Campaign Finance, Corruption, and Political Polarization

Campaign Finance Reform May Help With Polarization but Neglects Historical Corruption

By Robert Boatright and Robin Kolodny. If you enjoy this piece, you can read more Political Pen Pals debates here.

American Campaign Finance Laws Make Polarization Worse

By Robert Boatright – Professor and Chair, Department of Political Science, Clark University

Campaign finance laws are certainly not the only cause of political polarization in the United States, but they have inarguably helped to make the problem worse. In fact, reforms enacted in the early 21st century to improve the financing of elections bear much of the responsibility for this problem. Any campaign finance system must balance many competing goals, including encouraging competition, preventing corruption, giving citizens a voice, and limiting the role of wealth in politics. Until recently, little attention was paid in America to the relationship between campaign finance law and political extremism, but a growing body of research suggests that efforts to limit corruption may abet the rise of extreme voices and discourage bipartisan compromise.

A Brief History of Campaign Finance

During the 1990s, reformers worried that large business and labor contributions were encouraging informal quid pro quo agreements between politicians and their donors. These advocates believed that presidents were skirting contribution limits by offering special access to the White House in exchange for unregulated “soft money” contributions to party campaign committees. At the same time, concerns were raised on the left and the right about “electioneering” advertisements — television advertisements that made positive or negative statements about candidates but evaded contribution restrictions because they did not explicitly tell viewers who to vote for. Corporations, labor unions, and the very wealthy seemed to have the ear of politicians, and as a result, candidates had to spend hours courting wealthy donors — “dialing for dollars” — instead of attending to their legislative duties.  

Over the course of a decade, reformers in both parties worked to craft what eventually became the Bipartisan Campaign Reform Act (BCRA) of 2002, a law that prohibited soft money contributions to the parties, limited electioneering advertisements, and doubled (as well as inflation-indexed) individual contributions. These reforms were designed to bring individual contributors — that is, regular people — back into politics. They have arguably succeeded in doing so, but at a great cost. These changes, accompanied by changes in communications technology, have encouraged political polarization in two ways.

Grassroots Fundraising Empowers Partisans

Firstly, it is easier for candidates to raise money from small donors (people who give $200 or less) than ever before. In 2000 and 2004, candidates such as Democratic presidential aspirant Howard Dean discovered that email and internet solicitations could be used to raise large amounts of money much more quickly than had previously been possible. But the kinds of candidates who excel at online fundraising tend to differ from conventional politicians. Their ideological leanings are much more pronounced and they are likely to have more national visibility, rather than just a local following. What is more, the growing power of social media has made collecting small contributions even more efficient and effective.

Small donors also tend to be more motivated by ideology than larger donors. Moreover, the glut of political appeals the average citizen receives means that provocative, incendiary appeals are more likely to catch their attention. Not all of the candidates who excel at raising money in this way are ideologically extreme, but many are. Those who are more moderate face intense pressure to ramp up their rhetoric in order to compete.

Electioneering through Campaign Finance

Recall that BCRA prohibited large contributions to the political parties. While these contributions may have raised the specter of corruption, the organizations that provided them tended to be businesses or labor unions with long histories of working with both political parties. Yet the Supreme Court’s 2010 Citizens United v. Federal Election Commission decision has provided a way for donors who want to channel large sums of money into campaigns to do so with little or no accountability. Citizens United permitted the establishment of “Super PACs,” through which any individual or corporation could spend an unlimited amount of money talking about the election, as long as the spender did not do so in direct coordination with a candidate. In practice, these entities have become a way for people who are not accountable at all to voters to outspend the candidates and the parties in talking about political issues. 

Political parties and established lobbying groups are accountable to the public or to a large donor base. They have reputations to protect and reasons to look beyond the election at hand. Super PACs do not lobby and often do not intend to exist beyond the election at hand. They can be a mechanism to allow the idiosyncratic views of one person, or a small group of people, to dominate the political debate. Again, not all of these donors are extremists, but evidence has shown that the most ideologically extreme candidates tend to be aided by Super PACs.

