Markkula Center of Applied Ethics

The Power of Money: The Ethics of Campaign Finance Reform

The Senate Ethics Committee is currently investigating five senators, including some of its most prominent and powerful members, for possible conflicts of interest. These five senators received a total of nearly $1.4 million in contributions from Lincoln Savings and Loan chief Charles Keating, and are accused of interceding to protect the failing thrift against a timely takeover by federal regulators after receiving Keating's contributions. By the best estimates, it will now cost American taxpayers $2.5 billion to pay off Lincoln's insured depositors--$1.3 billion more than it might have if regulators had acted promptly to close down the insolvent S&L. The much-publicized case of the "Keating Five" is just the most recent and prominent example of the influence of money on politics.

Today, the cost of a congressional campaign often exceeds $1 million per candidate, and Senate campaigns average $4.3 million, often costing $10 million or even $15 million. Once in office, a senator needs to raise more than $10,000 every week to fund his or her re-election campaign, and much of that money ends up coming from political action committees (PACs) and other special interests. In the 1986 congressional campaign, for example, candidates spent a total of about $300 million with about a third of that total ($103 million) raised from PACs.

While congressional candidates can accept no more than $5000 from any PAC, ingenious donors and politicians have devised numerous "backdoor" funding channels. Most of Sen. Alan Cranston's contributions from Charles Keating, for example, came in the form of support for voter registration drives aimed at registering voters likely to favor Cranston, while John Glenn benefitted from contributions to a political committee that he controlled.

Critics of the current system of campaign financing argue that the high cost of office-seeking and current ways of meeting those costs not only distract elected officials from their primary task of lawmaking, but leave the door open to the influence of special interests. When a politician is influenced by either the need to solicit contributions from special interests to finance a costly election campaign, or by a sense of obligation to benefactors, the politician may no longer represent the interests of his or her entire constituency.

Furthermore, the ability to influence electoral outcomes with infusions of cash poses a significant challenge to the idea of equality expressed in the principle of "one man, one vote" upon which democratic government is based. If the outcome of elections can be determined by the amount of money spent on the political campaign, then special interest donors have greater power to influence elections than the average voter. Such a situation unjustly violates the principle of equality that is fundamental to democratic government.

Fifteen years ago, Congress amended the Federal Election Campaign Act of 1971, to limit total campaign expenditures in federal elections in order to block the power of special interest money. But the Supreme Court ruled important sections of the law unconstitutional, holding that they violated the constitutionally protected right of free expression. The reform effort was further undermined by a loophole that permitted candidates to raise campaign funds from PACs, and opened the door to the massive amounts of PAC money flowing into candidates' war chests.

To address these issues, the Center for Applied Ethics held a one-day conference on Campaign Finance Reform last fall. The conference, funded in part by the California Council for the Humanities, a state program of the National Endowment for the Humanities, featured a distinguished panel representing a broad range of perspectives on the ethical issues surrounding campaign finance reform.

The first speaker, Dr. Herbert Alexander, is a nationally recognized expert on the issue of campaign reform. Alexander framed the debate by acknowledging the widespread belief that special interests influence politics through campaign contributions. But while acknowledging that campaign contributions create the potential for conflicting obligations on the part of lawmakers, he held that it is "an affront to the integrity of ... elected officials to suggest their votes are 'bought' by their contributors." Given the many demands on a politician, the competition for a politician's ear or favorable vote, and the $5000 limit on PAC contributions, Alexander argued that no single PAC can expect to "buy" special favors from a politician with a campaign contribution.

Moreover, he claimed, even if campaign contributions from special interest groups influenced political decisions, restrictions on campaign financing would not eliminate this influence. Such restrictions would simply lead special interest groups to shift their resources from campaign contributions to lobbying.

American election campaigns, Alexander said, are "under-financed rather than over-financed." Noting that our current political system favors incumbents, Alexander argued that challengers, who must establish name recognition to unseat incumbents, need to wage well-financed campaigns, and this argues against imposing limits on campaign financing.

