The Ironic Failure of Campaign Finance Reform

by Peter Bearse







At the time of this writing, at the end of February, 2002, as the U.S. Senate prepares to vote on campaign finance reform (hereafter, abbreviated “CFR”), it helps to recall:


Ø      The primary season of the year 2000 Presidential race, and…

Ø      The fact that the state level has been the source of major initiatives for reform (an especially important fact in a federal system). 


These recollections are important because the major issue is whether CFR will suffice to bring people, as citizen volunteers contributing their time, back into the political picture or whether CFR will simply certify the continued dominance of politics as a money game played by “them” and not “us.”


The Federal Level


For awhile during year 2000 (Y2K), it seemed as if “reform” might be the prime driver of the  political season. Words resonant of the Progressive Era of 100 years ago brought out thousands of new, young and independent voters, putting life into a race that was not seen during the previous Presidential election year. The challengers attracting media and primary voters’ attention – John McCain and Bill Bradley – were on message re: reform like Frik and Frak.


Looking back, who among us has not noticed a disconnect between early and late Y2K and between Y2K and now in terms other than number of months passed? The early Presidential primary season was marked by political participation in New Hampshire that could nearly darn well be called populist. People from all over and many walks of life converged on the Granite state to walk, talk, mail, call and otherwise work for various Presidential candidates, not only McCain but Bradley, Forbes, Keyes and others. Old fashioned people politics seemed to be back with new faces and flavors. Now click on the early 2002 political channel. What do you see? – The people appear to have left the scene. The reform issue has been reduced to “McCain-Feingold” and “Shays-Meehan,” bills that mention only money. What happened to all the political volunteers that we saw in New Hampshire, those who thought the political process might still have some life left in it after all?


During the earlier Senate debate on CFR, no one seemed to notice how even the most populist pretenders among the Senators failed to define the issue to bring people back into the picture. There were two exceptions that prove the rule – Barbara Mikulski and Paul Wellstone. Especially Barbara. Her nostalgia was eloquent. She recalled how, with the help of political volunteers in Baltimore at the outset of her political career, she knocked on 10,000 doors to “beat the machine” and win a seat on City Council. But did she move from this recollection to observe how there seemed to be no room for volunteers in the “reform”(ed) political future envisaged by McCain-Feingold? No. 


Sen. Wellstone’s performance during the debates was marked by introduction of an amendment that promised to link CFR at the federal level with state initiatives -- an amendment to give states the option of extending public financing to federal office candidacies. This amendment failed even though supporters were able to point admiringly to the “Maine model” and use a “states rights” wrapper, rhetorically embellished by some Senatorial rappers.


The only concern expressed for people’s time as a resource in politics was a concern for Senators’ time – the time they need to spend (too much) raising money (too much) in order to finance multi-million dollar campaigns. The value of time contributed by political volunteers had disappeared from their radar screens as a result of “the money chase.” In the old days, candidates would spend more time calling for volunteers than dialing for dollars. The Senators felt free to blame TV for most of the time they had to spend fund raising to feed the maw of the media. None of them, however, felt strongly enough to introduce an amendment calling for even minimal allocations of free TV time to enable them to “get their message out.”


Yet the CHRISTIAN SCIENCE MONITOR concluded, immediately after U.S. Senate passage of McCain-Feingold as amended:


“Perhaps the biggest benefit of this legislation: Citizens might feel they can return to civic participation in this new political space created by the lessening of money influence in Washington…the American people can…lose some cynicism, and more actively participate in national politics.” (1)


This statement is exceptional but it’s also a reach. There is little basis for it. One can only hope that it turns out to be more than an article of Christian Science faith.


Thus, President Bush should veto the so-called “reform” legislation just passed by the House if it reaches his desk. It is not reform. It is a fraud on the public, a charade to give people the impression that the political system is being changed in “the people’s” interest. Instead of reducing the influence of money in politics and bringing people back into the picture, it legitimizes and institutionalizes the domination of politics by the incestuous mix of money and media that politics has long since become.


