Congress should say 'yes' to public financing

“They who have the gold, make the rules” is said to be the golden rule of politics. Indeed, Washington’s insatiable need for campaign dollars frequently turns the financiers of campaigns into de facto decision-makers.  One need only look to the healthcare debate and the financial meltdown of the last year as evidence of the enormous influence that moneyed interests wield over the crucial decisions in Washington.

For over 100 years, Congress has repeatedly attempted to wrestle control over Washington out of corporate hands and into the hands of the American people by structuring campaign finance regulation to incentivize candidates to seek money from individuals and not corporations.  Unfortunately, last month, the Supreme Court in Citizens United v. FEC took the bold step of holding that corporations have a First Amendment right to spend as much of their profits as they want in federal elections, making corporations the de facto decision makers in our democracy.  But just because the Supreme Court has sought to elevate the power of corporate money in our elections doesn’t mean that we can’t seek innovative ways to brunt the damage caused by the court.  We need the public financing of elections to ensure the primacy of people in our democracy — making our elected officials accountable to the grassroots and not the treetops.
 
Congressional efforts at regulating corporate money in politics can best be described as a cat-and-mouse game — every time Congress attempted to limit corporate dollars in elections, corporations found ingenious ways to influence elections.  Congress first tried a ban on direct corporate contributions in 1907, than a ban on corporate and union financed political ads in 1947.  In the wake of the Watergate scandal in 1972, Congress revamped the entire campaign finance regulatory system, recodifying these earlier bans on corporate spending.  However, by 2002, corporations were pumping enormous amounts of their profits into political parties and attack ads.  Congress again stepped in, this time with the Bipartisan Campaign Finance Reform Act of 2002 (BCRA), which (1) limited the ability of political parties to use corporate money and (2) required that money from PACs funded by people in a corporation and not shareholder money finance corporate attack ads.
 
By limiting corporate money in politics, Congress incentivized candidates to seek money from people while simultaneously creating expectations that individuals could and should influence elections.  Through innovative campaign strategies and the savvy use of technology, political parties and candidates seized on this people based model, transforming donations from many individuals into significant money.  According to the article Goodbye Soft Money, Hello Grassroots, by former Brennan Center attorney Laura MacCleery, BCRA’s restriction on the use of corporate money by political parties led efforts on behalf of the political parties to seek out money from a large number of individuals instead of relying on large contributions from a handful of entities.  There is no better example of a successful grassroots fundraising plan than Senator Obama’s 2008 presidential campaign, which, according to a report by the Campaign Finance Institute, raised $750 million from over 400,000 individual donors.  This enormous number of contributors to Obama’s campaign exceeded the combined individual donors to the campaigns of Sens. Kerry, Dean and Edwards and President Bush in 2004.
 
Despite this dramatic uptick in individual participation in electoral politics, the Supreme Court last week waved in renewed corporate spending when it invalidated BCRA’s requirement that PAC money and not shareholder money be used to finance corporate political ads.  In a scene befitting a Greek tragedy, it appears that just as the American political apparatus figured out a way to both encourage individual participation and win an election, the Supreme Court changed the rules of the game against people and in favor of corporations.
 
So what does this mean for representative democracy?  In the short term, it means that a single corporation, such as Exxon Mobil, can have a greater say than the over 400,000 individuals who gave $750 million in 2008, by using a fraction of Exxon’s $45 billion in profits in 2008 to pay for campaign ads.  
 
Despite this bone-chilling scenario, all is not lost.  Through the establishment of public financing systems, America can reclaim representative democracy by once again structuring fundraising incentives that drive candidates to the people and away from corporations.
 
Traditionally, public financing systems have been valued for their ability to “cleanse” politics by providing eligible candidates public, non-corrupting money to finance their campaigns in exchange for a participant’s promise not to accept potentially corrupting contributions from lobbyists, PACs and corporations.
 
But, innovative public financing systems can also make people, specifically small donors, the most valuable players in the game.  Multiple match public financing systems, like the system in New York City and the system proposed in Congress — the Fair Elections Now Act (FENA) — make people the central figures throughout the entire election.  Early on in the election, candidates who wish to become eligible for public financing must raise a requisite amount of small donations from many individuals.  However, the system encourages candidates to seek out small donors throughout the election by creating an incentive structure that matches small donations from individuals.  This structure rewards candidates for relying on people and communicates to people that they are the driving force of democracy.
 
The recent decision of the unelected branch of our government may have undermined representative democracy, but the elected branches of our government can restore the primary role of people in our democracy by enacting public financing systems.  With other legal challenges to corporate campaign restrictions already in the pipeline, this Supreme Court will soon have more opportunities to enlarge corporate participation in democracy.  Both Congress and President Obama must make it a priority to establish public financing in order to preserve the ever-dwindling space for people in our democracy.
 
Migally is an attorney at the Brennan Center for Justice at NYU School of Law.