But Dr. Timothy Lukes, Professor of Political Science at Santa Clara University, challenged Alexander's claim that PACs don't wield much political influence. Lukes pointed out that even government-financed school lunches reflect the special interest influence of the dairy industry, the beef industry, and other agricultural groups. Lawmakers routinely "scheme" to incorporate special provisions into legislation favored by campaign contributors. The money of the PACs, he said, created "an enviable source of power--diproportionately allocated to those with fat wallets." And that money, he insisted, greatly assists the campaigns of incumbents, who regularly win over 95 percent of their campaigns against newcomers. Contrary to Alexander's claim, Lukes believes that PAC money overwhelmingly favors incumbents over challengers.

Prof. Lukes offered a radical prescription to cure the system: "take the money out of the hands of the campaigners altogether." In his view, paid political advertising should be banned, and replaced with information and debates financed and presented by independent media and independent political groups.

A different set of prescriptions was proposed by Pete McCloskey, a former Republican congressman from California. Citing his experience in Congress, McCloskey argued that the emphasis on money does indeed have a corrupting influence on politics, and keeps good candidates from running for office. McCloskey suggested several corrective measures to reform the electoral system, including limitations on the size of political contributions, public financing of political campaigns, and restrictions on total campaign spending. McCloskey also suggested that to encourage competent new candidates to challenge incumbents, we should pay higher salaries to elected officials, limit the number of terms or the length of service of elected officials, and severely restrict incumbents' access to the use of paid staff and free postage for political purposes.

To Dr. Bruce Cain, a visiting professor of political science at the University of California at Berkeley, the problem of special interest campaign contributions was not so much a problem of money influencing policies as a problem of money influencing electoral outcomes--in effect undermining the fundamental principle of "one man, one vote." Cain noted that "the thrust of democratic reform in the twentieth century has been to make individuals more, not less equal, with respect to their voice in government, e.g. inequities in the franchise and vote weighting have been largely, though not completely, eliminated in US politics." Thus, he observed, "limiting the power of money is a natural extension of the impulse towards equity"--not necessarily because campaign contributions are immoral "bribes" of some sort, but because limits on campaign contributions serve to "redistribute" political power away from those with money. This, he suggested, is a legitimate political goal, but one whose legitimacy depends on one's conception of equity.

Whether justified as an attempt to lessen the influence of special interests or to achieve greater electoral equity, campaign finance reform is currently being warmly embraced on the floors of the Senate and the House. There, nearly all politicians pay at least lip service to the need to address ethics in financing campaigns. Whether these efforts will succeed in making the mix of money and politics more ethical still remains to be seen.

Political Ethics Checklist
Stephen Gillers, a professor of legal and judicial ethics at New York University School of Law, recently published an editorial in The Nation (Jan. 29, 1990) on the topic of legislative ethics. Gillers outlines certain factors to consider when attempting to ascertain if that quacking you hear is really coming from a duck. Specifically, he suggests that actions by a legislator on behalf of a campaign contributor may be suspect if:

  • The recipient of help is not a constituent of the legislator, and there is not other persuasive reason for the legislator's help except the contribution.
  • The beneficiary of the legislator's help is a large contributor.
  • The legislator devotes extraordinary personal attention to the matter [by] making phone calls and holding meetings. Such actions raise more doubts, for example, than a form letter from an aide.
  • The size of the group the legislator's help will benefit is relatively small. There is little reason to doubt a lawmaker's independence if an action will benefit a million consumers, more reason if it will profit a small group of generous supporters, and more reason still is assistance for those generous supporters comes at the expense of the million consumers.
  • Questionable conduct occurs on a regular basis. There is considerably less inclination to give a legislator the benefit of the doubt if we see repeated actions that suggest improper motives.

It is an affront to the integrity of elected officials to suggest their votes are bought by their contributors.
--Dr. Herbert Alexander

PAC money creates an enviable source of power disproportionately allocated to those with fat wallets.
--Dr. Timothy Lukes

Videotape available
Money & Politics: Ethical Issues Surrounding Campaign Finance Reform

This videotape of the Center's symposium on campaign finance reform is available at cost for $16.50. To order, please send your name and address and a check made payable to the Center for Applied Ethics to: Center for Applied Ethics, Santa Clara University, Santa Clara, CA 95053

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