CQ TODAY ONLINE NEWS
Nov. 13, 2008 – 1:02 a.m.
Obama’s Operation May Become the Model of Fundraising
By Emily Cadei and Shawn Zeller, CQ Staff
The one thing that can be counted on when it comes to political campaigns is they inevitably cost more with each election.
In 1992, for example, President George H.W. Bush and then-Arkansas Gov. Bill Clinton spent a total of just over $200 million in their race for the presidency. Eight years later, when George W. Bush defeated then Vice President Al Gore, the costs topped out at more than $300 million.
But that was just a small increase, compared to the staggering amount of money raised and spent in the 2008 presidential campaign, led by President-elect Obama’s unprecedented financing operation.
Final spending totals for this year are not yet available, but Obama and Republican nominee John McCain already had exceeded $800 million in combined spending two weeks before Election Day. It’s not just the amount of money that was spent but also the way it was raised — much of it online, in small chunks and, in Obama’s case, completely independent of the public financing system for the first time in the post-Watergate era — that has campaign finance observers rubbing their eyes in disbelief.
“I’ve studied all the great fundraisers of the past, from William McKinley to Richard Nixon to George W. Bush . American politics has never seen anything remotely like this before,” wrote former Federal Election Commission Chairman Bradley A. Smith in a Washington Post op-ed piece a week before the election.
Bradley’s sentiments seemed to sum up the views of political and campaign legal experts across the spectrum. There is now broad agreement that the 2008 election will usher in a new phase in the way political campaigns are financed in the future. However, what this will mean in practice — particularly what the response from lawmakers and regulators will be — is still anybody’s guess.
Opponents of fundraising restrictions say Obama’s financial success is proof that campaign finance laws don’t work and, moreover, aren’t necessary. But supporters of financial limitations contend that the 2008 race underscores the need for a public finance overhaul. And they argue that while Obama’s small donor model signaled the current system’s doom, it also could be the key to overhaul.
“The bottom line is that it is impossible to judge the Obama fundraising numbers without some idea about what the system is supposed to accomplish,” Richard Hasen, an election law professor at Loyola Law School, wrote in a recent article on the legal Web site FindLaw.
Where To Go From Here
In his op-ed piece, Smith, a prominent opponent of campaign finance restrictions, said, “Obama’s epic fundraising should put to rest all the shibboleths about campaign finance reform — that it is needed to prevent corruption, that it equalizes the playing field, or that tax subsidies are needed to prevent corruption.”
He pointed to the record number of donors who gave to Obama and concluded that heightened political participation through giving is a good thing for American democracy. He also claimed that there’s no evidence the massive amounts raised by Obama had a corrupting influence.
On those points, Smith and pro-change groups are in agreement.
Obama’s Operation May Become the Model of Fundraising
Arn Pearson, vice president for programs at Common Cause, said reformers have shifted from the post-Watergate mentality that held, “Let’s get money out of system and replace it with public dollars.” Now he said, reformers view “small contributions as a positive form of civic engagement and that there is value in encouraging that.”
Last week, seven of the most prominent groups advocating change — the Brennan Center for Justice, the Campaign Legal Center, Common Cause, Democracy 21, the League of Women Voters, Public Citizen and the U.S. Public Interest Research Group — announced a joint 2009 agenda to hold Obama to his campaign pledge to revamp the presidential public financing system. Obama also has said he would push for legislation to create for the first time a public financing system for congressional races.
The groups have largely come together around a new plan that would substantially boost the amount of public money available to presidential candidates beyond the $84 million in general election funding that went to McCain this year. And in a major shift, they also are pushing for incentives to promote the small dollar, Internet-based fundraising approach that Obama mastered.
Under their plan, the two major party presidential candidates would receive a lump sum payout of public funds in the general election as they do under current law. But they would be allowed to continue raising small contributions that would be matched with public dollars at a 3-, 4- or 5-to-1 ratio. Currently, a candidate must cease with fundraising after accepting public funds — a limitation that put McCain at a distinct disadvantage against Obama.
The reformers also would revamp the public financing system for the presidential primaries by boosting the initial payout of public funds, eliminating restrictions on how much of that money can be spent in each state and boosting the federal match for small dollar donations raised by the candidates to as much as 5-to-1.
To reduce the influence of large donors, reformers would like candidates who accept public financing to impose much lower individual limits on their contributors. Now, individuals can give up to $2,300 for the primary and the general.
Other Fundraising Issues
The 2008 election also raised a number of practical fundraising issues, including how to make the process more transparent.
Obama’s campaign epitomized a shifting strategy in the presidential politics of tapping into donors at both the small, $200-or-less end of the spectrum and high-end bundlers capable of gathering hundreds of thousands of dollars. Candidates are currently not required to disclose small donations of $200 or less, or the names of their bundlers.
Obama’s small donor operation generated controversy earlier this fall when reports surfaced that the campaign may have accepted fraudulent contributions, some in excessive amounts.
Michael J. Malbin, executive director of the Campaign Finance Institute, said he thought the controversy was overblown. But, he added, “I don’t think it’s a completely frivolous concern. I think it’s something that merits study by the (Federal Election Commission) or Congress.”
Malbin said one remedy worth considering is more extensive audits of all presidential campaigns, not just those that take public funding.
Another issue raised in the election was the role of independent political groups and the legal parameters they operate within.
Obama’s Operation May Become the Model of Fundraising
Activity among “soft money” groups, such as 527 organizations, that accept unregulated contributions was down compared to 2004, when groups such as the Swift Boat Veterans for Truth and America Coming Together first emerged on the political scene.
Campaign finance experts suggested that legal rulings opening up a broader scope of advocacy that political committees, unions and corporations could engage in may have been a big reason for decrease. Uncertainty surrounding regulation of 527 groups also played a role.
Hasen raised the possibility that the courts — which have struck down various fundraising restrictions over the last few years — could very well allow unlimited contributions in the future to political committees that conduct independent advocacy for or against candidates. That, Hasen wrote in a separate Findlaw article, “would open the floodgates for outside money in the 2012 election.”
For the Republicans, the ability to give unlimited contributions to groups that support their candidates could be a blessing as they gear up to challenge Obama in 2012.
For as Malbin observed, it’s unlikely there will be too many other candidates to rival Obama’s fundraising abilities, at least in the near term. “I see the campaign not as the model, but as a model for things to come.”
“People will try to imitate it,” he added, but “I don’t know how many candidates will be able to take advantage of this in the future.”
Comments
This issue is the one issue that consistently made me chuckle during the campaign. Remember how the Republicans were claiming that restricting the amount a donor could give was a violation of the donors 1st amendment right? Now when almost 4 million people give less that $2300 to the Democrats and the Republicans lose their fundraising advantage they call what Obama has accomplished, Socialism. I am still smiling about that.
Unfortunately, the moto of the republican often is couched in hypocrisy: when they're winning and rolling over the dems, let's erase campaign finance laws, spend till you drop; when dems find a way to tap into the motherload, it's "unfair".
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