CQ TODAY ONLINE NEWS
– CAMPAIGN FINANCE
Oct. 23, 2008 – 10:07 a.m.
Watchdogs Want To Curb Campaign Bundlers after Obama Tidal Wave
By Bart Jansen, CQ Staff
Watchdogs are drafting ways to attempt in the next Congress to curb big-dollar presidential campaign bundlers without discouraging the wave of small-dollar contributions flowing in through the Internet.
This movement comes after Barack Obama ’s record-shattering fundraising for president — made more urgent after he raised more than $150 million in September alone — which has sparked concerns that the public-financing system is broken; Fixing it could take a major overhaul.
The Illinois Democrat’s campaign already had reported 324 contributors bundling at least $100,000, including 47 who raised at least $500,000. By comparison, Arizona Republican candidate John McCain had 301 bundlers of $100,000, including 65 of at least $500,000, according to Democracy 21.
“When it comes to who will get the ear of an Obama administration, and who will get the governmental appointments and ambassadorships, it will be the small handful of big contributors,” said Craig Holman, lobbyist for Public Citizen. “These are the people to whom the campaign will feel most beholden.”
Among the options under consideration by these groups, along with Common Cause and the Campaign Legal Center, is to reduce contribution limits, boost public financing and offer incentives for both. A framework (
Congress created the Federal Election Commission in 1974 (PL 93-443) in the wake of scandals involving five- and six-figure contributions to Republican President Richard M. Nixon’s campaign, and set a $1,000 limit per contributor. That figure was finally raised and indexed to inflation under the 2002 Bipartisan Campaign Reform Act (PL 107-155) to what is now $2,300.
Public financing also posed problems. Primary funding, which major candidates routinely decline, offered up to $45 million on Jan. 1 — too late to compete in Iowa and New Hampshire. Obama became the first major-party nominee to decline for the general election, too.
“If you drive a car for 30 years and it breaks down and you don’t have maintenance, you don’t say, ‘Oh, what a terrible car,’” said Meredith McGehee, policy director for the Campaign Legal Center.
The question facing watchdog groups is how to encourage small-dollar contributors and public financing enough to attract participation.
Presidential candidates had been ignoring public financing for primaries because of unworkable rules.
But while McCain accepted $84 million in public financing for roughly two months before the general election, Obama ignored the system and swamped him by raising $150 million in September alone.
Not only was that the biggest monthly haul on record, the pace could yield the biggest disparity between presidential candidates since Nixon overwhelmed Democratic Sen. George McGovern [1963-1981] in 1972. Obama has raised $469 million to McCain’s $242 million by Aug. 31, which is about when public financing for the general election began.
“The dam is broken,” McCain said on Fox News Sunday. “We’re now going to see huge amounts of money coming into political campaigns, and we know history tells us that always leads to scandal.”
Watchdogs Want To Curb Campaign Bundlers after Obama Tidal Wave
The Republican National Committee blunted McCain’s disadvantage. But Obama’s prolific pace and abandonment of public financing spurred calls for reform. About half of Obama’s contributors initially gave less than $200, which allowed them to remain anonymous, and his 3 million contributors averaged $86 each.
Watchdog groups propose boosting federal funds from matching the first $250 of a contribution to matching perhaps four or five times the first $200 from each contributor.
“Internet fundraising allows candidates to raise large amounts of small, broad-based contributions at almost no cost, and with almost no time required from the candidates,” said Fred Wertheimer, president of Democracy 21. “It also increases citizen participation in our presidential elections.”
In an effort to keep candidates in the system, total public funding would also grow. Feingold’s bill had suggested $200 million against a well-financed opponent.
In exchange for public financing, the program could prohibit joint fundraising committees, which allow candidates to raise money with federal- and state-level parties. The program also could prohibit contributions from political-action committees or even lobbyists.
But in another break from the past, the program could allow a participant to continue raising small amounts from contributors even after receiving public financing. For example, if individual contributions were limited to $1,000 under the program, a candidate still could collect $100 from each contributor afterward.
“If people are jazzed enough by your campaign that a million people want to give you a small contribution, you can go to it,” said Arn Pearson, vice president for programs of Common Cause.
The prospects for massive reform are uncertain. The 2002 law that raised individual contributions while prohibiting big-dollar contributions to parties known as “soft money” followed years of legislative battles and still faces court challenges.
Republicans, who typically argue that candidates should be allowed to raise and spend as much as they want under the First Amendment, also acknowledge the need for change.
“I think it clearly needs to be fixed,” Alex Vogel, a campaign consultant who has worked for the Republican National Committee and National Republican Senatorial Committee.
He noted, however, the difficulty of getting anything through a Senate filled with potential presidential candidates who consider themselves experts on campaign law. “Maybe there’s a real mood to say that somebody spending $750 million to be elected president is unacceptable,” Vogel said.
Even though Obama opted out of public financing, he cosponsored Feingold’s latest bill. Watchdogs hope that as president, he would seek a remedy for the system.
“I don’t think he’s going to want to go down in history as the one who broke the public financing system,” Pearson said. “I think he’s going to be motivated to fix it.”
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