National Catholic Reporter
The Independent Newsweekly
Issue Date:  March 19, 2004

'527s': A new way to purchase politicians

“Elections must be more than auctions, and money must no longer drown out the role of citizens in our democracy.” -- Sen. John F. Kerry

Is it hopelessly naive to believe that the process by which we elect a president (or a member of Congress or governor) matters? To believe that how we choose the person who will lead this country has much to do with the way that person will govern?

It used to be said in Washington that money -- campaign contributions -- bought access, but not necessarily results. No sensible person believes that anymore (if they ever really did).

Take the most recent Medicare “reform” bill. That legislation forbids the federal government from negotiating with drug companies to lower the cost of prescription medicines seniors need to live. Why? Because Congressional Republicans and the White House know not to cross an industry that provided $22 million to their campaign coffers in 2000 (while Democrats got a paltry $7.6 million from the same industry).

The list is endless. Looking for a tough crackdown on Wall Street corruption? Don’t hold your breath. In the 2004 election cycle, the financial services industry (securities firms, real estate interests and insurance companies) is bankrolling the U.S. electoral process to the tune of $112 million -- $70 million to Republicans, $42 million to Democrats. Imagine how much more influence they can buy in the eight months still to go before the election.

These contributions are a cost of doing business to corporate and other special interest groups. They are smart people; they know they will get return on their investment.

And now we have the specter of unregulated, unlimited interest groups -- called “527s” for the section of the loophole-ridden tax code under which they are created -- funding the parallel campaign of presumptive Democratic nominee John Kerry (see story). Kerry, you see, despite having opted out of the federal campaign financing system during the Democratic primaries, is short of cash.

Reliance on these 527s certainly violates the spirit -- and we think the letter -- of the 2002 McCain-Feingold campaign reform legislation. But the agency that is supposed to enforce that law, the Federal Election Commission, is worse than a toothless tiger. It’s a pussycat.

Look for the commission to levy fines after the election.

Meanwhile, President Bush has raised nearly $150 million -- money he must spend or give to the Republican Party before the Republican convention later this summer. Bush, too, opted out of the federal financing system during the Republican primaries. (And, yes, technically there were Republican primaries.) Does Bush really need this much money given that he is unopposed for his party’s nomination?

Both Bush and Kerry will likely accept federal financing for their general election campaigns -- which will cost taxpayers a total of another $150 million.

What to do?

Several states -- Vermont and Arizona among them -- have enacted campaign finance laws that limit the impact of corporate and special interest money. Under these systems, candidates reach a threshold level of contributions from small contributors and then every dollar after that is matched through a public financing system.

Is it perfect? No. There are problems. The system, for example, seems to encourage marginal candidates to get in a race in order to get the matching funds.

But such a system could be the basis for genuine reform. And it certainly would be a vast improvement on the current model, which is, in a word, corrupt.

National Catholic Reporter, March 19, 2004

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