How to fix campaign financing forever for $50

A radical proposal by two Yale professors goes far beyond any reform envisaged by Feingold or McCain.

By Farhad Manjoo
Published February 5, 2007 11:56AM (EST)

We don't yet know whether the next president will be a man, a woman, white or black, but we know this much: On Inauguration Day, he or she will be gravely indebted to many very wealthy people. Sen. Hillary Clinton has already decided to fund her presidential campaign entirely through private donations, and her rivals are likely to follow that approach. The serious candidates are looking to raise $100 million this year alone, and the two who win the primaries will take in substantially more. That's an average of at least $2 million a week, or $286,000 every day, including weekends, until the election -- greater than the median price of a new American home.

The news is dispiriting to anyone who cares about clean politics, but it's not surprising. Today's campaign finance regulations are as effective as abstinence vows on prom night, and the leading proposals to fix the system do little more than impose some decorum on the bacchanalia. This week Sen. Russell Feingold, just about the last politician in the nation who can still muster any fervor on the issue, offered a plan that would modestly tweak the current system, increasing some public funding here and eliminating some limits there. The plan's prospects look uncertain. His former co-conspirator in reform, John McCain, says he's not even familiar with Feingold's idea, perhaps because as a presidential candidate he now spends much of his time asking rich people for money. But even if Feingold's plan did become law, it would do nothing about the fundamental problem. Running for office takes an enormous amount of money, and even though "You" may be Person of the Year, drunk on the power of "your" blogs and "your" YouTube, politicians will always be able to get more money from "Them," the fat cats.

But reforming the system doesn't have to be a pipe dream. In fact, there's already a plan out there that would work. The proposal, which was outlined a couple of years ago by Bruce Ackerman and Ian Ayres, two professors at Yale Law School, is nonpartisan, constitutional and completely contrary to nearly every orthodoxy in the campaign finance reform movement. Think of it as the best campaign finance reform proposal you've never heard of.

The first part of the Ackerman-Ayres plan calls on the government to give every voter $50 to donate to candidates running for federal office. The second part will sound almost as crazy, until it sounds brilliant: Make all campaign donations secret, so that nobody -- especially political candidates -- knows where any citizen's money is going. Anonymous giving means no quid pro quo.

To understand what's so truly inspired about this proposal, you first have to understand what's wrong with today's laws. The current regulations were put in place to counter the abuses uncovered during the Watergate investigation, things like the Committee to Re-elect the President's maintenance of secret slush funds for dirty tricks. They mainly limit how much money individuals can donate to candidates and how much candidates can spend to win office. In return for abiding by spending limits, politicians get public matching funds -- that is, money from the government -- to mount their campaigns.

This may seem like a sensible approach, but Ackerman and Ayres suggest that it is fundamentally flawed. Capping how much money people can give to candidates only invites ways to get around those limits. Getting around the limits has become a huge Washington business, employing battalions of lawyers and lobbyists. Limits simply don't limit much -- every election sees more private donations to candidates, and more money spent on campaigns.

Conservatives often argue that there's nothing wrong with candidates collecting all this money so long as they fully disclose it. Newt Gingrich, for example, wants politicians to have to post to the Web receipt of all donations within 24 hours of cashing the check. But we are already drowning in disclosure -- go to to feast on a smorgasbord of candidates' funding sources -- and it has hardly changed a thing. Public knowledge of politicians' funders perhaps deters the worst kind of influence peddling, outright bribery. But disclosure does nothing to stem more pervasive forms of favor trading. There is no better illustration of this than the current president, who won his office thanks to wheelbarrows of cash from business interests, notably the oil and gas industry, a sector few Americans hold in high regard. Public awareness of who backed George W. Bush has not mitigated his willingness to act in accordance with those backers' interests. As Slate's Timothy Noah recently observed, sometimes sunlight just isn't so great a disinfectant.

When you mention these difficulties to reformers, they often respond by suggesting the most radical change of all: complete public financing of elections. Under this plan, the government would pick up the entire tab for candidates' electioneering efforts. While that has obvious benefits -- public money frees up candidates to focus on policies rather than fundraising, and it leaves them beholden to no one -- there is one huge drawback. The public is opposed. The current system of public matching funds is paid for by taxpayers who check off a box on their tax forms directing $3 to candidates. In the 1970s, more than a third of taxpayers checked off the box. Now, only 1 in 10 do, and the number is dropping. If the people aren't willing to direct $3 to candidates, how can we expect them to go for anything more?

It's here that we come to what's great about the Ackerman-Ayres plan: It offers the public a reason to support public financing. Today, people have no say in how their $3 is spent. Under the new plan, anyone who registered to vote would receive $10 to donate to House candidates, $15 to Senate candidates and $25 to presidential candidates. They could make their pledges essentially any way they chose. They could fund long shots or front-runners, spend their wads in the primary or the general election, in their home state or across the nation. They could split their allotments among dozens of contenders or just choose one Senate candidate, one House candidate and one presidential candidate. They could not cheat and spend the money on dinner. The $50 would be issued as a kind of electronic voucher that would expire on Election Day, and Ackerman and Ayres suggest that people could register their donations using the Web, ATM machines or even their electronic food stamp cards.

About 120 million people voted for president in 2004. At $50 each, that would be $6 billion in public financing available for candidates, more than enough to fund big campaigns. As a comparison, all federal candidates -- for the House, the Senate and the presidency -- spent a combined $4 billion in 2004, most of it raised from private donors. Such sums would profoundly alter the political process. Today, Ackerman and Ayres point out, many Americans participate in politics only at the end of a long campaign, if they do at all. Fifty dollars isn't a fortune, but it's more than most voters give. By pooling the money, candidates would be forced to recognize issues of real importance and campaign in places they might otherwise deem pointless to visit. In search of donations, Republicans might even come to San Francisco.

