Sunday, January 24, 2010

A Solution For Federal Campaign Spending

 The Supreme Court decision to allow corporations to spend unlimited funds in elections may have opened the door finally to revamp our campaign financing laws.

President Barack Obama in his weekly Saturday address said he will be working with Congress to forge a "forceful bipartisan" counterattack in what amounted to a rare but firm rebuke of the court's decision.

“We have begun that work, and it will be a priority for us until we repair the damage that has been done,”  Obama said, adding “I can’t think of anything more devastating to the public interest.”

It is no secret that the campaign financing rules enacted by McCain-Feingold  and many of its predecessors, some of which were overturned in the court ruling, have not been effective. Smart lawyers always find loopholes and siphon money wherever they please.

Perhaps the approach to curb corruption has been misplaced.

Perhaps a better way is to allow unfettered contributions by individual, corporate and all special interest groups including lobbyists to not only issue ads but also directly to the candidates themselves. Let's call them donors since the court has decreed they are all one and the same.

The control mechanism would be complete transparency rigidly enforced. The framework for this model already exists in many financial disclosure laws. But they require some tweaking.

For example, donors who contribute less than $1,000 per calendar year for federal political purposes need not be reported. Those who contribute as well as those who receive more than $1,000 must file with the Federal Election Commission and the Internal Revenue Service.

A donor tax of 0.5% would be assessed on contributions from $1,000 to $10,000. A graduated tax beginning with 5% on $10,000 to a maximum of 25% for $1 million or greater would be levied.

The tax would be deposited in a special fund to help cities, counties, special districts and states defray up to 100% of the cost of federal elections. Such a fund already exists with The Help America Vote Act of 2002 (H.R. 3295). The law authorized the appropriation of approximately $3.9 billion to the states to replace punch card and lever voting machines, clean up voter rolls, and improve the administration of elections nationally.

The constitutionality of such a donor tax most certainly would be challenged. A non-legal argument is quite simple. It would equal the playing field between those who cannot afford to contribute and those who can. No one can claim money doesn't influence elections.

The late Jesse Unruh, Speaker of the California state assembly, said it correctly: "Money is the mother's milk of politics."

Under this law, disclosures by both the donors and recipients can be cross-checked by the FEC as well as watchdog groups. The names must be listed on the major donors and recipients web site pages.

For media political ads, groups would be required to disclose the names of donors kicking in at least 10% of the organization's total budget for the ad campaign at the time the ads are aired. Television and radio ads would  require a voice-over naming the donors meeting that 10% requirement.

People are accustomed to this practice required by the Federal Drug Administration to announce side effects of medicines.

Donors of in-kind services also must report if the value exceeds $1,000 for that function. For example, if a union provides volunteers to man phone banks and transport voters to polls, that service must be reported if the volunteer is paid by his union, employer or any outside source. If not paid, it goes unreported.

Harsh penalties for those convicted of violating the disclosure law would be at the discretion of the judge following these parameters: Automatic jail time ranging from 15 to 45 days, paying federal court costs and per diem prison costs. People convicted of white collar crimes are not comfortable with the prospects of incarceration.

That in itself would compel voluntary compliance, especially with the IRS looking over their shoulders.

As for the millions of citizens who contribute less than $1,000 in a calendar year. The Obama campaign beginning in 2007 tapped these people brilliantly through the use of the Internet and raised hundreds of millions of dollars as a result. The practice of bundling these donations drew criticism from his opponents.

Under this disclosure law, a citizen's 1040 income tax form would include a line item reporting any money donated to a federal election campaign. Even cash donations would be spotted if reported, by law, by the recipient group or politician.

Bundling still would be legal but the donor name, address, occupation, telephone and email would be kept on file by the receiving group, the FEC and IRS. On political ads, only their total number would be reported as designated contributors of less than $1,000.

Such a federal law could be used as a model for cities, counties, special districts and states to follow.

Personally, I am not convinced as some critics fear that corporations will flood the election process with truckloads of money to influence campaigns. The disclosures will turn the spotlight on them in which their buying public will read into it whatever they care to believe.

No comments: