Part 2: A Brief History of Campaign Finance Reform
The idea of public funding of campaigns grew out of the Watergate scandal, when it became known that the Committee to Re-Elect the President (CREP) had accumulated a "slush fund" consisting of large cash donations obtained from various sources. Strict limitations on donations and campaign spending were imposed.
The limitations on campaign spending ran into a roadblock when the U.S. Supreme Court ruled that campaign spending amounted to speech, and was therefore protected by the First Amendment. The result was voluntary public matching funds. Candidates who volunteer to participate in the program get partial public funding for their campaigns, in return for which they agree to limit their spending.
This leaves three loopholes.
The first is the self-funded campaign, in which a wealthy person uses his or her own money. Self-funded campaigns may seem like sure-fire winners, as Michael Bloomberg's mayoral campaigns show, but they often lose. A few examples: Lew Lehrman lost to Mario Cuomo in the 1982 New York gubernatorial race; Tom Golisano's multiple runs for Governor have also fallen short; Steve Forbes never got much traction running for President; and while Ross Perot did a little better, he also lost.
The second loophole is known as "soft money". Groups not officially connected to specific campaigns can raise huge sums to run what amount to shadow campaigns, supporting one particular candidate. The only limit is that they can't expressly use a short list of words or terms in their ads, but that limitation is hardly noticeable, and hardly noticed.
The third loophole is becoming more prevalent; it is the candidate who can raise so much money that he or she doesn't need public financing. It used to be true of Presidential campaigns that a candidate who couldn't raise enough money, or garner enough votes, to qualify for public matching funds couldn't win. Now, it is generally assumed that any candidate for President in 2008 who needs public matching funds has no chance of winning.
The current system of public matching funds is unraveling. Attempts to redefine and limit soft money are proving ineffective at best. On the national level, the system of using public matching funds to limit campaign fundraising and spending is becoming irrelevant. Locally, even the best public matching funds system, New York City, has failed to achieve any of its objectives.
In addition, as of the January 2008 filing, ten different candidates in New York City have raised over $1 million, and several of them have already raised all the money they can use if they accept matching funds -- with the primary election still 20 months away! It is clear that even the facade of effectiveness is being stripped away from the current system.
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