The plan wouldn't prevent you from giving a politician more than your government-issued $50. You could still make additional private contributions. Indeed, the professors call for raising significantly the current contribution limit of $2,300 per donor per candidate. The new caps would be $5,000 for House candidates, $32,000 for Senate candidates and $100,000 for presidential contenders (with a cumulative cap of $100,000 to all candidates). But that's where Ayres and Ackerman's second innovation, the "secret donation booth," comes into play.

Imagine that you are a politically connected Hollywood producer, and Hillary Clinton calls you up and asks you for $50,000. What do you do? In truth, you'd rather give to Barack Obama, whom you consider more electable, but you don't want Clinton to know that. After all, what if she wins? Then you'll never see the inside of the Lincoln Bedroom. So you tell Clinton that you're definitely on her side. Fortunately, under the Ackerman-Ayres plan, you'll make your check out to the Federal Election Commission, not Clinton. The FEC will wait five days before adding your money to Clinton's account. In those five days, you could contact the FEC and redirect the money to Obama if you chose. And regardless of which candidate ultimately gets the money, its origin will be masked. The FEC will distribute the cash to the candidate's account anonymously, in pieces, over several days, using a secret algorithm to vary the pattern by which it deposits the money. So even though you promised the New York senator your support, she'll have no way of knowing whether you really went through with it. You could send your money to Obama and Clinton would have no way of knowing whose side you were actually on.

The professors compare their anonymous donation mechanism to an electoral innovation that we now think of as sacrosanct -- the secret voting booth. Early American elections were conducted in the open, a situation that led to a rash of vote buying. But in the late 19th century, as states switched over to secret ballots, the practice of bribing people to vote a certain way dropped dramatically. Today only a foolish candidate would pay you to vote for him. You could take his money and swear on your mother's grave that you'll vote accordingly, but once in the privacy of the voting booth, you can do whatever you please.

The secret donation booth could have the same effect on today's main political transaction, wherein candidates, with a wink and a nudge, offer donors electoral favors. Certainly many wealthy people would still want to give candidates a lot of money, and certainly candidates would still promise great possibilities to their donors. But, theoretically, suspicion would sour the money parade, significantly reducing overall donations. Today's routine $2,000-per-plate benefits would become impossibly tense affairs. If they didn't like the veal, CEOs might go home and secretly cancel their checks, and the candidates would never know. Meanwhile, any politician would be foolish to risk losing public favor -- which, remember, would be worth billions -- by kowtowing to a big donor's unpopular ideas, because the politician could never truly know that the donor ever gave a dime.

You might argue that donors would find other ways to suggest to candidates that they're team players. Perhaps the nation's energy executives could visit Dick Cheney -- privately, of course -- and assure him that they're giving gobs of money. Because of constitutional restrictions, the proposed secret donation booth would not apply to organizations independent of candidates' control, groups like the Swift Boat Veterans for Truth or, nor do Ackerman and Ayres propose instituting a cap on such donations. Donors could always direct funds there as a way to show support. To prove to Cheney that they love the GOP, for instance, hundreds of Big Oil executives might get together and publicly give $10 million to Americans for Good Things, a group that runs ads alleging that Democrats were secretly educated at madrassahs. The oilmen would get to help Republicans and take credit for it.

Ackerman and Ayres have two responses to these worries. The first is that talk is cheap. The private assurances of donors might be comforting to a candidate, but Cheney could never really trust that the CEOs were telling him the truth -- at least not as much as he trusts them now. And what if donors directed their funds to Swift Boat-style efforts? The professors say the key is to set tough rules to ensure that such groups really are independent of a candidate's control. And if that were the case, Cheney might not appreciate Big Oil's big donation to Americans for Good Things. He might feel slighted that it didn't deposit the money instead in the Bush campaign's coffers, where the money would have been much more useful to the campaign. Ackerman and Ayres add one more clever idea. If donations to independent groups rise by a substantial amount, then the FEC, under their plan, would correspondingly increase public money given in vouchers. In other words, by design, public money would always vastly outweigh private money, and ordinary people would always have more combined power than the wealthy.

By now this whole thing may sound quite technical, though it's actually far less complex than today's regime. In "Voting With Dollars," their little-noticed 2004 book, Ackerman and Ayres outline their plan in great detail. They even include model legislation; Obama, Clinton or anyone else in Congress could introduce it tomorrow.

That's not going to happen. And that's because there is one group that won't find this plan attractive: those already in power. Because the plan would make politics extremely unpredictable, incumbents are bound to see it as dangerous. The right and some populists will reject using $6 billion or more in taxpayer money to finance campaigns -- they'd call it welfare to politicians (though for less than the price of a month of war in Iraq, it's pretty cheap welfare). Others would rankle at the idea of keeping donations secret. Full disclosure has become so entrenched a part of our political lives that to abandon it might look insane. Another complaint might be that by adding more money to the system in the form of vouchers, candidates would simply launch bigger, noisier campaigns, though Ayres and Ackerman argue that the secret donation booth would cause a net decrease in private political money.

Still, what could be worse than today's laws? Many who are now vying for the White House have cast themselves as reformers. In announcing his bid, Obama lamented that politics has become "so gummed up by money and influence ... that we can't tackle the big problems that demand solutions." Clinton's aides have suggested that she'd be in favor of overhauling today's presidential financing laws. The Ackerman-Ayres proposal is one plan that deserves serious consideration.

Farhad Manjoo

Farhad Manjoo is a Salon staff writer and the author of True Enough: Learning to Live in a Post-Fact Society.

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