copies of the Fifth Amendment would ultimately lead the Endowment to seek direct taxpayer support for its “worthy” cause. The back door of public funding, having been opened through the enticing rhetoric of a “voluntary” and “private” endowment, would have been finally entered. Public funding would be here to stay.

It is without question that the Democracy Endowment in its ultimate form, much like the public funding of Presidential campaigns, would further entrench the two party system and give greater advantage to incumbents. It would be likely to overfund less deserving candidates and underfund more needy candidates with lower name recognition and more complex views. Al Gore is correct on one point — our Democracy needs well-endowed campaigns. Unfortunately, this does not mean a single, oversized, government-run entity with new police powers, handing out meager amounts of cash based on some census formula. Instead, we need to lift the restrictions on current campaigns and allow larger donations to flow into our electoral system. While this may seem counterintuitive to the uninitiated, it is burdensome campaign restrictions that have led to the numerous and well documented outrages of the past few election cycles and are at the core of the demise of our campaign financing system.

In fact, it is the ridiculously low donation limits that force candidates to stretch campaign laws in an effort to fill ten-foot deep campaign coffers one spoonful at a time. It is low limits that cause candidates to spend an inordinate amount of time on the rubber chicken “fundraising circuit” — where being “all things to all people” and doling out promises to wealthy interests on both sides of almost every issue is rewarded handsomely. This need to raise funds in such small increments prolongs the campaign season and discourages good candidates from seeking federal office. No wonder voters are turned off and are tuning out in increasing numbers.

Instead of addressing this fundamental problem, Al Gore, George W. and the McCain cabal continue to seek the “reform” moniker by proposing new and burdensome campaign restrictions, which all but obliterate the first amendment. Real campaign reform is simple: remove (or at least significantly increase) donor limits and require immediate and full disclosure of the source of all donations. This simple reform will lead to well endowed campaigns, will increase the volume and quality of the information provided to voters and will ultimately lead to an improved democracy.

Derrick A. Max is director of government affairs for the Cato Institute.