01
Jun
2004
Federal Election Commission Chairperson Bradley A. Smith talks big. During a commencement address May 23 at Augustana College, he said, "It is a fact that under the Supreme Court's jurisprudence today, criticism of a congressman close to an election receives less constitutional protection than does Internet pornography, simulated child pornography, tobacco advertising, topless dancing, defamation, flag-burning, or burning a cross outside a black church.
"
President Bill Clinton in 2000 appointed Smith to fill a Republican vacancy on the six-member Federal Election Commission (or FEC, which can have no more than three members from any party). Smith is mild-mannered, but he's passionate about the problems of the current campaign-finance system. In an exclusive interview with the River Cities' Reader after his commencement address, Smith eloquently argued for de-regulation, talked about his role in changing the way the FEC operates, and discussed the effects of the McCain-Feingold campaign-finance reforms passed by Congress in 2002.
His position can be easily summarized in a single sentence: "It's a mistake to think you can regulate the system to a more perfect democracy," Smith said
Because of Smith's strong views against campaign-finance laws, his appointment to the FEC was greeted with alarm, particularly by liberal groups favoring restrictions.
"When it comes to filling the job of faithfully enforcing campaign-finance laws, the public is entitled to a chief law-enforcement officer who believes the laws are not just defensible, but important," attorneys for the Brennan Center for Justice wrote. "A law-enforcement officer who scoffs at the laws he is sworn to enforce will breed nothing but contempt for those laws. ... Smith's complete disdain for FECA [the Federal Election Campaign Act] renders him unsuitable for the role of an FEC commissioner, whose principal job is to administer FECA as enacted by Congress and upheld by the courts."
Smith said he doesn't see a contradiction or a conflict of interest in "uphold[ing] the law he disagrees with," and added that none of his critics can point to any situation in which the FEC hasn't upheld the law while he's been a commissioner.
"We Got Our First Amendment Priorities Mixed Up"
Campaign-finance regulation in the United States goes back to 1867 - when a law prohibited federal officials from requesting campaign money from Navy Yard workers - but the current system got its start with the passage of FECA in 1971. In the wake of the Watergate scandal, amendments in 1974 established the Federal Election Commission to enforce the laws and created strict limits on contributions and expenditures. In 1976, the U.S. Supreme Court upheld contribution limits in the interest of protecting the integrity of elections from the "appearance of corruption" but struck down expenditure caps.
Smith's basic argument is that restrictions on financing campaigns - particularly how much money a person can give - are fundamentally undemocratic. He sees no evidence that the restrictions on how campaigns are funded deter impropriety, and without an anti-corruption rationale, there's little reason to restrict people's political speech. "Somewhere we got our First Amendment priorities mixed up," Smith told the River Cities' Reader.
The 2002 Bipartisan Campaign Reform Act, the official name of McCain-Feingold, has made the situation even worse. While it did double contribution limits, it also banned "soft money" (contributions to political parties rather than candidates) and put a stop to "issue ads" (which have a clear position but don't directly advocate voting for or against a candidate or issue) close to an election. These key features of McCain-Feingold were upheld by the Supreme Court in late 2003.
The primary effect of the bill, Smith said, has been to make direct political speech - words meant to affect the outcome of an election - less protected than other forms of speech, including those he mentioned in his commencement address.
McCain-Feingold, Smith argues, creates a system that "protects free speech when it doesn't really matter." In other words, restrictions on overtly political speech are strongest right before an election, when they're most likely to have an impact.
Supreme Court Justice Clarence Thomas wrote in a dissent that McCain-Feingold sets a dangerous precedent: "The chilling endpoint of the court's reasoning is not difficult to see: outright regulation of the press."
Smith echoed this sentiment when he told the Reader, "Nobody wants to say what the stopping point [of regulation] is."
He noted that even though this is the first election cycle with McCain-Feingold in effect, already political interest groups are pushing for even more restrictions. The biggest change that McCain-Feingold has brought has been the shifting of campaign money toward tax-exempt independent political organizations, which are called "527" groups because of a section of the tax code. McCain-Feingold is "driving some of the activity away from parties and candidates," Smith said. Under the new law, 527 groups remain one of the few legal ways to raise soft money, especially from unions and corporations.
Liberal 527 groups such as MoveOn.org and The Media Fund were the first to take advantage of this new campaign-finance landscape and have so far raised tens of millions of dollars for Democratic Party causes and candidates. Republicans have started to raise money under 527s, but they lag far behind the Democrats. For this reason, Republicans asked the FEC to regulate 527s under McCain-Feingold.