If the American people want a politics of, for and by people rather than monied special interests, they will now have to work to take it back themselves. There are only two things that count: money and time. If people, most of whom don’t have money to contribute to political parties and campaigns, don’t belly up to the bar of political activity in their communities -- to volunteer time to political parties and/or campaigns, then money necessarily dominates and the influence of people is less. This is the way things have been going for years – increasing money contributions, decreasing people contributions. You want access and influence with a politician? If you work for a party or candidate who wins, you’ll have it. 


So, fellow Americans: turn off the TV, get off the couch, become a public citizen and look to participate in the political life of your community. Look for a local political committee club or campaign of some sort. Volunteer time as time permits. Pitch in. Press parties’ state committees to provide money to arm you and other volunteers with the resources and stuff you need to socialize, convene forums on issues, inform voters, get out the vote and do other things worth doing in your communities.


If President Bush does sign the new campaign finance legislation, we should try to take advantage of one part of it that, potentially, could help revive grass roots political participation – the part that allows “soft money” contributions of up to $10,000 to state and local party organizations. We need to make sure that this is used as soft money was originally supposed to be used, anyway, to support the activities of ordinary people in politics, not those of expensive political consultants. The latter have taken over, for private benefit, those political activities that used to involve the public = real people in real places before they vacated the political scene to leave the game to others.


There’s an old saying, here paraphrased: ‘If good people stand aside, the fools, assholes, thieves and turkeys take over.’ In other words, if we shy away from involvement in the political process of our democratic system because we think politicians are a bunch of lemons, then we won’t get lemonade, the system will just go sour. Is that what we want, a democratic system that is still the light of the world to be destroyed from within by apathy, laziness or indifference?


So, political reform is up to us. Our precious democratic republic cannot be saved by an Act of Congress. We either get back in and force “the system” to respond to us by our presence as political actors rather than just spectators or “our” politics will not be ours at all. It will continue to be an increasingly undemocratic money game dominated by the so-called “political class.” Then we all lose.(2)


The State Level


Lest McCain-Feingold be seen as the be-all and end-all of reform in legislative terms, let us note that the most energetic and extensive efforts at reform have been occurring at the state and local level. Sub-national units of government have been called “laboratories of innovation” in a federal system.(3) As already noted, the “Maine model” earned a good deal of attention during debates on one of the Wellstone amendments to McCain-Feingold. The state efforts have come to focus primarily on so-called “Clean Money” ballot initiatives which, somewhat ironically, try to take money out of politics by substituting public money for private. Such initiatives have been passed, not only in Maine, but in Arizona, Massachusetts and Vermont. In the past, similar initiatives have been passed in New York City, New Jersey, Minnesota and a few other places without relying on the apochryphal “Clean Money” billing. The latter seems to suggest the political counterpart of “Good Housekeeping.”


It helps to have an ironic sense of humor regarding “reform,” for ironies abound. Another is that the Clean Money ballot initiatives that have succeeded owe their success to political volunteers doing old-fashioned people-to-people, door-to-door, street-wise politics –  canvassing, getting signatures, writing letters to editors and getting out the vote. It’s interesting to note that many of these volunteers arrive in buses from locations outside the state where the initiative would be voted on by in-state voters, but that’s another issue which we can table for now. What’s even more interesting is that the interest in political volunteerism seems to wane once initiatives are passed. Politics is still a money game but it’s played with someone else’s money.


Consider the highly touted “Maine model,” for example. How do its admirers measure its reputed success? Let us count the ways. Quoting statistics on people’s political participation – to see whether the “reform” may have led it to increase – this is not among them. The primary indicators are otherwise – increases in numbers of candidates and seats contested. So let us sing hosannas for reform – the fact that we have increased political opportunities for the usual suspects – the already politically self-interested – to run for office and build their political careers at lower cost to themselves, their families and their friends.


