"Campaign Finance Reform and Connect the Dots"

My essay at The Blog from the Core, Monday, February 18, 2002.

I don't know if you'll care for the style, but I think my analysis holds up pretty well.

It’s that time of the year. If I told you I woke up with a headache this morning, and I’m so dizzy today that I can hardly stand without falling, you’d probably commiserate and say, “Got that nasty flu bug?”

Nope. I’m just following the news about Campaign Finance Reform (CFR) and trying to figure out what’s really going on.

Some members of Congress, and of the mainstream media, have somehow seized on the Enron business debacle as a springboard from which to launch another attempt at CFR. The previous attempt, March 2001, was known as McCain-Feingold, after the senators (John McCain, R-Arizona, and Russell Feingold, D-Wisconsin) who sponsored the legislation in the Senate. This time around, we have a couple of other names tacked onto legislation in the House: Shays-Meehan, after the representatives who sponsored the bill (Christopher Shays, R-Connecticut, and Martin Meehan, D-Massachusetts).

As far as I know, any CFR legislation sent to the president would have to be a compromise between McCain-Feingold and Shays-Meehan. Would that be McCain-Feingold-Shays-Meehan? Gotta get in those precious names, don’t they, for the history books and the interviews during the next campaign?

Anyway, Enron and its employees had thrown their campaign contributions around broadcast, to both Republicans and Democrats. Then, Enron went bust, and many people were cast adrift who had thought their futures were planted securely.

Now, some conservatives are in a tizzy because Enron’s political largesse has become the pretext for the latest attempt at CFR. Enron’s political contributions, they say, bought no favors from the White House: the Bush administration did nothing to stave off the corporation’s bankruptcy. (As I understand it, Enron’s execs tried to get the White House to influence Enron’s creditors to cut them some slack. No go. Some Democrats then took the tack, for a very short while, that the White House should have intervened, for the sake of “the little guy”: but that would merely have allowed Enron’s scam to live a little longer, no?)

They are right about Enron, specifically. It does seem, however, that campaign contributions did help, indirectly, to fuel Enron’s eventual collapse. For Enron’s execs would not have been able to keep their scheme going for as long as they did except for the deeds — or misdeeds, or “non-deeds” — of their auditors, Arthur Andersen.

As Dick Morris pointed out in a New York Post article, Jan. 29, Arthur Andersen’s behavior had been encouraged through legislation championed years ago by Sen. Christopher Dodd (D-Connecticut):

It was on account of Dodd’s tireless efforts that Arthur Andersen was able to act as both “independent auditor” and management consultant to Enron for $100 million a year. That role — so fraught with conflict of interest that it makes a joke of the concept of outside auditors protecting shareholders — has been identified as one of the major causes of the debacle. In 1995, it was Dodd who rammed through legislation, overriding President Clinton’s veto, to protect firms like Andersen from lawsuits in cases just like Enron.

Big names in the accounting industry have been especially generous to Dodd’s campaigns, you see, both before and since the legislation.

(Dodd has, of course, disputed Morris’ account of the events. But Morris is sticking by it, in an article in the Jewish World Review, Feb. 13, providing more details and sources.)

So, I think they are wrong who say that campaign contributions had nothing to do with Enron’s collapse. But they are wrong, too, who say that Shays-Meehan will help to prevent a recurrence. Why? Because the contributions that (according to Morris’ story) resulted in legal breaks for the accounting industry were hard-money contributions: Shays-Meehan puts restrictions on soft-money contributions in federal elections, but actually increases the limits on hard-money contributions.

So, those who support this CFR on the basis of wiping out alleged Enron-like political corruption are playing some kind of weird double bait-and-switch: neither contributions from Enron, nor soft-money contributions, were part of the problem supposedly being fixed.

(Hard money? Soft money? No, we’re not talking about the difference between coins and bills. Hard money is that contributed directly to a candidate. Soft money is contributed more generally to a party or is spent by organizations, including corporations and labor unions and other special-interest groups, on election-related issues.)

Another aspect of this hard-money, soft-money tango is referred to quite obliquely in an article in the Washington Post, Feb. 14:

Mixed signals throughout the day from the White House created some uncertainty about the bill’s eventual fate. Bush’s spokesman criticized a last-minute change in the bill, which some Republicans characterized as a Democratic maneuver designed to help pay off party debts from this fall’s campaign.

As reported on the Quinn in the Morning radio program that same day, the “last-minute change” allows soft-money contributions to be used to pay off campaign debts — which is currently illegal. Reportedly, the House’s minority leader, Dick Gephardt (D-Missouri), would be one of the chief beneficiaries of this “last-minute change”. What a shocker. Not.