But on May 13, the FEC decided to take no action for 90 days on 527s. "We don't feel new regulation is required" under the campaign-finance law, Smith said. In fact, he added, the legislative history and language of the law never address 527s: "New regulation would be contrary to McCain-Feingold."
Smith's position on 527s shows him to be more a person of principle than party, because his stance on this issue could cost Republicans dearly. On its editorial page, the Wall Street Journal wrote that "Democrats in Congress owe Federal Election Commission Chairman Bradley Smith an apology. The man they once called 'Dracula' and tried to banish from Washington may now save their ability to keep raising millions of dollars in 'soft money' to defeat President Bush this November."
Indeed, Smith didn't come to the FEC as a partisan. "I'm sort of a merit appointee," he told the Reader. He was a law professor at Capital University Law School in Ohio and made a name for himself, through congressional testimony, as the most outspoken critic of campaign-finance regulation around. (Augustana College President Steve Bahls was dean of the Capital University Law School for nine years, and that's how Smith came to be this year's commencement speaker.)
Although he criticizes McCain-Feingold, Smith has seen some positive effects. The soft-money restrictions on Democrats and Republicans have forced "parties to raise more from small contributors" and rely less on big donors, Smith said.
While much of Smith's criticism of the federal election system deals with regulation imposed by Congress, he also sees another major problem: bureaucracy. He argues that there are two things at work here. First, that the bureaucratization of the federal government took the de facto rule-making authority away from Congress and the FEC commissioners; civil servants make key decisions with little oversight. And second, because of the maze of rules and regulations, "regulation itself has become a campaign weapon," he said in one speech; campaigns accuse their rivals of violating the rules, thus engaging the complex FEC guidelines and bureaucracy. "The punishment was the process," Smith told me.
Many people don't realize that campaign treasurers - typically volunteers - are personally liable for fines levied by the FEC. Not only do they have to navigate the rules and defend themselves if they're accused of going afoul of regulations, they're on the hook for violations. Smith described the system's message: "Thank you for participating. Here's your fine." The effect, he argued, is to discourage participation.
Fines are the FEC's primary enforcement tools, and they can range from $275 to hundreds of thousands of dollars, depending on the severity of the violation.
Another problem has been that the process has been clogged with cases. Smith said he's helped the FEC streamline its enforcement procedures. In the past the commission dismissed 30 to 40 cases a year because they were no longer relevant; they lingered in the system past elections, to the point that continuing with them would serve no purpose. Now there are no cases being dismissed for that reason. Speeding up the process was done "to promote a little added caution against stretching the law too far," he said.
In addition, Smith said, he's successfully pushed for "fewer fines but more significant" from the FEC to further discourage violations.
Smith's political beliefs are based on the assumption that politicians and their campaigns are fundamentally honest. "There aren't that many intentional violations," he said. People who advocate tighter regulation of the campaign-finance system operate on the philosophy that all politicians are corrupt, Smith said. They therefore give a "free pass to people who are corrupt," he added.
A Better System?
Smith's arguments against regulation are forceful and direct, but he's less clear about how he'd change the current rules. He's blunt when he notes that "there's no perfect system" yet doesn't have a specific proposal saying what, if any, restrictions he'd place on donors, parties, political campaigns, and candidates.
He criticizes regulation by noting that there's no indication where it will end, but on the topic of de-regulation, he commits pretty much the same sin. If the country starts de-regulating and finds a place it's comfortable, Smith said, "we can always stop."
Many people who oppose limits to political giving still favor full disclosure of how much money is given by whom. (Parties and candidates must disclose from whom they receive their money.) Smith has it both ways on the disclosure issue.
During his speech to Augustana graduates, he noted: "The Federalist Papers, America's greatest contribution to political theory, ... were ... published anonymously. ... Similarly, opponents of the Constitution, honorable and talented men, equally patriotic, also wrote under pseudonyms. Why? For these men, to have written under their own names would have allowed the focus to be taken off the ideas discussed, and focused instead on the identities of the speakers." This suggests that Smith opposes disclosure of political contributions, but he never directly says that.
In our interview, his tone was different: "I tend to favor disclosure, but with a higher threshold," he said. Right now, contributions to "independent expenditure" committees must be reported at $250. Smith favors raising that level, but he doesn't propose an end point. "Five thousand? Ten thousand? Fifty thousand? A hundred thousand?" he said. " It ought to be a lot more than $250."
