RALEIGH – The self-styled advocates of campaign-finance reform are upset about the prominence of independent expenditures in the 2010 election cycle.
They are particularly incensed about the fact that 501(c)(4) groups – which are not political committees or organizations and can thus keep their donor lists confidential as long as political activities aren’t their primary purpose – are spending millions of dollars informing voters about the voting histories and positions of liberal lawmakers in competitive races.
These left-wing activists want to blame shadowy corporate interests, the dastardly Republicans, and the U.S. Supreme Court for the increasing influence of these groups. If they want to see the people most responsible for the situation, however, they need only look in a mirror.
The reason that independent expenditures have been soaring over the past decade is that the McCain-Feingold law restricted the flow of large contributions to the two main political parties. Because interest groups across the political spectrum – from business and industry associations to physicians, lawyers, unions, and government contractors – will always want to shape election results to their own liking, campaign-finance reform was never going to “get big money out of politics,” as its proponents claimed. It was merely going to change the nature of the money flow.
In response to McCain-Feingold, large donors at first steered their money into 527 organizations, which are explicitly political groups that face reporting requirements similar to other political actors such as campaigns and parties. After the 2004 election, during which left-wing donors had sent massive amounts through 527s in a losing effort to stop George W. Bush’s reelection, the Left went in a different direction.
As reported on extensively by the mainstream and conservative media, the Left’s strategy included the creation of new 501(c)(3) think tanks and policy shops, 501(c)(4) activist groups, donor circles, consulting firms, polling and message outfits, and database vendors that sought to share voter files among an array of explicitly political and ostensibly nonpolitical organizations.
Much of the Left’s new infrastructure wasn’t just funded by donors operating behind the (entirely legal) 501(c) shield of confidentiality, but also involved tax-deductible contributions from major liberal foundations and philanthropists. Contrary to popular myth, the ideological Left has long enjoyed more funding than the ideological Right.
Interestingly, few of the campaign-finance reform activists complained about the construction of this new infrastructure for liberal activism and politics, even as it helped set the stage for the Democratic takeover of Congress in 2006 and Barack Obama’s election in 2008. Perhaps that was because these activists were themselves part of the liberal infrastructure – funded by the Left, allied to the Left, and apparently engaged in the very coordination of politics and activism that one might have expected them to condemn.
Now that conservative-leaning donors and business groups have followed suit for the 2010 cycle, by adding active (c)(4) arms to preexisting groups such as the U.S. Chamber of Commerce and creating new ones like Crossroads GPS, campaign-finance activists are crying foul. Convenient.
The underlying policy issue isn’t as clear-cut as they’d like to make it. Obviously, there is a strong argument for disclosure rules in political campaigns. I believe that public is entitled to know who is funding campaigns, parties, and political committees. It’s a way to uncover or deter corruption, and it gives voters information they can use to choose the candidates who will represent them in federal, state, or local office.
At the same time, though, there is a strong argument for protecting the confidentiality of donors or members of public-interest groups, even groups whose work may sometimes influence the political debate. The key Supreme Court case on the issue dates back nearly 50 years, and involved the state of Alabama demanding the membership list of the NAACP. The Court, properly, said no.
The rights to privacy and association are no less important today. Why should a person who contributes to an activist group for abortion rights, gun rights, tax limitation, or environmental protection be identified, under penalty of law, if the organization they support happens to express views during campaign season?
The current controversy involves organizations that are somewhere in-between these poles – such as 501(c)(4)s that send mailers or run broadcast ads about candidates. North Carolina already requires these groups to report the identity of their top donors if they engage in “electioneering,” and some liberals want federal and state law to go further. They reason that if a group chooses to send mailers or run ads, it has crossed the line from activism to politics.
But what about 501(c) groups that publish opinionated newsletters or websites, send mass emails, hold public events, or run voter-registration drives aimed at groups likely to support their positions? It’s not clear to me why donors to these projects should be granted confidentiality while donors to other communications and outreach projects with potential political import are denied it.
There’s a simpler solution – one consistent with freedom of speech, freedom of association, and the preferences of voters and candidates. Repeal McCain-Feingold and other laws blocking major donors from giving as much as they like to the parties and candidates of their choice, as long as the gifts are fully disclosed.
Some of us argued against McCain-Feingold at the time, predicting that it would chase political money into the shadows. We were right. Let’s bring it back into the sunlight.
Hood is president of the John Locke Foundation.