Of Contribution Limits and Compelling Interests

For three decades, the Supreme Court and lower courts at both the state and federal level have clung to and repeated cited that prevention of corruption or the appearance of corruption is a compelling reason for campaign finance contribution limits. Even in the recently deciced Vermont campaign finance case, the Court essentially reiterated this point when they found that time management is not a compelling enough reason for the draconian limits found in Vermont's Act 64. Every state in the union has a campaign finance disclosure law, although some are more stringent than others. With such disclosures in place, is the corruption or appearace interest even applicable any more?

The original impetus behind the FECA rationale for prevention of corruption is that large campaign contributions have the potential to lead to a quid pro quo arragement between contributor and office holder/seeker. However, dozens of studies have failed to produce even one incident of actual corruption as the result of a campaign contribution. We have plenty of fabricated "appearance of corruption" assertions (the whole point behind websites like Opensecrets.org and Democracy 21). But in a era when rapid disclosure is possible through the internet, can we finally dispense with this archaic rationale?

When the orginial FECA was passed there were no mechanisms for immediately disclosing contributions. The Internet was a gleam in some engineer's mind and faxes were not particularly wide spread. A contribution limit, coupled with the less frequent disclosure deadlines, was the surest way to ensure that corruption didn't take place over the short haul, but the disclosure report provided the sunshine necessary to prevent corruption over the long haul. Advances in communcations and the speed of the internet to both disclose and review the contributions makes the contribution limit and the prevention of corruption rationale obsolete. In short, the FECA disclosure regime originally formulated to prevent corruption made a contribution limit necessary. But with modern tools of near instantaneous disclosure, and widely available campaign finance software packages (including a free one provided by the FEC), contribution limits are not necessary.

Campaign finance reports, at least for House candidates, political parties and presidential candidates, are filed electronically with the FEC and are generally available within minutes of submission for the whole world (namely reporters) to see. With the sunlight provided by the media, the contributors to each candidate become instantly available along with how much has been given. Even now, for these political committees at least, there is little need for much additional information, save for perhaps a change that would extend the late contribution report regime to include contributions of $1,000 or more coming in say the last month of a campaign.

A beefed up disclosure law, which no court in the land would strike down, does not impinge on freedom of speech and has only a marginal impact on associational freedoms. Thus with a stringent disclosure law, contribution limits are not necessary since the press and the public would put the most stringent limit on campaign contributions, that of the "red face test," whether or not a candidate can face his or her constituents and say that they are not controlled by the contributor. Will there be large campaign contributions? Most assuredly and rightfully so. But a candidate can only take so many large contributions before the electorate begins to question where their loyalties lie.

Here are some suggestions for changes to the disclosure rules:

1. All candidates must file monthly disclosure reports, due 15 days after the end of a month.
2. In the six weeks leading up to a primary and the eight weeks leading up to a general election, full disclosure reports are due every week.
3. In the six weeks leading up to a primary and the eight weeks leading up to a general election, any contribution in excess of $1,000 is to be reported to the FEC within 48 hours of receipt.
4. In the six weeks leading up to a primary and the eight weeks leading up to a general election, any contribution in excess of $5,000 must be reported withing 24 hours of receipt.
5. Failure to file these reports or omitting the information that is to be reported is punishable by a $10,000 fine for each failure plus a percentage of the receipts on the report.

The disclosure regime is the most successful feature of the election laws. Disclosure allows the voting public to know who is funding campaigns. However, the current regime does not provide a clear picture of activity in the days and weeks leading up to an election until after the election takes place. The structure provided above rectifies that problem.

The rationale for contribution limits is to prevent corruption. But corruption is not prevented by limits, but rather by the public scrutiny that is paid to campaign finance. Make the disclosure reports more frequent and more comprehensive and you can do away with the even marginal impact that contribution limits have on free speech.