However, we probably should not sneer at the Maine performance benchmark in a state like Massachusetts where are so few competitive races for state offices and the disease has been spreading to the local level.(4) As one columnist noted:


“In both 1998 and 2000, Massachusetts was tied for last among the 50 states in the percentage of contested primary races. Last. Virtually the entire Legislature and congressional delegation returned to office on a pass.”(5)


This columnist also remarked on frequent references to “the will of the people” by proponents of the Clean Election Law – “a well-intentioned if deeply flawed effort to reduce the decisive role money plays in state politics.” Many would challenge use of the word “decisive” here but not the phrase “deeply flawed.” One flaw is that the “Law” recognizes candidates but not parties as actors in electoral politics. It would provide no public funding to or through political parties even though the ballot question as worded would not preclude a law enacted by the Legislature from doing so.(6) “Clean Money” would go only to candidates, thus further diminishing the role of parties in the political process. Reliance upon initiative and referendum (I&R) as the primary tool of reform undermines the role of parties in the first instance, even before an initiative would take effect if passed. In Massachusetts, ex-Governor Cellucci is recognized as someone who successfully promoted the use of I&R but who whose leadership of the state GOP served to further undermine his already weak party.


Many political scientists have pointed to the undemocratic nature of “plebiscitary” democracy via I&R – another irony that should earn a frown rather than a smirk. So, here is yet “another nail in the coffins of parties” brought about through “well-intentioned” efforts of those characterized as “reformers” by media writers who understand no more of the political process than the reformers do.


More generally, the debate over Clean Elections initiatives features those who favor “direct democracy” vs. those who respect the fact that American governments at all levels, constitutionally, are representative democracies. Another basic controversy implicit in the debate is that between “public” and run-of-the-mill journalism. Journalists like the one last quoted did nothing to probe the issue sufficiently to inform the public before they voted on it. Then, when the voting is over, they hide behind the “popular will” as sufficient justification for ex-post rationalization of an initiative that some recognize as “deeply flawed.”   


Yet another irony seems to have escaped observers of state reformers’ efforts even though it is well known to public finance economists. This is that the introduction of significant amounts of public money into some segment of the political economy almost invariably has an inflationary effect. Goods and services purchased with public money tend to increase in price faster than the CPI. U.S. Senators participating in the CFR debate called attention to political inflationary factors in a situation where the only public money has been that committed to Presidential campaigns but where the prime driver has been heavy infusions of private “soft money.” Thus, Clean Money reformers, like others who have to face the lessons of past reform history, can anticipate seeing their initiatives fulfill the “law of unintended consequences.” By centering their reforms on money, they will increase the cost of campaigns and make them more, not less, dependent upon money over time.


The latter irony does not begin to speak to yet another. Reformers, most of whom are fundamentally apolitical because they view politics as “dirty,” are putting “Clean” campaign financing increasingly at the mercy of politicians. At some point, once all the reformers’ hype and media attention to it blows over, state legislatures will be increasingly reluctant to budget public money for private campaigns. This was the case in Massachusetts even at the beginning of Clean Money initiative implementation, when the state’s Supreme Judicial Court had to step in, as noted further on.


The field of public finance also helps to provide some additional perspective on the issue of taxpayer subsidies for political campaigns. This is the so-called “dead weight” issue. Subsidies are a wasteful “dead weight” to the extent that they subsidize activity that would have been undertaken anyway. There’s a lot of this in Clean Elections. Nearly all incumbents would be running for re-election. They’re subsidized, along with a significant portion of politically interested others who would run for office even if public funding weren’t provided. Especially from an economist’s standpoint, it’s pretty amazing that this issue was not raised in the Clean Elections debate in Massachusetts. Already, in a state where the legislature will have to appropriate at least $10 million to initially implement the “Law” (if it appropriates anything at all), there are complaints from proponents that Clean Elections would be under-funded at a level of $23 million. Given the “inflationary” issue already noted, the amount of subsidy is likely to be a bone of contention in the Legislature year after year.


