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HORIST: The Federal Election Commission, a bad idea made worse over time.

HORIST: The Federal Election Commission, a bad idea made worse over time.

Bad public policy is not always evident at the time it is passed and maybe not for decades after.  Such is the case of the 1971 campaign finance law that resulted in the creation the Federal Election Commission (FEC) in 1974.  At the time the emerging conservative movement was still quite weak and our voices of opposition to the law relatively unheard.  But, that does not mean we did not oppose the law and predict its dire consequences for the Republic.

What dire consequences, you ask?  Allow me to explain.

The law was designed to even the playing field between wealthy candidates or candidates with wealthy backers.  It was to eliminate the multimillion-dollar single contributions like the $5 million check Chicago insurance magnate W. Clement Stone gave Richard Nixon – and bear in mind that was in the 1960s when the word “trillion” was heard only in advanced math and physics classes.

Before loopholes were drilled into the FEC law, it limited individual contributions to around $2500 and Political Action Committee (PAC) contributions to $5000 – with other provisions regulating candidate and party funds.

At the time, my opposition and dire predictions were based on several points.

The greatest threat was not the size of the budget or the increase in the bureaucracy.  Though it has expanded exponentially, the annual budget of the FEC is around $80 million – loose change by Washington standards.  It employs approximately 350 people.  These figures are deceptive, however, because agency regulations create tens or even hundreds of thousands of indentured servants in the form of campaign treasurers, financial consultants and legal advisors to do most of the major work.    Paid for by the campaign, they essentially work for the FEC.  While the FEC strictly limits contributions it imposes an enormous unnecessary cost on campaigns.  It is, by any definition, an unfunded mandate.

In shifting control of campaign finances from the candidate to the federal government, the law had the undesirable effect of creating a new category of enormous potential litigation for our ruling class – the lawyers.  The campaign laws are sufficiently complicated that an average person cannot serve as a campaign treasurer without the elevated risk of tripping over ill-defined legal requirements.  It is so difficult to not break some law that I have often joked that campaign treasurers should get a commitment from the candidate to cover bail money.

The FEC was established to be non-political.  That, of course, is one of the great fairy tales of government.  Every government function is vulnerable to political influence because every government worker has a political bent.  Such supposedly impartial agencies as the FBI, the IRS and the Justice Department have all been correctly accused of operating at times with a political agenda.  Since partisan politicians hire, appoint or approve those we call public servants, it is foolish to simply rely on their political independence.  If we were to rate all government agencies in terms of susceptibility to political influence, I would rate the FEC in the top category and the Department of Defense at the bottom.

Like all bureaucracies, the FEC tends to lean left, on the side of a more authoritarian approach to government.  This should not be surprising since bureaucracy, by the nature of the beast, wants ever-increasing power and money concentrated in an elite corps of public workers.  For this reason, the FEC has often been credibly accused of utilizing its enforcement powers to a greater extent against Republican and conservative candidates and campaign organizations – even to the extent of snipping off the margins of the First Amendment. 

One of the most obvious activities of the FEC is to maintain a record of contributions in excess of $149 to federal election campaigns.  This is done in the name of maintaining an informed public.  Sounds good, but the reality is quite the opposite.  The lists are much like all that small script you see on the bottom of your television screen at the end of a pharmaceutical product commercial or one of those ambulance chasing law firm solicitations.  The law requires those disclaimers for the benefit of an informed public even though they are literally … and I mean literally … impossible to read them.

If used at all, the lists were generally perused by the press and political interest groups, and usually to ferret out the biggest and most controversial contributors.  The long portions of the list were more of an encumbrance than an assist to the public.  One might compare the lists to human DNA in which relevant genes are found amide volumes of junk DNA.

There are two areas where the long lists do serve a purpose – and a bad one at that.  It is unlawful to use the FEC required lists to troll for contributors.  That law has as much impact as Prohibition had on alcohol consumption.  They are routinely scoured for prospects. – especially for the contact information of those big donors.

There is an even more sinister use of the list.  Incumbents often use the lists to find out and punish those giving to opponents.  When I ran for mayor of Chicago, I was told more than once by business leaders that they would donate to my campaign if it were not for the fact that the Democrat machine folks would see their names on the list.  In another case, I represented a client wanting to do business with the State of Illinois.  When I visited the Democrat Senate president to discuss the issue, he was already aware that they gave to Republicans, including his past opponent.  In typical Chicago machine fashion, he told me to “correct that situation” before he would meet with the client.

The low-level reporting requirement even discourages a lot of average citizens who might give $200 to $500, but they do not wish to have their name published.  So they give $149 – one dollar under the reporting requirement – or not give at all.

But far worse than the reporting requirement is the donation limits themselves.  One of my earliest predictions at the creation of the FEC was that public office – especially the highest offices – would fall only to the richest people.  This is because the United States Supreme Court has determined that using one’s own money in a campaign is a form of free speech.  But it is not free speech if they give the money to another candidate.  