Smith is careful not to say that a de-regulated campaign-finance system wouldn't have its share of problems, but he claims that de-regulated systems aren't any more corrupt than regulated ones. Maryland has a heavily regulated campaign-finance system, while Virginia's is largely de-regulated, and there's "no evidence" that the latter is worse than the former, Smith said.
Underlying Smith's argument is the idea that no matter how much one regulates the campaign-finance system, politicians will always find ways to exploit the loopholes, as the McCain-Feingold law and 527s show.
And Smith acknowledges that sometimes incumbents write the laws in ways that favor themselves. But he said he doesn't believe that incumbents intentionally skew the system; he said he believes that they are addressing problems they have without taking into consideration the difficulties faced by challengers and third-party candidates.
De-regulating the system, Smith claims, will help people trying to unseat incumbents. Without the name recognition, party support, and campaign organizations of those who have already won elections, "challengers more than incumbents need larger contributions," he said.
And campaign-finance restrictions also work against small businesses, he said. Deere & Company doesn't need to give money to politicians to get access to them, Smith said; because of their importance to the local economy and employment, the company already has the ear of local legislators. A smaller company, however, without a large number of employees, can sometimes only get access through contributions. And limits on how much they can give restrict whether they can give enough money to be heard.
Major corporations, he noted, spend 10 times as much money on lobbying as they do on political campaigns. When they make donations to candidates, he said, "they're not buying access." In one speech, he said that "campaign contributions just aren't that important."
Smith said regulation might be better suited to other areas, that if there's corruption in American politics, the campaign-finance system is a small part of it. Book advances and $20,000 speeches by legislator's spouses create the appearance of corruption more than campaign contributions, he said. "That would be a better place to start" with regulation, he said.
Sidebar: A Campaign-Finance Primer
Enforcement of federal campaign-finance laws lies with the Federal Election Commission (FEC), a six-member body with three Republicans and three Democrats. The FEC can levy fines against candidates, parties, and corporations that violate the laws.
Hard money is cash given directly to political candidates and is regulated by federal law. Under the Bipartisan Campaign Reform Act (BCRA, also known as McCain-Feingold) passed in 2002, individuals can only give $2,000 to a candidate in an election cycle, for instance.
Soft money is cash given to political parties or political organizations outside of specific candidates. McCain-Feingold banned soft-money contributions to political parties.
But the BCRA did not address the question of so-called "527" groups, tax-exempt independent political organizations. Because soft money to 527 groups is still allowed, unions and corporations have funneled millions of dollars to 527 groups. Through late last year, liberal 527 groups has out-raised conservative groups by nearly a two-to-one margin.
President Bill Clinton in 2000 appointed Smith to fill a Republican vacancy on the six-member Federal Election Commission (or FEC, which can have no more than three members from any party). Smith is mild-mannered, but he's passionate about the problems of the current campaign-finance system. In an exclusive interview with the River Cities' Reader after his commencement address, Smith eloquently argued for de-regulation, talked about his role in changing the way the FEC operates, and discussed the effects of the McCain-Feingold campaign-finance reforms passed by Congress in 2002.
His position can be easily summarized in a single sentence: "It's a mistake to think you can regulate the system to a more perfect democracy," Smith said
Because of Smith's strong views against campaign-finance laws, his appointment to the FEC was greeted with alarm, particularly by liberal groups favoring restrictions.
"When it comes to filling the job of faithfully enforcing campaign-finance laws, the public is entitled to a chief law-enforcement officer who believes the laws are not just defensible, but important," attorneys for the Brennan Center for Justice wrote. "A law-enforcement officer who scoffs at the laws he is sworn to enforce will breed nothing but contempt for those laws. ... Smith's complete disdain for FECA [the Federal Election Campaign Act] renders him unsuitable for the role of an FEC commissioner, whose principal job is to administer FECA as enacted by Congress and upheld by the courts."
Smith said he doesn't see a contradiction or a conflict of interest in "uphold[ing] the law he disagrees with," and added that none of his critics can point to any situation in which the FEC hasn't upheld the law while he's been a commissioner.
"We Got Our First Amendment Priorities Mixed Up"
Campaign-finance regulation in the United States goes back to 1867 - when a law prohibited federal officials from requesting campaign money from Navy Yard workers - but the current system got its start with the passage of FECA in 1971. In the wake of the Watergate scandal, amendments in 1974 established the Federal Election Commission to enforce the laws and created strict limits on contributions and expenditures. In 1976, the U.S. Supreme Court upheld contribution limits in the interest of protecting the integrity of elections from the "appearance of corruption" but struck down expenditure caps.