Given the high degree to which the overall elections’ subsidy is “dead weight,” an economist would have to conclude that Clean Elections is a pretty inefficient solution to the campaign financing problem. In a way, that’s not surprising, since the costs and benefits of people’s time hasn’t been figured into any overall cost/benefit analysis (there hasn’t been one). What’s ironic here (and once again) is that reformers tend to want “efficiency” in politics.(7) Shall we count “inefficiency” as another example of “the law of unintended consequences” that has plagued CFR initiatives all along?


The Latest Episode in the Massachusetts CFR Drama


Clean elections supporters in Massachusetts, justifiably upset at the state legislature’s attempts to torpedo the initiative passed by nearly two-thirds of those voting on it, filed a suit that was legally known as “Kelly Bates & others vs. Director of the Office of Campaign and Political Finance & another.” This immediately came before the state’s highest court, the Supreme Judicial Court (SJC).


Without dishonoring voters’ approval via "popular initiative" (Article 48) calling for partial public financing of elections – “the clean elections law” (G.L. c. 55A) --  the SJC had the power to make recommendations to the legislature that would provide remedies to some of the difficulties posed by the law and the funding called for to effect its implementation. Proposals for “additional and further remedies” invited by the Court  included the following, as presented by the author of this article in a “friend of the Court” memorandum to the Chief Justice:

¨      That the public financing in question be provided only to political parties who have already earned ballot positions, then to be distributed from such parties to candidates that qualify consistent with the initiative petition as approved by the voters;

¨      That Commonwealth budgetary resources that are very limited at this time be conserved by awarding public funds to parties on a challenge or matching grant formula basis; e.g., that the Commonwealth would provide one dollar for every two dollars raised by a qualifying party from other sources, up to a total of $10 million to all parties involved; and that…

¨      Recipient parties would leverage their financial resources by using at least one-half of the public funds they receive, not for costly electronic media or newspaper advertising, but to recruit political volunteers and to purchase campaign materials that would be distributed by volunteers.


Thus, the mandate to bring public financing into campaign finance could be honored, state budget resources for this purpose could be conserved, the incentive for people to participate in electoral politics could be increased, and political parties could be strengthened. Unfortunately, “could” along with “would” or “should” doesn’t get us anywhere. Suffice to say that the SJC did not adopt the author’s recommendations. Rather, the Court ruled that individual candidates who wanted to run under Clean Elections rules could apply to the Court for the public financing they could earn if they followed the rules. There is still no attention to political parties.(8)

The recommendations sprang from two troubling sources of concern that are still valid even if the recommendations themselves, for the time being, are moot in Massachusetts:


1.      The weakness of Clean Elections initiatives noted earlier, especially that they would aggravate the growing weakness of political parties.

2.      Signs of deterioration in our state and local democracy that have been evident for some time in a state whose democratic system used to be a model for the nation; specifically:


Ø         Decreasing, and less than majority, turnouts in most elections, especially in primary and special elections.

Ø         Rising disaffection with political parties, evidenced by the fact that the “unenrolled” have become the largest group of registered voters.

Ø         Increasing numbers of uncontested seats, distrust of government and an increasingly low public opinion of the state legislature;

Ø         Single-digit percentages of the electorate participating in electoral politics as volunteers who contribute their time – percentages even less than the single-digit percentages who contribute $200 or more to political campaigns.

Ø         Increasing domination of parties by big money donors.

Ø         Deterioration of local political party infrastructures, as evidenced by:

·                 Increasing inability of local party committees to fill vacant membership slots allowed by law, leading to significant numbers and proportions of unfilled slots;

·                 Decreasing numbers and percentages of members of local party committees that are active; and

·                 Other indicators, too numerous to mention in this brief memorandum, that can be found in Chapter 5 of a forthcoming book by the author of this article entitled LABORING IN THE VINEYARDS, as well as in other published sources. Chapter 5 is based upon a survey of local political party committee chairs nationwide, including a significant sample from Massachusetts.