Balancing Reform, Transparency, and Party Power

These developments lead us to the depressing conclusion that both small and large donors contribute to polarization and extremism. If this is the case, is there any way to have a better campaign finance system? One clear response is to be cautious and clear-eyed about the trade-offs. Reforms intended to reduce the appearance of corruption or to reduce the role of business associations in politics may do so at the cost of encouraging more extreme voices. We should carefully study some of the local experiments in public financing — such as New York City’s program of providing matching funds to candidates who agree to limit their spending, and Seattle’s provision of campaign finance vouchers to residents — to see how these reforms influence elections. While these and other state and local programs may seem more democratic, the evidence so far is mixed about whether they increase or decrease polarization. Even the most well-intentioned reforms can make a bad system worse. 

Getting the level of transparency right is also important. While too much transparency can be burdensome for candidates and their donors, it is important for voters to have a clear understanding of where candidates’ money comes from. The media needs to be able to educate voters about how to understand campaign finance data and all Super PAC contributions must be promptly disclosed.  

The biggest lesson we have learned from the past two decades of campaign finance reform, however, is that strong political parties — and to a lesser extent, a strong constellation of stable and accountable interest groups — are a bulwark against polarization. Political polarization is a consequence of weakened political parties that have lost the ability or the need to speak to most Americans. Effective campaign finance reform must raise caps on contributions to the parties, allow parties to spend money on behalf of the candidates who most need it, and allow parties to coordinate their spending with that of their candidates. This will lead to less extreme partisanship and more moderate candidates. Political parties have rarely been popular among Americans, but in a strong two-party system, both parties will adopt positions in order to win elections. This pushes parties toward the political center and it encourages them to find ways to pass laws that improve the lives of most Americans rather than just providing entertainment for ideological extremists while lining their own pockets. 

Campaign Finance Laws Blind Americans to Our History of Polarization

By Robin Kolodny – Professor and Chair, Department of Political Science, Temple University

My colleague, Rob Boatright, does a great job of explaining recent research trends about party polarization and campaign finance. There is literally nothing to take issue with. Political science scholars have been clear: when partisan interest groups have relationships with candidates for federal office (measured by campaign finance donations and independent spending on campaigns), they get more attention and activism for their preferred policy outcomes from elected officials.

I have a larger concern with the way we approach this topic, however. Scholars and journalists tend to take the 1970s as a starting point when discussing campaign finance. As it happens, that is when we began systematic and public disclosure of campaign receipts and expenditures. Thus, as the data shows recent trends in campaign spending increasing, we assume that corporate America’s influence has also increased.

I would argue that corporate America’s influence has actually been far stronger in earlier times in American history, a period for which there is literally no hope of tracing campaign finance as a connective link. If anything, I might make the startling claim that because of public disclosure, politics is probably less corrupt today. 

The Age of Corruption

We often talk about democratic norms in a polarized political arena and seem to think we have the short end of the stick. Yet, we are a republic, not a true democracy. Our founders understood from the outset that constraining influence (that is, capitalist influence) was the most worrisome part of an open system such as ours. And our system has always favored capitalist interests. 

Think about the freedoms given to railroad magnates, manufacturers, and mining interests of the 1900s. They could provide their workers with the only housing within miles of the job site and force them to pay rent for it. They could poison their workers’ air and water, ignore the dangers of their work, pay them little better than slaves, and thwart laws intended to protect their children from exploitation without worry about interference from the government. The corrupt relationship was so undeniable by the end of the 19th century that we actually agreed to amend the constitution to require the direct election of Senators!

All the while, we had the ineffective Federal Corrupt Practices Act of 1925 to regulate campaign finance disclosure. Or, rather, we didn’t. The law was never enforced, and even if it had been, it had been designed like “Swiss cheese” with all of its exceptions (e.g., the amount committees could raise and spend for a candidate was limited, but not the number of committees the candidate could establish). When the banking system failed in 1929, it exposed how crippled the financial and social structure had become. Not only had the rich miscalculated the durability of their own investments, but the poor also saw their nest eggs evaporate, along with the institutions the rich set up to hold them. 