Shays-Meehan isn’t only about campaign contributions. As the Post reported in the same article:

Another provision, aimed at curbing thinly veiled attack ads by outside groups, would ban corporations, unions and advocacy groups from targeting candidates by name in “issue ads” within 60 days of a general election or 30 days of a primary.

Whoa. The politicians now in office don’t want groups targeting them by name within a month or two of an election. Is this not a brazen attempt at repression of political speech? What kind of reform is that?

True, you might get disgusted (as I do) by the mud-slinging, muck-raking depths to which certain groups will descend in the heat of a campaign battle. But that’s a price we pay for freedom of expression: putting up with expressions we can’t stand.

Now, it seems to me that most folks don’t know or care what’s going on in elections until well into the one- or two-month period before voting day. During that time, incumbent politicians will have, as they always do, ready access to the voting public: press releases, interviews in the mass media, mention in news stories, and taxpayer-funded mailings. But concerned groups, often comprising like-minded individuals who have no effective political voice without pooling their money, will be shut out.

No wonder some pundits are calling the bill the Incumbents’ Protection Act.

Moreover, the power and influence of the mass media would be enhanced considerably: as voting day nears, outside organizations would be largely silenced, while editors and reporters would be free, as always, to pontificate, and to pick-and-choose — or manufacture — whatever “news” stories they like.

So, Shays-Meehan might also be called the Mainstream Media Influence Enhancement Act.

Besides, we already have tons of election-related laws on the books that are inadequately enforced. Michelle Malkin wrote about that in a Creators Syndicate column, Feb. 13: Democrat fund-raiser (“funny money honey”) Maria Hsia was found guilty almost two years ago on five felony counts, and she could have been sentenced to up to 25 years in jail. She was finally sentenced this month to... what? Three months’ house arrest, three years’ probation, and a four-figure fine.

Malkin sums it up neatly:

During the 2000 presidential campaign, the Buddhist temple scandal [of 1996] was repeatedly invoked as a reason to support campaign finance reform. But the proposals by McCain & Feingold & Shays & Meehan would do nothing more to prevent politicians and fund-raisers from hustling cash from foreign nationals under the robes of monks and nuns in tax-exempt temples. It’s already illegal. Piling on new laws while the old ones get broken with impunity is a pointless exercise in Beltway sanctimony. Campaign finance reform is a joke, and fund-raising criminals like Maria Hsia are getting the last laugh.

The cable talk shows are already awash with “experts” who disagree on what actual effects Shays-Meehan would have. Some say Democrats would benefit more than Republicans would; others say that President Bush would benefit greatly in the next election cycle. And all of them have their reasons. Who knows for sure? Nobody. (It may be instructive to point out that this attempt at CFR would allegedly fix the problems produced by previous CFR.) Shays-Meehan is a prime example of a bill that’s a seedbed for the Law of Unintended Consequences.

Connect all the dots, and draw a monstrosity. Let’s see.

• The pretext for passing Shays-Meehan — supposed political corruption by Enron money — has nothing to do with reality.
• The kind of campaign contribution that just may have enabled the Enron scam — hard-money contributions influencing legislation and regulation of the accounting industry — would actually be allowed to increase.
• And, for the purpose of paying off campaign debts, soft money could be converted to hard-money use — a practice now illegal.
• Outside interest groups would be prohibited from naming candidates — including incumbents, of course — in issue ads in the days immediately preceding an election.
• But incumbents will, naturally, have their usual access to the voting public.
• And the mainstream media will be as free as always to editorialize for their candidates of choice — both in opinion pieces and in “news” stories.
• Election-related laws and regulations already on the books are poorly enforced.
• And nobody knows for sure what real long-term effects Shays-Meehan would actually have on the political process.

This kind of “reform” should never see the light of day in a representative republic that respects constitutional rights of freedom of assembly and speech.

Depending on which pundit you read, CFR will be DOA in the Senate, or it will breeze through. Time will tell. And shortly, too, I should think.

The legislation that may eventually be presented to the president would be a momentous challenge. I would advise him to rise to that occasion, if need be, as he has done so well before, and to veto this Incumbents’-Protection and Mainstream-Media-Influence-Enhancement Act. And to tell the American people exactly why he is vetoing it.

Easy to do? Certainly not. But George W. Bush has our ear, as few before have had it: let him use it well.

© ELC 2002

I think that President Bush's approval of the bill is, perhaps, his greatest failure as chief executive.

Lane Core Jr. CIW P — Sat. 12/13/03 07:05:04 AM
Categorized as Most Notable & Political.