Smith's basic argument is that restrictions on financing campaigns - particularly how much money a person can give - are fundamentally undemocratic. He sees no evidence that the restrictions on how campaigns are funded deter impropriety, and without an anti-corruption rationale, there's little reason to restrict people's political speech. "Somewhere we got our First Amendment priorities mixed up," Smith told the River Cities' Reader.
The 2002 Bipartisan Campaign Reform Act, the official name of McCain-Feingold, has made the situation even worse. While it did double contribution limits, it also banned "soft money" (contributions to political parties rather than candidates) and put a stop to "issue ads" (which have a clear position but don't directly advocate voting for or against a candidate or issue) close to an election. These key features of McCain-Feingold were upheld by the Supreme Court in late 2003.
The primary effect of the bill, Smith said, has been to make direct political speech - words meant to affect the outcome of an election - less protected than other forms of speech, including those he mentioned in his commencement address.
McCain-Feingold, Smith argues, creates a system that "protects free speech when it doesn't really matter." In other words, restrictions on overtly political speech are strongest right before an election, when they're most likely to have an impact.
Supreme Court Justice Clarence Thomas wrote in a dissent that McCain-Feingold sets a dangerous precedent: "The chilling endpoint of the court's reasoning is not difficult to see: outright regulation of the press."
Smith echoed this sentiment when he told the Reader, "Nobody wants to say what the stopping point [of regulation] is."
He noted that even though this is the first election cycle with McCain-Feingold in effect, already political interest groups are pushing for even more restrictions. The biggest change that McCain-Feingold has brought has been the shifting of campaign money toward tax-exempt independent political organizations, which are called "527" groups because of a section of the tax code. McCain-Feingold is "driving some of the activity away from parties and candidates," Smith said. Under the new law, 527 groups remain one of the few legal ways to raise soft money, especially from unions and corporations.
Liberal 527 groups such as MoveOn.org and The Media Fund were the first to take advantage of this new campaign-finance landscape and have so far raised tens of millions of dollars for Democratic Party causes and candidates. Republicans have started to raise money under 527s, but they lag far behind the Democrats. For this reason, Republicans asked the FEC to regulate 527s under McCain-Feingold.
But on May 13, the FEC decided to take no action for 90 days on 527s. "We don't feel new regulation is required" under the campaign-finance law, Smith said. In fact, he added, the legislative history and language of the law never address 527s: "New regulation would be contrary to McCain-Feingold."
Smith's position on 527s shows him to be more a person of principle than party, because his stance on this issue could cost Republicans dearly. On its editorial page, the Wall Street Journal wrote that "Democrats in Congress owe Federal Election Commission Chairman Bradley Smith an apology. The man they once called 'Dracula' and tried to banish from Washington may now save their ability to keep raising millions of dollars in 'soft money' to defeat President Bush this November."
Indeed, Smith didn't come to the FEC as a partisan. "I'm sort of a merit appointee," he told the Reader. He was a law professor at Capital University Law School in Ohio and made a name for himself, through congressional testimony, as the most outspoken critic of campaign-finance regulation around. (Augustana College President Steve Bahls was dean of the Capital University Law School for nine years, and that's how Smith came to be this year's commencement speaker.)
Although he criticizes McCain-Feingold, Smith has seen some positive effects. The soft-money restrictions on Democrats and Republicans have forced "parties to raise more from small contributors" and rely less on big donors, Smith said.
While much of Smith's criticism of the federal election system deals with regulation imposed by Congress, he also sees another major problem: bureaucracy. He argues that there are two things at work here. First, that the bureaucratization of the federal government took the de facto rule-making authority away from Congress and the FEC commissioners; civil servants make key decisions with little oversight. And second, because of the maze of rules and regulations, "regulation itself has become a campaign weapon," he said in one speech; campaigns accuse their rivals of violating the rules, thus engaging the complex FEC guidelines and bureaucracy. "The punishment was the process," Smith told me.
Many people don't realize that campaign treasurers - typically volunteers - are personally liable for fines levied by the FEC. Not only do they have to navigate the rules and defend themselves if they're accused of going afoul of regulations, they're on the hook for violations. Smith described the system's message: "Thank you for participating. Here's your fine." The effect, he argued, is to discourage participation.
Fines are the FEC's primary enforcement tools, and they can range from $275 to hundreds of thousands of dollars, depending on the severity of the violation.
Another problem has been that the process has been clogged with cases. Smith said he's helped the FEC streamline its enforcement procedures. In the past the commission dismissed 30 to 40 cases a year because they were no longer relevant; they lingered in the system past elections, to the point that continuing with them would serve no purpose. Now there are no cases being dismissed for that reason. Speeding up the process was done "to promote a little added caution against stretching the law too far," he said.
