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...to circumvent the law, the national political parties have responded to the ban on soft money by increasing their hard money resources. While outside groups appear active, particularly on the Democratic side, their soft money financing should remain a small fraction of what candidates and parties will raise and spend in the 2004 Elections.
KEYWORDS: elections, election law, campaign finance
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More heat than light has been produced in the initial flurry of commentary on the impact of the Bipartisan Campaign Reform Act of 2002 (BCRA). Perhaps not surprisingly, in a political environment increasingly characterized by sharply polarized values, policy preferences, and even perceptions of reality, initial assessments of BCRA range from measured success to unmitigated disaster. The positions taken on the law by politicians, election law attorneys, political pundits, and scholars when it was being considered in Congress and challenged in the courts appear to be closely related to conclusions about its impact. In other words, the battle over campaign finance reform has extended from Congress and the courts to the implementation of the new law in the 2004 election cycle.
We are certainly not immune from partisan perspectives when viewing this matter. Both of us supported the passage of BCRA in Congress and played a role in defending its constitutionality in the courts. Unlike many of its critics, we view the law as modest in its ambitions, designed not to reduce the overall amount of money in federal elections or to reduce campaign speech but instead to close several regulatory loopholes associated with two forms of unregulated funding in federal elections: party soft money and candidate-specific issue ads broadcast near the election. We thought that the flood of unregulated soft money through the parties and the use of corporate and union treasury funds to finance election-oriented issue ads had undermined campaign finance law and posed serious problems for the integrity of the electoral and policy process.
Whether our views about the objectives and desirability of BCRA fatally bias our initial assessment of its impact is for the reader to judge. Having put our cards on the table, we will note the most significant developments in campaign finance practice (as seen in early June 2004) and explore whether and how each is linked to BCRA.
Party Financing
BCRA's fundamental purpose is to reduce the potential for corruption in the political system by dissolving the nexus facilitated by soft money fundraising practices that links officeholders and party officials with large donors. The law's principal provision prohibits federal elected officials and candidates, as well as national party committee officials and their agents, from raising or using any funds that are not subject to federal contribution limits. Officeholders and candidates may no longer raise unlimited contributions for party committees or for use by other groups or organizations to finance activities that support federal candidates or are otherwise intended to influence federal elections. Nor may they raise soft money for their own leadership PACs or state or local party committees. In addition, all party public communications that "promote, support, attack, or oppose" a federal candidate must be financed with hard money funds, and all state or local party funding for "federal election activities" as defined in the law must be financed with federally regulated funds. (1)
Advocates of BCRA contended that this ban on soft money would reduce the potential for corruption in the political system by preventing federal politicians and party leaders from extracting large gifts from corporations, unions, and individuals in exchange for access to and influence with policymakers. They further argued that the law would enhance grassroots participation by requiring party committees to place greater emphasis on the solicitation of individual contributions and by encouraging them to broaden their bases of support. (2) Critics countered that the law would weaken the parties by stripping them of close to $500 million of valuable soft money resources and by restricting the types of financial transactions that could take place between national and state party committees. (3) These conflicting views raised legitimate questions as to whether the parties would be able to raise the funds needed to play a prominent role in the financing of federal campaigns in a wholly hard money world. They also raised concerns as to whether BCRA would serve to strengthen the role of organized interest groups at the parties' expense, since nonparty organizations would still be able to raise unregulated monies and use them for some election-related activities.
While it is still too early to answer these questions definitively, the early experience under BCRA suggests that the parties are adapting quickly to the new regulatory regime and in the ways anticipated by its supporters.
Officeholders and national party officials are no longer soliciting large, unregulated contributions. Officials in both parties are abiding by the new contribution limits and focusing...
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