Campaign Finance Reform

While the issue of campaign finance reform barely registers in public opinion polls, many politicians and the media tell us reform is critical to the future of democracy in America. It is clear, however, that they believe that is true only insofar as we accept the version of reform demanded by these same politicians and the media — public financing, contribution and expenditure limits, extensive regulation, and even prohibitions on issue advocacy and independent expenditures.

This version of reform will have little impact other than to stifle political debate and to further corrupt our political system. The legislature has created artificial restrictions on speech and artificial limits on contribution levels. The First Amendment's protection of speech, to many, is simply seen as an inconvenience. Political speech is under attack.

Serious reformers should accomplish the effectiveliberation of campaigns and elections from arbitrary limits on the flow of money, information, and access.

Money is Vital to Democratic Elections

Money is part of the system and always will be. Money allows candidates to get their messages out and allows challengers to compete with incumbents.

As the U.S. Supreme Court in Buckley v. Valeo stated: "A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached. This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money."

Money supports campaign advertising. A recent article in the American Journal of Political Science stated: "Specifically, our findings show that exposure to campaign advertising produces citizens who are more interested in the election, have more say about the candidates, are more familiar with who is running, and ultimately, are more likely to vote."

Unethical System v. Unethical Behavior

Many reformers want to "fix" the campaign finance system by continually restricting the ability of candidates to raise the money necessary for political speech. They also want to do whatever they can to undermine the speech of independent organizations that support candidates.

Ironically, by creating artificial restrictions (such as contribution limits) on activities that are neither wrong nor immoral, the reforms themselves increase the number of lawbreakers and unethical behavior. That serves only to decrease the faith citizens have in the political system. It becomes a vicious circle: the legislature passes artificial restrictions to address the illegal behavior caused by the artificial restrictions that the legislature created in the first place.

The behavior is unethical only because it is illegal, not because it is wrong in and of itself. For example, a candidate who receives contributions above what the law allows is doing something illegal. It certainly should not be condoned. But it is hard to argue that if it were legal, trying to fund a campaign to support one's speech is somehow morally wrong.

In fact, the moral wrong is government limiting funding and thereby political speech.

North Carolina's Failed Taxpayer-Funded Judicial Campaign System

Public financing — more accurately called taxpayer financing — is a "cute" way to get around campaign contribution limits. The idea behind the system is that candidates for appellate judgeships get taxpayer funding in return for agreeing to limit their spending. If their "traditional" opponents (those who do not take taxpayer money) spend beyond a certain level, the subsidized candidate gets additional taxpayer funds — called "rescue funds" — to counter their opponents.

This system has been a disaster. It was supposed to be funded voluntarily, but because there was so little support, the legislature instead took General Fund dollars to subsidize the system.

Besides usually meaning higher taxes, taxpayer financing has serious First Amendment free-speech problems. When taxpayers subsidize candidates, they are funding at least some candidates and speech they oppose. If that is not illegal, it is unethical, because they are being forced to support candidates and speech they don't believe in.

A candidate who doesn't take taxpayer subsidies might curtail his own political speech, because in spending a certain level of money to support his message, he would find himself funding the opposition. That effect is chilling speech. Even worse, the "rescue fund" system actually could allow a taxpayer-subsidized candidate to spend more than a traditional candidate — and still receive rescue funds.

Despite this failed system, in 2007, the legislature expanded taxpayer financing through a pilot program that covers three Council of State races: state auditor, insurance commissioner, and superintendent of public instruction.

Common Campaign-Finance Myths

Creating equality in funding is good for democracy. The U.S. Supreme Court in the 2008 case Davis v. FEC, which may provide the basis for striking down the public financing laws, explained "in Buckley we held that '[t]he interest in equalizing the financial resources of candidates' did not provide a 'justification for restricting' candidates' overall campaign expenditures, particularly where equalization 'might serve...to handicap a candidate who lacked substantial name recognition or exposure of his views before the start of the campaign.'"

Equalization means an artificial spending limit is keeping a candidate from spending money to advertise and educate voters. In creating an artificial limit, legislators, some acting in their own self-interests, are determining what is an appropriate amount of money to be spent in all elections. They could try to set up low limits that might make it easier for incumbents to win elections.

The only democratic way of funding is to allow citizens to decide for themselves whom to assist financially. If a candidate does not have support and is unable to raise money, that is a good thing, not a bad thing. This ensures only credible candidates are on the ballot. At least citizens and not legislators will be making funding decisions.

Taxpayer-financed systems lead to more faith in government. The belief is that a state that took the drastic step of taxpayer financing would see a significant increase in citizens' confidence in state government. But a GAO report on the early experiences of Arizona and Maine with their taxpayer-financed systems found the following: In Arizona, only 21 percent had more confidence in state government, while 33 percent said the system had no effect and 15 percent said they had less confidence. The findings were basically the same in Maine. Only 17 percent had more confidence, 39 percent said the system had no effect, and 8 percent said they had less confidence.

Recommendations

1. First and foremost, protect political speech.

2. Policymakers should follow a simple rule when considering campaign finance reform: If the reform undermines freedom of speech, then disregard it.

3. Disclosure should be the cornerstone of campaign finance reform. Require full and immediate disclosure of all contributions to state campaigns. If campaign treasurers say they cannot comply with this rule because they do not keep their records on a computer, give them an order form and even a coupon if need be for the appropriate software. No excuses.

4. The State Board of Elections needs to compile and organize the campaign finance data so it is easily searchable on the Internet, so anyone can quickly find what they are looking for. Currently, the data are provided through large files that certainly are not user-friendly. Disclosure is effective only if people can make sense of the reported data.

5. Public officials worried about the corrupting influence of campaign contributions should work diligently to decrease the reach and authority of government at all levels so that so-called "special interests" will no longer feel required to curry favor with legislators and executive branch officials.

6. Keep it simple. Recognize that money is going to be part of the system. Do not fight this reality by wishing it away with bad legislation. With clear disclosure rules and without artificial barriers to obtaining contributions, the system will work better.