Dollars and Democracy

Nov 2000

This summer the Association issued a report entitled Dollars and Democracy: A Blueprint for Campaign Finance Reform. Dollars and Democracy is the work of a non-partisan special Commission appointed in 1997 by then City Bar President Michael Cardozo. Three other former City Bar Presidents, John Feerick, Robert Kaufman and Cyrus Vance, co-chaired the Commission. Vice Dean Richard Briffault at Columbia Law School, and an expert on campaign finance law, served as Executive Director to the Commission and drafted the report. The first chapter of Dollars and Democracy, which summarizes the Commission's recommendations, is reprinted in the September/October 2000 issue of The Record. Key recommendations include a ban on soft money, public financing of presidential and congressional campaigns, an increase in the current $1,000 federal contribution limit, a limit on contributions to political parties and enhanced enforcement. This August, at the urging of the City Bar, the American Bar Association's House of Delegates overwhelming adopted a resolution that encompassed substantially these principles. The new ABA President, Martha Barnett of Florida, has agreed to work personally with us to secure adoption of federal campaign finance reform legislation. The City Bar will also be working to secure campaign finance reform at the State level. We will co-sponsor a broad-based conference in Albany in early February. The formulation of a specific blueprint for state reform is one of the missions of the recently appointed Committee on State Governance Reform.

Honest Graft Over 100 years ago, Tammany leader George Washington Plunkitt drew the distinction between "honest graft"-the taking of the opportunities that arise in politics to become rich-and "dishonest graft"-the "blackmailing of gamblers, saloon keepers and disorderly people." In practice "honest graft" consisted largely of facilitating payments expected by government officials to supplement their income. In this country, "honest graft" is mostly a thing of the past although it remains a problem internationally. We do, however, still face two similar problems. The first problem is called "pay to play." This is the expectation that those who seek either a government benefit, like a contract, or to block a government action, like a piece of legislation, will make a facilitating payment to the campaigns of the relevant decision makers or their political parties.

Escalating Spending The second problem is the increase in campaign spending. Campaign spending is increasing at a rate in excess of the rate of increase in the cost of the items-such as postage and television time-used in campaigns. For example, a recent report by the New York Fair Elections Project stated that in New York the cost of such items increased 27% between 1994 and 1998 whereas the amount spent in the 1998 Pataki/Vallone race was 121% more than the amount spent in the 1994 Cuomo/Pataki race. This kind of spending escalation has adverse consequences. Those who hold office are forced to divert time from governing to fundraising. All candidates are required to use more aggressive tactics such as one-on-one telephone solicitation (so-called "dialing for dollars"). The advantage of incumbency is increased because incumbents offer contributors a more immediate and more certain return on their investment. As the importance of incumbency goes up, competitiveness and accountability go down. A key adverse consequence of the high spending environment falls on the integrity of the law-making process. To be effective and reasonably efficient, candidates must pay attention to the so-called "giving pyramid" and raise the bulk of their money in large chunks. As their financial needs escalate, they must depend more and more on funding from wealthy individuals and business, union, and other well financed advocacy groups. This increased dependence means that increasingly these individuals and groups are the people to please. To a degree, law-making influence shifts from voters counted by their numbers to voters and entities counted by their wealth.

Disclosure Insufficient Absent reform, there is no clear end in sight to campaign spending increases. Disclosure alone will not end it. As Jesse Unruh, a former Speaker of the California Assembly, observed, "Money is the mother's milk of politics." Because money is central, only enforceable measures of restraint will bring the campaign financing under control. There are First Amendment limitations on what can be done, but there is a strong constitutional basis for all of the principles we are espousing. The Association does, and the entire Bar should, advocate comprehensive campaign finance reform. Because of the impact of campaign finance practices on the law making process, this is decidedly a lawyer's issue. Without reform the legislative process will not likely, in the words of the oath taken by every federal judge, "do equal right to the rich and the poor."