KRAMER VS.
The Softer Side of Money

By IRWIN KRAMER
The Daily Record
April 19, 2004

There are two types of money in America: Hard metal coins and soft paper bills. They show the faces of presidents who needed a lot less of both to get elected.

In the old days, freedom of speech was free of charge. Lincoln and Douglas debated the issues in a hotly-contested Senate race without federal matching funds, complex election laws or high-priced campaign consultants. Lacking a made-for-television image, they won elections on substance.

Today, candidates win elections on two substances: “Hard money” and “soft money.”

As big contributors began to exert big influence on federal elections, those who owed their political careers to the cold, hard cash of the wealthy wanted to avoid the “appearance of corruption” fostered by such “hard money.” Lacking any interest in reforming the very system that led to their election, members of Congress approved a law that sharply curtailed the amount of money an individual could contribute directly to their campaigns. By limiting the hard impact of hard money, our politicians scored political points by claiming to rid America of the what the Supreme Court has described as the “pernicious influence of ‘big money’ campaign contributions.”

Rather than eliminate corruption, the old law promoted it. Forced to limit what they took into their campaign coffers, politicians just pointed their donors to separate accounts — accounts held by political action committees and civic groups who used this “soft money” to soft-sell their favorite candidates without worrying about campaign finance laws.

Legally, these groups couldn’t urge you to vote for a given candidate, but that was nothing that a bit of creative writing couldn’t solve. “Citizens Against Drugs” couldn’t ask you to “Vote Against John Doe.” But they could run “issue ads” criticizing Doe’s foreign aid plan while asking you to “Call John Doe and urge him to stop funding governments run by drug dealers!” These ads may be funded by soft money, but still hit hard as candidates battle toward election day.

With the increase in “soft money,” Congress was once again faced with annoying calls for “election reform.” Both Democrats and Republicans needed to score political points by eliminating the “appearance” of corruption, while finding even more creative ways to finance their campaigns.

The Bipartisan Campaign Reform Act placed limits on both hard and soft money, but hardly cut the cost of political campaigns or the power of big donors. Nor did it end partisan bickering over election abuse.

Democrats and Republicans each accuse the other of violating election laws, but both parties continue to exploit loopholes that let them raise funds without restriction. The law does not restrict the fundraising of nonprofits formed under section 527 of the tax code, so many liberal groups have formed “527 committees” whose bank accounts are littered with soft money.

And, because the law lets news organizations continue to endorse candidates, conservative groups like the National Rifle Association have decided to go into the field of “journalism.”

As we follow the campaign on the “NRA Nightly News,” it seems apparent that the “Bipartisan Campaign Reform Act” is neither bipartisan, nor a reform. But it is an act.