Corruption and Polarization is the Norm

Wood and Jordan make the claim in their book “Party Polarization in America: The War Over Two Social Contracts” that we are looking at polarization the wrong way. Party politics were very polarized from the early national period of the 1800s up to the Great Depression/New Deal era. The reality of the collapse of the financial system absolutely changed the way parties and voters thought about “robber-baron”-style wealth and excesses. For Wood and Jordan, the time from the 1930s to the 1970s, when moderation ruled, was the outlier, not the norm. Polarization from both masses and elites began a significant uptick after Reagan was elected and continues today.

When we talk about the polarization of political parties and their candidates in contemporary America, we are again comparing today’s activities with the data we have from the 1970s. After passing New Deal legislation, winning a world war, and expanding the middle class with G.I. bills for higher education and mortgages, it looked like we had decided that social welfare mattered more than corporate gain.

Trading One Gilded Age for Another

The major campaign finance reform law, the Federal Election Campaign Act of 1971 (and its 1974 amendments) did not come about in a vacuum. The Freedom of Information Act in 1967, the Consumer Product Safety Act in 1972, the Budget and Accounting Act of 1974, and the Government in the Sunshine Act in 1976 are just a few of the many reforms Congress enacted in response to the turbulent social trends in the 1960s and a President who had disgraced his party and the presidency. Put in this context, the 1970s was a period where politicians were trying (and failing, as it turned out) to constrain the influence of corporate America by shining light on all the ways it had operated in the dark.

We didn’t need to have campaign disclosure to know we had problems. From 1954 to 1994, the Democrats controlled the U.S. House of Representatives without much effort. If you wanted to influence a member of Congress, you sent him on a research trip to the Caribbean, put his “friend” on the payroll, or took him to three-martini lunches. Who needed a Super PAC? It was the Gilded Age of the 1950s. But it wasn’t just campaign finance, alone, that changed the way business worked in Washington. E.E. Schattschneider famously wrote of the “scope of conflict” that elites worked hard to narrow. Well, since the 1960s, it has widened considerably. 

Some Fights Need to be Fought

In the low-polarization era, there were no legislative battles over abortion funding, employment non-discrimination for women, or protection for members of the LGBTQ+ community. Then, diverse candidates emerged and started to win. These candidates were propelled into office by championing the most deeply polarizing of issues: the concerns of their constituents. The role of race and religion in public spaces, welfare support, and reproductive freedom were no longer pushed aside in favor of traditional issues like trade, taxation, and national defense. The rise of polarization in Congress closely tracks with the increase in the number of Black, female, and Hispanic legislators in the body. That old system was over. 

I come back to where I started. Corporate interests do indeed spend more money in elections than they did in the past. They also spend more money on every other way to maintain their preferred policy positions. Some of the old tools in the anti-corruption toolbox just can’t be used any longer. The Supreme Court has overturned every effort to regulate campaign finance activity and each time they rule on the side of free speech, any effort to reign it in is crippled. Yet even as a scholar of campaign finance, I wish Americans would learn to look past it. The power of grassroots organizing is clear. New methods of reaching massive audiences are very cheap. Young people have dramatically increased their interest and participation in politics. These are the tools with which we can change how politics works in the United States.

If you liked this post, you can read more of our Encouraging Bipartisanship series here. 

Robert Boatright

Professor and Chair, Department of Political Science, Clark University | Website

Robert G. Boatright is professor and chair of the Department of Political Science at Clark University and the director of research for the National Institute for Civil Discourse at the University of Arizona.  He has written extensively on campaign finance and primary elections; his books include "Getting Primaried: The Causes and Consequences of Congressional Primary Challenges" and "Interest Groups and Campaign Finance Reform in the United States and Canada."  He is currently completing a book on the historical changes in American primary election laws during the 20th century. 

 

Robin Kolodny

Professor and Chair, Department of Political Science, Temple University

Robin Kolodny is professor and chair of the Department of Political Science at Temple University, where she has taught since 1991. Kolodny is the author of "Pursuing Majorities:  Congressional Campaign Committees in American Politics" (University of Oklahoma Press, 1998).  She is currently writing "The Fundamentals of Campaign Finance" (under advance contract with University of Michigan Press) with Diana Dwyre (California State University at Chico).