Thus, there are not only good state constitutional reasons for the SJC to support the Clean Elections initiative; there are also strong reasons to do so in a way that would help to bring people back into the political process as well as reduce the influence of large monetary contributions, consistent with the basic goals of the Clean Elections initiative.




Overall, the most important legislative common denominator between the federal-level

McCain-Feingold and state-level Clean Money reform initiatives is clear: They both certify the dominance of money in politics and further diminish the importance of people. The latter irony is not funny at all. It is rather threatening to the future of our democratic republic.


Recall the remarks of Ben Franklin to those waiting to hear the results of the founders’ Constitutional Convention. When asked what the Convention had accomplished, he responded: “A Republic, if you can keep it.” The danger of losing it is further aggravated by the fact that so-called reforms at both levels will weaken parties that are already weak at the grass roots – with respect to their local party committee foundations. Traditionally, these committees have relied heavily upon volunteers. It is also ironic that McCain-Feingold would ban “soft money” that was intended for “party building” and could have been devoted to such activities by re-directing rather than banning it.

During the Senate debate on the Hagel amendment to McCain-Feingold (S.27), Senators Hagel and McConnell pointed to the negative consequences of the bill for political parties – another state / federal “common denominator.” Unfortunately, as indicated earlier, the negative consequences of state-level reforms for parties has not figured in debates over Clean Money initiatives even though they are potentially more adverse. Without strong parties, how is the great American majority of unorganized, unaffiliated, “independent” individuals to make a difference in the political process? The answer is: They won’t. They will be effectively dis-empowered -- “spectators” of the political game and consumers of pundits’ political pablum, their role simply that of voters for the “usual suspects,” not that of citizen producers or political players. Some years hence, when it becomes amply clear that the political class can’t do it all for us, there will be hell to pay as the class minority faces an angry majority. 



Peter Bearse, Ph.D., 16 Broad St., Merrimac, MA 01860, Member, Business Advisory Council, Campaign Reform Project / Campaign for America and author of LABORING IN THE VINEYARDS or: The People, Yes! How “ordinary” can make a difference – through politics” (forthcoming later this year).




(1) Editorial: “The Senate Shows the Way” (Monday, April 2, 2001).

(2) The latter several paragraphs borrow from a letter to the editor by the author entitled “Political reform is up to us, the people” published by the (Newburyport, MA) DAILY NEWS (February 19, 2002).

(3) Following David Osborne’s book: LABORATORIES OF DEMOCRACY, Harvard Business School Publishing (1990).

(4) Although Massachusetts is a particularly bad example, the problem noted here is not peculiar to that state. The “supply side” of politics is drying up along with the grassroots of political participation in most states. Reader: Look to your own. You may see increasing numbers of uncontested races and a lack of people stepping forward to run for offices at all levels except the highest.

(5) Walker, Adrian (2001), “The Will of the People?,” BOSTON GLOBE (March 1, 2001).

(6) As also suggested by the example of another  state, Minnesota, whose enactment of state campaign finance reforms including public financing precedes the recent wave of  “Clean Elections” initiatives. Tony Sutton, Executive Director of the Minnesota Republican Party, reported: “not only candidates but parties take public money in Minnesota. A press release from the Campaign Finance and Public Disclosure Board said: For the 1999 tax year…$72,630 was distributed to the state parties…” E-mail to the “Politalk” e-forum on campaign finance reform (3/2/2001). Yet, even here, the parties’ role is quite minimal. $72,630 is only 6.6% of the total public finance disbursements under the Minnesota elections statute in 1999.

(7) This is a sharp insight of Wilhelm (1985) arising from his discussion of CFR and time in his book DEMOCRACY AND THE DIGITAL AGE.

(8) See “SJC orders remedy for Clean Elections candidates,” in the (Newburyport, MA) DAILY NEWS (February 26, 2002), accessible online via