In addition, Smith said, he's successfully pushed for "fewer fines but more significant" from the FEC to further discourage violations.
Smith's political beliefs are based on the assumption that politicians and their campaigns are fundamentally honest. "There aren't that many intentional violations," he said. People who advocate tighter regulation of the campaign-finance system operate on the philosophy that all politicians are corrupt, Smith said. They therefore give a "free pass to people who are corrupt," he added.
A Better System?
Smith's arguments against regulation are forceful and direct, but he's less clear about how he'd change the current rules. He's blunt when he notes that "there's no perfect system" yet doesn't have a specific proposal saying what, if any, restrictions he'd place on donors, parties, political campaigns, and candidates.
He criticizes regulation by noting that there's no indication where it will end, but on the topic of de-regulation, he commits pretty much the same sin. If the country starts de-regulating and finds a place it's comfortable, Smith said, "we can always stop."
Many people who oppose limits to political giving still favor full disclosure of how much money is given by whom. (Parties and candidates must disclose from whom they receive their money.) Smith has it both ways on the disclosure issue.
During his speech to Augustana graduates, he noted: "The Federalist Papers, America's greatest contribution to political theory, ... were ... published anonymously. ... Similarly, opponents of the Constitution, honorable and talented men, equally patriotic, also wrote under pseudonyms. Why? For these men, to have written under their own names would have allowed the focus to be taken off the ideas discussed, and focused instead on the identities of the speakers." This suggests that Smith opposes disclosure of political contributions, but he never directly says that.
In our interview, his tone was different: "I tend to favor disclosure, but with a higher threshold," he said. Right now, contributions to "independent expenditure" committees must be reported at $250. Smith favors raising that level, but he doesn't propose an end point. "Five thousand? Ten thousand? Fifty thousand? A hundred thousand?" he said. " It ought to be a lot more than $250."
Smith is careful not to say that a de-regulated campaign-finance system wouldn't have its share of problems, but he claims that de-regulated systems aren't any more corrupt than regulated ones. Maryland has a heavily regulated campaign-finance system, while Virginia's is largely de-regulated, and there's "no evidence" that the latter is worse than the former, Smith said.
Underlying Smith's argument is the idea that no matter how much one regulates the campaign-finance system, politicians will always find ways to exploit the loopholes, as the McCain-Feingold law and 527s show.
And Smith acknowledges that sometimes incumbents write the laws in ways that favor themselves. But he said he doesn't believe that incumbents intentionally skew the system; he said he believes that they are addressing problems they have without taking into consideration the difficulties faced by challengers and third-party candidates.
De-regulating the system, Smith claims, will help people trying to unseat incumbents. Without the name recognition, party support, and campaign organizations of those who have already won elections, "challengers more than incumbents need larger contributions," he said.
And campaign-finance restrictions also work against small businesses, he said. Deere & Company doesn't need to give money to politicians to get access to them, Smith said; because of their importance to the local economy and employment, the company already has the ear of local legislators. A smaller company, however, without a large number of employees, can sometimes only get access through contributions. And limits on how much they can give restrict whether they can give enough money to be heard.
Major corporations, he noted, spend 10 times as much money on lobbying as they do on political campaigns. When they make donations to candidates, he said, "they're not buying access." In one speech, he said that "campaign contributions just aren't that important."
Smith said regulation might be better suited to other areas, that if there's corruption in American politics, the campaign-finance system is a small part of it. Book advances and $20,000 speeches by legislator's spouses create the appearance of corruption more than campaign contributions, he said. "That would be a better place to start" with regulation, he said.
Sidebar: A Campaign-Finance Primer
Enforcement of federal campaign-finance laws lies with the Federal Election Commission (FEC), a six-member body with three Republicans and three Democrats. The FEC can levy fines against candidates, parties, and corporations that violate the laws.
Hard money is cash given directly to political candidates and is regulated by federal law. Under the Bipartisan Campaign Reform Act (BCRA, also known as McCain-Feingold) passed in 2002, individuals can only give $2,000 to a candidate in an election cycle, for instance.
Soft money is cash given to political parties or political organizations outside of specific candidates. McCain-Feingold banned soft-money contributions to political parties.
But the BCRA did not address the question of so-called "527" groups, tax-exempt independent political organizations. Because soft money to 527 groups is still allowed, unions and corporations have funneled millions of dollars to 527 groups. Through late last year, liberal 527 groups has out-raised conservative groups by nearly a two-to-one margin.