Many years ago I posed the question: What happens if Bill Gates decides to spend $1 billion dollars to run for president.  He would swamp the spending capability of any candidate. Although Gates never had any interest in running for President, what if that name was Mark Zuckerberg, Mark Cuban, Tom Steyer or Michael Bloomberg – each of whom have indicated an interest in running.

If you were a non-billionaire candidate running against them, you do not have the personal wealth to match that money AND you are prevented by law from even raising that much money.  This provides an enormous, yet underappreciated advantage to the billionaire.  The billionaire can kick in his $1 billion immediately and it can all go to campaign activities immediately.  Since he or she has unlimited resources, their strategies are not contingent on the uncertainty of future fundraising.  

Furthermore, raising money is costly – conservatively, one-third of the amount raised.  This means you have to actually raise $1.3 billion as fast as possible to even come close to matching your opponent – an impossible task.  Furthermore, you have to devote time and resources to fundraising instead of competitive campaigning.

We often hear complaints about how much fundraising an officeholder does relative to the official duties of the office.  It is a legitimate concern, but it is the FEC law that requires that diversion of time.   Fundraising is a function most candidates hate the most.  They do not do it because they like to. They do it because they have to.

In attempts to correct the flaws in the FEC law, a number of ineffective “corrections” have been passed or enabled by the courts in interpreting the Constitution.  PACs were one vehicle to liberalize the contribution limits.  Then there was the creation of the “independent expenditure campaigns” that allowed increased levels of giving as long as the IEC had no connection or coordination with the campaign – a surreal condition.

I recall meeting with then-Senator Dan Quayle to discuss legislative business on behalf of a client.  Once we were done with the subject at hand, the conversation turned to casual discussion of his upcoming campaign.  Since my client was involved in an IEC in support of Quayle, I had to immediately excuse myself from the room.

This is a meaningless barrier since a quick read of campaign material and a view of the advertising would provide all that is needed to understand the strategy, issues and tactics of a campaign in order to craft the “independent” efforts.

Then there were the issue-only campaigns that allow interest groups to spend money “educating” the public if there is no endorsement of a candidate or political party.  Let’s say candidate A was for strong border control and candidate B wanted open borders.  A tax-exempt organization could run millions of dollars in ads favoring the position of candidate B on immigration as educational even though they were, by timing and placement, designed to hurt candidate A.

Then along came Citizens United v. FEC.  It blew the lid off of expenditures by interest groups.  This means that for decades the FEC was violating the Constitution.

The FEC law created a never-ending tangled web of election law limitations and exceptions that are a disservice to an informed public.  They create an insider game in which the biggest winners are the political ambitious billionaires.

The most important … nay … the ONLY valuable information to the voter is the names of those people and groups who give large donations to a campaign. It should be up to the voter, not the FEC to prejudge such contributions.  That is the arrogance of progressive policies that presume the average citizen must be protected by government against their assumed ignorance and poor judgment.  Getting a large contribution is not a prima facie evil.  Let the citizens decide.

We should abolish the FEC and incorporate a campaign finance division within the Treasury Department.  It should make available for public view an established scale of larger donations based on the office sought.  Hypothetically that may be $3000 or more from individuals for congressional races, $8000 and up for Senate races and more than $20,000 for presidential races.  There should be no top limit on any contribution.  Open reporting is good.  Limits are not.

Unlimited contributions would re-open the political process to excellent candidates who do not have unlimited personal wealth to finance their own efforts but have wealthy people willing to do so.  It would discourage and eliminate many of the shadowy committees that currently operate beyond public purview.  The billionaires would still have a considerable advantage, but it would not be preemptive as it is today.

Larry Horist is a conservative activist with an extensive background in public policy and political issues. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman, and he has served as a consultant to the White House under Presidents Nixon and Reagan. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress and lectured at Harvard University, Northwestern University, Florida Atlantic University, Knox College and Hope College. An award winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He can be reached at lph@thomasandjoyce.com.

 

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry Horist Larry Horist is a businessman, conservative writer and political strategist with an extensive background in economics and public policy. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman. He has served as a consultant to the Nixon White House and travelled the country as a spokesman for President Reagan’s economic reforms. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress. Horist has lectured and taught courses at numerous colleges and universities, including Harvard, Northwestern, DePaul universities, Hope College and his alma mater, Knox College. He has been a guest on hundreds of public affairs talk shows, and hosted his own program, “Chicago In Sight,” on WIND radio. Horist was a one-time candidate for mayor of Chicago and served as Executive Director of the City Club of Chicago, where he led a successful two-year campaign to save the historic Chicago Theatre from the wrecking ball. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He is praised by readers for his style, substance and sense of humor. According to one reader, Horist is the “new Charles Krauthammer.” He is actively semi-retired in Boca Raton, Florida where he devotes his time to writing. So, there ‘tis is Horist’s signature sign off.

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